Good day, and welcome to the Alexandria Real Estate Equities Fourth Quarter Year-End 2018 Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Paula Schwartz, Investor Relations. Please go ahead.

Thank you, and good afternoon. 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 fourth quarter and year-end 2018 conference call, and happy new year and healthy new year to everybody. With me today are Steve Richardson, Peter Moglia and Dean Shigenaga. And as I always do, I want to thank the entire Alexandria family for an operationally outstanding fourth quarter and year ended 2018. A quick look at Page 4 of our press release highlights our, I think, and depicts our amazing collective accomplishments as of year-end, including our all-time high-end revenues. Each of the speakers will get into these -- the quality of our tenants, the quality of our cash flows, our leasing stats, our margins, our credit rating, our exposure to variable rate debt and importantly, very importantly, our leverage is lowest we've ever had in the history of the company. So with that, I'd like to talk a little bit about -- since our founding, we've always been blessed to be an idea-based meritocracy culture. And as a very mission-driven company, we operate at the highest standards and levels of integrity and ethical behavior. And we have among the best disclosure and transparency hard earned over our 22 years as a public company and so recognized by NAREIT. nd when we speak about corporate social responsibility, which is a big buzzword in the industry today, we at Alexandria try to live it every day. In 2018, among many notable accomplishments, our team volunteered over 2,600 collective hours to important nonprofit causes and 49 of our team members ran the New York City Marathon and raised over almost $0.25 million for Memorial Sloan-Kettering's cancer fund research. At Investor Day on November 28, in addition to giving what we felt was very good guidance for 2019, we also gave investors and analysts our framework…

Thank you, Joel. Alexandria as an innovator and leader in creating first-in-class life science clusters is very pleased to report healthy lab real estate fundamentals, featuring strong demand against the backdrop of constrained supply, and important to note, severely constrained supply in a few of our key submarkets that we'll detail in the following comments. Very quickly, 2018 was an absolutely excellent year. The highlights include a cash rent increase of 14.1%. Important to note that this is the highest during the past 10 years. 4.7 million square feet of leasing, the second highest during Alexandria's nearly 25-year history. And this stat, I think, is critically important that percentage of early renewals and re-leasing this past year was 71%. And what's underneath that is a clear indication of a sense of urgency in the market amongst our client tenants. The quarter highlights include rental rate increases of 11.4% cash and an increase of $41 million in rental revenue, primarily due to the delivery of 300,000 square feet leased on a long-term basis to Merck in South San Francisco and Takeda in San Diego, both high-quality, investment-grade pharmaceutical companies. Other key leases include Dendreon leasing 76,000 square feet in Seattle. That alone was a 44% GAAP increase, which is really a testament to the value and durability of Alexandria designed and operated lab improvements. Moving onto the East Coast. Gates Medical leased 52,000 square feet at [indiscernible] in Cambridge. An important GSA lab tenant leased 64,000 square feet at five Research in Maryland. Regenxbio also leased 132,000 square feet at a new project we have in Maryland. We also have an investment-grade pharmaceutical company that leased 66,000 square feet at a redevelopment project at 681 Gateway in South San Francisco. And finally, a very exciting early stage company insitro leased 35,000…

Thanks, Steve. I'm going to spend the next few minutes updating everybody on our fourth quarter deliveries, our near-term pipeline and our asset sales efforts. In the fourth quarter, we fully delivered 213 East Grand in South San Francisco to investment-grade tenant Merck. The initial stabilized cash yield is 6.5%, which is a healthy spread over what we believe would be a sub-5% cap rate if it was sold today. 9625 Towne Centre Drive in the prime University Town Center submarket of San Diego was fully delivered to investment-grade tenant Takeda. The initialized cash yield is 7.3%, which is 30 basis points greater than we initially projected and 160 points -- basis points over Green Street's cap rate for the submarket, so another great example of value creation. Two assets in Maryland: 9900 Medical Center Drive in the prime Shady Grove submarket of Rockville and 704 Quince Orchard Road in Gaithersburg partially delivered in the fourth quarter. Both assets have pro forma yields approaching or exceeding 8.5%. The Maryland market is continuing to gain momentum, and we are well positioned to capture its growth, illustrated by 2 recent announcements touched on by Steve for build-to-suit, for public gene therapy companies, Regenxbio and Autolus. Those two projects will further diversify the region's tenant base and combined for over 250,000 square feet of lease space that we'll deliver in 2020. A portion of five Laboratory Drive was delivered as well in the fourth quarter, bringing nearly 1/3 of that project into operation. Great leasing progress has continued there with 100% of the space either leased or under negotiation, prompting the need to expand this unique campus in RTP by beginning the development of the adjacent 9 Laboratory Drive property, which is also one of our 2020 deliveries. Finally, one of our partial…

