PASADENA, Calif., July 24,
2023 /PRNewswire/ -- Alexandria Real Estate Equities,
Inc. (NYSE: ARE) announced financial and operating results for the
second quarter ended June 30,
2023.
Key
highlights
|
|
|
|
|
|
|
Operating
results
|
2Q23
|
|
2Q22
|
|
1H23
|
|
1H22
|
|
Total
revenues:
|
|
|
|
|
|
|
|
|
In
millions
|
$
713.9
|
|
$ 643.8
|
|
$
1,414.7
|
|
$
1,258.8
|
|
Growth
|
10.9 %
|
|
|
12.4 %
|
|
|
Net income attributable
to Alexandria's common stockholders – diluted
|
In
millions
|
$
87.3
|
|
$ 269.3
|
|
$
162.5
|
|
$ 118.5
|
|
Per
share
|
$
0.51
|
|
$ 1.67
|
|
$
0.95
|
|
$ 0.74
|
|
Funds from operations
attributable to Alexandria's common stockholders – diluted, as
adjusted
|
|
In
millions
|
$
382.4
|
|
$ 338.8
|
|
$
756.1
|
|
$ 663.4
|
|
Per
share
|
$
2.24
|
|
$ 2.10
|
|
$
4.43
|
|
$ 4.15
|
|
An operationally excellent, industry-leading REIT with a
high-quality/diverse client base of approximately 825 tenants to
support growing revenues, stable cash flows, and strong
margins
Percentage of total
annual rental revenue in effect from investment-grade or
publicly traded large cap tenants
|
|
49 %
|
|
|
Sustained strength in
tenant collections:
|
|
|
|
|
Tenant
receivables as of June 30, 2023
|
|
$ 7.0
|
million
|
July
2023 tenant rent and receivables
collected as of July 24, 2023
|
|
99.7 %
|
|
|
2Q23
tenant rent and receivables collected as
of July 24, 2023
|
|
99.9 %
|
|
|
Occupancy of operating
properties in North America as of June 30, 2023
|
|
93.6 %
|
|
|
Adjusted EBITDA
margin
|
|
70 %
|
|
|
Weighted-average
remaining lease term as of June 30, 2023:
|
|
|
|
|
Top 20
tenants
|
|
9.4
|
years
|
All
tenants
|
|
7.2
|
years
|
Continued solid leasing volume and rental rate increases with
weighted-average lease terms of 13.0 years and 9.5 years for 2Q23
and 1H23, respectively
- Solid leasing activity continued in 2Q23 with leasing volume
aggregating 1.3 million RSF, 77% of which was generated from our
client base of approximately 825 tenants.
- 1H23 annualized leasing volume of 5.1 million RSF in line with
pre-COVID leasing volume.
|
|
2Q23
|
|
|
1H23
|
|
Total leasing activity
– RSF
|
|
1,325,326
|
|
|
2,548,753
|
|
Lease renewals and
re-leasing of space:
|
|
|
|
|
|
|
RSF (included in
total leasing activity above)
|
|
1,052,872
|
|
|
2,172,910
|
|
Rental rate
increase
|
|
16.6 %
|
|
|
35.1 %
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|
Rental rate
increase (cash basis)
|
|
8.3 %
|
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17.9 %
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|
Continued strong net operating income and internal
growth
- Net operating income (cash basis) of $1.8 billion for 2Q23 annualized, up $178.3 million, or 11.1%, compared to 2Q22
annualized.
- Same property net operating income growth of 3.0% and 4.9%
(cash basis) for 2Q23 over 2Q22 and 3.4% and 6.5% (cash basis) for
1H23 over 1H22.
- 96% of our leases contain contractual annual rent escalations
approximating 3%.
Alexandria's banking
syndicate continues to support our world-class brand,
differentiated business model, and laboratory space market
dominance
- In June 2023, we increased the
aggregate commitments available for borrowing under our unsecured
senior line of credit to $5.0 billion
from $4.0 billion. The increase was
1.7x oversubscribed, and we added one new banking
relationship.
Continued strong and flexible balance sheet with 13.4 years
of remaining term of debt and no debt maturities prior to
2025
- Investment-grade credit ratings ranked in the top 10% among all
publicly traded U.S. REITs.
- $6.3 billion of liquidity.
- No debt maturities prior to 2025.
- 13.4 years weighted-average remaining term of debt.
- 99.2% of our debt has a fixed rate.
- Net debt and preferred stock to Adjusted EBITDA of 5.2x,
matching our second-lowest level in Company history, and
fixed-charge coverage ratio of 4.7x for 2Q23 annualized.
- Total debt and preferred stock to gross assets of 27%.
- $1.3 billion of expected capital
contributions from existing real estate joint venture partners from
3Q23 through 2026 to fund construction.
Continued strong and increasing dividends with a focus on
retaining significant net cash flows from operating activities
after dividends for reinvestment
- Common stock dividend declared for 2Q23 of $1.24 per common share, aggregating $4.84 per common share for the twelve months
ended June 30, 2023, up 24 cents, or 5%, over the twelve months ended
June 30, 2022.
- Dividend yield of 4.4% as of June 30,
2023.
- Dividend payout ratio of 55% for the three months ended
June 30, 2023.
- Average annual dividend per-share growth of 6% from 2019 to
2Q23 annualized.
