PASADENA, Calif., Oct. 23,
2023 /PRNewswire/ -- Alexandria Real Estate Equities,
Inc. (NYSE: ARE) announced financial and operating results for the
third quarter ended September 30,
2023.
Key
highlights
|
|
|
|
|
YTD
|
|
Operating
results
|
3Q23
|
|
3Q22
|
|
3Q23
|
|
3Q22
|
|
Total
revenues:
|
|
|
|
|
|
|
|
|
In
millions
|
$
713.8
|
|
$
659.9
|
|
$ 2,128.5
|
|
$ 1,918.7
|
|
Growth
|
8.2 %
|
|
|
10.9 %
|
|
|
Net income attributable
to Alexandria's common stockholders – diluted
|
In
millions
|
$
21.9
|
|
$
341.4
|
|
$
184.4
|
|
$
461.5
|
|
Per
share
|
$
0.13
|
|
$
2.11
|
|
$
1.08
|
|
$
2.88
|
|
Funds from operations
attributable to Alexandria's common stockholders – diluted, as
adjusted
|
|
In
millions
|
$
386.4
|
|
$
344.7
|
|
$ 1,142.5
|
|
$ 1,008.1
|
|
Per
share
|
$
2.26
|
|
$
2.13
|
|
$
6.69
|
|
$
6.28
|
|
An operationally excellent, industry-leading REIT with a
high-quality, diverse client base of over 800 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:
|
|
|
|
|
Low tenant
receivables as of September 30, 2023
|
|
$ 6.9
|
million
|
October
2023 tenant rents and receivables
collected as of October 23, 2023
|
|
99.7 %
|
|
|
3Q23
tenant rents and receivables collected as
of October 23, 2023
|
|
99.9 %
|
|
|
Occupancy of operating
properties in North America as of September 30,
2023
|
|
93.7 %
|
|
|
Adjusted EBITDA
margin
|
|
69 %
|
|
|
Weighted-average
remaining lease term as of September 30, 2023:
|
|
|
|
|
Top 20
tenants
|
|
8.9
|
years
|
All
tenants
|
|
7.0
|
years
|
Solid leasing volume and rental rate increases and long lease
terms
- Solid leasing volume during 3Q23 aggregating 867,582 RSF,
despite minimal remaining contractual lease expirations for 2023
aggregating 622,654 RSF available for lease as of the beginning of
3Q23.
- Weighted-average lease terms of 13.0 years and 11.0 years for
3Q23 and YTD 3Q23, respectively, above our historically long
weighted-average lease term of 8.7 years over the last 10
years.
- YTD 3Q23 annualized leasing volume of 4.6 million RSF is in
line with 2013-2020 results.
- 80% of our leasing activity during the last twelve months was
generated from our client base of over 800 tenants.
|
|
3Q23
|
|
|
YTD
3Q23
|
|
Total leasing activity
– RSF
|
|
867,582
|
|
|
3,416,335
|
|
Leasing of development
and redevelopment space – RSF
|
|
204,530
|
|
|
363,017
|
|
Lease renewals and
re-leasing of space:
|
|
|
|
|
|
|
RSF (included in
total leasing activity above)
|
|
396,334
|
|
|
2,569,244
|
|
Rental rate
increase
|
|
28.8 %
|
|
|
33.9 %
|
|
Rental rate
increase (cash basis)
|
|
19.7 %
|
|
|
18.1 %
|
|
Continued strong net operating income and internal
growth
- Net operating income (cash basis) of $1.8 billion for 3Q23 annualized, up $129.6 million, or 7.9%, compared to 3Q22
annualized.
- Same property net operating income growth of 3.1% and 4.6%
(cash basis) for 3Q23 over 3Q22 and 3.7% and 5.6% (cash basis) for
YTD 3Q23 over YTD 3Q22.
- 96% of our leases contain contractual annual rent escalations
approximating 3%.
Strong and flexible balance sheet with significant liquidity,
13.1 years of remaining term of debt, and no debt maturities prior
to 2025
- In September 2023, S&P Global
Ratings affirmed Alexandria's
credit rating of BBB+ with a positive outlook, and in October 2023, Moody's Investors Service affirmed
Alexandria's credit rating of Baa1
with a stable outlook. These ratings affirmations reflect several
factors, including the scale and quality of our essential
Labspace® assets and market leadership. Additionally,
our investment-grade credit ratings continue to rank in the top 10%
among all publicly traded U.S. REITs.
- Significant liquidity of $5.9
billion.
- No debt maturities prior to 2025.
- 13.1 years weighted-average remaining term of debt.
- 99.0% of our debt has a fixed rate.
- Net debt and preferred stock to Adjusted EBITDA of 5.4x and
fixed-charge coverage ratio of 4.8x for 3Q23 annualized.
- Total debt and preferred stock to gross assets of 27%.
- $1.2 billion of expected capital
contributions from existing real estate joint venture partners from
4Q23 through 2026 to fund construction.
Consistent dividend strategy focuses on retaining significant
net cash flows from operating activities after dividends for
reinvestment
- Common stock dividend declared for 3Q23 of $1.24 per common share, aggregating $4.90 per common share for the twelve months
ended September 30, 2023, up
24 cents, or 5%, over the twelve
months ended September 30, 2022.
