For decades, Boston and Cambridge have reigned supreme as the epicenter of life sciences innovation and real estate in Massachusetts. Home to world-class universities, research institutions, and a dense ecosystem of biotechnology and pharmaceutical companies, these cities have long been the go-to destinations for life science organizations seeking prime laboratory and office space.
However, as demand for specialized life science facilities continues to surge and available space in Boston and Cambridge becomes increasingly scarce and expensive, we are witnessing a significant shift in the life science real estate landscape. The industry is expanding beyond the traditional confines of Kendall Square and the Longwood Medical Area, creating exciting opportunities in surrounding communities throughout Eastern Massachusetts.
As a commercial real estate broker serving the greater Boston area, I’ve had a front-row seat to this transformation. Let’s look at the factors driving this expansion, highlight emerging life science clusters, and discuss what this means for property owners, developers and life science companies seeking space in our region.
What’s Driving the Life Science Expansion?
Several key factors are propelling the growth of life science real estate beyond Boston and Cambridge:
- Limited availability and high costs in core markets: With vacancy rates for lab space in Cambridge hovering around 1% and rents reaching upwards of $100 per square foot, many companies – especially early-stage startups and growing mid-size firms – are priced out of these prime locations.
- Increased funding and company formation: The life sciences sector continues to attract significant venture capital and public market investment, fueling the creation and expansion of companies that need specialized facilities.
- Talent pool expansion: While Boston and Cambridge remain talent magnets, the growth of remote and hybrid work models has expanded the potential employee base to a wider geographic area.
- Infrastructure improvements: Investments in public transportation, such as the Green Line Extension, have improved connectivity to previously less accessible areas.
- Municipal incentives: Many suburban communities are actively courting life science companies with tax incentives, streamlined permitting processes and other business-friendly policies.
Emerging Life Science Clusters
As the industry expands, several areas are emerging as attractive alternatives to Boston and Cambridge:
Somerville and Watertown:
These communities, adjacent to Cambridge, have seen significant life science development in recent years. Boynton Yards in Somerville and Arsenal Yards in Watertown are prime examples of mixed-use developments with a strong life science focus.
Waltham and Lexington:
The Route 128 corridor has long been a technology hub, and it’s now becoming a hotbed for life sciences. The Reservoir Woods campus in Waltham and King Street Properties’ developments in Lexington are attracting major tenants.
Woburn and Bedford:
These northern suburbs offer more affordable real estate options while still providing easy access to Boston and Cambridge. The Cummings Properties portfolio in Woburn has been particularly successful in attracting life science tenants.
Marlborough and Worcester:
Further west, these cities are leveraging their lower costs and available land to create significant life science clusters. The former Hewlett-Packard campus in Marlborough has been transformed into a thriving biotech park.
Quincy and Braintree:
Communities South of Boston are beginning to see increased interest from life science companies and developers looking to create new lab spaces.
Implications for Stakeholders
This geographic expansion of the life science industry has significant implications for various stakeholders in the real estate market:
For Property Owners and Developers:
- Opportunity to reposition existing assets: Many suburban office parks and industrial buildings can be converted into attractive lab spaces with the right investments.
- New development potential: Municipalities eager to attract life science tenants may offer favorable zoning and expedited approvals for new construction projects.
- Need for specialized expertise: Developing and managing life science properties requires unique knowledge of laboratory design, infrastructure requirements and industry regulations.
For Life Science Companies:
- More options and potentially lower costs: The expansion provides a wider range of location options at various price points, allowing companies to find spaces that better fit their needs and budgets.
- Potential for purpose-built facilities: In less dense areas, there may be more opportunities for ground-up development tailored to specific company requirements.
- Talent considerations: While expanding beyond the core may provide access to a broader talent pool, companies need to carefully consider how location choices might impact recruitment and retention.
For Municipalities:
- Economic development opportunities: Attracting life science companies can bring high-paying jobs, increased tax revenue and ancillary economic benefits to communities.
- Infrastructure and service demands: Local governments need to ensure they can provide the necessary infrastructure, services and amenities to support a growing life science presence.
Hurdles to Overcome
While the expansion of life science real estate beyond Boston and Cambridge presents numerous opportunities, it also comes with challenges. The success of life science clusters often depends on achieving a critical mass of companies and supporting services. It can take time to develop the ecosystem that makes areas like Kendall Square so attractive.
As companies move further from the core, ensuring efficient transportation options for employees and easy access to collaborators and partners becomes crucial. Life science facilities require specific infrastructure, including enhanced power supplies, specialized HVAC systems and robust waste management capabilities. Not all properties or areas are easily adaptable to these needs.
Finally, as the industry expands geographically, there’s a need to ensure a pipeline of skilled workers in these new locations through partnerships with local educational institutions and training programs.
What’s Next for Life Science Real Estate in Massachusetts?
The expansion of life science real estate beyond Boston and Cambridge is not just a temporary trend but a long-term shift in the market dynamics of our region. As a commercial real estate broker, I anticipate this trend will continue to accelerate in the coming years, creating a more distributed but still interconnected life science ecosystem throughout Eastern Massachusetts.
For further information on this topic, please call us at 781.848.9400.