Focused execution on harvesting value from our asset
recycling program
Our $1.85 billion capital plan for
2023 is focused on the enhancement of our asset base through the
sale of non-core properties and/or properties not integral to our
mega campus strategy and comprises:
(in
millions)
|
|
Completed
During
2Q23
|
|
Expected
Completion
During 2H23
|
Dispositions of 100%
interests in properties with strong capitalization rates
|
|
$
603
|
|
$
—
|
Strategic partial
interest sales
|
|
98
|
|
—
|
Executed and pending
transactions subject to signed letters of intent or
purchase and sale agreements
|
|
—
|
|
175
|
Additional targeted
non-core dispositions in process
|
|
—
|
|
874
|
Proceeds of forward
equity sales agreements entered into during 2022
|
|
—
|
|
100
|
Completed and pending
transactions
|
|
$
701
|
|
$
1,149
|
Total 2023 capital
plan
|
|
$1,850
|
|
External growth and investments in real estate
Alexandria's highly leased
value-creation pipeline delivers annual incremental net operating
income of $58 million commencing
during 2Q23 and drives future annual incremental net operating
income aggregating $605 million
(dollars in
millions)
|
|
Incremental
Annual Net
Operating
Income
|
|
RSF
|
|
Project
Leased
Percentage
|
|
|
Placed into
service(1):
|
|
|
|
|
|
|
|
|
|
1Q23
|
|
$
23
|
|
453,511
|
|
100
|
%
|
|
|
|
2Q23
|
|
58
|
|
387,076
|
|
100
|
|
|
|
|
1H23
|
|
$
81
|
|
840,587
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected to be placed
into service and
stabilized(2):
|
|
|
|
|
|
|
|
|
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2H23
|
|
$
150
|
|
1,175,382
|
|
99
|
%
|
|
|
|
2024
|
|
127
|
|
1,842,713
|
|
90
|
|
|
|
|
2H23 through
4Q24
|
|
277
|
|
3,018,095
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q25 through
2Q26
|
|
328
|
|
3,695,763
|
|
43
|
|
|
|
|
|
|
$
605
|
|
6,713,858
|
|
70
|
%
|
(3)
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|
|
|
|
|
|
|
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|
|
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(1)
|
Annual net operating
income (cash basis) is expected to increase by $38 million upon the
burn-off of initial free
rent from recently delivered projects, which has a weighted-average
burn-off of three months.
|
(2)
|
Refer to "New Class
A/A+ Development and Redevelopment Properties: Current Projects" of
our Supplemental
Information for additional details.
|
(3)
|
77% of the leased RSF
of our value-creation projects was generated from our client
base.
|
Strong balance sheet management
Key metrics as of June 30, 2023
- $30.6 billion in total market
capitalization.
- $19.4 billion in total equity
capitalization, which ranks in the top 10% among all publicly
traded U.S. REITs.
|
|
2Q23
|
|
Goal
|
|
|
Quarter
Annualized
|
|
Trailing
12 Months
|
|
4Q23
Annualized
|
Net debt and preferred
stock to
Adjusted EBITDA
|
|
5.2x
|
|
5.4x
|
|
Less than or equal to
5.1x
|
Fixed-charge coverage
ratio
|
|
4.7x
|
|
4.9x
|
|
4.5x to 5.0x
|
|
Key capital events
- In June 2023, we amended our
unsecured senior line of credit to increase the aggregate
commitments available for borrowing to $5.0
billion from $4.0 billion
while maintaining the existing borrowing rate and maturity
date.
- In July 2023, we increased the
aggregate amount we may issue from time to time under our
commercial paper program to $2.5
billion from $2.0
billion.
- As of 2Q23, we have outstanding forward equity agreements from
2022 aggregating 699 thousand shares of common stock with expected
net proceeds of $102.8 million.
- As of June 30, 2023, the
remaining aggregate amount available under our ATM program for
future sales of common stock was $141.9
million.
Investments
- As of June 30, 2023:
-
- Our non-real estate investments aggregated $1.5 billion.
- Unrealized gains presented in our consolidated balance sheet
were $251.3 million, comprising gross
unrealized gains and losses aggregating $373.3 million and $122.0
million, respectively.
- Investment loss of $78.3 million
for 2Q23, presented in our consolidated statements of operations,
consisted of $77.9 million of
unrealized losses and reclassifications, and $371 thousand of realized losses.
Other key highlights
Nareit Investor CARE Gold Award winner
We received the 2023 Nareit Investor CARE (Communications and
Reporting Excellence) Gold Award in the Large Cap Equity REIT
category for superior shareholder communications and reporting. Our
most recent award contributes to an impressive milestone of our
sixth consecutive Nareit Investor CARE Award, our seventh Gold
award, and our eighth overall award since 2015, positioning us as
the equity REIT with the most Gold awards. These recognitions are
directly attributed to our world-class team's operational
excellence in upholding the highest levels of transparency,
integrity, and accountability to our stockholders.
Key items included
in net income attributable to Alexandria's common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share
amounts)
|
Amount
|
|
Per Share –
Diluted
|
|
Amount
|
|
Per Share –
Diluted
|
|
2Q23
|
|
2Q22
|
|
2Q23
|
|
2Q22
|
|
1H23
|
|
1H22
|
|
1H23
|
|
1H22
|
Unrealized losses on
non-
real estate investments
|
$ (77.9)
|
|
$
(68.1)
|
|
$ (0.46)
|
|
$ (0.42)
|
|
$
(143.8)
|
|
$
(331.6)
|
|
$ (0.84)
|
|
$ (2.07)
|
Gain on sales of real
estate
|
214.8
|
|
214.2
|
|
1.26
|
|
1.33
|
|
214.8
|
|
214.2
|
|
1.26
|
|
1.34
|
Impairment of
non-real
estate investments
|
(23.0)
|
|
—
|
|
(0.13)
|
|
—
|
|
(23.0)
|
|
—
|
|
(0.13)
|
|
—
|
Impairment of real
estate
|
(168.6)
|
|
—
|
|
(0.99)
|
|
—
|
|
(168.6)
|
|
—
|
|
(0.99)
|
|
—
|
Loss on early
extinguishment of debt
|
—
|
|
(3.3)
|
|
—
|
|
(0.02)
|
|
—
|
|
(3.3)
|
|
—
|
|
(0.02)
|
Total
|
$ (54.7)
|
|
$ 142.8
|
|
$ (0.32)
|
|
$
0.89
|
|
$
(120.6)
|
|
$
(120.7)
|
|
$ (0.70)
|
|
$ (0.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to "Funds from
operations and funds from operations per share" of this Earnings
Press Release for additional details.
