STEM education is extremely important to us, so we fund a variety of efforts. 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 encourage everyone to be super entrepreneurial and not think like they work in a structured corporation. The reduction in spend results in NOI from deliveries primarily commencing from the second quarter of '23 through the first quarter of '26 to be approximately $610 million. Alexandria Real Estate carves out life sciences Yeah. These were individually very significant gains. We are deeply honored to partner with Joel and the Alexandria team to ensure that this and future generations understand the significance of the events and legacies of 9/11, so they have the tools and perspective to navigate the challenges ahead. Okay. Mr. Marcus introduced the companys thought leadership platform in 2011, when he co-founded the renowned Alexandria Summit. Alexandria Real Estate "pretty darn cautious" about investments The upside for us is that 84% of our costs for our active development and redevelopment projects are under GMP or other fixed contracts with contingencies behind that. So obviously, '23, a lot of stuff has already been delivered. The asset is under construction and will not be delivered until the end of this year with cash flow commencing in mid-2024. WebEditors Note. 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. And if so, how much? Yes. And then the second question for me is on the success that you're having from asset sales and partial interest. Alexandria began as a garage startup in 1994 when biotech was still an emerging industry. And for those that do seek venture debt, SVB is by no means the only option. 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. 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? Right, right. [5] Its largest campuses in Boston are the 2,365,487 square foot Alexandria Center at Kendall Square and the 1,181,635 square foot Technology Square (Cambridge, Massachusetts). Prior to co-founding Alexandria, Mr. Marcus had an extensive legal career specializing in corporate finance and capital markets, venture capital, and mergers and acquisitions. Prior to co-founding Alexandria, Mr. Marcus had an extensive legal career specializing incorporate finance and capital markets, venture capital, and mergers and acquisitions with special expertise in the biopharmaceutical industry. 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. The annual event supports the 9/11 Memorial & Museum's critical efforts to respect and preserve a place made sacred through tragic loss and serve as a refuge of remembrance for the family members of the victims, as well as for all survivors, first responders, and recovery and relief workers, and as a place for the thousands of visitors from across the nation and around the world to pay their respects and learn about the attacks and the extraordinary, heroic efforts that followed. 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. I dont like a view that is focused on pure quotas. [4], In 1997, it became a public company via an initial public offering, raising $155 million. So we have added a lot of high-quality assets to our portfolio in recent years as well as coming online here over the next two to three years. Or do you think we should expect some moderation in occupancy levels as the demand is lower. Some that don't have pre-leasing today are multi-tenant projects anywhere from a building to multiple buildings. LEADERS Interview with Joel S. Marcus, Executive Chairman And while SVB has created a niche serving the segment, it was also cultural. Nareit and its REESA partners continue to advance adoption of the REIT model worldwide. Joel S. Marcus - Foundation for the National Institutes of Washington, Alexandria Real Estate Equities, Inc. | LinkedIn 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. Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. That is 1.1 million students every year. Yes. We focus on four core areas: first, biomedical research to help discover drugs and new technologies that will help cure disease. Well, wait a second, the $4.2 million is in rental properties today, it's in operations, Tony. While the outlook for Alexandria certainly looks solid, one thing that people are watching is the health and liquidity of the underlying biotech industry, Rodgers notes. Plans call for a net-zero commercial lab, relying on geothermal energy and on- and off-site renewable power. Launching the niche was the first step. Well, I think maybe South San Francisco might be not so much for us, but maybe others. I guess what I'm trying to just make sure if I'm putting a cap rate on ARE's NOI and getting a value, what from that slide do I need to add to that to kind of capture the totality? Next question comes from Jamie Feldman with Wells Fargo. Occupancy across Alexandrias portfolio was 94.7% in the first quarter while rent growth was 32.2%. But just curious, from a geographic perspective, are there certain markets or submarkets where the normalization is a little bit more onerous? Alexandria Real Estate Equities and the Transformation of Life 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 are the investors that we attracted really like the building, and it was an opportunity to fund something that was near-term dollars. Alexandria Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. Should You Be Too? Thank you. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. 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 to shape the Company and allocate our capital as much as possible the high barrier to entry markets and mega campuses. In addition to exploring potential new geographic markets, Alexandria is also staying on top of innovations in the life science industry through Alexandria Venture Investments, a venture capital platform Marcus created in 1996 that invests directly in the companies it serves. The court previously dismissed an earlier version of the suit on similar grounds but gave Alexandria an opportunity to resubmit it with more evidence. But I suspect that maybe some of them are not retail. Companies also continue to set high bars for continued innovation and product launches. Alexandria boasts more than 1,000 tenants including Moderna, Bristol-Myers Squibb, Sanofi, Illumina, and Takeda. 