Alexandria Real Estate Equities (ARE) Q2 2025 Earnings Call July 22, 2025 02:00 PM ET Company ParticipantsPaula Schwartz - Managing DirectorJoel Marcus - Founder & Executive ChairmanHallie Kuhn - SVP - Life Science & Capital MarketsPeter Moglia - CEO & Chief Investment OfficerMarc Binda - CFO & TreasurerFarrell Granath - Equity Research AssociateNick Joseph - Head - US Real Estate & Lodging Research TeamAnthony Paolone - Executive DirectorMichael Carroll - Managing DirectorVikram Malhotra - Managing Directo ...

Financial Data and Key Metrics Changes - FFO per share diluted as adjusted was $2.33 for Q2 2025, up 1.3% compared to the prior quarter [34] - Occupancy at the end of the quarter was at 90.8%, down 90 basis points from the prior quarter [35] - Same property NOI was down 5.4% and up 2% on a cash basis for the quarter [36] Business Line Data and Key Metrics Changes - Approximately 770,000 square feet were leased in Q2 2025 with leasing spreads of 5.5% to 6.1% on a cash basis [25] - Tenant improvements and leasing commissions on renewals were down 40% compared to the previous two quarters [25] - The company leased 131,768 square feet during the quarter, including the first lease signed at 701 Dexter in Seattle [26] Market Data and Key Metrics Changes - Private biotechnology companies represented 30% of overall leasing for the quarter, with nearly $22 billion deployed in the first half of the year [14] - Publicly traded biotechnology companies represented just under one-fourth of leasing for the quarter, with over 95% consisting of new leases [15] - Large pharma represented 5% of leasing for the quarter, buffered from short-term volatility due to significant cash flows [18] Company Strategy and Development Direction - The company is focused on its mega campus platform, which is strategically important for capturing opportunities and supporting talent recruitment [22][24] - The company has a $3 billion investment in various future pipeline projects, with a focus on preconstruction activities [40] - The asset recycling program is expected to be heavily weighted towards the fourth quarter, with significant dispositions planned [30][31] Management's Comments on Operating Environment and Future Outlook - Management expects the Fed to lower interest rates, which is crucial for the capital markets in the industry [7] - There are reasons to be optimistic about the life science sector, with M&A activity and biopharma licensing deals providing positive dynamics [20] - Management noted that fears regarding spending cuts and changes at HHS may be overblown, and onshoring of R&D could provide a tailwind for the life science sector [13] Other Important Information - The company completed the largest lease in its history, a 466,000 square foot lease, demonstrating brand trust and product quality [6][24] - The company has identified 768,000 square feet of lease rolls with a weighted average expiration date of January 21, 2025, with 20% already leased [27] - The company reiterated its guidance for year-end 2025 occupancy at 90.9% to 92.5% [36] Q&A Session Summary Question: Trends or catalysts leading to the Campus Point lease - Management indicated that the lease was driven by a notable big pharma's effort to consolidate its R&D hub rather than onshoring issues [48] Question: Insights on free rent trends - Management noted that free rent did increase slightly this quarter, but it is hard to predict future trends [50] Question: Tenant perspective on build-to-suit versus vacant space - Management explained that large tenants prefer build-to-suit options for their specific needs and the quality of the location [54][56] Question: Occupancy expectations for the remaining portfolio - Management expects a pickup in occupancy as non-stabilized assets are sold and new leases are executed [64] Question: Impact of FDA leadership change on tenant decisions - Management stated that concerns vary by tenant type, with private biotech focused on cash conservation and public biotechs concerned about market health [74][76] Question: Potential for larger capital transactions - Management expressed a preference for owning more of their mega campus assets and is focused on strategic transactions to monetize non-core assets [84][86]

Core Insights - Alexandria Real Estate Equities, Inc. (ARE) has signed a 16-year lease for 466,598 rentable square feet (RSF), marking the largest life science lease in its 31-year history [1][10] - The lease is with a long-term multinational pharmaceutical tenant and is part of a build-to-suit research hub located at Campus Point in San Diego [1][10] Group 1: Lease and Development - The new research hub aims for 100% electrification and is targeting LEED Gold Core & Shell and Fitwel certifications, with construction set to begin in 2026 and completion expected in 2028 [3][10] - Campus Point currently has 1.3 million RSF in operation, with a 98.8% occupancy rate, and has potential for future development to expand to approximately 2.6 million RSF, representing a 420% growth since its initial acquisition [5][10] Group 2: Market Position and Strategy - Alexandria has established itself as a leader in life science real estate since its founding in 1994, focusing on creating a unique Megacampus ecosystem that supports a diverse tenant base [4][7] - The company caters to a wide range of high-quality tenants, including multinational pharmaceutical firms and biotechnology companies, although it remains sensitive to changes in the life science and technology sectors [8] Group 3: Future Outlook - The active development and redevelopment pipeline is seen as a positive for long-term growth, but it also presents challenges such as rising construction costs and lease-up concerns amid macroeconomic uncertainty [9]

Core Insights - Alexandria Real Estate Equities, Inc. has established a new Learning Lab at Fred Hutch, aimed at enhancing science education and mentorship for future scientists [1][2] - The Learning Lab will provide a dedicated space for scientific training programs, allowing students to engage in hands-on experiments related to cancer diagnosis and treatment [1] - Alexandria has a long-standing commitment to building a life science innovation ecosystem in Seattle, which includes strategic investments and partnerships with organizations like Fred Hutch [2][3] Company Overview - Alexandria Real Estate Equities, Inc. is a leading life science REIT with a market capitalization of $28.8 billion as of March 31, 2025, and operates in key life science clusters across North America [3] - The company specializes in developing collaborative Megacampus ecosystems that enhance tenant recruitment and retention of top talent [3] - Alexandria also provides strategic capital to transformative life science companies through its venture capital platform, ensuring a high-quality tenant base and long-term asset value [3]

Alexandria Real Estate Equities (ARE) Q1 2025 Earnings Call April 29, 2025 08:44 PM ET Speaker0 Good day, and welcome to the Alexandria Real Estate Equities First Quarter twenty twenty five Conference Call. All participants will be in the listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Paula Schwartz. Please go ahead. Speaker1 Thank you, and good afternoon, everyone. This conference call contains forward looking statements within the meaning of the ...