Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Peter, I just wanted to follow up on your comments on asset recycling. Could you provide more color on what's driving the current activity levels?
A: Peter M. Moglia, CEO & CIO of Alexandria Real Estate Equities, clarified that there is no pause in asset recycling activities. He explained that the company tends to close many of its sales in the latter half of the year, following a busy fourth quarter, which is why it might appear that activity has slowed. He reassured that the activity remains brisk and is on target with their goals.
Q: Marc, could you elaborate on the expected cadence of rental rate increases through the rest of the year?
A: Marc E. Binda, CFO & Treasurer, noted that rental rate increases can vary by market and by specific leases renewed each quarter. He emphasized that while the first quarter was strong, the company maintains a positive outlook for the year, feeling good about the guidance provided for both GAAP and cash flow rate increases.
Q: Peter, regarding the competitive supply set, what gives you confidence that we're nearing the peak of the supply picture?
A: Joel S. Marcus, Founder & Executive Chairman, responded by correcting the notion of significant delays in project deliveries, explaining that adjustments are typical and not indicative of broader trends. Peter M. Moglia added that they track all competitive projects and adjust their expectations based on new data, which is a normal part of their process.
Q: Marc, why adjust the FFO guidance early on, especially the top end of the guide?
A: Marc E. Binda explained that as the year progresses, it's common to narrow the guidance range as they gain more certainty. The adjustment does not change the midpoint of their guidance, indicating that they still anticipate solid growth.
Q: Can you discuss the nature of short-term renewals and their impact on tenant decisions?
A: Joel S. Marcus noted that short-term renewals are typical in the industry, as companies often await critical data that could significantly impact their operations. This strategic flexibility is crucial for tenants facing pivotal developments.
Q: What factors give you confidence in a demand recovery into 2025?
A: Hallie Kuhn, SVP of Science & Technology and Capital Markets, highlighted the strength across various tenant segments and robust venture capital activity as indicators of sustained demand. She pointed out that despite macroeconomic challenges, the fundamentals in their sectors remain strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.