Monday, February 23, 2009

Report: Suburbs hot in 2008 for biotechs

By Mass High Tech staff

The desire for suburban lab space in the greater Boston area grew in 2008, making it the only segment of the local lab real estate market to increase.

That finding is part of the Winter 2009 edition of the Greater Boston Life Sciences Market Report, recently released by the firm Jones Lang LaSalle. The Chicago-based company is a financial and professional services firm that specializes in real estate services and investment management.

Among the report’s findings was that there was a steady lease transaction volume that contributed to “stable average asking rents” and vacancy numbers for lab space in greater Boston over 2008. The regional market recorded positive net absorption of 89,570 square feet, primarily in the suburban market. In fact, suburban landlords saw their vacancy rates drop below 10 percent, and, currently, only three blocks of contiguous lab space with 50,000 square feet remain available.

Jones Lang LaSalle’s report noted that Cambridge, the state’s hub for life sciences, saw “tempered activity” in 2008, mostly in the East Cambridge submarket. Overall, the availability rate remained high in Cambridge compared to the suburbs, although most of that space was in second-generation labs that wasn’t “highly sought after.” The report also noted that, in keeping with a local trend, a number of biotechs, such as Biogen Idec Inc., relocated some or all of their operations from Cambridge to the suburbs.

Leasing activity in Boston in the second half of 2008 mostly revolved around scaled-back expansion and relocation. In fact, a speculative lab construction project halted at Longwood Center in the Boston-based Longwood Medical area after its developers failed to secure commitments from potential tenants, said the report.