The Cambridge lab market showed tremendous velocity in 2010 and outpaced expectations going into the year.
This positive momentum was partially offset by Schering-Plough’s decision to consolidate its research and development operation in Greater Boston by putting 130,000 square feet of lab space on the sublease market at 320 Bent St. in East Cambridge.
At year-end 2010, the availability rate across Cambridge was only down 30 basis points from 15.3 percent to 15 percent.
From a transactional standpoint, 2010 was robust, with more than 40 deals closing throughout the Cambridge market, totaling nearly 800,000 square feet. The tenant making the biggest waves in 2010 was Sanofi-Aventis, which continued to increase its presence in East Cambridge. The company signed three leases totaling nearly 200,000 square feet, the most significant of which was an 112,000-square-foot deal at 640 Memorial Drive.
This lease allowed MIT to kick off a complete renovation and rehabilitation of the landmark building formally occupied by Millennium Pharmaceuticals.
Aside from Sanofi, the largest deals of the year included Partners Healthcare’s renewal on 122,000 square feet at 65 Landsdowne St. in University Park; Momenta Pharmaceuticals’ 78,000-square-foot renewal at 675 West Kendall St.; and Agios Pharmaceuticals’ 38,000-square-foot renewal and expansion at 38 Sidney St.
Pricing for lab space in Cambridge has reacted to the forces of the marketplace with average asking rates topping $50 per square foot, to reach $51.15 per square foot, NNN (triple net lease).
In the ownership and debt world, one major event in the Cambridge Lab market will be remembered in 2010. KBS Realty bought the debt of the well-known One Kendall Square project from Anglo Irish Bank. One Kendall Square was also extremely busy on the leasing front: Seven deals were closed with early-stage life science companies totaling north of 70,000 square feet, and a lab incubator was introduced to the market at Building 1400.
Greg Lucas is a principal and Curtis Cole is a senior vice president and partner at CB Richard Ellis/New England in Boston. E-mails: greg.lucas@cbre-ne.com and curtis.cole@cbre-ne.com
