(1)Source: Centers for Disease Control and Prevention/National Center for Health Statistics, “Provisional Drug Overdose Death Counts: Dashboard,” accessed October 14, 2021. The latest reported provisional data for drug overdose deaths may not be complete. The predicted provisional count, which accounts for incomplete reporting, exceeds 99,000 overdose deaths.
(1)Liquidity as of September 30, 2021. Refer to “Key credit metrics” of our Supplemental Information for additional details.
(2)As of September 30, 2021.
(1)Represents credit rating levels from Moody’s Investors Service and S&P Global Ratings for publicly traded U.S. REITs, from Bloomberg Professional Services as of September 30, 2021.
(2)As of the date of this report.
(3)As of September 30, 2021. Refer to “Annual rental revenue” and “Investment-grade or publicly traded large cap tenants” in the “Definitions and reconciliations” of our Supplemental Information for additional details.
(1)Represents credit rating levels from Moody’s Investors Service and S&P Global Ratings for publicly traded U.S. REITs, from Bloomberg Professional Services as of September 30, 2021.
(2)As of the date of this report. A credit rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.
(3)As of September 30, 2021. Refer to “Key credit metrics” of our Supplemental Information for additional details.
(4)Quarter annualized.
(5)As of September 30, 2021.
(1)Source: Barron’s, “The 10 Most Sustainable REITs, According to Calvert,” February 19, 2021.
(2)Relative to a 2015 baseline for buildings in operation that Alexandria directly manages.
(3)For buildings in operation that Alexandria indirectly and directly manages.
(4)Reflects sum of annual like-for-like progress from 2015 to 2020.
(5)Reflects progress for all buildings in operation in 2020 that Alexandria indirectly and directly manages.
 | |||||
| Table of Contents | |||||
September 30, 2021 | |||||
| EARNINGS PRESS RELEASE | Page | Page | ||||||||||||
Third Quarter Ended September 30, 2021, Financial and Operating Results | ||||||||||||||
| SUPPLEMENTAL INFORMATION | Page | Page | ||||||||||||
| 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 7 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. © 2021 | xi | |||||||
Alexandria Real Estate Equities, Inc.,
at the Vanguard of the Life Science Industry,
at the Vanguard of the Life Science Industry,
Providing High-Quality Office/Laboratory Space to Meet Historic-High Demand, Reports:
3Q21 and YTD 3Q21 Net Income per Share – Diluted of $0.67 and $3.38, respectively;
3Q21 and YTD 3Q21 FFO per Share – Diluted, As Adjusted, of $1.95 and $5.80, respectively
PASADENA, Calif. – October 25, 2021 – Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the third quarter ended September 30, 2021.
| Key highlights | YTD | |||||||||||||||||||||||||
| Operating results | 3Q21 | 3Q20 | 3Q21 | 3Q20 | ||||||||||||||||||||||
| Total revenues: | ||||||||||||||||||||||||||
| In millions | $ | 547.8 | $ | 545.0 | $ | 1,537.2 | $ | 1,421.9 | ||||||||||||||||||
| Growth | 0.5 | % | (1) | 8.1 | % | (1) | ||||||||||||||||||||
| Net income attributable to Alexandria’s common stockholders – diluted | ||||||||||||||||||||||||||
| In millions | $ | 101.3 | $ | 79.3 | $ | 490.6 | $ | 324.2 | ||||||||||||||||||
| Per share | $ | 0.67 | $ | 0.63 | $ | 3.38 | $ | 2.61 | ||||||||||||||||||
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted | ||||||||||||||||||||||||||
| In millions | $ | 296.0 | $ | 230.7 | $ | 841.3 | $ | 677.1 | ||||||||||||||||||
| Per share | $ | 1.95 | $ | 1.83 | $ | 5.80 | $ | 5.46 | ||||||||||||||||||
(1)3Q20 includes a termination fee of $89.5 million. Growth for 3Q21 and YTD 3Q21 was 20.2% and 15.4%, respectively, excluding this termination fee. | ||||||||||||||||||||||||||
Strategic relationship with Moderna, Inc. leads to new HQ and R&D facility at 325 Binney Street, representing largest life science lease executed in Company history
In September 2021, we signed a 15-year full-building lease with Moderna, Inc. to develop, construct, and operate its new headquarters and core R&D facility at 325 Binney Street, a leading-edge 462,100 RSF property designed to be the most sustainable laboratory building in Cambridge, representing the largest life science lease in Company history.
Historic-high year-to-date leasing volume and continued strong rental rate growth
•During YTD 3Q21, historic demand for our high-quality office/laboratory space translated into 5.4 million RSF of leasing activity in only nine months, representing the highest leasing activity in Company history, surpassing our record annual leasing of 5.1 million RSF in 2019.
•Continued strong leasing activity and rental rate growth during 3Q21 and YTD 3Q21 over expiring rates on renewed and re-leased space:
| 3Q21 | YTD 3Q21 | |||||||||||||
| Total leasing activity – RSF | 1,810,630 | 5,422,127 | ||||||||||||
| Leasing of development and redevelopment space – RSF | 1,005,890 | (1) | 2,071,750 | |||||||||||
| Lease renewals and re-leasing of space: | ||||||||||||||
| RSF (included in total leasing activity above) | 671,775 | 2,666,313 | ||||||||||||
| Rental rate increases | 35.3% | 39.4% | ||||||||||||
| Rental rate increases (cash basis) | 19.3% | 22.3% | ||||||||||||
(1)Represents the second highest leasing quarter of development and redevelopment square footage in Company history. | ||||||||||||||
Continued strong net operating income and internal growth
•Net operating income (cash basis) of $1.3 billion for 3Q21 annualized, up $234.3 million, or 21.2%, compared to 3Q20 annualized, excluding the effect of income recognized during 3Q20 aggregating $86.2 million, which comprised a termination fee of $89.5 million and related expenses of $3.3 million.
•95% of our leases contain contractual annual rent escalations approximating 3%.
•Same property net operating income growth:
•3.0% and 7.1% (cash basis) for 3Q21 over 3Q20.
•4.1% and 7.3% (cash basis) for YTD 3Q21 over YTD 3Q20.
A REIT industry-leading high-quality tenant roster with high-quality revenues and cash flows, strong margins, and operational excellence
| Percentage of annual rental revenue in effect from investment-grade or publicly traded large cap tenants | 53 | % | ||||||||||||
| Occupancy of operating properties in North America | 94.4 | % | ||||||||||||
| Occupancy of operating properties in North America (excluding vacancy at recently acquired properties) | 98.5 | % | (1) | |||||||||||
| Operating margin | 70 | % | ||||||||||||
| Adjusted EBITDA margin | 68 | % | ||||||||||||
| Weighted-average remaining lease term: | ||||||||||||||
| All tenants | 7.4 | years | ||||||||||||
| Top 20 tenants | 10.6 | years | ||||||||||||
(1)Excludes 1.6 million RSF, or 4.1%, of vacancy at recently acquired properties, representing lease-up opportunities that are expected to provide incremental annual rental revenues in excess of $59 million upon full lease-up. Excluding acquired vacancies, occupancy was 98.5% as of September 30, 2021, up 80 bps from 97.7% as of December 31, 2020. Refer to “Occupancy” in our Supplemental Information.
Credit rating outlook improvement
In October 2021, S&P Global Ratings upgraded our corporate issuer credit rating outlook to BBB+/Positive from BBB+/Stable as a result of our consistently strong operating performance and long-term positive fundamentals.
Strong and flexible balance sheet with significant liquidity
•Investment-grade credit ratings ranked in the top 10% among all publicly traded U.S. REITs as of September 30, 2021.
•Net debt and preferred stock to Adjusted EBITDA of 5.8x and fixed-charge coverage ratio of 5.1x for 3Q21 annualized.
•Net debt to gross assets of 28% as of September 30, 2021.
•$4.0 billion of liquidity as of September 30, 2021.
| |||||
Third Quarter Ended September 30, 2021, Financial and Operating Results (continued) | |||||
September 30, 2021 | |||||
Continued dividend strategy to share growth in cash flows with stockholders
Common stock dividend declared for 3Q21 of $1.12 per common share, aggregating $4.42 per common share for the twelve months ended September 30, 2021, up 24 cents, or 6%, over the twelve months ended September 30, 2020. Our FFO payout ratio of 58% for the three months ended September 30, 2021, allows us to continue to share growth in cash flows from operating activities with our stockholders while also retaining a significant portion for reinvestment.
Sustained strength in tenant collections
•Tenant collections remain consistently high, with 99.6% of October 2021 billings collected as of the date of this release.
•As of September 30, 2021, our tenant receivables balance of $7.7 million continues to be near historical lows.
Key items included in operating results
| Key items included in net income attributable to Alexandria’s common stockholders: | |||||||||||||||||||||||||||||||||||||||||||||||
| YTD | |||||||||||||||||||||||||||||||||||||||||||||||
| 3Q21 | 3Q20 | 3Q21 | 3Q20 | 3Q21 | 3Q20 | 3Q21 | 3Q20 | ||||||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | Amount | Per Share – Diluted | Amount | Per Share – Diluted | |||||||||||||||||||||||||||||||||||||||||||
| Unrealized (losses) gains on non-real estate investments | $ | (14.4) | $ | (14.0) | $ | (0.10) | $ | (0.11) | $ | 183.3 | $ | 140.5 | $ | 1.26 | $ | 1.13 | |||||||||||||||||||||||||||||||
| Significant realized gains on non-real estate investments | 52.4 | (1) | — | 0.35 | — | 110.1 | — | 0.76 | — | ||||||||||||||||||||||||||||||||||||||
| (Loss) gain on sales of real estate | (0.4) | 1.6 | — | 0.01 | 2.3 | 1.6 | 0.02 | 0.01 | |||||||||||||||||||||||||||||||||||||||
| Impairment of real estate | (42.6) | (1) | (7.7) | (0.28) | (0.06) | (52.7) | (30.5) | (0.37) | (0.24) | ||||||||||||||||||||||||||||||||||||||
| Impairment of non-real estate investments | — | — | — | — | — | (24.5) | — | (0.20) | |||||||||||||||||||||||||||||||||||||||
| Loss on early extinguishment of debt | — | (52.8) | — | (0.42) | (67.3) | (52.8) | (0.46) | (0.42) | |||||||||||||||||||||||||||||||||||||||
Termination fee(1) | — | 86.2 | — | 0.69 | — | 86.2 | — | 0.69 | |||||||||||||||||||||||||||||||||||||||
| Acceleration of stock compensation expense due to executive officer resignation | — | (4.5) | — | (0.04) | — | (4.5) | — | (0.04) | |||||||||||||||||||||||||||||||||||||||
Total | $ | (5.0) | $ | 8.8 | $ | (0.03) | $ | 0.07 | $ | 175.7 | $ | 116.0 | $ | 1.21 | $ | 0.93 | |||||||||||||||||||||||||||||||
(1)Refer to “Funds from operations and funds from operations per share” of this Earnings Press Release for additional details. | |||||||||||||||||||||||||||||||||||||||||||||||
Alexandria at the vanguard of innovation for over 750 tenants, with a focus to accommodate current tenant needs plus a path for their future growth
During 3Q21, we completed acquisitions in our key life science cluster submarkets aggregating 5.6 million SF, comprising 4.9 million RSF of value-creation opportunities and 0.7 million RSF of operating space, for an aggregate purchase price of $989.7 million.
Robust leasing activity of development and redevelopment projects
Historically high demand for our value-creation development and redevelopment projects of high-quality office/laboratory space, as well as continued operational excellence at our world-class, sophisticated laboratory facilities, and strong execution by our team, has translated into record leases executed in the nine months ended September 30, 2021, aggregating 2.1 million RSF, related to our development and redevelopment projects.
Value-creation development and redevelopment projects expected to generate significant growth in rental revenues and cash flows
Our highly leased value-creation pipeline of current and near-term projects that are under construction or will commence in the next six quarters is expected to generate significant incremental revenues, as follows:
| Under Construction | Key Projects Expected to Commence Construction in the Next Six Quarters(1) | Incremental Projected Annual Rental Revenues | ||||||||||||||||||
| 4.3 Million RSF | 3.4 Million RSF | > $615 Million | ||||||||||||||||||
| 37 Properties | + | 20 Properties | = | |||||||||||||||||
| 79% Leased/Negotiating | 80% Leased/Negotiating | |||||||||||||||||||
(1)We expect to commence construction of other projects in 2022. | ||||||||||||||||||||
•Approximately 93% of leased/negotiating activity related to the 7.7 million RSF of projects under construction or expected to commence construction in the next six quarters, is from existing relationships.
•In October 2021, our Alexandria Center® for Life Science – Fenway campus received entitlement rights to develop 450,000 SF of office/laboratory space.
Delivery of fully leased value-creation projects
•During 3Q21, we placed into service development and redevelopment projects aggregating 238,163 RSF that are 100% leased across four submarkets.
•Commencement of three value-creation projects aggregating 1.1 million RSF during 3Q21, including a 462,100 RSF development project at 325 Binney Street in our Cambridge submarket and a 229,000 RSF development project at 751 Gateway Boulevard in our South San Francisco submarket, which are 100% leased and 100% negotiating, respectively.
•Annual net operating income (cash basis) is expected to increase by $45 million upon the burn-off of initial free rent from recently delivered projects.
Key strategic transactions that generated capital for investment into our highly leased value-creation pipeline and acquisitions with development and redevelopment opportunities
•During 3Q21, we completed dispositions of and sales of partial interests in real estate assets aggregating $339.4 million in our key life science cluster submarkets.
•In October 2021, we completed the recapitalization of two consolidated real estate joint ventures in our Mission Bay submarket:
| 409 and 499 Illinois Street | 1500 Owens Street | ||||||||||||||||||||||||||||
| (Dollars in thousands) | Alexandria | JV Partner | Alexandria | JV Partner | |||||||||||||||||||||||||
| Previous ownership | 60 | % | 40 | % | 50.1 | % | 49.9 | % | |||||||||||||||||||||
| Recapitalization in October 2021 | 25 | % | 75 | % | 25 | % | 75 | % | |||||||||||||||||||||
| Sale of ownership interest | 35 | % | 25.1 | % | |||||||||||||||||||||||||
| Sales price (our share) | $274,681 | ||||||||||||||||||||||||||||
| Capitalization rate | 5.0% | ||||||||||||||||||||||||||||
| Capitalization rate (cash) | 4.2% | ||||||||||||||||||||||||||||
We retained control over these joint ventures and continue to consolidate them in our financial statements. Refer to “Dispositions and sales of partial interest” of this Earnings Press Release for additional details on these transactions.
| |||||
Third Quarter Ended September 30, 2021, Financial and Operating Results (continued) | |||||
September 30, 2021 | |||||
Balance sheet management
Key metrics as of September 30, 2021
•$38.6 billion of total market capitalization.
•$29.3 billion of total equity capitalization.
•No debt maturities prior to 2024.
•11.9 years weighted-average remaining term of debt as of September 30, 2021.
•Investment-grade credit ratings ranked in the top 10% among all publicly traded U.S. REITs as of September 30, 2021.
| 3Q21 | Goal | |||||||||||||||||||||||||
| Quarter | Trailing | 4Q21 | ||||||||||||||||||||||||
| Annualized | 12 Months | Annualized | ||||||||||||||||||||||||
| Net debt and preferred stock to Adjusted EBITDA | 5.8x | 6.2x | Less than or equal to 5.2x | |||||||||||||||||||||||
| Fixed-charge coverage ratio | 5.1x | 4.8x | Greater than or equal to 5.0x | |||||||||||||||||||||||
| Value-creation pipeline of new Class A development and redevelopment projects as a percentage of gross assets | 3Q21 | |||||||
| Under construction projects | 7% | |||||||
| Pre-leased/negotiating near-term projects and key pending acquisition | 2% | |||||||
Income-producing/potential cash flows/covered land play(1) | 5% | |||||||
| 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
•During 3Q21, we issued 2.5 million shares under our ATM program at a price of $200.73 per share (before underwriting discounts) and received net proceeds of $492.3 million. As of 3Q21, we have no amounts remaining under our ATM program. We expect to establish a new ATM program during 4Q21.
•As of September 30, 2021, we had outstanding forward equity sales agreements aggregating $771.9 million to sell 4.6 million shares of our common stock. We expect to settle these forward equity sales agreements in 4Q21.
Investments
•As of September 30, 2021, our investments aggregated $2.0 billion, including unrealized gains of $929.8 million.
•Investment income of $67.1 million for 3Q21 included $81.5 million in realized gains and $14.4 million in unrealized losses.
Industry and ESG leadership: catalyzing and leading the way for positive change to benefit human health and society
•In October 2021, our ESG commitment and leadership was recognized in the 2021 Global Real Estate Sustainability Benchmark (“GRESB”) Real Estate Assessment, including the following achievements: (i) Global Sector Leader and a 5 Star rating — GRESB’s highest rating — in the Diversified Listed sector for buildings in development, (ii) #2 ranking in the U.S. in the Science & Technology sector for buildings in operation, and (iii) fourth consecutive “A” disclosure score.
•In October 2021, Alexandria received an ESG Rating of A from MSCI as a result of our continued advancement of green building opportunities, recognition of talent management programs, and below-industry-average turnover rate, among other achievements. Our MSCI ESG Rating of A is currently ranked in the top 10% among all publicly traded U.S. equity REITs. An MSCI ESG Rating is designed to measure a company’s resilience to long-term industry-material ESG risks.
•In September 2021, Alexandria achieved the Fitwel Viral Response Certification With Distinction, the highest certification level within the Fitwel Viral Response module, for the second consecutive year. This evidence-based, third-party certification recognizes the Company's comprehensive and rigorous approach to protecting the health of its building occupants.
•In September 2021, the National September 11 Memorial & Museum honored Joel S. Marcus, our executive chairman and founder, for Distinction in Civic Engagement and Renewal, recognizing his meaningful contributions to and unwavering support of the 9/11 Memorial & Museum and its mission. As an active supporter of the Memorial & Museum since it opened in 2014, Mr. Marcus has served as a member of its board of trustees since his appointment in 2018 by former New York City Mayor Michael Bloomberg.
•In September 2021, OneFifteen, an innovative non-profit healthcare ecosystem dedicated to the full and sustained recovery of people living with addiction, received an honorable mention in Fast Company’s 2021 Innovation by Design Awards in the Impact category. Alexandria led the design and development of the pioneering OneFifteen campus in Dayton, Ohio, which houses a unique, evidence-based model encompassing a full continuum of care in one location, from intake, medication-assisted treatment, and residential living to family reunification, job training, and community transition.
•In July 2021, Alexandria Venture Investments, our strategic venture capital platform, was recognized by Silicon Valley Bank in its Healthcare Investments and Exits: Mid-Year 2021 Report as the most active biopharma corporate investor by new deal volume from 2020 to 1H21 for the fourth consecutive year and as the most active new Series A investor in biopharma from 2020 to 1H21. Alexandria’s venture activity provides us with, among other things, mission-critical data and knowledge on innovations and trends.
| Acquisitions | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Property | Submarket/Market | Date of Purchase | Number of Properties | Operating Occupancy | Square Footage | Purchase Price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions With Development/Redevelopment Opportunities(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Future Development | Active Development/Redevelopment | Operating With Future Development/ Redevelopment | Operating(2) | Operating | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Completed in 1H21 | 49 | 95% | 4,507,706 | 980,934 | 1,571,982 | 2,238,467 | 80,032 | 8,631,231 | $ | 2,952,205 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Completed in 3Q21: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Other/Greater Boston | 8/24/21 | 4 | 45% | 440,992 | 453,869 | 173,276 | — | — | 1,068,137 | 192,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1122 El Camino Real | South San Francisco/ San Francisco Bay Area | 9/14/21 | 1 | 100% | 700,000 | — | 223,232 | — | — | 700,000 | (3) | 105,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pacific Technology Park (50% interest in consolidated JV) | Sorrento Mesa/San Diego | 8/5/21 | 5 | 100% | — | — | 228,871 | 315,481 | — | 544,352 | 85,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Other/San Diego | 7/21/21 | 9 | 77% | 64,235 | — | 211,440 | 98,428 | — | 374,103 | 135,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3029 East Cornwallis Road | Research Triangle/Research Triangle | 7/30/21 | — | N/A | 1,055,000 | — | — | — | — | 1,055,000 | 91,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Various | Various | 8 | 95% | 1,178,188 | — | 414,286 | 148,665 | 158,916 | 1,900,055 | 380,213 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 27 | 90% | 3,438,415 | 453,869 | 1,251,105 | (4) | 562,574 | (4) | 158,916 | (4) | 5,641,647 | 989,697 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Completed in October 2021: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 2 | 75% | — | — | 185,228 | — | — | 185,228 | 203,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pending acquisition: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charles Park | Cambridge/ Greater Boston | December 2021 | 2 | N/A | TBD(5) | 400,000 | — | — | — | 400,000 | 815,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 80 | 7,946,121 | 1,834,803 | 3,008,315 | 2,801,041 | 238,948 | 14,858,106 | $ | 4,960,702 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 guidance range | $4,460,000 – $5,460,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 pending acquisition: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mercer Mega Block | Lake Union/Seattle | 1Q22(6) | — | N/A | 800,000 | — | — | — | — | 800,000 | $ | 143,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)We expect to provide total estimated costs and related yields for development and redevelopment projects in the future, subsequent to the commencement of construction. Refer to “New Class A development and redevelopment properties: current projects” in our Supplemental Information for additional details on active development and redevelopment projects.
(2)Represents the operating component of our value-creation acquisitions that is not expected to undergo development or redevelopment.
(3)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 operations with future development or redevelopment opportunities. We intend to demolish and develop or redevelop the existing properties upon expiration of the existing in-place leases. Refer to “Definitions and reconciliations” of this Supplemental Information for additional details on value-creation square feet currently included in rental properties.
(4)We expect the acquisitions completed during the three months ended September 30, 2021 to generate initial annual net operating income of $35.9 million. These acquisitions included 27 operating properties with a weighted-average acquisition date of July 26, 2021 (weighted by initial annual net operating income).
(5)We expect to pursue additional entitlement opportunities for future development of additional office/laboratory space.
