WebJoel Marcus Senior Partner at Marcus & Pollack LLP - the real estate tax law firm New York, NY. Or was it projects that were previously signed and then kind of the lease went away? Alexandria, which celebrated its 20th anniversary as an NYSE listed REIT in May 2017, is the only publicly traded pure-play office/laboratory REIT. Transitioning to leasing, our strong brand loyalty, mega campus offerings and operational excellence continue to drive strong leasing numbers in a challenging market. We participate in corporate giving and were quite philanthropic in that respect, but we have a lot of programs that allow team members to get involved: matching gifts; a volunteer rewards program that rewards those who volunteer on their own time; quarterly engagement opportunities so every office has a volunteer opportunity each quarter at a local charity; and, of course, volunteer time off in the form of two paid days a year for folks to volunteer at a charity of their choice. But the book value has that $4.2 million in there? Nareit and its REESA partners continue to advance adoption of the REIT model worldwide. So these inefficiencies will be with us for a while. Maybe just on the sourcing uses. 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. It will be ultra-efficient, minimizing its carbon footprint and harnessing geothermal energy and renewable electricity, which is really a game-changer, Marcus says. The next question comes from Anthony Paolone with JPMorgan. Next to public biotech, our tenants with marketed products make up 14% of our ARR generated $150 billion in revenue in 2022 and include names such as Amgen, Gilead, Vertex and Moderna. And let me maybe put a footnote on that, Steve. Global Real Estate Leaders See Hopeful Signs Amid Ongoing Market Uncertainty, REITworks: 2023 Real Estate ESG Conference, Alexandria Real Estate Equities and the Transformation of Life Science Real Estate. We are seeing very little that is starting new today. When typing in this field, a list of search results will appear and be automatically updated as you type. Yes. Thanks for taking the question. Okay. And I mean, if you looked at, say, the Rubius situation, we would say that if there's a management change that then you look at -- or you put that scrutiny at a higher level when it happens. 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. 90% of our top 20 tenants are investment-grade rated or large-cap publicly traded companies and we highlighted continued strength of timely payments of rent from client tenants at 99.9% of rent that was due in the first quarter really reflects the strength of our high-quality client tenants, important tenant relationships and the high-quality underwriting from our research team. 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. Our daily ratings and market update email newsletter. Alexandria projects further rental growth of 30% to 35% for full-year 2022. There are three key takeaways here. Briefly on venture investments, realized gains from the venture investments included in FFO averaged about $25.8 million per quarter for the last eight quarters through the end of 2022 in comparison to $20.7 million for the first quarter of 2023. The 10 most prevalent diseases in the US, heart disease, cancer, chronic respiratory disease, obesity, Alzheimer's, diabetes, substance abuse, infectious disease, chronic kidney disease and mental illness are not being solved to-date. Life science, meanwhile, has moved from being a niche segment to mainstream real estate. 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. 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. Now this represents a strong 6.4% growth in FFO per share for 2023 following excellent growth last year of 8.5%. See Joel S Marcus's compensation, career history, education, & memberships. Our team made excellent progress on our dispositions and sales of partial interest only four months into 2023. 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. We haven't broken out that number for '24 to spend just related to that, but that's not -- within that bucket now we've slimmed down the focus of what is continuing to generate the $610 million of NOI. Thank you, and good afternoon, everyone. The legal war between Joel Marcus, 72, and his son may not be over, however. 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Thank you. 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. As for long-term risk driven by instability of regional banks, unlike some tech companies that maintain significant cash and deposit accounts, our tenants largely rely on safer third-party custodial and sweep accounts to minimize cash deposits. 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. And where could equity play into that? We expect that the life science sector will be minimally affected going forward as evidenced by venture financing rounds that closed in March is expected and continue to do so in April, which I'll touch on in more detail shortly. REITs invest in the majority of real estate property types, including offices, apartment buildings, warehouses, retail centers, medical facilities, data centers, cell towers, infrastructure and hotels. 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. The availability and price of commodities such as steel, copper, aluminum and concrete, continue to fluctuate due to shortages of raw materials, low yields for mines, high demand from electrification or low capability utilization rates in the mills and fabrication shops due to labor shortages. Yeah, Rich, it's Dean here. There are less tenants actively seeking space in the market today, which we believe is being significantly driven by uncertainty in the economy. But this is baked into our mall. To that end, therapies such as Mounjaro, save and extend lives and have the potential to significantly drive down the cost of health care more broadly. There are a handful of dominant companies that control the whole global ag effort. These real estate companies have to meet a number of requirements to qualify as REITs. See what's happening in the market right now with MarketBeat's real-time news feed. 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. Joel Marcus fortunes have risen with those of the life sciences industry. Got it. Is there anything you're seeing from a buyer or kind of bidder pool buyer pools kind of change relative to what you've seen really over the last 12 months, just given kind of where financing costs have moved different institutions either fallen out? Prior to co-founding Alexandria, he had an extensive legal career specializing in corporate finance and capital markets, venture capital, and mergers and acquisitions. 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. Alexandria Real Estate Equities, Inc. and Alexandria Venture Investments. In the first quarter, we delivered 453,511 square feet in five projects into our high barrier to entry submarkets. What we are seeing is in areas outside of our core submarkets where we don't own product, there are vacant buildings sitting there. So, we are largely locked in. 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. Mr. Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. 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? 