EX-99.1 2 a2q20ex991supp.htm EX-99.1 Document

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(1)Refer to “Annual rental revenue,” “Class A properties and AAA locations,” and “Investment-grade or publicly traded large cap tenants” in the “Definitions and reconciliations” of our Supplemental Information for additional details.
(2)Liquidity as of June 30, 2020, pro forma for outstanding forward equity sales agreement entered into in July 2020. Refer to “Key credit metrics” of our Supplemental Information for additional details.
(3)Refer to “Summary of debt” in the “Key credit metrics” of our Supplemental Information for additional details.

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(1)Liquidity as of June 30, 2020, pro forma for outstanding forward equity sales agreements entered into in July 2020. Refer to “Key credit metrics” of our Supplemental Information for additional details.
(2)Represents credit rating levels from Moody’s Investors Service and S&P Global Ratings in comparison to those of all publicly traded REITs (excluding mortgage REITs) as of June 30, 2020.
(3)Quarter annualized.
(4)As of June 30, 2020.

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(1)Relative to a 2015 baseline for buildings in operation that Alexandria directly manages.
(2)Relative to a 2015 baseline for buildings in operation that Alexandria indirectly and directly manages.
(3)Reflects sum of annual like-for-like progress from 2015 to 2019.
(4)Reflects progress for all buildings in operation in 2019 that Alexandria indirectly and directly manages.


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(1)Projects targeting Fitwel or WELL certification.
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Table of Contents
June 30, 2020
EARNINGS PRESS RELEASEPagePage
SUPPLEMENTAL INFORMATIONPagePage
External Growth / Investments in Real Estate
New Class A Development and Redevelopment Properties:
Internal Growth
Balance Sheet Management
Definitions and Reconciliations
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. Please refer to page 11 of this Earnings Press Release and our Supplemental Information for further information.

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 Real Estate Equities, Inc. All Rights Reserved. © 2020viii
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Alexandria Real Estate Equities, Inc.
Reports:
2Q20 Revenues of $437.0 million, Up 16.9% Over 2Q19;
2Q20 and 1H20 Net Income per Share – Diluted of $1.82 and $1.99, respectively;
2Q20 and 1H20 FFO per Share – Diluted, As Adjusted, of $1.81 and $3.63, respectively; and Operational Excellence and Strong and Flexible Balance Sheet With Significant Liquidity

PASADENA, Calif. – July 27, 2020 – Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the second quarter ended June 30, 2020.
Key highlights
Operating results2Q202Q191H201H19
Total revenues:
In millions$437.0  $373.9  $876.9  $732.7  
Growth16.9 %19.7 %
Net income attributable to Alexandria’s common stockholders – diluted
In millions$226.6  $76.3  $244.8  $200.2  
Per share$1.82  $0.68  $1.99  $1.80  
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted
In millions$225.0  $192.7  $446.4  $382.5  
Per share$1.81  $1.73  $3.63  $3.44  
Alexandria and its tenants at the vanguard of advancing solutions for COVID-19
Safe and effective vaccines and therapies, in addition to widespread testing, are desperately needed to combat the global COVID-19 pandemic. Over 80 of our life science tenants are advancing solutions for COVID-19. By maintaining essential business operations across our campuses, Alexandria has enabled several of our life science tenants to continue mission-critical COVID-19-related research and development. Refer to “Alexandria and Its Innovative Tenants Are at the Vanguard of the Life Science Ecosystem Advancing Solutions for COVID-19” of this Earnings Press Release for additional details.

Strong and flexible balance sheet with significant liquidity
•$4.2 billion of liquidity as of June 30, 2020, pro forma for our $1.1 billion forward equity sales agreements entered into in July 2020.
•Zero debt maturing until 2023.
•9.9 years weighted-average remaining term of debt as of June 30, 2020.
•Investment-grade credit rating, which ranks in the top 10% among all publicly traded REITs, of Baa1/Stable from Moody’s Investors Service and BBB+/Stable from S&P Global Ratings, both as of June 30, 2020.

Continued dividend strategy to share cash flows with stockholders
Common stock dividend declared for 2Q20 of $1.06 per common share, aggregating $4.12 per common share for the twelve months ended June 30, 2020, up 25 cents, or 6%, over the twelve months ended June 30, 2019. Our FFO payout ratio of 59% for the three months ended June 30, 2020, allows us to share cash flows from operating activities with our stockholders while also retaining a significant portion for reinvestment.




A REIT industry-leading, high-quality tenant roster
•51% of annual rental revenue from investment-grade or publicly traded large cap tenants.
•Weighted-average remaining lease term of 7.8 years.

Continued strength in collections drives lowest tenant receivables balance since 2012
•As of July 24, 2020, we have collected 99% of July 2020 rents and tenant recoveries.
•We have collected 99.4% of June 2020 rents and tenant recoveries.
•As of June 30, 2020, our tenant receivables balance was $7.2 million, our lowest balance since 2012.

High-quality revenues and cash flows, strong Adjusted EBITDA margin, and operational excellence
Percentage of annual rental revenue in effect from:
Investment-grade or publicly traded large cap tenants51 %
Class A properties in AAA locations74 %
Occupancy of operating properties in North America94.8 %(1)
Operating margin72 %
Adjusted EBITDA margin69 %
Weighted-average remaining lease term:
All tenants7.8years
Top 20 tenants11.2years
(1)Includes 647,771 RSF, or 2.3%, of vacancy in our North America markets, representing lease-up opportunities at properties recently acquired, primarily at our SD Tech by Alexandria campus (joint venture), 601, 611, and 651 Gateway Boulevard (joint venture), and 5505 Morehouse Drive. Excluding these vacancies, occupancy of operating properties in North America was 97.1% as of June 30, 2020. Refer to “Occupancy” in this Supplemental Information for additional details regarding vacancy from recently acquired properties.

Strong leasing activity in 2Q20 and continued rental rate growth
•Continued strong leasing activity in light of modest contractual lease expirations at the beginning of 2020 and a highly leased value-creation pipeline; continued rental rate growth in 1H20 over expiring rates on renewed and re-leased space:
2Q201H20
Total leasing activity – RSF1,077,510  1,780,865  
Leasing of development and redevelopment space – RSF196,039  210,271  
Lease renewals and re-leasing of space:
RSF (included in total leasing activity above)699,130  1,251,152  
Rental rate increases37.2%41.1%
Rental rate increases (cash basis)15.0%17.9%

Guidance for unique and opportunistic value-creation acquisitions and construction
Refer to next page for specific details.
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Second Quarter Ended June 30, 2020, Financial and Operating Results (continued)
June 30, 2020
Key items included in operating results
Key items included in net income attributable to Alexandria’s common stockholders:
(In millions, except per share amounts)
AmountPer Share – DilutedAmountPer Share – Diluted
2Q202Q192Q202Q191H201H191H201H19
Unrealized gains on non-real estate investments(1)
$171.7  $11.1  $1.38  $0.10  $154.5  $83.3  $1.25  $0.75  
Impairment of real estate(2)
(13.2) —  (0.11) —  (22.9) 
(3)
—  (0.18) —  
Impairment of non-real estate investments(1)
(4.7) —  (0.04) —  (24.5) —  (0.20) —  
Loss on early extinguishment of debt
—  —  —  —  —  (7.4) —  (0.07) 
Preferred stock redemption charge
—  —  —  —  —  (2.6) —  (0.02) 
Total
$153.8  $11.1  $1.23  $0.10  $107.1  $73.3  $0.87  $0.66  
(1)Refer to “Investments” on page 46 of our Supplemental Information for additional details.
(2)Primarily relates to an impairment charge of a previously pending acquisition in April 2020 of an operating tech office property to reduce the carrying amount of a pre-acquisition deposit to zero dollars, concurrently with the submission of our notice to terminate the transaction.
(3)Amount includes $7.6 million related to our investment in a recently developed retail property held by our unconsolidated real estate joint venture and is classified in equity in earnings of unconsolidated real estate joint ventures within our consolidated statements of operations.

Guidance for unique and opportunistic value-creation acquisitions and construction
•Our initial 2020 guidance issued on December 3, 2019, included guidance midpoint for our 2020 construction spending and acquisitions of $1.6 billion and $950 million, respectively, and reflected a strong outlook for 2020, including continued strong demand for our value-creation development and redevelopment projects.
•Our guidance issued on April 27, 2020, reduced our 2020 forecasted construction spend, acquisitions, real estate dispositions and partial interest sales, and issuance of common equity. These reductions were deemed necessary while we monitored the impact of COVID-19 on many areas of our business, including the overall macro and capital market environments.
•Our guidance issued on July 27, 2020, was updated to address the continuing tenant demand for our development and redevelopment pipeline in part due to COVID-19 requirements, as well as existing and anticipated attractive acquisition opportunities in our markets, which will be partially funded through forecasted real estate dispositions and partial interest sales. Key updates to our sources and uses include:
•Increased midpoint for our 2020 construction spending guidance range from $960.0 million to $1.35 billion.
•An additional $900 million to $1.3 billion of real estate acquisitions in 2H20, including acquisitions completed in July 2020.
•Increased midpoint of our real estate dispositions and partial interest sales from $50.0 million to $1.25 billion, which is expected to fund a portion of the increase in construction spending and acquisitions in addition to providing significant capital for growth over the next two to three quarters.
•See “Key capital events” on page 3 for additional details on our July 2020 forward equity offering.
•See “Guidance” on page 10 for detailed assumptions for our updated guidance.
2020 Nareit Gold Investor CARE Award winner
2020 recipient of the Nareit Gold Investor CARE (Communications and Reporting Excellence) Award in the Large Cap Equity REIT category as the best-in-class REIT that delivers transparent, quality, and efficient communications and reporting to the investment community; our fifth Nareit Gold Investor CARE Award over the last six years, and our third consecutive Gold Award.

Core operating metrics
Continued strong net operating income and internal growth
•Net operating income (“NOI”) (cash basis) of $1.1 billion for 2Q20 annualized, up $165.0 million, or 17.6%, compared to 2Q19 annualized.
•94% of our leases contain contractual annual rent escalations approximating 3.0%.
•Same property net operating income growth:
•1.6% and 4.5% (cash basis) for 1H20 over 1H19.
•0.6% and 2.5% (cash basis) for 2Q20 over 2Q19.
•Includes the effect of temporary reduction in same property occupancy of 80 basis points related to downtime in connection with leases aggregating 152,045 RSF, with 63% already leased for delivery in the third quarter of 2020 at significantly higher rental rates. Excluding the impact of the temporary vacancies, the same property net operating income growth for the three months ended June 30, 2020, would have been 1.6% and 4.2% (cash basis), respectively. We expect occupancy and other contractual rental increases in the second half of 2020 will increase same property NOI and same property NOI (cash basis) to within our guidance range for the year ending December 31, 2020.
•Minimal remaining 2020 contractual lease expirations, aggregating 2.3% of annual rental revenue.

Highly leased value-creation pipeline, including COVID-19-focused R&D space
•Current projects aggregating 3.3 million RSF, including COVID-19-focused R&D spaces, are highly leased at 61% and will generate significant revenues and cash flows.
•As of July 27, 2020, construction activities were in process at all of our active value-creation projects.
•Significant pre-leasing at two new value-creation projects in our Sorrento Mesa submarket:
•Near-term development project at SD Tech by Alexandria, aggregating 176,428 RSF, is 59% pre-leased; and
•Active redevelopment project at 9877 Waples Street, a recently acquired property aggregating 63,774 RSF, is 100% pre-leased.
•Annual net operating income (cash basis), including our share of unconsolidated real estate joint ventures, is expected to increase $29 million upon the burn-off of initial free rent on recently delivered projects.

Strategic acquisitions with significant value-creation opportunities in key submarkets
•During 2Q20, we completed the acquisition of four properties aggregating 1.6 million RSF, including 1.4 million RSF of future value-creation opportunities and 63,774 RSF currently undergoing redevelopment, for an aggregate purchase price of $215.3 million. Refer to “Acquisitions” of this Earnings Press Release for additional details.

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Second Quarter Ended June 30, 2020, Financial and Operating Results (continued)
June 30, 2020
Balance sheet management

Key metrics as of June 30, 2020
•$27.7 billion of total market capitalization.
•$20.2 billion of total equity capitalization.
•$4.2 billion of liquidity as of June 30, 2020, pro forma for our $1.1 billion forward equity sales agreements entered into in July 2020.

2Q20Goal
QuarterTrailing4Q20
Annualized12 MonthsAnnualized
Net debt and preferred stock to Adjusted EBITDA
5.8x6.2xLess than or equal to 5.3x
Fixed-charge coverage ratio4.2x4.2xGreater than or equal to 4.4x

Value-creation pipeline of new Class A development and redevelopment projects as a percentage of gross investments in real estate
2Q20
Current projects 65% leased/negotiating
7%
Income-producing/potential cash flows/covered land play(1)
6%
Land
2%
(1)Includes projects that have existing buildings that are generating or can generate operating cash flows. Also includes development rights associated with existing operating campuses.

Key capital events
•In April 2020, we closed an additional unsecured senior line of credit with $750.0 million of available commitments. The new unsecured senior line of credit matures on April 14, 2022, and bears interest at LIBOR plus 1.05%. Pursuant to the terms of the agreement, we are required to repay the facility, if applicable, and reduce commitments available upon receiving the net proceeds from certain qualifying events, including new corporate debt and 50% of proceeds from the issuance of common stock, including any net proceeds from the settlement of our July 2020 forward equity sales agreements. Including our existing $2.2 billion unsecured senior line of credit, we have $2.95 billion in aggregate commitments under our unsecured senior lines of credit as of June 30, 2020.
•In 2020, we entered into forward equity sales agreements to sell an aggregate 13.8 million shares of our common stock (including the exercise of an underwriters’ option). As of July 27, 2020, our outstanding forward equity agreements are as follows:
Public Offering PriceShares
(in thousands)		Net Proceeds
(in thousands)
DateSettledOutstandingReceivedRemaining
January 2020$155.00  3,356  3,544  $500,001  $519,621  
July 2020$160.50  —  6,900  —  1,061,952  
3,356  10,444  $500,001  $1,581,573  
•During the three months ended June 30, 2020 and through July 27, 2020, there was no sale activity under our “at-the-market” common stock offering program (“ATM program”). As of July 27, 2020, we have $843.7 million remaining available under our ATM program.
Investments
•Our investments in publicly traded companies and privately held entities aggregated a carrying amount of $1.3 billion, including an adjusted cost basis of $762.3 million and unrealized gains of $556.2 million, as of June 30, 2020.
•Investment income included $184.7 million during 2Q20, comprising $17.7 million in realized gains, $4.7 million in impairments related to privately held non-real estate investments, and $171.7 million in unrealized gains.

Leader in corporate responsibility: philanthropic activities and partnerships to positively impact our communities

At the vanguard of fighting COVID-19 by aiding communities adversely affected by the global pandemic
•Alexandria has sourced and donated over 54,000 pieces of much-needed personal protective equipment to 12 hospitals and other entities in need in New York City, Boston, Seattle, San Diego, Dayton, and Los Angeles for use by medical professionals working on the front lines of the COVID-19 response. Through strategic philanthropic giving and the Company’s matching gift programs, Alexandria donated, in aggregate, over $700,000 to several highly impactful national and regional organizations performing important work to support a myriad of efforts in communities affected by this global public health emergency, including the following:
•Feeding America – COVID-19 Response Fund, the fund from the nation’s largest hunger-relief organization with a network of 200 member food banks, is supporting the food banks that help people feed their families during the school closures, job disruptions, and health risks related to the COVID-19 pandemic.
•First Responders Children’s Foundation COVID-19 Emergency Response Fund is providing support to the families of first responders on the front lines of the COVID-19 pandemic, who are enduring financial hardship due to the outbreak.
•Robin Hood’s COVID-19 Relief Fund, from New York City’s largest poverty-fighting organization, is providing immediate, short-term grants to support non-profits that are on the front lines in the fight against COVID-19 so they can move swiftly to serve affected communities.
•Relief Opportunities for All Restaurants (ROAR) is providing financial relief directly to employees of restaurants who have lost their jobs as a result of the COVID-19 pandemic.
•City of Cambridge Disaster Fund for COVID-19 is providing emergency assistance in partnership with non-profit organizations to individuals and families in Cambridge experiencing extreme financial hardship caused by the COVID-19 crisis.
•Project Angel Food is committed to providing uninterrupted deliveries of nutritious medically tailored meals to people impacted by serious illness in the Los Angeles area throughout the duration of the COVID-19 pandemic.

Driving educational opportunity and providing resources to underserved communities
•We regard education as one of the most fundamental foundations to achieving a safe, healthy, and good life. As a result, we have forged deep partnerships with inspiring community organizations focused on providing educational resources to underserved communities in a multitude of ways. Working closely with these organizations, we have helped open the doors of opportunity for countless students.
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Second Quarter Ended June 30, 2020, Financial and Operating Results (continued)
June 30, 2020
Driving educational opportunity and providing resources to underserved communities (continued)
•During 2Q20, we announced Alexandria’s 2020 scholarship recipients, 11 high-achieving public school students in San Francisco and Maryland who will each receive $5,000 annually to attend either a two- or four-year program at a college/university of their choice to study one of the STEM (science, technology, engineering, and mathematics) fields.
•As both a founding and sustaining donor, we have been passionate longtime supporters of Computer Science for All (CS4ALL) — a 10-year initiative launched in 2015 to provide high-quality computer science education for New York City’s 1.1 million public school students. Alexandria volunteers have worked alongside NYC high school students to rebuild computers donated by Alexandria for use in the CS4ALL program; served as judges for CS4ALL’s Hack League, a citywide coding competition involving students from 62 middle and high schools across New York City; participated in multiple Computer Science Education Weeks, a global effort encouraging computer science education; and hosted CS4ALL students at the Alexandria Center® for Life Science – NYC for them to learn about the vast array of jobs that computer science touches and the career paths available to them. Our ongoing partnership with CS4ALL has helped ensure that NYC’s public school students have the skills they need to achieve success in higher education, the 21st-century job market, and beyond.
•Through our very hands-on work with, and mission-critical funding support for, the Emily Krzyzewski Center in Durham, North Carolina, we are helping propel academically focused, low-income K–12 students and graduates toward success in college. Emily K programs begin in elementary and middle school to build and accelerate academic skills that lay the foundation for future college success. As students move on to high school, they receive holistic support in the areas of college planning, personal management and leadership, academic skills development, and career exploration, leading to graduating seniors who are scholarship eligible and college ready. After 12 years, the success rate for admittance to a four-year college is 100%.
•Robin Hood, New York City’s largest poverty fighting organization, has an intense focus on education and works to ensure that low-income students at risk of not finishing high school graduate ready to succeed in college and career. Robin Hood has provided over $29 million in funding to impactful tutoring and mentorship programs, college prep programs, mental health and counseling services, and teacher training initiatives and has helped more than 55,000 students across the city last year alone. We have very actively worked with CEO Wes Moore, as well as offered significant financial support, to make a huge impact in the underserved communities of New York City through highly important programs that have measurable outcomes.
•Alexandria has worked closely with Breakthrough Greater Boston (BTGB) over many years to prepare low-income students for success in college and train the next generation of urban teachers. Through six years of intensive, tuition-free, out-of-school-time programming, BTGB changes students’ academic trajectories and supports them along the path to college. Students gain a passion for learning and the perseverance and tools needed to succeed in college and beyond. BTGB also works to build the next generation of teachers through competitive recruitment, research-based training, and coaching from master teachers. Teaching Fellows gain intensive in-classroom experience, expert training, and 1:1 coaching.

Pioneering a uniquely comprehensive care model to tackle opioid addiction
•Against the backdrop of the COVID-19 pandemic, the U.S. opioid epidemic remains one of the most devastating public health issues of our time. With many people confronting additional stresses such as isolation, unemployment, anxiety, and loss, monthly drug overdose deaths, which decreased in 2018 for the first time in 25 years, have skyrocketed to record numbers during the pandemic, up 42% in May 2020 relative to May 2019. This alarming spike in drug overdoses highlights the urgent unmet need for evidence-based holistic treatment systems for addiction.
•As a key component of Alexandria’s mission to advance human health, we partnered with Verily, an Alphabet company, to pioneer a comprehensive care model for the full and sustained recovery of people suffering from opioid addiction. The 59,000 RSF campus, situated on 4.3 acres in Dayton, Ohio, includes dedicated facilities and services for treatment, residential housing, group therapy, family reunification, fitness, workforce development programs, job placement, and community transition. Alexandria has led the design and development of the campus, which opened to patients in the fall of 2019. In July 2020, we completed OneFifteen Living, the campus's three-story residential facility designed to serve as a safe place for individuals suffering from opioid addiction to live while accessing on-campus treatment services.
•As overdose deaths in 1H20 are up 34% compared to 1H19 in Montgomery County, Ohio, where our state-of-the-art OneFifteen campus is located, OneFifteen's doors are open to those ready to make a change and it has also successfully ramped up telehealth services to ensure those needing its addiction services do not experience a gap in care during this critical time. It is our sincerest hope that OneFifteen will not only provide hope for the Dayton community, but that is also serves as a blueprint for rest of the country.