- Dividend yield of 5.0% as of September
30, 2023.
- Dividend payout ratio of 55% for the three months ended
September 30, 2023.
- Average annual dividend per-share growth of 6% from 2019 to
3Q23 annualized.
Ongoing execution of our value harvesting and asset recycling
self-funding strategy
Our $1.65 billion value harvesting
plan for 2023 is focused on the enhancement of our asset base
through the following:
(in
millions)
|
|
Completed
During
YTD 3Q23
|
|
Expected
Completion
During 4Q23
|
Value harvesting
dispositions of 100% interest in properties
not integral to our mega campus
strategy
|
|
|
$ 603
|
|
|
|
$ —
|
|
Strategic dispositions
and partial interest sales
|
|
|
273
|
|
|
|
—
|
|
Pending transactions
subject to signed letters of intent or
purchase and sale agreements
|
|
|
—
|
|
|
|
699
|
|
Additional targeted
non-core dispositions and partial interest
sales in process
|
|
|
—
|
|
|
|
75
|
|
Completed and pending
transactions
|
|
|
$ 876
|
|
|
|
$ 774
|
|
Total 2023 value
harvesting plan
|
|
|
$1,650
|
|
External growth and investments in real estate
Alexandria's highly leased
value-creation pipeline delivers annual incremental net operating
income of $120 million commencing
during YTD 3Q23, including $39
million from 3Q23, and drives future annual incremental net
operating income aggregating $580 million
(dollars in
millions)
|
|
Incremental
Annual Net
Operating Income
|
|
RSF
|
|
Leased/
Negotiating
Percentage
|
|
Placed into
service(1):
|
|
|
|
|
|
|
|
1H23
|
|
$
81
|
|
840,587
|
|
100
|
%
|
3Q23
|
|
39
|
|
450,134
|
|
100
|
|
YTD 3Q23
|
|
$
120
|
|
1,290,721
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Expected to be placed
into service and
stabilized(2):
|
|
|
|
|
|
|
|
4Q23
|
|
$
114
|
|
808,095
|
|
99
|
%
|
2024
|
|
127
|
|
1,786,735
|
|
92
|
|
4Q23 through
4Q24
|
|
241
|
|
2,594,830
|
|
94
|
|
|
|
|
|
|
|
|
|
1Q25 through
3Q26
|
|
339
|
|
3,776,614
|
|
41
|
|
|
|
$
580
|
|
6,371,444
|
|
66
|
% (3)
|
|
|
|
|
|
|
|
|
(1)
|
Annual net operating
income (cash basis) is expected to increase by $42 million upon the
burn-off of initial free rent from recently delivered projects,
which has a weighted-average burn-off of seven months.
|
(2)
|
Refer to "New Class
A/A+ development and redevelopment properties: current projects" of
our Supplemental Information for additional details.
|
(3)
|
76% of the leased RSF
of our value-creation projects was generated from our client
base.
|
Strong balance sheet management
Key metrics as of September 30, 2023
- $28.3 billion in total market
capitalization.
- $17.1 billion in total equity
capitalization, which ranks in the top 10% among all publicly
traded U.S. REITs.
|
|
3Q23
|
|
Goal
|
|
|
|
Quarter
Annualized
|
|
Trailing
12 Months
|
|
4Q23
Annualized
|
|
Net debt and preferred
stock to
Adjusted EBITDA
|
|
5.4x
|
|
5.5x
|
|
Less than or equal to
5.1x
|
|
Fixed-charge coverage
ratio
|
|
4.8x
|
|
4.9x
|
|
4.5x to 5.0x
|
|
|
|
Key capital events
- As of 3Q23, we have outstanding forward equity agreements from
2022 aggregating 699 thousand shares of common stock, with expected
net proceeds of $103.1 million.
- As of September 30, 2023, the
remaining aggregate amount available under our ATM program for
future sales of common stock was $141.9
million. We plan to file a new program in the near
future.
Investments
- As of September 30, 2023:
- Our non-real estate investments aggregated $1.4 billion.
- Unrealized gains presented in our consolidated balance sheet
were $176.0 million, comprising gross
unrealized gains and losses aggregating $311.4 million and $135.4
million, respectively.
- Investment loss of $80.7 million
for 3Q23, presented in our consolidated statement of operations,
consisted of $77.2 million of
unrealized losses and $3.5 million of
realized losses, including $28.5
million of impairments.
Other key highlights
Executive management change, effective September 15, 2023
Effective on September 15, 2023,
Dean A. Shigenaga resigned from his
positions as President and Chief Financial Officer and Marc E. Binda, who previously served the Company
as Executive Vice President – Finance & Treasurer, was
appointed as Chief Financial Officer and Treasurer. Mr. Shigenaga
is expected to remain a full-time employee through December 31, 2023, and a part-time employee
thereafter.
