アレクサンドリア・リアル・エステート・エクイティーズ（ARE）2026年第3四半期決算説明会：リース動向が改善、FFOガイダンスを維持

アレクサンドリア・リアル・エステート・エクイティーズ（NYSE: ARE）は、2026年度第3四半期のリース活動の加速を発表し、通期の調整後FFO（業務キャッシュフロー）見通しを維持した。経営陣はまた、リースの満期到来やテナントの事業縮小・撤退により、2027年にかけて入居率に圧迫がかかる見通しを示した。

主なポイント

• 調整後希薄化FFOは1株当たり1.54ドルであった。アレクサンドリアは2026年見通しの中央値6.40ドルを再確認し、レンジを6.38〜6.42ドルに縮小した。
• リース契約高は123万6,000平方フィートに達し、7四半期ぶりの高水準となった。過去に空室だったスペースのリース実績は合計45万1,000平方フィートとなり、四半期ベースで同社史上2番目に高い水準を記録した。
• 入居率は前四半期比で20ベーシスポイント上昇し87.1%となった。契約締結済みの130万平方フィートのリースは、今後入居率を3.7パーセントポイント押し上げ、年間5,200万ドルの賃貸収入を創出する見込みである。
• アレクサンドリアは6月30日以降に17億ドルの資本取引を完了した。これには10億ドルの劣後債発行と4億7,500万ドルのキャンパス・ポイント合弁事業が含まれる。
• 経営陣は、主なリース契約140万平方フィートの満期到来に伴い、2027年前半に入居率への一時的な圧迫を予想しており、ダウンタイム（空室期間）は9〜24ヶ月、失効する賃料収入は1億100万ドルと見積もっている。
• 同社は6億3,800万ドルの不動産減損損失を計上した。これは主に売却プログラムに含まれる開発プロジェクト、土地、および研究所への転用候補資産に関連するものである。

主要財務データ

事業および運用業績

当四半期中、リース活動が加速した。総リース契約高123万6,000平方フィートには過去に空室だったスペース45万1,000平方フィートが含まれ、加重平均賃貸期間は約11年となった。既存テナントがリース活動の74%を占めた。

上場バイオテクノロジー企業は引き続き低調で、四半期リース契約高のわずか1.1%にとどまった。しかし経営陣は、このテナント層が2026年第4四半期にはより有意義な貢献をすると予想している。機関需要は改善し、先端技術企業はアレクサンドリアのメガキャンパスや既存インフラに対する関心を維持した。

同社は、まだ入居率に反映されていない契約締結済みリース130万平方フィートを保有している。これらのリースは平均して2027年6月に開始される予定であり、時間をかけて入居率を3.7パーセントポイント押し上げ、年間5,200万ドルの賃貸収入を生み出す見込みである。

アレクサンドリアは当四半期中に52万9,000平方フィートの開発および再開発スペースを引き渡した。同スペースの入居率は84%で、年間4,000万ドルの追加NOIを創出する見込みである。開発・再開発パイプラインは、2025年第4四半期の360万平方フィートから2026年第3四半期には160万平方フィートへと50%以上減少した。

アーセナル・ストリート311番地において、アレクサンドリアは6万7,000平方フィートのリース契約を締結し、さらに10万1,000平方フィートについて主に先端技術テナントと交渉中である。見直された戦略により、今後数年間で将来の建設資金需要が約2億2,000万ドル削減される見通しである。

資本および貸借対照表

アレクサンドリアは6月30日以降、17億ドルの資金を調達した。これには、主要格付機関から50%の資本性を認められた利率7.25%の劣後債10億ドルと、キャンパス・ポイント・メガキャンパスの持ち分一部売却による4億7,500万ドルが含まれる。

完了および保留中の資産売却・一部持ち分売却の合計は26億ドルに達し、同社の目標値19億ドルの中央値を約7億2,000万ドル上回った。経営陣は、これにより売却益の一部を2027年に繰り延べることができる可能性があると述べた。

キャンパス・ポイント合弁事業は引き続きアレクサンドリアが支配し、連結対象としている。パートナーは当初出資額4億7,500万ドルの少なくとも5.5%に相当する配当を受け取る見込みだが、経営陣はリターンが保証されているわけではないことを明確にした。パートナーは7年後にプット権（買取請求権）を有しており、アレクサンドリアは自らの選択により現金または普通株式で決済することができる。

同社は手元流動性46億ドルで当四半期を終え、50億ドルの無担保信用枠を2032年まで延長した。経営陣は、年末の純有利子負債対年換算調整後EBITDA比率の目標5.6倍〜6.2倍の維持に引き続きコミットしており、中期的には5倍台半ばを目指している。

経営陣の業績見通し（ガイダンス）

• アレクサンドリアは初期の試算に基づき、2026年第4四半期に約125万平方フィートのリース契約を見込んでいる。
• 2026年調整後希薄化FFO見通しの中央値は1株当たり6.40ドルで維持され、レンジは上下0.02ドルに縮小された。
• 一部の取引が2027年にずれ込んだため、実現投資益の予想中央値は7,500万ドルから6,500万ドルへと1,000万ドル引き下げられた。
• 2026年の一般管理費（G&A）の見通しは1億3,400万〜1億5,400万ドルのまま維持されている。
• 経営陣は、プロジェクトの引き渡しや売却目的保有資産への指定に伴い、2026年第4四半期に資本化利息が一段と減少すると予想している。
• 経営陣は、同一物件業績が2026年から2027年、そして2027年から2028年にかけて改善すると見込んでいるが、入居率の圧迫により2027年は依然としてマイナス成長になると予想している。
• 現在のリース状況と物件引き渡しスケジュールに基づき、経営陣は2028年に平均入居率が上昇へ転じると予想している。

