ARE - Earnings call transcript Q4 2024 | Alexandria Real Estate Equities, Inc.

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Operator

Good afternoon, and welcome to the Alexandria Real Estate Equities Fourth Quarter and Year-end 2024 Conference Call.

[Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Paula Schwartz, Investor Relations. Please go ahead.

Paula Schwartz

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

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

Joel Marcus

With quarter me and everybody. are XXXX Thank Hallie, welcome Marc you, welcome, Paula, call. and today I you Peter and earnings to and to want Alexandria's fourth year-end

been has luckily, team during are this by of hit Our the they California wildfires pretty hard supremely But January. resilient. month

had utilities, us, as of the there by team, the the way preparation Our start county state, are days by and local empowered were team largely we our to the city, XXXX. we our inadequate own step with to the profound recovery. disheartening as prayers violent protect are of warnings side and to time ahead by and actually, all each every those several those ignored the the Despite of well as really of impacted wind have as

share on we non-core capital year mega on very in Peter solid as exit shrink Let We're another assets. operating quarter per some both overall that. a of basis, program and a almost a fourth me very an to environment, land fourth and financial quarterly very bank leasing, macro campuses on solid proud and of year give full growth We a a will focus our get depth and future year-end on into couple yearly and had FFO observations recycling X% results. and tough quarter on the of of producing

and and have of stability, balance continued increasing sheet, great and strength dividend. well-covered our We liquidity flexibility

But Hallie logs anti-industry couple the XX% in to XXXX science value view and administration of the X administration last The reasons for to taking a of the it of maybe go-forward cracking is middlemen to I'll the PBMs industry. depth. gone do simple that. ideal I of life very example A therapeutics down at FTC think the more optimistic value XX% leave one, are thoughts new on the in are: and the little. economic focused is adding of the and chain on on the

wins And And solid interest the to new unconstitutional the and And reform so to going as then a tax. versus day positive that's provisions welcome market. eye. Fed will XX% there'll IRA administration the excise the rates the return to the experience of industry in science repeal a of be hopefully, a normalized be bull -- likely come bull's a are likely, life a down

of see we but a the been up. sectors. likely you focused, ahead, Hallie quarter as demand other Fed The just-in-time tell as we're the they're -- The given change development vast is laser the syndrome the to when you, on has all because to and will our diversified biotech been a come know, redevelopment it's It macro, has leasing. slowest in start Actually, from very really and super pipeline. leasing Peter that's from majority ease

Our pipeline for this leased year signed is almost or under XX% LOIs.

a of seeing year some across and actually new good do. lot XXXX where year and of The beyond submarkets. is activity strong. is We're work very looking have Next to our we activity

and on for time. progress. South this Day, coming We're to remains for very us obviously, predicted we leasing laser-focused a good rollovers on Francisco long slow making have as as Investor San noted year spaces back we at the

capital very progress good making this as also recycling well. We're for also and laser-focused on year

brand, of our Day finally, those as characteristics. ] in out are each superior engines say Cambridge Mission management our at we've highly land all we As Day, pundits I different And turned balance and and customer, said leadership possess during superior focused assets Investor said the we Bay stronger a in niche, sheet, And a on critical components of and three urge industry here and I an industry wrong. preeminent knowledge and our believe always growth Investor us to XXXX, success are GFC media, leadership major decade. legacy the X, of as and real-world to as there team the all a our emerged interesting legacy been the again I navigated pundits that enduring cycles that product, next we've on back even general. these successfully cycles bunch position it's December got legacy worthless, who we've must of that of they through very market back strength. on a the like successfully, of be it unload weighed had collective And been non-income-producing Those [

And forward seeing some this look peek you and and pockets Southern plans. We're just quarter new in wish where in XXXX wildfires we Orleans, and the We new an obviously, New during leasing quarter first alone, everyone Vegas, California. tragedy the already then Las strong here need a let new one, give since into our we January on our transaction update to year demand strong the in progress. we'll me call give finally, the a saw of last

symbols wisdom Alexandria. of year tomorrow. And over the Hallie. starts with the me epitomizes think I that, And Dragon transformation, it are the which let turn key and So to

Hallie Kuhn

by the years. Alexandria Kuhn, of over Therapeutics, a afternoon. good acquisition whose largest for $XX.X Thank Markets. billion brief and on start, To President J&J tenant, you, Vice spotlight represents Senior M&A biotech Joel, Intracellular Hallie Science in Life Capital and announced is This X.X

FDA-approved When Greengard Intracellular science Intracellular from research Paul University, Americans at affected cells Intracellular's mental X in company illness, Our X Laureate brain partnership With medicines communicate mental potential through to signals, chemical medicines with back novel on Rockefeller founded the bipolar leveraging was goes decades. Nobel over lab the lives. on have breakthrough patients how by for patients' treatment an depression. developing schizophrenia novel is X illness, transform and including with for

our Turning our to strong XQ from base. XXX by with in nearly to broad of trends continues existing Demand tenants relationships tenant diverse and 'XX. leasing science life XX% be across driven

leasing also each come from to Importantly, continues industry. of and segment science every life the

biotech, Over science the by biotech XX%. proportion XX%; Joel leasing biomedical represented science which pharma at and at XX%, multinational devices, product, course XX% XXXX, of life followed slot and the of by with the private largest institutions, public life RSF XX%; segment, to referred service

expected disruptions approved pace Research, than a Commissioner with of the and respect researcher novel Brenner, Notably, by John we the Marty Hopkins approved XX doubled, while nominee the policy its new highly FDA the trends the a expect approvals. to novel CEDAR, interim, healthy a FDA. for surgeon significant Now Center appointees, at Acting cell therapies. incoming to of for the at maintain tremendous annual looking In administration's tapped respected a experience. agency. notable X official trial the Biologics The horizon: Sara as In and few approvals towards is Makary, that win Evaluation and XXXX, first, gene the With the the novel Drug drug has deep Dr. FDA on Research, medical community XXXX, clinical don't is and public patients. the FDA FDA has of administration Center therapies number past X over more for career Evaluation Commissioner, CBER, average is decades, for

anticipate pick to life science up. we Second, M&A will continue

deals with their companies cliffs, patent M&A is from our acquisition seeking We pharma pending through acquisitions, in pipelines a the given FTC tenants, biotech regions public cycle are returns innovative reinvested across and backfill for credit lenient and investors generation are then in of cases, larger M&A environment. innovative the vital potential to some to as pharma more through private footprint Given medicines acquirer This next post time. in over expanded upgraded from companies. benefit with

