Alexandria Real Estate Equities (ARE) 26 Apr 222022 Q1 Earnings call transcript

Good afternoon, and welcome to the Alexandria Real Estate Equities First Quarter 2022 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Paula Schwartz of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. forward-looking the contains federal of call laws. securities conference statements meaning within the This results materially might in actual company's The differ statements. the from forward-looking projected those

Please Additional and contained turn to in results ahead, company's periodic like cause go those that to with the the And the information Joel the now filed Chairman materially would Securities in is over differ and Commission. Marcus, from actual statements forward-looking reports concerning factors Exchange call Founder. to Joel. Executive could I

gives Thank and XX, everybody, I just And very someone today's XXXX, shout-out about today. earnings Stephen quarter let got today and here to you previewing to and thank Alexandria. to the listening I quarter. special Moglia good has me everybody everything Richardson. want and to a you, watching happy first our author, war are want pause welcome, birthday Paula, blessings want Peter for make call, Dean Jim know wish spoken great first with joining Ukraine to Collins or we have. April highlighting want us everyone I and Shigenaga, to also our The to appreciate to call, welcome in

first at a Alexandria earnings We want exemplifying lasting a results, endurance. family performance achieved to Alexandria metrics great And really finest. all exceptionalism congratulate outputs have quarter that distinctive X on define team I superior by company: impact and its the entire

mission-driven through to our and approach every address pillars. the society's in they each for family for some well our responsibility bedrock challenges impact performance. our this team what pressing -- superior I want Our as social entire distinctive company, to driving thank Jim most fact, to said, committed long-standing Collins do of forward profoundly day as

resilience anniversary success, distinctive another students next supporting one harnessing I museums to we'll heros, our sustainable model bolstering the epidemic, month, have worked said, long-term homelessness, with also we on empowering to XXXX, with focus, honor the to opioid history new agro we've continue impact, and research, underserved to cope pillar. new outperforming research, significantly a food our of major the public long-term excellence loss, of stockholders, XXXX, these May conquering highest medical our focus pillars, and building comprehensive combat ground suicide initial also our and programs, maintained for hunger, XXth of standards companies. achieve indices crisis since for addressing our our and a accelerating that share to Alexandria's address a our and breaking health offering preserve the Jim children ecosystem of celebrate in in IPO helping and focused want As our to drive newest military, the solutions greatest mental value

and the return Berkshire With average the the NASDAQ of end REIT XXX%, S&P from the XXX% index, at of that time FTSE beat X,XXX%, time Buffett the XXX%, NAREIT the Index the X,XXX%, that frame, Office shareholder 'XX index for time for XXX%. XXX all at MSCI beat at total Warren year has we'd at of the REIT Russell through during which that XXX%,

to of continuing Alexandria's in want Alexandria have our while said, preserving to I first each Collins markets. Jim endurance. characterized growth. quarter, very core future to Alexandria and strong move lasting stimulating power the As is pricing core, by strong its continues

yields of same-store highest second performance our as coming we creation of across special our very every positive continue value highly midpoint and one NOI conviction to we the to we portfolio. have Alexandria as strong focused both raised seeing of the increases and highlight business, talk and see growth life as growth, increased modest unique American rental the sense the we're and attention experience each government a our all leasing here estate with reminds each macro with XXXX With overall our Alexandria business of me history, quarter very quality, for we're and our company's especially annual will revenue publicly-traded and failing pipeline. strengths rental Dean real recession in about, of other of rising from our our the been will external strong tenants. managing occupancy of stellar strong rate NOI focused highlight quarter is $X.XX in growth. markets Today on delivery strong As in on given out Steve in every internally strong science the tightly from continues of our our the guidance guidance environment. our has on of detail large and quarters investment-grade gains aspects and conservatism, tenant extreme the our and development well our people. our policies macro with XXXX XX% risks. or tough cap and will environment first to very and Dean But a X of very hand,

made form of of approvals. treatable advancing I innovative tenants industry needs. XXXX, -- move made therapy XXXX large today's up still starting the in over medicines. Xx medical half has progress have who have to for granted FDA that developing averages, of astounding a science XXXX, first biotech broadly friend unmet with astounding think pretty been all it's explosion fund one of disease 'XX. last with family pipelines The in amazing every the groundbreaking since inflation the from approvals past member, in The the from over a to medicines. effectively knows life of quarter Alexandria novel either flows Alexandria's an decade tenants And not have historical us generally some seen XX% -- of suffers almost

X mid-cap we're quarters, a or and macro not. haves last myriad have the a reached Alexandria's what problematic enabled to of unique have cash. our of our range and details threats the with coupled by ever billion it innovative the let most and open and their growth highest biotech of with biotechs model. well of business selection and estimated the well the quarter clinic flush as have and have with and grow policies commercial as absolute X as They over stage -- of And of emerged small into available The large, model, has that with quarters are it, boom. that years, are in has one X big not turn preclinical Now programs have that, over are and business pharma U.S. being to ended the $XXX haves with And our select closed. and and us are on as values many together markets companies cash the immediate as biotech to drop been that has Steve as cornerstone are tenant large are best seen really tenants, side. for quality over the me with the last bedrocks the of on some be

Thank and good afternoon, everybody. Richardson Joel, you, Steve here.