リスクおよび注視事項

最も重要な足元の課題は2027年のリース満期スケジュールである。主な満期到来契約である約140万平方フィートは1億100万ドルの失効賃料を伴い、見込まれるダウンタイムは9〜24ヶ月である。退去やダウンタイムが生じると予想される137万平方フィートのうち、経営陣は60%以上のスペースについて特定のテナントと交渉中であると述べた。

一部のバイオテクノロジー企業は治験の進展や新規資本調達に依存しているため、テナントの事業縮小・撤退の予測は依然として困難である。経営陣は、2027年の経済的影響を、2026年に含まれている3,000万〜3,500万ドルの年間ランレートとおおむね同水準と試算している。

2027年の売却に向けて評価中の資産が売却目的保有の会計要件を満たした場合、今後数四半期で追加の減損損失が発生する可能性がある。アレクサンドリアは、検討対象の一部の資産について、見積市場価値が帳簿価額を下回っている可能性があると説明した。

直近12ヶ月間のフリーレント（賃料無料期間）による優遇措置はリース期間1年あたり2ヶ月と高水準が続いたが、これは主にリサーチ・トライアングルにおける1件の大型非ライフサイエンス・リースの影響である。この取引を除いた場合、優遇措置は1年あたり1.1ヶ月にとどまっていた。

アナリスト質疑応答のハイライト

2027年の設備投資：経営陣は従来の見通しである11億5,000万〜16億5,000万ドルを更新しなかった。12月のインベスター・デイにて詳細な予測を提供する予定である。大部分は稼働ポートフォリオの支援および空室のリースに充てられる見込みである。

先端技術企業の需要：経営陣は、立地が適した資産に対する追加の需要源として先端技術企業を捉えている。建物のレイアウトや既存インフラへの適合性に左右されるものの、これらのテナントは貸主負担の投資資金が少なく、ダウンタイムも短く済む可能性がある。

資産の価格設定：経営陣は、金利の上昇圧力が存在するものの、最高水準のコア資産は依然としてキャップレート5%台で取引される可能性があると指摘した。より優良な資産はGAAPベースのキャップレートで6%台、その他の稼働資産は立地や品質に応じて7.5%〜8.5%で取引される可能性があると説明した。

2028年の入居率上昇への道のり：経営陣は、空室スペースの継続的なリースが不可欠であると述べた。過去2四半期でこの種のリース契約が約80万平方フィート完了したが、契約締結から実際の入居までのタイムラグは大きくなる可能性がある。

決算説明会（トランスクリプト）全文

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決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, everyone, and welcome to the Alexandria Real Estate Equities Third Quarter 2026 Conference Call. [Operator Instructions] Also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Paula Schwartz with Investor Relations. Please go ahead.

Paula Schwartz

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 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'd now like to turn the call over to Joel Marcus, Executive Chairman and Founder. Please go ahead, Joel.

Joel Marcus

Thank you, Paula, and good day, everybody, and welcome to Alexandria's third quarter earnings call. First of all, I want to thank each and every member individually and collectively of the Alexandria team for a very solid third quarter 2026. As a family team, we've impacted the lives of countless patients here in the United States and around the world, and thank you for your commitment to the life science sector through real estate venture capital that has really transformed the impact on the growth and success of this amazing industry.

And with that, I'd like to highlight a couple of key thoughts before turning it over to Marc Binda, our Chief Financial Officer, to recap the quarter. First of all, under the category of demand and leasing, we had a solid third quarter leasing over 1.2 million square feet. Notably, we had a weighted average lease term of about 11 years, which is pretty great. And we have the second highest filling a vacant space in the company's history. 74% of our leasing was existing tenants. We do have the largest life science tenant base in the industry, and it was quite well balanced except for public biotech, but we expect that to contribute importantly to fourth quarter projected leasing of about 1.25 million square feet.

Helpful was the defeat of the cap on indirect costs, a issue that we have talked about many times and that circuit court essentially beating off that cap helped drive institutional demand and leasing this quarter. One interesting indicator, people always wonder about the public biotech health rather than the XBI, I think people should look at what's called the BBC ETF about 129 stocks, 93% of which are clinical stage, which I think reflect the public biotech sector, probably more realistically.

Clinical stage biotech valuations still remain well below historical averages. There's been a good contribution this quarter from advanced technology companies as they're very attracted to our mega campuses for their recruitment and retention as well as our wonderful infrastructure that is quite well suited to their businesses.

For 2027, we have, I think, a very strong 60-plus percent of the 1.37 million square feet of lease rolls with expected downtime we're engaged with specific tenants, and that's very good at this stage.

Moving on to the capital plan, and Marc will have a lot to say about that. We had very successful very solid progress in the third quarter and through this earnings call, including the hybrid notes raising $1 billion in a very unique and very timely REIT debut for this instrument. And it's useful to note that over $160 billion of hybrid notes in the U.S. trade and get 50% equity credit from the rating agencies.

We just recently closed a $475 million joint venture at Campus Point with our continuing control of that core mega campus. Our ownership will grow to over -- back over 50% as we fund our Novartis build-to-suit. And on the Bristol-Myers space that's coming back to us on that campus, about 250,000-plus square feet rolling next year 2027, I'm pleased to say we're in advanced negotiations and expect to resolve on very favorable terms, almost 200,000 square feet of that.

