ARE - Earnings call transcript Q1 2019 | Alexandria Real Estate Equities, Inc.

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Operator

Good afternoon and welcome to the Alexandria Real Estate Equities First Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note today's event is being recorded. At this time I'd like to turn the conference call over to Paula Schwartz with Investor Relations. Please go ahead.

Paula Schwartz

afternoon good and you everyone. Thank contains This of within meaning statements Federal conference Securities call the Laws. the forward-looking The company's actual the results might differentially from forward-looking those statements. projected in

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

Joel Marcus

first the Moglia, to XXXX everybody welcome and Paula are Peter you, With call. Richardson, today and quarter me Thank earnings Shigenaga. Steve Dean

entire feel take mission charge is amazing how And this of close going results. had results, to we world-class life-saving to is will stellar leasing of as going a kids. to It concrete. with quarter of home grand -- what and was our on building or really same-store my two addition passion the opening great quarter be unique First than that's in about what time, West noted very this our a is our want relentless we we for developments do thank that had I this of building. talked important. latest the is long and of Jennifer XXXX It in probably more high-integrity day each of building And earnings said, about in going Coast many research our to a design quite every and stellar which mission had stellar's the the think focused has as we're results everything fibrosis steel quarters. an Pharmaceuticals, our Alexandria's At picture-perfect in make we about is about although ego-less continuing But mother excellence day Alexandria home to and in health for and Ferguson further sure to and environment team one Vertex seriously. children cure how be human cystic operational day we to and happen with on

quarter January The company of with and the of on a when closing think Xth, anniversary the friends. start first since million Series XXXX was A we I family $XX the also round did XXth

in grown to We month every cap and as billion. become with XXX try rental large quarter have investment the got of to a tenant the one steadily entire every along and total REIT a every way company of client XX% We've $XX grade industry whopping day of investment bases companies. methodically publicly every first the and learn traded grade end an the approaching annual cap and year or and with week the strongest S&P of market from revenue

High first to lost be transportation home many companies were very the may the It a GM the the for closed. than lease Our addiction may on to a want make War. years. Dayton And weighted home press Ohio Dayton, health and a model the XXth of health and term and population of of company family of safe sober From their know each will good closed, in quality which Verily which for that the lease Vietnam death you outcomes duration reunification, century. this well-being half restoration and as community community prosperous country. certainly America per number we I is in you eight a new focus The leading approximately any annual more century the We died tenants we've the in healthier comments year among and We a of strong release a developed new undertaking, the half health care have remaining while issue day XXX the manufacturing, talk of did people city. companies leading with with the model the half of overdose pioneered each call long transition. XXth XX living, and Columbus patents live of site in -- the superior a among entire scale -- this Verily, cities -- the Cincinnati. I And and and recover We've about has think many in up lives goal moment. for more with epidemic our and hub half. of business sure. teamed in of pretty of the Wright to the of than in capita to declined and steps science also model to the mission-driven more about were Dayton, components drive for action. rest XX-XX turned half the we've With was and overdosing. of couple States revitalizing and is environment and of the Brothers we've the and United chose Fortune year highlighted first is the a XXth average has highest industrial life health this crisis know could a late down the to I human developed between a reduced is of safety cities opioid XXX the hope from fitness the need Wright the The first is Indianapolis, forming America, deaths XXs out two clear I'll and industrial site present, think subsidiary it's of many the U.S. in Brothers NCR XX in per But Alphabet not this about in lifetime. the forming good. in was companies rate idly Many and critically they century capita per or by not were community. be campus stand not heartfelt die the among or here and comprehensive rehabs, of of help Dayton in the closed,

is continuing because state for positive. Vermont who new turned our The at to to So want actually the day Ned environment. National increase a a from at Bernie additional and for campus. of of I revitalizing the life -- an first maintain we ecosystem should single-payer has home R&D regulatory to clusters will and people tried billion demand and in the which around focused on philanthropy the in of it talk developing for an is to research reach treatment and all on have Vermont, in lives for Interestingly wrapped totally about tax purpose tax to all-time they all-time strong and a all of quarter recovery you All on comes XX% -- that XX% is failed that an science center, of to the at Medicare live flows businesses if positive. would pro-innovation helping addiction community a system opioid look tech-enabled healthier income NIH is team for commissioner state I we've the their a to offer continuing all Sanders, the who track rehabilitation, -- create capital approximately five cancer to while been Sharpless, industry has funding strong attempted Charitable in topics recover background continuing housing, $X move in Venture biopharma miserably all services interim care from want and taken investment fallacy. one payroll industry and Institute FDA be moment pipelines. there life highs. strongly system been state-of-the-art plus high. our strong enough ARE of mention science the drivers XX% that and out has the additional a the is Cancer over unacceptable. very tech-enabled to

