Skanska's Two Drydock Attracting Lab Users Late To The Amenity Game

Skanska’s newest Seaport building was built on spec with office users in mind, but its amenities are now attracting lab users searching for better tenant experiences.

The 221K SF Two Drydock, which opened early last year in the Seaport’s eastside industrial blocks, features a gym and a lounge, unobstructed views of downtown Boston and the harbor from several floors, and will deliver 9K SF of retail including a ground-floor beer hall. The $128M building broke ground in 2018, around the same time Skanska was developing, leasing up and selling three other Seaport office projects.

“We’ve got a lot of tenants knocking on our door saying, ‘Can we come into your building as a lab?’” Skanska USA Commercial Development Executive Vice President Russell DeMartino said. “And we’re starting to now entertain that, even though it’s not how the building was conceptualized or designed.”

The building design by Skanska and architect SGA was unchanged during the coronavirus pandemic; it didn't follow the conversions of more than 6M SF of office building space in Greater Boston into labs. Two Drydock, which is 71% leased to tech-oriented tenants, includes unfinished space on the 6th, 11th and 12th floors. The vacant floor plates stretch 27K SF, include outdoor patios and have few columns, allowing for flexible, wide-open workspaces for either lab or office users.

Office demand in Boston remains muted, still recovering from record-high vacancy and record-high negative absorption fundamentals in the past 12 months. Vacancies in the Boston market sat at 15.1% in Q2 2021 while absorption was negative at 110K SF, in the red for the fifth quarter in a row, according to Newmark.

Skanska didn’t sign a lease at Two Drydock in 2020 after inking deals in 2019, DeMartino said. Prospective tenant tours ticked up after a spring lull to two to three per week in the past three months, he said. Amenity offerings at Two Drydock include the 6,500 SF 13th-floor lounge, which can be reserved for company parties; an adjacent 2,500 SF gym; and an incoming Lord Hobo beer hall on the ground floor expected to open this winter.

Employees on the building’s 8K SF rooftop space can watch ships pass in the Boston Harbor, gaze at Boston’s Financial District skyline or the Back Bay, or listen to and watch concerts at the Rockland Trust Bank Pavilion blocks away. The sights won’t be obstructed by future vertical development because airport air rights cap building heights in the Seaport, DeMartino said. 

“You're only on the 13th floor here, but you have a view that is comparable to a 30th-floor view somewhere else,” he said.

Lab tenants who have expressed interest in Two Drydock are enticed by the “over-amenitized” building and by discrete rooftop mechanicals tucked into the building, a design in contrast to the unpopular rooftop mechanicals at lab-only developments that sit dozens of feet high, DeMartino said.

“A lot of the labs, the latest generation of lab buildings, are all about what's the best lab space, but they kind of forget that it's also about the workers,” DeMartino said. 

The life sciences industry in Massachusetts is expected to add 20M SF of inventory by 2024, according to the Massachusetts Biotechnology Council. Tenants in the airtight life sciences market are paying rents as high as $135 per SF in Kendall Square to secure much-needed space as the industry grows exponentially. Although — or perhaps because — the appetite for lab space is unwavering, life sciences landlords in the pandemic era didn’t enter into the amenity wars that office and multifamily markets have.

Tenant experience platform HqO CEO Chase Garbarino said his company had conversations with a handful of large life sciences landlords in Cambridge recently who said they felt they were falling behind in the tenant experience arena. HqO, which wasn’t involved in Two Drydock, has heard again from those landlords who now want to take their tenant experience more seriously, Garbarino said.

“With increasing rental rates, they’re getting more and more pressure from tenants [saying] we’re paying an arm and a leg to be here,” he said. “The tenant experience demands are getting more significant.”

Two Drydock’s office roots are apparent in its ground-floor offerings. Boston chain Render Coffee announced Tuesday afternoon it will open a ground floor space next year, which will flow will flow into the building’s lobby. Across the way, the Lord Hobo beer hall will provide food and beverage in the quiet section of the Seaport occupied by lab developments, industrial buildings and one lunchtime seafood restaurant.

The lobby won’t include a check-in desk, but rather have a concierge or security guard roaming the space to help tenants. The contactless experience begins in the above-ground parking garage, where technology will scan tenants’ license plates and automatically open its doors. Employees walking from the parking lot into the lobby will use a new Skanska phone app, Connected by Skanska, to scan into the elevator gates and into the elevator. A buttonless elevator will take users straight to their preferred floor, all part of the app.

The app, contactless parking system and open lobby design were implemented before the pandemic, well before office owners flocked to purchase touchless technologies across their portfolios.   

“Well-designed, modern buildings have already been the best response to Covid,” DeMartino said.

UPDATE, SEPT. 21, 4:40 P.M. ET: This story has been updated with information from Skanska regarding an incoming coffee shop.

CORRECTION, OCT. 11, 8 A.M. ET: An earlier version of this story incorrectly identified the building's vacant and amenity floors. This story has been updated.