Key items included
in net income attributable to Alexandria's common
stockholders:
|
|
|
|
|
|
|
|
|
|
YTD
|
|
3Q23
|
|
3Q22
|
|
3Q23
|
|
3Q22
|
|
3Q23
|
|
3Q22
|
|
3Q23
|
|
3Q22
|
(In millions, except
per share
amounts)
|
Amount
|
|
Per Share –
Diluted
|
|
Amount
|
|
Per Share –
Diluted
|
Unrealized losses on
non-
real estate investments
|
$ (77.2)
|
|
$ (56.5)
|
|
$ (0.45)
|
|
$ (0.35)
|
|
$
(221.0)
|
|
$
(388.1)
|
|
$ (1.29)
|
|
$ (2.42)
|
Gain on sales of real
estate
|
—
|
|
323.7
|
|
—
|
|
2.00
|
|
214.8
|
|
537.9
|
|
1.26
|
|
3.35
|
Impairment of
non-real
estate investments
|
(28.5)
|
|
—
|
|
(0.17)
|
|
—
|
|
(51.5)
|
|
—
|
|
(0.30)
|
|
—
|
Impairment of real
estate
|
(20.6)
|
|
(38.8)
|
|
(0.12)
|
|
(0.24)
|
|
(189.2)
|
|
(38.8)
|
|
(1.11)
|
|
(0.24)
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.3)
|
|
—
|
|
(0.02)
|
Acceleration of
share-based
compensation expense
due to executive officer
resignation
|
(1.9)
|
|
(7.2)
|
|
(0.01)
|
|
(0.04)
|
|
(1.9)
|
|
(7.2)
|
|
(0.01)
|
|
(0.04)
|
Total
|
$
(128.2)
|
|
$ 221.2
|
|
$ (0.75)
|
|
$
1.37
|
|
$
(248.8)
|
|
$ 100.5
|
|
$ (1.45)
|
|
$
0.63
|
Refer to "Funds from
operations and funds from operations per share" of this Earnings
Press Release for additional details.
|
Subsequent event
- In October 2023, we recognized a
real estate impairment charge of approximately $90.8 million to reduce the carrying amounts of
two non-laboratory properties located in our Greater Boston market to their current fair
values, less costs to sell. We initially acquired these industrial
and self-storage properties with an intention to entitle the site
as a life science campus, demolish the properties upon expiration
of the existing in-place leases, and ultimately develop life
science properties. Since our acquisition, the macroeconomic
environment has changed. Upon our reevaluation of the project's
financial outlook and its alignment with our mega campus strategy,
we decided not to proceed with this project. The impairment charge
was recognized upon meeting the criteria for classification as held
for sale. We expect to complete the sale of these properties in
4Q23.
Industry and ESG leadership: catalyzing and leading the
way for positive change to benefit human health and society
- Alexandria has a longstanding,
impactful partnership with the Galien Foundation, the premier
global institution dedicated to honoring life science innovations
that improve human health through a range of programs, including
the annual Galien Forum USA and
Prix Galien USA Awards, which will
be held this week, on October 26,
2023, in New York City.
- Alexandria will present a
mission-critical panel, titled "A National Imperative to Combat
Mental Illness and Addiction," featuring leading advocates of
mental health and addiction recovery, congressmen and veterans
Seth Moulton (MA-6) and Michael Waltz (FL-6) and Navy SEAL Foundation
CEO Robin King, at the 2023 Galien
Forum USA. The Galien Forum will
take place at the Alexandria Center® for Life Science –
New York City.
- Mr. Marcus, as a member of the Prix Galien USA Awards esteemed jury again this year, will
honor transformational innovations in life science. He, alongside
other influential life science leaders, will serve on the Prix
Galien USA Awards committee
responsible for evaluating and recognizing the Best Digital Health
Solution; Best Medical Technology; Best Incubators, Accelerators
and Equity; and Best Startup.
- In October 2023, Alexandria's sustained ESG leadership and
performance was reinforced by several achievements in the 2023
GRESB Real Estate Assessment: (i) 4 Star Ratings in the operating
asset and development benchmarks, (ii) our seventh consecutive
Green Star designation, and (iii) our sixth consecutive "A"
disclosure score, with a perfect score of 100 and a #1 ranking for
our best-in-class transparency around ESG practices and reporting
in 2023. GRESB is one of the leading global ESG benchmarks for real
estate and infrastructure investments.
- In September 2023, Alexandria received the Cambridge Chamber of Commerce's 2023 Visionary
Award for developing 325 Binney Street, designed to be the most
sustainable laboratory building in Cambridge and selected by Moderna as its new
global headquarters and R&D center. The Chamber's annual awards
recognize innovators from the business, institutional, and
non-profit communities that are effecting change and making an
extraordinary, positive impact on people's lives in Cambridge and beyond.
- In August 2023, 685 Gateway
Boulevard, an amenities hub designed at the forefront of
sustainability in our South San
Francisco submarket, was awarded a 2023 AIA California
Design Award in the Climate Action category. The building, which is
designated as Zero Energy Ready and is on track to achieve ILFI
Zero Energy certification, was one of two projects recognized at
the highest level in the awards program. The AIA California Design
Award winners embody design excellence and address climate
change.