(6)We continue to diligently work through various long-lead-time due diligence items. We are working toward completion of all due diligence items as soon as possible.
| Dispositions and Sales of Partial Interest | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Capitalization Rate (Cash Basis) | Sales Price per RSF | Consideration in Excess of Book Value(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property | Submarket/Market | Date of Sale | Interest Sold | RSF | Capitalization Rate | Sales Price(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Completed YTD 3Q21: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 213 East Grand Avenue | South San Francisco/ San Francisco Bay Area | 4/22/21 | 70 | % | 300,930 | 4.5 | % | 4.0 | % | $ | 301,000 | $ | 1,429 | $ | 103,679 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 400 Dexter Avenue North | Lake Union/Seattle | 7/23/21 | 70 | % | 290,111 | 4.1 | % | 4.2 | % | 254,814 | $ | 1,255 | $ | 95,467 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 260 Townsend Street | SoMa/San Francisco Bay Area | 7/30/21 | 100 | % | 66,682 | N/A | N/A | 49,000 | (3) | $ | 735 | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 220 and 240 2nd Avenue South | SoDo/Seattle | 7/29/21 | 100 | % | 80,160 | N/A | N/A | 24,100 | $ | 301 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land | Other/San Diego | 3/12/21 | 100 | % | 185,000 | N/A | N/A | 22,900 | N/A | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9444 Waples Street | Sorrento Mesa/San Diego | 8/5/21 | 50 | % | 88,380 | N/A | N/A | 11,469 | $ | 260 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 663,283 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Completed in October 2021: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 409 and 499 Illinois Street | Mission Bay/San Francisco Bay Area | 10/5/21 | 35 | % | (5) | 455,069 | 5.0 | % | 4.2 | % | 274,681 | $ | 1,366 | $ | 113,756 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1500 Owens Street | Mission Bay/San Francisco Bay Area | 10/5/21 | 25.1 | % | (5) | 158,267 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 937,964 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pending dispositions or sales of partial interest: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | Greater Boston | 4Q21 | TBD | 800,000 | (7) | TBD | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | San Francisco Bay Area | 4Q21 | TBD | 400,000 | (7) | TBD | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(8) | Various | 4Q21 | TBD | 500,000 | (7) | TBD | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 2,637,964 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 guidance range | $ | 1,670,000 | – | $ | 2,670,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)For sales of partial interests, represents the contractual sales price for the percentage interest of the property sold by us.
(2)For each partial interest sale, we retained control over the newly formed real estate joint venture and therefore continued to consolidate this property. We accounted for the difference between the consideration received and the book value of the interest sold as an equity transaction, with no gain or loss recognized in earnings.
(3)The sales price includes the assumption by the buyer of a secured loan for $28.2 million. Upon completion of the sale, we recognized a loss on sale of real estate aggregating $435 thousand.
(4)During the three months ended March 31, 2021, we recognized $2.8 million of gains on sales of real estate related to the completion of two real estate dispositions.
(5)Refer to “Key strategic transactions that generated capital for investment into our highly leased value-creation pipeline and acquisitions with development and redevelopment opportunities” on page 2 of this Earnings Press Release for additional details.
(6)Transactions are currently under negotiation of purchase and sale agreements.
(7)Represents the approximate aggregate sales price for each transaction. A significant amount of the proceeds from pending dispositions were subject to completion of lease negotiations prior to advancing the disposition process.
(8)Represents two transactions in early negotiations with potential buyers.
| Guidance | | ||||
September 30, 2021 | |||||
| (Dollars in millions, except per share amounts) | |||||
The following updated guidance is based on our current view of existing market conditions and assumptions for the year ending December 31, 2021. 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 7 of this Earnings Press Release for additional details.
| 2021 Guidance | 2021 Guidance Midpoint | |||||||||||||||||||||||||||||||
| Summary of Key Changes in Guidance | As of 10/25/21 | As of 7/26/21 | Summary of Key Changes in Sources and Uses of Capital Guidance | As of 10/25/21 | As of 7/26/21 | |||||||||||||||||||||||||||
| EPS, FFO per share, and FFO per share, as adjusted | See updates below | Real estate dispositions and partial interest sales | $2,170 | $1,920 | ||||||||||||||||||||||||||||
Occupancy(1) | 93.3% to 93.9% | 94.3% to 94.9% | Construction(2) | $2,110 | $1,910 | |||||||||||||||||||||||||||
| Rental rate increases | 33.0% to 36.0% | 31.0% to 34.0% | ||||||||||||||||||||||||||||||
| Rental rate increases (cash basis) | 19.0% to 22.0% | 18.0% to 21.0% | ||||||||||||||||||||||||||||||
Projected 2021 Earnings per Share and Funds From Operations per Share Attributable to Alexandria’s Common Stockholders – Diluted | ||||||||||||||||||||||||||
| As of 10/25/21 | As of 7/26/21 | |||||||||||||||||||||||||
Earnings per share(3) | $3.91 to $3.93 | $3.46 to $3.54 | ||||||||||||||||||||||||
| Depreciation and amortization of real estate assets | 5.05 | 5.50 | ||||||||||||||||||||||||
| Gain on sales of real estate | (0.02) | (0.02) | ||||||||||||||||||||||||
Impairment of real estate – rental properties(4) | 0.18 | 0.05 | ||||||||||||||||||||||||
| Allocation to unvested restricted stock awards | (0.04) | (0.04) | ||||||||||||||||||||||||
Funds from operations per share(5) | $9.08 to $9.10 | $8.95 to $9.03 | ||||||||||||||||||||||||
| Unrealized gains on non-real estate investments | (1.26) | (1.39) | ||||||||||||||||||||||||
Significant realized gains on non-real estate investments(4) | (0.76) | (0.41) | ||||||||||||||||||||||||
Impairment of real estate(4) | 0.19 | 0.02 | ||||||||||||||||||||||||
| Loss on early extinguishment of debt | 0.46 | 0.47 | ||||||||||||||||||||||||
| Allocation to unvested restricted stock awards | 0.02 | 0.01 | ||||||||||||||||||||||||
| Other | 0.01 | 0.06 | ||||||||||||||||||||||||
Funds from operations per share, as adjusted(5) | $7.74 to $7.76 | $7.71 to $7.79 | ||||||||||||||||||||||||
| Midpoint | $7.75 | $7.75 | ||||||||||||||||||||||||
Key Assumptions | Low | High | |||||||||||||||
Occupancy percentage in North America as of December 31, 2021(1) | 93.3% | 93.9% | |||||||||||||||
| Lease renewals and re-leasing of space: | |||||||||||||||||
| Rental rate increases | 33.0% | 36.0% | |||||||||||||||
| Rental rate increases (cash basis) | 19.0% | 22.0% | |||||||||||||||
| Same property performance: | |||||||||||||||||
| Net operating income increase | 2.0% | 4.0% | |||||||||||||||
| Net operating income increase (cash basis) | 4.7% | 6.7% | |||||||||||||||
| Straight-line rent revenue | $ | 119 | $ | 129 | |||||||||||||
| General and administrative expenses | $ | 146 | $ | 151 | |||||||||||||
| Capitalization of interest | $ | 172 | $ | 182 | |||||||||||||
| Interest expense | $ | 128 | $ | 138 | |||||||||||||
| Key Credit Metrics | 2021 Guidance | |||||||
| Net debt and preferred stock to Adjusted EBITDA – 4Q21 annualized | Less than or equal to 5.2x | |||||||
| Fixed-charge coverage ratio – 4Q21 annualized | Greater than or equal to 5.0x | |||||||
| Key Sources and Uses of Capital | Range | Midpoint | Certain Completed Items | |||||||||||||||||||||||||||||
| Sources of capital: | ||||||||||||||||||||||||||||||||
| Net cash provided by operating activities after dividends | $ | 210 | $ | 250 | $ | 230 | ||||||||||||||||||||||||||
| Incremental debt | 1,415 | 575 | 995 | |||||||||||||||||||||||||||||
| 2020 debt capital proceeds held in cash | 150 | 250 | 200 | |||||||||||||||||||||||||||||
Real estate dispositions and partial interest sales (refer to page 5) | 1,670 | 2,670 | 2,170 | $ | 938 | |||||||||||||||||||||||||||
| Common equity | 2,975 | 3,975 | 3,475 | $ | 3,533 | (6) | ||||||||||||||||||||||||||
| Total sources of capital | $ | 6,420 | $ | 7,720 | $ | 7,070 | ||||||||||||||||||||||||||
| Uses of capital: | ||||||||||||||||||||||||||||||||
Construction (refer to page 43)(2) | $ | 1,960 | $ | 2,260 | $ | 2,110 | ||||||||||||||||||||||||||
Acquisitions (refer to page 4) | 4,460 | 5,460 | 4,960 | $ | 4,146 | |||||||||||||||||||||||||||
| Total uses of capital | $ | 6,420 | $ | 7,720 | $ | 7,070 | ||||||||||||||||||||||||||
| Incremental debt (included above): | ||||||||||||||||||||||||||||||||
| Issuance of unsecured senior notes payable | $ | 1,750 | $ | 1,750 | $ | 1,750 | $ | 1,750 | ||||||||||||||||||||||||
| Principal repayments of unsecured senior notes payable | (650) | (650) | (650) | $ | (650) | |||||||||||||||||||||||||||
| Unsecured senior line of credit, commercial paper, and other | 315 | (525) | (105) | |||||||||||||||||||||||||||||
| Incremental debt | $ | 1,415 | $ | 575 | $ | 995 | ||||||||||||||||||||||||||
(1)Updated guidance for occupancy percentage in North America as of December 31, 2021, reflects vacancy at one recently acquired property that closed in 3Q21, and two pending acquisitions expected to close in 4Q21, representing lease-up opportunities that will contribute to growth in cash flows. One of the two pending acquisitions includes value-creation opportunities while the other pending acquisition is 50% under lease negotiation. Excluding vacancy at recently acquired properties, we expect occupancy for properties in North America as of December 31, 2021 to increase by approximately 100 bps compared to December 31, 2020. Refer to “Occupancy” of our Supplemental Information for additional details.
(2)Increase in construction guidance was primarily driven by recent pre-leasing/negotiating activity, which has provided additional visibility and accelerated our spending requirements on our active and near-term value-creation projects.
(3)Excludes unrealized gains or losses after September 30, 2021, that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted.
(4)Refer to “Funds from operations and funds from operations per share” of this Earnings Press Release for additional details.
(5)Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria’s common stockholders” in “Definitions and reconciliations” of our Supplemental Information for additional details.
(6)Refer to “Key capital events” on page 3 of this Earnings Press Release for additional details. During the nine months ended September 30, 2021, we issued 16.2 million shares of common stock and received net proceeds of $2.8 billion. We expect to issue 4.6 million shares in 4Q21 to settle our remaining outstanding forward equity sales agreements and receive net proceeds of approximately $771.9 million.
| |||||
| Earnings Call Information and About the Company | |||||
September 30, 2021 | |||||
We will host a conference call on Tuesday, October 26, 2021, at 3:00 p.m. Eastern Time (“ET”)/noon Pacific Time (“PT”), which is open to the general public, to discuss our financial and operating results for the third quarter ended September 30, 2021. To participate in this conference call, dial (833) 366-1125 or (412) 902-6738 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the call for Alexandria Real Estate Equities, Inc. The audio webcast can be accessed at www.are.com in the “For Investors” section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, October 26, 2021. The replay number is (877) 344-7529 or (412) 317-0088, and the access code is 10159105.
Additionally, a copy of this Earnings Press Release and Supplemental Information for the third quarter ended September 30, 2021, is available in the “For Investors” section of our website at www.are.com or by following this link: http://www.are.com/fs/2021q3.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, president and chief financial officer; Paula Schwartz, managing director of Rx Communications Group, at (917) 322-2216; or Sara M. Kabakoff, vice president – communications, at (626) 578-0777.
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, agtech, and technology campuses in AAA innovation cluster locations, with a total market capitalization of $38.6 billion as of September 30, 2021, and an asset base in North America of 63.9 million square feet (“SF”). The asset base in North America includes 38.7 million RSF of operating properties and 4.3 million RSF of Class A properties undergoing construction, 8.9 million RSF of near-term and intermediate-term development and redevelopment projects, and 12.0 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, the San Francisco Bay Area, 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, agtech, and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agtech, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.
***********
This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our 2021 earnings per share attributable to Alexandria’s common stockholders – diluted, 2021 funds from operations per share attributable to Alexandria’s common stockholders – diluted, net operating income, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as “forecast,” “guidance,” “goals,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” “targets,” or “will,” or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, lower than expected yields, increased interest rates and operating costs, adverse economic or real estate developments in our markets (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, failure to obtain LEED and other healthy building certifications and efficiencies, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission (“SEC”). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this Earnings Press Release and Supplemental Information, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.
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 annual report on Form 10-K filed with the SEC on February 1, 2021.
Alexandria®, Lighthouse Design® logo, Building the Future of Life-Changing Innovation™, That’s What’s in Our DNA®, Labspace®, Alexandria Center®, Alexandria Technology Square®, Alexandria Technology Center®, and Alexandria Innovation Center® are copyrights and trademarks of Alexandria Real Estate Equities, Inc. All other company names, trademarks, and logos referenced herein are the property of their respective owners.
| Consolidated Statements of Operations | | ||||
September 30, 2021 | |||||
| (Dollars in thousands, except per share amounts) | |||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||
| Income from rentals | $ | 546,527 | $ | 508,371 | $ | 478,695 | $ | 461,335 | $ | 543,412 | (1) | $ | 1,533,593 | $ | 1,416,873 | |||||||||||||||||||||||||||||
| Other income | 1,232 | 1,248 | 1,154 | 2,385 | 1,630 | 3,634 | 5,044 | |||||||||||||||||||||||||||||||||||||
| Total revenues | 547,759 | 509,619 | 479,849 | 463,720 | 545,042 | 1,537,227 | 1,421,917 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Rental operations | 165,995 | 143,955 | 137,888 | 136,767 | 140,443 | 447,838 | 393,457 | |||||||||||||||||||||||||||||||||||||
| General and administrative | 37,931 | 37,880 | 33,996 | 32,690 | 36,913 | 109,807 | 100,651 | |||||||||||||||||||||||||||||||||||||
| Interest | 35,678 | 35,158 | 36,467 | 37,538 | 43,318 | 107,303 | 134,071 | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 210,842 | 190,052 | 180,913 | 177,750 | 176,831 | 581,807 | 520,354 | |||||||||||||||||||||||||||||||||||||
| Impairment of real estate | 42,620 | (1) | 4,926 | 5,129 | 25,177 | 7,680 | 52,675 | (1) | 22,901 | |||||||||||||||||||||||||||||||||||
| Loss on early extinguishment of debt | — | — | 67,253 | 7,898 | 52,770 | 67,253 | 52,770 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 493,066 | 411,971 | 461,646 | 417,820 | 457,955 | 1,366,683 | 1,224,204 | |||||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated real estate joint ventures | 3,091 | 2,609 | 3,537 | 3,593 | 3,778 | 9,237 | 4,555 | |||||||||||||||||||||||||||||||||||||
| Investment income | 67,084 | 304,263 | 1,014 | 255,137 | 3,348 | 372,361 | 166,184 | |||||||||||||||||||||||||||||||||||||
| (Loss) gain on sales of real estate | (435) | — | 2,779 | 152,503 | 1,586 | 2,344 | 1,586 | |||||||||||||||||||||||||||||||||||||
| Net income | 124,433 | 404,520 | 25,533 | 457,133 | 95,799 | 554,486 | 370,038 | |||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | (21,286) | (19,436) | (17,412) | (15,649) | (14,743) | (58,134) | (40,563) | |||||||||||||||||||||||||||||||||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | 103,147 | 385,084 | 8,121 | 441,484 | 81,056 | 496,352 | 329,475 | |||||||||||||||||||||||||||||||||||||
Net income attributable to unvested restricted stock awards | (1,883) | (4,521) | (2,014) | (5,561) | (1,730) | (5,750) | (5,304) | |||||||||||||||||||||||||||||||||||||
| Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ | 101,264 | $ | 380,563 | $ | 6,107 | $ | 435,923 | $ | 79,326 | $ | 490,602 | $ | 324,171 | ||||||||||||||||||||||||||||||
| Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders: | ||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.67 | $ | 2.61 | $ | 0.04 | $ | 3.26 | $ | 0.64 | $ | 3.39 | $ | 2.62 | ||||||||||||||||||||||||||||||
| Diluted | $ | 0.67 | $ | 2.61 | $ | 0.04 | $ | 3.26 | $ | 0.63 | $ | 3.38 | $ | 2.61 | ||||||||||||||||||||||||||||||
| Weighted-average shares of common stock outstanding: | ||||||||||||||||||||||||||||||||||||||||||||
| Basic | 150,854 | 145,825 | 137,319 | 133,688 | 124,901 | 144,716 | 123,561 | |||||||||||||||||||||||||||||||||||||
| Diluted | 151,561 | 146,058 | 137,688 | 133,827 | 125,828 | 145,153 | 124,027 | |||||||||||||||||||||||||||||||||||||
Dividends declared per share of common stock | $ | 1.12 | $ | 1.12 | $ | 1.09 | $ | 1.09 | $ | 1.06 | $ | 3.33 | $ | 3.15 | ||||||||||||||||||||||||||||||
(1)Refer to “Funds from operations and funds from operations per share” of this Earnings Press Release for additional details.
| Consolidated Balance Sheets | | ||||
September 30, 2021 | |||||
| (In thousands) | |||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Investments in real estate | $ | 23,071,514 | $ | 21,692,385 | $ | 20,253,418 | $ | 18,092,372 | $ | 17,600,648 | ||||||||||||||||||||||
| Investments in unconsolidated real estate joint ventures | 321,737 | 323,622 | 325,928 | 332,349 | 330,792 | |||||||||||||||||||||||||||
| Cash and cash equivalents | 325,872 | 323,876 | 492,184 | 568,532 | 446,255 | |||||||||||||||||||||||||||
| Restricted cash | 42,182 | 33,697 | 42,219 | 29,173 | 38,788 | |||||||||||||||||||||||||||
| Tenant receivables | 7,749 | 6,710 | 7,556 | 7,333 | 7,641 | |||||||||||||||||||||||||||
| Deferred rent | 816,219 | 781,600 | 751,967 | 722,751 | 719,552 | |||||||||||||||||||||||||||
| Deferred leasing costs | 329,952 | 321,005 | 294,328 | 272,673 | 266,440 | |||||||||||||||||||||||||||
| Investments | 2,046,878 | 1,999,283 | 1,641,811 | 1,611,114 | 1,330,945 | |||||||||||||||||||||||||||
| Other assets | 1,596,615 | 1,536,672 | 1,424,935 | 1,191,581 | 1,169,610 | |||||||||||||||||||||||||||
| Total assets | $ | 28,558,718 | $ | 27,018,850 | $ | 25,234,346 | $ | 22,827,878 | $ | 21,910,671 | ||||||||||||||||||||||
| Liabilities, Noncontrolling Interests, and Equity | ||||||||||||||||||||||||||||||||
| Secured notes payable | $ | 198,758 | $ | 227,984 | $ | 229,406 | $ | 230,925 | $ | 342,363 | ||||||||||||||||||||||
| Unsecured senior notes payable | 8,314,851 | 8,313,025 | 8,311,512 | 7,232,370 | 7,230,819 | |||||||||||||||||||||||||||
| Unsecured senior line of credit and commercial paper | 749,978 | 299,990 | — | 99,991 | 249,989 | |||||||||||||||||||||||||||
Accounts payable, accrued expenses, and other liabilities | 2,149,450 | 1,825,387 | 1,750,687 | 1,669,832 | 1,609,340 | |||||||||||||||||||||||||||
| Dividends payable | 173,560 | 170,647 | 160,779 | 150,982 | 143,040 | |||||||||||||||||||||||||||
| Total liabilities | 11,586,597 | 10,837,033 | 10,452,384 | 9,384,100 | 9,575,551 | |||||||||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | 11,681 | 11,567 | 11,454 | 11,342 | 11,232 | |||||||||||||||||||||||||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity: | ||||||||||||||||||||||||||||||||
Common stock | 1,532 | 1,507 | 1,457 | 1,367 | 1,333 | |||||||||||||||||||||||||||
| Additional paid-in capital | 14,727,735 | 14,194,023 | 12,994,748 | 11,730,970 | 10,711,119 | |||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (6,029) | (4,508) | (5,799) | (6,625) | (10,638) | |||||||||||||||||||||||||||
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 14,723,238 | 14,191,022 | 12,990,406 | 11,725,712 | 10,701,814 | |||||||||||||||||||||||||||
| Noncontrolling interests | 2,237,202 | 1,979,228 | 1,780,102 | 1,706,724 | 1,622,074 | |||||||||||||||||||||||||||
| Total equity | 16,960,440 | 16,170,250 | 14,770,508 | 13,432,436 | 12,323,888 | |||||||||||||||||||||||||||
Total liabilities, noncontrolling interests, and equity | $ | 28,558,718 | $ | 27,018,850 | $ | 25,234,346 | $ | 22,827,878 | $ | 21,910,671 | ||||||||||||||||||||||
| Funds From Operations and Funds From Operations per Share | | ||||
September 30, 2021 | |||||
| (In thousands) | |||||
The following table presents a reconciliation of net income (loss) attributable to Alexandria’s common stockholders, the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria’s common stockholders – diluted, and funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted, for the periods below:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||||||||
| Net income attributable to Alexandria’s common stockholders | $ | 101,264 | $ | 380,563 | $ | 6,107 | $ | 435,923 | $ | 79,326 | $ | 490,602 | $ | 324,171 | ||||||||||||||||||||||||||||||
| Depreciation and amortization of real estate assets | 205,436 | 186,498 | 177,720 | 173,392 | 173,622 | 569,654 | 511,290 | |||||||||||||||||||||||||||||||||||||
Noncontrolling share of depreciation and amortization from consolidated real estate JVs | (17,871) | (16,301) | (15,443) | (15,032) | (15,256) | (49,615) | (46,901) | |||||||||||||||||||||||||||||||||||||
Our share of depreciation and amortization from unconsolidated real estate JVs | 3,465 | 4,135 | 3,076 | 2,976 | 2,936 | 10,676 | 8,437 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on sales of real estate | 435 | — | (2,779) | (152,503) | (1,586) | (2,344) | (1,586) | |||||||||||||||||||||||||||||||||||||
Impairment of real estate – rental properties | 18,602 | (1) | 1,754 | 5,129 | 25,177 | 7,680 | 25,485 | 15,324 | ||||||||||||||||||||||||||||||||||||
Allocation to unvested restricted stock awards | (1,472) | (2,191) | (201) | (420) | (1,261) | (6,574) | (5,692) | |||||||||||||||||||||||||||||||||||||
Funds from operations attributable to Alexandria’s common stockholders – diluted(2) | 309,859 | 554,458 | 173,609 | 469,513 | 245,461 | 1,037,884 | 805,043 | |||||||||||||||||||||||||||||||||||||
| Unrealized losses (gains) on non-real estate investments | 14,432 | (244,031) | 46,251 | (233,538) | 14,013 | (183,348) | (140,495) | |||||||||||||||||||||||||||||||||||||
| Significant realized gains on non-real estate investments | (52,427) | (3) | (34,773) | (22,919) | — | — | (110,119) | — | ||||||||||||||||||||||||||||||||||||
| Impairment of non-real estate investments | — | — | — | — | — | — | 24,482 | |||||||||||||||||||||||||||||||||||||
Impairment of real estate | 24,018 | (4) | 3,172 | — | — | — | 27,190 | 15,221 | ||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | — | 67,253 | 7,898 | 52,770 | 67,253 | 52,770 | |||||||||||||||||||||||||||||||||||||
| Termination fee | — | — | — | — | (86,179) | (5) | — | (86,179) | ||||||||||||||||||||||||||||||||||||
| Acceleration of stock compensation expense due to executive officer resignation | — | — | — | — | 4,499 | — | 4,499 | |||||||||||||||||||||||||||||||||||||
Allocation to unvested restricted stock awards | 149 | 3,428 | (1,208) | 2,774 | 179 | 2,400 | 1,804 | |||||||||||||||||||||||||||||||||||||
| Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted | $ | 296,031 | $ | 282,254 | $ | 262,986 | $ | 246,647 | $ | 230,743 | $ | 841,260 | $ | 677,145 | ||||||||||||||||||||||||||||||
(1)Related to a property in a non-core submarket to reduce the carrying amount of the property to its estimated fair value less costs to sell, upon our review of the current local market conditions.
