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Operator: Good day and welcome to the Alexandria Real Estate Equities First Quarter 2025 Conference Call. All participants will be in the listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Paula Schwartz. Please go ahead.

Paula Schwartz: 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.

Joel Marcus: Thank you, Paula. And welcome everybody to our first quarter call. With me today are Hallie, Peter and Marc. And let me begin by a quote from Robert Browning who once said, great things are made of little things. And needless to say, our profound thank you to the entire Alexandria family team. It is the little things each of us do each and every day that create the great things Alexandria is doing day in, day out. We are a unique, one-of-a-kind, mission driven company. Also, I want to mention our continued thoughts, prayers and assistance go to many of our team members impacted by the LA wildfires in January of 2025, a really shocking start to this year. I want to mention, I think something that we probably don’t say enough about and that is Alexandria has been and will continue to be one of the most consequential REITs in the sector’s history.

We have pioneered the life science real estate sector. We are the first and only pure play life science REIT and we have invented the complex principle of clustering for the life science industry. We own and operate the top-quality portfolio in life science real estate. Almost 40 million rentable square feet with 25 plus mega campus ecosystems in AAA locations with quality high-quality, top-quality assets and now 75% of our annual rental revenues generated by the mega campus platform which is actually a cluster in itself within the broader ecosystem cluster. Alexandria is the brand of choice to the life science sector and has built brand loyalty with our sector leading client base and has accomplished that with our deep knowledge of our client base.

The medicines, cures therapies and technology that continue to save and improve human life. Innovation is speeding to patients. Alexandria has scale, access to capital, low leverage and the best-in-class credit rating. Alexandria is best positioned to continue to reinforce the bedrock of the biotech sector which actually will celebrate its 50 anniversary next year on the founding of Genentech. This sector is the crown jewel in the broader biomedical sector of life science industry of not only this country but the world’s best and the underlying science and technology has never been as advanced as it is today or has ever been held as much promise as it does today. Alexandria’s balance sheet is in the top 10% of all REIT credit ratings and never has been as strong.

Alexandria has the longest weighted average remaining debt term among all S&P 500 REITs at two times the average. Alexandria is one of the strongest and safest dividends in the REIT sector with a very low payout ratio. Alexandria’s world class development expertise coupled with our best-in-class industry leasing capabilities have enabled our near-term development pipeline for ’25 and ’26 to report 75% leased or negotiating. Alexandra has an industry leading client base of over 750 tenants, 89% of which were the source of our first quarter leasing which came from this cherished tenant base and our average lease durations 9.6 years, almost 10 years from our top 20 tenants and over seven and a half years from all of our tenants. And proudly in the first quarter we collected 99% of our tenant rents and receivables.

Moving to the macro issues which have garnered a huge amount of attention and let me list them and give our take on them. Immigration, very good progress to date. Deregulation similarly very good progress to date. Tax and Budget Based on meetings with key insiders in the Senate and the House recently I’ve been told that July 4 is the most likely date for this big bill to emerge. On the international side, tariffs and wars overseas have created chaos and a key focal point for many folks both domestic and foreign. The Fed and Interest Rates. The Fed is being stubborn in moving interest rates down when the impact would be very, very helpful to Main Street. Center for Medicare services, Dr. Oz has recently taken over that and based on insider conversations that we’ve had, CMS is stable.

The NIH, that agency which is now run by Dr. Bhattacharya is going to see and is incurring restructuring based on a very inefficient structure of many different institutions. Several dozen institutions which the head of those institutions actually have budget and command and control authority, not the director of the NIH. And this has led to a substantial decentralization of control and certainly got a bit out of control during COVID and funding some of the experiments in the Wuhan lab through a third party. My guess is the private sector will pick up some slack in some of the applied research and the NIH under the new leadership hopefully will emerge leaner, stronger and focused on its mission with an organizational charge which will make good sense.

On the FDA, the comp, which is the crown jewel regulatory agency both for the United States and the world, and the bedrock of our best in class biomedical industry. We’ve seen a loss of some quality senior people and some we’ve seen returning. Most staff are in place and drug reviews are moving forward. And on a personal basis we have a company that we’re deeply involved with that is just got review comments this past week who has an industry partner and seeing relatively normality at that level. Dr. Makary who now heads the FDA is going to see to it that great science and regulatory skills continue and focused on their mission. Life science industry is delivering innovative products. The demand for innovation is strong. Drug approvals are moving forward.

June will be a big month, rate approvals. There’s four big ones coming up including RSV, hereditary angioedema, COPD and a rare skin disorder. And that may be a bellwether for the FDA’s continued urgency and vitality in approving drugs. But when it comes to the FDA, three things could make a huge difference. One is to curb the burdensome regulations and accelerate development, meaning safety has become so overwhelmingly important that they have in some cases lost sight of approving drugs where there are no other choices and choosing a relevant population that may be too large. So that could make a big difference if they could improve that. And also, on the manufacturing and medical resilience side, things can be done to improve on that level.

M&A is ongoing in the industry and that’s been a positive. When it comes to the 15% institutional indirect cost limitation which was under executive order that’s under judicial stay at the moment. It’s causing lots of concerns for institutions. Congress may soften the impact by legislation, but the variance of indirect costs among institutions is huge and a lot of inefficiencies remain. Our history at Alexandria demonstrates that in very tough times like these, the dot com bubble burst and the great financial crisis, we’ve emerged better and stronger. Our fortress balance sheet emerged over the last decade out of the lessons of the GFC and we see this as a time for important, important strengthening of all of our levers to continue to manage and grow the company.

Out of the last two severe market corrections came two of our most important clients, Alnylam in 2003 and Moderna in 2011. And remember, the biggest and most consequential investments and ultimately gains are made when investors and operators do the right thing at the worst time. And these are perceived by many people as the worst of times. And then finally I just want to say a couple of comments about Alexandria Brand is about trust. Our brand is more than a logo on a sign. It’s a shorthand for consistency, reliability and expectations we set every time we deliver space. Mission critical space that performs, endures and elevates the people and science who use it. And with that let me turn it over to Hallie Kuhn.

Hallie Kuhn: Thank you, Joel, and good afternoon, everyone. This is Hallie Kuhn, SVP of Life Science and Capital Markets. Amid choppy macroeconomic conditions, the fundamental thesis driving the life science industry and Alexandria remains firmly in place. Three key points. First and foremost is that the foundation of this industry is massive unmet medical need. Nine out of 10 diseases have no approved therapies and chronic conditions impact 129 million people in the U.S. That’s nearly 40% of Americans living with diseases like hypertension and heart disease and driving more than $4.5 trillion in annual healthcare costs. Second, innovation. The life science industry is fueled by new discoveries and the United States and Alexandria have the best substrate in the world to continue to drive new discoveries and development well into the future.

