Alexandria Real Estate Equities, Inc.

Good afternoon, everyone, and welcome to the Alexandria Real Estate Equity's second quarter 2026 conference call. All participants will be in a 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 and then one on a touch-tone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor 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 the Alexandria second quarter earnings call. With me today are Peter, Mark, and Hallie. And before we start detailed comments, I'd like to start with a quote from Ralph Waldo Emerson. Cultivate the habit of being grateful for every good thing that comes to you and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude. The point being we're very grateful and most proud of our one-of-a-kind team and of our one-of-a-kind mission. Operating in a highly regulated industry within a rapidly changing macro environment is never easy. but we remain steadfastly focused on our path forward. Let me share with you some key observations regarding the second quarter and maybe a good place to start is leasing, kind of the lifeblood and the key to stabilization of operating metrics, especially in the life science industry these days. And remember, 75% of our leasing has come from our own tenants, really best in class tenant roster. We're seeing steady improvement, which is good. We're winning outsized number of shares of transactions, which is good. We have a very well diversified and strong tenant base. Our page 18 pie chart is illustrative of that. Very strong leasing in the second quarter from our life science product service and device sector really depicts shovels and tools of the industry. Almost 40% of the leasing volume. Also a strong second quarter showing from our advanced technology sector in several of our submarkets with almost 30% of the leasing volume. Public biotech, only about 6%. As the industry is seeing substantially improving metrics, they are still decoupled from the demand on the ground, and we might have more to say about that in the Q&A. I think the one thing that could make a difference there would be, well, many things could make a difference, but I think stability and truly knowledgeable and expert leadership at HHS, FDA, and NIH would certainly go a long way. There's still much work to do on our leasing of our redevelopment development pipeline with only about 70,000 Renable Square Feet in the second quarter. And we're very keenly focused on the modest remaining 2026 rollovers that remain unresolved of about 494,000 Renable Square Feet. 2027 rollovers unresolved other than those focused either track to leasing or track, we have ongoing discussions of about 2.7 million. This is mission critical as we go forward to the last half of 2026. and Enda 27, of course. For third quarter, our pre-read indicates that our best knowledge at this point is about 950,000 rentable square feet of leasing projected in the third quarter, again, based on our current view of that forward pipeline. We have and will continue to meet the market. Moving from leasing to sources of capital, as we did in 2025, are currently very comfortable that we can and will meet our total target of $2.9 billion. We're always mindful time is of the essence, but timing is never simple. We are making excellent progress and would not let some artificial timing be of concern at this juncture. The demand for Alexandria's assets remains strong. and in third quarter we'll take a bit of a deep dive into the composition of the assets that have been sold or will be sold this year and the disposed NOI analysis. We are very mindful not to unduly tie our hands in any new joint venture transactions and are working hard to make sure those are successful both for capital raising and for operational efficiency. Moving on to allocation of capital, we're laser focused on trying to reduce our CapEx of the 1.75 billion construction pipeline for this year, which is fortunately highly leased, and we're anxious to continue deliveries, and we're focused on the lease up of vacant space and making good progress there. On the life science industry itself, I'll refer you to pre-read pages VII and VIII, seven and eight of the supplement, regarding the core pillars and the key 2026 second quarter events. To say it's greatly nuanced and complex would be a bit of an understatement. Again, we're still very focused on HHS, FDA, and NIH. One other comment we see during an election year, a lot of people advocating for Medicare for All. It's been stated by many administrations at both the executive level and the HHS level that that would be, Medicare for All would be kind of a budget buster. It would be almost impossible to administer given the current administration is still tough and it would be a giant impact on budget. It would also mean taking two thirds of the population who are covered under private plans and moving them to a government system. And if you go to Canada or any other country that has that system, you wait in line. So not a very desirable outcome. The key factors to watch for the rest of 2026 in the life science industry beyond obviously the midterms. There's obviously continuing strong innovation which is fueling the industry. There's been a very solid financing environment, and we're closely watching interest rates as they move around pretty significantly day-to-day, week-to-week, month-to-month. Sentiment we're watching closely has been generally positive. M&A has been very strong this year. Drug pricing and policy has been kind of a mixed bag, but the most favored nations has not derailed the Profitability and the go-forward health of the industry. We'll see where some of the IRA implementations come over the coming months and quarter. On the regulatory side, that still is a bit of a mess, and that is of concern, although 23 products were approved year to date, and that is pretty well in line with past practice. Patent cliffs continue to be a big bugaboo of the industry. Earnings and growth have been pretty positive, and China remains a big negative overhang. Moving quickly to the balance sheet, our North Star and one that we continue to focus on and keeping strong and flexible. Marc will have a lot more to say about it, but we're confident that our year-end target leverage remains, we can achieve, 5.6 to 6.2. Medium term, we're looking at mid fives. We have Excellent liquidity, and we successfully are extending our $5 billion line of credit to 2032. And as we've said a number of times, the longest average remaining debt maturity of all S&P 500 needs, which is good. And Marc will discuss, before I just turn it over to him in a moment, guidance. And he and the team have tried to detail the multifaceted set of items impacting 26 and the fourth quarter on page six of the earnings release. Obviously, critical to establishing a solid earnings run rate based beyond 2026 will be a strong and consistent leasing of our development and redevelopment pipeline and successful handling of the 2027 lease rules. We're laser focused on continuing to decrease capex and manage our funding cost effectively. And with that, let me turn it over to Marc.