(2)Calculated in accordance with standards established by the Nareit Board of Governors.
(3)Includes three separate significant realized gains from the following transactions: (i) the sale of shares in an investment in a publicly traded biotechnology company, (ii) a distribution received from a limited partnership investment, and (iii) the acquisition of one of our privately held biotechnology investments by a publicly traded biotechnology company.
(4)Primarily related to an impairment charge of $22.5 million to reduce the carrying amount of an option to purchase a land parcel in our SoMa submarket for the development of an office property to its estimated fair value less costs to sell, upon our classification of the option as held for sale in September 2021.
(5)Represents termination fee of $89.5 million and related expenses of $3.3 million recognized during the three months ended September 30, 2020, upon termination of our contract with Pinterest, Inc. related to a lease at 88 Bluxome Street in our SoMa submarket.
| Funds From Operations and Funds From Operations per Share (continued) | | ||||
September 30, 2021 | |||||
| (In thousands, except per share amounts) | |||||
The following table presents a reconciliation of net income (loss) per share attributable to Alexandria’s common stockholders, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations per share attributable to Alexandria’s common stockholders – diluted, and funds from operations per share attributable to Alexandria’s common stockholders – diluted, as adjusted, for the periods below. Per share amounts may not add due to rounding.
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||||||||
| Net income per share attributable to Alexandria’s common stockholders – diluted | $ | 0.67 | $ | 2.61 | $ | 0.04 | $ | 3.26 | $ | 0.63 | $ | 3.38 | $ | 2.61 | ||||||||||||||||||||||||||||||
Depreciation and amortization of real estate assets | 1.26 | 1.19 | 1.20 | 1.21 | 1.28 | 3.66 | 3.81 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on sales of real estate | — | — | (0.02) | (1.14) | (0.01) | (0.02) | (0.01) | |||||||||||||||||||||||||||||||||||||
| Impairment of real estate – rental properties | 0.12 | 0.01 | 0.04 | 0.19 | 0.06 | 0.18 | 0.12 | |||||||||||||||||||||||||||||||||||||
Allocation to unvested restricted stock awards | (0.01) | (0.01) | — | (0.01) | (0.01) | (0.05) | (0.04) | |||||||||||||||||||||||||||||||||||||
Funds from operations per share attributable to Alexandria’s common stockholders – diluted | 2.04 | 3.80 | 1.26 | 3.51 | 1.95 | 7.15 | 6.49 | |||||||||||||||||||||||||||||||||||||
| Unrealized losses (gains) on non-real estate investments | 0.10 | (1.67) | 0.34 | (1.75) | 0.11 | (1.26) | (1.13) | |||||||||||||||||||||||||||||||||||||
| Significant realized gains on non-real estate investments | (0.35) | (0.24) | (0.17) | — | — | (0.76) | — | |||||||||||||||||||||||||||||||||||||
| Impairment of non-real estate investments | — | — | — | — | — | — | 0.20 | |||||||||||||||||||||||||||||||||||||
| Impairment of real estate | 0.16 | 0.02 | — | — | — | 0.19 | 0.12 | |||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | — | 0.49 | 0.06 | 0.42 | 0.46 | 0.42 | |||||||||||||||||||||||||||||||||||||
| Termination fee | — | — | — | — | (0.69) | — | (0.69) | |||||||||||||||||||||||||||||||||||||
| Acceleration of stock compensation expense due to executive officer resignation | — | — | — | — | 0.04 | — | 0.04 | |||||||||||||||||||||||||||||||||||||
Allocation to unvested restricted stock awards | — | 0.02 | (0.01) | 0.02 | — | 0.02 | 0.01 | |||||||||||||||||||||||||||||||||||||
Funds from operations per share attributable to Alexandria’s common stockholders – diluted, as adjusted | $ | 1.95 | $ | 1.93 | $ | 1.91 | $ | 1.84 | $ | 1.83 | $ | 5.80 | $ | 5.46 | ||||||||||||||||||||||||||||||
| Weighted-average shares of common stock outstanding – diluted | 151,561 | 146,058 | 137,688 | 133,827 | 125,828 | 145,153 | 124,027 | |||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL
INFORMATION
| |||||
| Company Profile | |||||
September 30, 2021 | |||||
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, agtech, and technology campuses in AAA innovation cluster locations, with a total market capitalization of $38.6 billion as of September 30, 2021, and an asset base in North America of 63.9 million SF. The asset base in North America includes 38.7 million RSF of operating properties and 4.3 million RSF of Class A properties undergoing construction, 8.9 million RSF of near-term and intermediate-term development and redevelopment projects, and 12.0 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, the San Francisco Bay Area, 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, agtech, and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agtech, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For additional information on Alexandria, please visit www.are.com.
Tenant base
Alexandria is known for our high-quality and diverse tenant base, with 53% 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, agtech, and technology 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, agtech, and technology communities in their respective innovation clusters. We believe that our expertise, experience, reputation, and key relationships in the real estate, life science, agtech, and technology sectors provide Alexandria significant competitive advantages in attracting new business opportunities.
Alexandria’s executive and senior management team consists of 53 individuals, averaging 25 years of real estate experience, including 12 years with Alexandria. Our executive management team alone averages 18 years of experience with Alexandria.
| EXECUTIVE MANAGEMENT TEAM | ||||||||
| Joel S. Marcus | Stephen A. Richardson | |||||||
| Executive Chairman & Founder | Co-Chief Executive Officer | |||||||
| Dean A. Shigenaga | Peter M. Moglia | |||||||
| President & Chief Financial Officer | Co-Chief Executive Officer & Co-Chief Investment Officer | |||||||
| Daniel J. Ryan | Lawrence J. Diamond | |||||||
| Co-Chief Investment Officer & Regional Market Director – San Diego | Co-Chief Operating Officer & Regional Market Director – Maryland | |||||||
| Vincent R. Ciruzzi | John H. Cunningham | |||||||
| Chief Development Officer | Executive Vice President – Regional Market Director – New York City | |||||||
| Hunter L. Kass | Jackie B. Clem | |||||||
| Executive Vice President – Regional Market Director – Greater Boston | General Counsel & Secretary | |||||||
| Joseph Hakman | Terezia C. Nemeth | |||||||
| Co-Chief Operating Officer & Chief Strategic Transactions Officer | Executive Vice President – Regional Market Director – San Francisco Bay Area | |||||||
| Marc E. Binda | Andres R. Gavinet | |||||||
| Executive Vice President – Finance & Treasurer | Chief Accounting Officer | |||||||
| Gary D. Dean | ||||||||
| Executive Vice President – Real Estate Legal Affairs | ||||||||
| |||||
| Investor Information | |||||
September 30, 2021 | |||||
| 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 | |||||||||||||||
| Website: | 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 Lynch | Citigroup Global Markets Inc. | JMP Securities | RBC Capital Markets | |||||||||||||||||
| Jamie Feldman | Michael Bilerman / Emmanuel Korchman | Aaron Hecht | Michael Carroll / Jason Idoine | |||||||||||||||||
| (646) 855-5808 | (212) 816-1383 / (212) 816-1382 | (415) 835-3963 | (440) 715-2649 / (440) 715-2651 | |||||||||||||||||
| Berenberg Capital Markets | Evercore ISI | J.P. Morgan Securities LLC | Robert W. Baird & Co. Incorporated | |||||||||||||||||
| Connor Siversky / Nate Crossett | Sheila McGrath / Wendy Ma | Anthony Paolone / Ray Zhong | David Rodgers / Nicholas Thillman | |||||||||||||||||
| (646) 949-9037 / (646) 949-9030 | (212) 497-0882 / (212) 497-0870 | (212) 622-6682 / (212) 622-5411 | (216) 737-7341 / (414) 298-5053 | |||||||||||||||||
| BTIG, LLC | Green Street | Mizuho Securities USA LLC | SMBC Nikko Securities America, Inc. | |||||||||||||||||
| Tom Catherwood / James Sullivan | Daniel Ismail / Dylan Burzinski | Haendel St. Juste / Lydia Jiang | Richard Anderson / Jay Kornreich | |||||||||||||||||
| (212) 738-6140 / (212) 738-6139 | (949) 640-8780 / (949) 640-8780 | (212) 205-7860 / (212) 209-9379 | (646) 521-2351 / (646) 424-3202 | |||||||||||||||||
| CFRA | ||||||||||||||||||||
| Kenneth Leon | ||||||||||||||||||||
| (646) 517-2552 | ||||||||||||||||||||
| Fixed Income Coverage | Rating Agencies | |||||||||||||||||||
| Barclays Capital Inc. | Stifel Financial Corp. | Moody’s Investors Service | S&P Global Ratings | |||||||||||||||||
| Srinjoy Banerjee / Devon Zhou | Thierry Perrein | (212) 553-0376 | Fernanda Hernandez / Michael Souers | |||||||||||||||||
| (212) 526-3521 / (212) 526-6961 | (646) 376-5303 | (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 | | ||||
September 30, 2021 | |||||
| (Dollars in thousands, except per share amounts) | |||||
| Three Months Ended (unless stated otherwise) | ||||||||||||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||||||
Selected financial data from consolidated financial statements and related information | ||||||||||||||||||||||||||||||||
Rental revenues | $ | 415,918 | $ | 396,804 | $ | 370,233 | $ | 353,950 | $ | 438,393 | ||||||||||||||||||||||
Tenant recoveries | $ | 130,609 | $ | 111,567 | $ | 108,462 | $ | 107,385 | $ | 105,019 | ||||||||||||||||||||||
| General and administrative expenses | $ | 37,931 | $ | 37,880 | $ | 33,996 | $ | 32,690 | $ | 36,913 | ||||||||||||||||||||||
General and administrative expenses as a percentage of net operating income – trailing 12 months | 10.1% | 9.8% | 9.8% | 9.8% | 9.9% | |||||||||||||||||||||||||||
| Operating margin | 70% | 72% | 71% | 71% | 74% | |||||||||||||||||||||||||||
Adjusted EBITDA margin | 68% | 69% | 69% | 69% | 67% | |||||||||||||||||||||||||||
Adjusted EBITDA – quarter annualized | $ | 1,557,652 | $ | 1,483,576 | $ | 1,398,880 | $ | 1,331,608 | $ | 1,272,280 | ||||||||||||||||||||||
Adjusted EBITDA – trailing 12 months | $ | 1,442,929 | $ | 1,371,586 | $ | 1,314,153 | $ | 1,274,187 | $ | 1,228,440 | ||||||||||||||||||||||
Net debt at end of period | $ | 8,960,645 | $ | 8,550,339 | $ | 8,074,808 | $ | 7,021,893 | $ | 7,396,412 | ||||||||||||||||||||||
| Net debt and preferred stock to Adjusted EBITDA – quarter annualized | 5.8x | 5.8x | 5.8x | 5.3x | 5.8x | |||||||||||||||||||||||||||
| Net debt and preferred stock to Adjusted EBITDA – trailing 12 months | 6.2x | 6.2x | 6.1x | 5.5x | 6.0x | |||||||||||||||||||||||||||
| Gross assets at end of period | $ | 32,173,158 | $ | 30,480,630 | $ | 28,553,943 | $ | 26,010,316 | $ | 24,989,748 | ||||||||||||||||||||||
| Net debt to gross assets at end of period | 28% | 28% | 28% | 27% | 30% | |||||||||||||||||||||||||||
Fixed-charge coverage ratio – quarter annualized | 5.1x | 4.9x | 4.7x | 4.6x | 4.3x | |||||||||||||||||||||||||||
Fixed-charge coverage ratio – trailing 12 months | 4.8x | 4.6x | 4.4x | 4.4x | 4.3x | |||||||||||||||||||||||||||
Unencumbered net operating income as a percentage of total net operating income | 97% | 97% | 97% | 97% | 96% | |||||||||||||||||||||||||||
Closing stock price at end of period | $ | 191.07 | $ | 181.94 | $ | 164.30 | $ | 178.22 | $ | 160.00 | ||||||||||||||||||||||
Common shares outstanding (in thousands) at end of period | 153,284 | 150,708 | 145,656 | 136,690 | 133,312 | |||||||||||||||||||||||||||
Total equity capitalization at end of period | $ | 29,287,880 | $ | 27,419,791 | $ | 23,931,208 | $ | 24,360,950 | $ | 21,329,886 | ||||||||||||||||||||||
Total market capitalization at end of period | $ | 38,551,467 | $ | 36,260,790 | $ | 32,472,126 | $ | 31,924,236 | $ | 29,153,057 | ||||||||||||||||||||||
Dividend per share – quarter/annualized | $1.12/$4.48 | $1.12/$4.48 | $1.09/$4.36 | $1.09/$4.36 | $1.06/$4.24 | |||||||||||||||||||||||||||
Dividend payout ratio for the quarter | 58% | 60% | 60% | 60% | 61% | |||||||||||||||||||||||||||
Dividend yield – annualized | 2.3% | 2.5% | 2.7% | 2.4% | 2.7% | |||||||||||||||||||||||||||
Amounts related to operating leases: | ||||||||||||||||||||||||||||||||
| Operating lease liabilities at end of period | $ | 371,538 | $ | 371,905 | $ | 345,048 | $ | 345,750 | $ | 326,046 | ||||||||||||||||||||||
Rent expense | $ | 6,228 | $ | 6,213 | $ | 5,866 | $ | 5,543 | $ | 4,729 | ||||||||||||||||||||||
Capitalized interest | $ | 43,185 | $ | 43,492 | $ | 39,886 | $ | 37,589 | $ | 32,556 | ||||||||||||||||||||||
Weighted-average interest rate for capitalization of interest during the period | 3.30% | 3.47% | 3.44% | 3.66% | 3.64% | |||||||||||||||||||||||||||
| Financial and Asset Base Highlights (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands, except annual rental revenue per occupied RSF amounts) | |||||
| Three Months Ended (unless stated otherwise) | ||||||||||||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||||||
| Amounts included in funds from operations and non-revenue-enhancing capital expenditures | ||||||||||||||||||||||||||||||||
Straight-line rent revenue | $ | 33,918 | $ | 27,903 | $ | 27,382 | $ | 23,890 | $ | 28,822 | ||||||||||||||||||||||
Amortization of acquired below-market leases | $ | 13,664 | $ | 13,267 | $ | 12,112 | $ | 13,514 | $ | 13,979 | ||||||||||||||||||||||
Straight-line rent expense on ground leases | $ | 58 | $ | 248 | $ | 290 | $ | 348 | $ | 229 | ||||||||||||||||||||||
Stock compensation expense | $ | 9,728 | $ | 12,242 | $ | 12,446 | $ | 11,394 | $ | 12,994 | ||||||||||||||||||||||
Amortization of loan fees | $ | 2,854 | $ | 2,859 | $ | 2,817 | $ | 2,905 | $ | 2,605 | ||||||||||||||||||||||
Amortization of debt premiums | $ | 498 | $ | 465 | $ | 576 | $ | 869 | $ | 910 | ||||||||||||||||||||||
Non-revenue-enhancing capital expenditures: | ||||||||||||||||||||||||||||||||
Building improvements | $ | 3,901 | $ | 3,669 | $ | 3,760 | $ | 3,466 | $ | 3,358 | ||||||||||||||||||||||
Tenant improvements and leasing commissions | $ | 16,409 | $ | 47,439 | $ | 16,035 | $ | 31,235 | $ | 34,036 | ||||||||||||||||||||||
Operating statistics and related information (at end of period) | ||||||||||||||||||||||||||||||||
Number of properties – North America | 407 | 381 | 360 | 338 | 326 | |||||||||||||||||||||||||||
RSF – North America (including development and redevelopment projects under construction) | 43,044,195 | 40,076,883 | 37,916,882 | 35,163,572 | 34,071,653 | |||||||||||||||||||||||||||
Total square feet – North America | 63,858,780 | 58,108,390 | 52,591,039 | 49,712,701 | 47,389,023 | |||||||||||||||||||||||||||
| Annual rental revenue per occupied RSF – North America | $ | 47.73 | $ | 48.65 | $ | 49.58 | $ | 49.08 | $ | 49.55 | ||||||||||||||||||||||
| Occupancy of operating properties – North America | 94.4% | 94.3% | 94.5% | 94.6% | 94.9% | |||||||||||||||||||||||||||
| Occupancy of operating properties – North America (excluding vacancy at recently acquired properties) | 98.5% | (1) | 98.1% | 98.0% | 97.7% | 97.7% | ||||||||||||||||||||||||||
| Occupancy of operating and redevelopment properties – North America | 89.6% | 90.1% | 89.2% | 90.0% | 91.3% | |||||||||||||||||||||||||||
Weighted-average remaining lease term (in years) | 7.4 | 7.5 | 7.6 | 7.6 | 7.7 | |||||||||||||||||||||||||||
Total leasing activity – RSF | 1,810,630 | 1,933,838 | 1,677,659 | 1,369,599 | 1,208,382 | |||||||||||||||||||||||||||
Lease renewals and re-leasing of space – change in average new rental rates over expiring rates: | ||||||||||||||||||||||||||||||||
Rental rate increases | 35.3% | 42.4% | 36.2% | 29.8% | 39.9% | |||||||||||||||||||||||||||
| Rental rate increases (cash basis) | 19.3% | 25.4% | 17.4% | 10.7% | 30.9% | |||||||||||||||||||||||||||
| RSF (included in total leasing activity above) | 671,775 | 1,472,713 | 521,825 | 699,916 | 605,765 | |||||||||||||||||||||||||||
Same property – percentage change over comparable quarter from prior year: | ||||||||||||||||||||||||||||||||
| Net operating income increase | 3.0% | 3.7% | 4.4% | 2.7% | 2.9% | |||||||||||||||||||||||||||
| Net operating income increase (cash basis) | 7.1% | 7.8% | 6.1% | 5.0% | 4.9% | |||||||||||||||||||||||||||
(1)Refer to “Occupancy” in this Supplemental Information for additional details.
| |||||
| High-Quality, Diverse, and Innovative Tenants | |||||
September 30, 2021 | |||||
Long-Duration Cash Flows From High-Quality, Diverse, and
Innovative Tenants
| Investment-Grade or Publicly Traded Large Cap Tenants | Tenant Mix | ||||||||||||||||
 | |||||||||||||||||
| 53% | |||||||||||||||||
of ARE’s Annual Rental Revenue(1) | |||||||||||||||||
| Long-Duration Lease Terms | |||||||||||||||||
| 7.4 Years | |||||||||||||||||
Weighted-Average Remaining Term(2) | |||||||||||||||||
Percentage of ARE’s Annual Rental Revenue(1) | |||||||||||||||||
(1)Represents annual rental revenue in effect as of September 30, 2021.
(2)Based on aggregate annual rental revenue in effect as of September 30, 2021. Refer to “Annual rental revenue” in the “Definitions and reconciliations” of this Supplemental Information for additional details about our methodology on annual rental revenue from unconsolidated real estate joint ventures.
(3)Represents annual rental revenue currently generated from office space that is targeted for a future change in use. The weighted-average remaining term of these leases is 3.2 years.
(4)Represents annual rental revenue from publicly traded technology tenants with an average daily market capitalization greater than $200 billion for the twelve months ended September 30, 2021.
(5)Our other tenants, aggregating 5.0% of our annual rental revenue, comprise 4.0% of annual rental revenue from technology, professional services, finance, telecommunications, and construction/real estate companies and only 1.0% from retail-related tenants.
| |||||
| Class A Properties in AAA Locations | |||||
September 30, 2021 | |||||
High-Quality Cash Flows From High-Quality Tenants and
Class A Properties in AAA Locations
| Industry-Leading Tenant Roster | AAA Locations | |||||||||||||
 | ||||||||||||||
| 89% | ||||||||||||||
| of ARE’s Top 20 Tenants’ | ||||||||||||||
Annual Rental Revenue(1) | ||||||||||||||
| Is From Investment-Grade | ||||||||||||||
| or Publicly Traded Large Cap Tenants | ||||||||||||||
Percentage of ARE’s Annual Rental Revenue(1) | ||||||||||||||
(1)Represents annual rental revenue in effect as of September 30, 2021.
| |||||
| Occupancy | |||||
September 30, 2021 | |||||
Solid Historical Occupancy(1) | Occupancy Across Key Locations(2) | |||||||||||||
 | ||||||||||||||
| 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 September 30, 2021.
(2)As of September 30, 2021.
