Beyond Life Sciences: What’s Next For The Future Of Cambridge?
When commercial real estate professionals think of Cambridge, Massachusetts, the first thing that likely comes to mind is life sciences, and perhaps to a lesser though still significant extent, tech companies. Greater Boston has long been considered the king of life sciences real estate, and the Boston/Cambridge area has 52.7M SF of life sciences inventory with another 15.3M SF under construction.
At Bisnow’s Cambridge State of the Market event on July 18, the message from prominent local figures in attendance was clear: Life sciences has been and will hopefully always be the most important economic driver for the city, but the future of Cambridge must include serious work to protect this industry and others in the face of the climate crisis. Moreover, the city must focus its attention on its citizens and visitors who are separate from the life sciences and tech companies that call Cambridge their home.
“Life sciences, biotech and tech in Cambridge are an extraordinarily well-established and well-appreciated economic driver that the city and the state will still carry forward,” said Jennifer Schultz, a partner at the law firm Sullivan & Worcester and leader of Sullivan’s land use and permitting and energy/infrastructure/climate change practice groups. “But the city cannot rest on its laurels when it comes to life sciences in today’s ever-changing economy and climate. There are still people who live in Cambridge and who want or need to live in Cambridge, and attention must also be given to their interests.”
At the Cambridge State of the Market event, Schultz moderated a “fireside chat” with Massachusetts Secretary of Economic Development Yvonne Hao, Cambridge Assistant City Manager Iram Farooq and Kendall Square Association Executive Director Beth O’Neill Maloney. This discussion delved into what Schultz noted as the areas in need of attention in Cambridge to carry it into the future, including a modern and reliable electrical grid, significantly improved public transit and affordable housing, and small-business opportunities.
Bisnow sat down with Schultz to learn more about what efforts will be needed to carry Cambridge as seamlessly as possible into the future. Turns out, there are no easy answers.
Bisnow: Is Cambridge all about life sciences, or is the pendulum swinging?
Schultz: Cambridge is still the top worldwide destination for life sciences and much of the biotech world. However, Cambridge is about more than life sciences. I opened the fireside chat by asking, “What does Cambridge do well, and what are the challenges it’s facing?” While the “what does the city do well?” question was easily answered by pointing out a host of successful life sciences hubs, the challenges were focused on infrastructure concerns, including both transit and the electric grid, and affordability in terms of both housing and small-business opportunities.
Bisnow: What were some of the key takeaways from your discussion?
Schultz: Affordability was a major topic, and infrastructure concerns was another. Cambridge should not just be for the highly educated and wealthy, but it’s a balancing act not to bite the hand that feeds you, such as the life sciences economic driver, with the need to do good with the income provided by that industry.
As for affordable housing, from a zoning perspective, Farooq noted that multifamily housing is allowed by-right everywhere in Cambridge. However, making housing — and affordable housing, at that — economically feasible is a more challenging problem. No one on the panel was able to set forth a simple road map to fix this problem.
I asked Secretary Hao about a core facet of this problem, which is that despite the fact that Cambridge has made multifamily housing a right in the city, it is still very expensive to build, and the high costs of construction ultimately get passed on to tenants, thereby making the housing not affordable. I asked her if Cambridge could expect to see new subsidies from the state, and I specifically asked about the Housing Development Incentive Program, which is for workforce and middle-income housing and is the least-well-funded of all the state programs but addresses a critical affordability point: people who do not qualify for Section 8 housing but cannot pay $5K a month in rent. Hao responded that the city is in the process of developing an economic plan and can expect more pathways and more assistance from state and federal dollars in order to address this problem.
Regarding infrastructure concerns, the panelists debated whether the path to better public transit should include privatized shuttles or solely rely on the state and local public transit systems. Just as — if not more — complex are the concerns with modernizing the electric grid to support a more sustainable built environment in Cambridge. As the city and state begin to restrict the use of fossil fuels as a power source, the grid will soon be overburdened without serious investment, upgrade and innovation. There is, simply put, no easy solution here, but the problem is similarly unavoidable.
Bisnow: What aspects of the future of the Cambridge market is Sullivan & Worcester most interested in and why?
Schultz: The three areas we are most interested in are life sciences, energy and infrastructure.
We are big believers in life sciences, biotech and everything connected to that larger wheel. It’s a large part of what we do in my permitting and land use practice group at Sullivan & Worcester. For life science innovation to continue, you need the market to function, you need the investment to be there, and you need new buildings to be built or old buildings to be rebuilt. There's a true real estate asset piece of this puzzle to support medical and scientific innovation.
We are also very interested in energy and infrastructure, which is the reason I recently launched the firm’s energy/infrastructure/climate change practice group, an interdisciplinary group of practitioners across this complex and ever-changing industry. Infrastructure is about much more than roads and trains today. Utilities, power and especially electric transmission is at the heart of so much innovation, progress and challenge today. Right now, there are scores of new regulations in Cambridge to push decarbonization, which is the first step, but what do we do about the fact that we are in a cold-weather climate and have a huge life sciences lab presence that can never be without power because it puts the science at dire risk of full, utter failure? On top of that, lab buildings are huge energy users, bigger than any other asset class, and as we move away from fossil fuels and more toward electric, that will put a greater strain on the grid than it can handle now.
These are major problems that have no easy solutions, but ultimately, they are problems that both private and government money will need to be used to solve.
Bisnow: Is Cambridge at risk of becoming the next San Francisco, resulting from the change in office building utilization paired with extremely high exactions and affordable housing obligations?
Schultz: The answer from the experts onstage with me was no. Cambridge does not have a traditional downtown area, and the closest it does have to a downtown is populated with life sciences buildings, and most of those tenants still need to come into the office.
Tech, however, is different and does lend itself to remote work. At the event, we discussed that some of the subleases and vacancies that have opened up will provide a good opportunity for the smaller companies to get into the more established buildings. The new, smaller life sciences, tech and biotech companies that previously had no chance of getting into Kendall Square, because of the cost or lack of vacancies, now have a shot.
This article was produced in collaboration between Studio B and Sullivan & Worcester. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