U.S. headquartered companies account for 55% of global biopharmaceutical R&D investment and six out of every 10 FDA approved therapies. Third, biotechnology is critical to maintaining a safe and secure nation and we strongly support the recent slate of biopharma announcements committing billions of dollars to manufacturing in the United States. As emphasized by the bipartisan National Security Commission on Emerging Biotechnology Report published earlier this month. Biotechnology is key for the U.S. to remain dominant and secure future economic growth and in a new era of global competition. Now let us turn to Alexandria’s diverse 750 strong tenant base. The diversity of our tenant base is important as each of the segments draw on multifaceted sources of funding de risking the possibility of a singular funding shock.

Our tenant base is also a critical embedded source of demand, with 89% of leasing originating from our existing tenants this quarter and our tenant base remains resilient. 51% of our tenant base is investment grade or large cap, as is 87% of our top 20 tenants. 17 of the top 20 multinational pharmaceutical companies and four of the largest tech companies in the world are Alexandria tenants. Pivoting to 1Q ’25 specifically, we are sharing for the first time on this call quarterly leasing by RSF across our life science tenant segments to illustrate how the diversity of our tenant base contributed to 1Q 25’s solid leasing activity. First, biomedical institutions accounted for 10% of life science leasing by RSF, represented by six different private and public institutions.

Across this segment, our tenants have over seven and a half years of average remaining lease term and approximately 80% are investment grade. Next private biotech with 12% of life science leasing, venture funding remains steady and was deployed at a similar rate to 2023 and 2024. Capturing strong, well capitalized private biotech tenants remains a core focus as these companies form the next generation of demand and the next wave of ingenuity. Moving to multinational pharma at 13% this quarter. As pharma requirements tend to be larger and take a longer time to mature, this number can vary meaningfully from quarter-to-quarter. Importantly, we continue to see requirements across multiple markets. Public Biotech had a strong quarter at 27% of Life Science Leasing led by our 400-tech square lease with Intellia, a leading gene therapy company developing the next generation of treatments for rare disease.

Public biotech continues to be a story of have and have nots and our mega campuses continue to attract the haves as the Intellia lease and 4Qs lease expansion with Baccite and San Carlos demonstrate. Last is Life science product, service and devices at 38% with a significant direct lease to a commercial contract research organization in Research Triangle. Over time this segment may see increasing tailwinds in the U.S. as companies move to onshore manufacturing and other capabilities due to recently announced tariffs. Altogether, we continue to monitor the impact of regulatory and economic conditions closely and remain cautiously optimistic with respect to positive announcements including onshoring and biomanufacturing, a newly proposed FDA approval pathway for rare disease, steady venture funding and breakthroughs in new potential medicines such as tenant Eli Lilly’s recently announced clinical data on a new type of weight loss medicine that would come in a pill.

In the 30 years since Alexandria’s founding, the life science industry and our company have shown tremendous resilience and traversed multiple economic cycles and some of the strongest biotech companies have been founded during times like this as Joel mentioned, and the portfolio for future growth. With that I will turn the call over to Peter.

Peter Moglia: Thank you, Hallie. The life science industry is a national treasure and critical to a stronger, safer and healthier country. High interest rates and government disruption are not tempering and will not temper the demand for a better quality of life and the life science industry will always be here to meet that demand. Alexandria was created to enable it and we will always be here to support it. I’m going to discuss our development pipeline inclusive of the potential impact of tariffs, leasing and supply and update you on the progress of our value harvesting asset recycling program. In the first quarter we delivered approximately 309,500 square feet of 100% leased Class A plus laboratory space into our high barrier to entry submarkets which will contribute approximately $37 million in annual net in annual incremental net operating income.

An additional 1.6 million square feet, currently 75% leased or subject to a signed letter of intent, is expected to add another $171 million in annual NOI by the end of 2026. The initial weighted average stabilized yield for this quarter’s delivery was 6.6%, driven by the solid stabilized yield of 7.5% from our key 285,000 square foot delivery at 230 Harriet Tubman Way in Millbrae located in the San Francisco Bay Market. This high-quality project with adjacent access to both Caltrain and BART is fully leased to Eikon Therapeutics, a highly disruptive company at the intersection of science and technology, founded by prolific drug hunter Roger Perlmutter, who has been a strategic Alexandria relationship for decades. Roger is a highly accomplished industry and academic leader who has directed foundational research at Amgen and Merck and served as a professor at the University of Washington and Caltech.

Eikon under Rogers leadership is integrating the disciplines of data science, engineering, chemistry and biology to discover the next generation of drug candidates. They are working with super high-resolution microscopes, living cells, algorithms and robotics so they can observe therapeutically relevant biology in a way no one has before. Roger knew he needed robust building infrastructure coupled with world class operational excellence to house Eikon and wanted Alexandria to develop it in closely coordinated fashion. Turning to the impact of tariffs on our active development and redevelopment pipeline, spoiler alert, they are not expected to have a material influence on our yields. At the end of the first quarter, we had approximately $2.4 billion of remaining cost to complete, of which $1.3 billion is not subject to a fixed price contract as of the end of the quarter.

We estimate that 30% to 40% of those costs are for construction materials such as steel, drywall and HVAC equipment. Assuming 100% of those materials were subject to tariffs, we estimate that for every 10% tariff on such materials, our yields would decline by 2.5 to 3.5 basis points. Transitioning to Leasing and Supply. Alexandria’s superior quality, location, scale and sponsorship enabled the leasing of 1,030,553 square feet in the first quarter at solid rental rate increases for renewed and released space of 18.5% and 7.5% on a cash basis and the weighted average lease term was very strong at 10.1 years. This is the fifth straight quarter where we’ve exceeded a million square feet of leasing and despite elevated concessions, net effective rents on releasing and renewal space remain positive.

We have a solid list of prospects for our development and redevelopment projects, but activity for this leasing segment will which is typically driven by expansion requirements remains muted for the moment due to continuing conservatism from life science company management teams and boards. With respect to competitive supply, it peaked in 2024 and we expect far fewer additions in 2025 and 2026. In Greater Boston we anticipate 900,000 square feet to be delivered in 2025. Currently it’s 0% pre-leased and we expect 2.4 million square feet in 2026. That is 46% pre-leased. San Francisco has 1.1 million square feet of competitive supply scheduled for 2025 and it’s currently 21% pre-leased and has no scheduled deliveries in 2026. San Diego expects 700,000 square feet to be delivered in 2025, currently 80% pre-leased and 400,000 square feet to be delivered in 2026 which is 100% pre-leased.

