Earnings call transcript: Alexandria RE posts Q2 2025 loss, stock rises 3.84%

Alexandria Real Estate Equities (ARE) reported a surprising second-quarter loss for 2025, with earnings per share (EPS) at -$0.64, significantly missing analyst forecasts of $0.59. Despite this, the company’s revenue of $762 million exceeded expectations, leading to a positive market reaction with the stock gaining 3.84% to close at $78.27. The company, which offers an attractive 6.75% dividend yield and has maintained dividend payments for 29 consecutive years, appears undervalued according to InvestingPro analysis.

[Discover 7 more exclusive insights about ARE with InvestingPro, including detailed dividend growth analysis and future earnings projections.]

Key Takeaways

• Alexandria RE reported a surprising EPS loss of -$0.64 against a forecast of $0.59.
• Revenue surpassed expectations, reaching $762 million.
• The stock price rose by 3.84% despite the earnings miss.
• The company completed its largest lease in history and is focusing on development projects.
• Alexandria RE is targeting significant cost savings and property dispositions in the coming quarters.

Company Performance

In the second quarter of 2025, Alexandria RE faced challenges with an EPS loss, contrasting sharply with the forecasted positive earnings. The company demonstrated resilience with a revenue figure that exceeded projections, supported by trailing twelve-month revenue of $3.11 billion and EBITDA of $1.97 billion. The company’s focus on high-quality tenants and its mega campus platform continues to drive its long-term growth strategy, maintaining a robust gross profit margin of 70.5%.

Financial Highlights

• Revenue: $762 million, up from the forecast of $745.29 million.
• Earnings per share: -$0.64, missing the forecast of $0.59.
• FFO per share diluted as adjusted: $2.33, up 1.3% from the previous quarter.
• Occupancy: 90.8%, a slight decrease from the prior quarter.

Earnings vs. Forecast

Alexandria RE’s actual EPS of -$0.64 was a significant miss compared to the forecasted $0.59, resulting in a negative surprise of 208.47%. This marks a notable deviation from the company’s historical performance, where it has typically met or exceeded expectations. However, the revenue surprise of 2.24% provided a silver lining, indicating strong operational execution.

Market Reaction

Despite the earnings miss, Alexandria RE’s stock rose by 3.84% in the after-hours trading, closing at $78.27. This positive movement suggests investor confidence in the company’s strategic initiatives and future prospects, particularly given its recent leasing successes and development pipeline.

Outlook & Guidance

Looking ahead, Alexandria RE provided a year-end occupancy guidance of 90.9% to 92.5% and an FFO per share diluted guidance of $9.26 at the midpoint. The company maintains a "GOOD" overall financial health score according to InvestingPro analysis, with particularly strong cash flow metrics. The company remains optimistic about future venture investment gains and anticipates potential interest rate cuts by the Federal Reserve, which could positively impact its financing costs.

[Access the comprehensive Pro Research Report for ARE, part of our coverage of 1,400+ US stocks, offering deep-dive analysis and actionable insights.]

Executive Commentary

Joel Marcus, Executive Chairman, emphasized the importance of trust in the company’s brand, stating, "Trust is the lifeblood of the Alexandria one of a kind brand." Peter, another executive, highlighted Alexandria’s position in the market: "In Life Science Real Estate, a flight to quality means a flight to Alexandria." Hallie Kuhn, SVP of Life Science and Capital Markets, noted, "We continue to lay the groundwork for long term growth."

Risks and Challenges

• Macroeconomic uncertainties could impact occupancy and leasing.
• Potential policy changes from FDA leadership transitions.
• Competition in the life sciences real estate sector.
• Execution risks associated with large-scale development projects.
• Interest rate fluctuations affecting financing costs.

Q&A

During the earnings call, analysts focused on Alexandria RE’s cautious outlook on occupancy and leasing amid macroeconomic uncertainties. There was significant interest in the company’s build-to-suit opportunities and the potential for tech companies to utilize lab spaces. Alexandria RE also discussed ongoing evaluations of redevelopment projects slated for 2027.

Full transcript - Alexandria Real Estate Equities (ARE) Q2 2025:

Conference Operator: Please note today’s event is being recorded. I would now like to turn the conference over to Paula Schwartz with Investor Relations.

Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities: Thank you, and good afternoon, everyone. This conference call contains forward looking statements within the meaning of the federal securities laws. The company’s actual results might differ materially from those projected in the forward looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in the company’s periodic reports filed with the Securities and Exchange Commission. And now I’d like to turn the call over to Joel Marcus, Executive Chairman and Founder of Alexandria.

Please go ahead, Joel.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Thank you, Paula, and welcome everybody to our second quarter earnings call. With me today are Hallie, Peter and Mark. And I’d like to start with a quote from Brad Stevens, who coached at Butler and the Celtics as most of you know. There is no more important quality in striving for excellence than to true grip, a ferocious determination demonstrating resilience, hard work and passion, clear direction and mission. This so aptly describes the Alexandria team and pursuit to provide the best environments for the best scientific minds, which in turn enhance human health and extend the quality of life for inhabitants on this planet.

A profound thank you to this one of a kind team for an impactful second quarter. Disciplined people, disciplined thought, disciplined action built to last. As I opened my first quarter comments, I comment that ARE has been and will continue to be one of the most consequential REITs in the sector’s history. Steve Jobs once said, a brand is simply trust. The recent execution of the largest lease in the company’s history is a testament to that and our brand trust, our unique product quality and value to the client.

Trust is the lifeblood of the Alexandria one of a kind brand. This 466,000 square foot lease represents a seminal moment in the history of Alexandria and demonstrates the resilience of our sector showing long term commitment, long term lease with a high credit tenant. Couple of thoughts on the second quarter before I turn it over to Hallie, Peter, then Mark. Alexandria continues its solid performance across a wide variety of financial and operating metrics in the face of macro and industry headwinds. A key focal point for the company is the 2027 and beyond stabilization pipeline.

