Alexandria Real Estate Equities (ARE) 31 Jan 222022 Q4 Earnings call transcript

Good afternoon, and welcome to the Alexandria Real Estate Equities 2022 Fourth Quarter and Yearend Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I’d now like to turn the conference over to Paula Schwartz with Investor Relations. ahead. go Please

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

could factors statements materially the forward-looking actual results contained Securities filed with in the and Additional from that to in Commission. those information cause concerning reports Exchange the is differ company’s periodic

go turn to Chairman the call Joel. Joel to Executive Please like over and Marcus, Founder. now ahead, I’d

Thank their unique And and facets healthy safe to year. me fourth Peter continued you business for you, earnings everybody. new are today, With excellence Alexandria's XXXX for Paula, a and Dean thank of welcome truly across call platform. Hallie Kuhn, all company. our mission-driven, you and one-of-a-kind quarter Alexandria A our to joining and thank Moglia and operational yearend Want family members wishing team Shigenaga. you

XXXX all truly yearend while recording have We struggled by companies and past ever we're mightily many proud, metrics, any humbled, public year. really exceptional thankful, and results this very during quarter fourth and and

very backdrop Alexandria. of like what really I a history of some while will and you give short excellence of on macro-market growth tick our to XXXX to Dean notable Against in and the strengthen has balance operational sheet, the the our team. the nothing approximately that strongest amazing off most fortress per take news more be details in again, that. to year to I'd deleterious share earnings this Alexandria consider a for delivered Truly FFO moment X.X% continuing to

Alexandria strong continued development pipeline strong XXXX. on will and again in to earnings deliver With positioned comment well leasing our highly is Peter growth and leased that,

shareholder MSCI index XXXX% this XX, S&P a to of long-term the XXX the of IPO the from through end NASDAQ with shareholder have read XXX%. -- compared December XXXX end value create of of XXX% total and return to of continued We year, XXX%,

So a wide margin upbeat.

duration long base, proud of tenant fourth flows Peter quarter, for stats our XX and dividend. one Dean our cash approximately but again, the far amazing very year Alexandria base, generate We're rental continues lease client continues million two tenant and of proud own two on Pretty will very the a with a eight an the leased lab is highlight that increasing Alexandria years cash demand for year of and our space a remarkable for stable, million generated and away more on which to increasing, in space. about of kind over treasurer basis. last of rate square to increases almost that by XX% produce we're and last majority million X,XXX feet this, and

and was by highlight of the 'XX almost XQ in metrics very strong quarter same-store XXX% fundamental financial very collections performance and tenant and and others put yearend on this, and all quarter XX% of another a for a Dean few we -- will year. some strong a occupancy XXXX very think XXX% almost almost proud from both I base strong the and and durable

continuing continue nation's cancer years few diagnosed despite focus Nearly suffers with have that in be does war all over in population last and during with federal, mental see to will overdose in be medicine a seem XXX,XXX efforts their One need the of will four that amount to neurodegenerative at state double of One deaths to we're from a company the made out lifetimes. a governments and been just to women not the certainly develop vast illness and year, resources last the a imperative. there, and due mental Dayton in five a this be of which check but our in health on to is the really men but has disease. level Innovation of national must appropriated project, and us with this issue. adult down local literally over XX%

harvesting comment disciplined about XXXX with of year our and will we've billion one to and optimistic and comment also Peter our the amazingly but very progress and detail harvested our for made month harvesting in and in we're and value about Peter successfully date, A successful capital and a business excellent reinvested Dean will just continuing steady plan on recycling capital, stellar to and highly value recycling that, XXXX precious $X.X then disciplined, manner that.

over And sheet team I then finance hand and the and a particularly our in proud again company's once balance am pass impressive balance accomplishment had who all sheet particularly on have supplement. we the our thank the and out I in call out forth Page it thank those history. set very our to before XB to want Hallie, strongest of that call

to turn over Hallie further comments. going I'm that, it with So to for

Thank I'm provide out markets. volatility This resilient science to you, and industry through remain of and and XXXX a Kuhn, now environment. afternoon, how SVP a approximately X,XXX the tenants Today, going and capital science of unique is recap and Joel technology macroeconomic of coming current the our Hallie highly good into everyone. life XXXX of the

XX,XXX are diseases type these an opportunity treatments And and of need. unmet we have of XX% and do is, far mentioned, X remains the solved. from often about, fact as Joel incredible the diabetes. many Take talk that As

on X sentence a decisions death life with of XXX consequences. before diabetes it A of was or years over makes death a ago, insulin some which an health-related have carries day, the it XXX still person While burden. average discovery type immense

enduring which stats strength XXXX, speak for themselves life industry, the of X. the back regarding looking truly Now highlight at of the science I'll

pause billion. commentary deals venture $XX in widespread hit nearly VC despite First, life button XXXX, that the totaled funding science

tech deployed on it time hand over raising science ever Alexandria billion billion, nearly went Other powder dollars with across over XXXX than a highest is VC cluster, and eclipsing record year, note, an in capital to life the into of $XXX was deploy is horizon. $XXX XXXX's record and significant Of of second XXXX, multiyear amount funds a VC dry deployed. XX%

Second, on continue Dow market. innovate X XX%. the of performing In the large and total for X such to $XXX of XX%, over XX the as ended where M&A, year and with deploy over grow. of biopharma the to the returns billion year into hand, with NASDAQ biopharma returns continues to R&D average to the the historic pharma ending year top With a cash firepower year the levels top and best total has pharma indices XX%, ended up sectors be an market XX in down the

gene approvals the patients, to approval, pipeline and therapy with last, early Alexandria novel which cell novel molecule biologic half to a therapy And tenants. FDA continues of commercialization nearly were by innovation deliver and XX of approvals, three developed to small