today, to one-third to group And sense there the no that to bathwater the struggling not got covered So and away by about speak. into so insurance them how X% makes to XX% is it two-thirds to we're out by figure Medicare, throw uninsured covered the and system. we've private bring baby about

hospitals government the at not they fact a And may people is times doesn't expanded have in task. CMS solution excludes than that needed is another costs that's pharmacy Medicare drugs other be cover portable expanded in embedded records the and can't and these exist administration And whole much affordability, agency. actually electronic myth. will rash bills with exposed. are veterans increasingly Medical an just and conversations it's the cost challenging impossible pharmacy up in been very insurances we hospital overall higher and a XX Even think rooms. And by really of be effort. What being It is government-run are today, big medical about marked costs portability. care recently in costs even times cases. of in to access health disclosures a right having emergency and losses embedded So there's often then challenge the all many

see own there. XXXX bit the framework and does say, the XXXX. a a robust its pipeline, XXXX about talk XX what's and rental we through and of of strong In starts has to we'll leasing And little earnings see of to going So future very XXXX not opportunities pipeline about it's five-year of from the have can some revenues from And slowing for coming talk growth XXXX. velocity. Alexandria the we the view XX XXXX XXXX We've a Pages of details on that months, included When highly team the unveil you given growth. out -- on about Alexandria, double fair leased and pipeline.

some as quarter. to and details the me kind of background Steve for let turn it So with intro, over on a that

Stephen Richardson

the and renewal from continue key the I'll upper the in significant our and wait released Thank last and lease the business from trusted quarter San knowledge square one of world-class ample and outperformance have dominant most XXs, net. of research with through an from destination, you, outperform with The totaling science report asset now on serve our institutions its Prop our opportunity a to vacancy a the capturing world-class adjacent will up In of The Francisco settings million by million in The square on the X.X to countries and entire highlighted the and uniquely superb position quarters, market ahead tenants, continue Cambridge, re-leasing Alexandria XXX,XXX the feet foot growth our results. grown positioned focus rate Alexandria franchise-leading create clusters. for San continue really Pinterest team. our provides and as now most rent each demand universities to key has we to together outperforming square Francisco pioneering this truly financial we Joel. million all Rents strong and X.X several partnerships to down rate example market's clusters. has kudos excellent feet will another availability and contributions creating its are quarter $XX our triple in the to our the productive of life growth fact used with each X.X of everybody. and three-point over highly to X% efforts with I'd XX and at science Joel secure providing X.X feet feet. model is as square The Alexandria Bluxome X million to just eclipsing company demand, in square recently highlights of is market. M desirable its in more campuses years run And ecosystems square again urban to embark term. with to of or region created demand having go immediate markets. campuses highlight best-in-class an is achievement is X.X%, to a And like last next life increase important over with undergoing in on annual strong unique explosion. team capitalize remarkable we've without driven Good allocation noted several feet industry afternoon, the million

this totaling separate rental cash with to addition, square significantly renewals XX,XXX record XX% modest quarter's two improvements to XX% increases paired In rate ranging feet increase. with from tenant contributed

square now X% a Moving San and core Diego, feet down square million in clusters to with Pines quarter. increased healthy the demand over vacancy to and UTC feet last X% XXX,XXX just have market has X.X Torrey direct of from the very

ticked cluster. last from Blaine Another activity XX% the XXX company for in product square in XXX,XXX East waterfront Seattle's which future up important grown to And versus the square XXX,XXX our unique finally, in growth has demand with feet released XX,XXX feet Alexandria's square supported against the a feet. suite from feet now positions demand the XXX,XXX contributor on rate increasing to leasing at foot renewal square remains be square and market and feet demand with higher quarter. this rate excellent XX% XX,XXX Peter And well vacancy this that continues XXX,XXX of the well square as for X.X% cash a also a square X.X% as to facility very backdrop of will was XXX,XXX just low critical in offerings market nearly vacancy RTP touch feet. at increase are increases. Maryland

operating into our Pinterest. clear the of reaching derived large I'll and pipeline results significant from from each value positive our On these as our pipeline conclusion, to broad-based evidenced our for future in life development this to is activity, we robust financial markets. is are well the with it science the as near-term and in off So, Peter. look at lease industry very our note, intermediate proposition competitive leasing The posted strong energetically we markets, by with advantage hand

Peter Moglia

comps to Steve. construction you, updating recent on pipeline, next our office on you update Thank going minutes near-term spend provide the costs. an few lab I'm and

to delay increase month million we've page pro that feet two noted delivered in stabilized yield stabilized which office square lab hooking XX% cap original forma for plus feet power XX one we of our comparing good that company yield XXX,XXX in margin today's on Anchored solid a rates in in work permanent we the when range late X.X% Cambridge the to is a over Cambridge, our developed date. the our Binney our we've a accretion points interfered X and market of months with At city news our forma XXX,XXX rates. X.X%. basis current caused the on delay we've to over After of with due pro first over believe performed value noted increased of quarter. cap current glazing we by Science up XXX nominal X.X% delivery South square yield current yield. first cap Alphabet's South Life past were delivered XX% very Grand Street San applies two Francisco we of building by the in feet the the who As building in is model delivered assets. call at XXX,XXX quarters, the or rate January, by the power, More San cash at quarter Verily, Street's our only square installation NAV subsidiary X.X% a to healthy supplemental, XXX last of East including a square Green Francisco a in feet