We’re pleased to report that we’re making solid progress on 311 Arsenal, Sylvan Road asset, 1450 Owens, 269 East Grand and 701 Dexter. Another key focal point is asset sales and Peter will talk about this in our recycling strategy. We have about $1,100,000,000 to add to our executable sales pipeline for the next two quarters and we feel that it is doable given we completed $1,100,000,000 of sales in the fourth quarter of twenty twenty four. So in today’s current environment, what are we most focused on beside the operating and financial performance? Over the next several quarters, we expect the Fed to finally lower interest rates, which is desperately needed for the capital markets of our industry.

We have not seen or heard any major if you turn for a moment to the FDA, any major issues from our tenants regarding undue delays, but we’re monitoring this item very closely. In fact, several of our team members on July 17 attended a meeting with Commissioner Marty Makary and where he essentially elucidated his one hundred day agenda that was focused on the impact of better food for children as we know, revamping and rethinking how to modernize the FDA to move more efficiently and nimbly. And that is something many of us in the industry have certainly advocated for a long period of time. McCary’s thoughts were succinct and direct. The FDA is a national treasure.

The FDA is strong. We will meet our PDUFA targets. We will add more AI efficiencies. We will listen and talk to people externally. We’ll make sure the staff has what they need.

We have a phenomenal talent coming in, which was just announced the appointment of George Tidmarsh to be the Director of the Center for Drug Evaluation and Research. And we will be making meaning the FDA exciting new announcements on talent who are motivated by the incredible tradition of the FDA. So that’s very, very hopeful thinking. When it comes to tariffs, in theory, tariffs should not have huge impact on the innovation biopharma ecosystem, mostly because of the low cost of goods sold relative to other industries like hardcore manufacturing. However, used transfer pricing schemes may more heavily expose large pharma companies to tariffs.

Tariff impacts on biopharma may be muted as many levers exist to reduce the impacts. Pharma could end up being exempt IP reassuring trading companies as manufacturing intermediaries, course, moving more manufacturing back to The U. S. And increased drug pricing issues. When it comes to so we talked about the FDA a moment, tariffs a moment.

When it comes to drug pricing in most favored nations, so called MFN, this isn’t new was introduced during the first Trump term, but ultimately was rescinded by Biden when he came to office following legal challenges. The impact appears constrained based on currently available details. We know that some manufacturers are moving direct sales to consumers and this would provide commercial tailwinds, especially in certain segments such as obesity, drugs and the like. Key details remain unclear and we know there is negotiations going on being we believe chaired by Doctor. Oz of CMS.

And the market reaction so far suggests limited concern. I think when we think about this in summary, there are reasons to be optimistic. Fears of spending cuts and changes at HHS maybe substantially overblown. Onshoring of R and D can provide a tailwind for life science sector. Public markets move in cycles, macro events will eventually dissipate and the markets will stabilize and M and A consolidation is instrumental for a healthy biopharma ecosystem.

And with that, let me turn it over to Hallie.

Hallie Kuhn, SVP of Life Science and Capital Markets, Alexandria Real Estate Equities: Thank you, Joel, and good afternoon, This is Hallie Kuhn, SVP of Life Science and Capital Markets. Today, we will provide an update on the strength of the life science industry, an industry that remains critical to the health and safety of The US, driven by a resilient and dogged effort to address the ninety percent of diseases that to this day remain untreated by medicine. Overall, once again, the leasing stats we are about to walk through reflect the importance of the diversity of our tenant base, which drove over 80% of our 2Q leasing by volume. Starting with private biotechnology companies, which represented 30% of overall leasing for the quarter, life science venture funding remained steady with nearly $22,000,000,000 deployed in the first half of the year. Financings were predominantly later stage as seed stage financings took the back burner to more derisk technologies closer or already in human studies.

The result is fewer, albeit larger financings as investors focus on select, but in their minds, more certain opportunities. This cohort of companies remains highly disciplined with respect to leasing decisions. However, the companies that are being funded and are expanding are extremely high quality and form a solid foundation for future growth. Moving on to publicly traded biotechnology companies. This segment represented just under one fourth of our leasing for the quarter, of which over 95% consisted of new leases.

This cohort continues to be dominated by have and have nots with select companies with high quality data and teams driving leasing and demand. The broader picture for public biotech equities remains tough, with not a single biotech IPO in the second quarter. Given the broader risk off environment, we are not likely to see the biotech public equity markets open meaningfully until interest rates subside. Notably, biomedical institutions represented 22% of leasing this quarter. Leasing was driven by a significant new lease from a well endowed investment grade public institution, demonstrating that lab space remains critical to institutions’ operations.

Importantly, the budget for the NIH remains the same as last year’s levels under a continuing resolution. And while the White House has proposed significant budget cuts, there remains substantial bipartisan support to mean the current or at least close to current levels of funding. For context, approximately 80% of NIH funding is for external institutions, funding work and supporting local economies in all 50 states. One additional point of clarification. While NIH funding is one of several funding sources for biomedical institutions, few, if any, of our private and public biotech tenants rely on NIH funding.

Last, large pharma represented 5% of leasing for the quarter, not including our recently announced long term lease with a top 20 pharma for 467,000 square feet on our Campus Point mega campus in San Diego signed at the beginning of the third quarter. Pharma generally remains buffered from short term volatility given significant cash flows and a long term strategic outlook on generating innovative medicines. Their success ultimately comes down to talent and accessing the best innovation. As the recently announced lease reflects, positioning their r and d in an Alexandria mega campus is highly strategic to these goals. To round out industry stats, two tailwinds we are monitoring through the second half of the year.