Industry and ESG leadership
•In June 2020, our executive chairman and founder, Joel S. Marcus, had the honor of serving as the keynote speaker for a special fireside chat at the virtual BIO Health Caucus hosted by the Association of University Research Parks, an organization dedicated to guiding leaders to cultivate communities of innovation at global anchor institutions. The virtual fireside, titled “Three Decades of Building Bio Health Facilities and Companies,” covered a broad array of topics that provided a comprehensive view of our essential business, our dynamic cluster locations, and our critical role at the vanguard of the life science ecosystem fighting COVID-19.
•In June 2020, we released our 2019 Corporate Responsibility Report, which reinforces Alexandria’s longstanding environmental, social, and governance commitment, strong progress toward our 2025 environmental impact goals, and critical role at the vanguard of the life science ecosystem advancing solutions for COVID-19.
•In June 2020, we announced that Alexandria LaunchLabs® – AgTech awarded its inaugural $100,000 AgTech Innovation Prize to TerMir Inc., an early-stage agtech company aiming to address key, unresolved agricultural, environmental, and human health challenges.


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(1)Represents an illustrative subset of over 80 tenants focused on COVID-19-related efforts, with some of these companies working on multiple efforts that span testing, treatment, and/or vaccine development.

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(1)Source: FierceBiotech, “NIAID creates new COVID-19 drug and vaccine trial network through Trump's Warp Speed program,” July 9, 2020.
(2)Announced award value and clinical trial stage as of July 24, 2020.
Alexandria Fighting COVID-19 on Multiple Fronts
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June 30, 2020


Alexandria and its innovative tenants are at the vanguard of the life science ecosystem advancing solutions for COVID-19

Safe and effective vaccines and therapies, in addition to widespread testing, are desperately needed to combat the global COVID-19 pandemic. By maintaining essential business operations across our campuses, Alexandria has enabled several of our life science tenants to continue mission-critical COVID-19-related research and development. The heroic work being done by so many of our tenants and campus community members to help test for, treat, and prevent COVID-19, as well as provide medical supplies and protective equipment to neighboring hospitals, is profound and inspiring. We are currently tracking over 80 tenants across our cluster markets who are advancing solutions for COVID-19.

Developing preventative vaccines
A prophylactic vaccine should help bring about the effective end of the global COVID-19 pandemic. As such, researchers around the world are developing over 165 vaccines against the coronavirus, with at least 27 vaccine candidates in human trials.

In an effort to expedite the development, manufacturing, and distribution of COVID-19 vaccines, the U.S. government has allocated $10 billion to its Operation Warp Speed (OWS) initiative, calling for unprecedented public-private collaboration. OWS has awarded grants to a handful of company partners to date, including tenants AstraZeneca plc, Emergent BioSolutions Inc., Johnson & Johnson, Moderna, Inc., Novavax, Inc., and Pfizer Inc. Clinical trial data will continue to be reported by each company over the coming months, and the first COVID-19 vaccine could receive emergency use authorization from the FDA by year-end 2020 or early 2021.

Other tenants, including GlaxoSmithKline, GreenLight Biosciences, Inc., Medicago Inc., Merck & Co., Inc., and Sanofi, are similarly leveraging their vaccine development expertise and technology platforms to bring vaccine candidates into clinical trials, with the goal of expediting the delivery of a safe and effective vaccine to the public within the next 12 months.

Advancing new and repurposed therapies
Over 350 experimental drug treatments are being studied in over 500 clinical trials around the world in addition to more than 250 therapeutic candidates in preclinical development. A substantial number of these programs are sponsored by our tenants, including the following notable efforts:

•Eli Lilly and Company, in collaboration with AbCellera, began its Phase I study ahead of schedule to test a novel antibody targeted against the SARS-CoV-2 virus, the first COVID-19-specific antibody program of its kind to enter the clinic.
•Gilead Sciences, Inc.’s remdesivir is in late-stage studies for the treatment of moderate and severe COVID-19 patients. Based on positive safety and efficacy data, the FDA granted emergency use authorization for remdesivir in the treatment of hospitalized patients with severe COVID-19.
•Adaptive Biotechnologies Corporation and Amgen are working together to identify and develop therapeutic antibodies from the blood of patients who are actively fighting or have recently recovered from COVID-19.
•Vir Biotechnology, Inc. has announced unique partnerships with Alnylam Pharmaceuticals, Inc. and GlaxoSmithKline to utilize its neutralizing antibody platform to identify novel drug candidates that could be used as therapeutic or preventative COVID-19 treatments.

Many other Alexandria tenants, including AbbVie Inc., Atreca Inc., Corvus Pharmaceuticals, Inc., Enanta Pharmaceuticals, Inc., Novartis AG, and Pfizer Inc., are similarly endeavoring to develop novel therapies and repurpose existing and investigational drugs to provide near-term treatments for moderate and severe COVID-19 patients and those at highest risk.

Improving testing quality and capacity
Color Genomics, Laboratory Corporation of America Holdings, Quest Diagnostics, Roche, Thermo Fisher Scientific Inc., Verily Life Sciences, and others are working to improve testing quality, capacity, and turnaround time to more effectively determine who has an active COVID-19 infection, who has been exposed to the virus, and who has developed immunity against it. The increased availability of widespread COVID-19 testing is critical for curtailing the pandemic and facilitating a safer reopening of workplaces, communities, and society overall.
Acquisitions
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June 30, 2020
(Dollars in thousands)

PropertySubmarket/MarketDate of
Purchase		Number of PropertiesOperating
Occupancy		Square FootageUnlevered YieldsPurchase Price
Future DevelopmentActive RedevelopmentOperating With Future Development/ RedevelopmentOperatingInitial StabilizedInitial Stabilized (Cash)
Completed in 1Q201179 %295,000  —  371,031  1,492,599  $484,579  
Completed in 2Q20:
987 and 1075 Commercial Street
Greater Stanford/San Francisco
4/14/202100 %700,000  
(1)
—  26,738  —  
(2)
(2)
113,250  
4555 Executive Drive
University Town Center/San Diego
6/2/201100 %200,000  
(1)
—  41,475  —  
(2)
(2)
43,000  
Other
Various
Various1N/A544,825  63,774  —  —  N/AN/A59,000  
4100 %1,444,825  63,774  68,213  —  215,250  
Completed in July 2020:
VariousVarious
Various(3)
3Various567,488  —  181,515  —  N/AN/A141,744  
Pending acquisitions:
Pending
Greater Boston
TBD2100 %400,000  —  200,000  300,000  330,000  
OtherVariousTBD780,000  
2020 guidance range
$1,600,000 - $2,000,000
Mercer Mega Block
Lake Union/Seattle
TBD(4)
—N/A800,000  —  —  —  
(3)
(3)
$143,500  

(1)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operation. We intend to demolish the existing property upon expiration of the existing in-place leases and commencement of future construction. Refer to “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
(2)We expect to provide total estimated costs and related yields for development and redevelopment projects in the future, subsequent to the commencement of construction.
(3)Includes three properties acquired through three transactions.
(4)We are diligently working through various long-lead time due diligence items, with certain deadlines extending into early 2021. We are working toward completion of all due diligence items as soon as possible.

Guidance
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June 30, 2020
(Dollars in millions, except per share amounts)
Our initial 2020 guidance issued on December 3, 2019, included ranges for 2020 construction spending and acquisitions of $1.55 billion to $1.65 billion and $900 million to $1.0 billion, respectively, and reflected a strong outlook for 2020, including continued strong demand for our value-creation development and redevelopment projects. Our guidance issued on April 27, 2020 reduced our 2020 forecasted construction spend, acquisitions, real estate dispositions and partial interest sales, and issuance of common equity. These reductions were deemed necessary while we monitored the impact of COVID-19 on many areas of our business, including the overall macro and capital market environments.

The following provides key updates to our 2020 guidance since April 27, 2020, based on our current view of existing market conditions and other assumptions for the year ending December 31, 2020, and reflects increases in uses of capital to address the continuing tenant demand for our development and redevelopment pipeline and existing and anticipated attractive acquisition opportunities. Our updated 2020 construction spending guidance range increased closer to our initial forecast for 2020. Additionally, our initial guidance for 2020 anticipated meaningful acquisitions opportunities and our updated 2020 acquisition guidance range continues to reflect opportunistic offerings in the market with an increase above our initial acquisition guidance range to be funded through forecasted real estate dispositions and partial interest sales. Proceeds from these forecasted sales are expected to fund a portion of the increase in construction spending and acquisitions, in addition to providing significant capital for growth over the next two to three quarters. We remain committed to our guidance for net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2020, annualized, of less than or equal to 5.3x. 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 12 of this Earnings Press Release for additional details.

Projected 2020 Earnings per Share and Funds From Operations per Share Attributable to Alexandria’s Common Stockholders – Diluted
As of 7/27/20As of 4/27/20
Earnings per share(1)
$3.00 to $3.08$1.69 to $1.79
Depreciation and amortization of real estate assets
5.155.15
Impairment of real estate – rental properties(2)
0.060.06
Allocation to unvested restricted stock awards
(0.05)(0.04)
Funds from operations per share
$8.16 to $8.24$6.86 to $6.96
Unrealized (gains) losses on non-real estate investments
(1.25)0.14
Impairment of non-real estate investments
0.200.16
Impairment of real estate(3)
0.120.10
Allocation to unvested restricted stock awards
0.01(0.01)
Other0.02—
Funds from operations per share, as adjusted(1)
$7.26 to $7.34$7.25 to $7.35
Midpoint
$7.30$7.30
As of 7/27/20As of 4/27/20
Key Assumptions
LowHighLowHigh
Occupancy percentage in North America as of December 31, 2020
94.8%95.4%94.8%95.4%
Lease renewals and re-leasing of space:
Rental rate increases
28.0%31.0%28.0%31.0%
Rental rate increases (cash basis)
14.0%17.0%14.0%17.0%
Same property performance:
Net operating income increase
1.0%3.0%1.0%3.0%
Net operating income increase (cash basis)
4.5%6.5%4.5%6.5%
Straight-line rent revenue
$98  $108  $98  $108  
General and administrative expenses
$121  $126  $121  $126  
Capitalization of interest
$117  $127  $102  $112  
Interest expense
$170  $180  $185  $195  

(1)Excludes unrealized gains or losses after June 30, 2020, that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted.
(2)Includes a $7.6 million impairment on our investment in a recently developed retail property held by our unconsolidated real estate joint venture.
(3)Includes eight cents related to an impairment charge of $10 million recognized in April 2020 to write off the carrying amount of the pre-acquisition deposit related to an operating tech office property for which our revised economic projections declined from our initial underwriting. The impairment was recognized concurrently with the submission of our notice to terminate the transaction.

Guidance
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June 30, 2020
(Dollars in millions, except per share amounts)


Key Credit Metrics2020 Guidance
Net debt and preferred stock to Adjusted EBITDA – 4Q20 annualized
Less than or equal to 5.3x
Fixed-charge coverage ratio – 4Q20 annualized
Greater than or equal to 4.4x

As of 7/27/20
Key Sources and Uses of Capital
RangeMidpointCertain
Completed Items		As of 4/27/20
Midpoint		As of 2/3/20
Midpoint
Sources of capital:
Net cash provided by operating activities after dividends
$185  $225  $205  $205  $220  
Incremental debt
415  575  495  see below335  380  
Real estate dispositions and partial interest sales
1,000  1,500  1,250  $51  
(1)
50  
(1)
50  
(1)
Common equity2,090  2,090  2,090  $2,087  
(2)
1,020  
(1)
1,900  
(1)
Total sources of capital$3,690  $4,390  $4,040  $1,610  $2,550  
Uses of capital:
Construction (see page 44 for additional information)
$1,200  $1,500  $1,350  $960  $1,600  
Acquisitions (see page 8 for additional information)
1,600  2,000  1,800  $842  650  950  
Total uses of capital
$2,800  $3,500  $3,150  $1,610  $2,550  
Incremental debt (included above):
Issuance of unsecured senior notes payable(3)
$700  $700  $700  $700  $700  $600  
$3.0 billion unsecured senior lines of credit and other
(285) (125) (205) (365) (220) 
Incremental debt$415  $575  $495  $335  $380  
Excess sources of capital$890  $—  $—  


(1)In April 2020, we completed the sale of a partial interest in properties at 9808 and 9868 Scranton Road in our Sorrento Mesa submarket to the existing SD Tech by Alexandria consolidated real estate joint venture, of which we own 50%. We received proceeds of $51.1 million for the 50% interest in the properties that our joint venture partner acquired through the joint venture. Our previous guidance disclosures included a combined amount for real estate dispositions, partial interest sales, and common equity. Amounts presented have been split into two separate categories for (i) actual real estate dispositions and partial interest sales completed through July 27, 2020, and (ii) common equity.
(2)In January 2020 and July 2020, we completed $1.0 billion and $1.1 billion of forward equity sales agreements, respectively, to sell an aggregate of 6.9 million shares for each offering (13.8 million in aggregate) of our common stock (including the exercise of an underwriters’ option) at a public offering price of $155.00 per share and $160.50 per share, respectively, before underwriting discounts. In March 2020, we settled 3.4 million shares from our forward equity sales agreements and received proceeds of $500.0 million. As of July 27, 2020, 10.4 million shares of our common stock remain outstanding under forward equity sales agreements, for which we expect to receive proceeds of $1.6 billion, to be further adjusted as provided in the sales agreements, that will fund pending and recently completed acquisitions and the construction of our highly leased development projects. We expect to settle the remaining outstanding forward equity sales agreements in 2020.
(3)We may opportunistically seek to refinance additional near term maturities in 2020, subject to market conditions.

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Earnings Call Information and About the Company
June 30, 2020
We will host a conference call on Tuesday, July 28, 2020, at 3:00 p.m. Eastern Time (“ET”)/noon Pacific Time (“PT”), which is open to the general public, to discuss our financial and operating results for the second quarter ended June 30, 2020. To participate in this conference call, dial (833) 366-1125 or (412) 902-6738 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the call for Alexandria Real Estate Equities, Inc. The audio webcast can be accessed at www.are.com in the “For Investors” section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, July 28, 2020. The replay number is (877) 344-7529 or (412) 317-0088, and the access code is 10143904.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the second quarter ended June 30, 2020, is available in the “For Investors” section of our website at www.are.com or by following this link: http://www.are.com/fs/2020q2.pdf.

For any questions, please contact Joel S. Marcus, executive chairman and founder; Stephen A. Richardson, co-chief executive officer; Peter M. Moglia, co-chief executive officer and co-chief investment officer; Dean A. Shigenaga, co-president and chief financial officer; or Sara M. Kabakoff, vice president – corporate communications, at (626) 578-0777; or Paula Schwartz, managing director of Rx Communications Group, at (917) 322-2216.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500® urban office real estate investment trust (“REIT”), is the first, longest-tenured, and pioneering owner, operator, and developer uniquely focused on collaborative life science, technology, and agtech campuses in AAA innovation cluster locations, with a total market capitalization of $27.7 billion as of June 30, 2020, and an asset base in North America of 43.0 million square feet (“SF”). The asset base in North America includes 28.8 million RSF of operating properties and 2.3 million RSF of Class A properties undergoing construction, 6.6 million RSF of near-term and intermediate-term development and redevelopment projects, and 5.3 million SF of future development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, technology, and agtech 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, technology, and agtech companies through our venture capital arm. 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 2020 earnings per share attributable to Alexandria’s common stockholders – diluted, 2020 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,” 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, increased interest rates and operating costs, adverse economic or real estate developments in our markets (including the impact of the ongoing COVID-19 pandemic), 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, 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 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.

For additional discussion of the risks and other potential impacts posed by the outbreak of the COVID-19 pandemic and uncertainties we, our tenants, and the global and national economies face as a result, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our quarterly report on Form 10-Q filed with the SEC on July 27, 2020.

Alexandria®, Lighthouse Design® logo, Building the Future of Life-Changing Innovation™, Alexandria Center®, Alexandria Technology Square®, Alexandria Summit®, Alexandria Technology Center®, Alexandria Innovation Center®, LaunchLabs®, and GradLabs™ are 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
image671.jpg
June 30, 2020
(Dollars in thousands, except per share amounts)
 Three Months EndedSix Months Ended
 6/30/20

3/31/2012/31/199/30/196/30/196/30/206/30/19
Revenues:       
Income from rentals$435,856  
(1)
$437,605  $404,721  $385,776  $371,618  $873,461  $726,367  
Other income1,100  2,314  3,393  4,708  2,238  3,414  6,331  
Total revenues436,956  439,919  408,114  390,484  373,856  876,875  732,698  
Expenses:
Rental operations123,911  129,103  121,852  116,450  105,689  253,014  207,190  
General and administrative31,775  31,963  29,782  27,930  26,434  63,738  51,111  
Interest45,014  45,739  45,493  46,203  42,879  90,753  81,979  
Depreciation and amortization168,027  175,496  140,518  135,570  134,437  343,523  268,524  
Impairment of real estate13,218  
(2)
2,003  12,334  —  —  15,221  —  
Loss on early extinguishment of debt—  

—  —  40,209  —  —  7,361  
Total expenses381,945  384,304  349,979  366,362  309,439  766,249  616,165  
Equity in earnings (losses) of unconsolidated real estate joint ventures3,893  (3,116) 4,777  2,951  1,262  777  2,408  
Investment income (loss)184,657  (21,821) 152,667  (63,076) 21,500  162,836  105,056  
Gain on sales of real estate—  —  474  —  —  —  —  
Net income (loss)243,561  30,678  216,053  (36,003) 87,179  274,239  223,997  
Net income attributable to noncontrolling interests(13,907) (11,913) (13,612) (11,199) (8,412) (25,820) (16,071) 
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s stockholders
229,654  18,765  202,441  (47,202) 78,767  248,419  207,926  
Dividends on preferred stock—  —  —  (1,173) (1,005) —  (2,031) 
Preferred stock redemption charge—  —  —  —  —  —  (2,580) 
Net income attributable to unvested restricted stock awards
(3,054) (1,925) (2,823) (1,398) (1,432) (3,574) (3,134) 
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
$226,600  $16,840  $199,618  $(49,773) $76,330  $244,845  $200,181  
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
Basic$1.82  $0.14  $1.75  $(0.44) $0.68  $1.99  $1.80  
Diluted$1.82  $0.14  $1.74  $(0.44) $0.68  $1.99  $1.80  
Weighted-average shares of common stock outstanding:
Basic124,333  121,433  114,175  112,120  111,433  122,883  111,245  
Diluted124,448  121,785  114,974  112,120  111,501  123,117  111,279  
Dividends declared per share of common stock
$1.06  $1.03  $1.03  $1.00  $1.00  $2.09  $1.97  

(1)Change in income from rentals from 1Q20 comprise a $5.4 million decrease in tenant recoveries as a result of lower variable operating expenses, including our utility costs and restaurant-related expenses, partially offset by a $3.6 million increase in rental revenue driven by recently acquired operating properties and continued rental rate growth in lease renewals within our key submarkets.
(2)Includes a $10 million impairment charge to reduce the carrying amount of a pre-acquisition deposit to zero dollars, concurrently with the submission of our notice to terminate the acquisition that was pending at the time.
Consolidated Balance Sheets
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June 30, 2020
(In thousands)
6/30/203/31/2012/31/199/30/196/30/19
Assets    
Investments in real estate$16,281,125  $15,832,182  $14,844,038  $13,618,280  $12,872,824  
Investments in unconsolidated real estate joint ventures326,858  325,665  346,890  340,190  334,162  
Cash and cash equivalents206,860  445,255  189,681  410,675  198,909  
Restricted cash34,680  43,116  53,008  42,295  39,316  
Tenant receivables7,208  14,976  10,691  10,668  9,228  
Deferred rent688,749  663,926  641,844  615,817  585,082  
Deferred leasing costs274,483  269,458  270,043  252,772  247,468  
Investments1,318,465  1,123,482  1,140,594  990,454  1,057,854  
Other assets 930,680  983,875  893,714  777,003  694,627  
Total assets$20,069,108  $19,701,935  $18,390,503  $17,058,154  $16,039,470  
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable$344,784  $347,136  $349,352  $351,852  $354,186  
Unsecured senior notes payable6,738,486  6,736,999  6,044,127  6,042,831  5,140,914  
Unsecured senior lines of credit440,000  221,000  384,000  343,000  514,000  
Unsecured senior bank term loan—  —  —  —  347,105  
Accounts payable, accrued expenses, and other liabilities
1,343,181  1,352,554  1,320,268  1,241,276  1,157,417  
Dividends payable133,681  129,981  126,278  115,575  114,379  
Total liabilities9,000,132  8,787,670  8,224,025  8,094,534  7,628,001  
Commitments and contingencies
Redeemable noncontrolling interests12,122  12,013  12,300  12,099  10,994  
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
7.00% Series D cumulative convertible preferred stock
—  —  —  57,461  57,461  
Common stock
1,246  1,243  1,208  1,132  1,120  
Additional paid-in capital9,443,274  9,336,949  8,874,367  7,743,188  7,581,573  
Accumulated other comprehensive loss(13,080) (15,606) (9,749) (11,549) (11,134) 
Alexandria Real Estate Equities, Inc.’s stockholders’ equity9,431,440  9,322,586  8,865,826  7,790,232  7,629,020  
Noncontrolling interests1,625,414  1,579,666  1,288,352  1,161,289  771,455  
Total equity11,056,854  10,902,252  10,154,178  8,951,521  8,400,475  
Total liabilities, noncontrolling interests, and equity
$20,069,108  $19,701,935  $18,390,503  $17,058,154  $16,039,470  

