PASADENA, Calif., Oct. 21,
2024 /PRNewswire/ -- Alexandria Real Estate Equities,
Inc. (NYSE: ARE) announced financial and operating results for the
third quarter ended September 30,
2024.
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Key
highlights
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YTD
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Operating
results
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3Q24
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3Q23
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3Q24
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3Q23
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Total
revenues:
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In millions
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$
791.6
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$
713.8
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$ 2,327.4
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$ 2,128.5
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Growth
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10.9 %
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9.3 %
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Net income attributable
to Alexandria's common stockholders – diluted:
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In millions
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$
164.7
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$
21.9
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$
374.5
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$
184.4
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Per share
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$
0.96
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$
0.13
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$
2.18
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$
1.08
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Funds from operations
attributable to Alexandria's common stockholders – diluted, as
adjusted:
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In millions
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$
407.9
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$
386.4
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$ 1,217.3
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$ 1,142.5
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Per share
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$
2.37
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$
2.26
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$
7.08
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$
6.69
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An industry-leading REIT with a high-quality, diverse tenant
base and strong margins
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(As of
September 30, 2024, unless stated otherwise)
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Occupancy of operating
properties in North America
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94.7 %
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Percentage of annual
rental revenue in effect from mega campuses
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76 %
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Percentage of annual
rental revenue in effect from investment-grade or publicly
traded large cap tenants
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53 %
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Operating
margin
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71 %
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Adjusted EBITDA
margin
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70 %
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Percentage of leases
containing annual rent escalations
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96 %
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Weighted-average
remaining lease term:
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Top 20
tenants
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9.5
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years
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All tenants
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7.5
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years
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Sustained strength in
tenant collections:
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Tenant receivables as
a percentage of 3Q24 rental revenues
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0.9 %
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October 2024 tenant
rents and receivables collected as of October 21,
2024
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99.6 %
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3Q24 tenant rents and
receivables collected as of October 21, 2024
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99.9 %
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Strong and flexible balance sheet with significant liquidity;
top 10% credit rating ranking among all publicly traded U.S.
REITs
- Net debt and preferred stock to Adjusted EBITDA of 5.5x and
fixed-charge coverage ratio of 4.4x for 3Q24 annualized (targets
for 4Q24 annualized of ≤5.1x and ≥4.5x, respectively).
- Significant liquidity of $5.4
billion.
- 31% of our total debt matures in 2049 and beyond.
- 12.6 years weighted-average remaining term of debt.
- Since 2020, an average of 97.7% of our debt has been fixed
rate.
- Total debt and preferred stock to gross assets of 29%.
- $1.0 billion of capital
contribution commitments from existing consolidated real estate
joint venture partners to fund construction from 4Q24 through
2027.
Strong leasing volume and solid rental rate changes
- Strong leasing volume aggregating 1.5 million RSF during 3Q24,
up 48% compared to our previous four-quarter average of 1.0 million
RSF.
- Rental rate changes on lease renewals and re-leasing of space
were 5.1% and 1.5% (cash basis) for 3Q24 and 16.4% and 8.9% (cash
basis) for YTD 3Q24.
- 80% of our leasing activity during the last twelve months was
generated from our existing tenant base.
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3Q24
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YTD 3Q24
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Total leasing activity
– RSF
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1,486,097
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3,742,955
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Leasing of development
and redevelopment space – RSF
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39,121
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480,342
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Lease renewals and
re-leasing of space:
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RSF (included in total
leasing activity above)
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1,278,857
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2,863,277
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Rental rate
changes
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5.1 %
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(1)
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16.4 %
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Rental rate changes
(cash basis)
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1.5 %
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(1)
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8.9 %
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(1)
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Includes a five-year
lease extension to an investment-grade rated technology tenant
aggregating 357,136 RSF of recently acquired tech R&D space in
our Texas market that was renewed with rental rate changes of
(33.6)% and (4.8)% (cash basis). These spaces were originally
targeted for a future change in use at acquisition, but we instead
renewed them with a lower capital investment while we continue to
evaluate options to convert these spaces in the future, subject to
market conditions. Excluding this lease, rental rate changes for
renewed/re-leased space for 3Q24 were 13.0% and 2.3% (cash
basis).
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Attractive dividend strategy to share net cash flows from
operating activities with stockholders while retaining a
significant portion for reinvestment
- Common stock dividend declared for 3Q24 of $1.30 per common share aggregating $5.14 per common share for the twelve months
ended September 30, 2024, up
24 cents, or 5%, over the twelve
months ended September 30, 2023.
- Dividend yield of 4.4% as of September
30, 2024.
- Dividend payout ratio of 55% for the three months ended
September 30, 2024.
- Average annual dividend per-share growth of 5.4% from 2020
through 3Q24 annualized.
- Significant net cash flows from operating activities after
dividends retained for reinvestment aggregating $2.1 billion for the years ended December 31, 2020 through 2023 and including the
midpoint of our 2024 guidance range for net cash provided by
operating activities after dividends.
Ongoing successful execution of Alexandria's 2024 capital strategy
We expect to continue pursuing our strategy to fund a
significant portion of our capital requirements for the year ending
December 31, 2024 with dispositions primarily focused on sales
of properties and land parcels not integral to our mega campus
strategy. Refer to "Dispositions" in the Earnings Press
Release for additional details.
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(in
millions)
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Completed dispositions
of 100% interest in properties
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$ 319
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Pending dispositions
subject to non-refundable deposits
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577
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Pending dispositions
subject to executed letters of intent and/or purchase and sale
agreements
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603
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Forward equity sales
agreements
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28
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Total
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$
1,527
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2024 guidance midpoint
for dispositions and common equity
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$
1,550
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Ongoing successful execution of Alexandria's 2024 capital strategy
(continued)
- In September 2024, we completed
the following transactions with our longstanding tenant, Fred
Hutchinson Cancer Center ("Fred
Hutch"), in the Lake Union submarket:
- Sale of 1165 Eastlake Avenue East, a fully leased 100,086 RSF
single-tenant Class A+ life science facility that was developed in
2021. We sold the property for $150.0
million, or $1,499 per RSF, at
strong capitalization rates of 4.7% and 4.9% (cash basis). Upon
completion of the sale, we recognized a gain on sale of real estate
aggregating $21.5 million.
- Fred Hutch executed early
renewals aggregating 117,479 RSF at our 1201 and 1208 Eastlake
Avenue East properties, including a 15-year lease extension at 1201
Eastlake Avenue East.