|
Industry and ESG leadership: catalyzing and leading the way
for positive change to benefit human health and society
- In June 2023, Alexandria released our 2022 ESG Report, which
highlights our longstanding and continued leadership in ESG. The
report details the advancement of our decarbonization strategy and
our roadmap to climate resilience within our life science real
estate asset base. It also showcases Alexandria's comprehensive efforts to catalyze
the health, wellness, safety, and productivity of our employees,
tenants, local communities, and the world through the built
environment and beyond, including through our visionary social
responsibility initiatives. Notable ESG initiatives and
achievements include the following:
-
- We continue to further our approach to net zero by developing
an innovative greenhouse gas emissions mitigation strategy that
includes reducing emissions from the operation of our real estate
assets through electrification, energy efficiency, and renewable
electricity.
- We have proactively taken steps to incorporate electrification
into some of our development projects, including at 230 Harriet
Tubman Way on our Alexandria Center® for Life Science
–Millbrae campus in our South San
Francisco submarket.
- We look for opportunities to utilize alternative energy
sources, such as geothermal energy. In our Greater Boston region, our 325 Binney Street
development, Moderna's new HQ and core R&D operations, is
designed to be the most sustainable laboratory building in
Cambridge, and our 15 Necco Street
development is a state-of-the-art low-carbon laboratory building
for Eli Lilly. 325 Binney Street and 15 Necco Street are targeting
a 92% and 74% reduction in fossil fuel use, respectively.
- We also continue to increase our consumption of renewable
electricity. With our new solar power purchase agreement to take
effect in our Greater Boston
region in 2024, 100% of the electricity consumed by Greater Boston will be from renewable
electricity, assuming 2022 levels of use for Alexandria-paid utility accounts.
- Pursuing Zero Energy certifications for two projects: 325
Binney Street, which is targeting LEED Zero Energy certification
and is designed to be the most sustainable laboratory building in
Cambridge, and 685 Gateway
Boulevard in our South San
Francisco submarket, which is designated as Zero Energy
Ready and is on track to achieve ILFI Zero Energy
certification.
- In our Lake Union submarket, Alexandria received the 2023 BOMA Pacific
Northwest TOBY (The Outstanding Building of the Year) Award in the
Corporate Facility category for 1165 Eastlake Avenue East on The
Eastlake Life Science by Alexandria mega campus. The TOBY Awards honor
and recognize quality in commercial buildings and reward excellence
in building management.
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 since its
founding in 1994, Alexandria is
the preeminent and longest-tenured owner, operator, and developer
of collaborative life science, agtech, and advanced technology
campuses in AAA innovation cluster locations, including
Greater Boston, the San Francisco Bay Area, New York City, San
Diego, Seattle,
Maryland, and Research Triangle.
The trusted partner to approximately 825 tenants, Alexandria has a total market capitalization
of $30.6 billion and an asset
base in North America of 74.9
million SF as of June 30, 2023, which
includes 41.1 million RSF of operating properties and 5.3 million
RSF of Class A/A+ properties undergoing construction,
9.4 million RSF of near-term and intermediate-term development
and redevelopment projects, and 19.1 million SF of future
development projects. Alexandria
has a longstanding and proven track record of developing Class A/A+
properties clustered in life science, agtech, and advanced
technology 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, agrifoodtech, climate innovation, and
technology 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 additional
information on Alexandria, please
visit www.are.com.
Guidance
June 30, 2023
(Dollars in millions)
|
|
Guidance for 2023 has
been updated to reflect our current view of existing market
conditions and assumptions for the year ending December 31, 2023.
There can be no assurance that actual
amounts will not be materially higher or lower than these
expectations. Also, refer to our discussion of "forward-looking
statements" on page 8 of this Earnings Press Release
for additional details.
Key updates to the midpoints of our guidance ranges for our 2023
key sources and uses of capital include the following:
|
|
•
During the three months ended June 30, 2023, we pivoted our
strategy toward harvesting value by selling 100% interests in
non-core properties and/or properties not integral to our mega
campus strategy in lieu of seeking a new real
estate joint venture partner for one of our active development
projects.
|
• This resulted in increases to (i) proceeds
from dispositions and sales of partial interests by $225 million,
and (ii) our share of construction spending by $210 million, as
this amount
was previously
expected to be funded by a future joint venture partner.
|
• The revised midpoint to our 2023 guidance
range for dispositions and sales of partial interests is $1.75
billion.
|
• The revised midpoint to our 2023 guidance
range for construction spending is $2.9 billion. Total 2023
construction spending before contributions from real estate joint
venture partners
remains unchanged
from our prior forecast at $3.5 billion.
