News
Hyper: Good for Clusters
October 17, 2011
| Dr. Eric Lander hardly looks like a revolutionary in his blue blazer and silk tie. But he is. And he's president and founding director of the Broad Institute of MIT and Harvard in Cambridge. (It's hard to ask someone so accomplished to wear a Revolutionary War coat.) |
 |
| We snapped Eric, who is a world leader in rethinking how science and medicine approach diseases like cancer, diabetes and tuberculosis. And (what could be better) this revolution is good for real estate. Indeed, the Broad in Kendall Square will break ground Wednesday on a new $375M plus building adjacent to its current HQ, completed just a few years ago. Boston Properties is developing the new facility designed by Elkus Manfredi. |
 |
| Cambridge has become a blockbuster life science cluster with global draw not just because it has one or two top research centers. At the NAIOP's breakfast last week at the Renaissance Waterfront, Eric said it's because it's the nerve center for a network of top tier researchers, healthcare pros, and financial firms. They're within 15 minutes of each other, so they can readily collaborate. Further, he says every major pharma company is or will come here to follow the lead of drugmakers like Merck, Pfizer, Novartis, Bristol Meyers Squibb, and Sanofi Aventis. (Sorry NY/NJ.) |
 |
| As far as BioMed EVP Matthew McDevitt is concerned Boston metro is a hyper cluster, ?so core, it's unbelievable.? Of BioMed?s markets—San Diego, Seattle, San Francisco, NY/ NJ, Pennsylvania and Maryland—Boston is its No. 1 life science cluster, followed by San Fran because, he says, it has every known demand generator. Basically it has built bridges (yes, real brick and mortar bridges) between the labs, healthcare institutions, academic medical centers, and businesses needed to take therapies from bench to bedside. |
 |
| Cornerstone Real Estate Advisers president Mark Higgins also believes in the Boston life science cluster. His company has invested many millions in equity to partner with The Fallon Co to build the new $900M Vertex Pharmaceuticals HQ at the Boston waterfront. He says, he's ?still stunned? that they made such a big bet. But, he took the plunge because Boston metro is a leader in two of three big drivers of the US economy going forward: biotechnology and healthcare (the third is energy). Still, he isn't forgetting about other markets and is buying into value-add playsin Denver, Dallas, Houston, and Florida where he expects job and rent growth. |
 |
| AEW managing director Marc Davidson offered the comfort that hedoubts we're going into a double dip recession this year. But ?13is another matter. The Bush tax cuts will expire and spending cuts will go into effect. Marc says if growth remains slow, recession may loom. (The Mayans knew that, hence their calendar ending in 2012.) But as one who's been buying core, he's satisfied. Marc tells us that One Brigham Circle, the mixed-use property adjacent to the Longwood Medical Area, is worth $100SF more than what AEW paid for it a year and half ago. Going forward, Marc expects to keep buying distress in a loan-to-own play. |
 |
| Boston Properties President Doug Linde says he's at peace withMort Zuckerman?s pessimism over the economy because Mort thinks macro and BP is doing business at the micro level, zeroing in on pockets of economic strength. For instance, in NYC Doug says there's been ?significant improvement? in job growth. Indowntown Boston, where a great deal of low-rise space is available, the picture isn't quite as bright. Doug says it doesn?t have an obvious demand generator to match Cambridge?s life science cluster. Doug tells us that BP is staying away from A properties in B cities like Chicago, Baltimore, or Charlotte, where he says every major lease rollover is ?a game of chicken.? (Well, it's better than it being a never-ending game of Kick the Can.) |