Thanks, Peter. Dean Shigenaga here. Good afternoon, everyone. Let me just touch on an important topic before I jump into key highlights for the quarter and the full year. As Peter highlighted, we announced the execution of this P&S for the sale of the 60% interest core Class A property that was developed at 75/125 Binney Street in Cambridge. The sale price is $1,880 per rentable square foot that represents a 4.3% cap rate on fourth quarter cash NOI annualized. If you look back over the last 5 years, including this transaction, our dispositions aggregate $1.5 billion at an average cap rate in the mid-4% range. The key takeaways that our team has built a very high-quality asset base of Class A properties in some of the best real estate submarkets in the country, and we have built an industry-leading high-quality tenant roster. And both of these translate into one of the best portfolios of high-quality cash flows in the REIT industry today. We clearly have a very attractive high-value asset base and this P&S announcement today further supports this. Our office lab properties should be valued at a premium to Class A office due to the quality of the real estate, high-quality tenant roster, lower long-term CapEx requirement, and importantly, our unique and differentiated business strategy, our platform, brand and highly experienced team. So let me get back to our comments on operating and financial results. I briefly want to cover our fourth quarter and 2018 results, balance sheet and improving credit metrics, growth and cash flows from operating activities and dividends, brief comment on sustainability and philanthropy efforts and our updated guidance for 2019. From a real estate perspective, 2018 was truly an outstanding year with our entire team executing on our strategic goals. Real estate and life…

So operator, if we could go to Q&A, kindly?

[Operator Instructions]. The first question comes from Jamie Feldman of Bank of America Merrill Lynch.

I was hoping you could talk more about the pre-lease percentage of the 2020 development delivery pipeline? Can you provide more color on that?

Jamie, it's Steve here. Yes, sure. As we look at the 2020 deliveries, we've got 5 different buildings that total about 560,000 square feet. In those projects right now, we're 81% leased, another 2% negotiating, so very substantially resolved in the 83% range there. We do have a number of other projects totaling about 1.3 million square feet slated for deliveries later in 2020. We're in active discussions with groups at a number of those projects, and we look forward to updating everybody as the year progresses.

And Jamie, if I could add, I would just remind you in my prepared comments that during the year of 2018, we executed 1.7 million rentable square feet related to the value creation pipeline. 90% of that related to deliveries that are occurring in 2019. So our team is hitting on all cylinders on lease-up of the value creation pipeline, and we're working hard to really get the remainder of the pipeline addressed, but we're excited about what we have already resolved.

Okay. Did I miss it somewhere that you actually say, which five are the leased?

We haven't broken those out yet, Jamie. We'll be doing that in the future.

Can you say, which ones are leased?

Yes. We've got couple down in San Diego and then the two projects at Medical Center Drive in Maryland.

Those are leased?

Yes.

Okay. All right. And then, Dean, so your comment on the $100 million of less spend, does that -- is that getting pushed out into '20 or how do we think about it? Or is it just shrinking the total pipeline?

It is not pushing out much of the spend into '20. Most of it related to conservative two buckets, Jamie. One bucket was conservative assumptions that we were able to address over the last 2 months, which is pretty typical in a given year to be able to knock out 3%, 4%, 5% of the budget just by carefully challenging the forecasting. And then, we had 1 unique project that had a little bit of an element in it that as we looked harder at it, it wasn't something that we could accomplish in the final design and -- or ended up being a reduction to the overall cost of that project. So neither of them, Jamie, had anything to do with pushing the cost out to '20 or any delays on any of the projects.

Okay. And then, finally, I mean, as you think about the potential of doing more JV sales based on the great pricing in Cambridge, I mean, is there a scenario where you actually don't need any more common equity this year?

We have a modest number that remains, Jamie. I would say that dispositions are always a key component of our capital plan. We also have pretty unique opportunities to invest capital at great returns. So I don't know that it will fully eliminate it, but it's an important component.

