We beat guidance and we raised guidance. Well, if you can't look at the Edison, how it works and so forth, you can't underwrite the tenant. Each of the markets is seeing strong demand. Yeah. Importantly, occupancy is expected to recover in the second half of 2023. Briefly on external growth, we have $610 million of incremental net operating income from our pipeline of 6.7 million square feet that is 74% leased, approximately 30% of this NOI will commence in the remaining three quarters of 2023, about 40% will commence in 2024, about 26% in 2025 and the remaining 4% thereafter. So operator, can we go to questions, please? According to the American Society of Cell and Gene Therapy, there are over 3,700 gene cell and RNA therapies in preclinical and clinical development. Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools: Good day, and welcome to the Alexandria Real Estate Equities First Quarter 2023 Conference Call. Even worse is the availability of large transformers provided by the utility companies, which can take as long as three years now to get. View which stocks are hot on social media with MarketBeat's trending stocks report. And many banks, including G-SIBs have been working for years to carve out their own share of this market. 1-800-3-NAREIT These are the characteristics of real estate investment. 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. So information comes in different ways in different fashions. Were also big thinkers. So you will see some of that, but they're fairly small in the scheme of this. Thanks, good afternoon. from 8 AM - 9 PM ET. Alexandria Real Estate "pretty darn cautious" about investments But what's changed in South San Francisco is transportation is now a bit of an issue. Anyone contemplating a speculative development these days will have to contend with these delays and associated high costs, which will put the feasibility of building and financing the project at considerable risk. But if it's stable, high-quality assets going to have a five handle on it just like this one did. [6][1], The company's San Diego properties are primarily in Torrey Pines, San Diego, University City, San Diego, and Sorrento Mesa, San Diego. That being said, Alexandria is eyeing Texas as the next emerging market, where the REIT is in the process of a series of transactions, although Marcus says he cannot comment further. These future transactions and 15 Necco account for approximately 57% of the progress needed to meet the midpoint of our disposition guidance. I could not have made a better decision as it all proved out. Theres a competitive need for biotech companies to be in many of these major markets, Ismail says. The S&P 500 investment-grade rated REIT boasts an asset base of approximately 74 million square feet. If you look at Hallie indicated, if you look at the tenant collections by segment, they're 99% to 100%. Thanks, Hallie. All right. The life science industry thrives on that. Thank you, and good afternoon, everyone. It's reflective of where we usually start at the beginning of the year. The initial business plan included founders Kendell Lang, Alan Gold, Gary Kreitzer, and Steven Stone as part of the initial management team. We've maintained strong guidance while lowering uses and sources of capital. An Interview with Joel S. Marcus, Marcus co-founded it with $19 million in Series A capital. The health of ARE's best-in-class life science tenant base and innovation is a long-term driver of life science industry growth. Well, I mean, a couple of years back now, I think it was two years ago, Jamie, we took -- the market was able to deliver on some unique liquidity events within the portfolio, and we had something just north of $200 million in realized gains. Okay. 6.7 million square feet under construction or including 1.2 million to start in the near-term here. Washington, Is there any something about that building that didn't like or that was more particularly attractive to certain investors, I guess, why that property? What in particular kind of changed on that front, new supply coming online? No, that's great. Joel Marcus - Executive Chairman and Founder Peter Moglia - Chief Executive Officer & Co-Chief Investment Officer Dean Shigenaga - President & Chief Joel S. Marcus, Executive Chairman and Founder of Alexandria Real Estate Equities, Inc./Alexandria Venture Investments, Honored by the 9/11 Memorial & Additionally, Alexandria earned the first-ever Fitwel Life Science certification for its leadership in prioritizing tenant health and wellness and was named a 2021 Global Real Estate Sustainability Benchmark (GRESB) Global Sector Leader. Thank you for accessing our content on the Topio Networks Market Intelligence Center. The younger Marcus also allegedly falsely claimed his startups evolved from Alexandria, according to the suit. [5] Its largest campuses in Boston are the 2,365,487 square foot Alexandria Center at Kendall Square and the 1,181,635 square foot Technology Square (Cambridge, Massachusetts). Those are the areas we focus on, but we impact those areas in a variety of ways and we try to engage our team members throughout the company. Alexandria, which celebrated its 20th anniversary as an NYSE listed REIT in May 2017, is the only publicly traded pure-play office/laboratory REIT. We want to make sure you get the most out of our platform. The second is STEM education without the next generation of scientists and computer programmers and engineers, were at a loss to imagine where our innovation industries will go. The result of all this is we have built a brand without here that puts us in a position where we don't rely on third parties to bring us tenants. And I think we see in Maryland, it's still pretty good. Read More E. Rene Salas, CPA 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. WebEditors Note. Alexandrias already-strong performance was amplified by the pandemic when demand surged from new and existing tenants across its portfolio, as billions of dollars flooded into the research and development of a COVID-19 vaccine and other therapies to combat the virus. Alexandria hopes OneFifteen will encourage similar projects around the country. Alexandrias pipeline includes 8 million square feet under construction or scheduled to begin construction in the next six quarters, which is projected to generate $665 million in new annual rental revenue. Now, the model that they have all adopted is based on our cluster model. And so, a combination of settling in on activity this quarter, as well as our continued outlook for the remainder of the year, so slight improvement overall. This is Hallie Kuhn, Senior Vice President of Science and Technology and Capital Markets. Its undoubtedly a differentiator that has borne fruit.. 