|
|
|
|
Midpoint
|
|
As of
7/24/23
|
|
|
Key Sources and Uses
of Capital
|
|
As of
4/24/23
|
|
Key
Changes
|
|
As of
7/24/23
|
|
Range
|
|
Midpoint
|
|
Certain
Completed
Items
|
|
|
Sources of
capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incremental
debt
|
|
$
650
|
|
$
(15)
|
|
$
635
|
|
$
560
|
|
$
710
|
|
$
635
|
|
|
|
|
Excess 2022
bond capital held as cash at December 31, 2022
|
|
300
|
|
—
|
|
300
|
|
300
|
|
300
|
|
300
|
|
$
300
|
(1)
|
|
Net cash
provided by operating activities after dividends
|
|
375
|
|
—
|
|
375
|
|
350
|
|
400
|
|
375
|
|
|
|
|
Dispositions
and sales of partial interests
|
|
1,525
|
|
225
|
|
1,750
|
|
1,650
|
|
1,850
|
|
1,750
|
|
$
701
|
(2)
|
|
Future
settlement of forward equity sales agreements outstanding as of
December 31, 2022
|
|
100
|
|
—
|
|
100
|
|
100
|
|
100
|
|
100
|
|
$
100
|
(3)
|
|
Total sources of
capital before excess cash expected to be held at December 31,
2023
|
|
$ 2,950
|
|
$
210
|
|
$ 3,160
|
|
2,960
|
|
3,360
|
|
3,160
|
|
|
|
|
Cash expected to
be held at December 31, 2023(4)
|
|
$
275
|
|
$
—
|
|
$
275
|
|
125
|
|
425
|
|
275
|
|
|
|
|
Total sources of
capital
|
|
|
|
|
|
|
|
$ 3,085
|
|
$ 3,785
|
|
$ 3,435
|
|
|
|
|
Uses of
capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$ 2,725
|
|
$
210
|
|
$ 2,935
|
|
$ 2,785
|
|
$ 3,085
|
|
$ 2,935
|
|
|
|
|
Acquisitions
|
|
225
|
|
—
|
|
225
|
|
175
|
|
275
|
|
225
|
|
$
235
|
|
|
Total uses of
capital
|
|
$ 2,950
|
|
$
210
|
|
$ 3,160
|
|
$ 2,960
|
|
$ 3,360
|
|
$ 3,160
|
|
|
|
|
Incremental debt
(included above):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of
unsecured senior notes payable
|
|
|
|
|
|
|
|
$ 1,000
|
|
$ 1,000
|
|
$ 1,000
|
|
$
1,000
|
(5)
|
|
Unsecured senior
line of credit, commercial paper, and other
|
|
|
|
|
|
|
|
(440)
|
|
(290)
|
|
(365)
|
|
|
|
|
Net incremental
debt
|
|
|
|
|
|
|
|
$
560
|
|
$
710
|
|
$
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents $300.0
million of excess 2022 bond capital proceeds held as cash at
December 31, 2022, which we used to reduce our 2023 debt capital
needs.
|
(2)
|
In addition to
completed transactions, we have pending transactions subject to
signed letters of intent or purchase and sale agreements
aggregating $175.0 million as of July 24, 2023.
|
(3)
|
Represents outstanding
forward equity sales agreements to sell 699 thousand shares of
common stock under our ATM program entered into during 2022 and
expected to be settled during the second half of 2023.
|
(4)
|
Represents estimated
excess 2023 bond capital proceeds expected to be held as cash at
December 31, 2023, which reduces our 2024 debt capital
needs.
|
(5)
|
Represents $1.0 billion
of unsecured senior notes payable issued in February
2023.
|
Projected 2023
Earnings per Share and Funds From Operations per Share Attributable
to Alexandria's Common Stockholders – Diluted
|
|
|
|
As of
7/24/23
|
|
As of
4/24/23
|
|
Key
Changes
|
|
Earnings per
share(1)
|
|
$2.72 to
$2.78
|
|
$2.21 to
$2.31
|
|
|
|
Depreciation and
amortization of real estate assets
|
|
|
5.55
|
|
|
|
5.55
|
|
|
|
|
Gain on sales of
real estate
|
|
|
(1.26)
|
|
|
|
—
|
|
|
(2)
|
|
Impairment of
real estate – rental properties
|
|
|
0.98
|
|
|
|
0.81
|
|
|
(3)
|
|
Allocation to
unvested restricted stock awards
|
|
|
(0.04)
|
|
|
|
(0.04)
|
|
|
|
|
Funds from operations
per share(4)
|
|
$7.95 to
$8.01
|
|
$8.53 to
$8.63
|
|
|
|
Unrealized
losses on non-real estate investments
|
|
|
0.84
|
|
|
|
0.39
|
|
|
(3)
|
|
Impairment of
non-real estate investments
|
|
|
0.13
|
|
|
|
—
|
|
|
Impairment of
real estate
|
|
|
0.02
|
|
|
|
—
|
|
|
|
|
Allocation to
unvested restricted stock awards
|
|
|
(0.01)
|
|
|
|
(0.01)
|
|
|
|
|
Funds from operations
per share, as adjusted(4)
|
|
$8.93 to
$8.99
|
|
$8.91 to
$9.01
|
|
No change to
midpoint;
range narrowed by 4
cents
|
|
Midpoint
|
|
$8.96
|
|
$8.96
|
|
|
|
As of
7/24/23
|
|
As of
4/24/23
|
|
|
|
Key
Assumptions
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Key
Changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy percentage in
North America as of December 31, 2023
|
|
94.6 %
|
|
95.6 %
|
|
94.6 %
|
|
95.6 %
|
|
No change
|
|
Lease renewals and
re-leasing of space:
|
|
|
|
|
|
|
|
|
|
Rental rate
increases
|
|
28.0 %
|
|
33.0 %
|
|
28.0 %
|
|
33.0 %
|
|
Rental rate
increases (cash basis)
|
|
12.0 %
|
|
17.0 %
|
|
12.0 %
|
|
17.0 %
|
|
Same property
performance:
|
|
|
|
|
|
|
|
|
|
Net operating
income increases
|
|
2.0 %
|
|
4.0 %
|
|
2.0 %
|
|
4.0 %
|
|
Net operating
income increases (cash basis)
|
|
4.0 %
|
|
6.0 %
|
|
4.0 %
|
|
6.0 %
|
|
Straight-line rent
revenue
|
|
$
130
|
|
$
145
|
|
$
130
|
|
$
145
|
|
General and
administrative expenses
|
|
$
183
|
|
$
193
|
|
$
183
|
|
$
193
|
|
Capitalization of
interest
|
|
$
342
|
|
$
362
|
|
$
342
|
|
$
362
|
|
Interest
expense
|
|
$
74
|
|
$
94
|
|
$
74
|
|
$
94
|
|
Key Credit
Metrics
|
|
As of
7/24/23
|
|
As of
4/24/23
|
|
Key
Changes
|
|
|
|
|
|
|
|
Net debt and preferred
stock to Adjusted EBITDA – 4Q23 annualized
|
|
Less than or equal to
5.1x
|
|
Less than or equal to
5.1x
|
|
No change
|
Fixed-charge coverage
ratio – 4Q23 annualized
|
|
4.5x to 5.0x
|
|
4.5x to 5.0x
|
|
|
|
(1)
|
Excludes unrealized
gains or losses after June 30, 2023 that are required to be
recognized in earnings and are excluded from funds from operations
per share, as adjusted.
