441 Morgan Ave | Lot U | Cambridge Crossing | Cambridge

bigpicture7 said:
Good to see some leasing activity in this one:

www.bizjournals.com/boston/news/2023/08/10/cambridge-crossing-lands-lab-leases.html

Commercial Real Estate
Astellas signs lease at new Cambridge Crossing lab building
Click to expand...

From the article:

The Japanese pharmaceutical giant will occupy about 62,000 square feet at 441 Morgan Ave., a 10-story building whose core and shell is nearly fully built out. It expects to move into the facility next year.

Astellas has about 25,000 square feet at 1030 Massachusetts Ave. near Cambridge’s Central Square that it will vacate. Its Cambridge Crossing space will include labs and offices, including an incubator space for partner businesses. The location is expected to ultimately house a few hundred employees in areas like research and business development. The move will not affect operations at the Astellas Institute of Regenerative Medicine in Westborough.

That the Astellas lease is one of 2023’s largest speaks to how much demand for life sciences space has fallen over the past year. In 2022, there were at least seven lab leases of more than 200,000 square feet, including Takeda and AstraZeneca mega-leases in Kendall Square.
Click to expand...
(emphasis mine)

So a net change of +37,000 square feet is one of the largest leases of 2023. I'd love to be a fly on the wall in the boardroom of a developer with lab space currently under construction. I bet they are sweating bullets, desperately hoping that they're not throwing away hundreds of millions of dollars to construct buildings that will sit empty.
 
Brick Top said:
From the article:


(emphasis mine)

So a net change of +37,000 square feet is one of the largest leases of 2023. I'd love to be a fly on the wall in the boardroom of a developer with lab space currently under construction. I bet they are sweating bullets, desperately hoping that they're not throwing away hundreds of millions of dollars to construct buildings that will sit empty.
Click to expand...

And you have a celebratory tone about what you perceive as bad news for developers, why? This is a lease deal, and a lease is a lease. Things change week by week in this economy, and they'll continue to change.
 
bigpicture7 said:
And you have a celebratory tone about what you perceive as bad news for developers, why?
Click to expand...

Because if building lab space (which only drives up housing costs) is no longer so lucrative, developers will hopefully pivot to building housing.

This is a lease deal, and a lease is a lease. Things change week by week in this economy, and they'll continue to change.
Click to expand...

Things can always change, but if you look at the actual numbers, it's very hard to imagine a dramatic turnaround within the next year or two. Demand for lab space would have to increase roughly ten-fold to fill all of the lab buildings currently under construction.
 
Brick Top said:
Because if building lab space (which only drives up housing costs) is no longer so lucrative, developers will hopefully pivot to building housing.

Things can always change, but if you look at the actual numbers, it's very hard to imagine a dramatic turnaround within the next year or two. Demand for lab space would have to increase roughly ten-fold to fill all of the lab buildings currently under construction.
Click to expand...

I agree with what you are saying in general, but completely disagree with it for the particular instance of CX. CX is a Planned Unit Development with specific sub-parcels earmarked for specific uses following from a years-long planning process with the city. There is, to my knowledge, much more in-queue development space at CX already earmarked (and in some cases Special Permit-Approved) for Residential than there is remaining for Labs because (low and behold) the developer got going on the lab buildings before the residential (151 Park being an exception). For instance, next/soon up in the development queue, Parcel R and Parcel L-M are already in the master plan as residential. R is already approved and shovel ready.

So I read this as: our best shot at getting this residential done asap is for this developer to get their already-built lab space leased and investments recouped. For developers who have no intentions and ambitions to build residential: sure, screw-em. For developers with approved residential plans in-hand and shovel ready, I have a different attitude.
 
bigpicture7 said:
I agree with what you are saying in general, but completely disagree with it for the particular instance of CX. CX is a Planned Unit Development with specific sub-parcels earmarked for specific uses following from a years-long planning process with the city. There is, to my knowledge, much more in-queue development space at CX already earmarked (and in some cases Special Permit-Approved) for Residential than there is remaining for Labs because (low and behold) the developer got going on the lab buildings before the residential (151 Park being an exception). For instance, next/soon up in the development queue, Parcel R and Parcel L-M are already in the master plan as residential. R is already approved and shovel ready.

So I read this as: our best shot at getting this residential done asap is for this developer to get their already-built lab space leased and investments recouped. For developers who have no intentions and ambitions to build residential: sure, screw-em. For developers with approved residential plans in-hand and shovel ready, I have a different attitude.
Click to expand...