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 our
founding in 1994, Alexandria is
the preeminent and longest-tenured owner, operator, and developer
of collaborative life science, agtech, and advanced technology mega
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 over 800 tenants, Alexandria has a total market capitalization
of $28.3 billion and an asset
base in North America of 75.1
million SF as of September 30, 2023,
which includes 41.5 million RSF of operating properties and 5.6
million RSF of Class A/A+ properties undergoing construction,
8.9 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 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, 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
September 30, 2023
(Dollars in millions, except per share amounts)
|
|
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 changes to our
guidance include an increase to the midpoint of our guidance for
funds from operations per share, as adjusted by two cents driven by
the accelerated delivery of our under construction 462,100 RSF
Class A+ property at 325 Binney Street that is now set to deliver
to Moderna, Inc. in November 2023 and general and administrative
savings after September 15, 2023, resulting from the
resignation of Dean A. Shigenaga, our President and Chief Financial
Officer. Additionally, changes to our key sources and uses of
capital include a $100 million decrease to our guidance range
for dispositions and sales of partial interests and a corresponding
$100 million increase to our guidance range for incremental debt
for the year ending December 31, 2023. These updates are primarily
due to changes in the mix and timing of dispositions pending and
under executed letters of intent or purchase and sales agreements
that are expected to close in 4Q23.
|
Projected 2023
Earnings per Share and Funds From Operations per Share Attributable
to Alexandria's Common Stockholders – Diluted
|
|
|
|
As of
10/23/23
|
|
As of
7/24/23
|
|
Key
Changes
|
|
Earnings per
share(1)
|
|
$1.36 to
$1.38
|
|
$2.72 to
$2.78
|
|
|
|
Depreciation and
amortization of real estate assets
|
|
|
5.60
|
|
|
|
5.55
|
|
|
|
|
Gain on sales of
real estate
|
|
|
(1.26)
|
|
|
|
(1.26)
|
|
|
|
|
Impairment of
real estate – rental properties
|
|
|
1.62
|
|
|
|
0.98
|
|
|
(2)
|
Allocation to
unvested restricted stock awards
|
|
|
(0.03)
|
|
|
|
(0.04)
|
|
|
|
|
Funds from operations
per share(3)
|
|
$7.29 to
$7.31
|
|
$7.95 to
$8.01
|
|
|
|
Unrealized
losses on non-real estate investments
|
|
|
1.29
|
|
|
|
0.84
|
|
|
|
|
Impairment of
non-real estate investments
|
|
|
0.30
|
|
|
|
0.13
|
|
|
(4)
|
Impairment of
real estate
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
|
Acceleration of
stock compensation due to executive officer resignation
|
|
|
0.09
|
|
|
|
—
|
|
|
(5)
|
Allocation to
unvested restricted stock awards
|
|
|
(0.02)
|
|
|
|
(0.01)
|
|
|
|
|
Funds from operations
per share, as adjusted(3)
|
|
$8.97 to
$8.99
|
|
$8.93 to
$8.99
|
|
2-cent increase to
midpoint;
narrowed range by 4 cents
|
Midpoint
|
|
$8.98
|
|
$8.96
|
|
|
|
As of
10/23/23
|
|
As of
7/24/23
|
|
|
|
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
|
|
$
197
|
|
$
207
|
|
$
183
|
|
$
193
|
|
$14 million
increase
|
(5)
|
Capitalization of
interest
|
|
$
346
|
|
$
366
|
|
$
342
|
|
$
362
|
|
$4 million
increase
|
(6)
|
Interest
expense
|
|
$
70
|
|
$
90
|
|
$
74
|
|
$
94
|
|
$4 million
decrease
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes unrealized
gains or losses after September 30, 2023 that are required to be
recognized in earnings and are excluded from funds from operations
per share, as adjusted.
|
(2)
|
Includes a real estate
impairment charge of approximately $90.8 million recognized in
October 2023 to reduce the carrying amounts of two non-laboratory
properties located in our Greater Boston market to their current
fair values, less costs to sell upon meeting the criteria for
classification as held for sale. Refer to "Subsequent event" and
"Funds from operations and funds from operations per share" in this
Earnings Press Release for additional information.
|
(3)
|
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.
|
(4)
|
Refer to "Funds from
operations and funds from operations per share" in this Earnings
Press Release for additional information.
|
(5)
|
Effective on September
15, 2023, Dean A. Shigenaga resigned from his positions as
President and Chief Financial Officer and is expected to remain a
full-time employee through December 31, 2023, and a part-time
employee thereafter. In connection with Mr. Shigenaga's
resignation, stock-based compensation expense aggregating $15.6
million was accelerated through December 31, 2023, of
which $1.9 million was recognized during the three months
ended September 30, 2023. The increase in general and
administrative expenses for the year ending December 31, 2023 was
partially offset by a reduction to his compensation after September
15, 2023.
|
(6)
|
The changes to our
guidance ranges for capitalization of interest and interest expense
for the year ending December 31, 2023 are primarily due to a
five-week change in the delivery of our 140 First Street
redevelopment project in our Cambridge submarket and a
two-and-a-half-month change in the timing of our disposition of
268,023 RSF in a 660,034 RSF near-term development project at 421
Park Drive in our Fenway submarket. Both the delivery and the
partial disposition were completed during 3Q23.
