Good day, and welcome to the Alexandria Real Estate Equities third quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Paula Schwartz with Investor Relations. 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. And now I'd like to turn the call over to Joel Marcus, Executive Chairman and Founder of Alexandria. Please go ahead, Joel. Thank you, Paula, and welcome everybody to Alexandria's third quarter earnings call. I'm here today with Hallie, Peter, and Mark. First of all, as I do every quarter, I want to extend a profound thank you and huge congratulations to each and every member of our Alexandria's family team for bringing it this third quarter to post an impressive operating and financial performance in a continuing stubborn economic and operating environment. To the team, you're an inspiration to me each and every day, in small ways and large. Thank you. The continuing stubborn economic backdrop for commercial real estate and risk-on investments, Peter and Mark will address those, but let me just give you a couple of quick comments. Driven by the huge and, you know, unnecessary federal deficits over the last handful of years, $9 trillion plus, inflation in many areas remains sticky, stubborn, and structural, despite what the Labor Department is saying and reporting. Cost of capital is also stubbornly high across much of the equity and debt capital markets, again, despite the delayed and rather feeble responses of the Fed to date. And Main Street is hurting in the United States. It's pretty clear. Hallie will comment more in-depth on the life science industry, but let me say a couple of things I've said many times in the past. This is one of the few remaining crown jewel industries here in the United States and is the great bastion of true and novel innovation, and the only real and effective path to solve and address over 90% of human diseases which remain unsolved today, which bear an unbearable burden on our citizens and our healthcare system, is the translation of this innovation. Since the downward spiral of biotech began in early 2021 and kind of hit its bottom in what appears to be October of 2023, and after an almost decade of bull run from 2014 through 2021, unfortunately, the industry attracted and almost became drug addicted to too many and too free a capital flowing in, and some of the really stupid and outrageous monies both from the Fed and investors, which caused a rocket ship demand, 4X of what it normally is and really not wanted and sustainable. Since then, things have settled down. Here we are, almost four years later, since the XBI started to tail off in February 2021, and we're in a really highly, I would say, and toughly disciplined funding market, but one in which I personally prefer to operate. As an example of this market's stupidity, less than half the biotech IPOs from 2013 to 2019 remain standalone companies. The majority have either seen successful exits, which is awesome, less successful exits, which is less than awesome, or disappeared altogether, which is not awesome. A couple of thoughts, my take on the third quarter, a truly operationally excellent results, both operationally and financially, and a continuing strong balance sheet management with great liquidity and kudos to our team. Still in a very difficult supply and demand impacted market with a challenging cost to capital. In the third quarter, we continued to deliver increasing FFO per share and dividends per share growth, despite the tough environment. I think one of my key takes is our strong year-to-date rental rate growth, which is, I think, pretty exceptional. We continue with strong, continued high occupancy, collections nearly 100%, which is sensational. And I think what truly stands out in this third quarter is the leasing activity of almost 1.5 million rentable sq ft at a 48% increase quarter to quarter. Future embedded NOI growth of $510 million, which Mark will talk about, and our very successful self-funding capital recycling program this year, which Peter and Mark will talk about. Going forward, and finally, as the master investor, Warren Buffett, has said, "A truly great business must have an enduring moat." And out of the depths of this bear market, like I was, like we experienced and I feel, you know, like the 2010 era of this market, I still remain more optimistic than ever about the promise of unprecedented human health innovation from our precious industry... assuming the government doesn't screw it up, and Alexandria continuing at the vanguard of this industry to build the really building the future of life-saving and life-changing innovation. And finally, let me just say a couple more words before I turn it over to Hallie. Much as predicted, as we predicted, the doubling of our revenues from 2017 to 2021, which we exceeded during an unprecedented bull market on the back of our strategic, I think, long-developed strategy on the back of our development pipeline, created during the depths of the aftermath of the great financial crisis, when we really conceived of it in the 2010- 2013 era. In five short years, by the end of this decade, December 2029, our revenues will be overwhelmingly driven by our unique and highly competitive mega campuses. Best locations, best assets, best services, that also compete and clearly demonstrate superior return on investment, higher occupancy, higher rental rates, best talent recruitment and retention for our tenants, and a multiple and very competitive, convenient paths for growth. And so with that, I'll turn it over to Hallie. Thank you, Joel. This is Hallie Kuhn, Senior Vice President of Life Science and Capital Markets. This afternoon, we will provide an update on the life science industry, starting with FDA approvals and followed by a review of the current funding environment across our diverse life science tenant base. Taking a moment to reflect on the immense impact of the biopharma industry, since 2013, there have been 519 novel medicines approved by the FDA. Nearly half, specifically 257 of these approvals, have been developed or commercialized by Alexandria tenants. That's 257 approvals that have extended and improved lives and is what inspires Alexandria's deeply held mission, supporting the companies at the leading edge of life science innovation. Let's look at an example that will resonate for every person on this call who has personally experienced or supported loved ones with cancer. In the nineties, the FDA created an approval process known as the Accelerated Approval Pathway, with the goal of accelerating access to medicines for diseases with no effective medicines. Over the recent sixteen-year period, 69 cancer medicines were approved through the FDA's Accelerated Approval Pathway. These medicines have treated an estimated 911,000 patients and led to 262,000 additional years of life. That is more than 250,000 years of lives saved. It's truly stunning. Now, turning to life