PASADENA,
Calif., Jan. 29,
2024 /PRNewswire/ -- Alexandria Real Estate Equities, Inc.
(NYSE: ARE) announced financial and operating results for the
fourth quarter and year ended December 31,
2023.
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Key highlights
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Operating results
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4Q23
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4Q22
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2023
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2022
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Total
revenues:
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In millions
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$
757.2
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$
670.3
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$ 2,885.7
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$ 2,589.0
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Growth
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13.0 %
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11.5 %
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Net (loss) income
attributable to Alexandria's common stockholders –
diluted
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In millions
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$
(91.9)
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$
51.8
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$
92.4
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$
513.3
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Per share
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$
(0.54)
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$
0.31
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$
0.54
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$
3.18
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Funds from operations
attributable to Alexandria's common stockholders – diluted, as
adjusted
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In millions
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$
389.8
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$
353.6
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$ 1,532.3
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$ 1,361.7
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Per share
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$
2.28
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$
2.14
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$
8.97
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$
8.42
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Celebrating 30 years at the vanguard and heart
of the $5 trillion secularly growing
life science industry
We celebrated the 30th anniversary of our
one-of-a-kind, once-in-a-generation company on January 5, 2024. Alexandria pioneered the novel
Labspace® niche and created the first-ever REIT uniquely
focused on the critically important life science industry with our
founding on January 5, 1994. Over the
past three decades, we have transformed life science real estate
from a specialty niche into a compelling mainstream asset class.
From our IPO on May 27, 1997 through
December 31, 2023, we generated an
outstanding total shareholder return ("TSR") of 1,512%,
significantly outperforming major indices over the same period,
including the FTSE Nareit Equity Health Care Index's TSR of 980%
and the MSCI US REIT Index's TSR of 792% (assuming reinvestment of
dividends).
An operationally excellent, industry-leading
REIT with a high-quality, diverse client base to support growing
revenues, stable cash flows, and strong margins
Percentage of total
annual rental revenue in effect from mega campuses as of
December
31, 2023
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75 %
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Percentage of total
annual rental revenue in effect from investment-grade or
publicly
traded large cap tenants as of December 31, 2023
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52 %
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Sustained strength in
tenant collections:
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Low tenant
receivables as of December 31, 2023
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$ 8.2
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million
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January
2024 tenant rents and receivables
collected as of January 29, 2024
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99.4 %
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4Q23
tenant rents and receivables collected as
of January 29, 2024
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99.9 %
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Occupancy of operating
properties in North America as of December 31, 2023
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94.6 %
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Operating
margin
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71 %
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Adjusted EBITDA
margin
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69 %
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Weighted-average
remaining lease term as of December 31, 2023:
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Top 20
tenants
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9.6
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years
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All
tenants
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7.4
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years
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Solid annual leasing volume and rental rate increases with
continued long lease terms
- Solid leasing volume aggregating 889,737 RSF during 4Q23 and
4.3 million RSF for 2023.
- Weighted-average lease term of 11.3 years for 2023, above our
historically long weighted-average lease term of 8.8 years over the
last 10 years.
- 76% of our leasing activity during the last twelve months was
generated from our existing tenant base.
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4Q23
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2023
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Total leasing activity
– RSF
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889,737
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4,306,072
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Leasing of development
and redevelopment space – RSF
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233,516
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596,533
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Lease renewals and
re-leasing of space:
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RSF (included in total
leasing activity above)
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477,142
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3,046,386
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Rental rate
increase
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9.2 %
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(1)
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29.4 %
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(1)
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Rental rate increase
(cash basis)
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5.5 %
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(1)
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15.8 %
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(1)
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(1)
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Includes the re-lease
of 99,557 RSF to Cargo Therapeutics at 835 Industrial at a
4.1% decline in the cash rental rate compared with the rate from
the former tenant that was less than three years into a 10-year
lease. Excluding this lease, the rental rate increase on renewals
and re-leasing of space was 21.4% and 9.7% (cash basis) for 4Q23
and 32.4% and 17.0% (cash basis) for 2023.
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Strong and flexible balance sheet with
significant liquidity, top 10% credit rating ranking among all
publicly traded U.S. REITs
- Net debt and preferred stock to Adjusted EBITDA of 5.1x,
equaling the lowest leverage levels in Company history, and
fixed-charge coverage ratio of 4.5x for 4Q23 annualized.
- Significant liquidity of $5.8
billion.
- No debt maturities prior to 2025.
- Only 20% of our total debt matures in the next five years.
- 12.8 years weighted-average remaining term of debt.
- 98.1% of our debt has a fixed rate.
- Total debt and preferred stock to gross assets of 27%.
- $1.2 billion of expected capital
contribution commitments from existing consolidated real estate
joint venture partners to fund construction from 1Q24 through
2027.
- During 4Q23, we settled our outstanding forward equity sales
agreements by issuing 699 thousand shares of common stock, for
which we received net proceeds of $104.3
million.
Alexandria's
highly leased value-creation pipeline delivered the highest
incremental annual net operating income in Company history of
$145 million and $265 million, commencing during 4Q23 and 2023,
respectively, and drives future incremental annual net operating
income aggregating $495 million
- During 4Q23, we placed into service development and
redevelopment projects aggregating 1.2 million RSF that are 99%
leased across multiple submarkets and delivered incremental annual
net operating income of $145 million.
