For Life Sciences Real Estate Giant Alexandria, Another Mixed Quarter
The REIT plans to sell another $1.1 billion in assets over the next six months to boost key metrics and renew focus on its megacampuses
By Tom Acitelli July 22, 2025 4:08 pm
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It’s been a rough few quarters for a life sciences real estate industry grappling with the twin leviathans of a supply glut and dwindling funding for the work its lab tenants do.
So it’s little surprise that Alexandria Real Estate Equities, the nation’s largest life sciences real estate owner and the first to focus on the sector exclusively starting in 1994, reported a relatively modest second-quarter performance.
The Pasadena, Calif.-based real estate investment trust reported adjusted funds from operations (FFO) — a key measure of cash flow for REITs — of more than $396.4 million for the second quarter. That was ahead of the $392 million in FFO from the first quarter, but below the same period last year. In the second quarter of 2024, FFO totaled nearly $405.5 million.
Likewise, adjusted FFO per share for the second quarter was $2.33, up from $2.30 in the previous three months, but below the $2.36 a year earlier. The second-quarter 2025 number, though, did beat analysts’ expectations by 4 cents.
Alexandria’s revenue was also down annually for the quarter: $762 million versus nearly $767 million in the second quarter of 2024 (though up slightly compared to the first three months of this year). This was with a net loss of $109.6 million, the company said.
It was far from all doom and gloom for the life sciences giant. Its operating properties in North America — including in such industry heavyweight hubs as San Diego County and Greater Boston — were nearly 91 percent occupied by the end of the second quarter, about the same as at the end of the first. What’s more, the company just sealed its largest lease ever: a still-unnamed multinational pharmaceutical tenant took 466,598 square feet for 16 years at an Alexandria project in San Diego.
That lease, closed after June 30, was not included in the second-quarter leasing total of 769,185 square feet. Had it been included, the total for the second quarter would have exceeded 1.2 million feet. That would’ve extended a run of five consecutive quarters of leasing in excess of 1 million square feet.
The REIT also reported liquidity of $4.6 billion, and said only 9 percent of its total debt matures before 2028. In the meantime, Alexandria expects to sell off properties that do not fit with its so-called megacampus focus of giant life sciences complexes in key markets — like the one that drew that big San Diego lease.
“We have about $1.1 billion to add to our executable sales pipeline for the next two quarters, and we feel that it is doable given we completed $1.1 billion of sales in the fourth quarter of 2024,” Joel Marcus, Alexandria’s founder and executive chairman, said on a quarterly earnings call Tuesday. The REIT also unloaded more than $1.3 billion in non-core assets in 2023 for the same “value harvesting” reasons.
Executives on the earnings call also said that concerns about federal cuts to pharmaceutical and other life sciences research funding appear to be overblown, and that Alexandria’s tenants have not had to deal with any delays in drug approvals from federal regulators. The company also expects borrowing costs to ease starting this year.
“Over the next several quarters, we expect the Fed to finally lower interest rates,” Marcus said of the Federal Reserve, “which is desperately needed for the capital markets of our industry.”
Tom Acitelli can be reached at tacitelli@commercialobserver.com.