Alexandria's deploy color large roster; innovation. provide billion life was some into to $XXX additional and over partnerships. we Alexandria's $XXX pharma, the reinvested our of and M&A to life into forefront examples unrivaled to XXXX, R&D tenant Starting of segments pharma has wanted business including that, science leverage, estimate on and with billion science Moving tenants at analysts in

product in framed XQ to years, and commercial is The innovation types their programs months. clinical example, to from Pfizer an earnings medicines also clinical new are by large and from as pursuit in XX Alexandria pipelines preclinical early an company revenue noted of patents mRNA a this in clinical the therapies preclinical and late over XX by transition sorry, they next come and with going products targeting -- M&A expire XXX activity continued XXXX. to The be developments, morning, several stage. are as billion spanning such $XX large launching to and indeed tenant cell estimated additional great next decade of pharma's with

biotech, $XXX XXXX. companies, brought public to tenant Vertex Transitioning includes Tenants such majority growth. driving and base Amgen in commercial have the long-term billion large as pipelines, nearly in our in diversified which stage revenue

As treatment addresses stage a a root type note, novel therapy is with the of diabetes. cell next Vertex clinical of diabetes leading X cause that the also generation

capital that and follow-on have meet met For clinical-stage data to clinical will king. access milestones And see recovery is XXXX, in to through biotechnology companies, continue ability stock and financings. those

nearly science XXXX, over on the average is reached past still which right financings follow-on life decade. public science billion markets the life financings the are in While recovering, with par follow-on $XX

respect commercial of With consists to tenants. stage largely life segment science and service devices, this products,

large While not that challenges, segment immune supply chain to pharma, and drives both the and higher needs interest to to big a across rates continue grow innovate. which biotech this academia, business responds of researchers and and is

we XXXX critical drop A $XXX competition. space Costing driven that and notable to sequence increase genome, the a is genome the in per are a data access XXXX, genome saves now million to to $XXX of in at sequencing in $X,XXX the in enabling in healthy sequencing, looking development rapid by diving the genome price lives.

XXXX? economic value. face industries are the of the where areas forced down greatest So on double of headed in are In persistent headwinds, we to all

reset, the more is deployed As in long capital efficiently. that the as run, companies that are we'd part make argue this, of won't and it, is there healthy

There of map differentiated tenant clear like roster those will Alexandria's and technologies, raise clinical separation will nots, with data a as tenured on to generating capital. continue haves and to to teams such inflection road be points continue key further management have companies but

industry over the the problems, those come. the most depths a As time on are history downturn. of some shown instead is to thousands Ultimately, among looking in decades of again, but to that science life problem, thousands a incredibly i.e. address diseases industry has this for of financial innovative built and not technologies poised time successful created companies is devastating

To from end hope on FDA a Scott note Commissioner, of Gotland. former

compassion human our that it's to to our apply purpose other us drives the innovation, of advances hopeful these ingenuity reducing each but Our inspires suffering. for

I'll it that, pass With to Peter. off

markets, industry Hallie. you, that more century. subject are some a the year the volatile a the not is cycles, who's macro surprise others. since around the anyone pruning XXXX see in all than turn today in to we reminder a to quite of been tech was businesses Thank The

broken come However, heals. after bone, back will stronger it it much a like

to of than takes the science harder a whatever services life book quarter sound, much is as cycles. discipline the discipline this the creating developing reservation products share next historic you a crisis, time in tech, estate in during hard a mirrored disease investment, is see you app or label want that, bust our time, more Alexandria today's our those is more dot-com Unlike through and to real consuming remains financial Because in and and there to to of business address and recipes. has to can why conditions, results strategy, down our which lot

macro Biology. Golden of we and the innings early our Age Despite we for the headlines, in excited remain business are as optimistic the of

disease attack blueprint people the the to had be XXX. with that time, human than to developed for the the options it's in take genome only previous And in going and new to have have but is more Alzheimer's. hard, years. going industry We of for It's to XX time, we've going modalities

to detect going perfect and pancreatic It's cancer to to in more. technology much save much, time lives

you remember, and research all of science life making patience, it's essential. and development let's cycles, and proverbial continues So it and resilient will economic thick understand thin why takes and our the hard, time business then through

you real With update construction you estate. investor progress, said, for touch life briefly and that on update leasing discuss I'll science demand trends, on our development pipeline our on

laboratory In time on XXXX, I'll challenging in very on our and space teams purpose-built a moment. a high-quality, continue deliver which on in tenants touch to best-in-class environment, our construction budget development to

feet, delivered just the with commencing we shy of fourth quarter, $XX square million NOI during in XXX,XXX the quarter. annual During

For square on averaged the feet our deliveries year. annual Initial with X.X% $XXX.X million spread we the over of XX increases for delivered into stabilized X.X% embedded healthy projects, a leases. commencing million and development yields recent X.XX NOI cash reflecting basis, redevelopment during and year, the annual contractual

next projects year-end, leasing come X.X feet tenant our projects leased. expected totaled are and has the commence relationships. XX% of to construction construction Approximately under XX% million approximately As square from near-term quarters over that and of existing four X,XXX

Barnes XXXXX Sorrento square our Owens, will feet quarter XXX,XXX under venture XX% joint by be Road partner; Mesa, partner. XXX% active our New XXXX and funded include projects is are funded which approximately Canyon this venture be by which Both leasing negotiations. will projects joint in and added

driven time. through 'XX $XXX Deliveries are of reflecting consistent strong to even expected pipeline NOI, in by incremental a fourth volatile annual add this in primarily commencing demand quarter quarter from the first million the

can with the leasing year Transitioning to to is for unique of highest X,XXX leasing, square the range you quarter The on quarter, company see results history. continue on second XX% feet demonstrate in our XX% strength the annual And growth total in the company, of the remains a highest from supplemental, basis strong Day fourth in leased and the in our a X,XXX,XXX fourth unchanged one-of-a-kind with of the square volume history. leased XX% feet company -- GAAP for Investor total guidance XX% to as the cash. to mark-to-market

are These on of performance the of billion XXXX. the XXXX investment this reflective anticipate stellar in certainly hand, models of With of ability conversion results commentary from that to a the successful to existing $XXX and And in XX cohort the continued high-credit science, XXXX underlying strength in Alexandria cash VC have on innovation Hallie's identify. large and funding in sector growth will a we in tenant pharma. companies and reflected investment early new sound FDA incentivize unique further commercialization business approvals companies of in has

management Their in only imperative. facility research development, tool and best after. for consider is highly always tenants which in and Therefore, sought highest unrivaled but operational the facilities is campuses retain for an for best facilities used them recruit campus talent life by remains The as the assets far excellence greatest as scientific a not critical to the is and and science are are quality occupancy A+, world, and mega our the and asset. demand healthy Alexandria their our

a Moving to high the cusp the of it down. trends. is At on construction cost construction industry slowing appears level,

end of the to slow is leading architects construction the Index economic the work consultants months. indicators is XX Design so the to projects, down. activity Architectural are by of the AIA first at that One nonresidential leads industry Billings nine of front

