Insights Q2 2016 - page 10
Since research density and biotech clustering are the driving
factors in site selection, firms are clamoring to set up shop
in urban biotech corridors such as Boston’s Kendall Square,
which houses 130 biotech companies in 2.5 square miles.
This high demand has consumed nearly every vacant space:
Boston’s biotech availability decreased each quarter of 2015,
to just 5.4 percent at year-end. And Boston isn’t the only
market where space is tight. Lack of availability is the leading
real estate challenge facing landlords and tenants in all of
the country’s biotech hubs.
How, then, can tenants secure affordable rent in a tightening
urban market? Should they “reserve” space years in advance
by negotiating first right of refusal upon another tenant’s
expiration? Are suburban locations viable solutions?
Is acquiring a building or entering into a build-to-suit
agreement an option? What about converting traditional
office space to biotech?
While high demand is good news for landlords in these
urban clusters, where vacant space virtually leases itself and
drives high rents, landlords and tenants alike must rely on
sound strategy and creative thinking when making property
upgrades, weighing location amenities, and negotiating and
structuring leases. The biotech industry can be tenuous for
startups and small firms, which can grow and shrink quickly,
and flexibility by both parties is often the crucial factor to a
successful transaction.
Take, for example, ImmuneXcite, a privately held company
based in Massachusetts. Recently, Transwestern secured
10,323 square feet of space for ImmuneXcite in a building
converted to laboratory use in Waltham, a Boston suburb.
Property owners Griffith Properties LLC and Rockwood
Capital, also represented by Transwestern, converted the
two-story, 95,808-square-foot building to offer a high-quality,
affordable suburban option for companies that want to be
near Greater Boston’s biotech cluster.
Planting New Biotech Roots
Bryan, TX
Transwestern represented Caliber Biotherapeutics in the sale of its
139,000-square-foot, Class A production facility in Bryan, Texas. Within the
Texas A&M University-sponsored Research Valley Biocorridor and developed
for Caliber in partnership with the U.S. Department of Defense, the plant-
produced biologics building was the first of its kind. Caliber retained
Transwestern to find either a user to occupy the space in its current state, or
a company willing to invest in a new buildout. Through a national marketing
campaign, the team identified a New York plant-based biotech company
similar to Caliber that agreed to purchase the property for its own use.
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