science fundamentals. Venture capital deployment to private biotech tenants, which is 10% of our ARR, is healthy. This year is tracking to eclipse 2023 and may be the third highest year on record. As Joel mentioned, investors are highly disciplined, focused on rational valuations, de-risk technologies, and near-term milestones. The translation to demand on the ground is steady and conservative, transitioning to a just-in-time model for space. Scale and flexibility are core to this growth model and is why Alexandria's distinctive mega campus strategy is extremely well positioned to meet this trend in demand. With respect to pre-commercial public biotech companies, 9% of our ARR, follow-on financing is robust, already clinching the second highest year on record. These financings are focused on the subset of companies with compelling clinical data, while those without clear catalysts continue to struggle to access additional capital. The IPO market has also narrowly opened, particularly for companies with meaningful assets, de-risked with clinical data. The number of IPOs through third quarter 2024 has surpassed 2023, and over half of the companies that went public this year are trading above their issue price. Further opening of the IPO markets will be a positive indicator for future leasing demand as these companies grow and as investor and board conservatism thaws more broadly. Commercial stage public biopharma, which makes up 16% ARR, and large multinational pharma, which makes up around 20% ARR, continue to commit considerable dollars to R&D, both to internal programs and externally via partnerships and M&A. Importantly, they remain very well capitalized, with over $200 billion cash on hand amongst the top 25 biopharma. Next, life science product service and device tenants, which represent 20% ARR. Notably, the BioSecure Act has passed the House and is awaiting a vote in the Senate. If passed, the legislation will limit utilization of select Chinese contract research organizations. We view this legislation as largely positive. It includes grandfathering provisions to minimize near-term impact to biopharma, while creating an incentive for U.S.-based contract manufacturing and research organizations to onshore capabilities. Long-term, this could provide a tailwind for demand across this segment. Last, biomedical and government institutions, which represent 12% ARR. Institutions continue to be the catalyst for early discoveries that form the next generation of medicines. As our sale of 1165 Eastlake Avenue East to the Fred Hutchinson Cancer Center in our Seattle region, and their expansion into our neighboring 1201 and 1208 Eastlake Avenue East buildings reflect. These institutions plant deep, long-term roots focused on the right location, right ecosystem, right infrastructure, and trusted relationship with landlord partners such as Alexandria. Widening the lens on healthcare more broadly as we conclude, of the $4.5 trillion in healthcare costs annually spent in the U.S., less than 15% goes towards medicines. To put that in perspective, nearly 25% of healthcare spend is estimated to be on unnecessarily or wasted administrative spend. All to say that novel medicines have the incredible opportunity to both have a positive impact on individuals' health and drive long-term savings to the healthcare system by preventing, managing, and even curing the thousands of diseases with limited or no treatment options. With that, I will pass it over to Peter. Thank you, Hallie. Before I get into my update on the development pipeline, leasing, supply, and asset sales, I wanted to comment on the improving health of the office market because it's helpful to life science real estate in a couple of ways. First, a healthy office can create competition for life science tenants, as tech tenants have historically been attracted to our locations and centers of innovation and the appeal of our floor plates, ceiling heights, and amenities. Second, office offers an alternative for some of the misguided life science real estate supply that's been added since the pandemic. We are seeing it real-time with the boom of the office leasing taking place in Mission Bay. OpenAI completed a 490,000 sq ft sublease at our 1455 and 1515 Third Street property in the fourth quarter of 2023, and last quarter added another 315,000 sq ft at the neighboring 550 Terry Francois building, which, by the way, was being marketed as lab space. Our understanding is that two other tenants that were competing for that building, including a tech company, and that one of them is now negotiating at Mission Rock, which was also once identified as future lab supply. In the third quarter, we delivered 316,000 sq ft of development, redevelopment pipeline, 100% leased, with 100% of the space contained in mega campuses located in our high barrier to entry submarkets. The annual incremental NOI delivered during the quarter equaled $21 million, bringing the year-to-date total to $63 million. The weighted average stabilized yield of the deliveries was strong at 7.7%. After a strong second quarter, development and redevelopment leasing was light at 39,121 sq ft, bringing the total for the year to 480,342 sq ft. We suspect the result was driven by the fact that most of the space available for lease in the pipeline won't be available for occupancy until 2026 or later. In today's market, project leasing accelerates as projects near completion, as illustrated by our 2024 and 2025 deliveries being 91% leased. Projects expected to stabilize in 2026 and beyond are 35% leased, and overall activity in these projects is encouraging because most of them are in Greater Boston, and we have active proposals for touring activity at each one of them. Transitioning to leasing and supply, overall leasing volume was very robust at 1.49 million sq ft, up 33% quarter over quarter. This leasing was significantly driven by renewals with a strong 84% retention rate, which illustrates the power of our mega campus platform and trust in our brand, built by our internal, long-tenured asset services teams, providing unmatched operational excellence and know-how in the running of our mission-critical facilities. GAAP and cash rental increases were 1.5% and 5.1%, respectively, influenced materially by a large non-laboratory lease renewal with a high credit tech tenant. Although the increases were modest, we are pleased with the longer lease durations coming in at a weighted average of 9.7 years for renewed and released space. On competitive supply, as a reminder, 2024 is going to be the peak year for new deliveries, and most of that has been delivered through the third quarter. Inclusive of 2026, there is approximately 8 million sq ft of competitive supply remaining to be delivered in our three largest markets. In Greater Boston, approximately 200,000 sq ft will be delivered in the fourth quarter of 2024, and it is 100% leased. In 2025, 2.4 million sq ft is anticipated to be delivered, and that space is 65% pre-leased. In twenty twenty-six, another 900,000 sq ft will be delivered in Greater Boston, and it's 3.5% leased. In San Francisco Bay region, 300,000 sq ft will be delivered in the fourth quarter, and it's 0% leased. In twenty twenty-five, 1.7 million sq ft will be delivered, and it's currently 23% leased. We're not tracking anything to be delivered in the Bay Area for twenty twenty-six. In San Diego, 1.3 million sq ft will be delivered in the fourth quarter, and it's 50% leased. 