Moving on to the balance sheet and leverage. Importantly, we expect to hit our year-end guidance of 5.6x to 6.2x. We closed and extended our $5 billion credit line. We have the longest weighted average remaining debt term of all S&P 500 REITs at over 11.5 years. We have just $350 million of debt maturities next year. And then I'd like to refer everybody to Pages XV and XVI of the supplement, showing our very significant progress in reducing cap interest as we transition from a decade life science [indiscernible] and COVID rocketship era when our leasing went up 4x overnight, and that was led by historic development growth. That transition is never simple and takes a fair amount of time, but we're well into it.

Significant reductions are also noted on those pages in nonincome-producing assets as a percentage of gross assets, which is very, very good. And our ARR from noncore assets versus a percentage of total ARR overall, especially from the mega campuses continuing decline. On the path forward, which we'll have more to say at our December 2 Investor Day, we'll talk about 2027 and beyond. In the interim, we're laser-focused on many items, but including most importantly, moving lease vacant space into operations as rapidly as possible, leasing currently vacant space, future rollovers and development, redevelopment space as rapidly as possible in focusing our CapEx on re-leasing with the path to NOI. We're also heavily focused on continuing dispositions of land and noncore assets, especially focused on those without a reasonable path to NOI, and we've certainly called the base considerably at this point. And then finally, execution of our capital and to ensure we continue to achieve our leverage targets.

And with that, let me turn it over to Marc for a highlight of the third quarter. Marc?

Marc Binda

Thank you, Joel. This is Marc Binda. Good afternoon, everyone. Congratulations to the entire Alexandria team for continued solid execution during the quarter, including the 5 key accomplishments. First, great progress on the funding plan with $1.7 billion of capital completed since June 30, including $234 million of dispositions of land and noncore assets completed, a $475 million joint venture completed in October and $1 billion of junior subordinated notes, which received 50% equity credit from key rating agencies.

Second, completed and pending dispositions and sales of partial interest aggregate $2.6 billion and exceed the midpoint of our $1.9 billion target by $720 million, which gives us the opportunity to defer some proceeds into 2027.

Third, we had solid leasing volume for the quarter of 1.2 million square feet, which was the highest total volume in the last 7 quarters, and included 451,000 square feet of leasing from previously vacant space, which was the second largest quarterly total in company history.

Fourth, we continue to monetize the pipeline through deliveries of development and redevelopment space, of 529,000 square feet during the quarter, providing $40 million of incremental annual net operating income and through successful resolution of projects under evaluation, including 421 Park, which is under contract to sell and our 311 Arsenal project, which has around half of the building leased or under negotiation primarily with advanced technology tenants.

And fifth, we continue to manage general and administrative expenses prudently is our G&A expenses as a percentage of net operating income are almost half the S&P 500 REIT average.

FFO per share diluted as adjusted was $1.54 for 3Q '26 and we reaffirm the midpoint of our guidance for 2026 FFO per share diluted as adjusted at $6.40 while tightening the range to plus or minus $0.02. Leasing volume for the quarter was solid at 1,236,000 square feet and represented the largest total volume in the last 7 quarters.

Five key items to highlight on leasing activity. First, leasing a previously vacant space of 451,000 square feet was up significantly over the last several quarters and represented the second largest quarterly amount of company history. Second, leasing of public biotech remained muted, representing only 1.1% of total leasing volume for the quarter and remains a future potential catalyst. And third, we expect continued positive leasing momentum into the fourth quarter with an early estimate of 1.25 million square feet. Fourth, we continue to outperform the broader markets on leasing. For our 3 largest markets, our share of the leasing represented 1.7x our total share of the lab market last 4 quarters, driven by our high-quality assets, mega campus model, operational excellence and brand. And fifth, with respect to life science tenants in the market after 2 consecutive quarters of high growth, we observed a modest 5% decline in the list of total tenants in the market across all our markets. Greater Boston and San Francisco had moderate gains and San Diego had a moderate decline.

Declines are typically caused by the demand converting to leases without an equal number of new tenants to backfill the list. Initial free rent concessions remained elevated at 2 months per year of term for the trailing 12 months ended 3Q '26, really driven by 1 large non-life science lease signed in Research Triangle. Excluding this lease, free rent concessions would have been significantly lower at 1.1 months per annum.

Tenant improvements and leasing commissions on renewed and releasing space were modest during the quarter. In fact, as a percentage of total rent, they were 7.4%, which is the lowest percentage over the last 10 quarters.

Occupancy at the end of 3Q '26 was 87.1%, up 20 basis points from the prior quarter and in line with our guidance for year-end 2026 occupancy, which remained unchanged. We continue to significantly outperform on occupancy in our largest 3 markets, ranging from 6% to 12% higher than those broader markets. Bolstered by solid new leasing during the past few quarters, we have leases aggregating 1.3 million square feet, which will add 3.7% to occupancy over time and are expected to commence in June 2027 on average with expected annual rental revenue of $52 million.

We did not make any changes to our guidance for occupancy, rental rate changes on lease renewals or re-leasing of space or same property performance. Same property net operating income was down 6.7% and 2.8% on a cash basis for the quarter. The overall decline for 3Q '26 same property performance was primarily driven by lower occupancy in 2026. That represented an improvement compared to the prior quarter performance of 3.9% and 5.8% on a cash basis, primarily related to slightly better occupancy dynamics in the comparative same-property pool and changes to the same property pool driven by certain properties that were designated for held for sale during the quarter.

Despite current challenges in the life science real estate market, we continue to benefit from a high-quality tenant base with 57% of our annual rental revenue coming from investment grade, our publicly traded large-cap tenants, long remaining lease terms of 7.7 years, average rent steps approaching 3% on 97% of our leases and strong adjusted EBITDA margins of 65% for the quarter.

