Former Pfizer HQ may get life-science renovation

What to do with a 350,000-square-foot office lease turnover? The right medicine for Pfizer’s old headquarters in Midtown East may be to redevelop it as laboratory space, according to the nation’s largest landlord of life-science properties.

Alexandria Real Estate Equities, the California-based, publicly traded REIT and owner of 219 East 42nd Street, disclosed to investors on Tuesday that it may seek to attract life science tenants to the nearly vacant building following Pfizer’s exodus to Hudson Yards in 2018. 

The building “may be developed or redeveloped into laboratory space,” according to a public filing from the company, which did not immediately respond to a request for comment.

When Alexandria bought the building for $142 million, Pfizer agreed to a five-year leaseback, giving the pharma giant time to relocate Tishman Speyer’s Spiral office building at 66 Hudson Boulevard, and giving the REIT time to mull how to use the building.

With Pfizer’s leaseback set to expire in about a year — the most immediate turnover among Alexandria’s 20 biggest tenants — the REIT is looking to capitalize on demand for life-science space, which surged during the pandemic while providing barriers to working from home that have helped stabilize property values. 

The building at 219 East 42nd Street was constructed in 1905 and renovated substantially in 1963, about the same time that the neighboring 235 East 42nd Street was built. David Werner bought the latter building for about $360 million at the same time as Alexandria’s purchase. 

If Alexandria renovated the building for life-science tenants, it would complement its 1.4 million-square-foot medical campus on Manhattan’s East Side. Other large life-science tenants in the landlord’s 75 million-square-foot portfolio include Bristol-Myers Squibb, Moderna, AstraZeneca, Illumina, Novartis, and Eli Lilly. 

Earlier this year, Vanbarton Group was considering developing a vacant site next to the Marble Collegiate Church, at West 29th Street and Fifth Avenue in NoMad, as the city’s largest life science project rather than the office tower it had once intended. 

The amount of life sciences space surged in the city from 2022 to 2023, from 1.9 million square feet to 2.7 million square feet. While most of that space is in Manhattan, the outer boroughs still counted 700,000 square feet.

Last year, New York City tied with Boston and Cambridge, Massachusetts, for the lowest vacancy rate in major life-science markets at 1.1 percent, and at almost $90 per square foot, it was second highest in average asking rents.