(3)Excludes 1.6 million RSF, or 4.1%, of vacancy at recently acquired properties (noted below), representing lease-up opportunities that are expected to generate incremental annual rental revenues in excess of $59 million upon full lease-up. Approximately 41% of the vacant 1.6 million RSF is currently leased/negotiating, with occupancy expected primarily over the next two quarters. Excluding acquired vacancies, occupancy of operating properties in North America was 98.5% as of September 30, 2021, up 80 bps from 97.7% as of December 31, 2020. The following table provides vacancy detail for our recent acquisitions:
| Incremental Projected Annual Rental Revenue Upon Full Lease-Up | ||||||||||||||||||||||||||||||||||||||
As of September 30, 2021 | Percentage of Vacancy Leased/Negotiating | |||||||||||||||||||||||||||||||||||||
| Vacant | Occupancy Impact | |||||||||||||||||||||||||||||||||||||
| Property | Market/Submarket | RSF | Region | Consolidated | ||||||||||||||||||||||||||||||||||
| 601, 611, and 651 Gateway Boulevard | San Francisco Bay Area/South San Francisco | 314,991 | 3.8 | % | 0.8 | % | 45 | % | >$59 million | |||||||||||||||||||||||||||||
| 275 Grove Street | Greater Boston/Route 128 | 180,648 | 1.8 | % | 0.5 | 65 | ||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham | Research Triangle/Research Triangle | 150,337 | 4.7 | % | 0.4 | 94 | ||||||||||||||||||||||||||||||||
| Other | Greater Boston/Other | 95,501 | 0.9 | % | 0.2 | — | ||||||||||||||||||||||||||||||||
| SD Tech by Alexandria | San Diego/Sorrento Mesa | 92,768 | 1.2 | % | 0.2 | 13 | ||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Fenway | Greater Boston/Fenway | 81,538 | 0.8 | % | 0.2 | — | ||||||||||||||||||||||||||||||||
| Other acquisitions | Various | 674,471 | N/A | 1.8 | 36 | |||||||||||||||||||||||||||||||||
| 1,590,254 | 4.1 | % | 41 | % | ||||||||||||||||||||||||||||||||||
| |||||
| Key Operating Metrics | |||||
September 30, 2021 | |||||
| Historical Same Property Net Operating Income Growth | Favorable Lease Structure(1) | |||||||||||||||||||||||||||||||
 |  | Strategic Lease Structure by Owner and Operator of Collaborative Life Science, Agtech, and Technology Campuses | ||||||||||||||||||||||||||||||
| Increasing cash flows | ||||||||||||||||||||||||||||||||
Percentage of leases containing annual rent escalations | 95% | |||||||||||||||||||||||||||||||
| Stable cash flows | ||||||||||||||||||||||||||||||||
Percentage of triple net leases | 92% | (2) | ||||||||||||||||||||||||||||||
| Lower capex burden | ||||||||||||||||||||||||||||||||
Percentage of leases providing for the recapture of capital expenditures | 94% | |||||||||||||||||||||||||||||||
| Historical Rental Rate Growth: Renewed/Re-Leased Space | Margins(3) | |||||||||||||||||||||||||||||||
 |  | |||||||||||||||||||||||||||||||
| Operating | Adjusted EBITDA | |||||||||||||||||||||||||||||||
| 70% | 68% | |||||||||||||||||||||||||||||||
(1)Percentages calculated based on RSF as of September 30, 2021.
(2)Decline to 92% from 94% as of June 30, 2021, related to non-triple net leases in place at operating properties with future development or redevelopment opportunities acquired during the three months ended September 30, 2021. We expect to transition these properties to our triple net lease structure, in conjunction with our future development or redevelopment activities.
(3)Represents percentages for the three months ended September 30, 2021.
| Same Property Performance | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| September 30, 2021 | September 30, 2021 | |||||||||||||||||||||||||||||||||||||
Same Property Financial Data | Three Months Ended | Nine Months Ended | Same Property Statistical Data | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
Percentage change over comparable period from prior year: | Number of same properties | 259 | 249 | |||||||||||||||||||||||||||||||||||
Net operating income increase | 3.0% | 4.1% | Rentable square feet | 25,493,710 | 23,701,101 | |||||||||||||||||||||||||||||||||
Net operating income increase (cash basis) | 7.1% | 7.3% | Occupancy – current-period average | 94.8% | 96.5% | |||||||||||||||||||||||||||||||||
Operating margin | 71% | 72% | Occupancy – same-period prior-year average | 95.1% | 96.2% | |||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||
| Income from rentals: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Same properties | $ | 323,383 | $ | 313,015 | $ | 10,368 | 3.3 | % | $ | 915,884 | $ | 884,359 | $ | 31,525 | 3.6 | % | |||||||||||||||||||||||||||||||||||||
| Non-same properties | 92,535 | 125,378 | (1) | (32,843) | (26.2) | (1) | 267,071 | 233,531 | (1) | 33,540 | 14.4 | (1) | |||||||||||||||||||||||||||||||||||||||||
| Rental revenues | 415,918 | 438,393 | (22,475) | (5.1) | 1,182,955 | 1,117,890 | 65,065 | 5.8 | |||||||||||||||||||||||||||||||||||||||||||||
| Same properties | 108,958 | 98,749 | 10,209 | 10.3 | 298,955 | 275,953 | 23,002 | 8.3 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-same properties | 21,651 | 6,270 | 15,381 | 245.3 | 51,683 | 23,030 | 28,653 | 124.4 | |||||||||||||||||||||||||||||||||||||||||||||
| Tenant recoveries | 130,609 | 105,019 | 25,590 | 24.4 | 350,638 | 298,983 | 51,655 | 17.3 | |||||||||||||||||||||||||||||||||||||||||||||
| Income from rentals | 546,527 | 543,412 | 3,115 | 0.6 | 1,533,593 | 1,416,873 | 116,720 | 8.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Same properties | 178 | 126 | 52 | 41.3 | 382 | 237 | 145 | 61.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-same properties | 1,054 | 1,504 | (450) | (29.9) | 3,252 | 4,807 | (1,555) | (32.3) | |||||||||||||||||||||||||||||||||||||||||||||
| Other income | 1,232 | 1,630 | (398) | (24.4) | 3,634 | 5,044 | (1,410) | (28.0) | |||||||||||||||||||||||||||||||||||||||||||||
| Same properties | 432,519 | 411,890 | 20,629 | 5.0 | 1,215,221 | 1,160,549 | 54,672 | 4.7 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-same properties | 115,240 | 133,152 | (17,912) | (13.5) | 322,006 | 261,368 | 60,638 | 23.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 547,759 | 545,042 | 2,717 | 0.5 | 1,537,227 | 1,421,917 | 115,310 | 8.1 | |||||||||||||||||||||||||||||||||||||||||||||
| Same properties | 125,661 | 113,969 | 11,692 | 10.3 | 336,317 | 316,028 | 20,289 | 6.4 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-same properties | 40,334 | 26,474 | 13,860 | 52.4 | 111,521 | 77,429 | 34,092 | 44.0 | |||||||||||||||||||||||||||||||||||||||||||||
| Rental operations | 165,995 | 140,443 | 25,552 | 18.2 | 447,838 | 393,457 | 54,381 | 13.8 | |||||||||||||||||||||||||||||||||||||||||||||
| Same properties | 306,858 | 297,921 | 8,937 | 3.0 | 878,904 | 844,521 | 34,383 | 4.1 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-same properties | 74,906 | 106,678 | (31,772) | (29.8) | 210,485 | 183,939 | 26,546 | 14.4 | |||||||||||||||||||||||||||||||||||||||||||||
| Net operating income | $ | 381,764 | $ | 404,599 | $ | (22,835) | (5.6 | %) | $ | 1,089,389 | $ | 1,028,460 | $ | 60,929 | 5.9 | % | |||||||||||||||||||||||||||||||||||||
Net operating income – same properties | $ | 306,858 | $ | 297,921 | $ | 8,937 | 3.0 | % | $ | 878,904 | $ | 844,521 | $ | 34,383 | 4.1 | % | |||||||||||||||||||||||||||||||||||||
| Straight-line rent revenue | (16,654) | (25,852) | 9,198 | (35.6) | (47,713) | (65,899) | 18,186 | (27.6) | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired below-market leases | (4,201) | (4,965) | 764 | (15.4) | (9,844) | (13,166) | 3,322 | (25.2) | |||||||||||||||||||||||||||||||||||||||||||||
Net operating income – same properties (cash basis) | $ | 286,003 | $ | 267,104 | $ | 18,899 | 7.1 | % | $ | 821,347 | $ | 765,456 | $ | 55,891 | 7.3 | % | |||||||||||||||||||||||||||||||||||||
(1)Includes the effect of a termination fee of $89.5 million recognized in 3Q20. Excluding this termination fee, growth in rental revenues for 3Q21 and YTD 3Q21 was 19.2% and 15.0%, respectively. Refer to “Funds from operations and funds from operations per share” of this Earnings Press Release for additional details.
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.
| Leasing Activity | | ||||
September 30, 2021 | |||||
| (Dollars per RSF) | |||||
| Three Months Ended | Nine Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2021 | September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Including Straight-Line Rent | Cash Basis | Including Straight-Line Rent | Cash Basis | Including Straight-Line Rent | Cash Basis | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing activity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Renewed/re-leased space(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental rate changes | 35.3% | 19.3% | 39.4% | 22.3% | 37.6% | 18.3% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New rates | $54.66 | $52.90 | $57.47 | $55.08 | $49.51 | $46.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiring rates | $40.39 | $44.34 | $41.23 | $45.05 | $35.99 | $39.32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSF | 671,775 | 2,666,313 | 2,556,833 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tenant improvements/leasing commissions | $24.00 | $29.96 | $35.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average lease term | 4.4 years | 5.7 years | 6.0 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Developed/redeveloped/previously vacant space leased(2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New rates | $103.29 | $88.46 | $72.94 | $64.67 | $56.67 | $53.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSF | 1,138,855 | 2,755,814 | 1,802,013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average lease term | 11.2 years | 10.4 years | 9.0 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing activity summary (totals): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New rates | $85.25 | $75.27 | $65.33 | $59.96 | $52.47 | $49.46 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSF | 1,810,630 | 5,422,127 | (3)(4) | 4,358,846 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average lease term | 8.7 years | 8.1 years | 7.3 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease expirations(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expiring rates | $40.74 | $42.61 | $40.38 | $43.16 | $36.03 | $39.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSF | 870,283 | 3,329,865 | 3,560,188 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 94,202 RSF and 96,383 RSF as of September 30, 2021, and December 31, 2020, respectively.
(2)Refer to “New Class A development and redevelopment properties: summary of pipeline” of this Supplemental Information for additional information on total project costs.
(3)Represents the highest leasing activity in Company history, surpassing our record annual leasing volume of 5.1 million RSF during the year ended December 31, 2019.
(4)During the nine months ended September 30, 2021, we granted tenant concessions/free rent averaging 2.5 months with respect to the 5,422,127 RSF leased. Approximately 52% of the leases executed during the nine months ended September 30, 2021, did not include concessions for free rent.
| |||||
| Contractual Lease Expirations | |||||
September 30, 2021 | |||||
| Year | RSF | Percentage of Occupied RSF | Annual Rental Revenue (per RSF)(1) | Percentage of Total Annual Rental Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | (2) | 669,501 | 1.8 | % | $ | 42.01 | 1.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2,514,927 | 6.9 | % | $ | 43.75 | 6.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 3,593,276 | 9.9 | % | $ | 40.09 | 8.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 3,220,392 | 8.9 | % | $ | 43.27 | 8.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2,894,465 | 8.0 | % | $ | 50.51 | 8.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2,282,272 | 6.3 | % | $ | 45.40 | 6.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2027 | 2,264,684 | 6.2 | % | $ | 48.00 | 6.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2028 | 3,046,238 | 8.4 | % | $ | 49.97 | 8.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2029 | 2,333,448 | 6.4 | % | $ | 53.34 | 7.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2030 | 2,282,456 | 6.3 | % | $ | 53.32 | 7.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thereafter | 11,285,360 | 30.9 | % | $ | 47.44 | 31.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Market | 2021 Contractual Lease Expirations (in RSF) | Annual Rental Revenue (per RSF)(1) | 2022 Contractual Lease Expirations (in RSF) | Annual Rental Revenue (per RSF)(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leased | Negotiating/ Anticipating | Targeted for Development/ Redevelopment | Remaining Expiring Leases | Total(2) | Leased | Negotiating/ Anticipating | Targeted for Development/ Redevelopment(3) | Remaining Expiring Leases(4) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Boston | 91,284 | 16,674 | 202,428 | 5,807 | 316,193 | $ | 37.23 | 57,663 | 158,561 | — | 267,256 | 483,480 | $ | 57.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | 63,831 | 18,223 | — | 60,904 | 142,958 | 63.31 | — | 60,075 | 490,127 | 180,190 | 730,392 | 51.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New York City | — | 130 | — | 1,191 | 1,321 | N/A | 14,891 | — | — | 3,464 | 18,355 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego | 38,201 | — | 32,774 | 62,175 | 133,150 | 29.54 | 103,730 | 6,196 | 354,123 | 160,226 | 624,275 | 35.26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle | — | — | — | 17,883 | 17,883 | 16.09 | — | 15,177 | 51,255 | 124,951 | 191,383 | 32.79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maryland | 7,268 | — | — | 3,125 | 10,393 | 37.63 | 35,789 | 35,144 | — | 9,966 | 80,899 | 26.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research Triangle | 21,215 | 6,871 | — | 10,747 | 38,833 | 37.78 | — | 7,591 | 62,490 | 149,202 | 219,283 | 24.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canada | — | — | — | — | — | — | — | 26,426 | — | 2,197 | 28,623 | 22.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cluster/other markets | — | — | — | 8,770 | 8,770 | 104.46 | — | 10,430 | — | 127,807 | 138,237 | 35.21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 221,799 | 41,898 | 235,202 | 170,602 | 669,501 | $ | 42.01 | 212,073 | 319,600 | 957,995 | 1,025,259 | 2,514,927 | $ | 43.75 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of expiring leases | 33 | % | 6 | % | 35 | % | 26 | % | 100 | % | 8 | % | 13 | % | 38 | % | 41 | % | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Represents amounts in effect as of September 30, 2021.
(2)Excludes month-to-month leases aggregating 94,202 RSF as of September 30, 2021.
(3)Represents RSF targeted for development or redevelopment upon expiration of existing in-place leases primarily related to recently acquired properties with an average contractual lease expiration date, weighted by annual rental revenue, of April 26, 2022. 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.
(4)The largest remaining contractual expiration is 113,555 RSF in our Cambridge/Inner Suburbs submarket.
| Top 20 Tenants | | ||||
September 30, 2021 | |||||
| (Dollars in thousands, except average market cap amounts) | |||||
89% 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’s | S&P | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 | Bristol-Myers Squibb Company | 7.0 | 916,234 | $ | 53,085 | 3.1 | % | A2 | A+ | $ | 142.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2 | Takeda Pharmaceutical Company Ltd. | 7.9 | 606,249 | 39,416 | 2.3 | Baa2 | BBB+ | $ | 54.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3 | Moderna, Inc. | 11.0 | 855,458 | 39,341 | 2.3 | — | — | $ | 79.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4 | Facebook, Inc. | 10.3 | 903,786 | 38,795 | 2.3 | — | — | $ | 869.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 | Eli Lilly and Company | 7.5 | 602,874 | 37,755 | 2.2 | A2 | A+ | $ | 189.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6 | Sanofi | 7.7 | 553,693 | 36,952 | 2.2 | A1 | AA | $ | 126.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7 | Illumina, Inc. | 8.9 | 891,495 | 36,141 | 2.1 | Baa3 | BBB | $ | 60.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8 | Novartis AG | 6.8 | 447,820 | 30,595 | 1.8 | A1 | AA- | $ | 219.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9 | Uber Technologies, Inc. | 61.2 | (2) | 1,009,188 | 27,477 | 1.6 | — | — | $ | 91.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10 | Roche | 2.5 | (3) | 546,893 | 26,077 | 1.5 | Aa3 | AA | $ | 308.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11 | bluebird bio, Inc. | 5.7 | 312,805 | 23,140 | 1.4 | — | — | $ | 2.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12 | Maxar Technologies | 4.0 | (4) | 478,000 | 21,803 | 1.3 | — | — | $ | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 13 | Massachusetts Institute of Technology | 7.2 | 257,626 | 21,165 | 1.2 | Aaa | AAA | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14 | United States Government | 13.5 | 918,516 | 20,276 | 1.2 | Aaa | AA+ | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15 | The Children’s Hospital Corporation | 15.1 | 269,816 | 20,066 | 1.2 | Aa2 | AA | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 16 | New York University | 10.0 | 204,691 | 19,531 | 1.2 | Aa2 | AA- | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17 | Merck & Co., Inc. | 12.4 | 311,015 | 19,392 | 1.1 | A1 | AA- | $ | 196.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 18 | Pfizer Inc. | 3.4 | 416,896 | 17,760 | 1.0 | A2 | A+ | $ | 218.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 19 | FibroGen, Inc. | 7.2 | 234,249 | 16,896 | 1.0 | — | — | $ | 2.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 20 | Amgen Inc. | 2.5 | 407,369 | 16,838 | 1.0 | Baa1 | A- | $ | 136.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total/weighted-average | 10.6 | (2) | 11,144,673 | $ | 562,501 | 33.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Based on aggregate annual rental revenue in effect as of September 30, 2021. 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 about our methodology on annual rental revenue from unconsolidated real estate joint ventures and average daily market capitalization.
(2)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 real estate 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 8.1 years as of September 30, 2021.
(3)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. Excluding this 197,787 RSF, the weighted-average remaining term of space leased to Roche is 3.1 years.
(4)Represents remaining lease term at two recently acquired properties with future redevelopment and development opportunities. The leases with this tenant were in place when we acquired the properties in 2019.
| Summary of Properties and Occupancy | | ||||
September 30, 2021 | |||||
| (Dollars in thousands, except per RSF amounts) | |||||
Summary of properties
Market | RSF | Number of Properties | Annual Rental Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | % of Total | Total | % of Total | Per RSF | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater Boston | 10,163,050 | 972,216 | 885,001 | 12,020,267 | 28 | % | 82 | $ | 590,125 | 35 | % | $ | 61.58 | ||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | 8,385,438 | 535,373 | 48,722 | 8,969,533 | 21 | 68 | 419,550 | 25 | 59.92 | ||||||||||||||||||||||||||||||||||||||||||||||||||
New York City | 1,165,060 | — | 104,959 | 1,270,019 | 3 | 5 | 82,964 | 5 | 72.43 | ||||||||||||||||||||||||||||||||||||||||||||||||||
San Diego | 7,932,982 | 341,891 | 117,212 | 8,392,085 | 19 | 103 | 284,665 | 17 | 38.23 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle | 2,734,010 | — | 213,976 | 2,947,986 | 7 | 42 | 109,681 | 6 | 41.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Maryland | 3,594,657 | 84,264 | 344,226 | 4,023,147 | 9 | 50 | 96,652 | 6 | 26.97 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Research Triangle | 3,202,145 | 363,688 | 325,936 | 3,891,769 | 9 | 36 | 77,270 | 5 | 25.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Canada | 322,159 | — | — | 322,159 | 1 | 4 | 6,638 | — | 24.90 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cluster/other markets | 1,128,223 | — | — | 1,128,223 | 3 | 16 | 28,311 | 1 | 32.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Properties held for sale | 79,007 | — | — | 79,007 | — | 1 | 707 | — | 24.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 38,706,731 | 2,297,432 | 2,040,032 | 43,044,195 | 100 | % | 407 | $ | 1,696,563 | 100 | % | $ | 47.73 | ||||||||||||||||||||||||||||||||||||||||||||||
| 4,337,464 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of occupancy
| Operating Properties | Operating and Redevelopment Properties | |||||||||||||||||||||||||||||||||||||
| Market | 9/30/21 | 6/30/21 | 9/30/20 | 9/30/21 | 6/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||
| Greater Boston | 94.3 | % | (1) | 95.5 | % | 98.3 | % | 86.7 | % | 91.0 | % | 95.0 | % | |||||||||||||||||||||||||
| San Francisco Bay Area | 94.5 | (1) | 94.0 | 95.3 | 94.0 | 92.9 | 94.2 | |||||||||||||||||||||||||||||||
| New York City | 98.3 | 99.4 | 95.5 | 90.2 | 90.1 | 84.8 | ||||||||||||||||||||||||||||||||
| San Diego | 93.9 | (1) | 93.8 | 93.7 | 92.5 | 92.3 | 92.7 | |||||||||||||||||||||||||||||||
| Seattle | 96.2 | 97.6 | 91.0 | 89.2 | 90.2 | 91.0 | ||||||||||||||||||||||||||||||||
| Maryland | 99.7 | 98.9 | 96.0 | 91.0 | 90.3 | 96.0 | ||||||||||||||||||||||||||||||||
| Research Triangle | 94.1 | (1) | 92.8 | 90.5 | 85.4 | 84.1 | 73.4 | |||||||||||||||||||||||||||||||
| Subtotal | 95.0 | 95.2 | 95.2 | 90.1 | 90.9 | 91.5 | ||||||||||||||||||||||||||||||||
| Canada | 82.8 | 77.0 | 90.0 | 82.8 | 77.0 | 90.0 | ||||||||||||||||||||||||||||||||
| Non-cluster/other markets | 76.2 | 46.0 | 69.8 | 76.2 | 46.0 | 69.8 | ||||||||||||||||||||||||||||||||
| North America | 94.4 | % | (1) | 94.3 | % | 94.9 | % | 89.6 | % | 90.1 | % | 91.3 | % | |||||||||||||||||||||||||
(1)Refer to “Occupancy” of this Supplemental Information for additional details on vacancy at recently acquired properties.
