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Alexandria Real Estate Equities Details Five-Year Growth Plan


“Since our founding, we’ve always been blessed to be an idea-based meritocracy culture. And as a very mission-driven company, we operate at the highest standards and levels of integrity and ethical behavior. And we have among the best disclosure and transparency hard earned over our 22 years as a public company and so recognized by NAREIT. And when we speak about corporate social responsibility, which is a big buzzword in the industry today, we at Alexandria try to live it every day.”

So said Joel Marcus, founder and executive chairman of Alexandria Real Estate Equities, on the firm’s Q4 earnings call. In 2018, he explained that among many notable accomplishments, “our team volunteered over 2,600 collective hours to important nonprofit causes and 49 of our team members ran the New York City Marathon and raised over almost $0.25 million for Memorial Sloan-Kettering’s cancer fund research.”

At Investor Day on November 28, in addition to giving what he felt was very good guidance for 2019, he also noted that the company gave investors and analysts the company’s framework for its 5-year growth plan where Alexandria has the potential to double rental revenues from 2018 to 2022 on what it owns on balance sheet today, assuming a positive macro and industry environment. “And I think it’s important to understand why we can articulate such a bold and positive framework. It really is based on 3 key strategies. Number one is our business strategy. And in the 2004, ’05 and ’06 time frame, we pivoted from a single-asset strategy to a core cluster campus strategy and began and initiated major campuses in Mission Bay, New York City and Cambridge and beyond, which are now bearing huge cash flow — high-quality cash flow results.”

In addition to the REIT’s business strategy, its financial strategy was pretty crucial coming out of the financial crisis of ’08 and ’09. “For the years 2010 through 2013, we became critically important an investment-grade company with access to investment-grade debt, and we sold certain key land parcels including a very large site, which really was handled in an exquisite fashion by Steve Richardson, which now sits on where the Warriors Stadium is being built and where we’re building two towers for Uber for part of their headquarters at Mission Bay.”

And that really was critical to substantially lowering our leverage, he added, which led to the company’s significant outperformance in the years 2014 through 2018. “And then thirdly, really, you have a business strategy, you have a financial strategy and then you have a management and personnel strategy. Those are the 3 kind of anchors of any really great company strategy.”