Our results prove it out. Tomorrow, on September11, theAlexandria CenterforLife Science, the first and only commercial life science campus in New York City, will participate in the 9/11 Memorial & Museum's Tribute in Lightsan extension of the Memorial & Museum's annual Tribute in Lightto commemorate the 20th anniversary of the 9/11 attacks. Cost of materials and supply chain volatility were the initial drivers of construction inflation, but now the primary driver is labor with a triple whammy of wage increases, shortage of workers and the inefficiency of the remaining labor force due to the retirement of older, more skilled labor. So we've, I think, done an extraordinary job of managing rent collections and monitoring all of our tenants in a way that I don't think anyone else could even imagine. D.C. Alexandria is a publicly traded real estate investment trust that builds commercial properties and leases them to life science companies. So we have added a lot of high-quality assets to our portfolio in recent years as well as coming online here over the next two to three years. American Consumer News, LLC dba MarketBeat 2010-2023. They were the first to focus on life science real estate and really dedicate the bulk of their business to it. Now leasing volume for the first quarter was strong at 1.2 million rentable square feet, slightly ahead of the strong quarterly average of leasing volume prior to the exceptional record-level leasing volume in both 2021 and 2022. I agree with that assessment. So obviously, '23, a lot of stuff has already been delivered. 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. Its not hard to do it because were uniquely focused. There's definitely expansion needs. On lease sublease space is at 3.9% and unleased directly competitive with our AAA locations and building quality to be 1.5% to be delivered in 2023 and 5.1% to be delivered in 2024, a 1.3% total increase in availability from last quarter. In Alexandrias fourth-quarter 2021 earnings call, Marcus said, Literally, [theres] no real presence of commercial life science [in Texas] today, but our intent is to create a market and really bring early-stage commercial life science to Texas, much like we did in New York.. I don't know that -- I mean, we don't call it a credit watch list. And then, Joel, and maybe you and Hallie could just comment. With strong operational performance and balance sheets, REITs are well-positioned to navigate economic and market uncertainty in 2023. We couldn't understand the science, not that we had some ability to say, hey, this is going to fail or not fail, but we simply could not understand the science that we passed on the tenancy. WebThe Alexandria juggernaut, now with a $44B market capitalization, outperformed its expectations for last year, standing out in a year of superlative performances across the industry. But at what point does it become too much? Companies also continue to set high bars for continued innovation and product launches. And for those that do seek venture debt, SVB is by no means the only option. 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 Yeah. Mr. Marcus earned his undergraduate and Juris Doctor degrees from the University of California, Los Angeles. Please find specific details in the tabs below. I'm going to go and briefly touch on our development pipeline, construction costs, leasing and asset sales and then hand it over to Dean. 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. As CEO from March 1997 to April The human body must have adequate healthy food, so we focus on serving the life science and technology industries, as well as the agtech area how the technologies relating to the agricultural industry are driving fundamentally disruptive changes in our whole farm-to-table ecosystem. www.vbprofiles.com is now www.topionetworks.com. In 2022, biopharma deployed an estimated $267 billion into R&D. However, the elements of the cluster model, such as having access to top talent, are attractive to the industry and they do want to be on our campuses. And if so, how much? There's some more coming in '24, there's more coming. We focus on four core areas: first, biomedical research to help discover drugs and new technologies that will help cure disease. The book value would only have it to the extent it's not related to the operating component, Tony? Pasadena, California-based Alexandria is the only publicly traded, pure-play office/laboratory REIT. But new construction and development will be more expensive, and certainly, entitlements around the country are getting tougher to obtain.. That's helpful. And that's just how we do things. 