- Our prior joint venture partner sold their partial interest
ownership in each of 1201 and 1208 Eastlake Avenue East to
Fred Hutch. Our ownership interest
in both properties remains unchanged at 30.0%. This sale, lease
extensions, and new joint venture affirm Fred Hutch's commitment to South Lake
Union.
Alexandria's development and
redevelopment pipeline delivered incremental annual net operating
income of $21 million commencing during 3Q24 and is expected
to deliver incremental annual net operating income aggregating
$510 million primarily by 1Q28
- During 3Q24, we placed into service development and
redevelopment projects aggregating 316,691 RSF that are 100% leased
across multiple submarkets and delivered incremental annual net
operating income of $21 million. 3Q24
deliveries included 250,000 RSF at 9820 Darnestown Road on the
Alexandria Center® for Life Science – Shady Grove mega
campus in our Rockville
submarket.
- Annual net operating income (cash basis) is expected to
increase by $57 million upon the
burn-off of initial free rent, with a weighted-average burn-off
period of approximately six months, from recently delivered
projects.
- 69% of the RSF in our total development and redevelopment
pipeline is within our mega campuses.
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Development and
Redevelopment Projects
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Incremental
Annual Net
Operating Income
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RSF
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Leased/
Negotiating
Percentage
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(dollars in
millions)
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Placed into
service:
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1H24
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$
42
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628,427
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100 %
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3Q24
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21
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316,691
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100
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Placed into service in
YTD 3Q24
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$
63
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945,118
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100 %
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Expected to be placed
into service(1):
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4Q24 through
4Q25
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$
158
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(2)
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5,467,897
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55 %
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1Q26 through
1Q28
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352
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(3)
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$
510
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(1)
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Represents expected
incremental annual net operating income to be placed into service
from deliveries of
projects undergoing construction and one committed near-term
project expected to commence construction in
the next two years.
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(2)
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Includes (i) 1.0
million RSF that is expected to stabilize through 2025 and is 92%
leased/negotiating and
(ii) expected partial deliveries through 4Q25 from projects
expected to stabilize in 2026 and beyond. Refer to
the initial and stabilized occupancy years under "New Class A/A+
development and redevelopment properties:
current projects" in the Supplemental Information for additional
details.
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(3)
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70% of the leased RSF
of our development and redevelopment projects was generated from
our existing
tenant base.
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Continued solid net operating income and internal
growth
- Net operating income (cash basis) of $2.0 billion for 3Q24 annualized, up $274.2 million, or 15.5%, compared to 3Q23
annualized.
- Same property net operating income growth of 1.5% and 6.5%
(cash basis) for 3Q24 over 3Q23 and 1.6% and 4.6% (cash basis) for
YTD 3Q24 over YTD 3Q23.
- 96% of our leases contain contractual annual rent escalations
approximating 3%.
Strong balance sheet management
Key metrics as of
or for the three months ended September 30, 2024
- $33.1 billion in total market
capitalization.
- $20.5 billion in total equity
capitalization, which ranks in the top 10% among all publicly
traded U.S. REITs.
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3Q24
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Target
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Quarter
Annualized
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Trailing
12 Months
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4Q24
Annualized
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Net debt and preferred
stock to
Adjusted EBITDA
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5.5x
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5.6x
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Less than or equal to
5.1x
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Fixed-charge coverage
ratio
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4.4x
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4.5x
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Greater than or equal
to 4.5x
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Key capital events
- In September 2024, we amended and
restated our unsecured senior line of credit to, among other
changes, extend the maturity date from January 22, 2028 to January 22, 2030, including extension options
that we control.
- During 3Q24, we had no activity under our ATM program. As of
October 21, 2024, the remaining
aggregate amount available for future sales of common stock was
$1.47 billion.
Investments
- As of September 30, 2024:
- Our non-real estate investments aggregated $1.5 billion.
- Unrealized gains presented in our consolidated balance sheet
were $166.2 million, comprising gross
unrealized gains and losses aggregating $284.4 million and $118.2
million, respectively.
- Investment income of $15.2
million for 3Q24 presented in our consolidated statement of
operations consisted of $23.0 million
of realized gains and $2.6 million of
unrealized gains, partially offset by $10.3
million of impairment charges.
Other key highlights
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Key items included
in net income attributable to Alexandria's common
stockholders:
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YTD
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3Q24
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3Q23
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3Q24
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3Q23
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3Q24
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3Q23
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3Q24
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3Q23
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(in millions, except
per share
amounts)
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Amount
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Per Share –
Diluted
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Amount
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Per Share –
Diluted
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Unrealized gains
(losses) on
non-real estate investments
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$ 2.6
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$ (77.2)
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$ 0.02
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$
(0.45)
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$ (32.5)
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$
(221.0)
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$
(0.19)
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$
(1.29)
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Gain on sales of real
estate
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27.1
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—
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0.16
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—
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27.5
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214.8
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0.16
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1.26
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Impairment of non-real
estate
investments
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(10.3)
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(28.5)
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(0.06)
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(0.17)
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(37.8)
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(51.5)
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(0.22)
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(0.30)
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Impairment of real
estate
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(5.7)
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(20.6)
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(0.03)
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(0.12)
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(36.5)
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(189.2)
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(0.22)
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(1.11)
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Acceleration of
stock
compensation expense due
to executive officer resignations
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—
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(1.9)
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—
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(0.01)
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—
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(1.9)
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—
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(0.01)
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Total
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$
13.7
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$
(128.2)
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$ 0.09
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$
(0.75)
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$ (79.3)
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$
(248.8)
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$
(0.47)
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$
(1.45)
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Refer to "Funds from
operations and funds from operations per share" in the Earnings
Press Release for additional
details.
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Subsequent events
- In October 2024, we agreed to
sell four properties located in our Greater Boston market for a sales price of
$369.4 million to the current tenant
of the properties with whom we have a long-established
relationship. The sales price represents capitalization rates of
8.5% and 6.3% (cash basis) based upon net operating income and net
operating income (cash basis), respectively, for 3Q24 annualized.
These properties, acquired primarily during 2020–2021, are
currently 100% leased with a weighted-average remaining lease term
of 18 years. In October 2024, we
recognized an impairment charge aggregating $40.9 million to reduce the carrying amounts of
these properties by approximately 10% to the expected sales price
less costs to sell. Our decision to dispose of these properties is
based on their non-strategic location and the significant capital
that the expected sales proceeds provide for immediate reinvestment
into our development and redevelopment pipeline.
