Alexandria Real Estate Equities (ARE) 22 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the Alexandria Real Estate Equities Third Quarter 2024 Conference Call. [Operator Instructions]. Please note, today's event is being recorded.

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

good and Thank afternoon, you, everyone.

statements. call meaning the conference differ from the statements actual within the Federal materially forward-looking in projected forward-looking of those Securities might This results contains Laws. company's The

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

Please and go call And Joel. now over the Founder I of Executive Marcus, turn Alexandria. would to Chairman ahead, like Joel to

Thank Peter you, everybody, welcome, to Alexandria's I'm here third call. Paula, and quarter today and earnings with Hallie, Marc.

And it and every economic quarter huge this the post an third of family and member and you each as to team. to Alexandria thank every quarter performance stubborn and to profound first continuingly I operating in a congratulations of and impressive all, bringing extend financial environment for do operating our a team

me an each you. Thank and to in and large. day every You're inspiration small ways

backdrop huge economic a couple estate address by me you give stubborn and and and just those. quick But of continuingly in $X comments. and will handful areas the Peter investments, unnecessary for the over Inflation is stubborn the plus. structural reporting. federal remain sticky, what labor last of many Driven Marc despite The trillion on let risk department years, real commercial and deficits saying

high much date. the it's the is of to clear. across stubbornly in Street equity capital also the is rather and United delayed despite hurting capital feeble markets, Main States, debt of again, cost responses pretty Our And the Fed and of

the the things past, said say States life one and the -- science the this a few crown here many on times is comment will couple but industry, the in the industries Hallie let jewel in is which remaining crown United real and human of bear address which great remained the path over in depth me novel I've of today, more true and and our unsolved diseases, innovation. on citizens health of burden only of our bastion of system this XX% and and effective translation is an innovation, unbearable to solve care

began XXXX. Since and almost to of many after free XXXX. hit in bull decade early the through addicted appears its of attracted from drug flowing in. be of pile too in the bottom of too And to October what Unfortunately, almost and XXXX downwards kind biotech and of capital industry became XXXX run

some is ] money's, sustainable. ship caused And investors, the a the normally which both rocket of Fed not of outrageous a what wanted really exit and for [ really and and stupid from demand

And since settled have things down. then,

in tail prefer later one and Here a highly, I we but [ in toughly ] we're are, disciplined I almost and to XXXX, funding X started XBI market, in to operate. a off the say, years really since would personally February which

not successful an successful As or XXXX of stand-alone awesome. biotech less is stupidity altogether, remains Less example which seen half either exits, is is market's companies. from IPOs disappeared to awesome. majority this of less The exits, awesome of which than than which XXXX

capital. With a excellent. thoughts and liquidity management truly A to of with balance strong market. Results team, quarter, kudos impacted couple challenging on our might continuing a sheet great cost and and third the still the operationally and difficult operationally financially take in supply demand both very of

our FFO rental growth, strong And growth share dividends to environment. share per In tough year-to-date is, I of despite my key per quarter, takes and we deliver think, is rate the think the one increasing which third pretty I continue exceptional.

Marc think in of is what leasing quarter strong, million almost square sensational. will Peter truly stands and and about. which And quarter-to-quarter. Future continue increase occupancy, capital our program XX% year, successful self-funding very a out continued talk at talk NOI activity will rentable nearly X.X recycling is collections what $XXX about, feet million, Marc which We high third a embedded of this this I XXX% the growth

Buffett at changing about government investor innovation health ever unprecedented innovation. industry, of finally, doesn't the has future we -- than and like the truly screw said, building Alexandria optimistic human this moat. of experienced, market. more and of industry the enduring it I -- really this And Warren this was out era have market, to great assuming of our forward, saving and build an Going precious must continuing and remain XXXX life like the I the depths from vanguard business bear up, I the as master of of the like promise life feel still

words developed me to exceeded during And an couple more over during aftermath the our to revenues on we created back of let predicted when strategy turn pipeline back crisis doubling of conceived XXXX depths Hallie, in really before the of our, financial we it predicted of long XXXX just think, say bull -- to our it a the I of on XXXX which of from era. the the as market -- much finally, the development great strategic we our XXXX the of I unprecedented

also or revenues locations, will rental years higher very superior the and return driven convenient mega competitive for services our best on highly and overwhelmingly growth. for decade, Best paths assets, unique campuses. tenants short that X retention demonstrate recruitment our and best clearly XXXX, investment, end In compete be of by higher best rates, and December this multiple by occupancy, our

And so over that, to with turn it I'll Hallie.

the Life diverse provide Markets. update industry, starting Senior life Thank followed science the Vice Capital of on we an our with and of you, science approvals FDA current a by and review Science will is This tenant This afternoon, environment across base. Kuhn, Joel. Hallie funding President life

have is biopharma approvals been to these deeply held that Alexandria's the the commercialized novel and moment developed lives tenants. mission or Alexandria XXX and have companies the inspires of life supporting edge FDA. XXXX, That's the specifically leading on XXX, approvals approved since by improved at what innovation. Taking have medicines impact immense XXX science the extended reflect there half, been a of industry, of by Nearly

