Alexandria Continues Selling Spree With 2 More Boston-Area Deals

275 Grove St. In Newton, Massachusetts.

Alexandria Real Estate Equities has sold a Newton office building and part of a Fenway lab development, marking the latest in a string of Boston-area sales for the real estate investment trust.

Barings and Greatland Realty Partners acquired 275 Grove St., a 510K SF office and lab building in Newton, from Alexandria for $117.5M, according to public records. Primary tenants of the building include Tech Target, Atrius Health, Siemens and Parexel. Alexandria acquired the property in January 2020 for $235M.

In April, the developer announced that it was selling the three-office-building campus known as Riverside Center, saying in a quarterly investor filing “the macroeconomic environment and demand for office space has deteriorated considerably.”

Alexandria also revealed that it took a $139M impairment charge as a reflection of the property's lower value. The previous book value for the property was $259M, according to the filing.

The life sciences giant also sold a 286K SF portion of its 421 Park Drive development in the Fenway area to the Boston Children's Hospital for $155M, it announced Wednesday. Alexandria will still develop the 660K SF project and manage the entire property, including the space that Boston Children's occupies.

With this sale, 48.5% of the development, including the ground-floor retail, is committed to users, according to a press release. Construction on the 13-story development is expected to begin later this year and is projected to complete in 2026.

The two sales come after the REIT sold a five-building portfolio in Waltham and Cambridge for $365M to TPG Real Estate Partners life sciences portfolio company Alloy Properties. Alexandria announced last week that the firm has completed $884M in pending sales, marking 58% of its 2023 disposition plan.

Earlier this month, activist investor Jonathan Litt said that life sciences space is as underutilized as office, adding that he expects valuations to suffer as a result. Litt specifically named Alexandria as a firm that would feel the pain of empty space in its portfolio.

“Life science is not office space," Alexandria Executive Chairman Joel Marcus said in response. "You can't in any way, shape or form associate it with generic office, which is, in fact, in secular decline.”

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