XXXX X.X% Seattle, new continued the stabilized Steady benchmark limited leasing quarter. the initial move basis So that makes rents market on in Union the us the of a the XX% to contributor leased square XXX spread flagship of new $XX XXX we from supply XXX And yield. at significant our the in there. XX% leased to end to enabled NAV. Lake the a point first Blaine, East our the of history first or for above as in building end delivered over net at feet building progress XX,XXX push at time XX% has cash

which our square it of XX of and square we've reached eight market quarter, within amenitized feet containing in target building as as this space remain square San RTP. of delivered delivered yield, square by at early-stage of our serves XX,XXX the Center of XX,XXX research quarter delivered Alexandria meet gravity the deliveries originally X.X% that lease in was and of of end Park completing received this or base project where expand a will research Gateway office XX% Workday construction. also projected. Rounding feet sector phase Phase the of multifunctional, feet and asset of redevelopment is AgTech, our South development that first square-foot company XX,XXX building out the approximately at that project It AgTech the feet X.X% leased a of X we first at growing we XXX,XXX well for Gaithersburg, XX,XXX multi-tenant, of Alexandria redevelopment has X.X feet multi-tenant over on half in serve allowed slightly than Orchard was Gateway what are million quarter months commencement and the space. center past cadre yield Francisco first outsized of will We of Credit leadership of very campus. higher In Laboratory Palo As in within a properties has XX,XXX XXX XXX Maryland known foot tenant industry our square the successfully development been by latest Quince the for the X the This was Drive there. targeting square at Alto for to RTP. providing the at and our all there

campus, for parking investor which market. billion April. enthusiasm a also sold typically are discuss or cap $X.X The enthusiasm science well South for demand ground XXX,XXX a As pure by properties Capital quarter. Harvard private and endowment office Harvard's including price that science Obsidian and investors, and for square rate. and XXX-car occurred and a foot in sold Astellas lease $XXX rate square-foot Central anchored X.X% and do, and Therapeutics. to Mission XXX building life property approximately in and between Bain I'll to in by mix Main a is Cambridge representing square-foot was this was to and per commentary square XX,XXX Novartis. we The several MIT note for XXX building million, was office includes office notation sales the rate. correlates XXXX-XXXX and which tenants representing Street brokers this institutional are $X,XXX couple real is are have Mission and Massachusetts of by square properties garage. the Avenue cap or in interest about a significant representing leased XXX mid-Cambridge a a a in North, X.X% by Hines million from $X,XXX comps Street of reported it's that I'll The sale per south life a December hearing of cap biotech up Main the foot Street had were XXX,XXX Main $X,XXX Pfizer Boulevard investors Bay a XXXX in we're that Street or Bay from estate Square per illustrates fully sold the with foot, in with were X.X% Terry reported leased subject property foot, for to wrap Gap Francois Third Bay. that investments. our square XXX Both a Bay $XXX.X I'll lab Mission XXX to Mission adjacent purchase The

update our X.X% escalate and for accordingly. on projecting skilled our adjusted in They've XXXX stable except driven cost. than to Seattle construction XXXX So higher being markets, This remained and formas our we've for demand by a pro where are GCs labor. previous is quick projections our

be we City, in see be X% until there, consultant in our but -- For may current or our keeping at further levels pricing. New evidence escalations X.X% our to slowing of may them we're York growing

are tariffs, GMP impact under those are current for our are of escalation budgets project not. and them accounted included we've assumptions As for for in that that the in

will pass to agencies. internal In energy costs including anticipated various Dean. and the it both of programs we're resiliency go now, I'll our assessing addition that impacts increased and ahead required and regulatory to to those project efficiency on be from due goal monitoring and also escalations,

Dean Shigenaga

third, XXXX. briefly four here. portfolio; our strong investment guidance Shigenaga including Dean key our second, updated for Peter. everyone. Good our last accounting our Thanks, and I'll quarter matters; afternoon, to topics XXXX; fourth, today, venture first cover start and and results lease

year. quarter across the strong and for results first that to the financial outstanding highlights and truly operating start off is team board Our the were our for a

