Vertex HQ Renewal Deals Blow to Lab Projects

Banker & Tradesman file photo

Vertex Pharmaceuticals’ headquarters move to the Fan Pier in 2014 put Boston’s Seaport District on the map as a life science industry destination. Vertex’ reported decision to remain at the Fan Pier beyond 2028 deals a blow to a growing list of major lab projects still seeking tenants in the neighborhood.

The $10 billion-a-year pharma giant will remain at the Fan Pier complex after exercising a 1.1 million-square-foot lease renewal, according to the Boston Business Journal.

The life science cluster in the Seaport District has grown to over 5.2 million square feet of lab space and established Boston as a rival to Cambridge, most recently luring Foundation Medicine to a new 600,000-square-foot headquarters at 400 Summer St.

But lab vacancies stood at 19.1 percent with an availability rate of 37 percent at the end of the first quarter, according to CBRE research. Lab leasing activity failed to rebound in the second quarter in Greater Boston. Only 141,000 square feet of leases were signed, according to a Cushman & Wakefield report released today, and the region-wide vacancy rate hit 26.6 percent. Only 38 percent of the 2.5 million square feet of new lab supply this year was preleased.

But Vertex’ option to relocate at the end of its lease term offered lab developers a rare recent opportunity to land an industry leader.

Beacon Capital is seeking approval for a second phase of its South Boston Innovation Campus at 2 Harbor St., while Marcus Partners has approval for a 742,000-square-foot lab complex at 310 Northern Ave. Boston Global Investors’ 518,500-square-foot 10 World Trade tower is nearing completion, while BioMed Realty has been marketing 492,000 square feet at its Seaport Science Center at 601 Congress St.

Groundbreaking of another major lab project, Lincoln Property Co.’s 650,000-square-foot Seaport Circle tower, has been delayed by the industry downturn.

While remaining at the Fan Pier, Vertex also is expanding in the eastern side of the Seaport District, where it has leased the entire building at 22 Drydock Ave. being developed by Related Beal next to its Jeffrey Leiden Center for Cell and Genetic Therapies.

The two 15-story buildings that comprise the Vertex headquarters at Fan Pier were developed by The Fallon Co. and currently owned by Newton-based RMR Group. 

RMR Group did not respond to comment on the Fan Pier lease renewal, while Vertex spokeswoman Heather Nichols declined to comment.