Although availability in these markets ranges from 20% to 30%, a meaningful portion of it is what JLL terms zombie buildings in their Greater Boston overview from last quarter. Described as likely never to be leased as laboratory because the buildings are either a bad office conversion in an undesirable location and or built by an inexperienced owner. Location, quality and sponsorship matter to tenants for their mission critical infrastructure and that is why those numbers should be discounted. Much of what is in those numbers was is going to be office, not laboratory inventory in the future. To conclude this section, we would like to report on a lease in Cambridge we feel reinforces that quality, location, scale and sponsorship matter to tenants.

During the first quarter Matimco secured a 580,000 square foot 15-year laboratory office lease with Biogen at their large-scale Volpe site in East Cambridge. The reported rental rate was $136 triple net with 3% annual increases and a tenant improvement allowance of $310 per square foot, reminiscent of economics achieved at the peak of the cycle and illustrative of high-quality tenants willingness to pay significant rents for high quality buildings in great locations. I’ll conclude with our value harvesting asset recycling program. The team continues to be strategic and opportunistic in identifying non-core asset dispositions including land and partial interest sales to self-fund our high-quality development and redevelopment pipeline that is transforming our asset base into predominantly mega campuses.

A strategy that positions Alexandria over the long-term to capture an even greater share of future demand through from the secular growing life science industry. As of the end of the first quarter we’ve completed $176 million in dispositions and have another $434 million subject to non-refundable deposits or letters of intent aggregating to nearly $610 million or approximately 31% of our updated Dispositions Guidance. Highlighting this quarter’s value harvesting efforts is the disposition of 13.2 acres of land in the University Town Center Submarket of San Diego to a residential developer which provides $124 million of accretive equity and contributes to rightsizing our land bank. Here are the takeaways. We continue to deliver transformative projects and incremental NOI from our pipeline tariffs will not create material dilution to our current pipeline projects.

We continue to execute solid leasing. Competitive supply deliveries are winding down and we’re making good progress on our asset harvesting and recycling program. With that, I’ll pass the call over to Marc.

Marc Binda: Thank you, Peter, this is Mark Binda, Chief Financial Officer. Hello and good afternoon to everyone on this call. First, congratulations to the entire Alexandria team for outstanding execution during the quarter and for delivering solid operating and financial Results for the first quarter of 2025. Total revenues were up 4% and adjusted EBITDA was up 5% for 1Q ’25 over 1Q ’24 after removing the impact of dispositions completed since the beginning of 2024. FFO per share diluted as adjusted which was $2.30 for 1Q ’25 as expected bottom line results were impacted in the short term by the cost of our recently completed non-core asset sales to fund our development and redevelopment pipeline and our investment in the long-term ground lease at our Alexandria Technology Square campus.

Both of which we expect to provide significant long-term value for our tenants and our shareholders. Our solid operating results for the quarter continue to be driven by our highly disciplined execution of our mega campus strategy, tremendous scale advantage, long standing tenant relationships and operational excellence by our team. 75% of our annual rental revenue comes from our collaborative mega campuses and we expect to increase this steadily over time. We have high quality cash flows with 51% of our annual rental revenue from investment grade and publicly traded large cap tenants. Collections remain very high at 99.9% and adjusted EBITDA margins were strong at 71% for the quarter and represent the third highest quarterly margins reported since 2019.

As Peter highlighted, our leasing volume continues to be solid with over one million square feet leased during the quarter and represents the fifth consecutive quarter over a million square feet. We continue to benefit from our tremendous scale, high quality tenant roster and brand loyalty with 89% of our leasing activity in the quarter coming from our existing deep well of approximately 750 tenant relationships. We also continue to dominate in our core submarkets, getting more of the deals in many of our submarkets than the next several landlords combined. Rental rate growth for lease renewals and releasing of space for the quarter was a solid 18.5% and 7.5% on a cash basis which is at or above the high end of our guidance ranges for the year.

We continue to achieve very healthy lease terms on completed leases with 10 years on average for the quarter which is above our historical 10-year average. Tenant improvement and leasing commission costs on renewals and releasing of space for the quarter was elevated on a per square foot basis due to one large long-term lease executed at our Alexandria Technology Square Mega campus in Cambridge. Excluding this one lease, leasing costs on a gross basis and as a percentage of total rent over the lease term, we’re in-line with our five-year quarterly averages. Occupancy at the end of the quarter was at 91.7% which was down 2.9% from the prior quarter. About two thirds of the decline was related to the 768,000 square feet of lease expirations that were known vacates spread across four submarkets.

We discussed these spaces at our investor day last year and it includes both Moderna’s move out of Alexandria Technology Square to the new HQ R&D campus we developed for them at 325 Binney and our single tenant building at 49 Illinois in Mission Bay, San Francisco. The remaining one third represents several smaller spaces spread across multiple markets, of which the two largest spaces in that bucket have been released and are expected to be delivered later in 2025. Overall, for the full 2.9% reduction in occupancy, we’re making very good progress on resolving these with about a quarter of this amount leased with a future delivery date around the end of this year. Based upon our current outlook, we reduced the midpoint of guidance for our year end 2025 occupancy by 70 basis points from 92.4% to 91.7% driven by lower than anticipated re leasing and lease up of space.

Same property NOI was down 3.1% and up 5.1% on a cash basis for the quarter. As we have highlighted over the last few earnings calls, our 1Q ’25 same property results were impacted by the key 1Q ’25 lease expirations which became vacant in 1Q ’25 aggregating 768,000 square feet spread across four submarkets. Excluding these properties, our same property results would have been flat and up 9% on a cash basis. Also important to note that these spaces expired at the end of January on average, so we would expect an additional decline to the quarterly results next quarter as the impact becomes fully included. The strong cash same property performance for the quarter included the impact of some free rent in 1Q ’24 from development redevelopment projects completed in 2023 and we expect that benefit to go away over the next quarter or two.

Our outlook for full year ’25 same property growth has been reduced by 70 basis points and 20 basis points on a cash basis to reflect the impact on occupancy over the balance of the year. Turning next to general and administrative expenses. At our investor day, we outlined a plan to achieve significant savings in G&A cost through various corporate cost savings initiatives in 2025. G&A costs over the last two quarters have averaged around $32 million per quarter, which represents a 30% savings over the preceding three quarters. In addition, our trailing 12 months G&A cost as a percentage to NOI was 6.9% for 1Q ’25, which is the best percentage in the last 10 years for Alexandria and is significantly better than the Healthcare index average for last year which was around 10%.

