Alexandria Real Estate Equities, Inc.

Good day, and welcome to the Alexandria Real Estate Equity's third quarter 2019 conference call. All participants will be in a listen-only mode. Should you need assistance from an operator, you may dial star followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. Please note, this event is being recorded. I would now like to turn the conference over to Paula Schwartz with Investor Relations. Please go ahead.

Thank you, and good afternoon. 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 would like to turn the call over to Joel Marcus, Executive Chairman and Founder. Please go ahead, Joel.

Thank you, Paula, and welcome everybody to our third quarter call. And with me are Dean Shigenaga, Steve Richardson, Peter Moglia, and Dan Ryan. I'd like to start out by highlighting Alexandria's cluster markets remaining strong and vibrant, and our first mover advantage is a huge competitive advantage to all the aspects of our business. Our high quality cash flows are really based on best locations, best assets, best tenants, and by far and away the best teams. When it comes to external growth, our disciplined allocation of capital to a visible highly leased value creation pipeline is highlighted in pretty great detail in our supplement. You'll be able to see the pipeline we've placed in service both this quarter and recently. The near-term growth of our annual net operating income, and Dean will have a little bit of detail. It confused a couple of people, but we didn't miss any NOI numbers this quarter. We commenced development and redevelopment of a pretty significant pipeline, which is also detailed, and we were successful on our leasing of development and redevelopment space. And Steve and Peter and Dean will highlight all of that. When it comes to the Mercer MegaBlock, which I think – the team will highlight. I just want to say we won that really irreplaceable development opportunity because there is no other group with 20 years or more experience on the ground with the expertise and the experience we really have in South Lake Union. And I think it's pretty obvious that our team completely understands the integration of that kind of a development with the community today. There is no longer opportunities just to simply build a great asset. You have to be able to build with not only your tenants in mind, but really a great impact and integration with the communities in which we work and live and play. And Steve will talk in some detail about 88 Bluxom. And again, we won that because, and we've gotten approvals because we're a trusted partner with the city of San Francisco. It's important to remember we have an industry-leading, high-quality tenant roster. 53% of our annual revenues are investment grade, and our average lease term today is over eight years. A couple of comments about industry fundamentals, which continue to maintain themselves as strong and vibrant. The biggest cost driver of the healthcare system today is chronic disease, and there are a bunch of them. And patients in the categories of chronic disease account for a whopping 85% to 90% of all healthcare spending, and collectively, Those diseases are the leading cause of death and disability in the United States. So this industry, the biopharm industry, has a huge opportunity to impact and make great cost savings when it comes to chronic disease. When it comes to diagnosis, studies in high-income countries show that treatment costs for early diagnosis of patients generally are two to four times less expensive than treating those diagnosed with advanced stage cancer is a good example. So again, another great opportunity for this industry to impact the cost of health care. The industry itself, venture capital continued to be robust with over $19 billion raised in the first three quarters and over two-thirds of those flowing into Alexandria cluster markets. Public markets, on the other hand, are becoming more selective and risk adverse, making it more difficult for both life science and tech companies to go public. Despite this, five Life science companies and seven tech companies were able to go public this past quarter, raising half a billion dollars and $3.5 billion, respectively. Obviously, part of that is due to some of the unicorn challenges that we've seen trying to go IPO. The third quarter was an active quarter at the FDA with 13 new drug approvals, five of which were received by Alexandria tenants. There was an interesting quote in The Atlantic, which did a a good article, featured a good article on is this tech world today in any way, shape, or form like the tech bubble of the 2000, 2001 era? And I thought I'd just leave or give you a quote. The problem with tech today isn't so much software failed to eat the world, but that most of the celebrated unicorns weren't actually software companies. What we're seeing today isn't a dot-com bubble. If anything, it's a non-dot-com bubble. a period of inflated expectations for companies that had no real business being valued like pure tech companies in the first place. And then finally, on market fundamentals, they continue to remain strong and vibrant. The team will talk about that. And it's comforting to know that virtually almost 80% of our annual rental revenue is from Class A assets in our AAA campuses and our best cluster locations. So tenant demand and our leasing continues to be very solid. And with that kind of opening, let me ask Steve to comment on the quarter. Thank you, Joel.