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Raytheon's campus in Woburn has become the latest Boston-area office property eyed for a conversion to life sciences.
Alexandria Real Estate Equities last week acquired the office buildings at 225 and 235 Presidential Way in Woburn for $124.7M, the publicly traded life sciences developer revealed in its Q4 earnings report Monday afternoon. It acquired the property from Atlanta-based REIT Piedmont Office Realty Trust.
"WE PLAN TO CREATE A life science MEGA CAMPUS," Joel Marcus, chairman of Alexandria Real Estate Equities, wrote in an emailed response to Bisnow's request for comment Tuesday morning.
Marcus declined to answer specific follow-up questions about the project because he was preparing for Alexandria's Tuesday afternoon earnings call, but he did share more of his vision for the property.
"[We] will create a wonderful branded Alexandria site with lovely and attractive surroundings and an integrated life science mega campus aimed at curing some of the 10,000 diseases afflicting human kind where there is no therapy today and a huge unmet medical need," Marcus wrote in a follow-up email.
The deal was one of two January acquisitions in the Boston area that the REIT reported in its earnings release Monday evening, also including the $81M purchase of 421 Park Drive in the Fenway neighborhood, part of the site for its major Landmark Center project. Alexandria owns 84 Boston-area properties totaling around 10M SF, with another 2.4M SF in the pipeline for development and redevelopment projects, according to its earnings report.
The Woburn campus, a two-building, 440K SF office property, is 100% leased to Raytheon. The Waltham-based defense giant signed a lease renewal at the Woburn property in 2017 that expires in 2024, Piedmont announced at the time.
A Raytheon spokesperson told Bisnow that prior to last week's sale, the company signed a lease extension at the property until 2031. It is unclear how Raytheon's offices would factor into a future life sciences campus.
Piedmont began marketing the property for sale early last year and revealed in its Q3 earnings report that it had reached a $129M agreement to sell the campus. It declined to comment on Alexandria's reported closing price of $124.7M.
The Atlanta-based REIT had owned the property since acquiring it in 2011 for $85M. The two-building campus was built in 2000 by National Development and acquired by Invesco in 2004, shortly after Raytheon committed to lease the full property.
Raytheon CEO Gregory Hayes told CNBC in May that the company, which occupies 32M SF of office around the world, would cut its global office footprint by 25% because of the shift to remote work.
The transformation of the Woburn campus to life sciences would continue a growing trend of office-to-lab conversions in the Boston area, and it would help add more inventory to the area's supply-constrained lab market. As of Dec. 31, the 19.7M SF of lab inventory in the Boston suburbs had a roughly 2.9% vacancy rate, according to CBRE's Q4 report.
UPDATE, FEB. 1, 1:30 P.M. ET: This story has been updated to reflect that Raytheon extended its lease until 2031, according to a company spokesperson.
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