Given the great progress that we’ve shown over the last two quarters and based upon our current outlook, we’ve updated the midpoint of our 2025 guidance range for G&A cost to reflect an additional $17 million of cost savings which now represents an expected $49 million total savings in 2025 G&A compared to 2024. Our updated guidance also implies a run rate for G&A similar to the first quarter for the balance of the year. With projects under construction and expected to generate significant NOI over the next few years. Coupled with our future pipeline projects undergoing important pre construction activities, adding value and focused on reducing the time from lease execution to delivery, we are required to capitalize a significant portion of our gross interest cost.

Capitalized interest as a percentage of Gross interest costs was 69% or 61% for 1Q ’25 and has declined significantly compared to the two-year average of 74% for 2024 and 2023 driven by the completion of our in-process development and redevelopment projects. Our outlook for capitalized interest for the full year 2025 was reduced by $20 million and primarily relates to future development projects which are expected to cease capitalization in the second half of this year. In addition, there are a few active construction projects which may no longer qualify for capitalization of interest as construction work reaches critical milestones and may subsequently resume in the future when we advance final construction for delivery of space to prospective tenants.

In total, the change to capitalized interest represents approximately 1.4 billion of basis for approximately four months. Turning next to share buybacks, we updated our Sources and uses guidance for acquisitions and other opportunistic uses of capital including share buybacks to 250 million at the midpoint to reflect the 208 million purchases completed during the first quarter with the potential to do more in the future under the right market conditions. As of today we have approximately 242 million remaining under the plan authorized by the Board of Directors. One of the important areas to highlight in this quarter is that we have spent many disciplined years shaping and refining our strong balance sheet to provide flexibility and in challenging macroeconomic times like these.

Our balance sheet continues to stand out amongst all publicly traded U.S. REITs as our corporate credit ratings rank in the top 10% of all publicly traded U.S. REITs. Indeed, the balance sheet is in great shape. We’re targeting year end leverage of 5.2 times for net debt to adjusted EBITDA consistent with the average of our year end leverage for the last five years. We have tremendous liquidity of $5.3 billion and we have the longest debt maturity profile among all S&P 500 REITs with the average remaining debt term of 12.2 years and very low debt maturities over the next three years. Transitioning next to Funding we’re pleased with the execution of our bond deal in February for $550 million of 10-year unsecured bonds at an attractive pricing of 5.5%.

We continue to be we continue to focus on our disciplined funding strategy to recycle capital from dispositions and to minimize the issuance of common stock. Since 2019, we’ve completed more than $9.6 billion of dispositions and partial interest sales. As Peter highlighted, we’ve made good progress for 2025 with $609 million completed or in process, which represents 31% of the midpoint of our guidance for dispositions and sales of partial interest of $1.95 billion. Land sales and user sales continue to be an important component of the deals completed and in process. In addition to dispositions, we also expect to fund a meaningful amount of our equity needs in 2025 with retained cash flows from operating activities after dividends of $475 million at the midpoint of our guidance for ’25.

Our high-quality cash flows continue to support our common stock dividends with a conservative Expo payout ratio of 57% for 1Q ’25 and an attractive dividend yield of 5.7% as of the end of 1Q. Over the last five years, realized gains from venture investments included in FFO per share as adjusted have averaged approximately $29 million per quarter and our outlook for ’25 remains unchanged with a range of $100 to $130 million, which implies about $29 million per quarter at the midpoint. Turning to Guidance the details of our guidance are included on page four of our supplemental package. Our guidance for FFO per share diluted as adjusted was reduced by $0.7 to a midpoint of $9.26, which puts the revised midpoint at the low end of our initial range for FFO per share results and represents a change of 75 basis points from our initial guidance.

Even with this change, our estimate for five-year growth in Expo per share diluted as adjusted through 2025 is 27%, which puts us near the top end of the range among the peers in the 15 NAREIT Equity Health Care REIT index. Now I’ll turn it over to Joel.

Joel Marcus: Thank you and operator can we go to questions please?

Operator: Certainly. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Farrell Granath with Bank of America. Please go ahead.

Farrell Granath: Hi, good afternoon. Thank you for taking my question. I was wondering if you could walk us through with the new guidance. Does this encompass a worst-case scenario, especially in terms of what could happen in the biotech market, specifically with capital raising or within the range is there a worst case and best-case scenario baked in?

Joel Marcus: Well, before I direct that question to Marc, I’m not sure I fully understand it. What do you mean by worst case scenario and what in guidance are you looking to ask the question about?

Farrell Granath: Specifically, when it comes to leasing going forward, when it comes to the demand, and specifically if there’s continued cuts when it comes to NIH funding or even further reduction.

Joel Marcus: Just overall leasing demand?

Farrell Granath: Yes.

Joel Marcus: Okay. Mark?

Marc Binda: Yeah, look, I think the estimate we put out there is our best estimate with the facts that we know today. So, it’s not the best case and it’s not the worst case. It’s really our estimate with the facts that we know today.

Farrell Granath: Okay, thank you. And I guess also you had made a comment about the quarterly leasing coming from the private biotech, that venture funding is coming in around the same rate at 2023 and 2024. Just given kind of the macro and knowing that a lot of these companies require a lot of capital, do you think that that pacing of leasing within private biotech is sustainable going forward for ’25?

Joel Marcus: Well, yeah, I mean, I’ll ask Hallie to comment, but I think you have to think about venture who have, pretty full, have full funding in many of the big funds that have raised large amounts of money over the last year or two. And these funds are generally long-term funds. You find today venture folks deploying capital in a, I think, a more judicious fashion than certainly they did during the boom or rocket years of COVID and looking to put their capital to companies that have significant near-term, you know, value inflection, milestones. I think that’s where things are going much more intensively. But Hallie, you could comment.

Hallie Kuhn: Sure. Thanks for the question. Yeah, as I mentioned, the quarterly venture capital deployment was similar to what we saw in 2023 and 2024. Venture funds still sit on a significant amount of dry capital. So, they do have funding to deploy. I think as we’ve talked about for multiple quarters, both venture funds and companies continue to be conservative in how they make space decisions. And I don’t think this quarter has changed that. They were already in that mindset, especially last year. And so, we continue to see really strong companies with great executive management teams get funding. I think there’s just, I would say a healthy rationalism towards where the dollars are going.

Farrell Granath: Okay, thank you so much.

Operator: Our next question comes from Seth Bergey with Citi. Please go ahead.

