And there are demand that doesn't even show up today on projects that may be on the future drawing board that we're also comfortable with. Is it difficult to make long-term investments with the short-term, quarter-to-quarter pressure for results? Alexandria Reports Higher Revenues But Pauses Some Projects The life sciences REIT raised rents 48 percent the highest quarterly rate growth in company history. Thats an extraordinary number of commitments ahead of delivering the space. Okay. Yeah. Were also big thinkers. WebJoel Marcus is professor of New Testament and Christian origins at Duke Divinity School. "Their contributions continue to fund the Memorial & Museum's vital exhibitions and programming, such as Revealed: The Hunt for Bin Laden. So it made a lot of sense. And I think that's probably the best example I could maybe share Peter, but you could give you color. And that's what our tenants and Alexandria exemplify. They're either completed or subject to executed LOIs or purchase and sales agreements, including the new JV partner for our build-to-suit project for UI Lilly. Yeah. But Dean, do you want to highlight that for a moment? 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. In the biomedical area, the federal government supports basic research and makes us the leader in the world to the tune of $40 billion from the National Institutes of Health. But what's changed in South San Francisco is transportation is now a bit of an issue. Maybe just on the sourcing uses. We've maintained strong guidance while lowering uses and sources of capital. Marcus says it takes roughly 25 years for a cluster to mature. They come to us directly as we are a trusted partner with a long successful track record of developing and operating mission-critical facilities. One of the more interesting programs we launched when we revamped our philanthropy and volunteerism program a year and a half ago is a program we call Alexandria Access. Reflecting this, in April, we've collected 100% rent from our preclinical and clinical stage public biotech tenants. So that group of tenants, you're always looking now even much more so for much nearer-term value inflection milestones and really good data and importantly, large unmet medical needs. 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. View How to Invest in the Top Grocery Stocks for This Year, View Best Bank Stocks to Invest in Ahead of Rising Interest Rates, View Lucid Group, Inc. (NASDAQ:LCID) Position Increased by Zurcher Kantonalbank Zurich Cantonalbank, View 10 E-commerce Stocks to Consider for Long-Term Buys, View United Parcel Service Delivers A Warning To The Market. Joel Marcus - World Medical Innovation Forum The firm has maintained strong financials despite the ongoing economic storm, according to Executive Chairman and Founder Joel Marcus. [1], The company also has a venture capital arm, Alexandria Venture Investments, which invests in life sciences firms. 1-800-3-NAREIT Alexandria Real Estate Equities, Inc. Executive Chairman and 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. To access all the content for free, please sign up by entering your email. There are a handful of dominant companies that control the whole global ag effort. CONTACT: Courtney Mulligan, Senior Director Communications, (646) 939-7471, [emailprotected]. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio. Given that the receipt of cash flow is over a year away, it's difficult to translate the valuation to an operating cap rate. I think one thing to keep in mind is that -- our pipeline is $610 million of incremental net operating income from projects that are highly leased today. Prometheus Biosciences, while not a tenant exemplify how data drives the lifeblood of the industry. Get MarketBeat All Access Free for 30 Days (Ad), Array Technologies Brings Solar Flare To 2023 Earnings Forecast, Mondelez International Pricing Power Takes It To New Highs, Dont Chase Church & Dwight Higher; Let The Price Come To You, Rollins Pest Control Needs to be in Your Watchlist, Demand For Public Safety Technologies Drives Motorola's Growth, Boeing Cleared For Takeoff In Earnings Turnaround, 3 Volatile Mid-Caps to Trade This Earnings Season, Morgan Stanleys Earnings Is Fuel For The Rally, Teslas Earnings: So Bad Theyre Nearly Good, Johnson & Johnson Earnings Mix Some Good with Some Concerns. And then maybe just on that kind of reduction in development spend. [4], In October 2002, the company acquired the headquarters of ZymoGenetics for $52 million in a leaseback transaction. Steven Marcus, 41, the eldest of Joel Marcuss three children, started two companies, London-based RUNLABS UK and Dublin-based RUNLABS Ireland, that plan to house life science firms in Europe. With that, let me turn it back to Joel Marcus. RUNLABS plans to provide offices and shared laboratory space to life science firms and is starting in Europe with a 150,000-square-foot building that Steven Marcus hopes to open in Paris next year. We want to make sure you get the most out of our platform. Launching the niche was the first step. Early-stage start-ups work within a very tightened community and many used SVB because that's what everyone else used, not necessarily because there were no other options. Thank you, Paula, and welcome, everybody, to Alexandria's first quarter 2023 Earnings Call. Thanks for taking the question. Or have you seen kind of any institutional interest that you hadn't seen before? The next question comes from Georgi Dinkov with Mizuho. So you will see some of that, but they're fairly small in the scheme of this. 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 Tenants such as BAXI and Biometafusion, for example, have recently raised additional capital of promising clinical data. Some that don't have pre-leasing today are multi-tenant projects anywhere from a building to multiple buildings. 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. 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. 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. Clearly, you are flying above the clouds or just have a better portfolio, a better tenant base, but it's so hard to handicap just how bad this cycle could get for you. Thank you for accessing our content on the Topio Networks Market Intelligence Center. Annual NOI for these deliveries totals $23 million, and the initial stabilized yield is strong at 7.3%. China of course, but many other locations. And then there are transportation and increased energy costs as well. In 2021, US academic institutions accounted for 20,000 invention disclosures and nearly 1,000 new startups. 