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 Please go ahead. Well, if you can't look at the Edison, how it works and so forth, you can't underwrite the tenant. So we decided to pass on that. Occupancy across Alexandrias portfolio was 94.7% in the first quarter while rent growth was 32.2%. There are a few projects, obviously, that we do believe, and that's where those percentages are coming in. I saw you revised upward the leasing spread guidance. Rooted in its mission to advance human health, improve nutrition and enhance the quality of people's lives, Alexandria partners with leading local and national non-profit organizations, medical research institutions and municipalities to make a tangible positive impact in its clusters and communities. Obviously, there's dispositions and partial interest sales that are continuing to come at different points in the cycle right now. American Consumer News, LLC dba MarketBeat 2010-2023. But you have to start prioritizing and that one just kind of lost some of it shine when the opportunity to expand kind of went away. Do you see enough demand today to absorb the space that's coming online in the next couple of years? So -- what you're really focused on though in your question is a spend outside of that, which goes to quite a bit of activity, site work, advancing site work as well as entitlements. We achieved attractive economics primarily from our vast tenant base, accounting for 85% of the leasing this quarter, resulting in a rental rate increase of 48.3%, which was the highest in company history and a strong cash rate of 24.2%. We updated our underlying guidance assumptions for 2023. China of course, but many other locations. And then there are transportation and increased energy costs as well. And then just one -- second question, maybe a bit of detail. I could not have made a better decision as it all proved out. But directly on transportation, we felt was a huge competitive advantage in landed a world-class tenant to 100% occupy that development. I think that gives a sense of how were viewing this year, Marcus says. National Association of Real Estate Investment Trusts and Nareit are registered trademarks of the National Association of Real Estate Investment Trusts (Nareit). Executive Chairman and Founder, 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. However, from Alexandrias standpoint, they should be able to continue to fund their growth. Joel S. Marcus 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). [Operator Instructions] [Operator Instructions]. This is an important distinction in any part of the cycle, but perhaps even more when things have slowed down. 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. 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. Mr. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors, and AgTech Accelerator Corporation, for which he serves as Chairman of the board. I would like to turn the conference back over to Joel Marcus for any closing remarks. Continued innovation in medicine is an absolute The fact that the defendants do no business in the United States remains unrebutted, she wrote in a 26-page decision. We now have two or three mega agriculture companies that literally control the worlds food supply, and that isnt good. When it comes to upcoming lease expirations, you're typically in conversations with tenants a year or multiple years in advance. All right. But Peter, any comments? from 8 AM - 9 PM ET. From a capitalization perspective, that operating building that went in -- I'm sorry, the redevelopment building that's vacant that went into operations capitalization ceased immediately. And then just last, on 15 Necco, what's the reason for selling that specific, I guess, development stake? We're kind of a pure-play in our field. 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. 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. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns and greater long-term asset value. We beat guidance and we raised guidance. Alexandria Real Estate Equities, Inc. | LinkedIn But a judge dismissed the complaint last month. I agree with that assessment. Joel Marcus - Berkley Center for Religion, Peace, and World Affairs Many institutions want exposure, especially pension funds, life insurance companies, traditional investors, and even private equity, Marcus says. Alexandria boasts more than 1,000 tenants including Moderna, Bristol-Myers Squibb, Sanofi, Illumina, and Takeda. Reflecting this, in April, we've collected 100% rent from our preclinical and clinical stage public biotech tenants. 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. However, Marcus says existing assets will become more valuable as a result. View which stocks are hot on social media with MarketBeat's trending stocks report. So its more general TIs, kind of, renovation costs that aren't part of development and redevelopment that we need to scrutinize in our business. 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. Alexandria began as a garage startup in 1994 when biotech was still an emerging industry. Our mission is to create clusters to ignite and accelerate the worlds leading innovators in their pursuit of advancing human health by curing disease and improving nutrition. Alexandria Reports Higher Revenues But Pauses Some Projects The life sciences REIT raised rents 48 percent the highest quarterly rate growth in company history. You guys talked about driving a lot of your leasing from just internal relationships in your existing tenant base. Concentrating on the fast-growing biotech market in San Diego, Alexandria acquired four buildings. Clearly, demand is overall down from the peak of 2020 and 2021. But Peter, you want to comment and Dan, you could comment as well. Copyright Nareit 2023. [1], The company's largest tenants are as follows:[1]. For decades, Alexandria has been a leader in building sustainable campuses. [1], The company's 740,972 square foot Alexandria Center for Life Science in Manhattan has several biotechnology tenants. So you saw some of the moves we made last year in South San Francisco, exiting a number of assets, passing on -- we passed on an option we had to do a development. With Fed Decision Looming, Economy and Markets Wait Google Stock Concerned About AI? Marcus earned his undergraduate and J.D. To end, I want to reiterate that we are acutely aware of the years of abundance and easy capital that have passed and that the separation of haves and have-nots will continue to widen as the industry drills down on the technologies and medicines that bring the most value to patients and investors. LEADERS Interview with Joel S. Marcus, Executive Chairman We also absorbed $71,000 of vacancy from a building located in Texas. We encourage everyone to be super entrepreneurial and not think like they work in a structured corporation. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. Our disciplined core focus is our patented and trademark lab space. Okay. This is a really scalable effort and it is being run by Fred Wilson of Union Square Ventures and is a really effective program. Our funds FFO per share is up 7%, as you see in revenues, top line revenue is up almost 14%. Despite these challenges, the demand for high-quality life science assets which is vastly different from office assets continued in the quarter. 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. Please go ahead, Joel. Our business is built around four business verticals. We have not yet closed on the other transaction we signed an LOI on in the fourth quarter, but we expect to do so in the second quarter. The Company announced stellar data in December, driving their stock up over 600% in the past 12 months and culminating in a $10.8 billion acquisition by Merck. 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.
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