BOSTON— For Boston’s life sciences market, the second quarter of 2022 ended where the previous several years had left off – with record-breaking leasing activity, high asking rents and positive net absorption.
In fact, during Q2 the market posted 3.1 million sq. ft. of leasing, resulting in over 2 million sq. ft. of positive net absorption, the fifth consecutive quarter with more than one million sq. ft. of positive absorption.“Despite some headwinds, Boston’s life sciences market continued to outperform all other sectors, driven by large pharmaceutical companies signing new leases in Boston and Cambridge,” said Eric Smith of CBRE. According to CBRE’s industry-leading Figures report, key markets of East Cambridge and Seaport experienced slight declines in asking rents when compared to the previous quarter. New sublease opportunities hitting the market were the primary reason for a rise in vacancy, which climbed from 0.8% in Q1 to 1.3% at the end of the second quarter. For many companies looking for immediate occupancy, these new sublease opportunities are ideal. The largest commitments leased during Q2 2022 were AstraZeneca, Takeda Pharmaceuticals and Vertex Pharmaceuticals all signing deals over 300,000 sq. ft. in either Boston or Cambridge. Four other deals across the metro were at or near the 100,000 sq. ft. mark including the first in Devens at King Street Properties’ purpose-built GMP campus, Pathway Devens. Also, Route 128 West saw strong leasing activity in projects under construction, such as 99 Coolidge Avenue in Watertown, 880 Winter Street in Waltham, and 1050 Waltham Street in Lexington. Despite significant leasing absorption during Q2, the market is showing signs of challenges ahead. Demand by mid-size, private companies showed a decline during Q2, the public biotech market has been on a down swing since early 2021 and the frenzy in the private markets has begun to cool with new company formation slowing, climbing interest rates and venture capital funding seeing a drop from its record year in 2021.