When C4 Therapeutics, a Boston-based cancer and disease therapy firm, agreed to move to Watertown, Massachusetts, in 2017 from one of the nation’s premier life sciences hubs — the Kendall Square neighborhood in Cambridge, Massachusetts — it marked a turning point for the inner-ring suburb.
C4 expanded and extended its lease in Watertown last year, showing just how dramatically the market has since changed: The total square footage leased in Watertown has increased over 200%, according to CoStar data.
The deal: C4 amended its lease at 490 Arsenal St., better known as The Linx, owned by New York-based Clarion Partners. The amendment extended C4’s existing lease of 45,559 square feet, and the firm also took on another 66,052 square feet in the same building for a total of 111,611. Occupancy is set to run another 10 years, and there are options to extend.
Why it matters: In the ultra-competitive landscape of Boston lab office space, securing a high-quality tenant is always a challenge. Paying one tenant to leave its space so another can expand adds another layer of complication. Clarion did just that to keep and expand C4’s presence. Clarion paid Kala Pharmaceuticals $2 million to terminate its lease early, Kala reported in a Securities and Exchange Commission filing. Doing so allowed Clarion to sign C4 at a higher cost than what Kala was paying, according to parties involved in the deal. C4 is scheduled to pay more than $100 million over the life of its lease.
The brokers: Duncan Gratton of Cushman & Wakefield represented the landlord. Jon Varholak of CBRE represented the tenant.
What they’re saying: “C4 was the first company to commit to really the first new lab building to be built in Watertown,” Gratton said. “That was really the beginning of a real huge wave of tenants that have relocated to Watertown or chosen Watertown to locate their biotech facilities.”
Kala was “a heavy office user, even though they had lab space,” Gratton said. “They determined during COVID that their workforce could work remotely very well and so they didn’t need all their office space. They decided that the market was in their favor to get out from under this lease and have a lab someplace else with a smaller office.”
The property: The 185,015-square-foot, two-story building Linx opened for tenancy in 2018 and offers numerous amenities, including an acre of outdoor green space, a bocce court, outdoor furniture, a 33-foot high lobby with a cafe, locker rooms with showers and storage for 78 bicycles. The building was awarded LEED energy efficiency certification at the gold level upon its completion in 2017.
Fun fact: In 2017, when C4 signed its lease at Linx, it was one of 16 office or lab space signings totaling 267,131 square feet that year in Watertown, according to CoStar data. The average space leased was 10,274 square feet. Last year, Watertown recorded 51 such deals totaling 857,852 square feet, averaging 16,820 square feet per signing.
CoStar’s Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.