Think the Boston/Cambridge area is the top biotech market in the world? Think again.
Money talks, and when it comes to venture capital and investment dollars pumped into promising life sciences firms, the Boston area ranks No. 2, behind Silicon Valley.
The good news, though, that we are gaining fast on our slicker and hipper West Coast rivals, having doubled our portion of dollars going into the biotech sector since 2000.
I know all this not because I have morphed overnight into a life sciences guru; rather, I was fortunate enough to have veteran lab market researcher Brendan Carroll, who has struck out on his own, send me his latest insights – nifty new reports with intriguing titles like “Blue,” the inaugural report on the office market; “Green,” covering life sciences; “Steel” focusing on the industrial market; and “Chrome,” for tower sales.
A familiar name in Boston commercial real estate circles, Carroll was the guy who put out all quarterly must-read BioSTATus reports at the old Richards Barry Joyce and Partners.
Carroll was a one-man research powerhouse at RBJ, a startup itself back in 2001 before it rose to become one of the city’s top firms. Carroll matched the output of the research teams at much larger firms while often producing more compelling data and analysis, especially on the biotech market.
Following Transwestern’s acquisition RBJ, Carroll did a couple stints at other local commercial real estate houses. A couple weeks ago, he took the plunge and following his dream, launched his own lab market research and consulting firm, Encompass Real Estate Strategy.
And given his opening salvo of research reports, Carroll is already making a name for himself once again. After all, if he can make me sound smart, just think what he can do for you.
“Not only does this represent a larger percentage (of biotech investment) than we have traditionally had, but it also represents a serious catching up to San Francisco Bay and Silicon Valley, which has dominated us is every area of venture capital,” Carroll told me when we caught up the other day.
Carroll’s stats tell the story: Back in 2000, the Boston area attracted 14 percent of all biotech investment dollars, while the Bay Area/Silicon Valley weighed in at roughly twice that, with 27 percent. While our rivals out in Northern California are now up to 36 percent, the Boston area is now at 28 percent – or over $500 million in Q1 alone – the gap is much narrower, and nowhere near the 2-1 ratio it was at the start of the century.
We are also benefiting from a trend that has seen a few top metro markets increasingly dominate the booming biotech sector.
Back in 2000, the Boston area, the Bay Area/Silicon and San Diego accounted for half of all biotech investment dollars; now the big three suck up more than 70 percent, Carroll pointed out.
It’s a shift that has bucked other overarching technological and economic trends that have made geography increasingly less important, with the advent of instant communication and video conferencing of all types.
But the Boston area simply has a huge, embedded advantage in its array of world-class hospitals and research powerhouse universities, as well as a large constellation of venture capital firms scouring Cambridge and its environs for promising new companies to invest in.
“Not only is it a remarkably large share for a region, a large chunk of that 28 percent is being doled out within a walking radius from the Massachusetts Institute of Technology,” Carroll said.
Not surprisingly, when it comes to rents, occupancy and new research space in development, the lab market in the Boston area is hotter than it has ever been. Companies from Novartis on down have gobbled up 1.3 million square feet of lab space over the past 15 months, according to “Green,” Carroll’s life sciences report.
Overall vacancy has fallen to a super-low 6.6 percent, with the new space making nary a dent.
And it’s even lower in Kendall Square, with available space about as easy to find as a needle in the haystack, or ridiculously low .1 percent of the entire market.
And what of Carroll and his new venture?
Right now, Carroll is operating effectively out of his “garage” – the conference room and work space at the deluxe downtown tower The Kensington, where he lives.
Carroll plans eventually to start charging for his reports, which he is combining with consulting work under the Encompass umbrella. For now, they are “gratis to the universe.”
He gets a big vote of confidence from his old boss, Bob Richards, one of the founders of RBJ.
“Brendan was always amazingly prodigious and the information was consistently interesting and way beyond what everybody else was putting out,” Richards said. “It certainly helped us as a young company to be able to offer that level of service to our clients.”
The accolades don’t get much better that that.
Congrats, Brendan, and good luck!