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. Absolutely, that's helpful. So we feel good about it, and we'll keep an eye on things as we go through the next two quarters. But as Winston Churchill once said, "Never let a good crisis go to waste." And so, we're reasonably comfortable with our outlook into 2023 and we'll obviously provide an update as we go quarter-to-quarter, but a bulk of what we have under executed LOI or PSA agreements today is sliding to close here fairly soon, plus or minus mid-year. [8], In 2007, the company began development of the West Tower of the MaRS Discovery District in Toronto. 326 E 8th St #105, Sioux Falls, SD 57103 After serious contemplation, I decided that, if I was going to make it different in the world, this was a heck of an opportunity to do it. WebJoel S Marcus is Chairman/Co-Founder at Alexandria Real Est Equities. If you want to look at it from that perspective, redevelopments were placed into operations as vacant assets, development projects for the future for -- they have been paused on a few circumstances, which basically were left in the future development pipeline. And so we're being pretty darn cautious there, and you'll see that continue. 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. But I think the bottom line is the simple bottom line. Adding to the difficulty to execute in this environment is the increasing desperation of a number of office building owners, trying to raise cash to stay afloat by offering quality long-term leased assets with credit tenants at 6.5% to 7.5% cap rates. I think that's the area that everybody is really focused on, and we have very limited exposure there. We encourage everyone to be super entrepreneurial and not think like they work in a structured corporation. Were almost a $20-billion market cap company, which is hard to imagine since we started with $19 million. 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. He also sued his father and Alexandria in New York state court, alleging that Alexandria owes him more than $12 million for devising a new financing strategy for the company in 2013. As we all know, the rapid rise in interest rates have not only increased investors' cost of capital, but created a lot of uncertainty causing a number of investors to remain on the sidelines. I think there was one project in South San Francisco that has started recently, which is just beyond comprehension. In the first quarter, Alexandria inked a 427,000-square-foot lease with Bristol Myers Squibb, its largest tenant, (by annual rental revenue) for the development of that companys newest, cutting-edge research hub focused on cancer as well as immune-mediated and neurodegenerative diseases at the Alexandria Point mega campus inSan Diego. Alexandria also provides strategic capital to transformative life science, agtech and technology companies through our venture capital platform. Contact UsMediaPartners HealthCare InnovationPartners HealthCare. Improving nutrition is a newer goal that were just starting to develop. It allows them to be enmeshed in the life science business, not only as a landlord, but as a company thats actively investing in the business, trying to understand the science, understand the tenants, staying abreast of trends. I would now like to turn the conference over to Paula Swartz with Investor Relations. Stripping that $15 million from the purchase price gets you to a total valuation of $561 million increasing the cap rate to 5.4%. 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. 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. Yes, there's been a slowdown in activity due to the fact that boards and companies are really just trying to figure out where the economy is heading. I agree with that assessment. This concludes our question-and-answer session. We just gave -- so you saw there was no changes in capped interest down in the details, obviously, if you -- we did on a number of projects review strategically what we wanted to do and a number of them were put on temporary hold. We have 10,000 known diseases reeking havoc on human beings each and every day and the personal and economic cost of sickness, illness and today, the mental health crisis is continuing to skyrocket. WebAlexandria Executive Chairman and Founder, Joel Marcus, opened the 29th Annual Baron Investment Conference, one of the investment communitys most anticipated and highly Learn more about Alexandria's social impact leadership on the Corporate Responsibility page of the company's website. China of course, but many other locations. And then there are transportation and increased energy costs as well. I just had my 25th anniversary with the Company, In addition to that milestone reminding me of how fast time moves by brought about a nostalgic look back at my time at Alexandria. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. Well, that's kind of how we looked at Sorrento. No, that is helpful. Country of residence : Unknown. We have been involved in this sector since 1998, when we had only been a public company for one year. And for the most part, Rich, for the most part, those are either 100% leased projects or multi-tenant projects, most of which have some level of pre-leasing. 