Pasadena-based REIT buys Raytheon campus outside Boston

Life sciences developer Alexandria Real Estate Equities has added to its scores of Boston-area properties with a deal for a 440,000 square-foot Raytheon campus for $124.7 million.

The Pasadena-based real estate investment trust purchased two office buildings at 225 and 235 Presidential Way in the Boston suburb of Woburn from Atlanta-based REIT Piedmont Office Realty Trust, Bisnow reported. The deal followed an $81-million Boston buy for a life sciences campus.

“WE PLAN TO CREATE A life science MEGA CAMPUS,” Alexandria Chairman Joel Marcus wrote in an email to Bisnow. “[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.”

The Raytheon office deal was one of two January acquisitions in the Boston area that the publicly traded company reported in its fourth quarter earnings report.

Alexandria paid $81 million to buy a 600,000 square-foot property at 421 Park Drive in the Fenway neighborhood of Boston for a mixed-use Landmark Center redevelopment project. The project includes 550,000 square feet of life sciences offices and 50,000 square feet for a ground-level supermarket.

Alexandria owns 84 properties totaling roughly 10 million square feet in greater Boston, with another 2.4 million square feet in the development pipeline, according to its earnings report.

The Woburn campus is 100-percent leased to Raytheon. The Waltham-based defense giant signed a lease renewal of its offices in 2017, 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 plans for a future life sciences campus.

Raytheon has said it would cut its office space by 25 percent as more of its employees work from home.

The transformation of the Woburn campus to life sciences would dovetail with a growing trend of office-to-laboratory conversions in the Boston area, and add inventory to a shortage of local labs, Bisnow reported. As of Dec. 31, the nearly 20 million square feet of labs operating in the Boston suburbs had a roughly 2.9-percent vacancy rate, according to CBRE’s Q4 report.

Alexandria, a giant among developers of life sciences campuses across the nation, spent $1.5 billion in the last quarter of 2021 on life sciences acquisitions, according to documents filed with the Securities and Exchange Commission.

Last month, it paid $125 million for a San Diego strip mall it aims to turn into a major life sciences campus, shopping center and business hotel.

The publicly owned firm plans a similar move in Palo Alto, where it just purchased four office buildings at Stanford Research Park for $446 million to add to its six nearby life sciences holdings.

The purchase brought the value of its Palo Alto portfolio to more than $1 billion.

It also paid $21 million for a site with plans to build a 578,000-square-foot life science campus in Millbrae.

[Bisnow] – Dana Bartholomew