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. WebJoel Marcus. How do you focus Alexandrias corporate responsibility efforts? Of course, this is also not work that can be done from home. All Rights Reserved. [10], In January 2013, the company sold a research facility in Seattle to Trammell Crow Company for $42.6 million. 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. For Alexandria to own big concentrations of campuses where they can provide the amenity base, as well as the opportunity to expand and move into different facilities and have them run incredibly professionally by one of the most experienced teams in the industry, is a real competitive advantage for Alexandrias tenants.. Its easier than one thinks. We have a large mountain decline, and the industry is really in its formative days. And 29% of that space has already been leased. This is such a natural part of what we do we think of it every day; it is not something we strain to do. Now this represents a strong 6.4% growth in FFO per share for 2023 following excellent growth last year of 8.5%. Joel Marcus is 72, he's been the Executive Chairman of the Board of Alexandria Real Estate Equities since 2018. Yes. 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 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. Rich, it's Dean Shigenaga here. 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. Joel S. Marcus Yes. Mr. Marcus also founded and continues to lead Alexandria Venture Investments, the companys strategic venture capital platform. In the first quarter, we delivered 453,511 square feet in five projects into our high barrier to entry submarkets. Yeah. Its a program that allows our 400 employees to access Alexandrias network of expertise. Additionally, Alexandria earned the first-ever Fitwel Life Science certification for its leadership in prioritizing tenant health and wellness and was named a 2021 Global Real Estate Sustainability Benchmark (GRESB) Global Sector Leader. Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. They have worked with one or more of our core projects or programs. The next question comes from Nick Joseph with Citi. Right. And Dean will go into the metrics, but almost 100% collections, which is -- bodes well for our continued strength and stability of the company. Thank you, Joel, and good afternoon, everyone. So, on the $7.6 million square foot pipeline, how much -- what does that imply in terms of development spend in 2024? Such relationships are a huge differentiator for us and will continue to drive solid leasing even in tough environments. So, I think that's one example, yes. Should You Be Too? But I believe our early renewal statistics have been fairly strong recently. Alexandria Real Estate "pretty darn cautious" about investments Nearly 80% of that space is pre-leased or under negotiation, Marcus says. 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.". Same platform but with new and improved features. 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. [4], In October 2002, the company acquired the headquarters of ZymoGenetics for $52 million in a leaseback transaction. Very few people in that industry would not want to be in a cluster; the same is true of the agtech world. [1], In 1993, one of the partners of Jacobs Engineering Group, Jerry M. Sudarsky, was presented with a Business Plan written by Kendell R. Lang titled BioProperties Management Group, Inc., which was a plan to form a REIT dedicated to funding biotech properties. Maybe just on the sourcing uses. This conference call contains forward-looking statements within the meaning of the federal securities laws. Right, right. All right. The life science industry thrives on that. Or I'm just trying to piece that all together, so either we're capturing everything or not double-counting something? Thank you, guys. Each of these tenant relationships started literally decades ago, Marcus says. [12], In July 2018, the company acquired 219 East 42nd Street, the headquarters of Pfizer, for $203 million in a leaseback transaction.[13]. Joel Patrick Gunn, a San Francisco lawyer for Alexandria, said he was disappointed in the ruling but was considering refiling the suit in the United Kingdom or Ireland. If you look at us today, we'd say, well, let's think carefully about site work given cost of capital considerations with the macro environment today, and let's just hold on that until the right time. For Alexandria, these buildings stayed open and operational because its very difficult to do lab work from home.. Alexandria paid $81 million to buy a 600,000 square-foot property at 421 Park Drive in the Fenway neighborhood of Boston for a mixed-use Landmark Center redevelopment project. We think now is the right time. 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.. 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. 2023 Mass General Brigham Incorporated. At quarter end, projects under construction and near-term projects expected to commence construction over the next four quarters totaled 7.6 million square feet and are 74% leased or under negotiation. Pasadena, California-based Alexandria is the only publicly traded, pure-play office/laboratory REIT. The next question comes from Georgi Dinkov with Mizuho. Now key highlights of our continued strong operating and financial performance Strong growth in revenues, adjusted EBITDA and FFO per share was driven by the continued strength across key areas of our unique and differentiated business. REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. American Consumer News, LLC dba MarketBeat 2010-2023. And how that demand compares to the broader industry? When you look at the focus on agtech, was this a natural progression for Alexandria? I think we feel we're in pretty good shape. We were ahead of that curve because, historically, life science companies did not want to collaborate with institutions and other companies either. So, we are able to pick up some improvement to offset those. 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. 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. 