Third, mega market a expansion exemplifies trend, with companies for square having Carlos expect this our biotech strong XXX,XXX clinical San we campus signed Vaxcyte in follow-on at performance foot QX. data. value-driving public

likely value while key However, public face limited. window pressure continued will IPO will points downward inflection companies be lacking the

like XXX will remain financing These dynamics life volatility fewer larger XXXX. evidenced but continue over in the may align biotechs needs throughout to Fourth, in just-in-time life prioritizing their and to as on decisions, financings will space to indices exceeding science Private $XXX that mission-critical concentrated million approach take venture by XBI deals contribute strong requirements. be science sustained a with conservative XXXX. infrastructure

meet and are conditions scale with dynamic to remain positioned still demand. interest ideally as all mega industries. macro large Our There on this rates weigh uncertainty such will unmatched as their flexibility campuses

drive will capturing on However, outlook significant are promising future. of life the science remains we in focused long-term today and incredibly companies that the bright, the most demand biotech hyper

the with approved years, To growth of over has it and Peter. diseases biotech over public the continues the market with massive potential. to put XXx the last to it will increased perspective, industry of that, an into With only at have pass XX XX% size I exponential accelerating pace, innovation therapies

Peter M. Moglia

our of company confirms our I'll of and their the Hallie. area that its that a has exceptional Angeles individuals echo It's their within that the about you, from the they to Thank short surprise no outside the the it's for group do astounding in because not care shown position requires they're tough what Los been of which in do, inside team but Joel core, Joel's only have extraordinary neighbors. comments for helping colleagues people also they what is an get we Alexandria of resilience nothing humanity. and best our about who've support not at and they at members do as friends world famously to the and deeply, be only to what mission notoriously

submarkets into development In for quarter. the our barrier delivered and hand the year covering XX XXX,XXX including value fourth I'm pipeline, incremental during projects. to to $XX in the total it to the feet annual year asset supply recycling The high entry X,XXX,XXX then square approximately over fourth our Marc. million going leasing feet and square bringing was quarter, million, to discuss harvesting $XXX we delivered NOI deliveries

beginning is deliver cost the our weighted of yield to solid deliveries XXXX XXXX yield supported in initial a by stabilized quarter fourth from X.X% Another delivery. for on through of stabilized expected was XXXX. quarter $XXX The average second million X.X%,

to why boards. and a lingering due science plans and most need that Development from which part feet is at and until are is the conservatism expansion to life for leasing and critical demand. is attractive growth company space, delaying square the to ready low prioritizing inventory they Companies occupy in redevelopment for just-in-time current organic was quarter XX,XXX have activity turnkey

lease XX% and comments, Joel's Alexandria's of respectively, echo leased XXXX XX% trend have fully I are And negotiation. on do be in a arise. deliver projects to when Projects demand or delivering under negotiations or in while those This of XXXX lot well we pipeline projects. and signed future leased expected positioned in to pipeline. XX% under seen LOIs, our are is can percentages the expansion with beyond or work capture to needs XXXX

Our a and sponsorship they scale dominant market as front allows in of statistically existing base to us get to at and reach Investor many the illustrated requirements locations before our we tenant matter lot tenants Day.

to despite Net leasing XX.X% Rental year effective a supply, quarter early the scale last from rate tenant's square quarter. of activity, compared and XX.X% for was were X.X% availability, cash year reflecting X,XXX,XXX the rents a and for leased cash 'XX. representing basis leased consistent was feet at Transitioning were year was positive fourth on guidance X.X% and basis on square sponsorship. the and appreciation there increase during the location, remain the our strong renewal was the and elevated with a feet increase and quarter, and XX.X% which X,XXX,XXX during increases XX.X% to a

With much supply dive at respect and into we has deep changed. to Day a not them statistics, presented Investor

Boston So Day. highlight in like validate interesting a that, as of they of of we observed in recent rehashing overview lab market trends we'd spoke a at lot about lieu couple to JLL's Investor what

owner. of other urban proof to in leases Watertown, XX% First, that leases sponsorship in ownership, XXXX matters. XX% quality This signed leasing transacted JLL meaning and is of X/X Square, X% live and According deals for were of were there were indicated experienced really JLL, XX% were and in Alexandria's were by location in only all is Seaport, Fenway the urban signed Alexandria that both Kendall geography to another a that in submarkets, flight submarkets. and

made quality Second, that up and X/X location, further probably available a buildings, of matters. meaning unleasable closer is location because conversion, lab experienced XX% to JLL it's bad estimates sponsorship and that zombie least either office building proof is and/or space at today's an of undesirable owner, the

a executed billion to the self-funding finish over for total have $X.X transactions billion capital to closing our of value be quarter fourth the strong pleased by plan. very asset recycling our the $X.X harvesting bringing in We're to included our year on within approximately program in year

XXXX a were approximately presented to were XX% very strategic that of land strategic to optionality, assets, As diversified solid continue have at XX% Investor of Day, exemplified sales. of with and investors, portfolio our transactions to sales users providing the our dispositions we XX% us

The by stabilized and were fit our executive the combination requiring a of these core non-stabilized to to local and In significant capital investor with sales and assets significant sales strategy. capital latter user all the no to were and teams management deemed assets longer downtime stabilize. cases,

these none X.X% core science X.X% for provided on range have basis. a were to in We of super by the that that transactions should cap submarkets rates from cash coveted life It investors. the noted sales be stabilized

sales expirations in near-term vacancy and UTC note Diego. other of large properties the lease the San The or were Cambridge submarket of with