| Property Listing | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater Boston | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cambridge/Inner Suburbs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® at Kendall Square | 2,365,487 | — | — | 2,365,487 | 10 | $ | 171,131 | 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 | 7 | 105,158 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
100, 200, 300, 400, 500, 600, and 700 Technology Square | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Arsenal on the Charles | 571,533 | — | 301,132 | 872,665 | 11 | 25,429 | 88.9 | 58.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | 814,779 | 462,100 | — | 1,276,879 | 11 | 66,902 | 93.4 | 93.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| One Kendall Square – Buildings 100, 200, 300, 400, 500, 600/700, 1400, 1800, and 2000 and 325 and 399 Binney Street | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 480 Arsenal Way and 500 and 550 Arsenal Street | 495,127 | — | — | 495,127 | 3 | 20,644 | 98.3 | 98.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
640 Memorial Drive | 225,504 | — | — | 225,504 | 1 | 13,861 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
780 and 790 Memorial Drive | 99,658 | — | — | 99,658 | 2 | 8,800 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
167 Sidney Street and 99 Erie Street | 54,549 | — | — | 54,549 | 2 | 4,026 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
79/96 13th Street (Charlestown Navy Yard) | 25,309 | — | — | 25,309 | 1 | 620 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cambridge/Inner Suburbs | 5,833,581 | 462,100 | 301,132 | 6,596,813 | 48 | 416,571 | 97.4 | 92.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fenway | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Fenway | 973,145 | 510,116 | — | 1,483,261 | 2 | 58,119 | 91.6 | 91.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
401 Park Drive and 201 Brookline Avenue(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seaport Innovation District | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 380 and 420 E Street | 195,506 | — | — | 195,506 | 2 | 3,914 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 Necco Street | 87,163 | — | — | 87,163 | 1 | 5,819 | 86.6 | 86.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seaport Innovation District | 282,669 | — | — | 282,669 | 3 | 9,733 | 95.9 | 95.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Route 128 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reservoir Woods | 515,273 | — | — | 515,273 | 3 | 21,808 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 40, 50, and 60 Sylvan Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
275 Grove Street | 509,702 | — | — | 509,702 | 1 | 16,501 | 64.6 | 64.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| One Upland Road, 100 Tech Drive, and One Investors Way | 683,513 | — | — | 683,513 | 3 | 25,202 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Park at 128 | 343,882 | — | — | 343,882 | 8 | 12,544 | 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 | 3 | 13,515 | 84.8 | 84.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19 Presidential Way | 144,892 | — | — | 144,892 | 1 | 5,063 | 94.7 | 94.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 840 Winter Street | 30,009 | — | 130,000 | 160,009 | 1 | 1,239 | 95.1 | 17.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
100 Beaver Street | 82,330 | — | — | 82,330 | 1 | 4,886 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
285 Bear Hill Road | 26,270 | — | — | 26,270 | 1 | 1,167 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Route 128 | 2,653,488 | — | 130,000 | 2,783,488 | 22 | $ | 101,925 | 91.0 | % | 86.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Boston (continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Route 495 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
111 and 130 Forbes Boulevard | 155,846 | — | — | 155,846 | 2 | $ | 1,735 | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
20 Walkup Drive | 91,045 | — | — | 91,045 | 1 | 649 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Route 495 | 246,891 | — | — | 246,891 | 3 | 2,384 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 173,276 | — | 453,869 | 627,145 | 4 | 1,393 | 44.9 | 12.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater Boston | 10,163,050 | 972,216 | 885,001 | 12,020,267 | 82 | 590,125 | 94.3 | 86.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mission Bay | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Science and Technology – Mission Bay | 1,990,262 | — | — | 1,990,262 | 9 | 95,177 | 99.8 | 99.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mission Bay | 1,990,262 | — | — | 1,990,262 | 9 | 95,177 | 99.8 | 99.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South San Francisco | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Gateway | 1,415,020 | 229,000 | — | 1,644,020 | 12 | 57,160 | 76.3 | 76.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
600, 601(1), 611(1), 630, 650, 651(1), 681(1), 685(1), 701(1), 751(1), 901, and 951 Gateway Boulevard | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
213(1), 249, 259, 269, and 279 East Grand Avenue | 919,704 | — | — | 919,704 | 5 | 48,951 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco | 398,968 | 96,790 | — | 495,758 | 3 | 24,760 | 87.8 | 87.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 201 Haskins Way and 400 and 450 East Jamie Court | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1122 El Camino Real | 223,232 | — | — | 223,232 | 1 | 443 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
500 Forbes Boulevard(1) | 155,685 | — | — | 155,685 | 1 | 6,619 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7000 Shoreline Court | 139,709 | — | — | 139,709 | 1 | 8,632 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
341 and 343 Oyster Point Boulevard | 108,208 | — | — | 108,208 | 2 | 6,443 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
849/863 Mitten Road/866 Malcolm Road | 103,857 | — | — | 103,857 | 1 | 4,582 | 97.7 | 97.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South San Francisco | 3,464,383 | 325,790 | — | 3,790,173 | 26 | 157,590 | 88.8 | 88.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Stanford | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Menlo Gateway(1) | 772,983 | — | — | 772,983 | 3 | 29,779 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
100 Independence Drive and 125 and 135 Constitution Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos | 529,609 | 209,583 | — | 739,192 | 9 | 32,155 | 97.6 | 97.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 825, 835, 960, and 1501-1599 Industrial Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3825 and 3875 Fabian Way | 478,000 | — | — | 478,000 | 2 | 21,802 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Stanford Life Science District | 333,263 | — | 48,722 | 381,985 | 4 | 27,815 | 100.0 | 87.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3160, 3165, 3170, and 3181 Porter Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria PARC | 197,498 | — | — | 197,498 | 4 | 9,302 | 78.1 | 78.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2100, 2200, 2300, and 2400 Geng Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3330, 3412, 3450, and 3460 Hillview Avenue | 183,267 | — | — | 183,267 | 4 | 15,180 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2475 and 2625/2627/2631 Hanover Street | 116,869 | — | — | 116,869 | 2 | 9,972 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2425 Garcia Avenue/2400/2450 Bayshore Parkway | 99,208 | — | — | 99,208 | 1 | $ | 4,257 | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area (continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Stanford (continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shoreway Science Center | 82,462 | — | — | 82,462 | 2 | $ | 5,422 | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
75 and 125 Shoreway Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1450 Page Mill Road | 77,634 | — | — | 77,634 | 1 | 8,009 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3350 West Bayshore Road | 60,000 | — | — | 60,000 | 1 | 3,090 | 74.3 | 74.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Stanford | 2,930,793 | 209,583 | 48,722 | 3,189,098 | 33 | 166,783 | 97.6 | 96.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | 8,385,438 | 535,373 | 48,722 | 8,969,533 | 68 | 419,550 | 94.5 | 94.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New York City | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New York City | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – New York City | 740,972 | — | — | 740,972 | 3 | 65,744 | 97.4 | 97.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
430 and 450 East 29th Street | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
219 East 42nd Street | 349,947 | — | — | 349,947 | 1 | 14,006 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City | 74,141 | — | 104,959 | 179,100 | 1 | 3,214 | 100.0 | 41.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-02 48th Avenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New York City | 1,165,060 | — | 104,959 | 1,270,019 | 5 | 82,964 | 98.3 | 90.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Diego | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Torrey Pines | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One Alexandria Square | 776,150 | 146,456 | — | 922,606 | 10 | 33,432 | 90.3 | 90.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3115 and 3215 Merryfield Row, 3010, 3013, and 3033 Science Park Road, 10931/10933 and 10975 North Torrey Pines Road, 10975, 10995, and 10996 Torreyana Road, and 3545 Cray Court | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ARE Torrey Ridge | 298,863 | — | — | 298,863 | 3 | 12,836 | 83.3 | 83.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10578, 10618, and 10628 Science Center Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ARE Nautilus | 213,900 | — | — | 213,900 | 4 | 12,323 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3530 and 3550 John Hopkins Court and 3535 and 3565 General Atomics Court | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11119, 11255, and 11355 North Torrey Pines Road | 211,641 | — | — | 211,641 | 3 | 9,103 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Torrey Pines | 1,500,554 | 146,456 | — | 1,647,010 | 20 | $ | 67,694 | 91.7 | % | 91.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Listing (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Diego (continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| University Town Center | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Point(1) | 1,435,916 | — | — | 1,435,916 | 8 | $ | 61,734 | 98.8 | % | 98.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
9880(2), 10210, 10260, 10290, and 10300 Campus Point Drive and 4161, 4224, and 4242 Campus Point Court | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5200 Illumina Way(1) | 792,687 | — | — | 792,687 | 6 | 29,978 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
University District | 406,732 | — | — | 406,732 | 5 | 17,621 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9625 Towne Centre Drive(1), 4755, 4757, and 4767 Nexus Center Drive, and 4796 Executive Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| University Town Center | 2,635,335 | — | — | 2,635,335 | 19 | 109,333 | 99.3 | 99.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sorrento Mesa | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SD Tech by Alexandria(1) | 782,193 | 195,435 | 79,945 | 1,057,573 | 14 | 23,698 | 84.9 | 77.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9605, 9645, 9675, 9685, 9725, 9735, 9808, 9855, and 9868 Scranton Road, 5505 Morehouse Drive(2), and 10055, 10065, 10121(2), and 10151(2) Barnes Canyon Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sequence District by Alexandria | 805,223 | — | — | 805,223 | 7 | 26,544 | 92.5 | 92.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6260, 6290, 6310, 6340, 6350, 6420, and 6450 Sequence Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacific Technology Park(1) | 632,732 | — | — | 632,732 | 6 | 9,711 | 93.1 | 93.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9389, 9393, 9401, 9444, 9455, and 9477 Waples Street | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summers Ridge Science Park | 316,531 | — | — | 316,531 | 4 | 11,077 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9965, 9975, 9985, and 9995 Summers Ridge Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ARE Portola | 101,857 | — | — | 101,857 | 3 | 3,603 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6175, 6225, and 6275 Nancy Ridge Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7330 and 7360 Carroll Road | 84,441 | — | — | 84,441 | 2 | 2,743 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5810/5820 Nancy Ridge Drive | 82,272 | — | — | 82,272 | 1 | 1,031 | 41.4 | 41.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9877 Waples Street | 63,774 | — | — | 63,774 | 1 | 2,374 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5871 Oberlin Drive | 33,842 | — | — | 33,842 | 1 | 1,710 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sorrento Mesa | 2,902,865 | 195,435 | 79,945 | 3,178,245 | 39 | 82,491 | 90.7 | 88.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sorrento Valley | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3911, 3931, 3985, 4025, 4031, 4045, and 4075 Sorrento Valley Boulevard | 191,406 | — | — | 191,406 | 7 | 6,483 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11025, 11035, 11045, 11055, 11065, and 11075 Roselle Street | 121,655 | — | — | 121,655 | 6 | 3,306 | 97.1 | 97.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sorrento Valley | 313,061 | — | — | 313,061 | 13 | 9,789 | 98.9 | 98.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 581,167 | — | 37,267 | 618,434 | 12 | 15,358 | 88.0 | 82.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
San Diego | 7,932,982 | 341,891 | 117,212 | 8,392,085 | 103 | $ | 284,665 | 93.9 | % | 92.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Union | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Eastlake Life Science Campus by Alexandria | 937,290 | — | — | 937,290 | 8 | $ | 56,253 | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1165, 1201(1), 1208(1), 1551, and 1616 Eastlake Avenue East, 188 and 199(1) East Blaine Street, and 1600 Fairview Avenue East | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
400 Dexter Avenue North(1) | 290,111 | — | — | 290,111 | 1 | 14,603 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2301 5th Avenue | 197,135 | — | — | 197,135 | 1 | 9,239 | 99.0 | 99.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
219 Terry Avenue North | 30,705 | — | — | 30,705 | 1 | 1,852 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
601 Dexter Avenue North | 18,680 | — | — | 18,680 | 1 | 449 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Union | 1,473,921 | — | — | 1,473,921 | 12 | 82,396 | 99.9 | 99.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SoDo | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 830 4th Avenue South | 42,380 | — | — | 42,380 | 1 | 1,538 | 70.5 | 70.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elliott Bay | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3000/3018 Western Avenue | 47,746 | — | — | 47,746 | 1 | 1,839 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
410 West Harrison Street and 410 Elliott Avenue West | 36,849 | — | — | 36,849 | 2 | 1,362 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elliott Bay | 84,595 | — | — | 84,595 | 3 | 3,201 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 1,133,114 | — | 213,976 | 1,347,090 | 26 | 22,546 | 92.1 | 77.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle | 2,734,010 | — | 213,976 | 2,947,986 | 42 | 109,681 | 96.2 | 89.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maryland | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockville | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9601, 9603, 9605, 9609, 9613, and 9615 Medical Center Drive | 711,072 | — | 94,256 | 805,328 | 6 | 5,406 | 100.0 | 88.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9800, 9804, 9900, 9920, and 9950 Medical Center Drive | 560,788 | 84,264 | — | 645,052 | 8 | 24,280 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9704, 9708, 9712, and 9714 Medical Center Drive | 215,619 | — | — | 215,619 | 4 | 7,936 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1330 Piccard Drive | 131,511 | — | — | 131,511 | 1 | 4,021 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1500 and 1550 East Gude Drive | 91,359 | — | — | 91,359 | 2 | 1,844 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14920 and 15010 Broschart Road | 86,703 | — | — | 86,703 | 2 | 2,364 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1405 Research Boulevard | 72,170 | — | — | 72,170 | 1 | 2,478 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 Research Place | 63,852 | — | — | 63,852 | 1 | 2,719 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 Research Court | 51,520 | — | — | 51,520 | 1 | 1,788 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9920 Belward Campus Drive | 51,181 | — | — | 51,181 | 1 | 1,966 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12301 Parklawn Drive | 49,185 | — | — | 49,185 | 1 | 1,329 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockville | 2,084,960 | 84,264 | 94,256 | 2,263,480 | 28 | 56,131 | 100.0 | 95.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gaithersburg | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Gaithersburg I | 613,438 | — | — | 613,438 | 9 | 17,107 | 99.7 | 99.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9, 25, 35, 45, 50, and 55 West Watkins Mill Road and 910, 930, and 940 Clopper Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Gaithersburg II | 315,085 | — | 169,420 | 484,505 | 7 | $ | 10,409 | 99.0 | % | 64.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 700, 704, and 708 Quince Orchard Road and 19, 20, 21, and 22 Firstfield Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market / Submarket / Address | RSF | Number of Properties | Annual Rental Revenue | Occupancy Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Operating and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating | Development | Redevelopment | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maryland (continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gaithersburg (Continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 20400 Century Boulevard | — | — | 80,550 | 80,550 | 1 | $ | — | N/A | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
401 Professional Drive | 63,154 | — | — | 63,154 | 1 | 1,899 | 100.0 | % | 100.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
950 Wind River Lane | 50,000 | — | — | 50,000 | 1 | 1,004 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
620 Professional Drive | 27,950 | — | — | 27,950 | 1 | 1,207 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gaithersburg | 1,069,627 | — | 249,970 | 1,319,597 | 20 | 31,626 | 99.5 | 80.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beltsville | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8000/9000/10000 Virginia Manor Road | 191,884 | — | — | 191,884 | 1 | 2,768 | 96.7 | 96.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northern Virginia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14225 Newbrook Drive | 248,186 | — | — | 248,186 | 1 | 6,127 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maryland | 3,594,657 | 84,264 | 344,226 | 4,023,147 | 50 | 96,652 | 99.7 | 91.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research Triangle | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research Triangle | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham | 1,912,211 | — | 325,936 | 2,238,147 | 16 | 36,839 | 92.1 | 78.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6, 8, 10, 12, 14, 40, 41, 42, and 65 Moore Drive, 21, 25, 27, 29, and 31 Parmer Way, 2400 Ellis Road, and 14 TW Alexander Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Advanced Technologies | 137,740 | 229,500 | — | 367,240 | 4 | 3,837 | 85.1 | 85.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6, 8, 10, and 12 Davis Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for AgTech | 206,212 | 134,188 | — | 340,400 | 2 | 8,787 | 98.3 | 98.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 and 9 Laboratory Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Alston | 186,870 | — | — | 186,870 | 3 | 4,125 | 92.4 | 92.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 100, 800, and 801 Capitola Drive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
108/110/112/114 TW Alexander Drive | 158,417 | — | — | 158,417 | 1 | 5,416 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Innovation Center® – Research Triangle | 136,455 | — | — | 136,455 | 3 | 4,417 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7010, 7020, and 7030 Kit Creek Road | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 Triangle Drive | 96,626 | — | — | 96,626 | 1 | 3,156 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2525 East NC Highway 54 | 82,996 | — | — | 82,996 | 1 | 3,651 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
407 Davis Drive | 81,956 | — | — | 81,956 | 1 | 1,644 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
601 Keystone Park Drive | 77,395 | — | — | 77,395 | 1 | 1,375 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6040 George Watts Hill Drive | 61,547 | — | — | 61,547 | 1 | 2,148 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 Triangle Drive | 32,120 | — | — | 32,120 | 1 | 1,147 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6101 Quadrangle Drive | 31,600 | — | — | 31,600 | 1 | 728 | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research Triangle | 3,202,145 | 363,688 | 325,936 | 3,891,769 | 36 | 77,270 | 94.1 | 85.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Canada | 322,159 | — | — | 322,159 | 4 | 6,638 | 82.8 | 82.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cluster/other markets | 1,128,223 | — | — | 1,128,223 | 16 | 28,311 | 76.2 | 76.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North America, excluding properties held for sale | 38,627,724 | 2,297,432 | 2,040,032 | 42,965,188 | 406 | 1,695,856 | 94.4 | % | 89.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Properties held for sale | 79,007 | — | — | 79,007 | 1 | 707 | 37.1 | % | 37.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total – North America | 38,706,731 | 2,297,432 | 2,040,032 | 43,044,195 | 407 | $ | 1,696,563 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in Real Estate | | ||||
September 30, 2021 | |||||
We continue to execute our unique and differentiated life science strategy at an accelerated pace and expand our collaborative campuses and asset base in each of our key life science cluster submarkets, and we remain strategically positioned to take maximum advantage of historic tenant demand.
Demand for our value-creation development and redevelopment projects of high-quality office/laboratory space, as well as continued operational excellence at our world-class, sophisticated laboratory facilities and strong execution by our team, has translated into record leasing activity.
| Under Construction | Key Projects Expected to Commence Construction in the Next Six Quarters(1) | Incremental Projected Annual Rental Revenues | ||||||||||||
| 4.3 Million RSF | 3.4 Million RSF | > $615 Million | ||||||||||||
| 37 Properties | + | 20 Properties | = | |||||||||||
| 79% Leased/Negotiating | 80% Leased/Negotiating | |||||||||||||
(1)We also expect other projects to commence construction in 2022.
| Investments in Real Estate | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Development and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||
| Operating | Under Construction | Near Term | Intermediate Term | Future | Subtotal | Total | ||||||||||||||||||||||||||||||||||||||
| Investments in real estate | ||||||||||||||||||||||||||||||||||||||||||||
Book value as of September 30, 2021(1) | $ | 21,499,872 | $ | 2,240,891 | $ | 1,190,570 | $ | 605,848 | $ | 1,130,464 | $ | 5,167,773 | $ | 26,667,645 | ||||||||||||||||||||||||||||||
Square footage | ||||||||||||||||||||||||||||||||||||||||||||
| Operating | 38,706,731 | — | — | — | — | — | 38,706,731 | |||||||||||||||||||||||||||||||||||||
| New Class A development and redevelopment properties | — | 4,337,464 | 6,392,194 | (2) | 4,047,611 | 14,790,048 | 29,567,317 | 29,567,317 | ||||||||||||||||||||||||||||||||||||
Value-creation square feet currently included in rental properties(3) | — | — | (1,235,727) | (372,991) | (2,806,550) | (4,415,268) | (4,415,268) | |||||||||||||||||||||||||||||||||||||
Total square footage | 38,706,731 | 4,337,464 | 5,156,467 | 3,674,620 | 11,983,498 | 25,152,049 | 63,858,780 | |||||||||||||||||||||||||||||||||||||
(1)Balances exclude our share of the cost basis associated with our properties held by our unconsolidated real estate joint ventures, which is classified as investments in unconsolidated real estate joint ventures in our consolidated balance sheets. Refer to “Investments in real estate” in the “Definitions and reconciliations” of this Supplemental Information for reconciliation detail of investments in real estate.
(2)Includes 3,366,117 RSF, currently 80% leased/negotiating, expected to commence construction in the next six quarters. Refer to “New Class A development and redevelopment properties: current projects” for additional details.
(3)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: Recent Deliveries | |||||
| |||||
September 30, 2021 | |||||
| The Arsenal on the Charles | Alexandria Center® for Life Science – South San Francisco(1) | Alexandria Center® for Life Science – San Carlos(2) | 3160 Porter Drive | Alexandria Center® for Life Science – Long Island City(3) | ||||||||||||||||||||||
| Greater Boston/ Cambridge/Inner Suburbs | San Francisco Bay Area/ South San Francisco | San Francisco Bay Area/ Greater Stanford | San Francisco Bay Area/ Greater Stanford | New York City/New York City | ||||||||||||||||||||||
| 86,546 RSF | 226,400 RSF | 316,546 RSF | 43,578 RSF | 32,892 RSF | ||||||||||||||||||||||
| 100% Occupancy | 100% Occupancy | 100% Occupancy | 100% Occupancy | 100% Occupancy | ||||||||||||||||||||||
 |  |  |  |  | ||||||||||||||||||||||
| 1165 Eastlake Avenue East | 9804 Medical Center Drive | Alexandria Center® for Life Science – Durham(4) | Alexandria Center® for AgTech(5) | Alexandria Center® for Advanced Technologies(6) | ||||||||||||||||||||||
| Seattle/Lake Union | Maryland/Rockville | Research Triangle/Research Triangle | Research Triangle/Research Triangle | Research Triangle/Research Triangle | ||||||||||||||||||||||
| 100,086 RSF | 176,832 RSF | 326,445 RSF | 25,812 RSF | 20,500 RSF | ||||||||||||||||||||||
| 100% Occupancy | 100% Occupancy | 100% Occupancy | 100% Occupancy | 100% Occupancy | ||||||||||||||||||||||
 |  |  |  |  | ||||||||||||||||||||||
(1)Image represents 201 Haskins Way in our Alexandria Center® for Life Science – South San Francisco campus.
(2)Image represents 825 and 835 Industrial Road in our Alexandria Center® for Life Science – San Carlos campus.
(3)Image represents 30-02 48th Avenue in our Alexandria Center® for Life Science – Long Island City campus.
(4)Image represents 2400 Ellis Road in our Alexandria Center® for Life Science – Durham campus.
(5)Image represents 9 Laboratory Drive in our Alexandria Center® for AgTech campus.
