Alexandria Real Estate Equities, Inc.

Good afternoon and welcome to the Alexandria Real Estate Equity's second quarter 2022 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key 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. To withdraw your question, please press Store then 2. Please note this event is being recorded. I would now like to turn the conference over to Paula Schwartz of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. This 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. Please go ahead, Joel.

Thank you, Paula, and welcome, everybody. Thank you for joining Alexandria's second quarter 2022 earnings call. With me today are Hallie Kuhn, Steve Richardson, Peter Mowgli, and Dean Shigenaga. In a very challenging macroeconomic environment, for sure, we are very blessed and thankful to have a truly one-of-a-kind public company, which has a uniquely visionary mission to create and grow life science ecosystems and clusters that ignite and accelerate leading innovators to advance human health by curing disease, saving lives, and vastly improving nutrition. Our mission, for sure. We at Alexandria have worked tirelessly to earn the trust and have carefully and meticulously constructed our client-tenant base within our best-in-class asset base. In 1994, we uniquely set out to be the trusted lab space real estate partner for life science companies. Today, 28 years later, we have earned the trust of over 1,000 diversified, high-quality companies who have chosen our brand and rely on us to deliver on our reputation. Daily, they entrust us with their most precious assets, their talent, thousands of hardworking science, technology, and business professionals reliant on our lab space and on the life science ecosystems we cultivate to attract and retain the best talent to advance their science. We provide them with a truly inspirational and healthy place to work. Daily, they entrust us with billions and billions of dollars of research and development platforms to be safe, secure, and operational. Daily, they entrust us to be aligned with their mission to partner together at the highest level of operational excellence to improve human health. In this market, our results really stand out in the macroeconomic environment we're all experiencing, a slowing economy, the weakened consumer, higher interest rates, and raging structural inflation. Huge congratulations to our Alexandria family on a great 2Q22 report. As Dean will talk about in a while, we've updated guidance for the second quarter to $8.41 FFO per share representing an almost 8.5% growth for this year and combined with a 3% plus dividend We think that's an excellent combination of 11.5% in this macroeconomic environment. We've experienced very powerful continuing rental rate increases and leasing activity. It's important to remember 87% of our leasing comes from our existing tenants. We have uniquely crafted our own demand driver and our more than 1,000 tenants and 92% of the first half of 2022 leasing comes from this tenant base. 2.3 million square feet were signed in the second quarter, a third all-time high, with cash all-time high of 34%, rental rate increase, highest ever, and a 45% gap rental rate. Truly epic and historic. And then keep in mind, 50% of our annual rental revenue is from investment grade or big cap companies, public companies, and 80% of our tenants are not private or development stage biotech companies. Peter will discuss in detail our outstanding progress in capital recycling to the tune of about a half a billion dollars in the second quarter as we harvest great value which we have created over the last decade. He will also talk about strong external growth engine which we fine-tuned in the new economic environment. Dean will discuss our fortress balance sheet and strong liquidity, more important now than ever with turbulent capital markets. And fortunately, with our great team, we have no debt maturities until 2025, so no FFO dilution due to refinancings. Steve will discuss very strong internal growth and make sure to look at page 33 of the supplement. And also, Dean mentioned the burn off of free rent providing strong visibility for future growth. Our margin continued to be strong at 70%, and we're very proud of our tenant collections at 99.9%, so no real credit issues whatsoever. Hallie will speak to our awesome and non-replicable tenant base of over 1,000 tenants. and the continuing health of the broader life science industry. The life science industry is not synonymous with simply early stage biotech. Alexandria and its best in class tenant base is very well positioned and prepared for this shifting environment. With our best in class assets, decades long relationship, we in fact beat the so-called competitive product and much future theorized product which will never be built. Last but not least, I want to make a couple of comments about Steve Richardson, our retiring co-CEO. And I want to express on behalf of all the extended family here at Alexandria our profound thank you for the last 22 years, the best ever. Your humble service leadership has set the bar for all of us. Queen Elizabeth recently talked about leadership at her birthday celebration in which, and you exemplify these words precisely, finding ways of encouraging people to combine their efforts, their talents, their insights, their enthusiasm, and their inspiration to work together. And if I may just finally make a quote from the famous movie Band of Brothers, of course, could be all genders, of course, and the Requiem for a Soldier. We're all one great band of brothers, and one day you'll see we can live together. When all the world is free, have you lived to see all you gave to me? You, in fact, have. Your shining dream of hope and love, we're all one great band of brothers. And with that, I want to turn it over to Hallie Kuhn.