By Greg Ryan
Astellas Pharma Inc. has agreed to take space on two floors of the newest lab building in the massive Cambridge Crossing mixed-use development, one of the region’s largest lab leases this year.
The Japanese pharmaceutical giant will occupy about 62,000 square feet at 441 Morgan Ave., a 10-story building whose core and shell is nearly fully built out. It expects to move into the facility next year.
Astellas has about 25,000 square feet at 1030 Massachusetts Ave. near Cambridge’s Central Square that it will vacate. Its Cambridge Crossing space will include labs and offices, including an incubator space for partner businesses. The location is expected to ultimately house a few hundred employees in areas like research and business development. The move will not affect operations at the Astellas Institute of Regenerative Medicine in Westborough.
That the Astellas lease is one of 2023’s largest speaks to how much demand for life sciences space has fallen over the past year. In 2022, there were at least seven lab leases of more than 200,000 square feet, including Takeda and AstraZeneca mega-leases in Kendall Square.
The agreement marks a win for Cambridge Crossing developer and owner DivcoWest in a tough market. Other lab towers with core-and-shell construction well underway or even complete, including a converted former John Hancock building in Boston’s Seaport District and USQ’s first lab building in Somerville’s Union Square, have yet to announce a tenant.
“I’m happy to get the first lease done before we complete the core and shell,” DivcoWest managing director Mark Roopenian said. “The first one is always the hardest one.”
DivcoWest is considering creating “spec” suites at 441 Morgan — smaller, pre-built spaces that appeal to growing startups looking to find real estate fast — but has not yet made a decision, according to Roopenian.
“I wanted to preserve the bottom of the building, in case a big guy comes along,” he said. “This market’s cyclical. Right now, there are no big guys out looking, but they will be.”
“Unless we luck out and someone big comes along,” Roopenian continued, “I think it’s probably going to be singles and doubles. That’s good from an ecosystem standpoint, more is better.”
Cambridge Crossing’s four other lab and office buildings are fully leased, including two for Sanofi, another with Philips’ North American headquarters and Cerevel Therapeutics, and a fourth that Bristol-Myers Squibb is just now beginning to occupy. Its sole residential building to date, Park 151, is more than 90% leased after opening last year, Roopenian said.
DivcoWest has approval to build another lab site on Morgan Avenue, but that will likely wait at least until 441 Morgan is more leased, he said.