4Q23 deliveries include:
- Accelerated delivery of 462,100 RSF at 325 Binney Street in our
Cambridge submarket, which is 100%
leased to Moderna, Inc.;
- 345,996 RSF at 15 Necco Street in our Seaport Innovation
District submarket, which is 97% leased to Eli Lilly and
Company;
- 278,282 RSF at 1150 Eastlake Avenue East, a multi-tenant
building, in our Lake Union submarket, which is 100% leased;
and
- 88,038 RSF at 6040 George Watts Hill Drive in our Research
Triangle submarket, which is 100% leased to FUJIFILM Diosynth
Biotechnologies.
- Annual net operating income (cash basis) is expected to
increase by $114 million upon the
burn-off of initial free rent from recently delivered projects.
Initial free rent has a weighted-average burn-off period of 10
months.
- 66% of RSF in our value-creation pipeline is within our
mega campuses.
(dollars in millions)
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Incremental
Annual Net
Operating
Income
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RSF
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Leased/
Negotiating
Percentage
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Placed into
service:
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YTD 3Q23
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$
120
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1,290,721
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100 %
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4Q23
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145
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1,228,604
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99
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Placed into service in
2023
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$
265
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2,519,325
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100 %
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Expected to be placed
into service(1):
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2024
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$
149
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(2)
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5,697,062
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60%(3)
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2025
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146
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1Q26
through 4Q27
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200
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$
495
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(1)
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Represents expected
incremental annual net operating income to be placed into service,
including partial deliveries for projects that stabilize in future
years.
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(2)
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Includes 1.4 million
RSF expected to be stabilized in 2024 and is 93% leased. Refer to
the initial and stabilized occupancy years in the "New Class A/A+
development and redevelopment properties: current projects" of our
Supplemental Information for additional information.
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(3)
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70% of the leased RSF
of our value-creation projects was generated from our existing
tenant base.
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Continued solid net operating income and
internal growth
- Net operating income (cash basis) of $1.9 billion for 4Q23 annualized, up $190.4 million, or 11.3%, compared to 4Q22
annualized.
- Same property net operating income growth:
- 3.4% and 4.6% (cash basis) for 2023 over 2022, in line with our
previously provided 2023 guidance.
- 0.7% and 0.8% (cash basis) for 4Q23 over 4Q22, including four
properties in our Greater Boston,
San Francisco Bay Area, and
San Diego markets, with temporary
vacancy aggregating 331,454 RSF. This RSF is currently 64%
leased/negotiating, with leases expected to commence primarily
during 2H24.
- 96% of our leases contain contractual annual rent escalations
approximating 3%.
Consistent dividend strategy focuses on
retaining significant net cash flows from operating activities
after dividends for reinvestment
- Common stock dividend declared for 4Q23 of $1.27 per common share, aggregating $4.96 per common share for the year ended
December 31, 2023, up 24 cents, or 5%, over the year ended December 31, 2022.
- Dividend yield of 4.0% as of December 31, 2023.
- Dividend payout ratio of 56% for the three months ended
December 31, 2023.
- Average annual dividend per-share growth of 6% from 2019 to
2023.
- Significant net cash flows from operating activities after
dividends retained for reinvestment aggregating $1.9 million for the years ended December 31, 2019 through 2023.
Execution of our value harvesting and asset
recycling 2023 self-funding strategy
Our 2023 capital plan included $1.4 billion in funding primarily from
dispositions and partial interest sales, of which $439.0 million was completed during 4Q23, and
focused on the enhancement of our asset base through the
following:
(in millions)
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Completed in
2023
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Value harvesting
dispositions of 100% interest in properties not integral to
our
mega
campus strategy
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$ 1,042
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Strategic dispositions
and partial interest sales
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273
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Proceeds of forward
equity sales agreements entered into during 2022 and
settled in
4Q23
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104
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Total
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$ 1,419
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In January 2024,
our existing ATM program became inactive upon expiration of the
associated shelf registration. We expect to file a new shelf
registration and ATM program in the near future.
Strong balance sheet management
Key metrics as of or for December 31,
2023
- $33.1 billion in total market
capitalization.
- $21.8 billion in total equity
capitalization, which ranks in the top 10% among all publicly
traded U.S. REITs.
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4Q23
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Target
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Quarter
Annualized
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Trailing
12 Months
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4Q24
Annualized
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Net debt and preferred
stock to
Adjusted
EBITDA
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5.1x
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5.4x
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Less than or equal to
5.1x
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Fixed-charge coverage
ratio
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4.5x
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4.7x
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Greater than or equal
to 4.5x
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Investments
- As of December 31, 2023:
- Our non-real estate investments aggregated $1.4 billion.
- Unrealized gains presented in our consolidated balance sheet
were $196.9 million, comprising gross
unrealized gains and losses aggregating $320.4 million and $123.5 million, respectively.
- Investment income of $8.7 million
for 4Q23 presented in our consolidated statement of operations
consisted of $19.5 million of
unrealized gains and $10.8 million of realized losses. Realized
losses include $12.3 million of
realized gains, offset by impairment charges of $23.1 million.