Nick Joseph: Thanks. It’s Nick Joseph here with Seth. Joel, I guess in your prepared remarks you talked about the history of Alexandria and one of the comments you made is kind of sometimes doing the right thing at the worst time. And so, I’m curious what that means for Alexandria now. Obviously, you’ve been through plenty of cycles, so kind of where we stand today, what is the right thing and when do you expect to see the payoff from it?

Joel Marcus: Well, I think you can think about that in terms of where the industry is both in its cycle. We’re in the fifth year of a bear market with the biotech indices starting to move down, what, February of 21. So, this is fifth year, which is fairly long duration, although we’ve seen longer ones. And I think the sentiment toward the industry, at least in the spoken and written world out there, is among the most negative that I’ve seen. But the reality kind of belies that as we talked about through the different agencies, what’s going on and the, and the pace of innovation and new therapies being delivered to patients. So, you know, if you take a page out of the book that we saw in the dot com bubble burst and the GFC, the aftermath I mentioned, you know, we established a relationship with Alnylam 2003 and today that company is now a big biotech occupying huge amount of swath of real estate in Cambridge.

And the same is true of Moderna in 2011 when they were founded, we established an early relationship and today have a sizable swath of real estate in Cambridge. And so, the view is to align ourselves with the most innovative, most disruptive, most impactful companies that are likely to bring near term therapies and other, biomedical products to patients. And so I think rather than back away, we have to think about and we are doing that, doubling down on what we consider to be great innovation and at the same time shaping, and we’ve been doing this now for a handful of years, shaping our asset base into a mega campus which we consider to be a cluster within a cluster, which is the most attractive platform for any companies at any spectrum of the barbell.

You know, next year we deliver the R&D headquarters, west coast headquarters of Crystal Myers Squibb in our campus point. So those are the things we’re trying to do. And you know, if as we see time goes on, there are opportunities for entering new markets and we’ve already been incubating a plan on that or doing some interesting acquisition opportunities that we see at the right time, we won’t hesitate to do those as we continue to sell off non-core assets and enhance our mega campus ARR percentage. Sorry for the long-winded answer.

Nick Joseph: No, that was helpful, thanks. And then just I guess a question on capitalized interest, you mentioned it coming down from 75% to 61%. What’s the potential this year in 2025 for more of an adjustment of capitalized versus expensed interest? Or do you think this captures the potential, potential for at least adjustments this year?

Marc Binda: Yeah. Hi Nick. Look, I think the adjustment that we made is our best estimate at this point. Obviously you know, next year we can comment later at investor day, but at least for the duration of this year, I think we’ve got pretty good visibility. That’s our best guess at this point.

Operator: Our next question comes from Anthony Paolone with JP Morgan. Please go ahead.

Anthony Paolone: Thank you. Joel, last quarter you talked about, I think a couple of pockets of demand maybe starting to emerge and you were pretty optimistic about some messaging you might have on the first quarter call based on what you were seeing then. I mean, do you feel like that that emerged or did things just change quite a bit in the last few months?

Joel Marcus: I would say that they haven’t changed and stay tuned. I think we continue to see, and Hallie did a good job of describing the, the multi-faceted demand that we’re seeing given the more muted environment we’re in and the pie chart we put out there this time. But I think over the coming few weeks or month or two, I think we’ll have some things that will be viewed as very positive. It’s just, time just, it just takes time to do that. But nothing, nothing is changing for the negative.

Anthony Paolone: Okay. And then on the disposition side, I mean, you got 400 and some odd million teed up and then a decent amount to go over the balance of the year. How do you feel capital markets are holding up? How do you get comfortable that the stuff that’s in process will make it through and close? And I guess what’s the buyer pool look like? You mentioned a lot of land and if it doesn’t work for you all, I guess how it might work for someone else?

Joel Marcus: Yeah. So let me frame it and then I’ll ask Peter to comment. Remember too, that if you look at a number of, quite a number of our sales over the past, you know, 12, 15, 18 months, we’ve tried to pivot and redirect some of the land holdings because we’d like to reduce some of those. And Peter cited one of them where we sold a great, a great piece of land in University Town Center to resi developers. There’s a pretty healthy demand out there for land that we hold in really great locations for highest and best use residential. And I think you’ll continue to see that. And that buyer pool has only expanded, not shrunk. I think there’s still good opportunities and we’ve done some of it to sell to owner users. And then we do feel that given, good quality, non-core workhorse assets, as Peter has kind of coined the term, there still is a buyer pool for that. But Peter, do you want to maybe just give Tony some thoughts on that?

Peter Moglia: Yeah. Like I’ll echo Joel’s remarks and I really think it’s a big positive that we’ve been able to raise funds through reducing our land bank where, where we feel like that, they’re not going to contribute to our mega campus model. We’ve also been able to sell assets to users, so it’s taking it out of a potential competitor’s hands. And that’s been a significant amount of the sales this year. And as we look towards what we’re going to complete for the rest of the year, there’s still more land that we’re teeing up. The buyer pool there is really residential developers. I’ve personally worked on a couple deals myself. There’s a voracious appetite for that. They have capital and they’ve got a will to do the entitlements and to get it done.

And we think you know, that’s a huge positive. So, at the end of the day, we’ll right size our land bank through non-competitive opportunities for the future as those things go residential. And then as I look at what we are looking to sell to investors, what we’re working on specifically right now the audience is private equity and then you know, pure private equity that dabbles in the real estate space by owning assets directly. Then there’s private equity that is teamed up with some life science operators that look at some of our non-core assets that need repositioning and are willing to, you know, take those on and put in the capital to do so. I recently hosted a sovereign in our offices here. They reiterated to me that they have looked at a lot of different opportunities in life science space with different people.

They really want to focus their concentration on acquiring life science assets through us. So, they’re certainly a customer. They’re really excited if we can come back to them with some higher quality low cap rate assets because that’s the type of asset that that particular buyer likes. So, we know we’ve got a customer for that when we’re ready to do that. We’ve also been approached by industrial users for some of our properties. So that’s a positive. So overall, you know, if you consider the uncertainty in the market and the lack of capital flows at the time being, I think we’re doing really well with our activity.

Joel Marcus: Yeah. And Tony, I’d say one other thing and Peter, thanks for that really good explanation. Something else that we’ve seen that may give us a additional source of funding that we had not really planned on is we’re being approached. We’ve got over 25 mega campuses on a handful of those mega campuses by resi operators to either ground lease or build on land buy land do any number of things joint venture critical sites in our mega campuses that would both continue to make it a work live play location. One of our mega campuses is almost three million square feet in the aggregate. So, they’re almost like little mini cities. And I think that’s going to give us a really strong boost for both the vibrancy of the mega campus and also additional funding source.

