ALEXANDRIA REAL ESTATE EQUITIES INC
For the period ended Dec 31, 2024. Filed Jan 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Jan 27, 2025
ARE$44.80-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-01-29.
0001035443-24-000072
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-01-27.
0001035443-25-000067
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 499 previous paragraphs and 1601 current paragraphs.
128 unchanged; 269 reworded; 551 added; 101 removed; 1 previous and 653 current paragraphs rearranged.
Tables are not compared: 57 previous and 57 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (551)
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in “Results of operations” in Item 7 in this annual report on Form 10-K.
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Continued operational excellence and solid results amid challenging macroeconomic environment
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2014–2020 average of 4.3 million RSF.
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•Rental rate increases on lease renewals and re-leasing of space were 16.9% and 7.2% (cash basis) for theyear ended
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•Tenant improvements and leasing commissions on renewed and re-leased space executed during the year ended December
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31, 2024 represented only 8.4% of total lease term rents, the second lowest percentage of total lease term rents in the past
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five years.
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•Total revenues of$3.1 billion, up 8.0%, for theyear ended December 31, 2024, compared to$2.9 billion for theyear ended
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•Net operating income (cash basis) of$2.0 billion for theyear ended December 31, 2024, up$176.9 million, or 9.8%, compared
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to theyear ended December 31, 2023.
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to theyear ended December 31, 2023.
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Continued rigorous focus on management of general and administrative costs
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•General and administrative expenses as a percentage of net operating income of 7.6% for theyear ended
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December 31, 2024, compared to 9.8% for theyear ended December 31, 2023.
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•We expect general and administrative cost savings of approximately$32 million in 2025, based on the midpoint of our
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guidance, compared to 2024, from a variety of cost-control and efficiency initiatives, including:
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•Personnel-related matters: reduction in headcount over the last two years and restructuring of compensation plans.
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•Streamlining of business processes: systems upgrades, process improvements, and cost reduction in legal, technology,
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and operational support services.
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Attractive dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for
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reinvestment
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$5.19 per common share for theyear ended December 31, 2024, up 23 cents, or 5%, over theyear ended December 31,
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•Dividend yield of 5.4% as of December 31, 2024.
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•Dividend payout ratio of 55% for the three months ended December 31, 2024.
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years ended December 31, 2019 through 2024.
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Strong execution of Alexandria’s 2024 capital strategy
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Our 2024 capital plan included$1.4 billion in funding from strategic dispositions that focused on a portfolio of diversified
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assets, of which$1.1 billion was completed during the three months ended December 31, 2024. Refer to “Dispositions” in Item 2 in this
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annual report Form 10-K for additional details.
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As of the date of this report, our share of pending dispositions subject to negotiations aggregated $539.5 million. These
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transactions represent approximately 32% of the$1.7 billion midpoint of our 2025 guidance range for dispositions and sales of partial
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interests.
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Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of$55 million and
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$118 million, commencing during the three months andyear ended December 31, 2024, respectively, and isexpected to deliver
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incremental annual net operating income aggregating$395 million by thesecond quarter of 2028.
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•During thethree months ended December 31, 2024, we placed into service Megacampus development and redevelopment
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projects aggregating 602,593 RSF that are 98% occupied across multiple submarkets anddelivered incremental annual net
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operating income of$55 million. Key deliveries during thethree months ended December 31, 2024 include:
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•171,102 RSF at 4155 Campus Point Court located on the Campus Point by Alexandria Megacampus in our University
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Town Center submarket;
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An operationally excellent, industry-leading REIT with a high-quality, diverse client base to support growing revenues, stable cash flows, and strong margins
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•Weighted-average lease term of 11.3 years for the year ended December 31, 2023, above our historically long weighted-average lease term of 8.8 years over the last 10 years.
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(1)Includes the re-lease of 99,557 RSF to Cargo Therapeutics at 835 Industrial at a 4.1% decline in the cash rental rate compared with the rate from the former tenant that was less than three years into a 10-year lease. Excluding this lease, the rental rate increase on renewals and re-leasing of space was 32.4% and 17.0% (cash basis) for 2023.