Let's this pathway. truly or saved. period, will stunning. to ones more an goal approval years the million that That no medicines loved than a and experienced cancer. diseases an have effective known accelerating the XXX,XXX for supported who is the XX-year approved resonate of the accelerated of person for FDA look with were treated cancer medicines. created at recent approval as on call estimated medicines pathway access life. the accelerated XXX,XXX FDA's process 'XXs, every example In X.XX has with led medicines an Over patients to years with approval for additional These It's of live XX personally

to the on capital Venture XX% our turning third which life ARR Now year fundamentals. XXXX private of biotech and is healthy. highest This may to eclipse is to science tenants, record. tracking be year deployment is

As Joel demand rational disciplined, transitioning ground on mentioned, model investors The the and to translation and focused a are is technologies valuations, just-in-time conservative, to on derisk steady for highly near-term milestones. space.

model is flexibility mega this Scale positioned and growth core to in are campus and why strategy Alexandria's demand. is well meet extremely trend distinctive to this

highest ARR, catalysts follow-on continue additional respect public financings without access focused These X% of data, clinical the second struggle clear while are year subset capital. with of compelling is those financing on clinching pre-commercial the to to on With companies, record. our to companies already robust, biotech

a companies market over this broadly. year are of issue of went trading IPO leasing clinical indicator companies will as meaningful and future also grow thaws more public price. conservatism for that be half and Board XXXX, their has Further number 'XX particularly the The opening above narrowly demand, positive market with IPO as with assets to these third investor of data. for companies and quarter the opened, derisked The surpassed IPOs has

considerable up to Commercial XX% and public ARR, XX% which biopharma, ARR to pharma, and makes around stage R&D, to multinational externally which continue via commit programs makes and large both partnerships a dollars M&A. internal up

with the biopharma. Importantly, cash amongst top billion hand over on well capitalized remain they XX $XXX very

House products, view this has represent is passed limit the contract science manufacturing research the legislation minimize will an BIOSECURE awaiting legislation this organizations near-term tenants, to Chinese provide life the a could incentive and Next, grandfathering tailwind research Act We Notably, select contract segment. It across service Long If a positive. while ARR. impact and in creating for biopharma demand U.S.-based for passed, provisions to includes utilization this XX% which Senate. device as vote and organizations. to term, largely the of onshore capabilities.

institutions, government generation represent Institutions to catalyst for and which continue medicines. Last, the next discoveries that be form ARR. early XX% of biomedical the

deep long-term and XXXX location, As Alexandria. in institutions expansion our focused our Eastlake Eastlake the into trusted on buildings Institute plant relationship These right partners Fred the Hutch XXXX with infrastructure of region, right their and as Seattle such reflect. landlord ecosystem, neighboring to and XXXX sale our right routes Cancer

to to the on more and lens no diseases spend say wasted limited a incredible be options. or of long-term curing on the put positive estimated the as goes individual's managing annually both in even of savings administrative that novel perspective, by health to conclude the have Widening thousands than care medicines health trillion U.S., medicines. XX% is in the nearly $X.X health the system health All and less spend. impact towards opportunity have health spent on that care To in drive preventing, with costs we care XX% of care broadly unnecessarily to or treatment

over that, to With pass will I Peter. it

Hallie. you, Thank

improving the it's into estate I because my on couple the of wanted development ways. office pipeline, a asset health to to life Before and supply on of the science comment I real sales, market update in helpful get leasing

office locations have for market the ceiling historically and amenities. tenants appeal competition our floor attracted plate, science life been tech to of centers of tenants healthy a our First, create heights and as and innovation can

misguided estate offers real alternative the the life pandemic. some that's of Second, science office since an added been for supply

in the real We Bay. Mission leasing the place time are it boom office taking of with seeing

the OpenAI and completed last quarter of added lab XXX,XXX Froncois property sublease way, at our being XXX,XXX space. the quarter neighboring feet XXX the a Terry which, was marketed by Street square Third in fourth at and XXXX XXXX as building, square another XXXX, foot

once is that now is X and understanding one at supply. competing Rock, also as Our tech were was which future including company, that lab them a for that of that negotiating other Mission identified tenants link,

development, delivered quarter, square of high was in at million. the quarter located deliveries stabilized incremental the equaled we NOI feet our $XX The mega leased, space the the In XXX% delivered with million, of total annual submarkets. pipeline, XXX% yield bringing barrier-to-entry the of to The average X.X%. year-to-date in third weighted strong during contained campuses redevelopment XXX,XXX $XX

the result feet, leasing second be in redevelopment light, XXXX space available the feet. later. XX,XXX After at most available for won't driven and square pipeline for was lease suspect the was development year total occupancy quarter, a XXX,XXX for the strong the square until of by We to that or fact bringing the

as In turning by overall and them activity XXXX activity Projects project these projects accelerates illustrated are expected XXXX as and and Boston, most and them. of at XX% leased. beyond today's leasing one being near encouraging we our XX% market, XXXX is Greater leased completion, have stabilize in active because in or of projects deliveries each to in our proposals