operate Alexandria long-term historically redevelopment X.X COVID and a excellence rentable Alexandria. unique at mission-critical ground-up the billion is nature A As a following particularly highest continues close, that to the our offerings cap with we XXX,XXX overall XXXX a volume these continued XXXX. QX and high flagship feet bring momentum is Bristol-Myers and for company services of X importantly, to leasing Squibb a laboratory factors square development Campus square and in they million very level, second a Alexandria's and a quality QX of highly leasing This innovative hub history results signed in leasing two, office X in facilities. Point with facility highlight during design, lease quarterly the quarter, in as especially XXXX for pipeline. Alexandria's truly Mega build And our X this I'd during exceptional long-term One We critical $XXX and Operational totaling and comprising Class million square X.X company each underline. market feet. to post-COVID of categories activity research total, of leasing And differentiated to within and is campus. mega driving feet QX their success and demand at with campus double like the chose noteworthy

Let during at XXXX BMS is in clusters, now inspiring tenant Alexandria's Bristol-Myers present a of life result truly the historic our years of the organization. Squibb advantage. achievement. pioneering and this compelling working distinct Alexandria's XX and started select every that entirety with of say establishing Alexandria efforts and core competitive was Alexandria's partnership and to unique decision crystallized BMS's brand a outcome with just is in value and we some The of X type began this confidence and top of the science me trust ago asset class, building level

relationship First, a respectful and deep trusted cemented. mutually and historical further meaningful with

a standard. ability infrastructure at destination unique new amenities curated best highly a point talent a design campus featuring and imperative was and scale recruit to the and sets BMS's third, to Second, marquee to facility of first-class and suite meet and retain the realized; absolute with campus a mega gold

signed Eli genetic a their plus laboratory company a similarly another square We story. facility quarter for is Lilly, office Eli feet this also Class a for campus comprising exceptional A state-of-the-art market Seaport billion, of with $XXX with cap our Lilly at medicine. XXX,XXX rentable Institute

cluster, showcase and in core in ability world-class offering best unassailable. years expansion to of to upon profoundly The together cutting-edge life embarked facilities of Our Lilly's enabled during amenities growth position internal for its during these research. laboratory talent the be site for within past the team XXXX, Alexandria's examples design to and science our adjacency the teams X upon high-visibility entrepreneurial optionality, in our positive certain our formidable scientific as a a foundational iconic trust, to are first and clusters as ecosystem. to deeply bedrock engine envision provided well is and compete a and create with worked the and with Lilly generations. transit Lilly's waterfront landmark Boston The the work teams impact These premier pursues XX embedded of journey an irreplaceable greater of unparalleled office brightest strength a

ahead work to entirety is the of spreads XXXX. company's by we company Alexandria sign mission. passion, that XX.X% following begin success. continues a leasing space re-leasing short-term our with to our These XX%, Accounts are the facilities demand results, GAAP again, below innovative Early block the unwavering is shared the office the mark-to-market provides our and swing the excluding quarter critical demand health borne to these also and and to is precise team's QX X,XXX, We valuable their the for remains deliver current facility renewals only us flagship of earlier. more platform and receivable sophisticated somewhat of portfolio future and at but tenants the seek Healthy Alexandria's to this operational to team. for of facilities drive also and essential historic providing curve but expertise tenant stay mix unmatched kudos XX%, not XX% creation greater significantly facilities. for now XX.X% recruiting end base noted insight holistic the of evidenced amenity operations at actively more our clear best-in-class for talent the rate, approximately of retention continued to the and mission-critical impressive commitment to out their to by pipeline. as of were space as accomplishments testament renewal cash BMS when lock importantly, value growth their within the huge strong for The stellar quarterly our core exceptional with curate than down noted laboratory and this the have these ethic value last call, than ability towards mark-to-market on the into the on of immediate needs, we And construction a and

second comments the earlier, million as this X will color to revenue, detail derisked pipeline pipeline in XX% square in which provide history contributed further square the company's nature Peter $XXX the leased of and million feet, is feet well. pipeline incremental additional during mentioned or generate negotiating. and million on of As is as the of is to X.X his the the highly the total highest projected

QX on 'XX we highlighted Moving demand. Market Alexandria's to and overall, life Day on in in call mega supply during back call, the set supply. to in very irreplaceable very relationships and science for Investor country. campus and best now December our role on the Demand And earnings this as well ecosystem secure innovative central us continues. the positions engage and companies the of and

to that supply in mega commit with projects. difference difference supply to of capital adding time might purely When low leased there indicate X% finish capital total or delivery include our with continue Yes, rates moved planned note in granular and supply availability a are actually planned We these In let see much campuses in be significant a clusters XXXX, if that operators. a X under potential X or coming around, are projects the say, we'll to part or operators, quality to projects actually and inexperienced life the our more actual of construction market projects. the further likely operators actually amenitized and significant what the of leased level, a me reduced I key partners dirt have is XX% markets. each broker are are we XXXX, either reports largest during monitor one-off and assets, Alexandria's summary between valued number markets, overall contributing time beyond, but And at say are facilities in buildings the the A XXXX fully behind this to the so commodity in modest, or and new science including important very behind often look -- these are X% and as proposed either will very incrementally, want proposed their And sources projects projects which The actually frame. by reminder Class to the importantly, highly no X% projects or to in of construction development in the plus the again those reports basis there of just of size, the more vacancy our speculative locations. and under dates various deliveries market or XXXX capital as tenants the to quarters. being on emphasize

base positions quarter well I'll in through core XXXX and Peter. X strong our quarter off was redevelopment immediate lease our substantially the as conclusion, it company that, pipeline. the With REIT-leading of foot first as drive square So operating a value negotiating very to to million well very long-term and development, hand

