According to Alexandria Real Estate Equities’ Joel Marcus, founder and executive chairman, the third quarter was an outstanding quarter by almost every financial and operating metric and particularly core operating metrics that were really stellar. According to the firm’s earnings release, 52% of our annual rental revenue is from investment grade or large cap public companies.
“We are very proud that 79%, almost 80% of that revenue is from Class A assets in AAA locations, and about 60% of that is focused in Cambridge in San Francisco. Average lease term is about 8.6 years and 12.3 for top 20 tenants. So really a very strong and stellar core to the tenant base,” he said on the firm’s Q3 earnings call.
According to Marcus, “Venture funding in life science continued at very strong pace over $7 billion in the third quarter, marking the fourth consecutive quarter of over $5 billion invested. And this is really a record breaking trend driven by increase in deal size and well established venture firms raising larger funds and deploying capital at a faster pace.”
He added that “Something else that I think we are very fortunate, we had our 47th new drug approved on October 24, this year and the FDA has surpassed last year’s 46th drug approval count and could be on pace to beat the all time record of 53 set in 1996. Strong bipartisan support resulted in legislation enacted to increase the National Institutes of Health. Overall funding, $2 billion to approximately $39.1 billion and we are very fortunate about that. I think that is one of the critical competitive advantages of the United States in the world of biomedical research.”
He also noted that Biotech IPO activity has been the strongest since 2014. “The NASDAQ biotech index has been down a bit recently due to the volatility this month with the markets as all of you know and we’ve seen certainly a flight of value and big cap safety.”