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. The next question comes from Rich Anderson with SMBC. So, you're referring to the page 34 for others on the call, which is in the bottom right-hand corner. And now, I'd like to turn the call over to Joel Marcus, Executive Chairman and Founder. Certainly, there are -- there have been -- there has been spec building, especially in Boston. There aren't events that we control. Steven Marcuss firms issued a brief statement, saying RUNLABS is pleased to see justice rendered.. Marcus holds a B.A. And I think people would be impressed when we do our second quarter call. Sorry, we could not find any results with the search parameter provided. [1], The company's 740,972 square foot Alexandria Center for Life Science in Manhattan has several biotechnology tenants. We look forward to providing you with even more cutting-edge market research, as Topio Networks. Yes. This concludes our question-and-answer session. The next question comes from Tom Catherwood with BTIG. Any number of cities would like to get there but probably dont currently have those characteristics: Chicago, Denver, Phoenix. Thanks. 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. What we are seeing is in areas outside of our core submarkets where we don't own product, there are vacant buildings sitting there. After over 25 years in the industry, our various executives have an amazing network, which we have developed through our summits and our real estate, as well as through our venture investments. from 8 AM - 9 PM ET. "Joel and Alexandria's tremendous support has made a lasting impact on the 9/11 Memorial & Museum and enabled us to commemorate and honor the nearly 3,000 victims of these attacks and all those who risked their lives to save others," said Alice M. Greenwald, president and CEO of the National September11 Memorial & Museum. You see that just everywhere and you certainly see it on more of a normalization of our historical leasing, which has bounced around over the last either five-year benchmark or 10-year. There's no significant cash flows from assets that are sitting in the pipeline. 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. Alexandria It has really taken off and become a great model. The legal war between Joel Marcus, 72, and his son may not be over, however. For additional information on Alexandria, please visit www.are.com. Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. from New York University and M.A., M.Phil., and Ph.D. from Columbia University-Union Theological Seminary. We have found that technology companies are not collaborative because they dont want other companies taking their technology or poaching their people. WebJoel S Marcus is Chairman/Co-Founder at Alexandria Real Est Equities. And I appreciate the color that you guys have provided thus far on sort of demand and the normalization on that front. Berkley Center for Religion, Peace & World Affairs, 3307 M Street NW, Suite 200 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. 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 into an S&P 500 company with an approximately $18 billion total market capitalization and a total shareholder return of approximately 1,300 percent since the companys IPO But at what point does it become too much? Well, if you can't look at the Edison, how it works and so forth, you can't underwrite the tenant. Alexandria Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. That's that we'd be out--. Alexandria also provides strategic capital to transformative life science, agtech and technology companies through our venture capital platform. But directly on transportation, we felt was a huge competitive advantage in landed a world-class tenant to 100% occupy that development. We just have a more -- much more hands-on work approach with clients. Alexandria Real Estate Equities, Inc. | LinkedIn So, we've got good activity. Sign up for our newsletter and event information. It owns and manages more than 22 million square feet of lab and office space across the country, including 4.8 million in Cambridge. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. 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. Many of the in-process transactions are targeted to close on or about June 30. 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. Joel S. Marcus - Foundation for the National Institutes of You guys talked about driving a lot of your leasing from just internal relationships in your existing tenant base. For instance, in New York City, were a founding supporter of Computer Science for All. 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. [8], In 2007, the company began development of the West Tower of the MaRS Discovery District in Toronto. Thank you. Alexandria Real Estate Equities, Inc. and Alexandria Venture Investments. 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. What was that a function of just market rent growth or just leases you actually signed in 1Q? If you look back over time, I think we've enjoyed the opportunity to move rental rate growth and same-property performance northward as we make our way through the year. [4], In 1997, it became a public company via an initial public offering, raising $155 million. So you might think about an adjustment of cap rates maybe over this transition transitioning economic time of maybe 100 basis points. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio. Alexandria Real Estate Equities, Inc. pioneered the life science realestate niche and continues to break new ground in the sector. Additionally, high-level interest rates always have an impact on real estate, but thats where Alexandrias strong balance sheet comes in, Rodgers continues. 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. Alexandria Reports Higher Revenues But Pauses Some Projects The life sciences REIT raised rents 48 percent the highest quarterly rate growth in company history. There's so much equity type capital that's invested in CIP today, there's very little incremental equity needed to fund that pipeline. 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. Meaning, if we were to mark-to-market the rental rate, Steve, on the whole portfolio? Alexandria Real Estate Equities Inc. published this content on 24 April 2023 and is solely responsible for the information contained therein. For our own private biotech tenants in the days following the collapse, we had conversations with over 100 companies. The S&P 500 investment-grade rated REIT boasts an asset base of approximately 74 million square feet. Country of residence : Unknown. I saw that I guess in the last supplemental, you talked about sort of dealing with 1,000 tenants. 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. 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. Please go ahead. 