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•Total revenues of $2.9 billion, up 11.5%, for the year ended December 31, 2023, compared to $2.6 billion for the year ended December 31, 2022.
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•Net operating income (cash basis) of $1.8 billion for the year ended December 31, 2023, up $185.8 million, or 11.5%, compared to the year ended December 31, 2022.
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Consistent dividend strategy focuses on retaining significant net cash flows from operating activities after dividends for reinvestment
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•Dividend yield of 4.0% as of December 31, 2023.
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•Dividend payout ratio of 56% for the three months ended December 31, 2023.
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Execution of our value harvesting and asset recycling 2023 self-funding strategy
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Our 2023 capital plan included $1.4 billion in funding primarily from dispositions and partial interest sales, of which $439.0 million was completed during the three months ended December 31, 2023, and focused on the enhancement of our asset base through the following (in millions):
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In January 2024, our existing ATM program became inactive upon expiration of the associated shelf registration. We expect to file a new shelf registration and ATM program in the near future.
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Alexandria’s highly leased value-creation pipeline delivered the highest incremental annual net operating income in Company history of $145 million and $265 million, commencing during the three months and year ended December 31, 2023, respectively, and drives future incremental annual net operating income aggregating $495 million
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•During the three months ended December 31, 2023, we placed into service development and redevelopment projects aggregating 1.2 million RSF that are 99% leased across multiple submarkets and delivered incremental annual net operating income of $145 million. Deliveries during the three months ended December 31, 2023 include:
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•Accelerated delivery of 462,100 RSF at 325 Binney Street in our Cambridge submarket, which is 100% leased to Moderna, Inc.;
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•345,996 RSF at 15 Necco Street in our Seaport Innovation District submarket, which is 97% leased to Eli Lilly and Company;
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•278,282 RSF at 1150 Eastlake Avenue East, a multi-tenant building, in our Lake Union submarket, which is 100% leased; and
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•88,038 RSF at 6040 George Watts Hill Drive in our Research Triangle submarket, which is 100% leased to FUJIFILM Diosynth Biotechnologies.
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•66% of RSF in our value-creation pipeline is within our mega campuses.
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(1)Represents expected incremental annual net operating income to be placed into service, including partial deliveries that stabilize in future years.
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(3)70% of the leased RSF of our value-creation projects was generated from our existing tenant base.
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(1)Refer to the definition of “Capitalization rates” in the “Non-GAAP measures and definitions” section within this Item 7 in this annual report on Form 10-K for additional information.
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The table below presents our increasing capitalized interest and decreasing interest expense during 2021, 2022, and 2023 (dollars in thousands). However, there can be no assurance that this trend will continue into the future.
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•Solid same property net operating income growth of 3.4% and 4.6% (cash basis) for the year ended December 31, 2023 and anticipated same property net operating income growth of 1.5% and 4.0% (cash basis) at the midpoints of the respective guidance ranges for the year ending December 31, 2024.
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•Solid rental rate increases of 29.4% and 15.8% (cash basis) for the year ended December 31, 2023 and anticipated rental rate increases of 15.0% and 9.0% (cash basis) at the midpoints of the respective guidance ranges for the year ending December 31, 2024.
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•In 2023, our executed leases aggregated 4.3 million RSF. Although this is lower than the 8.4 million RSF and 9.5 million RSF of leasing activity in 2022 and 2021, respectively, it is important to recognize that the years 2021–2022 represented an exceptional period due to the significant growth in demand fueled by strong capital markets. Excluding these years, the 2023 leasing activity has normalized and was consistent with our historical annual average of 4.2 million RSF executed from 2013 to 2020.
