In 1996, Mr. Marcus founded the companys venture capital arm, Alexandria Venture Investments, to provide strategic investment capital to innovative life science and technology entities developing breakthrough therapies and technologies. We decided to hold on further redevelopment of the second building, aggregating 71,000 rentable square feet until we lease up the remainder of the 131,000 rentable square foot building. I recall my interview with Joel, where I learned about this novel idea of forming a real estate company to serve the life science industry, which made me both nervous as nobody had ever done it before and equally inspired to help enable an industry that was hell bent on changing the world. Its part of our DNA. The next question comes from Rich Anderson with SMBC. Real-time analyst ratings, insider transactions, earnings data, and more. We continue to underwrite and monitor all tenants closely, and our private biotech tenants remain compared to the broader market. Alexandria Reports Higher Revenues But Pauses Some Projects The life sciences REIT raised rents 48 percent the highest quarterly rate growth in company Many traditional offices during the pandemic were completely empty. It sounds like that's where the biggest incremental change was when you're looking at 2023 and 2024 on lease unleased new supply. Is it difficult to make long-term investments with the short-term, quarter-to-quarter pressure for results? He was named one of Real Estate Forums 2017 Best Bosses in commercial real estate and was previously a recipient of the EY Entrepreneur Of The Year Award (Los Angeles Real Estate). For our preclinical and clinical stage public biotechs comprising 10% of our ARR, compelling clinical data remains king. Right, right. The next question comes from Michael Carroll with RBC Capital Markets. Alexandria Real Estate Equities, Inc. Executive Chairman and Founder Joel Marcus Appointed to Emily Krzyzewski Center Board Alexandria extends its As noted in our press release, we were pleased to transfer an 18% interest in our current JV at 15 Necco, which we control and owned 90% prior to the sale. And if I think -- if there was some weakness there, I think I would have probably noticed it by now. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. While this market is and will continue to warrant extreme prudence, it is an opportunity for the best companies to hone in on their long-term fundamentals and thrive. WebMarcus co-founded Alexandria in 1994 as a garage startup with $19 million in Series A capital and, as Chief Executive Officer from March 1997 to April 2018, has led its growth Could you please provide more color on the internal leasing pipeline that comes from your existing tenants? We also gave updates on significant dispositions and partial interest sales aggregating $865 million including significant transactions that are under executed LOIs and purchase and sale agreements. And again, going back to the crux of your question, Steve, almost all that change in the tenancy was retail related at that shopping mall. It is just uncanny that people are still trying to put new products into the queue in a market that has a lot of vacancy. Alexandria Real Estate Equities Inc. published this content on 24 April 2023 and is solely responsible for the information contained therein. Driven by a voracious appetite for space, Alexandria raised the outlook for funds from operations (FFO) per share growth to 8% for the year. We have no peers. We didn't have 150 failures. Companies also continue to set high bars for continued innovation and product launches. We have brought the mission-critical real estate infrastructure of the life science industry and integrated it with an unparalleled and world-class 24/7 operational excellence service component aimed to protect the hundreds of billions of dollars of leading-edge science, which is conducted 24/7 within our asset base. Paula Schwartz - Investor Relations. Theres a ton of demand for life science real estate, says Daniel Ismail,lead analyst forGreen Streetsoffice team. Alexandria, which celebrates its 25th anniversary as a New York Stock Exchange listed company in May 2022, has a total shareholder return exceeding 2,500% as of December 31, 2021. Yes. Even worse is the availability of large transformers provided by the utility companies, which can take as long as three years now to get. Accordingly, we're tracking direct vacancy in Greater Boston to be 2.8%. The initial business plan included founders Kendell Lang, Alan Gold, Gary Kreitzer, and Steven Stone as part of the initial management team. And obesity is estimated to account for over $480 billion in direct health care costs in the US with an additional $1.2 trillion in indirect costs due to lost economic productivity. Maybe I'll start from the back end of your question. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle. We all have a responsibility to ensure that we never forgetthat we continue to pay tribute to those we lost; recognize the heroism, sacrifice and resilience of so many; and share lessons learned with new generations. As you know, Alexandria is truly a one-of-a-kind S&P 500 company. It's slower than it has been because obviously, '20 and '21 were peak times and obviously COVID dollars we're heavily focused on that market, but we're still seeing pretty decent activity that I would say, matches our historical numbers. 