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 innovation cluster locations. The new company proved that biotech companies were underserved, and that there was strong market demand. Alexandria projects further rental growth of 30% to 35% for full-year 2022. Please, go ahead. Marcus followed Harvard Business Professor Michael Porterstheory of cluster development and began operating under an urban cluster model, where a world-class location, technology and innovation, a talent pool of scientists and professional managers, and ample risk capital all merged. Now transitioning to the health of our world-class diverse life science tenant base, perhaps the best way to frame the current environment is the old adage in God we trust all else spring data. This is very similar to last quarter, but in response to the uncertainty and volatility in the markets, we have made a strategic decision to reduce 2023 construction spend by $250 million by pausing or delaying projects that had been classified as under construction, so we can focus our capital on the most strategic projects that have the most attractive terms, enabling our highly bedded and vast tenant base. Of course, this is also not work that can be done from home. "Joel and Alexandria's tremendous support has made a lasting impact on the 9/11 Memorial & Museum and enabled us to commemorate and honor the nearly 3,000 victims of these attacks and all those who risked their lives to save others," said Alice M. Greenwald, president and CEO of the National September11 Memorial & Museum. How has the mission of Alexandria Real Estate Equities evolved since the founding of the company in 1994? I mean we've always done that, but I think now it just goes to show that they're going to be the haves and the others that have not. I think kind of Hallie said it all that, when we look at private companies or we look at preclinical public companies or even companies in the clinic that are public. Well, I think maybe South San Francisco might be not so much for us, but maybe others. WebEditors Note. Well, it was a fairly low yield. I think Hallie indicated, we have a pretty methodical deep and judicious approach that has always been there. Please go ahead. Joel S. Marcus Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. Alexandria So you might think about an adjustment of cap rates maybe over this transition transitioning economic time of maybe 100 basis points. However, the mega-mergers in the agricultural field that have occurred over the past two years have made it clear that the only way to disrupt the entire farm-to-table system is by spawning a whole new system of startups in the agtech area. ", "I am deeply honored and incredibly moved to receive this honor from the 9/11 Memorial & Museum, especially as we commemorate the 20th anniversary of the 9/11 attacks," said Mr. Marcus. When it comes to upcoming lease expirations, you're typically in conversations with tenants a year or multiple years in advance. Please go ahead. I guess maybe a different way to ask it is if you think about the next couple of years, you see where the growth is within your portfolio and you also know space that's coming due in your development pipeline. The other three verticals are corporate responsibility where we focus on sustainability, philanthropy and volunteerism; thought leadership we recently hosted our second agriculture-focused Alexandria Summit; and venture investments where we invest in and support start-up to early-stage life science and technology companies building the next generation of therapies. Mr. Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. The next question comes from Michael Carroll with RBC Capital Markets. The next question comes from Rich Anderson with SMBC. And then you look at public, which are preclinical or in the clinic, but don't have near-term milestones. Now we have also identified other dispositions and sales of partial interest to bring our total for the year to $1.5 billion. That is 1.1 million students every year. I'm curious as to what you've committed to in terms of development spending. I don't think you can compare that because no one has the scale and depth of the tenant base that we do, and we know pretty instantaneously about the needs of those tenants versus if you're just in the market using brokers and you're kind of hearing here, say, your secondhand. 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. Alexandria - Building the Future of Life Science Jacobs approached Joel S. Marcus, a lawyer and CPA, with the idea of representing their interests in this company to oversee the management team who intended to provide laboratories and office space to biotech firms. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. CONTACT: Courtney Mulligan, Senior Director Communications, (646) 939-7471, [emailprotected]. Steven Marcus has asked the US Trademark Trial and Appeal Board to take Alexandrias registered trademarks off the books. There are 330,000 open construction jobs today and the time it takes to train the new entrants to be highly skilled as measured in years. Pasadena, California-based Alexandria is the only publicly traded, pure-play office/laboratory REIT. But Dean, do you want to highlight that for a moment? With me today are Peter, Dean, Hallie and Dan. As we have noted previously, demand has normalized from the record year of 2021. Maybe I'll start from the back end of your question. No, I think not Peter said it perfectly. So it kind of meets all the requirements that we have for monetization. These are the men and women who are going out every day and risking their lives so we and our tenants can work every day and we are honored to support them and their families. Where you're parting ways with your preeminent assets, you only want