Funds From Operations and Funds From Operations per Share
image671.jpg
June 30, 2020
(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 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 EndedSix Months Ended
6/30/203/31/2012/31/199/30/196/30/196/30/206/30/19
Net income (loss) attributable to Alexandria’s common stockholders$226,600  $16,840  $199,618  $(49,773) $76,330  $244,845  $200,181  
Depreciation and amortization of real estate assets(1)
165,040  172,628  137,761  135,570  134,437  337,668  268,524  
Noncontrolling share of depreciation and amortization from consolidated real estate JVs
(15,775) (15,870) (10,176) (8,621) (6,744) (31,645) (12,163) 
Our share of depreciation and amortization from unconsolidated real estate JVs
2,858  2,643  2,702  1,845  973  5,501  1,819  
Gain on sales of real estate—  —  (474) —  —  —  —  
Impairment of real estate – rental properties
—  7,644  12,334  —  —  7,644  —  
Assumed conversion of 7.00% Series D cumulative convertible preferred stock
—  —  —  —  1,005  —  2,031  
Allocation to unvested restricted stock awards
(2,228) (847) (1,809) —  (1,445) (4,531) (3,740) 
Funds from operations attributable to Alexandria’s common stockholders – diluted(1)
376,495  183,038  339,956  79,021  204,556  559,482  456,652  
Unrealized (gains) losses on non-real estate investments
(171,652) 17,144  (148,268) 70,043  (11,058) (154,508) (83,264) 
Impairment of non-real estate investments
4,702  
(2)
19,780  9,991  7,133  —  24,482  —  
Impairment of real estate
13,218  
(3)
2,003  —  —  —  15,221  —  
Loss on early extinguishment of debt
—  —  —  40,209  —  —  7,361  
Loss on early termination of interest rate hedge agreements
—  —  —  1,702  —  —  —  
Preferred stock redemption charge
—  —  —  —  —  —  2,580  
Removal of assumed conversion of 7.00% Series D cumulative convertible preferred stock
—  —  —  —  (1,005) —  (2,031) 
Allocation to unvested restricted stock awards
2,251  (591) 1,760  (1,002) 179  1,711  1,157  
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted
$225,014  $221,374  $203,439  $197,106  $192,672  $446,388  $382,455  
(1)Calculated in accordance with standards established by the Nareit Board of Governors. 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.
(2)Primarily relates to two investments in privately held entities that do not report NAV.
(3)Primarily relates to a $10 million impairment charge to write off the pre-acquisition deposit for a previously pending acquisition, which was recognized in April 2020 concurrently with the submission of our notice to terminate the transaction.

Funds From Operations and Funds From Operations per Share (continued)
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June 30, 2020
(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 EndedSix Months Ended
6/30/203/31/2012/31/199/30/196/30/196/30/206/30/19
Net income (loss) per share attributable to Alexandria’s common stockholders – diluted
$1.82  $0.14  $1.74  $(0.44) $0.68  $1.99  $1.80  
Depreciation and amortization of real estate assets
1.22  1.31  1.13  1.14  1.15  2.53  2.32  
Impairment of real estate – rental properties—  0.06  0.11  —  —  0.06  —  
Allocation to unvested restricted stock awards
(0.01) (0.01) (0.02) —  —  (0.04) (0.04) 
Funds from operations per share attributable to Alexandria’s common stockholders – diluted(1)
3.03  1.50  2.96  0.70  1.83  4.54  4.08  
Unrealized (gains) losses on non-real estate investments
(1.38) 0.14  (1.29) 0.62  (0.10) (1.25) (0.75) 
Impairment of non-real estate investments0.04  
(1)
0.16  0.09  0.06  —  0.20  —  
Impairment of real estate0.11  
(1)
0.02  —  —  —  0.12  —  
Loss on early extinguishment of debt
—  —  —  0.36  —  —  0.07  
Loss on early termination of interest rate hedge agreements
—  —  —  0.02  —  —  —  
Preferred stock redemption charge
—  —  —  —  —  —  0.02  
Allocation to unvested restricted stock awards
0.01  —  0.01  (0.01) —  0.02  0.02  
Funds from operations per share attributable to Alexandria’s common stockholders – diluted, as adjusted
$1.81  $1.82  $1.77  $1.75  $1.73  $3.63  $3.44  
Weighted-average shares of common stock outstanding(2) for calculations of:
Earnings per share – diluted
124,448  121,785  114,974  112,120  111,501  123,117  111,279  
Funds from operations – diluted, per share124,448  121,785  114,974  112,562  112,077  123,117  111,857  
Funds from operations – diluted, as adjusted, per share
124,448  121,785  114,974  112,562  111,501  123,117  111,279  
(1)Refer to footnotes on the previous page for additional details.
(2)Refer to “Weighted-average shares of common stock outstanding – diluted” in the “Definitions and reconciliations” of our Supplemental Information for additional details.








SUPPLEMENTAL
INFORMATION








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Company Profile
June 30, 2020
Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500® urban office REIT, is the first, longest-tenured, and pioneering owner, operator, and developer uniquely focused on collaborative life science, technology, and agtech campuses in AAA innovation cluster locations, with a total market capitalization of $27.7 billion as of June 30, 2020, and an asset base in North America of 43.0 million SF. The asset base in North America includes 28.8 million RSF of operating properties and 2.3 million RSF of Class A properties undergoing construction, 6.6 million RSF of near-term and intermediate-term development and redevelopment projects, and 5.3 million SF of future development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, technology, and agtech 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, technology, and agtech companies through our venture capital arm. 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.

Tenant base

Alexandria is known for our high-quality and diverse tenant base, with 51% of our annual rental revenue generated from tenants that are investment-grade rated or publicly traded large cap companies. The quality, diversity, breadth, and depth of our significant relationships with our tenants provide Alexandria with high-quality and stable cash flows. Alexandria’s underwriting team and long-term industry relationships positively distinguish us from all other publicly traded REITs and real estate companies.

Executive and senior management team

Alexandria’s executive and senior management team has unique experience and expertise in creating, owning, and operating highly dynamic and collaborative campuses in key urban life science, technology, and agtech cluster locations that inspire innovation. From the development of high-quality, sustainable real estate, to the ongoing cultivation of collaborative environments with unique amenities and events, the Alexandria team has a first-in-class reputation of excellence in our niche. Alexandria’s highly experienced management team also includes regional market directors with leading reputations and longstanding relationships within the life science, technology, and agtech communities in their respective urban innovation clusters. We believe that our expertise, experience, reputation, and key relationships in the real estate, life science, technology, and agtech industries provide Alexandria significant competitive advantages in attracting new business opportunities.
Alexandria’s executive and senior management team consists of 41 individuals, averaging 25 years of real estate experience, including 14 years with Alexandria. Our executive management team alone averages 18 years of experience with Alexandria.

EXECUTIVE MANAGEMENT TEAM
Joel S. MarcusStephen A. Richardson
Executive Chairman & FounderCo-Chief Executive Officer
Peter M. MogliaDean A. Shigenaga
Co-Chief Executive Officer &
Co-Chief Investment Officer		Co-President & Chief Financial Officer
Thomas J. AndrewsDaniel J. Ryan
Co-President & Regional Market Director – Greater BostonCo-Chief Investment Officer & Regional Market Director – San Diego
Lawrence J. DiamondJoseph Hakman
Co-Chief Operating Officer & Regional Market Director – MarylandChief Strategic Transactions Officer and Co-Chief Operating Officer
Vincent R. CiruzziJohn H. Cunningham
Chief Development OfficerExecutive Vice President – Regional Market Director – New York City
Marc E. BindaAndres R. Gavinet
Executive Vice President –
Finance & Treasurer		Chief Accounting Officer
Jackie B. ClemTerezia C. Nemeth
General Counsel & SecretaryExecutive Vice President – Regional Market Director – San Francisco
Gary D. Dean
Executive Vice President –
Real Estate Legal Affairs
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Investor Information
June 30, 2020
Corporate Headquarters New York Stock Exchange Trading Symbol Information Requests
26 North Euclid Avenue Common stock: ARE Phone:(626) 578-0777
Pasadena, California 91101  Email:corporateinformation@are.com
   Web:www.are.com
Equity Research Coverage
Alexandria is currently covered by the following research analysts. This list may be incomplete and is subject to change as firms initiate or discontinue coverage of our company. Please note that any opinions, estimates, or forecasts regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, or forecasts of Alexandria or our management. Alexandria does not by our reference or distribution of the information below imply our endorsement of or concurrence with any opinions, estimates, or forecasts of these analysts. Interested persons may obtain copies of analysts’ reports on their own as we do not distribute these reports. Several of these firms may, from time to time, own our stock and/or hold other long or short positions in our stock and may provide compensated services to us.
Bank of America Merrill LynchCitigroup Global Markets Inc.JMP SecuritiesRBC Capital Markets
Jamie Feldman / Elvis RodriguezMichael Bilerman / Emmanuel KorchmanAaron Hecht / Matthew HurwitMichael Carroll / Jason Idoine
(646) 855-5808 / (646) 855-1589(212) 816-1383 / (212) 816-1382(415) 835-3963 / (415) 835-3964(440) 715-2649 / (440) 715-2651
BTIG, LLCEvercore ISIJ.P. Morgan Securities LLCRobert W. Baird & Co. Incorporated
Tom Catherwood / James SullivanSheila McGrath / Wendy MaAnthony Paolone / Ray ZhongDavid Rodgers / Nicholas Thillman
(212) 738-6140 / (212) 738-6139(212) 497-0882 / (212) 497-0870(212) 622-6682 / (212) 622-5411(216) 737-7341 / (414) 298-5053
CFRAGreen Street Advisors, Inc.Mizuho Securities USA Inc.SMBC Nikko Securities America, Inc.
Kenneth LeonDaniel Ismail / Chris DarlingOmotayo Okusanya / Venkat KommineniRichard Anderson / Jay Kornreich
(646) 517-2552(949) 640-8780 / (949) 640-8780(646) 949-9672 / (646) 949-9754(646) 521-2351 / (646) 424-3202
 
Fixed Income CoverageRating Agencies
Barclays Capital Inc.Wells Fargo & CompanyMoody’s Investors Service S&P Global Ratings
Srinjoy Banerjee / Devon ZhouThierry Perrein / Kevin McClure(212) 553-0376 Fernanda Hernandez / Michael Souers
(212) 526-3521 / (212) 526-6961(704) 410-3262 / (704) 410-3252 (212) 438-1347 / (212) 438-2508
J.P. Morgan Securities LLC
Mark Streeter / Ian Snyder
(212) 834-5086 / (212) 834-3798
Financial and Asset Base Highlights
image671.jpg
June 30, 2020
(Dollars in thousands, except per share amounts)
 
Three Months Ended (unless stated otherwise)
6/30/203/31/2012/31/199/30/196/30/19
Selected financial data from consolidated financial statements and related information
Rental revenues
$341,555  $337,942  $308,418  $293,182  $289,625  
Tenant recoveries
$94,301  $99,663  $96,303  $92,594  $81,993  
General and administrative expenses$31,775  $31,963  $29,782  $27,930  $26,434  
General and administrative expenses as a percentage of net operating income –
trailing 12 months
10.3%10.2%10.0%9.7%9.5%
Operating margin
72%71%70%70%72%
Adjusted EBITDA margin
69%68%68%68%69%
Adjusted EBITDA – quarter annualized
$1,253,844  $1,239,016  $1,148,620  $1,099,908  $1,063,056  
Adjusted EBITDA – trailing 12 months
$1,185,347  $1,137,650  $1,085,382  $1,040,449  $1,004,724  
Net debt at end of period
$7,333,905  $6,870,571  $6,582,089  $6,333,459  $6,154,885  
Net debt to Adjusted EBITDA – quarter annualized
5.8x5.5x5.7x5.8x5.8x
Net debt to Adjusted EBITDA – trailing 12 months
6.2x6.0x6.1x6.1x6.1x
Net debt and preferred stock to Adjusted EBITDA – quarter annualized
5.8x5.5x5.7x5.8x5.8x
Net debt and preferred stock to Adjusted EBITDA – trailing 12 months
6.2x6.0x6.1x6.1x6.2x
Fixed-charge coverage ratio – quarter annualized
4.2x4.5x4.2x3.9x4.2x
Fixed-charge coverage ratio – trailing 12 months
4.2x4.2x4.2x4.1x4.2x
Unencumbered net operating income as a percentage of total net operating income
95%95%95%95%94%
Closing stock price at end of period
$162.25  $137.06  $161.58  $154.04  $141.09  
Common shares outstanding (in thousands) at end of period
124,559  124,326  120,800  113,173  111,986  
Total equity capitalization at end of period
$20,209,636  $17,040,078  $19,518,915  $17,522,382  $15,887,660  
Total market capitalization at end of period
$27,732,906  $24,345,213  $26,296,394  $24,260,065  $22,243,865  
Dividend per share – quarter/annualized
$1.06/$4.24$1.03/$4.12$1.03/$4.12$1.00/$4.00$1.00/$4.00
Dividend payout ratio for the quarter
59%58%61%57%58%
Dividend yield – annualized
2.6%3.0%2.5%2.6%2.8%
Amounts related to operating leases:
Operating lease liabilities
$291,710  $293,173  $271,809  $270,614  $243,585  
Rent expense
$4,936  $4,781  $4,609  $4,705  $4,482  
Capitalized interest
$30,793  $24,680  $23,822  $24,558  $21,674  
Weighted-average interest rate for capitalization of interest during the period
4.03%3.80%3.88%4.00%4.14%
Financial and Asset Base Highlights (continued)
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June 30, 2020
(Dollars in thousands, except annual rental revenue per occupied RSF amounts)
 
Three Months Ended (unless stated otherwise)
6/30/203/31/2012/31/199/30/196/30/19
Amounts included in funds from operations and non-revenue-enhancing capital expenditures
Straight-line rent revenue
$23,367  $20,597  $24,400  $27,394  $25,476  
Amortization of acquired below-market leases
$13,787  $15,964  $8,837  $5,774  $8,054  
Straight-line rent expense on ground leases
$167  $171  $219  $320  $226  
Stock compensation expense
$9,185  $9,929  $10,239  $10,935  $11,437  
Amortization of loan fees
$2,737  $2,247  $2,241  $2,251  $2,380  
Amortization of debt premiums
$888  $888  $907  $1,287  $782  
Non-revenue-enhancing capital expenditures:
Building improvements
$3,107  $3,198  $3,295  $2,901  $2,876  
Tenant improvements and leasing commissions
$11,500  $12,923  $14,648  $11,964  $13,901  
Operating statistics and related information (at end of period)
Number of properties – North America
304  302  291  269  257  
RSF – North America (including development and redevelopment projects under construction)
31,141,758  30,924,356  29,098,433  27,288,263  26,321,122  
Total square feet – North America
43,023,989  41,514,374  39,170,786  38,496,276  37,120,560  
Annual rental revenue per occupied RSF – North America
$51.30  $51.18  $51.04  $51.00  $50.27  
Occupancy of operating properties – North America
94.8%
(1)
95.1%96.8%96.6%97.4%
Occupancy of operating and redevelopment properties – North America
92.3%92.9%94.4%94.5%96.4%
Weighted-average remaining lease term (in years)
7.87.88.18.38.4
Total leasing activity – RSF
1,077,510  703,355  1,752,124  1,241,677  819,949  
Lease renewals and re-leasing of space – change in average new rental rates over expiring rates:
Rental rate increases
37.2%46.3%37.0%27.9%32.5%
Rental rate increases (cash basis)15.0%22.3%21.7%11.2%17.8%
RSF (included in total leasing activity above)699,130  557,367  571,650  758,113  587,930  
Same property – percentage change over comparable quarter from prior year:
Net operating income increase0.6%
(2)
2.4%2.0%2.5%4.3%
Net operating income increase (cash basis)2.5%
(2)
6.1%4.0%5.7%9.5%
(1)Refer to “Occupancy” in this Supplemental Information for additional details.
(2)Includes the effect of lower revenues from our retail tenancy and transient/short-term parking. Excluding this effect, same property net operating income growth for the three months ended June 30, 2020, would be 1.6% and 4.2% (cash basis), respectively. We expect occupancy and other contractual rental increases in the second half of 2020 will increase same property NOI and same property NOI (cash basis) to within our guidance range for the year ending December 31, 2020.
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High-Quality, Diverse, and Innovative Tenants
June 30, 2020


Long-Duration Cash Flows From High-Quality, Diverse, and
Innovative Tenants
Investment-Grade or
Publicly Traded Large Cap Tenants		Tenant Mix
q220clienttenantmix11.jpg
51%
of ARE’s Annual Rental Revenue(1)
Long-Duration Lease Terms
7.8 Years
Weighted-Average Remaining Term(2)
Percentage of ARE’s Annual Rental Revenue(1)
(1)Represents annual rental revenue in effect as of June 30, 2020.
(2)Based on aggregate annual rental revenue in effect as of June 30, 2020. Refer to “Annual rental revenue” in the “Definitions and reconciliations” of this Supplemental Information for additional details on our methodology on annual rental revenue from unconsolidated real estate joint ventures.
(3)67% of our annual rental revenue from technology tenants is from investment-grade or publicly traded large cap tenants. The weighted-average remaining term of leases with our technology tenants is 15.5 years.
(4)Our other tenants, aggregating 5.0% of our annual rental revenue, comprise 4.3% of annual rental revenue from professional services, finance, telecommunications, and construction/real estate companies and only 0.7% from retail-related tenants.
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Class A Properties in AAA Locations
June 30, 2020

High-Quality Cash Flows From Class A Properties in AAA Locations

Class A Properties in
AAA Locations		AAA Locations
q220realestatev211.jpg
74%
of ARE’s
Annual Rental Revenue(1)
Percentage of ARE’s Annual Rental Revenue(1)







(1)Represents annual rental revenue in effect as of June 30, 2020.
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Occupancy
June 30, 2020

Solid Historical Occupancy(1)
Occupancy Across Key Locations(2)
q220occupancysv211.jpg
96%
Over 10 Years

(1)Represents average occupancy of operating properties in North America as of each December 31 for the last 10 years and as of June 30, 2020.
(2)As of June 30, 2020.
(3)Includes 647,771 RSF, or 2.3%, of vacancy in our North America markets (noted below), representing lease-up opportunities at properties recently acquired. Excluding these vacancies, occupancy of operating properties in North America was 97.1% as of June 30, 2020.
As of June 30, 2020
Vacant Occupancy Impact
PropertySubmarket/MarketRSFRegionConsolidated
601, 611, and 651 Gateway Boulevard
South San Francisco/San Francisco
201,570  2.6 %0.7 %
SD Tech by Alexandria
Sorrento Mesa/San Diego
182,484  3.0 %0.6  
5505 Morehouse Drive
Sorrento Mesa/San Diego
71,016  1.2 %0.3  
Other acquisitionsVarious192,701  N/A0.7  
647,771  2.3 %
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Key Operating Metrics
June 30, 2020
Historical Same Property
Net Operating Income
Favorable Lease Structure(1)
q220samepropav111.jpg
q220samepropbv111.jpg
Strategic Lease Structure by Owner and Operator of Collaborative Life Science, Technology, and Agtech Campuses
Increasing cash flows
Percentage of leases containing
annual rent escalations
94 %
Stable cash flows
Percentage of triple
net leases
93 %
Lower capex burden
Percentage of leases providing for the
recapture of capital expenditures
92 %
Historical Rental Rates:
Renewed/Re-Leased Space
Margins(2)
q220rentalrateav111.jpg
q220rentalratebv111.jpg
OperatingAdjusted EBITDA
72%69%
(1)Percentages calculated based on RSF as of June 30, 2020.
(2)Represents percentages for the three months ended June 30, 2020.
Same Property Performance
image671.jpg
June 30, 2020
(Dollars in thousands)
June 30, 2020June 30, 2020
Same Property Financial Data
Three Months EndedSix Months Ended
Same Property Statistical Data
Three Months EndedSix Months Ended
Percentage change over comparable period from prior year:
Number of same properties
228213
Net operating income increase
0.6%
(1)
1.6%