We continue to focus on the successful reduction in management of general and administrative expenses. We remain on track with our guidance range of $134 million to $154 million for 2026. And our trailing 12-month G&A as a percentage of net operating income through 3Q '26 of 7.5% is almost half of the average for all S&P 500 REITs over the last few years of 14.3%. Realized gains included in FFO per share diluted as adjusted from our venture investments were $16 million for 3Q '26 and $44.5 million for the first 3 quarters of 2026. We lowered our guidance range for realized investment gains by $10 million at the midpoint from $75 million to $65 million due to certain transactions being pushed out into 2027.

We expect average real estate basis capitalized to reach a bottom for 2026 in the fourth quarter, ranging from $3.4 billion to $4.9 billion, which is a 40% to 60% decline from the basis that was capitalized for all of 2025. This is generally consistent with the significant 40% reduction in nonincome-producing assets as a percentage of gross assets, which has declined from 20% at the end of 2024 to 12% as of 3Q '26.

Capitalized interest for 3Q '26 was $62.9 million. It was down $11 million from the prior quarter, primarily driven by significant deliveries from the pipeline, coupled with redevelopment projects that reached milestones and were paused. We expect a further decline in capitalized interest in the fourth quarter, driven by 2 large projects designated as held for sale at September 30, coupled with significant deliveries from the pipeline in 3Q '26, including the 199,000 square foot delivered to Novo Nordisk for its R&D center at 60 Sylvan on our Waltham mega campus.

We continue to execute and favorably resolve our development and redevelopment pipeline. From 4Q '25 to 3Q '26, the pipeline has shrunk by more than 50% and from 3.6 million square feet to 1.6 million square feet. This included 3 major accomplishments during 3Q '26, including the following: first, we delivered 529,000 square feet of development and redevelopment space, it was 84% occupied and will generate $40 million of annual net operating income. Second, we entered into a contract to sell most of our remaining investment in our development project at 421 Park Drive in the Fenway with a 4Q '26 anticipated closing date. And third, with respect to our 311 Arsenal Street project in Watertown, we've executed leases of 67,000 square feet and 101,000 square feet of leases are under negotiation, primarily with advanced technology tenants, which has allowed us to pivot to a lower-cost advanced technology execution and will reduce future construction needs by approximately $220 million over the next few years.

As of 3Q '26, we have 906,000 square feet of development and redevelopment projects under construction and expected to stabilize through 2028, which are 77% leased or negotiating. In addition, we have 667,000 square feet, primarily related to 2 projects for which we are evaluating the business and financial strategy. The first is 40 Sylvan Road, which is located in our Waltham Mega campus. We continue to believe this project will be attracted to advanced technology tenants that may find the campus as well as certain elements of the building attractive and may not require a conversion to lab.

The second is 3000 Minuteman Road, which is located in our Andover Mega campus. The campus is very attractive to advanced technology tenants as evidenced by the 160,000 square foot lease we executed for an adjacent building on this campus in 2Q '26. If we complete significant advanced technology leases, we may place all or some of these spaces into the operating pool, which may reduce operating occupancy in the near term, but more importantly, will reduce our future capital needs and generate near-term revenue upon delivery.

We continue to make very good progress in raising capital with $1.7 billion completed since June 30, including the $1 billion junior subordinated notes offering completed in August. The 7.25% junior subordinated notes offering had several important benefits, including the following 4 key features. First, the rating agencies ascribe 50% equity credit to the notes, which will help us achieve our 2026 leverage goal. Second, it provides an implied cost of equity capital superior to the cost of issuing common equity as well as noncore stabilized operating asset sales. Third, it reduces our 2026 target for asset sales and near-term reliance on joint ventures. And fourth, it represents a fixed cost of capital for at least 5 years with significant flexibility to refinance thereafter.

We are highly focused on and expect to meet our $1.9 billion midpoint for dispositions and sales of partial interest. Our team is making good progress with $717 million completed, including $242 million of noncore and land dispositions and a $475 million sale of a partial interest related to our Campus Point Mega campus. In addition, we have [ 355 million ] under contract and subject to nonrefundable deposits an additional $1.5 billion of dispositions and sales of partial interest with signed letters of intent or in late-stage negotiations. Included in the $1.5 billion of pending transactions is one large joint venture for which we are actively engaged.

The aggregate sum of the completed pending transactions is $2.6 billion which exceeds the midpoint of our 2026 guidance by approximately $720 million, which may provide us the opportunity to potentially close certain transactions in '26, but defer the capital into 2027.

There are 3 key points on the Campus Point joint venture transaction I'd like to highlight. First, Alexandria will control and consolidate the joint venture. Second, the joint venture contains a waterfall distribution model that shifts distributions over time. But at a minimum, we expect the joint venture to make distributions to our new partner equivalent to at least 5.5% of their initial $475 million contribution in year 1 and beyond. And third, our partner has a put right exercisable after 7 years, and we may settle that amount in cash or shares of common stock at our election.

In connection with our disposition program, we did recognize impairments of real estate of $638 million during the quarter, of which substantially all of this amount is related to developments in process land or properties that were laboratory conversion opportunities. The 2 largest impairments made up 75% of the total balance and included the following: first, we are under contract to sell to an institutional user, substantially all our remaining space at our 421 Park Drive development project located in the Fenway. This project was acquired in January 2021 and was under construction. As a result of the expected sale, this removes the overhang on lease-up of this project, and the buyer will take on the cost to complete the interior lab improvements, which we estimate to be approximately $136 million.