AIA interest the X% show expressing heading billings, moving that from numbers clients towards growth are new the in and no average was starting commentary fewer Recent in projects.

the out and which pricing contractors since and significant work. cost first for of was chain subcontractors For general we're problems, the see materials time of flattening the to inflation restart signs projects, some postpandemic construction of starting and genesis looking supply

smart and aluminum, availability are them in controls difficult this time building ahead there electrical improvement than of of an very units ever over switchgear, such there handling to using obtain items last and it's of glass demand still so air before despite products for said, That copper more year, as is XX% supply. to chips, and rebar, XX% generators, emergency chips still because are still

task. on has are needed a to these relationships buildings and to vendors time to hard-to-get items with meet a is ensure we Laboratory construction to and and so budgets. decisions Intel quick consumers keep the on budget heavy access to and experience our have laboratory difficult critical the of project Alexandria materials schedule and needed make labor

Despite XXXX. XXXX reducing -- we believe XX% we cusp in and from to the pressures, mentioned, XX% of continued on construction to cost market range X% reflect industry in expect do from to escalations do is experienced X% to of slowing that XXXX, to X% the X% down, in the as the

and continue will conservatively to our underwrite manage However, projects. the so $X.X to eight the labor on costs and trillion we years infrastructure will creation next put continue spend over pressure value

redevelopment are during we fixed aggregating with As of square year, X.X is or other which the these under active maintained GMP our and development feet, have million consistent XX% projects, end of volatile run the of rate the times. contracts,

year-end real Day. completed quarter investment our value execution in Investor harvesting Anticipating third in out and the laid estate we the efforts we volatility at as asset with XXXX recycling impeccable markets,

managed a improved the properties achieving value are value billion operational best the many high-quality real average $X.X XXX%. X.X%, in environment interest volatile a in investors with we speaks desirability gain cap markets rate the of a achievement harvesting, assets, on $X.X with with sidelines. of creation Overall, the of tenants and excellence. is tremendous total It XXXX completed margin This which weighted estate rate to of billion realizing the and of considering a our with

High-quality is life in science reflected pricing. that assets the are scarce, and

like on real good that started that harvesting product. have are that you We science meantime, strong for recycling, there and we'll XXXX the But making life sales to working is non-Alexandria on, still quarter. we'd update illustrate and value report in on demand notable and on next three progress asset estate

and the is Area. El The in XXXX of Real Bay the Camino [indiscernible] first sale

three power quality, no is to non-credit window Anchored property XX% with limited shipping get leased, receiving, but no the adequate venting through and HVAC. line, science by low life windows the backup extremely tenants, and is

this, square of $XXX rate Despite cap for a an at X.X%. asset per paid foot investor this

The October per square second for at trade cap a of was sold X.X% Road Lexington, single foot in in occupied and the foot tenant XXX non-credit XXX,XXX Route submarket McGuire square where building a rate. XX $XXX manufacturing

a Waltham. the of The third R&D and is that the $XXX at in foot XXX campus to traded return that of rate. that -- high Point comp, the in and It for property the reported as that is Xs. Center week, which submarket some some existed X% per vacancy was It closed cap be stabilized last square an known and Route Gauge likely

to and As levers the we inflation, and cap remain creation other rates to efficiently but relatively thus basis a we up, value at pull battle see a Fed attractive we relative less continues value among to to expect positioned well on by other types, creation much pricing our product move sources. pipeline our harvesting fund will

Dean. pass over I'll that, With to it

everyone. We'll Peter. Thanks, Shigenaga in here. jump Good here. right Dean afternoon,

is result of the And over in strongest management company's as the of balance of have team liability is sheet December very pleased decade. history Our a the disciplined this XX. past year-to-year to execution really

the include, our of today. ratings really highlights REIT credit XX% corporate industry earned key top have Our rank in we that the

and term today, basis, of year The XX-month X.Xx, times fixed debt can a this to of strong macro a is Net was ratio $X.X REITs on a XXXX, adjusted outstanding debt EBITDA very on a quarter remaining charge a and weighted XX.X% only years. small No to debt important environment. handful the us in billion was maturities with of basis. flexibility X.Xx fixed statement until rates. liquidity coverage trailing annualized ended interest of subject make tremendous average debt We provides X.X XX.X at that at

X.X% Our highlights the XX-year in bonds, with team, Outstanding in team by billion include capital cash $X.X had highlighted, creation of Peter $X.X a partial cap in sales, as statistics completed execution average with and strategic gains Key and rate of our had value in dispositions, of on on XXXX. tap February reinvestment. for value, amazing billion years rate outstanding significant outright excess consideration or exceptional $X.X plan. aggregating of an XX-year a our interest on billion, XX term NOI, XXXX X.XX%, all weighted execution of booked

disciplined sold of common aggregating equity had We per price XXX XXXX. On average proceeds $X.X equity million of under share. the sales we equity million comfortable under sales $XXX under $XXX basis agreements share, December with issuance the year, of forward equity at December agreements felt the billion for in an in roughly blended modest a $XXX forward at executing per on including