First is an acceleration of m and a, with acquisitions through the first half of this year eclipsing all of m and a in 2024. M and a is a significant positive for the entire biotech industry, recycling and incentivizing capital back into new companies. It’s a virtuous cycle we have seen occur over and over and over again. Examples include AbbVie’s acquisition of a company called Kapstan, an early clinical stage company developing novel mRNA therapies for autoimmune diseases such as severe lupus, signaling that pharma is ready and willing to buy cutting edge science. Second is the abundance of biopharma licensing dollars flowing into private and public biotech.

These are deals whereby large pharma licenses specific programs from smaller companies as opposed to a full fledged acquisition. In the first half of this year, 113,000,000,000 in biopharma licensing deals were announced, which compares to a 187,000,000,000 for the full year 2024. This is an important dynamic to highlight because it enables smaller companies to access additional capital and farmer resources when venture or public equity capital becomes more dilutive or challenging to raise. Both the life science sector and Alexandria remain resilient in the face of an uncertain macroeconomic environment. By retaining and securing high quality tenants today, we continue to lay the groundwork for long term growth.

It will be underpinned by the robust biopharma ecosystem, their tremendous ingenuity we are seeing in science, technology, and medicine, and the broader need to address the nine out of ten diseases and conditions that don’t have safe and effective treatments today. With that, I will pass it over to Peter.

Peter, Executive, Alexandria Real Estate Equities: Thank you, Hallie. I hope you all saw our recent press releases, and I’ll discuss the Seminole multinational pharma lease in a bit. But I want to first congratulate our team for their superb operational excellence in winning our first International Building of the Year Award for A. Davis Drive, a 150,000 square foot premier research and development building in the heart of our Alexandria Center for Advanced Technologies mega campus in the Research Triangle. This achievement highlights the quality of the workplaces we deliver to our tenants.

And while our mega campus platform is a strategically important strength, it’s also important to recognize the high quality buildings that proliferate throughout the core of our asset base. In Life Science Real Estate, a flight to quality means a flight to Alexandria. I’m going to discuss our development pipeline, leasing and supply and provide an update on the progress of our value harvesting and asset recycling program. In the first quarter, we delivered approximately 218,000 square feet of 90% leased Class A plus laboratory space into our high barrier to entry submarkets, which will contribute approximately $15,000,000 in annual incremental net operating income. The initial weighted average stabilized deal for this quarter’s deliveries was 6.6%, which was driven by a 100 basis basis point improvement in yield at our one Alexandria Square mega campus in Torrey Pines, which was the result of achieving higher rental rates than previously underwritten and a 4.7% reduction in construction costs.

So you’ve already heard the big news in the press release and from Joel and Hallie before me. But I wanted to talk a little bit about the multinational pharmaceutical lease that was the largest in our company’s history. What I wanted to point out is that that opportunity really aligns well with the ongoing development we have going on at the same campus with Bristol Myers. And it really illustrates that our mega campus platform is perfectly positioned to capture these opportunities by offering essential expansion space and premium amenities that support the recruitment and retention of key talent required to drive future scientific advancements. So I’ll transition to Leasing and Supply.

In the second quarter, we leased approximately 770,000 square feet with leasing spreads of 5.56.1% on a cash basis. We were very pleased that tenant improvements and leasing commissions on renewals were down 40% compared to previous two quarters. And although free rent was elevated, it enabled us to secure a relatively high average duration of nine point four years. The lease duration was also healthy for developed and redeveloped and previously vacant space at twelve point three years. One key result of the quarter we’d like to highlight is that our focused effort on development and redevelopment leasing has started to gain traction with 131,768 square feet leased during the quarter, including the first lease signed at 701 Dexter in Seattle and continued leasing progress at 99 Coolidge in Watertown.

Another key leasing item we’d like to update you on is the progress on the 786,000 square feet of lease rolls we identified in the third quarter twenty twenty four supplemental, which had a weighted average expiration date of 01/21/2025. We’ve leased 20% of this space and have serious prospects for another 30% plus that would resolve approximately half of it in the near term when we execute on it and we are confident that we will. Moving to competitive supply. In Greater Boston, two competitive projects, one in the Fenway and one in Austin, totaling approximately 565,000 square feet were delivered completely vacant. This reduced the remaining expected for 2025 delivery to 300,000 square feet, which is unleased.

The 2,500,000 square feet expected to deliver in 2026 remains two thirds pre leased. In San Francisco, two competitive projects were delivered, one in Menlo Park and one in Milbray, reducing the space expected for 2025 delivery to 700,000 square feet, which is 32% pre leased. No additional supplies expected to be delivered after this year. And in San Diego, Alexandria delivered 119,000 square feet of fully leased space at 1 Alexandria Square in Torrey Pines as I mentioned and approximately 120,000 square feet of unleased competitive space remains to be delivered here in the second half of the year. I want you to note that last quarter, mistakenly said 700,000 square feet was to be delivered in 2025, but that was actually the total amount to be delivered in ’twenty five and ’twenty six.

The 400,000 square feet expected to be delivered in 2026 is 100% pre leased. I’ll conclude with our value harvesting asset recycling program. Our dispositions and sales of partial interest will be heavily weighted towards the fourth quarter. We closed on approximately 84,000,000 asset sales in the second quarter. Included in those sales were 2425 Garcia Avenue and 404450 Bayshore Parkway, a set of vacant buildings in our Greater Stanford submarket that were primarily improved as offices and had been highly leased for several years prior to COVID.

In addition, we sold an attractive 16.5 acre land site in Texas we did not anticipate developing in the near to medium term. To date, dispositions and our share of non core pending dispositions amount to $785,400,000 approximately 36% of these dispositions consist of land, 52% are unstabilized improved properties and 12% are stabilized improved properties. The current identified non core asset pool that is being marketed or will soon be marketed comprises 25% land, 52% on stabilized properties and 24% stabilized properties. We expect to achieve a weighted average cap rate on our non core projected dispositions and partial interest sales, including non stabilized operating properties in the range of 7.5% to 8.5%. The buyer pool for our closed and pending dispositions includes residential developers, municipalities, a healthcare system, local commercial investor operators, domestic and international private equity, users, universities and domestic core funds.