1 for 4 weeks, First Republic in limbo as US regulators juggle bank's fate, Alibaba's Jack Ma turns up in Japan as college professor, On May Day, workers rally for better labor conditions, 'Waste of time': Community college transfers derail students. And are the investors that we attracted really like the building, and it was an opportunity to fund something that was near-term dollars. We're fortunate we have one project moving that is kind of a good niche for earlier-stage companies, mid-stage companies, so we don't have to go on an elephant hunt to lease some really large project, but there's a lot of folks out there that are going to be in a lot of trouble because of what I would think is fairly reckless investing. I would now like to turn the conference over to Paula Swartz with Investor Relations. To foster innovation and collaboration in the nations top life science ecosystems, Alexandria made the crucial decision to pursue its urban cluster campus strategy as the first mover in Mission Bay (2004), New York City (2005), and Cambridge (2006). And then you look at public, which are preclinical or in the clinic, but don't have near-term milestones. I know people who did diligence and they said they could never look at the Edison machine. It raised an additional $155 million on the public market. Thats an extraordinary number of commitments ahead of delivering the space. Joel S. Marcus - Foundation for the National Institutes of Click here to download a PDF of An Interview with Joel S. Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities, Inc. and Alexandria Venture Investments, See other features from LEADERS Magazine's April, May, June 2019 edition. Its a perfect time. We updated our underlying guidance assumptions for 2023. from 8 AM - 9 PM ET. Mr. Marcus also founded and continues to lead Alexandria Venture Investments, the companys strategic venture capital platform. These assumptions are disclosed on page four of our supplemental package. And then clearly, biotechs that whether they be public or private that have got good data coming, I think that's where you see it, but I'm not sure we could give you a numerical characterization of that. Concentrating on the fast-growing biotech market in San Diego, Alexandria acquired four buildings. Marcus says those four components are necessary for life science companies to flourish. Occupancy was 96 -- 93.6% as of March 31 and really in line with expectations and the comments I provided on our year-end earnings call. Staying on the topic of innovation, a few final data points to orient the growth of the life science industry beyond the next few quarters but to the decades to come. Were almost a $20-billion market cap company, which is hard to imagine since we started with $19 million. Executive Chairman & Founder, Alexandria Real Estate Equities, Inc. Joel S. Marcus, JD, CPA, is the Executive Chairman and Founder of Alexandria Real Estate Equities, Inc. (NYSE: ARE), the urban office REIT that pioneered life science real estate from a specialty niche to a mainstream asset class and today is the preeminent and longest-tenured owner, operator, and developer uniquely focused on collaborative life science, agtech, and technology campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. So information comes in different ways in different fashions. As a testament to this point, with the week remaining in April, private biotech tenant rent collection is at 99.7%. Yeah. Or do you think we should expect some moderation in occupancy levels as the demand is lower. [1], The company also has a venture capital arm, Alexandria Venture Investments, which invests in life sciences firms. At that point in time, the U.S. was But Dean, do you want to highlight that for a moment? In the first quarter, we delivered 453,511 square feet in five projects into our high barrier to entry submarkets. [Operator Instructions] [Operator Instructions]. I spend a lot of time as a board member of mission-critical social responsibility organizations, and one of the most important things each of us can do is to participate in a number of ways with such things. Since its inception in 1996, it has strategically invested in disruptive life science, agrifoodtech, climate innovation, and technology companies advancing transformative new modalities and platforms to meaningfully improve human health. Great. Alexandria is designing it to be the most sustainable commercial lab building in Cambridge. And the companies with tenured management teams and strong differentiated technologies and near-term value inflection milestones are the ones that rise above the fray. Alexandria sued Steven Marcus in US District Court in December. WebJoel S. Marcus Executive Chairman & Founder Alexandria Real Estate Equities, Inc./Alexandria Venture Investments Joel S. Marcus is the Executive Chairman and Founder of Alexandria Real Estate Equities, Inc. (NYSE:ARE), an urban office REIT uniquely focused on collaborative life science and technology campuses in AAA But new construction and development will be more expensive, and certainly, entitlements around the country are getting tougher to obtain.. Both facilities will provide many amenities and be highly sustainable, high-performance buildings. [7], Its first purchase was of 4 buildings in San Diego which had been negotiated and structured by Kendell R. So, we don't necessarily think that those buildings are competitive to ours. I would like to turn the conference back over to Joel Marcus for any closing remarks. He was also a practicing certified public accountant and tax manager with Arthur Young & Co., where he focused on the financing and taxation of REITs. Now key highlights of our continued strong operating and financial performance Strong growth in revenues, adjusted EBITDA and FFO per share was driven by the continued strength across key areas of our unique and differentiated business. