The retail and residential portions of Arsenal Yards, the sprawling mixed-use complex that replaced the old Arsenal Mall in Watertown, are officially up for sale. Boylston Properties, the developer behind the project, has put the shops and apartments on the market while keeping the Hampton Inn and Suites hotel and the complex's lab and office buildings out of the deal.
No asking price has been disclosed. As Watertown News reports, additional details about the offering are only available to prospective buyers willing to sign a confidentiality agreement, and the hotel and lab/office space are explicitly excluded from the sale. The listing follows a teaser brochure that commercial real estate firm CBRE released in late September outlining the complex's performance numbers, according to the same report.
A Shopping Hub With Serious Foot Traffic
Those numbers are meant to make the retail portion attractive to buyers. The complex includes 257,000 square feet of ground-floor retail space that drew 4.8 million shoppers over the past 12 months, per Watertown News. Anchor tenants include Marshall's, ULTA, Old Navy, Nike, Roche Brothers Supermarket, Shake Shack, Warby Parker and J. Crew Factory, and the marketing materials cite an average shopper dwell time of more than 50 minutes along with heavy traffic on Arsenal Street.
The residential side of the offering includes more than 300 luxury apartments, also according to the Watertown News report. Together, the retail and residential assets represent a significant chunk of a development that transformed one of Watertown's busiest commercial corridors over the past several years.
From Dead Mall to Mixed-Use Neighborhood
Arsenal Yards traces back to the former Arsenal Mall, which Boylston Properties redeveloped in partnership with J.P. Morgan and The Wilder Companies into what the developer describes as a denser, mixed-use neighborhood in Watertown's East End. According to Boylston Properties, the project includes a life-science campus, an apartment community, a hotel and activated outdoor space. The complex got its first tenants back in 2019, per Watertown News.
The life-science side of Arsenal Yards has continued attracting tenants even as the retail and residential assets head to market. The ALS Therapy Development Institute signed a 33,310-square-foot lease at 200 Arsenal Yards Blvd., as reported by NBC Boston. That space is among the portions of the complex not included in the current sale.
Big Money Behind the Build
Getting Arsenal Yards built required substantial financing. Boylston Properties and The Wilder Cos. secured $324 million in construction financing and joint venture equity for the redevelopment, according to REBusinessOnline. Reported figures for the project's total retail square footage, apartment count and hotel room count have varied across different accounts of the development over the years, and this article does not attempt to reconcile those differing totals into a single figure.
Watertown has already seen at least one major piece of the Arsenal Street corridor change hands. A Home Depot at 615 Arsenal Street, near the Arsenal Yards complex, was acquired for $96,250,000, according to Bldup. That sale offers a point of reference for the kind of money moving through the area's commercial real estate, even though it involved a different property.
A Sale Amid a Shifting Market
The Arsenal Yards listing comes as Boston's retail sector has been described as one of the tightest in the country, with a 3.4% vacancy rate and 5.0% retail sales growth over the past year, according to the Boston Real Estate Times. That tight retail environment could work in Boylston Properties' favor as it seeks buyers for the shopping portion of Arsenal Yards.
The life-science market tells a different story. Greater Boston's life-science real estate sector is beginning to show signs of an inflection point after years of supply growth, declining rents and subdued tenant demand, according to Banker & Tradesman — context that may help explain why the lab and office buildings at Arsenal Yards were left out of this particular sale. For now, the retail and residential future of one of Watertown's most visible redevelopment projects rests with whoever steps forward to sign that confidentiality agreement.