Other key highlights
Key items included in net income attributable to
Alexandria's common stockholders:
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YTD
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4Q23
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4Q22
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4Q23
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4Q22
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2023
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2022
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2023
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2022
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(in millions, except per share
amounts)
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Amount
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Per Share
–
Diluted
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Amount
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Per Share
–
Diluted
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Unrealized gains
(losses) on
non-real
estate investments
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$
19.5
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$
(24.1)
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$ 0.11
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$ (0.15)
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$
(201.5)
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$
(412.2)
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$ (1.18)
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$ (2.55)
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Gain on sales of real
estate
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62.2
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—
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0.36
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—
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277.0
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537.9
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1.62
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3.33
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Impairment of
non-real
estate
investments
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(23.1)
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(20.5)
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(0.13)
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(0.12)
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(74.6)
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(20.5)
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(0.44)
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(0.13)
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Impairment of real
estate
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(271.9)
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(1)
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(26.2)
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(1.59)
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(0.16)
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(461.1)
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(65.0)
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(2.70)
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(0.40)
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Loss on early
extinguishment
of
debt
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—
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—
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—
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—
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—
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(3.3)
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—
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(0.02)
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Acceleration of
stock
compensation expense due
to
executive officer
resignations
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(18.4)
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—
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(0.11)
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—
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(20.3)
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(7.2)
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(0.12)
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(0.04)
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Total
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$
(231.7)
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$
(70.8)
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$ (1.36)
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$ (0.43)
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$
(480.5)
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$
29.7
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$ (2.82)
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$ 0.19
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(1)
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Represents impairment
charges to reduce our investments in real estate assets to their
respective estimated fair values less costs to sell upon their
classification as held for sale, primarily consisting of
non-laboratory assets that are not integral to our mega campus
strategy, including (i) $94.8 million for two non-laboratory
properties in our Seaport Innovation District submarket, (ii)
$93.5 million for an office property in our New York City
submarket, (iii) $36.1 million for a development land parcel in our
Seaport Innovation District submarket, and (iv) $29.7 million
for an office property in our Bothell submarket. We initially
acquired these real estate assets with the intention to entitle or
reposition each site as part of a life science campus, including
the demolition of properties as necessary, upon expiration of the
existing in-place leases, and ultimately develop or redevelop life
science properties. Since acquiring these assets, the macroeconomic
environment has changed and we decided not to proceed with
them.
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Refer to "Funds from
operations and funds from operations per share" of this Earnings
Press Release for additional details.
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Industry and corporate responsibility leadership: catalyzing
and leading the way for positive change to benefit human health and
society
- In November 2023, Alexandria earned several 2023 TOBY (The
Outstanding Building of the Year) Awards from BOMA (Building Owners
and Managers Association) in Boston, San
Diego, and Seattle King County:
- In our Greater Boston market,
60 Binney Street on our Alexandria Center® at Kendall
Square mega campus won in the Laboratory Building category, and
Buildings 200 and 1400 on our Alexandria Center® at One
Kendall Square mega campus won in the Historical Building and
Renovated Building categories, respectively.
- In our San Diego market, 9880
Campus Point Drive on our Campus Point by Alexandria mega campus, which is home to
Alexandria GradLabs®, won a TOBY in the region's
first-ever Life Science category.
- In our Seattle market, 1165
Eastlake Avenue East on The Eastlake Life Science Campus by
Alexandria mega campus won a TOBY
in the region's first-ever Life Science category.
- Alexandria continues to
address some of today's most pressing societal challenges through
our impactful social responsibility pillars, with a prioritized
focus on mental health and addiction. OneFifteen, a data-driven
comprehensive care model for treating people living with addiction,
which we pioneered in partnership with Verily, celebrated the
fourth anniversary of its campus in Dayton, Ohio in October
2023. Since it opened its doors in 2019, OneFifteen has
treated over 7,500 patients at this patient-centered holistic
learning health system.
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. Alexandria has a total market capitalization
of $33.1 billion and an asset
base in North America of 73.5
million SF as of December 31, 2023,
which includes 42.0 million RSF of operating properties, 5.5
million RSF of Class A/A+ properties undergoing construction and
one near-term project expected to commence construction in the next
two years, 2.1 million RSF of priority anticipated development and
redevelopment projects, and 23.9 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
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December 31,
2023
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(Dollars in millions,
except per share amounts)
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The following guidance
for 2024 has been updated to reflect our current view of existing
market conditions and assumptions for the year ending December 31,
2024. There can be no assurance that actual results will not be
materially higher or lower than these expectations. Also, refer to
our discussion of "forward-looking statements" on page 7 of this
Earnings Press Release for additional details. Key updates to our
2024 guidance from November 29, 2023 are summarized below which
includes a $125 million reduction in excess 2023 bond capital held
as cash at December 31, 2023 and a corresponding increase in
incremental debt.
