On this section from Motley Idiot Reside, recorded on Jan. 6, Idiot contributors Jason Corridor and Marc Rapport focus on the sturdy tailwind pushing Alexandria Actual Property Equities (NYSE:ARE) this 12 months.
Jason Corridor: What’s ARE, what do they do?
Marc Rapport: They personal and function in web lease out lab house principally. For example, they’re constructing proper now Moderna’s new headquarters in Cambridge, Mass. They’ve ag-science, know-how, and primarily life-sciences campuses.
A extremely neat manner is that they present it very graphically on the web site. You go to the Maryland part of their web site, it appears like a Google Earth map that reveals the buildings they personal proper subsequent to the Nationwide Institutes of Well being and simply close by is the Nationwide Most cancers Institute, Johns Hopkins, College of Maryland. These are the locations the place they arrange. These are collaborative life-sciences areas.
What occurs is that you may’t develop the stuff at residence. That is an workplace REIT, however you possibly can’t do the stuff at residence, so they are not in that hassle. They began about 25 years in the past. They’re one of many largest gamers on this house. They acquired 700 purchasers, virtually all the main huge pharma, and plenty of universities.
If you happen to take a look at the place they’re positioned, it is all the main life sciences facilities, Boston, San Diego, San Francisco, New York, D.C. space. They’re actually concentrated in these areas. I just like the moat they’ve.
Different firms are entering into this. Boston Properties (NYSE:BXP) is a giant workplace REIT that is a serious participant. However this firm has a giant head begin, there are long-term purchasers, they’ve escalation clauses of their lease that retains the revenue rising, and so they simply have a serious head begin on this.
This can be a actually good house to be in proper now. I do not assume the emphasis on life sciences and biotech goes to go away anytime quickly.
Corridor: The tailwind, that is the important thing. There’s a lot concern about workplace house and the change in the best way individuals work. However when you consider these industries, the tailwinds are monumental and supporting continued growth of that type of actual property market.
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