We agreements. are bound by confidentiality

here. Our be must commentary limited

With vacancy years, occupancy assets, and improved driven significant economics to office vacancy leasing beyond in over as require expected respect to were Center the and to The an loss to significantly loss. current profile stabilize building costs addition building, the current respect CapEx occupancy historical XXX the Street, asset future. material have inclusion by the primarily a the First future the the Cambridge of similar building next with X assets will University a in Town

campus of the they UTC to future strategy avoiding strategy. opportunity is core and over by receiving Cambridge but the part monetize served longer The assets and and CapEx well no mega and capital today our prudent assets in us time, the are disciplined a

we tenant into strategy base. goal scale asset campus of the self-funding location, continuing the and continue As drive prioritized asset that by we mega look for to meet value to will base our our harvesting recycling transformation high-quality we with XXXX, confident to are sponsorship the program provides our today's

great subject transactions With or million letters We're $XXX a executed agreement in sale approximately start. of negotiations. purchase deposits intent and/or pending to to nonrefundable and off

pass with So that, Marc. it I'll over to

Operator

the on Mr. muted perhaps your is your Binda, this operator, is conference end. phone

on You're mine. open

Peter M. Moglia

We're him. checking with

Marc Binda

You hear me now?

Operator

there? you Marc,

Marc Binda

I'm me? Yes, you hear Can here. Yes.

Operator

can. we Yes,

Marc Binda

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

that Angeles weeks. pause to last team to plagued have personally like over horrible the moment recognize the Alexandria I'd of First, a impacted been who many Los members have our by area the few fires

XX% over property that per represents the our by up share highest equity and amongst driven Index last of percentage adjusted over the tremendous quarter and the primarily and We capital to as Healthcare XX.X%, congratulations up a XXXX and Second, execution adjusted solid growth for financial $X.XX, FFO results $X.X XX billion development were time. during continued of the which execution and XXXX, same the entire completed years, the fourth the respectively, development up X.X% strategy. over NAREIT was quarter, X Alexandria the and the including recycling team year. Total outstanding during X% quarter. performance revenues and operating the reported over for EBITDA solid

our this long-standing quarter to results by strategy, our our of internal driven the continue relationships operating hope collaborative to by campuses, and growth, tremendous mega-campus we solid tenant time. operational our scale increase annual and revenue our of steadily team. for execution XX% rental mega over be our from disciplined comes advantage, excellence On

was our is X very rental annual consecutive quarters. second revenue volume reported from square new X.X Leasing amount important square were On solid XX% previously represents the continued takeaway X fourth last vacant adjusted which publicly cash over for for Collections feet, leasing, square included year. and quarter our momentum quarterly the for since have quarter also at traded XX% volume margins the the the highest of XXXX. into the and with million the quarter strong creates XXX,XXX volume We EBITDA quarter great of million the represent and high high-quality margin at transition leasing the and largest feet quarterly large-cap as business. driving space, tenants. flows remained XX.X%, investment-grade an in we feet The

the feet, X.X to XX% year X-year prior square Leasing year and to volume the historical over XXXX. up million the XX% up period compared was full 'XX for prior

brand to and approximately last benefit activity XX% well and growth existing over X.X% a tenant high-quality continue roster space months our We lease of releasing and XXX scale, XX tenant from of 'XX loyalty cash renewals leasing solid coming XX.X% from tremendous basis. the our at deep on our relationships. rate Rental with for was in

it X.X% and quarter, XX.X% cash the on basis. For a was

historical X.X our We continue healthy the is on average. for to quarter, on achieve average completed very above XX-year with terms leases lease which years

as commissions for were leases was a on per leasing signed total fairly was space lease the X due the costs leasing year quarter X.X% the the Diego. a lowest importantly, modest and last year years. large and on for to for and But and percentage the percentage square these when as X of considered renewals TIs rent in 'XX over Francisco over the San ranks elevated second foot San the basis the long-term term, full which

including the second-generation years, averaged leasing income non-revenue-enhancing all space have been average. X of commissions net including last and expenditures, X-year over have on TIs the last X Our the below XX% operating

respectively. in of rate, and and fourth the benefiting by 'XX in on cash burn-off basis pickup and occupancy rental 'XX, increase repositioning On bit a Technology to due tick the this Looking up X.X% do Illinois. and activities expect X.X% solid property, cash at to Square 'XX, quarter forward numbers. some the NOI same to ratio X.X% of rent same-property a at Driven and for same-property free basis X.X% growth on solid we a XXX cash was in

results same-property outlook cash on down approximately spread of X.X% basis at $XXX,XXX consistent projects. Our lease on at our basis projected impact XQ 'XX from and X.X% to full vacant XXXX X% flat a cash include across and for a X prior midpoint. go expirations outlook the These is expected of the for growth with and year 'XX

As key by Alexandria of a XQ Square move-out reminder, single another the in balance made at feet X building those to our ongoing leased upcoming Bay. Alexandria and several property Illinois great progress tests. negotiation of lease with with a relate these components Moderna, Mission to Technology most under XXX,XXX 'XX discussions with on the XXX lease largest expirations and expansion prospective our square expirations We've under specific with already tenant

expect We complete months average construction to at to time spaces these work. downtime on be XX given least on

same-property expect impacted starting some of cash be of rent the rest over XQ results 'XX. to the property We to pool the free results in burn-off same with 'XX the for half offsets across the first of

Turning quarter expirations last XX.X%, supplemental approximately for Page at The consistent on described with guidance X for I results of vacant are X the to to for includes expected was midpoint the and over steady occupancy. coming range which occupancy lease which of solid 'XX XQ the XX our package. year-end is Occupancy the from XX.X%, go vacancy with X% quarters. 'XX that described is projects earlier our

