What happened: Investment management firm Land & Buildings published a white paper on the impact of work-from-home culture on life sciences office and lab buildings. The report discovered contradicting views to the widely believed feeling that life science assets were immune to the impact of work-from-home. Land & Buildings utilized cell phone data from Placer.ai to analyze the attendance at Alexandria Real Estate's (ARE) life science portfolio. What the numbers say: Through its analysis, Land & Buildings discovered that attendance at ARE's New York City buildings was down 60% in the period between March 2022 and February 2023 when compared from March 2019 to February 2020. Attendance in Seattle, Boston, and San Francisco buildings were down 59%, 56%, and 52%, respectively. The decline was on par with the decline seen in traditional office buildings. Alexandria's leasing volume was down 50% annually in the first quarter of this year.
Relevance: Land & Buildings believes if the life science sector's trajectory is similar to the traditional office, then ARE's valuation could take a 30%-40% hit from its current level. |