The next question comes from Manny Korchman of Citi.

Your markets have certainly had some massive rent growth, which is from -- given sort of those very low vacancy rates you discussed. Is there an elasticity curve to rent? Or could you push rent harder? And if so, why aren't we seeing even bigger mark-to-market or rent markups on rollovers?

Manny, it's Steve here. Look, there's always a balance and I think we've been pretty consistent with that. These are repeat clients, multi-market clients. I think you've seen very significant statistics. With the outset, we referenced the highest cash increase this past year. So I don't think we've been shy at all about pushing rents. So we continue to engage on a long-term basis with these tenants, and I think we are hitting the mark and capturing the full value there. So stay tuned as the development pipeline continues to get leased up.

Manny, it's Peter Moglia. I also would like to remind everybody that one of the things that we really do well is incorporate annual increases into our leases and add a 3% per year clip by the time those leases roll, and we're still making some pretty great cash and GAAP increases over and above what happened during the lease, certainly, I think, speaks to our great execution on the leasing side.

And maybe on a similar topic. Again, given those low vacancy rates, what's the re-lease-up for those multiples of demand that want to be in this market and just can't find the space?

Our 2019 and 2020 deliveries, to start.

Yes. And to add to that, Manny, I think you see the early renewals and that one of the all-time highs at 71%. Clearly, the sense of urgency there, locking down space, figuring out how to expand when it's a high-class problem, but that is a challenge we have in a number of our markets.

And one final one for Peter, if I could. Just what are your criteria when thinking about these JVs? So maybe more specifically, why was it 75/125 that got JV-ed rather than one of your other Cambridge properties? And then as you look at expanding either the JV or the sales program, how do you think about what you're JV-ing?

I'm sorry. What's the last part of that? How do I think about what?

Peter, just how do you think about what goes into a JV versus something you want to own -- wholly own going forward?

Yes, I think one of the key elements is, have we provided as much value as we possibly can up to this time? And is the ability to create more value later on? In the case of 75/125 Binney, it's fully leased to great tenancy, but it goes for another, I believe, 12 years before you can actually get to the mark-to-market. So our partner is patient capital, and it will do well in 12 years when that lease rolls, but it's a great opportunity for us to monetize that and then put that money to work into our highly leased -- highly returned pipeline. So that is one of the things we certainly look at. And then as far as JV partners go, we've definitely looked for those that are -- understand our business and are easy to work with and trust in our judgment and our brand to deliver great results. And this particular partner recognize that, and I wouldn't be surprised if we do more business with them down the road.

The next question comes from Sheila McGrath of Evercore.

Yes. I wanted to ask Peter a few more questions on the JV. Did you speak to one partner exclusively? Or were there many potential partners discussed? And what was the level of interest? And if you could just give us a little insight on where the rents in that asset mark versus current market rent?

Okay, the first one, the current rents, I believe, are in the mid-70s and the market rent there is conservatively in the low to mid-80s. So that -- the answer is that piece. As far as marketing, we had a strategy to message to investors that we wanted to work with because that is a very important thing as far as who we partner with. It's not all about the cost or the purchase price. It has a lot to do with the culture of who we're dealing with because we want to make sure we're very aligned. So we had a small, targeted audience that we approached. We had a valuation in mind that was very close to what we ended up with, and our buyers stepped up early and we were able to get it done. There were a number of other people contacted before we settled on the final choice, and we did receive an enormous amount of interest given that this product was in Cambridge and that there are a number of parties out there that want to JV with Alexandria and get into this life science real estate niche.

Okay. that's helpful. Do you think that the people that you're in discussion with are starting to give the life science the lease structure and EBITDA margins more -- any consideration versus more traditional office?

I think that people definitely recognize on the CapEx side that we're very efficient in our operation versus office. I think they also look at our tenant roster and understand that they're not only investing in great real estate but they're getting credit behind it relative to office. So I think that's really what's driving it. Plus the industry is one of the driving forces of the economics of the United States. It's an industry that's very difficult to take offshore due to intellectual property issues. And obviously, it's a well-paying industry and our tenant base is very -- has very large balance sheets and is constantly looking to expand its pipeline for the future, and they have been looking to us to be a provider of that space.