|
(2)
|
Refer to "Dispositions
and sales of partial interests" in this Earnings Press Release for
additional information.
|
(3)
|
Refer to "Funds from
operations and funds from operations per share" in this Earnings
Press Release for additional information.
|
(4)
|
Refer to "Funds from
operations and funds from operations, as adjusted, attributable to
Alexandria's common stockholders" in the "Definitions and
reconciliations" of our Supplemental Information for additional
details.
|
Acquisitions
June 30, 2023
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Square
Footage
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions With
Development/Redevelopment
Opportunities(1)
|
|
|
Property
|
|
Submarket/Market
|
|
Date
of
Purchase
|
|
Number of
Properties
|
|
Operating
Occupancy
|
|
Future
Development
|
|
Active
Development/
Redevelopment
|
|
Operating With
Future
Development/
Redevelopment
|
|
Total(2)
|
|
Purchase
Price
|
|
Completed in
1H23:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
Canada
|
|
1/30/23
|
|
1
|
|
100 %
|
|
—
|
|
—
|
|
247,743
|
|
247,743
|
|
$
|
100,837
|
|
Other
|
|
Various
|
|
|
|
2
|
|
100
|
|
1,089,349
|
|
110,717
|
|
10,000
|
|
1,210,066
|
|
|
125,103
|
|
|
|
|
|
|
|
3
|
|
100 %
|
|
1,089,349
|
|
110,717
|
|
257,743
|
|
1,457,809
|
|
|
225,940
|
|
Completed in July
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,495
|
|
2023 acquisitions
completed as of July 24, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
235,435
|
|
2023 guidance
range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$175,000 –
$275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We expect to provide
total estimated costs and related yields for development and
redevelopment projects in the future, subsequent to the
commencement of construction.
|
(2)
|
Represents total square
footage upon completion of development or redevelopment of one or
more new Class A/A+ properties. Square footage presented includes
RSF of buildings currently in operation with future development
or
redevelopment opportunities. Refer to "Investments in real estate"
in the "Definitions and reconciliations" of our Supplemental
Information for additional details on value-creation square feet
currently included in rental properties.
|
Dispositions and
Sales of Partial Interests June 30, 2023
(Dollars in thousands, except per RSF
amounts)
|
Property
|
|
Submarket/Market
|
|
Date of
Sale
|
|
Interest
Sold
|
|
RSF
|
|
Capitalization
Rate
|
|
Capitalization
Rate
(Cash
Basis)
|
|
Sales
Price
|
|
Sales Price
per RSF
|
|
Completed in
1H23:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value harvesting
dispositions and recycling of assets not integral to
our
mega campus
strategy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225, 266, and 275
Second Avenue and 780 and 790
Memorial Drive(1)
|
|
Route 128 and
Cambridge/Inner
Suburbs/Greater Boston
|
|
6/13/23
|
|
100 %
|
|
|
428,663
|
|
5.0 %
|
(1)
|
|
5.2 %
|
(1)
|
|
$
365,226
|
|
$
852
|
|
11119 North Torrey
Pines Road(2)
|
|
Torrey Pines/San
Diego
|
|
5/4/23
|
|
100 %
|
|
|
72,506
|
|
4.4 %
|
(2)
|
|
4.6 %
|
(2)
|
|
86,000
|
|
$
1,186
|
|
275 Grove
Street(3)
|
|
Route 128/Greater
Boston
|
|
6/27/23
|
|
100 %
|
|
|
509,702
|
|
N/A
|
|
|
N/A
|
|
|
109,349
|
|
N/A
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
602,667
|
(4)
|
|
|
Strategic partial
interest sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15 Necco
Street(5)
|
|
Seaport Innovation
District/
Greater
Boston
|
|
4/11/23
|
|
18 %
|
(5)
|
|
345,995
|
|
6.6 %
|
|
|
5.4 %
|
|
|
66,108
|
|
$
1,626
|
|
9625 Towne Centre
Drive(6)
|
|
University Town
Center/San Diego
|
|
6/21/23
|
|
20.1 %
|
|
|
163,648
|
|
4.2 %
|
|
|
4.5 %
|
|
|
32,261
|
|
$
981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
98,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
701,036
|
|
|
|
Pending as of July 24,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
421 Park
Drive(7)
|
|
Fenway/Greater
Boston
|
|
|
|
(7)
|
|
|
(7)
|
|
|
|
|
|
|
|
155,000
|
|
|
|
Executed and pending
transactions subject to signed letters
of intent or purchase and sale agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
Total pending and under
executed letters of intent or
purchase and sales agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
876,036
|
|
|
|
Additional targeted
non-core dispositions in process
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
873,964
|
|
|
|
2023 dispositions and
sales of partial interests (midpoint)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,750,000
|
|
|
|
2023 guidance
range
|
|
|
|
|
|
|
|
|
$1,650,000 –
$1,850,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We calculated
capitalization rates based upon net operating income and net
operating income (cash basis) for 2Q23 annualized that includes
vacancy available for redevelopment. Upon completion of the
sale, we recognized a gain on sale
of real estate aggregating $187.2 million and a value-creation
margin of 80%.