And second, this relates to a 4-building office project related or located in our Palo Alto submarket, which was acquired in January 2022 with a business plan to convert the buildings for laboratory use. This market has subsequently had limited demand for life science tenants, and we now expect to sell these assets rather than go forward with the redevelopment.

Looking forward, we have real estate assets under consideration for potential disposition in 2027 that may have estimated market values below their respective carrying values. These assets remain as held for use assets as of 3Q '26 and remain recoverable under probability weighted recovery analysis. And accordingly have not been impaired due to a variety of factors necessary to designate them as held for sale including the lack of a final decision to proceed as well as our current estimation that it is unlikely that we will complete these sales within the next 12 months.

We could have impairments over the next couple of quarters if these types of assets subsequently meet the accounting requirements for held-for-sale designation as we refine our approach, make final decisions to proceed, obtain the necessary approvals and commence the disposition marketing process.

We continue to have a strong and flexible balance sheet. Our corporate credit ratings rank in the top 20% of all publicly traded U.S. REITs. We have tremendous liquidity of $4.6 billion as of 3Q '26. And we recently extended our $5 billion unsecured senior line of credit to 2032, providing additional significant flexibility. We continue to have the longest average remaining debt maturity among all S&P 500 REITs with an average term of 11.6 years, and we remain committed to meeting our leverage goal for 4Q '26 of 5.6x to 6.2x on a net debt to annualized adjusted EBITDA basis. Over the intermediate term, beyond 2026, we would like to be around mid-5x for leverage.

We tightened the range of our guidance for 2026 FFO per share diluted as adjusted with no changes to the midpoint of $6.40. Key moving pieces underlying our 2026 guidance included a reduction of $10 million realized investment gains and slightly later timing on expected dispositions and sales of partial interest. Our earnings release contains several key considerations that could have an impact on our results beyond 2026, which are highlighted on Pages 6 and 7.

Three key important takeaways from those pages to highlight. First, we expect temporary pressure on occupancy in the first half of 2027, which includes the impact of the 1.4 million square feet of key lease expirations, which are expected to have on time ranging from 9 to 24 months on average with expiring rent of $101 million, and the potential for tenant wind downs. Based upon our current outlook and considering typical lag times between lease execution and delivery, we expect to see average occupancy growth in 2028.

Second, we expect same property performance to improve from both 2026 to 2027 and from 2027 to 2028, although we still expect '27 to be negative driven by occupancy.

And then third, we continue to prioritize capital spending with high incremental returns, including cost to meet the market and lease up vacant space. And accordingly, we expect construction spending related to our operating assets to comprise a significant component of next year's construction forecast. We continue to refine our capital funding plan for 2027, and we expect to have access to the same funding tools used in 2026, including noncore and land dispositions, sales of partial interest and other cost-effective capital. We also expect to continue to manage our leverage and other credit metrics carefully.

We continue to focus on the execution of the steps for our path forward that we established at our Investor Day. Our seasoned and best-in-class team remains disciplined and committed to making forward progress, including maintaining our strong balance sheet, solid lease volumes, reducing capital needs where it makes sense, procuring cost-efficient sources of capital, effectively managing G&A and focusing on our highly differentiated mega campus strategy. We believe these steps put us in a great position to be highly successful. Now I'll turn it back to Joel.

Joel Marcus

Thanks, Marc. Operator, please open it up for questions. .

Operator

[Operator Instructions] Our first question today comes from Jim Kammert from Evercore.

質疑応答

James Kammert

Marc or team, as regards the new joint venture, in that waterfall, is there any particular fixed cadence to the shift of the cash flows over time? Or is it more elective? I'm just trying to think how they get to their IRR and how that impacts kind of what ARR is to hold on to in the interim?

Marc Binda

Yes. Jim, it's Marc. So, yes, there's a 5.5% that's in place for at least the first several years. There are steps in that over time. And as I said, there is a put mechanism that's intended that if exercised, would allow the investor to get to a certain IRR that they're targeting.

James Kammert

And the second question kind of related as regards to the other joint ventures you're working on hoping to close or negotiated at the end of the year, will that have a similar structure do you imagine a put and some sort of minimum? I'm just curious how the structuring of that is looking at this point.

Marc Binda

We -- that is a structure that we're looking to potentially replicate, but the other joint venture that I did mention that we're actively engaged on right now is different than the campus point structure.

Operator

Our next question comes from Farrell Granath from Bank of America.

Farrell Granath

My first question is around the tenant wind downs. First, for 2026, obviously, we had a little step-up in the tenant wind-downs in guidance and then the commentary around expecting similar for 2027. I was curious if that is outlined just given or a conservative number just from what you saw in 2026? Or you already have known move-outs or wind down expected in '27?

Marc Binda

Yes. Farrell, so that is an estimate at this point. These situations are generally really hard to predict. We do go through and diligently underwrite each and every tenant. A lot of these tenants have milestones coming up, which will dictate whether or not they're able to raise capital. So certainly, once we know that a tenant is vacating, the deferred rent gets written off. So it gets written off when they move out, they hit the occupancy role. So this is really our best guess at this point as to what happens next year.

The other thing I would mention here is the run rate for 2026 has a similar number in there, $30 million to $35 million. So -- we're not -- they shouldn't necessarily result in incremental dilution to next year because we're really just saying we think we'll have a similar type of hit to the economics next year as we've had this year.