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. Concentrating on the fast-growing biotech market in San Diego, Alexandria acquired four buildings. While the macro environment remains challenging, we are reasonably optimistic that we can execute on our disposition plan in 2023 at attractive values and cap rates. This is an important distinction in any part of the cycle, but perhaps even more when things have slowed down. Diversity is fundamental to our culture. And I appreciate the color that you guys have provided thus far on sort of demand and the normalization on that front. We dont focus on hiring a certain number of people in certain groups, we focus on hiring the most qualified candidates. When typing in this field, a list of search results will appear and be automatically updated as you type. Joel Marcus is 72, he's been the Executive Chairman of the Board of Alexandria Real Estate Equities since 2018. [3], As of December 31, 2022, the company owned or had investments in 41.7 million square feet of operating properties in addition to properties under construction. They asked Marcus, then 47, to lead the company. Nareit's members are REITs and other businesses throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses. Plans call for a net-zero commercial lab, relying on geothermal energy and on- and off-site renewable power. The company's revenues are derived in the following markets: Properties are generally located near universities to attract tenants. The company, led by founder and Executive Chairman Joel Marcus, focuses exclusively on highly specialized lab space used for research and development in the booming life science industry. There aren't events that we control. Moderna continues to highlight the potential of novel platforms to deliver innovative new medicines to patients. This time, you've kind of mentioned $850. 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. Thank you, Joel, and good afternoon, everyone. But I believe our early renewal statistics have been fairly strong recently. We updated our underlying guidance assumptions for 2023. 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. Paula Schwartz - IR. And I think we see in Maryland, it's still pretty good. Its goal is to develop and operate efficient and healthy buildings by reducing carbon emissions and mitigating climate risk. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio. That has been the secret sauce in trying to get things done. In San Diego, direct vacancy is at 4.1%, sublease space is at 2.3% and unleased competitive supply is 3.2% in 2023 and 5.4% in 2024, a slight increase of 0.2% over last quarter. Annual NOI for these deliveries totals $23 million, and the initial stabilized yield is strong at 7.3%. Importantly, within approximately 72 hours from the start of the bank run, companies had access to all deposits and the near-term risks such as making payroll were mitigated. Monitor your investments 24 hours a day, around the clock from around the globe. I would say that we will see things that are still lower than 5% potentially when there's a good mark-to-market opportunity that can be monetized. Steven Marcus has asked the US Trademark Trial and Appeal Board to take Alexandrias registered trademarks off the books. the mental health crisis is continuing to skyrocket, said Joel Marcus, AREs founder and executive chairman. 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. Inspired by the OneFifteen platform, Alexandria is developing a new model in Seattle to combat the home- lessness crisis. Yes. So you will see some of that, but they're fairly small in the scheme of this. And let me maybe put a footnote on that, Steve. I think the way we're trying to think about it is to -- I mean, we have a very significant position in the Greater Boston market, 14 million, 15 million square feet. Yes. Alexandria Real Estate Equities, Inc. (NYSE:ARE) Q4 2021 Results Conference Call February 1, 2022 3:00 PM ETCompany Participants. Continued innovation in medicine is an absolute REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. 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. With that, let me turn it back to Joel Marcus. from 8 AM - 9 PM ET. We have a very strong balance sheet. Yes, it's somewhere around -- I think last quarter, it was somewhere around 27%. When you look at the focus on agtech, was this a natural progression for Alexandria? Lionel Messi talks through the most iconic moments of his illustrious career, with journalists, teammates and opponents offering insight and analysis into the goals and games that will define his legacy. Great. They have worked with one or more of our core projects or programs. 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. 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. Thank you for your continued support. While the outlook for Alexandria certainly looks solid, one thing that people are watching is the health and liquidity of the underlying biotech industry, Rodgers notes. Entitlements are important. Some of which use SVB, but many of which did not or had multiple banking relationships. Now the key takeaway is that the scale of our high-quality tenant roster combined with operational excellence from our team, puts us in an excellent position to benefit from the unique pool of demand from our client tenants even in this unusual macro environment. And are the investors that we attracted really like the building, and it was an opportunity to fund something that was near-term dollars. Chief Executive Officer and Co-Chief Investment Officer, Co-Chief Investment Officer and Regional Market Director - San Diego, Managing Director at Alexandria Real Estate Equities, Executive Chairman and Founder at Alexandria Real Estate Equities, Vice President, Science and Technology at Alexandria Real Estate Equities, Chief Executive Officer and Co-Chief Investment Officer at Alexandria Real Estate Equities, President and Chief Financial Officer at Alexandria Real Estate Equities, Co-Chief Investment Officer and Regional Market Director - San Diego at Alexandria Real Estate Equities, How to Invest in the Top Grocery Stocks for This Year, Best Bank Stocks to Invest in Ahead of Rising Interest Rates, Lucid Group, Inc. (NASDAQ:LCID) Position Increased by Zurcher Kantonalbank Zurich Cantonalbank, 10 E-commerce Stocks to Consider for Long-Term Buys, United Parcel Service Delivers A Warning To The Market, Get 30 Days of MarketBeat All Access Free, By creating a free account, you agree to our, First Republic up in air as regulators juggle bank's fate, Stock market today: Tokyo gains, most Asian markets closed, 'Super Mario Bros. Movie' hits $1B, is No. How challenging is it to disrupt that model? All rights reserved. 