(6)Image represents 10 Davis Drive in our Alexandria Center® for Advanced Technologies campus.
| New Class A Development and Redevelopment Properties: Recent Deliveries (continued) | |||||
| |||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Property/Market/Submarket | Our Ownership Interest | RSF Placed in Service | Occupancy Percentage(2) | Total Project | Unlevered Yields | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3Q21 Delivery Date(1) | 4Q20 | 1Q21 | 2Q21 | 3Q21 | Total | Initial Stabilized | Initial Stabilized (Cash Basis) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSF | Investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Development projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco/San Francisco Bay Area/South San Francisco | 8/4/21 | 100% | — | — | 171,042 | 55,358 | 226,400 | 100% | 323,190 | $ | 370,000 | 6.4 | % | 6.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos/San Francisco Bay Area/Greater Stanford | 7/9/21 | 100% | 96,463 | 99,557 | 114,157 | 6,369 | 316,546 | 100% | 526,129 | 630,000 | 6.4 | 6.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1165 Eastlake Avenue East/Seattle/Lake Union | N/A | 100% | — | 100,086 | — | — | 100,086 | 100% | 100,086 | 138,000 | 6.3 | (3) | 6.4 | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9804 Medical Center Drive/Maryland/Rockville | N/A | 100% | — | 176,832 | — | — | 176,832 | 100% | 176,832 | 89,300 | 8.3 | 8.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for AgTech/Research Triangle/Research Triangle | 7/22/21 | 100% | — | — | — | 25,812 | 25,812 | 100% | 340,400 | 193,000 | 7.1 | 7.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Advanced Technologies/Research Triangle/Research Triangle | 9/24/21 | 100% | — | — | — | 20,500 | 20,500 | 100% | 250,000 | 151,000 | 7.5 | 7.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redevelopment projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Arsenal on the Charles/Greater Boston/Cambridge/Inner Suburbs | 9/4/21 | 100% | — | — | — | 86,546 | 86,546 | 100% | 872,665 | 772,000 | 6.2 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3160 Porter Drive/San Francisco Bay Area/ Greater Stanford | 8/19/21 | 100% | — | — | — | 43,578 | 43,578 | 100% | 92,300 | 107,000 | 5.2 | 5.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City/New York City/New York City | N/A | 100% | 17,716 | — | 15,176 | — | 32,892 | 100% | 179,100 | 224,000 | 5.8 | 5.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9877 Waples Street/San Diego/Sorrento Mesa | N/A | 100% | 63,774 | — | — | — | 63,774 | 100% | 63,774 | 31,000 | 8.8 | 8.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other/San Diego | N/A | 100% | — | — | 128,745 | — | 128,745 | 100% | 128,745 | 47,000 | 8.0 | (4) | 8.0 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham/Research Triangle/Research Triangle | N/A | 100% | — | — | 326,445 | — | 326,445 | 100% | 652,381 | 245,000 | 7.5 | 6.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 8/22/21 | 177,953 | 376,475 | 755,565 | 238,163 | 1,548,156 | 3,705,602 | $ | 2,997,300 | 6.6 | % | 6.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Refer to “New Class A development and redevelopment properties: current projects” of this Supplemental Information for details on the RSF in service and under construction, if applicable.
(1)Represents the average delivery date during the current quarter, weighted by annual rental revenue.
(2)Relates to total operating RSF placed in service as of the most recent delivery.
(3)Unlevered yields represent aggregate returns for 1165 Eastlake Avenue East, an amenity-rich research headquarters for Adaptive Biotechnologies Corporation, and 1208 Eastlake Avenue East, an adjacent multi-tenant office/laboratory building.
(4)We achieved yields greater than 8.0%.
New Class A Development and Redevelopment Properties: Current Projects | | ||||
September 30, 2021 | |||||
| 325 Binney Street | The Arsenal on the Charles | 201 Brookline Avenue | 840 Winter Street | Alexandria Center® for Life Science – South San Francisco(1) | ||||||||||||||||||||||
| Greater Boston/Cambridge | Greater Boston/ Cambridge/Inner Suburbs | Greater Boston/Fenway | Greater Boston/Route 128 | San Francisco Bay Area/ South San Francisco | ||||||||||||||||||||||
| 462,100 RSF | 301,132 RSF | 510,116 RSF | 130,000 RSF | 96,790 RSF | ||||||||||||||||||||||
| 100% Leased | 92% Leased/Negotiating | 96% Leased/Negotiating | 18% Leased/Negotiating | 100% Leased | ||||||||||||||||||||||
 | |  |  | | ||||||||||||||||||||||
| 751 Gateway Boulevard | Alexandria Center® for Life Science – San Carlos(2) | 3160 Porter Drive | Alexandria Center® for Life Science – Long Island City(3) | 3115 Merryfield Row | ||||||||||||||||||||||
| San Francisco Bay Area/ South San Francisco | San Francisco Bay Area/ Greater Stanford | San Francisco Bay Area/ Greater Stanford | New York City/New York City | San Diego/Torrey Pines | ||||||||||||||||||||||
| 229,000 RSF | 209,583 RSF | 48,722 RSF | 104,959 RSF | 146,456 RSF | ||||||||||||||||||||||
| 100% Leased/Negotiating | 100% Leased | 88% Leased/Negotiating | 52% Leased/Negotiating | 100% Leased | ||||||||||||||||||||||
 | | | |  | ||||||||||||||||||||||
(1)Image represents 201 Haskins Way in our Alexandria Center® for Life Science – South San Francisco campus.
(2)Image represents 825 and 835 Industrial Road in our Alexandria Center® for Life Science – San Carlos campus.
(3)Image represents 30-02 48th Avenue in our Alexandria Center® for Life Science – Long Island City campus.
New Class A Development and Redevelopment Properties: Current Projects (continued) | | ||||
September 30, 2021 | |||||
SD Tech by Alexandria(1) | 5505 Morehouse Drive | 10277 Scripps Ranch Boulevard | 9601 and 9603 Medical Center Drive | 9950 Medical Center Drive | ||||||||||||||||||||||
| San Diego/Sorrento Mesa | San Diego/Sorrento Mesa | San Diego/Other | Maryland/Rockville | Maryland/Rockville | ||||||||||||||||||||||
| 195,435 RSF | 79,945 RSF | 37,267 RSF | 94,256 RSF | 84,264 RSF | ||||||||||||||||||||||
| 100% Leased | 100% Leased | 47% Leased/Negotiating | 51% Leased/Negotiating | 100% Leased | ||||||||||||||||||||||
 |  |  |  |  | ||||||||||||||||||||||
| 700 Quince Orchard Road | 20400 Century Boulevard | Alexandria Center® for Life Science – Durham(2) | Alexandria Center® for AgTech(3) | Alexandria Center® for Advanced Technologies(4) | ||||||||||||||||||||||
| Maryland/Gaithersburg | Maryland/Gaithersburg | Research Triangle/Research Triangle | Research Triangle/Research Triangle | Research Triangle/Research Triangle | ||||||||||||||||||||||
| 169,420 RSF | 80,550 RSF | 325,936 RSF | 134,188 RSF | 229,500 RSF | ||||||||||||||||||||||
| 100% Leased | 40% Leased/Negotiating | 77% Leased/Negotiating | 87% Leased/Negotiating | 83% Leased/Negotiating | ||||||||||||||||||||||
 |  |  | | | ||||||||||||||||||||||
(1)Image represents 10055 Barnes Canyon Road in our SD Tech by Alexandria campus.
(2)Image represents 14 TW Alexander Drive in our Alexandria Center® for Life Science – Durham campus.
(3)Image represents 9 Laboratory Drive in our Alexandria Center® for AgTech campus.
(4)Image represents 10 Davis Drive in our Alexandria Center® for Advanced Technologies campus.
New Class A Development and Redevelopment Properties: Current Projects (continued) | | ||||
September 30, 2021 | |||||
Market Property/Submarket | Square Footage | Percentage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dev/Redev | In Service | CIP | Total | Leased | Leased/Negotiating | Initial Occupancy(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Under construction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Boston | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 325 Binney Street/Cambridge | Dev | — | 462,100 | 462,100 | 100 | % | 100 | % | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| The Arsenal on the Charles/Cambridge/Inner Suburbs | Redev | 571,533 | 301,132 | 872,665 | 85 | 92 | 3Q21 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 201 Brookline Avenue/Fenway | Dev | — | 510,116 | 510,116 | 59 | 96 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 840 Winter Street/Route 128 | Redev | 30,009 | 130,000 | 160,009 | 18 | 18 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Redev | — | 453,869 | 453,869 | — | — | 2023/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco/South San Francisco | Dev | 226,400 | 96,790 | 323,190 | 100 | 100 | 2Q21 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 751 Gateway Boulevard/South San Francisco | Dev | — | 229,000 | 229,000 | — | 100 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos/Greater Stanford | Dev | 316,546 | 209,583 | 526,129 | 100 | 100 | 4Q20 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 3160 Porter Drive/Greater Stanford | Redev | 43,578 | 48,722 | 92,300 | 86 | 88 | 3Q21 | |||||||||||||||||||||||||||||||||||||||||||||||||
| New York City | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City/New York City | Redev | 74,141 | 104,959 | 179,100 | 49 | 52 | 4Q20 | |||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3115 Merryfield Row/Torrey Pines | Dev | — | 146,456 | 146,456 | 100 | 100 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| SD Tech by Alexandria/Sorrento Mesa | Dev | — | 195,435 | 195,435 | 100 | 100 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 5505 Morehouse Drive/Sorrento Mesa | Redev | — | 79,945 | 79,945 | 100 | 100 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 10277 Scripps Ranch Boulevard/Other | Redev | 32,774 | 37,267 | 70,041 | 47 | 47 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Redev | 246,647 | 213,976 | 460,623 | 53 | 61 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Maryland | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9601 and 9603 Medical Center Drive/Rockville | Redev | — | 94,256 | 94,256 | — | 51 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 9950 Medical Center Drive/Rockville | Dev | — | 84,264 | 84,264 | 100 | 100 | 1H22 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 700 Quince Orchard Road/Gaithersburg | Redev | — | 169,420 | 169,420 | 100 | 100 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 20400 Century Boulevard/Gaithersburg | Redev | — | 80,550 | 80,550 | 27 | 40 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Research Triangle | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham/Research Triangle(2) | Redev | 326,445 | 325,936 | 652,381 | 77 | 77 | 2Q21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for AgTech/Research Triangle(3) | Redev/Dev | 206,212 | 134,188 | 340,400 | 83 | 87 | 3Q21 | |||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Advanced Technologies/Research Triangle | Dev | 20,500 | 229,500 | 250,000 | (4) | 80 | (4) | 83 | (4) | 3Q21/2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2,094,785 | 4,337,464 | 6,432,249 | 70 | 79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-leased/negotiating near-term projects and key pending acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charles Park/Greater Boston/Cambridge(5) | Redev | — | 400,000 | 400,000 | — | 100 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 4150 Campus Point Court/San Diego/University Town Center | Dev | — | 171,102 | 171,102 | 100 | 100 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other near-term projects expected to commence construction in the next six quarters (17 properties) | Dev/Redev | — | 2,795,015 | 2,795,015 | 4 | 76 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| — | 3,366,117 | 3,366,117 | 9 | % | 80 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,094,785 | 7,703,581 | 9,798,366 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Initial occupancy dates are subject to leasing and/or market conditions. 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)The recently acquired Alexandria Center® for Life Science – Durham campus redevelopment project includes three properties at 40 Moore Drive, 2400 Ellis Road, and 14 TW Alexander Drive. 2400 Ellis Road is 100% leased and was delivered in 2Q21. We expect stabilized occupancy for the remaining buildings in 2022.
(3)The strategic collaborative agtech campus consists of Phase I at 5 Laboratory Drive, including campus amenities, which was previously delivered, and Phase II at 9 Laboratory Drive.
(4)Represents 150,000 RSF that is 71% leased/negotiating at 8 Davis Drive and 100,000 RSF that is 100% leased at 10 Davis Drive.
(5)We expect to complete this acquisition in December 2021.
| New Class A Development and Redevelopment Properties: Current Projects (continued) | |||||
| |||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Our Ownership Interest | Unlevered Yields | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Market Property/Submarket | In Service | CIP | Cost to Complete | Total at Completion | Initial Stabilized | Initial Stabilized (Cash Basis) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Under construction | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greater Boston | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 325 Binney Street/Cambridge | 100 | % | $ | — | $ | 198,031 | $ | 582,969 | $ | 781,000 | 8.6 | % | 7.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| The Arsenal on the Charles/Cambridge/Inner Suburbs | 100 | % | 454,061 | 236,242 | 81,697 | 772,000 | 6.2 | % | 5.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 201 Brookline Avenue/Fenway | 98.2 | % | — | 446,219 | 287,781 | 734,000 | 6.8 | % | 6.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 840 Winter Street/Route 128 | 100 | % | 12,981 | 56,926 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 100 | % | — | 113,389 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco/South San Francisco | 100 | % | 254,933 | 92,551 | 22,516 | 370,000 | 6.4 | % | 6.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 751 Gateway Boulevard/South San Francisco | 48.1 | % | — | 59,657 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos/Greater Stanford | 100 | % | 391,681 | 202,346 | 35,973 | 630,000 | 6.4 | % | 6.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 3160 Porter Drive/Greater Stanford | 100 | % | 44,537 | 50,469 | 11,994 | 107,000 | 5.2 | % | 5.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| New York City | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City/New York City | 100 | % | 52,470 | 120,664 | 50,866 | 224,000 | 5.8 | % | 5.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3115 Merryfield Row/Torrey Pines | 100 | % | — | 104,535 | 47,465 | 152,000 | 6.2 | % | 6.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| SD Tech by Alexandria/Sorrento Mesa | 50.0 | % | — | 71,291 | 109,709 | 181,000 | 7.2 | % | 6.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 5505 Morehouse Drive/Sorrento Mesa | 100 | % | — | 41,784 | 25,216 | 67,000 | 6.9 | % | 7.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 10277 Scripps Ranch Boulevard/Other | 100 | % | 11,850 | 13,727 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 100 | % | 54,500 | 68,259 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maryland | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9601 and 9603 Medical Center Drive/Rockville | 100 | % | — | 28,724 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9950 Medical Center Drive/Rockville | 100 | % | — | 41,813 | 17,787 | 59,600 | 8.6 | % | 7.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 700 Quince Orchard Road/Gaithersburg | 100 | % | — | 62,156 | 17,344 | 79,500 | 8.6 | % | 7.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 20400 Century Boulevard/Gaithersburg | 100 | % | — | 12,391 | TBD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research Triangle | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham/Research Triangle | 100 | % | 89,443 | 74,138 | 81,419 | 245,000 | 7.5 | % | 6.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for AgTech/Research Triangle | 100 | % | 111,803 | 73,184 | 8,013 | 193,000 | 7.1 | % | 7.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Advanced Technologies/Research Triangle | 100 | % | 10,622 | 72,395 | 67,983 | 151,000 | 7.5 | % | 7.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 1,488,881 | $ | 2,240,891 | $ | 2,210,000 | (1)(2) | $ | 5,940,000 | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Amounts rounded to the nearest $10 million.
(2)Based on our current target of net debt and preferred stock to adjusted EBITDA of less than or equal to 5.2x, we expect the net operating income to be generated upon stabilization of these projects will require $1.6 billion of debt and approximately $600 million of incremental equity funding on a leverage-neutral basis. Actual debt and equity capital funding until stabilization of these projects will vary from these estimates.
| New Class A Development and Redevelopment Properties: Summary of Pipeline | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market Property/Submarket | Our Ownership Interest | Book Value | Square Footage | |||||||||||||||||||||||||||||||||||||||||||||||
| Development and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Under Construction | Near Term | Intermediate Term | Future | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||
| Greater Boston | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 325 Binney Street/Cambridge | 100 | % | $ | 198,031 | 462,100 | — | — | — | 462,100 | |||||||||||||||||||||||||||||||||||||||||
| The Arsenal on the Charles/Cambridge/Inner Suburbs | 100 | % | 269,802 | 301,132 | 200,000 | — | 12,502 | 513,634 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Fenway/Fenway | (2) | 572,449 | 510,116 | — | 450,000 | — | 960,116 | |||||||||||||||||||||||||||||||||||||||||||
| 840 Winter Street/Route 128 | 100 | % | 56,926 | 130,000 | — | — | — | 130,000 | ||||||||||||||||||||||||||||||||||||||||||
| 99 Coolidge Avenue/Cambridge/Inner Suburbs | 75.0 | % | 56,152 | — | 275,000 | — | — | 275,000 | ||||||||||||||||||||||||||||||||||||||||||
| 15 Necco Street/Seaport Innovation District | 90.0 | % | 211,324 | — | 350,000 | — | — | 350,000 | ||||||||||||||||||||||||||||||||||||||||||
| Reservoir Woods/Route 128 | 100 | % | 47,762 | — | 515,273 | — | 440,000 | 955,273 | ||||||||||||||||||||||||||||||||||||||||||
| 10 Necco Street/Seaport Innovation District | 100 | % | 93,586 | — | — | 175,000 | — | 175,000 | ||||||||||||||||||||||||||||||||||||||||||
| 215 Presidential Way/Route 128 | 100 | % | 6,808 | — | — | 112,000 | — | 112,000 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Square®/Cambridge | 100 | % | 7,881 | — | — | — | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||||||
| 550 Arsenal Street/Cambridge/Inner Suburbs | 100 | % | 54,853 | — | — | — | 775,000 | 775,000 | ||||||||||||||||||||||||||||||||||||||||||
| 380 and 420 E Street/Seaport Innovation District | 100 | % | 119,517 | — | — | — | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||
| 99 A Street/Seaport Innovation District | 94.8 | % | 46,597 | — | — | — | 235,000 | 235,000 | ||||||||||||||||||||||||||||||||||||||||||
| One Upland Road, 100 Tech Drive, and One Investors Way/Route 128 | 100 | % | 14,081 | — | — | — | 1,100,000 | 1,100,000 | ||||||||||||||||||||||||||||||||||||||||||
| 231 Second Avenue/Route 128 | 100 | % | 1,093 | — | — | — | 32,000 | 32,000 | ||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | 161,182 | 453,869 | 190,992 | — | 434,504 | 1,079,365 | ||||||||||||||||||||||||||||||||||||||||||
| 1,918,044 | 1,857,217 | 1,531,265 | 737,000 | 4,129,006 | 8,254,488 | |||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | ||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Gateway/South San Francisco | 48.1 | % | 82,176 | 229,000 | 300,010 | — | 291,000 | 820,010 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco/ South San Francisco | 100 | % | 92,551 | 96,790 | — | — | — | 96,790 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos/Greater Stanford | 100 | % | 481,720 | 209,583 | — | 700,000 | 587,000 | 1,496,583 | ||||||||||||||||||||||||||||||||||||||||||
| 3160 Porter Drive/Greater Stanford | 100 | % | 50,469 | 48,722 | — | — | — | 48,722 | ||||||||||||||||||||||||||||||||||||||||||
| 1450 Owens Street/Mission Bay | 100 | % | 65,685 | — | 191,000 | — | — | 191,000 | ||||||||||||||||||||||||||||||||||||||||||
| 901 California Avenue/Greater Stanford | 100 | % | 2,694 | — | 56,924 | — | — | 56,924 | ||||||||||||||||||||||||||||||||||||||||||
| 3450 and 3460 Hillview Avenue/Greater Stanford | 100 | % | — | — | 42,340 | 34,611 | — | 76,951 | ||||||||||||||||||||||||||||||||||||||||||
| 88 Bluxome Street/SoMa | 100 | % | 318,656 | — | 1,070,925 | — | — | 1,070,925 | ||||||||||||||||||||||||||||||||||||||||||
| 3825 and 3875 Fabian Way/Greater Stanford | 100 | % | — | — | — | 250,000 | 228,000 | 478,000 | ||||||||||||||||||||||||||||||||||||||||||
| 1122 El Camino Real/South San Francisco | 100 | % | 105,053 | — | — | — | 700,000 | 700,000 | ||||||||||||||||||||||||||||||||||||||||||
| East Grand Avenue/South San Francisco | 30.0 | % | 6,113 | — | — | — | 90,000 | 90,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2475 Hanover Street/Greater Stanford | 100 | % | — | — | — | — | 83,980 | 83,980 | ||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | (3) | 38,137 | — | — | — | 223,188 | 223,188 | |||||||||||||||||||||||||||||||||||||||||
| $ | 1,243,254 | 584,095 | 1,661,199 | 984,611 | 2,203,168 | 5,433,073 | ||||||||||||||||||||||||||||||||||||||||||||
(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 or redevelopment opportunities. Upon expiration of existing in-place leases, we have the intent to demolish or redevelop the existing property and commence 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 have a 98.2% ownership interest in 201 Brookline Avenue, aggregating 510,116 RSF, and is currently under construction. We have a 100% ownership interest in the intermediate-term development project, aggregating 450,000 RSF. (3)Includes a future development project at Alexandria Center® for Life Science – Millbrae Station where we have a 37.6% ownership interest. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New Class A Development and Redevelopment Properties: Summary of Pipeline (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market Property/Submarket | Our Ownership Interest | Book Value | Square Footage | |||||||||||||||||||||||||||||||||||||||||||||||
| Development and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Under Construction | Near Term | Intermediate Term | Future | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||
| New York City | ||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City/New York City | 100 | % | $ | 120,664 | 104,959 | — | — | — | 104,959 | |||||||||||||||||||||||||||||||||||||||||
| 47-50 30th Street/New York City | 100 | % | 30,639 | — | 135,938 | — | — | 135,938 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – New York City/New York City | 100 | % | 74,894 | — | — | 550,000 | (2) | — | 550,000 | |||||||||||||||||||||||||||||||||||||||||
| 219 East 42nd Street/New York City | 100 | % | — | — | — | — | 579,947 | 579,947 | ||||||||||||||||||||||||||||||||||||||||||
| 226,197 | 104,959 | 135,938 | 550,000 | 579,947 | 1,370,844 | |||||||||||||||||||||||||||||||||||||||||||||
| San Diego | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 3115 Merryfield Row/Torrey Pines | 100 | % | 104,535 | 146,456 | — | — | — | 146,456 | ||||||||||||||||||||||||||||||||||||||||||
| SD Tech by Alexandria/Sorrento Mesa | 50.0 | % | 159,088 | 195,435 | 190,074 | 160,000 | 333,845 | 879,354 | ||||||||||||||||||||||||||||||||||||||||||
| 5505 Morehouse Drive/Sorrento Mesa | 100 | % | 41,784 | 79,945 | — | — | — | 79,945 | ||||||||||||||||||||||||||||||||||||||||||
| 10277 Scripps Ranch Boulevard/Other | 100 | % | 13,727 | 37,267 | 32,774 | — | — | 70,041 | ||||||||||||||||||||||||||||||||||||||||||
| 11255 and 11355 North Torrey Pines Road/Torrey Pines | 100 | % | 111,760 | — | 288,956 | — | — | 288,956 | ||||||||||||||||||||||||||||||||||||||||||
| 10931 and 10933 North Torrey Pines Road/Torrey Pines | 100 | % | — | — | 242,000 | — | — | 242,000 | ||||||||||||||||||||||||||||||||||||||||||
| Alexandria Point/University Town Center | 55.0 | % | 112,895 | — | 596,102 | — | 324,445 | 920,547 | ||||||||||||||||||||||||||||||||||||||||||
| Sequence District by Alexandria/Sorrento Mesa | 100 | % | 37,758 | — | 200,000 | 509,000 | 1,089,915 | 1,798,915 | ||||||||||||||||||||||||||||||||||||||||||
| University District/University Town Center | 100 | % | 66,108 | — | — | 600,000 | (3) | — | 600,000 | |||||||||||||||||||||||||||||||||||||||||
| 9444 Waples Street/Sorrento Mesa | 50.0 | % | 18,809 | — | — | 149,000 | — | 149,000 | ||||||||||||||||||||||||||||||||||||||||||
| 10975 and 10995 Torreyana Road/Torrey Pines | 100 | % | 49,009 | — | — | — | 125,280 | 125,280 | ||||||||||||||||||||||||||||||||||||||||||
| 5200 Illumina Way/University Town Center | 51.0 | % | 13,313 | — | — | — | 451,832 | 451,832 | ||||||||||||||||||||||||||||||||||||||||||
| 4025, 4031, 4045, and 4075 Sorrento Valley Boulevard/Sorrento Valley | 100 | % | 7,765 | — | — | — | 247,000 | 247,000 | ||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | 13,734 | — | 54,000 | — | 114,235 | 168,235 | ||||||||||||||||||||||||||||||||||||||||||
| 750,285 | 459,103 | 1,603,906 | 1,418,000 | 2,686,552 | 6,167,561 | |||||||||||||||||||||||||||||||||||||||||||||
| Seattle | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1150 Eastlake Avenue East/Lake Union | 100 | % | 102,305 | — | 311,631 | — | — | 311,631 | ||||||||||||||||||||||||||||||||||||||||||
| 701 Dexter Avenue North/Lake Union | 100 | % | 67,509 | — | 217,000 | — | — | 217,000 | ||||||||||||||||||||||||||||||||||||||||||
| 601 Dexter Avenue North/Lake Union | 100 | % | 37,827 | — | — | — | 188,400 | 188,400 | ||||||||||||||||||||||||||||||||||||||||||
| 1010 4th Avenue South/SoDo | 100 | % | 50,969 | — | — | — | 544,825 | 544,825 | ||||||||||||||||||||||||||||||||||||||||||
| 830 4th Avenue South/SoDo | 100 | % | — | — | — | — | 52,488 | 52,488 | ||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | 80,172 | 213,976 | 51,255 | — | 230,000 | 495,231 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 338,782 | 213,976 | 579,886 | — | 1,015,713 | 1,809,575 | ||||||||||||||||||||||||||||||||||||||||||||
(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 or redevelopment opportunities. Upon expiration of existing in-place leases, we have the intent to demolish or redevelop the existing property and commence 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)Pursuant to an option agreement, we are currently negotiating a long-term ground lease with the City of New York for the future site of a new building approximating 550,000 RSF. (3)Includes our recently acquired property at 4555 Executive Drive and 9363, 9373, 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) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
Market Property/Submarket | Our Ownership Interest | Book Value | Square Footage | |||||||||||||||||||||||||||||||||||||||||||||||
| Development and Redevelopment | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Under Construction | Near Term | Intermediate Term | Future | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||
| Maryland | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 9601 and 9603 Medical Center Drive and Excess Land/Rockville | 100 | % | $ | 43,073 | 94,256 | — | 258,000 | — | 352,256 | |||||||||||||||||||||||||||||||||||||||||
| 9950 Medical Center Drive/Rockville | 100 | % | 41,813 | 84,264 | — | — | — | 84,264 | ||||||||||||||||||||||||||||||||||||||||||
| 700 Quince Orchard Road/Gaithersburg | 100 | % | 62,156 | 169,420 | — | — | — | 169,420 | ||||||||||||||||||||||||||||||||||||||||||
| 20400 Century Boulevard/Gaithersburg | 100 | % | 12,391 | 80,550 | — | — | — | 80,550 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® at Traville Gateway/Rockville | 100 | % | 33,091 | — | 410,000 | — | 70,000 | 480,000 | ||||||||||||||||||||||||||||||||||||||||||
| 9808 Medical Center Drive/Rockville | 100 | % | 9,986 | — | 90,000 | — | — | 90,000 | ||||||||||||||||||||||||||||||||||||||||||
| 202,510 | 428,490 | 500,000 | 258,000 | 70,000 | 1,256,490 | |||||||||||||||||||||||||||||||||||||||||||||
| Research Triangle | ||||||||||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Durham/Research Triangle | 100 | % | 117,469 | 325,936 | 100,000 | — | 885,000 | 1,310,936 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for Advanced Technologies/Research Triangle | 100 | % | 112,762 | 229,500 | 180,000 | — | 990,000 | 1,399,500 | ||||||||||||||||||||||||||||||||||||||||||
Alexandria Center® for AgTech, Phase II/Research Triangle | 100 | % | 73,184 | 134,188 | — | — | — | 134,188 | ||||||||||||||||||||||||||||||||||||||||||
| 3029 East Cornwallis Road/Research Triangle | 100 | % | 94,958 | — | 100,000 | 100,000 | 855,000 | 1,055,000 | ||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | 4,185 | — | — | — | 76,262 | 76,262 | ||||||||||||||||||||||||||||||||||||||||||
| 402,558 | 689,624 | 380,000 | 100,000 | 2,806,262 | 3,975,886 | |||||||||||||||||||||||||||||||||||||||||||||
| Other value-creation projects | 100 | % | 86,143 | — | — | — | 1,299,400 | 1,299,400 | ||||||||||||||||||||||||||||||||||||||||||
Total pipeline as of September 30, 2021 | $ | 5,167,773 | (2) | 4,337,464 | 6,392,194 | 4,047,611 | 14,790,048 | 29,567,317 | (1) | |||||||||||||||||||||||||||||||||||||||||
| Key pending acquisitions | ||||||||||||||||||||||||||||||||||||||||||||||||||
Charles Park/Cambridge(3) | — | 400,000 | — | — | 400,000 | |||||||||||||||||||||||||||||||||||||||||||||
| Mercer Mega Block/Lake Union | — | 800,000 | — | — | 800,000 | |||||||||||||||||||||||||||||||||||||||||||||
| 4,337,464 | 7,592,194 | 4,047,611 | 14,790,048 | 30,767,317 | ||||||||||||||||||||||||||||||||||||||||||||||
(1)Total square footage includes 4,415,268 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.
