2 biotech giants seeking office space in Cambridge

Two biotech giants are searching for office space in Cambridge in moves that may foreshadow the establishment of larger research facilities.

Genentech Inc. of South San Francisco, the world's second-largest biotech firm ranked by stock market value, is seeking 10,000 square feet of office space, according to real estate brokers. Separately, Elan Pharmaceuticals of Ireland is looking to lease as much as 20,000 square feet.

The two firms would add additional heft to the growing biotechnology cluster that has made Cambridge a crucial location for both start-ups and established companies.

"Genentech is looking to put their toe in the water," said Curtis Cole, a partner at CB Richard Ellis, a commercial real estate services company based in Los Angeles. "My guess is they want to establish a presence and spend some time figuring out what their research needs are before pursuing a research facility, which is much more costly."

Several brokers said Genentech is considering space at 101 Main St., an office high-rise that is just on the Cambridge side of the Longfellow Bridge.

Genentech, which claims to be the first biotechnology company, was founded in 1976 and focuses on oncology, immunology, and vascular medicine. It had operating revenue of $3.3 billion last year and has a market capitalization of about $45 billion, second in the industry to Amgen Inc. of Thousand Oaks, Calif.

Caroline Pecquet, a Genentech spokeswoman, said, "We don't comment on rumors of facility development."

Elan, based in Dublin, skirted bankruptcy two years ago. Now with a new management team, it has rebounded strongly. It is preparing to launch a drug it discovered for multiple sclerosis, Antegren, in collaboration with Biogen Idec Inc. of Cambridge.

An Elan spokeswoman declined to comment.

The bursting of the tech bubble and an 18-month biotechnology slump have left Cambridge with an enormous overcapacity of office and lab space and some of the highest vacancy rates it has ever seen. In July, the vacancy rate for office space across the city was 23.2 percent, according to research by Trammell Crow Co. In biotech-heavy East Cambridge, the vacancy rate in July was 28.4 percent, including space available through subleases.

"We're not going to solve the softness in the market simply from the growth of existing tenants," said Bob Richards, president of Richards Barry Joyce & Partners, a real estate advisory firm in Boston.

Jeffrey Krasner can be reached at krasner@globe.com.