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. 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. On the supply side, we track high quality projects, we believe, are competitive to ours in the high barrier-to-entry submarkets. Starting with pharma, which makes up 18% of our ARR, this segment continues to operate from a position of strength with strong balance sheet and significant free cash flows, pharma is less sensitive to rising rates. 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. Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. We dont have an organizational chart. 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. Gross unrealized gains in our venture investments as of March 31st were $459 million on a cost basis of $1.2 billion. 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). We chose not to win the Britannia assets came for sale quite a number of years ago and in those days, HCP bought that, I think, almost $3 billion, we valued at about $1.7 billion. Please go ahead. Reflecting this, in April, we've collected 100% rent from our preclinical and clinical stage public biotech tenants. Right. At this rate, this represents over $1.1 billion of capital for reinvestment over the next three years. Maybe just on the sourcing uses. 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. How has the mission of Alexandria Real Estate Equities evolved since the founding of the company in 1994? Alexandria is targeting LEED Zero Energy and Fitwel certifications. We focus primarily on high barrier-to-entry markets where supply is inherently limited. And then the second question for me is on the success that you're having from asset sales and partial interest. I think that's the area that everybody is really focused on, and we have very limited exposure there. And then you look at public, which are preclinical or in the clinic, but don't have near-term milestones. WebJoel Marcus is professor of New Testament and Christian origins at Duke Divinity School. So we in addition to high-barrier to enter, we also really are focused on aggregating into mega emphasis, and the opportunity to do that wasn't attractive enough for us to move forward. I think we're still seeing decent activity maybe RTP or RT, I should say, has slowed maybe a bit more than we would have guessed, but part of that's due to my guess is the mix of tenants down there in the -- not so much our tenants per se, but the mix of life science, the components of life science tenants in that market. The reduction in spend results in NOI from deliveries primarily commencing from the second quarter of '23 through the first quarter of '26 to be approximately $610 million. Additionally, he is a member of the MIT Corporation Visiting Committee for the Department of Biology. That is almost -- that's hard to do generally, and it's so submarket and building specific, Tony. [Operator Instructions] The first question today comes from Steve Sakwa with Evercore. Nareits members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses. Any number of cities would like to get there but probably dont currently have those characteristics: Chicago, Denver, Phoenix. Is it difficult to make long-term investments with the short-term, quarter-to-quarter pressure for results? And we're very pleased that we just received new -- one of Newsweek's most trusted company awards. 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. Now turning to guidance. We had continued strength and timely payment of rent from our client tenants, 99.9% and for the first quarter and 99.7% for April that was through April 21, only three weeks into this month, pretty amazing. I mean we look at qualifying activities carefully across all of our projects that are undergoing construction activities and capped interest and shut them down accordingly. And I think in a tougher macro environment, it's kind of thought to prune and rightsize you see what we've done last year would be a good example of -- we sold a set of really good high-quality workhorse assets, but we felt in locations that were not necessarily high barrier to entry markets, but good economics for buyers as well and good economics for us. 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. Koh was unimpressed with the revisions and tossed the suit. Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. It will be ultra-efficient, minimizing its carbon footprint and harnessing geothermal energy and renewable electricity, which is really a game-changer, Marcus says. Thanks. So, we don't necessarily think that those buildings are competitive to ours. Mr. Age : 74. Our disciplined core focus is our patented and trademark lab space. The result is tenants like Eli Lilly that continue to translate this R&D into transformative medicines. Please go ahead. Now turning to outstanding financial and operating results, we had really strong growth of $342.9 million or up 13.9% in total revenues for the first quarter annualized in comparison to the first quarter of 2022. Just some new recent starts and one, large one in particular in South San Francisco, you made up most of that change. So information comes in different ways in different fashions. [1], The company's 740,972 square foot Alexandria Center for Life Science in Manhattan has several biotechnology tenants. The legal war between Joel Marcus, 72, and his son may not be over, however. As a testament to this point, with the week remaining in April, private biotech tenant rent collection is at 99.7%. And Dean will go into the metrics, but almost 100% collections, which is -- bodes well for our continued strength and stability of the company. Washington, Depending on who you ask, demand is at slightly below or slightly above pre-COVID levels. All Rights Reserved. So that's really, I think, where the mindset is. For our preclinical and clinical stage public biotechs comprising 10% of our ARR, compelling clinical data remains king. Export data to Excel for your own analysis. Country of residence : Unknown. Now, our policy has been these large significant unusual items. 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. A lot of people have left these companies and are now starting companies. Alexandria also provides strategic capital to transformative life science, agtech and technology companies through our venture capital platform. So, we are largely locked in. Thank you for indulging me on that retrospective. Were also big thinkers. The agtech industry is purpose-driven because the nutrition effort, similar to fighting disease, is bringing healthy, fresh, and cost-effective food to the U.S. Was the cluster model built around providing a collaborative environment? WebJoel 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 Yes. 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. So, the two are pretty fundamentally different. The buyer will fund the remaining construction costs to deliver the property to our tenant until they reach a 37% ownership, which is expected to be the remainder of the cost to deliver the project. There are less tenants actively seeking space in the market today, which we believe is being significantly driven by uncertainty in the economy. Theyre incredibly active on the venture capital side of the business, he explains. Please go ahead. 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. Its easier than one thinks. See what's happening in the market right now with MarketBeat's real-time news feed. The life science industry thrives on that. For Alexandria, these buildings stayed open and operational because its very difficult to do lab work from home.. So rightsized for delivery to requirements in the market, they're not lumpy, large build-to-suit opportunities that could be more specific to larger requirements. 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). 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. Now JV contributions to construction spend, including forecasted joint ventures were added to our detailed disclosures on page 48 of our supplemental package. Thank you, guys. 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. Alexandria Real Estate Equities, Inc. Executive Chairman and Founder Joel Marcus Appointed to Emily Krzyzewski Center Board Alexandria extends its 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). Meaning, if we were to mark-to-market the rental rate, Steve, on the whole portfolio? That is an initiative to bring computer modules and computer science education to every single New York City public school student by 2025. Continued innovation in medicine is an absolute national priority and the transformative work of our tenants in the industry is critical to addressing the massive unmet medical need. However, from Alexandrias standpoint, they should be able to continue to fund their growth. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. Were almost a $20-billion market cap company, which is hard to imagine since we started with $19 million. Ismail says the platform gives Alexandria a competitive edge. Technology Square (Cambridge, Massachusetts), "Alexandria Real Estate Equities, Inc. 2022 Form 10-K Annual Report", "Alexandria Sets up Incubator, $25M Seed Fund For NY Bio Startups", "Alexandria Real Estate Equities: More Than Just a Landlord", "The #1 Real Estate Stock To Own Is Built On Trends", "A real estate empire grows in Kendall Square", "Take a look inside the stunning offices where companies are reinventing NYC's biotech scene", "Alexandria Real Estate Equities, Inc.: People, Passion, Purpose", "ZymoGenetics sells headquarters in $52 million lease-back deal", "MaRS selects Alexandria Real Estate Equities to expand the MaRS Centre in the Discovery District of Toronto", "Ontario government bails out MaRS building for $309m", "Trammell Crow Co. back in the game in Seattle with $42.6 million acquisition", "Another Amazon-leased building sells for $95 million", "Alexandria Real Estate Equities, Inc. We have meaningfully reduced uses of capital for 2023, made excellent progress on dispositions and sales of partial interest, have a conservative FFO payout ratio and a growing dividend and are the go-to brand for life science real estate.
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