X.XX unmatched a long-tenured Transitioning supply, up campus the of which mission-critical rate, renewals of was very asset at internal was with in the leasing excellence mega by facilities. platform retention trust XX% to significantly million leasing and driven XX% operational quarter-over-quarter. leasing our and know-how This our volume square providing in and illustrates running our built feet, overall strong brand, services our teams, power by robust

large increases nonlaboratory X.X%, X.X% with cash and tech rental by a to lease were tenant. a respectively, influenced and high GAAP renewal credit materially

modest, supply, the competitive durations space. is quarter. with X.X years and weighted third as reminder, be released the for average we the most increases a Although renewed year delivered new in were XXXX a are through for has lease longer been going pleased to and that at of deliveries coming peak the On of

million In in the anything In in Bay it's our XXXX Inclusive approximately is another X is and XXX,XXX San of supply be square in to feet XX% Area be square it's the largest quarter in Bay competitive X.X% delivered markets. In to and feet will XXXX, square be and square delivered Boston, and Francisco XXX,XXX remaining quarter currently X.X Greater X.X feet feet delivered feet be square X will tracking In leased. be is feet and million will X% is leased. Boston, for leased. XXXX, not anticipated space region, Greater to be fourth delivered square pre-leased. that leased. XX% delivered delivered In We're will be approximately the XXX,XXX XXX% XXXX, fourth million of delivered, in there XXXX, of it's XXXX.

In and be competitive XXX,XXX will leased. San leased. in it's XXXX, quarter to in And to supply Diego, it's XX% XXX,XXX feet feet and see leased. fourth X.X be it's delivered, million is and in delivered square to deliver XXXX, expect square expected the square feet XXX% of we XX%

just submarket respect of a our the value X of to update asset highlighted With of of harvesting north We've past the XXXX the the value be conclude the harvesting million weighted towards that recycling commented I'll of an program. our on Eastlake asset on on sale transactions Avenue by East, Seattle. with year. third the calls quarter, we $XXX will closed heavily in end link asset core transactions sale

it's transaction not our attributes. constructive know, several sell to but intent core offers assets, this As you

driver to mentioned, is was and relationship us with at as with of Eastlake East science an major a in neighboring institutions Cancer opportunity gain. This Hutch prestigious it who Research one which afforded to assets life to our region. the First, existing well estate the Fred Hallie as for a opportunity the sale in clinical Center, the taking and us is Avenue XXXX them real deepen fantastic the the out recapitalize most Hutchinson our XXXX demand partner an a research was world, of

the term entire a for XXXX foot the transaction properties, building. where occupies renewal provided recap XX-year square early the Hutch lease inclusive Second, XXX,XXX for Eastlake those of at

Third, it investors our upon NAV core provides assets. can the of which price and analysts evaluate discovery

value. We pricing but buyers user sale, a market to that in acknowledge going was this any rational neighborhood require the of

and the foot X.X% of rate per value we $X,XXX our assets. representative square campus value So mega think core of is capitalization the

Virginia of at asset acquired of quarter of value pre-IPO. East Northern a Newbrook transaction enduring a our the that Street the a asset completion XXnd announced XXX workhorse X.X% into testament New and fits longer sale cap $XX the XXXXX out it we previously is no sale York strategy, Drive but rate, as third City in to our the base in Rounding of was million the

we several expect close forward, look the we with tap end transactions As harvesting to to strong value year-end. before on year

excess suburbs that will to of research a in was buildings include one-off the Class We be part dispositions of another are have million a owned land set development retail of assemblage land that Maryland, suburbs deposits. Boston, Boston, in campuses of submarket we assets located $XXX.X a that outside which in the redeveloped be buildings in a Greater Stanford subject nonrefundable our Greater to one-off a use, mega of for the pair on our office asset a Those B will a sold of triangle in core of and user. building

residential sales of dispositions million executed expected in proceeds Rounding stand-alone or will for out expected and is letters set from $XXX.X Approximately are no XX% intent to these residential our pair to for transactions developed require and are of come are that our of our to in longer will and strategy. bank quarter fourth into subject Cambridge purchase a development be a land assets The sale agreements. re-lease that the assets fit capital from that balance significant demolished buildings noncore be and of use.

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

Marc afternoon, and Binda, is This good Peter. you, everyone. Thank CFO. Hello,

consensus. X.X% for development for the our adjusted line by XQ XX.X%, same-property of quarter quarter. over diluted redevelopment up 'XX, We share is per second $X.XX, primarily reported XQ 'XX in over operating and execution solid XQ and FFO and NOI solid strategy. continued financial with results were and up XX.X% 'XX and the for and was respectively, performance revenues Total driven as

were our campuses. relationships Our results of comes by solid rental tenant excellence strategy, mega driven our for operational operating our campus tremendous XX% our team. mega collaborative the quarter our by disciplined revenue of long-standing execution annual from and scale,

for quarter. XX% and be of with cash Collections at large-cap traded tenants. annual from and high EBITDA high-quality revenue XX.X%, at adjusted to have very margins XX% rental We the flows strong remained publicly continue our investment-grade

the over XQ the square since Leasing was be important X.X An for volume was feet, the quarter was strong takeaway up the highest X-quarter trailing quarterly million the leasing results. for XX% and 'XX. average volume very quarter which should volume

tremendous roster XXX We tenant continue last tenant to existing and XX% coming benefit leasing approximately from high-quality brand our of the of over scale, deep our loyalty with well our XX months relationships. activity from

months rate our X the rental for during highlight XXXX 'XX on the XX% the at rate increases didn't quarter R&D XX%, solid renewal lease and renewals growth year full cash rate on an a did acquired for and was to And cash growth on Texas were quarter. numbers basis. rental Rental and weigh strong The for of remains lease the cash tech for XX% basis. X.X% for at a a We X% to basis. in outlook that first of X.X% the down the re-leasing and X.X% XX.X% space for space

solid During about the which our a of healthy percentage almost cash rent completed commissions entire around starting an years XX very average. The cash X% in-place terms historical leasing which this less improvements leases quarter, leasing lease years asset overall average second-generation XX%. also on for related rates to the on about Tenant remains rental than of over were last as leases, and quarter, X%. at base on we achieved were mark-to-market is X

amount our third laboratory that really average projects is of this repositioning is and of expect XX% XXXX as improvements lower some REIT to of larger nonrevenue-enhancing in that to is range XX% given is X-year highlights than several below percentage sectors next we net the on of we've be to expenditures, in do operating total a be been year re-leasing which tenant to This on of in XX% a range, XX% includes nature infrastructure. the horizon. Our other in income the the row and which although expected XX% our renewals and durable higher year space, the