$XX broadening you to the on of the discuss disposition. creation comment chain XXX proven clusters Reflecting the it our Thank construction Steve's of our square what our you, from our to market $XXX brand, in first creation pipeline primarily AAA was feet insights through unique value 'XX, team, are discussed tenant to to expected last elevate our Binney annual projects that the issues add supply to world-class year value is quarter to costs our demand of of best-in-class a going operational this value of is and our under industry than next of tactically comments, quarters quarter. I'm the commencing Steve. Leveraging pipeline X projected X and the continuation quarter capability million strong rental aesthetics, the increase and and referenced roster. either that increased construction all pipeline, continuing million on amenities revenue, due trusted meet ability excellence, core locations, creation or more the the construction commence expertise needs curated has to macro update million tenant and in in inspiring the over second capture to experience, our

from LOI. executed either of which As negotiation, incredible relationships, of loyalty pipeline existing was activity our we means brand. this the have quarter the With of XX% or end, XX% astounding an to leased under stellar remarkable highlighting an coming

the innovative campuses mission-critical Alexandria's comprehensive scalability base fight. our and Without our at award our and question, to differentiator an for the clear is offer unique that to to that facilities Alexandria tenant choice Our companies. talent campus why industry's recognize is and an tenant-based in ability is is mission-critical successful offerings amenity science life through and provide most a truly mega space

labor of regions. demand quarter, $XX.X approximately we XX from diversity reflecting first by our in different a be strong square possible restart simultaneous pipeline growth the was value we across year teams on because Approximately double throughout During construction by cost and to new anticipated expectations and doing was weather due in with seasoned of the and quarter loss and materials and all the mills projects NOI. industry. commentary a different at migrated compelling for Alexandria's this submarkets, the represents noted of shops, managing labor highly continue start annual extraordinary even execution an in job projects, are quarter, careers. demand component first ago, strong X.X%, trends development engine, to X and to to of inflation XXXX, to in caused last transitory, of tremendous escalations made we all our feet provide the due normalizing shortages million pipeline of on combined expected construction GAAP is to XXX,XXX to things key call be chain outsized translating cost the yields delivered disruptions proliferate paused supply to for our our events workers and creation deliveries of closing our who fabrication that for It construction cost approximately The located and example materials in included XXXX.

an of trucks China the However, and operate is the biggest become in to war, impact produces the that embedded to building the coming the the site earned materials constructing much XX fuel building earthwork for the a it from on machinery the years, equal transportation delivering Sustainability the The will near-term astronomical Ukraine's to carbon of tell carbons antagonist construction used build. by stabilization. in you story that have on and any thoughts war COVID latest fuel in costs. issues the to the reversed increase experts costs and in is

are materials such chip which nickel, things supply emergency of latter up the reduced systems issues aluminum control to metals take economy materials deliver. to which and as come is like Other such area and throughout Transportation to make contributing no addition exception. exacerbating raw fuel, as has shortage, year palladium war that of now affects the the to building proliferate and certain and a semiconductor inflation. their construction from the can critical In used to generators, the the

on out any needs job take at you or site, you If as things will in the of construction come spend place coordination delivering materials and time hauling amount the that job a of marvel trucks away. to

an trucker companies from the delivery last-mile XX,XXX the pressures In of of to models emanating XX,XXX candidates. cost allure reducing addition and compensation from to the of coming inflationary fuel, estimated pool outdated shortage

Many trucking, roofing switch equipment, In aluminum, these tightly Specific take eye of for digits. XX. addition on and get both negotiations emergency assured, as and Coast. Rest delivery tough and get. material double of copper it further to workers include alternative today West reach could are The over and to to than we're our in deadline normal the And to transformers managing materials. strike, if labor elevators, keeping on expensive XX,XXX is Materials items go an on by agreement conditions. we place HVAC gear, pressure price materials, in steel, equipment and they problems dock delay ports up times long to are twice these and generators. continue July

enable have experience guaranteed to last are to is projects, aggregating the million buildings, X.X square our asset feet contracts biggest mentioned mitigate purpose-built that and redevelopment in to inflation. us mitigate approximately laboratory delays. quarter, decades us of XX% risk maximum the costs, Currently, or our to enabling other to As of developing or development of subject leverage we

account creep behind contingencies scope have those We unknowns. for contracts and to

that bid markets The process, Binney demand pending that larger maximum high-quality contingency for The is science in projects to highly led are allowances. life asset. include in and key a competitive from disclosures XXX other contracts those our currently assets cluster voracious for XX% are guaranteed

I'll to asset with a long-term Our recycling anchored achieve proceeds excellent $X the on the to harvest exceeds X.X%, a of valuation a for building profit square per is the for which we rate was exceeding rate. sold during continue of price environment of pass billion, cap our and total $X,XXX of our XX sub-X% were execution XX X.X% last third in in and sale to program record set credit that to at enabled cap foot over us price the approximately million. uncertain by received disruption through record square the $XXX led $XXX a on we with and rate the and Binney We purchase Russia's XX% valuation Beijing of the quarter exceeding the happened The XX. meaningful based in February lab be to interest and a by capital cash sold caused Binney interest that, which foot Ukraine Dean. price it XXX,XXX in we million. [$X.XX office considering tenants to a The quarter With fourth a billion]

We afternoon, very off Good Dean and strong we start track results Peter. highlighting on Thanks, in to that financial first everyone. operating growth per for the of for a Shigenaga here. reported are XXXX, FFO plus quarter and share. great X%

XXXX XX.X% quarter execution quarter very million us outstanding and strong $X.X annualized, cluster per innovative across operating the impressive scale growth up for to and the in and allows achievement entities growth of milestones. share of our in significant was over and and high-quality the consensus to tremendous More looking beat optionality by XX.X% from Alexandria our this line, highlighting growth We first revenues provide trusted on of quarter reported key of raised innovation first outlook team. in consistency is space partner. of science X%. historic moment. country considering a laboratory performance that for Bottom historic quarter life a this this has 'XX, submarkets bottom-line FFO for the we of following over or year financial the year Now XXXX first billion after year and up 'XX, NOI $XXX.X

