Life Sciences’ Diagnosis

Alexandria Real Estate Equities, the largest owner of life sciences space in the U.S., has a warning for the sector: Revenues are up — and demand from life sciences companies is still there — but Alexandria is pausing some projects nonetheless. Meanwhile, one of the nation’s largest publicly traded office landlords has some … good news: Its revenues are up despite a dropoff in leasing.

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— Tom Acitelli, Co-Deputy Editor

Alexandria Reports Higher Revenues But Pauses Some Projects

Alexandria Real Estate Equities (ARE) reported higher revenues and strong leasing during the first three months of 2023, despite a wider industry reset and increasing macroeconomic headwinds. However, the life sciences REIT based in Pasadena, Calif., did say it’s halting a chunk of its development pipeline valued at approximately $250 million. ARE said it took in $701 million in revenue in the first quarter, which is almost 14 percent more year-over-year, and about a 4.6 percent increase from the previous quarter, with $534 million in expenses. For the 12th consecutive quarter, the nation’s leading lab and R&D landlord secured more than 1 million square feet in leasing — this time registering 1.22 million square feet. At the same time, the company raised rents 48.3 percent, which is the highest rental rate growth in company history. “Demand has normalized from the record year of 2021,” Peter Moglia, CEO and co-CIO, said during ARE’s earnings call Tuesday. “There are less tenants actively seeking space in the market today, which we believe is being significantly driven by uncertainty in the economy.”

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Boston Properties Sees Higher Revenue Despite Leasing Slowdown in First Quarter

Boston Properties’ revenue was up 6.5 percent in the first quarter of 2023 compared to the same period last year “despite significant economic headwinds” and slow leasing, the real estate investment trust (REIT) said in its quarterly earnings call Wednesday. Overall revenue was $803.2 million in the first quarter, up from $754.3 million in the first quarter of last year, even as leasing sank from 1.2 million square feet to 600,000 square feet during that time. Boston Properties’ funds from operations slipped to $272 million, or $1.73 per share, a drop from the $286.1 million in the same time last year but slightly beating economists expectations of $1.70 per share. Boston Properties stock rose 2 percent to $51.23 per share in early trading Wednesday following the announcement.

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