700,000 sq ft is expected to deliver in twenty twenty-five, and it's 23% leased. In twenty twenty-six, we expect to see 400,000 sq ft of competitive supply to be delivered, and it's 100% leased. I'll conclude with an update on our value harvesting asset recycling program. We've commented on the past two calls that our value harvesting transactions will be heavily weighted towards the end of the year. With respect to the third quarter, we closed on just north of $300 million of asset sale transactions, highlighted by the sale of 1165 Eastlake Avenue East, a core asset in the Lake Union submarket of Seattle. As you know, it's not our intent to sell core assets, but this transaction offered several constructive attributes. First, as Hallie mentioned, the sale was to the Fred Hutchinson Cancer Center, which is one of the most prestigious clinical research institutions in the world, and it afforded us an opportunity to recapitalize our neighboring 1201 and 1208 Eastlake Avenue East assets with them, as well, taking out an existing partner at a gain. This was a fantastic opportunity for us to deepen our relationship with the Hutch, who is a major driver of life science real estate demand in the region. Second, the transaction provided for early renewals at those recap properties, inclusive of a twenty-year lease term at 1201 Eastlake, where the Hutch occupies the entire 106,000 sq ft building. Third, it provides price discovery, upon which analysts and investors can evaluate the NAV of our core assets. We acknowledge that this was a user sale, but any rational buyer is gonna require pricing in the neighborhood of market value. So we think the 4.9% capitalization rate and $1,499 per sq ft value is representative of the value of our core mega campus assets. Rounding out the third quarter transaction was the completion of the previously announced $60 million sale of 219 East 42nd Street, New York City, and the sale of 14255 Newbrook Drive in Northern Virginia at a 7.4% cap rate, a workhorse asset that no longer fits into our strategy, but is a testament to the enduring value of our asset base as we acquired it pre-IPO. As we look forward, we expect to end the year strong, with several value harvesting transactions on tap to close before year-end. We have $577.2 million in dispositions that are subject to non-refundable deposits. Those assets include a retail development on excess land we owned in Maryland, a one-off Class B asset in our greater Stanford submarket that will be redeveloped for another use, a one-off office building that was part of a land assemblage in the suburbs of Boston, a pair of buildings in the Research Triangle located outside of our core mega campuses, and a set of buildings in the suburbs of Greater Boston, which will be sold to a user. Rounding out our fourth quarter dispositions are assets that are subject to executed letters of intent or purchase and sale agreements. Approximately 48% of the $602.5 million in sales proceeds expected from these transactions come from our land bank and are expected to be developed for residential use. The balance is a pair of buildings that will be demolished for residential development and a set of non-core standalone assets in Cambridge that will require significant capital to re-lease and no longer fit into our strategy. With that, I'll pass it over to Mark. Thank you, Peter. This is Mark Binda, CFO. Hello, and good afternoon, everyone. We reported solid operating and financial results for the second quarter. Total revenues in NOI for 3Q 2024 were up 10.9% and 12.5%, respectively, over 3Q 2023, primarily driven by solid same property performance and continued execution of our development and redevelopment strategy. FFO per share, diluted as adjusted for the quarter, was $2.37, up 4.9% over 3Q 2023, and is in line with consensus. Our solid operating results for the quarter were driven by our disciplined execution of our mega campus strategy, tremendous scale, long-standing tenant relationships, and operational excellence by our team. 76% of our annual rental revenue comes from our collaborative mega campuses. We have high-quality cash flows, with 53% of our annual rental revenue from investment-grade and publicly traded large cap tenants. Collections remained very high at 99.9%, and adjusted EBITDA margins continued to be strong at 70% for the quarter. An important takeaway for the quarter should be the very strong leasing volume results. Leasing volume for the quarter was 1.5 million sq ft, which was up 48% over the trailing four-quarter average and was the highest quarterly volume since 4Q22. We continue to benefit from our tremendous scale, high-quality tenant roster, and brand loyalty, with 80% of our leasing activity over the last twelve months coming from our existing deep well of approximately 800 tenant relationships. The rental rate increases for the first nine months of 2024 were strong at 16.4% and 8.9% on a cash basis, and our outlook for rental rate growth for the full year 2024 remains solid at 11%-19% and 5%-13% on a cash basis. Rental rate growth for lease renewals and releasing the space for the quarter was 5.1% and 1.5% on a cash basis. We did highlight the renewal of an acquired lease in Texas for tech R&D space that did weigh down the numbers during the quarter. During the quarter, we also achieved very healthy lease terms on completed leases, which were almost 10 years on average. The overall mark to market for cash rental rates related to in-place leases for our entire asset base remains solid at about 10%. Tenant improvements in leasing commissions on second-generation leasing as a percentage of starting cash rent were around 8% this quarter, which is less than our historical average over the last three years of about 9%. Our total non-revenue enhancing expenditures, which includes tenant improvements on renewals and releasing of space, is expected to be in the 10%-11% range as a percentage of net operating income in 2024, which this amount is below our five-year average of 15%, and is lower than that of several other REIT sectors, and really highlights the durable nature of our laboratory infrastructure. This is the third year in a row that we've been in the 10-13% range, although we do expect next year to be higher, given some larger repositioning projects on the horizon. Turning to same property results. Same