Turning to by cash a growth free same for really on solid rent. some results. was X.X% in rate rental property burn X.X% at Same-property solid pickup and a of occupancy 'XX increases, basis, off driven NOI and XQ

results, X% our growth the for same-property some outlook with resulting from growth our at Illinois we at fourth XXX Street, where XXXX expect will rent guidance. termination at do We of the lease Our in the solid lease of basis update a expiring at mission-based beginning occurred pressure and no same-property on midpoint full little expect consistent a that our year of XXXX, is X.X% cash be quarter of last submarket on the fourth the to 'XX. and quarter

our XXX% do As same-property a of consolidated reminder, include results.

$XX million even going So will we our this the property, in annual only away though the quarter XX% fully in results, even pick reflected of though line XX% only interest this related bottom up share. approximately FFO rental in the tenant be a to have particular fourth results same-property revenue will

occupancy. to Turning

quarter, occupancy over very continues solid results was basis the X is the quarter XX points quarters. the and For the at which last prior up XX.X%, over steady

guidance on of XX.X%. range the We year-end low to XX.X% occupancy our of to expect be end

for quarter again feet. X.X our has of lease XXX,XXX are expirations On feet. square completed expirations team modest XXXX 'XX And at strong lease great balance million the of with the leasing addressing square volume a of the very the done expirations, in rentable remaining only job lease unresolved

lease XX% as and expiration. downtime re-lease have spaces with rental across average require the the Square million or multi-tenancy. with million highlighted Even to buildings of rentable revenue few annual annual reposition square on is Looking these our ahead remain revenue are the the $XX to months XX XXXX, following Street same-property may XXX which for feet lease related rental basis. to XXX,XXX though spread X and expected to Illinois XX of first projects Alexandria aggregating pool, expected properties weighted the Technology XX% total to capital some quarter key of projects a time are we that to $XX of to expirations a operating

the primarily delivered Moderna building last The and XXX,XXX the project year Alexandria square And their expansion out Technology Square supplemental new Illinois XXX footnote on with approximately tenant we for of late we early of the to X of are to additional foot our to Binney. Please relates Page move details in discussions Street lease at half property. package to XXX there. XX the refer

growth. On external

continued annual strategy we incremental net and from to our XXX,XXX operating million quarter, feet generate the delivering which by the square pipeline, $XX income. development rentable will of on During execute redevelopment

leased X.X years, XX% of over are rentable projects including and redevelopment $XXX generate million We million the negotiating over net the square quarters. feet next development have operating next or are million of projected to X and X.X $XXX that incremental income

next the sheet. balance Transitioning to

strongest U.S. continue one have traded We to the REITs. balance sheets amongst of all publicly

credit our on Our We are publicly debt achieve X.Xx in of year-end. track to annualized ratings corporate quarterly REITs. the on adjusted of top traded EBITDA by ratio all leverage XX% basis to a targeted remain U.S. net

last liquidity XX.X%. tremendous rate weighted years our percentage funding debt over of X remaining and billion, $X.X and highlights term business fixed of our year-end debt of the average a have attractive years average to We debt XX.X with of our commitment profile of long-term of

and continue from and common do issuance the recycle Common stock. minimize of less and capital equity XXXX, stock have fourth any focus on total of we dispositions We funding strategy new sources quarter to amounted our to not in the to to issuances X% issue XXXX. expect XXXX than funding to our of disciplined in

of our on assets, strategy, expirations land nonstabilized Our vacancy disposition with of parcels. enhance or near-term stabilized outright the include base focused primarily is strategy asset and lease not properties dispositions us mega noncore our for integral properties, to to allowing quality campus and XXXX

that Research $XXX was to mentioned Fred is XXXX we've Peter which including asset Cancer Eastlake Union submarket the completed date, Avenue, Hutchinson sales, sale Institute. million sold To of located the in at Lake our

or capitalization pending intent of a dispositions subject X.X% stabilized agreements. to users letters pending of to sold a expected cash dispositions rate half most be of expected of $X.X represent property billion PSA blended to About deposits or another which the X% have and on of sales, executed basis. are non-refutable We with

half other near-term with sales properties represents lease vacancy land and The expirations. the or of

is annualized million million a the 'XX associated XQ important is note cash $XX The $XX.X NOI basis. and billion on It's $XX.X sales $X.X with pending that of the to million a a backward-looking lease certain some next properties not occur the over significant does including expected of nonlaboratory XX amount and expirations amount months, consider of for the nonstabilized to space.