Okay, great, and just one more. You've allocated more capital to the Stanford kind of cluster via acquisitions. Can you just talk about that market and your vision there? Is demand kind of equally driven by tech and life science in that cluster?

Sheila, it's Steve here. Having been in that market for 35 years, it was historically very well balanced between life science and technology. I mean, you had some very strong brand names down there with -- Merck historically has been a tenant in Stanford Research Park, Syntex, Alza and others. And what we've seen over time is tech has become larger and larger with Google, in particular, Facebook, even Apple begin crowding out to life science industry there. There is still strong demand for serial entrepreneurs, the venture capital on Sand Hill Road for people to be in that Greater Stanford cluster. So as we look at this very strategically, certainly with the acquisition in the Research Park, building out as we will the first new Class A lab facilities in San Carlos in over 20, 25 years, we think this is critically important to the industry and we've heard that directly from clients that we've worked with for a long, long time.

The next question comes from Tom Catherwood of BTIG.

So we've seen a good deal of M&A activity in the life science sector. Obviously, some impacts your tenants, Bristol-Myers and Celgene and Takeda. How do -- kind of multi-part question here, but, a, how do you evaluate your exposure to any one tenant when these large companies are merging? And then the second part of it is, when companies merge, what has -- historically, what has been the impact on the real estate needs? And has it depended if it's a large-cap pharma or small-cap biotech? What's kind of been the impact on the need?

Yes. So Tom, this is Joel. So I think if you look at Page 26 of the supp, as we kind of think about -- we have really an all-star, highly diversified cast of top 20 tenants that make up more -- almost 45% of the rent. We always think about not trying to be overly concentrated. And I think if you look at the numbers, the percentage of aggregate rental revenues, we really don't have great exposure to any single company in a way that we think would be catastrophic or highly damaging to the company from Takeda at #1 at 3.6% down to FibroGen, which has a potential blockbuster product to oral erythropoietin to replace the injectable, at 1.4%. So I think we're pretty mindful of that. I think when you think about the Celgene/Bristol-Myers -- Bristol-Myers' acquisition of Celgene, so you have our #7 acquiring our #5, but I think one thing to keep in mind is Bristol is leading some facilities in Seattle that we've re-leased at the Fred Hutch Cancer Research Center. And we believe on Celgene, as we luckily don't have any of Celgene's home campus in Summit, New Jersey, which I think where most of the cost synergies will come out of, but they have two important locations -- several with us but two of the most important are Juno in Seattle and the...

Receptos.

Receptos, yes, in San Diego. Both of those, we believe, have mission-critical therapies that are critical to the acquisition and the value of the acquisition. So I think we feel pretty good overall about that combination.

Got you. And then in general, in the past, in your experience, do kind of waves of mergers cause a large footprint reduction? Or does it totally depend on kind of the mission of the companies and what their drug pipeline looks like?

Yes, I think where you have large companies merging to large companies, I think you have a lot of cost synergies that shake out and you have a lot of home campuses, many of those are owned by the pharma companies themselves where things get reduced in size. But I think where you have pharma buying biotech, it isn't always true but I think more than -- more likely than not, those acquisitions are for the pipeline and the talent that you have. There are occasions where select biotechs are bought that have a single product opportunity, and those are pretty easy to spot. So when we lease to tenants, there are no tenants in our top 20 that have -- that are single product, onetime shots on goal. So we're really careful in our underwriting about that. That would be a bad outcome.

Got it, got it. And then a quick question for Peter. You mentioned that the Maryland market continues to gain momentum as well as the lease-up then an RTP driving the start of the next development down there. Is this the case in those two markets where demand is relatively onetime in nature, as in the growth is related to a specific resource topic or 1 specific funding source? Or are those markets developing more sustainable ecosystems similar to your larger clusters?

Yes. So maybe let me talk -- I'll ask Peter to talk about real estate, but for a second, in Maryland, I think you have a resurgence over the last couple of years of tremendous amounts of dollars that have come into the National Institutes of Health. And overall, the government funding of biomedical research in that area has been stronger. You've also seen -- as Peter and Steve said, you've got certain new gene therapy or cell therapy companies that have emerged. There's a stronger base of venture capital in the areas located there and they raised funds that are in the $2 billion to $3 billion range. So that ecosystem actually has come back from a very nascent system. It was super vibrant in the early 2000s with the genetic revolution and sequencing, but then it kind of fell into a long kind of tenure, kind of non-growth situation but it's really coming out and we expect it to be not a onetime shot. North Carolina, I think what we've done is we've tried to move to where we think -- and we'll have a lot more to talk about this on the first quarter call, where we think the intersection of human health is both in fighting disease and then enhancing nutrition. And so we've made a stake in the ground and really created the first ever in the U.S. that we know of -- that we know about multi-tenant ag tech campus, and that's the one that I think Steve referred to that we've got about 100% lease or committed. Peter, you might comment.