(2)Total book value includes $2.2 billion of projects currently under construction that are 79% leased/negotiating. We also expect to commence construction on pre-leased/negotiating near-term projects and a key pending acquisition aggregating $624.5 million in the next six quarters that are 80% leased/negotiating.
(3)We expect to complete this acquisition in December 2021.
| Construction Spending | | ||||
September 30, 2021 | |||||
| (In thousands) | |||||
| Nine Months Ended | ||||||||||||||||||||
| Construction Spending | September 30, 2021 | |||||||||||||||||||
Additions to real estate – consolidated projects | $ | 1,542,210 | ||||||||||||||||||
| Investments in unconsolidated real estate joint ventures | 739 | |||||||||||||||||||
| Contributions from noncontrolling interests | (56,669) | |||||||||||||||||||
| Construction spending (cash basis) | 1,486,280 | |||||||||||||||||||
| Change in accrued construction | 69,551 | |||||||||||||||||||
| Construction spending | 1,555,831 | |||||||||||||||||||
| Projected construction spending for the three months ending December 31, 2021 | 554,169 | |||||||||||||||||||
| Guidance midpoint | $ | 2,110,000 | ||||||||||||||||||
| Year Ending | ||||||||||||||||||||
| Projected Construction Spending | December 31, 2021 | |||||||||||||||||||
| Development, redevelopment, and pre-construction projects | $ | 1,990,000 | ||||||||||||||||||
Contributions from noncontrolling interests (consolidated real estate joint ventures) | (100,000) | |||||||||||||||||||
Revenue-enhancing and repositioning capital expenditures | 155,000 | |||||||||||||||||||
Non-revenue-enhancing capital expenditures | 65,000 | |||||||||||||||||||
| Guidance midpoint | $ | 2,110,000 | ||||||||||||||||||
| |||||
| Joint Venture Financial Information | |||||
September 30, 2021 | |||||
| Consolidated Real Estate Joint Ventures | ||||||||||||||||||||||||||||||||||||||
| Property | Market | Submarket | Noncontrolling Interest Share(1) | Operating RSF at 100% | ||||||||||||||||||||||||||||||||||
| 75/125 Binney Street | Greater Boston | Cambridge/Inner Suburbs | 60.0% | 388,270 | ||||||||||||||||||||||||||||||||||
| 225 Binney Street | Greater Boston | Cambridge/Inner Suburbs | 70.0% | 305,212 | ||||||||||||||||||||||||||||||||||
| 99 Coolidge Avenue | Greater Boston | Cambridge/Inner Suburbs | 25.0% | — | (2) | |||||||||||||||||||||||||||||||||
| 409 and 499 Illinois Street | San Francisco Bay Area | Mission Bay | 40.0% | (3) | 455,069 | |||||||||||||||||||||||||||||||||
| 1500 Owens Street | San Francisco Bay Area | Mission Bay | 49.9% | (3) | 158,267 | |||||||||||||||||||||||||||||||||
Alexandria Technology Center® – Gateway(4) | San Francisco Bay Area | South San Francisco | 51.9% | 1,089,852 | ||||||||||||||||||||||||||||||||||
| 213 East Grand Avenue | San Francisco Bay Area | South San Francisco | 70.0% | 300,930 | ||||||||||||||||||||||||||||||||||
| 500 Forbes Boulevard | San Francisco Bay Area | South San Francisco | 90.0% | 155,685 | ||||||||||||||||||||||||||||||||||
Alexandria Center® for Life Science – Millbrae Station | San Francisco Bay Area | South San Francisco | 62.4% | — | ||||||||||||||||||||||||||||||||||
Alexandria Point(5) | San Diego | University Town Center | 45.0% | 1,337,916 | ||||||||||||||||||||||||||||||||||
| 5200 Illumina Way | San Diego | University Town Center | 49.0% | 792,687 | ||||||||||||||||||||||||||||||||||
| 9625 Towne Centre Drive | San Diego | University Town Center | 49.9% | 163,648 | ||||||||||||||||||||||||||||||||||
SD Tech by Alexandria(6) | San Diego | Sorrento Mesa | 50.0% | 679,801 | ||||||||||||||||||||||||||||||||||
| Pacific Technology Park | San Diego | Sorrento Mesa | 50.0% | 632,732 | ||||||||||||||||||||||||||||||||||
The Eastlake Life Science Campus by Alexandria(7) | Seattle | Lake Union | 70.0% | 321,218 | ||||||||||||||||||||||||||||||||||
| 400 Dexter Avenue North | Seattle | Lake Union | 70.0% | 290,111 | ||||||||||||||||||||||||||||||||||
| Unconsolidated Real Estate Joint Ventures | ||||||||||||||||||||||||||||||||||||||
| Property | Market | Submarket | Our Ownership Share(8) | Operating RSF at 100% | ||||||||||||||||||||||||||||||||||
| 1655 and 1725 Third Street | San Francisco Bay Area | Mission Bay | 10.0 | % | 586,208 | |||||||||||||||||||||||||||||||||
| Menlo Gateway | San Francisco Bay Area | Greater Stanford | 49.0 | % | 772,983 | |||||||||||||||||||||||||||||||||
| 1401/1413 Research Boulevard | Maryland | Rockville | 65.0 | % | (9) | (10) | ||||||||||||||||||||||||||||||||
(1)In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in five other real estate joint ventures in North America.
(2)We expect to commence vertical construction of 275,000 RSF during 2021.
(3)Refer to “Dispositions and sales of partial interests” in our Earnings Press Release for additional information on the partial interest sale of these consolidated joint ventures in October 2021.
(4)Includes 601, 611, 651, 681, 685, 701, and 751 Gateway Boulevard in our South San Francisco submarket. Noncontrolling interest share is anticipated to be 49% as we make further contributions into the joint venture over time.
(5)Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4161, 4224, and 4242 Campus Point Court in our University Town Center submarket.
(6)Includes 9605, 9645, 9675, 9685, 9725, 9735, 9808, 9855, and 9868 Scranton Road and 10055 and 10065 Barnes Canyon Road in our Sorrento Mesa submarket.
(7)Includes 1201 and 1208 Eastlake Avenue East and 199 East Blaine Street in our Lake Union submarket.
(8)In addition to the unconsolidated real estate joint ventures listed, we hold an interest in one other insignificant unconsolidated real estate joint venture in North America.
(9)Represents our ownership interest; our voting interest is limited to 50%.
(10)Represents a joint venture with a distinguished retail real estate developer for an approximate 90,000 RSF retail shopping center.
| Joint Venture Financial Information (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| As of September 30, 2021 | ||||||||||||||||||||||||||
| Noncontrolling Interest Share of Consolidated Real Estate JVs | Our Share of Unconsolidated Real Estate JVs | |||||||||||||||||||||||||
| Investments in real estate | $ | 2,048,838 | $ | 475,982 | ||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | 70,786 | 9,492 | ||||||||||||||||||||||||
| Other assets | 235,407 | 63,397 | ||||||||||||||||||||||||
Secured notes payable (refer to page 49) | — | (219,245) | ||||||||||||||||||||||||
| Other liabilities | (106,148) | (7,889) | ||||||||||||||||||||||||
| Redeemable noncontrolling interests | (11,681) | — | ||||||||||||||||||||||||
| $ | 2,237,202 | $ | 321,737 | |||||||||||||||||||||||
| Noncontrolling Interest Share of Consolidated Real Estate JVs | Our Share of Unconsolidated Real Estate JVs | ||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2021 | September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 54,419 | $ | 147,534 | $ | 10,876 | $ | 33,595 | |||||||||||||||||||||||||||||||||||||||
| Rental operations | (15,217) | (39,845) | (1,785) | (5,610) | |||||||||||||||||||||||||||||||||||||||||||
| 39,202 | 107,689 | 9,091 | 27,985 | ||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | (267) | (599) | (31) | (185) | |||||||||||||||||||||||||||||||||||||||||||
| Interest | — | — | (2,504) | (7,887) | |||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (17,871) | (49,615) | (3,465) | (10,676) | |||||||||||||||||||||||||||||||||||||||||||
Fixed returns allocated to redeemable noncontrolling interests(1) | 222 | 659 | — | — | |||||||||||||||||||||||||||||||||||||||||||
| $ | 21,286 | $ | 58,134 | $ | 3,091 | $ | 9,237 | ||||||||||||||||||||||||||||||||||||||||
| Straight-line rent and below-market lease revenue | $ | 1,377 | $ | 3,459 | $ | 809 | $ | 2,924 | |||||||||||||||||||||||||||||||||||||||
Funds from operations(2) | $ | 39,157 | $ | 107,749 | $ | 6,556 | $ | 19,913 | |||||||||||||||||||||||||||||||||||||||
(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” of this Supplemental Information for the definition and reconciliation from the most directly comparable financial measure presented in accordance with GAAP.
| Investments | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
We hold investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. The tables below summarize components of our non-real estate investments and investment income. For additional details, refer to “Investments” in the “Definitions and reconciliations” of this Supplemental Information.
| September 30, 2021 | |||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Year Ended December 31, 2020 | |||||||||||||||||||||||||||
| Realized gains | $ | 81,516 | (1) | $ | 189,013 | (2) | $ | 47,288 | (3) | ||||||||||||||||||||
| Unrealized (losses) gains | (14,432) | 183,348 | 374,033 | ||||||||||||||||||||||||||
| Investment income | $ | 67,084 | $ | 372,361 | $ | 421,321 | |||||||||||||||||||||||
| September 30, 2021 | |||||||||||||||||||||||||||||
| Investments | Cost | Unrealized Gains | Carrying Amount | ||||||||||||||||||||||||||
| Publicly traded companies | $ | 282,816 | $ | 374,515 | (4) | $ | 657,331 | ||||||||||||||||||||||
| Entities that report NAV | 355,400 | 480,412 | 835,812 | ||||||||||||||||||||||||||
| Entities that do not report NAV: | |||||||||||||||||||||||||||||
Entities with observable price changes | 54,562 | 74,906 | 129,468 | ||||||||||||||||||||||||||
Entities without observable price changes | 349,100 | — | 349,100 | ||||||||||||||||||||||||||
| $ | 1,041,878 | (5) | $ | 929,833 | 1,971,711 | ||||||||||||||||||||||||
| Investments accounted for under the equity method of accounting | 75,167 | ||||||||||||||||||||||||||||
| Total investments | $ | 2,046,878 | |||||||||||||||||||||||||||
(1)Includes three separate significant realized gains aggregating $52.4 million related to the following transactions: (i) the sale of shares in an investment in a publicly traded biotechnology company, (ii) a distribution received from a limited partnership investment, and (iii) the acquisition of one of our privately held biotechnology investments by a publicly traded biotechnology company.
(2)Includes six separate significant realized gains aggregating $110.1 million related to the following transactions: (i) the sales of investments in three publicly traded biotechnology companies, (ii) a distribution received from a limited partnership investment, and (iii) the acquisition of two of our privately held non-real estate investments in a biopharmaceutical company and biotechnology company.
(3)Includes impairments of $24.5 million related to investments in privately held entities that do not report NAV.
(4)Includes gross unrealized gains and losses of $400.0 million and $25.5 million, respectively, as of September 30, 2021.
(5)Represents 3.2% of gross assets as of September 30, 2021.
| Public/Private Mix (Cost) | ||||||||
 | ||||||||
| Tenant/Non-Tenant Mix (Cost) | ||||||||
 | ||||||||
| |||||
| Key Credit Metrics | |||||
September 30, 2021 | |||||
| Liquidity | Minimal Outstanding Borrowings and Significant Availability on Unsecured Senior Line of Credit | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| $4.0B |  | |||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Availability under our unsecured senior line of credit, net of amounts outstanding under our commercial paper program | $ | 2,250 | ||||||||||||||||||||||||
Outstanding forward equity sales agreements(1) | 772 | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | 368 | |||||||||||||||||||||||||
| Investments in publicly traded companies | 657 | |||||||||||||||||||||||||
Liquidity as of September 30, 2021 | $ | 4,047 | ||||||||||||||||||||||||
Net Debt and Preferred Stock to Adjusted EBITDA(2) | Fixed-Charge Coverage Ratio(2) | |||||||||||||||||||||||||
 |  | |||||||||||||||||||||||||
(1)Represents expected net proceeds from the future settlement of the remaining 4.6 million shares outstanding under our forward equity sales agreements as of September 30, 2021.
(2)Quarter annualized. Refer to “Fixed-charge coverage ratio” and “Net debt and preferred stock to Adjusted EBITDA” in the “Definitions and reconciliations” of this Supplemental Information for additional details.
| Summary of Debt | | ||||
September 30, 2021 | |||||
| (in millions) | |||||
Weighted-Average Remaining Term of 11.9 Years
 | ||||||||
(1)Refer to footnote 2 on the next page under “Fixed-rate and variable-rate debt” for additional details.
| Summary of Debt (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Fixed-rate and variable-rate debt | Fixed-Rate Debt | Variable-Rate Debt | Total | Percentage | Weighted-Average | |||||||||||||||||||||||||||||||||
Interest Rate(1) | Remaining Term (in years) | |||||||||||||||||||||||||||||||||||||
| Secured notes payable | $ | 198,758 | $ | — | $ | 198,758 | 2.1 | % | 3.41 | % | 2.4 | |||||||||||||||||||||||||||
| Unsecured senior notes payable | 8,314,851 | — | 8,314,851 | 89.8 | 3.54 | 12.8 | ||||||||||||||||||||||||||||||||
| Unsecured senior line of credit | — | — | — | — | N/A | 4.3 | ||||||||||||||||||||||||||||||||
| Commercial paper program | — | 749,978 | 749,978 | 8.1 | 0.23 | (2) | ||||||||||||||||||||||||||||||||
| Total/weighted average | $ | 8,513,609 | $ | 749,978 | $ | 9,263,587 | 100.0 | % | 3.27 | % | 11.9 | (2) | ||||||||||||||||||||||||||
| Percentage of total debt | 92 | % | 8 | % | 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)The commercial paper notes bear interest at short-term fixed rates and can generally be issued 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 are used to fund short-term capital needs and are backed by our unsecured senior line of credit. The commercial paper outstanding as of September 30, 2021, matured on October 6, 2021. In the event we are unable to issue commercial paper notes or refinance outstanding borrowings under terms equal to or more favorable than those under our unsecured senior line of credit, we expect to borrow under the unsecured senior line of credit at L+0.815%. As such, we calculate the weighted-average remaining term of our commercial paper by using the maturity date of our unsecured senior line of credit. Using the maturity date of our outstanding commercial paper, the consolidated weighted-average maturity of our debt is 11.6 years. The commercial paper notes sold during the three months ended September 30, 2021, were issued at a weighted-average yield to maturity of 0.21% and had a weighted-average maturity term of 9 days.
| Debt covenants | Unsecured Senior Notes Payable | Unsecured Senior Line of Credit | |||||||||||||||||||||||||||
Debt Covenant Ratios(1) | Requirement | September 30, 2021 | Requirement | September 30, 2021 | |||||||||||||||||||||||||
| Total Debt to Total Assets | ≤ 60% | 31% | ≤ 60.0% | 28.7% | |||||||||||||||||||||||||
| Secured Debt to Total Assets | ≤ 40% | 1% | ≤ 45.0% | 0.6% | |||||||||||||||||||||||||
| Consolidated EBITDA to Interest Expense | ≥ 1.5x | 11.5x | ≥ 1.50x | 4.34x | |||||||||||||||||||||||||
| Unencumbered Total Asset Value to Unsecured Debt | ≥ 150% | 299% | N/A | N/A | |||||||||||||||||||||||||
| Unsecured Interest Coverage Ratio | N/A | N/A | ≥ 1.75x | 9.15x | |||||||||||||||||||||||||
(1)All covenant ratio titles utilize terms as defined in the respective debt and credit agreements. The calculation of consolidated EBITDA is based on the definitions contained in our loan agreements and is not directly comparable to the computation of EBITDA as described in Exchange Act Release No. 47226.
| Unconsolidated real estate joint ventures’ debt | |||||||||||||||||||||||||||||||||||||||||||||||
| Unconsolidated Joint Venture | Our Share | Maturity Date | Stated Rate | Interest Rate(1) | Debt Balance at 100%(2) | ||||||||||||||||||||||||||||||||||||||||||
| 1401/1413 Research Boulevard | 65.0% | 5/17/22 | L+2.50% | 3.50% | (3) | $ | 27,145 | ||||||||||||||||||||||||||||||||||||||||
1655 and 1725 Third Street | 10.0% | 3/10/25 | 4.50% | 4.57% | 598,550 | ||||||||||||||||||||||||||||||||||||||||||
Menlo Gateway, Phase II | 49.0% | 5/1/35 | 4.53% | 4.59% | 154,992 | ||||||||||||||||||||||||||||||||||||||||||
Menlo Gateway, Phase I | 49.0% | 8/10/35 | 4.15% | 4.18% | 137,578 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 918,265 | ||||||||||||||||||||||||||||||||||||||||||||||
(1)Includes interest expense and amortization of loan fees.
(2)Represents outstanding principal, net of unamortized deferred financing costs, as of September 30, 2021.