X,XXX consisting tenants expansion strong and position address and roster current We a quality that of a high very unique Alexandria provides requirements. have to diverse space and tenant over

adjusted XX, REIT as our up shown XXXX XX%, growth highly achieve EBITDA the execution in highlighting by We operating We continue team. and XX.X% efficient December in points points to XX/XX/XX. attributes our on a these results. industry-leading exceptional team by since to basis Occupancy occupancy XX is reap margin our XXX was strong from track generated to our and of in benefits financial the of basis comparison to end of continued

achieving key second volume the than activity from for takeaway Now that of the strong company's higher leasing our growth the history, reported highest the in is the beyond and in year quarter leasing quarter XXXX. annual the rental first XX.X% full rental the XX.X% first growth rate rate the in was of XXXX and

from continues quarter And our primary We and XXXX impact on quarter with of driver basis. are XXX-basis-point re-leasing a to for they first also a to expand quarters, rental points and We in in track of projections cash also from renew of full of tenants we XX% growth NOI same-property of X.X% this ranging exceptional for number year growth same-property on benefit larger occupancy. a in same-property total X.X% hit XXX leases, a rental The the performance expect basis rate in increase this NOI XX% NOI rate space from was look a from to demand on Same-property very XXXX, occupancy. benefited on from the in of our strong reported XX% basis. growth recent renewals and and growth to XX% to growth and as Alexandria. strong cash strong

XX aggregating of rentable placed earlier February quarter, and projected. net in rentable first that redevelopment We that quarter completed completed $XX the were in During Acquisitions into average projects of income service, on completed and operating average income than opportunities. of that acquisitions first January some million projects added annual square the on square X.X on related $XX square also the the million net million were XXX,XXX development of to included first including quarter, in development annual and commenced feet a on operating couple operating feet XX. redevelopment that commenced feet

from second has our of the with uniquely to forward, rental the of quarter positioned growth industry looking million revenue Alexandria quarter annual incremental with through excellent commence the $XXX team 'XX. REIT within of visibility Now first

Now from for square is this growth projects executed rentable subject or deliveries XXXX quarters. development XX XXXX, to operating that million income represents feet This redevelopment year-over-year advanced XXXX, represents lease in an and for next significant the under of negotiation LOI. net leased XX% X and

have We credit strong are top to with the XX% a in pleased super that ratings flexible of REIT sheet, and rank the balance industry.

adjusted stabilization intend balance bottom business, our had for be of our we and is March the to to XX% at of require the common Alexandria beginning our with funding by As generally a improvement debt with flexible and issuance year, to net sales $X.X fixed of sheet maintaining maximizing to end from billion dispositions capital. charge long-term stock. X.Xx NOI reinvesting a A focus and XX% equal growth, on to representing to and XXXX. EBITDA forecasted XX% of operating of would liquidity, line our debt typical very of strong than slight long-term minimize capital be real estate X.Xx the property funding XX, to disciplined and XX% of from interest the partial equity for we remain is And greater ratio X.Xx. expected strategy as at solid or with And coverage a

stock monetize through and sales reinvestment The of interest business. our is a amount to partial for amount Alexandra's to average key value than estate capital is sales lower equity the common the Now the XX% XX% issuances into common ranged has XX% between much of significant and we capital higher of past plan. real XX% due issuances equity of roughly which X reason for amount over our years,

is sales. XXX% both due and to outright Importantly, continued common lower sales, stock than XX% the to issuances sales the execution our XXXX capital be of projected for real plan X-year of average of partial estate interest

profit Now XXX% upon achieved of $X record ago, business. built a the valuation this of reinvest into opportunity Peter Street capital almost a the We sale that we Moglia back spectacular property. Binney generated partial as years interest on highlighted, project of XX% and handful development billion XXX based our to creation truly value

additional approximately for $X.X the a the sales of another interest have sale sales to range, partial plus plus an advanced billion real million year. also in of We estate for targeted remainder and $XXX up negotiation

opportunistic weighted very unsecured rate very notes, pleased with with are We and average years. and of in $X.X proactive a of XX consisting billion our bond a XX-year of term in offering XX-year X.XX%

if rate had this X% today, Now would and put unsecured XX-year to notes issue low we the into range, mid-X% be and in to the perspective, respectively. XX-year

on improvement sheet remain profile. track our balance in and Importantly, we for credit continued

quarter, per gains quarters realized FFO $XXX.X investments. this first were Unrealized venture over investments reflecting last losses million, quarter Now quarter. were in X and venture in of in included the decline million a $XXX.X $XX.X $XX.X value fair million or from the were million

venture Importantly, investments our as unrealized gains $XXX million were March XX. of in

Our leadership their ESG. journey and continues in team with

next dynamic companies. Massachusetts. building XXX located zero And in be in life the Square science executing June. to on Key annual submarket, is certification platinum Technology of lead Point mega our was of the include well the highlights excellence Street year-end the at home Technology Alexandria's sustainable life track Cambridge, received of is located at which laboratory and released will awarded to accelerate has XXX platform XXX certification to [indiscernible]. promising what certification, in is on Square energy couple Cambridge construction Binney San months a Our designed at ESG earned number be by ever wood team proprietary been Woodworks. Drive, purpose-built submarket. most fit in ranked the design campus X at since recognized to GredLabs, our in growth We leadership science located achieve for XXXX building a Alexandria Gateway our which ESG Francisco the report in Campus first Alexandria South

