ACKS | Alexander Center Kendall Sq. | 50 Binney | E Cambridge

stellarfun said:
This is why only developers who are fools would build tall in Kendall:

50 Binney was just sub-leased for $100 a square foot (actually a nickel shy of $100 at $99.95) by Sanofi to Bluebird. Sanofi's lease with Alexandria is $62.50 a square foot. Sanofi is making $27.45 a square foot with its sub-lease flip.

https://www.bostonglobe.com/business/2019/04/22/labspace/xVIXwAzVPRr0QPizsUn4JL/story.html
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I'm not sure I see your point - the developer isn't seeing this money. If Alexandria had built twice as much building, they'd be making (in a typical supply/demand situation) slightly less than twice as much money.

Why should developers build less to maintain the opportunity for their tenants to drink their milkshake?
 
stellarfun said:
This is why only developers who are fools would build tall in Kendall:

50 Binney was just sub-leased for $100 a square foot (actually a nickel shy of $100 at $99.95) by Sanofi to Bluebird. Sanofi's lease with Alexandria is $62.50 a square foot. Sanofi is making $27.45 a square foot with its sub-lease flip.
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Yeah, what ever point you think is evident by your statement... is not.
 
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shmessy said:
Why not? I think Equilibria made a good point there.
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Look at the time stamps. They both posted almost simultaneously. I think he was piggy-backing off your answer to stellarfun.

I also didn't see anything backing up stellarfun's conclusion that he drew from that article.
 
shmessy said:
Oh, ok. But it wasn't a statement. I was asking a general question. I didn't know and was hoping someone could answer.
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I think pretty much everybody here (minus stellarfun) would agree that residential in the area should go as tall and dense as possible. Is there anything more "green" than being able to walk to your job?
 
Sorry. Added the quote above....
Not understanding why this is evidence that building tall is not in a developers best interest. Unless I fully missed some sarcasm.
 
Some sarcasm, ---but also if lab space is now leasing at $100 a square foot in Kendall, building lab space gives you the greatest return.

Bluebird's lease of 50 Binney is cheaper than Bayer's lease of the top two floors of 238 Main for $135* a square foot. *The actual lease cost is less because there is a pre-occupancy, non-tabulated, fit-out cost being incurred, and included in the total cost that Bayer is paying. A 1,000 sq ft rental apartment renting for $48 a sq ft annually provides you half the revenue of lab space. That's oversimplified, but other factors aside, demand for lab space in Kendall is likely to escalate over time, while future demand for $4,000 a month rental apartments in Kendall is more uncertain.

I am not sure there is any place on the planet, other than Kendall, where lab space is fetching such stratospheric rents.

https://bayarealabspace.com/
 
Can someone fix the title of this thread? It should be Alexandria not Alexander.
 
stellarfun said:
Some sarcasm, ---but also if lab space is now leasing at $100 a square foot in Kendall, building lab space gives you the greatest return.

Bluebird's lease of 50 Binney is cheaper than Bayer's lease of the top two floors of 238 Main for $135* a square foot. *The actual lease cost is less because there is a pre-occupancy, non-tabulated, fit-out cost being incurred, and included in the total cost that Bayer is paying. A 1,000 sq ft rental apartment renting for $48 a sq ft annually provides you half the revenue of lab space. That's oversimplified, but other factors aside, demand for lab space in Kendall is likely to escalate over time, while future demand for $4,000 a month rental apartments in Kendall is more uncertain.

I am not sure there is any place on the planet, other than Kendall, where lab space is fetching such stratospheric rents.

https://bayarealabspace.com/
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50 Binney is 100% office space. Designed as office, with no lab infrastructure. This was Sanofi's HQ office building. So office is going for $100 bucks a foot. We're moving our office because ours would be basically 100 bucks at triple net.

SoMa building 3 is a lab building, and Bayer is building lab space. Yes, it leases for more.
 
Seamus, thanks for the clarification.

I will point out that Alexandria is a publicly traded REIT, dedicated solely to building and owning tech and life-sciences oriented office and laboratory space. Tried to find Alexandria properties available for lease elsewhere, and as of December 31, over 97 percent of the total space in their operating properties was fully leased.
 
stellarfun said:
Seamus, thanks for the clarification.

I will point out that Alexandria is a publicly traded REIT, dedicated solely to building and owning tech and life-sciences oriented office and laboratory space. Tried to find Alexandria properties available for lease elsewhere, and as of December 31, over 97 percent of the total space in their operating properties was fully leased.
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Yeah. They're not going to be the first developer to build tall here.
BP is building taller, and they're building office space. The market is so hot here for both, every developer who builds short is leaving money on the table in a big way.

We'll see what Alexandria does at Met Pipe of course. They could surprise us all, but I'm not holding my breath.
 
SeamusMcFly said:
Yeah. They're not going to be the first developer to build tall here.
BP is building taller, and they're building office space. The market is so hot here for both, every developer who builds short is leaving money on the table in a big way.

We'll see what Alexandria does at Met Pipe of course. They could surprise us all, but I'm not holding my breath.
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At their last community meeting about the project, they were asked to reduce the heights. It was originally proposed to be about as tall as the neighboring Amgen building and then taper down as it extended further into to the East Cambridge neighborhood.

They have a fairly extensive mitigation and package which includes acquiring and preserving the right of way for the Grand Junction Path (and enough room for 2 tracks of rail) between Binney and Cambridge Sts.
 
sm89 said:
At their last community meeting about the project, they were asked to reduce the heights. It was originally proposed to be about as tall as the neighboring Amgen building and then taper down as it extended further into to the East Cambridge neighborhood.

They have a fairly extensive mitigation and package which includes acquiring and preserving the right of way for the Grand Junction Path (and enough room for 2 tracks of rail) between Binney and Cambridge Sts.
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I understand not wanting it to shadow over East Cambridge, but if it's already tapered down in that direction, why else would they want to reduce the heights further?
 
Dr. Rosen Rosen said:
Remote work is sticking around for a bit.

www.bostonglobe.com

In latest blow to office market, Facebook is hitting pause on new space in Kendall - The Boston Globe

The tech giant said it will delay construction on a new expansion to redesign space for hybrid work.
www.bostonglobe.com www.bostonglobe.com
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They're in a hefty new lease there, which it does not appear they are trying to sublet or get out of. I'm pretty sure that the fact that their stock has dropped 50%+ this year and there's layoffs pending has as much to do with them pumping the brakes as other factors:

A large renovation project is discretionary spending - one that's perhaps better put on pause when a company is in such situation. I'm sure there will be lots of remote work going forward, but big tech will still have substantial office hubs too.
 
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