The greater Boston area's laboratory market has stayed largely the same in the second quarter of 2020, however purchasing plans are showing a greater emphasis in the area suburbs, according to Colliers International Lab Viewpoint report.
"More space is coming, and conversions in the suburbs and Boston and future new development throughout the market aim to tap into this supply/demand imbalance," the report states.
Historically, lab space has been most prevalent in the Cambridge area. However, the suburbs are likely going to grow in the near future. The report states that Alexandria has expanded its suburban operations by purchasing spaces in Watertown and Newtown in recent quarters. The report says the company also has plans to acquire the Mount Auburn Club alongside National Development.
Spear Street Capital is buying space in Watertown as a part of a deal with Tufts/Harvard Pilgrim. The deal will give the health provider The Block in Canton.
"The life science market is growing, and the once largely Cambridge-centric industry has expanded and will continue to do so across Greater Boston," the report states.
Kendall Square, according to the report has mostly been built out except for the Volpe site, according to the report. Future development in Cambridge will be focused on Cambridge Crossing and Alewife. GCP Applied Technologies has agreed to sell its 26-acre campus to IQHQ. IQHQ reportedly has plans to redevelop the property.
"Because of future plans along the Concord Avenue corridor across the tracks from Alewife, this submarket is ripe for life science growth," the report states
Vacancies did not move much the second quarter and only moved up 0.2 percentage points to 7.3% through all markets in the area which include Boston, Cambridge and the suburbs surrounding those areas. Lab vacancies in Boston are just under 10%, in the suburbs vacancy rates are just above 10%. However, in Cambridge, vacancy rates for laboratories are under 5%.
Because vacancy rates are low, landlords in the space are still doing well because there is not a lot of space for tenants to choose from.
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Dan Clark
Dan covers cyber security, legal operations and intellectual property for Corporate Counsel. Follow him on Twitter @Danclarkalm.