property NOI growth for 3Q 2024 was solid at 1.5% and 6.5% on a cash basis, really driven by solid rental rate increases, a pickup in occupancy, and some burn off of free rent. Our outlook for the full year 2024 same property growth is consistent with our last update at solid growth of 1.5% and 4% on a cash basis at the midpoint of our guidance. We do expect some pressure on fourth quarter same property results, resulting from a lease termination that occurred at 409 Illinois Street in our Mission Bay submarket, where the lease will be expiring at the beginning of twenty twenty-five, and we expect little to no rent in the fourth quarter of twenty-four. As a reminder, our same property results do include 100% of consolidated results. So even though we only have a 25% interest in this particular property, the approximately $17 million of annual rental revenue going away related to this tenant in the fourth quarter will be fully reflected in same property results, even though the bottom line FFO results will only pick up our 25% share. Turning to occupancy, for the quarter, occupancy was very solid at 94.7%, which is up 10 basis points over the prior quarter and continues the steady results over the last four quarters. We expect year-end occupancy to be on the low end of our guidance range of 94.6% to 95.6%. On lease expirations, our team has done a great job of addressing the 24 lease expirations with very strong leasing volume, again, completed in the quarter of 1.5 million sq ft, and the unresolved lease expirations remaining for the balance of 2024 are modest at only 134,000 rentable sq ft. Looking ahead to the first quarter of 2025, we highlighted a few key lease expirations spread across four projects, aggregating 768,000 sq ft of rentable square feet, with $47 million of annual rental revenue that are expected to have 12-24 months of downtime on a weighted average basis. 75%-80% of the total $47 million annual rental revenue is related to our Alexandria Technology Square and 409 Illinois Street projects, which are expected to remain as operating properties with the same property pool following the lease expiration. Even though these spaces may require some time and capital to release or reposition the buildings for multi-tenancy. The Alexandria Technology Square project primarily relates to the move-out of Moderna and the expansion to their new 462,000 sq ft building we delivered late last year at 325 Binney Street. We are in early discussions with the tenant to lease approximately half of the 409 Illinois Street property. Please refer to footnote 4 on page 24 of our supplemental package for additional details there. On external growth, during the quarter, we continued to execute on our development and redevelopment strategy by delivering 316,691 rentable sq ft from the pipeline, which will generate $21 million of incremental annual net operating income. We have 5.5 million rentable sq ft of development and redevelopment projects that are 55% leased or negotiating, and are projected to generate $510 million of incremental net operating income over the next three and a half years, including $158 million over the next five quarters. Transitioning next to the balance sheet, we continue to have one of the strongest balance sheets among all publicly traded U.S. REITs. Our corporate credit ratings are in the top 10% of all publicly traded U.S. REITs. We remain on track to achieve our targeted net debt to Adjusted EBITDA leverage ratio of 5.1 times on a quarterly annualized basis by year-end. We have tremendous liquidity of $5.4 billion, and our attractive debt profile highlights our commitment to long-term funding of our business with a weighted average remaining term of debt of 12.6 years, and an average year-end percentage of fixed-rate debt over the last five years of 97.7%.... We continue to focus on our disciplined funding strategy to recycle capital from dispositions and to minimize the issuance of common stock. Common stock issuances have amounted to less than 2% of our total funding sources in 2023 and 2024, and we do not expect to issue any new equity in the fourth quarter of 2024. Our disposition strategy for 2024 is focused primarily on outright dispositions of non-core assets, not integral to our mega campus strategy, allowing us to enhance the quality of our asset base, and include stabilized properties, non-stabilized properties with vacancy or near-term lease expirations, and land parcels. To date, we've completed $319 million of asset sales, including the sale Peter mentioned at 1165 Eastlake Avenue East, which is located in our Lake Union submarket, that was sold to the Fred Hutchinson Cancer Center. We have another $1.2 billion of pending dispositions, subject to non-refundable deposits or executed letters of intent or PSA agreements. About half of the pending dispositions represent stabilized property sales, most of which are expected to be sold to users, with a blended expected capitalization rate of 8.5% and 7% on a cash basis. The other half represents the sales of land and properties with vacancy or near-term lease expirations. The 3Q 2024 annualized NOI associated with the $1.2 billion of pending sales is $95.8 million and $91 million on a cash basis. It's important to note that the $95.8 million is a backwards-looking amount and does not consider certain lease expirations for some of the non-stabilized properties expected to occur over the next twelve months, including a significant amount of non-laboratory space. On a forward-looking twelve-month basis for these non-stabilized disposition assets, we expect that NOI will decline by $30-$35 million. Given that these assets no longer fit our strategy, we've elected to sell these assets and allow the buyer to invest the capital to reposition those assets. Included in the $1.2 billion pending dispositions are two key items aggregating nearly $700 million. First, a suburban campus with specialty non-traditional lab space in our Greater Boston market to the existing tenant for $369 million, which represents a 6.3% cash cap rate. Second, various sites in Sorrento Mesa and University Town Center to residential developers for $314 million, which will allow us to monetize some of our future pipeline without adding to the lab supply. The aggregate total of the completed and pending dispositions is $1.5 billion, which puts us right around the midpoint of our guidance, and we're reasonably confident we can close all of this by the end of the year. We also expect to fund a meaningful amount of our equity needs with retaining cash flows from operating activities after dividends of $450 million at the midpoint of our guidance for 2024, and our high-quality cash flows continue to support the growth in our annual common stock dividends, with an average annual increase in dividends per share of 5.4% since 2020, and we continue to have a conservative FFO payout ratio of 55% for 3Q 