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

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

on cash a expect $XX months from initial basis. of a growth rent over burns executed annual on to as operating from the net weighted basis the delivery off in We million average leases see also income X free next significant recent incremental

will stock and million. under buybacks. of and of repurchases we $XX that in million the up common January to repurchased of any we price Turning 'XX. million average fund through end On at To plan $XX.XX. leverage-neutral $XXX date, X, the changing million to Board December December announced basis we've on including in $XXX continue monitor share to a an $XXX to Subject program, additional market under conditions, authorized a the repurchases purchase our program expect to had

million. other opportunistic range here, guidance capital X acquisitions reminder uses a is for As and of to our $XXX

share the year. our completed range the first quarter, we're on already in of with So high end repurchases for the guidance the

to next sheet. Turning the balance

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

debt of ratings leverage We to the for consistent corporate to the with our traded rank Our EBITDA, continue REITs. X credit average ended year-end adjusted [indiscernible] top publicly leverage in the last U.S. the of all with year of XX% for X.Xx net years.

amongst have liquidity, REITs tremendous maturing the X XXX have with of years. XX% debt profiles over only and We all the we longest X S&P next total maturity of debt

[indiscernible] dispositions dispositions last transactions average execution the our quarter; has close common aggregating on that million interesting of of completed, to were related and continue disciplined primarily dispositions Diego, million tremendous submarkets, in half the the capital following: quarter in the of $XXX.X our primarily some which land focused fourth their stabilized our $X.X to we plan. note including Important from completed for the fourth were tenant our of for sold in been stock, suburban 'XX second, Way and capital quarter, recognize to San the fraction to and with $X.X impairments $XXX.X will to billion Alexandria quarter many funding Virginia X RT about XXX, team of of Group years. completed during of with next The properties long-standing multiple parcels million funding, here sold minimize to for over stabilized a be team which Moderna we Huge which laser-focused strategy on to year. continues In located and cash primarily fourth recycle the to $XX.X of dispositions the dispositions small capitalization comprised overall to asset a $XXX base. different located comprise at Boston, nominal first, across which which next of was did Northern during be was execution which with the during issuance rate and billion congratulations fourth the of the quarter XX in from coming weighted that X X.X%. million,

off to we're start. mentioned, a great Peter As

or We in this about of of sales contract to deposits dispositions X/X for of million of for nonrefundable subject about anticipated have $XXX.X our negotiations represents next guidance pending of midpoint half total, represents XXXX the which land year. and

dispositions also activities fund with retained amount addition we the to of needs our interest, midpoint equity a flows for expect dividends cash of next and In operating of after $XXX meaningful from year million partial to our year. sales guidance next at of

Our flows dividends our the to FFO to annual adjusted an growth FFO a stock per increase venture dividends since conservative as support quarterly payout gains ratio XX% high-quality cash continue in investments have investments the of common venture X.X% average share share $XX in averaged have of continue quarter. with a On XXXX, and XXXX, quarter. for realized from per included about since million we

XXXX, rate above slightly million at for the gains, the FFO fourth historical quarter share on in full just our average $XX or realized including quarter. per $XXX and were million $XX about a For million year

run XXXX. the year the XXXX with for full for rate consistent recent most outlook Our is

in $XXX are originally Turning our guidance our to million and the close share per reflect of adjusted were ranges reaffirmed were FFO XXXX closing certain that our to the of change midpoints changes We 'XX guidance. of for in to a dispositions expected to and $X.XX. guidance EPS for with capital of sources XXXX $X.XX XXXX. expected now diluted as There of to close to no

considering after view from 'XX Technology ground FFO lease last completed As a year. our extension the reminder, XXXX the midpoint XX% per impact to approximate projected Square relative as Alexandria we share flat

X.X% reinforcing XXXX, relationships scale, reflect with we're deep fourth position management our we tremendous year quarter the on tough experienced industry as a dominant the high-quality macroeconomic positioned of the execution pleased closing, team, for and with With we're in strategically platform to environment. growth well us In future of continue FFO flows, solid and cash full growth. our highly tremendous and our very

to I'll back Joel. turn that, With it

Joel Marcus

if up it can questions. for Operator, we Okay. open

Operator

Instructions] [Operator

Our today with from first JPMorgan. is question Pallone Anthony

Anthony Paolone

bit was if is, first really you I think picture. strong wondering more bit comments. that leases? little the a going color the Joel, or having of development leasing alluded with or you a to in question here on trending terms types the could to on or give I little whether to -- core the of maybe toward in Just there detail pipeline First quarter the a that's regards more

Joel Marcus

to But make spread them quarter. talked I of about. say it's items first I would the among the kind prefer on various you heavily,

So it's necessarily one one. not single

Anthony Paolone

might at full of And we maybe the are us guidance -- of moving much I'm process related question ones can from maybe consider you year, I for that kind the your development that is, And there? would thoughts spending Okay. then in bucket buybacks look given you the buyback want guess you the to how to that is if capital with remind versus where just going that projects start? to further or any

Joel Marcus

Yes.

So could on that. Marc, you comment

Marc Binda

$X.X billion year. billion. of share to active construction vertical next Yes. It's your there, break is start out new back, Yes. We lion's the $X.XX to to not there's projects the a do construction that out the in But expected take projects. of Tony, point I'd yes, but say, ton related

Anthony Paolone

you've sounded purchases opportunistic end [ your kind that put guidance, done But of high like the that on of should we from kind that's is take of it as though about to ] of kind at it XXX buyback hearing the further... for you room it the it? right your this and acquisition there Or comments,

Joel Marcus

it to et in refresh wouldn't give current that the like on Yes, change. development update rollovers and could case, pipeline, first to space coming that you us, Tony, us will guidance, it us but definitely color give back we'll room. think the quarter, but assume cetera, I But leasing be that's vacant that let the the we much I but

Operator

next with The from is question Rich Wedbush. Anderson

Richard Anderson

on were at down plan? shut discussion, the it's I'm Investor get to do the you're XXX, have ahead terms color? and at you running Maybe you think leased running plan? -- under say of a Just Tony. going you and question. you're that leasing in of Another again, any lot of like But Day you Or where XXX would would you

