“Since our acquisition, the macroeconomic environment has changed,” Alexandria disclosed in a recent securities filing. “Upon our reevaluation of the project’s financial outlook and its alignment with our mega campus strategy, we decided not to proceed with this project.”
Alexandria also cited deteriorating macroeconomic conditions in its sale of Newton’s Riverside Center in June for $117.5 million — half the $235 million it paid for the office complex near the Riverside MBTA station in January 2020, where it had planned a 510,000-square-foot lab conversion.
The sales come amid a rocky time for the local biotech and life-sciences industry. Some 3,800 life sciences workers have lost their jobs in Massachusetts this year, the Boston Business Journal recently reported.
Companies on the hunt for lab space will have more options than ever in the next year or two, thanks to a wave of office-to-lab conversions and ground-up lab projects slated to come online soon. When many of those projects got underway — before and during the COVID-19 pandemic — their developers frequently cited intense demand from life-science companies, paired with lack of available lab space.
These days, however, those lab tenants — and the investors backing the companies — have an abundance of newly built labs to consider, and are likely to be cautious when choosing a new home, according to a recent research report from brokerage Newmark. Many will likely keep their focus on existing hubs of biotech activity in Cambridge and its immediate neighbors, the report said, rather than conversion projects outside of the urban cores.
David L. Ryan/Globe Staff
Despite the recent struggles, the local life-science industry remains among the world’s strongest biotech hubs. The region added about 60,000 life sciences jobs in the past decade, and real estate experts remain bullish on the industry’s long-term future.
Beyond Alexandria’s canceled project on E Street, multiple life-science developments are still in the works in South Boston. Oxford Properties and Pappas Enterprises in November filed plans with city officials for an eight-building lab and residential campus on West First and Summer streets. The Boston Planning and Development Agency board in October approved the master plan for 11 new buildings, many of them labs, near the Andrew MBTA station.
Alexandria’s E Street sale was split into two transactions, both of which were recorded in late December: the sale of 380 E St. to Memphis, Tennessee-based self-storage facility operator Premier Storage Investors LLC for $38.6 million, and the sale of 420 E St. to an affiliate of Oliver Street Capital for $48.4 million. None of the companies responded to requests for comment.
Catherine Carlock can be reached at catherine.carlock@globe.com. Follow her @bycathcarlock.