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). However, Marcus says existing assets will become more valuable as a result. Joel Marcus A business newsletter from Globe Columnist Larry Edelman covering the trends shaping business and the economy in Boston and beyond. Now this was an exceptional rental rate growth, GAAP at the highest in the Company's history, both GAAP and cash rental rate growth higher than the strong rental rate growth for the full year of 2022 and 2021. So, the $4.2 million does have some meaningful NOI associated with it. And then you look at public, which are preclinical or in the clinic, but don't have near-term milestones. 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. 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 have no peers. And are the investors that we attracted really like the building, and it was an opportunity to fund something that was near-term dollars. of societys most pressing issues including harnessing the agri-food ecosystem to combat hunger, addressing the mental health crisis, and accelerating groundbreaking medical research. Pasadena REIT Buys Raytheon Campus Outside Boston - The Alexandria Real Estate Equities, Inc. (NYSE:ARE) Q1 2023 Results Conference Call April 25, 2023 3:00 PM ETCompany Participants. I think the way to think about at a high level is that we just close the conversation about the pipeline. 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. Transitioning to leasing, our strong brand loyalty, mega campus offerings and operational excellence continue to drive strong leasing numbers in a challenging market. So, great locations, great facilities, and I think our operational excellence and our brand puts us in a great position to capture mark-to-market on most of these spaces that have come back. Thank you for indulging me on that retrospective. Please go ahead. No, that's helpful. And while SVB has created a niche serving the segment, it was also cultural. We first identified and pioneered the lab space niche back in 1994 and then through our disciplined execution of our original vision using the strategic architecture of our cluster model, which we customize to the life science industry. I'm curious as to what you've committed to in terms of development spending. So that ties to the $610 million for others of incremental net operating income. Flexing capital plan and turning to equity as a solution is not really something we are contemplating. Executive Chairman and Founder Joel Marcus spoke with S&P Global Market Intelligence about the company's life sciences focus and contribution to developing research hubs at campuses across the country. It sounds like that's where the biggest incremental change was when you're looking at 2023 and 2024 on lease unleased new supply. Please, go ahead. 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. I see what number you're referring to. And that's fairly normal activity. The court previously dismissed an earlier version of the suit on similar grounds but gave Alexandria an opportunity to resubmit it with more evidence. We encourage everyone to be super entrepreneurial and not think like they work in a structured corporation. I realize not singling out individual deals, but is there a way to bracket them or bucket them against maybe where your implied cap rate is today, or maybe against the deal that Peter discussed? Yes. 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. Sorry, we could not find any results with the search parameter provided. display: none; Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. Yeah. So you might think about an adjustment of cap rates maybe over this transition transitioning economic time of maybe 100 basis points. WebJoel S. Marcus has served as a member of our Board of Directors since January 2017. So, I would say that there's a nice amount of pent-up demand building and I would say a couple of years from now that, that's definitely going to be in the market if not sooner. I don't think we see demand dropping off a cliff here at all. Next question comes from Jamie Feldman with Wells Fargo. I thought you were asking about the $38 million right above it. "Their contributions continue to fund the Memorial & Museum's vital exhibitions and programming, such as Revealed: The Hunt for Bin Laden. 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. We're kind of a pure-play in our field. And what we saw in 1994 in the embryonic days of the life science industry is multiplied geometrically today, 30 years later, as Steve Jobs said, the 21st century will be the century of the intersection of biology and technology innovation. With that, I'm going to hand it over to Dean. The firm has maintained strong financials despite the ongoing economic storm, according to Executive Chairman and Founder Joel Marcus. 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. 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. 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. So, you don't want to double count the square footage there. We have a very strong balance sheet. We actually have a number of choices still in the market. 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. China of course, but many other locations. And then there are transportation and increased energy costs as well. Then we also feel its important to support military families. During that time, he acquired an expertise in the biopharmaceutical industry and was one of the principal architects of the Kirin-Amgen EPO joint venture in 1984. We see this as a critical role in helping our mission to advance human health. 