Now for has was beginning just X% improved, briefly has yesterday, Alexandria. market, for below significantly Overall Alexandria and as or XXXX been bonds of upper on high-quality the X%. range of the the for like pricing bond XX-year in positive issuers

asset. transactions are to on that partner For XXXX, are of we other a for $XXX will component transactions continue and this will a portion capital in real of sales transactions joint dispositions partial bring million complete of we equity-type These expect plan. and capital approximately there to Two to year. XXXX, in a ventures provide each focus our under on executed execution XXXX LOI or estate of interest significant

to for and XXXX, for up of revenues team really, over results, environment. We the X.X% operating year of share ahead our XXXX, very full billion, outperforming by congratulations up of XXXX $X.XX, $X.X quarter reported in per XXXX. initial consensus, or over total macro $X.XX, challenging XX.X% execution year to a during outlook FFO $X.XX for XXXX of fourth this the with and our both adjusted and financial and as Turning entire outstanding of

of growth, from and X.X% average record growth volume of financial cash X.X% renewals releasing same-property rental our have Now basis, drove the and same-property X% rate in of and The rental operating and XXXX on basis. occupancy exceeding been to leasing and for our Strong key history, prior of the cash in XXXX. lease NOI rate last a growth rental diving on four highlights XXXX into XX-year XXXX. growth a X.X% growth in including results growth XX% space the highest years rate NOI amazing on truly company's

growth quarterly the in highlighting Leasing Over XX.X% years the been including has the company's fourth cash volume volume range continued per was the history, of average client demand recent the the rentable X.X our last of in feet square two in XXXX. X.X highest full to years, relative robust rental year for the from quarter in quarter, tenants. rate the to

last rentable rentable highest quarters quarterly Now two three years two rentable square the two four the periods the last fourth periods feet including out leased, feet represented quarter. including X.X in feet million of million leased, feet annual of have of square generated square square the XXXX. highest the in

occupancy, XX. turning since XX.X% December Now to basis of occupancy the points was as to up XXXX of beginning XX

of overall 'XX. Now did similar in half occupancy first third a the quarter the decline XXXX, to in from 'XX but in of first XX-basis-point expected in recovery second have the looking we decline dip half strong the quarter the forward year, of with occupancy in specifically the in a We the year. had we of slight into year, XXXX, a expect occupancy

For to generate expected XXXX, rental significant average, on that, related rate greater quarter expect basis. spaces first we in than temporary on are vacancy growth, cash a beginning XX% to the

includes a expirations lab mix of first departures. conversion small over Now a next these few i.e., to tenant space, space, five lease spaces the forecasted and This quarters. redevelopment are early the occupancy for time normal

general with share FFO growth quarter-to-quarter many per quarter-to-quarter growth consistent for we share years, in in FFO our expect in per Importantly, XXXX.

revenue client operational or of team had tenants rental highlighting adjusted of of our our XX%, companies the publicly And team. the by excellence curated of we traded from XX, through highlighting January tenants, collections. XX years. within execution top annual our very collections that just high-quality XX.X% a of rent large-cap the margin strength of continued EBITDA our rent highlighting January over XX% highlights. strong of is key other few a Now has investment-grade list

flows at Cash $XXX at support our after operating guidance, will annual to from very is and stock be continue million dividends per dividends for strong common of midpoint activities growth XXXX expected share. in our the to

at dividends, next was the Our after And years, ratio operating generate the activities statistic solid very $X amazing from quarter. for over for billion FFO and XX% and an three reinvestment. this cash payout at should efficient pace, over fourth very capital flows that's

to Now then the through forecasted in important deliveries of as turning dollar a amount is over peak highlighting highlights. slightly known to next couple to progress, of years. the CIP to of otherwise couple estate Construction are as real of quarter, expected CIP in the volume exceed declined deliveries first the additions XXXX significant quarter-to-quarter,

primarily in As have over to quarter, projected Peter of rentable related we on and feet to In million estate, that to a million million the three next $XX.X few we the had generate highlighted, real are aggregating years. net impairments incremental $XXX XX% XXXX. of sell projects square recognized income we operating assets X.X leased fourth plan

asset Each the asset noncore Alexandria of held represents And own. of is review our as approximately we of The put into base. December the and that perspective, quality remaining $XXX and the was to proceed is to small million that for assets longer selective with sales strategic from time book sale base to value to for continue key this time, enhance assets XX. asset no takeaway

$XXX each per investments, of adjusted X venture gains included has the as share last over quarter. year from of investments. approximately realized years average or on $XX venture FFO million million Briefly an per

comparison quarterly expected in recent are venture to from run slightly in up Now gains this XXXX to quarterly investments be rate.

$XXX portfolio. As in had billion, of investment significant value $X.XX basis cost on gains of of venture December unrealized gross we XXXX, a XX, million our highlighting

our in in fourth years, venture been we portfolio than in last $XX.X including that investments have $XX quarter. million the modest, less million at over recognized Now the very aggregate five

bond guidance. our to held initially to X in cash $XXX guidance. increase million with guidance We that November excess million, XX updated We on representing provided Day from connection for $XX midpoint proceeds minor the Turning XXXX our Investor Annual from of reaffirm update. was a prior with

guidance range as to FFO is from $X.XX. of in a the XXXX $X.XX Our $X.XX share $X.XX EPS a range per change to diluted diluted from and no $X.XX, midpoint with is for adjusted

place, under program, distribution have remaining the we have approximately agreement XXX common as stock Now otherwise in we our known current ATM available.