Anthony Paolone: Okay, thanks for all that.

Operator: The next question comes from Richard Anderson with Wedbush. Please go ahead.

Richard Anderson: Thanks. Good afternoon. So, when you kind of reflect upon this nightmare of fundamental backdrop for the business and you talk just then about rightsizing your land bank. Do you think that the, the end game here in the aftermath of all this is to have development be a far lesser percentage of your asset base? If it’s 20%, 25% of your NAV today, maybe it’s significantly less by design, but also because you’re selling so much land at the current time. If you could just comment on a kind of longer-term view of your development exposure?

Joel Marcus: Well, part of that depends on location Rich. I think locations that are either on or adjacent to the mega campus, we really don’t want to part with those assets. We might partner those in some way or not, but those have been accumulated over a long period of time and we consider to be AAA locations in the best, in the best place on the planet for biotech and life science. It’s really the other locations. And a good example is the land we sold this past quarter, the first quarter in University Town Center. It sat astride and was really part of a big shopping center. It wasn’t integrated with any mega campus we own, but it was a AAA location, great access to transit, great access to retail and resi. And that would be in a more boom boom market.

That would be a great life science site or even advanced technologies because Qualcomm and a number of the folks are pretty active in the San Diego area. But given the current, and I wouldn’t call it a nightmare scenario, I think it’s a, I think it’s a, you know, there’s a lot of good things happening, but there is dislocation and there is giant misperceptions about what actually is going on. But in a, in a boom market, you might hold that for a period of time to build. But in this kind of a market, we thought it’s better to monetize that which has, as Peter said, you know, accretive use of proceeds rather than hold. And so I think that’s how we’ll kind of analyze it. I wouldn’t use, you know, to use the term of what people are talking about Doge.

We’re going to use a scalpel, not a sledgehammer. And I think that’s how we’ll approach it. But we do think there are, you know, significant opportunities to do what we’re doing in other locations. And so that’s on our, that’s on our target list over time as well.

Richard Anderson: And just lastly on the disposition program, what is the percentage of seller financing that you’d expect from that? Is that sort of ramping up or declining as you go through the process this year? Thanks.

Joel Marcus: Yeah. Peter?

Peter Moglia: Yeah, last year there was definitely a few of those that occurred. Right now, we don’t have anything in process for investor sales that are not land or users, but that could change as we go throughout the year. We’re open to it if the terms are right, but I’m not sure it’s going to be a requirement to execute.

Richard Anderson: Okay, fair enough. Thanks very much.

Operator: The next question comes from Tayo Okusanya with Deutsche Bank. Please go ahead.

Omotayo Okusanya: Yes, good afternoon, everyone. I’m wondering if you could share some comments just around, you know, the ad tech piece of your business and if there’s anything unique happening in the Research Triangle?

Joel Marcus: Yeah, that’s a really good question. And you know, it’s kind of strange that the amount of private capital, venture capital going into ad tech from the middle part of last decade to kind of the COVID period went up, you know, more than 5x. It may have been, you know, well in excess of that, but it was astoundingly large. But then there was kind of a precipitous drop in that once Covid hit, and it hasn’t really recovered. So, we still have a very active ag tech tenant base in Research Triangle. Number of companies have moved down there from the Boston area. There’s a good talent base. There is venture available. The problem in ag tech these days is really, I think twofold. One is there are no exits for private capital.

The SPAC market dried up, and we looked at that very carefully. There are really no IPO opportunities over the last handful of years. So that’s been a challenge. And then I think the bigger challenge is the handful of half a dozen incumbents that control the distribution, sales, marketing, that whole system. Whereas pharma and bio have a much broader palette of participants, the ag area has a few incumbents, and they just are so dominant, it is hard to get in and break through to commercialize a product. So those are the factors at work these days. But we’re still active.

Hallie Kuhn: Maybe just to jump in here on RT, not on the ad tech side, but on biomanufacturing. Research Triangle has a long history of biomanufacturing and is really an epicenter for that type of talent, which is certainly of interest as pharma companies look to strategize around on shoring and biomanufacturing. I do think that the Research Triangle region is pretty well situated for ongoing onshoring activities.

Omotayo Okusanya: That’s super helpful if you just indulge me for one more question. Let me go back to the next question on capitalized interest and I think in the earlier comments there was a statement that one of the reasons why it’s declining is there are certain future projects that may no longer qualify. I just wondered if you could just talk a little bit about that statement and exactly what that meant?

Joel Marcus: Yes, so Marc?

Marc Binda: Sure. Sure. Yes. So, what I was referring to there is we do have one or two projects that are under active construction, which may get to a point where or one in particular, we expect to get to a point where there won’t be much left to do absent fitting out the space for a tenant. So, we do expect in that particular situation. It’s an asset in San Francisco that capitalization of interest would pause until we’re ready to resume construction and finish out the space.

Omotayo Okusanya: And that was not an initial guidance. It’s something that just kind of has been reassessed, which is why guidance was changed somewhat for that line of item?

Marc Binda: That was a much smaller portion of the adjustment to cap interest. Most of the adjustment of the $20 million that we changed guidance call it, 70% or so was really on the future land bank. So that was the lion’s share of it.

Omotayo Okusanya: Got you. Thank you very much.

Operator: The next question is from Vikram Malhotra with Mizuho. Please go ahead.

Vikram Malhotra: Good afternoon. Thanks for taking the question. I guess, Joel, based on just the comments around dispositions. You talked about a sovereign interested on potentially some assets. I’m just wondering like your trading stocks, trading at a 10 cap. There’s a huge disconnect between on the private markets where you’re kind of saying life sciences is still trading. Would you consider sort of selling kind of $2 billion, $3 billion and doing a big buyback?

Joel Marcus: Selling $2 billion or $3 billion of what?

Vikram Malhotra: Of assets of properties.

Joel Marcus: Well, it depends on what they are. But I think the way we’re thinking about it is a more measured and careful way to do it. We’re continuing to sell land parcels, which are very — they’re accretive to us and our reinvestment of those. We’re continuing to sell workhorse noncore assets, and those are — because those help us further enhance our focus on revenue from the mega campus environment. And there may be over time — and then owner user sales. And then as Peter said, there may be some partial interest sales as well over time. But we’re heavily focused on the early earlier ones I talked about. And the guidance we gave for this year is our best judgment about doing that. Whether we go further into asset sales to fund any buybacks. I think that will be determined as we go quarter-to-quarter through this year. And obviously, that’s something we’re watching our fully in closely.