Joel Marcus

Yes. So Farrell, this is Joel. One other thing that -- or a couple of things to keep in mind, since the kind of bear market, which followed the historic bull run and the COVID run up, more and more funders of companies, certainly on the private side and sometimes on the public side have sought to combine or merge companies, which historically they did, but the pace at which they've done it over the past handful of years has been much more pronounced. And I think we've had one case where a tenant after we underwrote them, ended up taking on venture debt, and they were essentially almost put out of business or were put out of business as it goes back a handful of years by the debt being called by a lender who was kind of not a traditional venture debt provider and just felt that the matters going on with the company were such that they triggered the debt without even bridging the covenant.

So we've seen things in this, I don't know if you call it cycle or just episodic period that are different than past practice. So we're trying to be conservative here. But thank you.

Farrell Granath

And I just also wanted to ask about the progress that you've made in your 2027 key expirations now with the 22% under negotiation, which was essentially at 0 in the last quarter, so definitely, making progress there. If you could give a little bit more on the profile of that leasing. Is this -- any of this on renewal or net new leasing and any economics or expected downtime relative to your underwriting as you're going through those negotiations?

Joel Marcus

Yes. So I think I mentioned in my kind of prepared remarks, if you look at the 1.37 million square feet that's rolling that are move-outs with downtime a bunch of that, like, for example, in San Diego is Bristol-Myers leaving space to go into their new building. That amount, the $1.37 is fully moved out and we now have over 60% in active tenant, some in late stage and some in early stage, but with specific tenants. So I think that's a really good sign for us at this stage to have that many specific situations under discussion or negotiation, I should say.

Operator

Our next question comes from Ronald Kamdem from Morgan Stanley.

Ronald Kamdem

Two quick ones. I think last quarter, you talked about $1.15 billion to $1.65 billion of development spending in '27. Just curious if we can get an update on the current thinking and sources and uses and leverage impact on that spending in '27?

Marc Binda

Yes. Ronald, yes, you're right. That was the estimate that we had given off of our 2Q earnings call, $1.15 billion to $1.65 billion. We expect to be able to refine that number over the next 5 weeks here as we get prepared here for Investor Day. So I would say stay tuned, we'll have a better number in early December.

The one thing I can certainly tell you is we expect a big chunk of that to be targeted towards the operating portfolio, and a lot of that is stuff that's either leased or under negotiation. But we'll -- again, we'll have a better number here soon.

Ronald Kamdem

And there's no sneak peek if that's going to be lower or higher or?

Marc Binda

I don't think I can say at this point, Ron.

Ronald Kamdem

Okay. Got it. My second question, just going back to the JV, just trying to get my arms around it. So the returns are guaranteed, is this being treated as equity or debt? And how does the value of the JV change given sort of that put option? Just high level, how is that going to work?

Marc Binda

Yes, sure. Yes, the joint venture is treated as permanent equity, Ronald. So there is a put mechanism. There is a call option that Alexandria will hold, which really strategically is important to us because it allows us to control our destiny there long term on a campus that we really like, but in the meantime, get a very effective or efficient cost of capital, particularly in the near term at the 5.5%.

Peter M. Moglia

This is Peter. Sorry, I'm a little under the weather, so my voice is bad. There is no guarantee just to be clear, you had stated that it was guaranteed that, that is not true.

Operator

Our next question comes from Seth Bergey from Citi.

Seth Bergey

I just kind of wanted to go back to kind of your updated views on kind of pricing for assets. You obviously came up with this creative structure for the joint venture and are contemplating. It sounds like another one. But just where do you think kind of core assets price in today's market, especially given the macroeconomic uncertainty?

Peter M. Moglia

This is Peter. I'll take this one. In past conferences, I've been talking about, I thought our Tier 1 core assets would still have a 5 handle. I think that's getting pressured by rates. But I would say that things like Campus Point and other high quality would still have that threshold. But I would say that our -- overall our better assets would trade with a 6 GAAP handle on it. And then we've got some good workhorse assets that could trade anywhere between 7.5% and 8.5%.

The market is a specific or it is specifically tied to markets. The big 3 markets tend to have lower cap rates and markets like Seattle tend to have lower cap rates. Those markets are usually are typically looked at by institutional investors as favorable markets. And historically, we've done well there, but there are other markets that are more suburban that typically have 100 to 150 basis point spread, not because of the quality of the assets or the tenancy, but just because of the location. Hopefully, that's helpful.

Seth Bergey

And then maybe just for a second one, just going back to your comments on kind of the mid-5 leverage target. And as we think about sources and uses for next year, but how do kind of the JVs go into those computations because you get the benefit of the cash, but then since you saw control the EBITDA is still consolidated. So is that the right way to think about how those -- how that structure kind of factors into that calculation?

Marc Binda

That's correct, Seth. We would continue to consolidate the Campus Point joint venture and the EBITDA would stay on balance sheet or stay on the income statement and included in the leverage computation.

Operator

Our next question comes from John Kim from BMO Capital Markets.

John Kim

I know you don't want to give out 2028 guidance at this point, but you did mention that you've seen improvement in same-store NOI from 2027. And I'm just wondering how you anticipate getting there just given known move-outs that you provided and the tenant buydowns on our numbers is the 10% headwind to occupancy over the next couple of years. So I just want to clarify, do you expect occupancy to improve by 2028 to drive that same-store performance?

Marc Binda

Yes. John, yes, clearly, in order to have occupancy growth in 2028, we're going to have to continue at a very healthy pace of leasing, particularly the leasing of vacant space. So we -- this quarter was a really a strong quarter in that regard. We had 450,000 square feet leased that was previously vacant, second highest in company history. So we're going to need to continue to focus there and we're working hard every day to continue that. So that's going to be key.

John Kim

Okay. And then as a follow-up, I just wanted to ask about embracing advanced technology as a leasing opportunity going forward, given it does have a lower rent than life sciences, but also lower CapEx. So I'm wondering how you view this tenant base in your leasing?

