Alexandria Pulls Out Of 600K SF California Project, Takes $30M Loss

Joel Marcus
Courtesy of Alexandria Real Estate Equities
Alexandria Real Estate Equities Chairman Joel Marcus

Life sciences development giant Alexandria Real Estate Equities pulled out of a 600K SF development project in California, taking a $30M loss in the process, the company disclosed in a regulatory filing.

The Pasadena, California-based real estate investment trust filed a notice with the Securities and Exchange Commission Wednesday, indicating that a site it acquired last year with plans to develop no longer made economic sense, and it was exiting the project. It didn't specify which one, other than to say that it is in “one of the company’s existing submarkets in California.”

“Since the company’s initial investment, the macroeconomic environment has deteriorated and negatively impacted the financial outlook for this project,” the filing stated. “The company concluded a real estate impairment charge of approximately $30M was required under generally accepted accounting principles to write off its entire investment in the project.”

The publicly traded REIT has seen its stock price affected by the overall decline in markets this year, especially with the pullback in biotech funding. It ended trading Wednesday at $153.40, down 30% from the start of the year.

Alexandria executive founder and Executive Chairman Joel Marcus declined to comment when reached by Bisnow via email Wednesday.

Alexandria has several development projects totaling millions of square feet in the works in the San Francisco Bay and San Diego areas, going big into its investment thesis of mixed-use megacampuses that combine life sciences facilities with other property types like hotels or retail.

Its California projects include the redevelopment of a mall in San Bruno, as well as a 22-acre parcel near the Torrey Pines Golf Course and a retail strip, both in San Diego.

Alexandria had two CEOs until July 31, when co-CEO Stephen Richardson retired and Peter Moglia became the sole chief executive. Its near-term development pipeline was 8M SF, according to its most recent quarterly earnings report.

Jay Rickey contributed reporting to this article.

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