Please package our file refer a of supplemental new to for our Page to the assumptions first 'XX. strong detailed expect in the year underlying for in X program of outlook of included We XXXX. quarter full

let that, Joel. back me turn it With to

Operator, please. up you. Thank it you for can questions, open

[Operator come from of Steve ahead. Please Instructions] first And go question our ISI. Evercore will Sakwa

to you give Peter Dean, on wanted about just some I just I'm some us to it make interest. transactions changed sales of over guess I over of six of months? line? these more you bit is flavor of the circle any little comments, and back a could made when wondering either finish And market institutional how sort the color has you on some venture sort joint pending the provide of looking can if pricing or past for? the the Maybe timing what

Yes. is Joel. This

have in try to view. give could that on stage letter given the of think Peter, -- number we intent a we're of that of transactions. general I maybe, at kind we'll you a be topside But

X there's Obviously, estate investing Sure. them. a of real right only few in life comfortable in out types obviously, there now. is And people are product science that

this So mean, -- to going have what on basis excited been from we see that calls regular I fairly are we are some partners existing year. a receiving

basis, reporting start peak. to are comments, they'll science I'm very estate. a mentioned cap in given We'll I rise where rates during real now to but scarcity will on data, not life be more I've anticipate, sticky going be. speculate be for my high. to also the opportunities on from And of right As But we once have the they said the as expected past, relative don't we

of then not a just on Joel. acquisitions both did a development. quarter you it's But the announce comment projects, development of for the your versus you are the now, that second kind Okay. rationale on you of I opportunities? think those just deals could pricing know part And question, about maybe and X in huge plan mostly right and how the those strategic

Yes.

to of into of granular, XXX great itself. to mega and that. don't campus, unique want the I a different So some think projects from we those us have together too to the one corridor get enables in tenants our each Route really was more fill than help X,XXX piece three X-million-square-foot and activity one but in I

under was flow. so of optimistic continuing feel that will also lease we're be to it on for number So like very years, strategic. It's very that and back a cash

The under a We of acquisition a period location. unique back that a other a for was it was downtown Austin. acquisition lease in also It's time. superb felt

So to and for that's I spot, what great if future that, do but really opportunity something there's we that good think we'll generate in plan unique business revenue, to continue on a comment won't helpful. is our

The Please next Securities. of Mizuho go question comes from Georgi ahead. Dinkov

I in And could your the an wondering of subleased? more and your please is subleasing sector? us any, was have And what board you percentage, across uptick sublet markets? remind space currently specifically So if the thoughts market portfolio companies in the you are on what seen with your

generally on So, maybe you to comment that? Peter, do want

in our so Yes. that down will I've I couple sublease over last space come of the of for will say overall I got -- quarters. some has -- amount sublease larger statistics markets. the the

out-of-pocket attractive, to companies to want One investment especially built is lab the their that that of limit reasons out in for is today space for the try very space.

at Francisco X.X%. is built about again, of right now And and X.X% is Diego quality out and moving anything has fairly X.X% has that's San only San sublease. quickly. been to reduced Boston So

for numbers these So are very cycle. normalized any all

Great. portfolio? your And comment on could you specific

than that. less It's

Sanofi. I that the you if on some quarter-over-quarter. just rent about question square my on could that. footage dropped noticed by XX,XXX was And color feet square more wondering second We provide day Okay.

don't Dean, I know, that, SPX you if know asset was that what you want or to...

a I'm my such don't don't We it's small have number. sorry, fingertips. No, I at that guys. --

I don't either.

is square portfolio on square artwork. million XX,XXX It's our feet foot XX

of The Please question next Citigroup ahead. Global comes Griffin Michael Markets. from go

submarket I that with. back some maybe that's Route like XXX it favorable there's on touched with Peter, around supply going X more seemed been to Maybe the worries transaction pretty comps. you like probably feel acquisition. pricing

sentiment those on what we a we So you're more product? has maybe highest the quality of when there, out Cambridge that of suburban I market? sentiment shifted maybe suburban expand Boston, market you for has being obviously, there, seeing mean, in think changed think but can sort

Joel. Yes, is this

Let and then me a topside to over make turn it I'll comment, Peter.

I think existing if our asking because you're have about from about targeted we demand a you're it's will different if -- Peter to you generally general have our client asking comment environment sentiment, certain acquisition of or want doing that go, where really base, say, our and game to on companies create do did we plan. to therefore, focused it by we kind is an making, the things sentiment

view But Waltham looking don't view, if topside generally. you're you I know, topside at could on share Peter, a

made They surrounding comp, the that group, $XXX I The reported sold only Waltham, the still other the -- that the campus it the is Well, million two I that areas, sold group positive. think it. five last was think talked it on years. [indiscernible] it I for a owned it that about sentiment for article that was cap, had

pretty ago, the if somewhat it the outcome. paying obviously, million growth a years in So rent it bought believer for they're years maybe that more in is ago two somebody good market. was than $XXX now, And three --

suburbs So not there's the lot buy are Seaport the to weighted or the Cambridge Watertown. in likely that other available comps product very is towards reason the a or just because of

were sentiment opportunities probably just more about it I And says and the don't know anything about So the if the just there. availability.

more demand always be been there the it's for And Waltham now. Cambridge. Route just keep how companies That's decades will of in than in for mind, R&D-light XXX heart in among

partners, these that And much on But restrictions any helpful. anything can fund? well. billion kind can are around that be of down, partners portion would be joint how curious, in commitment got I $X.X then I'm costs venture how you That's drawn the there your think expand of can from that some capital helpful on as year. this plan for you've Great. of

situation every Dean Dean, that, ask but and view? obviously, each different, is upside to I'll Yes. do but

Yes.

speaking, think depending construction over related years our $X.X JV I requirements of do commitments. the the two these these extend for commitments to joint funding are concept three funding to creation partners, the multiple high-level billion venture. value pipeline, on years out, from commitments And funding on generally our out so

the investment of just ventures that to from But on four with the of over coming given the to significance understood our we the the increase wanted joint a in be handful last, projects community just commitments sure recent partners it, call quarters, six projects. construction

So we'll forward. going continue that disclosure

Next from Lynch. question go Please comes ahead. of Josh Dennerlein of Merrill Bank America

there's cash footnote Looks XX% are saying XXX quarter current just market. that your I on a X below to the XX% sub. tenants in in-place XX% looks below Bio last like the top rents page market. current XX saw in was like It

Just curious update? on that what's driving

have do you any that? Dean, on information

Yes.

