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Alexandria Real Estate faces $183M loss claim in NYC dispute
Alexandria says it has spent $183M in preconstruction costs as of June 30, while the city alleges the company missed a Nov. 3, 2024 option deadline and claims a $5M deposit plus at least $3.8M in damages.
Alexandria Real Estate Equities is still in a high-stakes legal fight with New York City over a life sciences campus on the East Side of Manhattan, a dispute that has now surfaced a potential $183M loss for the REIT, according to Bisnow.
The company says the city is trying to undermine its Alexandria Center for Life Science project, a $1.5B research park that Alexandria alleges it would add and expand. The REIT points to an agreement reached in 2006 to lease ground between Bellevue Hospital and NYU Medical Center at 430 and 450 E. 29th St., after which Alexandria built an East Tower delivered in 2010 and a West Tower delivered in 2013, together totaling nearly 730K SF.
Bisnow reports that the broader life sciences context has weakened, even as lab inventory has grown. A Savills report cited by Bisnow puts lab inventory at 3M SF, while the city’s vacancy rate was 32.5% as of the second quarter, despite Alexandria’s property being 95% leased at the end of last year.
The dispute also centers on a plan for a third building, the North Tower, and on competing claims around delays. Bisnow says Alexandria had sunk $183M in preconstruction costs as of June 30, while court records cited by Bisnow indicate the city alleges Alexandria failed to close on an option by Nov. 3, 2024 and is seeking to retain a $5M security deposit and at least $3.8M in damages. Bisnow adds that in August 2024, Alexandria sued NYCEDC and NYC Health + Hospitals, alleging the city deliberately delayed the developer to shift floodwall costs and postpone construction.