Peter Abair
Rather than the ubiquitous “2015 retrospective,” in this week’s column, I offer instead a winner’s circle. In 2015, it’s tough to think about a loser in the life sciences real estate space. It was an incredible year, built upon the wonderful preceding year. If there were losers, it’s the new lab-lease payers for spaces in Cambridge’s Kendall Square. Though, as the rewards of being in the core of the thriving life sciences industry seem to offset the monthly rent payments, even those paying top dollar in Kendall Square seem perfectly content.
Among life science space developers, the 2015 “Platinum Medal” goes to Alexandria Real Estate Equities. With successes abounding in the lab development marketplace in Massachusetts, from King Street Properties breaking ground on a new 91,000-square-foot speculative life sciences building in Lexington to BioMed Realty Trust’s ambitious renovation of the old haunts of Vertex Pharmaceuticals in Cambridgeport as its new Sidney Research Campus, it’s Alexandria’s year that stands out.
Less than two years ago, I walked along Binney Street in Cambridge with Alexandria’s Executive Vice President Tom Andrews as he discussed plans for what, at the time, were acres of surface parking. I felt that Alexandria might have been smarting a bit from not having landed Baxalta at one of its properties. Baxalta had instead opted for BioMed Realty’s 450 East Kendall St. As Andrews spoke of plans for a million-plus-square-foot lab complex at 40, 50 and 100 Binney St., I recall thinking that such buildings must be on a distant rather than near horizon.
Just a couple of months after that stroll, Alexandria began clearing the property and digging a foundation at 50 Binney. Today, the transformation of Binney Street continues. Once Kendall Square’s back lot, Binney Street is now becoming biotech’s Champs-Elysees, as it was referred to by Genzyme’s corporate communications guru, Bo Piela. The occasion of that quotation was Genzyme’s announcement that it would move its headquarters to 50 Binney St. in 2018. But that was just one “groundbreaking” announcement of several for Alexandria. With Genzyme slated to move into 251,000 square feet of the 541,000 square feet being built at 50 Binney, bluebird bio inked a deal for 253,000 square feet at adjoining 60 Binney St. If that wasn’t enough, Bristol-Myers Squibb came on board Alexandria’s ship with a commitment for 231,000 square feet at 100 Binney St.
Coming Out Swinging
Back in 1999, California-based Alexandria entered the Massachusetts market with the acquisition of lab space in Worcester (buildings later sold to the University of Massachusetts in 2013). It now controls about 6 million square of life sciences space in the region, not only in Cambridge, but also in suburbs such as Watertown, Waltham and Lexington. Some years after Alexandria entered Massachusetts, long-time California-based rival BioMed Realty (BMR) also entered the Massachusetts market. The two firms compete in life sciences markets around the nation and the world. In the world of accounting, there are the Big 4 firms. In the specialty of life sciences lab space there were the big two – Alexandria and BioMed.
With the announced acquisition in October of BMR by Blackstone Real Estate Properties, it feels very much like Alexandria has been left with all its flags still planted firmly on the field of battle. With a reported $93 billion in assets under management, Blackstone is huge but highly diversified. Alexandria is the big specialized lab developer left standing. Blackstone will be every bit a player locally on the life sciences scene that BioMed has been and our hope is that it keeps in place BioMed’s outstanding local team.
That all said, in our little lab market, with victory after victory after victory, 2015 was Alexandria’s year.
