by Michelle Hillman | Friday, June 26, 2009
Pharmaceutical companies that were among the first to flee Cambridge for cheaper offices in the suburbs are now shedding space as revenue and head counts continue to shrink.
Altus Pharmaceuticals Inc. and ImmunoGen Inc. are among companies that have listed space for sublease at their respective Waltham headquarters. Both companies moved operations from the life science hub of Cambridge to Waltham last year.
Altusis listing more than 150,000 square feet of office and lab sublease space at the Hobbs Brook Office Park in Waltham. Earlier this year the biopharmaceutical company announced it would lay off 75 percent of its employees, leaving 35 people at its Waltham headquarters. ImmunoGen is subleasing 14,000 square feet of the nearly 90,000 square feet of lab space it leases at 830 Winter St. in Waltham.
Immunogen planned to grow into excess space at 830 Winter St. but has decided to sublease instead, sources said. This month, ImmunoGen announced it would discontinue the internal development of a gastric-cancer drug.
Other pharmaceutical companies, such as Tokyo-based Eisai Inc., are trimming excess real estate as a result of acquisition deals. Eisai merged last year with MGI Pharma Inc. Eisai is subleasing 46,700 square feet of MGI Pharma’s former space at 35 Hartwell Ave. in Lexington.
Another company, Synta Pharmaceuticals Corp., is terminating its option to renew a lease for 31,000 square feet of office space at 91 Hartwell Ave. in Lexington following a 40 percent reduction of its staff in March, according to real estate sources. Synta will leave the building when the lease expires in August. Synta suffered a setback when GlaxoSmithKline announced it was ending a collaboration agreement for the development and commercialization of its cancer-drug candidate elesclomol.
Real estate executives predict the list of pharmaceutical companies looking to shed lab and office space leased just a few years ago will increase as companies’ financial troubles deepen. Many of the companies subleasing space suffered from poor results in clinical trials for key drug developments.
“Certainly, I’m seeing some availability in companies that have had setbacks in the trials,” said Dan Cordeau, an executive vice president at Jones Lang LaSalle.
Despite a significant savings subleasing lab space presents — $26 per square foot compared with $32 per square foot for a direct lease — there are few tenants in the market.
Cordeau, who is listing the former MGI Pharma space, said the demand for suburban office and lab space has slowed. He has two parties considering subleasing a portion of MGI Pharma’s space at 35 Hartwell Ave.
“We need more activity for sure, but it’s certainly not at unhealthy levels,” he said.
Despite a lack of growing companies, the amount of sublease space in the suburban lab market (excluding Cambridge and Boston) has increased incrementally to 270,000 square feet of sublease space in the first quarter of 2009 from 153,000 square feet of sublease space in the fourth quarter of 2008, said Brendan Carroll, director of research at Richards Barry Joyce & Partners LLC. In the fourth quarter of 2006 the suburban lab market posted 432,000 square feet of sublease space, he said.
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Open spaces
Pharmaceuticals shedding space in the suburbs include:
• Altus Pharmaceuticals Inc., which is subleasing 83,000 square feet of office space at 333 Wyman St., Waltham, and close to 85,000 square feet of lab space at 610 Lincoln St.
• ImmunoGen Inc., which is subleasing 14,000 square feet of its almost 90,000 square feet of space at 830 Winter St., Waltham.
• Synta Pharmaceuticals Corp., which terminated its option on a lease for 31,000 square feet of office space at 91 Hartwell Ave. in Lexington. It will leave the building when the lease expires this summer.
• Eisai Inc., which is subleasing 46,700 square feet of MGI Pharma’s former space at 35 Hartwell Ave. in Lexington.
