Young biomedical scientists don’t want to sit in traffic for hours every week, burning gasoline for more than $4 a gallon.
That’s part of the equation for Alexandria Real Estate Equities as it plans to bet $1 billion over the next decade that it can build, and fill up, new laboratory space that’s a short bike ride from MIT or a quick walk from the subway stop. Its idea—still in the planning stages but described last month in the Boston Globe—is to build a sprawling complex with six buildings spanning 1.5 million square feet of lab and office space in East Cambridge, integrated with four acres of open space, underground parking, and room for restaurants. If it passes muster with city officials, the complex would turn the once purely industrial hub into more of a 24-hour urban place where people live and work.
“A lot of the workforce in the innovation economy is younger people, who may still be a bit tethered to their academic institutions and live in communities like Cambridge or Somerville,” says Tom Andrews, a senior vice president and regional director in Massachusetts for Alexandria (which also has properties in the Seattle area). “They don’t really want to get in a car and drive to Waltham.”
Biotech companies have always wanted to settle near the intellectual vibrancy of great universities, hoping some would rub off and foster innovation at work. Biogen Idec, the world’s largest maker of multiple-sclerosis medicines, grew up near its founders’ labs at MIT and Harvard. Genentech, the world’s biggest maker of cancer drugs, followed the same path near UC-San Francisco and Stanford.
No doubt that’s partly why Alexandria thinks it can attract an emerging crop of younger companies to fill up more space than the Prudential Tower has in Boston. Some of the factors working in Cambridge’s favor are the same as they were in the ’70s and ’80s, when Biogen and Genentech were growing. For instance, Alexandria subscribes to the ideas articulated by Harvard Business School professor Michael Porter about industry clustering, Andrews says. Simply put, innovative companies like to cluster together to take advantage of informal interactions that can speed up technological development. Not surprisingly, about half of the 4 million square feet Alexandria has acquired in the Bay State since the mid-’90s is in Cambridge, Andrews says.
The property for Alexandria’s expansion, located between Kendall Square and the CambridgeSide Galleria (very much in the neighborhood of Xconomy’s headquarters at 10 Rogers Street), is “from a location standpoint, in the absolute sweet spot,” for new biotech development, says Greg Lucas, a principal at CBRE/Lynch Murphy Walsh Advisors. Since Alexandria is planning to introduce the space in phases, Lucas says he doesn’t think the firm runs the risk of flooding the market with surplus space.
Alexandria emphasizes that the idea is still far from becoming reality. The company has submitted proposals to the city but still needs to get approval, Andrews says. Alexandria hasn’t signed up any anchor tenants, either. But aside from being close to Biogen, Genzyme, and MIT, part of what makes Alexandria bullish about Cambridge … Next Page »