- In October 2024, we agreed to
sell five operating properties aggregating 203,223 RSF and land
parcels aggregating 1.5 million SF in our Sorrento Mesa and
University Town Center submarkets to buyers that are expected to
develop residential properties on these sites for an aggregate
sales price of approximately $314.0
million. In October 2024, we
recognized impairment charges aggregating $65.9 million to reduce the carrying amounts of
these properties to the expected aggregate sales price less costs
to sell. Our decision to dispose of these assets, which are not
integral to our mega campus strategy, is primarily based on the
substantial capital that the sales proceeds will provide for
immediate reinvestment into our development and redevelopment
pipeline.
Industry and corporate responsibility leadership: catalyzing
and leading the way for positive change to benefit human health and
society
- In September 2024, Alexandria was named one of the World's Most
Trustworthy Companies by Newsweek. This significant
distinction builds on the Company's recognition by the publication
as one of America's Most Trustworthy Companies in 2023 and 2024.
Alexandria is one of only three
S&P 500 REITs recognized in the real estate and housing
category.
- In September 2024, Alexandria and its executive chairman and
founder, Joel S. Marcus, were
honored with the inaugural Bisnow Life Sciences Icon &
Influencer Award. This prestigious award highlights Mr. Marcus and
the Company's significant long-term contributions to and lasting
impact on the life science real estate sector and broader life
science industry. Mr. Marcus accepted the award on his own behalf
and that of Alexandria at Bisnow's
International Life Sciences & Biotech Conference, where he was
also the keynote speaker.
- Alexandria continued to
receive broad recognition for our operational excellence in asset
management, design, development, and sustainability, including the
following recent awards:
- In our Greater Boston market,
the atrium at 325 Binney Street, located on the Alexandria
Center® at One Kendall Square mega campus, is a
light-filled collaboration space with a terraced garden and
communal staircase that was celebrated for design excellence in the
Science & Research – Small (under 50,000 SF) category of the
2024 International Interior Design Association New England
(IIDA NE) Design Awards and also
received the award program's top honor, Best in Show.
- In our Maryland market, we
were awarded three 2024 NAIOP DC|MD Awards of Excellence for
developments and enhancements on the Alexandria Center®
for Life Science – Shady Grove mega campus: 9810 and 9820
Darnestown Road for Best Life Science Facility, 9800 Medical Center
Drive for Best Amenity Space, and 9950 Medical Center Drive for
Best Industrial/Flex.
- We received a 2024 Nareit Sustainable Design Impact Award for
our groundbreaking approach to utilizing alternative energy sources
such as geothermal energy and wastewater heat recovery systems to
reduce operational greenhouse gas emissions in
Labspace® development projects in our Greater Boston and Seattle markets.
- Alexandria GradLabs® at 9880 Campus Point Drive,
located on the Campus Point by Alexandria mega campus in our San Diego market, earned a 2024 International
Institute for Sustainable Laboratories (I2SL) Lab Buildings and
Projects Award for Excellence in Energy Efficiency. The
state-of-the-art building was designed to operate as a highly
energy-efficient research facility. In 2023, the LEED Platinum
certified facility earned an I2SL Labs2Zero pilot Energy Score of
96 out of 100, indicating its operational energy performance is
better than 96% of similar facilities.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P
500® company, is a best-in-class, mission-driven
life science REIT making a positive and lasting impact on the
world. As the pioneer of the life science real estate niche with
our founding in 1994, Alexandria
is the preeminent and longest-tenured owner, operator, and
developer of collaborative mega campuses in AAA life science
innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of September 30, 2024, Alexandria has a total
market capitalization of $33.1 billion and an asset base in
North America that includes
41.8 million RSF of operating properties, 5.3 million RSF of
Class A/A+ properties undergoing construction, and one committed
near-term project expected to commence construction in the next two
years. Alexandria has a
longstanding and proven track record of developing Class A/A+
properties clustered in mega campuses that provide our innovative
tenants with highly dynamic and collaborative environments that
enhance their ability to successfully recruit and retain
world-class talent and inspire productivity, efficiency,
creativity, and success. Alexandria also provides strategic capital to
transformative life science companies through our venture capital
platform. We believe our unique business model and diligent
underwriting ensure a high-quality and diverse tenant base that
results in higher occupancy levels, longer lease terms, higher
rental income, higher returns, and greater long-term asset value.
For more information on Alexandria, please visit www.are.com.
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Guidance
September 30, 2024
(Dollars in millions, except per share amounts)
|
|
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The following guidance
for 2024 has been updated to reflect our current view of existing
market conditions and assumptions for the year ending December 31,
2024. There can be no assurance that
actual results will not be materially higher or lower than these
expectations. Also, refer to our discussion of "forward-looking
statements" of the Earnings Press Release for additional
details.
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2024 Guidance
Midpoint
|
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Summary of Key
Changes in Guidance
|
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As of
10/21/24
|
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As of
7/22/24
|
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Summary of Key
Changes in Sources and Uses of Capital
|
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As of
10/21/24
|
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As of
7/22/24
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EPS, FFO per share, and
FFO per share, as adjusted
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See updates
below
|
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Cash expected to be
held at December 31, 2024
|
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$150
|
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$—
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Straight-line rent
revenue
|
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$147 to $162
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$169 to $184
|
|
|
|
|
|
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General and
administrative expenses
|
|
$176 to $186
|
|
$181 to $191
|
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Key Credit Metric
Targets(1)
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Net debt and preferred
