Alexandria Plans $581M in Dispositions as Leasing Struggles Persist

Alexandria Real Estate Equities, the nation’s largest owner of life sciences real estate, has posted another depressed quarter, with leasing unchanged from the third quarter of 2025 and a further decrease in funds from operations (FFO).

Joel Marcus, Alexandria’s founder and executive chairman, lamented the current political climate on a Tuesday afternoon fourth-quarter 2025 earnings call, noting federal funding for biomedical technology advancements running dry, leaders at the Food and Drug Administration leaving the agency, and a comeback in preventable diseases like measles.

The Pasadena, Calif.-based real estate investment trust is now looking for cost-saving measures as tenants leave their assets in the coming months, such as possibly selling off about $581.7 million in underperforming assets in key markets throughout 2026, Alexandria announced in its earnings call.

“In 2025, we witnessed the fifth year of a life science bear market,” Marcus said during the call. “Our timeline clearly evidences that no one could have predicted the February 2025 nomination of [U.S. Health and Human Services Secretary Robert F. Kennedy Jr.], the intense cascade of events from that point on, and, in fact, sadly, measles and polio might be back to some extent.” 

Alexandria saw 1.2 million square feet leased during the fourth quarter of 2025 — same as the previous quarter — and there will coincidentally be 1.2 million square feet of lease expirations in the firm’s Boston, San Francisco and San Diego markets during the first quarter of 2026. It could take six to 24 months to backfill that space, Alexandria officials said.

FFO attributable to Alexandria’s common stockholders was $368.5 million during the fourth quarter of 2025, compared to $377.8 million in the previous quarter.

Net loss attributable to common stockholders also continued to snowball with $368.5 million in the last three months of the year, an increase from the $234.9 million seen in the third quarter and the $109.6 million in the second quarter.

“2026 is all about timely execution of our plan heavily focused on dispositions and maintaining a strong and flexible balance sheet, and driving occupancy with intense leasing focus on vacant space, redevelopment and development space,” Marcus said during the call.

Revenue was $754.4 million during the fourth quarter, compared to $751.9 million in the third quarter.

In December, Alexandria’s board of directors approved $500 million to repurchase common stock, but that has not been initiated.

Following its third-quarter performance, Marcus blamed much of the REIT’s poor results on the low interest rate environment following the pandemic, which resulted in developers flooding the life sciences market with unsustainable levels of supply. 

Venture capital funding in the biotechnologies sector is still strong, Alexandria executives said on Tuesday, but companies are cautious about taking new space due to a lack of public cash infusions.

Mark Hallum can be reached at mhallum@commercialobserver.com.