Good afternoon, and welcome to the Alexandria Real Estate Equities Fourth Quarter and Year-end 2020 Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Paula Schwartz. 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.

Thank you, Paul, and welcome, everybody, today. With me, as usual, Jenna Foger, Steve Richardson, Peter Moglia and Dean Shigenaga. Want to welcome everybody and extend our thoughts and prayers to each one of you to continue to be well safe and state COVID free. Just over one year ago, January 21, 2020, the United States had its first reported case of COVID-19 in Seattle. And just today, a little more than a year later, we have lost more than 443,000 Americans, a number that is actually quite astounding to imagine. And that does not even count the number of - the millions, probably tens of millions of Americans who have suffered really irreparable personal, mental and financial arm due to the worldwide pandemic. President Roosevelt on Pearl Harbor Day referred to that day as a day that would live in infamy. And I think we will all feel that 2020 is a year that will live in infamy in all of our memories. Talking about the pandemic, there is much work to do to control the virus’ spread. We need to enhance manufacturing supply chains as well as a big effort on distribution, administration of the vaccines as well as continued testing. And we, as a country, I think, for decades, have been ill prepared and behind the curve to respond to a true worldwide and kind of a 100-year pandemic, I think our readiness just has not been there, unfortunately. Much work to do to rebuild businesses and lives so devastatingly impacted. And I would say it is going to take a good part of this decade to do that for many people who’ve been really so devastated. We still have not discovered the root cause of the virus, natural or human made or brought those responsible to an accounting. We at Alexandria at the Vanguard, the heart of the life science industry, are honored, proud and yet humbled to serve this mission-critical industry, which has been on the forefront, 24/7, really as the savior of human kind in this pandemic. It really doesn’t get more important or impactful than that truly. There are two primary causes behind the COVID vaccines rescue of humanity from this pandemic, I firmly believe. The first one is our free market system here in the United States, the economic system that facilitated the innovation, competition and cooperation between our biotech and pharma industries and government, that literally doesn’t happen in other countries around the world. There would likely be no multiple COVID vaccines today that they are not being venture capitalist prepared to invest before product or profit was really visible and no corporate leadership would be willing to double down other than those in our country with the company’s own money in the spring of 2020 to fund a crash effort to produce a safe and affected vaccine by year-end, really truly unheard of.

Thank you so much, Phil, and good afternoon, everyone. So really echoing Joel here. As the entire world looks to the power of science, the life science industry and specifically to our tenants to lead us out of this devastating COVID pandemic. 2020 has underscored why Alexandria has dedicated our business, our passion and purpose helped drive this mission-critical industry forward. Without a doubt biopharma, essential R&D engine has persisted with amazing productivity and resilience throughout the past year, which has further magnified our tenant’s role as the key solution to overcoming today’s greatest health challenges, bringing unprecedented positive sentiment to the sector, as Joel mentioned. The achievements in COVID vaccine development from our tenants, Pfizer, Moderna, Johnson & Johnson, Novavax and AstraZeneca many others in the fourth quarter, specifically of 2020 and into the beginning of 2021, have marked the culmination of a full year’s worth of tireless, truly collaborative efforts across the industry with significant aid of federal funding.

Thank you, Jenna. A tremendous deep dive. Good afternoon, everyone. A clear insured vision fused with undaunted determination during 2020 from the Alexandria team has enabled the company to thrive during this unprecedented and challenging time. At a high level, consider the truly exceptional growth during the past 12 months. The operating platform has grown from 26.9 million square feet to 31.8 million square feet, an increase of 18%. The redevelopment pipeline has grown from 12.1 million square feet to 17.8 million square feet, an increase of 47%. And it is important to note that this development pipeline has been smartly derisked with 45% of this value in significantly pre-leased projects well underway, 40% in covered land plays and just 15% of this value in land. The total Alexandria Real Estate platform then have grown during 2020 from 39 million square feet to 49.7 million square feet, an increase of 27%, a truly remarkable achievement. The Company’s leadership and central role in the nation’s life science ecosystem is clearly evident in only increasing in each of our core clusters. The year 2020 demanded the very best from our teams, from operational excellence to the vision and execution of critical strategic growth initiatives. Alexandria is pleased to prevent its outperformance highlights for Q4 and 2020. Operational excellence. The company collected 99.8% of its accounts receivable during COVID from April 1 through December 31, 2020, and we are at 99.6% for the month of January. Alexandria’s labs were deemed essential infrastructure and have been operational from day 1 in the pandemic. Leasing outperformance. During Q4, we leased approximately 1.4 million square feet and a total of 4.35 million square feet during 2020, which is meaningfully above our 10-year average of 4 million square feet and consistent with our 5-year average of 4.4…

