Industry Overview - The life sciences sector is experiencing significant growth, with global biotech spending projected to increase from approximately $1.7 trillion in 2025 to over $5 trillion by 2034, creating a demand for specialized laboratory space [1] Company Profile: Alexandria Real Estate Equities (ARE) - Alexandria Real Estate Equities owns the largest portfolio of labs and life-science properties in the U.S., with around 750 high-quality tenants including major biotech firms like Eli Lilly, Moderna, and Bristol-Myers Squibb [2] - The company has an occupancy rate of 92%, primarily leasing to biotech, pharmaceutical, and AgTech tenants, which leads to longer leases and stable cash flow [4][5] - Alexandria achieved average rent increases of 18.5% on renewals and 7.5% on new leases, indicating strong pricing power [4] Financial Strategy - Management is focused on capital recycling, selling noncore assets to reduce debt and reinvest in higher-yield developments, which enhances returns while mitigating long-term risks [6] - For 2025, Alexandria plans to dispose of $2 billion in assets, with one-third already closed or under contract, directing proceeds into profitable mega-campus developments [7] - The company has a weighted-average remaining lease term of 7.6 years, contributing to predictable cash flow and income stability [5] Growth Prospects - Alexandria has approximately 4 million square feet of Class A lab projects under construction in key markets, with much of the space pre-leased, indicating future revenue growth [8] - The company expects to retain around $475 million of operating cash this year after dividends, allowing for self-funding of expansion [8] Valuation and Dividend - Alexandria trades around $71 per share with a dividend yield of 7.27%, significantly higher than the average REIT payout of 4% [13] - The dividend payout ratio is conservative at 57% of FFO, suggesting financial stability [13] - The stock is currently undervalued, trading at approximately 7x forward FFO, and is over 65% below its 2021 peak, presenting both yield and upside potential for investors [14]