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•60% of our projects aggregating 5.7 million RSF that are primarily expected to be placed into service and stabilized during 2024–2027 are either leased or under negotiation;
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•Strong occupancy of 94.6% as of December 31, 2023 and anticipated strong occupancy of 95.1% at the midpoint of our guidance range as of December 31, 2024; and
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•Although life science venture funding has declined compared to a peak in 2020–2022, it remains robust. In 2023, funding levels exceeded those achieved in each year from 2013 to 2019.
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•CBRE’s “2024 U.S. Life Science Outlook” report, published in January 2024, highlighted that “FDA approvals of novel drugs in 2023 neared the second-highest annual total over the past 25 years.” Alexandria tenants were responsible for almost half of novel FDA-approved therapies since 2013.
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•Our net debt and preferred stock to Adjusted EBITDA ratio was 5.1x for the three months ended December 31, 2023 annualized, equaling the lowest leverage levels in Company history.
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•Continued strategic value harvesting through real estate dispositions, partial interest sales, and settlements of forward equity contracts.
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•In 2023, sales primarily of real estate assets not integral to our mega campus strategy generated $1.3 billion of capital for investment into our highly leased development and redevelopment projects and strategic acquisitions. In connection with these transactions, we recorded gains or consideration in excess of book value aggregating $284.8 million.
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•During the three months ended December 31, 2023, we settled our forward equity sales agreements that were outstanding as of December 31, 2022, by issuing 699 thousand shares of common stock, for which we received net proceeds of $104.3 million.
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•In January 2024, our existing ATM program became inactive upon expiration of the associated shelf registration. We expect to file a new shelf registration and ATM program in the near future.
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•As of December 31, 2023, our credit ratings from S&P Global Ratings and Moody’s Investors Service were BBB+ and Baa1, respectively, which continued to rank in the top 10% among all publicly traded U.S. REITs.
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•Significant liquidity of $5.8 billion.
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•No debt maturities prior to 2025.
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•98.1% of our debt has a fixed rate.
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•Non-real estate investments aggregating $1.4 billion:
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•Investment loss of $195.4 million for the year ended December 31, 2023 presented in our consolidated statement of operations consisted of $201.5 million of unrealized losses and $6.1 million of realized gains, including $74.6 million of impairments.
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The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under “Item 15. Exhibits and financial statement schedules” in this annual report on Form 10-K. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, those described within this “Item 7. Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K. We do not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any other document, whether as a result of new information, future events, or otherwise.
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The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under
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As used in this annual report on Form 10-K, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.
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As used in this annual report on Form 10-K, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to
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For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” in the “Non-GAAP measures and definitions” section and to the tabular presentation of these items in the “Results of operations” section within this Item 7 in this annual report on Form 10-K.
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For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria
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Solid annual leasing volume and rental rate increases with continued long lease terms
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Continued solid leasing volume and rental rate increases
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•Solid leasing volume aggregating 4.3 million RSF for the year ended December 31, 2023.
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•Continued solid leasing volume aggregating 5.1 million RSF for theyear ended December 31, 2024, up 19% compared to our
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•76% of our leasing activity during the last twelve months was generated from our existing tenant base.
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•84% of our leasing activity during the last twelve months was generated from our existing tenant base.
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•96% of our leases contain contractual annual rent escalations approximating 3%.
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•97% of our leases contain contractual annual rent escalations approximating 3%.
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•Common stock dividend declared for the three months ended December 31, 2023 of $1.27 per common share, aggregating $4.96 per common share for the year ended December 31, 2023, up 24 cents, or 5%, over the year ended December 31, 2022.
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•Common stock dividend declared for thethree months ended December 31, 2024 of$1.32 per common share, aggregating
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•Average annual dividend per-share growth of 6% from 2019 to 2023.
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•Average annual dividend per-share growth of 5.4% from 2020 to 2024.
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•Significant net cash flows from operating activities after dividends retained for reinvestment aggregating $1.9 million for the years ended December 31, 2019 through 2023.
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•Significant net cash flows from operating activities after dividends retained for reinvestment aggregating$2.2 billion for the
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•Annual net operating income (cash basis) is expected to increase by $114 million upon the burn-off of initial free rent from recently delivered projects. Initial free rent has a weighted-average burn-off period of 10 months.
