Alexandria Real Estate Equities said demand for biotech real estate from its existing tenants helped its revenue grow despite challenges for medical research property in the United States over the past year.

Pasadena, California-based Alexandria, among the nation’s largest holders of biotech real estate with a portfolio of about 73.5 million square feet, said revenue rose 13% to more than $757.2 million for the quarter ending Dec. 31. Full-year revenue for 2023 was up 11.5% from a year earlier at more than $2.8 billion.

The real estate investment trust said 54% of its leases in the fourth quarter were renewals. Executives told analysts Tuesday that that 76% of its leasing activity during the past year was generated by its current tenants, many of which are large global pharmaceutical firms. Unlike general office tenants, many of Alexandria’s tenants conduct work that can’t be done remotely.

“Recruiting and retaining scientists is more important than ever,” Hallie Kuhn, Alexandria’s senior vice president of science and technology and capital markets, said during a conference call. “Cancer can’t be cured from the couch, and expectations of a scientific workforce, where working from home is not an option, are high.”

The prevalence of larger tenants, now also involved in high-growth research areas such as dementia, diabetes and obesity, helped shelter Alexandria from the effects seen during 2023 for some other biotech landlords, as small to mid-sized tenants pulled back on space needs or put space back on the market for subleasing after demand waned for coronavirus-related vaccines and treatments.

Alexandria executives said the company added 1.2 million square feet in the fourth quarter, which is now 99% leased. New space completed during 2023 is expected to bring in $265 million in annual revenue, which officials said is a record in the company’s 30-year history.

Alexandria is nonetheless continuing an “asset recycling” program in which it plans to sell off about $1.65 billion in older, non-core properties that don’t align with its focus on newly developed “mega-campuses” in regions such as Boston, San Francisco and San Diego — the three biggest U.S. centers for biotech real estate.

Last month, for instance, the company sold off a property that it acquired in 2019 in Queens, New York, at a reported loss after calling off plans to redevelop the former printing plant facility into life science space, though it remains active in the New York City region with newer campus projects.

Alexandria’s relatively good returns came as the overall life science real estate industry experienced setbacks nationwide in the past year, with overall new completions of labs and offices outpacing space demand.

A new report from brokerage CBRE, tracking the 13 largest U.S. biotech regions, said nationwide biotech vacancy was 13% at the end of 2023, well above the 8% annual average from 2016 to 2020. Most of that vacancy was created by 4.3 million square feet of newly constructed space completed in the fourth quarter that remained unleased as 2023 drew to a close.

Citing data sources including CB Insights, the brokerage said U.S. venture funding, a key fuel for expansion especially by early- and mid-stage biotech companies, totaled $3.3 billion in the fourth quarter, the lowest quarterly tally since 2019. Full-year venture funding of $16.5 billion was well below the $21.7 billion total for 2022, though not far off from pre-pandemic numbers for 2019 and early 2020.

CBRE researchers said most of the nation’s largest biotech regions still recorded more space being leased than vacated in the fourth quarter, led by San Diego at 211,000 square feet and Seattle with 194,000 square feet. The average annual U.S. biotech rent also rose 4.1% from the prior quarter, reaching a record $70 per square foot in the fourth quarter of 2023, the brokerage reported.

(Updated Jan. 31 to include new leasing from existing tenants.)