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. Our disciplined core focus is our patented and trademark lab space. So, we are largely locked in. 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For chronic diseases, which drives the bulk of health care spend in the United States, there are over 800 medicines in clinical development. 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. SVB certainly was a go-to provider for banking needs of many venture-backed companies, particularly in the tech industry. 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. Many cities want to become the next emerging life science market, but obstacles exist. I know people who did diligence and they said they could never look at the Edison machine. As a public company, staying true to that focus of clustering assets around key life science geographies has really paid off over the long term.. 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. The Alexandria Summit convenes a diverse group of visionary partners and key stakeholders from the pharmaceutical, biotechnology, agribusiness, technology, medical, academic, venture capital, private equity, philanthropic, patient advocacy, and government communities to address the most critical challenges in global healthcare, agriculture, and the environment. the mental health crisis is continuing to skyrocket, said Joel Marcus, AREs founder and executive chairman. But new construction and development will be more expensive, and certainly, entitlements around the country are getting tougher to obtain.. Specific to life science buildings, the availability of switchgear and equipment such as HVAC units and generators are -- has slightly improved but their lead times are still extraordinarily long with custom air handlers taking 27 weeks longer to get than before COVID and switch gear and generators and astounding 64 weeks longer. This is an increase of 3.4% in total availability over last quarter, largely driven by spec building in South San Francisco. 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. I mean, I guess the big picture is like everyone kind of sees the headlines on what's going on in life science. Alexandria 20007. Our business is built around four business verticals. Alexandria has filed another claim against Steven Marcus in a California state court. Joel S. Marcus, founder of Alexandria Real Estate Equities Inc. Pat Greenhouse/Globe Staff/File/2014/Globe Staff Joel S. Marcus, the real estate tycoon I mean what's the maximum you think you could do on that number, on that line item? Transitioning to leasing, our strong brand loyalty, mega campus offerings and operational excellence continue to drive strong leasing numbers in a challenging market. of societys most pressing issues including harnessing the agri-food ecosystem to combat hunger, addressing the mental health crisis, and accelerating groundbreaking medical research. Were almost a $20-billion market cap company, which is hard to imagine since we started with $19 million. Now we've got continued consistency and growth in dividends from really high quality cash flows we generate in our business. We dont focus on hiring a certain number of people in certain groups, we focus on hiring the most qualified candidates. Now turning to record rental rate growth and strong leasing volume, strong rental rate growth continued into 2023 at 48.3% on a GAAP basis, 24.2% on a cash basis from lease renewals and re-leasing the space in the first quarter. You asked about the nature of underwriting. Alexandria Real Estate Equities, Inc. (NYSE:ARE) Q4 2021 Results Conference Call February 1, 2022 3:00 PM ETCompany Participants. Public asset : 49,278,736 USD. The Academic and medical institutions continue to be highly productive, a key metric being the pace of new intellectual property. Then we also feel its important to support military families. 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. Alexandria projects further rental growth of 30% to 35% for full-year 2022. It really has transformed in a way that I could never have quite imagined, and thats coincided with the boom in the biotechnology industry.. Or have you seen kind of any institutional interest that you hadn't seen before? Yes. Plus after having been in real estate for about eight years at that point, I could see a tremendous value in offering mission-critical facilities over commodity product. The culmination is continued FDA approvals and 2023 has started at a fast clip. 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. Tony, it's Dean here. 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. Its undoubtedly a differentiator that has borne fruit.. No, that's great. As you can imagine, the cost of this equipment is reflective of these shortages and paired with high labor cost is making new laboratory office projects more expensive to build than ever before. Alexandria Real Estate Equities, Inc. Executive Chairman and Founder Joel Marcus Appointed to Emily Krzyzewski Center Board Alexandria extends its And then the second question for me is on the success that you're having from asset sales and partial interest. Alexandria, which celebrated its 20th anniversary as an NYSE listed REIT in May 2017, is the only publicly traded pure-play office/laboratory REIT. They own a billion-dollar venture capital portfolio and have invested in startups and established technology companies., This is relatively unique to Alexandria within the public REIT world, he says. [1], The company's largest tenants are as follows:[1]. But I think it's fair to say if you look at our pipeline, which is pretty highly leased, I think we have a reasonably high level of confidence that we can fully lease those projects. If you go back to my comments in the fourth quarter, I believe I gave similar comments of pre-leasing on space that had just rolled as well. Please go ahead. We now have two or three mega agriculture companies that literally control the worlds food supply, and that isnt good. A lot of people have left these companies and are now starting companies. 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? Were not a real estate company that is wrapped up in the deal or the financial return. That's a lot of product. And I guess that really just speaks to how are you changing maybe your underwriting in the tenants that you're sort of willing to do business with today versus maybe tenants who were willing to do business with either post-SVB or a couple of years ago? Please go ahead. 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