Here are the key takeaways. First, we continue to deliver transformative projects and incremental NOI from our pipeline. Second, our focused efforts to catalyze development and redevelopment leasing have gained traction. Third, we are making great progress on resolving the 768,000 square feet of move outs that rolled at the 2024 and in the first quarter of twenty twenty five. And fourth, further material project progress on our asset recycling program will be heavily weighted towards the end of the year.

And with that, I’ll pass it over to Mark.

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Thank you, Peter. This is Mark Binda, Chief Financial Officer. Hello and good afternoon to everyone on this call. I plan to walk through our performance and outlook and provide greater detail around the disciplined steps we’ve taken and will continue to take across the portfolio and the pipeline to bolster our strong balance sheet and manage through this period in order to emerge in a position of strength to support our future. First, a big congratulations to the entire Alexandria team for outstanding execution during the quarter and for completing the largest lease in the history of the company earlier this month.

Second, our team delivered solid per share results for the quarter. Please refer to our earnings release for our EPS results. FFO per share diluted as adjusted was $2.33 for 2Q ’twenty five, up 1.3% compared to the prior quarter and included the positive impact from the the recent development deliveries in San Francisco and San Diego. Occupancy at the end of the quarter was at 90.8%, which was down 90 basis points from the prior quarter. With 75% of our annual rental revenue coming from our highly distinguished mega campus platform, we continue to outperform the rest of the market on occupancy in our biggest three markets.

We are reiterating guidance for year end 2025 occupancy at 90.9% to 92.5%. An important note about our occupancy guidance is that we have 669,000 square feet or about 1.7% occupancy of leased but not yet delivered space, which will positively impact our occupancy in early twenty twenty six on average upon delivery. In addition, our year end occupancy guidance assumes around a 2% benefit from assets with vacancy, which are expected to be sold, of which about a third of that is subject to a signed purchase and sale agreement. Next on same property. Same property NOI was down 5.4% and up 2% on a cash basis for the quarter.

Included in 2Q ’twenty five same property results is the full impact from from the 768,000 square feet of leases spread across four projects that expired on average in late January twenty twenty five that are now fully included in the 2Q results. We continue to make good progress with these four projects as Peter just highlighted with 20% leased with some of that expected to be delivered in late twenty twenty five and we have a user very focused on another 234,000 square feet. We are reiterating our prior guidance for same property performance for 2025. Three items to note here. First, we expect continued pressure on same property results in the second half of twenty twenty five, driven by the recent decline in occupancy.

Second, we also expect second half twenty twenty five cash same property results to decline from the first half results given the burn off of initial free rent from last year. And third, our guidance for the full year 2025 same property results also assumes that the same property pool in the back half of the year will change from the first half twenty twenty five pool as we make progress on our disposition program and those assets subsequently become excluded from the pool later in the year. In the meantime, we continue to benefit from a very high quality tenant base with 53% of our ARR coming from investment grade or publicly traded large cap tenants, long remaining average lease terms of seven point four years, average rent steps approaching 397% of our leases, and our adjusted EBITDA margins remained strong at 71% for the most recent quarter, consistent with our five year average. Turning next to general and administrative expenses. We continue to make great progress toward our goal of annual savings for 2025 of approximately $49,000,000 compared to 2024 through a number of strategic cost savings initiatives.

Our trailing twelve months G and A cost as a percentage of NOI was 6.3% and represents our lowest level in the past ten years. Our best estimate at this point is that around half of the 2025 gs and A savings for 2025 will recur into 2026. Next on the development pipeline, with projects under construction and expected to generate significant NOI over the next few years and other earlier stage projects undergoing important entitlement design and site work necessary to be ready for future ground up development, we are required to capitalize a portion of our gross interest cost. The 466,000 square foot build to suit historical win that was recently announced is a great example of the value created by our important preconstruction activities associated with our future pipeline projects, which allowed us to meet the tenant’s timeline for delivery in this case. We remain focused on continuing these important preconstruction activities for our future pipeline where it makes good financial sense to continue.

On Page 45 of our supplemental package, we highlighted that we have a $3,000,000,000 investment in various future pipeline projects that required interest to be capitalized in the 2025 while we pursue preconstruction activities, but have future project milestones over the next eighteen months ending in April 2026 on a weighted average basis. We will continue to routinely evaluate these projects to determine on a project by project basis whether to continue progress beyond the current milestones and those decisions will be subject to future market conditions. If we decide to pause on a project as it reaches the next milestone, capitalization of interest and other required costs would seize on that project. For 2025, we are reiterating our guidance for capitalization of interest. In addition, we expect steady to slightly higher capitalized interest in the back half of the year, mostly driven by spending on the active pipeline, coupled with continued high interest rates.

Now on to venture investments. For the first half of twenty twenty five, we realized $60,000,000 of gains from our venture investments, which are included in FFO per share as adjusted, or about $30,000,000 per quarter consistent with our last six quarters. Our outlook for the full year 2025 remains unchanged with a range of 100,000,000 to $130,000,000 Next on other income. This balance primarily includes interest income, leasing and other types of management fees. Fee recognition, for example, can bounce around from quarter to quarter.

For the first half of twenty twenty five, other income was $39,700,000 or less than 3% of total revenues. This represents a quarterly average of about $20,000,000 per quarter, which is pretty close to the quarterly average over the last six quarters of around $18,000,000 per quarter. Turning next to the balance sheet and funding. We continue to stand out as our corporate credit ratings rank in the top 10% of all publicly traded U. S.

