Developer buys athenahealth’s Watertown campus for $525.5 million

Watertown-based athenahealth will lease back space it formerly owned.Associated Press

In the latest sign that Watertown is emerging as a key part of the region’s life science and tech industries, Alexandria Real Estate Equities closed this week on a deal to purchase athenahealth’s campus on Arsenal Street.

Despite the sale, the locally grown health data company will stay put. It’s leasing about half of the office space in the 29-acre campus back from Alexandria through 2034. But the deal will fetch $525.5 million for athenahealth, which was purchased in February by two private equity firms, which put the 11-building complex up for sale to focus on core operations.

In Alexandria, they found a buyer that has helped drive an explosion of lab and life science development in Greater Boston. The Southern California-based developer has built a sizable chunk of Kendall Square — most recently a corridor of buildings along Binney Street — and has in the last year or so begun acquiring sites in other corners of the region where it sees potential to lure major life science companies.

Alexandria is seeking permits for a building on A Street in South Boston, and earlier this year partnered with National Development to buy the site where General Electric had planned to build its headquarters, pushing forward with a proposal to turn it — and eventually a neighboring parking garage — into life-science-oriented office space. Alexandria and National were also finalists to build the first phase of Harvard University’s Enterprise Research Campus in Allston but lost out to New York-based developer Tishman Speyer.

Now, apparently, Alexandria has turned to Watertown, where a string of small and midsized life science companies have moved into the newly redeveloped Arsenal Mall and other new buildings along Arsenal Street.

At Arsenal on the Charles, athenahealth will consolidate into 311,000 square feet by the end of 2020, according to lease documents filed in Middlesex County. The rest of the campus — 682,000 square feet currently — will be vacated by athenahealth, is leased to other companies, or is sitting vacant, giving Alexandria room to bring in new tenants.

In a presentation to investors earlier this month, the developer suggested that it saw potential to redevelop another 153,000 square feet and build an additional 200,000 square feet, bringing the entire complex to more than 1 million square feet by the time it’s through.

Alexandria declined to comment on its plans, as did a representative of athenahealth.