stock to Adjusted EBITDA – 4Q24 annualized
|
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Less than or equal to
5.1x
|
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Fixed-charge coverage
ratio – 4Q24 annualized
|
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Greater than or equal
to 4.5x
|
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|
Projected 2024
Earnings per Share and Funds From Operations per Share Attributable
to
Alexandria's Common Stockholders –
Diluted
|
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As of
10/21/24
|
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As of
7/22/24
|
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Earnings per
share(2)
|
|
$2.60 to
$2.64
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|
$2.98 to
$3.10
|
|
|
Depreciation and
amortization of real estate assets
|
|
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6.05
|
|
|
|
5.95
|
|
|
|
Gain on sales of real
estate(3)
|
|
|
(0.38)
|
|
|
|
—
|
|
|
|
Impairment of real
estate – rental properties and land(4)
|
|
|
0.67
|
|
|
|
0.01
|
|
|
|
Allocation to unvested
restricted stock awards
|
|
|
(0.06)
|
|
|
|
(0.05)
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Funds from operations
per share(1)
|
|
$8.88 to
$8.92
|
|
$8.89 to
$9.01
|
|
|
Unrealized losses on
non-real estate investments
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
Impairment of non-real
estate investments
|
|
|
0.22
|
|
|
|
0.16
|
|
|
|
Impairment of real
estate
|
|
|
0.17
|
|
|
|
0.17
|
|
|
|
Allocation to unvested
restricted stock awards
|
|
|
(0.01)
|
|
|
|
(0.01)
|
|
|
|
Funds from operations
per share, as adjusted(1)
|
|
$9.45 to
$9.49
|
|
$9.41 to
$9.53
|
|
|
Midpoint
|
|
$9.47
|
|
$9.47
|
|
|
|
|
|
|
|
|
|
|
Certain
Completed
Items
|
|
Key Sources and Uses
of Capital
|
|
Range
|
|
Midpoint
|
|
|
Sources of
capital:
|
|
|
|
|
|
|
|
|
|
|
Incremental
debt
|
|
$ 885
|
|
$
1,185
|
|
$ 1,035
|
|
See below
|
|
Net cash provided by
operating activities after
dividends
|
|
400
|
|
500
|
|
450
|
|
|
|
|
Dispositions and
common equity(5)
|
|
1,050
|
|
2,050
|
|
1,550
|
|
(5)
|
|
Total sources of
capital
|
|
$
2,335
|
|
$
3,735
|
|
$ 3,035
|
|
|
|
|
Uses of
capital:
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$
1,950
|
|
$
2,550
|
|
$ 2,250
|
|
|
|
|
Acquisitions
|
|
250
|
|
750
|
|
500
|
|
$
249
|
|
|
Ground lease
prepayment(6)
|
|
135
|
|
135
|
|
135
|
|
|
|
|
Cash expected to be
held at December 31, 2024(7)
|
|
—
|
|
300
|
|
150
|
|
|
|
|
Total uses of
capital
|
|
$
2,335
|
|
$
3,735
|
|
$ 3,035
|
|
|
|
|
Incremental debt
(included above):
|
|
|
|
|
|
|
|
|
|
|
Issuance of unsecured
senior notes payable(8)
|
|
$
1,000
|
|
$
1,000
|
|
$ 1,000
|
|
$ 1,000
|
(8)
|
|
Unsecured senior line
of credit, commercial paper,
and other
|
|
(115)
|
|
185
|
|
35
|
|
|
|
|
Net incremental
debt
|
|
$ 885
|
|
$
1,185
|
|
$ 1,035
|
|
|
|
|
|
|
|
|
|
|
Key
Assumptions
|
|
Low
|
|
High
|
|
|
Occupancy percentage in
North America as of December 31, 2024
|
|
94.6 %
|
|
95.6 %
|
|
|
Lease renewals and
re-leasing of space:
|
|
|
|
|
|
|
Rental rate
changes
|
|
11.0 %
|
|
19.0 %
|
|
|
Rental rate changes
(cash basis)
|
|
5.0 %
|
|
13.0 %
|
|
|
Same property
performance:
|
|
|
|
|
|
|
Net operating income
changes
|
|
0.5 %
|
|
2.5 %
|
|
|
Net operating income
changes (cash basis)
|
|
3.0 %
|
|
5.0 %
|
|
|
Straight-line rent
revenue(9)
|
|
$
147
|
|
$
162
|
|
|
General and
administrative expenses(10)
|
|
$
176
|
|
$
186
|
|
|
Capitalization of
interest
|
|
$
325
|
|
$
355
|
|
|
Interest
expense
|
|
$
154
|
|
$
184
|
|
|
Realized gains on
non-real estate investments(11)
|
|
$
95
|
|
$
125
|
|
|
|
|
(1)
|
Refer to "Definitions
and reconciliations" in the Supplemental Information for additional
details.
|
|
(2)
|
Excludes unrealized
gains or losses on non-real estate investments after September 30,
2024 that are required to be recognized in earnings and are
excluded from funds from operations per share, as
adjusted.
|
|
(3)
|
Includes $37.1 million
of gain on sales of real estate recognized in October 2024. Refer
to "Dispositions" in the Earnings Press Release for additional
details.
|
|
(4)
|
Includes $106.8 million
of real estate impairments recognized in October 2024. Refer to
"Subsequent Events" in the Earnings Press Release for additional
details.
|
|
(5)
|
We expect to fund our
remaining capital requirements for the year ending December 31,
2024 with real estate dispositions. As of October 21, 2024, we
completed real estate dispositions aggregating $319.2 million, have
additional pending transactions subject to (i) non-refundable
deposits aggregating $577.2 million and (ii) executed letters of
intent and/or purchase and sale agreements aggregating $602.5
million and forward equity sales agreements aggregating $28
million, which in aggregate, represents 98% of the $1.55 billion
midpoint of our guidance range. We do not expect to issue
additional equity in 2024 beyond the existing forward equity sales
agreements outstanding.
|
|
(6)
|
In July 2024, we
executed an amendment to our existing ground lease agreement at the
Alexandria Technology Square® mega campus in our
Cambridge submarket, which requires that we prepay our entire rent
obligation for the extended lease term
aggregating $270.0 million in two equal installments
during the fourth quarter of 2024 and the first quarter of
2025.
|
|
(7)
|
The increase in cash
expected to be held at December 31, 2024 is primarily due to
changes in the mix and timing of pending dispositions that are
subject to non-refundable deposits or subject to executed letters
of intent and/or purchase and sale agreements that are expected to
close in 4Q24. This cash is expected to reduce our 2025 debt
capital needs.
|
|
(8)
|
Represents $1.0 billion
of unsecured senior notes payable issued in February 2024. Subject
to market conditions, we may seek additional opportunities in 2024
to fund all or a portion of the proceeds necessary for the
repayment of our $600.0 million of 3.45% unsecured senior notes
payable due on April 30, 2025 through the issuance of additional
unsecured senior notes payable that is not assumed in our current
2024 guidance.
|
|
(9)
|
Reduction in the
midpoint of our guidance range for straight-line rent revenue by
$22 million is primarily attributable to (i) the write-off of a
deferred rent receivable of $9 million related to the lease
termination and a payment of $10 million from a tenant at 409
Illinois Street in our Mission Bay submarket, a 234,249 RSF
property owned by our consolidated real estate joint venture for
which we have an ownership interest of 25%, and (ii) a change in
the expected stabilization date from 4Q24 to 1Q25 at our fully
leased development project at 230 Harriet Tubman Way in our South
San Francisco submarket as reported in our 2Q24 Earnings Press
Release and Supplemental Information.
|
|
(10)
|
Reduction in the
midpoint of our guidance range for general and administrative
expense by $5 million is primarily attributable to the realization
of savings associated with overall efficiencies, including enhanced
cost control measures, incremental use of technology, streamlined
processes, and optimization of execution in connection with the
sale of non-core assets not integral to our mega campus
strategy.
