Thank you. 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. Yeah. So -- what you're really focused on though in your question is a spend outside of that, which goes to quite a bit of activity, site work, advancing site work as well as entitlements. So we're giving away not too much upside by selling part of it, right? We have developed very broad and deep multi-cluster and multi-market relationships with most of the top companies in our industry.. For decades, Alexandria has been a leader in building sustainable campuses. We started this whole life science real estate niche with the purpose of helping to solve human diseases. And we have brought this to a highly respected and recognized real estate product type today. Please go ahead, Joel. 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. Reflecting this, in April, we've collected 100% rent from our preclinical and clinical stage public biotech tenants. 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. [12], In July 2018, the company acquired 219 East 42nd Street, the headquarters of Pfizer, for $203 million in a leaseback transaction.[13]. In the first quarter of 2022, the company leased another 2.5 million square feet. And so, they're interested in accumulating more life science product, but they can't necessarily play right now. We have found that technology companies are not collaborative because they dont want other companies taking their technology or poaching their people. No, I think not Peter said it perfectly. Alexandria boasts more than 1,000 tenants including Moderna, Bristol-Myers Squibb, Sanofi, Illumina, and Takeda. 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. The S&P 500 investment-grade rated REIT boasts an asset base of approximately 74 million square feet. That's where Joel Marcus, executive chairman of Alexandria Real Estate Equities Inc., met up with Verily CEO Andrew Conrad. 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. Joel S. Marcus, founder of Alexandria Real Estate Equities Inc. Pat Greenhouse/Globe Staff/File/2014/Globe Staff. All rights reserved. We continue to underwrite and monitor all tenants closely, and our private biotech tenants remain compared to the broader market. We continue to refine our plan for 2024 because as I mentioned earlier, the $610 million of pipe, that pipeline does not require much more equity capital at stabilization because we have so much already in CIP, which the incremental EBITDA will allow us to debt fund leverage neutral, the wide majority of the incremental capital for that pipeline. 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. 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. Alexandria Each of these tenant relationships started literally decades ago, Marcus says. 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. We think about who the greatest person is for the role we need, and it always works out. That is an initiative to bring computer modules and computer science education to every single New York City public school student by 2025. Mr. Marcus has built Alexandrias unique business model around four business verticals real estate, venture investments, thought leadership, and corporate responsibility. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's periodic reports filed with the Securities and Exchange Commission. $37.889 million. Alexandria Real Estate Equities, Inc. Executive Chairman and Founder Joel Marcus Appointed to Emily Krzyzewski Center Board Alexandria extends its Mr. Read More E. Rene Salas, CPA That was almost all of the change in the tenancy from roughly 1,000 to 850. 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. Joel Marcus - Executive Chairman and Founder Peter Moglia - Chief Executive Officer & Co-Chief Investment Officer Dean Shigenaga - President & Chief 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. With me today are Peter, Dean, Hallie and Dan. It sits within our range of FFO with other assumptions offsetting those changes. In 1996, 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. Our industry is very collaborative, and campuses become very important places for people to go, he notes. I mean, I guess the big picture is like everyone kind of sees the headlines on what's going on in life science. And we just completed a lot of product over the last two or three years. 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. Accordingly, we're tracking direct vacancy in Greater Boston to be 2.8%. They add a lot of value. However, the mega-mergers in the agricultural field that have occurred over the past two years have made it clear that the only way to disrupt the entire farm-to-table system is by spawning a whole new system of startups in the agtech area. These are the men and women who are going out every day and risking their lives so we and our tenants can work every day and we are honored to support them and their families. Joel Marcus co-founded Alexandria Real Estate Equities, Inc. in 1994 as a garage startup with $19 million in Series A capital. Bipartisan support for life science research remains strong. They come to us directly as we are a trusted partner with a long successful track record of developing and operating mission-critical facilities. We now have two or three mega agriculture companies that literally control the worlds food supply, and that isnt good. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. 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. We decided to hold on further redevelopment of the second building, aggregating 71,000 rentable square feet until we lease up the remainder of the 131,000 rentable square foot building. 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. But Peter, any comments? Thank you for accessing our content on the Topio Networks Market Intelligence Center. Yes. 