Editor's Note: The following is a guest post from Seth Taylor, chief financial officer and co-founder of Mass Innovation Labs.
There’s almost no vacant space left in Kendall Square, Cambridge. Any biotech or life science company in Boston would say that this is no surprise. It’s the top performing lab market in the country and companies of all sizes are eager to get a piece. A recent report from JLL revealed direct vacancy dropped below 1% for the first time since 2001, coming in at 0.8%.
As biotech companies continuously move in at a fast pace, the race for space in Kendall Square has become cutthroat. Landlords are constantly raising rent prices which have now hit a record high. On average, companies were paying $65.33 per square foot in Cambridge last quarter. This has only heightened the competition between life science companies looking to get a space in this top-market location, but what is the real driver behind this space crunch?
Competition is fierce for biotech companies ranging from early stage startups to big pharma. Having headquarters in an innovative ecosystem such as Kendall Square can give these companies the edge they need to pull ahead. Not to mention, it can be an untapped resource of smaller companies waiting to move their brightest ideas forward. Depending on the size of the company, the need for rentable square feet (RSF) can range from 150,000 to 2,000 RSF. While companies may need this space for different reasons, ultimately it’s the Kendall Square location that makes it so coveted.
As big pharma companies dominate the larger spaces, the smaller innovative companies struggle to secure their spot while driving the future pharma pipelines in an effort to secure future partnership opportunities. Accelerated Commercialization Spaces (ACS) help even the playing field by providing smaller companies with the space support they need to compete with global pharma for space. Using this model to both access real estate and streamlined services, small companies regain access to critical space while reducing their overall costs. By assisting at the earliest stages of development, these companies are able to benefit from a Kendall Square location to reach their milestones.
As the conversion of Kendall Square space from office to lab has emerged, real estate giants have adjusted their sails in an effort to meet the market demand. Space and location are two of the most important factors in launching business operations; but for life science companies this includes much more than just office space.
The lab is the heart of a life science company, where all of the critical research is done and breakthroughs are made. The lab must be built out to accommodate each company’s unique research needs, and be flexible to move and grow through the changing stages of the R&D lifecycle. To keep up with this, landlords in Kendall Square are renovating office space to lab space. Many biotech companies are finding that outside vendors and non-traditional spaces are the best option for lab space.
Outside vendors and co-working spaces offer life science companies, contract research organization (CRO) service providers, instrumentation vendors and investors a place to work together. These partnerships save time and money while heightening the R&D for small yet rapidly growing teams.
Building out a traditional lab space can take as long as four to seven months, but when utilizing an ACS, companies are able to cut this time down to a matter of weeks. They are also able to save money by dodging the high prices of a traditional lease, sourcing operations, support and hiring. It’s important to offer a cost-effective alternative to companies who may only need lab space for a specific amount of time. This ensures that they don’t waste time and resources building out a lab that may only be used for a few years.
With the competition for space in Kendall Square continuing to heat up, many companies are electing to choose accelerators to save time. This location is home to startups and mature companies all along the spectrum of the life science and biotech industries. An ACS can aid smaller companies to overcome hurdles involving time, money and space, all while positioning them at the center of the life science ecosystem.
About Seth Taylor
As the CFO and co-founder of Mass Innovation Labs, Seth Taylor seeks to remove obstacles and understand pain points for Boston-area biopharma companies. Taylor is a leader in strategy and business development, and he has a penchant for entrepreneurship. He has consulted to the life science industry, has issued patents, has spun out multiple companies including Molecularware Inc., and runs BiotechTuesday, one of the largest networking events in the Boston area.