By Evan Gallagher | July 2017
When I recently spoke at the NAIOP/SIOR Mid-Year Roundup, one of the major topics was the shifting and expansion of Kendall Square. The heart of East Cambridge and its center of gravity has changed a lot in recent years. From 2010–2015, up-zoning approvals allowing the expansions along both Main and Binney streets have almost doubled the size of Kendall Square. The area has become increasingly dense, with over seven million SF of development.
Alewife, Central Square, and Harvard Square are also drawing heightened development, but East Cambridge maintains a healthy lead, hosting nearly 95% of all upcoming development in Cambridge. These projects reflect the trending business in the area, with 75% slated to be lab space and the remaining 25% offices.
Biotech is leading the charge in Cambridge, generating 32% growth in jobs since 2006 and $1.3 billion in VC funding for early-stage companies in just the last year. Clearly, new lab space in Cambridge will fill quickly.
Here is what our team considers the original Center of Kendall Square – about 70 acres, 6.7 million SF, from Main Street over to Technology Square.
Adding the expansion along the Binney Street corridor and east toward the Charles River makes Kendall Square very similar to the current market. This expansion increased market size to 135 acres and about 10.7 million SF of space.
Now let’s look to the future. Landmark additions by MIT and Alexandria Real Estate Equities will bring the total market size to about 170 acres and roughly 13.5 million SF. The image to the right shows the 14-acre redevelopment of MIT’s Volpe site, its remodel of its Main Street site, and Alexandria Real Estate Equities’ major expansion at the Metropolitan Pipe Site.
The bottom line is that biotech is thriving in Cambridge, based on its proximity to talent, transit accessibility, and numerous amenities. But being in the center of this ecosystem comes with higher rents that give some companies pause. While some look to areas like the Seaport or Route 128 for lower costs and increased functionality, however, SHIRE is expanding into Kendall Square from Route 128. It recently made a huge move in leasing 340,000 SF at 500 Kendall Street and is rumored to be looking at about 100,000 SF more. This speaks to the fact that the ideas are born in Cambridge, and if you want to tap into that innovation, you have to be close to it.