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 90% of our top 20 tenants are investment-grade rated or large-cap publicly traded companies and we highlighted continued strength of timely payments of rent from client tenants at 99.9% of rent that was due in the first quarter really reflects the strength of our high-quality client tenants, important tenant relationships and the high-quality underwriting from our research team. Stripping that $15 million from the purchase price gets you to a total valuation of $561 million increasing the cap rate to 5.4%. So that's just two examples. Adjusted EBITDA on a trailing 12-month basis was up $246.2 million or 15.4% really strong growth of 6.8% in FFO per share for the quarter in comparison to the first quarter of 2022, again, off to a very strong start and on track for 6.4% growth in FFO per share for 2023. Plans call for a net-zero commercial lab, relying on geothermal energy and on- and off-site renewable power. 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). And so, I think, we're going to look hard, as I mentioned earlier, over the next couple of quarters. In-depth profiles and analysis for 20,000 public companies. Alexandria Real Estate Equities and the Transformation of Life See what's happening in the market right now with MarketBeat's real-time news feed. And 29% of that space has already been leased. Theyre embracing it, but theyre not very good at it yet. Companies also continue to set high bars for continued innovation and product launches. 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. Tenants such as BAXI and Biometafusion, for example, have recently raised additional capital of promising clinical data. Marcus says those four components are necessary for life science companies to flourish. Serving growing pharmaceutical and biotech companies, Alexandria reported its highest-ever annual leasing volumein 2021 with 9.5 million square feet. And how that demand compares to the broader industry? 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. Yes, there's been a slowdown in activity due to the fact that boards and companies are really just trying to figure out where the economy is heading. Now key updates on the underlying detailed assumptions included the following; a significant reduction of $325 million in both sources and uses of capital, including a $75 million reduction in the midpoint of acquisitions to $225 million and a $250 million reduction in construction spend at $2.725 billion. 1 for 4 weeks, First Republic in limbo as US regulators juggle bank's fate, Alibaba's Jack Ma turns up in Japan as college professor, On May Day, workers rally for better labor conditions, 'Waste of time': Community college transfers derail students. We updated our underlying guidance assumptions for 2023. Language links are at the top of the page across from the title. Mr. Marcus also founded and continues to lead Alexandria Venture Investments, the companys strategic venture capital platform. Please go ahead. 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. Joel Marcus, Chairman, Chief Executive Officer, and Founder, Get short term trading ideas from the MarketBeat Idea Engine. This time, you've kind of mentioned $850. Theyre incredibly active on the venture capital side of the business, he explains. There's definitely expansion needs. The company's actual results might differ materially from those projected in forward-looking statements. Joel Marcus Joe, look, I can appreciate that you still haven't closed a lot of these deals, but I think the market would certainly appreciate just any range of commentary you could provide on how to think about cap rates? Koh was unimpressed with the revisions and tossed the suit. Adding to the difficulty to execute in this environment is the increasing desperation of a number of office building owners, trying to raise cash to stay afloat by offering quality long-term leased assets with credit tenants at 6.5% to 7.5% cap rates. 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. Those are all 100% pre-leased projects. 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. The company, led by founder and Executive Chairman Joel Marcus, focuses exclusively on highly specialized lab space used for research and development in the booming life science industry. As 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. We were ahead of that curve because, historically, life science companies did not want to collaborate with institutions and other companies either. WebEditors Note. The company also continues to leverage its leadership, knowledge, expertise and resources to develop and implement long-term, scalable solutions to the most pressing societal issues. So, we are largely locked in. Were not a real estate company that is wrapped up in the deal or the financial return. [8], In 2007, the company began development of the West Tower of the MaRS Discovery District in Toronto. What happens on these campuses is intertwined with our other three verticals. However, from Alexandrias standpoint, they should be able to continue to fund their growth. Joel Marcus is professor of New Testament and Christian origins at Duke Divinity School. In the first quarter, we delivered 453,511 square feet in five projects into our high barrier to entry submarkets. So is there a, sort of, a number you can point to that this is how much we can raise from a disposition standpoint, still be in a range where we're comfortable with our ownership position in these fantastic assets longer term. Understood. As you know, Alexandria is truly a one-of-a-kind S&P 500 company. 20007. 