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•Annual net operating income (cash basis) is expected to increase by $70 million upon the burn-off of initial free rent, with a
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(2)Includes 1.4 million RSF expected to be stabilized in 2024 and is 93% leased. Refer to the initial and stabilized occupancy years in the “New Class A/A+ development and redevelopment properties: current projects” section under Item 2 in this annual report on Form 10-K for additional information.
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redevelopment properties: current projects” in Item 2 for additional information.
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In 2023, we identified key market trends and uncertainties that had or may have a negative effect on our performance. Although we have mitigating strategies to minimize the risks posed by these trends and uncertainties, there can be no assurance that these measures will be successful in preventing material impacts on our future results of operations, financial position, and cash flows. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of additional risks we face.
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In 2024, we identified key market trends and uncertainties that had or may have a negative effect on our business. Although
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•New competitive supply may exert pressure on our rental rates and adversely affect our operating results. During and after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements has led certain office and other REITs and real estate companies to repurpose their underutilized office spaces into laboratory facilities. Our success and the success of other laboratory operators have prompted and may continue to prompt new and existing life science developers to commence speculative redevelopment and/or development projects in anticipation of demand for laboratory facilities. These conversion and speculative development projects may result in a substantial increase in life science facility supply in the near future, potentially intensifying competition in the sector and placing downward pressure on future rental and occupancy rates.
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•New competitive supply may exert pressure on our rental rates and adversely affect our operating results. During and
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Our rental rates for renewed/re-leased space increased by 29.4%, 31.0%, and 37.9% during years ended December 31, 2023, 2022, and 2021, respectively. Our 2024 guidance range for rental rate increases on lease renewals/re-leases of 11.0% to 19.0% reflects lower expectations relative to the past several years. However, to remain competitive, we may need to further reduce our future rental rates below these projections. In addition, we may need to offer more tenant improvement allowances or additional tenant concessions, including free rent, to retain existing tenants or to attract new tenants.
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need to reduce our future rental rates below these projections and/or offer more tenant improvement allowances or additional
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As of December 31, 2023, we anticipate that 5.7 million RSF, primarily expected to be placed into service and stabilized during 2024–2027, will generate $495 million in incremental annual net operating income primarily commencing during 2024–2027. The realization of the aforementioned risks could hinder our ability to secure tenants for the remaining unleased RSF related to these projects at the expected rates, or at all, potentially leading to a shortfall in or delays in the commencement of the projected incremental annual net operation income.
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aforementioned risks could hinder our ability to secure tenants for the remaining unleased RSF related to these projects at the
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•Unfavorable capital markets and overall macroeconomic environment may negatively impact the value of our real estate and non-real estate portfolios, and may limit our ability to raise capital to further our business objectives.
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estate and non-real estate portfolios may limit our ability to raise capital to further our business objectives.
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The effective execution of our development and redevelopment activities is contingent upon our access to the required capital. In 2024, we expect to incur from $2.2 billion to $3.3 billion in construction and acquisition spending.
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The effective execution of our development and redevelopment activities is contingent upon our access to the required capital.
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•Lower property valuations and increased capitalization rates. A portion of our projected construction and acquisition spending is expected to be funded through dispositions of and sales of partial interests in non-core real estate assets. Real estate investments are generally less liquid than many other investment types, which can present challenges in selling our properties timely or at desirable prices, particularly in an economic climate marked by uncertainties around inflation and interest rates.
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•Lower property valuations and increased capitalization rates. A portion of our projected construction and acquisition
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Should inflation remain elevated, the Federal Reserve may continue to raise the federal funds rate, which may lead to further increases in interest rates and costs of debt and equity financing. This could prevent prospective buyers of our real estate assets from obtaining required financing on favorable terms, potentially eliminating their participation in the market or forcing them to seek more expensive alternative funding options. Such challenges for buyers could lead to a rise in properties available for sale, and could exert downward pressure on property valuations and elevate capitalization rates, potentially adversely impacting the sales proceeds we expect from our real estate asset sales in 2024.
