When BioMed Realty Trust’s last tenant vacated a nondescript, two-story brick lab building in Cambridgeport a year ago today, the REIT was forced to make some tough decisions for the structure’s future.
The property underwent interior renovations and is now half what the firm calls universal flex labs for its adaptability and half office space.
But last year, it was 70 percent outdated laboratories and 30 percent office, although life science companies have been requiring increased dry lab space as more research is done via computers.
Renovations to the 60,000-square-foot building cost below $150 per square foot, said William Kane, BioMed’s senior director of leasing and development, although he would not give a hard number.
While those improvements updated the labs and offices with new airflow and other systems, the labs themselves are generic with a Spartan finish, as the sinks and vent hoods are the only permanent equipment installed by BioMed. That allows startup science companies the flexibility they require to customize the space they will occupy for often only three years, and helped keep costs down for construction.
Venture capital-backed companies have a year and a half of cash in-hand, but they do not have any revenue yet coming in during research and development, so efficiency is key, Kane opined. So that gives landlords a relatively new company with high degrees of change that wants a three-year lease term. And with tenant improvements, some labs can require up to $350 per square foot, he added.
"When you put that kind of money into a building, you’re really scared when you’re doing a three-year term," Kane told the crowd at a NAIOP event this morning, where members took tours of the 325 Vassar St. facility. "We basically have to underwrite change every three years. This completely changed how we design core shell space."
That newly conceived lab space got Epizyme, which creates cancer drugs, to sign a three-year lease at 325 Vassar St. The universal flex labs were perfect for the company that has grown from four employees when it started to 34 today, said Jason Rhodes, chief business officer. The company’s 18,400 square feet at Vassar Street nearby about doubled its former footprint at 840 Memorial Drive. While they looked first at Kendall Square and the suburbs, nothing there matched their price range.
"It’s frankly very hard to find space in general in Cambridge if you want less than 20,000 square feet," Rhodes offered. "For us, and I’m only partly kidding, 300 yards away from Kendall Square is out-of-state."
