One Kendall Square complex sold for $725 million
Another month, another blockbuster deal in Boston-area real estate.
Alexandria Real Estate Equities has an agreement to buy the eight-acre One Kendall Square complex for $725 million, and it plans to add another building to the nine-building campus of office and lab space, the company disclosed in a securities filing. The complex includes the Kendall Square Cinema and several restaurants in addition to the office buildings.
Alexandria, which is already among the biggest landlords in Kendall, will pay roughly $1,124 per square foot, among the highest prices ever for a large office building in the Boston area. The seller is DivcoWest, another large tech-oriented real estate firm, which paid $394 million for One Kendall just two years ago and spent $24 million on upgrades. The deal is set to close later this year.
Despite the rich sum it’s paying, Alexandria said it sees opportunities to make even more money out of One Kendall, the company said in the filing earlier this month. The complex is 98.5 percent occupied but more than half of its leases expire by 2019. As it signs new leases, Alexandria expects to raise rents, which average $47 per square foot. The average in East Cambridge is now more than $70 per square foot.
The company may also convert some office space to lab facilities, which rent for higher sums. And, Alexandria noted, the complex is permitted for another building, of 172,500 square feet.
A spokesman for Alexandria declined to comment.
Another record for commercial office space in the Boston area was set in April, when one of the city’s newest office buildings became one of its most expensive.
The glass tower at 101 Seaport Blvd., which opened last year and is the local home to the accounting giant PwC, sold in April for $452 million, or $1,027 per square foot — then a record. Skanska USA, which developed the 17-story tower in the Seaport, closed the deal with German real estate fund Union Investment.