Rentable square feet
21,779,06621,191,416
Net operating income increase (cash basis)
2.5%
(1)
4.5%
Occupancy – current-period average
96.3%96.6%
Operating margin
73%73%
Occupancy – same-period prior-year average
97.1%97.1%
 Three Months Ended June 30,Six Months Ended June 30,
20202019$ Change% Change20202019$ Change% Change
Income from rentals:
Same properties$272,951  $273,543  $(592) (0.2 %)$529,138  $522,721  $6,417  1.2 %
Non-same properties68,604  16,082  52,522  326.6  150,359  41,467  108,892  262.6  
Rental revenues341,555  289,625  51,930  17.9  679,497  564,188  115,309  20.4  
Same properties81,618  79,637  1,981  2.5  162,493  153,902  8,591  5.6  
Non-same properties12,683  2,356  10,327  438.3  31,471  8,277  23,194  280.2  
Tenant recoveries94,301  81,993  12,308  15.0  193,964  162,179  31,785  19.6  
Income from rentals435,856  371,618  64,238  17.3  873,461  726,367  147,094  20.3  
Same properties32  93  (61) (65.6) 114  265  (151) (57.0) 
Non-same properties1,068  2,145  (1,077) (50.2) 3,300  6,066  (2,766) (45.6) 
Other income1,100  2,238  (1,138) (50.8) 3,414  6,331  (2,917) (46.1) 
Same properties354,601  353,273  1,328  0.4  691,745  676,888  14,857  2.2  
Non-same properties82,355  20,583  61,772  300.1  185,130  55,810  129,320  231.7  
Total revenues436,956  373,856  63,100  16.9  876,875  732,698  144,177  19.7  
Same properties94,006  94,140  (134) (0.1) 188,816  181,678  7,138  3.9  
Non-same properties29,905  11,549  18,356  158.9  64,198  25,512  38,686  151.6  
Rental operations123,911  105,689  18,222  17.2  253,014  207,190  45,824  22.1  
Same properties260,595  259,133  1,462  0.6  502,929  495,210  7,719  1.6  
Non-same properties52,450  9,034  43,416  480.6  120,932  30,298  90,634  299.1  
Net operating income$313,045  $268,167  $44,878  16.7 %$623,861  $525,508  $98,353  18.7 %
Net operating income – same properties
$260,595  $259,133  $1,462  0.6 %
(1)
$502,929  $495,210  $7,719  1.6 %
Straight-line rent revenue
(18,873) (22,441) 3,568  (15.9) (33,492) (45,225) 11,733  (25.9) 
Amortization of acquired below-market leases
(4,637) (5,292) 655  (12.4) (7,372) (7,757) 385  (5.0) 
Net operating income – same properties (cash basis)
$237,085  $231,400  $5,685  2.5 %
(1)
$462,065  $442,228  $19,837  4.5 %
Refer to “Same property comparisons” in the “Definitions and reconciliations” of this Supplemental Information for a reconciliation of same properties to total properties. “Definitions and reconciliations” also contains definitions of “Tenant recoveries” and “Net operating income” and their respective reconciliations from the most directly comparable financial measures presented in accordance with GAAP.

(1)Includes the effect of temporary reduction in same property occupancy of 80 basis points related to downtime in connection with leases aggregating 152,045 RSF, with 63% already leased for delivery in the third quarter of 2020 at significantly higher rental rates. Excluding the impact of the temporary vacancies, the same property net operating income growth for the three months ended June 30, 2020, would have been 1.6% and 4.2% (cash basis), respectively. We expect occupancy and other contractual rental increases in the second half of 2020 will increase same property NOI and same property NOI (cash basis) to within our guidance range for the year ending December 31, 2020.
Leasing Activity
image671.jpg
June 30, 2020
(Dollars per RSF)
Three Months EndedSix Months EndedYear Ended
June 30, 2020June 30, 2020December 31, 2019
Including
Straight-Line Rent		Cash BasisIncluding
Straight-Line Rent		Cash BasisIncluding
Straight-Line Rent		Cash Basis
Leasing activity:
Renewed/re-leased space(1)
  
Rental rate changes
37.2%15.0%41.1%17.9%32.2%17.6%
New rates
$55.34  $53.15  $51.78  $49.07  $58.65  $56.19  
Expiring rates
$40.34  $46.20  $36.71  $41.61  $44.35  $47.79  
RSF
699,130  1,251,152  2,427,108  
Tenant improvements/leasing commissions
$16.86  $19.52  $20.28  
Weighted-average lease term
5.3 years5.4 years5.7 years
Developed/redeveloped/previously vacant space leased
New rates
$58.18  $54.31  $56.12  $53.37  $55.95  $52.19  
RSF
378,380  
(2)
529,713  2,635,614  
Tenant improvements/leasing commissions
$19.79  

$17.73  $13.74  
Weighted-average lease term
10.2 years8.9 years9.8 years
Leasing activity summary (totals):
New rates
$56.33  $53.56  $53.07  $50.35  $57.25  $54.11  
RSF
1,077,510  
(3)
1,780,865  
(3)
5,062,722  
Tenant improvements/leasing commissions
$17.89  $18.99  $16.88  
Weighted-average lease term
7.0 years6.4 years7.8 years
Lease expirations(1)
Expiring rates
$39.25  $44.04  $36.36  $40.67  $43.43  $46.59  
RSF
1,081,504  1,879,355  2,822,434  


Leasing activity includes 100% of results for each property in which we have an investment in North America.

(1)Excludes month-to-month leases aggregating 65,592 RSF and 41,809 RSF as of June 30, 2020, and December 31, 2019, respectively.
(2)As of July 27, 2020, our value-creation pipeline was 65% leased or negotiating.
(3)During the six months ended June 30, 2020, we granted tenant concessions/free rent averaging 1.7 months with respect to the 1,780,865 RSF leased. Approximately 66% of the leases executed during the six months ended June 30, 2020, did not include concessions for free rent.
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Contractual Lease Expirations
June 30, 2020
YearRSFPercentage of
Occupied RSF
Annual Rental Revenue (Per RSF)(1)
Percentage of Total
Annual Rental Revenue
2020
(2)
807,485  3.0 %$38.40  2.3 %
20211,550,450  5.7 %$42.80  4.8 %
20222,439,487  9.0 %$42.06  7.5 %
20232,815,546  10.4 %$45.65  9.3 %
20242,316,246  8.6 %$45.58  7.7 %
20251,979,757  7.3 %$48.43  7.0 %
20261,680,093  6.2 %$48.20  5.9 %
20272,481,628  9.2 %$50.78  9.2 %
20281,842,786  6.8 %$59.34  8.0 %
20291,474,769  5.4 %$57.38  6.2 %
Thereafter7,698,120  28.4 %$57.69  32.1 %

Market
2020 Contractual Lease Expirations (in RSF)
Annual Rental Revenue
(Per RSF)(1)
2021 Contractual Lease Expirations (in RSF)
Annual Rental Revenue
(Per RSF)(1)
LeasedNegotiating/
Anticipating		Targeted for
Development/
Redevelopment
Remaining
Expiring
Leases(3)
Total(2)
LeasedNegotiating/
Anticipating		Targeted for
Development/
Redevelopment
Remaining
Expiring Leases(4)
Total
Greater Boston79,736  38,834  75,754  
(5)
69,051  263,375  $44.68  —  

11,897  79,101  
(5)

241,230  332,228  $43.69  
San Francisco15,128  —  —  106,540  121,668  45.86  35,798  2,843  26,738  
(6)

403,952  469,331  52.39  
New York City3,407  —  —  21,581  24,988  59.81  13,101  —  —  2,315  15,416  116.82  
San Diego36,038  71,961  
(7)
—  126,643  

234,642  33.69  89,780  44,681  

41,475  
(8)
198,447  374,383  36.18  
Seattle15,835  —  —  8,397  24,232  54.24  15,704  —  —  54,514  70,218  51.17  
Maryland10,820  —  —  12,477  23,297  32.29  —  14,323  —  

107,770  122,093  24.58  
Research Triangle34,226  1,592  —  41,778  77,596  15.95  16,942  22,634  —  91,517  131,093  28.45  
Canada—  2,587  —  20,953  23,540  11.23  —  4,722  —  13,672  18,394  23.40  
Non-cluster markets6,285  —  —  7,862  14,147  46.59  —  —  —  17,294  17,294  67.08  
Total
201,475  114,974  75,754  415,282  807,485  $38.40  171,325  101,100  147,314  1,130,711  

1,550,450  $42.80  
Percentage of expiring leases
25 %14 %9 %52 %100 %11 %7 %10 %72 %100 %

(1)Represents amounts in effect as of June 30, 2020.
(2)Excludes month-to-month leases aggregating 65,592 RSF as of June 30, 2020.
(3)The largest remaining contractual lease expiration in 2020 is 93,521 RSF related to a recently acquired property in our South San Francisco submarket.
(4)The largest remaining contractual lease expiration in 2021 is 89,576 RSF at a Class A office/laboratory building in our University Town Center submarket.
(5)Represents office space aggregating 154,855 RSF at The Arsenal on the Charles, a campus acquired on December 17, 2019, in our Cambridge/Inner Suburbs submarket, that is targeted for redevelopment into office/laboratory space upon expiration of the respective existing leases.
(6)Represents two retail leases aggregating 26,738 RSF at our recently acquired properties at 987 and 1075 Commercial Street. Upon expiration of these leases, we expect to demolish the existing building to allow for the future development of 700,000 RSF of an office/laboratory building on the site.
(7)Includes 71,961 RSF at 9363 and 9393 Towne Centre Drive in our University Town Center submarket, a future development site.
(8)Represents 41,475 RSF at the recently acquired property at 4555 Executive Drive in our University Town Center submarket. Upon expiration of the existing lease during the third quarter of 2021, we expect to demolish the existing building to allow for the future development of a new office/laboratory building on the site.
Top 20 Tenants
image671.jpg
June 30, 2020
(Dollars in thousands, except average market cap amounts)
81% of Top 20 Annual Rental Revenue From Investment-Grade
or Publicly Traded Large Cap Tenants(1)
Tenant
Remaining Lease Term(1) (in years)
Aggregate
RSF
Annual Rental Revenue(1)
Percentage of Aggregate Annual Rental Revenue(1)
Investment-Grade
Credit Ratings
Average Market Cap(1)
(in billions)
Moody’sS&P
1Bristol-Myers Squibb Company8.2  900,050  $52,243  3.9 %A2A+$116.5  
2Takeda Pharmaceutical Company Ltd.9.1  606,249  39,342  2.9  Baa2BBB+$57.2  
3Facebook, Inc.11.5  903,786  38,951  2.9  ——$562.6  
4Illumina, Inc.10.1  891,495  35,907  2.7  —BBB$45.4  
5Sanofi8.0  494,693  33,845  2.5  A1AA$116.9  
6Eli Lilly and Company9.0  531,784  33,527  2.5  A2A+$124.4  
7Novartis AG7.8  441,894  31,216  2.3  A1AA-$223.9  
8Roche2.7  
(2)
649,482  28,298  2.1  Aa3AA$270.2  
9Uber Technologies, Inc.62.4  
(3)
1,009,188  27,379  2.0  ——$56.3  
10bluebird bio, Inc.6.9  312,805  23,169  1.7  ——$4.7  
11
Maxar Technologies(4)
5.0  478,000  21,577  1.6  ——$0.7  
12Massachusetts Institute of Technology8.5  257,626  21,145  1.6  AaaAAA$—  
13Moderna, Inc.10.6  354,396  21,054  1.6  ——$9.9  
14Merck & Co., Inc.13.1  321,063  20,075  1.5  A1AA-$211.3  
15New York University11.3  201,284  19,126  1.4  Aa2AA-$—  
16Pfizer Inc.4.7  416,979  17,762  1.3  A1AA-$204.9  
17Stripe, Inc.7.3  295,333  17,736  1.3  ——$—  
18
athenahealth, Inc.(4)
12.0  409,710  17,686  1.3  ——$—  
19Amgen Inc.3.8  407,369  16,838  1.3  Baa1A-$127.8  
20United States Government7.4  287,638  16,521  1.2  AaaAA+$—  
Total/weighted-average
11.2  
(3)
10,170,824  $533,397  39.6 %

(1)Based on aggregate annual rental revenue in effect as of June 30, 2020. Refer to “Annual rental revenue” and “Investment-grade or publicly traded large cap tenants” in the “Definitions and reconciliations” of this Supplemental Information for additional details on our methodology on annual rental revenue from unconsolidated real estate joint ventures and average daily market capitalization.
(2)Includes 197,787 RSF expiring in 2022 at our recently acquired property at 651 Gateway Boulevard in our South San Francisco submarket. Upon expiration of the lease, 651 Gateway Boulevard will be redeveloped into a Class A office/laboratory building.
(3)Includes (i) ground leases for land at 1455 and 1515 Third Street (two buildings aggregating 422,980 RSF), and (ii) leases at 1655 and 1725 Third Street (two buildings aggregating 586,208 RSF) owned by our unconsolidated joint venture in which we have an ownership interest of 10%. Annual rental revenue is presented using 100% of the annual rental revenue of our consolidated properties and our share of annual rental revenue for our unconsolidated real estate joint ventures. Refer to footnote 1 for additional details. Excluding the ground lease, the weighted-average remaining lease term for our top 20 tenants was 8.5 years as of June 30, 2020.
(4)Located at properties acquired during the three months ended December 31, 2019.

Summary of Properties and Occupancy
image671.jpg
June 30, 2020
(Dollars in thousands, except per RSF amounts)
Summary of properties
Market
RSFNumber of PropertiesAnnual Rental Revenue
OperatingDevelopmentRedevelopmentTotal% of TotalTotal% of TotalPer RSF
Greater Boston
7,591,334  —  205,690  7,797,024  25 %66  $475,672  35 %$63.82  
San Francisco
7,732,722  841,178  347,912  8,921,812  29  62  370,512  28  57.88  
New York City
1,127,580  —  140,098  1,267,678  4  5  77,766  6  71.91  
San Diego
5,990,151  199,621  63,774  6,253,546  20  77  216,032  16  39.31  
Seattle
1,538,465  100,086  —  1,638,551  5  17  77,640  6  53.07  
Maryland
2,799,682  261,096  20,998  3,081,776  10  43  76,413  6  29.35  
Research Triangle
1,224,904  160,000  —  1,384,904  4  17  33,186  2  28.00  
Canada
256,967  —  —  256,967  1  3  5,717  —  24.72  
Non-cluster markets
354,879  —  —  354,879  1  11  9,508  1  37.83  
Properties held for sale
184,621  —  —  184,621  1  3  942  —  N/A
North America
28,801,305  1,561,981  778,472  31,141,758  100 %304  $1,343,388  100 %$51.30  
2,340,453

Summary of occupancy
 Operating PropertiesOperating and Redevelopment Properties
Market6/30/203/31/206/30/196/30/203/31/206/30/19
Greater Boston98.2 %98.9 %98.7 %95.6 %97.0 %98.4 %
San Francisco94.7  
(1)
94.7  98.7  90.6  90.6  98.7  
New York City97.1  
(2)
99.2  98.8  86.2  88.1  87.8  
San Diego91.8  
(1)
90.9  95.2  90.8  90.9  95.2  
Seattle95.1  
(3)
97.8  97.3  95.1  97.8  97.3  
Maryland93.9  95.9  96.7  93.2  94.6  95.1  
Research Triangle96.8  96.5  97.9  96.8  96.5  94.2  
Subtotal95.1  95.6  97.6  92.6  93.3  96.6  
Canada90.0  93.6  93.7  90.0  93.6  93.7  
Non-cluster markets70.8  65.2  84.9  70.8  65.2  84.9  
North America94.8 %
(1)
95.1 %97.4 %92.3 %92.9 %96.4 %
(1)Refer to “Occupancy” in this Supplemental Information for additional details.
(2)The decrease in occupancy for the New York City market from March 31, 2020, was primarily related to one lease for 19,647 RSF that ended during the three months ended June 30, 2020. This space has been 100% re-leased to a new tenant with expected delivery by the end of 2020.
(3)The decrease in occupancy for the Seattle market from March 31, 2020, was related to recently acquired properties containing 31,518 RSF of vacant space.

Refer to “Definitions and reconciliations” in this Supplemental Information for additional details.

Property Listing
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
Greater Boston
Cambridge/Inner Suburbs
Alexandria Center® at Kendall Square
2,365,487  —  —  2,365,487  10$168,990  98.9 %98.9 %
50, 60, 75/125(1), 100, and 225(1) Binney Street, 161 and 215 First Street, 150 Second Street, 300 Third Street, and 11 Hurley Street
Alexandria Technology Square®
1,181,635  —  —  1,181,635  7101,118  98.2  98.2  
100, 200, 300, 400, 500, 600, and 700 Technology Square
The Arsenal on the Charles
630,598  —  205,690  836,288  1124,731  100.0  75.4  
311, 321, and 343 Arsenal Street, 300 and 400 North Beacon Street,
1, 2, and 3 Kingsbury Avenue, and 100, 200, and 400 Talcott Avenue
Alexandria Center® at One Kendall Square
815,156  —  —  815,156  1068,287  97.1  97.1  
One Kendall Square – Buildings 100, 200, 300, 400, 500, 600/700, 1400, 1800, 2000, and 399 Binney Street
480 and 500 Arsenal Street
234,260  —  —  234,260  29,826  88.1  88.1  
640 Memorial Drive
225,504  —  —  225,504  113,815  100.0  100.0  
780 and 790 Memorial Drive
99,658  —  —  99,658  28,194  100.0  100.0  
167 Sidney Street and 99 Erie Street
54,549  —  —  54,549  24,025  100.0  100.0  
79/96 13th Street (Charlestown Navy Yard)
25,309  —  —  25,309  1620  100.0  100.0  
Cambridge/Inner Suburbs
5,632,156  —  205,690  5,837,846  46399,606  98.3  94.8  
Seaport Innovation District
5 Necco Street
87,163  —  —  87,163  14,672  86.6  86.6  
Route 128
275 Grove Street
509,702  —  —  509,702  125,280  99.2  99.2  
Alexandria Park at 128
343,882  —  —  343,882  812,228  100.0  100.0  
3 and 6/8 Preston Court, 29, 35, and 44 Hartwell Avenue, 35 and 45/47 Wiggins Avenue, and 60 Westview Street
225, 266, and 275 Second Avenue
317,617  —  —  317,617  313,932  100.0  100.0  
100 Tech Drive
200,431  —  —  200,431  18,455  100.0  100.0  
19 Presidential Way
144,892  —  —  144,892  14,773  94.2  94.2  
100 Beaver Street
82,330  —  —  82,330  13,165  80.0  80.0  
285 Bear Hill Road
26,270  —  —  26,270  11,167  100.0  100.0  
Route 128
1,625,124  —  —  1,625,124  1669,000  98.2  98.2  
Route 495
111 and 130 Forbes Boulevard
155,846  —  —  155,846  21,745  100.0  100.0  
20 Walkup Drive
91,045  —  —  91,045  1649  100.0  100.0  
Route 495
246,891  —  —  246,891  32,394  100.0  100.0  
Greater Boston
7,591,334  —  205,690  7,797,024  66$475,672  98.2 %95.6 %
(1)We own a partial interest in this property through a real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details.
Property Listing (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
San Francisco
Mission Bay/SoMa
Alexandria Center® for Science and Technology – Mission Bay
1,990,262  —  —  1,990,262  9$88,305  100.0 %100.0 %
1455, 1515, 1655(1), and 1725(1) Third Street, 409 and 499 Illinois Street(1), 1500(1) and 1700 Owens Street, and 455 Mission Bay Boulevard South
510 Townsend Street
295,333  —  —  295,333  117,736  100.0  100.0  
945 Market Street—  —  255,765  255,765  1—  N/A—  
505 Brannan Street148,146  —  —  148,146  112,129  100.0  100.0  
260 Townsend Street66,682  —  —  66,682  14,271  73.4  73.4  
Mission Bay/SoMa2,500,423  —  255,765  2,756,188  13122,441  99.3  90.1  
South San Francisco
Alexandria Technology Center® – Gateway
1,412,480  —  —  1,412,480  1156,292  79.2  79.2  
600, 601(1), 611(1), 630, 650, 651(1), 681(1), 685(1), 701(1), 901, and 951 Gateway Boulevard
213, 249, 259, 269, and 279 East Grand Avenue
919,704  —  —  919,704  548,744  100.0  100.0  
201 Haskins Way
—  315,000  —  315,000  1—  N/AN/A
400 and 450 East Jamie Court
163,035  —  —  163,035  29,436  100.0  100.0  
500 Forbes Boulevard(1)
155,685  —  —  155,685  16,619  100.0  100.0  
7000 Shoreline Court
136,395  —  —  136,395  15,420  62.8  62.8  
341 and 343 Oyster Point Boulevard
107,960  —  —  107,960  25,767  100.0  100.0  
849/863 Mitten Road/866 Malcolm Road
103,857  —  —  103,857  15,076  100.0  100.0  
South San Francisco2,999,116  315,000  —  3,314,116  24137,354  88.5  88.5  
Greater Stanford
Menlo Gateway(1)
772,983  —  —  772,983  329,842  100.0  100.0  
100 Independence Drive and 125 and 135 Constitution Drive
Alexandria District for Science and Technology
136,738  526,178  —  662,916  54,091  100.0  100.0  
825, 835, and 960 Industrial Road and 987 and 1075 Commercial Street
3825 and 3875 Fabian Way
478,000  —  —  478,000  221,577  100.0  100.0  
Alexandria Stanford Life Science District
190,270  —  92,147  282,417  313,902  100.0  67.4  
3160, 3165, and 3170 Porter Drive
Alexandria PARC
197,498  —  —  197,498  410,169  87.7  87.7  
2100, 2200, 2300, and 2400 Geng Road
3330 and 3412 Hillview Avenue
106,316  —  —  106,316  29,387  100.0  100.0  
2425 Garcia Avenue/2400/2450 Bayshore Parkway
99,208  —  —  99,208  14,257  100.0  100.0  
Shoreway Science Center
82,462  —  —  82,462  25,472  100.0  100.0  
75 and 125 Shoreway Road
1450 Page Mill Road
77,634  —  —  77,634  18,009  100.0  100.0  
3350 West Bayshore Road
60,000  —  —  60,000  12,191  62.3  62.3  
2625/2627/2631 Hanover Street
32,074  —  —  32,074  11,820  100.0  100.0  
Greater Stanford2,233,183  526,178  92,147  2,851,508  25110,717  97.9  94.0  
San Francisco
7,732,722  841,178  347,912  8,921,812  62$370,512  94.7 %90.6 %
(1)We own a partial interest in this property through a real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details.
Property Listing (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
New York City
New York City
Alexandria Center® for Life Science – New York City
740,972  —  —  740,972  3$62,743  95.5 %95.5 %
430 and 450 East 29th Street
219 East 42nd Street
349,947  —  —  349,947  114,006  100.0  100.0  
Alexandria Center® – Long Island City
36,661  —  140,098  176,759  11,017  100.0  20.7  
30-02 48th Avenue
New York City
1,127,580  —  140,098  1,267,678  577,766  97.1  86.2  
San Diego
Torrey Pines
ARE Spectrum
336,461  —  —  336,461  317,422  100.0  100.0  
3215 Merryfield Row and 3013 and 3033 Science Park Road
ARE Torrey Ridge
294,326  —  —  294,326  312,439  87.8  87.8  
10578, 10618, and 10628 Science Center Drive
ARE Sunrise
236,635  —  —  236,635  38,291  99.7  99.7  
10931/10933 and 10975 North Torrey Pines Road, 3010 Science Park Road, and 10996 Torreyana Road
ARE Nautilus
220,651  —  —  220,651  410,613  100.0  100.0  
3530 and 3550 John Hopkins Court and 3535 and 3565 General Atomics Court
3545 Cray Court
116,556  —  —  116,556  1—  —  —  
11119 North Torrey Pines Road
72,506  —  —  72,506  13,676  100.0  100.0  
Torrey Pines1,277,135  —  —  1,277,135  1552,441  88.0  88.0  
University Town Center
Campus Pointe by Alexandria(1)
1,419,772  199,621  —  1,619,393  1059,653  99.9  99.9  
9880(2), 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4150, 4161, 4224, and 4242 Campus Point Court
5200 Illumina Way(1)
792,687  —  —  792,687  629,977  100.0  100.0  
University District
520,168  —  —  520,168  819,361  100.0  100.0  
9363, 9393, and 9625(1) Towne Centre Drive, 4755, 4757, and 4767 Nexus Center Drive and 4555 and 4796 Executive Drive
University Town Center2,732,627  199,621  —  2,932,248  24$108,991  99.9 %99.9 %

