Over the last few years in Boston, we’ve seen an increasing trend of limited lab space in the city and more companies moving out to the suburbs – COVID-19 has only sped up this process.
This trend is partly due to the health crisis exacerbating shortages in the already tight Boston market, particularly in Cambridge (the epicenter of the state’s life sciences industry), and companies seeking lower rents found in the suburbs.
In this post, we’ll share what experts have been seeing with this phenomenon and what benefits they see in having lab and office space in the suburbs vs. Cambridge/Boston.
This past August, Safety Partners hosted a webinar with a group of partners representing architects, construction management, project management, and real estate brokers called a Primer on Moving Out, where we gave an overview of the keys to a successful lab relocation. Understanding the markets is an important factor to consider.
In September, we had the opportunity to join BisNow Boston‘s webinar on the topic of this suburb renaissance. In this blog, we summarize this insightful webinar and additional BisNow rental property insights.
The panel consisted of:
- Carly Bassett, Principal, TotalOffice Interiors
- Gary Kaufman, Chief Operating Officer, ABI-LAB
- Johannes Fruehauf, President, LabCentral
- Iram Farooq, Assistant City Manager, City of Cambridge
The webinar focused on the positive and negative aspects of lab space in Cambridge/Boston vs. the suburbs.
The Boston area was short on lab space before the pandemic. At the beginning of the year, the vacancy rate for lab space in greater Boston was only 0.8%. Demands for space have ramped up as the area races to find a coronavirus vaccine. There are more than 120 companies with a presence in Massachusetts that are working on fighting the virus, which has killed more than 170,000 Americans, according to Colliers (data reported as of September 2, 2020).
By 2024, the lab market could be twice as large as it is now, which is about 20.6M SF, according to Cushman & Wakefield, and even that might not be enough.
There’s more driving the move to the suburbs than just the virus, as space and price seem to be the biggest issues.
Natick-based ABI-LAB Chief Operating Officer, Gary Kaufman, said there isn’t enough land in Cambridge to accommodate all of the life sciences operations that want to be there.
“We’ve seen a number of companies move to Natick from Cambridge and Boston,” Kaufman said. “Price is a consideration.”
“With the savings on real estate, you can hire another scientist. This was true before and will be after COVID. “You will see more development along [Route] 128 and along the Mass Pike,” Kaufman said. “I call it the ‘Biotech Belt.’”
“Gene therapy will take off in the Boston area very soon, and the AI work at MIT will create thousands of companies, many in Massachusetts.”
Kaufman compared the race for a vaccine and the move to the suburbs to the Gold Rush, which is the perfect metaphor. He explained that the companies that are providing solutions are very similar to the people who provided shovels and tools to dig gold in the Gold Rush. These people were the ones that profited the most from the Gold Rush, not those who tried searching for gold directly.
The biotech companies that are being created by the pandemic are providing the solutions for this virus, and he sees this as another reason for the continued explosion of biotech companies in Massachusetts.
When these companies are ready to take lab space, they will have a myriad of options.
“This isn’t the last pandemic,” city of Cambridge Assistant City Manager Iram Farooq said. “There will be other viruses and bacteria that we encounter. The focus on the life sciences industry has become more acute.”
“Cambridge is the name that the world knows,” Farooq said, “but the fact is the entire region is now a life sciences corridor. One role of a life sciences hub like Cambridge is to recognize that further growth will come because of partnerships with other cities and towns in the Boston region.”
“Different markets offer different competitive advantages,” Farooq said. “It’s important to have a range of space, for companies to make choices based on their needs.”
Cambridge will always have a reputation and unique position with its proximity to talent from MIT and Harvard, and companies seeking that talent will always flock to this area if talent is their priority.
For many other companies, space and price will be the priority and the Biotech Belt has a real chance at creating a thriving life sciences community of its own while still being connected with Cambridge.
Most of the state lives in the suburbs, having this option for a suburban commute benefits many.
While many are passionate about the unique history and culture of having space in Cambridge, rising costs are pushing companies out to the suburbs, which is not such a bad thing. Both areas are providing benefits to all and further expanding the Massachusetts life sciences footprint.
We are excited to see what this growth brings to the diversity of the life sciences industry in Massachusetts.
For help with your next lab move and decommissioning, learn more about our services here.
This blog was written by Emily Smith, our Digital Marketing Manager.