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Bill Kane
Executive vice president, East Coast and U.K. Markets, BioMed Realty
Age: 49
Industry experience: 27 years
Bill Kane got in on the ground floor of Kendall Square’s life science boom working at pioneering developer Lyme Properties, and planted the industry’s biggest flag in Boston’s Seaport District helping The Fallon Co. land Vertex Pharmaceuticals’ 1.1 million-square-foot headquarters. Now the East Coast and U.K. leader for BioMed Realty, Kane oversees a Greater Boston portfolio that’s over 98 percent leased. But BioMed is still finding ways to grow in industry nucleus Kendall Square, with development plans for the 1-acre Constellation Center parcel that it acquired in 2018 for $50.5 million. BioMed operated as a publicly-traded REIT until its 2016 acquisition by Blackstone Real Estate Partners for $8 billion.
Q: What are you hearing from the community outreach on the Constellation Center site?
A: We worked really hard on that transaction and we saw it as strategic and an opportunity to complement one of the largest sites in Kendall, a 10-acre site that we control and operate. We know that working with the community is important. So we are going through a very deliberate process to understand what the broader environment needs, and we don’t want to rush to any conclusions. We’ve rebranded the broader 10-acre site as Canal District Kendall, but we’re not at a point where we commit to a specific timeline [to submit a proposal].
Q: Why is the Boston Seaport District suddenly in favor among life science developers after the lull following Vertex’s move from Cambridge?
A: I would describe it as a real concerted effort by Vertex to move to one specific location, but more projects opened in Kendall Square too and a lot of product came online. We finished up projects at BioMed that made for more viability in Kendall Square, such as 301 Binney St. and 650 East Kendall. It coincided with a structural shift in the industry where the fundamentals started to push users into these buildings. It really boils down to a surge of investment capital that entered the market. The venture capital industry really picked up. It was close to $5 billion last year for Massachusetts alone, and over half of that landed in Cambridge. That coincided with faster approvals from the FDA that allows these businesses to move their drugs to later stages faster, and technology drastically improved. The gene therapy research has changed a lot of the ways that companies do their work.
Q: What’s the biggest risk to the industry’s growth?
A: We have studied that closely. We have north of 200 tenants that we talk to and ask them what their needs are. Our parent, Blackstone, has invested in Clarus, a VC arm that has a deep bench of research analysts that understand the pulse of the industry. What we’ve found out is despite the highest level of efficiency and computational research, it still doesn’t negate the need of improving something physically. There will always be a need for physical lab space, to make sure it’s effective and safe for humans.
There’re a couple of things we’re finding out about the business: the speed to innovate is becoming more important, and it’s creating an urgency to be proximate to relationships, creating this cluster theory. Even though we’re 98 percent leased in Cambridge, we’re seeing 10 percent of our portfolio transition each year, and that relates to the frequency of change. They’re turning to real estate providers to have more of a portfolio solution than a one-building solution for adaptability and flexibility.
Q: How has BioMed’s business plan changed with the transition from a publicly-traded REIT to a private owner in Blackstone?
A: Naturally, changing from a public company forum to a private company has allowed us to focus on real estate itself as a business without the obligation of reporting in a certain way. It’s allowed us to broaden our reach in a big way through Blackstone’s portfolio: they opened up opportunities in other countries and other business we didn’t have when we were publicly traded, and relationships within the life science industry. What’s interesting is that Cambridge, U.K. has very similar fundamentals as Cambridge, Massachusetts. It has a very strong history of basic science and strong academic drivers that promote research, attract talent and commercial enterprise. We’ve secured 400,000 square feet there and procuring another 200,000.
Q: How is the industry dealing with the region’s mobility crisis, given Kendall Square’s reliance on the MBTA Red Line?
A: It’s galvanized us. It’s been a necessary catalyst to force us to start talking through a common voice, the Kendall Square Association, and MassBio. It’s forced us to think proactively and help the city and state plan ahead. But I can’t think of a way it has slowed down progress. It’s something that’s important to address, but the demand we’re seeing to move into Kendall is still extraordinary.
Q: Does BioMed seek to maintain a specific allocation of its portfolio by region for diversification?
A: We’re very analytical in the way we look at the activity in each market, specifically the density and the depth of each market. We’re very happy with the volume and the depth of each market. I’m not saying we’re necessarily trying to grow one more than the other. With a strong capital partner in Blackstone, we evaluate each property on a case-by-case basis rather than a regional strategy.
Q: What’s BioMed’s strategy on incubator and co-working space and are there any plans to operate them internally?
A: We feel very strongly about the need for supporting the innovation network in all of our clusters and balancing each of our environments with large and small companies. With work closely with all of the incubators and coworking operators. We’re really impressed with the way they do their business. We work with them as tenants. Our business model is to do an exceptional task at building environments and access to capital, but we see innovation and co-working as a highly scientific basis of delivering services to clients. There’s a high proportion of Ph.D’s who actually run the spaces.
Q: What percentage of the Greater Boston portfolio is in the suburbs and any plans to pursue suburban office-lab conversions?
A: I would say 100 percent of our portfolio is in Greater Boston or the outer Cambridge ring. Our Watertown investment [at 65 Grove St.] is about the furthest out. We’re extremely pleased with the performance of that asset and we feel strongly about Watertown. What’s important is we offer a variety of spaces and alternatives to our tenants. When they sign a lease with us, they’re not just signing a lease for one space, but 11 million square feet of alternatives. Those could be a very large, robust lab facility with higher–capacity utility services, to smaller, lighter spaces that don’t need all of the mechanical systems and storage. We use the term “coopetitition” and we’re all pulling in the same direction. We’re beyond the point now where we’re trying to put Kendall Square on the map. We’re trying to maintain Massachusetts’ No. 1 status.
Kane’s Five Favorite Winter Hikes in the U.S.
- Mount Rainier
- Mount Washington
- Mount Chocorua
- Carter Notch
- Mount Moosilauke