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. Alexandria is designing it to be the most sustainable commercial lab building in Cambridge. All right. Occupancy was 96 -- 93.6% as of March 31 and really in line with expectations and the comments I provided on our year-end earnings call. Yeah, Rich, it's Dean here. 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. Alexandria is targeting LEED Zero Energy and Fitwel certifications. 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. But as Hallie mentioned, BCs are more discriminate disciplined in demanding of future investments and companies with tenured management teams, strong differentiated technologies and near-term value inflection milestones are the ones that will rise above the fray. Alexandria Thanks, Hallie. The next question comes from Nick Joseph with Citi. WebJoel S Marcus is Chairman/Co-Founder at Alexandria Real Est Equities. Mr. Marcus is also personally engaged in numerous mission-critical philanthropic efforts, including through his service as Chair of the Navy SEAL Foundations 2017 New York City Benefit, which raised $12.8 million to help support the Naval Special Warfare community and their families. STEM education is extremely important to us, so we fund a variety of efforts. Thank you. 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? In addition to this transaction, we have signed letters of intent or purchase and sale agreements for a number of assets, including the office campus referenced in the press release, aggregating to a total sales price of $799.3 million. Do you see enough demand today to absorb the space that's coming online in the next couple of years? The company leased 4.1 million square feet during the fourth quarter alone. It sits within our range of guidance. You can name a dozen cities.. That has been the secret sauce in trying to get things done. Joel S. Marcus, Executive Chairman and Founder of Alexandria Real Estate Equities, Inc./Alexandria Venture Investments, Honored by the 9/11 Memorial & One of Alexandrias largest efforts is OneFifteen, a data-driven opioid treatment and recovery campus in Dayton, Ohio, created in partnership with Verily, the life science arm of Google-parent company Alphabet. Alexandrias top-line revenue is up almost 14 percent, funds from operations per share are also up 7 percent, and the company executed strong leasing performance. Thank you, guys. 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. 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. These real estate companies have to meet a number of requirements to qualify as REITs. Theyre certainly not overcommitted in any way, and they have several great projects going forward. We now have two or three mega agriculture companies that literally control the worlds food supply, and that isnt good. And we're mindful of your question, but we have so much coming online and that we have completed in recent years. 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? 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. Capital is available. China is the dominant force they bought a number of large companies and theyre tying up all kinds of agricultural sites around the world. Beginning with SVB, there remains some misperceptions on the long-term impact of its collapse on the life science industry. Export data to Excel for your own analysis. For example, Alexandria signed a massive, 462,000-square-foot lease with vaccine-maker Moderna at its Alexandria Center at One Kendall Square mega campus in Cambridge, Massachusetts. Mr. Marcus 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 into an S&P 500 company with an approximately $18 billion total market capitalization and a total shareholder return of approximately 1,300% since the companys IPO in 1997. I think, as I mentioned on the call earlier, we're mindful of the macro environment. Bringing these elements together creates thriving centers that incorporate our cluster model, which guides how we select our real estate hubs, and build collaborative, sustainable campuses that enable scientific and technological breakthroughs to benefit humankind. About 80% of our projects are under fixed-rate contracts, and were in the process of finalizing fixed-rate contracts for the remaining 20%, so were insulated as best you can, he continues. 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. Second, 371,000 rentable square feet of the recent vacancy has significant rental rate growth of 110% on a GAAP basis and 115% on a cash basis; and third, 29% of this 371,000 rentable square feet has already been leased with occupancy of some of the space beginning in the third quarter of '23. WebJacobs 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 And so, we're looking at spend across other projects as we look forward over into '24 and beyond to be sure we're prioritizing things that we should be investing into and maybe holding on things that we shouldn't be just given the macro environment. Now, our policy has been these large significant unusual items. I think that's the area that everybody is really focused on, and we have very limited exposure there. So put off a piece of the portfolio makes sense. We have a large mountain decline, and the industry is really in its formative days. Alexandria 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. This quarter, it's closer to 22% overall in the whole portfolio. But from an NOI perspective, if that's your fundamental question, the future pipeline doesn't have any significant NOI being generated at the moment. 2023 Berkley Center for Religion, Peace & World Affairs, The Culture of Encounter and the Global Agenda, Politicization of Religion in Global Perspective, Religion and the Crisis of Displaced Persons, Revitalizing Global Religious and Interfaith Networks, Transatlantic Policy Network on Religion and Diplomacy, Intercultural and Interreligious Dialogue. We also gave updates on significant dispositions and partial interest sales aggregating $865 million including significant transactions that are under executed LOIs and purchase and sale agreements. 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. 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. LEADERS Interview with Joel S. Marcus, Executive Chairman Joel Marcus fortunes have risen with those of the life sciences industry. Should You Be Too? So, we are able to pick up some improvement to offset those. The health of ARE's best-in-class life science tenant base and innovation is a long-term driver of life science industry growth. Now we have also identified other dispositions and sales of partial interest to bring our total for the year to $1.5 billion. 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. 