Alexandria Real Estate Equities hit with class action lawsuit

Life sciences developer Alexandria Real Estate Equities misled investors regarding its property portfolio, according to a class action lawsuit filed against the company.

A shareholder launched the litigation against Alexandria last week in the U.S. District Court for the Central District of California, Bisnow reported. Filed on behalf of all investors, the lawsuit alleges Alexandria gave false and overly optimistic statements to investors, who proceeded to suffer losses as a result.

Defendants include executive chair Joel Marcus, CEO Peter Moglia and CFO Marc Binda. The lawsuit seeks damages aligned with stock market losses, without specifying a figure.

The company did not comment on the suit to Bisnow.

The lawsuit appears to be tied to an Alexandria property at 32-02 48th Avenue in Long Island City, which the firm bought for $75 million in 2018. The plaintiff alleges Alexandria misled investors about the leasing prospects of the Queens property for several quarters.

“In truth, the Company’s LIC value and potential growth as a life-science destination had been declining for years,” the lawsuit stated. The former book bindery is 52 percent occupied today, according to an earnings supplement; the company recently tied Long Island City struggles to Amazon’s HQ2 blowup in 2019.

Alexandria’s third-quarter earnings report disappointed, causing a 19 percent hit to the stock price. The report included $206 million writedown of the Long Island City property.

The report and commentary surrounding it painted a sobering picture of the life sciences market, particularly in Long Island City. Binda said the company doesn’t “view it as a life sciences destination that can scale.” He also said Alexandria would look to sell assets and reevaluate a $4 billion pipeline.

That’s a far cry from what was depicted in previous calls, according to the lawsuit, which features numerous glowing statements made in releases and calls over the preceding year.

As of midday on Monday, the stock was trading at $53.02, down more than 45 percent year to date.

— Holden Walter-Warner