Brokers Steve Purpura (left) and Robert B. Richards (right) of Richards Barry Joyce & Partners are assisting ViaCell President Marc D. Beer in the biotechnology firm’s quest for as much as 100,00 square feet of headquarters and research space in Eastern Massachusetts.

Some see it as a cure-all, others merely a Band-Aid solution to the Bay State’s lingering economic ills, but at the very least, the life sciences industry is providing short-term relief for Greater Boston’s commercial real estate market.

In the latest example, rising biotechnology star ViaCell is looking for as much as 100,000 square feet in Eastern Massachusetts, company President Marc D. Beer told Banker & Tradesman last week. The homegrown firm, which is pursuing cures for everything from cancer and diabetes to strokes and muscular dystrophy, already has operations in Cambridge, Boston and Worcester, but the new headquarters/research facility would be its largest to date.

“It’s a big step for us,” said Beer, explaining that his company hopes to move in by the first or second quarter of 2003. ViaCell is looking in Cambridge, but also exploring other markets such as Allston, Waltham and Watertown, said Beer, who founded the firm in April 2000.

Aiding ViaCell in its search is Richards Barry Joyce & Partners, among a growing number of Boston real estate firms providing services to biotech and pharmaceutical companies. Others claiming a stake in that arena include Trammell Crow, Meredith & Grew, CB Richard Ellis/Whittier Partners and Spaulding & Slye Colliers. GVA Thompson Doyle Hennessey is listing agent for BioSquare in Boston’s South End, while Cushman & Wakefield is representing the region’s largest space seeker, Swiss-based Novartis AG, estimated to be pursuing at least 400,000 square feet and possibly as much as 1 million square feet of space in Cambridge.

Insignia/ESG broker Gregory A. Lucas, deemed by most observers as the local leader in life sciences real estate transactions, agreed there has been a flurry of activity in recent months, as well as a fervor among real estate companies to grab a share of the biotech plum. But while clearly better than the struggling office market, Lucas questioned whether the opportunities are as deep as advertised.

“If you strip away the impact Novartis has had, you’d see some underlying strengths, but it’s not as strong as some would have you believe,” Lucas said. “The velocity of demand is certainly not as robust as I’d like to see it.”

Trammell Crow principal Joseph P. Fallon, who began representing Genzyme Corp. back in the mid-1980s, also acknowledged there has been a surge of companies trying to chase life sciences business. But the space requirements in Cambridge currently amount only to about 1.3 million square feet, and even a 10 percent growth in employees statewide would mean just 3,000 new jobs added to that sector, he said.

“In terms of someone getting a dominant market share, I think it’s going to be very hard for new people to do,” Fallon said. Along with Fallon and Lucas, Meredith & Grew broker Joseph P. Flaherty has secured a longstanding life sciences foothold, while RBJ&P President Robert B. Richards and colleague Steve Purpura are also considered leading players in that field.

Fallon said that Trammell Crow considers life sciences a critical aspect of its business plan, and maintains that the company’s experience servicing that industry matches up with anyone. Of the 30 companies seeking the 1.3 million square feet of space in Cambridge, Trammell Crow represents 11 of them, for example. “I don’t think any of our competitors come close to that,” Fallon said. Along with Genzyme, which is represented in the suburbs by CB/Whittier’s Chris Tosti, Trammell Crow has such well-known firms as Amgen, Biogen, Astra Xeneca and Wyeth Research on its client list. In one recent survey detailing the top 10 Cambridge biotech firms in terms of space occupied, Trammell Crow was broker for five of the firms on the list, Fallon said.

Specialized Practice

Spaulding & Slye Colliers is also active in life sciences, and is so bullish on the future that it is now forming a dedicated Life Sciences Group. Nancy Kelley, an attorney who also serves on the board of Jackson Laboratories, has recently been retained to oversee the new division, one that will provide a gamut of services from design and construction to brokerage, property management and technology assistance.

Although Spaulding & Slye is just now formalizing the group, Kelley stressed that the firm has also been busy in the life sciences market for some time, with clients including the National Institutes of Health, Pfizer and the Harvard School of Public Health. Spaulding & Slye built an 80,000-square-foot vaccine research center for the NIH in Maryland, and recently helped built a research facility in Wilmington for another national client.

“It’s already a substantial book of business for us, and what we are doing is making the investment to take it to the next level,” said Kelley. “I really think we can offer superior knowledge to the industry.”

Kelley said life sciences made up 10 percent of Spaulding & Slye’s revenues in 2001 and is on pace to do the same this year. She also cited a recent Brookings Institute report that showed Boston is among nine areas in the country with the greatest chance to capture life sciences business. Spaulding & Slye Colliers also has professionals in place in the remaining four East Coast markets as well, she said, including New York City, Philadelphia, Baltimore/Washington, D.C., and Raleigh, N.C.

“We do think there’s enough business in those five markets on the East Coast to keep us more than busy,” said Kelley, who estimated the Life Sciences Group will have 40 people when it is launched later this year. Kelley said she believes the one-stop shopping approach will be another lure for life sciences clients, a view shared by Trammell Crow’s Fallon. Besides a veteran brokerage team with intimate knowledge of Greater Boston, the national platform with Crow can provide a soup-to-nuts menu of real estate needs for companies, he said.

“We’ve always been doing it, and I do think it is an advantage,” he said. “There are a lot of good brokerage services out there who don’t have these services in-house.”

Others, however, insist that flexibility is a better way to go, including Richards, who worked for Trammell Crow prior to founding his own firm just over a year ago. Richards pointed to ViaCell as one prime example, noting that RBJ&P has been able to offer a gamut of services to the company by identifying qualified vendors who have been more than able to deliver.

“We look to bring the best service providers in every necessary discipline to the table,” Richards said. “We believe that is the right platform, and I think our clients would agree.”

Beer certainly seems to, lauding RBJ&P for its ability to react to complex requirements in a moment’s notice. When the company had difficulty getting its 20,000-square-foot facility in Northern Kentucky moving forward, Beer brought in RBJ&P and “they got the project on track overnight.” The firm has since helped ViaCell open a facility in Singapore, lease space at 26 Landsdowne St. in Cambridge and open its 20,000-square-foot operation in Worcester. Beer said he plans to use RBJ&P as the company expands into Europe in the near term.

“We have put some significant demands on Bob [Richards] and his team, and they have always come through,” said Beer. “I have found their relationship to go far beyond a broker relationship. They really are a strategic partner with us.”

ViaCell also helps show the value of helping small users assess their space needs, with Cambridge particularly adept at growing companies quickly overnight. Richards recalls meeting with ViaCell when it was just Beer and a handful of employees, with the firm’s first deal just 2,500 square feet. Likewise, Lucas aided major players Millennium Pharmaceuticals and Vertex when they were fledgling operations, while Fallon’s first contact with Genzyme was when the company has a tiny operation on Kneeland Street in Boston.

Today, the deals are increasingly larger, as witnessed by an 81,000-square-foot lease assignment RBJ&P recently completed between Cereon Genomics and Millennium at University Park at MIT in Cambridge. In other recent deals, RBJ&P represented Xanthus in an 18,000-square-foot lease at 300 Technology Square, while Lucas and Spaulding & Slye brokered a 49,000 square foot lease at 770 Memorial Drive in Cambridge.

Biotech’s Cure For Real Estate Still Uncertain

by Banker & Tradesman time to read: 6 min
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