Life Sciences Market Report / Fourth Quarter 2020 Greater Boston

Market Overview Over the last few years Greater Boston has established itself as the top life sciences market in the world. Even in the middle of the COVID-19 pandemic, demand for laboratory space continued to be off the charts throughout 2020. In addition to the race to find a COVID-19 vaccine, the pandemic has accelerated research trends such as the growing importance of personalized medicine for an increasingly older population.

Life sciences in Greater Boston are growing unabated, as evidenced by tightening vacancies and a record-setting $6.3 billion in biotechnology venture capital funding Greater Boston Area in 2020. Venture capital funding is a major indicator of the sector’s success, as life ranked sciences companies use capital for research, recruiting talent, and ultimately leasing laboratory space. The Greater Boston Area, San Francisco Bay Area, and San Diego, #1 in nation the “big three” biotechnology markets, account for over half of the total laboratory (according to Sum Of NIH inventory in the country. Access to top research universities and a highly skilled talent Funding Recipients) pool are just two of the reasons why life sciences companies from across the world have flocked to Greater Boston over the years.

Overall Inventory Overall Average Total Building Vacancy Under Construction NNN Asking Rate Inventory 5.0% 3.9 msf $80.40 31.0 msf

Vacancy Trends

18%

16%

14%

12%

10%

8%

6%

4%

2%

0% 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4

Overall Life Sciences Market Vacancy Cambridge Life Sciences Vacancy

© 2020 Avison Young New England. All rights reserved. E&OE: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young Notable Lease Transactions Tenant Address Submarket Square Footage Date Translate Bio 200 West St 128 West 138,444 Q4 2020 Constellation Pharmaceuticals 100 Talcott Ave 128 West 79,000 Q4 2020 Dyne Therapeutics 1560 Trapelo Rd 128 West 68,187 Q4 2020 Ginkgo BioWorks 10 Wilson Rd Mid Cambridge 38,759 Q4 2020 Bristol Myers Squibb 250 Water St East Cambridge 360,000 Q3 2020 CRISPR Therapeutics 105 West First St Seaport 263,500 Q3 2020 BlueRock Therapeutics 238 Main St East Cambridge 73,830 Q3 2020 Alnylam Pharmaceuticals 101 Main St East Cambridge 37,287 Q3 2020 Affinia Therapeutics 43 Foundry Ave 128 West 31,590 Q3 2020

Notable Sale Transactions Buyer Address Submarket Price Square Footage Date The Blackstone Group Portfolio East Cambridge $3.45 billion 2,300,000 Q1 2021* Healthpeak Properties Discovery Park West Cambridge $720 million 620,000 Q4 2020 Alexandria Real Estate Equities Reservoir Woods 128 West $330 million 515,273 Q3 2020 IQHQ Alewife Park West Cambridge $125 million 290,000 Q3 2020

*This transaction is agreed upon but set to close officially in Q1 2021

2020 NIH Funding Overall Market Sale Price Per SF

$0.191 b $800 Corporations $727

$1.646 b $600 Institutions $400

$200 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $3.6 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 billion

Investor Spotlight: The Blackstone Group

In December, Blackstone emerged as the largest $1.766 b life sciences property Hospitals owner in Cambridge with its agreement to acquire Institution NIH Funding 14 laboratory properties, Harvard University $514 m totaling 2.3 msf, from UMASS (All Campuses) $340 m Brookfield for $3.45 billion. The deal is the largest Boston University $226 m transaction across all U.S. real estate markets since Massachusetts Institute of Technology $209 m November 2019, when a Las Vegas casino traded Tufts University $92 m for $4.2 billion. Most (90%) of the properties are concentrated in East Cambridge, the epicenter of life sciences activity in the U.S. The acquisition Hospital NIH Funding reaffirms Blackstone’s strong commitment to the Massachusetts General Hospital $552 m long-term fundamentals of the sector and the Brigham & Women's Hospital $327 m Boston/Cambridge market alike. As a result of the Boston Children's Hospital $202 m acquisition, BioMed Realty, Blackstone’s life sciences Dana-Farber Cancer Institute $174 m portfolio company, now has an enterprise value of Beth Israel Deaconess Medical Center $136 m over $20 billion. Two thirds of BioMed’s properties are in the Greater Boston Area.

© 2020 Avison Young New England. All rights reserved. E&OE: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young Historical NIH Funding Construction $3.6 b The upward trajectory of the life sciences $3.4 b market has caught the attention of many $3.2 b developers who are seeing opportunities for $3.0 b new ground up development and evaluating $2.8 b the potential for office-to-laboratory $2.7 b conversions. As the office market continues 2017 2018 2019 2020 2015 2016 to struggle, many high- profile office owners such Historical Venture Capital Funding $6.3 b as Boston Properties have announced that they are shifting their focus to life $5.5 b sciences. Oxford Properties Group is the latest developer pivoting to life sciences as it retracted its 2019 proposal for a 625,000 sf office tower to pitch a 393,000 sf laboratory building at 125 Lincoln St in the CBD, a submarket $3.7 b $3.8 b $3.8 b devoid of laboratory space. Greater Boston has 3.9 msf $3.2 b of laboratory construction underway, approximately 1 msf greater than any other U.S. market, and 18.4 msf 2015 2016 2017 2018 2019 2020 proposed, according to Avison Young research.

