A
lexandria Real Estate Equities (ARE) is aggressively executing its plan to focus on its life sciences portfolio, dubbed "mega-campuses," and the strategy appears to be yielding strong results. The Pasadena-based REIT reported $791.6 million in revenue for Q3 2024, an 11% year-over-year increase from the same period in 2023.

    Seventy-six percent of that revenue came from its larger campuses, such as the massive complexes it owns in San Diego. CEO Peter Moglia emphasized the company's commitment to mega-campuses, stating they are the best way to mitigate supply in core markets and drive growth.

    Leasing volume was particularly strong this quarter, reaching 1.5 million square feet, a 48% jump from its previous four-quarter average. Occupancy across North American assets stood at 94.7% as of September. Rental rates also saw a 5.1% boost, with year-to-date growth of 16.4%.

    Alexandria's development pipeline is focused on mega-campuses, with nearly 317,000 square feet delivered in Q3 2024, all of which are fully leased and within its mega-campus platform. The company has sold three assets this year for $319.2 million and has another $577.2 million worth of deals pending.

    Founder Joel Marcus is optimistic about the life sciences industry's growth prospects, citing unmet needs in areas like Alzheimer's research and obesity treatment. Senior Vice President Hallie Kuhn noted that while investors are being cautious due to high inflation and interest rates, demand for high-quality life sciences property remains robust.