Secured and unsecured senior debt

6 Months Ended

Jun. 30, 2016

The following table summarizes our secured and unsecured senior debt as of June 30, 2016 (dollars in thousands):



	Fixed-Rate/Hedged Variable-Rate		Unhedged Variable-Rate						Weighted-Average
					Total				Interest		Remaining Term (in years)
					Consolidated		Percentage		Rate ⁽¹⁾		Remaining Term (in years)
Secured notes payable	$	382,052	$	340,742	$	722,794	17.6	%	3.46	%	2.8
Unsecured senior notes payable	2,376,713		—		2,376,713		57.8		4.12		7.7
Unsecured senior line of credit ⁽²⁾	—		72,000		72,000		1.7		1.57		2.5
2019 Unsecured Senior Bank Term Loan	597,304		—		597,304		14.5		2.20		2.5
2021 Unsecured Senior Bank Term Loan	347,726		—		347,726		8.4		2.22		4.5
Total/weighted average	$	3,703,795	$	412,742	$	4,116,537	100.0	%	3.52	%	5.8
Percentage of total debt	90%		10%		100%


(1)	See footnote 1 on the page 23 for additional information on weighted-average interest rate.


(2)	On July 29, 2016, we amended our unsecured senior line of credit and increased commitments available for borrowing by $150 million to an aggregate of $1.65 billion, extended the maturity date to October 29, 2021, and reduced the interest rate from LIBOR+1.10% to LIBOR+1.00%.

The following table summarizes our outstanding indebtedness and respective principal payments as of June 30, 2016 (dollars in thousands):



	Stated Rate			Weighted-Average Interest Rate			Maturity		Principal Payments Remaining for the Periods Ending December 31,														Unamortized (Deferred Financing Cost), (Discount)/Premium
Debt	Stated Rate			Weighted-Average Interest Rate		⁽¹⁾	Date ⁽²⁾		2016		2017		2018		2019		2020		Thereafter		Principal		Unamortized (Deferred Financing Cost), (Discount)/Premium			Total
Secured notes payable
Maryland	2.44	%		2.79	%		1/20/17		$	—	$	76,000	$	—	$	—	$	—	$	—	$	76,000	$	(146	)	$	75,854
Greater Boston	L+1.35			2.44			8/23/17	⁽³⁾	—		201,241		—		—		—		—		201,241		(1,614		)	199,627
Greater Boston	L+1.50			1.88			1/28/19	⁽³⁾	—		—		—		180,753		—		—		180,753		(3,081		)	177,672
Greater Boston	L+2.00			2.94			4/20/19	⁽³⁾	—		—		—		40,089		—		—		40,089		(3,703		)	36,386
San Diego, Seattle, and Maryland	7.75			8.08			4/1/20		864		1,832		1,980		2,138		104,352		—		111,166		(1,253		)	109,913
San Diego	4.66			4.93			1/1/23		861		1,540		1,615		1,692		1,770		29,904		37,382		(428		)	36,954
Greater Boston	3.93			3.33			3/10/23		—		—		1,091		1,505		1,566		77,838		82,000		3,586			85,586
San Francisco	6.50			6.72			7/1/36		9		20		22		23		25		703		802		—			802
Secured debt weighted-average interest rate/subtotal	3.42	%		3.46					1,734		280,633		4,708		226,200		107,713		108,445		729,433		(6,639		)	722,794

Unsecured senior line of credit ⁽⁴⁾	L+1.10	%	⁽⁴⁾	1.57			1/3/19		—		—		—		72,000		—		—		72,000		—			72,000
2019 Unsecured Senior Bank Term Loan	L+1.20	%		2.20			1/3/19		—		—		—		600,000		—		—		600,000		(2,696		)	597,304
2021 Unsecured Senior Bank Term Loan	L+1.10	%		2.22			1/15/21		—		—		—		—		—		350,000		350,000		(2,274		)	347,726
Unsecured senior notes payable	2.75	%		2.95			1/15/20		—		—		—		—		400,000		—		400,000		(2,793		)	397,207
Unsecured senior notes payable	4.60	%		4.72			4/1/22		—		—		—		—		—		550,000		550,000		(3,726		)	546,274
Unsecured senior notes payable	3.90	%		4.02			6/15/23		—		—		—		—		—		500,000		500,000		(4,095		)	495,905
Unsecured senior notes payable	4.30	%		4.46			1/15/26		—		—		—		—		—		300,000		300,000		(4,563		)	295,437
Unsecured senior notes payable	3.95	%		4.00			1/15/27		—		—		—		—		—		350,000		350,000		(5,225		)	344,775
Unsecured senior notes payable	4.50	%		4.58			7/30/29		—		—		—		—		—		300,000		300,000		(2,885		)	297,115
Unsecured debt weighted average/subtotal				3.54					—		—		—		672,000		400,000		2,350,000		3,422,000		(28,257		)	3,393,743
Weighted-average interest rate/total				3.52	%				$	1,734	$	280,633	$	4,708	$	898,200	$	507,713	$	2,458,445	$	4,151,433	$	(34,896	)	$	4,116,537

