Alexandria reported a challenging Q1 with weak leasing, particularly from public biotech (zero leases), but highlighted outperformance in its largest markets and strong interest from advanced technology tenants as a new demand source. Management reaffirmed full-year EPS guidance but lowered Q4 EPS guidance due to lower capitalized interest, while pivoting its capital recycling program more towards joint ventures for core assets. Zero leases signed with public biotech companies in Q1, a first in company history, highlighting severe sector weakness.
Alexandria reported a challenging Q1 with weak leasing, particularly from public biotech (zero leases), but highlighted outperformance in its largest markets and strong interest from advanced technology tenants as a new demand source. Management reaffirmed full-year EPS guidance but lowered Q4 EPS guidance due to lower capitalized interest, while pivoting its capital recycling program more towards joint ventures for core assets. Zero leases signed with public biotech companies in Q1, a first in company history, highlighting severe sector weakness.
Management acknowledges a tough operating environment but expresses confidence in execution of dispositions, leasing momentum in Q2, and continued market leadership.
Zero public biotech leases signed in Q1, an unprecedented first. Management acknowledges a tough operating environment but expresses confidence in execution of dispositions, leasing momentum in Q2, and continued market leadership.
Management discussed AI at length, arguing it cannot replace physical experimentation in biology and will have a neutral impact on real estate demand, possibly increasing lab space needs as experiments designed by AI are run.
Captured 2-2.5x their market share of leasing in core markets (Boston, SF Bay, San Diego), highlighting asset quality.
Management discussed AI at length, arguing it cannot replace physical experimentation in biology and will have a neutral impact on real estate demand, possibly increasing lab space needs as experiments designed by AI are run.
Zero public biotech leases signed in Q1, an unprecedented first. Management acknowledges a tough operating environment but expresses confidence in execution of dispositions, leasing momentum in Q2, and continued market leadership.
Capitalized interest is being reduced due to pauses on construction and disposals, with significant reductions expected in 2H26. The 2026 construction budget is largely set, with future spending decisions tied to milestones on certain projects.
Management acknowledges a tough operating environment but expresses confidence in execution of dispositions, leasing momentum in Q2, and continued market leadership.
“This is maybe the first quarter in the history of the company that I can remember where we didn't sign a single public biotech lease, so that gives you a sense of what the environment is out there.”
“We are seeing good activity for this project from advanced technology users, and we recently executed approximately 82,000 square feet of letters of intent with four tenants for this kind of use”
“that money is there, and as I said, it comes both domestically and internationally, we're leveraging that to get a better cost of capital overall for our program.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $6.40 | $6.40 | MAINTAINED |
| EPS | FY2026 Q4 | $1.40–$1.50 | $1.45 | LOWERED |
Amazon is a significant tenant (25% of rent roll at one campus) for sophisticated research space, confirming ongoing demand for physical lab/tech space.
“Two tenants really make up maybe 25% of the rent roll there. One is Amazon. This is not a fulfillment or a distribution. This is part of, you know, I really can't say what part of Amazon, but it is a a very sophisticated and”
Okay. Thank you.
Well, a lot of that is secret sauce, so, but let me say, I think, you know, an example, and you guys were just there at Campus Point when you did the tour with us, that campus holds, you know, primarily we're delivering the Bristol-Myers West Coast Research Headquarters Hub. We're working, we just broke ground on Novartis, and there's a lot of, you know, early stage biotech there, but The campus, in addition to being heavily big pharma, is heavily advanced technology. Two tenants really make up maybe 25% of the rent roll there. One is Amazon. This is not a fulfillment or a distribution. This is part of, you know, I really can't say what part of Amazon, but it is a a very sophisticated and research-oriented part of Amazon, and they've been there for quite a long time. And then we did a build-a-suit on that property. I think we showed you the buildings, or the building, several stories of brand new office for Leidos, who does the, they manufacture the advanced screening technology at airports, et cetera, and then we built several floors of SCIF space below that. So, we consider both the Amazon use and the Leidos use as advanced technology uses. So, advanced technology is pretty broad. We've been involved in it since, I mean, we did Google, although Google, you know, is not necessarily an office or a lab type tenant, although we've leased to some of their subsidiaries laboratory, would be advanced technology is pretty broad definition, but I don't necessarily on a public call get into how we view this and how we're trying to position some of our spaces because obviously it's a highly competitive marketplace. But the demand there is large and the funding there is large.
