Alexandria Real Estate Equities, Inc.

Good day and welcome to the Alexandria Real Estate Equity second quarter 2025 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, and to withdraw your question, please press star then two. 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.

Thank you, and good afternoon, everyone. This conference call contains forward-looking statements within the meaning of the federal securities law. The company's actual results might differ materially from those projected in the forward-looking statement. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statement 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.

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 true grit, a ferocious determination demonstrating resilience, hard work, and passion. clear direction and mission. This so aptly describes the Alexandria team in 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 open 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, then 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 $1.1 billion to add to our executable sales pipeline for the next two quarters, and we feel that it is doable given we completed $1.1 billion of sales in the fourth quarter of 2024. 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 17th attended a meeting with Commissioner Marty McCary, and where he essentially elucidated his 100-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, commonly 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 reshoring, trading companies as manufacturing intermediaries, of 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, the 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 documents. 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 Dr. 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 may be substantially overblown. Onshoring of R&D can provide a tailwind for the life science sector. Public markets move in cycles. Macro events will eventually dissipate, and the markets will stabilize, and M&A consolidation is instrumental for a healthy biopharma ecosystem. And with that, let me turn it over to Hallie.