Where to Next?
During 2022 and 2023, we saw unprecedented growth in the Life Science industry in the greater Boston marketplace. Biotech, Clean tech, and Med Device all saw venture capital investment as never before. And the real estate market answered! Coming out of the COVID slump, we were all making hay with the life science industry keeping us all (especially the construction companies) busy! And despite challenges with inflation, labor availability and supply chain, we all found a way to create a robust, vibrant real estate industry.
Boston and Cambridge found perhaps the most development. Over the last few years, tens of thousands of jobs have been created and over 12 million square feet of construction in this sector is still taking place. And although the market in Boston and Cambridge remains strong, we are seeing this trend reaching beyond city limits.
While Boston and Cambridge saw amazing rental rates, the Fenway area, Somerville and Watertown hit their stride and were able to compete with reduced rental rates, easy access to the city, and even some Class A buildings coming online, creating new hubs and communities. The Arsenal area in Watertown is becoming a life science hub, with the addition of a newly thought-out mall, parking garages, and many amazing Life Science buildings – some on the river and with great views!
Waltham and Burlington haven’t been asleep at the wheel either. With a plethora of office to lab conversions, some developers are creating aggressive speculative labs spaces and the large incubators are looking beyond the traditional areas. Even the blue-chip real estate developers are looking beyond 128 to find the next markets to uncover and develop, especially in manufacturing.
I would be remiss if I didn’t acknowledge the growth and development in the Worcester area. With a portfolio of manufacturing buildings, and a few large companies making their home in this area, there are many possibilities for companies looking for properties to support commercialization and cGMP. And with MBI creating a place for start-ups to learn and grow, this is certainly an area to keep an eye on for the future.
But it’s not all rosy
With 2024 coming into view, we are seeing a marked dip in investment, Biotechs without a strong path to commercialization are starting to fold, and with a general move towards conservative capital spending, things have slowed down for sure. But interestingly, the urge to sign more real estate than needed combined with a tightening of the science streams within many companies, we are seeing an opportunity for small tenants that we’ve never seen before.
Subleases are now a significant part of any company’s real estate search. There are many biotechs with space to sublet – the benefits of partnering with an existing company are many and these sublets are very appealing to smaller tenants looking for shorter term leases. We are seeing many partnerships growing out of this trend – something that probably would have never happened 10 years ago!
In short, we are hopeful for what 2024 will bring! There is a lot of real estate on the market, which is something we all needed in the past to maintain our stronghold in this sector. And we know that innovation, science & technology, manufacturing – and resiliency! – are all in our Massachusetts blood – so it’s only a matter of time for things to pick up again.
Venture Forward Lab Partners can help
Thinking of moving, either out of the incubator or into a new space? Venture Forward Lab Partners is a lab management and lab operations consulting company helping companies since 2018. We have the knowledge, resources, and expertise to help growing biotech companies with their real estate decisions and ongoing lab operations. Our team of lab managers and project managers has worked in the Life Science sector, managing lab operations for a myriad of small to medium size biotechs. From securing the space to a fully operational move-in, Venture Forward Lab Partners has the experience and proven track record to help you every step of the way.
Contact us to see how we can make the space you envision – happen.