So it's guys. here, Dean

dive prior did we overall, at bit slightly that we it the modest a So what were the further specific or and reflective for mark-to-market sense at looking quarter had actual little it was opportunity space. we but lower realized didn't property into looking current because it looked a we of quarter. more was the at was to I make as the we details believe showing carefully

at so portion bigger we and they're the building a that as the the looked space And space mark-to-market specific specifically, a opportunity. there's occupying, of

wanted we sure to quarter. the number current that be updated in So we

they or from So today, it's the And overall real but space building. changed that quarter specific just mark-to-market, a this to was specifically, it that it's occupy. previously, nothing

market curious Okay. that it to newer just a It cap. like kind has company. I'm And then type small since the story, -- just disclosure the of on why looks

that. to due really It's

some we research need incremental in don't who market color Some did to a to of top -- to modest not own. list the cap, we tenants or has and investors occasionally, provide that curate there's a just details their XX tenant the on some ourselves want

Nikko of Securities. next The SMBC comes Please from go question ahead. Anderson Richard

be mute, may You on Rich.

about, sorry Joel. was, totally I

comments, you what talked rates mentioned would along partial So be looking Dean, quality Peter, I the you your think, you're cap in interest? far shortly. interests characterize you spectrum announced about for and opening are that of at How and may partial some

forward? a the talking like middle keep to best too more much back the Binney assets Street also while a very that we of of mechanism going cap rate, but relinquish transaction and or minimize your Are assets high-quality opportunity not of is hold the road

that a I'll is I sold we don't outside, think, anything what lot I have of much The good assets of certainly We on of high going those. mean, Rich. of profile still we've start, hold, quality. some quality. workhorse

just we're quality the be because what So interest the partial of on profile sales typically higher working and going now. assets, of our to portfolio are that's

you're Are any... just yet? talking pricing you can give we Or sub-five, not about

we're good pricing talk still with to people. don't any I mean think negotiating really about it I because does

strategy to at And so keep better ourselves to that this point.

And second enough. then Fair Dean. is for me for question

expires you in You have think, your as future an XX with average assets, the your in X liabilities wondering of that matching any said, X I'm the average lease or I you term comparison debt interest provides that years, in of exploration, in I years. stands opportunity way it today. if think conservative

around now that, something ever the or to that you you lengthen future? make that maybe would that a could that the raise in spread debt shorter-term the wiggle Do shrinking place see whereas bit for if just opportunity I'm term is curious lease in gap sense company? little have

longer we the a for big Rich, that a meaningful question the company, find our the a we maybe I given maturity have it. company is -- significant and of way in matches way profile a company big maturity value profile describing I think answer or size is better right, the guess to of

manage term much a debt right? lot any years, lot with more capital. if will outstanding, was be growth average year-to-year that top on to debt overall So to gives a the Because like manage maturity it that longer more profile, us the five flexibility of

remaining So us. I a for real think maturity strategically, the is term of longer positive

go next from of Tom comes Our Catherwood question BTIG. Please ahead.

M&A Maybe, Joel, usage? jumped the was biopharma were Pfizer of tenant their in cycles M&A expansions? and companies funding real or industry, tend or out. outset what at Appreciated Did Hallie's health Peter footprint prior read-through acquirers consolidate comments about during the to for and really there the estate commentary portfolio the further around

Yes. share and give thoughts, Peter I you his. can can my

hard in was level it's sophisticated the because cycles I think of modalities. more Today, so to it's different. much biotech new compare technological past development

to it company maybe the today, maybe a Today, to like market for hold M&A be it's on people, especially is Cambridge. going you're if have used and you to but two. you decade in pretty a a located when maybe top-tier oftentimes a less space is So like buying cluster back critical, space or that valuable pipeline

closely. pretty both the R&D the and in into projects, modality integrated you new technologies, which do for on the also working sophisticated the people Not want probably but recruitment, side lab you've kind only just retention some is so got space at and built manufacturing, of the

I to So tell. harder think it's

series going there's of a whole again, think, capital. uses of of I types be to different

A of be has the There pharma. which been lot will partnering, probably of it will some historically be approach favorite acquisitions.

industry Trade that's days. got in You've to Federal pretty a acquisition Commission any hostile any these

keep So it's probably see the that But in say, to acquisitions at, think in think bolt-on past you'll look relevance is big group technology and has tow. today. easy to people where to that mergers mega any will that, want and don't that I

and life will billion. for historically the velocity, if cash hoard focus think you could just $XXX buy be $XXX you XXXX, could kind depth key what as billion. the seen. Hallie science And and what much the framed out of But line I it, And is in the billion to in addition of you to this Peter, $XXX leverage as large comment be you've what

you like clusters. were beneficial to a -- one-trick and of were It and platform technologies, down. lot developed they good is bought mean, was by down. then bought used company But with completely the M&A, of Seattle ICOS a an they it pony, they were shut a super it in was growth Cialis, rise acquisition of our the the Lilly, called to by if shut example area be you I the

the the but that realized were they Companies that than valuable extremely just were teams buying -- or teams these more pipeline, companies important. much these were

companies. Gilead I bought was by number remember when a got company I of mean a there So I were in Seattle,

They -- approached they was tenant. with we a Pharma. after that, and XXXXXX-square-foot And a huge over us, the expand Gilead Corus team. was deal It called them XXXX-square-foot were ended right of the so capabilities doing that the could it up a

flows. said, Joel it ebbs as and So

world, fact from the on at XX% or XX that that, think started platforms market buy the other biotech years, hit and teams certain products place look to innovation about generally because external to up in that and about products hands, that, you end the the if it's that a think is their have pharma's I they initial telling to long-lasting pretty strategy -- have ones. the -- I But companies of behind in have cone keep in

has my... recent So years to them I and would expand. trend be the been in to in think That general place keep

final on any that Yes. Hallie, comments question?

along very Just of types that market acquisition the base terms in. acquired, comes to say the it, talent of that in that it's is unique products the with be being to every going

the the very are nature And ultimately, aware we we ecosystem. And tuck of where so acutely of one-off kind it positive acquisitions a acquisition. into in of company, much the every see they for net may

it's a companies go company folded get after multiple on executives X those small If to in, does or more that create that.