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. 1-202-739-9401 (fax). Should You Be Too? Yes. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, agtech and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. degrees from the University of California, Los Angeles. Alexandria has filed another claim against Steven Marcus in a California state court. The new company proved that biotech companies were underserved, and that there was strong market demand. We think about who the greatest person is for the role we need, and it always works out. Mr. Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. They were the first to focus on life science real estate and really dedicate the bulk of their business to it. But the book value has that $4.2 million in there? And altogether for the year, nearly 60 novel medicines have been scheduled for FDA approval review which mirrors 2018's record year of 59 novel FDA approvals. at We have taken judicious measure to cut our capex, while at the same time, making strong progress on our funding plan for 2023, and you'll hear more about that from Peter. We continue to refine our plan for 2024 because as I mentioned earlier, the $610 million of pipe, that pipeline does not require much more equity capital at stabilization because we have so much already in CIP, which the incremental EBITDA will allow us to debt fund leverage neutral, the wide majority of the incremental capital for that pipeline. And do we want in the portfolio or not. Paula Schwartz - IR. In the first quarter of 2022, the company leased another 2.5 million square feet. For example, Alexandria tenant Gilead has laid out an ambitious plan to achieve 20 new drug approvals by 2030, which will entail advancement of their current pipeline, particularly in oncology, supplemented by additional M&A. That's a hard question to answer because it's pretty -- would be pretty granular for me to understand when I'm looking at leasing reports remembering what is expiring today versus in the future. Just some new recent starts and one, large one in particular in South San Francisco, you made up most of that change. So that group of tenants, you're always looking now even much more so for much nearer-term value inflection milestones and really good data and importantly, large unmet medical needs. Just simply thank you very much, and we look forward to talking to you on second quarter call. So, I guess the short answer is, I don't -- I haven't noticed anything. Joe, look, I can appreciate that you still haven't closed a lot of these deals, but I think the market would certainly appreciate just any range of commentary you could provide on how to think about cap rates? These were individually very significant gains. Our range of guidance for EPS is $2.21 to $2.31 and a range for FFO per share diluted as adjusted is $8.91 to $9.01 with no change at the midpoint of $8.96. The next question comes from Georgi Dinkov with Mizuho. And we have brought this to a highly respected and recognized real estate product type today. Now our strong occupancy was in line with our expectations. So, hopefully, that gives you just some color on how we're thinking more broadly about it. This is Hallie Kuhn, Senior Vice President of Science and Technology and Capital Markets. But I think it's fair to say if you look at our pipeline, which is pretty highly leased, I think we have a reasonably high level of confidence that we can fully lease those projects. I just wanted to follow-up on some of those supply comments, particularly the San Francisco supply. "Their contributions continue to fund the Memorial & Museum's vital exhibitions and programming, such as Revealed: The Hunt for Bin Laden. Marcus says it takes roughly 25 years for a cluster to mature. And first of all, I want to send a big thank you to our entire ARE family team for an operationally and financially strong first quarter in a tough -- continuing tough macro environment. And I think as we think about different assets, we're trying to make sure that we're more focused on the highest barrier to entry markets rather than less. All Rights Reserved. In sum, with the majority of our academic and institutional ARR from investment-grade tenants and funding cycles that are based on multiyear grant funding time lines, this segment continues to be sheltered from larger macroeconomic conditions. Mr. Marcusand Alexandria virtually joined thousands of patriots, partners, colleagues and friends to remember those that the nation lost in the attacks and honor the courage of everyday heroes in the aftermath. So we decided to pass on that. I think, as I mentioned on the call earlier, we're mindful of the macro environment. But that's just one example as a historical data point, Jamie, is -- but if you look back for now, I