News
THE SCIENCE OF CRE
July 21, 2011
| Yesterday, landlords in the thick of the hot biotech market were among the 200 guests at our Life Science Summit, which looked at how local lab markets are faring, the impact of the Vertex move, and access to capital. |
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| We snapped panelists BioMed?s Bill Kane, Skanska's Andrew Quirk, Forest City's Frank Wuest, and King Street?s Tom Ragno with moderator Tsoi/Kobus? Rick Kobus. A favorite aphorism for the morning belonged to Rick: ?The road to cure cancer runs through Kendall Square.? Everyone is confident about the strength of the metro Boston life science market as a national and global competitor. With municipalities fighting to attract life science companies and the revenue they generate, Frank says the City of Boston has been very supportive of development projects. Meanwhile, careful Cambridge is considering allowing greater density and Tom tells us that even suburban Lexington upzoned an area where he's developing lab space. |
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| When asked about the impact of the Vertex move out of Cambridge into a 1.1M SF build-to-suit on Boston's Fan Pier, Bill says, as a large Vertex landlord, ?we're dismantling the Longfellow Bridge? between the two cities. (We think he was joking.) He also tells us that Vertex isn't leaving 1.1M SF. It's leaving less space and will uproot in tranches. He's optimistic about filling BioMed?s space in Cambridgeport considering how well Forest City does at University Park. Bills tells us that Vertex? move is a ?bittersweet moment.? It may be difficult to anticipate, but at the end of the day, he thinks it will be "accretive." Cambridge has allure. Look at Biogen. After moving its HQ to the ?burbs last year, it's already coming back to ?Our Fair City.? |
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| Tom isn't worried about Cambridge absorbing the Vertex move because it has the institutions that attract US and global life science players. Several years ago, he was on the Beacon Capital team that helped Swiss drug maker Novartis set up shop in Kendall Square. Tom tells us that when CEO Dan Vasella toured the city he looked for the MIT dome, and that's where he wanted to set down his flag. Novartis has been in Kendall Square for nearly a decade and continues to expand. Frank adds that pharma and life science companies want to be near MIT and Harvard, where there are brains, a life science ecosystem, and a product pipeline. He says Cambridge is one of the healthiest biotech markets in the country. |
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| Andrew (right), schmoozing after the panel, says the sunbelt offers some competition in places that have academic medical research. They boast friendly weather, a high quality of life, and lower taxes. But Bill says it's tough to compete with the Harvard and MIT brands. Tom points out that the Boston/Cambridge market where labs are only 7% of the total office supply, has room to develop more lab space. In San Francisco, a strong life science market, labs make up 19% of the total supply. Andrew also says that green building— once an afterthought if budgets allowed—is now a line item. Frank agrees. He says what life science companies want most are the best and brightest minds and thinking people think green. |
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| We snapped Frank with Linear 5?s Richard Radville. In talking finance, Frank says there are plenty of lenders who understand life science now. He says Forest City has ?name brand lenders? for each of its buildings, a reversal from 20 years ago. Back then, it took convincing to get them to the table. As a private company,Tom says that there's a strong interest to finance his projects into which King Street puts 40% equity to buy and prepare buildings. Once he gets leases, lenders like Eastern Bank provide financing that covers TI and broker fees. Bill tells us that BioMed puts up 60% equity. Last year, it raised substantial capital to pay down debt and conduct an aggressive acquisition agenda. |
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| Talk about rubbin' shoulders. We snapped a contingent from a sponsor of the event, Interstate Electrical Services? company president James Alibrandi (center) with Michael Gould and Carl Brand. The North Billerica-based company specializes in the design, installation, and maintenance of the complex electrical and control systems for life science research and manufacturing facilities. Recently, it completed life science projects for Pfizer (Wyeth), Genzyme, Shire, Astra Zeneca, Cubist Pharmaceuticals, Abbott Labs, Anika Therapeutics, and ArQule. |
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| Skanska's Laura Oneissimo chats with Harry R. Feldman?s Michael Feldman and VHB principal Mark Junghans. Michael says he's encouraged; his billings are up 50% over last year. His land surveyors are working on a variety of asset types. In life science/medical they're involved in projects for Children's Hospital, Dana Farber, and Alexandria's big complex in East Cambridge. Mark?s firm is also working with Alexandria, the Broad Institute, and National Development in the Longwood Medical Area. |