Thanks, Steve. I’m going to follow-up on some remarks we made about our valuation on Investor Day. And then I’m going to update you all on our development pipeline and briefly comment on a new acquisition. As the inventor and pioneer of the essential life science real estate asset class, we have created our campuses and clusters in the best locations with the market’s best assets. By combining our irreplaceable locations and our world-class campuses and ecosystems with meticulously designed, highly functional buildings and a world-class tenant base, Alexandria has aggregated the best life science real estate base in the world and it isn’t close. During Investor Day, we highlighted our views that the private market has been sending strong signals that there should be significant upside in our stock price. This included a comparison of Ventas’ acquisition of the Genesis property in South San Francisco for $1,260 per square foot, which has since been updated to $1,301 per square foot. And Blackstone’s recap of BMR at a value of $1,100 per square foot against a very simple back of the napkin, $767 per square foot implied value of our operating portfolio, which was based upon the difference between the closing price of our common stock on September 30, 2020, and the book value of other significant assets such as construction in progress, venture investments and cash divided by our total operating square feet. We acknowledge that the implied value of our operating portfolio can vary up or down depending upon the valuation of our other assets and liabilities as well as adjustments for joint ventures, but we believe the underlying thesis remains true, which is that Alexandria is significantly undervalued. The Genesis property is vastly inferior to our South San Francisco asset base. It is located on the opposite…

Thanks, Peter. Dean Shigenaga here. Good afternoon, everyone. Our team is super passionate about our strategic initiatives to drive unique, disruptive and highly impactful solutions to tackle society’s most complex and pressing challenges. Now they are also very pleased with continued recognition as a leader in ESG. From our 115 projects focused on solving the opioid epidemic, combating the COVID-19 pandemic, the GRESB sector leadership and leadership in health, wellness and safety. Our team’s passion goes well beyond operational excellence and strong financial and operating results from our real estate business. Our fourth quarter and year-end 2020 financial and operating results were outstanding. For 2020, we reported strong growth in total revenues of 23.1%, NOI growth of 24.8%, and adjusted EBITDA growth of 17.4%, EPS and FFO as adjusted of $6.01 and $7.70 per share diluted, respectively. Now our high-quality properties in tenant roster, combined with our outstanding execution by our best-in-class team, continue to generate strong performance, including many results representing some of the top in the REIT industry. Investment-grade rated or large-cap publicly traded companies generate 55% of our annual rental revenue, consistently high and timely payment of rent and well into the 99% range each month. Strong 5.1% cash same-property NOI growth. Strong leasing velocity with record rental rate growth of 37.6% and 18.3% on a cash basis, an adjusted EBITDA margin of 69%, highlighting operational excellence, occupancy of 94.6% or 97.7% adjusted for vacancy at recently acquired properties. And please see Page 25 of our supplemental package for details on vacancy at these recently acquired properties. Now I should briefly mention that our quarterly rental rate growth related to lease renewals and releasing of space does vary occasionally, since it is only 1/4 of our annual leasing volume. For example, in the third quarter of 2020,…

Operator, if we could go to questions, please.

And the first question will come from Jamie Feldman with Bank of America Merrill Lynch.

I guess I want to start off with the Fenway acquisition. I’m hoping you can talk a little bit more about what do you like about that submarket? What do you like about those - the 3 buildings or properties for the future? And then how should we be thinking about just your Boston strategy going forward, given - it just seems - now that you have moved to the mega cluster model, it just seems like there is a lot more submarkets to choose from. Where does Fenway fit into kind of the larger Alexandria footprint we might see?

Yes. So thanks, Jamie. This is Joel. I will ask Peter to comment in a minute. We don’t want to say too much about Fenway at this point. Peter has given a little bit of detail. He can talk a little more about it. I think it is pretty clear that the location of Fenway which has good proximity to the other submarkets, obviously, to Boston itself and Downtown and Cambridge, but it is also pretty proximate to the collection of important Harvard hospitals, et cetera. And it has been a submarket that has been, I think, quite vital for several decades, and we just think that time is right for the kind of change to a more life science orientation there. And so that is one of the motivations that certainly attracted us. It is pretty clear that the greater Boston region still is the number one region or I should say the number 1 cluster market in the world and still the major destination for so many companies because there is such a rich amount of science, talent capital and the location is certainly one that is excellent. So Peter, just general comments?