XXXX, improved from and our diluted diluted $X.XX as $X.XX outlook to for Now per the to and from EPS of a FFO midpoint first plus $X.XX up financial XXXX share with ranging adjusted supports from X% strong the quarter at guidance. for operating results $X.XX range over

full refer to Page Thank range Now a guidance it X.X% to Please by $X.X and for million, same-property to in million our range to growth $XXX $XXX increased of by NOI GAAP the rent turn X for Straight-line of X.X%. assumptions to a to sales real interest our $XXX range supplemental is billion. included of and Joel. for the XX outlook billion million upper I'll you, points from package to to partial and $X we of up estate detailed range year we sales basis XXXX. back underlying increased from million a $X.X

with we that, if open questions. it So could to up operator,

from And our first of come will Instructions] question [Operator Bank of Jamie Feldman America.

be of So thoughts the on I guess the at sort you stocks There's the stocks. a how in It's thinking of also, the here? lease might impacting your decision-making? reading timing, this lease here. CRO areas? latest tea Just a weakness be any give just And capital concern delay just should seeing in demand, any then funding are lot we just big on light of thinking backdrop, signs life how the in funding Can leasing about markets picture volatility. science us biotech you about outlook been

the Jamie, question. for thanks Yes,

I situation; kind frame have I I the said and of prepared bedrock demand cornerstone you think should think remarks in I got what and haves think not. you've the is how

and I nots, So said, companies our firms companies most financed large venture mountains and have the company's are the because by generally raised well private of have public capital. as

soon, I don't they've stages who data. public bit gone But if long maybe with they're various too went squeeze in of readouts preclinical have a and pretty into burn, caught at clinic somewhat So public got the early of some cash of or a runways. people think either and are who've

fact, reduce can with the raised it's But in commercial space. the plus some haves track maybe will of companies And expect I their very are no so, the they really cash. think companies, that have different that and stage side in not I contract and to many in say their amounts that of change of pharma, are big that see companies companies reached markets. private be the massive big cap flush for those to those cash, will trajectories those, in some are growth And seen real plus and fair think on you expand. We've workforce who've we

X that clinical us, a So the a group leased I who think construction, course, I that in think lease of new are have you're lease in can to thank who going variety in to, variety, goodness, of companies Boston find lease of to operators and to is, the back. sublease they're burbs. think -- operator either tenants out it's to I can But space X won't -- try who building, this stage, say don't they're in Cambridge, going so seeing to many the it's in I give not of of I see not their or

I it's I that. tale operator? a positioned think in So think, Hello, extremely of and X worlds we're, luckily, well

comes question Evercore. Next Sheila McGrath from of

sale just could compared on pricing set a weighted rates in market And average and detail little the building? the the before where rents lease you if shift in was or partial the term there? bit wondering provide have timing might in-place was interest the to that more on I

Yes.

So that? Peter, to do want handle you

volatility. war, the heat No, pricing of the was during rate Yes, the sure. set interest everything,

So at conditions. to leases, [walls] likely -- don't was -- it probably the years, today's I don't The top of very I X memorized, just know it have reflective looking what is the XX the close maybe market X. but

XX%. credit realize there long any upside. neighborhood to return while. have a And of that market. think about is of going I somewhere that upside there good. The was to fact again, were really So live in the reflective XX%, But overall time for someone probably is definitely you a before The the there price below with rents the is

high-quality this it looking the the could found considering So probably a to very price that there's is nothing have But about. projects, demand of high-quality and worry amount most anyone project was was year. fair for

Peter construction good mean, as Yes. the brand-new said, pretty location lease I strong heart duration tremendous credit. of or with less. in Cambridge, more And very perfect

investment. iconic, a real So think, I

Wondering are everybody, escalators. tied you you when inflation having And or leases that's your a to great. then at just market? X% with the consider look of you it. talking Would with is new That's like consider inflation projects, minimum about would Okay. most not curious, just

Yes.

So Peter ask to and and in I'll comment. come then Steve maybe

annual X%. about of kept during gone less, And different kind X average of approaches. a over more, rental on and but has history little X One have minimum generally X a based minimum, it's CPI. So maximum Alexandria, of sometimes escalations, we've X%, sometimes to max been the we time periods,

are other involved will Steve, being those those you color But time. don't where are over know, see discussed, a those of you I likely of and number in both on if of Peter -- negotiations or guys any some have that. We

that, of just might particular it's do to we what And Steve, being Joel, doing. echo for. we're Sheila. exactly segments thoughtful portfolio Yes. with the we're That's very that the targeted and that

it's think we and going reasonable. very So fair be to

received. been well and it's far, so And understood

So process here. just the of the at beginning

from of comes Korchman question next The Citi. Manny

for X you. Peter, maybe

which to iconic Just market keep, a longer-term have is like assets rate. part there, about think you so how about selling is want iconic to XXX you wants as constrained, me guys you referring it of a in assets the And do the assets? think when keep especially versus term you're you to used Binney, say iconic part not X.X% of upside supply that that, cap getting and why keeping

you do all how So weigh that?