|
Key Credit
Metrics
|
|
As of
10/23/23
|
|
As of
7/24/23
|
|
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
|
|
|
|
As of
10/23/23
|
|
As of 7/24/23
Midpoint
|
|
Key
Changes
|
Key Sources and Uses
of Capital
|
|
Range
|
|
Midpoint
|
|
Certain
Completed
Items
|
|
|
Sources of
capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
Incremental
debt
|
|
$
660
|
|
$
810
|
|
$
735
|
|
See below
|
|
$
635
|
|
$100 million
increase(1)
|
Excess 2022
bond capital held as cash at December 31, 2022
|
|
300
|
|
300
|
|
300
|
|
$
300
|
(2)
|
300
|
|
No change
|
Net cash
provided by operating activities after dividends
|
|
350
|
|
400
|
|
375
|
|
|
|
375
|
|
Dispositions
and sales of partial interests
|
|
1,550
|
|
1,750
|
|
1,650
|
|
$
875
|
(3)
|
1,750
|
|
$100 million
decrease(1)
|
Future
settlement of forward equity sales agreements outstanding as of
December 31, 2022
|
|
100
|
|
100
|
|
100
|
|
$
100
|
(4)
|
100
|
|
No change
|
Total sources of
capital before excess cash expected to be held at December 31,
2023
|
|
2,960
|
|
3,360
|
|
3,160
|
|
|
|
$
3,160
|
|
Cash expected to
be held at December 31, 2023(5)
|
|
125
|
|
425
|
|
275
|
|
|
|
$
275
|
|
Total sources of
capital
|
|
$ 3,085
|
|
$ 3,785
|
|
$ 3,435
|
|
|
|
|
|
|
Uses of
capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$ 2,785
|
|
$ 3,085
|
|
$ 2,935
|
|
|
|
$
2,935
|
|
No change
|
Acquisitions
|
|
175
|
|
275
|
|
225
|
|
$
259
|
|
225
|
|
Total uses of
capital
|
|
$ 2,960
|
|
$ 3,360
|
|
$ 3,160
|
|
|
|
$
3,160
|
|
Incremental debt
(included above):
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of
unsecured senior notes payable
|
|
$ 1,000
|
|
$ 1,000
|
|
$ 1,000
|
|
$
1,000
|
(6)
|
|
|
|
Unsecured senior
line of credit, commercial paper, and other
|
|
(340)
|
|
(190)
|
|
(265)
|
|
|
|
|
|
|
Net incremental
debt
|
|
$
660
|
|
$
810
|
|
$
735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The changes to our
guidance ranges for incremental debt and dispositions and sales of
partial interests for the year ending December 31, 2023 is
primarily due to changes in the mix and timing of dispositions
pending and under executed letters of intent or purchase and sale
agreements that are expected to close in 4Q23.
|
(2)
|
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.
|
(3)
|
In addition to
completed transactions, we have pending transactions subject to
signed letters of intent or purchase and sale agreements
aggregating $699.3 million as of October 23, 2023.
|
(4)
|
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 4Q23.
|
(5)
|
Represents estimated
excess 2023 bond capital proceeds expected to be held as cash at
December 31, 2023, which reduces our 2024 debt capital
needs.
|
(6)
|
Represents $1.0 billion
of unsecured senior notes payable issued in February
2023.
|
Acquisitions
September 30, 2023
(Dollars in thousands)
|
Property
|
|
Submarket/Market
|
|
Date
of
Purchase
|
|
Number of
Properties
|
|
Operating
Occupancy
|
|
Square
Footage
|
|
Purchase
Price
|
Acquisitions With
Development/Redevelopment
Opportunities(1)
|
|
Future
Development
|
|
Active
Development/
Redevelopment
|
|
Operating With
Future
Development/
Redevelopment
|
|
Total(2)
|
|
|
Completed in YTD
3Q23:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
Canada
|
|
1/30/23
|
|
1
|
|
100
|
%
|
|
—
|
|
—
|
|
247,743
|
|
247,743
|
|
$
|
100,837
|
|
Other
|
|
Various
|
|
|
|
4
|
|
100
|
|
|
1,089,349
|
|
110,717
|
|
185,676
|
|
1,385,742
|
|
|
150,139
|
|
|
|
|
|
|
|
5
|
|
100
|
%
|
|
1,089,349
|
|
110,717
|
|
433,419
|
|
1,633,485
|
|
|
250,976
|
|
Completed in October
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
2023 acquisitions
completed as of October 23, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
258,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 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
|
|
Value harvesting of
dispositions and recycling of assets not integral to our mega
campus strategy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225, 266, and 275
Second Avenue and 780 and 790
Memorial Drive
|
|
Route 128 and
Cambridge/Inner
Suburbs/Greater Boston
|
|
6/13/23
|
|
100 %
|
|
|
428,663
|
|
5.0 %
|
|
|
5.2 %
|
|
|
$
365,226
|
|
$
852
|
|
11119 North Torrey
Pines Road
|
|
Torrey Pines/San
Diego
|
|
5/4/23
|
|
100 %
|
|
|
72,506
|
|
4.4 %
|
|
|
4.6 %
|
|
|
86,000
|
|
$
1,186
|
|
275 Grove
Street
|
|
Route 128/Greater
Boston
|
|
6/27/23
|