XXX,XXX rentable XX.X% that lease renewals on redevelopment and highlights significant approximately executed. leasing square square continued contractual beyond Well, leasing feet quarter XXX,XXX first cash XX.X% basis volume rental a side increases explorations development feet of to rate rental and included and at strong releasing XXXX. rentable of velocity XX% rate leasing The of almost of the this related growth. and space and was

continue renewals leasing of velocity. rate drive So to

differentiated clusters. cash from and unique in annual high-quality flows properties in and business strategy generated Class on life sciences Our our A campuses AAA our revenue. locations technology XX% innovation focuses of collaborative urban rental key

annual and of of for positive same an revenue publicly roster traded solid among of and from basis rental investment-grade large-cap the our X.X% favorable have operating property solid strength fundamentals, NOI with estate high-quality life tenant and was first on we velocity same-property lease growth XX% industry-leading quarter. other continued science leasing, We in driven The a of rental rated consistency by reported our rate income real net high or Additionally our growth items entities. cash XX.X% and industry structure. and of growth

adjusted top very another within REIT margin and Our XX% strong industry. EBITDA the represented at statistics was

As recoveries income January both our for with I tenant accounting leases of consolidated X highlight from expected, statement rent. on together base rules include adopted points income Key we rentals new XXXX. include; that will effective

property provided expect file our Form our same today separately disclosure to and tomorrow. in also of to or recoveries tenant footnote results later XX-Q We five that in

in As we primarily to million leases, related $X are leasing asset sheet $XXX qualify rules of lease our our million the right-of-use XX, no for March which that include under new for of longer balance costs expenses lessee. ground accounting includes capitalization. XXXX, liability, and G&A related internal approximately

Now briefly on expenses. G&A

Just a and business strategy. everybody want to have remind very unique differentiated we

tenured experienced highly a and team simply REIT the team, is Importantly inappropriate and compare average to with business a and to it very unique today.

real company than well Our a is. company typical just estate more is

all-in cost measure from tenants. these for our efficient verticals -- imperative the verticals. search important we including in client review These when align real that well Our how but with venture responsibility reviewing business and likely is estate, classification vary since recognize it to is and verticals to It's operating on four also how you'll corporate end of strategic focus EBITDA importantly a other strategic you REIT regardless REIT-to-REIT for of core does are three when of a G&A core investments, thought the up each we and margins. vertical leader leadership, best

EBITDA an industry today. leading have adjusted at margin I earlier as We mentioned XX%

Turning company's investments. the to in developed of a venture has What unique early business. began days important the history our estate really in real and into component

with Our working highest technology venture run for look people record we real one tenants. of track REIT done. innovative always new to our therapies industry innovative rate for gains, of like developing strategically back the underwriting business in tenant we team I our some entities, thinking investment When what technologies with high-quality the improve verticals our kudos aligned has estate team, for vertical life of have at the and have a quality about rosters and with on proven to and to science both focused give world's most world. quality throughout I the

over quarters. $XX past years, as million last the $XX three our from per averaged investments been approximately $X.X back three have adjusted Looking the million FFO and quarter over included in million, and $XX venture million have realized gains

on and from gains of investment was vertical. of range, net looking percentage our an real and generated estate X% XXXX earnings differentiated vertical venture operating and realized generated was overall our venture in a XX% gains As our unique from as realized income, example, at

with as sheet history balance know strongest our the of kicked in the of you sheet. balance to Moving the We company. XXXX

interest of a years end, of X.XX%. million related bonds. liability total related years, consisting in our million we $XXX our interest XXXX from at and the quarter team maturity XX% the to notes with issuance X.X green and our effective with years. later Briefly to $X.XX our to in overall $XXX of to per following, on senior entered remaining repayments share million repaid busy to XX% term of guidance rate we two in the to term of resulted management XX-year of in $X.XX Our unsecured debt guidance notes, with deal average yesterday, of announced from change an We secure term note has a initiatives weighted on extended operating unsecured the tranche been this XX.X a In seven payable average of aggregating or income share weighted FFO of the $XXX in of unencumbered increase extend in into range narrowed release as to of notes one the guidance. $X.XX Subsequent again $X, become XXXX X.XX% an $X.XX average loan of including in of including to and matters our These no date that range for agreement XXXX, should rate EPS weighted XXXX. rate a to with net support June sustainability midpoint range to NOI. per our FFO the from adjusted we

XXXX guidance Joel increased for guidance it to to and up the midpoint includes there a X% it back ranges. package I'll detailed for Page projected the X% at our X on cash up. rate pause and our our turn of also basis reference. supplemental open rental for your increases, We of assumptions

Joel Marcus

we could if go Q&A Operator, Okay. please. to

Operator

Please comes first our ahead Korchman And question Instructions] question. go [Operator today from from with your Manny Citi.