On disposition months given these these the will basis a buyer those expect million to sell that the capital reposition $XX XX to million. forward-looking assets. $XX for by our to we've nonstabilized decline assets assets, fit assets NOI these that and longer we allow invest to strategy And elected no

are pending key million. nearly the $X.X in billion aggregating X dispositions items Included $XXX

Center and Sorrento campus suburban second, Boston sites specialty cap existing represents our various rate, pipeline developers University allow the in X.X% future lab monetize will residential for a to a some cash in $XXX tenant space which with nontraditional lab supply. which million million, to First, Greater Mesa Town our in us market to of adding the for $XXX to without the

this close and puts us which The of by aggregate we the the pending can end of year. all midpoint $X.X of and our the of guidance, dispositions is around reasonably we're the billion, confident total right completed

the our for of a high-quality stock XX% for X.X% with in flows cash expect our annual guidance dividends average payout operating growth per since after also dividends 'XX. increase ratio million continue XQ annual with the conservative from FFO fund to of XXXX dividends and support at $XXX our flows an needs of of cash we a of our XXXX. share activities to common continue We And have midpoint in amount to retaining meaningful equity

rate consistent the since range we've for the million $XX to gains the including year million. $XX.X months full adjusted gains million, were per $XX the X September. first Realized close run to and for the historical for the XXXX quarters Through of with have so million and quarter about guidance ended million. of averaged $XXX our million FFO about Quarterly X venture averaged investments, $XX as share pretty $XX for XXXX, realized

moving our of were straight-line we rent which lower guidance. few lower for G&A, a on supplemental. and to pieces in revenue our our guidance, guidance We Page updated Turning X highlighted There XXXX for represents underlying our per FFO share diluted maintained which EPS we of a the guidance midpoint per of growth of as share $X.XX solid FFO X.X% $X.XX XXXX. to our for $X.XX, adjusted in and for including

platform the enhance and disciplined dispositions look we differentiated over resilience which conviction base. force number we driving of our quality to time as to of aspirations land to core continue redevelopment rental through campuses this properties, As strategy, XQ well and With disposition beyond the our strategy. noncore continue dominant development on our coming and as mega ahead is behind asset increasing campuses, 'XX, XX% campus and have reinforce with of these mega the mega and we today expect our our annual revenue to from

With that, to Joel. you, let turn me it over

please? open have the moderator, Paula, questions, you it Okay. could up for

Paku. do, please Yes,

Joshua [Operator with Instructions] Today's question first Lynch. Merrill BofA Dennerlein comes from

Seattle like those cash Is rate. sale to pending driving appreciated just there cap it's a sales that rate? in cash cap of we the mega GAAP opening X.X% touched asset like that appreciate other, like, comments the additional like the stabilized between on color are what's I then and at provide X.X% the time. X.X% you the maybe any I can to little closer that the should assume remarks. the like bit stabilize, Maybe stuff be on not second that's campuses two? the like I part you your know would a

you to how think But assumption. think Seattle want a Yes, about about... maybe to Marc, that's I don't do think and reasonable

I cash big Josh, term place. rate, Yes, is, between sorry. really market the referring delta GAAP. Yes, what cap that of had there that and you're big long in for I GAAP X% was the to I lease suburban X.X% the and actually think a is was Boston some think it think on chunk stabilized perhaps reason the cash The Greater

think if they're I there pretty to you expect we've terms So sales, you this asset you number cash in for of between year, given But and spread GAAP. think the a had about what big stabilized and noncore.

So we to... them expect

space. that, Yes, interrupt traditional me lab was not let -- that's just not that a

The of land it stabilized like think that's that's was that -- office? that's science, for like pending half So play play, not about land traditional kind or... you're the way not selling, to a it recover life

Yes.

comment? So Marc, do want you to

specifically Greater talking Boston asset? you're Josh, about the

GAAP I was pool $X.X billion you in like, the I pending sold No. going like like that like sold dispositions, that half contrast And trying like to a was be thought of versus I X.X% Seattle. for heard just we're say, that X%. at assets X.X% to cash

Yes. Yes.

of half billion about assets. I terms. a the in So much stabilized cap Greater GAAP one rate cap That that long had asset X.X% we the in includes think given cash wider the we a particular mentioned Boston is rate $X.X

other the The of is of some land and half nonstabilized $X.X properties. billion also mixture a

of Xs you the If offline. coming high in kind terms GAAP it's engineer the math, somewhere of in reverse the of NOI

away say that that next we're for in year. fair amount prepared is I that But happen NOI Boston be will that of a to those going was there's particular selling what in be the that trying commentary assets to

buyer And to assets really so the the our longer. don't really to since those strategy capital was invest any decision just fit there allow that

you have? comments further any Peter,

Northern the assets lab X.X%. Yes. of Virginia. clinical I more question, the The mean, mentioned is space And the I core part it in in mega was maybe is campuses. space cap not lab X.X% I X.X% is that of one of your it versus asset type space, and referenced but of that our our core R&D think, workhorse rate,

my make interest noncore, of was been was that is has a a lot commentary what we everything trying noncore. everyone to to because I been what But unless was wanted selling aware we've it's been in Almost across sure get sale. partial

haven't in while. a interest We partial done sale a

or user just they're not was matter So we sold X.X%. certainly which Union value, right? to the be I though at in asset anything a it market any and Lake of was whether not. buyers has overpay mean from way why. influences value, for even rational And no I And going a to it sale, core user explained a ballpark in it

portion left own example get we're core with what our I campus making we done So mega way reflects to a And highly I trying or we're was to that. on across. it everything have a thought is that what our we own, that what and reminder everybody good assets. was that program, of we valuable once and to comp that's disposition And good

mega really over remember, of campus so That's that to the fit so period Yes. one redeveloped developed strategy. good. or it's Josh, have And XX other the company old, that time and comment years a assets is you go-forward now don't acquired, long just

pretty So that's obvious.

