Best Type of Lab Space for Your Firm

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Phone: 508-655-5626
Web : www.rwholmes.com

Navigating the Greater Boston Suburbs Lab Market:

Determining the Best Lab
Space for your Company

BUILD TO SUITE (BTS)

As more life science companies search for space outside of Kendall Square,
Greater Boston’s landlords are working to keep up with demand by creating
opportunities with lab ready facilities in the suburbs. With the increase in demand, we
wanted to provide a breakdown of what all the different options offer and how your
company might fit into each one, based on your specific needs.
These are large scale, ground up projects that involve months of planning and
negotiation prior to construction commencement. Lab users that go into these types of
projects will typically need to lease a minimum of 50% (usually a minimum of 40-50,000
SF) of the entire project for the developer/landlord to begin the work. Landlords of BTS
projects will also require a lengthy commitment in lease term that typically goes beyond
10 years. An example of a recently completed project is Millipore’s new facility at 200
Summit in Burlington.
BTS lab projects are typically structured so that the landlord/developer is
responsible for delivery of the shell building, grounds, infrastructure, and all common
areas but not including the user’s space. This is where users must either use the
landlord/developer’s construction team or may hire an outside general contractor,
architect, and engineer to build their space out to their specifications at the user’s cost.
Landlord’s typically offer a tenant improvement allowance (TIA) for the user’s build out,
which is paid back to the user once the work is complete and they move in.
In other cases (usually for full building users), BTS leases may be structured
so that the space is delivered in “turnkey” condition before Furniture Fixtures and
Equipment (FF&E) – whereas the landlord/developer is responsible for delivery of the
building AND the user’s space inside of it.

SPECULATIVE LAB DEVELOPMENTS (SPEC)

Spec lab developments are projects that are already underway prior to
any user committing to any of the space. Since the demand for lab ready space
is so high and supply is so low, developers are beginning the process of either
constructing new buildings that have the infrastructure in place (HVAC, power,
clear height, floor load, waste water mitigation, exhaust, etc.) or are taking
older, vacant office buildings and making them lab-ready by adding these
components.
Users that go into these types of projects can expect to have the
necessary infrastructure in place to buildout a facility ranging from about
10,000 SF on up and can expect to lease this type of space for anywhere
between 5 to 10 years depending on buildout needs. Users going into a spec
lab development can also expect a TIA for their space that will defray the cost
of construction, if not cover the majority of the cost.
Some examples of Spec lab developments include Jumbo Capital’s
project at The Pod on Crosby Drive in Bedford (268,000 SF), Burlington
BioCenter by Gutierrez in Burlington (110,000 SF), Hobb Brooks’ Wyman Street
project in Waltham (225,000 SF), and Greatland’s Revolution Labs project at
1050 Waltham Street in Lexington (174,000 SF).

EXISTING BUILDING: LAB-SPECIFIC OR
LAB-READY

This type has become harder to come by with the increase in demand recently. In an ideal world, a user that
can fit into the right space that another user has vacated and meets most of their specifications. This is the best
scenario for both the user and landlord/owner alike as it saves costs all around. This can come in the form of direct
lease space (meaning a tenant vacated at the end of their term), sublease space (a user had to vacate prior to the
end of their term), or shared lab space.
These types of lab space options allow for maximum flexibility for the end user’s length of term and are much
cheaper than going the route of either BTS or Spec options which include large construction costs.
Existing lab space can be found in lab-specific buildings, lab-ready buildings, or incubators. Lab-specific
buildings are those built to solely accommodate life science firms. These spaces are typically built out with most
infrastructure in place. However, there is a premium for most lab-specific buildings – expect rents in Waltham and
Watertown to be around $50-70 NNN at the newest lab buildings. Second generation lab spaces can be closer to
$30-40 NNN.
Lab-ready buildings are those that have the infrastructure in place to build a lab for your needs. These buildings
can be single-story flex buildings or office buildings. Lab-ready buildings typically have lower rental rates – usually
in the $20-30/SF NNN range. However, there will be significant construction costs for the buildout and the TIA
provided by landlords varies- sometimes as little as $10/SF. The most basic lab buildouts are around $100/SF. It is
important to compare the final all-in number (annual rent plus construction costs) to see if a lab-ready building is
saving you money. It is also important to ensure your landlord or landlord’s construction company is experienced
with lab buildouts and local code requirements.
Incubators work similarly to existing lab space as they are already built out and move-in ready. These incubators
provide short term leases and community benefits. However, this comes at a premium and can become costly
depending on the membership you need and the number of employees you have. Local incubators include
LabShares in Newton and ABI Labs in Natick. This type of space is great for startups who need less than 5,000 SF or
a satellite location.
When comparing direct leases versus sublease space, note that most likely no TIA will be provided in a sublease,
but you may be able to lease for below-market rents or shorter lease terms. For a direct lease, owners will be
more willing to provide a TIA with the amount varying depending on length of term (most requiring at least 5
years).
Some examples of current available spaces like this are Spaulding and Slye’s building at 749 Middlesex Turnpike
in Billerica (40,000 SF, existing direct lease), Immunogen’s 50,000 SF Sublease at 830 Winter Street in Waltham,
Boston Dynamics 30,000 SF Sublease at 78 Fourth Ave in Waltham, and AdvanDx’s Sublease at 300 TradeCenter
(12,000 SF).

