The final beam is hoisted into place on BioMed Realty's Assembly Innovation Park building on March 23, 2023. Photo by Steve Adams | Banker & Tradesman Staff
The ingredients of a new life science cluster are emerging between Interstate 93 and the Orange Line in Somerville, as developers seek to lure growing companies to the Assembly Square area.
BioMed Realty is targeting a June 2024 completion for the first phase of its Assembly Innovation Park campus, a 12-story, 495,000-square-foot tower. The San Diego developer and construction manager John Moriarty & Assoc. held a topping-off ceremony Thursday for the project.
After a decade of rapid growth, lab leasing decelerated in 2022 and faces new questions about the banking system turmoil’s effect on life science tenants’ finances and future demand.
“For this project we’re very confident. We have an amazing location between the scale of the project, at 1.5 million square feet, and proximity to Assembly Row,” said Salvatore Zinno, BioMed Realty’s senior vice president of development.
The campus is approved for three buildings, including a second phase currently under special permit review by the Somerville Planning Board.
Tenant demand for lab space has assumed a “barbell” shape since mid-2022, with requirements dominated by large pharma companies and small startups, Zinno said. BioMed anticipates that a portion of the demand for the Somerville tower will come from its existing tenants in Cambridge, where it owns a large portfolio in Kendall Square.
Assembly Innovation Park will rise 12 stories and contain 495,000 square feet when completed. Image courtesy of BioMed Realty
BioMed also is planning to build out some lab suites on speculation, Zinno said. The strategy has become increasingly popular among lab developers seeking to attract life science tenants that want to save on fitout costs.
Developer Greystar is constructing a 465,000-square-foot lab tower nearby at 74 Middlesex Ave., which is scheduled for completion in early 2024.
Greater Boston is retaining a leading global role in the life science sector, according to a report released this week by brokerage Colliers. But vacancies which remained around 1 percent in recent years have risen to 8 percent and are set to increase further over the next 12 months, Colliers predicts, with flat demand and rent trends.
Now, the Silicon Valley Bank collapse is adding uncertainty to future market demand, as well as the financial health of existing life science tenants that rely on SVB for operational funding.
In a statement, BioMed Realty said the “small percentage of tenants with letters of credit from SVB either have transferred or are in the process of transferring the letters to new banks.”
Editor’s note: This report has been updated to correct the completion of the core-and-shell for phase one of Assembly Innovation Park.