(1)We own a partial interest in this property through a real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details.
(2) We own 100% of this property.
Property Listing (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
San Diego (continued)
Sorrento Mesa
SD Tech by Alexandria(1)
854,463  —  —  854,463  11$21,375  67.3 %67.3 %
9605, 9645, 9675, 9685, 9725, 9735, 9805, 9808, 9855, and 9868 Scranton Road and 5505 Morehouse Drive(2)
Summers Ridge Science Park
316,531  —  —  316,531  411,077  100.0  100.0  
9965, 9975, 9985, and 9995 Summers Ridge Road
10121 and 10151 Barnes Canyon Road
102,392  —  —  102,392  22,689  100.0  100.0  
ARE Portola
101,857  —  —  101,857  33,603  100.0  100.0  
6175, 6225, and 6275 Nancy Ridge Drive
5810/5820 Nancy Ridge Drive
82,272  —  —  82,272  12,532  100.0  100.0  
7330 Carroll Road
66,244  —  —  66,244  12,431  100.0  100.0  
9877 Waples Street—  —  63,774  63,774  1—  N/A—  
5871 Oberlin Drive
33,817  —  —  33,817  1—  —  —  
Sorrento Mesa1,557,576  —  63,774  1,621,350  2443,707  79.9  76.8  
Sorrento Valley
3911, 3931, 3985, 4025, 4031, 4045, and 4075 Sorrento Valley Boulevard
191,378  —  —  191,378  75,215  88.1  88.1  
11025, 11035, 11045, 11055, 11065, and 11075 Roselle Street
121,655  —  —  121,655  62,706  97.1  97.1  
Sorrento Valley313,033  —  —  313,033  137,921  91.6  91.6  
I-15 Corridor
13112 Evening Creek Drive
109,780  —  —  109,780  12,972  100.0  100.0  
San Diego
5,990,151  199,621  63,774  6,253,546  77216,032  91.8  90.8  
Seattle
Lake Union
The Eastlake Life Science Campus by Alexandria – North Campus
631,070  —  —  631,070  535,479  100.0  100.0  
1616 and 1551 Eastlake Avenue East, 188 and 199 East Blaine Street, and 1600 Fairview Avenue East
The Eastlake Life Science Campus by Alexandria – South Campus
206,134  100,086  —  306,220  311,626  100.0  100.0  
1165, 1201, and 1208 Eastlake Avenue East
400 Dexter Avenue North
290,111  —  —  290,111  115,158  100.0  100.0  
2301 5th Avenue
197,135  —  —  197,135  19,717  99.1  99.1  
219 Terry Avenue North
30,705  —  —  30,705  11,835  100.0  100.0  
601 Dexter Avenue North
18,680  —  —  18,680  1425  100.0  100.0  
Lake Union1,373,835  100,086  —  1,473,921  1274,240  99.9  99.9  
SoDo
220 and 240 2nd Avenue South80,160  —  —  80,160  21,329  46.9  46.9  
Elliott Bay
3000/3018 Western Avenue
47,746  —  —  47,746  11,839  100.0  100.0  
410 West Harrison Street and 410 Elliott Avenue West
36,724  —  —  36,724  2232  14.7  14.7  
Elliott Bay84,470  —  —  84,470  32,071  62.9  62.9  
Seattle
1,538,465  100,086  —  1,638,551  17$77,640  95.1 %95.1 %

(1)We own a partial interest in this property through a real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details.
(2)We own 100% of this property.
Property Listing (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
Maryland
Rockville
9800, 9804, 9900, 9920, and 9950 Medical Center Drive
383,956  261,096  —  645,052  8$14,065  89.5 %89.5 %
9704, 9708, 9712, and 9714 Medical Center Drive
214,725  —  —  214,725  47,862  100.0  100.0  
1330 Piccard Drive
131,511  —  —  131,511  13,719  100.0  100.0  
9605 Medical Center Drive
115,691  —  —  115,691  13,163  85.8  85.8  
1500 and 1550 East Gude Drive
90,489  —  —  90,489  2620  28.1  28.1  
14920 and 15010 Broschart Road
86,703  —  —  86,703  22,283  100.0  100.0  
1405 Research Boulevard
72,170  —  —  72,170  12,423  100.0  100.0  
5 Research Place
63,852  —  —  63,852  12,743  100.0  100.0  
5 Research Court
51,520  —  —  51,520  11,788  100.0  100.0  
9920 Belward Campus Drive
51,181  —  —  51,181  11,687  100.0  100.0  
12301 Parklawn Drive
49,185  —  —  49,185  11,329  100.0  100.0  
Rockville1,310,983  261,096  —  1,572,079  2341,682  90.7  90.7  
Gaithersburg
Alexandria Technology Center® – Gaithersburg I
613,438  —  —  613,438  915,485  93.8  93.8  
9, 25, 35, 45, 50, and 55 West Watkins Mill Road and 910, 930, and 940 Clopper Road
Alexandria Technology Center® – Gaithersburg II
294,087  —  20,998  315,085  67,702  99.2  92.6  
704 Quince Orchard Road(1), 708 Quince Orchard Road, and
19, 20, 21, and 22 Firstfield Road
401 Professional Drive
63,154  —  —  63,154  11,593  91.0  91.0  
950 Wind River Lane
50,000  —  —  50,000  11,004  100.0  100.0  
620 Professional Drive
27,950  —  —  27,950  11,191  100.0  100.0  
Gaithersburg1,048,629  —  20,998  1,069,627  1826,975  95.6  93.8  
Beltsville
8000/9000/10000 Virginia Manor Road 191,884  —  —  191,884  12,618  98.4  98.4  
Northern Virginia
14225 Newbrook Drive248,186  —  —  248,186  15,138  100.0  100.0  
Maryland
2,799,682  261,096  20,998  3,081,776  43$76,413  93.9 %93.2 %
(1)We own a partial interest in this property through a real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details.
Property Listing (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)
Market / Submarket / Address
RSF
Number of PropertiesAnnual Rental Revenue
Occupancy Percentage
OperatingOperating and Redevelopment
OperatingDevelopmentRedevelopmentTotal
Research Triangle
Research Triangle
Alexandria Center® for AgTech, Phase I – Research Triangle
180,400  160,000  —  340,400  2$5,491  95.2 %95.2 %
5 Laboratory Drive
Alexandria Technology Center® – Alston
186,870  —  —  186,870  33,850  93.7  93.7  
100, 800, and 801 Capitola Drive
108/110/112/114 TW Alexander Drive
158,417  —  —  158,417  14,681  100.0  100.0  
Alexandria Innovation Center® – Research Triangle
136,455  —  —  136,455  34,010  98.0  98.0  
7010, 7020, and 7030 Kit Creek Road
6 Davis Drive
100,000  —  —  100,000  12,126  98.4  98.4  
7 Triangle Drive
96,626  —  —  96,626  13,156  100.0  100.0  
2525 East NC Highway 54
82,996  —  —  82,996  13,651  100.0  100.0  
407 Davis Drive
81,956  —  —  81,956  11,644  100.0  100.0  
601 Keystone Park Drive
77,395  —  —  77,395  11,410  100.0  100.0  
6040 George Watts Hill Drive
61,547  —  —  61,547  12,148  100.0  100.0  
5 Triangle Drive
32,120  —  —  32,120  1479  54.2  54.2  
6101 Quadrangle Drive
30,122  —  —  30,122  1540  100.0  100.0  
Research Triangle
1,224,904  160,000  —  1,384,904  1733,186  96.8  96.8  
Canada
256,967  —  —  256,967  35,717  90.0  90.0  
Non-cluster markets
354,879  —  —  354,879  119,508  70.8  70.8  
North America, excluding properties held for sale
28,616,684  1,561,981  778,472  30,957,137  3011,342,446  94.8 %92.3 %
Properties held for sale
184,621  —  —  184,621  3942  20.3 %20.3 %
Total – North America
28,801,305  1,561,981  778,472  31,141,758  304$1,343,388  
Investments in Real Estate
image671.jpg
June 30, 2020
(Dollars in thousands)

        Our initial 2020 guidance issued on December 3, 2019, for our 2020 construction spending guidance ranges from $1.55 billion to $1.65 billion and reflected a strong outlook for 2020, including continued strong demand for our value-creation development and redevelopment projects.

Our guidance issued on April 27, 2020, reduced the midpoint our 2020 forecasted construction spend guidance from $1.6 billion to $960.0 million. A significant portion of our historical annual construction spend forecast included amounts related to future development projects with no aboveground vertical construction and not committed to a specific tenant. This reduction in our 2020 construction spend guidance was deemed necessary to focus primarily on projects that were partially or fully leased due to the dislocation of capital and other markets caused by COVID-19, including the overall macro and capital market environments.

To address the continuing tenant demand for our development and redevelopment pipeline and existing and anticipated attractive acquisition opportunities, we increased the midpoint our 2020 construction spending guidance range from $960.0 million to $1.35 billion, which is closer to our initial forecast for 2020.

As of July 27, 2020, construction activities were in process at all of our active construction projects with no further delays due to the temporary mandates issued by state or local ordinances arising from the COVID-19 pandemic. Construction workers continue to observe social distancing and follow rules that restrict gatherings of large groups of people in close proximity, as well as adhere to other appropriate measures that may slow the pace of construction.
        
Importantly, upon improvement of market conditions, we have the option, on a project-by-project basis, to address demand for our development and redevelopment projects.

Development and Redevelopment
OperatingUnder ConstructionNear
Term		Intermediate
Term		FutureSubtotalTotal
Investments in real estate
Book value as of June 30, 2020(1)
$16,283,753  $1,290,966  $539,568  $722,317  $382,015  $2,934,866  $19,218,619  
Square footage
Operating28,801,305  —  —  —  —  —  28,801,305  
New Class A development and redevelopment properties—  2,340,453  2,144,353  5,435,186  6,124,302  16,044,294  16,044,294  
Value-creation square feet currently included in rental properties(2)
—  —  —  (975,060) (846,550) (1,821,610) (1,821,610) 
Total square footage
28,801,305  2,340,453  2,144,353  4,460,126  5,277,752  14,222,684  43,023,989  
 

(1)Balances exclude our share of the cost basis associated with our unconsolidated properties, which is classified as investments in unconsolidated real estate joint ventures in our consolidated balance sheets.
(2)Refer to “Investments in real estate” in the “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
New Class A Development and Redevelopment Properties: Current Projects
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June 30, 2020

The Arsenal on the Charles945 Market Street201 Haskins Way
Greater Boston/
Cambridge/Inner Suburbs		San Francisco/Mission Bay/SoMaSan Francisco/South San Francisco
205,690 RSF255,765 RSF315,000 RSF
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Alexandria District for
Science and Technology		3160 Porter Drive
Alexandria Center® –
Long Island City
San Francisco/Greater Stanford San Francisco/Greater StanfordNew York City/New York City
526,178 RSF92,147 RSF140,098 RSF
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New Class A Development and Redevelopment Properties: Current Projects (continued)
image671.jpg
June 30, 2020
9880 Campus Point Drive and
4150 Campus Point Court		9877 Waples Street1165 Eastlake Avenue East
San Diego/University Town CenterSan Diego/Sorrento MesaSeattle/Lake Union
199,621 RSF63,774 RSF100,086 RSF
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9804 Medical Center Drive9950 Medical Center Drive
Alexandria Center® for AgTech
Maryland/RockvilleMaryland/RockvilleResearch Triangle/Research Triangle
176,832 RSF84,264 RSF160,000 RSF
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New Class A Development and Redevelopment Properties: Current Projects (continued)
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June 30, 2020
Property/Market/Submarket
Square FootagePercentage
Dev/RedevIn ServiceCIPTotalLeasedLeased/Negotiating
Initial
Occupancy(1)
Developments and redevelopments under construction
The Arsenal on the Charles/Greater Boston/Cambridge/Inner SuburbsRedev630,598  
(2)
205,690  836,288  75 %89 %2021
945 Market Street/San Francisco/Mission Bay/SoMaRedev—  255,765  255,765  —  —  2020
(3)
201 Haskins Way/San Francisco/South San FranciscoDev—  315,000  315,000  33  33  4Q20-1Q21
Alexandria District for Science and Technology/San Francisco/Greater Stanford
Dev—  526,178  526,178  59  59  4Q20-1Q21
3160 Porter Drive/San Francisco/Greater StanfordRedev—  92,147  92,147  20  20  1H21
Alexandria Center® – Long Island City/New York City/New York City
Redev36,661  140,098  176,759  21  28  4Q20-1Q21
9880 Campus Point Drive and 4150 Campus Point Court/San Diego/
University Town Center(4)
Dev69,481  199,621  269,102  89  91  4Q19
9877 Waples Street/Sorrento Mesa/San Diego
Redev—  63,774  63,774  100  100  2021
1165 Eastlake Avenue East/Seattle/Lake Union
Dev—  100,086  100,086  100  100  4Q20-1Q21
9804 Medical Center Drive/Maryland/RockvilleDev—  176,832  176,832  100  100  2H20
9950 Medical Center Drive/Maryland/RockvilleDev—  84,264  84,264  100  100  2H20
704 Quince Orchard Road/Maryland/Gaithersburg(5)
Redev59,034  20,998  80,032  90  90  4Q18
Alexandria Center® for AgTech/Research Triangle/Research Triangle(6)
Dev180,400  160,000  340,400  50  50  2021
Total
976,174  2,340,453  3,316,627  61 %65 %


(1)Initial occupancy dates are subject to leasing and/or market conditions. Construction disruptions resulting from COVID-19 and observance of social distancing measures may further impact construction and occupancy forecasts and will continue to be monitored closely. Multi-tenant projects may have occupancy by tenants over a period of time. Stabilized occupancy may vary depending on single tenancy versus multi-tenancy.
(2)We expect to redevelop an additional 154,855 RSF of an office space (acquired lease with space in operating RSF) into office/laboratory space upon expiration of the existing leases in the third quarter of 2020 and the first quarter of 2021.
(3)Various options are under evaluation for this property, including ongoing discussion with a company interested in this property. We expect to update the initial occupancy date later this year.
(4)Refer to footnote 2 on the next page.
(5)704 Quince Orchard Road is an unconsolidated real estate joint venture. RSF represents 100%.
(6)The new strategic collaborative agtech campus consists of Phase I at 5 Laboratory Drive, including campus amenities, and Phase II at 9 Laboratory Drive.
New Class A Development and Redevelopment Properties: Current Projects (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)

Our Ownership InterestUnlevered Yields
Property/Market/Submarket
In ServiceCIPCost to CompleteTotal at
Completion		Initial StabilizedInitial Stabilized (Cash Basis)
Developments and redevelopments under construction
The Arsenal on the Charles/Greater Boston/Cambridge/Inner Suburbs100.0 %$428,539  $109,107  TBD
945 Market Street/San Francisco/Mission Bay/SoMa
99.5 %—  197,330  
201 Haskins Way/San Francisco/South San Francisco100.0 %—  211,100  $102,900  $314,000  6.6 %6.5 %
Alexandria District for Science and Technology/San Francisco/Greater Stanford
100.0 %—  368,998  $220,002  $589,000  6.4 %6.1 %
3160 Porter Drive/San Francisco/Greater Stanford
100.0 %—  39,264  TBD
Alexandria Center® – Long Island City/New York City/New York City
100.0 %16,549  98,263  $69,488  $184,300  5.5 %5.6 %
9880 Campus Point Drive and 4150 Campus Point Court/San Diego/
University Town Center(1)
(1)
78,429  58,269  $118,302  $255,000  6.3 %
(2)
6.4 %
(2)
9877 Waples Street/Sorrento Mesa/San Diego
100.0 %—  17,064  $12,136  $29,200  8.6 %7.9 %
1165 Eastlake Avenue East/Seattle/Lake Union
100.0 %—  75,486  $62,514  $138,000  6.5 %
(3)
6.3 %
(3)
9804 Medical Center Drive/Maryland/Rockville100.0 %—  55,498  $39,902  $95,400  7.7 %7.2 %
9950 Medical Center Drive/Maryland/Rockville100.0 %—  34,340  $19,960  $54,300  7.3 %6.8 %
Alexandria Center® for AgTech/Research Triangle/Research Triangle
100.0 %86,015  26,247  TBD
Consolidated projects
609,532  1,290,966  
704 Quince Orchard Road/Maryland/Gaithersburg(4)
56.8 %8,599  2,825  $1,876  $13,300  8.9 %8.8 %
Total $618,131  $1,293,791  


