Biotech firms flock to Cambridge roosts

The bio-pharmaceutical industry has been the cure for ills in the Cambridge office market.

Both newcomers and veterans of the biotech and pharmaceutical scene are gobbling up vacant offices, to the point where empty space is disappearing faster here than in other submarkets in the Boston area.

Indeed, the expansion by firms in these sectors seems to be feeding on itself; other companies in the field are relocating to Cambridge simply because their competitors or colleagues are already here.

''We think virtually every pharmaceutical company is asking, ''should we have a presence in the Boston or Cambridge research cluster?" said David Clem, managing partner of Lyme Properties LLC, which is building a huge laboratory building on speculation on Binney Street.

Clem, who has been constructing lab space for 25 years, said he has leased more space over the last year than in any 12-month period in his career.

Before the recent rush, Cambridge's office market had been in a lull like so many other local markets. Now, the availability of space in the office market is at 14.3 percent, its lowest since the first quarter of 2001, when it was 9.3 percent, according to real estate firm Spaulding & Slye. A year ago, the availability rate was 21 percent. Moreover, the Cambridge market last year absorbed 1 million square feet of office lab space, more than even Boston's financial district.

Indeed, veteran watchers of the real estate scene said there is something of a land-rush mentality in Cambridge.

''You don't want to be the last one in the neighborhood," said Peter Bekarian, vice president of Spaulding & Slye.

Estella Johnson, Cambridge's director of economic development, attributes the lower availability rate to reduced rents that have enabled companies to negotiate better deals. ''It makes me hopeful that things are going to be turning around," she said.

This fall, the Novartis Institutes for Biomedical Research is adding about 80,000 square feet of lab space to its stock and is building a 65,000-square-foot facility next door to its headquarters on Massachusetts Avenue, which will replace some existing space, spokesman Jeff Lockwood said. Before locating in Cambridge, Novartis did a global search for headquarters for its research arm and concluded Cambridge offered proximity to innovative science, top-flight academic institutions, renowned clinical centers, and other biotech companies. ''Everyone's here," Lockwood said.

Meanwhile, Cambridge stalwart Genzyme Corp., which has been in the city 16 years, added 100,000 square feet in two buildings, 55 Cambridge Parkway and next door to its headquarters on West Kendall Street, spokeswoman Erin Emlock said.

Another mainstay of Cambridge's economy, software, has also expanded.

For example, VMware, a software maker that moved to 11 Cambridge Center last year to tap into the area's ''innovative talent pool," plans to bump up its staff of 30 engineers to 200 in the coming years, said Steve Herrod, vice president of technology development. To accommodate growth, officials have signed a letter of intent to move from their 17,000-square-foot space to 36,000 square feet a block away, with the option to expand to 50,000 square feet.

''These are big deals," Bekarian said. ''When good things happen, they happen quickly." One of the bigger new spaces due to come on line is Lyme Properties's lab building.

''We would not build a 400,000-square-foot building on spec if we didn't think there was a high probability that we would be able to hit our absorption objectives," said Clem. He said the building is ''a first-class office building on steroids" with wide appeal to research companies, including specialized heating and cooling systems and heavy-duty electrical capacity.