Leidos is a tenant for advanced technology space (SCIFs, office), indicating demand from defense-tech institutions.
“And then we did a build-a-suit on that property. I think we showed you the buildings, or the building, several stories of brand new office for Leidos, who does the, they manufacture the advanced screening technology at airports, et cetera,”
Okay. Thank you.
Well, a lot of that is secret sauce, so, but let me say, I think, you know, an example, and you guys were just there at Campus Point when you did the tour with us, that campus holds, you know, primarily we're delivering the Bristol-Myers West Coast Research Headquarters Hub. We're working, we just broke ground on Novartis, and there's a lot of, you know, early stage biotech there, but The campus, in addition to being heavily big pharma, is heavily advanced technology. Two tenants really make up maybe 25% of the rent roll there. One is Amazon. This is not a fulfillment or a distribution. This is part of, you know, I really can't say what part of Amazon, but it is a a very sophisticated and research-oriented part of Amazon, and they've been there for quite a long time. And then we did a build-a-suit on that property. I think we showed you the buildings, or the building, several stories of brand new office for Leidos, who does the, they manufacture the advanced screening technology at airports, et cetera, and then we built several floors of SCIF space below that. So, we consider both the Amazon use and the Leidos use as advanced technology uses. So, advanced technology is pretty broad. We've been involved in it since, I mean, we did Google, although Google, you know, is not necessarily an office or a lab type tenant, although we've leased to some of their subsidiaries laboratory, would be advanced technology is pretty broad definition, but I don't necessarily on a public call get into how we view this and how we're trying to position some of our spaces because obviously it's a highly competitive marketplace. But the demand there is large and the funding there is large.
Bristol-Myers is a key tenant taking space at a new research hub, showing continued demand for high-quality lab space from large pharma.
“that campus holds, you know, primarily we're delivering the Bristol-Myers West Coast Research Headquarters Hub.”
Okay. Thank you.
Well, a lot of that is secret sauce, so, but let me say, I think, you know, an example, and you guys were just there at Campus Point when you did the tour with us, that campus holds, you know, primarily we're delivering the Bristol-Myers West Coast Research Headquarters Hub. We're working, we just broke ground on Novartis, and there's a lot of, you know, early stage biotech there, but The campus, in addition to being heavily big pharma, is heavily advanced technology. Two tenants really make up maybe 25% of the rent roll there. One is Amazon. This is not a fulfillment or a distribution. This is part of, you know, I really can't say what part of Amazon, but it is a a very sophisticated and research-oriented part of Amazon, and they've been there for quite a long time. And then we did a build-a-suit on that property. I think we showed you the buildings, or the building, several stories of brand new office for Leidos, who does the, they manufacture the advanced screening technology at airports, et cetera, and then we built several floors of SCIF space below that. So, we consider both the Amazon use and the Leidos use as advanced technology uses. So, advanced technology is pretty broad. We've been involved in it since, I mean, we did Google, although Google, you know, is not necessarily an office or a lab type tenant, although we've leased to some of their subsidiaries laboratory, would be advanced technology is pretty broad definition, but I don't necessarily on a public call get into how we view this and how we're trying to position some of our spaces because obviously it's a highly competitive marketplace. But the demand there is large and the funding there is large.
Management cites Novartis' CEO to support the thesis that AI cannot replace physical experimentation, implying durable need for wet lab space.
“Novartis' CEO who just joined the board of Anthropix said, we only understand less than 5% of the functioning of the human body today.”
… both on the recipients of care and on the innovative drug discoverers. We get often asked about AI in all realms of all industries, and I think it's fair to say that most of you know by now We've got 37 trillion cells in each of our bodies and AI can support but not replace physical experimentation. Biology is just way too complex at this stage. R&D cannot go fully in silico given the massive complexity of biology. And give you an example, Novartis' CEO who just joined the board of Anthropix said, we only understand less than 5% of the functioning of the human body today. And as you know, drug development is very complex from target discovery to hit generation to lead identification to optimization to clinical trials and on to commercialization. And it's pretty clear that the authorities in this area believe AI cannot replace physical experimentation. Most current usage is still document-centric, not biology breaking. Push button drug discovery is overhyped and even native AI companies in this sector haven't proven dominance whatsoever. It's pretty clear that AI is not fully autonomous discovery but is aimed at compressing timelines and increasing throughput and recovering lost …