(1)Refer to “Joint venture financial information” in the “Definitions and reconciliations” of this Supplemental Information for additional details.
(2)Represents a two-phase development project as follows:
•Initial phase represents 9880 Campus Point Drive, a 98,000 RSF project to develop Alexandria GradLabs™, a highly flexible, first-of-its-kind life science platform designed to provide post-seed-stage life science companies with turnkey, fully furnished office/laboratory suites and an accelerated, scalable path for growth. As of June 30, 2020, 199,621 RSF and 69,481 RSF are classified in construction in process and in-service, respectively. The R&D building located at 9880 Campus Point Drive was demolished and as of June 30, 2020, continues to be included in our same property performance results. Refer to “Same property comparisons” in the “Definitions and reconciliations” of this Supplemental Information for additional details.
•Subsequent phase represents 4150 Campus Point Court, a 171,102 RSF, 100% leased project undergoing pre-construction, and we expect to commence vertical construction in 1Q21, with occupancy expected in 2022.
•Project costs represent development costs for 9880 Campus Point Drive and 4150 Campus Point Court. Unlevered yields represent expected aggregate returns for Campus Pointe by Alexandria, including 9880, 10290, and 10300 Campus Point Drive and 4150 Campus Point Court.
(3)Unlevered yields represent anticipated aggregate returns for 1165 Eastlake Avenue, an amenity-rich research headquarters for Adaptive Biotechnologies Corporation, and 1208 Eastlake Avenue, an adjacent multi-tenant office/laboratory building.
(4)704 Quince Orchard Road is an unconsolidated real estate joint venture. Cost and yield amounts represent our share.
New Class A Development and Redevelopment Properties: Summary of Pipeline
image671.jpg
June 30, 2020
(Dollars in thousands)


Property/SubmarketOur Ownership InterestBook ValueSquare Footage
Development and Redevelopment
Under ConstructionNear
Term		Intermediate
Term		FutureTotal
Greater Boston
The Arsenal on the Charles/Cambridge/Inner Suburbs100 %$126,156  205,690  —  —  200,000  405,690  
15 Necco Street/Seaport Innovation District98.2 %179,347  —  293,000  —  —  293,000  
215 Presidential Way/Route 128100 %6,613  —  112,000  —  —  112,000  
325 Binney Street/Cambridge100 %116,712  —  —  402,000  —  402,000  
99 A Street/Seaport Innovation District95.9 %42,959  —  —  235,000  —  235,000  
10 Necco Street/Seaport Innovation District100 %88,365  —  —  175,000  —  175,000  
Alexandria Technology Square®/Cambridge
100 %7,881  —  —  —  100,000  100,000  
100 Tech Drive/Route 128100 %—  —  —  —  300,000  300,000  
231 Second Avenue/Route 128100 %1,093  —  —  —  32,000  32,000  
Other value-creation projects100 %9,587  —  —  —  16,955  16,955  
578,713  205,690  405,000  812,000  648,955  2,071,645  
San Francisco
201 Haskins Way/South San Francisco100 %211,100  315,000  —  —  —  315,000  
Alexandria District for Science and Technology/Greater Stanford100 %611,255  526,178  —  587,000  
(1)
700,000  
(1)
1,813,178  
945 Market Street/Mission Bay/SoMa99.5 %197,330  255,765  —  —  —  255,765  
3160 Porter Drive/Greater Stanford100 %39,264  92,147  —  —  —  92,147  
88 Bluxome Street/Mission Bay/SoMa100 %256,334  —  1,070,925  
(2)
—  —  1,070,925  
Alexandria Technology Center® – Gateway/South San Francisco
45.0 %44,025  —  217,000  300,010  
(1)
291,000  808,010  
505 Brannan Street, Phase II/Mission Bay/SoMa99.7 %18,770  —  —  165,000  —  165,000  
3825 and 3875 Fabian Way/Greater Stanford100 %—  —  250,000  
(1)
228,000  
(1)
478,000  
East Grand Avenue/South San Francisco100 %6,112  —  —  —  90,000  90,000  
Other value-creation projects100 %44,096  —  —  191,000  25,000  216,000  
$1,428,286  1,189,090  1,287,925  1,493,010  1,334,000  5,304,025  


(1)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operation at properties that also have inherent future development opportunities, with the intent to demolish the existing property upon expiration of the existing in-place leases and commencement of future construction. Refer to “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
(2)Includes 488,899 RSF pre-leased to Pinterest, Inc., for which we expect demolition of the existing building to commence in January 2021.
New Class A Development and Redevelopment Properties: Summary of Pipeline (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)

Property/SubmarketOur Ownership InterestBook ValueSquare Footage
Development and Redevelopment
Under ConstructionNear
Term		Intermediate
Term		FutureTotal
New York City
Alexandria Center® – Long Island City/New York City
100 %$98,263  140,098  —  —  —  140,098  
Alexandria Center® for Life Science – New York City/New York City
100 %42,157  —  —  550,000  
(1)
—  550,000  
47-50 30th Street/New York City100 %28,497  —  —  135,938  —  135,938  
219 East 42nd Street/New York City100 %—  —  —  —  579,947  
(2)
579,947  
168,917  140,098  —  685,938  579,947  1,405,983  
San Diego
Campus Pointe by Alexandria/University Town Center
(3)
111,126  199,621  —  390,164  
(4)
359,281  
(4)
949,066  
9877 Waples Street/Sorrento Mesa100 %17,064  63,774  —  —  —  63,774  
3115 Merryfield Row/Torrey Pines100 %49,409  —  125,000  —  —  125,000  
SD Tech by Alexandria/Sorrento Mesa
(3)
47,444  —  176,428  
(5)
190,074  388,000  754,502  
10931 and 10933 Torrey Pines Road/Torrey Pines100 %—  —  —  242,000  
(4)
—  242,000  
University District/University Town Center100 %51,559  —  —  600,000  
(4)(6)
—  600,000  
Townsgate by Alexandria/Del Mar Heights100 %21,735  —  —  185,000  —  185,000  
5200 Illumina Way/University Town Center51 %12,302  —  —  —  451,832  451,832  
Vista Wateridge/Sorrento Mesa100 %4,175  —  —  —  163,000  163,000  
4045 and 4075 Sorrento Valley Boulevard/Sorrento Valley100 %7,668  —  —  —  149,000  
(4)
149,000  
Other value-creation projects100 %—  —  —  —  50,000  50,000  
322,482  263,395  301,428  1,607,238  1,561,113  3,733,174  
Seattle
1165 Eastlake Avenue East/Lake Union100 %75,486  100,086  —  —  —  100,086  
1150 Eastlake Avenue East/Lake Union100 %41,687  —  —  260,000  —  260,000  
701 Dexter Avenue North/Lake Union100 %47,081  —  —  217,000  —  217,000  
601 Dexter Avenue North/Lake Union100 %33,787  —  —  —  188,400  
(4)
188,400  
Other value-creation projects100 %53,877  —  —  —  579,825  579,825  
$251,918  100,086  —  477,000  768,225  1,345,311  
(1)We have been negotiating a long-term ground lease for the future site of a new building approximating 550,000 RSF. Beginning in March 2020, due to the impacts of COVID-19 on New York City, the City has been using the site as a temporary morgue. The use of this site by the City has resulted in delays to deadlines for both ground lease negotiations and ultimately the timing to commence and complete key milestone construction dates.
(2)Includes 349,947 RSF in operation with an opportunity to either convert the existing office space into office/laboratory space through future redevelopment or to expand the building by an additional 230,000 RSF through ground-up development. The building is currently occupied by Pfizer Inc. with a remaining lease term of approximately five years.
(3)Refer to “Joint venture financial information” of this Supplemental Information for additional details on our ownership interest.
(4)Represents total square footage upon completion of development of a new Class A property. Square footage presented includes RSF of buildings currently in operation at properties that also have inherent future development opportunities. We intend to demolish the existing property upon expiration of the existing in-place leases and commencement of future construction. Refer to “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
(5)During the three months ended June 30, 2020, we pre-leased 59% of this project and expect to commence construction over the next six to eight months.
(6)Includes our recently acquired project at 4555 Executive Drive and 9363 and 9393 Towne Centre Drive in our University Town Center submarket, which are currently under evaluation for development, subject to future market conditions.
New Class A Development and Redevelopment Properties: Summary of Pipeline (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)

Property/SubmarketOur Ownership InterestBook ValueSquare Footage
Development and Redevelopment
Under ConstructionNear
Term		Intermediate
Term		FutureTotal
Maryland
704 Quince Orchard Road/Gaithersburg
56.8 %$—  
(1)
20,998  —  —  —  20,998  
9804 and 9800 Medical Center Drive/Rockville
100.0 %56,905  176,832  —  —  64,000  240,832  
9950 Medical Center Drive/Rockville100.0 %34,340  84,264  —  —  —  84,264  
14200 Shady Grove Road/Rockville100.0 %27,285  —  —  290,000  145,000  435,000  
118,530  282,094  —  290,000  209,000  781,094  
Research Triangle
Alexandria Center® for AgTech, Phase II/Research Triangle
100 %26,247  160,000  —  —  —  160,000  
8 Davis Drive/Research Triangle100 %15,985  —  150,000  70,000  —  220,000  
6 Davis Drive/Research Triangle100 %15,761  —  —  —  800,000  800,000  
Other value-creation projects100 %4,185  —  —  —  76,262  76,262  
62,178  160,000  150,000  70,000  876,262  1,256,262  
Other value-creation projects100 %3,842  —  —  —  146,800  146,800  
Total
2,934,866  2,340,453  2,144,353  5,435,186  6,124,302  16,044,294  
(2)
Key pending acquisition
Mercer Mega Block/Lake Union
(3)
(3)
—  —  —  800,000  800,000  
—  —  —  —  800,000  800,000  
$2,934,866  2,340,453  2,144,353  5,435,186  6,924,302  16,844,294  


(1)This property is held by an unconsolidated real estate joint venture. Refer to “Joint venture financial information” of this Supplemental Information for additional details on our ownership interest.
(2)Total square footage includes 1,821,610 RSF of buildings currently in operation that will be redeveloped or replaced with new development RSF upon commencement of future construction. Refer to “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
(3)Refer to “Acquisitions” in our Earnings Press Release for additional details.
Construction Spending
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June 30, 2020
(Dollars in thousands, except per RSF amounts)

Six Months Ended
Construction SpendingJune 30, 2020
Additions to real estate – consolidated projects
$725,742  
Investments in unconsolidated real estate joint ventures2,861  
Contributions from noncontrolling interests(5,704) 
Construction spending (cash basis)722,899  
Change in accrued construction(56,497) 
Construction spending for the six months ended June 30, 2020
666,402  
Projected construction spending for the six months ending December 31, 2020683,598  
Guidance midpoint$1,350,000  

Year Ending
Projected Construction SpendingDecember 31, 2020
Development, redevelopment, and pre-construction projects$1,170,000  
Contributions from noncontrolling interests (consolidated real estate joint ventures)
(20,000) 
Revenue-enhancing and repositioning capital expenditures
144,000  
Non-revenue-enhancing capital expenditures
56,000  
Guidance midpoint
$1,350,000  


Joint Venture Financial Information
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June 30, 2020
(Dollars in thousands)

Consolidated Real Estate Joint VenturesUnconsolidated Real Estate Joint Ventures
Property/Market/Submarket
Noncontrolling
Interest Share(1)
Property/Market/Submarket
Our Ownership Share(2)
225 Binney Street/Greater Boston/Cambridge
70.0 %
1655 and 1725 Third Street/San Francisco/Mission Bay/SoMa
10.0 %
75/125 Binney Street/Greater Boston/Cambridge
60.0 %
Menlo Gateway/San Francisco/Greater Stanford
49.0 %
409 and 499 Illinois Street/San Francisco/Mission Bay/SoMa40.0 %704 Quince Orchard Road/Maryland/Gaithersburg56.8 %
(3)
1500 Owens Street/San Francisco/Mission Bay/SoMa49.9 %
Alexandria Technology Center® – Gateway/San Francisco/South San Francisco(4)
55.0 %
500 Forbes Boulevard/San Francisco/South San Francisco90.0 %
Campus Pointe by Alexandria/San Diego/University Town Center(5)
45.0 %
5200 Illumina Way/San Diego/University Town Center49.0 %
9625 Towne Centre Drive/San Diego/University Town Center
49.9 %
SD Tech by Alexandria/San Diego/Sorrento Mesa(6)
50.0 %
(1)In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in six other joint ventures in North America.
(2)In addition to the unconsolidated real estate joint ventures listed, we hold an interest in two other insignificant unconsolidated real estate joint ventures in North America.
(3)Represents our ownership interest; our voting interest is limited to 50%.
(4)Excludes 600, 630, 650, 901, and 951 Gateway Boulevard in our South San Francisco submarket. Noncontrolling interest share is anticipated to be 49% as we make further contributions over time.
(5)Excludes 9880 Campus Point Drive in our University Town Center submarket.
(6)Excludes 5505 Morehouse Drive in our Sorrento Mesa submarket.
As of June 30, 2020
Noncontrolling Interest Share of Consolidated Real Estate JVsOur Share of Unconsolidated
Real Estate JVs
Investments in real estate$1,491,601  $459,843  
Cash, cash equivalents, and restricted cash48,327  9,338  
Other assets168,342  49,503  
Secured notes payable (refer to page 49)
—  (186,254) 
Other liabilities(70,734) (5,572) 
Redeemable noncontrolling interests
(12,122) —  
$1,625,414  $326,858  
Noncontrolling Interest Share of
Consolidated Real Estate JVs		Our Share of Unconsolidated
Real Estate JVs
June 30, 2020June 30, 2020
Three Months EndedSix Months EndedThree Months EndedSix Months Ended
Total revenues$39,869  $77,646  $10,011  $20,655  
Rental operations(10,302) (20,397) (1,199) (2,617) 
29,567  57,249  8,812  18,038  
General and administrative(102) (219) (50) (134) 
Interest—  —  (2,011) (3,982) 
Depreciation and amortization(15,775) (31,645) (2,858) (5,501) 
Impairment of real estate—  —  —  (7,644) 
Fixed returns allocated to redeemable noncontrolling interests(1)
217  435  —  —  
$13,907  $25,820  $3,893  $777  
Straight-line rent and below-market lease revenue
$1,274  $3,236  $5,698  $11,551  
Funds from operations(2)
$29,682  $57,465  $6,751  $13,922  
(1)Represents an allocation of joint venture earnings to redeemable noncontrolling interests primarily in one property in our South San Francisco submarket. These redeemable noncontrolling interests earn a fixed return on their investment rather than participate in the operating results of the property.
(2)Refer to “Funds from operations and funds from operations per share” in our Earnings Press Release and “Funds from operations and funds from operations, as adjusted, attributable to Alexandria’s common stockholders” in “Definitions and reconciliations” in this Supplemental Information for the definition and reconciliation from the most directly comparable GAAP measure.
Investments
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June 30, 2020
(Dollars in thousands)

        
        We present our equity investments at fair value whenever fair value or net asset value (“NAV”) is readily available. Adjustments for our limited partnership investments represent changes in reported NAV as a practical expedient to estimate fair value. For investments without readily available fair values, we adjust the carrying amount whenever such investments have an observable price change, and further adjustments are not made until another price change, if any, is observed. Refer to “Investments” in the “Definitions and reconciliations” of this Supplemental Information for additional details.

June 30, 2020
Three Months EndedSix Months EndedYear Ended December 31, 2019
Realized gains$13,005  
(1)
$8,328  
(1)
$33,158  
(2)
Unrealized gains171,652  154,508  161,489  
Investment income$184,657  $162,836  $194,647  
InvestmentsCostUnrealized
Gains		Carrying Amount
Fair value:
Publicly traded companies
$159,129  $262,841  
(3)
$421,970  
Entities that report NAV
302,954  218,602  521,556  
Entities that do not report NAV:
Entities with observable price changes
48,565  74,708  123,273  
Entities without observable price changes
251,666  —  251,666  
June 30, 2020$762,314  
(4)
$556,151  $1,318,465  
March 31, 2020$738,983  $384,499  $1,123,482  

(1)Includes realized gains for the three and six months ended June 30, 2020, of $17.7 million and $32.8 million, respectively, and impairments related to investments in privately held entities that do not report NAV of $4.7 million and $24.5 million, respectively.
(2)Includes realized gains of $50.3 million and impairments related to investments in privately held entities that do not report NAV of $17.1 million for the year ended December 31, 2019.
(3)Includes gross unrealized gains and losses of $279.7 million and $16.9 million, respectively, as of June 30, 2020.
(4)Represents 3.3% of gross assets as of June 30, 2020.

Public/Private
Mix (Cost)
q220pubprivmixv111.jpg
Tenant/Non-Tenant
Mix (Cost)
q220tenantmixv111.jpg
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Key Credit Metrics
June 30, 2020

LiquiditySignificant Availability on Unsecured Senior Lines of Credit
(in millions)
$4.2B
q220lineofcreditv411.jpg
(in millions)
Availability under our unsecured senior lines of credit$2,510  
Outstanding forward equity sales agreements(1)
520  
Cash, cash equivalents, and restricted cash242  
Investments in publicly traded companies422  
Liquidity as of June 30, 20203,694  
Outstanding forward equity sales agreements(2)
532  
Total$4,226  
Net Debt and Preferred Stock to Adjusted EBITDA(4)
Fixed-Charge Coverage Ratio(4)
q220netdebtpreferredv211.jpg
q220fixedchargev211.jpg
(1)Represents expected net proceeds from the future settlement of the remaining 3.5 million shares outstanding under our January 2020 forward equity sales agreements.
(2)Represents expected net proceeds from the future settlement of 6.9 million shares outstanding under our July 2020 forward equity sales agreements, net of the reduction in availability for borrowing under our $750 million unsecured senior line of credit. Pursuant to the terms of the $750 million unsecured senior line of credit agreement, the outstanding commitments will be reduced in the future by 50% of the net proceeds from any equity offerings entered into subsequent to the execution of this line of credit in April 2020. As of July 27, 2020, none of our forward equity sales agreements entered into in July 2020 have been settled.
(3)Total outstanding availability on our unsecured senior lines of credit reduced by the expected net proceeds from the future settlement of 6.9 million shares outstanding under our July 2020 forward equity sales agreements.
(4)Quarter annualized.
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Summary of Debt
June 30, 2020

Debt maturities chart
(In millions)


Weighted-Average Remaining Term of 9.9 Years
q220debtmaturitiesv41.jpg

Summary of Debt (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)

Fixed-rate and variable-rate debtFixed-Rate
Debt		Variable-Rate DebtTotalPercentageWeighted-Average
Interest Rate(1)
Remaining Term
(in years)
Secured notes payable$344,784  $—  $344,784  4.6 %3.57 %3.5
Unsecured senior notes payable6,738,486  —  6,738,486  89.6  4.10  10.6
Unsecured senior lines of credit(2)
—  440,000  440,000  5.8  1.33  3.6
Total/weighted average$7,083,270  $440,000  $7,523,270  100.0 %3.91 %9.9
Percentage of total debt94 %6 %100 %
(1)Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to the amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
(2)Includes our commercial paper program, which had no outstanding balance as of June 30, 2020.

Debt covenantsUnsecured Senior Notes PayableUnsecured Senior Lines of Credit
Debt Covenant Ratios(1)
RequirementJune 30, 2020RequirementJune 30, 2020
Total Debt to Total Assets≤ 60%34%≤ 60.0%30.7%
Secured Debt to Total Assets≤ 40%2%≤ 45.0%1.4%
Consolidated EBITDA to Interest Expense≥ 1.5x6.9x≥ 1.50x3.77x
Unencumbered Total Asset Value to Unsecured Debt≥ 150%273%N/AN/A
Unsecured Interest Coverage RatioN/AN/A≥ 1.75x5.98x
(1)All covenant ratio titles utilize terms as defined in the respective debt and credit agreements. EBITDA is not calculated pursuant to the definition set forth by the SEC in Exchange Act Release No. 47226.


Unconsolidated real estate joint ventures’ debt
Unconsolidated Joint VentureOur ShareMaturity DateStated Rate
Interest Rate(1)
100% at JV Level
Debt Balance(2)
704 Quince Orchard Road56.8%3/16/23L+1.95%2.40%$11,602  
1655 and 1725 Third Street
10.0%3/10/254.50%4.57%598,020  
Menlo Gateway, Phase II
49.0%5/1/354.53%4.59%106,580  
Menlo Gateway, Phase I
49.0%8/10/354.15%4.18%140,843  
$857,045  
(1)Includes interest expense and amortization of loan fees.
(2)Represents outstanding principal, net of unamortized deferred financing costs, as of June 30, 2020.