I totally agree with all of this. My slightly celebratory tone in my original post concerns the lab construction bubble bursting in general, with this lease being yet another piece of supporting evidence. I have nothing against this particular developer, and didn't mean to come across as if I were singling them out.
 
Brick Top said:
I totally agree with all of this. My slightly celebratory tone in my original post concerns the lab construction bubble bursting in general, with this lease being yet another piece of supporting evidence. I have nothing against this particular developer, and didn't mean to come across as if I were singling them out.
Click to expand...

Got it, and thanks for clarifying. And to be clear on my side, I have zero affiliation with this developer nor any personal financial skin in their game here. Simply knowing a bit about what's going on in Cambridge, however, I do actually believe that significant housing investment is actually in-process here, and would prefer that this developer not bankrupt themselves before building it! So, since Parcel U is already mostly built anyway, I was glad to see some cash inflow there. It is a fairly recent phenomenon, but planners in Cambridge have indeed been trying to couple residential development with commercial (meaning: to not let the latter race ahead of the former, as it of course had been doing), this being one case (the MXD district being another).
 
HenryAlan said:
Can you elaborate a bit on how this works?
Click to expand...

New jobs bring in new people from outside the area. If we don't build enough housing for these people, they will be competing with the rest of us in an already very tight housing market. Thus, housing costs go up due to increasing the demand while not offsetting it with enough new supply. It's basically the world's simplest concept we're talking about here....

I too am ready to see the lab boom come to an end. Mainly I want the parcels at the Congress Street Garage and that garage by South Station to go back to the drawing board, as they represent a knee-jerk crime against humanity for one, and an epically botched opportunity for the other. Both should come back as taller/slimmer housing projects. The one by South Station could literally be a 700' residential, and we're going to settle for a 190' lab!

For North Point in particular, it's also time for them to go back to the drawing board and come back with much taller residential buildings for the remaining parcels. I'm pretty sure one of them is literally only going to be 7 floors! Now that Kendall is starting to allow a bit of height we should revisit this master plan before it's too late. There aren't many better locations or opportunities for height in the whole metro than right here.
 
Thanks, I assumed that's where Brick Top was going, but I think there is more to it than just that lab buildings can theoretically stimulate housing demand by increasing population. Regardless, if the lab market crashes, where so much capital is already tied up, I'm not sure that will result in a sudden surge of housing construction. I don't think the two are related so much, in that what currently prevents housing development is mostly zoning and process related, rather than whatever extent labs might be crowding out necessary building resources (capital, materials, labor, etc.)
 
HenryAlan said:
Regardless, if the lab market crashes, where so much capital is already tied up, I'm not sure that will result in a sudden surge of housing construction...
Click to expand...

It would still help ease pressure on the demand side by not bringing in additional outsiders to compete for the existing stock. However, I expect we're going to be in for a few lean years towards the end of this decade, kind of back to the 2005-2014 levels of construction. Luckily, the embarrassment of riches that have been built in the last few years will be more than enough to get this particular architecture enthusiast through the upcoming dark times!
 
HenryAlan said:
Thanks, I assumed that's where Brick Top was going, but I think there is more to it than just that lab buildings can theoretically stimulate housing demand by increasing population. Regardless, if the lab market crashes, where so much capital is already tied up, I'm not sure that will result in a sudden surge of housing construction. I don't think the two are related so much, in that what currently prevents housing development is mostly zoning and process related, rather than whatever extent labs might be crowding out necessary building resources (capital, materials, labor, etc.)
Click to expand...
yea, I tend to take this view.
In the work from home era, Lab space is really the only major thing drawing people in to work in the urban core. If/when the lab bubble bursts, they're not going to start constructing tonnes of new residential in it's place. They're not going to construct new residential at all.
 
Ruairi said:
yea, I tend to take this view.
In the work from home era, Lab space is really the only major thing drawing people in to work in the urban core...
Click to expand...

I get your point about the profound changes in this era, but "only major thing drawing people in" is a bit of hyperbole. Even office utilization at 50%, heck, 30%, is still a "major thing" in terms of why some not insignificant number of people may wish to live in a particular place. Boston on-site work at ~50% is still going to be a lot more of a residential draw than many places in the U.S. in terms of residential desirability.

But this is a nitpick since I think your overall point makes sense: that there's likely a risk that investment in an area in general (residential, public amenities, transportation, etc) simply dries up if there isn't work-use-related energy in that area. I don't disagree with Brick Top, though, that if one facet of this ecosystem is a speculative bubble, it can harm the ecosystem as a whole.
 