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. South San Francisco, we've never had a dominant position. 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. Joel S. Marcus, Executive Chairman and Founder of The report and its 30-plus case studies feature REIT leadership and ESG innovation from a variety of sectors and serves as a tool to assess the scale and impact of the REIT industrys ESG commitments and initiatives. First, occupancy is expected to improve in the back half of the year. Alexandria Real Estate Equities, Inc. pioneered the life science realestate niche and continues to break new ground in the sector. Mr. Marcus founded Alexandria Real Estate Equities, Inc., or Alexandria Real Estate, a Beyond that, like we highlighted, not just during this call, but over the last couple of quarters, we've had, as you would always expect some normal lease expirations that occur at the end where the tenant doesn't choose to extend. Marcus is also personally engaged in numerous mission-critical philanthropic efforts, which include his service as Chair of the Navy SEAL Foundations 2017 New York City Benefit in support of the Naval Special Warfare community and their families. Additionally, he is a member of the MIT Corporation Visiting Committee for the Department of Biology. Thus, the office component cannot be broken out or compared to traditional office, but is an adjacent, highly integrated and critical component of laboratory design and workflows. Jacobs invested in the company with $5 million. But they're all basically shutting down in the near term in the scheme of things, they're relatively small. 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. We also absorbed $71,000 of vacancy from a building located in Texas. 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 beat guidance and we raised guidance. So we in addition to high-barrier to enter, we also really are focused on aggregating into mega emphasis, and the opportunity to do that wasn't attractive enough for us to move forward. Mr. Marcusand Alexandria virtually joined thousands of patriots, partners, colleagues and friends to remember those that the nation lost in the attacks and honor the courage of everyday heroes in the aftermath. WebEditors Note. There aren't events that we control. Bloomberg Daybreak Europe, anchored live from London, tracks breaking news in Europe and around the world. Theyre embracing it, but theyre not very good at it yet. $37.889 million. Diversity is fundamental to our culture. You guys talked about driving a lot of your leasing from just internal relationships in your existing tenant base. Given that the receipt of cash flow is over a year away, it's difficult to translate the valuation to an operating cap rate. 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. WebAlexandria Real Estate Equities, Inc. 25,025 followers 4mo On November 4, our Executive Chairman and Founder Joel S. Marcus was honored to present for an extraordinary In the supplemental package on page 34, you break out the portfolio between the operating assets and the various buckets of future opportunities. Thank you. 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.. However, Alexandria has an immense advantage with its long-term relationships with large, industry-leading companies, many of which are revolutionizing the biotech sector. It sounds like that's where the biggest incremental change was when you're looking at 2023 and 2024 on lease unleased new supply. 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. 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. [11], In June 2018, the company acquired an office building leased to Amazon.com in Seattle from The Blackstone Group for $95 million. Alexandria - Building the Future of Life Science Its a program that allows our 400 employees to access Alexandrias network of expertise. It's a retail project known as the shops at 10 Fran. For decades, Alexandria has been a leader in building sustainable campuses. Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools: Good day, and welcome to the Alexandria Real Estate Equities First Quarter 2023 Conference Call. Literally every day, we hear of great progress. Well, yes, I'll let maybe Peter comment on that as well. Its undoubtedly a differentiator that has borne fruit.. In the first quarter, we delivered 453,511 square feet in five projects into our high barrier to entry submarkets. Continued innovation in medicine is an absolute Q1 2023 Alexandria Real Estate Equities Inc Earnings Call We were the first group that identified life science real estate as a niche, which could both garner and deploy capital to an important industry, which really had no major infrastructure capital going into it in the early 1990s, Marcus says. 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. So, we are largely locked in. 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. Board of Directors | Intracellular Therapies Maybe just on the sourcing uses. And now, I'd like to turn the call over to Joel Marcus, Executive Chairman and Founder. 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. To be clear, in the process of developing novel medicines, there will always be some that fail no matter what the market conditions. Joel Marcus - World Medical Innovation Forum In-depth profiles and analysis for 20,000 public companies. And so we're being pretty darn cautious there, and you'll see that continue. Thanks, Hallie. 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. And Dean will go into the metrics, but almost 100% collections, which is -- bodes well for our continued strength and stability of the company. Prometheus Biosciences, while not a tenant exemplify how data drives the lifeblood of the industry. Weve got a built-in demand driver by our own clients, which is very unusual.. We've maintained strong guidance while lowering uses and sources of capital. I mean, the comments I provided on the vacancies that came up just in the first quarter alone with mark-to-market, both GAAP and cash north of 100%. When I rang the opening bell at the IPO, I was interviewed and someone asked, How big could this company be? Marcus recalls. Age : 74. 