Sanofi signs megalease at Cambridge Crossing
In one of the biggest office deals on record in the region, Sanofi on Monday said it will lease two buildings to be built in booming East Cambridge and consolidate much of its local workforce there.
The French drug maker — Massachusetts’ largest life sciences employer — will put 2,700 employees in a pair of buildings at Cambridge Crossing, an old railyard being redeveloped on the Boston-Cambridge border north of the MBTA’s Lechmere Green Line Station. Construction will start soon and Sanofi plans to open the buildings in late 2021 or early 2022.
At 900,000 square feet, the deal is the largest lease since Vertex Pharmaceuticals leased 1.1 million square feet at two office buildings on the Seaport’s Fan Pier in 2011. And it comes on the heels of a wave of big expansions by tech and life sciences companies in recent months that have anchored construction of several new office buildings in Boston and Cambridge.
In Sanofi’s case, it’s not adding jobs, a spokeswoman said, but putting workers from several offices in Cambridge and a variety of suburban facilities under one roof and near the heart of the region’s drug-making industry.
“Our new Sanofi site will further anchor us in this unique ecosystem of innovators for years to come,” said executive vice president Bill Sibold, in a statement. “Cambridge Crossing is a critical investment in our infrastructure and our people, and the move will allow us to reimagine the way we work together to develop transformative treatments for patients.”
Sanofi spent months searching for a site to consolidate in the center of the region before settling on Cambridge Crossing. It looked at office buildings MIT is building in Kendall Square, land in Allston where Harvard University is planning a research campus, and sites in the Seaport District.
The company felt so strongly about being in one place that it plans to shift about 1,200 employees from a new building Sanofi just moved into at 50 Binney St. in Kendall Square when the new buildings open in a few years. It’s unclear what Sanofi will do with its lease on roughly 250,000 square feet there, but other companies that have recently moved in Kendall’s tight office market have had little trouble subleasing to new tenants.
Sanofi also said it will leave a building on Memorial Drive near the Boston University Bridge, and could shift employees from up to eight other facilities — from Waltham to Westborough — into the new offices.
Spokeswoman Ashleigh Koss wouldn’t say whether the company intends to completely move out of any communities except to emphasize that it will keep operations in Framingham, where Sanofi is expanding a large manufacturing plant that makes drugs to treat rare diseases.
“We will continue to have a presence in Framingham,” Koss said.
When the moves are complete, Koss said, the Cambridge Crossing buildings will hold about 1,000 research and development staffers, 1,500 employees of rare disease unit Sanofi-Genzyme, and roughly 200 corporate and administrative workers. They will not include any drug manufacturing.
Sanofi will be the second blue-chip tenant to move to Cambridge Crossing since developer DivcoWest bought the 45-acre project in 2015 for $291 million.
Philips Healthcare will move its North American headquarters, and roughly 2,000 employees, from Andover, to a building under construction. DivcoWest is also building a retail plaza and green space, has started construction on yet another office building, and is permitted for about 2,400 apartments.
Cambridge Crossing also will become home to a new Lechmere Station as part of the Green Line Extension. The deal with Sanofi will give the project even more momentum, DivcoWest said in a statement.
“This news is a step forward for Cambridge Crossing as we look to fulfill our collective goal to design and create a vibrant, state-of-the-art mixed-use community,” the company said.
Sanofi is the latest local company to move workers from suburban offices into the region’s core, and to put as many people as it can under one roof, said Brendan Carroll, director of intelligence at real estate firm Perry Brokerage. Both trends, he said, highlight the importance of proximity to major employers in many industries, despite higher rents.
“It speaks to the value of collaboration, not only being around the industry in Cambridge but bring around each other,” Carroll said. “We’ve developed all this technology that allows people to spread out. But they want to be physically in one place.”
That was the idea, said Koss, who described the move as the culmination of “a long-term plan to bring the majority of our organization in Massachusetts together in one location.”