Alexandria Real Estate Equities, Inc.

Good day, and welcome to the Alexandria Real Estate Equity's third quarter 2022 conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Paula Schwartz with Investor Relations. Please go ahead.

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. Please go ahead, Joel.

Thank you, Paula, and welcome everybody to Alexandria's third quarter earnings call. With me today are Peter Moglia, Dean Shigenaga, and Hallie Kuhn. First of all, thank you to our Alexandria family team for their continued exceptionalism in the face of a challenging macro environment, mostly self-inflicted by a really deleterious set of government actions and policies coupled with a Fed which has been slow to act. I would characterize third quarter as really an exceptional quarter when you look at earnings in this challenging macro environment delivering 9.2% and 8.3% FFO per share growth for the third quarter. And then 2022 year to date is really exceptional, especially again given the size and scope of the company with almost 75 million square feet in its total asset base. I'd say the health and resilience of the broad and diverse life science sector, the niche which we pioneered, remains strong. And there is a continuing strong R&D investment. Hallie will speak to this. But in general, we've seen life science R&D funding in 2021 approaching almost $500 billion. I think the number is actually about 480, which is astounding. and $1.8 trillion since 2017, and we expect totals in 2022 to be very strong continuation of that. I think it's also important to recognize that the strong life science sector employment trends remain positive, and the core strength of the life science industry in our key cluster markets remains resilient and continuing strong. And I think the overriding macro observation would be the long-term healthcare needs of this country certainly aren't going away. Innovation in medicine is really a national imperative, and just look at the mental health problem across this country as one simple example. And as I've said many times before, there are about 10,000 known diseases to humankind, and really we've only addressed as a society about 10%. with addressable therapies and very few real cures. Biotech, I think, remains resilient. Clinical data, regulatory updates, and M&A can be idiosyncratic events that really are unaffected by economic trends, and Hallie will talk about that. I think demand continues very solidly for our high-quality and well-located assets, which are really powered by asset-level operational excellence second to none. Alexandria has the greatest knowledge, and I think this is pretty unique, experience and expertise by orders of magnitude with respect to the life science real estate niche, which we created and informed by our over 1,000 client tenants, where 87%, an important number to remember, of our leasing comes from. We have a level of knowledge and understanding of the true life science real estate demand that just isn't out there. if you hang a for-lease sign and hire a broker. Alexandria continues to experience strong leasing spreads and rental rate increases, and I think we're very proud that we've got 99.9% collections this quarter, truly stellar. Our industry-leading roster of the 1,000 tenants drives and creates stable long-term duration cash flows. And our high-quality and diverse industry mix is really unmatched. And I think one of the great stories of the day I'll talk about in a moment will be the balance sheet. But among industry-leading fundamental metrics for the third quarter, which are notable, and Dean will talk about some of the details there, are 10.6% same-store NOI growth increasing over the last few years. and the significant strategic value creation harvesting of over $2 billion, which Peter will detail. And I think something we're very proud of, having lived through the 08-09 really financial crisis, and with this team steering this ship as an unrated REIT in those days, today we have matured and really have a fabulous fortress balance sheet. We've worked very hard to put together over many years. I think it's important to note Alexandria, out of 127 REITs as of June 30th, has the second best debt maturity profile of all of them, and that's pretty amazing. Dean will highlight our liquidity of over $6 billion, and I think we were both, I think, strategically informed, and I think executionally aware when we timely executed both equity and debt transactions in both January and February of 2022, earlier this year, before the Ukraine invasion. And again, almost coming to the end of my comments, the strong and flexible balance sheet, in addition to, I think, fabulous liquidity, our remaining debt term is over 13 years. Our weighted average interest rate is about 3.5%. And we've got almost 96% of our debt, which is a fixed rate. And again, no debt maturities into 2025. And I think as many of you know and we're working on, we are crafting a well-thought-through set of alternative plans for 2023, which we'll unveil at Investor Day. And as you look out at the world today and you just look at what happened at the PRC meeting this past week where the president actually had his former, the person who turned over the reins of power to him, kind of ushered out a little bit in front of the entire party Congress there. It creates the impression that we might not only have a ground war in Europe, but we might have friction over Taiwan in a kinetic sense. And so that's something to think about. And so we're planning hard about all eventual outcomes that could be very significant black swan events to the United States of America. So with that, let me turn it over to Hallie.