I'm usually the person defending against criticisms of labs, but I do acknowledge there are downsides. One is that most jobs in a laboratory are well above median income, many far above, which puts upward pressure on both rents and home prices. Most communities in the US would love to attract high-paying jobs, even if those jobs mostly go to transplants, because it brings money into the local economy as well as new tax revenue. Here, our pain point is too many dollars chasing too few homes, so adding new high paying jobs does exacerbate the housing problem.

My personal preference is to build the jobs AND the homes to support them AND more homes on top of that to catch up with our undersupply.
 
Ruairi said:
yea, I tend to take this view.
In the work from home era, Lab space is really the only major thing drawing people in to work in the urban core. If/when the lab bubble bursts, they're not going to start constructing tonnes of new residential in it's place. They're not going to construct new residential at all.
Click to expand...

With all due respect, that is extremely shortsighted .

Age 60+ newly retired empty nesters who want to ditch their cars and home maintenance bills, living longer/more active 20-30 years retirements = demographic explosion. I hope to be one in 5 years and a large proportion of the people I know in this situation have the same idea. With AI advancing and the population getting greyer (and richer) with fewer young people and far more older people, smart businesses and cities will start to skate to where the puck is going to be.

Cities that ignore residential and do not attract the cash flushed retirees (who love and nourish new restaurants/museums/theatres and medical services) will be the Detroits/Baltimores/Clevelands of the next 50 years.
 
The population of both Boston and Massachusetts has been dropping. Apparently labs aren’t drawing that many new ‘outsiders’.
 
shmessy said:
With all due respect, that is extremely shortsighted .

Age 60+ newly retired empty nesters who want to ditch their cars and home maintenance bills, living longer/more active 20-30 years retirements = demographic explosion. I hope to be one in 5 years and a large proportion of the people I know in this situation have the same idea. With AI advancing and the population getting greyer (and richer) with fewer young people and far more older people, smart businesses and cities will start to skate to where the puck is going to be.

Cities that ignore residential and do not attract the cash flushed retirees (who love and nourish new restaurants/museums/theatres and medical services) will be the Detroits/Baltimores/Clevelands of the next 50 years.
Click to expand...
ok, maybe there was a touch of hyperbole when I suggested that no one would build any residential, I would have thought that was obvious tongue n' cheek.
I'm also not proposing that cities should ignore residential.
I'm just pointing out, that in the post covid age of working from home, lab space is one of the very few major growing sectors thats drawing new people in to the urban core. If this bubble bursts, I think there'll be a major slow down in private residential construction.
Of course empty nesters are moving back to urban areas, but in nowhere near the numbers to take up any slack left by WFH.
CX and to an extent the Sea Port got lucky as the kind of industry anchoring these huge developments requires most people to be on site and keeps the demand for residential high. Once the demand for lab space peters out, so will the demand for residential. I've no idea what will happen to the urban core but it wont be saved by empty nesters looking for easy access to nice restaurants.
 
Suffolk 83 said:
I'd like to see a citation on this one
Click to expand...

Here's one citation:
www.wgbh.org

Boston to challenge census count

Mayor Michelle Wu said the count missed college student, immigrants and people in correctional facilities.
www.wgbh.org www.wgbh.org
The census placed Boston’s population at 675,647, up nearly 10 percent from 2010. But, according to the Boston Planning and Development Agency , the latest headcount count represents about 15,000 less people than recent census population estimates projected.
Click to expand...

Did we increase the housing stock by 10% since 2010? Hmmm, don't think so.

Mods, feel free to nix this off-topic post along with the instigating ones above
 
Last edited:
Ruairi said:
ok, maybe there was a touch of hyperbole when I suggested that no one would build any residential, I would have thought that was obvious tongue n' cheek.
I'm also not proposing that cities should ignore residential.
I'm just pointing out, that in the post covid age of working from home, lab space is one of the very few major growing sectors thats drawing new people in to the urban core. If this bubble bursts, I think there'll be a major slow down in private residential construction.
Of course empty nesters are moving back to urban areas, but in nowhere near the numbers to take up any slack left by WFH.
CX and to an extent the Sea Port got lucky as the kind of industry anchoring these huge developments requires most people to be on site and keeps the demand for residential high. Once the demand for lab space peters out, so will the demand for residential. I've no idea what will happen to the urban core but it wont be saved by empty nesters looking for easy access to nice restaurants.
Click to expand...

I disagree with just about every point you wrote in that post, but in the words of Voltaire, I'll defend to the death your right to say them. ;)
 
You must log in or register to reply here.

Back
Top