- Alexandria’s Q3 net loss hit $234.9M, more than doubling from the prior quarter, with the firm projecting a $2.94/share loss for 2025.
- Occupancy fell to 90.6%, down from 94.7% a year ago, as space lingers on the market and tenant demand slows.
- Asset sales and development slowdowns are expected as the company faces up to $685M in Q4 impairments and reevaluates its $4.2B pipeline.
- Life sciences oversupply continues to weigh on fundamentals, with total vacancy reaching 27% and conversion of lab space to other uses projected through 2030.
A Harsh Reset
Alexandria Real Estate Equities (NYSE: ARE), the nation’s top developer of life sciences properties, warned of significantly deeper losses ahead, triggering a sharp 19% drop in its stock price Tuesday. The downturn followed a weak Q3 report, with a $234.9M loss and a slashed full-year forecast, reports Bisnow.
The company now expects a net loss of $2.94 per share in 2025, down from earlier guidance of a 50-cent profit. It cites upcoming asset impairments and weak leasing trends.
Weakening Market Signals
Same-property NOI dropped 5.8% year-over-year in Q3, prompting Alexandria to slightly lower its guidance due to slow re-leasing activity. With portfolio occupancy dipping below 91%, executives pointed to shrinking demand in the life sciences sector. Startups are scaling back real estate needs amid tighter capital markets and prolonged FDA approval cycles.
The outlook is further clouded by the ongoing federal government shutdown, which Alexandria Chairman Joel Marcus said is hindering drug approvals and tenant momentum.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Development Pullback And Asset Sales
Faced with a cooling leasing environment and rising vacancies, Alexandria plans to reevaluate its $4.2B development pipeline in early 2026 and may pause some projects. CFO Marc Binda also said the firm would “aggressively pursue” asset sales to preserve liquidity.
In Q3, Alexandria recorded $323M in impairment charges, including a $206M write-down in Long Island City, NY. Property sales slowed in Q3, but Alexandria expects up to $1B in Q4 dispositions, much of it likely at a loss.
Strategy Shift Amid Oversupply
Even as AI-driven biotech firms begin to sign leases, their space requirements are leaner—further dampening demand. The nationwide vacancy for life sciences real estate now sits at 27%, with JLL forecasting nearly 19M SF of lab space will be converted to alternative uses by 2030.
Despite these headwinds, Alexandria’s megacampus model continues to show resilience. A July lease with Novartis for 467K SF at Campus Point in San Diego boosted Q3 leasing to 1.2M SF. Large-scale campuses now generate 77% of Alexandria’s revenue.
Going forward, the company plans to reduce construction spend and shift focus to income-producing assets, targeting a reduction in its non-revenue-generating portfolio from 20% to as low as 10%.
The Bottom Line
The pandemic-era boom in life sciences real estate has cooled dramatically, and Alexandria is now navigating a new era of higher vacancies, tighter capital, and tempered tenant growth. While its core campus strategy offers some stability, broader market headwinds remain strong. Looming asset writedowns add further pressure. Together, they suggest a tough road ahead for one of CRE’s leading life sciences players.