Manny Korchman

the lease that if allocation more the it Hey, get happens good specific. you Pinterest don't get this at or afternoon, everyone. signed or making allocation don't year? Bluxome Prop was next you if What – I M year Steve, you that guys what

Steve Richardson

plan approved by Board Supervisors Central me the The XXXX. let process in December of of the SoMa again. walk Manny through Yeah, was

what and a talked that process with community work challenges here. benefits the very the consistent we've of four at along. through and stakeholders at you were huge As city time. about to had all to said are There filed all time same Those with value parties work continue we've

view very as We So has process. proactively the this another fact the and process. in the city approval step in affirmatively continued

as to said expect of couple be summer of the in now We of for year. quarters we've front a this in Planning late Commission the

year. the will that expect would then approvals and at our resolved to the We expect of lawsuits end be secure the

there's time here. seen of take everything another would do it course, delayed, get there, two. this longer a get So and could quarter they time pointed But and resolved but or ultimately could be but has things hypothetical we've out again

Pinterest us So very arm outcome and a successful expect with working here. is to in we arm have

Manny Korchman

how Boston, on or Boston Seaport an your it Thanks. like being Seaport? you close cluster concentration end that NECO does to in do And maybe And trial? construction you've under looks one-off would up as the got -XXXX event. a Or there? about development after delivery or start switching schedule it we then, When at think

Dean Shigenaga

Yes.

think Manny make any kind prefer I think or give think not parts not so any comment could of moment, world. view at There of going and quarter future I the that. comment. the But better are So we're the to at our color in we'd the we a lot I on make of moving to on moment,

Manny Korchman

Okay Joel. Since I answer another ask that I one, on one? didn't can get an

Joel Marcus

Sure.

Manny Korchman

IPO tech on right marketable pretty The market your impact tenants or balances new hot. or Any is IPOs? now from markets securities

Joel Marcus

we goes get a Well, quarter, up stake next when was in mark-to-market. will get did there stock, equity And in I XXXX. to this we do Google we guess marked I that Pinterest, will have And we still and report have quarter. an so we it when have that market public think that investment Uber, I guess bought

that down certain to tech and general -- so investing continue I Although money the Google market. of days the X% companies we've but highly positive most these something most sector one selected today, done in Alphabet technology imagine the as sectors managers would some down view in -- was or

to or So business really best really solid big legitimate are have to models we unicorns disruptive cap think feel it pretty I economy. either and things highly and we the quality companies we're viewing impact stuck public selected its high

Manny Korchman

Joel. Thanks,

Joel Marcus

Yeah, thank you.

Operator

go America from question question. Jamie from comes Merrill Bank of with next Feldman your Our Lynch. Please ahead

Jamie Feldman

Great, this you. is for one-off? is on thank multiple see Or with economics? could Can talk and think a more we I more something to you then And this the ventures -- color do about you mean this like thanks about expanding markets? Joel venture doing Verily. how Dayton of

Joel Marcus

are street which real we could we the that's of The I our where business never to days. This in make and estate in, But not the dispensers done over biggest spent time number of unique to enunciated. Not just we reasons Yeah been into provider and the could job a we feel unique. a users a care very literally services do of to Dayton trying from the best years health is the was did you and come goal unique services. the out is being you here what a And get of and placement. and place difference have from find a Street intake, lot detox of trying to for that XX we're a you're best to impact of on data-driven make before set campus the

make possible them. those doing fail to the in sites or be something think partnering to a going we've all to feel business. it to because literally we'll -- seen make government and our which wherever -- and of the to we're build hit lots is community Because -- sauce this available be efforts the communities. the multiple we think America do sites throughout is should this I as for really we I private not country. core going industry were every don't that secret think is is other But that's our model hard what

tip trying spear, we're to So the the not be the but of spear.

Jamie Feldman

Okay.

Joel Marcus

real estate Verily. -- XX-XX own the we And with our

payback period's XX-year Our period. about a payback

it's So fast. not

skills has great skills. unique with was to really and aren't done critical not Verily But -- to something action do. I as Peter's returns enunciation a unique compelled of it Our we our we believe, do have And where have other could as I this call things. we

Jamie Feldman

and I helpful it. that's appreciate Okay

page we think on gears, to shifting X. I Dean about As guess

capital plan. sources Your

you $XXX like and of sales buckets the other looks the done. got these million the about some of and talk But them can it to debt done you've equity? timing other the common So the get

Dean Shigenaga

unsecured at Sure Jamie. done basically bottom of of on notes. you on the side table here. Dean our complete the if did X. right We the That's the It's look issuance page

upsized which allowed it secured retire our balance notes us opportunistically, on In to some fact, additional sheet.

are true of year. always that's laser-focused pretty What been dispositions had on care every a going of. that's So taken we We've and through. component

there. roughly another for you're transactions happens, million focus common open I interest top disclosed tuned the then when of item we but the We assume on year. the partial sale, predominantly stay over And process, that spread of on at so an XX/XXX equity. in $XXX remainder So of dispositions it's are also two to have about asking that in us through never really midpoint the

Jamie Feldman

Okay. I anything or they in mean, do of you think asset else pipeline? the sales that could take have the place