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. We continued with very strong adjusted EBITDA margin of 69%. Pasadena REIT Buys Raytheon Campus Outside Boston - The Accordingly, we're tracking direct vacancy in Greater Boston to be 2.8%. And that's kind of the general outlook other than having a slightly lower number for the first quarter. The company, led by founder and Executive Chairman Joel The construction spend, plus or minus will play out like a normal curve for spend over that pipeline, roughly two years from the start of new projects, the active pipelines part way through that already. Thank you, and good afternoon, everyone. Before transitioning to the health of our tenant base, one quick reminder on the differentiation of our life science real estate product from traditional office, importantly, the office component of our life science buildings directly supports researchers in the lab. Good afternoon. There's so much equity type capital that's invested in CIP today, there's very little incremental equity needed to fund that pipeline. So put off a piece of the portfolio makes sense. Now our strong occupancy was in line with our expectations. (844) 978-6257. 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. But outside of that, we believe that anything that would compete in -- of our quality is in our numbers and that we don't think many, if any, people will start new projects from here on out, at least not in a material manner, but who knows? Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. And then, Joel, and maybe you and Hallie could just comment. So rightsized for delivery to requirements in the market, they're not lumpy, large build-to-suit opportunities that could be more specific to larger requirements. I know people who did diligence and they said they could never look at the Edison machine. 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. Joel S. Marcus, Executive Chairman and Founder of Alexandria Real Estate Equities, Inc./Alexandria Venture Investments, Honored by the 9/11 Memorial & Well, I don't know that -- I mean, it's interesting the way you posed the question. Meaning, if we were to mark-to-market the rental rate, Steve, on the whole portfolio? 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. Executive Chairman and Founder,
They come to us directly as we are a trusted partner with a long successful track record of developing and operating mission-critical facilities. 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. WebAlexandria Executive Chairman and Founder, Joel Marcus, opened the 29th Annual Baron Investment Conference, one of the investment communitys most anticipated and highly Joel S. Marcus; Founder & Executive Chairman; Alexandria Real Estate Equities, Inc. Peter M. Moglia; CEO & Co-CIO; Alexandria Real Estate Equities, Inc. 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. With that, I'm going to hand it over to Dean. We all make deals, but we also make the coffee, so nothing is too small to deal with. Well, it was a fairly low yield. 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. Supply in all submarkets is very likely to be muted beyond what is under construction today due to high construction costs that I referenced, higher cost of capital and the lessening of generic tenant demand. Our industry is very collaborative, and campuses become very important places for people to go, he notes. Transitioning to private venture-backed biotech which makes up 8% of our total ARR, we continue to see a reset of venture deployment to pre-2020, 2021 levels, which while down from peak remains strong by historic standards. It's Peter. The asset base in North America includes 36.7 million RSF of operating properties and 3.4 million RSF of Class A properties undergoing construction, 7.7 million RSF of near-term and intermediate-term development and redevelopment projects and 10.3 million SF of future development projects. National Association of Real Estate Investment Trusts and Nareit are registered trademarks of the National Association of Real Estate Investment Trusts (Nareit). Its easier than one thinks. Please go ahead. 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. With Fed Decision Looming, Economy and Markets Wait Google Stock Concerned About AI? In addition to biomedical research and STEM education, we also do a lot in our local communities the communities in which we live and work and in which our tenants live and work. 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. Alexandria projects further rental growth of 30% to 35% for full-year 2022. Hi. And we just completed a lot of product over the last two or three years. Yes, thanks. 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. His publications include two monographs on Mark, a two-volume commentary on the same Gospel in the Anchor Bible series (2000, 2009), Jesus and the Holocaust: Reflections on Suffering and Hope (1997), John the Baptist in History and Theology (2018), and several articles about the parting of the ways between Judaism and the Christianity of the first three centuries of the Christian era. Life science, meanwhile, has moved from being a niche segment to mainstream real estate. Is there any something about that building that didn't like or that was more particularly attractive to certain investors, I guess, why that property? Good afternoon, everyone. 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. Koh was unimpressed with the revisions and tossed the suit. But I think the bottom line is the simple bottom line. Yes. Bayer bought Monsanto, Syngenta got bought by ChemChina, Dow and Dupont merged, and BASF is out there. WebJoel S Marcus is Chairman/Co-Founder at Alexandria Real Est Equities. 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.
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