Suburban lab space is in high demand as East Cambridge’s supply shrinks

Suburbs like Waltham, Watertown, Bedford and Lexington have seen a 30 percent increase in demand for lab space in the past year.

Don Seiffert
BioFlash Editor- Boston Business Journal

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A new report looking at life science laboratory space in Greater Boston finds fast-growing demand in the suburbs as top-quality lab space in the Kendall Square area gets harder to come by.

The Life Science Outlook, a report put out by real estate services firm Jones Lang LaSalle, confirms this region’s strength as a leader in biotechnology and medical device firms. The total number of employees in those firms last year was about 82,000, representing a 1.5-percent increase from the year before and second only to San Diego as a percentage of the total workforce. Greater Boston also remains one of the country’s leading recipients of venture capital and funding from the National Institutes of Health, with $1.4 billion in VC and $2 billion in NIH money last year.

Don Domoretsky, a vice president at Jones Lang LaSalle, said that among the notable findings in the report is a 30 percent year-over-year growth in the amount of space being sought in the suburban real estate lab market. He said the biggest driver of that growth is the expansion of life science companies that are already out there. But the report also cites greater vacancy rates and much lower rents in the suburbs as compared to East Cambridge: between 10 and 20 percent of the 6.7 million square feet of emerging lab space to the north and west of Cambridge is vacant, versus about 7 percent of the 7.4 million square feet in East Cambridge.

The cost of that space is also half the cost (or less) of East Cambridge, with the Watertown and Waltham area commanding $24 per square foot for annual lease terms, the Lexington and Bedford area getting an average of $28, and Woburn and Beverly (where Cummings Properties recently developed a huge mass of lab space) asking $19. East Cambridge, meanwhile, continues to see an average of $51 per square foot asking price.