Joel Marcus

Well, I think it's fair to say, John, much like our early tenants, Google and then during the heydays of the last technology boom companies like Stripe and Pinterest, those folks came to us because of our ability to put creative spaces together that allow them to retain and recruit great talent and doing -- and having the infrastructure for what they needed, and we're finding the same thing with a whole range of advanced technology clients. There have been a whole series of articles about those coming to our campuses for both the infrastructure and what's offered on the campus. So kind of speaks for itself.

Peter M. Moglia

And this is Peter, if I could add. It's not only a benefit to Alexandria as a wider tenant base to lease from, but it is also going to take a lot of the current supply that was built as -- or -- and marketed as lab, it probably shouldn't have been, and we're definitely seeing that. So it's been [indiscernible] for that segment to really start to have a bunch of funding coming into it and a lot of companies create -- being created, because lab buildings are perfect for what they need, and we're definitely seeing that as a source to chew up some of the supply.

Joel Marcus

Yes. Now 1 footnote to what Peter said, which I think is generally true is some of those buildings are really true zombie buildings built in locations that people just don't want to go to. So there's got to be some other adaptive reuse. But in general, if well located, they would be recipients of that demand. .

Operator

Our next question comes from Anthony Paolone from JPMorgan.

Anthony Paolone

First question is on the $1.9 billion of pending dispositions. I think it's the $1.5 billion and the $350 million or so under contract. What are the GAAP and cash type cap rates we should be thinking about for that roofing?

Marc Binda

Yes. Tony, maybe I'll talk about it in the context of I would say, noncore and land. There's definitely a combination of both of those in the 355. A big chunk of that, as an example, is the 421 Park. So that will have basically no cap rate. The bigger chunk the, call it, $1.5 billion of pending, a big chunk of that is the joint venture that we're working on. And I would have -- I apologize, I have to ask you to stay tuned on the economics since we are currently in advanced discussions on that deal.

Anthony Paolone

Okay. Got it. And then going back to the discussion on the construction spending for next year, if I look at the remaining spend on the few developments that you have underway, I think it's about $0.5 billion. So whether it's the $1.4 billion prior midpoint or some new number that you'll give us at Investor Day, am I missing anything to assume that anything above the $500 million would be like CapEx? Or am I missing a different type of bucket?

Marc Binda

Yes. No, there'll definitely be some capitalized costs for the portfolio, right? So capped interest -- capitalized operating expenses. As an example, in this year's construction forecast, we've got -- let's see, we've got $210 million of the $1.75 billion is future, call it, land, almost all of that is capitalization. So there will be some of that as well. TBD, what that ends up being. But you're right, Tony, it suggests that there is a large amount that is going to be tied into the operating portfolio for leasing a vacant space. So that will be the -- that will definitely be the majority.

Operator

Our next question comes from Rich Anderson from Cantor Fitzgerald.

Richard Anderson

Marc, you mentioned the tenant market number down 5% in the third quarter. If I remember correctly, that number was sequentially up 30% in the first quarter. So that perhaps was tied to the removal of that overhead cap situation made that created activity. But my question is, is the 30% in the first quarter in terms of its sort of onetime-ishness sort of likewise onetime-ishness when you talk about this down 5% in the third quarter. I'm curious like what does this [indiscernible] use a cool word in terms of ongoing tenant market activity in 2027, if you were to guess today.

Peter M. Moglia

Rich, it's Peter. Congratulations on expanding your vocabulary. The -- yes, look, the 30% quarter-over-quarter from 4Q to 1Q was definitely an anomaly. I had never seen it jump like that. And then last quarter, you may recall, it went up another 10% -- another 10%. That is something that we would see. So a 5% move down is really kind of normal. So it usually goes from flat to plus or minus 7% or so percent.

So I think, at least for now, there was probably some pent-up demand that came out boosted from 4Q to 1Q a little bit more leaked out after that. And I think we're probably in a stable situation at this point. That's my best guess.

Richard Anderson

Okay. Fair enough. Good. Good stuff, Peter. Second question for me is just broadly on the component of dispositions related to partial interest of core assets, what is your appetite for that in terms of the 3 buckets marked that -- or anyone could respond to this noncore assets land and partial interest -- partial sales. Is that #3 in the total pole? Or do you think it could be an equal player in 2027 just because you get better pricing there?

Marc Binda

Yes Rich, it will certainly be on the menu. I mean I think what we've -- what we've done and what we expect to do this year is a little unique. We did one on a mega campus as we talked about. I think the other JV that we're working on will be a little different than that. So likely something having to do with multiple assets -- multiple types of assets, so it could be core and noncore. So certainly, as you mentioned, future JVs would be on the menu for next year as well as some land and some noncore assets that we weren't able to get done this year, we'll certainly be on the menu for next year to resolve a big chunk of the capital plan. .

Richard Anderson

And related to answer, [indiscernible] what's the efficient frontier on like percentage of the total represented by mega campus. I know it's 80%. I think it's up from 74% to start the year. I mean, is -- could that be 100% someday? Or will there always be a need for some sort of non-megacampus sort of assets in and around the portfolio?

Joel Marcus

Yes, I think there will always be a need, Rich. This is Joel. Remember, too, we have a variety of core, but non-mega campus assets. A good example is the Lilly building in the Seaport. So we will continue to have a balance. I think you may see it move up to 85%, maybe at a high 90%, but I wouldn't expect it would be 95% or 100% at any point.

Operator

Our next question comes from Michael Carroll from RBC Capital Markets.

