Biotech Players Lead a Boom in Cambridge
By KAREN WEINTRAUB
Published: January 1, 2013
CAMBRIDGE, Mass. — Anyone who knows the history of this town would be surprised to find a fashionable coffee shop on Third Street, with dozens of people walking by. The lattes and chai teas are being sold on a Kendall Square site that had been empty for most of the last 40 years — since factories with names like American Rubber and the Badger Company were razed for a NASA facility that was never built.
Instead, the land lay fallow for decades, even as spinoff companies from the adjacent Massachusetts Institute of Technology transformed the neighborhood into a major research hub.
But now, this corner of Cambridge is at the center of a real estate boom.
“You sit here and you’d never know there’s a recession going on anywhere else in the country,†Travis McCready, executive director of the Kendall Square Association, said over chai tea recently at Voltage Coffee & Art.
Cranes are busy on eight separate construction sites in this area, and roughly two million square feet of space is being built or renovated or is under city review here. An additional 1.4 million new square feet is committed, and more is expected elsewhere in this city of 106,000, located directly across the Charles River from the city of Boston. If it all gets built, the new investment in Cambridge will come close to $2 billion.
“It’s one of the hottest submarkets in the country,†said Steven Purpura, managing partner of Richards Barry Joyce & Partners, a commercial real estate firm based in Boston. “Top two or three for sure.â€
Most of that growth is connected to the biotechnology and pharmaceutical industries, including new buildings for Pfizer and Novartis. Amazon just revealed plans to rent 100,000 square feet here; Google is expanding its footprint by 40,000 square feet; and Microsoft, I.B.M. and Nokia are nearby.
Pharmaceutical companies traditionally preferred suburban enclaves where they could protect their intellectual property in more secluded settings and meet their employee's needs.
But in recent years, as the costs of drug development have soared and R.& D. pipelines slowed, pharmaceutical companies have looked elsewhere for innovation. Much of that novelty is now coming from biotechnology firms and major research universities like M.I.T. and Harvard, just two subway stops away.
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