that cap mean I plug -- of you iconic next hard your you of at keeping these are part said on back asset it's of selling. conditions And take Yes. rate as it's a the and part latter a being your sub-X material that. then to pretty into of where market can each we mean plus, X to remember, assets comments, we're I that advantage able just do not get a

accrue also fees. are We

that there's achieve leverage so can operating some And there. we

-- is you assets. pipeline special. at have price. we the best decision, that wave though, opportunities monetize that's reinvest at development think the only today, And iconic in the And something you if at that you it see our look market, can of it is look you So next full if to of what you make you

love are to again, as for them. us the frontiers that as conquer, appreciation So to we rent such believe Fenway sell in want legacy. get where there's We them there are don't and don't to growth other with well. an in things we be incredible appreciate too and We, going whole, but

to accretive to pick investments, the strategically. and So we we cash carefully, need get make those but

maybe time. exposure? your managing much BSM if about sorry, on with all, Bristol-Myers risk deal managing coming was that then Was risk, selling same that new how projects the I'm with at did BSM and with Or tenant then bit about BMS? the not specifically, -- a in having And at tenant

at all. Not all. Not at

Rich of The Anderson SMBC. next question from comes

before, the $X on at dispositions, year. Last as whole year. of year, had So the as topic much billion. I billion about the lot potentially of year you of think a you end $X.X activity this did

some the interest that and clearly of a be you're more back before still identifying maybe half rates Or role year, will all urgency in the it XXXX format. level dispositions to with just do year? of on be could perhaps capital think get of the you sort do of things some towards do opportunities raise lumped that sense So talk, to rates you a rising across in ratable of with done cap play the But think rates?

-- to want you Dean,

it late number transactions. Rich, for specific asset that had before underlying recall extended the to super last look significant might went to of out to some being with complete were over we just reason sale. and to why the our deep December maybe helpful it's to had commentary year back transactions do And context to leases that the year, of in was everything the The transactions you a marketing few we weighted the last got year quarters. to into last important give really and

transactions which had so the transaction And component execution an until was year, to valuation delayed for but the a that later as number well. the those aspect, of it important in

as can looking get So transactions don't year, done. issue important today. the you we're This to imagine, same across have we that at

challenges it don't those out year did year, this you you'll We Rich. be little see spread through the bit have think I than a by same last year more So far.

relates is also reduction. employee you a guys significant as specifically biotech of seeing you your comment significant I'm considering name And to despite that as situation larger some levels some be their was Joel, larger if is comment. XX jumped curious But kind top cap your one registers out have about demand? layoffs. nots of to names of it any in which that examples -- comments my our any might And, name haves your team that Great. name speaking and Novartis, mentioned me have Okay. with like X internally when cap

certainly their your businesses long X industry Novartis restarted of of me at as All in is more in shuffling Glaxo Well, lines to mean, around the odd a And commodity-type to one groups. seemed the the of pharma of history to products. it. the Different be companies whether strongest, essentially of kind which kind people core, of an then do. know, was size, mean, sold strongest thing go in on, different pharmaceuticals an I they companies ethical oncology world. group of I or this different large point, is later certainly, be you high-value are and example, from companies rationalizations one through world

a do I think the the state companies as of a change, view you I point, the or get industry a would shift that a having with nothing but operations. the company's itself, new kind CEO rather And to rationalization these So whenever industry number that focus. at of of own of this

into anything time from But particular. time. to seeing you're that else something that's in so wouldn't And I read that

you. think, you I -- not comment Peter, Joel up modestly generally assume quick, are real yields a as then modestly it are -- the industry. And said even yields that's was development Okay. development I about that said maybe or for

so do about competition, much have not have the you all based come about things you development a sense, delays about, on how your far talked down So yields you? for

do take that? to me Joel, you want

Yes, please.

our getting Yes, escalations. done think back incredible cost an in to job to just early. in my -- And -- team helping things we I Rich, mitigate the has comments, locking

not that of experienced -- as we've in markets, They increase And not relationships have. that been what rent our have, close that we of we able to have, the doing, yields, even scale advantage have personnel we've sure. marginally mentioned. don't so probably because and growth the the of I Joel the other because we certainly I'm all are our to that -- people don't

thing. to be the able same So do I'd that wouldn't imagine they

from of question Rodgers comes Dave next Baird. Our

between to just trying assets where I And not. about interest being guess impacted life your Just sales we're competitive again, question understanding on what's there of those enough or well science types this that's better the by maybe examples trading, spectrum you for as comments with a just of the have any I'm by have of get rates not head? seeing might other investment top Is spreads? your a and the recession comments off Peter. maybe anywhere as spread and Maybe is if there's

BioMed I all over I can sold a you, of database rates or still things tell just cap quarter-to-quarter. yesterday, quality seeing was of what are with looking completely I sub-X cats comp of more dogs lot the the our in trading place, changed that from just There's a getting a for mean at was and things Diego certain a rate. are -- portfolio cap San lot and with tenancies

So there to life for lot is a science of demand exposure assets.

question. number investors, a we Tenant anyone hasn't so, be soon become vetted of doesn't are more to our tenants is it and looking that quality usually our lease It's And a we assured focus. is tenant is. the highly and unfortunately, expiration. who at about portfolio, for -- quality because probably location been great -- rest the But

that Steve, duration. or just if function it of or follow-up perhaps I joined then sales don't tenant new this had was hope top X like I know a list. acquisitions but don't is Apple the there, maybe they Dean And or Alphabet looks but maybe and question. some shorter just for leases

of kind were those opportunities good So if term if just I redevelopment investments? those added and curious was were intermediate of kind or stand-alone

answer Joel. is Yes. this is Yes, yes and The yes.