think this would be the third year that we're into this run rate right at about $100 million, $105 million on average, I think, for the last couple of years. Now this represents a strong 6.4% growth in FFO per share for 2023 following excellent growth last year of 8.5%. Site work shrinks the time to deliver buildings to a tenant, which -- if you looked at us two years ago, we said, let's move that along. $37.889 million. In the supplemental package on page 34, you break out the portfolio between the operating assets and the various buckets of future opportunities. Yeah. This prestigious recognition highlights Mr. Marcus's many meaningful contributions to the Memorial & Museum and his unwavering support of its mission to commemorate those who lost their lives in the terrorist attacks of September11, 2001 and February26, 1993; educate the public and a new generation about their ongoing global impact; and inspire Americans and people around the world to value courage, public service, hope, empathy and resilience in the face of adversity. It's obviously the best way to or one of the best ways to raise equity capital right now for you guys today. There aren't events that we control. Right. And we continue to be the dominant owner as well. However, we're not dependent at all on broker deal flow. We just have a more -- much more hands-on work approach with clients. So hopefully, that gives you a sense. So, we've been able to absorb that. Were building in Seattle, San Francisco, San Diego, Boston, Maryland, and North Carolina. When it comes to upcoming lease expirations, you're typically in conversations with tenants a year or multiple years in advance. Diversity is fundamental to our culture. Thanks for taking the question. There are a handful of dominant companies that control the whole global ag effort. So we feel good about it, and we'll keep an eye on things as we go through the next two quarters. Mr. Marcus is also personally engaged in numerous mission-critical philanthropic efforts, including through his service as Chair of the Navy SEAL Foundations 2017 New York City Benefit, which raised $12.8 million to help support the Naval Special Warfare community and their families. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland and Research Triangle. And to put this in perspective, nearly one out of every $4 of US health care spend is deployed to care for people with diabetes. Thank you, Paula, and welcome, everybody, to Alexandria's first quarter 2023 Earnings Call. It invests in disruptive life science, agri-food tech, climate innovation, and technology companies. The overarching larger vertical is real estate the infrastructure and collaborative campuses that we build to support entities like life science and ag companies. And then one other question. The REIT also signed a 334,00-square-foot lease with Eli Lilly and Co. for the development of Lillys new state-of-the-art Institute for Genetic Medicine at 15 Necco Street in the REITs Seaport Innovation District submarket ofGreater Boston. As a public company, staying true to that focus of clustering assets around key life science geographies has really paid off over the long term.. And so I was wondering -- if I don't know if there's an Alexandria dashboard, so to speak, or what, but can you maybe give us a sense as to what either like leasing traffic, rate or just the aggregate amount of demand that's coming out of your portfolio today looks like versus, say, now two, three, four quarters ago? So is there a, sort of, a number you can point to that this is how much we can raise from a disposition standpoint, still be in a range where we're comfortable with our ownership position in these fantastic assets longer term. But there are definitely some folks that are on the sidelines that are facing redemptions. Yeah. And where could equity play into that? We focus primarily on high barrier to entry markets and brand mega-campus offerings in those AAA high barrier to entry market locations and operational excellence enables us to continually mine our vast and deep tenant base to drive our leasing activity, which will likely lessen the impact of generic supply. Dan, any other comment you would throw out? Can you provide some more insight on the decision not to redevelop 275 Grove Street? The fact that the defendants do no business in the United States remains unrebutted, she wrote in a 26-page decision. Joel Marcus, who lives in Beverly Hills, Calif., is executive chairman and co-founder of the Pasadena-based firm. I guess what I'm trying to just make sure if I'm putting a cap rate on ARE's NOI and getting a value, what from that slide do I need to add to that to kind of capture the totality? In addition, we've built an irreplaceable world-class asset base of robust and highly differentiated properties and campuses that attract a diversified best-in-class tenant base who values our expertise and operational excellence by providing 75% to 85% of our leasing quarter-to-quarter. Additionally, high-level interest rates always have an impact on real estate, but thats where Alexandrias strong balance sheet comes in, Rodgers continues. Understood. This page highlights square footage of our operating, but most importantly, the different categories of our pipeline, everything from construction to the future.
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