By Jon Chesto
It took longer than expected,but The Davis Companies’ big bet on Watertown Square is paying off with the region’s largest lease deal for newly built lab space so far this year.
Davis and its partner Boston Development Group just inked a deal with serial biotech entrepreneur Greg Verdine that would bring two of Verdine’s startups into nearly 120,000 square feet at 66 Galen St. in Watertown. That’s more than half of the leasable space in Davis’ recently-finished 224,000-square-foot buildingacross the Charles River from the square.
The lease deal is particularly notable given the glut of new lab properties in the area, at a time when demand has cooled off. Lab vacancy rates in the region have soared during the past two years as a flood of new lab buildings and office-to-lab conversions hit the market. Until this deal for 66 Galen, no leases for more than 100,000 square feetfor new lab spacehave been signed yet in 2024, according to data from real estate firm CBRE.
Now, at 66 Galen, Verdine’s LifeMine Therapeutics will move into the fourth floor next August, while a second, still-unnamed biotech will occupy the third floor next October. Davis and BDG are still searching for tenants to fill the remaining space on the first two floors. BDG also has permits to put up a second lab building next door.
Duncan Gilkey, a senior vice president at Davis, said the Galen Street site is well situated given its proximity to the Mass. Turnpike, and the landlord will provide private shuttles to the Red Line in Harvard Square and the Boston Landing commuter rail station in Brighton. Gilkey said prospective tenants also like the fact that there are so many small businesses within walking distance, on both sides of the Charles. There’s already a booming life science corridor along Arsenal Street in Watertown’s East End, near the Cambridge line, but this is the largest lab building to go up in recent years in or near Watertown Square.
“A lot of people questioned why we picked this location [but] we never doubted our location,” Gilkey said. “People like the ability to walk into a neighborhood that’s filled with local businesses. People want to be part of a neighborhood. They’re tired of these cold, big-block locations.”
Gilkey said the developers strived to offer a premium-style building, with a lobby, bathrooms, and gym that look like they belong in high-end hotels. He admits it was “a little scary” to substantially finish the building in June without a tenant lined up. The developers initially hoped to land a “big pharma” tenant.
“But we got the next best thing, which is Greg Verdine,” Gilkey said. “You have a really brilliant mind who appreciates the quality. … To have gotten Greg’s stamp of approval was huge.”
In a brief message, Verdine was also effusive: “I am excited about this building and location, and we congratulate [chief executive] Jon Davis on his vision.”
Greg Reibman, president of the Charles River Regional Chamber, said he was relieved to see such a prominent lab building, which juts out from the hillside overlooking Watertown Square, drawing tenants. He’s optimistic that Watertown’s lab cluster will continue to grow, as evidenced by plans for labsat the Watertown Mall and also at the parking lot behind Home Depot, both in the Arsenal Street corridor.
“My first reaction when I heard this was: What a relief,” Reibman said of the 66 Galen deal. “This building has been a poster child for the stalled lab market. My second reaction was: This speaks to the attractiveness of Watertown as a hub for innovation.”