Growing Demand for Lab Space Between
5,000 -15,000 SF Across Greater Boston
By Mike Ogasapian and Elizabeth Holmes
The demand for lab ready space has been quietly shifting over the last year away from what was a very robust market for large block, Class A lab space from mid-2020 to mid-2022. This shift is not so much a complete re-direction but more of a slowdown in response to several economic factors. This phenomenon is not just limited to Massachusetts but in other life science markets such as San Francisco and Raleigh.
In Greater Boston, we are seeing a continued demand for move-in ready lab space ranging between 5,000 and 15,000 square feet in buildings that are not necessarily Class A nor the most expensive buildouts. Many companies that are growing their operations are opting for 2nd generation sublease space or lab ready R&D buildings to achieve their ends while controlling costs.
Recently, we completed several deals in this range: Blue Martin Laboratories, a biomedical company specializing in the development of innovative healthcare methods, leased 5,385 square feet of lab space at 100 Trade Center in Woburn, MA; Quantum Diamond, which has developed atom-sized quantum sensors in diamonds, functioning under the hardest conditions, leased 5,811 square feet of lab space at 1466 Main Street in Waltham, MA. Also in Waltham, Iradiant Technologies, a nanotechnology company, leased 6,500 SF at 425 Waverly Oaks Road.
For landlords, this is a great opportunity to attract tenants as long as the building has loading docks, elevators, and ample power (at least 400 amps). Many growing lab users are very conscious about cost but want to continue with their projects, hoping for the next rounds of funding. They also have the potential to become a larger tenant.
With slight improvements and retrofit for lab space, landlords can capture this market demand for such space not only in well known life science hubs such as Cambridge, Watertown, Waltham, and Lexington but also in lesser known areas such as Woburn, Beverly, Andover, Bedford, and Billerica. These towns are very friendly for smaller users since they allow for PH neutralization to be accomplished via a chip tank as opposed to a centralized system for an entire building, which is extremely prohibitive in multi-use buildings.
We expect life science companies to continue to focus on move-in ready lab space for as long as supply is available. Class A lab will have less demand due to quality sublease options but will continue to attract well capitalized companies. Lab ready R&D buildings will play a large role in the current market where funding is limited, and cost savings are a top priority for growing lab companies looking to extend their cash runway.