Sun, Oct 07, 2018 - Page 15 News List

How a dingy Boston square birthed a biotech boom

By Rebecca Spalding  /  Bloomberg

It might have all been different had former US president John F. Kennedy not been assassinated. Or so the local legend goes.

Before fate intervened, the native Bostonian planned to root the US space program in Cambridge, Massachusetts. An 11.7-hectare site in Kendall Square was vacated to be the home of the electronics center of NASA.

However, by the late 1960s, after Kennedy was shot, the agency’s plans changed.

“Houston, we have a problem” entered the lexicon, while much of the Cambridge neighborhood fell into disrepair.

A half-century later, the area is among the most expensive business districts in the US.

The story of how office space in a blue-collar Boston suburb came to command rents comparable to the priciest pockets of Manhattan or San Francisco is also a story of scientific ambitions that match Kennedy’s 1961 vow to reach the moon.

The next great frontier, investors in Cambridge-area firms are betting, would be unlocking ever-deeper mysteries of life to develop unprecedented therapies.

Much of that work is being done in Kendall Square, by companies and academic centers that are often on the same block — even in the same building.

Sixty-two public companies with a combined market value of about US$170 billion, the majority of them biotechnology firms, call Cambridge home.

Global pharmaceutical giants, including Takeda Pharmaceutical Co, Sanofi SA and Novartis AG, also have extensive research operations in the city.

“Perhaps the best way to explain Kendall Square to the people beyond the world of science and the world of Massachusetts area is this: Kendall Square is to science what New York is to finance, what Paris is to culture, what Washington is to government,” said Jay Bradner, president of the Novartis Institutes for Biomedical Research, the research hub of the Swiss giant located across the street from the Massachusetts Institute of Technology’s (MIT) museum.

The sense of being at a historical crossroads has meant that Cambridge competes with midtown Manhattan as the priciest commercial real-estate market in the US.

Average office rents in the third quarter of this year were US$82.23 a square foot (0.1m2), according to commercial real-estate firm CBRE Group Inc, just a hair behind US$82.51 a square foot in midtown Manhattan.

Main Street, home to academic centers that contributed to the Human Genome Project and early Crispr research, is the fourth-most-expensive commercial thoroughfare in the US, trailing only Silicon Valley’s Sand Hill Road, Manhattan’s Fifth Avenue and San Francisco’s Mission Street.

While it might seem inevitable that the area around MIT would become exceedingly valuable, for much of its history Kendall Square was a dump.

Locals recall empty parking lots and bad architecture. Rents were relatively low, which made it easy for biotech pioneers, such as Biogen Inc, to grow and flourish.

That soon changed. Joel Marcus, chairman and co-founder of Alexandria Real Estate Equities Inc, was one of the driving forces of the transformation.

Marcus is an unlikely baron of Kendall Square. He has never developed a drug. He does not have a doctorate degree. He does not live in Cambridge, or even on the East Coast.

Instead, Marcus, who resides in Pasadena, California, trained as an accountant and became a lawyer for drugmakers.

In 1994, Marcus realized that the biotechnology companies he was representing in California needed laboratory space and wanted to be near major academic facilities.

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