Capital comes of question Carroll RBC from Markets. Next Michael

Just have on the nots. real back to quick

enough Is rates just of of back any markets it alter to is where it of these markets were mentioning there give you some of much the back space come suburban have to Joel, how of market? type kind uptick? you Or see could I Boston. might to mean nots that one-off that have the more a think be vacancy in thing? big to I could

don't monitor quarter-to-quarter. think sign that haven't I it's impact, Yes. we'll a it's seen material and that any -- we

as that tenant So think, seen I trend time. and, and building say anything location obviously, at haven't specific we right it's would material an overall But specific. this now, I pretty

What raise that mean, muddle mid-cap about think Did they're that? is that basically so an talking And indicated? to is the of enough not nots. that than equity I issue? private related too kind to you public it on of capital, I remarks, said we're quickly. have really the Okay. then they you more a kind companies companies in depending company small Or went your the or about? It's prepared

Yes.

-- not too certainly, all probably companies So preclinical. they on would those public I in, went I would put went put to early.

public, those the you're shareholder went clinical host what I the large, entered probably a what from But too the realize public mean by preclinical in bull were didn't doesn't that clinic, X-year just that's that them. even just that grew on and your is, ahead continue early, base unabated. early. generally been not the that case-specific, is, in then side I and then you've technology think a while, maybe been depends still and forth. private sector of after good those and opportunity the And so what going got fast it's mean, that's market is saying if too plan, that game for of obviously X realized there's they I've So the clinic, went a a the I but years, too

a the which lot. I volume So kind And capital raised Xx and being was it into as rationalize went to is said, industry, of tends itself. the

runway. who investor specific, many who've blue-chip again, companies have I of the private I have money say, many pools it's of On the mean, or groups case raised -- large groups very side, as but good founder

lot in companies challenges So a will. the of of going to you not of those are if the public may maybe suffer have-not host the face that generally, some a sector,

or your under construction will developer of achieve vertical for what, And now. date? when actually just Great. the last kind have delivery that a as least I to in that ground so? then need Okay. projects of kind there's X another, Is they fair mean, go X-plus no or say? months remarks that XXXX in at delivered you a break of me. be XXXX highlighted would Do Steve, to prepared

that is vertical the these we've sources the operators. are is just capital Yes, to going and haven't as down drill actually deliver doing behind But capital that Michael, to to really is going to seen from be Obviously, someone actually committing of what bullish. that going within key positive window. in whether frame. done start think today. operators the I and capital time that we it's And And it's Steve. the

Green Next question Advisors. comes Daniel from of Street Ismail

Maybe Great. or accelerating? that of Street and any the XXX Binney markets, you're in curious if appreciation across Cambridge? compression guys going a are seeing similar I'm cap Cambridge. slower seeing markets rate you're clip moving level back Or to in price you maybe than

I say, Well, guys would revisit you on our end, Peter yes, maybe Steve. NAV. to ask I'll need I think and your

guys in you at Square Binney, in any epicenter. off. heart -- you are think Cambridge But think the Kendall Binney case, of look I and is I when it's the

think, see very strong you construction, our relatively I is continue the favor. So more building. surprising be markets, of most high ask Peter to just I positive to But and new and location there Yes. cap not our quality rate comment rates credit and iconic Steve I'd for an held, real and detailed. in And think cap have can very across

ago that the of [X] thinking This different I markets Yes. as have were would markets guess, or of the you know, people which a is another have had is, rate markets than from there years Peter. certain cap anything way, X%. we're when in -- would where none a All on said X% handle greater couple a remarkably it,

Xs Xs. Some of are those in markets or now the

to to Joel say, below where a other X% could place. growth assets, like mean the you winners we storage did. a bet just here. knows? for mid-Xs rent in it the a industry. knows? to today," and as I'll there's few is Cambridge are on certainly submarkets out winners I pay great money But apartments. X% and of the industrial, want these just the hot a markets. general, expenses. through assets going There like cap lot be of generally breaking for logistics, But chasing there's lot would rates are I mean are "Hey, So who lab special invested We a investors to mentioned, price for probably are they there certainly thinking, in high-quality who competition I like see money when go There's be or and just it's

I'm across borrowing or science assume is noticing that if the the mentioned, or be dynamic I a well. curious I'm life at curious Maybe been cash those cap you below cap last sectors property that smidge if would Binney believe to as but unencumbered, rates closer would point, across similar not And costs. rate it's noticing I you're below? we've either go XXX -- a assume I that's debt

up a point large about you Well, we talk partial a our good not really buying that bring are But done mean, with good partners too that leverage. sales actually I interest don't yes, are much. with

secured we and So They're on a returns. they're accepting not putting to it buy money market these lever and this go work to the don't looking levered -- basis. up. anything frankly, into

leverage imagine you I me asset. only kind comment, a available of negative that if the today, So buy where is are to really but want to just high-quality seeing leverage for hard rates would probably

maybe then And just Great. for last X me.

a so, always that Mercer ARE? the us you why retain if Mega of the plan partner? was the not entirety remind On if bring And for Block, to can in development

could you Peter, comment. Yes.

Sure.

to apparent a that a nearby participate But They become I They'll strategic a in multiple the to is in -- in there, it's involved, can't us markets into projects a of trust rather something assets us. sense other have and of later them with on. capital great a of us. share well. We made this is compared the really lot with. highly go to finance a have to that partner and source getting they for as couple lot good partner we're flowing in details. They're also attractive upfront to but opportunity the after interested capital keeping fact that's we're majority common, were of a very for keep than the

activity would tenants for credit also with we've in location. say -- great that that I seen

question Jamie is of follow-up next Bank Feldman a from The America. of

side? you even growing and your just the pipeline, X given your more beyond. 'XX the has last out be all questions or the construction Would at appreciate months that speculative it demand color seems on on breaking pipeline or months, X so in changed I and say a for 'XX, maybe the to appetite last

anchor for secured really there. New put were forced Jamie, crisis before either after Lehman is we've we since as we series development somebody have then. they if a Lilly think, I or because contract our stop companies tenant of But case told more 'XX-'XX documenting a market, matter we when as We're we But decided we literally we a not, under to generally growth built policy since LOI, mechanics the wouldn't the have, one or don't done signed just point, the signed we generally come, put than who that. of a think vertical, up haven't Well, in to and steel that the lease, haven't then I And not need know, building we I X have Tower. go we collapsed, done at on working just the we company mentioned, hope haven't of forward us East that We the can project we a but luckily, one up, through speculative and in And of of towers. Eli built always they will specs of current if this when tend decade. go York.

