Amid Boom, Still a Discount to Kendall Square
By Jay Fitzgerald | Sep 29, 2019
With recent major deals and more on the way, West Cambridge’s Alewife neighborhood has emerged as a life science cluster that any other city in the nation would love to claim as its own.
Granted, the Alewife/West Cambridge market, with about 1.1 million square feet of mostly new lab space, operates in the shadow of Kendall Square in East Cambridge, with its 7.2 million square feet of lab space and now widely considered the largest and most prestigious life-science cluster in the world.
But consider this: Just in recent months, The Davis Cos. has leased up and sold a speculative building at 35 Cambridge Park Drive (branded as the Alewife Research Center) to HCP Inc. for $332.5 million; Bulfinch Cos. announced three key leases for its own new speculative 400-500 Cambridge Discovery Park development; and Cabot, Cabot & Forbes and Invesco/Davis Cos. seem poised to develop even more parcels in the area known as “the Quad,” in separate moves that could double the amount of lab space at Alewife.
Connections to Kendall, Suburban Markets
Combined with other lab and office space and thousands of new housing units along Route 2 near the Alewife T station, the submarket is now a major live-and-work destination in Cambridge, though many say the area still needs more retail outlets to truly be considered a classic “live, work, play” neighborhood.
“In the early 2000s, it seemed like a stretch to say that Alewife would become a true Cambridge [life science] cluster,” said Brendan Carroll, director of intelligence at Perry Brokerage. “But it’s absolutely a cluster today. It’s become an incredible place.”
Mark Winters, a vice chairman at Newmark Knight Frank whose firm has brokered deals at Alewife for both the Bulfinch and Davis Cos., says the success of Alewife is ultimately due to the even more spectacular success of Kendall Square. Alewife has become a valid alternative to life-science companies that can’t find, or afford, space in Kendall Square and yet want to locate in Cambridge, he said.
“You’re still in Cambridge, along the Red Line and it’s a lot less expensive,” said Winters. “[Alewife] has arrived in terms of being a cluster on its own.”
Aaron Jodka, managing director of research and client services at Colliers International, said the cost savings of locating in Alewife, compared to Kendall Square, are “quite substantial,’ with recent per-square-foot prices ranging from the mid-$60s to low $70s in the former and in the mid-$90s to more than $100 in the latter.
CDP Spec Building Already 88 Percent Leased
The Davis Cos. recently made headlines by announcing that its speculative 225,000-square-foot Alewife Research Center building was now fully leased. Among the building’s new tenants are Codiac Biosciences (68,000 square feet), Eisai Co. Ltd., (50,000 square feet), Syros Pharmaceuticals (50,000 square feet) and Glympse Bio (23,000 square feet).
The quick leaseup laid the groundwork for The Davis Cos. to agree to sell the property to
HCP Inc., just as tenants are poised to move in, for a $332.5 million.
“At the time we started [construction], the rents were just starting to move,” said Jonathan Davis, CEO of the Davis Cos. “We took a deep dive when we started, analyzing the real estate and industry. It paid off. We were really fortunate to thread the needle.”
Other buildings in the neighborhood have found similar success.
The last building to be constructed by Bulfinch on the former sprawling campus of Arthur D. Little, 400-500 Cambridge Discovery Park is already 88 percent leased and expected to be fully leased by the time it formally opens early next year. The recently announced leases in the speculative building: Arbor Biotechnology (36,000 square feet), Kintai Therapeutics (72,000 square feet) and Simcere Innovation (26,000 square feet). And FogPharma, now located at 200 Cambridge Discovery Park, is set to take up nearly half of the 283,000-square-foot facility when it’s delivered in the first quarter of 2020.
For Bulfinch, the project represents the completion of its nearly two-decade transformation of the old Arthur D. Little Co. campus into the six-building Cambridge Discovery Park, which also includes an AC by Marriott Hotel and two parking garages. Bulfinch recently reacquired, for $138 million, the 193,000-square-foot Forrester Research headquarters building that it originally developed.
“Bulfinch is proud to be part of Alewife’s growth,” Robert Schlager, president of Bulfinch, said in a statement, adding that the coming completion of 400-500 “marks the culmination of Cambridge Discovery Park’s nearly 20 years of development to revitalize an underutilized park into a state-of-the-art life science campus.”
Across the Tracks to the Next Frontier
The next frontier for the Alewife area is the so-called “Quad,” as a sprawling group of mostly low-rise industrial buildings. Sitting on the south side of railroad tracks in the Alewife area, the area seems poised for a major buildout by two major players: Cabot, Cabot & Forbes and a partnership between Invesco Real Estate and The Davis Cos.
Last year, Banker & Tradesman reported that Cabot, Cabot & Forbes had purchased 12 acres in the area for $80 million, in what many expect will be a major redevelopment. Cabot, Cabot & Forbes chief Jay Doherty couldn’t be reached for comment, but some believe the firm is in position to add as much as 1 million square feet of new lab and office space in the Quad.
Meanwhile, Jonathan Davis said The Davis Cos. and Invesco, which together own nine acres of property in the Quad, hope to develop two new buildings in the area – one 150,000 square feet and the other up to 250,000 square feet.
Construction of the former could start as early as next year on a speculative basis, depending on permitting and other factors, Davis said. Construction of the second, larger facility would come “at the earliest” in 2022 or 2023, he said.
One key to maximizing development of the entire Quad, Davis and other industry executives say, is connecting it to the already established north side of the Alewife area, likely via a pedestrian bridge over the existing railroad tracks.
“The really big change in the area will be the connection of the north side and south side,” Davis said. “The north side is now very firmly a cluster. The south side is just taking shape.”
The Davis Companies Sells Alewife Research Center For $333M
CAMBRIDGE, MA—HCP Inc, an Irvine, CA-based REIT, has signed a definitive agreement to acquire life science property 35 Cambridge Park Drive here for $332.5 million.
The 224,000-square-foot LEED Gold lab building is being purchased from a partnership of The Davis Companies and Invesco Real Estate. The deal increases HCP’s Cambridge holdings to in excess of 1 million square feet. The firm recently acquired 87 Cambridge Park Drive and further development opportunity at 101 Cambridge Park Drive. Combined, HCP has created up to 440,000 square feet of contiguous space across a modern campus. The deal for 35 Cambridge Park Drive is expected to close in December…