Vikram Malhotra: Okay. Fair enough. Just on the credit side. I mean, I guess, in this environment where maybe VCs are a little more hesitant or maybe even publics are having maybe a little bit more difficulty raising. Would you mind just giving us a sense of how you see the current watch list. What’s the exposure to private and public that are pre-revenue? It would be help to size that just given the environment.

Joel Marcus: Yes. So Marc, do you want to maybe comment on that?

Marc Binda: Yes. Look, I would say, we monitor each and every — well, I’ll start with the private companies. We monitor those tenants very carefully. We generally get quarterly financial statements. So we generally have a very good pulse on the funding needs of those companies and certainly try to get ahead of that. The same is true on the public companies, but those are a lot easier to monitor because their information is public. Just one example of that, Vikram, was we did have a tenant in San Francisco end of ’23 that was in a large space, 100,000 feet, and we had been working with that company for several months before they got into trouble, and we were able to backfill that space completely without spending a bunch of money on TIs with another company to take that space.

So, I think our strategy has always been and will continue to be extremely proactive to try to navigate those types of situations. Failures do happen, that’s just a natural part of the business, but I think we’ve got a uniquely talented team led by Hallie and others that really spend a lot of time meeting with the companies and doing really diligent underwriting.

Vikram Malhotra: Thank you.

Operator: Our next question comes from Michael Carroll with RBC Capital Markets. Please go ahead.

Michael Carroll: Yes, thanks. Marc, I wanted to circle back on your capitalization comments. And, I guess, specific land parcels that likely stop being capitalized. I guess are these sites that were going through predevelopment work and you’re just pausing because you were thinking about going vertical previously and now you’re not. And that’s the reason why you’re start capitalizing those at the end of this year?

Marc Binda: Yes. That’s right, Michael. We’ve got about — if you look at what we capitalized for the last quarter, it’s about $4.1 billion of the future land bank, right? And those are across multiple sites somewhere mega campuses, some are not. They’re in various different phases of entitlement and design. And so the basis that I mentioned that was turning off roughly $1.4 billion. Most of that is part of that future land bank, and it’s really situations where we got to a point where we have done and added all the value that we felt like made sense at that point, and we’re really just pausing and deciding what to do next, whether that resumes in the future because we get encouraged that there’s demand and that we could go forward or whether we sell or whether we continue to hold for another day, it will just depend.

Michael Carroll: Okay. Great. Thanks. And then just lastly, Joel, I want to circle back on your comments on the leasing trends. I know in the last quarter, you were pretty positive. And I think you’re talking to Tony and you were saying you’re still positive on some of those transactions. I guess is there — are those being slower on making those decisions right now, and that’s kind of why we’re a little bit further off in talking about them? Are they just stopping making decisions or slowing down because of the uncertain macro environment?

Joel Marcus: Well, I think almost every today, Michael, almost every transaction other than maybe smaller transactions of some size, medium and large are complex and inherently slower. And in today’s world, you’ve got oversight by third parties and boards and other people that their job is to be judicious in making sure that the company is making the best decision and minimizing its risk — because remember, I guess, like Peter Drucker said, every decision is risky. It’s a commitment of today’s resources to an uncertain and unknown future and the people are taking that very seriously but we’re in a different business. We’re not in office space where somebody decides, well, okay, we don’t need to move to a better place or we don’t need to expand.

If an R&D group, whether it be biotech pharma product and services needs space mission critical for its business, it has to make a move and do it. And that gives us confidence and comfort that at the end of the day, the process, there will be a good outcome. But this is going to be a bumpy year until, as I said, until this tariff thing gets a little bit straightened out in the minds of the American public until the budget and tax bill are done, hopefully, maybe by summer, I think, and maybe the Fed gets a knock on the head and decides to move rates lower. I think that then opens up the possibility of a more normal business environment. But until then, it’s just much more cautious, but I still have the same view.

Michael Carroll: Yes, that makes sense. And then just following up real quick. But these — there’s no example of these tenants stopping or canceling their expansion plans is just more of a pause is a better way to…

Joel Marcus: Well, but I think that — I’m not sure you can — I was referring to several specific things that are underway. But if you try to generalize it, every company is different. Every entity is different and they’re going to make a decision based on how they see macro and micro in their own circumstance. And so everyone is in just a different decision-making mode and situation. And sometimes, boards are management teams are way more cautious and other times, they’re more realistic and business like. So, it just kind of depends. So, I don’t want to generalize too broadly because every situation is so different.

Michael Carroll: Yes, great, thanks.

Operator: The next question is from Dylan Burzinski with Green Street Advisors. Please go ahead.

Dylan Burzinski: Yes, thanks for taking the question. I guess just sort of continuing with the theme of the last question. You guys mentioned that negative sentiment towards the industry is as negative as it’s been. You guys talked about how expansion requirements are remaining muted for the time being due to that conservatism from company management teams and boards. But I guess you kind of mentioned tariffs, still higher rates being issues. But I guess are there certain idiosyncratic things across the life science industry that you think is causing more of this conservatism like some of the NH funding cuts FDA uncertainty? Or you sort of — this environment as more broader U.S. macro related?

Joel Marcus: I think it’s both. I think it depends on the investor, but I think it’s both. People are worried about macro for the half a dozen reasons I articulated in my comments, and people are worried about the industry because they’ve never seen the NIH ended before the FDA was kind of just always there and steady. And suddenly, you’ve got a head of HHS who’s a little bit of a bull in a China shop. But I do think what’s very settling for those of us who are on the ground and doing this work day by day is that the heads of the agencies are really, really solid people, and they’re making really good decisions and we know that both from our own direct experience and from people inside. And so we’re comfortable with that it’s not — I mean people like to try to characterize all this stuff going on as total chaos.

I think the tariffs were total chaos, but I don’t think what’s going on in the agencies now that they’re being run directly by the folks hitting it as opposed to HHS somehow or dose directing this or that decision. I think that’s going to kind of fade in the past, and each will emerge, although as I said, I think CMS is in great shape has got a little bit of repair work doing, but I think they’re doing that and the key reviewers are in place and working. And I think the NIH is yet to be seen what’s going to happen there. And the investment in the Wuhan lab, which is related to COVID, destroyed a lot of the great reputation the NIH had for decades and decades, but the organization of the NIH is pretty arcane. You’ve got, what, 27 plus or minus entities all headed by a different CEO, so to speak, as budget authority and decision-making authority, and they all had their own IT teams.