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2024 Guidance Midpoint
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Summary of Change in Key Credit Metric
Targets
|
|
As of 1/29/24
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As of 11/29/23
|
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Summary of Key Changes in Sources and Uses of
Capital
|
|
As of 1/29/24
|
|
As of 11/29/23
|
Fixed-charge coverage
ratio – 4Q24 annualized
|
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Greater than
or
equal to
4.5x
|
|
4.5x to
5.0x
|
|
Incremental
debt
|
|
$900
|
|
$775
|
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|
|
Excess 2023 bond
capital held as cash at December 31, 2023
|
|
$—
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$125
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|
|
|
|
|
|
|
|
|
|
|
Key Credit Metric
Targets(1)
|
|
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Net debt and preferred
stock to Adjusted EBITDA – 4Q24 annualized
|
|
Less than or equal to
5.1x
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Fixed-charge coverage
ratio – 4Q24 annualized
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Greater than or equal
to 4.5x
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|
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Projected 2024 Earnings per Share and Funds From
Operations per Share Attributable to
Alexandria's Common Stockholders –
Diluted
|
|
Earnings per
share(2)
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|
$3.49 to
$3.69
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|
Depreciation and
amortization of real estate assets
|
|
|
5.95
|
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|
Allocation to unvested
restricted stock awards
|
|
|
(0.07)
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|
Funds from operations
per share(3)
|
|
$9.37 to
$9.57
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Midpoint
|
|
$9.47
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|
|
Key Sources and Uses of Capital
|
|
Range
|
|
Midpoint
|
|
Sources of capital:
|
|
|
|
|
|
|
|
Incremental
debt
|
|
$
900
|
|
$
900
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|
$
900
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Net cash provided by
operating activities after dividends
|
|
400
|
|
500
|
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450
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Dispositions and sales
of partial interests(4)(5)
|
|
900
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|
1,900
|
|
1,400
|
|
Total sources of
capital
|
|
$ 2,200
|
|
$ 3,300
|
|
$ 2,750
|
|
Uses of capital:
|
|
|
|
|
|
|
|
Construction
|
|
$ 1,950
|
|
$ 2,550
|
|
$ 2,250
|
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Acquisitions(6)
|
|
250
|
|
750
|
|
500
|
|
Total uses of
capital
|
|
$ 2,200
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|
$ 3,300
|
|
$ 2,750
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Incremental debt (included
above):
|
|
|
|
|
|
|
|
Issuance of unsecured
senior notes payable(7)
|
|
$
600
|
|
$ 1,400
|
|
$ 1,000
|
|
Unsecured senior line
of credit, commercial paper, and other
|
|
300
|
|
(500)
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|
(100)
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|
Net incremental
debt
|
|
$
900
|
|
$
900
|
|
$
900
|
|
|
|
Key Assumptions
|
|
Low
|
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High
|
|
Occupancy percentage in
North America as of December 31, 2024
|
|
94.6 %
|
|
95.6 %
|
|
Lease renewals and
re-leasing of space:
|
|
|
|
|
|
Rental rate
increases
|
|
11.0 %
|
|
19.0 %
|
|
Rental rate increases
(cash basis)
|
|
5.0 %
|
|
13.0 %
|
|
Same property
performance:
|
|
|
|
|
|
Net operating income
increases
|
|
0.5 %
|
|
2.5 %
|
|
Net operating income
increases (cash basis)
|
|
3.0 %
|
|
5.0 %
|
|
Straight-line rent
revenue
|
|
$
169
|
|
$
184
|
|
General and
administrative expenses
|
|
$
181
|
|
$
191
|
|
Capitalization of
interest
|
|
$
325
|
|
$
355
|
|
Interest
expense
|
|
$
154
|
|
$
184
|
|
Realized gains on
non-real estate investments(8)
|
|
$
95
|
|
$
125
|
|
|
|
(1)
|
Refer to each metric's
corresponding definition within the "Definitions and
reconciliations" of our Supplemental Information.
|
(2)
|
Excludes unrealized
gains or losses on non-real estate investments after December 31,
2023 that are required to be recognized in earnings and are
excluded from funds from operations per share, as
adjusted.
|
(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 information.
|
(4)
|
As of January 29, 2024,
we have pending real estate dispositions subject to signed letters
of intent or purchase and sale agreements aggregating $142.4
million.
|
(5)
|
In January 2024, our
existing ATM program became inactive upon expiration of the
associated shelf registration. We expect to file a new shelf
registration and ATM program in the near future.
|
(6)
|
Primarily represents
strategic acquisitions that expand existing mega campuses or are
associated with a new mega campus. We have completed acquisitions
aggregating $103.3 million as of January 29, 2024.
|
(7)
|
Our guidance assumes we
issue new unsecured senior notes payable in 2025 to fund the
repayment of our $600 million unsecured senior notes payable due on
April 30, 2025. Subject to market conditions, we may seek
opportunities in 2024 to fund the repayment of our 2025 debt
maturity through the issuance of additional unsecured senior notes
payable.
|
(8)
|
Represents realized
gains and losses included in funds from operations per share –
diluted, as adjusted, and excludes significant impairments realized
on non-real estate investments, if any. Refer to "Investments" of
our Supplemental Information for additional details.