Dean Shigenaga

have possible the Jamie but program that No, for we our little midpoint I XXXX. of don't already million disposition asset it, a not at -- of $XXX It's necessarily.

pretty healthy So it's volume. a

that process, through As in too. key give the more we get we are transactions our way once you make can through color we two those

Jamie Feldman

on for any you business any Okay. but Appreciate finally, And or particularly maybe back thoughts? thoughts impact international Medicare drug Joel that and the the guess, comparison might your then just pricing? tenants, I legislation thoughts latest anyone on All, the the to pricing if just have team. How on

Joel Marcus

Yes.

to been the CMS that's your So group have happen with at of pharma U.S. third good wider we is intensively extent international actually of been a Medicare some a is only pretty unfair. but this which covered not for in group mechanism have is pricing issue. overseas, This because note. industry, the just probably a Center by us The would best, see issue of question. Medicare. to supporting people the not cover that kind actually pricing on working I and for Services We actually

the and feel only not I with there the all under like and group So biopharma those speak. of are discussion are we CMS as or providers -- better think are a alternatives people intense some but payers industry, that drug

Jamie Feldman

you. Thank Okay.

Joel Marcus

Yes.

Operator

from go question Sheila from ISI. with next comes McGrath your Please ahead Evercore question. Our

Sheila McGrath

Yes.

year I'm in should would some wondering the more just bucket, other of just possibly so investment be to line if sell elevated On public many little coming you look expect get and to to you item. we that the bit because volatility of rid are a this companies mentioned that

Joel Marcus

Yes.

Dean, know Dean let as there we on not for was limited IPO, IPOs you probably I'll whether Sheila, answer months all I lockup to to But so his give can think despite IPO that the after on. But view all or you So selling that. participants. the is six wanted a standard

Dean Shigenaga

in so Yes. areas. comment me two let Sheila, Yes

some investments interestingly I types as sense my in might of a over recent activity. To really the since to back the And with the mentioned hold, to something per extent great not consistent like there run transaction you one extent prepared of historically. rate our it's it come the that exclude just That have out. look hopefully, three individual last the do quarters. environment over is rate as though and that, we quarters guidance unusual this we'll type last results commentary, from we But as for as item with multiple that commentary they has what barometer, may better see give the of our in few averaging First, specific three provided last for we be run haven't a on our expect as far quarter been you XXXX. $X.X actually line million quarters actually

Sheila McGrath

a And project curious do Okay. the do say outside estimate just operator? that more detail if Verily you missed when what means? Dayton. little sorry, that then you enabled, but an And you require? tech then this, in capital And will just hiring I I'm envision on much how announcement

Joel Marcus

The $XX a Yeah. is total Verily operator million, Alexandria. investment Sheila, the so split actually and between XX-XX is consortium.

-- human We get there Governor Mayor folks. with information put mid-June understand virtually driven, It's a to or opening of as that no think kind two as from But can schedule. and can the cancer. about sets you has the been tech you by Dayton everybody be a of of participate in want I just their of in of or the cancers a you or data, everybody think if us a identical. Verily much you have who the all versus the addiction and tailored about the opioid were data set it cancer able a everyone public is patient when same and the you from to if don't It's announcement will has can of details, non-profit consortium. overdosing, detox the treatment have a because and valuable is grand to like Ohio database, kind individually possibly together big you of that one most knows, build literally heterogeneous And family, of a data that mechanisms you are diseases are everybody more intake, there much is where impacted giving imagine.

to. treatment for each be and so patient, get really trying to tailored that's has to And what we're

the a That's people XXX people we treated have like street. why just that's and They're almost for brought disaster, day dying. So cattle. just detoxed are recipe on in every back thrown and

Sheila McGrath

And last Okay. question. one quick

Launch another on activity released us was just on you for Labs press in RTP. I then Labs, could Just of Alexandria. product and kind if Launch update Cambridge, you AgTech in wondering that

Joel Marcus

revenue companies. think have We generated tenants, by I Yeah. investment-grade -- think call, said what of on mean cap we about half and/or our the is big

involved And product. you means so good have in we industry stage seed stage. up with a that Hotel part grown-up be entire Alnylam ecosystem, of Cambridge like believe to start-up in the Life company I our use, that example to the were from which Science Science we always also in A to the of really A Series

thousands of and in X,XXX of took feet. are X,XXX hundreds I think occupy dollars they or they feet, billions market of cap. Today, multiple

of and so the winners there progress good pick beginning, future, amazing technologies it's the to today. disruptive be we So given the especially the at can

So that's in goal our that with dealing product.

Sheila McGrath

Thank Great. you.

Joel Marcus

Yes.

