When Sanofi inked a massive lease in Cambridge Crossing for its Genzyme unit last year, the French drugmaker found itself in prime position for another real estate deal.
The move opened up a lot of square footage at Sanofi Genzyme's existing facility in Kendall Square, the hottest address in the Boston biotech hub. And by subleasing that space to gene therapy player Bluebird Bio at a premium, Sanofi stands to make a profit, Boston Globe reports.
Back in December, Sanofi leased 900,000 square feet in Cambridge Crossing, a new development in Kendall Square. The company plans to bring 2,700 employees from around the state together in two buildings there. At the time, Genzyme chief Bill Sibold said the lease was a “critical investment” that’ll allow the company to “reimagine the way we work together to develop transformative treatments for patients.”
But even after the big move, Sanofi will still have the lease on its existing Genzyme headquarters just a few steps away at 50 Binney Street, at a rate of $62.50 per square foot, the Boston Globe reports. After all, the company just moved into the space last year.
So, it's subleasing the space to Bluebird beginning in July 2021, the biotech disclosed in a securities filing. And it'll profit off the spread. Bluebird will pay $99.95 a foot, or $26.7 million per year for the space, with the rent subject to annual increases and additional other costs. The sublease ends at the end of 2030, according to the filing.
With that deal, the French drugmaker will generate $8.6 million in profit in the first year of the sublease, the Globe reports; it’ll likely split those proceeds evenly with the building owner, Alexandria Real Estate Equities.
Sanofi’s move to Cambridge Crossing comes quickly after the company moved into the Binney Street location in 2018. The Binney street building contains about 267,000 square feet, according to Bluebird’s recent SEC filing, so the move to Cambridge Crossing dramatically expands Genzyme's footprint in the neighborhood. Bluebird plans to use the lease to expand from its existing headquarters at 60 Binney Street.
Cambridge Crossing will feature lab space plus 11 acres of parks, housing and more. Healthcare firm Philips North America plans to move its U.S. headquarters there as well.