According to a real estate analysis, the per-square-foot costs in Kendall Square increased $18 in 2018.
The one-square-mile region of Kendall Square in Cambridge, Mass. is arguably the premier biotech hub on the east coast of the United States. Companies large and small flock to the area to take advantage of the vast intellectual collaborations taking place. With the hype and appeal, it should come as no surprise it’s an expensive area to set up shop.
In a recent report, the Boston Business Journal pointed out just how expensive Kendall Square can be. The per-square-foot cost of space in the area is $88. That’s much higher than the $60 price in San Francisco and the $79 price per square foot in New York City, the Journal reported, citing data from a new Cushman & Wakefield report. The price is high in Kendall Square because the availability of space has gone down as more and more companies seek to establish a presence there, such as Allergan, which announced in January that it will establish an R&D facility in Kendall Square.
As the Journal noted, the price of real estate in Kendall Square is rapidly increasing. In July of 2018, the price was at $70 per square foot. And it seems that the price could make another jump. Bob Richards, vice president of Cushman, speculated that the cost of real estate in Kendall Square could soon hit $100 per square foot, the Journal said.
As space in Kendall Square has become tight, some real estate developers have looked to other areas for potential development, such as Lexington, Mass. Several years ago King Street Properties banked $46 million on a new 91,000 square-foot structure for pharmaceutical companies seeking cheaper space in the Boston suburbs. In 2017, another developer, The Abbey Group, announced plans to develop 5.6 acres in what the company describes as the ideal life sciences complex for the greater Boston area. The new space is located just a few miles from Kendall Square. The buildings will include space for laboratories and offices for life science companies, as well as 80,000 square feet of retail and culture space for the employees on the campus and the surrounding neighborhood.
In November, three Boston-area developers, King Street Properties, Mugar Enterprises and the DiStefano family, proposed a possible new life sciences campus in the area to compete with Kendall Square. It is a 607,900-square-foot campus on a 4.3-acre site in Allston, an officially recognized neighborhood of Boston. As BioSpace previously reported, the new campus, called NEXUS – The Allston Innovation Corridor, will include laboratory space, area for research and development, as well as office, residential and civic space in three buildings.