Balloon payments									$	—	$	277,241	$	—	$	892,842	$	503,979	$	2,450,487	$	4,124,549	$	—		$	4,124,549
Principal amortization									1,734		3,392		4,708		5,358		3,734		7,958		26,884		(34,896		)	(8,012		)
Total debt									$	1,734	$	280,633	$	4,708	$	898,200	$	507,713	$	2,458,445	$	4,151,433	$	(34,896	)	$	4,116,537

Fixed-rate/hedged variable-rate debt									$	1,734	$	153,392	$	4,708	$	605,358	$	507,713	$	2,458,445	$	3,731,350	$	(27,555	)	$	3,703,795
Unhedged variable-rate debt									—		127,241		—		292,842		—		—		420,083		(7,341		)	412,742
Total debt									$	1,734	$	280,633	$	4,708	$	898,200	$	507,713	$	2,458,445	$	4,151,433	$	(34,896	)	$	4,116,537


(1)	Represents the weighted average interest rate as of the end of the applicable period, plus the impact of debt premiums/discounts, interest rate hedge agreements, and deferred financing costs.


(2)	Reflects any extension options that we control.


(3)	Refer to “Secured Construction Loans” in Note 8 – “Secured and Unsecured Senior Debt” for options to extend maturity date.

(4)

See footnote 2 in the preceding table regarding our July 2016 amendment to our unsecured senior line of credit. Our unsecured senior line of credit contains a feature that allows lenders to competitively bid on the interest rate for borrowings under the facility. This may result in an interest rate that is below the stated rate. In addition to the cost of borrowing, the facility is subject to an annual facility fee of 0.20%, based on the aggregate commitments. Unamortized deferred financing costs related to our unsecured senior line of credit are classified in other assets and are excluded from the calculation of the weighted-average interest rate.

3.95% Unsecured senior notes payable

In June 2016, we completed a $350 million public offering of our unsecured senior notes payable due on January 15, 2027, at a stated interest rate of 3.95%. The unsecured senior notes payable are unsecured obligations of the Company and are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P., a 100% owned subsidiary of the Company. The unsecured senior notes payable rank equally in right of payment with all other unsecured senior indebtedness. However, the unsecured senior notes payable are subordinate to existing and future mortgages and other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future preferred equity and liabilities, whether secured or unsecured, of the Company’s subsidiaries, other than Alexandria Real Estate Equities, L.P. We used the net proceeds, after discounts and issuance costs, of $344.7 million to repay outstanding principal borrowings under our unsecured senior line of credit.

Interest expense

The following table summarizes interest expense for the three and six months ended June 30, 2016 and 2015 (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Gross interest	$	38,813		$	35,105		$	75,767		$	69,312
Capitalized interest	(13,788		)	(8,437		)	(25,887		)	(19,408		)
Interest expense	$	25,025		$	26,668		$	49,880		$	49,904

Repayment of secured notes payable

During the three months ended June 30, 2016, we repaid two secured notes payable aggregating $173.8 million with a weighted-average effective interest rate of 5.59%. During the six months ended June 30, 2016, we repaid five secured notes payable aggregating $231.0 million with a weighted-average effective interest rate of 5.29%.

Secured construction loans

The following table summarizes our secured construction loans as of June 30, 2016 (dollars in thousands):



Property/Market	Stated Rate				Maturity Date		Outstanding Balance		Remaining Commitments		Total Aggregate Commitments
75/125 Binney Street/Greater Boston		L+1.35	%		8/23/17	⁽¹⁾	$	201,241	$	49,159	$	250,400
50/60 Binney Street/Greater Boston		L+1.50	%		1/28/19	⁽²⁾	180,753		169,247		350,000
100 Binney Street/Greater Boston		L+2.00	%	⁽³⁾	4/20/19	⁽⁴⁾	40,089		264,192		304,281
							$	422,083	$	482,598	$	904,681


(1)	We have a one-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.


(2)	We have two, one-year options to extend the stated maturity date to January 28, 2021, subject to certain conditions.


(3)	In June 2016, we executed two interest rate cap agreements to cap LIBOR at 2.00% for a notional amount based on scheduled increases over the term of the cap, up to $150 million of the total loan commitment, which will become effective on July 29, 2016.


(4)	We have two, one-year options to extend the stated maturity date to April 20, 2021, subject to certain conditions.