|
|
|
Acquisitions
December 31,
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)
|
|
2023 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
Canada
|
|
1/30/23
|
|
1
|
|
100 %
|
|
—
|
|
—
|
|
247,743
|
|
247,743
|
|
$
100,837
|
Other
|
|
Various
|
|
Various
|
|
4
|
|
100
|
|
1,089,349
|
|
110,717
|
|
185,676
|
|
1,385,742
|
|
158,139
|
Total 2023
acquisitions
|
|
|
|
|
|
5
|
|
100 %
|
|
1,089,349
|
|
110,717
|
|
433,419
|
|
1,633,485
|
|
$
258,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed through
January 29, 2024
|
|
Various
|
|
Various
|
|
—
|
|
N/A
|
|
300,000
|
|
—
|
|
—
|
|
300,000
|
|
$
103,250
|
Pending acquisitions
subject to signed
letters of
intent or purchase and
sale
agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
358,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
461,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 guidance
range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$250,000 –
$750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
December 31,
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 dispositions of 100% interest
in
properties not integral to our mega
campus strategy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed in YTD
3Q23:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11119 North Torrey
Pines Road
|
|
Torrey Pines/San
Diego
|
|
5/4/23
|
|
100 %
|
|
|
72,506
|
|
4.4 %
|
|
|
4.6 %
|
|
|
$
86,000
|
|
$
1,186
|
|
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
|
|
N/A
|
|
|
N/A
|
|
|
365,226
|
|
$
852
|
|
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
|
|
|
|
Completed in
4Q23:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
640 Memorial Drive,
100 Beaver Street, and 11025
and 11035
Roselle Street(2)
|
|
Cambridge and Inner
Suburbs and
Route
128/Greater Boston and
Sorrento
Valley/San Diego
|
|
12/20/23
|
|
100 %
|
|
|
361,102
|
|
N/A
|
|
|
N/A
|
|
|
312,244
|
|
$
865
|
|
380 and 420 E
Street(3)
|
|
Seaport Innovation
District/
Greater
Boston
|
|
12/20/23
|
|
100 %
|
|
|
195,506
|
|
N/A
|
|
|
N/A
|
|
|
86,969
|
|
$
445
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
438,966
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,041,633
|
|
|
|
Strategic dispositions and partial interest
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15 Necco
Street
|
|
Seaport Innovation
District/
Greater
Boston
|
|
4/11/23
|
|
18 %
|
|
|
345,996
|
|
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
|
|
421 Park
Drive(5)
|
|
Fenway/Greater
Boston
|
|
9/19/23
|
|
(5)
|
|
|
(5)
|
|
N/A
|
|
|
N/A
|
|
|
174,412
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272,781
|
|
|
|
Total 2023 dispositions
and sales of partial interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,314,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents five
laboratory properties at 225, 266, and 275 Second Avenue
aggregating 329,005 RSF and 780 and 790 Memorial Drive aggregating
99,658 RSF. We calculated capitalization rates of 5.0% and 5.2%
(cash basis) based upon net operating income and net operating
income (cash basis), respectively, for 2Q23 annualized that
includes vacancy available for redevelopment. Upon completion of
the sale, we recognized a gain on sales of real estate aggregating
$187.2 million.
|
(2)
|
Represents four
operating properties that were 46% occupied as of 3Q23 consisting
of two laboratory properties at 640 Memorial Drive aggregating
242,477 RSF in Cambridgeport, MA and 100 Beaver Street aggregating
82,330 RSF in Waltham, MA, and two non-laboratory properties at
11025 and 11035 Roselle Street aggregating 36,295 RSF in our
Sorrento Valley submarket. These non-core assets were not integral
to our mega campus strategy and would have required significant
capital to stabilize. Upon completion of the sale, we recognized a
gain on sales of real estate aggregating
$59.7 million.
|
(3)
|
Represents two
non-laboratory properties initially acquired as industrial and
self-storage space with the intention to demolish the properties
upon expiration of the existing in-place leases to entitle and
develop a life science campus. During 4Q23, we decided to not
proceed with this project due to the change in macroeconomic
environment and a lack of transit options near the properties and
recognized an impairment charge of $94.8 million to reduce our
investment to its current fair value less costs to sell.
|
(4)
|
Dispositions completed
during the three months ended December 31, 2023 had annual net
operating income of $22.7 million with a weighted-average
disposition date of December 19, 2023 (weighted by net operating
income for 4Q23 annualized).
|
(5)
|
Represents the
disposition of 268,023 RSF in a 660,034 RSF active development
project at 421 Park Drive in our Fenway submarket. The proceeds
from this transaction will help fund the construction of our
remaining 392,011 RSF. The project commenced vertical construction
in 4Q23 and is expected to be substantially completed in 2026. The
buyer will fund the remaining costs to construct its 268,023 RSF,
and as such, 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
December 31, 2023
We will host a conference call on Tuesday, January 30, 2024, at 3:00 p.m. Eastern Time ("ET")/noon Pacific Time ("PT"), which is open to the
general public, to discuss our financial and operating results for
the fourth quarter and year ended December 31, 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,
January 30, 2024. The replay number is (877) 344-7529 or (412)
317-0088, and the access code is 3134066.
Additionally, a copy of this Earnings Press
Release and Supplemental Information for the fourth quarter and
year ended December 31, 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/2023q4.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.
