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Why Medical Office is Boston’s Best Bet

The Medical Device Industry, the new face of Boston’s Biotechnology industry, continues to make progress in an otherwise bleak economy. What makes medical device development so attractive is the short time required for research, development and FDA approval.  The medical device pipeline totals 5-6 years as opposed to the longer development pipeline for drugs of 15 years. According to the Donahue Institute study in 2006, 10% of U.S. venture capital went to medical device firms. In Massachusetts alone last year, medical devices accounted for $5.5 billion of sales, representing a 38% increase since 1997 according to the National Real Estate Investor. As a result of such robust growth, many medical device companies are expanding current facilities, leasing or buying new buildings. Medical devices include equipment used in heart surgery, minimally invasive surgery (laparoscopy), implantable devices such as pacemakers, orthopedic implants, x-ray devices and other small devices or items used to conduct procedures on a daily basis in hospitals. Research and testing of the new devices is often performed at teaching hospitals where surgeons can be consulted about the utility of these new devices. Due to the high concentration of world-class universities and teaching hospitals, including those affiliated with Harvard, Tufts and Boston University, the greater Boston area is especially attractive to the medical device companies. Many medical device companies first sprung up in Cambridge, near the Harvard and MIT campuses, where real estate can be as high as $60 per square foot. As a result of such high prices, many have moved out to the surrounding suburbs where the prices are much lower. Many of the current medical device company offices occupy previous machine shops or old mill buildings in the area where the cost per square foot is less. For these companies expanding to the suburbs, easy access to Cambridge is considered highly desirable, allowing consultants to commute between the company office and the university campuses. For those considering buying or leasing commercial property in the Boston area in 2009, medical commercial real estate reigns supreme. In an economy where other real estate sectors are downsizing, medical real estate is maintaining its value and transaction volume much better. Patients will continue to require physicians, the care they provide and the devices used to treat them regardless of the current economic situation….and the population is only getting older. And when you consider the potential for continued expansion of the medical device industry in Boston, you can further hedge your bets that medical commercial real estate is the way to go! Sign up for free CREFrontline updates, if you haven’t already. It's free and has absolutely no obligations.