Development Pipeline Building Developer Submarket Delivery RBA % Leased Boynton Yards DLJ Real Estate Capital Partners Near North Q3 2021 289,000 0% Cambridge Crossing DivcoWest East Cambridge Q4 2021 1,405,640 100% 225 Wyman St Hobbs Brook Management 128 West Q1 2022 507,620 36% 750 Main St Massachusetts Institute of Technology Mid Cambridge Q1 2022 200,000 100% 300 Third Ave Lincoln Property Company 128 West Q1 2022 140,000 0% 201 Brookline St Samuels & Associates Fenway/Kenmore Q2 2022 501,200 18% 400 Summer St WS Development Seaport Q1 2023 626,400 100%

Q4 2020 Laboratory Statistics Total Total Total Net Net NNN Under Submarket RBA Vacant Vacancy Absorption Absorp. Asking Construction (sf) Space (sf) Rate (sf) YTD (sf) Rate East Cambridge/Kendall Square 9,590,423 197,394 2.1% 10,373 7,344 1,405,640 $104.28 Mid Cambridge/Harvard Square 4,736,929 13,034 0.3% 3,407 -7,173 200,000 $85.90 West Cambridge/Alewife Square 1,295,375 133,590 10.3% 62,140 255,446 0 $79.51 Cambridge 15,622,727 344,018 2.2% 75,920 255,617 1,605,640 $96.65 Seaport 2,231,464 103,913 4.7% -55,493 -39,007 626,400 $84.94 Allston/Watertown 2,814,235 342,849 12.2% -123,168 -139,516 0 $72.10 Fenway/Kenmore 2,538,705 0 0.0% 0 0 501,200 $79.28 Boston & The Ring 7,584,404 446,762 5.9% -178,661 -178,523 1,127,600 $78.28 Route 128 North 210,113 3,374 1.6% -3,374 -3,374 289,000 $48.81 Route 128 West 6,976,892 741,941 10.6% 23,699 198,167 852,212 $51.29 128 Belt 7,187,005 745,315 10.4% 20,325 194,793 1,141,212 $51.22 495 Belt 583,108 23,865 4.1% -16,674 -16,674 0 $32.24 TOTAL Market 30,977,244 1,559,960 5.0% -99,090 255,213 3,874,452 $80.40

© 2020 Avison Young New England. All rights reserved. E&OE: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young Greater Boston submarkets map

MAP KEY

495 Belt 128 Belt The Ring Boston

495 Northeast 128 North Charlestown/Eastie Seaport CBD Route 3 North 128 West Near North North Station 495 Route 2 West 128 South Allston/Watertown Back Bay 495 Mass Pike West South Shore Fenway/Kenmore Cambridge West Cambridge/Alewife Framingham/Natick Crosstown Corridor Mid Cambridge/Harvard 495 South East Cambridge/Kendall Sq

93 Amesbury 3 Salisbury Merrimac

Newburyport

Haverill West Newbury Newbury

60 EVERETT 495 Georgetown Rowley Methuen 16 3 93 Lawrence Dracut Boxford 1 Ashby Dunstable Townsend Pepperell Ipswich Tyngsborough North 99

Andover 2A 95 Lowell Topsfield Andover Rockport Hamilton Essex West Cambridge 128 Groton Tewksbury Alewife Fitchburg Middleton Wenham Gloucester Lunenberg Westford 495 93 North Reading Manchester 128 Ayer Chelmsford 3 Danvers by the Sea Shirley Billerica Beverly 3 Mid Cambridge Wilmington Mid Cambridge Littleton Harvard Reading East Cambridge Leominster Lynnfield East Cambridge Carlisle Kendall Sq 2 Peabody Harvard Burlington 128 Acton 95 Wakefield Salem Marblehead 90 190 Lancaster Boxborough Bedford 3 Woburn 2 Saugus Lynn Swampscott 20 Princeton Acton Concord Stoneham Sterling Melrose Winchester 1 Lexington 93 90 Bolton Stow Medford Malden 30 Clinton Maynard Lincoln 128 2 Arlington Revere Everett 95 Holden 495 Belmont Somerville Chelsea West Hudson Sudbury Waltham Boylston Berlin Cambridge Winthrop Weston Watertown

Marlborough 90 Boston Boylston 290 Wayland Newton 190 Framingham 9 Northborough 90 Brookline Southborough 9 Wellesley 128 Crosstown Corridor Shrewsbury 9 Natick Needham 93 North Worcester Westborough 95 Station 3 Ashland 290 Quincy 90 Dedham Sherborn Dover Milton Cohasset Hopkinton Westwood Hingham 3 CBDC 93 Auburn 1 Grafton 93 Braintree Weymouth Scituate Holliston Medfield Milbury 495 Norwood Randolph 90 Canton Norwell Back Bay Upton Millis 1 3 a a 395 146 Milford Medway Walpole Seaport Holbrook 90 Sutton Rockland Northbridge Oxford Avon Stoughton Abington Hanover Hopedale Norfolk 95 Marshfield Franklin Sharon 24

Mendon Bellingham Brockton Whitman

Webester Douglas 1 Foxborough Pembroke Uxbridge Wrentham Hanson Duxbury Blackstone East Millville Easton Bridgewater 495 West Mansfield 3 Bridgewater Plainville Halifax North Kingston Attleborough Bridgewater Norton Plympton

Attleboro Raynham

24 Taunton Middleborough Carver 495 Plymouth

Rehoboth 140 3 Dighton Seekonk Lakeville 195 Wareham 495 Freetwown Swansea 24 Rochester 195 Fall River Tom Collins ChrisSomerset Hart 140 Bourne Sandwich 6 Managing Director, Principal Research Analyst Acushnet Marion New England, LLC New [email protected] [email protected] +1 781 775 6675 +1 617 702 8880

© 2020 Avison Young New England. All rights reserved. E&OE: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young