REITs. We have the longest average remaining debt maturity among all S and P 500 REITs at twelve years and tremendous liquidity of $4,600,000,000 We remain focused on achieving our year end leverage target of 5.2 times for net debt to adjusted EBITDA by executing on our disposition program, which Peter covered. In connection with our disposition program, we recognized impairments of real estate of 129,600,000 during the quarter, with around two thirds of that coming from one land parcel in a non cluster market, which is expected to be sold to a residential user and an office property located in Northern San Diego. Importantly, these sales will raise significant equity like capital and continue the trend of enhancing the quality of our asset base with an increased focus on our mega campus platform. We are carefully managing our capital allocation given a high cost of capital environment.

For construction spending, we are evaluating some of our twenty twenty seven redevelopment projects for alternative lower cost investment opportunities and hope to have more to report over the coming quarters. We did not execute any common stock buybacks during the quarter and we don’t have any current plans as of right now as we remain focused on the execution of our disposition program to fund our existing capital needs. Next on dividend policy, the Board’s approach has been to share cash flows from operating activities with investors and to retain a meaningful amount for reinvestment, which has allowed us to retain $475,000,000 at the midpoint of our guidance for 2025. For the second quarter, our Board elected to maintain the dividend at its current level of $1.32 per quarter or a dividend yield of 7.3% as of quarter end. Turning next to guidance, we are holding firm on our guidance for FFO per share diluted for $25 at $9.26 per share at the midpoint of our guidance range.

Next, I’ll turn it back to Joel.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Can we open it up for questions please?

Conference Operator: Absolutely. Our first question today comes from Pharrell Grant with Bank of America. Please go ahead.

Pharrell Grant, Analyst, Bank of America: Good afternoon. Thank you for taking my question. I first wanted to congratulate you on the California Campus Point lease. But also digging in a little bit deeper to that, can you share any possible trends or catalysts that led up to this deal being able to close. I’m curious if there is any initiatives on either reshoring or having larger investments stateside that would also be a tailwind for further leasing like this?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Well, first of all, you for the compliment. No, that didn’t have anything to do with the onshoring issues that are currently underway with respect to administration policies. It was more an effort by a notable big pharma to bring together its core R and D hub on the West Coast and put them in a world class location where they could continue to recruit and retain great talent. And much like Bristol Myers, they chose Campus Point. As I said, we had a great team, great solution and great execution.

Pharrell Grant, Analyst, Bank of America: Okay. Thank you. And also just in terms of free rent, I know you made a comment about it up ticking slightly. What are your thoughts around that? I guess thinking and going forward, if it’s viewed on a trailing basis, will we see that starting to peak anytime soon or any insights?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. So Mark?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Hard to tell. Thanks for your question. Yes, it did go up a little bit this quarter. That trend has been relatively consistent for the up until this quarter for the last three or four quarters. So it did peak this quarter given one particular lease that had quite a bit of free rent.

So yes, TBD, what that looks like in the future.

Pharrell Grant, Analyst, Bank of America: Okay. Thank you very much.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Thank you.

Conference Operator: And our next question today comes from Seth Berge with Citi. Please go ahead.

Nick Joseph, Analyst, Citi: Thanks. It’s Nick Joseph here with Seth. Just maybe following up on Campus Point. Just curious if you can give a little more detail kind of from the tenant perspective of what drew them to build to suit versus some of the vacant space in that market available today?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: I think when you are big and powerful and you have a very robust R and D effort going on, you want really a location that provides you everything rather than just going to a bunch of random buildings in random locations that really are disaggregated. So I think the power of Campus Point, ultimately, will be almost 3,000,000 square feet. So we kind of think of it as almost like city like with every possible amenity you could imagine, the greatest place to work, to retain and recruit people. Was pretty obvious that If somebody wants Somebody wants Somebody wants Yeah. Operator, you’re getting feedback there.

If somebody wants a world class location then that was the place to be. I think that was the driver. And I think the unique design, place making and solution clearly made a huge impact on this tenant.

Nick Joseph, Analyst, Citi: That’s very helpful. Thank you. Just as you Sorry, I

Hallie Kuhn, SVP of Life Science and Capital Markets, Alexandria Real Estate Equities: just jump in here? This is Hallie. One additional add there. I mean, Joel talked about the amenities. But the other really crucial thing is just the robustness of the infrastructure for these buildings.

So these types of requirements can’t go to, you know, just kind of prefab building and an operator who, you know, hasn’t been doing this for a long time, given the, you know, vibration requirements, live loads, you know, power capacity, these requirements are really built to suit needs that can’t be accommodated by a building down the street.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. And remember too that the energy is putting sizable amounts of their own capital in much like Bristol Myers is as well.

Nick Joseph, Analyst, Citi: Thanks. And then just as you look at your leasing pipeline today, what trends are you seeing? Is it larger space takers? Is it smaller? Is it are there any kind of common threads that you’re seeing across the current pipeline?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. I think it’s clearly different situations in each submarket. Each submarket has its own dynamics whether it’s a headwind or tailwind. And it’s hard to generalize at all.

Dylan Brzezinski, Analyst, Green Street: Thank you.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Thank you.

Conference Operator: Thank you. And our next question today comes from Anthony Paolone with JPMorgan. Please go ahead.

Anthony Paolone, Analyst, JPMorgan: Great. Thanks. First question is just want to follow-up on some of the occupancy comments you made. And so I guess if from understanding the dispositions right, if we were to put those aside and think about sort of the remaining portfolio over the course of the year, Did you mention that occupancy will be down 2% then in the second half, like kind of if you ignore sort of the dispositions?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes, Tony. In terms of kind of the bridge to year end occupancy, we’re at 90.8% today, so kind of right at the or just below the bottom end of our range. We’re expecting a pickup in occupancy given, as Peter said, a big chunk of the assets that we’ve identified for sale are non stabilized, so they have some vacancy. So we’re expecting some pickup as those assets get sold. And then you’ve got the normal kind of leasing to do on the back half of the year.

So you put all those pieces together, that’s how we get to our year end number.

