Home to Harvard University and the Massachusetts Institute of Technology, Cambridge sits directly across the Charles River from downtown Boston and serves as the core of Greater Boston’s reputation as an intellectual powerhouse. These academic institutions, and the many research institutions that surround them, fuel the Massachusetts innovation economy and spawn Nobel Prize winners, high technology start-ups, and life science companies at an amazing rate. Cambridge may well be the most prominent life science market in the world, with local companies including Biogen, Millennium Pharmaceuticals, and Genzyme, as well as International firms such as Novartis occupying large facilities. Established technology firms, as well as venture capital, consulting, and a diverse array of other service firms also call Cambridge home to gain access to Cambridge’s highly educated workforce and unique urban culture. Submarkets within Cambridge are East Cambridge, the largest, Harvard Square, a niche but very desirable cluster around Harvard University, and Alewife Station/Route 2, which has developed around the Red Line MBTA station in West Cambridge.
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Market fundamentals remain strong in Cambridge as lease and sale transactions continue at a steady pace. Small to midsized lease transactions comprised the majority of the activity in the second quarter of 2008. The combined availability rate for office and lab space continues to hover at a stable 15 percent. The average asking rent for office space inched up slightly to $46.06 per square foot gross while the average lab rent stayed steady for the second consecutive quarter at $53.31 per square foot NNN.
Absorption for the quarter was positive as a result of two significant transactions, helping offset a negative first quarter and resulting in (110,917s.f.) of absorption year-to-date. First, CDM renewed its headquarter lease at 50 Hampshire Street for 180,000 square feet. Second, Abt Associates and New Boston Fund executed a sale-lease back of Abt’s 126,149 square foot headquarter building at 55 Wheeler Street. The transaction was completed for $24.5 million.
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LEASE
JumpTap
10 Canal Park
23,813 SF
Sublease
Permabit, Inc
25 First Street
17,230 SF
Renewal w/ expansion
Allurent
222 Third Street
10,202 SF
Renewal w/ expansion
SALE
The Life Science Portfolio May 2008
$90,500,000 ($611/SF) 148,116 SF
39 John F Kennedy Street
May 2008
$25,750,000 ($1,022/SF) 25,200 SF
55 Wheeler Street
March 2008
$24,500,000 ($194/SF) 126,149 SF
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