Alexandria Real Estate Equities, Inc. (NYSE:ARE) Q3 2016 Earnings Conference Call - Final Transcript
Nov 01, 2016 • 03:00 pm ET
Good day ladies and gentlemen, welcome to the Alexandria Real Estate Equities' Third Quarter 2016 Earnings Conference Call. My name is Katherine and I'll be your operator for today's call. [Operator Instructions] Later, we will conduct a question-and-answer session. [Operator Instructions].
I would now turn the call over to Paula Schwartz. Please go ahead, ma'am.
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.
I now would like to turn the call over to Joel Marcus. Please go ahead Joel.
Thank you, Paula and welcome everybody to our third quarter call. And with me today is Dean Shigenaga, Tom Andrews, Steve Richardson, Peter Moglia, Dan Ryan and Monica. Thank you, and congratulations to the entire Alexandria family for a truly strong operating and financial performance in the third quarter.
A couple of key the things that we like to stress, one would be our continuing strong core, Dean, will speak to that. Secondly, our continuing strong leasing, bolstered by strong demand and a constrain supply in our urban cluster markets, and solid rent growth and we're pleased to say that in the third quarter our rent growth was heavily driven by our Greater Boston region, maintaining strong occupancy, strong tenant credit, also a strong pipeline with deliveries with increase in yields as you saw, and number five, superb execution of our capital plan.
Let me give a couple of macro thoughts as I like to do each quarter. Alexandria's business is on two of the most important global issues facing humanity, disease and hunger. Life science fundamentals remain strong and as I stated in the last quarter, 10,000 diseases were identified to date and only about 500 of those have been medically addressed.
We're seeing more patients to date, especially with the implementation of the Affordable Care Act, about 36 million more here and we're likely to see quite a lot large growth worldwide over the coming couple of decades and the emerging markets growth have been double digits over the couple of years.
We see more drugs, 19 approvals to date in 2016, 68% are Alexandria tenants, more revenue opportunities, multiple disease areas with large market potentials including immune-oncology, the hepatitis world, liver disease and eye diseases and clearly more innovation including cures and therapies that really address a better quality of life.
Demand is driven really by three key factors, in our world we focus on the RND, which is research, 154 billion by biomedical RND worldwide which is very substantial, 34 billion NIH funding basic research and surprisingly $30 billion of medical philanthropy funding basic research as well.
There's a lot of rhetoric these days regarding drug pricing and drug spending