The largest life science employer in Massachusetts is now one of the biggest contributors to the state's office sublease market as it looks to slash nearly half a million square feet from its vast real estate portfolio.
Takeda Pharmaceuticals, a Japanese-based life science company with a corporate hub in Cambridge, Massachusetts, earlier this month dumped space across multiple office buildings it leases in the area on the region's sublease market ahead of plans to consolidate its operations at a new biotech development slated for completion later this year.
The listings collectively total a little more than 449,140 square feet across the properties at 300 Massachusetts Ave., 35 Landsdowne St. and 75-125 Binney St., according to brokerage materials viewed by CoStar News.
They hit the market less than two years after Takeda prematurely renewed the lease for its space at the 388,270-square-foot Binney Street property, extending its agreement with landlord Alexandria Real Estate Equities by another decade and pushing the expiration date to at least 2040.
The decision to shrink its prominent role in the Cambridge real estate market coincides with Takeda's preparation to take over the entire office development BioMed Realty has underway at 385 Kendall St. The 600,000-square-foot project, which the company signed on for back in 2022, will anchor Takeda's role in the city's Kendall Square district — even as it makes cuts elsewhere in an effort to better focus it.
"Our strategy has always been to unify Takeda’s global research and development center with other key operations into one Cambridge campus, expanding our presence in Kendall Square," a Takeda spokesperson said in a statement to CoStar News. They declined to provide details about the latest subleasing moves and how they will ultimately impact that presence.
The company has been on a significant growth spurt over the past several years, expanding its regional headcount to more than 6,000 employees, according to Securities and Exchange Commission filings, a figure that solidifies its standing as Massachusetts' largest biotech employer.
All told, the company's real estate footprint in the state is upward of 1.26 million square feet, according to CoStar data.
Hunting for a cure
The listings deliver a blow to the Boston life science market, coming at a time when the biotech market's vacancy rate has soared to nearly 30%, according to CBRE.
The regional life sciences market has stalled as a growing cohort of biotech companies have rapidly offloaded space, pushing vacancy rates to all-time highs.
Developers kicked off a slew of speculative projects across the region to capitalize on the pandemic-era life sciences boom that ultimately fizzled when the market turned in early 2022. About 55% of the more than 11.5 million square feet of biotech real estate in the Boston area was vacant by the end of the third quarter last year, according to data from Cushman & Wakefield.
There have been a few silver linings since the beginning of the year, however, a signal that Takeda could have an easier time landing a subtenant as the market shows early signs of gaining some traction.
Over the past several months alone there have been a handful of significant leases signed. Drug maker Stoke Therapeutics finalized a lease last month for just shy of 98,500 square feet in Waltham, Massachusetts. Scientific superintelligence startup Lila Sciences inked one of last year's largest office deals for the Boston area with a 235,000-square-foot commitment to anchor the new Alewife Park District campus in Cambridge. Medical device company TransMedics is also planning a major headquarters expansion, signing a lease earlier this month for nearly 500,000 square feet in Somerville.
And Roche Group's Genentech last week agreed to triple the amount of space it will occupy at the Harvard Enterprise Research Campus in Boston's Allston neighborhood.