Alexandria has a total market
capitalization of $33.1 billion and
an asset base in North America of
73.5 million SF as of December 31, 2023, which includes 42.0
million RSF of operating properties, 5.5 million RSF of Class A/A+
properties undergoing construction and one near-term project
expected to commence construction in the next two years, 2.1
million RSF of priority anticipated development and redevelopment
projects, and 23.9 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 2024 earnings per
share attributable to Alexandria's
common stockholders – diluted, 2024 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
December 31,
2023
(Dollars in thousands,
except per share amounts)
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
12/31/23
|
|
12/31/22
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
rentals
|
|
$
742,637
|
|
$ 707,531
|
|
$
704,339
|
|
$
687,949
|
|
$
665,674
|
|
$
2,842,456
|
|
$
2,576,040
|
Other income
|
|
14,579
|
|
6,257
|
|
9,561
|
|
12,846
|
|
4,607
|
|
43,243
|
|
12,922
|
Total
revenues
|
|
757,216
|
|
713,788
|
|
713,900
|
|
700,795
|
|
670,281
|
|
2,885,699
|
|
2,588,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
operations
|
|
222,726
|
|
217,687
|
|
211,834
|
|
206,933
|
|
204,352
|
|
859,180
|
|
783,153
|
General and
administrative
|
|
59,289
|
(1)
|
45,987
|
|
45,882
|
|
48,196
|
|
42,992
|
|
199,354
|
|
177,278
|
Interest
|
|
31,967
|
|
11,411
|
|
17,072
|
|
13,754
|
|
17,522
|
|
74,204
|
|
94,203
|
Depreciation and
amortization
|
|
285,246
|
|
269,370
|
|
273,555
|
|
265,302
|
|
264,480
|
|
1,093,473
|
|
1,002,146
|
Impairment of real
estate
|
|
271,890
|
(2)
|
20,649
|
|
168,575
|
|
—
|
|
26,186
|
|
461,114
|
|
64,969
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
Total
expenses
|
|
871,118
|
|
565,104
|
|
716,918
|
|
534,185
|
|
555,532
|
|
2,687,325
|
|
2,125,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated real estate joint ventures
|
|
363
|
|
242
|
|
181
|
|
194
|
|
172
|
|
980
|
|
645
|
Investment income
(loss)
|
|
8,654
|
|
(80,672)
|
|
(78,268)
|
|
(45,111)
|
|
(19,653)
|
|
(195,397)
|
|
(331,758)
|
Gain on sales of real
estate
|
|
62,227
|
|
—
|
|
214,810
|
|
—
|
|
—
|
|
277,037
|
|
537,918
|
Net (loss)
income
|
|
(42,658)
|
|
68,254
|
|
133,705
|
|
121,693
|
|
95,268
|
|
280,994
|
|
670,701
|
Net income attributable
to noncontrolling interests
|
|
(45,771)
|
|
(43,985)
|
|
(43,768)
|
|
(43,831)
|
|
(40,949)
|
|
(177,355)
|
|
(149,041)
|
Net (loss) income
attributable to Alexandria Real Estate Equities, Inc.'s
stockholders
|
|
(88,429)
|
|
24,269
|
|
89,937
|
|
77,862
|
|
54,319
|
|
103,639
|
|
521,660
|
Net income attributable
to unvested restricted stock awards
|
|
(3,498)
|
|
(2,414)
|
|
(2,677)
|
|
(2,606)
|
|
(2,526)
|
|
(11,195)
|
|
(8,392)
|
Net (loss) income
attributable to Alexandria Real Estate Equities, Inc.'s
common
stockholders
|
|
$
(91,927)
|
|
$
21,855
|
|
$
87,260
|
|
$
75,256
|
|
$
51,793
|
|
$
92,444
|
|
$
513,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to Alexandria Real Estate Equities,
Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.54)
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
0.54
|
|
$
3.18
|
Diluted
|
|
$
(0.54)
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
0.54
|
|
$
3.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
171,096
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
170,909
|
|
161,659
|
Diluted
|
|
171,096
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
170,909
|
|
161,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
share of common stock
|
|
$
1.27
|
|
$
1.24
|
|
$
1.24
|
|
$
1.21
|
|
$
1.21
|
|
$
4.96
|
|
$
4.72
|
|
|
(1)
|
Includes $18.4 million
of accelerated stock compensation expense primarily related to the
resignations of two executive officers, Dean A. Shigenaga from his
position as President and Chief Financial Officer and John H.
Cunningham from his position as Executive Vice President – Regional
Market Director – New York City. Excluding this accelerated stock
compensation expense, general and administrative expenses would
have been $40.9 million.
|
(2)
|
Refer to "Funds from
operations and funds from operations per share" of this Earnings
Press Release for additional details.