|
|
(11)
|
Represents realized
gains and losses included in funds from operations per share –
diluted, as adjusted, and excludes significant impairments realized
on non-real estate investments, if any. Refer to "Investments" in
the Supplemental Information for additional details.
|
|
Acquisitions
September 30, 2024
(Dollars in thousands)
|
|
Property
|
|
Submarket/Market
|
|
Date
of
Purchase
|
|
Number of
Properties
|
|
Operating
Occupancy
|
|
Square
Footage
|
|
Purchase
Price
|
|
|
|
|
Future
Development(1)
|
|
Operating With
Future Development/
Redevelopment(1)
|
|
|
|
|
|
|
|
|
Completed in
1H24:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
285, 299, 307, and 345
Dorchester Avenue (60%
interest in consolidated JV)
|
|
Seaport Innovation
District/Greater
Boston
|
|
1/30/24
|
|
—
|
|
N/A
|
|
1,040,000
|
|
—
|
|
$
|
155,321
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
201,811
|
|
|
Completed in October
2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
428 Westlake Avenue
North
|
|
Lake
Union/Seattle
|
|
10/1/24
|
|
1
|
|
100 %
|
|
|
—
|
|
88,514
|
|
|
47,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
249,411
|
|
|
2024 guidance range for
acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
$250,000 –
$750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We expect to provide
total estimated costs and related yields for development and
significant redevelopment projects in the future, subsequent to the
commencement of construction.
|
|
|
Dispositions
September 30, 2024
(Dollars in thousands)
|
|
Property
|
|
Submarket/Market
|
|
Date of
Sale
|
|
Interest
Sold
|
|
RSF
|
|
Capitalization
Rate
|
|
Capitalization
Rate
(Cash
Basis)
|
|
Sales
Price
|
|
Sales Price
per RSF
|
|
Completed in
1H24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
17,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed in
3Q24:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale to longstanding
tenant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1165 Eastlake Avenue
East
|
|
Lake
Union/Seattle
|
|
9/12/24
|
|
100 %
|
|
|
100,086
|
|
4.7 %
|
|
|
4.9 %
|
|
|
149,985
|
(1)
|
$
1,499
|
|
Dispositions of
properties not integral to our mega campus
strategy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
219 East 42nd
Street
|
|
New York City/New York
City
|
|
7/9/24
|
|
100 %
|
|
|
349,947
|
|
N/A
|
|
|
N/A
|
|
|
60,000
|
(2)
|
N/A
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,496
|
(3)
|
|
|
Dispositions completed
in YTD 3Q24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238,709
|
|
|
|
Completed in October
2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions of
properties not integral to our mega campus
strategy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14225 Newbrook
Drive
|
|
Northern
Virginia/Maryland
|
|
10/15/24
|
|
100 %
|
|
|
248,186
|
|
7.6 %
|
|
|
7.4 %
|
|
|
80,500
|
(4)
|
$
324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
319,209
|
|
|
|
Pending 4Q24
dispositions subsequent to October 21, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subject to
non-refundable deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale to longstanding
tenant
|
|
Greater
Boston
|
|
4Q24
|
|
100 %
|
|
|
|
|
8.5 %
|
|
|
6.3 %
|
|
|
369,439
|
(5)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
577,152
|
|
|
|
Subject to executed
letters of intent and/or purchase and sale
agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
602,500
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,179,652
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 1,498,861
|
|
|
|
2024 guidance range for
dispositions and common equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,050,000 –
$2,050,000
|
|
|
|
|
|
(1)
|
Upon completion of the
sale, we recognized a gain on sale of real estate aggregating $21.5
million.
|
|
(2)
|
The property was leased
to a single tenant with a July 2024 lease expiration and had annual
net operating income of $18.6 million based on 2Q24 annualized.
This property was previously considered to be a potential
development project upon expiration of the in-place non-laboratory
space lease.
|
|
(3)
|
Dispositions completed
during the three months ended September 30, 2024 had annual net
operating income of $26.5 million (based on 2Q24 annualized) with a
weighted-average disposition date of July 28, 2024 (weighted by net
operating income for 2Q24 annualized).
|
|
(4)
|
Demonstrating the
long-term enduring value of our laboratory facilities, Alexandria
successfully operated our only asset in the Northern Virginia
submarket from its acquisition in 1997 (prior to our IPO) through
its sale in October 2024. Upon completion of the sale, we
recognized a gain on sale of real estate aggregating $37.1
million.
|
|
(5)
|
Refer to "Subsequent
events" in the Earnings Press Release for additional
details.
|
|
(6)
|
Pending dispositions
subsequent to October 21, 2024 have estimated annual net operating
income of approximately $95.8 million (based on 3Q24 annualized)
with a weighted-average non-core estimated stand-alone disposition
date of December 5, 2024 (weighted by net operating income for 3Q24
annualized). Approximately half of our pending dispositions are
non-core stabilized stand-alone properties with weighted-average
capitalization rates of 8.5% and 7.0% (cash basis), and the
remaining half are land and non-stabilized properties that have
vacancy or significant near-term lease expirations that will
require capital to re-tenant, including one building with
approximately 72% of non-laboratory space.
|
Earnings Call Information and About the Company
September 30, 2024
We will host a conference call on Tuesday, October 22,
2024, at 3:00 p.m. Eastern Time
("ET")/noon Pacific Time ("PT"),
which is open to the general public, to discuss our financial and
operating results for the third quarter ended September 30,
2024. To participate in this conference call, dial (833) 366-1125
or (412) 902-6738 shortly before 3:00 p.m.
ET/noon PT and ask the
operator to join the call for Alexandria Real Estate Equities, Inc.
The audio webcast can be accessed at www.are.com in the "For
Investors" section. A replay of the call will be available for a
limited time from 5:00 p.m.
ET/2:00 p.m. PT on Tuesday,
October 22, 2024. The replay number is (877) 344-7529 or (412)
317-0088, and the access code is 1168152.
Additionally, a copy of this Earnings Press Release and
Supplemental Information for the third quarter ended
September 30, 2024 is available in the "For Investors" section
of our website at www.are.com or by following this link:
https://www.are.com/fs/2024q3.pdf.
For any questions, please contact corporateinformation@are.com;
Joel S. Marcus, executive chairman
and founder; Peter M. Moglia, chief
executive officer and chief investment officer; Marc E. Binda, chief financial officer and
treasurer; Paula Schwartz, managing
director of Rx Communications Group, at (917) 633-7790; or
Sara M. Kabakoff, senior vice
president – chief content officer.