|
(2)
|
We calculated
capitalization rates based upon net operating income and net
operating income (cash basis) for 1Q23 annualized. Upon completion
of the sale, we recognized a gain on sale of real estate
aggregating $27.6 million and a
value-creation margin of 34%.
|
(3)
|
During 2Q23, we
recognized a real estate impairment charge of $145.4 million to
reduce our investment to its current fair value less costs to
sell.
|
(4)
|
Dispositions completed
during the three months ended June 30, 2023 had annual net
operating income of $32.4 million with a weighted-average
disposition date of June 13, 2023 (weighted by net operating income
for 2Q23 annualized).
|
(5)
|
Represents a
development project under construction aggregating 345,995 RSF, 97%
of which is leased to Eli Lilly and Company for the Lilly Institute
for Genetic Medicine. In April 2023, an investor acquired a 20%
interest in this joint
venture, which consisted of an 18% interest sold by us and a 2%
interest sold by our existing partner. Upon completion of the sale,
our ownership interest in the consolidated real estate joint
venture was 72% and our existing and new
partners' noncontrolling interests were 8% and 20%, respectively.
We retained control over this real estate joint venture and
therefore continue to consolidate this property. The sales price of
the 18% interest sold by us was $66.1 million, or
$1,626 per RSF, representing capitalization rates of 6.6% and 5.4%
(cash basis). We expect our new joint venture partner to contribute
capital approximating $130 million to fund construction of the
project over time and to accrete its
ownership interest in the joint venture to 37% from 20%.
|
(6)
|
An investor acquired a
70% interest in this consolidated real estate joint venture, which
consisted of a 20.1% interest sold by us and a 49.9% interest held
by our previous joint venture partner. Our portion of the sales
price was
$32.3 million, or $981 per RSF, representing capitalization rates
of 4.2% and 4.5% (cash basis) based upon net operating income and
net operating income (cash basis) for 2Q23 annualized. We retained
control over this real estate joint
venture and therefore continue to consolidate this property. This
transaction resulted in consideration in excess of book value of
$15.6 million and a value-creation margin of 88%.
|
(7)
|
Represents the
disposition of 268,023 RSF of a 660,034 RSF near-term development
at 421 Park Drive. The proceeds from this transaction will help
fund our remaining 392,011 RSF of the project. The project is
expected to commence
vertical construction later this year and be completed in 2026. The
buyer will fund the project costs related to its 268,023 RSF,
and these costs are not included in our projected construction
spending. We will develop and operate the
completed project and will earn development fees over the next
three years.
|
Earnings Call Information and About the Company
June 30, 2023
We will host a conference call on Tuesday, July 25, 2023, 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 second quarter ended June 30, 2023.
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,
July 25, 2023. The replay number is (877) 344-7529 or (412)
317-0088, and the access code is 6301307.
Additionally, a copy of this Earnings Press Release and
Supplemental Information for the second quarter ended June 30,
2023 is available in the "For Investors" section of our website at
www.are.com or by following this link:
https://www.are.com/fs/2023q2.pdf.
For any questions, please contact Joel
S. Marcus, executive chairman and founder; Peter M. Moglia, chief executive officer and
co-chief investment officer; Dean A.
Shigenaga, president and chief financial officer;
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 since
its founding in 1994, Alexandria
is the preeminent and longest-tenured owner, operator, and
developer of collaborative life science, agtech, and advanced
technology campuses in AAA innovation cluster locations, including
Greater Boston, the San Francisco Bay Area, New York City, San
Diego, Seattle,
Maryland, and Research Triangle.
The trusted partner to approximately 825 tenants, Alexandria has a total market capitalization
of $30.6 billion and an asset base in
North America of 74.9 million
SF as of June 30, 2023, which includes 41.1 million RSF of
operating properties and 5.3 million RSF of Class A/A+ properties
undergoing construction, 9.4 million RSF of near-term and
intermediate-term development and redevelopment projects, and 19.1
million SF of future development projects. Alexandria has a longstanding and proven track
record of developing Class A/A+ properties clustered in life
science, agtech, and advanced technology 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, agrifoodtech, climate innovation, and
technology 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 additional
information on Alexandria, please
visit www.are.com.