Summary of Debt (continued)
image671.jpg
June 30, 2020
(Dollars in thousands)

DebtStated 
Rate
Interest
Rate(1)
Maturity
Date(2)
Principal Payments Remaining for the Periods Ending December 31,PrincipalUnamortized (Deferred Financing Cost), (Discount)/Premium Total
20202021202220232024Thereafter
Secured notes payable
San Diego
4.66 %4.90 %1/1/23$893  $1,852  $1,942  $26,259  $—  $—  $30,946  $(164) $30,782  
Greater Boston
3.93 %3.19  3/10/23790  1,628  1,693  74,517  —  —  78,628  1,503  80,131  
Greater Boston
4.82 %3.40  2/6/241,623  3,394  3,564  3,742  183,527  —  195,850  9,688  205,538  
San Francisco
4.14 %4.42  7/1/26—  —  —  —  —  28,200  28,200  (595) 27,605  
San Francisco
6.50 %6.50  7/1/3625  26  28  30  32  587  728  —  728  
Secured debt weighted-average interest rate/subtotal
4.55 %3.57  3,331  6,900  7,227  104,548  183,559  28,787  334,352  10,432  344,784  
Commercial paper program(3)
N/AN/A
(3)
N/A—  —  —  —  —  —  —  —  —  
$750 million unsecured senior line of credit(4)
L+1.05 %N/A
(4)
4/14/22—  —  —  —  —  —  —  —  —  
$2.2 billion unsecured senior line of credit
L+0.825 %1.33  1/28/24—  —  —  —  440,000  —  440,000  —  440,000  
Unsecured senior notes payable
3.90 %4.04  6/15/23—  —  —  500,000  —  —  500,000  (1,769) 498,231  
Unsecured senior notes payable – green bond
4.00 %4.03  1/15/24—  —  —  —  650,000  —  650,000  (449) 649,551  
Unsecured senior notes payable
3.45 %3.62  4/30/25—  —  —  —  —  600,000  600,000  (4,236) 595,764  
Unsecured senior notes payable
4.30 %4.50  1/15/26—  —  —  —  —  300,000  300,000  (2,704) 297,296  
Unsecured senior notes payable – green bond
3.80 %3.96  4/15/26—  —  —  —  —  350,000  350,000  (2,840) 347,160  
Unsecured senior notes payable
3.95 %4.13  1/15/27—  —  —  —  —  350,000  350,000  (3,308) 346,692  
Unsecured senior notes payable
3.95 %4.07  1/15/28—  —  —  —  —  425,000  425,000  (3,194) 421,806  
Unsecured senior notes payable
4.50 %4.60  7/30/29—  —  —  —  —  300,000  300,000  (2,017) 297,983  
Unsecured senior notes payable
2.75 %2.87  12/15/29—  —  —  —  —  400,000  400,000  (3,889) 396,111  
Unsecured senior notes payable
4.70 %4.81  7/1/30—  —  —  —  —  450,000  450,000  (3,719) 446,281  
Unsecured senior notes payable
4.90 %5.05  12/15/30—  —  —  —  —  700,000  700,000  (8,230) 691,770  
Unsecured senior notes payable
3.38 %3.48  8/15/31—  —  —  —  —  750,000  750,000  (7,212) 742,788  
Unsecured senior notes payable
4.85 %4.93  4/15/49—  —  —  —  —  300,000  300,000  (3,389) 296,611  
Unsecured senior notes payable
4.00 %3.91  2/1/50—  —  —  —  —  700,000  700,000  10,442  710,442  
Unsecured debt weighted average/subtotal
3.93  —  —  —  500,000  1,090,000  5,625,000  7,215,000  (36,514) 7,178,486  
Weighted-average interest rate/total
3.91 %$3,331  $6,900  $7,227  $604,548  $1,273,559  $5,653,787  $7,549,352  $(26,082) $7,523,270  
Balloon payments
$—  $—  $—  $600,487  $1,273,221  $5,653,200  $7,526,908  $—  $7,526,908  
Principal amortization
3,331  6,900  7,227  4,061  338  587  22,444  (26,082) (3,638) 
Total debt$3,331  $6,900  $7,227  $604,548  $1,273,559  $5,653,787  $7,549,352  $(26,082) $7,523,270  
Fixed-rate/hedged variable-rate debt
$3,331  $6,900  $7,227  $604,548  $833,559  $5,653,787  $7,109,352  $(26,082) $7,083,270  
Unhedged variable-rate debt
—  —  —  —  440,000  —  440,000  —  440,000  
Total debt
$3,331  $6,900  $7,227  $604,548  $1,273,559  $5,653,787  $7,549,352  $(26,082) $7,523,270  
Weighted-average stated rate on maturing debt
N/AN/AN/A3.94%3.09%4.01%
(1)Represents the weighted-average interest rate as of the end of the applicable period, including amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
(2)Reflects any extension options that we control.
(3)Under our commercial paper program, we have the ability to issue up to $1.0 billion. This program provides us with the ability to issue commercial paper notes bearing interest at short-term fixed rates, generally with a maturity of 30 days or less and with a maximum maturity of 397 days from the date of issuance. Borrowings under the program will be used to fund short-term capital needs and are backed by our $2.2 billion unsecured senior line of credit. In the event we are unable to issue commercial paper notes or refinance outstanding commercial paper notes under terms equal to or more favorable than those under the $2.2 billion unsecured senior line of credit, we expect to borrow under the $2.2 billion unsecured senior line of credit at L+0.825%. The commercial paper notes sold during the three months ended June 30, 2020, were issued at a weighted-average yield to maturity of 0.79%.
(4)During the three months ended June 30, 2020, we did not draw on our $750 million unsecured senior line of credit. Pursuant to the terms of the $750 million unsecured senior line of credit agreement, the outstanding commitments will be reduced by 100% of net proceeds from the issuance of new corporate debt and 50% of the net proceeds from the settlement of our forward equity sales agreements entered into in July 2020. As of July 27, 2020, none of our forward equity sales agreements entered into in July 2020 have been settled.
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Definitions and Reconciliations
June 30, 2020


This section contains additional details for sections throughout this Supplemental Information package and the accompanying Earnings Press Release, as well as explanations and reconciliations of certain non-GAAP financial measures and the reasons why we use these supplemental measures of performance and believe they provide useful information to investors. Additional detail can be found in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Adjusted EBITDA and Adjusted EBITDA margin
 
The following table reconciles net income (loss) and revenues, the most directly comparable financial measures calculated and presented in accordance with GAAP, to Adjusted EBITDA and revenues, as adjusted, respectively:
 
Three Months Ended
(Dollars in thousands)
6/30/203/31/2012/31/199/30/196/30/19
Net income (loss)$243,561  $30,678  $216,053  $(36,003) $87,179  
Interest expense
45,014  45,739  45,493  46,203  42,879  
Income taxes
1,406  1,341  1,269  887  890  
Depreciation and amortization168,027  175,496  140,518  135,570  134,437  
Stock compensation expense
9,185  9,929  10,239  10,935  11,437  
Loss on early extinguishment of debt
—  —  —  40,209  —  
Gain on sales of real estate
—  —  (474) —  —  
Unrealized (gains) losses on non-real estate investments
(171,652) 17,144  (148,268) 70,043  (11,058) 
Impairment of real estate
13,218  9,647  12,334  —  —  
Impairment of non-real estate investments
4,702  19,780  9,991  7,133  —  
Adjusted EBITDA
$313,461  $309,754  $287,155  $274,977  $265,764  
Revenues
$436,956  $439,919  $408,114  $390,484  $373,856  
Non-real estate investments – total realized gains (losses)
13,005  (4,677) 4,399  6,967  10,442  
Impairment of non-real estate investments
4,702  19,780  9,991  7,133  —  
Revenues, as adjusted
$454,663  $455,022  $422,504  $404,584  $384,298  
Adjusted EBITDA margin
69%68%68%68%69%

        We use Adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization (“EBITDA”), excluding stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, and impairments of real estate. Adjusted EBITDA also excludes unrealized gains or losses and significant realized gains and impairments that result from our non-real estate investments. These non-real estate investment amounts are classified in our consolidated statements of operations outside of revenues.

        We believe Adjusted EBITDA provides investors with relevant and useful information as it allows investors to evaluate the operating performance of our business activities without having to account for differences recognized because of real estate and non-real estate investment and disposition decisions, financing decisions, capital structure, capital market transactions, and variances resulting from the volatility of market conditions outside of our control. For example, we exclude gains or losses on the early extinguishment of debt to allow investors to measure our performance independent
of our indebtedness and capital structure. We believe that adjusting for the effects of impairments and gains or losses on sales of real estate, and significant impairments and significant gains on the sale of non-real estate investments allows investors to evaluate performance from period to period on a consistent basis without having to account for differences recognized because of real estate and non-real estate investment and disposition decisions. We believe that excluding charges related to stock compensation and unrealized gains or losses facilitates for investors a comparison of our business activities across periods without the volatility resulting from market forces outside of our control. Adjusted EBITDA has limitations as a measure of our performance. Adjusted EBITDA does not reflect our historical expenditures or future requirements for capital expenditures or contractual commitments. While Adjusted EBITDA is a relevant measure of performance, it does not represent net income (loss) or cash flows from operations calculated and presented in accordance with GAAP, and it should not be considered as an alternative to those indicators in evaluating performance or liquidity.

        Our calculation of Adjusted EBITDA margin divides Adjusted EBITDA by our revenues, as adjusted. We believe that revenues, as adjusted, provides a denominator for Adjusted EBITDA margin that is calculated on a basis more consistent with that of the Adjusted EBITDA numerator. Specifically, revenues, as adjusted, includes the same realized gains on, and impairments of, non-real estate investments that are included in the reconciliation of Adjusted EBITDA. We believe that the consistent application of results from our non-real estate investments to both the numerator and denominator of Adjusted EBITDA margin provides a more useful calculation for the comparison across periods.

Annual rental revenue

Annual rental revenue represents the annualized fixed base rental obligations, calculated in accordance with GAAP, for leases in effect as of the end of the period, related to our operating RSF. Annual rental revenue is presented using 100% of the annual rental revenue of our consolidated properties and our share of annual rental revenue for our unconsolidated real estate joint ventures. Annual rental revenue per RSF is computed by dividing annual rental revenue by the sum of 100% of the RSF of our consolidated properties and our share of the RSF of properties held in unconsolidated real estate joint ventures. As of June 30, 2020, approximately 93% of our leases (on an RSF basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Annual rental revenue excludes these operating expenses recovered from our tenants. Amounts recovered from our tenants related to these operating expenses, along with base rent, are classified in income from rentals in our consolidated statements of operations.

Cash interest

        Cash interest is equal to interest expense calculated in accordance with GAAP plus capitalized interest, less amortization of loan fees and debt premiums (discounts). Refer to the definition of fixed-charge coverage ratio for a reconciliation of interest expense, the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest.
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Definitions and Reconciliations (continued)
June 30, 2020

Class A properties and AAA locations

        Class A properties are properties clustered in AAA locations that provide 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. Class A properties generally command higher annual rental rates than other classes of similar properties.

        AAA locations are in close proximity to concentrations of specialized skills, knowledge, institutions, and related businesses. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space.

Development, redevelopment, and pre-construction

        A key component of our business model is our disciplined allocation of capital to the development and redevelopment of new Class A properties, and property enhancements identified during the underwriting of certain acquired properties, located in collaborative life science, technology, and agtech campuses in AAA urban innovation clusters. These projects are generally focused on providing high-quality, generic, and reusable spaces that meet the real estate requirements of, and are reusable by, a wide range of tenants. Upon completion, each value-creation project is expected to generate a significant increase in rental income, net operating income, and cash flows. Our development and redevelopment projects are generally in locations that are highly desirable to high-quality entities, which we believe results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

        Development projects generally consist of the ground-up development of generic and reusable facilities. Redevelopment projects consist of the permanent change in use of office, warehouse, and shell space into office/laboratory, tech office, or agtech space. We generally will not commence new development projects for aboveground construction of new Class A office/laboratory, tech office, and agtech space without first securing significant pre-leasing for such space, except when there is solid market demand for high-quality Class A properties.

        Pre-construction activities include entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building improvements. The advancement of pre-construction efforts is focused on reducing the time required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of buildings. Ultimately, these projects will provide high-quality facilities and are expected to generate significant revenue and cash flows.

Development, redevelopment, and pre-construction spending also includes the following costs: (i) certain tenant improvements and renovations that will be reimbursed, (ii) amounts to bring certain acquired properties up to market standard and/or other costs identified during the acquisition process (generally within two years of acquisition), and (iii) permanent conversion of space for highly flexible, move-in-ready office/laboratory space to foster the growth of promising early- and growth-stage life science companies.

Revenue-enhancing and repositioning capital expenditures represent spending to reposition or significantly change the use of property, including through improvement in the asset quality from Class B to Class A.

Non-revenue-enhancing capital expenditures represent costs required to maintain the current revenues of a stabilized property, including the associated costs for renewed and re-leased space.
Dividend payout ratio (common stock)

Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (shares of common stock outstanding on the respective record dates multiplied by the related dividend per share) to funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted.

Dividend yield

Dividend yield for the quarter represents the annualized quarter dividend divided by the closing common stock price at the end of the quarter.

Fixed-charge coverage ratio

Fixed-charge coverage ratio is a non-GAAP financial measure representing the ratio of Adjusted EBITDA to fixed charges. We believe this ratio is useful to investors as a supplemental measure of our ability to satisfy fixed financing obligations and preferred stock dividends. Cash interest is equal to interest expense calculated in accordance with GAAP plus capitalized interest, less amortization of loan fees and debt premiums (discounts).

The following table reconciles interest expense, the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest and fixed charges:
 Three Months Ended
(Dollars in thousands)6/30/203/31/2012/31/199/30/196/30/19
Adjusted EBITDA$313,461  $309,754  $287,155  $274,977  $265,764  
Interest expense
$45,014  $45,739  $45,493  $46,203  $42,879  
Capitalized interest30,793  24,680  23,822  24,558  21,674  
Amortization of loan fees(2,737) (2,247) (2,241) (2,251) (2,380) 
Amortization of debt premiums
888  888  907  1,287  782  
Cash interest
73,958  69,060  67,981  69,797  62,955  
Dividends on preferred stock
—  —  —  1,173  1,005  
Fixed charges
$73,958  $69,060  $67,981  $70,970  $63,960  
Fixed-charge coverage ratio:
– quarter annualized4.2x4.5x4.2x3.9x4.2x
– trailing 12 months4.2x4.2x4.2x4.1x4.2x
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Definitions and Reconciliations (continued)
June 30, 2020

Funds from operations and funds from operations, as adjusted, attributable to Alexandria’s common stockholders

        GAAP-basis accounting for real estate assets utilizes historical cost accounting and assumes that real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Nareit Board of Governors established funds from operations as an improved measurement tool. Since its introduction, funds from operations has become a widely used non-GAAP financial measure among equity REITs. We believe that funds from operations is helpful to investors as an additional measure of the performance of an equity REIT. Moreover, we believe that funds from operations, as adjusted, allows investors to compare our performance to the performance of other real estate companies on a consistent basis, without having to account for differences recognized because of real estate investment and disposition decisions, financing decisions, capital structure, capital market transactions, and variances resulting from the volatility of market conditions outside of our control. On January 1, 2019, we adopted standards established by the Nareit Board of Governors in its November 2018 White Paper (the “Nareit White Paper”) on a prospective basis. The Nareit White Paper defines funds from operations as net income (computed in accordance with GAAP), excluding gains or losses on sales of real estate, and impairments of real estate, plus depreciation and amortization of operating real estate assets, and after adjustments for our share of consolidated and unconsolidated partnerships and real estate joint ventures. Impairments represent the write-down of assets when fair value over the recoverability period is less than the carrying value due to changes in general market conditions and do not necessarily reflect the operating performance of the properties during the corresponding period.

        We compute funds from operations, as adjusted, as funds from operations calculated in accordance with the Nareit White Paper, excluding significant gains, losses, and impairments realized on non-real estate investments, unrealized gains or losses on non-real estate investments, gains or losses on early extinguishment of debt, gains or losses on early termination of interest rate hedge agreements, preferred stock redemption charges, deal costs, the income tax effect related to such items, and the amount of such items that is allocable to our unvested restricted stock awards. Neither funds from operations nor funds from operations, as adjusted, should be considered as alternatives to net income (determined in accordance with GAAP) as indications of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as measures of liquidity, nor are they indicative of the availability of funds for our cash needs, including our ability to make distributions.

        The following table reconciles net income to funds from operations for the share of consolidated real estate joint ventures attributable to noncontrolling interests and our share of unconsolidated real estate joint ventures:
Noncontrolling Interest Share of Consolidated Real Estate JVsOur Share of Unconsolidated
Real Estate JVs
June 30, 2020June 30, 2020
(In thousands)Three Months EndedSix Months EndedThree Months EndedSix Months Ended
Net income$13,907  $25,820  $3,893  $777  
Depreciation and amortization
15,775  31,645  2,858  5,501  
Impairment of real estate
—  —  —  7,644  
Funds from operations$29,682  $57,465  $6,751  $13,922  
        
Initial stabilized yield (unlevered)
        Initial stabilized yield is calculated as the estimated amounts of net operating income at stabilization divided by our investment in the property. Our initial stabilized yield excludes the benefit of leverage. Our cash rents related to our value-creation projects are generally expected to increase over time due to contractual annual rent escalations. Our estimates for initial stabilized yields, initial stabilized yields (cash basis), and total costs at completion represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.
•Initial stabilized yield reflects rental income, including contractual rent escalations and any rent concessions over the term(s) of the lease(s), calculated on a straight-line basis.
•Initial stabilized yield (cash basis) reflects cash rents at the stabilization date after initial rental concessions, if any, have elapsed and our total cash investment in the property.

Investment-grade or publicly traded large cap tenants

        Investment-grade or publicly traded large cap tenants represent tenants that are investment-grade rated or publicly traded companies with an average daily market capitalization greater than $10 billion for the twelve months ended June 30, 2020, as reported by Bloomberg Professional Services. In addition, we monitor the credit quality and related material changes of our tenants. Material changes that cause a tenant’s market capitalization to decline below $10 billion, which are not immediately reflected in the twelve-month average, may result in their exclusion from this measure.

Investments

        We hold investments in publicly traded companies and privately held entities primarily involved in the life science, technology, and agtech industries. We recognize, measure, present, and disclose these investments as follows:
Statements of Operations
Balance SheetGains and Losses
Carrying AmountUnrealizedRealized
Difference between proceeds received upon disposition and historical cost
Publicly traded companies
Fair valueChanges in fair value
Privately held entities without readily determinable fair values that:
Report NAVFair value, using NAV as a practical expedientChanges in NAV, as a practical expedient to fair value
Do not report NAVCost, adjusted for observable price changes and impairmentsObservable price changesImpairments to reduce costs to fair value, which result in an adjusted cost basis and the differences between proceeds received upon disposition and adjusted or historical cost
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Definitions and Reconciliations (continued)
June 30, 2020

For investments in privately held entities that do not report NAV per share, an observable price is a price observed in an orderly transaction for an identical or similar investment of the same issuer. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold.

Investments in real estate

The following table reconciles our investments in real estate as of June 30, 2020:
(In thousands)Investments in Real Estate
Gross investments in real estate$19,218,619  
Less: accumulated depreciation(2,967,150) 
Net investments in real estate – North America16,251,469  
Net investments in real estate – Asia29,656  
Investments in real estate$16,281,125  
        
The following table represents RSF of buildings in operation as of June 30, 2020, that will be redeveloped or replaced with new development RSF upon commencement of future construction:
Property/SubmarketRSF
Intermediate-term projects:
651 Gateway Boulevard/South San Francisco300,010  
3825 Fabian Way/Greater Stanford250,000  
960 Industrial Road/Greater Stanford110,000  
10931 and 10933 North Torrey Pines Road/Torrey Pines92,450  
10260 Campus Point Drive/University Town Center109,164  
9363 and 9393 Towne Centre Drive/University Town Center71,961  
4555 Executive Drive/University Town Center41,475  
975,060  
Future projects:
3875 Fabian Way/Greater Stanford228,000  
987 and 1075 Commercial Street/Greater Stanford26,738  
219 East 42nd Street/New York City349,947  
4161 Campus Point Court/University Town Center159,884  
4110 Campus Point Court/University Town Center12,375  
4075 Sorrento Valley Boulevard/Sorrento Valley40,000  
4045 Sorrento Valley Boulevard/Sorrento Valley10,926  
601 Dexter Avenue North/Lake Union18,680  
846,550  
Total value-creation RSF currently included in rental properties1,821,610  
Joint venture financial information

We present components of balance sheet and operating results information related to our real estate joint ventures, which are not presented, or intended to be presented, in accordance with GAAP. We present the proportionate share of certain financial line items as follows: (i) for each real estate joint venture that we consolidate in our financial statements, which are controlled by us through contractual rights or majority voting rights, but of which we own less than 100%, we apply the noncontrolling interest economic ownership percentage to each financial item to arrive at the amount of such cumulative noncontrolling interest share of each component presented; and (ii) for each real estate joint venture that we do not control and do not consolidate, and are instead controlled jointly or by our joint venture partners through contractual rights or majority voting rights, we apply our economic ownership percentage to each financial item to arrive at our proportionate share of each component presented.