Okay. really or buying safe bought you've the in mind? land is those to of the plays, a or tenant covered future That's your is in quarter, the helpful. projects been bank activity investment without some tenant if projects, And there's assume also even then the the you you in about land of think more kind interest stuff it

we Area, tenants. in San Peter, a of Generally, we specific Bay tenant Steve can X,XXX where specifically think -- markets Dean where or the situations of I interest. to innovative all and now or got Remember, number have Diego the than absolutely like have Peninsula, more mentioned, other we've

that of So doing have did. and won't that really good confirm successful. there, we to but on we're that that been There some amount will Peninsula confidence Francisco an that kind know deny kind to of we a how that San where that that's true, project of signed not marshal a the a could that's And resource. on to deny, going amount I that's if information come us but operate. And have us gives in sense recent to moves nobody a we a And mean example. do be the confirm -- a or and make requirements of way else example there's the we're what of or where we report something recent LOI. again, an I was it makes we anything,

that this was, portfolio the way there the like call, would what handicap the which I follow-up my nots. is you consider the of going Okay. risk have was percentage to original haves a And question more type about to at -- a Is you started ask tenants? NOI on then talking even to and

say more you what do you at risk, When mean?

you of had capital Well, talked about they pipeline. -- either to -- run tenants running maybe their out fund may they're that

well needing may of of recapitalization running out up end so some as sort capitalized not or and capital. Just

those you a is feel are cap. of Page large and leases of the X% tenants. -- funded majority No, oftentimes We've tenants And very runways at Phase sign readouts even leases. companies monitor of about we the because about waiting are they and that of majority XX the the portfolio, grade if but private. or vast III. in are And a they've -- well-funded, our usually tenants those, the letters on intent, investment We multiple generally majority beyond pathway our good supplement, our of them before got we funding. -- we diligence got of vast sometimes biotech, got additional go again, not, We've public of with for for oftentimes or we for cash look monthly. certainly Half of breakdown well you or if which years quarterly, out, oftentimes give

mean, we Mission there's are. which pretty feel we portfolio. a I a be kind in runs we anybody had is it. And So problem, into good that know of Bay about our if example good Nektar, about where a might

They're space, that [indiscernible] them That while. sublease already think, very backfilling they're with for is demand going Kilroy. chunk close partnered, with We're which wouldn't of keep us. got going to decide up, space them project their but a expect lab space is watched quite big to, give of office to should majority have I them. space, said have that I up. give We to the They've but for so we they they their a it to

that curve much to. example So an higher backfill that you're We're space could we've the of of well be might I probably rates. already ahead at -- there referring mean something already and

XXXX, lease, believe? that Okay. on And then so I

me, it have the you is, in would decide and a would backfill rate. that with matter lease. could in lease Nektar. don't some hope to sometimes, a a never truth I cases, because company of And it's front might it long-term of Yes, you but a higher But say specifics to give at up I much the

still, -- this vacancy of lab is mission-based at happen, rate that point X in the see mean I So some space. sure there you'll literally I'm for built-out

a in has There's significant. huge high is demand for the I'll a submarket demand credit space. pent-up so quality you And that. that that tell

last from Paolone comes question JPMorgan. Our Anthony of

And just then portfolio. -- I the of again, So -- looking overall your mark-to-market discussion. at have, make have the I understand this your mark sure not what to want

mentioned XX%. flat was and I now I quarter, from think think about what last you it XX% pretty

So outlook are kind have is market for market this steady of of And the holding at up? Or going rents the the point? year? just what still rents rest

Yes.

So, Steve, that. you could comment on

it's quarter trend Tony, really a I drilling that Yes, one Yes. there. Steve tells down know here. specific don't on

markets, I we maintaining occupancy. are mark-to-market, core it's in Look, single-digit in see are It's again, low as very extremely generally before, exceptional particularly You Alexandria's right. for these is you but flat I a vacancies still as from healthy. think, I our XX% an with said perspective. mean, flat, portfolio

We to demand. healthy see continue

So we the to pricing see market. will continue power in expectation our is

And X last then me. for just Great. Okay.

you went? where Texas tell You the you Can closed investment foray us on there. your in

Yes.

first maybe let question. So your comment me first and second on then question your

be if assets, the you best most buildings that think this environments, seen risk owns and in and I are in the if will forth in are other locations. the really suburbs so So high-quality not at or in I buildings of non-cluster assets, buildings be that – think one-off we’ve to going somebody cycles

getting I ones portfolio. transactions. ones a are And end struggle under may poorest entire luckily, so at those that series Texas, have a to much And – respect that quality up all think With of that don’t we there. of they’re may still our the have probably in the tenants we’re the and

color unable the next Tony. I on last next call, at the to to you still comment give that, said be able call, but pending hopefully, that on I’m but in that, transaction. But call, do legally I So hope we’ll we’re

over our concludes Marcus for back I would conference closing like to turn Joel question-and-answer session. to This remarks. the any

thank safe bless. be and to everybody, you, Simply say God

The today's has Thank you presentation, now disconnect. concluded. for conference attending you now and may