About the Company
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P
500® company, is a best-in-class, mission-driven life
science REIT making a positive and lasting impact on the world. As
the pioneer of the life science real estate niche with our founding
in 1994, Alexandria is the
preeminent and longest-tenured owner, operator, and developer of
collaborative mega campuses in AAA life science innovation cluster
locations, including Greater
Boston, the San Francisco Bay
Area, San Diego,
Seattle, Maryland, Research Triangle, and New York City. As of September 30,
2024, Alexandria has a total
market capitalization of $33.1 billion and an asset base in
North America that includes
41.8 million RSF of operating properties, 5.3 million RSF of Class
A/A+ properties undergoing construction, and one committed
near-term project expected to commence construction in the next two
years. Alexandria has a
longstanding and proven track record of developing Class A/A+
properties clustered in mega campuses that provide our innovative
tenants with highly dynamic and collaborative environments that
enhance their ability to successfully recruit and retain
world-class talent and inspire productivity, efficiency,
creativity, and success. Alexandria also provides strategic capital to
transformative life science companies through our venture capital
platform. We believe our unique business model and diligent
underwriting ensure a high-quality and diverse tenant base that
results in higher occupancy levels, longer lease terms, higher
rental income, higher returns, and greater long-term asset value.
For more information on Alexandria, please visit www.are.com.
Forward-Looking Statements
This document includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements include, without limitation,
statements regarding our 2024 earnings per share, 2024 funds from
operations per share, 2024 funds from operations per share, as
adjusted, net operating income, and our projected sources and uses
of capital. You can identify the forward-looking statements by
their use of forward-looking words, such as "forecast," "guidance,"
"goals," "projects," "estimates," "anticipates," "believes,"
"expects," "intends," "may," "plans," "seeks," "should," "targets,"
or "will," or the negative of those words or similar words. These
forward-looking statements are based on our current expectations,
beliefs, projections, future plans and strategies, anticipated
events or trends, and similar expressions concerning matters that
are not historical facts, as well as a number of assumptions
concerning future events. There can be no assurance that actual
results will not be materially higher or lower than these
expectations. These statements are subject to risks, uncertainties,
assumptions, and other important factors that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a
difference include, without limitation, our failure to obtain
capital (debt, construction financing, and/or equity) or refinance
debt maturities, lower than expected yields, increased interest
rates and operating costs, adverse economic or real estate
developments in our markets, our failure to successfully place into
service and lease any properties undergoing development or
redevelopment and our existing space held for future development or
redevelopment (including new properties acquired for that purpose),
our failure to successfully operate or lease acquired properties,
decreased rental rates, increased vacancy rates or failure to renew
or replace expiring leases, defaults on or non-renewal of leases by
tenants, adverse general and local economic conditions, an
unfavorable capital market environment, decreased leasing activity
or lease renewals, failure to obtain LEED and other healthy
building certifications and efficiencies, and other risks and
uncertainties detailed in our filings with the Securities and
Exchange Commission ("SEC"). Accordingly, you are cautioned not to
place undue reliance on such forward-looking statements. All
forward-looking statements are made as of the date of this Earnings
Press Release and Supplemental Information, and unless otherwise
stated, we assume no obligation to update this information and
expressly disclaim any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. For more discussion relating to risks
and uncertainties that could cause actual results to differ
materially from those anticipated in our forward-looking
statements, and risks to our business in general, please refer to
our SEC filings, including our most recent annual report on Form
10-K and any subsequent quarterly reports on Form 10-Q.
This document is not an offer to sell or a solicitation to buy
securities of Alexandria Real Estate Equities, Inc. Any offers to
sell or solicitations to buy our securities shall be made only by
means of a prospectus approved for that purpose. Unless otherwise
indicated, the "Company," "Alexandria," "ARE," "we," "us," and "our"
refer to Alexandria Real Estate Equities, Inc. and our consolidated
subsidiaries. Alexandria®, Lighthouse
Design® logo, Building the Future of Life-Changing
Innovation®, That's What's in Our DNA®,
Labspace®, At the Vanguard and Heart of the Life Science
Ecosystem™, Alexandria Center®, Alexandria Technology
Square®, Alexandria Technology Center®, and
Alexandria Innovation Center® are copyrights and
trademarks of Alexandria Real Estate Equities, Inc. All other
company names, trademarks, and logos referenced herein are the
property of their respective owners.
|
Consolidated
Statements of Operations
September 30, 2024
(Dollars in thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
9/30/24
|
|
9/30/23
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
rentals
|
|
$
775,744
|
|
$
755,162
|
|
$
755,551
|
|
$