Joel Marcus

of answer that -- question I would ahead I plan. can

Richard Anderson

did G&A savings the some okay, XXXX. case, of XXXX, for of talk for well, maintaining about -- FFO Ahead how books did where timing that. I sort flattish terms give that? from? FFO reasonable mean points sort good. of some of And of kind -- Like if level that can growth fortuitous of that in you around XXXX, Where final around plan, this hit can come you then it's in materialize the in and

Joel Marcus

I'll a give frame. comments, you ask -- me make kind but Marc Yesterday to let of

savings there benefit payroll-related payroll our expenses look So other got in yesterday, G&A and expenses, we expenses, expenses, you filed in programs. and MD&A. We've XX-K, can so legal IT some

don't know, make if pretty and other Marc, cetera. I want implementation, It's comment. to So et you software also broad any

Marc Binda

Yes. to add Joel. No, nothing there,

Richard Anderson

in looking step Would Okay. a several a questions guess, regulatory me, from place about HHS. administration, certainly, big-picture you forward point of new fairly I today does it I things tactics are although there's concern XXXX aggressive confident interesting part administration. pauses for more a that then a going with But And around, the the that type maybe like that are sounded headed say where optimistic this for of you're around new are on politics, be some lastly And situation question about understand view? absolutely are of time. course this back you some in the for Joel, you is it could a the say like step policy may any that feel Or I at? that despite

Joel Marcus

last the the day. light administration, of the it's of to and dark compared say, night night would like I Yes. --

I some governed nominee one. I We've skilled highly alone are think the and idea. Hallie by interim think industry Just primarily people. also both I FTC commissioner got, mean, FDA. you gave the And the is our both is

see we California. from abatement any it non-biologics. and Vocera didn't I you on of of think good, even area, over when comes as the a was to care who Javier very approvals overarching the And both the feel don't political we years, biologics somebody pace in and I appointee, what So past HHS health mean, had know X an

the on have there and credibility the withheld, the reporting The kind nominee know as lab. won't a nominee. So impact certainly think, about Jr. you of of whether RFK there's not, gets during we the COVID. NIH, as Wuhan or will controversy way, That solid it COVID that. lot probably lost of of NIH I it on know, as lost that the FDA. cause I It's accurate be nearly out a its much feel Also

to BSLX I the the it's like there, of labs we and summer clear and as was mean on things getting were of that as NIH funded that And And pretty early that. sick gain understand we function mandated XXXX. work people not and in merit-based just of of system from the award win And think science want project to province somebody mandated best a sake to who's it. award the system. a you for science, win, I they went

most clean come So some but I the the of funds amount think NIH products we the that is that it of and that a do fair work will of a of, of to house, important continue. lot research, would agency kind core out, to imagine a has fantastic ultimately, overall substrate that, therapeutic

of I'm other lot whole than don't think us, few to pretty we a a market. I leases the leases, If you Maryland actually have the optimistic. directly are look NIH exposure in long-term But which to micro

Operator

from is Wes question Golladay with Baird. next The

Wesley Golladay

be see I just-in-time there? just in the that want we comment mean to that developments? about lease to Would that until Would all XXXX What that back next be leasing this half it year? way for your does more go back leasing. year

Joel Marcus

want you do maybe that? frame to Peter, So

Peter M. Moglia

to and things things out that the that deciding market are to need space top XXXX in of are Yes. identify are just XX mind for within Certainly, go and days. not XX folks they delivering then

Joel Marcus

the that's Yes, sector. biotech

in So keep mind. that

Peter M. Moglia

do have Yes, that been loves our loves existing and platform, certainly tenant very our but it's our just operations, loyal. base we

things ourselves XXXX. certainly in getting we see done do So

lease that mentioned or XX% signed I have negotiations, under we I means LOIs of XX% for which space. we're think

the come good we're So those into other out It's pretty still are 'XX getting tenant from potentially but folks XX% tenants, will likely base shape. new some too our existing thinking. for far where or in

is we're relatively looking into more really they [indiscernible] But frame. in that the pretty good So our at things short generate going just the in to or time market and short some to shape. but very is a time activity the a can 'XX get do best 'XX there,

Joel Marcus

Yes.

this rest of you they of run where through the that want focus people think is leasing to noting, XXX% do just lose biotech and it's the focused respect I sectors the worth with because of think because to the maybe get Hallie, So percentages industry. of on I

bear just those to run minute, So maybe sorry through a for with us.

Hallie Kuhn

And my mentioned remarks, Yes, this Yes. the and I in for as just-in-time earlier-stage leasing of absolutely. comment, is the to particular that more companies. is

from are ARR biotech, well-funded, year, for of XX% about right, certainly good leasing reflected represented companies but and of as have-nots, our privately has our a access past and this our be funded those, of overall then very and think of particular, in portion XX% existing small they biotech have they about portion a capital, said, leasing. and to they the in public most -- tenants private you terms a much If of about incredibly challenges could and Peter were which had

square it's on going So about very it's much say, to where that, companies talk foot when be leasing focused we XX,XXX leasing just-in-time space.

of parties, larger We're both find works not talking that tenants. about where takes new the and lot time both requirements right, existing solution to that from for much a a really

Wesley Golladay

guess, then And into quick of the non-biotech there from Any is regions any, a development -- any follow-up. I the maybe tenants, demand so those Okay. leasing? or out from in the come non-pharma, And from just standing portfolio? a more AI side X

Joel Marcus

good looking Francisco. slow the hubs. for good that want has and South presence huge San out. critical seen mentioned, The is competitive we AI or I Mission the great that and I a other after as a Well, lynchpin are our the after activity of I I companies don't a boom by think crisis I key developed was base moving news decade in which think Francisco really space in San OpenAI information at looking at Bay, to certainly But as see give But anchored one, we financial AI number the think in talent.

