Alexandria Records Another Tough Quarter Despite a Record Lease
By Mark Hallum October 28, 2025 3:48 pm
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Alexandria Real Estate Equities recorded progress on the leasing front in the third quarter of 2025. That didn’t translate into profits, though
The Pasadena, Calif.-based real estate investment trust — the nation’s largest owner of life sciences real estate — saw funds from operations sink further from the previous two quarters to $377.8 million in the three months ending Sept. 30, according to the company’s Tuesday earnings call.
Net loss attributable to common stock holders more than doubled to $234.9 million compared to the $109.6 million in the second quarter.
Alexandria’s executives blamed years of overbuilding in the life sciences sector for some of the difficulties they continue to face, as well as the potential damage to federally funded tenants due to the government shutdown, which has now been in effect for nearly a month.
“A very low interest rate environment went along with that, which incentivized really foolish speculation by financially motivated real estate companies, and their even more foolish capital partners,” Joel Marcus, Alexandria’s founder and executive chairman, said during the earnings call. “This brought an unwanted, unnecessary oversupply of many of the innovation submarkets, which had never happened in this real estate niche before. But they’re learning painful lessons that this real estate niche is unique and different from all others.”
Alexandria notched 1.2 million square feet in leasing during the third quarter, but almost half of that was due to one tenant in a single deal. In July, Alexandria secured the biggest life science lease in the company’s history with an undisclosed tenant taking 466,598 square feet at its Campus Point “mega-campus” in San Diego’s University Town Center.
The third-quarter leasing total ran well ahead of the second quarter’s 769,815 square feet.
Regardless of this progress, Alexandria’s occupancy shrank to 90.6 percent compared to 91 percent in the previous quarter.
Chief Financial Officer Marc Binda said the company is still suffering financial setbacks from its investments in the Long Island City, Queens, market, which Alexandria entered with the expectation that Amazon’s HQ2 would become a reality. When it didn’t, the company sold the property at 47-50 30th Street to CineMagic Companies for $19.1 million in late 2023, after paying $25 million to acquire it in 2019.
On its remaining Long Island City property, Alexandria is carrying “impairment charges” of $206.2 million after the conversion of a former factory, which is only 52 percent leased.
Mark Hallum can be reached at mhallum@commercialobserver.com.