|
100 %
|
|
|
509,702
|
|
N/A
|
|
|
N/A
|
|
|
109,349
|
|
N/A
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
602,667
|
|
|
|
Strategic
dispositions and partial interest sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
421 Park
Drive(1)
|
|
Fenway/Greater
Boston
|
|
9/19/23
|
|
(1)
|
|
|
(1)
|
|
N/A
|
|
|
N/A
|
|
|
174,412
|
|
N/A
|
|
15 Necco
Street
|
|
Seaport Innovation
District/
Greater
Boston
|
|
4/11/23
|
|
18 %
|
|
|
345,995
|
|
6.6 %
|
|
|
5.4 %
|
|
|
66,108
|
|
$
1,626
|
|
9625 Towne Centre
Drive
|
|
University Town
Center/San Diego
|
|
6/21/23
|
|
20.1 %
|
|
|
163,648
|
|
4.2 %
|
|
|
4.5 %
|
|
|
32,261
|
|
$
981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272,781
|
|
|
|
Dispositions and sales
of partial interests completed in YTD 3Q23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
875,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pending and under
executed letters of intent or purchase
and sale agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
699,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,574,722
|
|
|
|
Additional targeted
non-core dispositions in process
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,278
|
|
|
|
2023 dispositions and
sales of partial interests (midpoint)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,650,000
|
|
|
|
2023 guidance
range
|
|
|
|
|
|
|
|
|
$1,550,000 –
$1,750,000
|
|
|
|
|
|
(1)
|
Represents the
disposition of 268,023 RSF in a 660,034 RSF near-term
development at 421 Park Drive. The proceeds from this transaction
will help fund the construction of our remaining 392,011 RSF of the
project. The project is expected to commence vertical construction
in 4Q23 and be substantially complete in 2026. The buyer will fund
the remaining costs to construct 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
September 30, 2023
We will host a conference call on Tuesday, October 24,
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 third quarter ended September 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, October 24, 2023.
The replay number is (877) 344-7529 or (412) 317-0088, and the
access code is 4808355.
Additionally, a copy of this Earnings Press Release and
Supplemental Information for the third quarter ended
September 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/2023q3.pdf.
For any questions, please contact 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 since our
founding in 1994, Alexandria is
the preeminent and longest-tenured owner, operator, and developer
of collaborative life science, agtech, and advanced technology mega
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 over 800 tenants, Alexandria has a total market capitalization
of $28.3 billion and an asset base in
North America of 75.1 million SF
as of September 30, 2023, which includes 41.5 million RSF of
operating properties and 5.6 million RSF of Class A/A+ properties
undergoing construction, 8.9 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 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, 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
September 30, 2023
(Dollars in thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
9/30/23
|
|
9/30/22
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
rentals
|
|
$
707,531
|
|
$
704,339
|
|
$
687,949
|
|
$
665,674
|
|
$
656,853
|
|
$
2,099,819
|
|
$
1,910,366
|
Other income
|
|
6,257
|
|
9,561
|
|
12,846
|
|
4,607
|
|
2,999
|
|
28,664
|
|
8,315
|
Total
revenues
|
|
713,788
|
|
713,900
|
|
700,795
|
|
670,281
|
|
659,852
|
|
2,128,483
|
|
1,918,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
operations
|
|
217,687
|
|
211,834
|
|
206,933
|
|
204,352
|
|
201,189
|
|
636,454
|
|
578,801
|
General and
administrative
|
|
45,987
|
|
45,882
|
|
48,196
|
|
42,992
|
|
49,958
|
|
140,065
|
|
134,286
|
Interest
|
|
11,411
|
|
17,072
|
|
13,754
|
|
17,522
|
|
22,984
|
|
42,237
|
|
76,681
|
Depreciation and
amortization
|
|
269,370
|
|
273,555
|
|
265,302
|
|
264,480
|
|
254,929
|
|
808,227
|
|
737,666
|
Impairment of real
estate
|
|
20,649
|
|
168,575
|
|
—
|
|
26,186
|
|
38,783
|
|
189,224
|
|
38,783
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
Total
expenses
|
|
565,104
|
|
716,918
|
|
534,185
|
|
555,532
|
|
567,843
|
|
1,816,207
|
|
1,569,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated real estate joint ventures
|
|
242
|
|
181
|
|
194
|
|
172
|
|
40
|
|
617
|
|
473
|
Investment
loss
|
|
(80,672)
|
|
(78,268)
|
|
(45,111)
|
|
(19,653)
|
|
(32,305)
|
|
(204,051)
|
|
(312,105)
|
Gain on sales of real
estate
|
|
—
|
|
214,810
|
|
—
|
|
—
|
|
323,699
|
|
214,810
|
|
537,918
|
Net income
|
|
68,254
|
|
133,705
|
|
121,693
|
|
95,268
|
|
383,443
|
|
323,652
|
|
575,433
|
Net income attributable
to noncontrolling interests
|
|
(43,985)
|
|
(43,768)
|
|
(43,831)
|
|
(40,949)
|
|
(38,747)
|
|
(131,584)
|
|
(108,092)
|
Net income attributable
to Alexandria Real Estate Equities, Inc.'s
stockholders
|
|
24,269
|
|
89,937
|
|
77,862
|
|
54,319
|
|
344,696
|
|
192,068
|
|
467,341
|
Net income attributable
to unvested restricted stock awards
|
|
(2,414)
|
|
(2,677)
|
|
(2,606)
|
|
(2,526)
|
|
(3,257)
|
|
(7,697)
|
|
(5,866)
|
Net income attributable
to Alexandria Real Estate Equities, Inc.'s common
stockholders
|
|
$
21,855
|
|
$
87,260
|
|
$
75,256
|
|
$
51,793
|
|
$
341,439
|
|
$
184,371
|
|
$
461,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Alexandria Real Estate Equities, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.08
|
|
$
2.88
|
Diluted
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.08
|
|
$
2.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
170,846
|
|
160,400
|
Diluted
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
170,846
|
|
160,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
share of common stock
|
|
$
1.24
|
|
$
1.24
|
|
$
1.21
|
|
$
1.21
|
|
$
1.18
|
|
$
3.69
|
|
$
3.51
|
Consolidated Balance
Sheets
September 30, 2023
(In thousands)
|
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate
|
|
$
31,712,731
|
|
$
31,178,054
|
|
$
30,889,395
|
|
$
29,945,440
|
|
$ 28,771,745
|
Investments in
unconsolidated real estate joint ventures
|
|
37,695
|
|
37,801
|
|
38,355
|
|
38,435
|
|
38,285
|
Cash and cash
equivalents
|
|
532,390
|
|
924,370
|
|
1,263,452
|
|
825,193
|
|
533,824
|
Restricted
cash
|
|
35,321
|
|
35,920
|
|
34,932
|
|
32,782
|
|
332,344
|
Tenant
receivables
|
|
6,897
|
|
6,951
|
|
8,197
|
|
7,614
|
|
7,759
|
Deferred
rent
|
|
1,012,666
|
|
984,366
|
|
974,865
|
|
942,646
|
|
918,995
|
Deferred leasing
costs
|
|
512,216
|
|
520,610
|
|
527,848
|
|
516,275
|
|
506,864
|
Investments
|
|
1,431,766
|
|
1,495,994
|
|
1,573,018
|
|
1,615,074
|
|
1,624,921
|
Other assets
|
|
1,501,611
|
|
1,475,191
|
|
1,602,403
|
|
1,599,940
|
|
1,633,877
|
Total assets
|
|
$
36,783,293
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$
35,523,399
|
|
$ 34,368,614
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
|
Secured notes
payable
|
|
$
109,110
|
|
$
91,939
|
|
$
73,645
|
|
$
59,045
|
|
$
40,594
|
Unsecured senior notes
payable
|
|
11,093,725
|
|
11,091,424
|
|
11,089,124
|
|
10,100,717
|
|
10,098,588
|
Unsecured senior line
of credit and commercial paper
|
|
—
|
|
—
|
|
374,536
|
|
—
|
|
386,666
|
Accounts payable,
accrued expenses, and other liabilities
|
|
2,653,126
|
|
2,494,087
|
|
2,479,047
|
|
2,471,259
|
|
2,393,764
|
Dividends
payable
|
|
214,450
|
|
214,555
|
|
209,346
|
|
209,131
|
|
193,623
|
Total
liabilities
|
|
14,070,411
|
|
13,892,005
|
|
14,225,698
|
|
12,840,152
|
|
13,113,235
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
51,658
|
|
52,628
|
|
44,862
|
|
9,612
|
|
9,612
|
|
|
|
|
|
|
|
|
|
|
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
1,710
|
|
1,709
|
|
1,709
|
|
1,707
|
|
1,626
|
Additional
paid-in capital
|
|
18,651,185
|
|
18,812,318
|
|
18,902,821
|
|
18,991,492
|
|
17,639,434
|
Accumulated
other comprehensive loss
|
|
(24,984)
|
|
(16,589)
|
|
(20,536)
|
|
(20,812)
|
|
(24,725)
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity
|
|
18,627,911
|
|
18,797,438
|
|
18,883,994
|
|
18,972,387
|
|
17,616,335
|
Noncontrolling
interests
|
|
4,033,313
|
|
3,917,186
|
|
3,757,911
|
|
3,701,248
|
|
3,629,432
|
Total equity
|
|
22,661,224
|
|
22,714,624
|
|
22,641,905
|
|
22,673,635
|
|
21,245,767
|
Total liabilities,
noncontrolling interests, and equity
|
|
$
36,783,293
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$
35,523,399
|
|
$ 34,368,614
|
Funds From
Operations and Funds From Operations per Share
September 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
|
|
Nine Months
Ended
|
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
9/30/23
|
|
9/30/22
|
Net income
attributable to Alexandria's common stockholders
|
|
$ 21,855
|
|
$ 87,260
|
|
$ 75,256
|
|
$ 51,793
|
|
$
341,439
|
|
$