Anthony Paolone, Analyst, JPMorgan: Okay. And then got it. And then because then you mentioned you also have a bunch of signed, but not yet commenced stuff that sounds like that kind of picks up a couple of points early next year. And I guess where I was going with that is you also added this disclosure around the 2026 expirations and it seems like there’s a couple of points that might come out early next year there as well. And so just trying to get the next few quarters kind of understand the trajectory and because you laid out a lot of good pieces.

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes, there’s a lot of moving pieces. We’ve got the 600 and change or the 1.7% benefit to occupancy. And then we’ve also got some work to do on some of these 26 expirations. A little too early to give you clear guidance in terms of what downtime looks like on that, as we’re really still working through the business plans and the releasing strategy on those things.

Anthony Paolone, Analyst, JPMorgan: Okay. And then just second one for me. Appreciate the added disclosure around the cap interest that’s helpful. The $1,400,000,000 I think you mentioned last quarter that you were going to stop on I think later this year. Which I mean, I guess one is that still planned to be the case?

And two, which bucket in your disclosure does that come out of?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes. That’s a part of the $3,000,000,000 Tony. So we kind of we tried to pull it together really with everything that we’re looking at, really the entire future land bank and give some sense of the things that we’re pretty highly confident will continue through the ’6 versus those things that are either known to be stopping or those things that we’re evaluating based upon the milestones that are in place. And we’re that will go project by project a project by project basis, there’s a ton of projects in there. But that April date is kind of the weighted average date of those milestones.

Anthony Paolone, Analyst, JPMorgan: Okay. But as we know right now that $3,000,000,000 bucket will be like 1,600,000,000.0 at year end roughly?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes. I would expect it to burn down for those projects that we already identified the $1,400,000,000 that is turning off close to the end of the year.

Anthony Paolone, Analyst, JPMorgan: Okay. Thank you.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Thanks, Tommy.

Conference Operator: Thank you. And our next question today comes from Michael Carroll with RBC Capital Markets. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities0: Yes, thanks. Joel, can you provide some color on what tenants are telling you today? I mean, how big of an issue is this FDA leadership change in the most favored nations having on their mindset? I mean, is that’s what holding them back on making decisions? Or is it really driven by the macro uncertainty in interest rates?

I guess, bucket is more concerning to most tenants right now?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Well, of course, it depends on the nature of the tenant. You’ve got private biotech, they have and Hallie has given a bit of chapter and verse on each of the buckets. So each one has its own concerns. Institutional folks, they’re clearly focused on NIH reimbursement. Public biotechs are focused on the health of the market to finance should they hit clinical milestones.

Venture is looking at how do we put together a company or grow a company and what’s our exit. Is it M and A? Is it IPO? So everybody is a bit different at this point, but obviously conservation of cash is critical and interest rates are I think overall a big have been a big negative for this industry in a lot of different focal points. And when you look at the FDA at the moment, as I said, we’ve seen no tangible evidence of delays of responses, meaningful responses and detailed issues with the FDA, but people are always wary of that because any delay means you’re just burning more capital.

So that’s a key issue in people’s minds.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities0: So how long did it take for them to get comfortable with the FDA situation? Is it just like time, like just proving out over the next one to two quarters then having no issues then our tenants will Well, be

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: comfortable when you say they with you have to be specific. If somebody is at the R stage, they’re not so focused FDA approvals. If somebody is in clinical trials, they’re hyper focused on it. So it totally depends on the nature of the entity that’s looking that you’re talking about and the nature of their product or technology. So you just can’t globalize that comment.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities0: Okay. And then and just lastly on the NIH issue, guess with the budget holding steady. Is there issues with NIH or HHS the not doling out the capital? Or is that Well, is behind yes.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: I mean that is I think Kelly mentioned that is a problem. They’re worried about will the 15% limitation on indirect costs be held up and that will be the lay of the land going forward. They’re also worried about the NIH not issuing grants, which they’ve cut back a lot of they’ve appropriated capital, but they haven’t issued it. And so that creates a capital supply to institutions that is disruptive. And that we’ve clearly seen as a force of hold back from the institutional side, although we’re still making some deals as we said.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities0: Okay. Thank you.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Thank you.

Conference Operator: Thank you. And our next question today comes from Vikram Malhotra with Mizuho. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities1: Good afternoon. Thanks for taking the question. I guess Joel Peter, I just wanted to get a sense of you’ve got a good build to suit opportunity, hopefully more down the road. I’m just wondering, is there some thought about dealing with capital needs in a faster, bigger way than sort of every quarter sort of waiting for transactions. And I guess my point being there’s still a very robust private capital market.

You laid out a lot of interested parties. So I’m wondering if there’s a bigger JV of a core asset or a core asset in the offering that you’re contemplating?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Well, I’ll let Peter comment. But I think from the top side, I think it’s important that what we’re trying to do as you know is focus our asset base heavily on the mega campus asset base. And we’ve made great progress on that because we think at the end of the day, if those destinations for the reasons that we’ve mentioned, Hallie mentioned some of the specific attributes of why people would want to do a build to suit versus just an existing building. But clearly, it’s the quality of the asset, the quality of the operation and obviously the quality of the brand and the financial capability that we have compared to operators who are just have maybe a vacant building and are capital challenged. I think it’s important as we go forward, we’re just going to be very careful.

We think owning more of our mega campus is actually a good idea as opposed to not owning as much. So that’s why we’re continuing to pair our land holdings, our non core assets and even some key assets that may not be integrated with our mega campus. So at the moment that’s the strategy we’re going to follow. But Peter, I don’t know if you have any comments.

Peter, Executive, Alexandria Real Estate Equities: Yes. I mean, agree with everything you just said. I guess I would just let everybody know that we have a tremendous amount of equity in our mega campuses. And if we hadn’t made a make a strategic transaction to, monetize some of it to pay for an opportunity like what we have in front of us in San Diego, we could do so. But as Joel said, we would prefer to own more of that than less of it.