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financing for the prospective buyers of our real estate assets, potentially eliminating their participation in the market or
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The aforementioned surplus and pressures on valuations may be further intensified by the entry of new real estate investments in the laboratory space, discussed above. Combined with high interest rates and reduced market liquidity, this may result in a prolonged period of reduced property valuations and increased capitalization rates, potentially necessitating the recognition of additional significant real estate impairments.
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The new supply, discussed above, combined with high interest rates and reduced market liquidity, may result in a
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The table below presents a trend of increasing capitalization rates associated with the dispositions of and sales of partial interests in our real estate assets in 2021, 2022, and 2023 (dollars in thousands). While the increase in capitalization rates presented in the table can partly be attributed to the quality of non-core assets we sold, capitalization rates in general have increased in recent years, and there is no assurance that this upward trend will stabilize or reverse in the future.
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impairment, and a trend of increasing capitalization rates associated with dispositions and sales of partial interests in our
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•Increased cost and limited availability of capital. In 2024, we expect a portion of our construction to be funded through bond issuances ranging from $600 million to $1.4 billion. However, should we encounter difficulties in selling our real estate assets at our targeted prices, we may need to increase our reliance on debt financing to fund our construction projects in 2024. If the current high interest rate environment persists or worsens, the debt funding option could become costlier, less accessible, or even unavailable, potentially limiting our ability to complete our development projects on schedule, thereby delaying our expected incremental annual income generation and negatively affecting our business.
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•Increased cost and limited availability of capital. In 2025, we expect to issue approximately$600 million of unsecured
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The table below reflects a trend of increasing interest rates related to our unsecured senior notes payable issued in 2021, 2022, and 2023 (dollars in thousands). There is no assurance that this trend of increasing debt costs will not continue into the future.
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2023, and 2024 (dollars in thousands). There is no assurance that this trend of increasing debt costs will not continue into
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•Reduction in capitalized interest. Our strategic focus is on prioritizing the completion of our highly leased projects under construction. Additionally, we invest in our future pipeline with the goals of enhancing value and reducing the timeline to allow for vertical construction. This is in response to our expectation of increased future demand for these projects, and is reflected in our expectation for capitalized interest to range from $325 million to $355 million in 2024. Refer to the definition of “Capitalized interest” in the “Non-GAAP measures and definitions” section within Item 7 in this annual report on Form 10-K for additional information.
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expense from$165 million to$195 million. Our strategic focus is on prioritizing the completion of our highly leased
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However, the current challenging macroeconomic environment, including the increased supply of laboratory space, higher costs or unavailability of debt, and challenges in obtaining sufficient proceeds from real estate asset dispositions, as discussed above, could necessitate a reevaluation of our current plans and lead to a temporary suspension of our construction projects. This could result in a decline in our 2024 capitalized interest below our current projections and in an increase in interest expense recognized in our consolidated statements of operations in 2024.
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However, the challenging macroeconomic environment, including the elevated supply of laboratory space, higher costs or
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•Volatility in non-real estate investments. We hold strategic investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. These investments are subject to market and sector-specific risks that can substantially affect their valuation. Like many other industries, the life science industry is susceptible to macroeconomic challenges, such as ongoing economic uncertainty and a tighter capital environment. These factors may lead to increased volatility in the valuation of our non-real estate investments.
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•Volatility in non-real estate investments. We hold strategic investments in publicly traded companies and privately held
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In such an unfavorable environment, distributions from our investments — which we may receive as dividends, as liquidation distributions from our investments in limited partnerships, or as a result of mergers and acquisitions that lead to our privately held investees being acquired by other entities — could result in lower realized gains. Moreover, should market conditions worsen, we may face challenges in selling these securities at optimal prices, potentially disrupting our capital strategy.
