Alexandria Shows Positive Signs After Several Depressed Quarters: Earnings

Ailing Alexandria Real Estate Equities is showing signs of improvement as leasing increased over the second quarter of 2026, a hopeful sign of progress after several quarters of declining fundamentals.

The life sciences-focused real estate investment trust (REIT) posted earnings Tuesday that show declining balance sheet performance with $73.7 million in net income for the second quarter of 2026 versus $109.6 million during the same period last year.

Funds from operations (FFO) was $296.1 million, more than $100 million lighter than in the second quarter of 2025 and down a similar amount from the $396.4 million reported in the first quarter of 2026. Revenue declined from $762 million in the second quarter of last year to $662.7 million for the same period in 2026.

Joel Marcus, Alexandria’s executive chairman and founder, however, was more optimistic than in previous quarters, stating that science sectors are improving economically, even if that progress has not yet been reflected on the real estate side.

“We’re winning an outsized number of shares of transactions, which is good,” Marcus said during the call. “We have a very well-diversified and strong tenant base. … Very strong leasing in the second quarter from our life science products, service and device sector really depicts shovels and tools of the industry and is almost 40 percent of the leasing volume.”

Alexandria leased 1 million square feet of space in the second quarter of 2026, compared to about 647,300 square feet in the first quarter, with about 329,000 square feet being deals that backfilled newly vacant space.

In previous quarters, Alexandria executives have pursued dispositions to support the company financially while the life science market recovers. The company sold $170.3 million in assets, including 3825 and 3875 Fabian Way in Palo Alto, Calif., for $163 million in mid-July.

Alexandria is currently developing or redeveloping 1.4 million square feet of life science space and is expected to further stabilize its balance sheet by 2028.

The company has $3.6 billion in liquidity as of the end of the second quarter of 2026.

Much of the distress experienced by the REIT was attributed to a massive influx of new space coming on the market after developers sought to sidestep difficulties in the office and retail sectors during the pandemic.

Marcus also tied the decline to a lack of support from the Trump administration for scientific research, manifesting in funding cuts for the biotech sector. 

In March, Colliers predicted that the remainder of 2026 would be kind to the life science industry as investment in weight-loss therapy drugs like GLP-1s offered a boost in demand.

There has, however, been an influx of investment in underperforming life science assets, despite the unlikelihood of any sort of conversion of those assets to residential or other uses, Commercial Observer reported in June.

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