2024. Realized gains for the venture investments, including FFO per share as adjusted for the quarter, were $23 million and $85.2 million for the nine months ended September. Quarterly realized gains since 2021 have averaged about $25 million. Through the first three quarters of 2024, we've averaged about $28 million, so pretty close to the historical run rate and consistent with our guidance range for the full year of $95 million-$125 million. Turning to guidance, there were a few moving pieces in our underlying guidance, including lower straight-line rent revenue and lower G&A, which we highlighted on page five of our supplemental. We've updated our guidance for 2024 for EPS of $2.60 to $2.64, and we maintain the midpoint of our guidance for FFO per share, diluted as adjusted, of $9.47, which represents a solid 5.6% growth in FFO per share for 2024. As we look ahead beyond 3Q 2024, we continue to have conviction to reinforce our core through our differentiated mega campus strategy, which is the driving force behind our disposition strategy. With 76% of our annual rental revenue coming from mega campuses today and aspirations to enhance this number over time with non-core dispositions of land and properties, as well as disciplined development and redevelopment on these mega campuses, we expect to continue increasing the quality and resilience of our dominant platform and asset base. With that, let me turn it over to you, Joel. Okay, Paula, could you have the moderator open it up for questions, please? Yep, please do. Rocco? Absolutely. If you'd like to ask a question, please press star then one on your telephone keypad. If your question has already been addressed, if you'd like to remove yourself from queue, please press star then two. Today's first question comes from Joshua Dennerlein with BOA Merrill Lynch. Please go ahead. Yeah. Hey, guys. Appreciate the time. I appreciated the comments on the Seattle asset sale at a 4.9, and then the pending sales that are stabilized, like at a 7.5 cash cap rate. Is there any other, like, additional color you can provide on, like, what's driving the gap between those two? I know you touched a little bit on your opening remarks. And maybe just the second part of that would be like: Should we assume, like, the stuff that's not in the mega campuses, but is stabilized, maybe is closer to that 7.5 cash cap rate? Yeah, I don't think that's a reasonable assumption, but Mark, do you wanna talk about Seattle and maybe how to think about? Yeah, sorry. Yeah, Josh, I think on the stabilized cap rate, I think perhaps what you're referring to is, I think it was a seven cash and eight and a half GAAP. The big reason for the delta there between cash and GAAP was the big chunk of that is the suburban Greater Boston market that actually had a really long lease term in place. So you had a pretty big spread there between cash and GAAP. But I think if you think about, you know, what to expect in terms of stabilized asset sales, we've given you the number for this year, and they're non-core, so, you know- Yeah, so- Expect them to be wider than that. So, Mark, yeah, let me just interrupt that. That was not a—that's not traditional lab space. The pending half that's not stabilized, that you're selling, that's not like traditional life science. That's more office, so it was like a land play, recovery land play, kind of? Is that the way to think about it, or? Yeah. So Mark, do you wanna comment? Josh, you're talking specifically about the Greater Boston asset? No, I thought I heard you say, like, half the pending dispositions, that $1.2 billion were gonna be, like, sold for, like, a GAAP 8.5, a cash 7. And I was just trying to, like, contrast, like, that pool of assets versus that 49 that was sold in Seattle. Oh, right. Like night and day. Yeah. Yeah. So, about half of the $1.2 billion is stabilized assets. That includes the one particular asset we mentioned in Greater Boston that I think had a 6.3 cash cap rate and then a much wider GAAP cap rate, given the long terms. The other half of the $1.2 billion is a mixture of land and also some non-stabilized properties. If you kind of reverse engineer the math, it's somewhere in the high sevens in terms of the GAAP NOI coming offline. But what I was trying to say in the prepared commentary is there's a fair amount of that NOI for those particular assets that we're selling that happen to be in Boston that will be going away next year. And so, you know, the decision there was really to allow the buyer to invest that capital, since those assets really just don't fit our strategy any longer. Yep. Peter, any further comments you have? Yeah, I mean, part of your question, I think, referenced the 7.6% cap rate, maybe that I mentioned of one of our workhorse assets versus the core asset 4.9%. Yeah, you know, the 7.6% was in Northern Virginia. It is lab space, but it is more clinical lab space and not the R&D type of space that is in our core mega campuses. But what I was trying to get across in my commentary was we wanted to make sure that, you know, everyone was aware, because a lot of what we've been selling is, has been non-core. You know, almost everything is non-core, unless it's been a partial interest sale. We haven't done a partial interest sale in a while. So we just sold a core asset in Lake Union, and I explained why. And it was at a 4.9, and even though it was a user sale, you know, which certainly, you know, influences value, it has to be in the ballpark of market value, right? I mean, from any rational buyer is not gonna way overpay for anything, no matter whether they're a user or not. So I thought it was a good example and reminder to everybody that, you know, we're on our way to making everything that we own or, you know, a good portion of what we own, core mega campus assets. And once we're done with our disposition program, you know, we're what we have left is highly valuable, and that comp reflects that, and that's what I was trying to get across. Yep, that's really good. And Josh, just one other comment that you have to remember, so the company's thirty years old, and so it's acquired, developed or redeveloped assets over a long period of time, that now don't fit the go-forward mega campus strategy. So that's, you know, pretty obvious. Okay. Appreciate the color, guys. Thank you. Yep, thank you. Thank you. And our next question today comes from Rich Anderson at Wedbush. Please go ahead. Hey, thanks. Good afternoon. So in terms of the dollar value of what you can still do in terms of non-core assets, you mentioned 76% mega campuses. I just sort of did a 24% of your enterprise value and got to $9 billion. But I assume that's a bit simplistic, but is the pipeline for additional sales to meet your development obligations in that sort of $5-$10 billion range? Would you agree with that number, or am I way off? Yeah, Mark, do you wanna respond to that? Yeah, I think it's true