Summary of Alexandria Real Estate Equities 2025 Investor Day Company Overview - **Company**: Alexandria Real Estate Equities (NYSE: ARE) - **Industry**: Life Science Real Estate Core Points and Arguments 1. **Mission and Impact**: Alexandria focuses on advancing human health by providing mission-critical space for life sciences, with approximately 50% of all FDA approvals in the last decade attributed to its tenants [3][34][35] 2. **Market Conditions**: The life science industry is currently facing significant challenges, including a bear market, regulatory changes, and a decline in demand for lab space, with a reported 62% decrease in demand since peak levels in 2021 [4][8][31] 3. **Supply and Demand Dynamics**: The company is navigating an oversupplied market, leading to declining occupancy rates and slower lease-up of new developments [10][44] 4. **Financial Strategy**: Alexandria aims to maintain a strong balance sheet, optimize cash flow, and strategically invest in its mega campuses while reducing capital expenditures [10][12][13] 5. **Regulatory Environment**: The FDA is experiencing leadership turmoil, which has resulted in increased delays in drug approvals, impacting the life science sector [33][34] 6. **Venture Capital Trends**: Venture capital fundraising is at a decade low, affecting the ability of biotech companies to secure funding and grow [31][32] 7. **M&A Activity**: Despite challenges, there is a strong year for mergers and acquisitions as pharmaceutical companies seek new innovations to offset patent expirations [32][33] 8. **Reimbursement Challenges**: The life science industry faces hurdles in reimbursement for novel medicines, with ongoing discussions about drug pricing impacting funding for research and development [36][37][38] Important but Overlooked Content 1. **NIH Funding Issues**: The proposed 15% cap on indirect costs for NIH grants has frozen institutional demand, creating uncertainty for research institutions [29][30] 2. **Market Performance Metrics**: Alexandria's leasing volume in Greater Boston and San Diego significantly outperforms competitors, with 110% and 150% of the next five largest life science real estate owners, respectively [46][49] 3. **Mega Campus Strategy**: Alexandria's proprietary algorithm combines location, innovation, talent, and capital to create a competitive advantage in the life science real estate market [45][46] 4. **Historical Context**: Alexandria has a 30-year history in the life science real estate sector, having pioneered the industry and established a first-mover advantage [45] 5. **Future Opportunities**: The potential for AI and biological discoveries to transform drug development could lead to significant growth in the biotech sector, increasing demand for Alexandria's infrastructure [39][40] Conclusion Alexandria Real Estate Equities is strategically positioned to navigate current industry challenges while leveraging its unique mega campus model to capture future demand in the life sciences sector. The company remains focused on maintaining financial strength and operational excellence amidst a tumultuous market environment.

Financial Data and Key Metrics Changes - Total revenues increased by 4% and adjusted EBITDA rose by 5% for Q1 2025 compared to Q1 2024, after excluding the impact of dispositions completed since the beginning of 2024 [38] - FFO per share diluted as adjusted was $2.30 for Q1 2025, with collections remaining high at 99.9% [39][40] - Same property NOI decreased by 3.1% but increased by 5.1% on a cash basis for the quarter [42] Business Line Data and Key Metrics Changes - The company reported that 75% of annual rental revenue comes from collaborative mega campuses, with 89% of leasing activity in Q1 2025 originating from existing tenants [40] - The average lease term for completed leases was ten years, above the historical average [40] - The first quarter saw 1,030,553 square feet leased at a rental rate increase of 18.57.5% on a cash basis [31] Market Data and Key Metrics Changes - The life science industry continues to face a massive unmet medical need, with nine out of ten diseases lacking approved therapies [20] - U.S. headquartered companies account for 55% of global biopharmaceutical R&D investment [21] - The demand for innovation in the life science sector remains strong, with drug approvals moving forward [14] Company Strategy and Development Direction - The company aims to deepen relationships with strong tenants and capture future growth opportunities in the life science sector [27] - Alexandria is focusing on transforming its asset base into predominantly mega campuses to capture a greater share of future demand [35] - The company is strategically disposing of non-core assets to fund high-quality development and redevelopment projects [35] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting that the demand for life science innovation remains robust despite challenges [19][26] - The company is positioned to benefit from ongoing M&A activity in the life science industry and anticipates positive developments in FDA approvals [14][19] - Management highlighted the importance of maintaining a strong balance sheet and liquidity to navigate challenging market conditions [49] Other Important Information - The company has a strong balance sheet with a corporate credit rating in the top 10% of all publicly traded U.S. REITs [48] - The average remaining debt term is 12.2 years, with low debt maturities over the next three years [49] - The company has completed $176 million in dispositions and has another $434 million subject to nonrefundable deposits or letters of intent [36] Q&A Session Summary Question: Is the new guidance a worst-case scenario regarding the biotech market? - Management clarified that the guidance reflects their best estimate based on current facts, not a worst-case or best-case scenario [54][55] Question: Is the current pace of leasing in private biotech sustainable for 2025? - Management indicated that venture funds have significant dry capital and are deploying it judiciously, suggesting sustainability in leasing activity [56][58] Question: What does "doing the right thing at the worst time" mean for Alexandria now? - Management emphasized the importance of aligning with innovative companies and continuing to develop mega campuses despite the current market sentiment [63][64] Question: What is the outlook for capitalized interest adjustments this year? - Management stated that the current estimate for capitalized interest is their best guess, with good visibility for the remainder of the year [66] Question: How is the capital markets environment affecting dispositions? - Management expressed confidence in the buyer pool for land and non-core assets, noting strong demand from residential developers and private equity [70][72]