WATERTOWN, MA–The Watertown Mall, once slated for a sweeping transformation into a life sciences campus, will instead remain a retail destination after being sold for $100 million to Newton-based National Development.
According to the Boston Business Journal (BBJ), National Development purchased the 18-acre property from Alexandria Real Estate Equities, a California-based firm that had acquired it in 2021 for $130 million. The sale, which closed on October 16, represents both a financial and strategic shift amid Boston’s cooling lab market, according to BBJ.
As BBJ reported, Alexandria had proposed redeveloping the mall — home to tenants like Best Buy and Target — into roughly 500,000 square feet of lab and office space alongside retail. The plan reflected the red-hot demand for laboratory facilities in Greater Boston just three years ago, when vacancy rates hovered near zero.
But that landscape has changed dramatically. BBJ said the Boston area’s lab vacancy rate now sits at 27.7%, according to CBRE data, as a surge of speculative development has outpaced tenant demand. Lease rates have fallen to about $85 per square foot, down from roughly $100.
The downturn in the life sciences real estate market has left at least 20 lab buildings in the Boston area entirely vacant, BBJ noted. Nearly 12 million square feet of office space also remains unoccupied, signaling broader challenges in the region’s commercial property sector.
Watertown, once a fast-growing hub for the life sciences industry, has seen much of that expansion concentrated across Arsenal Street. The redevelopment of the former Arsenal Mall, as well as new projects at Arsenal on the Charles and other nearby sites, added significant lab and mixed-use space in recent years.
National Development — whose projects include the Ink Block in Boston’s South End — has not announced its long-term vision for the Watertown Mall site. Representatives for both National Development and Alexandria did not respond to requests for comment, according to BBJ.
While details remain unclear, the sale underscores a broader recalibration in the region’s real estate market: a move away from speculative lab conversions and back toward more stable, income-generating retail and mixed-use models.
As BBJ summarized, the transaction marks “a turning point” for one of Watertown’s most prominent properties — and a sign that Greater Boston’s once-unshakable lab boom has reached a crossroads.