that some of that, you know, 24% of ARR that resides in non-mega campuses, some of that would be stuff that we may look to exit over time. But there are some really good assets in there that are located in good markets that, you know, may be things we hang on to. The other thing I would say is that we do have some land on the books that is also not located in mega campuses, so that could also be another capital source that we look to go after. I think about 31% or so of the square footage in the land bank is not located in mega campuses. Okay, great. And then just a quick sec question here. On the realized gains guidance for the full year, it's still over $100 million. I think you've done 47 as of the third quarter year to date. Does that imply another 50 plus in the fourth quarter, or am I, again, am I missing something? Yeah, you're missing it, Mark. Yeah. Yeah. Yeah, realized gains for the quarter were $23 million, and I think we're $85.2 million for the nine months. So if you annualize that, you know, that kind of puts you square in the middle or pretty close to the middle of our guidance range of $95 million-$125 million. I thought I saw a disclosure for $47 million year to date. I must have, I must have. Yeah. I'll have a relook at that. Erroneous. Yep. Okay. That's all I got. Thanks. Yeah, thanks. And our next question today comes from Michael Griffin with Citi. Please go ahead. Thanks. It's Nick Joseph here with Michael. Maybe just first on the five-year lease extension with the tech tenant in Texas. Just hoping to get some more color on that and kind of what your long-term plans are, if you still plan to convert this to lab space and kind of the considerations that went into that decision. Yeah, so we're under strict confidentiality, as you probably can imagine. All big tech tenants don't want their name used. They don't allow you to put other tech tenants in the building. They're pretty strict on what they do. So we can say very little other than we felt that this renewal was integral to their own campus, which is actually adjacent to our site. These are highly improved buildings for their particular use, so they aren't just some kind of half-assed tech, you know, office kind of thing. They're actually quite, quite valuable and quite improved. I don't know where it goes over time, but clearly having the cash flow is better than in this market environment with cost of capital than trying to reposition them. But they may be an ultimate buyer here as well, so we'll see how the story plays out. Thanks. That's helpful. And then, just on leasing more broadly, have you started to see larger space requirements, kind of demand pick up, or is it still more from the medium-sized 20-40,000 sq ft tenants? I think it's pretty good in the early and steady on the, you know, on the revenue generating side. I think in the middle is where it still remains challenging, and when you've got good clinical data or an approval, generally you've got good news, and if not, you know, it's kind of sluggish. I don't think that's materially changed. Thank you very much. Thank you. And our next question comes from Michael Carroll with RBC Capital Markets. Please go ahead. Yep, thanks. Mark, I wanted to circle back on the, the valuations on some of the dispositions you provided to make sure I'm thinking about everything correctly. So I know on the $1.2 billion of pending sales, the supplement says there's $96 million of GAAP NOI associated to that, which reflects about an 8.1% cap rate. Do you have the cash number for there? So how much cash NOI should we expect, kind of, goes away once those sales are completed? Yeah, that number's around $91 million, Michael. Okay, great. And then, Peter, in your comments earlier, you were saying once you're done with the non-core asset sales, the portfolio quality is gonna be significantly improved. I mean, how much should we think about the timing of that? I mean, is this gonna be a longer-term process, or is there a line of sight when you kind of gave us that idea? Yeah. Let me say something before Peter answers. I don't think you could say the quality of the portfolio is gonna be substantially improved. It is already first in class, best assets, best location, best services, best tenants. So I don't think how you're thinking about that is quite correct. We have a variety of assets, land, redevelopments and developments that no longer fit the mega campus strategy, and we'll harvest those assets over the coming years, you know, as we deem appropriate to match sources and uses, and also in light of, you know, the valuation in the marketplace. So that's kind of how we look at it. But Peter, you could comment further. Yeah, look, the best strategy for us to mitigate the supply that's gone into our core markets is our mega campus strategy. So, you know, we're going all in on it. And as Joel mentioned, we feel like all the assets we have are good assets, but, you know, we deem some of them to no longer be part of our strategy, and, you know, those are the ones that we're selling. ... in order to fund our pipeline, which is increasing our percentage of mega campus assets. How long it's gonna take is hard to say, but, you know, we're doing it incrementally as we, you know, as we build out our mega campus platform. It's, you know, it's good. It's good that we're able to fund this transition by selling assets that, you know, are no longer part of our strategy versus using common. So, the net effect is, you know, we're funding the business without issuing common equity. And, at the same time, as those sales occur, we increase the percentage of our mega campus assets. Yeah, and maintaining a great balance sheet in the meantime. Okay, great. And And then just one last question for me. It does look like 99 Coolidge in the development schedule. Kind of the stabilization got pushed out a year. Can you kind of provide some color, the reasoning of why that kind of got pushed out? Yeah. Well, it's pretty simple. This is a brand-new building. It's one of the most highlighted buildings in all of the Watertown, you know, campus and submarket. And it's pretty clear that it's gonna take us more time to build out space to deliver to tenants, rather than having just some time and space available. So as part of the development, we're doing that, but that takes time in this marketplace. But we did just sign a lease. I don't know, it may be after the end of the quarter, another lease there, which will be reported, I think it was October thirteenth or something like that, for part of the space there. But the challenge there is to lease space and have available space that people can move into, and that's what we're trying to get to. That's the point. Okay, thanks. Yep. Thank you. And our next question comes from Omotayo Okusanya with Deutsche Bank. Please go ahead. Yes, good afternoon, everyone. Just wanted to follow up on Rob's question. Mark, you mentioned