Joel Marcus and Peter Moglia

Joel Marcus and Peter Moglia are doubling down on their cluster-focused strategy at Alexandria, the nation’s largest landlord specializing in life sciences space.

Alexandria is doing that by homing in on the nation’s established life sciences hubs: Greater Boston, the San Francisco Bay Area and San Diego County, as well as Seattle, Maryland, North Carolina’s Research Triangle and New York City.

The reality, Marcus said, is that it’s difficult for biotech firms to thrive anywhere outside of those seven hubs. He points to a startup that was incubated at the University of Pennsylvania and, despite its home campus’ Ivy League pedigree, recently moved to an Alexandria property in Southern California. “There wasn’t enough talent in the Philadelphia area, so they came to San Diego where they can scale,” Marcus said.

It’s not just Philly that struggles to compete with the established hubs. Marcus points to Texas and Florida as places that have yet to establish significant footholds despite investment in life sciences. “You need risk capital, and you need the talent pool,” Marcus said. “At the moment, neither of those really exists at scale in Texas or Florida.”

Alexandria launched in 1994 as an office REIT providing space to life sciences companies. After some asset sales last year, the landlord now owns 391 properties totaling 44 million square feet. The REIT’s properties were 94.6 percent leased as of the end of 2024, with companies such as Eli Lilly, Moderna and Bristol Myers Squibb among its major tenants.

Marcus sees headwinds for 2025, namely from elevated interest rates. He said the Federal Reserve was too slow to raise rates during the pandemic and has been too timid about lowering them now.

“The life science industry is in its fifth year of a bear market, and the sentiment is largely negative because of the cost of capital,” he said. “Jerome Powell missed it at the front end — he called inflation transitory — and is now too slow at the back end.”

But Marcus also predicts long-term growth for the life sciences sector. “As the industry has grown, we’ve discovered therapies that address only 10 percent of human disease,” Marcus said.

What’s more, life sciences is an industry where work from home remains impractical. Cracked Marcus: “You can’t cure cancer from your couch.”