Yes, I mean, I'll echo the comments on RTP. We certainly saw a trend few years ago of North Carolina being an optimal place for ag tech research, and we started making incremental investments over time. And as Joel said, we'll provide some more detail on that next quarter. In Maryland, I wanted to say that -- I think one of the things we're really happy about is that it used to be very dependent on government funding, and so you could basically chart the market based on the NIH budget. And of course, around 2008, 2009, we started to see that dip, and of course, the Maryland market went down. What has happened over the last few years is that we're seeing a lot of commercial companies coming into the areas because they want to be adjacent to the NIH and other institute -- government institutions because they're having the government cosponsor different programs. Kite, for example, has moved there because they're working with the NIH and the National Cancer Institute on projects, and then we saw a follow-up with Autolus, one of the tenants that is anchoring our new development at 9950 Medical Center. They're also a CAR-T company. So that diversity is going to really dissipate the reliance on government, and that was really a key for us to gain the confidence to start investing more in there. And it's paid off because demand has just really been strong, and any thing that has come available has re-leased fairly quickly. And of course, now we've announced to build to suit, which will be the first new product developed in Maryland in well over a decade. So there's been a constrained supply for good reasons because there was very little growth over the last decade but that is now turning. And because we're well positioned with landholdings and redevelopment opportunities, we're able to capitalize on it and we're hoping that there'll be more good news in the future.

The next question comes from Michael Carroll of RBC Capital Markets.

Can you provide some color on the major near-term development starts the company is pursuing today? I know the North Tower is on that list, but are there any other major projects that we should be looking out for here over the next few quarters?

Michael, it's Steve Richardson. Sure, I think as we've listed in the supplemental there, we've got a project in South San Francisco on Haskins Way. So we're beginning to do the predevelopment work and horizontal infrastructure. As I had talked about earlier down in the Greater Stanford cluster, the 825, 835 Industrial Road project as well, we're doing predevelopment work there down in San Diego at 3115 Merryfield, again, predevelopment work there; 1165 Eastlake. And these are all in markets where we don't have significant availabilities, and these are the result of ongoing conversations that we have with our client tenant base. So I just want to be clear on how these decisions are being made and how we're informing our plans to move forward, and I think 1165 Eastlake is a perfect case in point. The 1818 project has done extremely well. And then finally, down in North Carolina, as Joel and Peter were just commenting, the great success at 5 Lab Drive is leading us to start doing predevelopment work, getting 9 Lab Drive. And then 6 Davis Drive is also getting build-to-suit interest, very early discussions down there. So that kind of rounds out the 2020 deliveries, as we've been detailing them in the supplemental.

So when you think about breaking ground on these projects too, do you need to have some type of pre-lease percentage to break ground? Are you just happy if there's interest and there's no availability and you think that's going to be leased up over the two years it takes to complete and stabilize?

Yes, I think what we've done historically, Michael, is we've looked at the predevelopment work and the horizontal work as necessary from a speed-to-market perspective, but then we monitor these very closely before we actually make the big capital investment and going vertically. And at that point, that's when we really look at having some type of kickoff tenant or anchor tenant in these projects. And as I detailed in my prepared remarks, 4 million square feet at the time of kickoff were fully leased at 100%, and the other 3.1 million square feet were roughly 1/3 leased, so very significant and on both accounts, whether we were multi-tenant or single tenant.

Great. And then Steve, I know you mentioned in your prepared remarks the increased competition that you're seeing in South San Francisco. I mean, how do you think about that market today? And is that something that you still want to heavily invest in given the planned projects that are on top over the next few years?

