Dean Shigenaga, CFO and treasurer at Alexandria Real Estate Equities (NYSE: ARE), joined REIT.com for a video interview at REITWeek 2017: NAREIT’s Investor Forum at the New York Hilton Midtown.
Shigenaga said Alexandria is benefitting from strong internal growth and a sizeable external growth pipeline.
Limited supply of class-A assets, combined with strong demand, is creating an environment that’s “very landlord friendly,” according to Shigenaga. As a result, rental rate growth will likely continue beyond 2018. “I think we’re well positioned,” he said.
Alexandria is also in a solid position from a development perspective, Shigenaga said. In 2016, the company generated 10 new buildings, with five new buildings scheduled for delivery in 2017. That amounts to almost $200 million of incremental net operating income (NOI), or roughly a third more than NOI in 2015, Shigenaga observed.
Shigenaga also noted that Alexandria has many well-located land parcels, which enables the company to meet demand from “some of the most innovative entities” across the country.
Meanwhile, Shigenaga pointed out that new entrants into the life science real estate field highlight the long-term value of the assets. Alexandria has a strategic advantage, he noted, because the company has built “some of the most important relationships within the life science, technology and real estate industries, which actually puts us in a great opportunity to capitalize on opportunities going forward.”