Alexandria Lands Biggest Life Sciences Lease in Company History

San Diego’s life sciences market is adjusting to a glut of overdevelopment and chilly demand, but that still hasn’t stopped the U.S.’s biggest lab landlord from securing the largest lease in its 31-year history — and a future campus expansion.

Alexandria Real Estate Equities has inked a 466,598-square-foot lease at its Campus Point “mega-campus” in San Diego’s University Town Center region. The tenant name in the 16-year, build-to-suit deal was not disclosed, though Alexandria described the company as a “longtime, multinational pharmaceutical tenant.” Representatives for Alexandria did not immediately respond to a request for more information. 

The lease is Alexandria’s biggest since its founding in 1994, according to the real estate investment trust. Construction on the research hub, which will prioritize energy efficiency and reduced water use, per the REIT, is expected to begin in 2026 and wrap by 2028.

“Campus Point is a crown jewel of Alexandria’s mega-campus platform, and we are honored that one of our long-standing, highly innovative tenants has selected it as the site for a new R&D hub,” Daniel J. Ryan, Alexandria’s co-president and San Diego regional market director, said in a statement. “Every detail of this generational campus has been intentionally crafted to enhance innovation, foster meaningful connection among a growing community of 3,000 professionals, and empower them to create life-changing medicines to improve human health and quality of life.”

Alexandria has spent the past several years dropping non-core assets in favor of its mega-campus portfolio, which constitutes about 71 percent of its development and redevelopment pipeline, according to its latest earnings report. The 1.3 million-square-foot Campus Point, for example, is currently 98.8 percent occupied and is primed for another 1.3 million square feet of development opportunity, per the REIT. Alexandria’s portfolio-wide occupancy rate is nearly 92 percent, per the earnings call. 

San Diego’s life sciences market in general is a different story. Vast amounts of new space delivered in recent years, spurred by the pandemic-induced leasing bonanza, has caused a severe drop-off in demand. The region’s total life sciences availability rate hit 27.4 percent in the second quarter of this year, with leasing activity sharply declining despite a rebound in 2024, according to a recent market report by JLL.

Capital flows have also shrunk considerably. Venture funding for San Diego life sciences projects fell by 56 percent over the past 12 months, per JLL.

Nick Trombola can be reached at ntrombola@commercialobserver.com.