Yes, maybe stepping back at the Bay Area, we just had a strategic planning meeting, and I think what was highlighted is we are very, very well balanced in kind of the 4 key clusters, the SoMa market, the Mission Bay market, South San Francisco and Greater Stanford market, so not really overweight in any one market. We've been 100% leased in the region now for a number of years. South San Francisco continues to be a critically important market to us, and we think the Haskins project will provide a great platform for a number of different types of companies. Peter had highlighted it, 681 Gateway. We fully resolved that in very short order. We just started the redevelopment activities there. We're already 100% leased. So we monitor the competition very closely. I think we're significantly differentiated on a number of fronts, and we think our tenants respond to that very favorably as well.

The next question comes from Daniel Ismail of Green Street Advisors.

Maybe to follow on that question, are you noticing any other pockets of new supply in any of your markets that is a cause for concern?

Daniel, it's Steve again. No, not in particular. Again, Seattle's very tight. I would say Cambridge is severely constrained. We've talked about the Bay Area, really no significant ground-up development projects down in San Diego. So really, South San Francisco is the only sub-cluster that we're monitoring.

Okay. And maybe just a bigger picture question for Joel. So prescription drug pricing is likely to come up in tonight's State of the Union address. Are there any expectations for drug price regulation in the next 12 to 18 months? And the -- and is there any potential impact on the pricing power for your tenants?

Well, I guess I'd say one thing. Could you imagine Congress agreeing on anything? But we did actually meet with Medicare recently and had some very good discussions with them. The President's desire is to try to eliminate the rebates and the middlemen fees, which make up -- so if you're an ethical drug company selling branded products, about 40% of the price of that goes off to third parties. And then in the discussion we had in Washington, it's clear that there are a lot of end user vendors, not the patient but the vendors who dispense these. So there are hospitals and other third parties that then mark the drugs up, some as much as 10x. And when it's buried, if you go in for surgery and it's $100,000 -- actually, I just had this happen personally to a family member, and they get a bill back that shows everything's paid for by insurance or reimbursed by insurance except drugs and the drug is $1,000 or $2,000. Oftentimes, that's marked up 2, 3, many times by the group that's dispensing it. So there's a real effort to go after the probably unreasonable markups and the middlemen who are taking 40% off of the list price before it ever gets to the consumer. Those are the two big areas that I think people are focused on but it's pretty clear. Remember, go back to basics. Drugs only make up about 10% to 15% of overall health care cost, and 90% of all drugs that are sold are generic. So there's a lot of fire and talk about drug prices, but it doesn't fall wholly on the manufacture standpoint. I think what you may see is Medicare forcing out that middlemen rebate pricing whether that can be extended to a private pay. Remember, in U.S. insurance or U.S. health care, about 2/3 are covered privately; about 1/3 is covered through Medicare and government plans; and then there's about 8% to 10% which still are uncovered. So if Congress is going to act, they have to act on the 2/3 and it would take both parties and I don't think that's going to happen, but it would go after the middlemen pricing and the unreasonable markups of the dispensary element of the system, if that's helpful.

No, that's helpful. Maybe just a last one for Dean. On the sources of equity in 2019, should we be expecting that to be done in the form of a forward equity raise or of ATM throughout the year?

Manny, I think all of our -- whether it's debt or equity capital and dispositions for that matter...

Daniel.

I'm sorry, Dan, really dependent on market conditions. And when we hit that point in time or assess those, the environment, and execute, the capital needs on the equity front are fairly modest this year given the disposition program we have in place. So either option is available to us when we're ready for it.

And we have a follow-up from Manny Korchman of Citi.

It's Michael Bilerman. Maybe Dean or Steve or Peter, whoever wants to take this, but just sort of following whole sort of capital discussion. And I recognize that if you're trading at a big premium to NAV, issuing equities at great use of capital, but when I think back to last 3 years, one of the things that you guys did was over-equitize a lot of your external growth via -- whether it was acquisitions or redevelopment or new development opportunities in order to delever the balance sheet, but the balance sheet now in the best position, better it ever has been, which is a great thing. But you think about the equity size of the company, and the company has gone from about 70 million shares outstanding to over -- well over 100 million shares outstanding. So the equity base has grown pretty dramatically. As you think about the capital commitments that are going to be coming down the road in 2020, 2021, 2022, just given the vast amount of opportunities that you already have within the company, do you think about more of a merchant build to take advantage of the significant value creation that you have in the development pipeline and maybe pre-selling more assets, like you just did at 75/125 Binney, to raise that capital today when the market is hot and when you've put these commitments out there where you are getting great returns on the development?