So we are going down the road of selling things like land and unstabilized properties. And then if that isn’t enough, then we have the backstop of a bigger transaction monetizing some of that equity.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities1: Okay. And then just second one, I guess, you laid out a part about occupancy headwinds near term. But maybe if we can step back, can you give us a sense of how you see this playing out, call it, over the next eighteen months? And when are we going to cross for ARE specifically? And maybe if you can embellish that a little bit of like how strong is the potential build to suit pipeline for you guys?

Thanks.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Okay. Well, I’ll ask Mark to maybe comment on occupancy, but let me just give you a couple of thoughts there. There are a couple of things you asked. One on, when does maybe leasing become more robust? Obviously, I think the capital markets are going to have a huge amount to do with that.

And hopefully, Powell’s got what eight months left on his term, he’s going. It’s pretty clear that the Fed has got to move in the direction of lowering rates, which is good for everybody including servicing the national debt. And so that’s going to be super helpful. And I think as Makary and Bhattachary at the NIH and Doctor. Asu, understand is doing a great job over at CMS as those agencies become more stabilized from the transition and really operating at a much more peak performance effort and people get very comfortable with what’s going on, I think it’s moving in that direction.

There’s some really good signs of that after a lot of turmoil. I think you’ll start to see those combinations of both policy and interest rates impacting the capital markets. And I think you’ll see decisions moving faster than they have and positive decision making regarding leasing. But Mark on occupancy?

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: Yes. I would just

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: refer you Vikram to the discussion we had with Tony earlier

Peter, Executive, Alexandria Real Estate Equities: in

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: the call. We held our occupancy guidance where it was at. We’re right just below the low end of the guidance range right now at 90.8%. We’ve got a good head start in terms of what that looks like for next year with the space that’s leased that is going to be delivering. But at the same time, we’ve got the lease rolls that we highlighted, that we need to deal with as well.

And we’ll have kind of more to come on those as we flesh out the re leasing strategies, hopefully, in the coming quarters.

Conference Operator: Thank you. And our next question today comes from Tom Catsworth with BTIG. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities3: Thank you and good afternoon everybody. Joel, you mentioned in the prepared remarks five developments where you’re making progress and some of these saw a boost in 2Q leasing like seven zero one Dexter and the Sylvan Road buildings. But a few others like 269 East Grand didn’t show a change. Are you seeing an uplift in prospects for space, but they haven’t reached the in negotiation stage yet? And if so what’s driving

Peter, Executive, Alexandria Real Estate Equities: that That’s correct.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Again, somebody asked that question before. It really is submarket and building or campus specific as to why a particular space or location is being looked at. It just it’s hard to generalize beyond a building, a campus, a submarket. It just you just can’t do that. So they are very, very case specific.

And remember, the majority of our leases come from existing tenants. So we have a line of sight that most people don’t have on future tenancies that just a lot of people would be flying blind just waiting for brokers to bring people by on tours. But I think we have a much more in-depth pipeline opportunity with existing clients who are looking for expansion etcetera.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities3: Got you. So just to clarify, so that pipeline of prospects then is larger and kind of increasing compared to what it would have been a quarter or a year ago. Is that how we should read through on that?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Well, I would say Joe, yes, go ahead.

Peter, Executive, Alexandria Real Estate Equities: Joe, I can verify that. I mean, track along with the regions company by company prospects. And it has grown as we have put significant effort into focusing on this leasing as I mentioned in my comments. So I can tell you that it has gotten it has increased. The pool of prospects has increased.

Now the time to make decisions remains elongated. So you can’t translate that comment to we’re going to have more leasing next quarter, but we are pleased with the amount of prospects we’re seeing for these development for our development pipeline.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: But remember too, I think if you take what Peter just said, so many specific, these are very case specific, a new initiative, a new partnership, a financing, a milestone, those are things that drive decisions beyond just people who are in the market compared one quarter to another year to year. And that’s what makes the big difference. And that’s very hard to generalize quarter to quarter.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities3: Got it. Really appreciate all that color. And then Peter, just a small one here. Just wanted to understand how you classify certain leasing. So in the quarter, you did roughly 286,000 square feet of development, redevelopment and kind of previously vacant space leasing.

And you mentioned 131,000 square feet of development and redevelopment leasing. On the gap between those two, roughly 155,000 square feet, I assume that’s previously vacant space. That first gen space that was previously delivered vacant? Or is that second gen space that’s just been vacant over a set period of time? How do we think about the classification of that?

Peter, Executive, Alexandria Real Estate Equities: Mark, you can tell you can correct me if I’m wrong, but that is vacant space of existing properties.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: That’s right.

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: That’s right, Peter.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities3: So that goes right into signed not commenced leases. That’s not part of the development pipeline, redevelopment pipeline, nothing like that?

Peter, Executive, Alexandria Real Estate Equities: Correct. Correct. It’s just our general operating portfolio vacancy.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities3: Perfect. That’s it for me. Thanks everyone.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Okay. Yes. Thanks Tom.

Conference Operator: Our next question today comes from Omotayo Okusanya with Deutsche Bank. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities4: Afternoon. Joel, again, I wanted to add my own congrats on the large build to suit lease. It’s just great to see that as a nice proof of concept there. In terms of that project, have you discussed at all what the building costs could look like and what potential deals could look like?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Stay tuned on those. We haven’t really put those into the sup at this point, but they’ll be forthcoming.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities4: Okay. Sounds good. And then the 2027 redevelopment project, just wanted to visit some of the commentary around looking at alternatives around some of those projects, whether you could give a couple of examples of kind of what else you’re kind of considering at this point to kind of create shareholder value from them?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Well, I mean, it’s obvious in today’s market in some of these locations and we’ve seen this phenomena happen before in a kind of a different era where 2015 to 2020, we were inundated by big tech and large tech users wanting to come into our campuses and even in the lab buildings for their own use for security purposes or quality of buildings, quality of sponsorship of course. And we’re seeing some of that in some of our locations now with the new generation of tech companies. And I think Peter and others have mentioned Mission Bay is a great example where AI has been on a tear in gobbling up space, some buildings that were destined to be lab buildings and others that were office. So I think we’re seeing some of that in some of our submarkets.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities4: Helpful. Thank you.