So it’s almost like having 27 entities under one. I was on Board of the foundation for the NIH for more than a decade. So I know a lot about the inside workings and there’s a lot of reorganization that can be done. And I think under the last administration, they also went away from best idea wins the grant. And I don’t think that’s a good idea either. So, the NIH remains to be seen, but we don’t have we, as a company, have very little exposure to the NIH. We have a small handful of leases. They’re fairly good duration, and they’re noncancelable but what happens to their grant-making capability and their extramural investment remains to be seen, and we’ll see. And private industry is going to have to pick some of that up as well. I don’t know, Hallie, if there’s anything else you want to mention about the NIH.

Hallie Kuhn: Right. I would just mention that historically, as where the NIH focused on really large national projects that you needed immense coordination. The economic output has just been incredible. The Human Genome project costs about $3.8 billion between 1990 and 2003. And they estimate that by 2010, the economic impact was nearly $800 billion, right? So whether the NIH looks different or is structured in a different way, the importance really is that there’s funding going to innovation to ensure that we maintain our global leadership position.

Joel Marcus: Yes. And remember one thing, and I don’t mean to drag this on, but whatever anybody thinks of the President and the current administration, one thing is true. These people are not totally stupid and they are focused on preserving and protecting this industry, which is one of the few remaining crown jewel industries. And when it comes to things like the tariffs, they’re really trying to put tariffs on making a distinction between materials coming from friendly countries and unfriendly countries. And what they want to do is bring supply lines back to the U.S. or to safer locations, and I think that’s going to benefit this industry greatly. But Blynn Congress, bipartisan, whether it’s this administration, the last administration, future administrations they’re going to want this industry to remain dominant and not allow China to overtake us much like Japan did in the automobile industry.

The steel industry went by the wayside. I think people are looking forward to trying to protect this industry as best we can, it’s a crown jewel.

Dylan Burzinski: Great. Well, I appreciate those comments. Thank you.

Operator: The next question comes from Peter Abramowitz with Jefferies. Please go ahead.

Peter Abramowitz: Yes. Thank you for taking my question. Just wondering, as you have conversations internally, especially, I guess, as it relates to the change in the guidance, certainly, you’ve outperformed a lot of your markets in terms of occupancy loss, just curious, your internal conversations, do you have a sense of where you think occupancy could bottom in the portfolio, had the time line for how that could happen? And then kind of what you would need to see to start to see an inflection?

Joel Marcus: Yes. So, Marc, you could talk about how you analyze occupancy guidance.

Marc Binda: Yes. We definitely look space by space. I mean I do think that we had a large amount of expirations that came proportionately in the first quarter here, Peter. So I do think that, that was a little unusual that it was that large in a particular quarter. And of course, we knew that we had a couple of big suites coming back to us that will require some time. The couple of projects in that $768,000, many of those — most of those will take some time to release. So those — we’re not expecting that at least that $768,000 that much of any of that will be delivered this year. So it could be into ’26 before we see that stuff both could get leased this year. I would hope that, that would be the case but delivery really not until next year.

But beyond that, the stuff that came back this quarter, as we said in the prepared comments, it was a lot of a lot of smaller spaces here and there, and some of those were leased and they’re just going to take time to renovate and to deliver to the tenants.

Joel Marcus: Yes, we’re seeing a phenomenon very different backdrop, but that we saw during the ballpark on now, we’re in a bear market run. But where we have a number of spaces in different locations, which are being eyed for alternative uses, not lab. And so Peter has mentioned and I think we’ve mentioned on this call and it’s certainly been prominent in the press. If you look at Mission Bay, AI has an open AI, in particular, but AI, in general, has taken a lot of space in that market, in that submarket in a way that if you go back a year or two, you wouldn’t have guessed. And so there are a number of users and disciplines outside of lab that are looking at a bunch of our different spaces. So you could see some of those — and I’m not speaking about Mission Bay in particular, but more generally, you could see some of those spaces becoming occupied maybe quicker than we would have anticipated given alternative uses.

And we had some of that with big tech taking space in our laboratory developments, which we never imagined back a handful of years ago. So we’re seeing that kind of thing, again, starting to take hold. So I’d say stay tuned on that as well.

Peter Abramowitz: All right. I appreciate the commentary. Thanks for the time.

Operator: Our next question is from James Kammert with Evercore ISI. Please go ahead.

James Kammert: Sorry to make you stay on. Just to clarify, please, some of Mark’s comments regarding the interest expense. Is that correct, Marc? I interpret the $20 million plus or minus the revision for ’25 is for four months on $1.4 billion. Does that imply an annualized kind of $56 million $65 million for ’26 of incremental expense?

Marc Binda: Yes. The numbers I rattled through the — on average about $1.4 billion for four months, that kind of gets you to that $20 million. That’s spread across several projects. So yes, I mean, if the assumption was that we didn’t recommence on any of that for a year, the $20 million, you can do the math, that $20 million becomes 3x that amount, right, to an annualized number. But it’s just difficult to predict what next is like, right? A lot of that land is very well located in mega campuses. So hard to predict what the world like come ’26 and whether we recommence work on those sites or whether they continue to be shut down.

James Kammert: Fair enough. Maybe just finally, circling back to some Hallie and prepared comments regarding the onshoring of pharma manufacturing, et cetera. certainly, a positive for the U.S. industry. But do you look back over your long history as an operating company, have you seen where R&D also kind of gets a ramp when more manufacturing is located. In other words, does that stimulate more R&D space, which I think has been more your middle of the fairway tenant demand?

Joel Marcus: Yes, Hallie?

Hallie Kuhn: Sure, yes. I think it depends on the type of manufacturing. So when we’re talking about manufacturing chemical ATIs, so most of the medicines will form those are largely. Think of them as more of a chemical refinery type projects, which are not going to be located where our clusters are. However, if you think about more advanced manufacturing, particularly cell therapy, gene therapies those tend to have a much more advanced talent base right, that overlaps with R&D talent, right? And so, RT is a good example where many of those employees could be both in — in a manufacturing site, they were one and the same. So, I certainly think it depends on the specific case and what type of manufacturing it is. I just think also broadly speaking, it’s just a really important step for our industry to ensure that we have — we don’t have all in really critical medicines, and I think broadly have more investment here in the U.S. and more capabilities in the industry.

James Kammert: All right. Thank you for your color. Appreciate it.

Operator: Thank you. We have no further questions. I would now like to turn the conference back over to Joel Marcus for any closing remarks.

Joel Marcus: Just to say thank you very much, and we’ll look forward to talking to you on the second quarter call. Take care.

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