***********
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 2023 earnings per share attributable to
Alexandria's common stockholders –
diluted, 2023 funds from operations per share attributable to
Alexandria's common stockholders –
diluted, 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®, 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
June 30, 2023
(Dollars in thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
6/30/23
|
|
6/30/22
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
rentals
|
|
$
704,339
|
|
$
687,949
|
|
$
665,674
|
|
$
656,853
|
|
$
640,959
|
|
$
1,392,288
|
|
$
1,253,513
|
Other
income
|
|
9,561
|
|
12,846
|
|
4,607
|
|
2,999
|
|
2,805
|
|
22,407
|
|
5,316
|
Total
revenues
|
|
713,900
|
|
700,795
|
|
670,281
|
|
659,852
|
|
643,764
|
|
1,414,695
|
|
1,258,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
operations
|
|
211,834
|
|
206,933
|
|
204,352
|
|
201,189
|
|
196,284
|
|
418,767
|
|
377,612
|
General and
administrative
|
|
45,882
|
|
48,196
|
|
42,992
|
|
49,958
|
|
43,397
|
|
94,078
|
|
84,328
|
Interest
|
|
17,072
|
|
13,754
|
|
17,522
|
|
22,984
|
|
24,257
|
|
30,826
|
|
53,697
|
Depreciation and
amortization
|
|
273,555
|
|
265,302
|
|
264,480
|
|
254,929
|
|
242,078
|
|
538,857
|
|
482,737
|
Impairment of
real estate
|
|
168,575
|
(1)
|
—
|
|
26,186
|
|
38,783
|
|
—
|
|
168,575
|
|
—
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
|
—
|
|
3,317
|
Total
expenses
|
|
716,918
|
|
534,185
|
|
555,532
|
|
567,843
|
|
509,333
|
|
1,251,103
|
|
1,001,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated real estate joint ventures
|
|
181
|
|
194
|
|
172
|
|
40
|
|
213
|
|
375
|
|
433
|
Investment
loss
|
|
(78,268)
|
|
(45,111)
|
|
(19,653)
|
|
(32,305)
|
|
(39,481)
|
|
(123,379)
|
|
(279,800)
|
Gain on sales of real
estate
|
|
214,810
|
|
—
|
|
—
|
|
323,699
|
|
214,219
|
|
214,810
|
|
214,219
|
Net income
|
|
133,705
|
|
121,693
|
|
95,268
|
|
383,443
|
|
309,382
|
|
255,398
|
|
191,990
|
Net income attributable
to noncontrolling interests
|
|
(43,768)
|
|
(43,831)
|
|
(40,949)
|
|
(38,747)
|
|
(37,168)
|
|
(87,599)
|
|
(69,345)
|
Net income attributable
to Alexandria Real Estate Equities, Inc.'s
stockholders
|
|
89,937
|
|
77,862
|
|
54,319
|
|
344,696
|
|
272,214
|
|
167,799
|
|
122,645
|
Net income attributable
to unvested restricted stock awards
|
|
(2,677)
|
|
(2,606)
|
|
(2,526)
|
|
(3,257)
|
|
(2,934)
|
|
(5,283)
|
|
(4,134)
|
Net income attributable
to Alexandria Real Estate Equities, Inc.'s common
stockholders
|
|
$
87,260
|
|
$
75,256
|
|
$
51,793
|
|
$
341,439
|
|
$
269,280
|
|
$
162,516
|
|
$
118,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Alexandria Real Estate Equities, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.67
|
|
$
0.95
|
|
$
0.74
|
Diluted
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.67
|
|
$
0.95
|
|
$
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
161,412
|
|
170,824
|
|
159,814
|
Diluted
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
161,412
|
|
170,824
|
|
159,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
share of common stock
|
|
$
1.24
|
|
$
1.21
|
|
$
1.21
|
|
$
1.18
|
|
$
1.18
|
|
$
2.45
|
|
$
2.33
|
|
(1) Refer to
"Funds from operations and funds from operations per share" of this
Earnings Press Release for additional details.
|
Consolidated Balance
Sheets
June 30, 2023
(In thousands)
|
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate
|
|
$
31,178,054
|
|
$
30,889,395
|
|
$
29,945,440
|
|
$
28,771,745
|
|
$ 27,952,931
|
Investments in
unconsolidated real estate joint ventures
|
|
37,801
|
|
38,355
|
|
38,435
|
|
38,285
|
|
37,587
|
Cash and cash
equivalents
|
|
924,370
|
|
1,263,452
|
|
825,193
|
|
533,824
|
|
420,258
|
Restricted
cash
|
|
35,920
|
|
34,932
|
|
32,782
|
|
332,344
|
|
97,404
|
Tenant
receivables
|
|
6,951
|
|
8,197
|
|
7,614
|
|
7,759
|
|
7,069
|
Deferred
rent
|
|
984,366
|
|
974,865
|
|
942,646
|
|
918,995
|
|
905,699
|
Deferred leasing
costs
|
|
520,610
|
|
527,848
|
|
516,275
|
|
506,864
|
|
498,434
|
Investments
|
|
1,495,994
|
|
1,573,018
|
|
1,615,074
|
|
1,624,921
|
|
1,657,461
|
Other assets
|
|
1,475,191
|
|
1,602,403
|
|
1,599,940
|
|
1,633,877
|
|
1,667,210
|
Total assets
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$
35,523,399
|
|
$
34,368,614
|
|
$ 33,244,053
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
|
Secured notes
payable
|
|
$
91,939
|
|
$
73,645
|
|
$
59,045
|
|
$
40,594
|
|
$
24,986
|
Unsecured senior notes
payable
|
|
11,091,424
|
|
11,089,124
|
|
10,100,717
|
|
10,098,588
|
|
10,096,462
|
Unsecured senior line
of credit and commercial paper
|
|
—
|
|
374,536
|
|
—
|
|
386,666
|
|
149,958
|
Accounts payable,
accrued expenses, and other liabilities
|
|
2,494,087
|
|
2,479,047
|
|
2,471,259
|
|
2,393,764
|
|
2,317,940
|
Dividends
payable
|
|
214,555
|
|
209,346
|
|
209,131
|
|
193,623
|
|
192,571
|
Total
liabilities
|
|
13,892,005
|
|
14,225,698
|
|
12,840,152
|
|
13,113,235
|
|
12,781,917
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
52,628
|
|
44,862
|
|
9,612
|
|
9,612
|
|
9,612
|
|
|
|
|
|
|
|
|
|
|
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
1,709
|
|
1,709
|
|
1,707
|
|
1,626
|
|