next our Rich Wedbush. Anderson And comes at question from

off? But a your So of billion. $X or I $X you a the of am do simplistic, I in billion value did sales pipeline assume value is to got $XX agree way still assets, of mega would of can the sort what to with development dollar that's bit of mentioned your sort XX% of XX% terms but I that noncore just for to number billion you obligations that and meet additional in in you range, campuses. terms enterprise

do Marc, respond want that? to Yes, to you

Yes.

in there things that time. hang that good resides look may in that really some it's are we XX% of on of good there assets would exit in of some may some I located be that campuses, are think markets that to. to non-mega over stuff But that ARR that true we be

located would thing that I is have we do that say campuses. books land other mega the some in is also on The not

go after. source to also could that capital another be So we look that

footage of or in square located is XX% the mega bank the about think campuses. in I not so land

second then And just a quick Great. here. question Okay.

On $XXX the the am Does third of fourth that another something? million, quarter in quarter? imply $XX gains I it's still year, for think the Or am over I as $XX million missing million-plus full again, done year-to-date. you've the guidance realized I --

you're Yes, it. missing Marc?

Yes. Yes. I million, were $XX the gains think X Realized $XX.X for million quarter months. the for we're and

$XX you million if of million. $XXX the you middle annualize middle of to that, pretty puts that in range or of kind the So our close square guidance to

at I a a thought, have I year-to-date. have -- must saw million I that. for I re-look $XX will disclosure

Erroneous, yes.

Our Citi. from with comes Griffin next Michael question today

It's Michael. with Nick Joseph here

extension Maybe Texas. tenant just the first on with the tech X-year in lease

considerations plans this color went plan still kind into the Just that to if what decision? to of you of and to long-term get your that are kind more space some that on and convert lab hoping

Yes.

don't we're name you all don't strict So tenants in their tech They under big you in do. can They're want other building. tech imagine strict used. probably tenants allow pretty to confidentiality as the put what they

So site. we own integral to which say other renewal very little can campus, actually is than our was to felt we their that adjacent this

particular highly buildings improved their use. for These are

But an this having may of tech kind they is than flow actually and don't half them, than house environment it but kind ultimate be know buyer to thing. just improved. aren't trying of cash goes in quite capital office quite cost as here time. over of some clearly, reposition with So they well. the better where valuable They're market I

see we'll out. plays story how the So

Or foot more still XX,XXX That's the of kind space have tenants? helpful. pick And larger broadly, then XX,XXX see is on just to started from leasing to demand it more you up? square requirements medium-sized

Well, revenue-generating think, I I is middle it's clinical kind on when in approval, you've and good sluggish. And and news. data generally, of where got challenging. think it's it got pretty good not, if in the the steady you've And early still the good side, remains

think don't materially I that's changed. So

RBC from Capital Carroll And Markets. next comes question Michael with our

dispositions on provided wanted Marc, sure I some circle you the I'm to the to everything valuations about back make thinking correctly. on of

the that, So the of there? completed? are reflects know have sales, NOI to of goes away says sales of I how Do we So the NOI there's cash you on X.X% much associated once $X.X which million number kind cash rate. supplement the expect pending cap GAAP billion about for $XX should

around is $XX number Michael. million, that Yes,

asset the about idea? Or should there us timing longer-term is gave mean, going Peter, line be saying And in we I is comments noncore you think you're kind much Great. then, to of is portfolio of the your mean, process? sight significantly of how done a were the once sales, you when earlier, be with quality improved. Okay. that that? going to this I a

say, something Peter of me portfolio be let improved. before Yes, could say quality answers. to the I is substantially don't think going you

assets, best It is already location, first-in-class, best tenants. services, best best

I correct. about So think is you're that how don't quite thinking

developments uses assets deem over the the harvest and redevelopments longer light have We we'll those assets, fit, and coming to the of mega no land, campus and that the variety in also appropriate valuation marketplace. years as a of match and we sources in strategy

So that's we of how look kind at it.

But Peter, you could comment further.

to supply Yes. into is strategy. markets best the our strategy Look, the that's us mitigate core our mega gone campus for

we're order we Joel are of on assets. we assets, our of some them longer it. we of in all campus So percentage is our like And assets are which have ones no part feel strategy but -- good all fund those to going to deem and the we're the our as mentioned, increasing selling in pipeline, be that where mega

take? that It's say. We part going build as good it of no But campus it's common. selling using doing long incrementally How transition platform. good. It's we're to this like fund feel to are versus to mega strategy able we out that hard by we're our it's assets longer our

time, mega increased equity. at assets. same as without issuing the effect occur, the not campus those -- the net is of common And our funding business the sales we So percentage we're

And a balance great the sheet maintaining meantime. in

pushed last of XX schedule, does some the one just reasoning for of that It kind in question why the out? out like year. then color me. you of provide Coolidge a kind got look pushed And kind Great. of, the development stabilization Okay. Can got

the This that more space it's all building. to it's time time pretty It's in rather the take going campus us tenants pretty out Watertown to space of simple. highlighted Yes. to is brand-new most of submarket. build buildings to just clear it's and and a Well, And having available. one than deliver

don't was the which sign know. marketplace. doing just another space after get And a maybe something development, will like the be the lease in I but of lease to of space that, of XX, what That's trying reported, part into, space it But and part end But quarter, can as people there. that we the the we're that there, October available time think there to So takes this the we're lease, challenge I have is that's point. for that, move and to.

