The rapid growth of biotech labs in Greater Boston might end up saving the region’s commercial real estate market, if not its entire economy, from the impacts of the COVID-19 pandemic. But that doesn’t mean everyone wants one next door.
A common complaint revolves around the hefty HVAC systems that lab buildings need. They can be noisy and tall, sometimes 30 feet or more on a rooftop, an intrusive change for some neighbors. Some critics say they worry about safety in spaces where potentially hazardous materials are handled. Others dislike the labs’ round-the-clock operations, with foot traffic and lights at all hours.
This blowback has begun amid the early stages of a massive wave of renovations and retrofits, with 10 million square feet of office and industrial space in Greater Boston being converted for use by the booming life sciences industry. As lab developers migrate from Kendall Square and the office parks along Route 128 to the dense blocks of Somerville and tree-lined cul-de-sacs of Newton, they’re coming into conflict with wary neighbors and city officials.
Some of these conflicts may get resolved in the courts. In one of the first legal disputes, the owner of a five-story building in South Boston sued the city’s Zoning Board of Appeal over the denial of a lab conversion nearly three weeks ago.
“Clearly, the ramp-up over the last five years here in our neighborhood has just been crazy,” said Tom Ready, referring to Fort Point and the Seaport area. “That’s rather eye-opening for us.”
Boston may be feeling the brunt of this trend, with many offices emptying out amid a widespread shift to remote and hybrid work brought about by the pandemic. But conversions are popping up in other communities, too. Aaron Jodka, research director at real estate brokerage Colliers, counts 10 million square feet of office and industrial space in Greater Boston that’s being converted to labs, and roughly half of those projects don’t even have a tenant lined up right now. That’s the equivalent of roughly five John Hancock towers, and doesn’t even count lab space that’s being planned for buildings that haven’t gone up yet.
And with investors pouring money into local biotech companies, demand is insatiable; Jodka estimates lab vacancy rates of zero percent in Boston and Cambridge, and 2 percent in the suburbs.
Commercial real estate firm JLL tracks more than 80 lab conversions planned or underway in the region, and managing director Bob Coughlin says that is nowhere near enough. He worries state or local officials might put the brakes on some projects unnecessarily. He’s even more concerned that biotech firms will expand elsewhere if they can’t find the space they need in Greater Boston.
“If it means you have to come up with a creative way to deal with a more robust HVAC system on the roof of a building, you’ve got to figure that out,” said Coughlin, who previously led the Massachusetts Biotechnology Council. “The lack of life science space infrastructure is a huge bottleneck in our ability to grow.”
And unlike more traditional office space, lab work usually needs to happen in person, notes Tim Schoen, chief executive at life sciences developer BioMed Realty.
“You can’t do science in your living room or your kitchen,” said Schoen, whose company bought the former Seaport headquarters of life insurer John Hancock, and is now converting it to lab space. “We should be embracing the ability to have more lab buildings . . . Think about a building being vacant versus life sciences, with discoveries of new medicines. That’s an easy trade.”
But conversion of existing buildings in parts of Boston often requires relatively little formal approval. When work began to turn 51 Sleeper St. in Fort Point into labs, Ready said, residents only learned about it when they heard the construction noise.
The apparent ease of switching uses prompted him to speak up at a virtual hearing that Boston City Councilors Ed Flynn and Michael Flaherty held in July to scrutinize the flood of lab conversions. The Fort Point Neighborhood Association has been talking with Flynn about the need to improve Boston Public Health Commission staffing levels and to provide enhanced emergency services to the waterfront area, Ready said, because of the use of chemicals and biohazards among the city’s growing number of labs.
Flynn and Flaherty said they recognize the outsize role that biotech companies are playing in helping Boston’s economy weather the pandemic. But they also want to listen to their constituents in South Boston, where new lab projects pop up seemingly every week.
Flynn said it’s important to ensure a fire station gets built in the traffic-choked Seaport, in part because so many labs are being built there. And Flaherty said developers should give up some of the leasable areas in their buildings to accommodate these mechanical systems, a trade-off to keep height and noise in check. BioMed agreed to do exactly that, by filling the top floor of the former Hancock building with mechanical systems, cutting into the amount of lab space that could be built there.
“There has to be a better way to incorporate these mechanicals in the building, even if it means giving up some square footage . . . to make sure we’re protecting the residents,” Flaherty said.
There’s been little action in Boston since the hearing. But in Somerville, city officials have been considering a proposal to limit the height of rooftop systems on smaller and midsized buildings.
City Councilor Ben Ewen-Campen filed the measure earlier this year after developer Rafi Properties proposed a three-story lab at the site of the shuttered La Ronga bakery on Somerville Avenue. His concern: mechanicals that would essentially add another story or two to the building’s height, beyond what’s allowed in existing zoning rules. He has also asked city staff to analyze whether Somerville should enact its own, stricter safety rules than what’s currently required under state and federal standards.
“We don’t want to outlaw lab buildings,” Ewen-Campen said. “There are plenty of appropriate places. But I think the public has an understandable expectation that if an area is zoned for three stories, the building would be around three stories. This is basically closing a huge loophole. It’s not trying to stop commercial development.”
The conversion craze is also reaching Newton. There, the City Council recently approved developer Robert Korff’s plans to replace a proposed office building and hotel at the Riverside T station with labs. Now, the council is weighing an office-lab conversion request on Grove Street, on the other side of the T stop.
Developer Alexandria Real Estate Equities would like room for another nearly 16 feet, or roughly an additional floor’s worth of height, on top of the four-story building and its existing mechanical systems at 275 Grove St., to accommodate mechanicals, according to Stephen Buchbinder, an attorney for the firm. Alexandria is seeking a “blanket-use” permit to put labs in the entire building, so it doesn’t need to get approval on a tenant-by-tenant basis. Neighbors, meanwhile, worry that Alexandria — one of the nation’s largest life sciences developers — eventually plans to do the same thing in an adjacent office building, where a portion has already been converted to labs, that abuts a cluster of single-family homes; Buchbinder said a number of office tenants in that building still have several years left on their leases. Supporters hope to resolve the issue by the end of the year before the current City Council turns over.
Greater Boston’s life sciences sector could add up to 40,000 jobs through 2024 to staff the extra 20 million square feet of new lab and biomanufacturing construction and conversions planned over that time, driven by medical breakthroughs and a surge of investment, said Joe Boncore, the new chief executive of MassBio.
“The development is going to have to happen outside of the traditional biotech hubs,” Boncore said. “It’s inevitable that these clusters are going to expand outside of Boston and Cambridge.”
That growth could lead to more potential conflicts with neighborhood groups, said Chris Froeb, a real estate lawyer with Nixon Peabody. But Froeb said he doubts local officials will want to risk losing high-paying jobs to other parts of the country.
“You can listen to neighborhood concerns, work with developers and . . . mitigate some of the concerns,” Froeb said. “It’s just like anything. I think you can be reasonable and still welcome the business.”
Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.