that past CEO the company build on and a we've company. had gets a some So of even in then bigger to examples and great acquired goes larger

So matter altogether, say what is. the for it's would outcome no I positive net the a ecosystem,

great X their and then Celgene's is of Bristol-Myers, critical that's really most of outpost. example great Juno Peter the as Seattle, a advanced one cell acquisition in And therapy by acquisition another mentioned,

So again, case it's case, almost by Rich.

developments notice did there sale Great. are serves a East plans, potential If we current that Pfizer, moved asset. any, thoughts intermediate Street from memory that a if there. I with on me, in I to building leaseback really X-year future was your project? appreciate think XXX New XXnd the York, Maybe developments. in that sticking on What

Yes.

have for X leaseback are to is from unique be that so They client some our that building, it So their but base, bones current Hudson very Pfizer, it's moving York, few do we to Yards, for which you so. converted a lease out the we and to office had lab. demand years Remember, and know, acquired New we're an or building up, about I buildings think, as Pfizer. internally in along. to have generated moving that But

RBC Markets. Please comes ahead. Michael Capital question of next from The Carroll go

the that I development to dropped I outlays demand that level product mean build months any off past the the given the pretty XX have invest lab significant where noticeably amount pipeline in markets? disruption know in to you out a of cash tenants built-out over But space? difference of fully you're capital X need your has is high. for demand do noticed in to tracking

Yes. Peter, upside. you could generally to comment

much a of just sublease demand. lab of is years, out one to is that X the high check satisfy the cost almost stayed and not more -- that market the to the created the about Yes. as there's some in been reasons though, even just news, expensive a companies lot construction has has disruptions when now when fact talked there's for all The proposition have build of you space. to space sublease we've

So is costs. space do expand company a though where if and even space, be square sentiment they a there building different that deals -- to wants existing still I continue to in But XX,XXX into to and available existing if try portfolio. consider even and leasing today it feet XX,XXX neighborhood, doing they're there But to given our go there's the of deals go. development redevelopment different your our and it. that tenants might mean, in have and to Board grab you're our a redevelopment We're space, an just the as such can invest development going of the just fine to

like is the from the you're do competitors first-generation is in that development Dean, drop-off Okay. that type you mean, pipeline? is space? coming I where know demand if on

and have think our mean that for facilities. excellence be the I of -- the talked a we And it brand. as about bring, don't said aren't they the successful lot to the just the reason we've it's about I management Well, to operational because there's design facilities years the years. of others that

it's projects there's they've out -- to vacant, after things. pausing there I think the number even of extent or gone that vertical are a remain that

isn't critical these location very need is because to a three, the basis high manage One they've don't to two, good; they and isn't have rents reputation ours; their they comparable very to, underwritten that infrastructure building.

really of that, behind say buildings lot would the reason not... the I that's a So competitive

budgets, on X exactly client came in overruns we huge can of and project didn't went space to there needed, that a I developer on when they And overrun Boston they because back where have then a the the had us costs. major think

time. goes that on the So all

looking then at fair me. roster what Okay. happens give I off mean just a read? I the list. prior a us there? for that X like was dropped Maxar versus I looks And quarter, tenant of And is sense you Am can current looking at your Technologies that correctly? it last and the

own project redevelopment Yes. out and that of That and a where future a rotating development. is we development be that will that, -- project they're

Yes.

Please question next Robert from Our go Baird. of ahead. comes David Rogers W.

of kind of was function XX%. that maybe. some of sense rents down? more can to science in for Or the be of December, leases I a of a give been reaffirmed leasing different for excluded a strong talk last you performance the guide year, that slowing quarter, think Maybe But about incremental When just may about company obviously, Is that XX%, that But component us for Curious this to night. more there you the wanted that function of kind leases pool? is this in market very said to XX% is overall. of I that X the Dean. you have But had which you non-life was that that to spread. the XX% kind added the gave at

Hard play statistics overall, it, our But as well, out non-lab percentage at future, really to expirations will Lab it are the rents remain rates leasing mix healthy all strong. tell product. we as the remain to expect you even call results. certain certain coming and slight from portfolio. here. accomplish, Dean look we is into There trending a in of blend Rental and together, is small you product 'XX up a well when with that very activity fourth go its lab noted out in you Dave, the rents can quarter. as from leasing

level? higher-quality even then assets. and What of A- kind maybe in between the kind sounds in might lower-quality of that replacement to of top today of three your rents kind of like be performing the maybe where last up, growth, or a fair. clusters pick terms might like be traditional maybe rent look market does it's spread at kind That's it question bifurcating more the going where of asset And follow rent probably a across today in Peter, further, terms portfolio market versus maybe

I a competitive have outside rents. don't the our from lot visibility can to hearing are to that only buildings. asking of really I of speak rents just we

new in buildings product our over much premium between newer product, of buildings. -- Typically, and a older Our XX% our you older there's see it. not to spread XX% even a might for

that I probably the today. lot amenitized. valuable the existing suburbs, say also, the of the assets makes quality overall more -- of speaks out But of stuff that's could would existing We it you portfolio. to the don't space B in space you availability a think, our just I think single-story that not have that

type that the are there product in premium. of to to give math the Still, $XX for $XX fairly close, $XXX in the $XXX the to in -- will you or the the the and Cambridge mean, the out that still greater do you Compare Boston, $XXX can that $XX I It's maybe to but in rents, I and rents Seaport. range.

really, movement for in I might the high-quality have I though, has think that for held lab I that's us. still office with lot all rents like fairly concessions market. read have in are you a strong, have know And that and case a overall, not say there, know at market, seeing concessions the I the and I really and the buildings high. but rents be office big not would gotten been about space regressed not

concessions have constant. have Our and rents well held remained

The Street Advisors. at Please from next Burzinski go Dylan ahead. Green question comes

just converted some the seen guys you have the for versus cap have rate the differential on purpose-built between transactions lately. happened lab at color rates of any X? But cap when And that I curious, appreciate we look product product,

is on is talked and I Burlingame just than South don't the specific any San just conversion. really terrible in examples It maybe Peninsula. comp Francisco. is other to close very the I a have about what

fully I than expect at So illustrates at XXX I be a cap conversions would almost lab leased to rate, to lower basis good to that that an comp points X% quality, aren't probably in appealing. XXX think, get that. least purpose-built Berlingame

not almost most don't And work. all, conversions, but all

and see are picture, Okay. markets I more the And That's here? certain maybe or supply become of helpful. at starting where submarkets looking to pick then, guess, supply up just risk there you're a

From supply standpoint? a

Yes.