1,615
|
Additional
paid-in capital
|
|
18,812,318
|
|
18,902,821
|
|
18,991,492
|
|
17,639,434
|
|
17,149,571
|
Accumulated
other comprehensive loss
|
|
(16,589)
|
|
(20,536)
|
|
(20,812)
|
|
(24,725)
|
|
(11,851)
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity
|
|
18,797,438
|
|
18,883,994
|
|
18,972,387
|
|
17,616,335
|
|
17,139,335
|
Noncontrolling
interests
|
|
3,917,186
|
|
3,757,911
|
|
3,701,248
|
|
3,629,432
|
|
3,313,189
|
Total equity
|
|
22,714,624
|
|
22,641,905
|
|
22,673,635
|
|
21,245,767
|
|
20,452,524
|
Total liabilities,
noncontrolling interests, and equity
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$
35,523,399
|
|
$
34,368,614
|
|
$ 33,244,053
|
Funds From
Operations and Funds From Operations per Share
June 30, 2023
(In thousands)
|
|
The following table
presents a reconciliation of net income 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
|
|
Six Months
Ended
|
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
6/30/23
|
|
6/30/22
|
Net income
attributable to Alexandria's common stockholders
|
|
$ 87,260
|
|
$ 75,256
|
|
$ 51,793
|
|
$
341,439
|
|
$
269,280
|
|
$
162,516
|
|
$
118,511
|
Depreciation and
amortization of real estate assets
|
|
270,026
|
|
262,124
|
|
261,185
|
|
251,453
|
|
238,565
|
|
532,150
|
|
475,725
|
Noncontrolling
share of depreciation and amortization from consolidated real
estate
JVs
|
|
(28,220)
|
|
(28,178)
|
|
(29,702)
|
|
(27,790)
|
|
(26,418)
|
|
(56,398)
|
|
(50,099)
|
Our share of
depreciation and amortization from unconsolidated real estate
JVs
|
|
855
|
|
859
|
|
982
|
|
795
|
|
934
|
|
1,714
|
|
1,889
|
Gain on sales of
real estate
|
|
(214,810)
|
|
—
|
|
—
|
|
(323,699)
|
|
(214,219)
|
|
(214,810)
|
|
(214,219)
|
Impairment of
real estate – rental properties
|
|
166,602
|
(1)
|
—
|
|
20,899
|
|
—
|
|
—
|
|
166,602
|
|
—
|
Allocation to
unvested restricted stock awards
|
|
(872)
|
|
(1,359)
|
|
(953)
|
|
1,002
|
|
—
|
|
(2,220)
|
|
—
|
Funds from
operations attributable to Alexandria's common stockholders
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
diluted(2)
|
|
280,841
|
|
308,702
|
|
304,204
|
|
243,200
|
|
268,142
|
|
589,554
|
|
331,807
|
Unrealized losses
on non-real estate investments
|
|
77,897
|
|
65,855
|
|
24,117
|
|
56,515
|
|
68,128
|
|
143,752
|
|
331,561
|
Impairment of
non-real estate investments
|
|
22,953
|
(3)
|
—
|
|
20,512
|
|
—
|
|
—
|
|
22,953
|
|
—
|
Impairment of
real estate
|
|
1,973
|
|
—
|
|
5,287
|
|
38,783
|
|
—
|
|
1,973
|
|
—
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
|
—
|
|
3,317
|
Acceleration of
stock compensation expense due to executive officer
resignation
|
|
—
|
|
—
|
|
—
|
|
7,185
|
|
—
|
|
—
|
|
—
|
Allocation to
unvested restricted stock awards
|
|
(1,285)
|
|
(867)
|
|
(482)
|
|
(1,033)
|
|
(778)
|
|
(2,164)
|
|
(3,264)
|
Funds from
operations attributable to Alexandria's common stockholders
–
|
|
diluted, as adjusted
|
|
$
382,379
|
|
$
373,690
|
|
$
353,638
|
|
$
344,650
|
|
$
338,809
|
|
$
756,068
|
|
$
663,421
|
|
(1)
|
Primarily related to an
impairment charge aggregating $145.4 million at an office campus
located at 275 Grove Street in our Route 128 submarket to
reduce our investment in this campus to fair value less costs to
sell.
|
(2)
|
Calculated in
accordance with standards established by the Nareit Board of
Governors.
|
(3)
|
Primarily related to
three non-real estate investments in privately held entities that
do not report NAV.
|
Funds From
Operations and Funds From Operations per Share (continued)
June 30, 2023
(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
|
|
Six Months
Ended
|
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
6/30/23
|
|
6/30/22
|
Net income per share
attributable to Alexandria's common stockholders –
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
diluted
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.67
|
|
$
0.95
|
|
$
0.74
|
Depreciation and
amortization of real estate assets
|
|
1.42
|
|
1.38
|
|
1.41
|
|
1.39
|
|
1.32
|
|
2.80
|
|
2.68
|
Gain on sales of
real estate
|
|
(1.26)
|
|
—
|
|
—
|
|
(2.00)
|
|
(1.33)
|
|
(1.26)
|
|
(1.34)
|
Impairment of
real estate – rental properties
|
|
0.98
|
|
—
|
|
0.13
|
|
—
|
|
—
|
|
0.98
|
|
—
|
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
|
|
1.64
|
|
1.81
|
|
1.84
|
|
1.51
|
|
1.66
|
|
3.45
|
|
2.08
|
Unrealized losses
on non-real estate investments
|
|
0.46
|
|
0.39
|
|
0.15
|
|
0.35
|
|
0.42
|
|
0.84
|
|
2.07
|
Impairment of
non-real estate investments
|
|
0.13
|
|
—
|
|
0.12
|
|
—
|
|
—
|
|
0.13
|
|
—
|
Impairment of
real estate
|
|
0.02
|
|
—
|
|
0.03
|
|
0.24
|
|
—
|
|
0.02
|
|
—
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.02
|
|
—
|
|
0.02
|
Acceleration of
stock compensation expense due to executive officer
resignation
|
|
—
|
|
—
|
|
—
|
|
0.04
|
|
—
|
|
—
|
|
—
|
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
|
|
$
2.24
|
|
$
2.19
|
|
$
2.14
|
|
$
2.13
|
|
$
2.10
|
|
$
4.43
|
|
$
4.15
|
Weighted-average shares
of common stock outstanding – diluted
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
161,412
|
|
170,824
|
|
159,814
|
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SOURCE Alexandria Real Estate Equities, Inc.