Okusanya And question Omotayo next with our Bank. comes from Deutsche

disappearing NOI the million wanted mentioned sales. $XX you the to Just Marc, up follow cash about Rob's billion is question. $X.X on on of

of it done cash that's X.X% kind I'm X.X%. a a So saying developments that but looking at stabilized are at being about yield,

more an I a flow certainly because that we cash of about still again, something at with just to I'm you're or to recurring on dilutive kind are of in it's X.X%. CapEx, being So at selling on mean, at bunch we trying to fund not thinking to going X.X% a assets free understand, accretive be -- AFFO FFO should dealing basis. be

Yes. Yes. Sure.

what in of that cap higher You're require in if we're absolutely those. a selling to what we're right But moment look need you than retenant will ones, time. has just for assets, I a at will rate or is obviously particularly bunch capital the those developing a nonstabilized think significant

redeploy concentrated them product to that the fit was all proceeds those into strategy the mega those in take our to and really and in campuses. assets I the longer the the amount pipeline think buyer do the choice since just of is where any there don't allow significant So pipeline

if think I it use of some tenants a these straight-line And ask thinking write-offs? think with was a that about does then may I if words. one rent I reduction and of kind again, watch in look of write-offs you rents, mean associated know part kind those we just was I today, how may -- whether kind list, XXXX, few of mean The of straight-line more of may about Okay. I another That's I instances some see just for overall the terminations. of lease you one. of and helpful. at when portfolio guidance

you put one I'll how we at maybe, watch to just Hallie, kind Maybe, the of Yes. list. talk about over to that look

it Frame for her first.

time, actually tenant. been that very was there. event a asset inherited operating particular not Look, this It tenant to years, the close it. I kind They've but ago. was close pretty decade long a Yes. in with this a tenant. large there to, over for a XX quite in bought of It think a a been we discrete They've we was when

just our reduce Bay number to campus I out exposure. I years event. communicate happen, one-off sold kind that that want a ago is think but that a But of these we of Mission of do to things in what was And particular

maybe another for I'll fire can answer hold Hallie, on And Yes. your you question.

this been too, I a keep that it's building Marc It in So XXXX, signed lease bought in believe. who there was to the in had XXXX. Shorenstein mind, said, tenant important team when we with in the

and one The instead company, the of the personally actually, underwriting replacement a blockbuster it in course a I Amgen's look just lot the drugs, science the strategy, that and of come down other that whole of through the maybe winding promising was issues injectable, but to prospect when bear so underwrote lost the China time and it, opportunity changes was had erythropoietin, of in in was variety in and of for with have But it involved pill. continuing a combination over to management of we its U.S. most business a faced XXXX,

we track years by of and very we underwriting proud everything one think our did I the industry No has have best capability. best think I fact far. records the the that So could during of of we those all in one the tenants, prudent

the for you question. So thank

Dinkov next And Mizuho. question Georgi comes with from today our

is is This the as exceeding the the on you And midpoint for disposition of Vikram. guidance? what's assets, of Georgi capital? the use potential say, What for best this

Yes.

Marc? So

in almost we're I late think Look, Yes. October.

have now, out I that. expect that moving laid would beyond to either But assume under things don't under probably much at I we're a in looking hard the contract So that we'll beyond continue There to for are that are terms we're -- or actual what we on. wouldn't much do know work asset. amounts other I along that of

second the And of the question? part

you could Georgi? the second Sorry, repeat part,

use view? capital assets you your as this sell the best is What yes. in Yes, of

Yes. Right.

to So really this year planned pipeline construction with of look, we the the fund the the of beginning since capital.

pay borrowed construction the fund to So during which will debt, this the that's used down to And we been happening pipeline. year. be money

expect where to pay that We have do have the proceeds debt. the we actually ability sales down expect, the little year, given we do won't more just are we bit from in to a

revolver expect We be at close should or to X. a

of end the by the So year.

in cash to some So year of hold on expect ought to XXXX. to debt that next we redeployed needs that our reduce do be going that forward can then

as construction funding of development funding were opportunities, committed only at above we're can pipeline whether or these of they in capital, returns cost in the past pipeline well the be you cost But fact where be capital. obviously, that new redevelopment given many of years, projects given look our

So that's how we're looking up.

space you more see How that do just improves. and on And evolving any demand as do how needs for one me. have funding AI forward? lab And updated thoughts drive would you going

Yes.

