Alexandria Real Estate Equities, Inc.

Good day, and welcome to the Alexandria Real Estate Equities First Quarter 2026 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'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 our first quarter earnings call. With me today are Mark, Peter, and Jenna. First of all, as I always do, I want to say a thank you to our remarkable family team for their awesome efforts during a tough first quarter operating environment. And as they know well, we are motivated each and every day by our solemn mission to enable this precious life science industry, one of the most treasured and innovative industries on the face of the planet, to discover and bring to patients lifesaving and life-changing therapies. And how many of us, friends, loved ones, still suffer from the likes of Parkinson's, ALS, pancreatic, colon, breast, et cetera, cancers, dementia, to name a few. 2026, we celebrate the 50th anniversary of the DNA and biotech revolution, and we still have addressed less than 10% of human disease. The life science industry is a highly regulated industry dependent upon proper functioning of the four key pillars. As we've said before, strong and basic translational research is critical. There remains strong bipartisan support in Washington to fully fund the NIH. There was a great victory this quarter in the defeat of the 15% limitation on reimbursement of institutional indirect costs, which I think will be very, very well both received and implemented over the coming quarters and years. Unfortunately, August 24th, the entire NSF, National Science Foundation Advisory Board, was fired. Their role is science and engineering advice, kind of a shock. Leadership challenges remain at the NIH and HHS and FDA. Number two, strong innovation coupled with open and vibrant capital markets. Obviously, we're in one of maybe the greatest innovation time in the history of humankind. On the capital markets, they've been very selective. Private have Private funding has been very solid, but deliberate and discriminating. On the public side, the markets have been open for good data and key milestones, but for most public biotechs in preclinical or in the clinic, which don't have data or milestones to finance off of, it's been a very tough slog. Number three, reliable and efficient regulatory framework. Continuing effort to need to reduce time and cost into and through the clinic. The FDA progress has been sluggish. Leadership and staffing pressures have been abundant, and China continues to pressure the industry here at home. Number four, health payment and reimbursement environment for innovative medicine. CMS is actually operating quite well under the leadership of Dr. Oz, but both sides of the aisle are focused on drug pricing. and it's hard to imagine that they haven't figured out an approach to cut out the middleman, which takes 40 to 60% of medicine pricing, which would ease the burden both on the recipients of care and on the innovative drug discoverers. We get often asked about AI in all realms of all industries, and I think it's fair to say that most of you know by now We've got 37 trillion cells in each of our bodies and AI can support but not replace physical experimentation. Biology is just way too complex at this stage. R&D cannot go fully in silico given the massive complexity of biology. And give you an example, Novartis' CEO who just joined the board of Anthropix said, we only understand less than 5% of the functioning of the human body today. And as you know, drug development is very complex from target discovery to hit generation to lead identification to optimization to clinical trials and on to commercialization. And it's pretty clear that the authorities in this area believe AI cannot replace physical experimentation. Most current usage is still document-centric, not biology breaking. Push button drug discovery is overhyped and even native AI companies in this sector haven't proven dominance whatsoever. It's pretty clear that AI is not fully autonomous discovery but is aimed at compressing timelines and increasing throughput and recovering lost institutional knowledge and that is all really good. I think most experts believe that AI will have a small impact on real estate requirements and could even see the need for additional dry and wet space as they run experiments designed by AI. Moving to the first quarter, as all of you know, it was a very tough operating environment, but we made very solid progress on our path forward laid out in detail at our investor day. Number one was to maintain a strong and flexible balance sheet, and Mark will talk more about that. Number two is to reduce capital spend and funding needs going forward, and I think we're well on our way to refining and reducing CapEx in our pipeline. And we've also been fortunate to sign quite a number of LOIs leading to leases which will reduce the CapEx into the lease statistics as we go forward. Something that is a cornerstone to this year in this reset is to substantially complete a large-scale core, non-core, and sales of partial interest disposition plan. We are on track, even though the first quarter was relatively quiet. But we fully intend, like last year, to meet our goal. And I think it's fair to say, and Peter can expound on this during Q&A, the transaction market for life science assets is even better. this year than it was last year, and we have a high level of confidence. Four, we want to steadily improve occupancy and increase NOI focused on leasing. The pinch point in leasing has been, this is one of our lower quarters, but we look to bounce back nicely next quarter. This is maybe the first quarter in the history of the company that I can remember where we didn't sign a single public biotech lease, so that gives you a sense of what the environment is out there. I think it's fair to say in our pre-read we highlighted the sale which closed during the fourth quarter, but it's emblematic of the quality and value of the underlying life science assets that we continue to hold, especially on the mega campus. Our disposition of 409-499 Illinois Street in Mission Bay received a record pricing of $1,645 per square foot, the highest ever achieved for lab lab asset in San Francisco, and by the way, it was 40% occupied. Fair to say that this year, what is critical for us is to continue our path forward. The mega campuses will continue to differentiate us. Our balance sheet will remain strong and flexible. We've worked on continuing to lower G&A. The quality of our assets continues to be outstanding as recognized by our tenants as well as our operational excellence. and clearly a best in class team throughout. I think finally, fair to say that if you look at our top 20 tenants, 80% of the top 20 tenants are investment grade or large cap companies, and that's very reassuring. 55% of our total ARR comes from that, and of the top 20, We have almost a 10-year WALT, which is really great, and we have one, I think, the longest WALT of, not WALT, but duration of our debt, and Mark will talk about that. And then finally, 78% of our ARR comes from our mega campus platform, which we've been working hard on. So with that kind of intro to the quarter, let me turn it over to Mark for his detailed comments.