The Boston office market has become the object of envy of property owners all over the United States, thanks to the expansion of biotech companies that are swimming in cash. The life sciences were a coveted field in commercial real estate even before the Corona plague. But their growth went into high gear when billions of dollars began to be poured into the vaccines, and when the vaccines were shown to be effective against the virus.

The latest example is that of Marcus Partners, a real estate investment company that recently announced that it would build a 21,000.square.foot complex in Boston Sports, and that Ginkgo Bioworks would lease most of the space.

Other projects that are in the planning or construction stages may double the area inhabited by this area in Boston to more than 5.5 million square feet in the next decade, according to Colliers International Group, a commercial real estate services firm.

While office owners in New York City, San Francisco and Chicago are struggling with falling prices, declining occupancy rates and uncertainty about when business will return, the life sciences field is giving Boston a boost. “Boston will be able to recover faster than other cities because of the life sciences locomotive,” says Arun Judka, director of research at Colliers.

Shares of Alexandria Real Estate Equities, which focuses on the acquisition and development of life sciences assets, have risen 17.8% since the beginning of 2020, according to Steve Squa, an analyst at Evercore ISI. By comparison, shares of income.producing real estate companies specializing in offices fell by 3.6% and shares of commercial real estate companies by 1.8%, and shares of tourism real estate companies by 9.2%.

In the Boston area alone, venture capital funds pumped $ 7.2 billion into life sciences companies in May – compared to $ 8.2 billion they invested last year, according to Crunchbase.

“But one does not want to let the plague raise its head again,” says Brian Golden, director of the Boston Planning and Development Agency. “And that means a lot of investment in the areas of disease, vaccines and public health.“

12 hospitals and 30 colleges

Boston has become a global center of life sciences because of 12 medical centers and 30 colleges, including MIT and Harvard University. These have become a solid source for talented employees and fertile ground for start.ups.

“In Boston, it’s not hard to recruit,” says Barry Canton, one of Ginkgo’s founders and the company’s VP of technology. Ginkgo is a typical example of a company that grew up in the city. Employees recently announced a $ 15 billion SPAC merger.
Outside of the life sciences sector, the Boston office market is actually in trouble. The vacancy rate rose to 15.6% at the end of March, from 8.7% at the end of the first quarter last year, according to Colliers.

Pushes the rest of the sectors

But the growth in the life sciences sector also helps traditional offices because there are entrepreneurs who buy old properties and turn them into labs or spaces for pharmaceutical companies or biotech.
Alexandria, which owns about 1.4 million square feet in the Boston area, is redeveloping a $ 1.5 billion property in the stadium area of ​​the Red Sox Group. Joel Marcus, chairman of Alexandria, says he sees little danger in biotech companies giving up space because of moving from work from home – because most of the lab work cannot be done from home.

He expressed doubt that biotech companies would leave Boston in favor of states with lower taxation, as high.tech companies in California do. “In the field of biotech, you have to be near big research institutions,” he says. “You can not just go through with your computer.“

By Editor

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