Bay Area Biotech Land Headed for Housing Conversion

The slowdown in demand for life sciences space is leading one of the Bay Area’s biggest landlords in the sector to sell its land for residential use.

Alexandria Real Estate Equities is planning for up to 35 percent of its $2.9 billion in asset sales this year to be land, with most of it poised for possible housing development, the San Francisco Business Times reported.

The Pasadena-based firm is already moving to offload some of its properties in the region. Alexandria is expected to put its 88 Bluxome Street site in San Francisco on the market in the first half of the year. The company has also begun marketing sites near Stanford University in Palo Alto for housing and is expected to sell the land within the next year.

Alexandria saw almost $1.9 billion in write-downs last year, marking a nearly tenfold increase from 2024. With heightened surplus supply across the Bay Area, many developers are shying away from building new life sciences projects after the pre-pandemic biotech boom. Vacancy is approximately 24 percent, according to Savills data cited by the Business Times.

Leasing in the life sciences market is picking up steam and some demand remains, according to the Business Times. Alexandria executives believe recovery is coming, but it isn’t moving fast enough to absorb excess supply. Rather than bet on life sciences, buyers for surplus land are instead looking to acquire property at lower prices and plan for housing instead.

An increasing portion of Alexandria’s land and aging properties are now being positioned for housing upon sale, Peter Moglia, Alexandria’s CEO and CIO, said. Much of Alexandria’s recent write-downs were linked to land, a direct result of oversupply in the Bay Area and other parts of the country, Marc Binda, Alexandria’s CFO noted.

Some Alexandria-owned land is being primed for housing without even selling. Last month, Strada Investment Group unveiled a proposal to demolish four office buildings on Alexandria-owned land in Palo Alto to make way for 145 residential units.

— Chris Malone Méndez