The following is an excerpt that originally appeared in the Banker & Tradesman on September 17, 2023:
According to Avison Young research, Greater Boston now is home to 38 life science incubators, including 20 commercial incubators operated by groups such as SmartLabs, LabCentral and Launchlabs. The facilities typically rent lab benches for startups with up to five employees for periods as short as a month, similar to the co-working office model but including lab benches and shared scientific equipment.
“The beauty of an incubator is: It’s shared space and shared resources for these early-stage companies who are really at an inflection point in their business,” said Ben Bradford, head of external affairs for industry group MassBio. “The more they can focus on science before taking a large leap on a real estate footprint, that’s better for the companies and their investors. And at the end of the day, it’s better for the landlord. They can get more of a sure thing when that company signs a lease.”
Commercial brokers predict that early-stage companies represent the next wave of demand for lab space as the market rebounds in the next several years. Boston-area life science companies raised over $2 billion during the second quarter, according to CBRE, representing nearly half of all life science funding in the U.S. And series A funding for early-stage companies has been the most resilient element of the market.
With nearly 20 million square feet of life science development in the pipeline, according to brokerage reports, representing approximately 10 times the current tenant demand, projects that do move forward will be less choosy about holding out for long-term leases with well-financed companies, industry experts predict.