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. I'll end with some commentary on our value harvesting and recycling progress. Okay. But the book value has that $4.2 million in there? It invests in disruptive life science, agri-food tech, climate innovation, and technology companies. Washington, How critical is it to maintain that culture in order to move into new areas and adapt quickly to a changing environment? Thank you, Paula, and welcome, everybody, to Alexandria's first quarter '23 Earnings Call. Our focus on advancing human health is made up of fighting disease and it is now increasingly including nutrition. Alexandria sued Steven Marcus in US District Court in December. 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? Marcus was one of the original architects and co-founders of Accelerator Life Science Partners, for which he serves on the board of directors. If you look at Hallie indicated, if you look at the tenant collections by segment, they're 99% to 100%. Could you please provide more color on the internal leasing pipeline that comes from your existing tenants? Good afternoon, everyone. But if it's stable, high-quality assets going to have a five handle on it just like this one did. Each of the markets is seeing strong demand. Now leasing volume for the first quarter was strong at 1.2 million rentable square feet, slightly ahead of the strong quarterly average of leasing volume prior to the exceptional record-level leasing volume in both 2021 and 2022. They're one-off. Beginning with SVB, there remains some misperceptions on the long-term impact of its collapse on the life science industry. display: none; "Their contributions continue to fund the Memorial & Museum's vital exhibitions and programming, such as Revealed: The Hunt for Bin Laden. So, we are able to pick up some improvement to offset those. 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. Yeah. The life science industry thrives on that. And then as technology developments or take hold that you are informed about. So, you don't want to double count the square footage there. WebJoel S. Marcus, J.D., CPA Executive Chairman & Founder, Alexandria Real Estate Equities (NYSE: ARE)/Alexandria Venture Investments Read More Rory B. Riggs, MBA Co-Founder and Director, Royalty Pharma; Founder and CEO, Syntax LLC, Locus Analytics; Managing Member, Scientia Ventures. Obviously, there's dispositions and partial interest sales that are continuing to come at different points in the cycle right now. 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? 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. 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? The Global Biotech Epicenter | New England Now and in 2030. Nareit and its REESA partners continue to advance adoption of the REIT model worldwide. There aren't events that we control. Life science, meanwhile, has moved from being a niche segment to mainstream real estate. Yes. 1-202-739-9401 (fax). Any number of cities would like to get there but probably dont currently have those characteristics: Chicago, Denver, Phoenix. Biotech is also not reliant on venture debt to the same extent as the tech industry. 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. Were building in Seattle, San Francisco, San Diego, Boston, Maryland, and North Carolina. WebJoel S. Marcus Executive Chairman & Founder Alexandria Real Estate Equities, Inc./Alexandria Venture Investments Joel S. Marcus is the Executive Chairman and Founder of Alexandria Real Estate Equities, Inc. (NYSE:ARE), an urban office REIT uniquely focused on collaborative life science and technology campuses in AAA Alexandria Real Estate carves out life sciences With strong operational performance and balance sheets, REITs are well-positioned to navigate economic and market uncertainty in 2023. The next question comes from Dylan Burzinski with Green Street. And it's -- we're hearing that there's no tours, there's no activity. China of course, but many other locations. And then there are transportation and increased energy costs as well. 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. It has really taken off and become a great model. Marcus recognized that companies utilizing labs often cluster, so Alexandria pursued locations where clusters were likely to develop, including urban areas near major universities. 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. [Operator Instructions] The first question today comes from Steve Sakwa with Evercore. Literally every day, we hear of great progress. Markets never sleep, and neither does Bloomberg News. There are three key takeaways here. WebJoel Marcus is professor of New Testament and Christian origins at Duke Divinity School. This is an increase of 3.4% in total availability over last quarter, largely driven by spec building in South San Francisco. 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. Gross unrealized gains in our venture investments as of March 31st were $459 million on a cost basis of $1.2 billion. The culmination is continued FDA approvals and 2023 has started at a fast clip. 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. Now turning to guidance. So operator, can we go to questions, please? Some that don't have pre-leasing today are multi-tenant projects anywhere from a building to multiple buildings. So we feel good about it, and we'll keep an eye on things as we go through the next two quarters. Or do you think we should expect some moderation in occupancy levels as the demand is lower. And let me maybe put a footnote on that, Steve. 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. And apologies if I missed it, but do you have any lease termination since this quarter? Or was it projects that were previously signed and then kind of the lease went away? Click here to download a PDF of An Interview with Joel S. Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities, Inc. and Alexandria Venture Investments, See other features from LEADERS Magazine's April, May, June 2019 edition. Linked companies : Alexandria Real Estate Equities, Inc. - Intra-Cellular Therapies, Inc. 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.
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