Francisco, remains the of mean, still are our few -- been where last the the is for is over South talk not changed. We -- are it supply numbers have. really has The Greater and broken in assets numbers markets availability any way. overhang about that talked I of what's That San -- of Boston. lot ground, of there's that Majority kind quarters. some about in in a they've biggest supply hasn't

is competitive is. them the to of Summerville not in product lot area, are A our which where

involved yes, best So think that X have about we're to to But get concerned story about. very supply to we locations in the it. not are that get. are is trying difficult talk business. the always I too But the People

point. to limited have no people out other fan such And I tried some to areas Summerville with success, at think, in this as

for Okay. me. Thanks. That's it

of Feldman Please go Jamie Wells Fargo. from comes ahead. question next The

Thanks for question. my taking

spoke quarter-over-quarter. rents been effective and portfolio But rising of markets, seeing show kind flattish some net it So month-over-month a differentiated is. AllexInterest market the I you're look if concessions in is you you does these declining maybe and know leasing that demand and rents lot how of or about at

you looks at Are I And seeing some really we're you you grown a pushing versus what market? can know portfolio? but how said your are provide for in still concessions just your haven't that all color you in lot, seeing rents? more I mean, maybe overall that business the on the

Jamie, time it's have Net been here. our effective Dean for over positive rents business.

it's declining, increasing. not it's So

maybe say net basis, Do how you're how a quarter-over-quarter? that effective much by like you Can like rents? pushing much same-store

look, exact it it right trend. cash the rents, and Jamie, substantial, positive have just right? off and GAAP effective me, reviewing solid very front right? but last Because increases rents -- over are but GAAP is Very little base up. net don't bit, Those it's statistic, was I their in but out period-over-period. we I very strong. I don't your rents, recall the is Net trailing month of effective mean have our it significant still are based directionally a a

Jamie, doubt, are the between wouldn't offering gap bridge and reputation I that what concessions quality to that Yes. try to they developers have other the we and offer.

point. numbers still Our stable at are this

one. just agreement how time just all this -- a Typically, the $XXX why at year, the great That's you -- to then larger you you something in I much million about forward equity I noticed you'll discuss decision equity you Can quarter? saw did can this news. And the And fourth of Okay. quarter. do sometimes decide didn't you just bigger? do the think do

Jamie, it's Dean.

on, million. As And was the year, raise attractively. an very opportunity a to there we the that it modest we as amount, capital our at looked raised blended we mentioned, commented up as looked wrapping in at very you've our $XXX during overall which year, I

about overall think were the common blended at $XXX, While, share. $XXX was proceeds per done it equity I

modest other just that going but back there's to amount in a needed And to things just second keeping second, just lost a Jamie, the pull page. So perspective, X I your I raised. question, it, we

on XX% around for so -- rental Net was for we GAAP, were 'XX growth, the But year rate cash at something year. effective the XX%.

leasing in show I spreads. up mark-to-market but of color rents? get in to I net the keep month, just guess basis, going effective more But are hoping on versus that. baked-in think a was terms you like last are you in you I It you have sounds just able that's still, I to on pushing a to was thinking today. market nice mean,

Look, for XXXX, are and like. It Jamie, year going what we first very like quarter look to the is strong. asking the the in sounds fourth you're quarter

an the first again, have into for XXXX XX% is net effective, don't I going on quarter basis. So but up effective a outlook net

just for so... cash, too directionally, GAAP and our And at look guidance

Okay. the going And back That's raise. great. I equity guess to just

So fresh and things about equity? in would of like view, your it kind you 'XX a sounds then raise of cleaned like that you up kind -- XX-month is of how kind on think start for 'XX a it

for And Jamie, Well, that focused important, more of mentioned, of of inter a LOI sales probably broad our remain the right JV moving are for think partial maybe advanced capital, capital as on couple and transactions got significant equity-type what's component I fairly for executed through. bucket we solving dispositions I now we've on XXXX. a capital plan and

So it's only January spot XX, on good and we plan feel like there. we're in our moving a capital

so as been in it mind as many that's got well, now. years an Jamie, component And important we has keep to that, for

next ahead. from Omotayo question comes Okusanya Please of Suisse. Credit The go

interest. Just a quick question on capitalized

to a I capitalize was there think guidance on decline in But made slowly have CIP CIP deliveries. then as capital start above think difference? Just first is meaningfully used would and reconcile I year. comment CIP? quarter Or do that that? you earlier about peak kind the help the cost believe the just we us higher of to being of how you Can last

your Is question just the growth year-over-year?

Yes.

undergoing of construction is year-over-year today. of just function The growth the a size more activities

our starts either construction XX% from leased. or know X.X have on disclosures average, near-term million under you As we

I'll the the the $XX it quarter quarter, in third it of the quarter-over-quarter. up of $X about reflective If million million quarter. which capped was cap $XX.X basis in construction, at you interest million. average prior million $XX interest, million $X it so for is under quarter, about was call was the so It fourth look up

project that the out you project $X guidance. quarter-to-quarter, end our of bottom $X you of just And what just the like. look kind of can at you're continue double that out or million that would to of year the to If were half now range increase million forward, point from

So directionally, look it should it make a sense from rate at you run perspective. if

significantly activities actually year-over-year. Again, amount of construction up the because year-over-year, it's were up

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

feel first call. you, forward and look Be quarter to we Thank to everybody, the well. talking you on safe,

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