BOSTON—Those looking for laboratory space in Greater Boston still have limited choices available, despite a recent increase in availability in the region.
Commercial brokerage firm Transwestern reports the availability rate at mid-year 2017 for the region's 21-million-square-foot lab inventory stood at 7.4%, up from the 5.9% rate posted at the end of 2016. While the lab availability rate inched up slightly, the mid-year 2017 rate for Greater Boston is still lower than the five-year running average of 9.3%. At the end of June there was 1.5 million square feet of lab space available in Greater Boston.
“Even with a relatively slow reporting period, Greater Boston's laboratory market is still very strong,” says Chase Bourdelaise, managing director of research and analytics for Transwestern. “The balance between a strong market with low availability and a market with enough space for new companies to enter and existing companies to expand is difficult to maintain. Right now, we're at a good point between the two conditions.”
Cambridge's 11-million-square-foot lab market posted a 7.1% availability rate. Average asking lease rates in East and Mid Cambridge were in the mid $70s-a-square-foot range and Cambridge continues to show strong leasing fundamentals, according to Transwestern. The brokerage firm's semi-annual bioSTATus report notes that Cambridge is approaching the point where it will have more laboratory than office space. It is projected that by next yar there will be 12.1 million square feet of laboratory space compared to 11 million square feet of office space in Cambridge.
Some of the laboratory construction underway include 50-60 Binney St., which will increase the lab inventory by more than 500,000 square feet and 250 North St., which will produce another 435,000 square feet of office/lab space when it is delivered in the first quarter of 2019.
Report author Bourdelaise notes that while Cambridge continues to dominate the regional laboratory market, the outlying suburbs have seen increased activity. He notes that in the last two years, the 5.7-million-square-foot lab market has seen 526,000 square feet of positive take-up, which has reduced its availability rate from 15.2% to a more respectable 11.8%.
“In conjunction with the take up in availability, space absorption has been positive, with 273,000 square feet absorbed in the last two years and a decrease in vacancy from 9.6% to 7.2%,” Bourdelaise states. “As lab space in Cambridge becomes less available and more expensive, anticipate a trend in outward movement by tenants looking to get a piece of the Boston market at a discounted rate.”
The report also cites another positive going forward for the lab market—Gov. Charlie Baker's recent announcement of a $500-million life sciences initiative. The five-year plan includes up to $300 million for job creating incentives and $150 million for job-creating tax incentives devoted to the life sciences sector.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