that. So about we're pretty optimistic

Operator

next is with Vikram The Malhotra question Mizuho. from

Vikram Malhotra

comment even sort hopefully inflecting? sort deliveries 'XX critical the changed of well. but I wondering just even know given like for half, just leasing velocity for you market now can is Any bigger a anticipate don't picture, evolve And Q-over-Q critical Joel, story you you just to bigger share the that's has like numbers just XQ, 'XX? on picture, guess, critical -- do or industry, I'm statistics [indiscernible] pipeline of in some you could how you I if how how critical as share but feels piece. versus leasing Can back the want the can just just coming in ARE the towards

Joel Marcus

Yes.

that the granularity the prefer first of of mentioned industry question tenant that's base. bulk science think I'd whole come really we of under Remember when to Hallie I tenants you, as feel leave from I for kind our service life variety the sectors that we can in that more we give quarter think, comfortable that our the own with. a

where a oftentimes, we may of really sign apart things. of and what And see demand may often have picture, from that see, we really, over we leases LOIs of the quite is So tenants see. aren't what brokers represent each or aware the don't they people those market good and every what what XXX they simply or brokers much

quarter. I the So first to get don't there. really of into into kind want details I get want to

like we're active. can administration the happen, to think with get think cost me that's ask that's from in That's I cards paying up and as sector, me open impacts but servicing and term Fed going assured that and be think hope news. outrageous there. I think you seems But b*** as steady. it this also bull of secret market. to I'd to that Trump is key are that's We of what's not up it's good I sectors who've going replace said, -- last be have one, loans you going the debt, people the and because to next the pretty apart the gear. So other But I really things I key. jawbone one wild patient pretty And the as to the credit that It comes the living that. interest is, And biotech can rates that's them. kind remember, going and But And is to to 'XX impacts House measured bear on the us. their of to to some just is early take biotech been really hopefully,

Vikram Malhotra

the in Got X submarkets San San overall, across gave you the bit does South little are of sort Francisco. just could it. you the today? we've give like strength been more that markets But up of more the of some key if Maybe hearing relative and how and color us us in each relative of tenants a like perhaps key -- maybe Diego, mix pick

Joel Marcus

Yes.

markets, heart enormous very very, Cambridge remains distance intelligence. of the far the Bay -- market great in and has at see Mission we think and I so more strength it's of been as U.S. Francisco affordable. in place of as Boston steady, much the has San overall living, an much the driven South biotech I Diego I to in has Area now submarkets. least by highest still an think, biotech, think The still San And not a cost Mission at span and good and a institutional Bay because Bay, it's it's and artificial large. live. And

of through leasing I Peter the some went think there.

only oversupply South So South Francisco would kind reckless a thumb, And of I there primarily who biotech a suffers people from San -- is say, they think by the again, what then Francisco, I know doing. really sore of market. also were really being kind a San didn't

at So based really you've institutionally got which it those to, compared is now AI-based. X and work that more hurt Bay, Mission things say,

of little lay a the the of of bit land. kind that's So

Vikram Malhotra

I can sorry, And if then clarify. just last one,

out lease-up 'XX, 'XX developments or either any pretty feel starts, into good there say? but of 'XX factors it question you the the cause to into the be in 'XX about of mentioned push that pause maybe the 'XX, development You 'XX, you would

Joel Marcus

No.

we're Marc what guess best press the of match think is capital release and our we published think I our press the in seeing. of [indiscernible] how should -- demand allocation the

expect I don't 'XX changes post 'XX print. or So any certainly material this to

Operator

is next Tom Catherwood BTIG. question from The with

William Catherwood

questions for previous at Two that. Sticking XXX Illinois and on Moderna's Tech with leasing Square. space for

is signed or leases. that Square... X XXX X on of square the XXX,XXX feet was vacancy? negotiating buildings? I And the second Tech you mentioned Was then with those Or buildings and First, Illinois Marc, part think

Joel Marcus

Illinois, The next sits UCSF So granular more remember want right view, a that's any to and But that's that a that. -- to next got right water Square. to Tech building to I get don't related the XXX right Chase than next mean don't company biotech imagine the City. South Mission in demand one moment. building at but institutional Bay really, South that is and I heavily the in AI and for could is the Center -- City there exited, it's

good So the superb. optimism on location fairly And is I think we that. have

William Catherwood

looking against does And as tenants new Got against competing it second building it space? Is the... of stack against competing mean, I kind -- it are up of domains it. construction? the competing is at gen is And that how across

Joel Marcus

Tom. bigger who on probably generalize probably depends so is. space, it, on new but there, existing -- so depends who can't it's the It tenant space, dependent dependent tenants prefer tenant for you tenants Smaller on

William Catherwood

Hallie. to back a deal can comments and lead me, Appreciate M&A, your I the investors with event to And go one it. liquidity then Joel. that, about Got to provides Is last for that in activity want idea specifically there? biotech alone a enough early companies. do also Or sustained rebound increase stage in need M&A an kind investment? to in we boost activity back in reinvestment IPO of to life science get

Hallie Kuhn

Yes.

in and the at about this really I activity But is board. capital don't licensing see coming I the from? across the the opening. that a between the industry. M&A and It's investment of companies day source historically there's mix is for lifeblood market say, strong M&A, pharma exclusive. IPO so there I continued private and think holistic mutually balance deals very a this right? all and we we it's this think biotech year always healthy without they're a M&A and think could where end really of of see capital would And I IPO is and

from their X/X to going returns pharma I biotechs. get and around from work. them right? [indiscernible] those to across are coming put revenues, and really innovation If investors products, current public at that you of look came think They [indiscernible] private And

up public it's think is market I what IPO we'll also is mean IPO but doesn't choice, another see opening the market hard. company right, that the right does. a the avenue being So Certainly, for capital,

look it's significant I so And be for looking pharma that we to as continues overall, positive drivers this and very think to very innovation. M&A, for

Operator

Green is The Street. with Dylan from Burzinski next question

Dylan Burzinski

Just drop sort economics. supply touch so, development of know pipeline months that off and leasing have deteriorated on new I over or economics the in leasing last demand. wanted the to XX given

that So as expectations CIs sort then the I sort mean, is just of sense XX curious, for of have months? you expectations about forward. think stabilized and and higher and moving it environment at that levels your current sort [indiscernible] over these of next the

Joel Marcus

Peter?