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 have a very strong balance sheet with $5.3 billion in liquidity, no debt maturities until 2025. And then just on the transaction market, I know you touched on cap rates, maybe up about 100 basis points in each asset, very different, though. 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. We will provide values and cap rates quarter-to-quarter as we close transactions since we're unable to do so sooner while transactions are in process. Thanks. 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. There are a few projects, obviously, that we do believe, and that's where those percentages are coming in. (844) 978-6257. I mean if you look at the tenant base and where we, again, how they went through each of the segment or a number of the segments, and I think you could always say to me, the privates are in pretty good shape because they're not exposed to the public markets, and they generally assuming we've underwritten them well, and we have. 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. Many cities want to become the next emerging life science market, but obstacles exist. I'll take that. So that's just two examples. Alexandria is designing it to be the most sustainable commercial lab building in Cambridge. Mr. Marcus earned his undergraduate and Juris Doctor degrees from the University of California, Los Angeles. But what's changed in South San Francisco is transportation is now a bit of an issue. They generally have good and deep backers, whether it's venture or institutional. Alexandria has filed another claim against Steven Marcus in a California state court. }Customer Service. Real-time analyst ratings, insider transactions, earnings data, and more. These life science companies are all about trying to cure or retard disease that will help mitigate the whole healthcare burden personally and financially. What happens on these campuses is intertwined with our other three verticals. So, on the $7.6 million square foot pipeline, how much -- what does that imply in terms of development spend in 2024? We continued with very strong adjusted EBITDA margin of 69%. We focus on four core areas: first, biomedical research to help discover drugs and new technologies that will help cure disease. Please go ahead. For decades, Alexandria has been a leader in building sustainable campuses. Gross unrealized gains in our venture investments as of March 31st were $459 million on a cost basis of $1.2 billion. Today, I'm going to comment on the life science industry following the collapse of Silicon Valley Bank. 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. Get daily stock ideas from top-performing Wall Street analysts. Although the case was dismissed, it was a limited basis, he said. 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 The legal war between Joel Marcus, 72, and his son may not be over, however. 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. The life science industry thrives on that. 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. In 1993, the partners at Jacobs Engineering Group asked Marcus, a certified public accountant and biotech industry attorney, to create a business plan to launch a private REIT that would exclusively own and invest in life science real estate, essentially, creating a brand-new asset class. 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. Moderna continues to highlight the potential of novel platforms to deliver innovative new medicines to patients. Thank you. The 71,000 rentable square foot building is vacant and is classified in operating properties. I'll end with some commentary on our value harvesting and recycling progress. 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. Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. The result is tenants like Eli Lilly that continue to translate this R&D into transformative medicines. 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. China is the dominant force they bought a number of large companies and theyre tying up all kinds of agricultural sites around the world. Marcus Marcus holds a B.A. Yes. Annual NOI for these deliveries totals $23 million, and the initial stabilized yield is strong at 7.3%. Yeah. For example, for Prometheus Bio was originally spun out of Cedars-Sinai, which is set to receive nearly $800 million from the recently announced M&A. This conference call contains forward-looking statements within the meaning of the federal securities laws. Our per share outlook for 2023 was updated to plus or minus $0.05 of a range from the midpoint of guidance, down from the plus or minus $0.10 range last quarter. 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. 