Michael Carroll

Joel, in your prepared remarks, you still seem to be pretty cautious on the macro outlook for the space. But Alexandria did see some better leasing trends in 3Q and the expected in 4Q. Can you kind of explain the difference there? Is that just more leasing activity from the advancement or the tech tenants versus core life science tenants?

Joel Marcus

Well, I think you have to remember and go to the pie chart in our supplement, remember, this niche and it is a niche and life science sector is made up of a whole bunch of sectors, subsectors, if you will, and [indiscernible] have gone through the health of each. Each kind of are different for different reasons. Obviously, public biotech with marketed products or approved products is one that would be normally pretty steady. It's the public biotech in the clinic, but without immediate data as value inflection milestone is where the pinch point has been, private has been historically pretty stable. It's gone through ups and downs, but it's pretty stable. Institutional has come roaring back in an important way life science product services tools, et cetera, has been continually strong.

So I think don't get lost in public biotech as the entire sector. Pharma is obviously chunky, but steady. So that's what I would say. But we are expecting to see based on the best we can tell from our discussions, negotiations, fourth quarter should see an upswing in public biotech for the first time in quite a number of quarters. And I think that's irrespective of Alexandria, I think that's healthy for the industry.

Michael Carroll

Okay. Great. And then on the new disclosure that Alexandria expects about downtime at 718,000 square feet on the 2028 lease expirations. Does this largely reflect the above-average move-outs that year? Are there still some large leases that are TBD? I'm just trying to get a handle on the remaining 3 million square feet. Should we just assume that, that's normal tenant retention? Or is that still kind of up in the air, and you can see that have lower tenant retention kind of similar to 2027?

Joel Marcus

Well, it's a combination. We do have one large move-out in Tech Square, which is coming to the end of a lease, actually, a big pharma that has consolidated elsewhere years before. And that's an example of a backfill, but we are seeing activity here we are, what, 1.5 years away or 1.25 years or whatever it may be, and we're starting to see some activity there. So our thoughts are maybe more positive than they were, say, 3, 6, 9, 12 months ago. .

Michael Carroll

Okay. And then just 1 clarification. I mean could that known tenant move-out number increase significantly off of that 718? Or should we think about that 718 is the big known move-outs in the...

Joel Marcus

That's the big one, yes. Or the big combination, yes.

Operator

Our next question comes from Wes Golladay from Baird.

Wesley Golladay

Looking at the 2027-'28 expirations overtime, are you open to having advanced technology tenants look at that space for all the locations? Or you going to hold some back for life science tenants?

Joel Marcus

Well, yes, you can't kind of make a judgment like that because each space is so unique and where you have built out lab space obviously, that's not necessarily a target for advanced technology, but where you may have office space or you have shelf space in a building that has robust infrastructure, and it's on a campus that certainly could be 311 Arsenal, which Marc alluded to on our Watertown Arsenal on the Charles campus is a good example of that. So they're not interchangeable 1 for 1 by any means.

Wesley Golladay

Okay. And then a quick follow-up on that. If you did -- if you did pursue the advanced technology tenants, would the downtime be less?

Joel Marcus

Well, again, it's space by space. But generally, yes, because oftentimes, these are extremely well-capitalized companies that are prepared to put in significant tenant improvements on their own. They -- a little bit like pharma, pharma generally puts in a huge amount of CapEx on their own. So we would expect, yes, less downtime.

Operator

And our final question this afternoon comes from Dylan Burzinski from Green Street.

Dylan Burzinski

Just maybe touching on the outlook for partial interest sales on sort of your guys' core assets. I mean, should we be expecting most of that capital to be coming from or derived from more structured transactions like you guys did at Canvas Point? Or will there potentially be just outright partial interest sales included in that?

Marc Binda

Yes. Dylan, so for the balance of this year, we got the Campus Point joint venture done. The other joint venture we're working on for 2026 is not that -- I mentioned earlier, it will probably be a combination of multiple assets, core and noncore, not necessarily mega campus driven. Next year is a little bit of a TBD. I certainly, as I said at the outset of the call, the structure we used for the Campus Point joint venture would be something that we would consider doing again. But it's a little too early to kind of comment on what the mix of partial interest sales might look like. But I would say we're certainly open to both, but we're also very focused on finding the most cost-efficient capital in this environment.

Dylan Burzinski

That's helpful. And then maybe something you touched on earlier in Q&A about '28 and new leasing needing to continue to be strong. But as we sort of think about some of the commentary you guys outlined, right, an increase in -- increase in occupancy, an improvement in same-store NOI growth versus '27. I mean is the idea that you need new leasing activity to pick up from what you guys saw in Q3? Or would it be a continuation of that? Just sort of curious, what's sort of baked into some of that commentary?

Marc Binda

Yes. Well, certainly, this quarter was a strong number. Last quarter was actually a pretty strong number as well in terms of new leasing. So have really seen that the last 2 quarters. We, I think, combined over the last 2 quarters, we've leased over -- or almost 800,000 square feet of that type of leasing. And we've started to accumulate a large amount of space that's been leased that hasn't yet hit the occupancy roles. And we're seeing that there can be a significant delay between when those leases get executed and when they get delivered, right? If you look today, we've got 1.3 million square feet that's on average, that stuff is not delivering until June of next year.

So our commentary for '28 was really based upon market conditions today and what we think we can get done, understanding that in many cases, a lot of these spaces will have a fair amount of a lag between when we lease and when we deliver.

Operator

And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Joel Marcus for closing remarks.

Joel Marcus

Thank you very much, everybody, and look forward to meeting everybody on Investor Day. Thanks so much.

Operator

And with that, ladies and gentlemen, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.