Michael, good comments all around. You're right that we did raise more equity over the last few years to drive down improvement and leverage in our credit profile. 70 million to 100 million shares directionally sounds correct, but keep in mind we also grew bottom line FFO per share 60% if you include our growth through the end of 2019 here, so outstanding, top of the market REIT sector growth. I think the key to continuing to drive results as strong as that is to be disciplined with our value creation pipeline, both development, redevelopment and being disciplined on funding, which we will continue to do and utilize sources that makes sense. Over the years, I'd say 10-plus years, we've always thought about different alternatives, including what you just mentioned but we haven't pulled the trigger on it as far as some fund-type approach because it didn't just make sense for the business. So we do evaluate alternatives as the short answer your question, Michael, and we'll continue to be very prudent in how we execute the business.

And I don't know necessarily they have to be a merchant bill fund or have a fund, but it just sounds like there is substantial institutional interest in your asset class, as evidenced by the sales that you've done and other sales in the marketplace that try to harvest some of that value today when you know that your commitment is going out or there could be a good arbitrage knowing it would be short-term dilutive but long-term NAV-accretive in doing that.

Yes, it's interesting as we step back over the last -- looking at this question today but we've thought differently about it, a variety of scenarios to fund the business over the last 1.5 decades, Michael, and we'll continue to brainstorm about different alternatives. But I think, again, the key here is to be focused and balanced on how we grow the business and how we fund it, and so we'll continue to brainstorm on the best solutions. And if something changes, we'll share it with the investor community as it develops.

Yes, on a number of assets, I think, Michael, we clearly would not joint venture, things like our center in New York or a number of assets in Cambridge. But the 75/125, for the reasons Peter articulated, turned out to be a great opportunity both time, value and it's on the -- actually the same side of the street that 225 Binney is that we joint-ventured back a couple of years ago. So it's on the north side. It also is going through an interesting transition in tenant base. And as Peter said, we had wrung all the value out of it that we could be. We remember the times when we we're dealing with ARIAD. So that building has a long history, as you know well. So we're pretty careful about what we do, but I think Peter's deep expertise in this area and, I think, world-class relationship together with Tom and those on the ground in Cambridge, I think, give us a real set of opportunities to selectively mix a variety of forms of equity for our future growth. And also, on the future growth, we don't know what's going to happen come 2021, 2020 even. So we're pretty careful about the growth in the future.

Right. Joel, have you -- I can't be the only one that's receiving emails from bio REIT [indiscernible] at yandex.com. Can you comment a little bit about what's happening with your eldest son and the lawsuits going back and forth regarding him starting a -- ran a labs thing in Europe and countersuing for the use of your logo and name and where this is headed?

Yes. So I think if you go back to what I said at the beginning, think of Alexandria as a company that has been around for 25 years. I think this year is actually our 25th anniversary. We've built a very special business. We were the first ones to really identify this business and really build this business. We've developed, I think, a unique business strategy, as I said in my prepared remarks. We've developed, I think, a great financial strategy that's been reflective of the market changes over the years. And I think most importantly, we've built an employee base and a management base that I would say is really second to none, very long-tenured people in all aspects of the company. We've had Jim Collins come in and help our people, and I think it's fair to say that if you look at anyone who is trying to bring any discredit or any cloud to the company, I think you can assume that, that is a meaningless approach. And I think that I'll let Jennifer Banks, who's our General Counsel, comment on the litigation. But I think just remember, you have a highly ethical, highly motivated company here made up of long-tenured people, and I think the kinds of things that are going on are clearly illegal and they're immoral and they will be dealt with in a very severe fashion.

Michael, this is Jennifer Banks. I'm a General Counsel here and so I'll just jump in quickly. I mean, as I'm sure you can imagine, we don't comment on litigation matters. For litigation matters, like all company matters, we'll continue to always make all appropriate and required disclosures, but we don't have comment beyond that.

This concludes our question-and-answer session. I would like to turn the conference back over to Joel Marcus for any closing remarks.

Yes. Thank you, everybody. We appreciate your taking time to listen, appreciate the Q&A, and we look forward to talking to you at the first quarter results end of April or early May, and we'll bring you more detail on the -- on some of the ag tech strategies that we have in mind and appreciate it very much. Thanks, guys.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.