Yes. Thanks, Jamie. Look, the 401 Park asset is a really nice office R&D building. It has some dry lab in it. It has a great tenant roster. It is got great duration and leases. And there is going to be opportunities for us to convert some of that to lab over time. The development of 201 Brookline is doing really well ever since we’re awarded the transaction. There is been great activity. We will be reporting on that in future quarters. There is some opportunities at the 401 Park building as well to mark some rents to market. So overall, just typical Alexandria value creation play here with combination of using our brand to increase rents to bring new product to market, and ultimately, another building to create a nice urban campus.

And then $1.5 billion, obviously, a very large transaction. Is this something we should expect to see from Alexandria going forward as just…?

Yes, I don’t think you - people ask about that all the time about when we acquire something or become involved in a transaction. We never know what is - and I’m sure Blackstone has the same feeling. You never know until a - like the University Park assets came forward when or if that will ever happen. So I don’t think you can make any general assumptions about things like that. I think they’re very opportunistic, and they’re very dependent upon the time play space. So I wouldn’t take anything, read anything into it or out of it. All - every one of these is just quite unique on their own.

Okay. And then my last question is, if you look at your TIs in the quarter, definitely above-average for the year. Is there anything to read into about concessions?

Steve and Dean, you guys maybe want to?

Hi, Jamie, it is Steve. Yes, that was really driven. We had two opportunities in core markets with two very exciting tenants to refresh buildings that were 15 to 20 years old. So we go - we went ahead and did that. The incremental yield was exceptionally strong, well into the double-digits. So when we see opportunities like that, we are going to move. So if you excluded those, I think we were in much more of a normal range. But it was opportunistic to go ahead and refresh buildings, secure great tenants. And have exceptionally strong yields as well on the incremental capital.

Okay. And those are life science projects or office?

Yes.

Well, yes, they...

And the next question will come from Sheila McGrath with Evercore ISI.

I guess, Joel, I was wondering your thoughts on the new administration, if you believe there will be more or less favorable to biotech research and investment and also bringing manufacturing of pharma back to the U.S. just your big picture thoughts there?

Yes. So we don’t fully know what the health side of the administration is going to look like. We have some indication. But I would say it is too early to tell. I think, though, that when it comes to the enormous substrate, which exists in the NIH and in much of the funding that goes on at really the basic research level. That has remained, I think, very favorably bipartisan for decades now. And I don’t think there will be any change in the increase-- the rate of increase with respect to that. I think the biggest worry would be a knee-jerk reaction by some to raise corporate taxes to try to somewhat either address deficits or just because it seems fair. But the challenge with that and policymakers and lawmakers should really know better and understand that plants can revert back to Ireland or more favorable tax havens and cash can go overseas if the incentives aren’t made to do those things in America. So I hope that people take a long-term view of that. But at the moment, I think, by and large, it looks, I would say, favorable but still too early to tell.

Okay. And one other question. The investment portfolio had very strong gains in fourth quarter. Just - I know Dean touched on it a little bit, but I’m just wondering, given where biotech indices are, if your thoughts on taking some more meaningful profits from that, those investments to invest in the pipeline - development pipeline?

Well, we do, and we have done that from time to time. So the answer is, I’m sure we will review that almost real-time and certainly consider that for sure.

And the next question will come from Emmanuel Korchman with Citi.

Joel, just wanted to sort of circle back on the early remarks you made on the call about scale, and especially the scale you have in your cluster markets. Can you just elaborate on sort of the direct advantages of having the market trend and the scale versus an environment where the tenants are growing quickly? And at the same time, there is new supply being created. So are those kind of going to match up naturally where tenants are just going to slot into space that is available, maybe rather than working through a relationship they have had with you to build space years from now?

You have revealed the office playbook because when you have a generic commodity product, that is true. But I think as Peter indicated or Steve, when you have a mission-critical project, much like the Waples in Sorrento Mesa with Cue Health, you don’t just turn it over to the cheapest guy on the Street or the one who maybe has something available. It is much more careful than that. Office space, that is true. But when you have critical R&D and critical next-gen manufacturing, that just doesn’t happen that way.

Next question is from Rich Anderson with SMBC.

So was looking back in time a little bit about your Moderna exposure, went from about 382,000 square feet in the first quarter to 615,000 square feet in the fourth quarter. I guess, my broader question is, is - can we consider COVID a new line of business? Perhaps, as Jenna mentioned, more leaning towards the therapy side once we kind of get beyond this year and now? Or is what I see, not something I should be reading through to in a broader sense?