LAB SPACE COMPARISON CHART

TYPE OF PRICING LENGTH OF TENANT IMPROVEMENT IDEAL USER
BUILDING HIGH
BUILD TO HIGH TERM ALLOWANCE

SUIT MEDIUM • WANTS FULL CONTROL OVER THE DESIGN OF THEIR

SPECULATIVE LONG TERM (10+) OWNER WILL COVER A MAJORITY • SPACE/BUILDING
AVERAGE (MIN 5) OF BUILD OUT COST STABLE COMPANY THAT CAN COMMIT TO A 10+ YEAR
EXISTING:
LAB-SPECIFIC (75-100%) LEASE

• HAS 18+ MONTHS BEFORE NEW FACILITY NEEDS TO BE

OPERATIONAL

• WANTS START OF THE ART, BRAND NEW SPACE TO

OWNER WILL COVER A MAJORITY • IMPRESS CLIENTS/INVESTORS
OF BUILD OUT COST HAS 12+ MONTHS BEFORE NEW FACILITY NEEDS TO BE

(75-100%) OPERATIONAL

• WANTS TO BE IN A BUILDING WITH OTHER LIFE

SCIENCE COMPANIES

VARIES - SHORT FLEXIBLE BASED ON LEASE TERM • WANTS TO BE IN A BUILDING WITH OTHER LIFE
TO AVERAGE AND RENTAL RATE
(3-5+) SCIENCE COMPANIES

($0 – TURNKEY) • DOES NOT WANT TO PERFORM EXTENSIVE BUILDOUT

• COMFORTABLE WITH HIGHER MONTHLY RENTAL RATE

EXISTING: FLEXIBLE BASED ON LEASE TERM • WANTS LOW MONTHLY RENTAL RATE
LAB-READY
LOW AVERAGE (MIN 5) AND RENTAL RATE • COMFORTABLE BUILDING THEIR SPACE FROM SCRATCH

($15/SF – TURNKEY) • HAS 6+ MONTHS BEFORE NEW FACILITY NEEDS TO BE

OPERATIONAL

EXISTING: MEDIUM-HIGH SHORTEST NONE – INCUBATOR PROVIDES • NEEDS LESS THAN 5,000 SF
INCUBATOR (VARIES BASED (MONTH TO PRE-BUILT SPACE • STARTING THEIR COMPANY OR OPENING IN A NEW
ON # EMPLOYEES MONTH OR 1
AND SERVICES YOU NONE AREA
YEAR) • WANTS MOVE-IN READY SPACE
NEED) • WANTS IDEA SHARING AND STARTUP COMMUNITY

SUBLET: LOW VARIES DEPENDING • WANTS BELOW MARKET RATE
EXISTING LAB ON REMAINING • WANTS MOVE-IN READY AND DOES NOT HAVE
TERM, BUT
SPECIFIC REQUIREMENTS FOR THEIR SPACE
TYPICALLY UNDER 5 • WANTS SHORT LEASE TERM – MAYBE DUE TO
YEARS
UNKNOWN SHORT-TERM GROWTH

ABOUT OUR FIRM

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