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. We dont focus on hiring a certain number of people in certain groups, we focus on hiring the most qualified candidates. All rights reserved. I think Peter can comment as well. And so, we're pretty aware. It raised an additional $155 million on the public market. Some private and preclinical clinical stage companies are making do with the space they have today until they can better understand their ability to raise capital on its cost. These were individually very significant gains. But new construction and development will be more expensive, and certainly, entitlements around the country are getting tougher to obtain.. Well, yes, I'll let maybe Peter comment on that as well. But Peter, you want to comment and Dan, you could comment as well. Thank you. When it comes to upcoming lease expirations, you're typically in conversations with tenants a year or multiple years in advance. Thats an extraordinary number of commitments ahead of delivering the space. I agree with that assessment. The key areas that represent Alexandria's six bedrock social action pillars comprise disease and other threats to human health; hunger and food insecurity; deficiencies in support services for the military; the opioid epidemic; educational disparities; and the homelessness crisis. We've had very solid leasing with the highest-ever rental rate increase, and we've had continuing strong operating and EBITDA margins. It's a premium priced, non-commodity product, generally characterized by high barrier to entry markets, where we have a dominant franchise and where we exercise pricing power, especially in our highly sought after Alexandria-branded mega campuses, and those markets exhibit deep science base, deep life science talent base, a rich abundance of risk capital and also are ones that are generally safe and have excellent transportation access. 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. STEM education is extremely important to us, so we fund a variety of efforts. And we have brought this to a highly respected and recognized real estate product type today. The next question comes from Dylan Burzinski with Green Street. 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. Last October, life sciences developer Alexandria Real Estate Equities infamously pulled out of a partnership with industrial giant Prologis to develop a 600,000 Capital is available. PASADENA, Calif., Sept. 10, 2021 /PRNewswire/ --Alexandria Real Estate Equities, Inc. (NYSE: ARE), an urban office REIT and the first, longest-tenured and pioneering owner, operator and developeruniquely focused on collaborative life science, agtech and technology campuses in AAA innovation cluster locations, today announced that its executive chairman and founder, Joel S. Marcus, was honored last evening for Distinction in Civic Engagement and Renewal by the National September 11 Memorial & Museum during its Benefit Broadcast commemorating 20 years since 9/11. Rich, it's Dean Shigenaga here. The under-construction Moderna Science Center, at 325 Binney Street, will house the mRNA pioneers headquarters and research and development operations. We have found that technology companies are not collaborative because they dont want other companies taking their technology or poaching their people. Bayer bought Monsanto, Syngenta got bought by ChemChina, Dow and Dupont merged, and BASF is out there. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. I think, as I mentioned on the call earlier, we're mindful of the macro environment. Thank you for taking my question. Yeah. The following interview has been condensed and edited for clarity. Yeah. I dont like a view that is focused on pure quotas. For additional information on Alexandria, please visit www.are.com. This month, the Company's personalized mRNA cancer vaccine in combination with an immunotherapy drug from tenant Merck, demonstrated promising clinical trial results in aggressive forms of skin cancer. There's no significant cash flows from assets that are sitting in the pipeline. I think there was one project in South San Francisco that has started recently, which is just beyond comprehension. But I believe our early renewal statistics have been fairly strong recently. This is such a natural part of what we do we think of it every day; it is not something we strain to do. 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. 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. "I was in New York City on September 11, 2001, the day that profoundly changed the course of our nation, when we lost thousands of people to the hands of terroristsbut as the words of Virgil prominently displayed at the Museum implore us, 'No day shall erase you from the memory of time.' Alexandria, which celebrated its 20th anniversary as an NYSE listed REIT in May 2017, is the only publicly traded pure-play office/laboratory REIT. So, the two are pretty fundamentally different. 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. WebAlexandria Executive Chairman and Founder, Joel Marcus, opened the 29th Annual Baron Investment Conference, one of the investment communitys most anticipated and highly Paula Schwartz - IR. WebJoel Marcus. Or do you think we should expect some moderation in occupancy levels as the demand is lower. And Dean will go into the metrics, but almost 100% collections, which is -- bodes well for our continued strength and stability of the company. Marcus says toplife science clusters and the upgraded amenities that Alexandrias buildings offer are a significant advantage for companies in their ability to recruit and retain top talent in a very competitive environment. 