Well, I think maybe two things, Rich. One is, I think, COVID and pandemic virus, we have been through a number of mini ones over the years. But certainly, this is one of the biggest ones we have ever seen in our lifetime, different than HIV aids, which we did turn into a chronic condition. So I think and Jenna said, it will be with us for a long, long time, and there will be continual efforts not only on the vaccine side and the booster side, the testing side, this testing is going to be critical going forward, and then obviously, on the therapy side because if you can take a quick - if you can have access to therapy that is maybe not infusible, but 1 that is a pill like, just as you get a sour throat, you get a fever, that would be a whole lot better than trying to - or being very sick and looking for an infusion site. So there is a lot to do there. And I do think COVID will be a continuous business and these companies will be very busy. But I think one of the things about Moderna, in particular, we have bought into the mRNA revolution back almost a decade ago when Moderna was founded. And I think today, if you just separate out the COVID-19 stuff, Moderna represents really one of the most impressive and important platforms for many different - to address many different illnesses. Imagine if the body could replicate erythropoietin, so you didn’t need to have constant external injections, et cetera, where the body itself could address different - or insulin where you could do it by regulation in a sense. So the opportunity is pretty big, and that is what we have looked at when we look at companies like Moderna, and there are obviously many more that have enormously big technology platforms. It is not simply a one product company.

And then just 1 question on Fenway Park. Although not specifically, since I know you want to kind of keep it a little tight to the vest for the time being. But if memory serves the Longwood Medical Area perhaps did not pan out as well, if I - and correct me if I’m wrong on that. But it is a further afield from Cambridge. If I’m right on my recollection of Longwood - and I’m not making enough judgment about you, I think your peers were invested there. What makes you think Fenway pretty close to Longwood would sort of work out this, using…?

Yes, your recollection is correct. We dipped our toe into the Longwood Medical Area, and it turns out, it is a pretty institutional area and one that is not a really vibrant one at night. But I think what’s happened in Fenway, and certainly, our partner has been at the forefront of that is it is - they have really created a 24/7 live, work, play environment. Certainly, the park itself has been a major part of that. So I think it is a totally different submarket and a totally different feeling. So I think we have no qualms at all about the future there.

The next question is from Michael Carroll with RBC Capital Markets.

And I think, Joel, you kind of touched on this a little bit earlier, but can you provide some color on the supply outlook for the space? And I know a few years ago, there were some concerns in South San Francisco, but those seem to have abated. Are there specific markets that ARE is tracking that we should kind of look out for?

So I think Steve touched on that, Steve, do you want to maybe get the question?

Yes. Hi, Michael, it is Steve. No, you are right. We were monitoring South San Francisco closely with combination of Kilroy, PEAK and Blackstone at the time. And those projects have all been substantially leased. And look, we track literally building by building, parcel by parcel in each of our markets very closely, and we just don’t see a lot of new Class A high-quality product being delivered. There has been a lot in the press about conversions. And I think at Investor Day, we kind of went through that chapter inverse, and I highlighted it in the comments today, so we stay very vigilant in our analysis of that. But at the current time, we just don’t see significant supply disruptions happening in the market.

Okay. Great. And then, I guess, can you talk a little bit about, I guess, the Mercer Mega Block deal. What’s the time line on that potential acquisition and/or, I guess, the development you do acquire, what’s holding it up? And what should we be expecting there?

Yes. I think we don’t know precisely, but I think sometime over the next 6 months, part of it is diligence and part of it, as you know, the city has gone through quite a shock over the last probably since, what, late May. Triggered by the death of George Floyd and has had its share of tumult. And obviously, the city - both the Mayor and the counsel have been fighting. Obviously, there was a defund police effort going on there. So I think part of the effort is, hopefully, for the city, I think there is a Mayor election coming up, I think, maybe later this year to get back into a more normal environment. We hope that is true. And this, certainly, I think you will see activity on this over the next six months. But I think Seattle, certainly, South Lake Union remains a very safe and really good area. Seattle’s got a strong, obviously, on the technology side anchored by the likes of Amazon and Microsoft across the water and the big Facebook and Google and the big things are up there other than Netflix different way. So I think that is been all positive. The life science industry, as you know, Peter, I think, talked about our pricing on the partial interest sale we made in a couple of assets. Seattle has attracted a lot of institutional money and the life science industry certainly is growing well, anchored by the Fred Hutch and the University of Washington. So it is a pretty positive outlook there.

