Greg Lucas, senior managing director at Insignia/ESG, calls this city "the epicenter of the east" for the biotech industry, in a NAIOP release. But demand for property that will support the industry is "rippling out" to nearby cities such as Waltham, Medford and Woburn and is spreading as far west as Worcester.
"Some of the larger companies are looking to spread out for a number of reasons," Frances Shifman, chief operating officer for NAIOP, tells GlobeSt.com. "There's quality of life issues and parking." Shifman notes that Cambridge is the "hot spot" for biotech but as the industry grows, she says, it "needs more space." Vacancy rates for biotech space there are practically zero, she adds.
While additional space is a primary motivator for biotech companies to move to the suburbs, costs are another driving factor. Shifman points out that for a biotech start up suburbs are more cost effective. In fact, in NAIOP's news release, actual costs for biotech tenants--after costs are bumped up for the enhanced systems, access and structural integrity a biotech company needs--are between $130 to $150 per sf. Final tallies for that space in the suburbs are in the $74 to $100 per sf range.
The seminar also took note of the technical differences involved with biotech facility development and the subsequent additional risks developers of such space are taking on. A lot of the equipment is above the ceiling and on the roof of the building and the footprint usually needs to be both longer and wider. Shifman points out that biotech space either requires new development or a retrofit of an existing building, but even then, not all buildings will work for biotech space.
Among the companies that recently relocated from Cambridge to the suburbs are Praecis, Transform Pharmaceuticals and GPC Pharmaceuticals. "Biotech," says Shifman, "is the driver of the new economy. It is fueled by government spending and venture capital money. Its research and development is critical for all of us. We all want to live longer. It is the major bright spot on the horizon."
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