to do that to a certain degree before -- you're giving away stuff you'd rather own 100%. Yes. We just have a more -- much more hands-on work approach with clients. I just wanted to follow-up on some of those supply comments, particularly the San Francisco supply. The report and its 30-plus case studies feature REIT leadership and ESG innovation from a variety of sectors and serves as a tool to assess the scale and impact of the REIT industrys ESG commitments and initiatives. Prior to co-founding Alexandria, he had an extensive legal career specializing in corporate finance and capital markets, venture capital, and mergers and acquisitions. If you look back over time, I think we've enjoyed the opportunity to move rental rate growth and same-property performance northward as we make our way through the year. 1-202-739-9400 The construction spend, plus or minus will play out like a normal curve for spend over that pipeline, roughly two years from the start of new projects, the active pipelines part way through that already. This page highlights square footage of our operating, but most importantly, the different categories of our pipeline, everything from construction to the future. Our results prove it out. REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. 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. WebJoel Marcus. The asset is under construction and will not be delivered until the end of this year with cash flow commencing in mid-2024. Over 80% of that demand comes from our existing 1,000 tenants. Thank you for indulging me on that retrospective. When the world is in a tumultuous situation of global conflict, economic stress, and rising interest rates, those are a series of things that investors worry about, Rodgers says. Great. Should You Be Too? But just curious, from a geographic perspective, are there certain markets or submarkets where the normalization is a little bit more onerous? [1], The company also has a venture capital arm, Alexandria Venture Investments, which invests in life sciences firms. Despite these challenges, the demand for high-quality life science assets which is vastly different from office assets continued in the quarter. Understood. The next question comes from Dylan Burzinski with Green Street. Alexandria sued Steven Marcus in US District Court in December, saying he misused Alexandrias name and logo, an image of the Alexandria lighthouse in ancient Egypt, in fund-raising pitches emailed to venture capitalists in California, including former Vice President Al Gore. And how much of that is potentially some place where you can sort of tap the brakes like you kind of did this quarter in deference to the current capital raising market, please? Although the case was dismissed, it was a limited basis, he said. Alexandria has successfully utilized Harvard Business Professor Michael Porters cluster theory as the foundation for its proven cluster model, which identifies four critical components for life science clusters to thrive: location, innovation, talent, and capital. I know there's a few data sources out there saying that developers are still pursuing life science projects, specifically in Boston, I mean, would you agree with that statement? Sign up for our newsletter and event information. So Steve, -- so the huge majority of the change was really due to a simple future Mega Campus development project that we acquired. All of these efforts support our mission, and theyre core to the culture here and to all the employees everyday experience as an Alexandria team member. Yes. Our outlook -- our strong outlook for 2023 same-property NOI growth is 3% on a GAAP basis, 5% on a cash basis and generally consistent with our strong 10-year average for same property growth. Alexandria Real Estate Equities - Wikipedia Joel S. Marcus - Foundation for the National Institutes of Some of which use SVB, but many of which did not or had multiple banking relationships. Please go ahead. Marcus also serves on the boards of Applied Therapeutics Inc., Boragen Inc., Frequency Therapeutics, Intra-Cellular Therapies, Inc., MeiraGTx Holdings plc, and Yumanity Therapeutics; the Foundation for the National Institutes of Health (FNIH), MassBio, and Scripps Research; and the Emily Krzyzewski Center, the National September 11 Memorial & Museum, the Navy SEAL Foundation, the Partnership for New York City, and Robin Hood. Obviously, there's dispositions and partial interest sales that are continuing to come at different points in the cycle right now. Steven Marcus v. Alexandria Real Estate Equities, Inc. et al 2:2021cv08088 | US District Court for the Central District of California | Justia Justia Dockets & Filings Ninth Circuit California Steven Marcus v. Alexandria Real Estate Equities, Inc. et al Steven Marcus v. Alexandria Real Estate Equities, Inc. et al RSS Track this Docket Now rental rate growth on lease renewals, re-lease in this space was increased 1% for both GAAP and cash to a range of 28% to 33% for GAAP and 12% to 17% on cash and occupancy was adjusted 20 basis points to reflect vacancy from 170,000 rentable square foot building located in Texas that is on hold while we lease up the adjacent building under redevelopment that is currently 36% leased. 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. We updated our underlying guidance assumptions for 2023. Get daily stock ideas from top-performing Wall Street analysts. So we're giving away not too much upside by selling part of it, right? Hi, everyone. These real estate companies have to meet a number of requirements to qualify as REITs. And apologies if I missed it, but do you have any lease termination since this quarter? As CEO from March 1997 to April 2018, he led its growth into an S&P 500 company with an approximately $18 billion total market capitalization and a total shareholder return of approximately 1,350 percent from the companys IPO in May 1997 to December 31, 2017.