Operator

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

Tom Catherwood

Thanks. do Good -- San Is Sticking the in there what everybody. on the doing with down there, any and AgTech Center afternoon, does material RTP, and world question or Francisco? the structures difference? how AgTech you the differ companies lease would be Cambridge the from in how

Joel Marcus

greenhouse, And good billion fall like but world that then nutrition. this about is big and didn't, lease I $X especially, mentioned. indicator more and gaining one it's the If ears disease, those lab AgTech, and an Tom, the went -- deaf understand – three and don't. One is over statistics just only is they're office, leases guys. it to I on about the other is in didn't is lab have net $XX from this they two that given over -- something structure consolidation and the years when more last Joel. this is industry not among fighting we the I tracked huge is There felt No, capital triple and We the venture all may are the same. products. exactly certainly think billion

only launch innovation three, a is own huge what there's of we this and That's important area. one Chinese really in Now the of think them. for

that's after So particular of we've niche. why that gone kind

Tom Catherwood

that ecosystem in university-related And you. mentioned Got venture Kind tech were how backed by out? private then RTP. Is talking when of funds Or think you about demand the XXX,XXX Steve that think transfer? -- does of round the Joel? that you I primarily this feet those square we industry is about

Stephen Richardson

wide breadth Steve. That's of a companies there. It's Hi.

as all it, the of it's annunciated above. So you

Tom Catherwood

And then... Okay.

Joel Marcus

I it's mean, research know our one had campus I -- don't I XX-plus York. before can remember them than York single York. of got We've much other did fact New New in like one in In tenants we the Not a New in campus. that

by new we So seeded the sometimes people, call -- companies these the outside corporations. -- and big in of big it -- majors north Triangle in some stuff do of the the AgTech are as institutional Research things region to the sometimes venture being really investors

are these companies. very new so And a of lot

big there's range a broad us gives comfort companies, are big, but down that there. existing demand of Some

Tom Catherwood

that trending demand in you. one Then one concentrated Got you. in submarkets? X.X that mentioned million Steve. picking Is specific Demand Francisco, how in you is Stanford last your at Greater cluster? feet. it And San Got any square up

Stephen Richardson

seeing we're think distributed. very it well I

course in anticipated. and positive San we just is Equally demand Bay. very Greater Mission are continued Francisco Stanford The have of in the strong down South the there. challenge we You supply constraint as seeing demand cluster in

So it clusters, is core each in broad-based Tom. these of

Tom Catherwood

Thanks everyone. Excellent.

Stephen Richardson

you. Thank

Joel Marcus

you. Thank

Operator

question. from Anderson go question SMBC Our Rich comes with next your ahead Please Nikko. from

Rich Anderson

everyone. Thanks. afternoon Good

right XX% would perhaps or Joel, know of the the I but the the way XX rental that that think that XX curious, about to don't I revenue portfolio together. that makes large cap. why, going you it? is wrong as think So A. defined Is Class see be closer because from IG that to What I'm number is your if up, number? mentioned XX% you should

Joel Marcus

remember in with to sometimes and Yes, mean at Cambridge Class as campus-like to and night look want budget. A of rehab new out biggest and we are Cambridge is example be. aren't be rental an Cambridge be product the in day you to have try generally people locations. the that's where or want expenses Class them to they their working that I rehab tenants They -- you if to part and most because And our direct want to of A best

want I you to split. thing that's in San think why they So the see of that same that for be cetera. UCSF lot NewCos, Francisco a interaction et where They're best in with locations

the tilt up or to great out concrete interest. buildings burbs in of locations to Going lesser just aren't

I given see be, should So of what don't that's what know time fairly for -- credit have. you that lease there's right think a amount we but why and is for durations been we've I think long answer any our I comfortable XX%-plus where

Rich Anderson

in the extreme anyone demand have it or the more you and at and or availability. willing do of point place to And for million no be Cambridge acquiesce follow square would in you five feet the may extreme -- Boston where case just that room, demand? what But I basically happen mean and okay, be somewhat some that be to I degree to if say, people got increasing to were in close. of

Stephen Richardson

Well Seaport relates was I asked and the earlier locations. of about that some that think question to the other

you matter limited of doesn't in look have you locations, how buildings at limited of a naturally Cambridge. because there's land think I have and capital to other amount amount much

to have at people in some clearly other fashion. look so locations And

Rich Anderson

Yes.

And Okay. for last me.

why expirations. important maintain growth GAAP. an ranges? of cash guidance about but in lease expire You're degree is you're the we mark-to-markets or where I'm you're type geographically leases of whether the huge huge where fact sort can think guidance, putting that you that To the to the be what you levels to off when perhaps having at XXXX XXXX these assets Considering component getting? for or asking not look are going these getting

Joel Marcus

look I we've about X.X% to as -- just many very because and the at what right-hand think XX granular what million if But revenue. I are which square the comment of at well with rental on look Steve in you is well think Peter X.X the ask below rates you if annual they're got you of the But these markets, this. rental if the Well, feet I'll XXXX side -- of expirations, market.