And our next question will come from Tom Catherwood with BTIG.

So Steve and Dean, you both kind of alluded to this topic, but I wanted to dive into it a little more. We know that the same-store NOI growth guidance on a GAAP basis is 2% for the year. But you have done nearly $6.3 billion of acquisitions over the last 25 months. And I assume most of those, if not all of them, are not in the same-store pool. So how should we think about NOI growth in 2021 from the lease-up and mark-to-market on these non-same-store assets?

Well, as Tom, it is Dean here, just to clarify. As I mentioned in our commentary, and you have our guidance for 2021, which our guidance for occupancy covers the entire asset base in the operating portfolio, and you have got something in the range of, I think, 170 basis point growth in occupancy, and then that continues into 2022 as well. We’re actually likely to pick up something approaching 300 basis points over the two calendar years. So you are going to see occupancy growth from the acquisitions be a key driver and it is not - we find the asset that fit our business profile nicely. And occasionally they come with some vacancy that we need to manage. But fortunately, we feel comfortable about making good progress on that in 2021. So that is going to be a key driver, and you will see that continue to benefit into 2022 as well. So that is important to note. It is just not a one year trend. I think 2022 will benefit probably as well in the same-property pool because some of those properties will start to drop into the same-property pool over time.

Got it. That is really helpful, Dean. And then kind of along the same lines, looking at newly acquired assets and all and development assets as well. So a number of development projects shift between your intermediate classification and your near-term classification. But one that had kind of a real marked jump was the Arsenal on the Charles, where 200,000 square feet of future redevelopment moved from the future bucket to near-term, it is kind of a 2-phase jump, and you also picked up an extra 81,000 square feet of potential redevelopment. Can you speak a little bit to the demand that you are seeing in Watertown and how that is driving this acceleration of your redevelopment plans?

Yes. So I don’t want to get into too much there at the moment because nothing has been formally announced. But one thing that has been announced that you have seen in a lot of the papers is the next-gen innovation technologies and manufacturing consortium with ourselves, Fujifilm, MIT, Harvard have selected that site as the home of this enterprise. And then there are a host of other, I would say, advanced technology companies, life science companies and other things that have sought that location as being, I think, very proximate to Cambridge and transportation being easier to deal with than some of the other submarkets that are, I think, harder to get in and out. Alewife is a good example. We stayed out of Alewife because we believe that transportation in and transportation out have been super problematic. And so that is been one of the challenges that when we have looked at acquisitions in that submarket, they have kind of confounded us to figure out how we can solve the transportation problem, but Watertown is, I think, in much better shape. So I would say stay tuned.

Next question is from Tayo Okusanya with Mizuho.

Most of my questions have been answered, but quick one. One of your largest tenants, not top 10, but just outside top 10, bluebird bio is doing some type of spin-off of one of its units. Just kind of curious...

I’m sorry, what?

One of your tenants, bluebird bio?

Yes?

They’re doing a spin-off of one of their business units. Just curious if that has any implications for their current lease with you guys?

I’m sorry. So the question is what?

They are spinning off one of their business units. Does that have any implications for the current lease they have with you?

Well, we don’t know the answer to that. They may sublease, and they may not. Jenna, do you want to maybe just comment on the nature of that change?

Sure, for sure. So bluebird bio, basically announced. They haven’t disclosed the details other than that they’re basically dividing the company between severe genetic diseases and oncology company. And so we usually have exposure to them in Greater Boston, specifically in Cambridge and then in Seattle. And so basically, they’re - everything that they’re retaining in place is what they have kind of with us, both in terms of their H2 in Cambridge and then manufacturing in Seattle, so we’re really not concerned about that at all.

Yes. And it would be easy to backfill space if we had it in those locations, I can tell you.

The next question is a follow-up from Jamie Feldman with Bank of America Merrill Lynch.

Just quickly, I wanted to go back to Dean’s comment on - you said that investment gains as a percentage of EBITDA you expect to be higher this year than last year. Can you maybe quantify that? How big of a portion of EBITDA do you think it can be?

It is just - Jamie, it is Dean here. It is slight. I think what my comments were - in 2019 was probably in the 4.5% range, 2020 was probably about 5.5% of EBITDA and just a slight growth anticipated as we look out to 2021 on top of that. So it is still staying pretty small as a percentage of overall EBITDA.

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

No closing remarks other than to wish everybody be safe, be healthy and COVID-free, and we look forward to talking to you on the first quarter call. Thank you again, everybody.

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