A Boston-area biotech company is cutting the cord on all of its physical office space in the aftermath of failed drug trials and the elimination of its remaining workforce.
Lyra Therapeutics reached early termination agreements for two properties it had been leasing in Watertown and Waltham, Massachusetts, ending what had been an expansion streak. Yet after years of clinical development challenges, it will now pay about $2.5 million in termination fees and forfeit almost $1.5 million in deposits to cut ties with its space across the Boston area.
The company was originally headquartered in nearly 22,400 square feet at Alexandria Real Estate Equities' 480 Arsenal St. property in Watertown, where it had been based since 2008. Several years ago, it unveiled plans to expand and relocate its corporate hub to Waltham, signing a sublet deal for about 52,000 square feet at 880 Winter St.
The larger space was intended to expand Lyra's manufacturing operations ahead of the release of results from a late-stage trial of one of its experimental products. Yet those results failed to materialize, and the biotech firm subsequently halted future drug development and laid off essentially all of its remaining employees.
The company was left on the hook for both buildings, and earlier this year tried to sublet them out as part of its effort to explore "strategic options."
The termination agreements, detailed in filings with the Securities and Exchange Commission, come several months after Lyra was served a default notice by RVAC Medicines, the sublandlord for the space, for failing to pay rent on its Waltham headquarters. The company said in an SEC filing that it had been "seeking to resolve its outstanding obligations, including its lease obligations, ideally outside of a bankruptcy process."
Lyra did not respond to a request to comment.
'Setting the stage'
The now-vacant space is a new bruise for Boston's life science market as it scrambles to find its post-pandemic footing.
After years of significant construction and leasing momentum, the region has struggled to keep up with its growth, sending the regional vacancy rate soaring to nearly 30%, according to CBRE.
The area's biotech real estate market has stalled as a growing cohort of biotech companies has 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.
Yet there have been some emerging bright spots in the Boston area and elsewhere across the nation's largest life science hubs as markets move through their respective correction periods.
Leasing for lab space slowed to what JLL described as a "glacial pace" in early 2025. By the end of last year, more than 61 million square feet of available biotech real estate was sitting around, weighing down the national market, according to one of the brokerage's recent reports. The U.S. life science vacancy rate has spiked to about 27%, but the national availability rate ended last year at more than 31%.
"We're witnessing a historic market correction that, while painful in the short term, is setting the stage for a more sustainable and innovative future," Travis McCready, JLL's head of life sciences for the Americas markets, said in the report.
In Boston, Danish drugmaker Zealand Pharma finalized a deal last month with Healthpeak Properties for about 55,000 square feet at the Cambridgepark Drive campus. Once it officially moves into the building, the company will land in the backyards of other Boston-area biotech conglomerates such as Novo Nordisk, Pfizer, Eli Lilly and Roche Group — all of which are racing to capitalize on the rising popularity of GLP-1s and other weight-loss drugs.
Scientific superintelligence startup Lila Sciences inked one of the largest office deals in the Boston area last year, committing to a 235,000-square-foot space to anchor the new Alewife Park District campus in Cambridge. Medical device company TransMedics is also planning a major headquarters expansion, signing a lease in January for nearly 500,000 square feet in Somerville.