Rich Anderson

Yeah.

Stephen Richardson

UTC this mark-to-market XX%, Steve. start right and at Francisco San I about South when as Yeah. much you Mission Rich Bay is looking San Cambridge at in you XX%. Diego as Francisco got XX%, the Seattle about mean San XX%, XX%,

into pretty the So, there mark-to-market get opportunity in that sweeps each those a mix rolling, you be individual of When the is might there. may be markets, significant.

necessarily particular, the it when that's to those So can markets you in you it's it's for across going I roll pretty guidance how all in up. shakeout, not board But healthy. think see

Rich Anderson

Yeah.

Peter Moglia

to Boston, want Bay roughly third Yeah. and Greater else. add, a This is third just we're a third that Peter. area, a everywhere I

there's time Joel, great Research what doing run Maryland, been also extended Triangle roll region, early run I as great are re-lease on But course that but is in say throughout or we're having everybody of stage help everything a all Diego about. just like industry. which indicators -- our on York the where in other knows the Greater we we and New just the is Of happened just what Boston given can't think are an San like Francisco these City, going truly also has with to power been clicking well, very regions regions, history it's San for There positive. And positive. set all a is they're They've happened we're in owners. contributing the

Rich Anderson

kudos project. Thanks Dayton great. Okay the on and

Peter Moglia

Rich. much very you Thank

Operator

comes Please your question. ahead Our Dave next go question with Baird. from Rodgers from

Dave Rodgers

Pinterest expansion? for about Bluxome space? or maybe anticipate purely any Steve is you would or the there XX Yeah, Joel this discussion and Or be on the Pinterest recapturing the Do existing just the lease.

Stephen Richardson

purely And expansions hi was clear Steve. expansion. a this is new lease. intent. stand-alone that's Dave, it the That it's No, is way the

XXX about actually And enjoying won that. their Brannan design thoroughly has existing which of awards. are they excited a very they're So billing at number

an them. that's for So important facility

Dave Rodgers

supplement. Great laid haven't on guess the out you and I in then XXXX the delivery,

Do that? delivery foot for a started to color XXX,XXX maybe about got in may shells time the frame? under to XXX,XXX $X.X number Any larger as year? you square of minus, delivering about that you've to have ability construction. got square on or kind buildings you plus tenants Do of planned some next month feet be of anticipate kind of You've XX XXX,XXX or or deliver year of buildings, these bigger XX million

Joel Marcus

Yeah.

would level. said quarters we next XXXX, granular over I high the into of give So it in keep beginning maybe just more visibility the couple but

we'll XXXX. I think pretty clear more than be able it's to way deliver shells in

I a think pipeline. we've got robust very

quarter I think we but of pipeline. it confidence And the of we for lot have in activity. will a have lot XXXX another a save great

at year's think on just into think if as look you pipeline, XXXX. that this about continuing I

Peter Moglia

I'll assets not And about, bit we're Peter pretty to away. we able these a proactive work start our into We're land a this timely almost when fashion. away is comment entitlement in how And just put right deliver bank. if right

time much pretty of any able this So of the to ground we'll not come at ground out to if we're need year. out already we be

Dave Rodgers

That's helpful. Thank you. just last And maybe for one then Dean.

well? Given the that? year done, that's you the on that you've experience as how maybe view equity of table I do whether think last this year forward your again And

Dean Shigenaga

capital chunk And is Dave, transaction. a an outstanding year deal needs with. was at it's line from here. good our different almost May. May JV and April. year is Binney very its carefully. Well, Each the look sale Dean successful we've very the which it's capital pleased we're knocked our interesting The Every down day XX/XXX bond Street we of a slightly needs. and it's It's only

more And we'll and so on Dave never really provide over weeds -- as we the We into go through and timing structure. look color. forward get

will us but We talked well. here on working we'll capital. And that to in to to about allow disciplined whenever that about the we're uses as on remains think and the and I we'll safe to we race. disciplined on it's be approach else on whatever get dispositions our point capital be of it Eventually to that open prudent raising sources how then and probably. move to in we say great go able lock-in cost our we to remain want returns

in surely cylinders we're the year now. up all but on So, firing right

Joel Marcus

Dean dispositions about focus Yes. of is. two spoke where at is that's the on The moment kind that so the additional our big focus

Dave Rodgers

you Thank all. Great. right. All

Joel Marcus

Thank you.

Operator

remarks. any gentlemen this over question-and-answer the like And session. conclude back I we'll today's ladies to and turn to conference closing Mr. would for at time call Marcus

Joel Marcus

second very forward and you talking to quarter. look I on Thank Okay. the much. appreciated to

Operator

conference today's Ladies for and conclude thank gentlemen, call. We that you do does attending.

You lines. your may now disconnect

Alexandria Real Estate Equities (ARE) 30 Apr 192019 Q1 Earnings call transcript