the cash NOI disappearing was about, is about $91 million on the $1.2 billion of sales. So I'm looking at it kind of saying that's about a 7.5% cash yield, but developments are being done at a stabilized 6.4%. So I'm a little. I'm just kind of trying to understand, again, selling at 7.5% to fund assets at 6.4%. Are we looking at that being something dilutive to FFO? Or should we be thinking more about because you're suddenly not dealing with a bunch of recurring CapEx, it's still gonna be accretive on an AFFO on a free cash flow basis? Yeah, sure. Yeah, no, you're right that, you know, what we're selling is obviously has a higher cap rate than what we're developing in, if you just look at a moment in time. But I think though, a bunch of those assets, particularly for the non-stabilized ones, will absolutely need or will require significant capital to retenant those. So I think the choice there was really just to allow the buyer to do that, since those assets don't fit our strategy any longer, and take, you know, take those proceeds and redeploy them into the pipeline, where a significant amount of the product in the pipeline is all concentrated in the mega campuses. Okay, that's helpful. And then if I may ask another one. The reduction in guidance for straight line rents, again, I know part of it was just write-offs of, you know, associated with some tenants and some lease terminations. I mean, when you look at the overall portfolio today, you know, and you kind of think of a watchlist, if I may use those words, I mean, how does one kind of think about that and kind of, as I start thinking about twenty twenty-five, whether we may see a few more of these instances of straight line rent write-offs? Yeah, maybe, Hallie, I'll maybe pump that one over to you just to talk about kind of how we look at the watchlist. Well, but Mark, frame it for her first. Yeah. Yeah, look, I think, you know, there was this, a kind of a discrete event with this particular tenant. You know, it was a large tenant. It was actually a tenant that we'd inherited when we bought the asset over a decade ago. They'd been in there for a very long time, close to not quite twenty years, but pretty close to it. They'd been operating in there. And, you know, we sold out of that particular campus a number of years ago in Mission Bay to reduce our exposure. But, you know, I think what I want to just communicate is that, you know, these things do happen, but that was just kind of a one-off event. Yeah, and I'll maybe answer, and Hallie, you can hold your fire for another question. So it's important to keep in mind, too, that this tenant, who Mark said was in there when we bought the building in 2010, it had been signed a lease with the Shorenstein team in 2006, I believe. The company, actually, when we underwrote it, and I personally was involved in the underwriting in 2010, looked to have one of the most promising blockbuster drugs, a replacement for Amgen's erythropoietin, but instead of injectable, it was a pill. But over the course of time, through a variety of management changes and just-... A combination of maybe strategy, science, and a whole lot of other issues that come to bear. It had lost that opportunity, and so, you know, was faced with the prospect of continuing its business in China and winding down in the US. So I think we did everything prudent we could during all those years, and very proud of the fact that, you know, we have one of the best track records of underwriting tenants. I think the best in the industry by far. No one has our capability. So thank you for the question. I appreciate it, Joel. Thank you. Our next question today comes from Georgie Dincov with Mizuho. Please go ahead. Hey, this is Georgie on for Vikram. What is the potential for exceeding the midpoint of the disposition guidance? And as you sell assets, what is the best use of this capital? Yeah. So, Mark? Yeah, look, I think we're almost in late October, so, I don't know that I would expect to do much beyond what we laid out in terms of the actual amounts that are, you know, either under contract or under, you know, have a hard deposit. There are other things we're looking at that we're moving along that we'll continue to work on, but for now, I probably wouldn't assume much beyond that. The second part of the question? Sorry, could you repeat the second part, Georgie? Yeah, yeah. What is the best use of this capital as you sell assets in your view? Oh, right. Yeah. So look, you know, we planned since the beginning of the year to really fund the construction of the pipeline with this capital. So, you know, that's been happening during the year, and this money will be used to pay down debt, which we borrowed to fund the construction pipeline. We do expect, just given where we are in the year, we do expect to actually have a little bit more proceeds from the sales that we won't have the ability to pay down debt. We expect that our revolver should be at or close to zero, so by the end of the year. So we do expect to hold on to some of that cash that can then be redeployed next year that ought to reduce our debt needs going forward in 2025. But obviously, as you look at funding construction, given cost of capital, given the fact that many of these projects in the pipeline were committed in past years, we're only funding new pipeline opportunities, whether they be development or redevelopment, where our, you know, returns can be well above cost of capital, so that's how we're looking at it. Thank you. And just one more for me. How do you see demand evolving as funding improves? And do you have any updated thoughts on AI and how that would drive lab space needs going forward? Yeah. So, demand, I think, has been pretty. I think, the word I used was the industry is in a highly disciplined capital deployment, both capital raising and capital deployment, so we're dealing with that. But, you know, we've got 800 tenants plus, and we have high quality tenants that need lab space. And so as I think Mark said, 80% of our tenants over the last year have come from our own tenants. So we outcompete in those opportunities if we have space available, and that's good. On the AI side, I think it's very early days, although AI has been around for quite a long time. Very early days for AI. Obviously, the best use of AI and the world of AI is gonna have to meet the world of drug development. At the moment, language models and a lot of inhibitions remain between those two, but many companies, in fact, most companies are trying to use AI to inform them to get to better targets and outcomes. Ultimately, my own view is that AI is gonna make maybe the most remarkable progress in the clinical setting, where if over time, one could predict with greater certainty those who would respond positively versus no response or negative response, that could save the largest amount of money in the entire drug development