184,371
|
|
$
461,475
|
Depreciation and
amortization of real estate assets
|
|
266,440
|
|
270,026
|
|
262,124
|
|
261,185
|
|
251,453
|
|
798,590
|
|
727,178
|
Noncontrolling share
of depreciation and amortization from consolidated real estate
JVs
|
|
(28,814)
|
|
(28,220)
|
|
(28,178)
|
|
(29,702)
|
|
(27,790)
|
|
(85,212)
|
|
(77,889)
|
Our share of
depreciation and amortization from unconsolidated real estate
JVs
|
|
910
|
|
855
|
|
859
|
|
982
|
|
795
|
|
2,624
|
|
2,684
|
Gain on sales of real
estate
|
|
—
|
|
(214,810)
|
|
—
|
|
—
|
|
(323,699)
|
|
(214,810)
|
|
(537,918)
|
Impairment of real
estate – rental properties
|
|
19,844
|
(1)
|
166,602
|
|
—
|
|
20,899
|
|
—
|
|
186,446
|
|
—
|
Allocation to unvested
restricted stock awards
|
|
(838)
|
|
(872)
|
|
(1,359)
|
|
(953)
|
|
1,002
|
|
(3,050)
|
|
(81)
|
Funds from
operations attributable to Alexandria's common stockholders –
diluted(2)
|
|
279,397
|
|
280,841
|
|
308,702
|
|
304,204
|
|
243,200
|
|
868,959
|
|
575,449
|
Unrealized losses on
non-real estate investments
|
|
77,202
|
|
77,897
|
|
65,855
|
|
24,117
|
|
56,515
|
|
220,954
|
|
388,076
|
Impairment of non-real
estate investments
|
|
28,503
|
(3)
|
22,953
|
|
—
|
|
20,512
|
|
—
|
|
51,456
|
|
—
|
Impairment of real
estate
|
|
805
|
|
1,973
|
|
—
|
|
5,287
|
|
38,783
|
|
2,778
|
|
38,783
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
Acceleration of stock
compensation expense due to executive officer
resignation
|
|
1,859
|
(4)
|
—
|
|
—
|
|
—
|
|
7,185
|
|
1,859
|
|
7,185
|
Allocation to unvested
restricted stock awards
|
|
(1,330)
|
|
(1,285)
|
|
(867)
|
|
(482)
|
|
(1,033)
|
|
(3,503)
|
|
(4,743)
|
Funds from
operations attributable to Alexandria's common stockholders –
diluted, as adjusted
|
|
$
386,436
|
|
$
382,379
|
|
$
373,690
|
|
$
353,638
|
|
$
344,650
|
|
$
1,142,503
|
|
$
1,008,067
|
|
|
(1)
|
Primarily to reduce the
carrying amounts of three non-laboratory properties classified as
held for sale aggregating 230,704 RSF, located in our Greater
Boston and Texas markets, to their respective estimated fair values
less costs to sell. These assets represent non-core properties that
are not integral to our mega campus strategy.
|
(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.
|
(4)
|
Refer to footnote 4 on
page 4 in "Guidance" in this Earnings Press Release for additional
information.
|
Funds From
Operations and Funds From Operations per Share (continued)
September 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
|
|
Nine Months
Ended
|
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
9/30/23
|
|
9/30/22
|
Net income per share
attributable to Alexandria's common stockholders –
diluted
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
2.11
|
|
$
1.08
|
|
$
2.88
|
Depreciation and
amortization of real estate assets
|
|
1.40
|
|
1.42
|
|
1.38
|
|
1.41
|
|
1.39
|
|
4.19
|
|
4.06
|
Gain on sales of real
estate
|
|
—
|
|
(1.26)
|
|
—
|
|
—
|
|
(2.00)
|
|
(1.26)
|
|
(3.35)
|
Impairment of real
estate – rental properties
|
|
0.12
|
|
0.98
|
|
—
|
|
0.13
|
|
—
|
|
1.09
|
|
—
|
Allocation to unvested
restricted stock awards
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
0.01
|
|
(0.01)
|
|
—
|
Funds from
operations per share attributable to Alexandria's common
stockholders – diluted
|
|
1.64
|
|
1.64
|
|
1.81
|
|
1.84
|
|
1.51
|
|
5.09
|
|
3.59
|
Unrealized losses on
non-real estate investments
|
|
0.45
|
|
0.46
|
|
0.39
|
|
0.15
|
|
0.35
|
|
1.29
|
|
2.42
|
Impairment of non-real
estate investments
|
|
0.17
|
|
0.13
|
|
—
|
|
0.12
|
|
—
|
|
0.30
|
|
—
|
Impairment of real
estate
|
|
—
|
|
0.02
|
|
—
|
|
0.03
|
|
0.24
|
|
0.02
|
|
0.24
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Acceleration of stock
compensation expense due to executive officer
resignation
|
|
0.01
|
|
—
|
|
—
|
|
—
|
|
0.04
|
|
0.01
|
|
0.04
|
Allocation to unvested
restricted stock awards
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
—
|
|
(0.01)
|
|
(0.02)
|
|
(0.03)
|
Funds from
operations per share attributable to Alexandria's common
stockholders – diluted, as adjusted
|
|
$
2.26
|
|
$
2.24
|
|
$
2.19
|
|
$
2.14
|
|
$
2.13
|
|
$
6.69
|
|
$
6.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding – diluted
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
161,554
|
|
170,846
|
|
160,400
|
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SOURCE Alexandria Real Estate Equities, Inc.