742,637
|
|
$
707,531
|
|
$
2,286,457
|
|
$
2,099,819
|
|
Other income
|
|
15,863
|
|
11,572
|
|
13,557
|
|
14,579
|
|
6,257
|
|
40,992
|
|
28,664
|
|
Total
revenues
|
|
791,607
|
|
766,734
|
|
769,108
|
|
757,216
|
|
713,788
|
|
2,327,449
|
|
2,128,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
operations
|
|
233,265
|
|
217,254
|
|
218,314
|
|
222,726
|
|
217,687
|
|
668,833
|
|
636,454
|
|
General and
administrative
|
|
43,945
|
|
44,629
|
|
47,055
|
|
59,289
|
|
45,987
|
|
135,629
|
|
140,065
|
|
Interest
|
|
43,550
|
|
45,789
|
|
40,840
|
|
31,967
|
|
11,411
|
|
130,179
|
|
42,237
|
|
Depreciation and
amortization
|
|
293,998
|
|
290,720
|
|
287,554
|
|
285,246
|
|
269,370
|
|
872,272
|
|
808,227
|
|
Impairment of real
estate
|
|
5,741
|
|
30,763
|
|
—
|
|
271,890
|
|
20,649
|
|
36,504
|
|
189,224
|
|
Total
expenses
|
|
620,499
|
|
629,155
|
|
593,763
|
|
871,118
|
|
565,104
|
|
1,843,417
|
|
1,816,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated real estate joint ventures
|
|
139
|
|
130
|
|
155
|
|
363
|
|
242
|
|
424
|
|
617
|
|
Investment income
(loss)
|
|
15,242
|
|
(43,660)
|
|
43,284
|
|
8,654
|
|
(80,672)
|
|
14,866
|
|
(204,051)
|
|
Gain on sales of real
estate
|
|
27,114
|
|
—
|
|
392
|
|
62,227
|
|
—
|
|
27,506
|
|
214,810
|
|
Net income
(loss)
|
|
213,603
|
|
94,049
|
|
219,176
|
|
(42,658)
|
|
68,254
|
|
526,828
|
|
323,652
|
|
Net income attributable
to noncontrolling interests
|
|
(45,656)
|
|
(47,347)
|
|
(48,631)
|
|
(45,771)
|
|
(43,985)
|
|
(141,634)
|
|
(131,584)
|
|
Net income (loss)
attributable to Alexandria Real Estate Equities, Inc.'s
stockholders
|
|
167,947
|
|
46,702
|
|
170,545
|
|
(88,429)
|
|
24,269
|
|
385,194
|
|
192,068
|
|
Net income attributable
to unvested restricted stock awards
|
|
(3,273)
|
|
(3,785)
|
|
(3,659)
|
|
(3,498)
|
|
(2,414)
|
|
(10,717)
|
|
(7,697)
|
|
Net income (loss)
attributable to Alexandria Real Estate Equities, Inc.'s
common stockholders
|
|
$
164,674
|
|
$
42,917
|
|
$
166,886
|
|
$
(91,927)
|
|
$
21,855
|
|
$
374,477
|
|
$
184,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to Alexandria Real Estate Equities,
Inc.'s common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.96
|
|
$
0.25
|
|
$
0.97
|
|
$
(0.54)
|
|
$
0.13
|
|
$
2.18
|
|
$
1.08
|
|
Diluted
|
|
$
0.96
|
|
$
0.25
|
|
$
0.97
|
|
$
(0.54)
|
|
$
0.13
|
|
$
2.18
|
|
$
1.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
172,058
|
|
172,013
|
|
171,949
|
|
171,096
|
|
170,890
|
|
172,007
|
|
170,846
|
|
Diluted
|
|
172,058
|
|
172,013
|
|
171,949
|
|
171,096
|
|
170,890
|
|
172,007
|
|
170,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
share of common stock
|
|
$
1.30
|
|
$
1.30
|
|
$
1.27
|
|
$
1.27
|
|
$
1.24
|
|
$
3.87
|
|
$
3.69
|
|
Consolidated Balance
Sheets
September 30, 2024
(In thousands)
|
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate
|
|
$
32,951,777
|
|
$
32,673,839
|
|
$
32,323,138
|
|
$
31,633,511
|
|
$ 31,712,731
|
|
Investments in
unconsolidated real estate joint ventures
|
|
40,170
|
|
40,535
|
|
40,636
|
|
37,780
|
|
37,695
|
|
Cash and cash
equivalents
|
|
562,606
|
|
561,021
|
|
722,176
|
|
618,190
|
|
532,390
|
|
Restricted
cash
|
|
17,031
|
|
4,832
|
|
9,519
|
|
42,581
|
|
35,321
|
|
Tenant
receivables
|
|
6,980
|
|
6,822
|
|
7,469
|
|
8,211
|
|
6,897
|
|
Deferred
rent
|
|
1,216,176
|
|
1,190,336
|
|
1,138,936
|
|
1,050,319
|
|
1,012,666
|
|
Deferred leasing
costs
|
|
516,872
|
|
519,629
|
|
520,616
|
|
509,398
|
|
512,216
|
|
Investments
|
|
1,519,327
|
|
1,494,348
|
|
1,511,588
|
|
1,449,518
|
|
1,431,766
|
|
Other assets
|
|
1,657,189
|
|
1,356,503
|
|
1,424,968
|
|
1,421,894
|
|
1,501,611
|
|
Total assets
|
|
$
38,488,128
|
|
$
37,847,865
|
|
$
37,699,046
|
|
$
36,771,402
|
|
$ 36,783,293
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
|
|
Secured notes
payable
|
|
$
145,000
|
|
$
134,942
|
|
$
130,050
|
|
$
119,662
|
|
$
109,110
|
|
Unsecured senior notes
payable
|
|
12,092,012
|
|
12,089,561
|
|
12,087,113
|
|
11,096,028
|
|
11,093,725
|
|
Unsecured senior line
of credit and commercial paper
|
|
454,589
|
|
199,552
|
|
—
|
|
99,952
|
|
—
|
|
Accounts payable,
accrued expenses, and other liabilities
|
|
2,865,886
|
|
2,529,535
|
|
2,503,831
|
|
2,610,943
|
|
2,653,126
|
|
Dividends
payable
|
|
227,191
|
|
227,408
|
|
222,134
|
|
221,824
|
|
214,450
|
|
Total
liabilities
|
|
15,784,678
|
|
15,180,998
|
|
14,943,128
|
|
14,148,409
|
|
14,070,411
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
16,510
|
|
16,440
|
|
16,620
|
|
16,480
|
|
51,658
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
1,722
|
|
1,720
|
|
1,720
|
|
1,719
|
|
1,710
|
|
Additional paid-in
capital
|
|
18,238,438
|
|
18,284,611
|
|
18,434,690
|
|
18,485,352
|
|
18,651,185
|
|
Accumulated other
comprehensive loss
|
|
(22,529)
|
|
(27,710)
|
|
(23,815)
|
|
(15,896)
|
|
(24,984)
|
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity
|
|
18,217,631
|
|
18,258,621
|
|
18,412,595
|
|
18,471,175
|
|
18,627,911
|
|
Noncontrolling
interests
|
|
4,469,309
|
|
4,391,806
|
|
4,326,703
|
|
4,135,338
|
|
4,033,313
|
|
Total equity
|
|
22,686,940
|
|
22,650,427
|
|
22,739,298
|
|
22,606,513
|
|
22,661,224
|
|
Total liabilities,
noncontrolling interests, and equity
|
|
$
38,488,128
|
|
$
37,847,865
|
|
$
37,699,046
|
|
$
36,771,402
|
|
$ 36,783,293
|
|
Funds From
Operations and Funds From Operations per Share
September 30, 2024
(In thousands)
|
|
|
The following table
presents a reconciliation of net income (loss) attributable to
Alexandria's common stockholders, the most directly comparable
financial measure presented in
accordance with U.S. generally accepted accounting principles
("GAAP"), including our share of amounts from consolidated and
unconsolidated real estate joint ventures, to funds from
operations
