Alexandria Real Estate Equities is selling its nearly complete 421 Park Drive life sciences tower in Boston’s Fenway neighborhood to an institutional buyer, a deal the company says will reduce its remaining construction costs by about $136 million. The 13-story, 339,668-square-foot building sits at the company’s Alexandria Center for Life Science megacampus and had just wrapped construction in June, making it the last speculative lab project in Greater Boston to finish without a tenant already lined up.
A Megacampus Tower Changes Hands
Alexandria disclosed the pending sale in its third-quarter earnings report, saying it entered a purchase and sale agreement with an institutional user for the property, according to a company release distributed via prnewswire.com. The deal covers 339,668 rentable square feet, which the release describes as substantially all of Alexandria’s remaining development project at that site. Alexandria said the sale is expected to generate significant proceeds while cutting future potential construction spending by roughly $136 million.
As NBC Boston reported, Alexandria is one of Greater Boston’s largest life sciences landlords, and 421 Park Drive is an office and life sciences building that was nearing completion in Fenway. The company’s own disclosures put the closing timeline in flux: the prnewswire.com release states closing is anticipated in the fourth quarter of 2026, while an earlier SEC filing had indicated the sale was expected to close by the third quarter of that year. That SEC filing also notes the agreement includes customary representations, warranties, covenants and indemnification provisions, and that the sale remains subject to customary closing conditions.
Buyer Would Inherit Unfinished Lab Space
The buyer is expected to take on roughly $136 million in remaining interior laboratory improvements still needed to finish out the space, per a report from Banker & Tradesman. The outlet’s report notes that a 268,000-square-foot portion of the same building was already sold to Boston Children’s Hospital in 2023 as a condominium, meaning the current transaction involves what’s left of the tower. The broader Alexandria Center for Life Science campus, which includes 401 and 421 Park Drive along with 201 Brookline Ave., totals 1.5 million square feet and is 74 percent occupied, the publication reported.
The trade outlet also reported that Alexandria, described as the nation’s largest lab landlord, is canceling planned office-to-lab conversions elsewhere to cut expenses, while recruiting technology and advanced-technology tenants to chip away at vacancy across its portfolio.
A Market Still Working Through a Glut of Empty Lab Space
The sale lands at a tough moment for Greater Boston’s lab sector. Vacancy climbed 20 basis points to 28.9% in the third quarter, and availability rose 30 basis points to 33.1%, according to CBRE figures. Asking rents fell to $77.97 per square foot on a triple-net basis, down 8.1% from a year earlier, and net absorption was negative 168,430 square feet for the quarter, with Cambridge alone shedding 307,103 square feet as large subleases hit the market. The Greater Boston suburbs offset some of that with 151,858 square feet of positive absorption, led by Somerville…