Since the pandemic, office real estate investment trusts have been under a cloud. Remote workers are happy to reduce commute time and employers can cut down on occupancy costs. Alexandria Real Estate Equities, (ARE -11.77%) reports higher occupancy and rents. Alexandria Real Estate Equities, an office REIT, focuses on tenants in life sciences and technology. The company owned 74.6 million square footage in development and operation as of December 31, 2022. Alexandria Real Estate Equity's innovation clusters are used by biotech and pharmaceutical companies, government agencies and academic research institutions as well as tech companies. Its campuses can be found in major urban centers like New York City, Boston, Washington DC, and San Francisco Bay Area. Life sciences require sophisticated laboratory spaces. To earn the trust of tenants, an operator must be up to date with the latest regulations and have a history of building these properties. It is difficult for other office REITs, such as the NYSE, to enter this sector. Alexandria Real Estate Equities outlined some of the market differences during the earnings conference call. The first is that the S&P 500 has been outperformed by the pharmaceutical industry by a large margin in the last year. These companies have $300 billion available to invest in research and development (R&D). Venture capital funding is also strong, with $58 Billion in 2022. 70% of this went to an Alexandria Real Estate Equities Cluster. Alexandria Real Estate Equities expects that the next decade will be driven by large pharma R&D spending, with patents ending and treatments like mRNA or cell therapies moving from pre-clinical to commercial production. Alexandria believes that the remote environment is not as favorable to life sciences as it is for tech companies or financial firms. Alexandria's occupancy rate was 94.8% at the end 2022 and 96% over its 10-year history. Alexandria's occupancy rate was 94% at the end of 2021. Alexandria Real Estate Equities expects 2023 funds from operation (FFO), per share, to be between $8.86 - $9.06 which places the stock on a multiple 19.1 times guided FFO/share. Instead of using GAAP earnings per share, REITs use FFO to describe their earnings. This is because amortization and depreciation are a significant deduction under GAAP, but not a cash charge. Alexandria increased its dividend twice in 2022 and currently pays a $4.84 annual dividend. This amount is covered by the expected FFO per share and Alexandria's low payout ratio which shows that it is reinvesting cash. Brent Nyitray CFA does not hold any position in any of these stocks. The Motley Fool holds positions in and recommends Alexandria Real Estate Equities. Moderna is recommended by the Motley Fool. The Motley Fool follows a disclosure policy.