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In such a challenging environment, distributions from our investments — which we may receive as dividends, as
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Unfavorable market conditions could also indicate potential impairment of our investments in privately held entities that do not report NAV per share and lead to the recognition of additional significant non-real estate impairments, lower realized gains, and higher unrealized losses.
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not report NAV per share and lead to the recognition of additional significant non-real estate impairments, lower realized
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The table below reflects the volatility of our non-real estate investments in 2021, 2022, and 2023 (in thousands):
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The table below reflects the volatility of our non-real estate investments in 2022,2023, and 2024 (in thousands):
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(1)Includes impairment charges aggregating $74.6 million and $20.5 million for the years ended December 31, 2023 and 2022, respectively. There were no impairment charges recognized during the year ended December 31, 2021.
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(1)Includes impairment charges aggregating$58.1 million,$74.6 million, and$20.5 million for the years ended December 31, 2024,2023, and 2022,
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The realization of any of the aforementioned risks could have a material adverse impact on our revenues, particularly our income from rentals, net operating income, our results of operations, funds from operations, operating margins, initial stabilized yields (unlevered) on new or existing construction projects, occupancy, EPS, FFO per share, our overall business, and the market value of our common stock.
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The realization of any of the aforementioned risks could have a material adverse impact on our revenues, particularly our
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•Mega campus strategy: focus on premier Class A/A+ assets in AAA innovation cluster locations. Alexandria has established a high-quality Labspace® asset base predominantly concentrated in markets with high barriers to entry. Despite a recent increase in the availability of laboratory space, Alexandria is expected to continue to benefit from our focus on Class A/A+ assets strategically clustered in life science, agtech, and advanced technology mega campuses in innovation cluster locations in close proximity to top academic medical institutions. This proximity is a key driver of tenant demand. Our campuses are used in two distinct ways: (i) to house the research operations of our tenants, and (ii) to recruit and retain the best talent available from a limited pool, which underscores why the scale, strategic design, and placement our mega campuses provide are critical.
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•Megacampus strategy: focus on premier Class A/A+ assets in AAA life science innovation cluster locations.
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CEOs of life science companies typically anticipate rapid and exponential growth upon their companies’ achieving scientific milestones. Our mega campuses are designed for scalability, providing opportunities for our tenants to grow within our mega campuses, including through our future developments and redevelopments aggregating 31.5 million RSF, of which 66% is concentrated within our mega campuses. The strategic location of our mega campuses, which offer both high visibility and a clear path to growth, serves as a powerful motivator for tenants to lease space from us.
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CEOs of life science companies typically anticipate rapid and exponential growth upon their companies’ achieving
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Moreover, our tenants recognize that their success is directly linked to their ability to attract and retain personnel to advance their science. Our mega campuses provide a superior set of amenities, services, and access to transit that offer our tenants valuable optionality. The collaborative, vibrant elements of our mega campuses, coupled with world-class amenities, enhance their confidence in using these spaces as effective recruiting tools. In contrast, a significant amount of the competitive supply in the market today consists of isolated, one-off buildings. These facilities may provide operational space, but they fall short in offering the scale and strategic design that our mega campuses deliver.
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Moreover, our tenants recognize that their success is directly linked to their ability to attract and retain personnel to
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Consequently, our external growth strategy focuses on creating new and enhancing existing mega campuses, which represent our strongest defense against competitive supply. Over the past three decades, we have established a significant market presence in AAA innovation cluster locations. Our mega campuses provide a comprehensive solution to life science tenants, one that is challenging to replicate due to the significant time and capital required to replicate this model. We believe the focus on our mega campus strategy will continue to position us favorably against potential supply of new competitive laboratory spaces. This strategy is partially responsible for our notable performance metrics listed below, which have been achieved despite the current challenging macroeconomic environment and residual impacts from the COVID-19 pandemic:
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Consequently, our external growth strategy focuses on the development of new Megacampus ecosystems and the
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•Strong funds from operations per share – diluted, as adjusted for 2023 of $8.97 and an anticipated 5.6% growth to $9.47 per share in 2024 at the midpoint of our guidance range.