Conference Operator: Thank you. And our next question today comes from Peter Abramowitz with Jefferies. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities5: Yes. Thank you. Just wanted to dig in a little bit more on the 26 known vacates. Any sense of kind of timing and how long do you would expect it will take to release those?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. I think I’ll let Mark comment, but on our assumptions, but again, they’re very, very like I’ve said a couple of times on the call Peter, it’s very case specific to buildings, to campuses and things like that. But Mark, you can comment on our assumptions.

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes. It will really depend Peter on the amount of capital that we put into those sites. The biggest one is a project in Greater Stanford that we acquired with the intent to redevelop a number of years ago. And as that lease is starting to burn off, we’re evaluating other opportunities whether should go to lab or that market, has had interest from other types of advanced technology users. So there may be opportunities to do other things there.

So really hard to kind of give you a sense for where we’re going to end up in terms of downtime, but there’s a good chance that those properties will require some capital to lease.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities5: All right. Thank you. And then my other question, you called out specifically yields coming in above your underwriting at some of the deliveries in Torrey Pines. Would you say those improvements on rents are kind of specific to those projects or that submarket? Or generally, is there a sense that things are accelerating in that market overall?

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Peter?

Peter, Executive, Alexandria Real Estate Equities: That particular project is just very high quality. And once it opened and first tenant started moving in, there was a lot of buzz in the market. We’ve just been able to push. So it’s specific to the project, but it’s also, I guess, something that you were not surprised because we do play in the high quality asset game. And tenants are willing to pay for value.

So I think it’s a good takeaway that that happened, that, you know, there’s certainly still supply and a supply, overlap in the markets. But with the build to suit lease we signed and with the above underwriting rents we achieved at 1 Alexandria Square, I think it proves that the tenants are willing to pay for quality.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities5: All right. That’s all for me. Thank you.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. And remember just one kind of footnote, the reconciliation bill provided a variety of incentives including things like permanent expensing for domestic R and D, bonus depreciation, expensing of qualified production properties, all of which bode well for onshoring supply line kinds of issues. So there’s a lot of thinking that’s going on with a bunch of different users as to when, how and what they may do with space that we’re having conversations about.

Conference Operator: Thank you. And our next question today comes from Dylan Brzezinski with Green Street. Please go ahead.

Dylan Brzezinski, Analyst, Green Street: Hi, guys. Thanks for taking the question. Most of mine have been asked, just wanted to sort of if you can discuss sort of the reasoning why you guys raised cap rates on the dispositions. Is that more representative of changing cap rates across the property sector or more so related to just the types of assets you guys are selling and that being sort of noncore potentially with some near term lease roll here on

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: it. Yeah. Peter?

Peter, Executive, Alexandria Real Estate Equities: Yeah. I mean, I think it’s just reflective of the fact that a lot of these assets are in transition. So, you know, we’re always trying to be very measured on even commenting on cap rates for these sales because they don’t really represent the core of what, you know, Alexandria is gonna look like in the future. So, you know, a lot of these assets have a little bit of walled. So the cap rate gets increased because the buyer’s taking the chance on the renewals.

So it’s really asset specific, and we just have a lot of assets in transition in what we’re trying to sell. And, you know, one of the reasons that they’re non core and and they’re, you know, they’re not on mega campuses.

Dylan Brzezinski, Analyst, Green Street: Great. That’s helpful. Thank you, guys.

Conference Operator: Thank you. And our final question today comes from Jim Cameron with Evercore. Please go ahead.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: Good afternoon. Thank you. Thinking about the $3,000,000,000 of potentially go or no go projects on Page 45. In addition to interest expense, what would be the order of magnitude sort of overhead and other predevelopment costs in dollar terms that you’re capitalizing on that cohort?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: Yes. Hi, Jim, it’s Mark. If you look at our 10 Q, we do disclose capitalized operating expenses, really property taxes, insurance and other direct costs as well as overhead. That number, if you do the math, is around 3%. So that should give you a sense for what could come with that if some of

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: that

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: stuff turns off capitalization.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: Thank you, Mark. So 3% basically at a run rate balances or basis is a good guesstimate?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: That’s right. Based upon if you just look at the six the first six months, that’s what it translates to as a percentage of the basis being capitalized.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: Perfect. Thank you. And then second related question, would not a fair percentage of those $3,000,000,000 or that $3,000,000,000 of assets, if it’s a no go decision, would they not likely be sales? I mean, Alexander is probably not going to hold on to them for the indefinite time or maybe you’re thinking about the wrong way?

Mark Binda, Chief Financial Officer, Alexandria Real Estate Equities: No, for sure. There is a chunk of the $3,000,000,000 that we are evaluating for sale. We’ve got, I think Peter highlighted, or it’s in the sub 20% to 25% of our sorry, percent to 30% of our sales for the year expected to come from land. So part of that $3,000,000,000 will be from things that we expect to execute on that will naturally roll off of capitalization if we sell the asset.

Paula Schwartz, Investor Relations, Alexandria Real Estate Equities2: Thank you. Thanks very much.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Yes. Thanks, Jim.

Conference Operator: Thank you. And this concludes our question and answer session. I’d like to turn the conference back over to Mr. Marcus for any closing remarks.

Joel Marcus, Executive Chairman and Founder, Alexandria Real Estate Equities: Thank you everybody and have a very safe and good summer. Thank you.

Conference Operator: Thank you, sir. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.