|
Consolidated Balance
Sheets
December 31,
2023
(In
thousands)
|
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Investments in real
estate
|
|
$
31,633,511
|
|
$
31,712,731
|
|
$
31,178,054
|
|
$
30,889,395
|
|
$ 29,945,440
|
Investments in
unconsolidated real estate joint ventures
|
|
37,780
|
|
37,695
|
|
37,801
|
|
38,355
|
|
38,435
|
Cash and cash
equivalents
|
|
618,190
|
|
532,390
|
|
924,370
|
|
1,263,452
|
|
825,193
|
Restricted
cash
|
|
42,581
|
|
35,321
|
|
35,920
|
|
34,932
|
|
32,782
|
Tenant
receivables
|
|
8,211
|
|
6,897
|
|
6,951
|
|
8,197
|
|
7,614
|
Deferred
rent
|
|
1,050,319
|
|
1,012,666
|
|
984,366
|
|
974,865
|
|
942,646
|
Deferred leasing
costs
|
|
509,398
|
|
512,216
|
|
520,610
|
|
527,848
|
|
516,275
|
Investments
|
|
1,449,518
|
|
1,431,766
|
|
1,495,994
|
|
1,573,018
|
|
1,615,074
|
Other assets
|
|
1,421,894
|
|
1,501,611
|
|
1,475,191
|
|
1,602,403
|
|
1,599,940
|
Total assets
|
|
$
36,771,402
|
|
$
36,783,293
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$ 35,523,399
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
|
Secured notes
payable
|
|
$
119,662
|
|
$
109,110
|
|
$
91,939
|
|
$
73,645
|
|
$
59,045
|
Unsecured senior notes
payable
|
|
11,096,028
|
|
11,093,725
|
|
11,091,424
|
|
11,089,124
|
|
10,100,717
|
Unsecured senior line
of credit and commercial paper
|
|
99,952
|
|
—
|
|
—
|
|
374,536
|
|
—
|
Accounts payable,
accrued expenses, and other liabilities
|
|
2,610,943
|
|
2,653,126
|
|
2,494,087
|
|
2,479,047
|
|
2,471,259
|
Dividends
payable
|
|
221,824
|
|
214,450
|
|
214,555
|
|
209,346
|
|
209,131
|
Total
liabilities
|
|
14,148,409
|
|
14,070,411
|
|
13,892,005
|
|
14,225,698
|
|
12,840,152
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
16,480
|
|
51,658
|
|
52,628
|
|
44,862
|
|
9,612
|
|
|
|
|
|
|
|
|
|
|
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
1,719
|
|
1,710
|
|
1,709
|
|
1,709
|
|
1,707
|
Additional paid-in
capital
|
|
18,485,352
|
|
18,651,185
|
|
18,812,318
|
|
18,902,821
|
|
18,991,492
|
Accumulated other
comprehensive loss
|
|
(15,896)
|
|
(24,984)
|
|
(16,589)
|
|
(20,536)
|
|
(20,812)
|
Alexandria Real Estate
Equities, Inc.'s stockholders' equity
|
|
18,471,175
|
|
18,627,911
|
|
18,797,438
|
|
18,883,994
|
|
18,972,387
|
Noncontrolling
interests
|
|
4,135,338
|
|
4,033,313
|
|
3,917,186
|
|
3,757,911
|
|
3,701,248
|
Total equity
|
|
22,606,513
|
|
22,661,224
|
|
22,714,624
|
|
22,641,905
|
|
22,673,635
|
Total liabilities,
noncontrolling interests, and equity
|
|
$
36,771,402
|
|
$
36,783,293
|
|
$
36,659,257
|
|
$
36,912,465
|
|
$ 35,523,399
|
Funds From
Operations and Funds From Operations per Share
|
December 31,
2023
|
(In
thousands)
|
|
The following table
presents a reconciliation of net income (loss) attributable to
Alexandria's common stockholders, the most directly comparable
financial measure presented in accordance with U.S. generally
accepted accounting principles ("GAAP"), including our share of
amounts from consolidated and unconsolidated real estate joint
ventures, to funds from operations attributable to Alexandria's
common stockholders – diluted, and funds from operations
attributable to Alexandria's common stockholders – diluted, as
adjusted, for the periods below:
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
12/31/23
|
|
12/31/22
|
Net (loss) income attributable to Alexandria's common
stockholders
|
|
$
(91,927)
|
|
$
21,855
|
|
$
87,260
|
|
$
75,256
|
|
$
51,793
|
|
$
92,444
|
|
$
513,268
|
Depreciation and
amortization of real estate assets
|
|
281,939
|
|
266,440
|
|
270,026
|
|
262,124
|
|
261,185
|
|
1,080,529
|
|
988,363
|
Noncontrolling share
of depreciation and amortization from consolidated real
estate
JVs
|
|
(30,137)
|
|
(28,814)
|
|
(28,220)
|
|
(28,178)
|
|
(29,702)
|
|
(115,349)
|
|
(107,591)
|
Our share of
depreciation and amortization from unconsolidated real estate
JVs
|
|
965
|
|
910
|
|
855
|
|
859
|
|
982
|
|
3,589
|
|
3,666
|
Gain on sales of real
estate
|
|
(62,227)
|
|
—
|
|
(214,810)
|
|
—
|
|
—
|
|
(277,037)
|
|
(537,918)
|
Impairment of real
estate – rental properties
|
|
263,982
|
(1)
|
19,844
|
|
166,602
|
|
—
|
|
20,899
|
|
450,428
|
|
20,899
|
Allocation to unvested
restricted stock awards
|
|
(2,268)
|
|
(838)
|
|
(872)
|
|
(1,359)
|
|
(953)
|
|
(5,175)
|
|
(1,118)
|
Funds from operations attributable to Alexandria's
common stockholders –
diluted(2)
|
|
360,327
|
|
279,397
|
|
280,841
|
|
308,702
|
|
304,204
|
|
1,229,429
|
|
879,569
|
Unrealized (gains)
losses on non-real estate investments
|
|
(19,479)
|
|
77,202
|
|
77,897
|
|
65,855
|
|
24,117
|
|
201,475
|
|
412,193
|
Impairment of non-real
estate investments
|
|
23,094
|
(3)
|
28,503
|
|
22,953
|
|
—
|
|
20,512
|
|
74,550
|
|
20,512
|
Impairment of real
estate
|
|
7,908
|
|
805
|
|
1,973
|
|
—
|
|
5,287
|
|
10,686
|
|
44,070
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,317
|
Acceleration of stock
compensation expense due to executive officer
resignations
|
|
18,436
|
(4)
|
1,859
|
|
—
|
|
—
|
|
—
|
|
20,295
|
(4)
|
7,185
|
Allocation to unvested
restricted stock awards
|
|
(472)
|
|
(1,330)
|
|
(1,285)
|
|
(867)
|
|
(482)
|
|
(4,121)
|
|
(5,137)
|
Funds from operations attributable to Alexandria's
common stockholders –
diluted, as
adjusted
|
|
$
389,814
|
|
$
386,436
|
|
$
382,379
|
|
$
373,690
|
|
$
353,638
|
|
$
1,532,314
|
|
$
1,361,709
|
|
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 information.