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•Strong funds from operations per share – diluted, as adjusted, for 2024 of$9.47.
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•Same property net operating income growth of 3.4% and 4.6% (cash basis) for the year ended December 31, 2023, compared to the year ended December 31, 2022.
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•Same property net operating income growth of 1.2% and 4.6% (cash basis) for the year ended December 31,2024.
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•Strong occupancy of 94.6% as of December 31, 2023 and anticipated strong occupancy ranging from 94.6% to 95.6% as of December 31, 2024.
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•Solid occupancy of 94.6% as of December 31,2024.
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•The weighted-average lease term for leases executed during 2023 was 11.3 years, exceeding the weighted-average lease term of 8.8 years achieved during 2014–2023.
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•The weighted-average lease term for leases executed during 2024 was 8.9 years; and
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“Item 15. Exhibits and financial statement schedules” in this annual report on Form 10-K. Forward-looking statements involve inherent
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risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business
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strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from
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those included within or contemplated by such forward-looking statements, including, but not limited to, those described within this “Item
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Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K. We do not
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undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking
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statements contained in this or any other document, whether as a result of new information, future events, or otherwise.
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Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.
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Real Estate Equities, Inc.’s common stockholders” under “Definitions and reconciliations” and to the tabular presentation of these items
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•Same property net operating income growth of 1.2% and 4.6% (cash basis) for theyear ended December 31, 2024, compared
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weighted-average burn-off period of approximately three months, from recently delivered projects.
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we have mitigating strategies to minimize the risks posed by these trends and uncertainties, there can be no assurance that these
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measures will be successful in preventing material impacts on our future results of operations, financial position, and cash flows. Refer
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to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of additional risks we face.
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after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements has led certain office and other real
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estate companies to repurpose their underutilized office spaces into laboratory facilities. Our success and the success of other
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laboratory operators have prompted and may continue to prompt new and existing life science developers to commence
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speculative redevelopment and/or development projects in anticipation of demand for laboratory facilities. These conversion
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expected rates, or at all, potentially leading to a shortfall in or delays in the commencement of the projected incremental
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•Unfavorable capital markets and overall macroeconomic environment negatively impacting the value of our real
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spending is expected to be funded through dispositions and sales of partial interests in core and non-core real estate
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assets. Real estate investments are generally less liquid than many other investment types, which can present challenges
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in selling our properties timely or at desirable prices, particularly in an economic climate marked by ongoing uncertainties
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forcing them to seek more expensive alternative funding options. Such challenges for buyers could lead to a rise in
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properties available for sale, and could exert downward pressure on property valuations and elevate capitalization rates,
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potentially adversely impacting the sales proceeds we expect from our real estate asset sales in 2025.
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real estate assets in 2022,2023, and 2024 (dollars in thousands). While the increase in capitalization rates presented in
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the table can partly be attributed to the quality of core and non-core assets we sold during each period, capitalization rates
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in general have increased in recent years, and there is no assurance that this upward trend will stabilize or reverse in the
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selling our real estate assets at our targeted prices, we may need to increase our reliance on debt financing to fund our
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If the current high interest rate environment persists or worsens, the debt funding option could become costlier, less
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accessible, or even unavailable, potentially limiting our ability to complete our development projects on schedule and
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thereby delaying our expected incremental annual net operating income generation and negatively affecting our business.
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The table below reflects a trend of increasing interest rates related to our unsecured senior notes payable issued in 2022,
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projects under construction. Additionally, we invest in our future pipeline with the goals of enhancing value and reducing
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the timeline to allow for vertical construction. This is in response to our expectation of increased future demand for these
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projects and is reflected in our expectation for capitalized interest. Refer to “Capitalized interest” under “Definitions and
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unavailability of debt, and challenges in obtaining sufficient proceeds from real estate asset dispositions, as discussed
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above, have necessitated and may continue to necessitate a reevaluation of our current plans and lead to a temporary
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suspension of our construction projects. This could result in a decline in our 2025 capitalized interest below our current
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Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders