Summer 2020
Biostatus is a special, quarterly publication from Cushman & Wakefield’s Boston office characterizing the condition of Greater Boston’s laboratory real estate market. Also see Officestatus (office), Logistatus (warehouse), and Transtatus (smart growth).
all data as of or for the quarter ended June 30, 2020 current until September 30, 2020
@BOSqFt
bioSTATus The Greater Boston biotechnology-focused laboratory market remains highly active as of the second quarter of 2020 despite significant impacts to most other areas of economic activity relating to the COVID-19 pandemic. Biotech industry occupants are operating with a heightened appreciation of needs for next-generation diagnostics, therapies and vaccines. Several large lease transactions with significantly more than one million SF of implied demand are in active negotiation with likely 2020 executions as drug discovery is not easily conducted through remote work practices. A growing roster of lab property owners now includes California-based IQHQ, having acquired significant assets in Andover and in Cambridge, in the quarter. Developers are working to add stock in East Cambridge and activity has significantly accelerated in Watertown, with its proximity to both urban and suburban talent pools.
+124K
4.5%
$89
Q2’2020
Q2’2020
Q2’2020
take-up*
*take-up inventory, including under construction product, less availability
vacancy
cl a rents**
**calculated off executed lease transactions, Boston & Cambridge only
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bioSTATus
Summer 2020
IN THE QUARTER … 64 Whittemore| Cambridge
33 New York | Framingham
87 Cambridgepark | Cam.
26 acres| $125 MM
fully leased to Cambridge-based CRISPR and Woburn-based Replimune 100k
57 Coolidge| Watertown
220 Mill | Chelmsford
Resumption of Work
828 Winter | Waltham
35 Gatehouse | Waltham
220k SF
leased by Arrakis Tx, currently located at the adjacent 830 Winter Street 70K
4 Corporate| Andover
400-500 Acorn Park | Cam.
500 Arsenal | Watertown
202k SF | $178 per SF
FogPharma completed a relocation from 100 Acorn Park 115K
201 Brookline| Boston
645 Summer | Boston
1030 Mass. Ave | Cambridge
501k SF | 2022
successful completion of Akouos’ Initial Public Offering $213 MM
Arsenal Yards| Watertown
399 Binney | Cambridge
200 Tech | Cambridge
acquired by developer IQHQ
acquired by Alexandria RE & Nat’l Development
6.3 acres | $33 MM
900 Winter| Waltham
completed and occupied by Alkermes
acquired by investor IQHQ
Samuels RE & JPMorgan project underway
completed & 100% leased
109k SF
IMPACT
HI
APRIL 1
6 13
leased by Thermo Fisher biotech unit Life Technologies 86K
successful completion of Relay Tx Initial Public Offering $370 MM
successful completion of Ra Pharmaceuticals acquisition by UCB of Belgium $2.1 B work resumed following a Boston & Cambridge construction stoppage due to COVID-19 Corvidia Tx acquired by Novo Nordisk of Denmark $2.1 B successful completion of Forma Tx Initial Public Offering $278 MM successful completion of a venture capital fundraise by Manus Bio $340 MM
successful completion of Moderna Tx Follow-on Offering of Equity $1.3 B JUNE 30
Q2 TIMELINE 18 17 3
11 94 14
85 7
15
16
10 12
2
1
LO
Construction & Sales Tenant Activity Other Activity
For an interactive version of this map including suburban events visit https://cwbos.io/labmap202 or click on the QR code at left
www.cushmanwakefield.com
page 2
bioSTATus
Summer 2020
SUBMARKET OBSERVATIONS
Take-up Vacancy $ Average Class A Rent Under Construction
CAMBRIDGE +8K 2.6% $110 1.4MM Active negotiations on more than one million SF of space continue with final decisions deferred discretionarily to later 2020. Sites at the Cambridgeside Galleria, Kendall Square and on Binney Street have been identified for more than 1.3 million SF of development. BOSTON & STREETCAR RING -26k 4.4% $83 2.1MM 1 Winthrop Square is what may be the start of a conversion trend of eligible office space to lab in the Financial District. Inner core activity remains constant with nearly 300k SF now under conversion in Watertown. SUBURBS -106k 8.4% $58 214k In an otherwise transaction-free environment, suburban lab leases were closed in the second quarter, as space users expressed confidence in properties that more easily accommodate social distancing adjustments. WATERTOWN +0k 13.8% $72 298k With a long heritage of biotechnology activity in its own right, Watertown has seen a surge of demand from both suburban space users looking to tap into the adjacent cluster of biotechnology activity in Cambridge, and Cambridge bios with either a defined and willing workforce. Alexandria Real Estate Equities is undergoing a first phase renovation of 298K SF at the Arsenal on the Charles to lab.
FIVE YEAR TRENDS BY QUARTERS
TAKE-UP
0.8 0.6
inventory, including under construction product, less availability sf in millions
0.4 0.2 0.0 -0.2 -0.4
Cambridge
15%
Boston & Streetcar Ring
Suburbs
Boston & Streetcar Ring
Suburbs
VACANCY
10% 5% 0%
Cambridge
RENTS
$120 $100
Class A Lab, Executed Net Effective NNN Rents $ per SF
$80 $60 $40 $20 $0
1.5 1.0
Urban Boston
Cambridge
Streetcar Ring
TEN YEARS OF CONSTRUCTION
STARTS COMPLETIONS
SF in millions
0.5 0.0
2010
www.cushmanwakefield.com
2012
2014
2016 page 3
2018
2020
bioSTATus
Summer 2020
Q2’2020 STATISTICS INVENTORY SF MM
TOTAL MKT CAMBRIDGE Lechmere Kendall Central Harvard Alewife URBAN BOSTON Seaport Other Downtown STREETCAR RING Urban North Urban West Watertown Fenway/Longwood Urban South 128 BELT North Shore 128 Core 495 BELT 3 North Boroughs Metrowest
VACANCY
ABSORPTION
AVAILABILITY
TAKEUP
CONSTRUCTION
RENTS
# Bldgs
%
QTR
LTM
Total
Sublet
QTR
LTM
UC SF
% Leased
23.6 12.1
181
4.5%
397
705
4.8%
1.6%
124
1,021
3,749
52%
$76
84
2.6%
79
182
2.6%
0.9%
(8)
224
1,431
61%
$110
6.9 3.8 0.1 1.2 1.3 1.1 0.2 4.1 0.2 0.5 0.7 1.8 0.8 4.1 0.3 3.7 2.0 0.6 0.4 1.0
35
2.1%
(4)
(148)
1.2%
0.4%
0 33
0 188
1,044 387
86%
32 1
0.9% 0.0%
(31) 0
(10) 0
2.2% 0.0%
0.6% 0.0%
(17) 0
(13) 0
0 0
16
11.0%
114
340
12.4%
5.1%
(24)
49
0
5
8.9%
0
92
8.9%
0.4%
12
301
966
78%
4
7.8%
0
124
7.8%
0.5%
12
301
966
78%
1 22
14.2% 2.9%
0 31
(32) 58
14.2% 4.5%
0.0% 3.0%
0 14
0 124
0 1,138
9%
2
0.0%
0
0
0.0%
0.0%
14
14
339
4%
3
4.5%
(19)
(22)
19.2%
18.2%
0
(25)
0
6
13.8%
50
80
11.7%
3.5%
0
46
298
0%
6 5
0.0% 0.0%
0 0
0 0
0.0% 0.0%
0.0% 0.0%
0 0
89 0
501 0
18%
44
8.3%
239
289
7.0%
1.0%
146
411
214
100%
$58
4
2.6%
(8)
(8)
2.6%
0.0%
(8)
(8)
0
39
8.8%
247
297
7.4%
1.1%
154
419
214
100%
$58
26
8.5%
48
83
11.4%
4.4%
(40)
(40)
0 0
10
0.0%
0
0
3.9%
0.0%
(23)
(23)
7
20.3%
0
3
20.9%
0.0%
(7)
4
0
8
9.3%
48
80
12.5%
9.2%
(10)
(20)
0
WHERE?
https://cwbos.io/coverage for a coverage map or scan QR code to the right.
moniTOR
(000 omitted except inventory and as noted) $ Cl A
52%
$115
QTR = Quarterly LTM = Last Twelve Months Take-up = Change in total committed space including under construction assets Class A rent data derived from C&W’s Boston lease comps database must be at least three qualified transactions to register data UC = Under Construction
Will the COVID-19 pandemic drive increased leasing activity in the suburbs? Who will sign the first post-pandemic new building lease? How many additional urban office assets can be repositioned as laboratory facilities? Will there be any speculative groundbreakings in the second half of 2020? Will a Boston-area bio firm play a major role in a COVID vaccine or therapy?
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
www.cushmanwakefield.com
$83
Brendan Carroll
Director, Business Intelligence brendan.carroll1@cushwake.com
Robert Richards
Executive Vice Chair, Brokerage robert.richards@cushwake.com