|
|
|
(1)
|
Represents impairment
charges to reduce our investments in real estate assets to their
respective estimated fair values less costs to sell upon their
classification as held for sale, primarily consisting of
non-laboratory assets that are not integral to our mega campus
strategy, including (i) $94.8 million for two non-laboratory
properties in our Seaport Innovation District submarket, (ii)
$93.5 million for an office property in our New York City
submarket, (iii) $36.1 million for a development land parcel in our
Seaport Innovation District submarket, and (iv) $29.7 million
for an office property in our Bothell submarket. We initially
acquired these real estate assets with the intention to entitle or
reposition each site as part of a life science campus, including
the demolition of properties as necessary, upon expiration of the
existing in-place leases, and ultimately develop or redevelop life
science properties. Since acquiring these assets, the macroeconomic
environment has changed and we decided not to proceed with
them.
|
(2)
|
Calculated in
accordance with standards established by the Nareit Board of
Governors.
|
(3)
|
Primarily related to
four non-real estate investments in privately held entities that do
not report NAV.
|
(4)
|
Related to the
resignations of two executive officers, Dean A. Shigenaga from his
position as President and Chief Financial Officer and John H.
Cunningham from his position as Executive Vice President – Regional
Market Director – New York City.
|
Funds From
Operations and Funds From Operations per Share
(continued)
|
December 31,
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
|
|
Year Ended
|
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
12/31/23
|
|
12/31/22
|
Net (loss) income per share attributable to
Alexandria's common stockholders
– diluted
|
|
$
(0.54)
|
|
$
0.13
|
|
$
0.51
|
|
$
0.44
|
|
$
0.31
|
|
$
0.54
|
|
$
3.18
|
Depreciation and
amortization of real estate assets
|
|
1.48
|
|
1.40
|
|
1.42
|
|
1.38
|
|
1.41
|
|
5.67
|
|
5.47
|
Gain on sales of real
estate
|
|
(0.36)
|
|
—
|
|
(1.26)
|
|
—
|
|
—
|
|
(1.62)
|
|
(3.33)
|
Impairment of real
estate – rental properties
|
|
1.54
|
|
0.12
|
|
0.98
|
|
—
|
|
0.13
|
|
2.64
|
|
0.13
|
Allocation to unvested
restricted stock awards
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.01)
|
|
(0.04)
|
|
(0.01)
|
Funds from operations per share attributable to
Alexandria's common
stockholders –
diluted
|
|
2.11
|
|
1.64
|
|
1.64
|
|
1.81
|
|
1.84
|
|
7.19
|
|
5.44
|
Unrealized (gains)
losses on non-real estate investments
|
|
(0.11)
|
|
0.45
|
|
0.46
|
|
0.39
|
|
0.15
|
|
1.18
|
|
2.55
|
Impairment of non-real
estate investments
|
|
0.13
|
|
0.17
|
|
0.13
|
|
—
|
|
0.12
|
|
0.44
|
|
0.13
|
Impairment of real
estate
|
|
0.05
|
|
—
|
|
0.02
|
|
—
|
|
0.03
|
|
0.06
|
|
0.27
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Acceleration of stock
compensation expense due to executive officer
resignations
|
|
0.11
|
|
0.01
|
|
—
|
|
—
|
|
—
|
|
0.12
|
|
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
|
|
$
2.28
|
|
$
2.26
|
|
$
2.24
|
|
$
2.19
|
|
$
2.14
|
|
$
8.97
|
|
$
8.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding – diluted
|
|
171,096
|
|
170,890
|
|
170,864
|
|
170,784
|
|
165,393
|
|
170,909
|
|
161,659
|
|
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 information.
|
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SOURCE Alexandria Real Estate Equities, Inc.