A brand-new, 370,000-square-foot lab tower at 808 Windsor Street in Somerville's Boynton Yards sits completely empty, and the bank that financed its construction now owns it outright. Bank OZK took control of the 11-story building on September 29 through a deed-in-lieu of foreclosure, ending a years-long bet on the once-booming life sciences market just as the building's finished construction ran headlong into one of the worst lab leasing slumps the region has seen.
The transfer followed a collapsed deal to sell the property, according to Bisnow, which reported that the building's ownership group — a joint venture of Leggat McCall Properties, DLJ Real Estate Capital Partners and Deutsche Finance Group — had been in talks with a buyer over a proposed $330 million sale, a figure disclosed in a Bank OZK July earnings statement. That sale fell apart, and the property reverted to the bank that had bankrolled it from the start.
Bank OZK provided a five-year, $246 million construction loan for the 808 Windsor project back in December 2021, according to Commercial Observer. The building, designed to offer research-and-development lab and office space along with ground-floor retail and below-grade parking across its 11 floors, was completed in 2024, per New England Construction — but it has never landed a tenant.
A Steep Markdown and a Pending Sale
Bank OZK's October earnings release carried 808 Windsor Street at $132 million, after the bank wrote down the property's value by $37 million, the Bisnow report notes. Now Bank OZK is pursuing a sale of its own and is in ongoing discussions with an interested purchaser, the station's report states, while it has also engaged Leggat McCall Properties to manage the building and carry out a business plan that includes leasing.
The building was part of a wave of speculative lab projects launched during the pandemic-era industry boom, when developers across Greater Boston raced to build space for an expected surge of biotech tenants that never fully materialized at the scale projected. That timing has proven brutal: the Somerville-area life sciences submarket had a vacancy rate exceeding 47% at the end of the third quarter of 2026, according to CBRE, as cited in the same report.
A Regionwide Lab Glut
The trouble at 808 Windsor fits a broader pattern across Greater Boston's life sciences market. Net absorption across the region was negative 168,430 square feet in the third quarter, according to CBRE, while vacancy climbed to 28.9% and availability rose to 33.1%. Asking rents, meanwhile, fell to $77.97 per square foot on a triple-net basis, down 8.1% from a year earlier.
Leasing activity totaled 708,446 square feet in the quarter, down 21.1% from the prior quarter, though year-to-date leasing was still up 20%, driven largely by renewals rather than new tenants, per CBRE's figures. Statewide, the picture looks even more strained: Massachusetts lab and manufacturing vacancy jumped eleven-fold to 31.1% between the end of 2021 and mid-2026, according to MassBio data reported by Fierce Biotech. Local brokerages have separately tracked as much as 16.6 million square feet of vacant lab space across the region even as the construction pipeline has shrunk to roughly 2.1 million square feet, Banker & Tradesman reported.
808 Windsor is not the only casualty. Bisnow's report notes that Deutsche Finance Investment Fund 17 — Club Deal Boston II planned to file for insolvency after failing to find a buyer or secure a loan extension, as Bloomberg reported in August. Nearby, a development team put on hold a planned 262,000-square-foot life sciences project at 15 McGrath Highway back in 2024. And Bank OZK's experience in Somerville is not its only recent foreclosure in the sector — the bank also took ownership of a vacant 320,000-square-foot life sciences building at 1229 West Concord Place in Chicago via deed-in-lieu of foreclosure, satisfying a $65 million construction loan, according to The Real Deal.
Not Every Lab Building Is Struggling
Elsewhere in Boynton Yards, the picture looks different. The development team completed 101 South Street, a purpose-built lab building now fully leased to Flagship Pioneering, which placed four of its portfolio companies — Cellarity, Tessera Therapeutics, Laronde and Generate Biomedicines — inside, according to Leggat McCall Properties. Greystar also delivered a 469,000-square-foot Somerville lab building in 2024, and last month signed a 105,000-square-foot lease with Mass General Brigham, per Bisnow's reporting. CBRE's quarterly figures describe the same Somerville lease as a 105,000-square-foot deal with MassGeneral Hospital, while the Boston Business Journal reported it as a 100,000-square-foot lease by Mass General Brigham at an empty Assembly-area building.
Other recent comparisons point to how uneven the recovery can be. Somerville's 10 Prospect, completed in 2024 with roughly 200,000 square feet of lab and office space, has remained largely empty with unfinished ground-floor space, according to Fierce Biotech's reporting. By contrast, the 225,000-square-foot 66 Galen building in Watertown sat vacant at the start of 2025 but reached 95% leased by year's end, the same outlet reported.
Somerville Weighs More Housing at Boynton Yards
Boynton Yards itself is a planned 1.8-million-square-foot life sciences campus adjacent to the MBTA Green Line's Union Square station that includes 808 Windsor Street, with two more lab projects and a 350-unit residential building still unstarted. In September, the Boynton Yards team filed a zoning text amendment request that would reduce the share of commercial floor area required on the site from 75% to 60%, opening the door to more residential development.
Applicants behind that request said life-sciences leasing demand had declined and vacancy remained elevated, and argued Boynton Yards was well suited for more housing given the regional and national housing shortage and the site's proximity to transit. Somerville's Planning Board and Land Use Committee have planned to discuss allowing more housing at Boynton Yards and nearby Windsor Place, weighing the same downturn in lab-space tenants, according to the Cambridge | Somerville Independent.
