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BioMed Realty Trust faced a daunting assignment filling nearly 350,000 square feet in its three-building Cambridgeport R&D complex once Vertex Corp. decided to move to a build-to-suit headquarters in Boston’s Seaport District.
The San Diego developer adopted a leasing strategy tailored to the crowded field of early-stage life science companies looking for space in East Cambridge, with over three-quarters of companies seeking 80,000 square feet or less.
“It’s not Kendall Square, and that’s what I love about it,” said Bill Kane, senior vice president for BioMed’s Boston-area market. “Kendall Square gets a lot of attention from the global operators, but Cambridgeport still has the immediate adjacency to the MIT campus. The VC’s all love it because it’s not the place that Big Pharma is tackling.”
Over a 12-month span in 2014 and 2015, BioMed signed leases for 80 percent of the space in the two larger buildings within the Sydney Research Campus, 200 Sidney St. and 40 Erie St. Another undisclosed firm has taken all 46,000 square feet previously available at 21 Erie St., with an announcement expected in mid-October, Kane said. An industry source said Mass Innovation Labs has signed a letter of intent to relocate from BioMed’s 675 West Kendall St. property.
Sydney Research Campus tenants range from personalized cancer therapy researchers Gritstone Oncology which occupies 14,000 square feet to Seres Therapeutics, which leased 83,000 square feet in the wake of a $140-million initial public offering to bring 200 Sidney St. up to full occupancy.
“There was extraordinary demand for smaller spaces in the East Cambridge market by well-capitalized, venture-backed companies,” Kane said.
BioMed has begun capital improvements to building systems at 21 Erie St. including updates to energy and mechanical systems to meet the needs of the next tenant and others over the long term, Kane said.
Targeting early-stage companies provided diversification for BioMed’s more than 3-million-square-foot Greater Boston portfolio, which includes industry heavyweights such as Alnylam Pharmaceuticals and Shire Plc.
Timing Is Everything
The transformation of the campus has filled a niche within the East Cambridge life science cluster for early-stage companies looking for flexibility as they grow. Boston-based architects Arrowstreet led the project turning the property into a multitenant campus with new amenities, while BioMed lured chef Joanne Chang’s Flour bakery as lead retail tenant.
Arrowstreet implemented BioMed’s “FlexLab” concept that it first debuted at its nearby 325 Vassar St. property, a 40,000-square-foot converted manufacturing building.
“In life science, companies need space fast,” said Jim Batchelor, a principal at Arrowstreet. “They cannot wait for custom designs. That puts the burden on the landlord to design a combination of office areas, lab benches and conference rooms that meet their needs.”
Building upgrades included new mechanicals and more energy-efficient exhaust systems, the removal of a pedestrian bridge and creation of new outdoor gathering spots.
“In terms of the tenant roster, it speaks for itself with some really high-profile, well-funded companies and they’ve done a good job in creating a campus down in Cambridgeport,” said Mark Winters, an executive managing director for Newmark Grubb Knight. “Not only have they done a great job they’ve ridden the market up like a lot of good new projects in that area.”
Cambridgeport has established itself as a spillover biotech market in its own right, said Curtis Cole, a partner at CBRE/New England. Many of the small 1- and 2-story R&D buildings in the neighborhood have been converted into top-tier space, he said.
“Fifteen years ago, it was kind of looked upon as an up-and-coming location but today it’s gentrified, there’s amenities down that way and it’s always provided great access to MIT,” Cole said. “Because of the recent improvements to the spaces, they’re class A buildings. From the outside, they’re not the shiny new glass buildings, but from a research standpoint they work really well.”
