Tech Co. Buys 760 KSF Office Campus from Harvard
- May 14, 2013
Athenahealth Inc. has acquired the historic 11-building, 760,000-square-foot Arsenal on the Charles office campus in Watertown, Mass., from Harvard University for $168.5 million, it was announced yesterday. The purchase closed last Friday.
Avison Young, of Toronto, represented Athenahealth in what reportedly is the largest user-buyer transaction in Boston so far in 2013; Athenahealth began occupying space in the complex (initially 133,000 square feet) in 2005.
Avison Young principals Steve Cook in Boston and Suzanne Martinez in Chicago represented Athenahealth, and Harvard University represented itself.
Athenahealth provides cloud-based services for medical practice management, care coordination, medical billing and electronic health records.
The company has grown to become one of the area’s largest tech tenants and had been seeking up to 500,000 square feet for its corporate headquarters. The purchase reportedly followed a two-year search of properties and development sites throughout the Boston area by Avison Young and Athenahealth.
Given Athenahealth’s ongoing expansion requirements, Martinez said in a release, “long-term ownership is a financial home run when compared with a long-term lease.”
The choice reportedly was also driven by a lack of existing product and the high cost of new construction, coupled with the fact that Athenahealth’s employees were already happy with the Arsenal on the Charles’ location and amenities.
The campus is more than 90 percent leased. Athenahealth currently occupies 250,000 square feet, and other major tenants include Harvard Business School Publishing (100,000 square feet), Bright Horizons (90,000 square feet) and Boston Sports Clubs (50,000 square feet). The 29-acre complex is managed by The Beal Companies, Boston,
All 11 buildings on the campus were built around 1816 and rehabbed in 2000, Cook told Commercial Property Executive.
The buildings comprise three Class A offices (totaling 228,300 square feet), five Class B offices (totaling 485,750 square feet), two small Class C offices (totaling 22,680 square feet) and a Class B flex/R&D building of 13,000 square feet, according to information provided to CPE by Cook.
Harvard acquired the property in 2001, but after the economic downturn decided to use property closer to its main campus for institutional needs and instead leased the Arsenal on the Charles.
Although the complex has evolved to accommodate Digital Age high tech, it was once an example of Industrial Age high tech.
The campus is called Arsenal on the Charles, said Cook, because it was once part of the 90-plus-acre Watertown Arsenal, founded by the U.S. Army in 1816 as an ordnance storage depot. During the Civil War, the arsenal was expanded and began manufacturing gun carriages, and the complex was hugely expanded again during World War I.
Starting in 1968, the Army began to downsize its operations at Watertown, a process that was completed in 1995. One of the other redevelopments at the former arsenal is Arsenal Mall, a 502,000-square-foot shopping center owned by Simon Property Group.