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. Now, our policy has been these large significant unusual items. With its core focus on real estate, Alexandria has a proven track record of developing Class A buildings on urban life science and technology campuses in AAA innovation cluster locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. He also serves on the boards of Applied Therapeutics Inc., Atara Biotherapeutics, Inc. (NASDAQ:ATRA), Boragen Inc., Intra-Cellular Therapies, Inc. (NASDAQ:ITCI), MeiraGTx Limited, and Yumanity Therapeutics; Biotechnology Innovation Organization (BIO), the Foundation for the National Institutes of Health (FNIH), Friends of Cancer Research, MassBio, NewYorkBIO, and The Scripps Research Institute; the 9/11 Memorial & Museum, the Navy SEAL Foundation, the Partnership for New York City, and Robin Hood Foundation; as well as on Nareits 2018 Executive Board. Please go ahead. Were not a real estate company that is wrapped up in the deal or the financial return. So these inefficiencies will be with us for a while. Please go ahead, Joel. We look forward to providing you with even more cutting-edge market research, as Topio Networks. 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. 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. 326 E 8th St #105, Sioux Falls, SD 57103 Alexandria Reports Higher Revenues But Pauses Some Projects The life sciences REIT raised rents 48 percent the highest quarterly rate growth in company history. Our business is built around four business verticals. Yes, it's somewhere around -- I think last quarter, it was somewhere around 27%. Both facilities will provide many amenities and be highly sustainable, high-performance buildings. Thank you for your continued support. Reflecting this, in April, we've collected 100% rent from our preclinical and clinical stage public biotech tenants. See what's happening in the market right now with MarketBeat's real-time news feed. Joel S. Marcus. Age : 74. My sense is half of that is, is retail tenants that maybe are leaving for an asset. For Alexandria, these buildings stayed open and operational because its very difficult to do lab work from home.. I work specifically on our philanthropy and volunteerism efforts. Alexandria Real Estate Equities founder and executive chairman Joel Marcus said Class-A commercial buildings are "scarce assets" on "Mornings with Maria" Tuesday, July 26, 2022. And we just completed a lot of product over the last two or three years. 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 think the way to look at our capital point is what we are doing internally, like we did in the current quarter for earnings as well as over the last several quarters and prep for initial guidance for Investor Day this year was to really challenge the uses of capital. Good afternoon, everyone. Alexandria also provides strategic capital to transformative life science, agtech and technology companies through our venture capital platform. Since co-founding the company in 1994 as a garage startup with $19 million in Series A capital and a mission to advance human health, he has led the remarkable growth of Alexandria into an S&P 500 company that, as of December 31, 2021, has a total market capitalization of $44 billion, and a total equity capitalization of $35 million that ranks it among the top 10% of all publicly traded U.S. REITs. 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. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors. Great. Since life science demand exploded, new developers and property owners want a piece of the action. 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. Joel S. Marcus, Executive Chairman and Founder of Alexandria Real Estate Equities, Inc./Alexandria Venture Investments, Honored by the 9/11 Memorial & Okay, I understand. 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%. But that was really a handful of leases over the last couple of quarters. Each of the markets is seeing strong demand. And now 20 years later, in the brutal wake of the end of the country's war in Afghanistan, we again find ourselves immensely indebted to the thousands of service members who have devoted and sacrificed so muchespecially the many who have made the ultimate sacrificefor the sake of their missions and their teams, the defense of our country and the fight against terrorism at its roots, and the safeguarding of our freedoms.". Or was it projects that were previously signed and then kind of the lease went away? Alexandria Real Estate Equities, Inc. | LinkedIn Thanks for taking the question. And I mean it's a world-class building with a world-class tenant. So, I'm just trying to understand if in some of these future opportunities buckets, if there's some operating assets in those? 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. When families or their loved ones are facing illness or injury and can benefit from some guidance, we have a mechanism here for them to reach out and be connected with an expert who can, hopefully, offer them a second opinion or help them get in to see a doctor they might not otherwise have been able to see. But I suspect that maybe some of them are not retail. CONTACT: Courtney Mulligan, Senior Director Communications, (646) 939-7471, [emailprotected]. Alexandria is targeting LEED Zero Energy and Fitwel certifications. We just don't want you to double count the square footage as you go towards the future pipeline. It's in operations, the book value would be sitting in the operating component if a larger campus had two operating buildings and a pad to support two buildings, the pad to support the future buildings would be in the future pipeline, the book basis, but the cost base is related to the operating buildings would be in operations, not in the pipeline.

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