Peter M. Moglia

we space. to as today ship where tenant institutional not and kind XX% the was need adjusting the than TIs do it's can traditional new and for between I Thus But and it's what economics turnkey TIs or is a the definitely biotech it -- that mean looking a looking higher as [indiscernible] demand be see we for We company. pre stabilizing. free accordingly. is turnkey if construction type the understand far The are -- market so pharma of landlord are the that rent a and you there Yes. outside split deal we're still of essentially is providing. company the years. a tenant, demand it rocket That's if still of see our is other and but pharmatec institutional you much it's larger

see we bottom think report we'll the few collapse. as we're the fundamental the I in reaching But quarters. next of

Dylan Burzinski

guys owner it institutional know bidding But sort bring seeing That's assets to sector? you in today? market, on mean, capital are of family that talked one-off of still mostly firms your come in tires profile the just guys buyer helpful. dispositions. users or And XQ kick deploying disposition sort the your are terms of in estate is you then back real maybe of are tenants and the money office-type I I as about Or largely bit a little the you continuing to side. maybe

Peter M. Moglia

user We Hutchinson a sell. for haven't quarter, a institutional Research the had with we on sale Institute side. lot Broad quality had So the Cancer last Center a nice sale

focus folks. science our great people And a that with -- we've that. learned one these it great takeaway. investors need not institutions be to I current of it ties institution we in meeting, is been meeting, yet telling But some commentary I my science to was that like together that where demand, supply, in which life lessons had Francisco That's talked is We've that basis, a getting and probably us a you", it's about you large no of meet want tell that about So what of in do is zombie funded the think just at buildings, partners, but Greater it's the sponsor stuff, are hyped there's with all to haven't we strength the with experience, unfortunately, want with we've in level invested lease folks up probably that they've we some because institutional they wrong a our lesson. partners partners and in they said, San meeting lot and to and one so or had want of whether science, "hey, right, Boston a life that some And a learned were XX% has tested very of on regular won't in inventory of something location. not the quality, a about recently takeaway. different and they the life fairly their assurances the Alexandria. in look, couple be to investors We keep market be it's of good about we a

going And portfolios it's life going science estate real so going out, with to see a of on to institutional it's and but or and experience, somebody there's fail. you're to and from be just to developers lot I least night But think try to here us be that a else with that into has of at are space flyby others. to scale get other going want all these couple be

ones real these may of case they know the soured good to for be partnered be They lost, will money some use we're on going institutions it that but know with. a And be it's to know a because they they're science and life not estate, business. they there's

Operator

Deutsche is Next from Omotayo question Okusanya Bank. from

Omotayo Okusanya

happen? well then expected million capital below wanted million where at some plan. in as of Maybe I the buyback. cost the midpoint. did And the us on that first focus trading today at look taking to a allocation could stock you $XX quickly potentially could of the just the $XXX also just savings through savings just How as help walk you

of quickly curious kind the think under buybacks what how how remaining of million and of So and just you circumstances kind about happen? could $XXX that

Joel Marcus

Yes. maybe Thanks want for those? your question. Marc, do you to address

Marc Binda

one. Yes, I hear actually fourth problem savings in I think And 'XX can the total on quarter address the had savings. fact, G&A, the second But little significant one, in compared relative a on actually pretty the pretty to first had first the I quarter. to third one, to some significant the had 'XX

versus in 'XX. strip you was acceleration amount there of 'XX If the expense 'XX, was savings still to there about million from $XX an I'm G&A last year, out stock -- talking of

that be that, the sense should 'XX. expecting give guidance a trend to accomplish. into assumes our fourth accelerate million will Obviously, of a we can I quarter think So We're what encouraging you decline. $XX-plus for But

for that's right around think, I XXXX. the implied actually that guidance is that our at rate, in run run rate

evidence I savings that of terms So we to of headed in into quarter fourth think the accomplish is can 'XX. expect sort good we G&A what

Joel Marcus

we on are. Marc, the globally where buyback just comment

Marc Binda

Yes. Right.

So bought Joel's $XX comments. back million last January. would $XXX back earlier refer definitely We've $XXX million, to in million yes, I quarter,

million. to X $XXX assumes guidance Our

blown 'XX that already of million through our we've year So in this $XXX guidance.

tuned. So I stay think

what we'll today, as we'll change. here it. more, conditions in that's But Joel much that evaluate continue monitor to As guidance not really got market to said, as continue but we we've stand is

Operator

is question Evercore. next Jim The from with Kammert

James Kammert

that of leasing vacant sort be any are lease-up space? content they're your suggesting up might Or it's Is if you're any, that the and there's new And I'm extracted there timing of regarding of into I'm leases? to that up the some space. been these tenants over curious vacant picking quarter-over-quarter thematic because doing otherwise previously gone developments have

Joel Marcus

and and markets, good tenants insight XXX of each big the into Jim, have their pretty the needs remember, are. in we stable pretty sectors cluster core again, with different a Well, what

really So generalize. it's I case-specific very to and hard would say

James Kammert

in looking And cash Is to then enough. look sort compare of the peak the at 'XX fund remaining it term. you your least to can near dispositions? dollar maybe assume here and to Fair finally, Page years over the XX, X commitment of probable absolute your terms retained at that next that you flow developments reasonable at in

