Alexandria Real Estate Equities, Inc.

What does it do?

Alexandria Real Estate Equities owns and rents out lab and office buildings specifically designed for biotech and pharmaceutical companies. Think of them as the landlord for science — instead of renting office space to law firms or tech startups, they rent highly specialized lab facilities to companies trying to develop new drugs and medical treatments. Their buildings are in expensive, hard-to-replicate science hubs like Boston, San Francisco, and San Diego. A company like Moderna or Bristol Myers Squibb might be paying Alexandria rent to use one of their campuses.

How does it make money?

Alexandria makes money almost entirely from collecting rent. They reported $3.0 billion in revenue last year, generated from long-term leases — typically 10 to 15 years — with large, creditworthy tenants like pharmaceutical giants and research universities. These are not short-term agreements, so revenue is relatively predictable. The company also develops new buildings and campuses, which costs a lot upfront but adds new rental income once complete.

Why do investors care?

The long-term bet here is that demand for lab space in top-tier science cities will keep growing as biotech and pharma expand. Alexandria's locations — Boston's Kendall Square, San Francisco's Mission Bay — are essentially impossible to replicate due to zoning, talent concentration, and decades of relationships. What has to go right: biotech funding needs to recover, interest rates need to come down (cheaper borrowing helps REITs significantly), and Alexandria needs to lease up the space it has already built before spending more on new development.