The components of balance sheet and operating results information related to our real estate joint ventures do not represent our legal claim to those items. For each entity that we do not wholly own, the joint venture agreement generally determines what equity holders can receive upon capital events, such as sales or refinancing, or in the event of a liquidation. Equity holders are normally entitled to their respective legal ownership of any residual cash from a joint venture only after all liabilities, priority distributions, and claims have been repaid or satisfied.

We believe this information can help investors estimate the balance sheet and operating results information related to our partially owned entities. Presenting this information provides a perspective not immediately available from consolidated financial statements and one that can supplement an understanding of the joint venture assets, liabilities, revenues, and expenses included in our consolidated results.

The components of balance sheet and operating results information related to our real estate joint ventures are limited as an analytical tool as the overall economic ownership interest does not represent our legal claim to each of our joint ventures’ assets, liabilities, or results of operations. In addition, joint venture financial information may include financial information related to the unconsolidated real estate joint ventures that we do not control. We believe that in order to facilitate for investors a clear understanding of our operating results and our total assets and liabilities, joint venture financial information should be examined in conjunction with our consolidated statements of operations and balance sheets. Joint venture financial information should not be considered an alternative to our consolidated financial statements, which are prepared in accordance with GAAP.

Key items included in net income attributable to Alexandria’s common stockholders

We present a tabular comparison of items, whether gain or loss, that may facilitate a high-level understanding of our results and provide context for the disclosures included in this Supplemental Information, our most recent annual report on Form 10-K, and our subsequent quarterly reports on Form 10-Q. We believe such tabular presentation promotes a better understanding for investors of the corporate-level decisions made and activities performed that significantly affect comparison of our operating results from period to period. We also believe this tabular presentation will supplement for investors an understanding of our disclosures and real estate operating results. Gains or losses on sales of real estate and impairments of held for sale assets are related to corporate-level decisions to dispose of real estate. Gains or losses on early extinguishment of debt, gains or losses on early termination of interest rate hedge agreements, and preferred stock redemption charges are related to corporate-level financing decisions focused on our capital structure strategy. Significant realized and unrealized gains or losses on non-real estate investments and impairments of real estate and non-real estate investments are not related to the operating performance of our real estate assets as they result from strategic, corporate-level non-real estate investment decisions and external market conditions. Impairments of non-real estate investments are not related to the operating performance of our real estate as they
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Definitions and Reconciliations (continued)
June 30, 2020

represent the write-down of non-real estate investments when their fair values decline below their respective carrying values due to changes in general market or other conditions outside of our control. Significant items, whether a gain or loss, included in the tabular disclosure for current periods are described in further detail in this Supplemental Information.

Lease accounting

On January 1, 2019, we adopted new lease accounting standards that set out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). The new lease accounting standards did not result in material changes in neither the amount nor the timing of lease-related revenues that we recognized from our tenants. However, the new standards affected our financial statement presentation primarily in three specific areas.

Key differences between the prior accounting standard and the new lease accounting standards:

Prior to January 1, 2019, we classified rental revenues and tenant recoveries as separate line items on our consolidated statements of operations. Effective January 1, 2019, based on our election of a practical expedient, we are required to disclose the combined components of rental revenues and tenant recoveries as a single lease component, which is classified on our consolidated statements of operations as income from rentals. As a result, we do not disclose tenant recoveries as a separate GAAP revenue measure. Refer to the definition of tenant recoveries below for additional details on tenant recoveries revenue and its usefulness to investors.

The new lease accounting standard requires that lessors and lessees capitalize, as initial direct costs, only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Effective January 1, 2019, costs that we incur to negotiate or arrange a lease, regardless of its outcome, such as for fixed employee compensation, tax, or legal advice to negotiate lease terms, and other costs, are expensed as incurred.

Under the package of practical expedients and optional transition method that we elected on January 1, 2019, we are not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease accounting standard in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease accounting standard. Therefore, we continue to amortize these initial direct leasing costs over the respective lease term.

In addition, the new lease accounting standards require companies to recognize a lease liability and a corresponding right-of-use asset on the consolidated balance sheets, and to represent the net present value of future rental payments related to operating leases in which we are the lessee. As a result, on January 1, 2019, we recognized a lease liability classified in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets, and a corresponding right-of-use asset included in other assets on our consolidated balance sheets, related to our ground leases existing as of January 1, 2019, for which we are the lessee. The net present value of the remaining future rental payments of our ground leases was calculated for each operating lease using the respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the estimated interest rate that we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments.

Net cash provided by operating activities after dividends

Net cash provided by operating activities after dividends includes the deduction for distributions to noncontrolling interests. For purposes of this calculation, changes in operating assets and liabilities are excluded as they represent timing differences.
Net debt to Adjusted EBITDA and net debt and preferred stock to Adjusted EBITDA

Net debt to Adjusted EBITDA and net debt and preferred stock to Adjusted EBITDA are non-GAAP financial measures that we believe are useful to investors as supplemental measures in evaluating our balance sheet leverage. Net debt is equal to the sum of total consolidated debt less cash, cash equivalents, and restricted cash. Net debt and preferred stock is equal to the sum of net debt, as discussed above, plus preferred stock outstanding as of the end of the period. Refer to the definition of Adjusted EBITDA and Adjusted EBITDA margin for further information on the calculation of Adjusted EBITDA.

The following table reconciles debt to net debt, and to net debt and preferred stock, and computes the ratio of each to Adjusted EBITDA:
(Dollars in thousands)6/30/203/31/2012/31/199/30/196/30/19
Secured notes payable$344,784  $347,136  $349,352  $351,852  $354,186  
Unsecured senior notes payable 6,738,486  6,736,999  6,044,127  6,042,831  5,140,914  
Unsecured senior lines of credit
440,000  221,000  384,000  343,000  514,000  
Unsecured senior bank term loan—  —  —  —  347,105  
Unamortized deferred financing costs52,175  53,807  47,299  48,746  36,905  
Cash and cash equivalents(206,860) (445,255) (189,681) (410,675) (198,909) 
Restricted cash(34,680) (43,116) (53,008) (42,295) (39,316) 
Net debt$7,333,905  $6,870,571  $6,582,089  $6,333,459  $6,154,885  
Net debt
$7,333,905  $6,870,571  $6,582,089  $6,333,459  $6,154,885  
7.00% Series D Convertible Preferred Stock
—  —  —  57,461  57,461  
Net debt and preferred stock
$7,333,905  $6,870,571  $6,582,089  $6,390,920  $6,212,346  
Adjusted EBITDA:
– quarter annualized
$1,253,844  $1,239,016  $1,148,620  $1,099,908  $1,063,056  
– trailing 12 months$1,185,347  $1,137,650  $1,085,382  $1,040,449  $1,004,724  
Net debt to Adjusted EBITDA:
– quarter annualized
5.8x  5.5x  5.7x  5.8x  5.8x  
– trailing 12 months6.2x  6.0x  6.1x  6.1x  6.1x  
Net debt and preferred stock to Adjusted EBITDA:
– quarter annualized
5.8x  5.5x  5.7x  5.8x  5.8x  
– trailing 12 months6.2x  6.0x  6.1x  6.1x  6.2x  
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Definitions and Reconciliations (continued)
June 30, 2020

Net operating income, net operating income (cash basis), and operating margin

        The following table reconciles net income to net operating income, and to net operating income (cash basis):
Three Months EndedSix Months Ended
(Dollars in thousands)6/30/206/30/196/30/206/30/19
Net income$243,561  $87,179  $274,239  $223,997  
Equity in earnings of unconsolidated real estate joint ventures
(3,893) (1,262) (777) (2,408) 
General and administrative expenses
31,775  26,434  63,738  51,111  
Interest expense45,014  42,879  90,753  81,979  
Depreciation and amortization
168,027  134,437  343,523  268,524  
Impairment of real estate
13,218  

—  15,221  —  
Loss on early extinguishment of debt
—  —  —  7,361  
Investment income(184,657) (21,500) (162,836) (105,056) 
Net operating income313,045  268,167  623,861  525,508  
Straight-line rent revenue
(23,367) (25,476) (43,964) (52,441) 
Amortization of acquired below-market leases
(13,787) (8,054) (29,751) (15,202) 
Net operating income (cash basis)$275,891  $234,637  $550,146  $457,865  
Net operating income (cash basis) – annualized
$1,103,564  $938,548  $1,100,292  $915,730  
Net operating income (from above)$313,045  $268,167  $623,861  $525,508  
Total revenues$436,956  $373,856  $876,875  $732,698  
Operating margin72%72%71%72%
        
Net operating income is a non-GAAP financial measure calculated as net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding equity in the earnings of our unconsolidated real estate joint ventures, general and administrative expenses, interest expense, depreciation and amortization, impairments of real estate, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, and investment income or loss. We believe net operating income provides useful information to investors regarding our financial condition and results of operations because it primarily reflects those income and expense items that are incurred at the property level. Therefore, we believe net operating income is a useful measure for investors to evaluate the operating performance of our consolidated real estate assets. Net operating income on a cash basis is net operating income adjusted to exclude the effect of straight-line rent and amortization of acquired above- and below-market lease revenue adjustments required by GAAP. We believe that net operating income on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent revenue and the amortization of acquired above- and below-market leases.

Furthermore, we believe net operating income is useful to investors as a performance measure for our consolidated properties because, when compared across periods, net operating income reflects trends in occupancy rates, rental rates, and operating costs, which provide a perspective not immediately apparent from net income or loss. Net operating income can be used to measure the initial stabilized yields of our properties by calculating net operating income generated by a property divided by our investment in the property. Net operating income excludes certain components from net income in
order to provide results that are more closely related to the results of operations of our properties. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort comparability of operating performance at the property level. Impairments of real estate have been excluded in deriving net operating income because we do not consider impairments of real estate to be property-level operating expenses. Impairments of real estate relate to changes in the values of our assets and do not reflect the current operating performance with respect to related revenues or expenses. Our impairments of real estate represent the write-down in the value of the assets to the estimated fair value less cost to sell. These impairments result from investing decisions or a deterioration in market conditions. We also exclude realized and unrealized investment income or loss, which results from investment decisions that occur at the corporate level related to non-real estate investments in publicly traded companies and certain privately held entities. Therefore, we do not consider these activities to be an indication of operating performance of our real estate assets at the property level. Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as losses on early extinguishment of debt, as these charges often relate to corporate strategy. Property operating expenses included in determining net operating income primarily consist of costs that are related to our operating properties, such as utilities, repairs, and maintenance; rental expense related to ground leases; contracted services, such as janitorial, engineering, and landscaping; property taxes and insurance; and property-level salaries. General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional fees, office rent, and office supplies that are incurred as part of corporate office management. We calculate operating margin as net operating income divided by total revenues.

We believe that in order to facilitate for investors a clear understanding of our operating results, net operating income should be examined in conjunction with net income or loss as presented in our consolidated statements of operations. Net operating income should not be considered as an alternative to net income or loss as an indication of our performance, nor as an alternative to cash flows as a measure of our liquidity or our ability to make distributions.

Operating statistics

We present certain operating statistics related to our properties, including number of properties, RSF, occupancy percentage, leasing activity, and contractual lease expirations as of the end of the period. We believe these measures are useful to investors because they facilitate an understanding of certain trends for our properties. We compute the number of properties, RSF, occupancy percentage, leasing activity, and contractual lease expirations at 100% for all properties in which we have an investment, including properties owned by our consolidated and unconsolidated real estate joint ventures. For operating metrics based on annual rental revenue, refer to our discussion of annual rental revenue herein.

Same property comparisons

As a result of changes within our total property portfolio during the comparative periods presented, including changes from assets acquired or sold, properties placed into development or redevelopment, and development or redevelopment properties recently placed into service, the consolidated total income from rentals, as well as rental operating expenses in our operating results, can show significant changes from period to period. In order to supplement an evaluation of our results of operations over a given quarterly or annual period, we analyze the operating performance for all consolidated properties that were fully operating for the entirety of the comparative periods presented, referred to as same properties. We separately present quarterly and year-to-date same property results to align with the interim financial information required by the SEC in our management’s discussion and analysis of our financial condition and results of operations. These same properties are analyzed
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Definitions and Reconciliations (continued)
June 30, 2020

separately from properties acquired subsequent to the first day in the earliest comparable quarterly or year-to-date period presented, properties that underwent development or redevelopment at any time during the comparative periods, unconsolidated real estate joint ventures, properties classified as held for sale, and corporate entities (legal entities performing general and administrative functions), which are excluded from same property results. Additionally, lease termination fees, if any, are excluded from the results of same properties.

        The following table reconciles the number of same properties to total properties for the six months ended June 30, 2020:
Development – under construction
PropertiesAcquisitions after January 1, 2019Properties
9804 Medical Center Drive1  25, 35, and 45 West Watkins Mill
9950 Medical Center Drive1  Road3  
Alexandria District for Science
3170 Porter Drive1  
and Technology2  Shoreway Science Center2  
201 Haskins Way1  3911, 3931, and 4075 Sorrento Valley
1165 Eastlake Avenue East1  
Boulevard
3  
4150 Campus Point Court1  260 Townsend Street1  
Alexandria Center® for AgTech, Phase II
1  5 Necco Street1  
8  601 Dexter Avenue North1  
4224/4242 Campus Point Court and
Development – placed into
10210 Campus Point Drive3  
service after January 1, 2019
Properties3825 and 3875 Fabian Way2  
399 Binney Street1  SD Tech by Alexandria11  
279 East Grand Avenue1  The Arsenal on the Charles6  
188 East Blaine Street1  275 Grove Street1  
3  601, 611, and 651 Gateway
Boulevard3  
3330 and 3412 Hillview Avenue2  
Redevelopment – under constructionProperties9605 Medical Center Drive1  
Alexandria Center® – Long Island City
1  220 2nd Avenue South1  
945 Market Street1  987 and 1075 Commercial Street2  
3160 Porter Drive1  4555 Executive Drive1  
The Arsenal on the Charles5  Other8  
9877 Waples Street1  53  
9  
Unconsolidated real estate JVs6  
Redevelopment – placed into
Properties held for sale3  
service after January 1, 2019
PropertiesTotal properties excluded from same
Alexandria PARC4  properties91  
681 and 685 Gateway Boulevard
2  Same properties213  
(1)
266 and 275 Second Avenue
2  Total properties in North America as of
Alexandria Center® for AgTech, Phase I
1  June 30, 2020304  
9  
(1)Includes 9880 Campus Point Drive and 3545 Cray Court. The 9880 Campus Point Drive building was occupied through January 2018 and is currently in active development, and 3545 Cray Court is currently undergoing renovations.
Stabilized occupancy date

The stabilized occupancy date represents the estimated date on which the project is expected to reach occupancy of 95% or greater.

Tenant recoveries

Tenant recoveries represent revenues comprising reimbursement of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses and earned in the period during which the applicable expenses are incurred and the tenant’s obligation to reimburse us arises.

We classify rental revenues and tenant recoveries generated through the leasing of real estate assets within revenue in income from rentals in our consolidated statements of operations. We provide investors with a separate presentation of rental revenues and tenant recoveries in “Same Property Performance” of this Supplemental Information because we believe it promotes investors’ understanding of our operating results. We believe that the presentation of tenant recoveries is useful to investors as a supplemental measure of our ability to recover operating expenses under our triple net leases, including recoveries of utilities, repairs and maintenance, insurance, property taxes, common area expenses, and other operating expenses, and of our ability to mitigate the effect to net income for any significant variability to components of our operating expenses.

The following table reconciles income from rentals to tenant recoveries:
Three Months EndedSix Months Ended
(In thousands)06/30/2003/31/2012/31/1909/30/1906/30/196/30/206/30/19
Income from rentals$435,856  $437,605  $404,721  $385,776  $371,618  $873,461  $726,367  
Rental revenues(341,555) (337,942) (308,418) (293,182) (289,625) (679,497) (564,188) 
Tenant recoveries$94,301  $99,663  $96,303  $92,594  $81,993  $193,964  $162,179  

Total equity capitalization

Total equity capitalization is equal to the sum of outstanding shares of 7.00% Series D cumulative convertible preferred stock (“Series D Convertible Preferred Stock”) and common stock multiplied by the related closing price of each class of security at the end of each period presented.

Total market capitalization

Total market capitalization is equal to the sum of total equity capitalization and total debt.

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Definitions and Reconciliations (continued)
June 30, 2020

Unencumbered net operating income as a percentage of total net operating income

Unencumbered net operating income as a percentage of total net operating income is a non-GAAP financial measure that we believe is useful to investors as a performance measure of the results of operations of our unencumbered real estate assets as it reflects those income and expense items that are incurred at the unencumbered property level. Unencumbered net operating income is derived from assets classified in continuing operations, which are not subject to any mortgage, deed of trust, lien, or other security interest, as of the period for which income is presented.

The following table summarizes unencumbered net operating income as a percentage of total net operating income:
 
Three Months Ended
(Dollars in thousands)
6/30/203/31/2012/31/199/30/196/30/19
Unencumbered net operating income
$296,358  $295,001  $270,903  $259,128  $251,397  
Encumbered net operating income
16,687  15,815  15,359  14,906  16,770  
Total net operating income$313,045  $310,816  $286,262  $274,034  $268,167  
Unencumbered net operating income as a percentage of total net operating income
95%95%95%95%94%

Weighted-average interest rate for capitalization of interest

The weighted-average interest rate required for calculating capitalization of interest pursuant to GAAP represents a weighted-average rate based on the rates applicable to borrowings outstanding during the period, including expense/income related to interest rate hedge agreements, amortization of loan fees, amortization of debt premiums (discounts), and other bank fees. A separate calculation is performed to determine our weighted-average interest rate for capitalization for each month. The rate will vary each month due to changes in variable interest rates, outstanding debt balances, the proportion of variable-rate debt to fixed-rate debt, the amount and terms of interest rate hedge agreements, and the amount of loan fee and premium (discount) amortization.

The following table presents the weighted-average interest rate for capitalization of interest:
 Three Months Ended
6/30/203/31/2012/31/199/30/196/30/19
Weighted-average interest rate for capitalization of interest
4.03%3.80%3.88%4.00%4.14%
Weighted-average shares of common stock outstanding – diluted

From time to time, we enter into capital market transactions, including forward equity sales agreements (“Forward Agreements”), to fund acquisitions, to fund construction of our highly leased development and redevelopment projects, and for general working capital purposes. We are required to consider the potential dilutive effect of our forward equity sales agreements under the treasury stock method while the forward equity sales agreements are outstanding. As of June 30, 2020, we had Forward Agreements outstanding to sell an aggregate of 3.5 million shares of common stock.

Prior to the conversion of our remaining outstanding shares in October 2019, we considered the effect of assumed conversion of our outstanding 7.00% Series D Convertible Preferred Stock when determining potentially dilutive incremental shares to our common stock. When calculating the assumed conversion, we add back to net income or loss the dividends paid on our Series D Convertible Preferred Stock to the numerator and then include additional common shares assumed to have been issued (as displayed in the table below) to the denominator of the per share calculation. The effect of the assumed conversion is considered separately for our per share calculations of net income or loss; funds from operations, computed in accordance with the definition in the Nareit White Paper; and funds from operations, as adjusted. Prior to the conversion of our remaining outstanding shares in October 2019, our Series D Convertible Preferred Stock was dilutive and assumed to be converted when quarterly and annual basic EPS, funds from operations, or funds from operations, as adjusted, exceeded approximately $1.75 and $7.00 per share, respectively, subject to conversion ratio adjustments and the impact of repurchases of our Series D Convertible Preferred Stock. The effect of the assumed conversion was included when it was dilutive on a per share basis. The dilutive effect to both numerator and denominator may result in a per share effect of less than a half cent, which would appear as zero in our per share calculation, even when the dilutive effect to the numerator alone appears in our reconciliation.

The weighted-average shares of common stock outstanding used in calculating EPS – diluted, FFO per share – diluted, and FFO per share – diluted, as adjusted, during each period are calculated as follows:
Three Months EndedSix Months Ended
(In thousands)6/30/203/31/2012/31/199/30/196/30/196/30/206/30/19
Basic shares for EPS
124,333  121,433  114,175  112,120  111,433  122,883  111,245  
Forward Agreements
115  352  761  —  68  234  34  
Series D Convertible Preferred Stock
—  —  38  —  —  —  —  
Diluted shares for EPS
124,448  121,785  114,974  112,120  111,501  123,117  111,279  
Basic shares for EPS124,333  121,433  114,175  112,120  111,433  122,883  111,245  
Forward Agreements
115  352  761  442  68  234  34  
Series D Convertible Preferred Stock
—  —  38  —  576  —  578  
Diluted shares for FFO
124,448  121,785  114,974  112,562  112,077  123,117  111,857  
Basic shares for EPS
124,333  121,433  114,175  112,120  111,433  122,883  111,245  
Forward Agreements
115  352  761  442  68  234  34  
Series D Convertible Preferred Stock
—  —  38  —  —  —  —  
Diluted shares for FFO, as adjusted
124,448  121,785  114,974  112,562  111,501  123,117  111,279