So highly demand, the I capital disciplined in used I think a is think, deployment, capital industry and has I deployment. been was the pretty both word capital raising

got that. we're But with space. have that and plus, XXX we've tenants dealing So high-quality tenants need we lab

as I tenants. of so think over come And Marc from said, XX% year own have our our tenants last the

have opportunities outcompete space that's we in good. those we So available and if

AI is of remain have moment and two, development language the around going inhibitions quite the it's but AI AI the of world between think of On although for Obviously, use for has companies. been of long early the time, and AI meet days, a best many very the models to very to a drug AI. at I days and early lot world side, those

most are them and fact, inform to In to outcomes. use get to companies targets AI trying to better

development could certainty, predict is most to drug that those no could which where or ultimately, clinical trials. over And save process, one largest make remarkable the going respond the would if, own the in maybe amount my in positively negative progress is entire AI view response, that versus greater the is response of clinical money who setting, time, the with

for that thanks question. So

new a it medicine years of early quarter-to-quarter just Hi, is just I -- terms XX companies, was to to as on unfortunately, Hallie. patient. you research for respond to demand. that can And bit. medicine question bring in I on reminder of public from about going a the just a It think a development, to doesn't layer easily your as to this a happen first takes Joel, right? basis,

and way continue We're to modalities see discoveries what see be to will incredible make on the continuing ground just And right? that innovation, the we to their still developed is new of patients. and forms

are term conservative now, translating certainly that industry And outlook while on in the and is of the growth right to over environment needs we the long the so a positive.

And that continue. right? we across obesity so need outlook in still the leads much innovation cancer driving industry will of so for There's space, example the Alzheimer's other forms demand see the across and the that unmet

And from question with Jefferies. Peter our next comes Abramowitz

and Is wondering Bay just to specifically sort Area. Or stabilized? in if sublease could seem increase? was like space, it does of on it's comment you it I continuing Boston

to want you do that? address Peter, Yes.

time good Yes. still because good look when the It's or on that not just the has space. not it's Anything sublease It that's percentage it's that of that actually space not is been -- state a for are a long. at long, a long -- market available sublease, for shelf not you stayed space things there space stabilized.

seeing now. But we're of market put a space lot not being the on back

not So is what space available generally is space. absorbed being vacant and sublease not vacant space directly and

that's through have So direct, for they there over no although go market, subleasing some want space that's availabilities is But control they're tend because tenants it. tenant to a going the positive if to been the a if sure. possible, all still for at

think capital Okay. generally That's to and tenants go more I thoughtful being just comment, terms then back Joel's in allocation. helpful. to their disciplined And just of

it's cycles of of been changing historically? where today length of done leases and on get actually that's comment where of to sense versus any sort anytime just at that soon? you time Could deal sort And

Peter? Yes,

than in decisions the it sure definitely are the Yes. the at the Boards used IPO taking to all looking Boards certainly, them we're longer Boards to, requiring the to sure. We mix but for companies. all The diligence looking cycle lot really are every are get least, feel in market doing diligence longer everything deal, we're that the options and to at of was wanting to the maybe confident The ensure going that earlier-stage to pretty dollar for early growth a at and deals the before when companies and their make win done. space any taken they're make tenants because leasing scrutinizing has making now all much, are are

next Dylan And Burzinski today question Green comes for our from Street. with

one markets. on transaction quick one Just

are like to the bids the come depth the it have dispositions call, of of seems It commentary on year, to year-end. Given those most in that this those close happened seems from users. to the -- like most had have been that said that

So on base science curious just into of appetite into estate today? traditional to work life from investors the real sort capital put

Peter? Yes,

that want Yes. opportunity users real there the we've there Look, fortunate past. been weren't to that take opportunity because the of advantage out have estate buy had been sellers have to in wouldn't the to they otherwise the buy

really coming more back for dependent is not improve, into of acquiring next it and to so. mode. the investor we're that on some there'll needs lot But highly for money starting that where lot opportunity market. doing to it's it's to for Transaction velocity And sales we sidelines into to a be do year, There think sure. be us are still although off get a to financing investors the

they'd year market. We reverse. And XX up, will back to hopefully not seeing lenders down. start be we but have will, into do all get thought they down, going at are rates to start the because point, that we go now will confidence One, then the this

also increase So leverage an valuations that, opportunity velocity because they'll better transactions an be able on the investors to be will to of that to opportunity them. to and do

Kammert today with And Evercore. comes question Jim from our last

you or demand pre-commercial any it hanging deeper view. pharma. if would the put can, development, biotech, you is in in Is the extent new say around private I'm space, paper redevelopment, that, biotechs, curious the of other you for big better words, where lease-up where are the pockets the it the broader To could the of just sort

a it's and a company get by large. the or has think stage you the I news good yes, commercial I immediately. pockets. common move got And if it's think earlier stage probably then X and mean Those it's are -- most the that clinical I to company

that to And on just Great. understood your make in could if I response. prior leverage sure Okay. comment I AI, last

But in -- terms to for studies, lab that portfolio? mistaken I hinders or AI really in think then space terms does of You am helps that Joel. your thought be of clinical it would powerful demand

in the shots sense provide doing hospitals clinical trial. or opportunities and it goal, don't for it's that on bets more in think others trial if I lease space positive aids a Well, clinical will process, in it targets, way we medicines the to

XX%-plus us, hurt what need products but doesn't that address be that matters of the the diseases to that pipeline So is solved.

good think news So would be that I us. for very

any our session. Joel And to that to over question-and-answer remarks. conference turn concludes I'd closing the for like Marcus back

Okay. and and Thank you, be everybody, God bless. safe

presentation. concludes today's We conference This for you. call. today's thank all Thank you attending

disconnect have your a now day. and may You lines, wonderful