The demand for lab space by the life science industry is a boon for Boston Metro commercial real estate. According to Boston Bisnow, about 100 local life science companies are working on some facet of COVID-19 research. Overall, Massachusetts life science companies are capturing 17.3% of related funding from the National Institutes of Health. The urgency of vaccine development is pushing an already-hot sector into overdrive.
Even before the pandemic, the Boston area was the leading life sciences market in the United States, based on laboratory inventory, funding, employment and the concentration of key scientists, according to CBRE. Lab space vacancies have been trending around 6% in recent years, and today’s accelerated demand is driving new development.
With sites for new lab development becoming scarce, developers are increasingly looking beyond Cambridge and considering vertical designs in the Back Bay, Somerville, South Boston, the Seaport and Downtown. Redevelopment of existing parcels, expansion into air rights space and the remodeling of existing office space are potential solutions.
Low vacancy rates and lucrative rents have kept fresh capital flowing in to life science developments in the Boston Metro. As related companies and services follow the expansion of lab space, it will add economic support to the wider Boston Metro commercial real estate market.
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