Joel Marcus

Marc, you that. Well, Yes. can on comment

Marc Binda

come got pretty with be. the good visibility Well, this, the seen been looks years, couple for give like, here on end The construction Yes. projects far construction have to -- of -- that what the amount in. of dollars 'XX little We've for has 'XX a of outpacing where would has it's going of say amount us construction. that but right, -- down got of I through is a you dollars kind the to last off been might sense deliveries obviously we've

tuned. stay guess I So

Operator

from The next question John with Kilochowski is Fargo. Wells

James Feldman

impact sorry I is handling such comments much Joe, of so back the end, the difficult to we're wildfires on started to when regarding go your very the This But on to you impact company them wanted the Feldman with John. and had Jamie that a your to hear team. that call.

insurance away or implications think leaning costs. real of initiatives, are all to of I one you're What commercial changes, California California as commercial long-term investing of the do California And incremental are from thoughts you your in this? dollars, in towards what California. estate for political business to owning real initial investing largest a estate impact are result the the terms any long-term in in here? your landlords So mean, on you in also

Joel Marcus

Yes.

in at I look it, shape frame the doesn't question. to in. most Diego, Hill very think, and to the the of have think refer addresses which portfolio, I Marc our XX-K, a I I'll you wildfires, Country. to let a particularly So But would ask good you come if San exposure great number of points of your in which me is and start then

not think Francisco, I there, particularly San exposed. same is South true the

the overall, good our of assets really think I So shape. bulk are in

though California we're in several and here days the of it very the the lost, versus is mayor and during XXX-mile season. rethink that I of that I elect an back, I and come county local hope it winds they one because think state Rick of he's lack election Caruso. electorate here officials going about the preparation to how current going think time even ahead that that known a hour think what to have was possible means well dry of

their who's real operates political who all have person, You choice person commission. versus a someone a headed the of a business lives estate, who police

time So I Palisades kind kind And for are I and headed search in I think and of hope lived evacuated gave to is there sense common more practical of policies. for years, the was I leadership. many where think I is twice I mean up. California people going on not lived foolish during that XI finally and just take the

I In there, that I when was it fact, dry. overlooked house reservoir my the during was never dry. And days saw the

season I in think want California. But area do further. high fire comment reservoir a fire So be protected dry sense. makes anything how so Marc, the to you well no anyway, during a could in we're But

Marc Binda

taken the operationally potential into concentration No, we've San Diego. San what's in Yes. ourselves is kind and we've fire. and we in science to in California, best -- tenants wildfire the part a well just buildings the climate San facilities company design happened I of more and that with what something the a to in been as can got as obviously, Diego doing seriously. that, obviously, the here region has It's adopted probably across of tell put assets there mostly really say of of Francisco But Los you in position unfortunate to portfolio then can that's part their exposure resilience got our a really harden very that deal as our our to as Angeles.

James Feldman

some that even your Okay. that I in you the I just the mean if And impact very appetite there think early. I anything California? expenses on could about of be then on is know you operating on a have are And to longer-term guess similarly or policy insurance the think front? table, initiatives and it's

Joel Marcus

I the Well, remember in think are California. of X major have you to X clusters

So this knowledge-based and a intellectual industry is industry. an industry that's

and knowledge think from. say, I tenant or to And nature base where have you in shape Diego. there San so that where assets is our San thing that Francisco, I good base tenants same be [indiscernible] And think fires, San the Francisco where cluster and because that's as hire of is in I

just natural on holdings the we've our from steps Bay hazards extraordinary disaster Area think think maybe state I water, when earthquakes well Board -- report said, to or risk any big by lot a much and really job exit tend other for we and The acting people our issue. made here we quarterly current a San a is comes I it don't would in of whether of issue. And insurance as But Diego. do right to profit insurance insured. insurances California But fire, to kinds hope our it we've done by And taken companies and make and here a the as I ballot our good their operate here, has policyholders by were be management, to that think Marc changes it well. whether whether or smarter harder getting prudently. I that and more

James Feldman

sensitive are team. and on our this. topic for Okay. it's a know your Thank I with thoughts thoughts you your

Joel Marcus

number amazing of unfortunately. dislocated been an people It's who've Yes.

Operator

Citi. today question is with last Griffin The from Michael

Michael Griffin

maybe feet to after round, their that of tenants environment of some with realize comments cadence VC But do see the flows going go on XX,XXX order start-up types pickup? marketed need might and I back these to greater to tenants more funding the a square in funding Hallie, your a to firms flowing expand more capital to type leasing of established see to capital the from in space. could you increase X,XXX products,

Hallie Kuhn

Yes.

from our have As is to the up, portion this that in of right, came previous what portion. coming you keep it question of when ARR, overall context

private biotech. of So from ARR X% overall our comes

'XX. And our strong So demand to entire kind perspective, I right? built would a broad it of funding that at, while enable, going certainly, conditions set driver of that the I say, change. very to has venture diverse contingent capital as would dry a say, lease-up, market There's is on say, We've come help not, a hand have 'XX, right, right? tenants peak deploy. we're from funding is and reflective of lot of investors portfolio, and It's important a pretty off really looking would of a into down the environment of

throughout to So year, be the it evolves. seen remains that how

there mentioned, more As dampening are just are environment. risk-off still Joel lot right in that a macro factors a of activity

the closely, So provide as certainly goes we'll and on. an update year tracking it

Michael Griffin

sort just then there. transaction and maybe And helpful. activity the X market on That's of

the administration's rates yields it return your of of given current I or interest policies new if into given guess called the account you to will XX-year, higher at You guess, whether move be environment? the out in the mid-Xs, buyers taking kind your be prospective Investor Are hurdles not inflationary. might rate cap for expectations low for we've the it's but seen Day and anybody's

Joel Marcus

Yes, Peter?

Peter M. Moglia

account what Yes. we at Day. then Yes, Investor to you of gave we it you to and have the sell we to into we take just quality give numbers have and -- I the think average it

numbers. those comfortable So we that yes, can this at achieve we're point

Operator

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

Joel Marcus

and Just the quarter forward first thank to we talking Thank you everybody, on look you. to call. you,

Operator

has you today's now for concluded. conference The attending presentation. Thank

You may disconnect. now

Alexandria Real Estate Equities (ARE) 28 Jan 252024 Q4 Earnings call transcript