attributable to Alexandria's common stockholders – diluted, and
funds from operations attributable to Alexandria's common
stockholders – diluted, as adjusted, for the periods
below:
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
9/30/24
|
|
9/30/23
|
|
Net income (loss)
attributable to Alexandria's common stockholders – basic
and diluted
|
|
$
164,674
|
|
$ 42,917
|
|
$
166,886
|
|
$
(91,927)
|
|
$ 21,855
|
|
$
374,477
|
|
$
184,371
|
|
Depreciation and
amortization of real estate assets
|
|
291,258
|
|
288,118
|
|
284,950
|
|
281,939
|
|
266,440
|
|
864,326
|
|
798,590
|
|
Noncontrolling share
of depreciation and amortization from consolidated real
estate JVs
|
|
(32,457)
|
|
(31,364)
|
|
(30,904)
|
|
(30,137)
|
|
(28,814)
|
|
(94,725)
|
|
(85,212)
|
|
Our share of
depreciation and amortization from unconsolidated real estate
JVs
|
|
1,075
|
|
1,068
|
|
1,034
|
|
965
|
|
910
|
|
3,177
|
|
2,624
|
|
Gain on sales of real
estate
|
|
(27,114)
|
|
—
|
|
(392)
|
|
(62,227)
|
|
—
|
|
(27,506)
|
|
(214,810)
|
|
Impairment of real
estate – rental properties and land
|
|
5,741
|
(1)
|
2,182
|
|
—
|
|
263,982
|
|
19,844
|
|
7,923
|
|
186,446
|
|
Allocation to unvested
restricted stock awards
|
|
(2,908)
|
|
(1,305)
|
|
(3,469)
|
|
(2,268)
|
|
(838)
|
|
(7,657)
|
|
(3,050)
|
|
Funds from
operations attributable to Alexandria's common stockholders –
diluted(2)
|
|
400,269
|
|
301,616
|
|
418,105
|
|
360,327
|
|
279,397
|
|
1,120,015
|
|
868,959
|
|
Unrealized (gains)
losses on non-real estate investments
|
|
(2,610)
|
|
64,238
|
|
(29,158)
|
|
(19,479)
|
|
77,202
|
|
32,470
|
|
220,954
|
|
Impairment of non-real
estate investments
|
|
10,338
|
(3)
|
12,788
|
|
14,698
|
|
23,094
|
|
28,503
|
|
37,824
|
|
51,456
|
|
Impairment of real
estate
|
|
—
|
|
28,581
|
|
—
|
|
7,908
|
|
805
|
|
28,581
|
|
2,778
|
|
Acceleration of stock
compensation expense due to executive officer
resignations
|
|
—
|
|
—
|
|
—
|
|
18,436
|
|
1,859
|
|
—
|
|
1,859
|
|
Allocation to unvested
restricted stock awards
|
|
(125)
|
|
(1,738)
|
|
247
|
|
(472)
|
|
(1,330)
|
|
(1,640)
|
|
(3,503)
|
|
Funds from
operations attributable to Alexandria's common stockholders –
diluted, as adjusted
|
|
$
407,872
|
|
$
405,485
|
|
$
403,892
|
|
$
389,814
|
|
$
386,436
|
|
$
1,217,250
|
|
$
1,142,503
|
|
Refer to "Definitions
and reconciliations" in the Supplemental Information for
additional details.
|
|
|
|
(1)
|
Primarily to reduce the
carrying amount of one property in Canada that continued to meet
the held-for-sale classification to the sales price under
negotiation with a potential buyer less costs to sell.
|
|
(2)
|
Calculated in
accordance with standards established by the Nareit Board of
Governors.
|
|
(3)
|
Primarily related to
two non-real estate investments in privately held entities that do
not report NAV.
|
|
Funds From
Operations and Funds From Operations per Share (continued)
September 30, 2024
(In thousands, except per share amounts)
|
|
|
The following table
presents a reconciliation of net income (loss) per share
attributable to Alexandria's common stockholders, the most directly
comparable financial measure presented in
accordance with GAAP, including our share of amounts from
consolidated and unconsolidated real estate joint ventures, to
funds from operations per share attributable to Alexandria's
common
stockholders – diluted, and funds from operations per share
attributable to Alexandria's common stockholders – diluted, as
adjusted, for the periods below. Per share amounts may not add
due
to rounding.
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
9/30/24
|
|
9/30/23
|
|
Net income (loss)
per share attributable to Alexandria's common stockholders –
diluted
|
|
$
0.96
|
|
$
0.25
|
|
$
0.97
|
|
$
(0.54)
|
|
$
0.13
|
|
$
2.18
|
|
$
1.08
|
|
Depreciation and
amortization of real estate assets
|
|
1.51
|
|
1.50
|
|
1.48
|
|
1.48
|
|
1.40
|
|
4.49
|
|
4.19
|
|
Gain on sales of real
estate
|
|
(0.16)
|
|
—
|
|
—
|
|
(0.36)
|
|
—
|
|
(0.16)
|
|
(1.26)
|
|
Impairment of real
estate – rental properties and land
|
|
0.03
|
|
0.01
|
|
—
|
|
1.54
|
|
0.12
|
|
0.05
|
|
1.09
|
|
Allocation to unvested
restricted stock awards
|
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
(0.01)
|
|
(0.01)
|
|
(0.05)
|
|
(0.01)
|
|
Funds from
operations per share attributable to Alexandria's common
stockholders – diluted
|
|
2.33
|
|
1.75
|
|
2.43
|
|
2.11
|
|
1.64
|
|
6.51
|
|
5.09
|
|
Unrealized (gains)
losses on non-real estate investments
|
|
(0.02)
|
|
0.37
|
|
(0.17)
|
|
(0.11)
|
|
0.45
|
|
0.19
|
|
1.29
|
|
Impairment of non-real
estate investments
|
|
0.06
|
|
0.08
|
|
0.09
|
|
0.13
|
|
0.17
|
|
0.22
|
|
0.30
|
|
Impairment of real
estate
|
|
—
|
|
0.17
|
|
—
|
|
0.05
|
|
—
|
|
0.17
|
|
0.02
|
|
Acceleration of stock
compensation expense due to executive officer
resignations
|
|
—
|
|
—
|
|
—
|
|
0.11
|
|
0.01
|
|
—
|
|
0.01
|
|
Allocation to unvested
restricted stock awards
|
|
—
|
|
(0.01)
|
|
—
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
Funds from
operations per share attributable to Alexandria's common
stockholders – diluted, as adjusted
|
|
$
2.37
|
|
$
2.36
|
|
$
2.35
|
|
$
2.28
|
|
$
2.26
|
|
$
7.08
|
|
$
6.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding – diluted
|
|
172,058
|
|
172,013
|
|
171,949
|
|
171,096
|
|
170,890
|
|
172,007
|
|
170,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to "Definitions
and reconciliations" in the Supplemental Information for
additional details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/alexandria-real-estate-equities-inc-reports-3q24-and-ytd-3q24-net-income-per-share--diluted-of-0-96-and-2-18--respectively-and-3q24-and-ytd-3q24-ffo-per-share--diluted-as-adjusted-of-2-37-and-7-08--respectively-302282138.html
SOURCE Alexandria Real Estate Equities, Inc.