Cultivating Societal Flourishing Through Alexandria Real Estate
By Colin Craig, MBA, CSRIC®
What comes to mind when you hear the term real estate rental? Perhaps your mind goes back to splitting rent with roommates in college, or being handed the keys to your first apartment as a married couple. Nostalgia aside, the business model of a tenant renting property from a landlord is simple and straightforward. You pay a monthly amount, and in exchange you are given the rights associated with living in a contractually agreed upon location.
While residential real estate is likely what comes to mind for most of us when we hear the words landlord and tenant, commercial real estate is also a significant sector within our modern-day American economy. Today, we want to introduce you to one such commercial real estate company, Alexandria Real Estate, which we believe is contributing to a flourishing society by supporting innovative healthcare companies and demonstrating intentionality in its philanthropic efforts.
Alexandria serves a niche customer base: companies in the life sciences industry. In other words, Alexandria’s tenants are sophisticated, research-intensive companies in sectors such as pharmaceuticals and biotechnology. Alexandria’s mission statement confirms its commitment to life sciences, stating its goal is “to create and grow life science ecosystems and clusters that ignite and accelerate the world’s leading innovators in their noble pursuit to advance human health by curing disease and improving nutrition.”1 If you are like me, I was not sure what these “clusters” were referring to – so we will take a deeper dive into that next.
Alexandria’s Cluster Model
Michael Porter, renowned Harvard Business School professor, explains that
“Clusters are geographic concentrations of interconnected companies and institutions in a particular field… clusters affect competition in three board ways: first by increasing the productivity of companies based in the area; second by driving the direction and pace of innovation, which underpins future productivity growth; and third, by stimulating the formation of new businesses, which expands and strengthens the cluster itself.”2
Applied specifically to real estate for life sciences companies, Alexandria believes that its “cluster” business model is successful when four components come together cohesively:
- location
- innovation
- talent, and
- capital
In other words, Alexandria invests in real estate properties that it believes can foster collaboration between interconnected, innovative, and talent-driven life sciences companies. The hope is that the synergies created through this model will lead to new ideas and new medical break-throughs.
To foster its “cluster” business model, Alexandria even invests in some of its tenants through its Alexandria Venture Investments platform. In other words, Alexandria pours capital directly into some of tenants that it believes have the potential to improve human health.3 Credit check aside, the company’s Venture Investments platform shows that it believes in the long-term value creation of its business model and partners.
Shining Light Companies Meet Unmet Needs
You may be asking yourself, “Why are you telling me all of this?”
Beacon Wealth Consultants believes that the power of investment capital, rightly applied, leads to products and services that benefit individuals and society as a whole. This manner of investing glorifies God as we act out our roles as royal stewards.
We believe that Shining Light Companies are those companies that address unmet societal needs. In this fallen world, sickness and disease are realities that impact every one of us. By investing in companies, like Alexandria, who are providing critical real estate infrastructure for the life sciences industry, we are partnering (as owners) with those who are focused on restoring the health of patients in need.
But Alexandria’s impact goes far beyond its real estate investment portfolio. In its most recently published Corporate Responsibility Report, Alexandria highlighted several of its philanthropic efforts aimed at addressing some of the most challenging issues facing our society today.
Recognizing that veterans have nearly a 60% higher suicide 
rate compared to non-veteran adults, Alexandria has supported the Navy SEAL Foundation by raising more than $21 million in its mission of supporting veterans and their families.4 Together, Alexandria and the Navy SEAL Foundation have created programs to support the unique needs of veterans by providing access to cutting-edge treatments, clinical psychologists, and suicide prevention initiatives.
Similarly, Alexandria has also directed its philanthropic efforts towards fighting the opioid epidemic by partnering with a company called Verily to create a non-profit addiction recovery treatment organization known as OneFifteen.
OneFifteen “brings together dedicated facilities and services for crisis stabilization, medication-assisted treatment, residential housing, peer support, family reunification, workforce development, job placement, and community transition.”4 Since 2019, the 4.3-acre campus has treated more than 5,800 patients and has conducted more than 15,000 telehealth visits.
While the extent of Alexandria’s philanthropic efforts surpasses the length of this blog post, we hope you find encouragement today knowing that you can make a difference in the world by investing in Shining Light companies that are making a difference in the lives of others.
If you would like to learn more about our investment philosophy which drives us to invest in companies like Alexandria Real Estate, please don’t hesitate to reach out to us today.
Colin Craig, MBA, CSRIC® is a Portfolio Analyst at Beacon Wealth Consultants where he serves as a member of the investment management team.
Sources
- https://www.are.com/about.html
- https://www.are.com/cluster-model.html
- https://www.are.com/venture-investments.html
- https://www.are.com/cr/AREESG2022.pdf