A MassMutual subsidiary and Boston-based developer Greatland Realty Partners have acquired a three-building Newton office complex from Alexandria Real Estate Equities Inc. for $117.5 million, exactly half the price that Alexandria paid for the site three years ago.
California-based Alexandria (NYSE: ARE) revealed plans in April to sell 510,000-square-foot Riverside Center, located across from the Riverside MBTA station on Grove Street. The life sciences developer bought the complex in January 2020 for $235 million with an eye to convert it to labs. But economic uncertainty and the deteriorated office market led it to change those plans.
The company took a $139 million impairment charge in April to reflect the property’s lower value. An Alexandria spokesperson declined comment Wednesday.
The sale is one of the most striking instances yet of the fall of the office market, and even the life sciences real estate market, in Greater Boston. Office sales have been few and far between in recent months, especially in or just outside of Boston, though some of those that have traded hands have done so at a steep discount.
The Riverside Center property’s value, in fact, is significantly less than it was a decade ago: A Hines affiliate bought it for $197 million in 2013.
Barings, a Charlotte-based investment management subsidiary of MassMutual, and Greatland highlighted the continued potential to convert Riverside Center to labs in a statement.
Greatland co-founder Phil Dorman told the Business Journal he sees the complex as an “outstanding asset” with a history of occupancy rates over 90%. Riverside Center’s tenants include TechTarget, Siemens and Atrius Health administrative offices.
“While we appreciate the flexibility to pursue additional opportunities in life science-related uses in the future, we expect to maintain current operations for the foreseeable future,” Dorman said.
Since Dorman and fellow Boston Properties alum Kevin Sheehan founded Greatland in 2018, the firm has built a reputation as a converter of suburban office space into labs, including a former Liberty Mutual complex in Weston and Revolution Labs in Lexington.
Barings, meanwhile, manages more than $360 billion in assets globally, including real estate and fixed-income and equity investments.