Life sciences developer Alexandria Real Estate Equities continues to hunt for real estate assets it can turn into lab developments, and its latest acquisition shows how creative it is willing to be.
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Alexandria paid $130M to acquire Watertown Mall at 550 Arsenal St. in a deal that closed Wednesday, Middlesex County land records show. The mall, anchored by a Best Buy and a Target, was sold by Watertown Mall Associates Limited Partnership, which was represented in the transaction by New York real estate consultant Alan Mantell. New York-based Rosen Associates is also tied to the mall's ownership.
Neither Mantell nor Alexandria responded to requests for comment Thursday.
Plans for the development were not immediately apparent, but Alexandria in the past two years has scooped up other buildings in Watertown and beyond in conversion plays. A lab may not be pitched soon at the Watertown Mall because of tenants’ long-term leases, Watertown Community Development and Planning Director Steve Magoon said Thursday. Target has a lease through 2033, public records show.
The REIT is bullish on Watertown, Alexandria founder Joel Marcus said during the company’s Q4 2020 earnings call in February. The community with more than 2M SF of life sciences developments provides proximity to the Cambridge life sciences cluster and easier transportation than other rising neighborhoods, Marcus said.
The Watertown Mall sits less than a mile from the former Athenahealth complex, an 11-building project that Alexandria acquired for $526M in 2019. The site has already secured commitments from a novel therapeutics company and a biomanufacturing project. It recently secured approval in Newton to convert a large chunk of an office building into lab space.
Malls have been especially vulnerable during the coronavirus pandemic in Massachusetts’ oversaturated market, with rising distress leading to more redevelopment. Already, a Worcester mall is on its way to becoming an Amazon last-mile center, while projects in Cambridge and Woburn will bring mixed-use developments to the former retail centers. Simon Property Group has handed several of its regional malls back to lenders.
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