process, which is clinical trials. So thanks for that question. Joel, can I just layer on that a bit? So, hi, everyone. This is Hallie. I was just gonna, you know, respond to your first question in terms of demand. Just to, you know, as a reminder of, yeah, as you think about medicine development, you know, it's unfortunately, for public companies, it doesn't happen on a quarter-to-quarter basis, right? It takes ten years easily to bring a new medicine from, you know, early research to a patient. And, you know, what we see on the ground is just incredible innovation, right? We're still continuing to see, you know, the discoveries and new forms of modalities that will continue to be developed and make their way to patients. While we are in a conservative environment right now, you know, the outlook on the growth of the industry and that translating to needs over the long term is certainly positive. You know, the leaps we see, for example, in the obesity space, right? There's so much unmet need across Alzheimer's, across still other forms of cancer, that the industry outlook and the innovation driving that demand will continue. Great. Thank you for taking my questions. Thank you. And our next question comes from Peter Abramowitz with Jefferies. Please go ahead. Thank you. Yes, I was just wondering if you could comment on sublease space, specifically in Boston and the Bay Area. Is it continuing to increase or does it seem like it's sort of stabilized? Yeah, Peter, you want to address that? Yeah, it, it's stabilized. You know, it has actually not stayed. Good sublease space has not stayed on the market long. Anything that, you know, when you look at the percentages of things that are still available for sublease, that's space that's been on there for a long, long time because it's just not good space or it's not, you know, it's shell space. But we're not seeing a lot of space being put back on the market now. So what is being absorbed is generally available vacant space and not directly vacant space and not sublease space. So that's been a positive for the market, although there is still some availabilities for sure. But tenants tend to wanna go direct, if at all possible, because they have no control over the space if they're going through a tenant that's subleasing it. Okay, that's helpful, and then just to go back to Joel's comment about, I think tenants generally, just being more thoughtful and disciplined in terms of their capital allocation. Could you just sort of comment on length of time and deal cycles to actually get leases done? Sort of where that's at today versus where it's been historically, and any sense of that changing anytime soon? Yeah, Peter? Yeah, you know, the cycle of leasing has definitely taken a lot longer now than it used to. Certainly boards are scrutinizing any growth space, and tenants are, you know, looking at all the options in the market before making decisions, to make sure they're doing all their diligence. Because boards are requiring them to get everything, you know, pretty much, you know, at least for the earlier stage companies and maybe the early IPO companies, the boards are really looking at every dollar and wanting to ensure that all the diligence was done. You know, we feel confident when we're in the mix, that we're gonna win the deal, but the deals are taking longer to make, for sure. Excellent. That's all for me. Thanks for the time. Thank you. And our next question today comes from Dylan Burzezinski with Green Street. Please go ahead. Good afternoon, and thanks for taking the question. Just one quick one on transaction markets. Given the commentary on the call, it seems like most of the dispositions this year, those that have happened and those that are set to close through year-end, seems like most of the depth of bids has come from users. So just sort of curious on, you know, appetite from traditional real estate investors to put capital to work into the life science space today. Yeah, Peter? Yeah, look, the. We've been fortunate that there have been users out there that have wanted to take advantage of the opportunity to buy the real estate that they wouldn't have otherwise had the opportunity to buy because we weren't sellers in the past. Transaction velocity to investors is really highly dependent on finance, the financing market, and although it's starting to improve, it's still not where it needs to be for a lot of money to get off the sidelines and back into acquiring mode. There are some investor sales that we're doing, for sure, but it, you know, we think that coming into next year, there'll be a lot more opportunity for us to do so. One, because rates, hopefully, will reverse. We all thought they'd be going down, not up, at this point, but we do have confidence that they will, the ten-year will start to go down. Then, we are seeing lenders now start to get back into the market. So that'll be, you know, an opportunity to increase the velocity of transactions to investors and also an opportunity to do better on valuations because they'll be able to leverage them. Great. That's all I had. Thanks. Thank you. Our next question, our last question today, comes from Jim Kammert with Evercore. Please go ahead. Good afternoon. Thanks for making the time. To the extent you can, where would you say are the better pockets of demand for new space? You know, the lease up, in other words, in the development, redevelopment. Is it the private biotechs? Is it the pre-commercial biotechs, big pharma? I'm just curious if you can put any, sort of hang any paper around that, where the broader or the deeper- I think it's the... Yeah. Hi, Jim. I think it's the earlier stage companies, by and large, and if you get a commercial, or, I mean, a clinical stage company that has good news, then it's got to move immediately. Those are probably the two most common pockets today. Okay, great. And if I could just leverage off your last comment about AI, make sure I understood in your prior response. You thought it would be really powerful, AI, in terms of clinical studies, Joel, but does that, am I mistaken to think that that helps or hinders demand for space then, in terms of your lab portfolio? I think it's positive in the sense that it'll provide way more opportunities for targets, medicines and shots on goal if it aids and abets in the clinical trial process. We don't lease space to hospitals- Right. -or others doing clinical trials, so that doesn't really matter to us. But what matters is, the pipeline of, you know, products that address the 90% plus diseases that need to be solved. So I think that would be very good news for us. Got it. Thanks for the clarification. Yep. Thank you. And that concludes our question and answer session. I'd like to turn the conference back over to Joel Marcus for any closing remarks. Okay, thank you, everybody, and, be safe and God bless. Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.