Lab Tenants Get 180,000-SF Space Option

CAMBRIDGE, MA-Laboratory space at discount prices in Cambridge is a formula not very often found in one of the country’s hotbeds of life sciences research, but that is precisely what One Kendall Sq. is offering as 180,000 sf of supply comes to the market. The owner of the eclectic commercial complex, a partnership of the Beal Cos. and Rockwood Capital, has retained DTZ FHO Partners to market the space coming available as long-time tenant Genzyme Corp. moves tenants to other company buildings.

“It’s a bit of a competitive advantage,” DTZ FHO Partners principal Duncan Gratton concurs in estimating the rental rate to be in the mid-$40s to $50-per-sf range, a substantial drop from the average rate of $65 to $70 per sf seen for the limited supply of new laboratory space in the market. The One Kendall Sq. space is comparable in quality to first-generation product, says Gratton, who anticipates the opportunity will be well-received by the tenant constituency.

“It should appeal to a lot of companies,” he says, especially as escalating prices force some to consider alternatives outside the city. “Most firms in Cambridge would like to stay if they could,” says Gratton, who reports the fresh inventory will become available over the next six months. Both small and large lab requirements can be accommodated, he says, with about 60,000 sf of contiguous space in two connected structures, Buildings 600 and 700. Although most of the demand is expected to be organic, Gratton notes that the Cambridge allure can draw in prospects from just about anywhere.

Officials at the Beal Cos. note that they expect the global reach of DTZ FHO Partners helped in selecting the firm over several qualified competitors. According to Beal SVP Stephen Faber, the real estate services company “has the experience and relationships that will enable us to lease this project in a timely fashion,” while Gratton says a dedicated team has already been put in place. DTZ FHO’s recently formed Asset Advisory Group that focuses on landlord representation is participating in the assignment, with Gratton as the representative from that division. DTZ FHO leasing specialists Mike Brown, Joseph Fallon and Ted Lyon are also trolling for tenants on behalf of the client.

Besides the limited amount of Cambridge lab inventory, Gratton predicts activity will be driven by a series of changes being undertaken at One Kendall Sq., a property acquired by the partnership in early 2006 for $210 million. The landlord is investing $12 million to re-brand and reposition the asset, upgrading common areas, facades and mechanical systems, as well as signage and landscaping. Located on a 10.2-acre parcel, the complex features nine buildings and 675,000 sf of office and lab space, plus seven levels of parking, a cinema and multiple restaurant and retail options. “It’s a cool place,” says Gratton. “People really like working there.”