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. Joel S. Marcus Executive Chairman and Founder at Alexandria Real Estate Equities Well, and also, historically, if you go back to my comments, I said we have tried With strong operational performance and balance sheets, REITs are well-positioned to navigate economic and market uncertainty in 2023. The next question comes from Joshua Dennerlein with Bank of America. Our focus on advancing human health is made up of fighting disease and it is now increasingly including nutrition. Or I'm just trying to piece that all together, so either we're capturing everything or not double-counting something? 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. With nearly $2 billion in carrying value, Alexandria Venture Investments has been recognized by Silicon Valley Bank as the #1 most active corporate investor in biopharma by new deal volume for five consecutive years and by AgFunder as one of the five most active U.S. agtech investors for the second consecutive year. [1], The company's 740,972 square foot Alexandria Center for Life Science in Manhattan has several biotechnology tenants. We updated our underlying guidance assumptions for 2023. from 8 AM - 9 PM ET. I know people who did diligence and they said they could never look at the Edison machine. I think we feel we're in pretty good shape. Our team made excellent progress on our dispositions and sales of partial interest only four months into 2023. A lot of people have left these companies and are now starting companies. 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. He says he came up with the Alexandria name and logo as an undergraduate student at the University of Pennsylvanias Wharton School and that they belong to him. 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. Ismail agrees: Theres some concern with biotech stocks, but overall, thats more of a potential change in the rate of growth rather than something that appears likely to upset or end the party.. So, we don't necessarily think that those buildings are competitive to ours. And just one last question, Dean, do you have like an overall mark-to-market on kind of what you think the portfolio kind of lost the leases on the overall assets today? Our range of guidance for EPS is $2.21 to $2.31 and a range for FFO per share diluted as adjusted is $8.91 to $9.01 with no change at the midpoint of $8.96. I work specifically on our philanthropy and volunteerism efforts. You're right. Were funding some of the premier biomedical research institutions across the country in helping to bridge that gap between basic science and translational research and also supporting some translational research. But as you think about the ability to flex that going forward, if the transaction market stalls even more, how are you thinking about the flexibility on your end? 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. The next question comes from Dylan Burzinski with Green Street. We focus on four core areas: first, biomedical research to help discover drugs and new technologies that will help cure disease. So, we've got good activity. 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. 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. We have taken judicious measure to cut our capex, while at the same time, making strong progress on our funding plan for 2023, and you'll hear more about that from Peter. 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. And I think people would be impressed when we do our second quarter call. The pandemic helped supercharge a demand story that existed pre-COVID. It also highlighted the resiliency in terms of the essentialness of the underlying real estate, he says. Its undoubtedly a differentiator that has borne fruit.. Get short term trading ideas from the MarketBeat Idea Engine. 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. These life science companies are all about trying to cure or retard disease that will help mitigate the whole healthcare burden personally and financially. Inspired by the OneFifteen platform, Alexandria is developing a new model in Seattle to combat the home- lessness crisis. But the book value has that $4.2 million in there? 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. ", "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. The company had one of the worlds first office/lab projects certified in theU.S. Green Building Council LEED Core and Shell pilot program, and now has over 80 projects that achieved or are pursuing LEED certification. Alexandria raised about $100 million in capital, which led to its IPO in May 1997, becoming the first REIT focused on lab space. And so we're being pretty darn cautious there, and you'll see that continue. }Customer Service. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, agtech and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. 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. That was almost all of the change in the tenancy from roughly 1,000 to 850. Yes, that's a good example. 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. That encompasses everything from school supplies for kids in a local underserved school to homeless shelters. [Operator Instructions] [Operator Instructions]. And so, I think, we're going to look hard, as I mentioned earlier, over the next couple of quarters. Real estate investor finds earnings success in early days of Joel S. Marcus. 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. This individual is not a direct affiliate of the Berkley Center. 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. WebEditors Note. 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 we have brought this to a highly respected and recognized real estate product type today. I mean there was one nuance to kind of focus us on 275 Grove, which was when we acquired that, there was a thought an opportunity to expand our holdings in that neighborhood and in fact, adjacent to it. 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. A quarter century after it began life as a garage start-up, Alexandria Real Estate Equities, Inc.s (NYSE: ARE) decision to focus on the niche segment of life science real estate looks sounder than ever as demand for sophisticated lab space across major U.S. markets sits at an all-time high. Its a program that allows our 400 employees to access Alexandrias network of expertise. And apologies if I missed it, but do you have any lease termination since this quarter? I think the way to think about at a high level is that we just close the conversation about the pipeline. Our business is built around four business verticals.

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