(3)This loan is subject to a fixed floor rate of 3.50%.
| Summary of Debt (continued) | | ||||
September 30, 2021 | |||||
| (Dollars in thousands) | |||||
| Debt | Stated Rate | Interest Rate(1) | Maturity Date(2) | Principal Payments Remaining for the Periods Ending December 31, | Principal | Unamortized (Deferred Financing Cost), (Discount)/Premium | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured notes payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater Boston | 4.82 | % | 3.40 | % | 2/6/24 | $ | 870 | $ | 3,564 | $ | 3,742 | $ | 183,527 | $ | — | $ | — | $ | 191,703 | $ | 6,377 | $ | 198,080 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | 6.50 | % | 6.50 | 7/1/36 | — | 28 | 30 | 32 | 34 | 554 | 678 | — | 678 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured debt weighted-average interest rate/subtotal | 4.83 | % | 3.41 | 870 | 3,592 | 3,772 | 183,559 | 34 | 554 | 192,381 | 6,377 | 198,758 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial paper program(3) | 0.23 | % | (3) | 0.23 | (3) | (3) | (3) | — | — | — | — | 750,000 | 750,000 | (22) | 749,978 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unsecured senior line of credit | L+0.815 | % | (4) | N/A | 1/6/26 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 3.45 | % | 3.62 | 4/30/25 | — | — | — | — | 600,000 | — | 600,000 | (3,151) | 596,849 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.30 | % | 4.50 | 1/15/26 | — | — | — | — | — | 300,000 | 300,000 | (2,106) | 297,894 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable – green bond | 3.80 | % | 3.96 | 4/15/26 | — | — | — | — | — | 350,000 | 350,000 | (2,237) | 347,763 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 3.95 | % | 4.13 | 1/15/27 | — | — | — | — | — | 350,000 | 350,000 | (2,693) | 347,307 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 3.95 | % | 4.07 | 1/15/28 | — | — | — | — | — | 425,000 | 425,000 | (2,673) | 422,327 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.50 | % | 4.60 | 7/30/29 | — | — | — | — | — | 300,000 | 300,000 | (1,744) | 298,256 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 2.75 | % | 2.87 | 12/15/29 | — | — | — | — | — | 400,000 | 400,000 | (3,385) | 396,615 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.70 | % | 4.81 | 7/1/30 | — | — | — | — | — | 450,000 | 450,000 | (3,259) | 446,741 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.90 | % | 5.05 | 12/15/30 | — | — | — | — | — | 700,000 | 700,000 | (7,261) | 692,739 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 3.375 | % | 3.48 | 8/15/31 | — | — | — | — | — | 750,000 | 750,000 | (6,422) | 743,578 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unsecured senior notes payable – green bond | 2.00 | % | 2.12 | 5/18/32 | — | — | — | — | — | 900,000 | 900,000 | (9,939) | 890,061 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 1.875 | % | 1.97 | 2/1/33 | — | — | — | — | — | 1,000,000 | 1,000,000 | (9,916) | 990,084 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.85 | % | 4.93 | 4/15/49 | — | — | — | — | — | 300,000 | 300,000 | (3,246) | 296,754 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 4.00 | % | 3.91 | 2/1/50 | — | — | — | — | — | 700,000 | 700,000 | 10,342 | 710,342 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured senior notes payable | 3.00 | % | 3.08 | 5/18/51 | — | — | — | — | — | 850,000 | 850,000 | (12,459) | 837,541 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured debt weighted average/subtotal | 3.27 | — | — | — | — | 600,000 | 8,525,000 | 9,125,000 | (60,171) | 9,064,829 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average interest rate/total | 3.27 | % | $ | 870 | $ | 3,592 | $ | 3,772 | $ | 183,559 | $ | 600,034 | $ | 8,525,554 | $ | 9,317,381 | $ | (53,794) | $ | 9,263,587 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balloon payments | $ | — | $ | — | $ | — | $ | 183,221 | $ | 600,000 | $ | 8,525,000 | $ | 9,308,221 | $ | — | $ | 9,308,221 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal amortization | 870 | 3,592 | 3,772 | 338 | 34 | 554 | 9,160 | (53,794) | (44,634) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total debt | $ | 870 | $ | 3,592 | $ | 3,772 | $ | 183,559 | $ | 600,034 | $ | 8,525,554 | $ | 9,317,381 | $ | (53,794) | $ | 9,263,587 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed-rate debt | $ | 870 | $ | 3,592 | $ | 3,772 | $ | 183,559 | $ | 600,034 | $ | 7,775,554 | $ | 8,567,381 | $ | (53,772) | $ | 8,513,609 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable-rate debt | — | — | — | — | — | 750,000 | 750,000 | (22) | 749,978 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt | $ | 870 | $ | 3,592 | $ | 3,772 | $ | 183,559 | $ | 600,034 | $ | 8,525,554 | $ | 9,317,381 | $ | (53,794) | $ | 9,263,587 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average stated rate on maturing debt | N/A | N/A | N/A | 4.82% | 3.45% | 3.15% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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)Refer to footnote 2 on the prior page under “Fixed-rate and variable-rate debt.”
(4)During the year ended December 31, 2020, we achieved certain sustainability measures, as described in our unsecured senior line of credit agreement, which reduced the borrowing rate by one basis point for one year ending December 31, 2021.
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| Definitions and Reconciliations | |||||
September 30, 2021 | |||||
This section contains additional details for sections throughout this Supplemental Information 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) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||
| Net income | $ | 124,433 | $ | 404,520 | $ | 25,533 | $ | 457,133 | $ | 95,799 | |||||||||||||||||||
Interest expense | 35,678 | 35,158 | 36,467 | 37,538 | 43,318 | ||||||||||||||||||||||||
Income taxes | 3,672 | 2,800 | 1,426 | 2,053 | 2,430 | ||||||||||||||||||||||||
| Depreciation and amortization | 210,842 | 190,052 | 180,913 | 177,750 | 176,831 | ||||||||||||||||||||||||
| Stock compensation expense | 9,728 | 12,242 | 12,446 | 11,394 | 12,994 | ||||||||||||||||||||||||
Loss on early extinguishment of debt | — | — | 67,253 | 7,898 | 52,770 | ||||||||||||||||||||||||
| Loss (gain) on sales of real estate | 435 | — | (2,779) | (152,503) | (1,586) | ||||||||||||||||||||||||
| Significant realized gains on non-real estate investments | (52,427) | (1) | (34,773) | (22,919) | — | — | |||||||||||||||||||||||
| Unrealized losses (gains) on non-real estate investments | 14,432 | (244,031) | 46,251 | (233,538) | 14,013 | ||||||||||||||||||||||||
Impairment of real estate | 42,620 | 4,926 | 5,129 | 25,177 | 7,680 | ||||||||||||||||||||||||
| Termination fee | — | — | — | — | (86,179) | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 389,413 | $ | 370,894 | $ | 349,720 | $ | 332,902 | $ | 318,070 | |||||||||||||||||||
Revenues | $ | 547,759 | $ | 509,619 | $ | 479,849 | $ | 463,720 | $ | 545,042 | |||||||||||||||||||
| Total realized gains on non-real estate investments | 81,516 | (1) | 60,232 | 47,265 | 21,599 | 17,361 | |||||||||||||||||||||||
| Significant realized gains on non-real estate investments | (52,427) | (34,773) | (22,919) | — | — | ||||||||||||||||||||||||
| Termination fee | — | — | — | — | (86,179) | ||||||||||||||||||||||||
| Revenues, as adjusted | $ | 576,848 | $ | 535,078 | $ | 504,195 | $ | 485,319 | $ | 476,224 | |||||||||||||||||||
Adjusted EBITDA margin | 68% | 69% | 69% | 69% | 67% | ||||||||||||||||||||||||
(1)Refer to “Investments” in our Supplemental Information for additional information.
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, impairments of real estate, and significant termination fees. Adjusted EBITDA also excludes unrealized gains or losses and significant realized gains or losses 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 total 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 investing and financing decisions related to our real estate and non-real estate investments, our 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, significant impairments and realized gains or losses on non-real estate investments, and significant termination fees allows investors to evaluate performance from period to period on a consistent basis without having to account for differences recognized because of investing and financing decisions related to our real estate and non-real estate investments or other corporate activities that may not be representative of the operating performance of our properties.
In addition, 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.
In order to calculate Adjusted EBITDA margin, we also make comparable adjustments to our revenues. We adjust our total revenues by realized gains, losses, and impairments related to our non-real estate investments and significant termination fees to arrive at revenues, as adjusted. Our calculation of Adjusted EBITDA margin divides Adjusted EBITDA by our revenues, as adjusted. We believe that consistent application of these comparable adjustments to both components 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 September 30, 2021, approximately 92% 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.
Capitalization Rates
Capitalization rates are calculated based upon net operating income and net operating income (cash basis) annualized for the quarter preceding the date on which the property is sold, or near term prospective net operating income.
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| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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.
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, agtech, and technology campuses in AAA 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, agtech, or tech office space. We generally will not commence new development projects for aboveground construction of new Class A office/laboratory, agtech, and tech office 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 a 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) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 389,413 | $ | 370,894 | $ | 349,720 | $ | 332,902 | $ | 318,070 | |||||||||||||||||||
Interest expense | $ | 35,678 | $ | 35,158 | $ | 36,467 | $ | 37,538 | $ | 43,318 | |||||||||||||||||||
| Capitalized interest | 43,185 | 43,492 | 39,886 | 37,589 | 32,556 | ||||||||||||||||||||||||
| Amortization of loan fees | (2,854) | (2,859) | (2,817) | (2,905) | (2,605) | ||||||||||||||||||||||||
Amortization of debt premiums | 498 | 465 | 576 | 869 | 910 | ||||||||||||||||||||||||
| Cash interest and fixed charges | $ | 76,507 | $ | 76,256 | $ | 74,112 | $ | 73,091 | $ | 74,179 | |||||||||||||||||||
Fixed-charge coverage ratio: | |||||||||||||||||||||||||||||
| – quarter annualized | 5.1x | 4.9x | 4.7x | 4.6x | 4.3x | ||||||||||||||||||||||||
| – trailing 12 months | 4.8x | 4.6x | 4.4x | 4.4x | 4.3x | ||||||||||||||||||||||||
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| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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 acquisition and disposition decisions, financing decisions, capital structure, capital market transactions, variances resulting from the volatility of market conditions outside of our control, or other corporate activities that may not be representative of the operating performance of our properties.
The 2018 White Paper published by the Nareit Board of Governors (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, significant termination fees, acceleration of stock compensation expense due to the resignation of an executive officer, 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:
| (In thousands) | Noncontrolling Interest Share of Consolidated Real Estate JVs | Our Share of Unconsolidated Real Estate JVs | |||||||||||||||||||||
| September 30, 2021 | September 30, 2021 | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| Net income | $ | 21,286 | $ | 58,134 | $ | 3,091 | $ | 9,237 | |||||||||||||||
Depreciation and amortization | 17,871 | 49,615 | 3,465 | 10,676 | |||||||||||||||||||
| Funds from operations | $ | 39,157 | $ | 107,749 | $ | 6,556 | $ | 19,913 | |||||||||||||||
Gross assets
Gross assets is calculated as total assets plus accumulated depreciation:
| (in thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||
| Total assets | $ | 28,558,718 | $ | 27,018,850 | $ | 25,234,346 | $ | 22,827,878 | $ | 21,910,671 | |||||||||||||||||||
| Accumulated depreciation | 3,614,440 | 3,461,780 | 3,319,597 | 3,182,438 | 3,079,077 | ||||||||||||||||||||||||
| Gross assets | $ | 32,173,158 | $ | 30,480,630 | $ | 28,553,943 | $ | 26,010,316 | $ | 24,989,748 | |||||||||||||||||||
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 September 30, 2021, as reported by Bloomberg Professional Services. Credit ratings from Moody’s Investors Service and S&P Global Ratings reflect credit ratings of the tenant’s parent entity, and there can be no assurance that a tenant’s parent entity will satisfy the tenant’s lease obligation upon such tenant’s default. We monitor the credit quality and related material changes of our tenants. Material changes that cause a tenant’s market capitalization to decrease below $10 billion, which are not immediately reflected in the twelve-month average, may result in their exclusion from this measure.
| Space Intentionally Blank | |||||
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| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
Investments
We hold investments in publicly traded companies and privately held entities primarily
involved in the life science, agtech, and technology industries. We recognize, measure, present, and
disclose these investments as follows:
| Statements of Operations | ||||||||||||||||||||
| Balance Sheet | Gains and Losses | |||||||||||||||||||
| Carrying Amount | Unrealized | Realized | ||||||||||||||||||
| Difference between proceeds received upon disposition and historical cost | ||||||||||||||||||||
Publicly traded companies | Fair value | Changes in fair value | ||||||||||||||||||
Privately held entities without readily determinable fair values that: | ||||||||||||||||||||
| Report NAV | Fair value, using NAV as a practical expedient | Changes in NAV, as a practical expedient to fair value | ||||||||||||||||||
| Do not report NAV | Cost, adjusted for observable price changes and impairments(1) | Observable price changes(1) | Impairments 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 | |||||||||||||||||
| Equity method investments | Contributions, adjusted for our share of the investee’s earnings or losses, less distributions received, reduced by other-than-temporary impairments | Our share of unrealized gains or losses reported by the investee | Our share of realized gains or losses reported by the investee, and other-than-temporary impairments | |||||||||||||||||
(1)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 with similar rights and obligations executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer.
Investments in real estate
The following table reconciles our investments in real estate as of September 30, 2021:
| (In thousands) | Investments in Real Estate | ||||||||||
| Gross investments in real estate | $ | 26,667,645 | |||||||||
| Less: accumulated depreciation | (3,609,994) | ||||||||||
| Net investments in real estate – North America | 23,057,651 | ||||||||||
| Net investments in real estate – Asia | 13,863 | ||||||||||
| Investments in real estate | $ | 23,071,514 | |||||||||
The square footage presented in the table below includes RSF of buildings in operation as of September 30, 2021, primarily representing lease expirations at recently acquired properties that also have inherent future development or redevelopment opportunities, for which we have the intent to demolish or redevelop the existing property upon expiration of the existing in-place leases and commencement of future construction:
| Dev/ Redev | RSF of Lease Expirations Targeted for Development and Redevelopment | |||||||||||||||||||||||||||||||
| Property/Submarket | 2021 | 2022 | Thereafter | Total | ||||||||||||||||||||||||||||
| Near-term projects: | ||||||||||||||||||||||||||||||||
| Reservoir Woods/Route 128 | Redev | 202,428 | — | 312,845 | 515,273 | |||||||||||||||||||||||||||
| 651 Gateway Boulevard/South San Francisco | Redev | — | 197,787 | 102,223 | (1) | 300,010 | ||||||||||||||||||||||||||
| 3450 Hillview Avenue/Greater Stanford | Redev | — | 42,340 | — | 42,340 | |||||||||||||||||||||||||||
| 11255 and 11355 North Torrey Pines Road/ Torrey Pines | Dev | — | 139,135 | — | 139,135 | |||||||||||||||||||||||||||
| 10931 and 10933 North Torrey Pines Road/ Torrey Pines | Dev | — | 92,450 | — | 92,450 | |||||||||||||||||||||||||||
| 10277 Scripps Ranch Boulevard/Other San Diego | Redev | 32,774 | — | — | 32,774 | |||||||||||||||||||||||||||
| Other/Seattle | Redev | — | 51,255 | — | 51,255 | |||||||||||||||||||||||||||
| 41 Moore Drive/Research Triangle | Redev | — | 62,490 | — | 62,490 | |||||||||||||||||||||||||||
| 235,202 | 585,457 | 415,068 | 1,235,727 | |||||||||||||||||||||||||||||
| Intermediate-term projects: | ||||||||||||||||||||||||||||||||
| 3825 Fabian Way/Greater Stanford | Redev | — | 250,000 | — | 250,000 | |||||||||||||||||||||||||||
| 3460 Hillview Avenue/Greater Stanford | Redev | — | — | 34,611 | 34,611 | |||||||||||||||||||||||||||
| 9444 Waples Street/Sorrento Mesa | Dev | — | 39,944 | 48,436 | (2) | 88,380 | ||||||||||||||||||||||||||
| — | 289,944 | 83,047 | 372,991 | |||||||||||||||||||||||||||||
| Future projects: | ||||||||||||||||||||||||||||||||
| 550 Arsenal Street/Cambridge/Inner Suburbs | Dev | — | — | 260,867 | 260,867 | |||||||||||||||||||||||||||
| 380 and 420 E Street/Seaport Innovation District | Dev | — | — | 195,506 | 195,506 | |||||||||||||||||||||||||||
| Other/Greater Boston | Redev | — | — | 167,549 | (3) | 167,549 | ||||||||||||||||||||||||||
| 1122 El Camino Real/South San Francisco | Dev | — | — | 223,232 | 223,232 | |||||||||||||||||||||||||||
| 3875 Fabian Way/Greater Stanford | Redev | — | — | 228,000 | 228,000 | |||||||||||||||||||||||||||
| 960 Industrial Road/Greater Stanford | Dev | — | — | 110,000 | 110,000 | |||||||||||||||||||||||||||
| 2475 Hanover Street/Greater Stanford | Redev | — | — | 83,980 | 83,980 | |||||||||||||||||||||||||||
| 219 East 42nd Street/New York City | Dev | — | — | 349,947 | 349,947 | |||||||||||||||||||||||||||
| 10975 and 10995 Torreyana Road/Torrey Pines | Dev | — | — | 84,829 | 84,829 | |||||||||||||||||||||||||||
| 4161 Campus Point Court/University Town Center | Dev | — | — | 159,884 | 159,884 | |||||||||||||||||||||||||||
| 10260 Campus Point Drive/University Town Center | Dev | — | — | 109,164 | 109,164 | |||||||||||||||||||||||||||
| Sequence District by Alexandria/Sorrento Mesa | Dev/Redev | — | — | 689,938 | 689,938 | |||||||||||||||||||||||||||
4025, 4031, 4045, and 4075 Sorrento Valley Boulevard/Sorrento Valley | Dev | — | 82,594 | — | 82,594 | |||||||||||||||||||||||||||
| 601 Dexter Avenue North/Lake Union | Dev | — | — | 18,680 | 18,680 | |||||||||||||||||||||||||||
| 830 4th Avenue South/SoDo | Dev | — | — | 42,380 | 42,380 | |||||||||||||||||||||||||||
| — | 82,594 | 2,723,956 | 2,806,550 | |||||||||||||||||||||||||||||
| 235,202 | 957,995 | 3,222,071 | 4,415,268 | |||||||||||||||||||||||||||||
(1)Represents vacant square footage as of September 30, 2021.
(2)Includes 43,690 of vacant square footage as of September 30, 2021.
(3)Includes 89,774 of vacant square footage as of September 30, 2021.
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| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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 presented and 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 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 represent the write-down of non-real estate investments when their fair values decrease 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 and accompanying Earnings Press Release.
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 and preferred stock to Adjusted EBITDA
Net debt and preferred stock to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure of evaluating our balance sheet leverage. Net debt and preferred stock is equal to the sum of total consolidated debt less cash, cash equivalents, and restricted cash, 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 preferred stock and computes the ratio to Adjusted EBITDA:
| (Dollars in thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | |||||||||||||||||||||||||||
| Secured notes payable | $ | 198,758 | $ | 227,984 | $ | 229,406 | $ | 230,925 | $ | 342,363 | ||||||||||||||||||||||
| Unsecured senior notes payable | 8,314,851 | 8,313,025 | 8,311,512 | 7,232,370 | 7,230,819 | |||||||||||||||||||||||||||
| Unsecured senior line of credit and commercial paper | 749,978 | 299,990 | — | 99,991 | 249,989 | |||||||||||||||||||||||||||
| Unamortized deferred financing costs | 65,112 | 66,913 | 68,293 | 56,312 | 58,284 | |||||||||||||||||||||||||||
| Cash and cash equivalents | (325,872) | (323,876) | (492,184) | (568,532) | (446,255) | |||||||||||||||||||||||||||
| Restricted cash | (42,182) | (33,697) | (42,219) | (29,173) | (38,788) | |||||||||||||||||||||||||||
| Preferred stock | — | — | — | — | — | |||||||||||||||||||||||||||
| Net debt and preferred stock | $ | 8,960,645 | $ | 8,550,339 | $ | 8,074,808 | $ | 7,021,893 | $ | 7,396,412 | ||||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
| – quarter annualized | $ | 1,557,652 | $ | 1,483,576 | $ | 1,398,880 | $ | 1,331,608 | $ | 1,272,280 | ||||||||||||||||||||||
| – trailing 12 months | $ | 1,442,929 | $ | 1,371,586 | $ | 1,314,153 | $ | 1,274,187 | $ | 1,228,440 | ||||||||||||||||||||||
| Net debt and preferred stock to Adjusted EBITDA: | ||||||||||||||||||||||||||||||||
| – quarter annualized | 5.8 | x | 5.8 | x | 5.8 | x | 5.3 | x | 5.8 | x | ||||||||||||||||||||||
| – trailing 12 months | 6.2 | x | 6.2 | x | 6.1 | x | 5.5 | x | 6.0 | x | ||||||||||||||||||||||
| |||||
| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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 Ended | Nine Months Ended | |||||||||||||||||||||||||
| (Dollars in thousands) | 9/30/21 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||
| Net income | $ | 124,433 | $ | 95,799 | $ | 554,486 | $ | 370,038 | ||||||||||||||||||
| Equity in earnings of unconsolidated real estate joint ventures | (3,091) | (3,778) | (9,237) | (4,555) | ||||||||||||||||||||||
General and administrative expenses | 37,931 | 36,913 | 109,807 | 100,651 | ||||||||||||||||||||||
| Interest expense | 35,678 | 43,318 | 107,303 | 134,071 | ||||||||||||||||||||||
Depreciation and amortization | 210,842 | 176,831 | 581,807 | 520,354 | ||||||||||||||||||||||
Impairment of real estate | 42,620 | 7,680 | 52,675 | 22,901 | ||||||||||||||||||||||
Loss on early extinguishment of debt | — | 52,770 | 67,253 | 52,770 | ||||||||||||||||||||||
| Loss (gain) on sales of real estate | 435 | (1,586) | (2,344) | (1,586) | ||||||||||||||||||||||
| Investment income | (67,084) | (3,348) | (372,361) | (166,184) | ||||||||||||||||||||||
| Net operating income | 381,764 | 404,599 | 1,089,389 | 1,028,460 | ||||||||||||||||||||||
Straight-line rent revenue | (33,918) | (28,822) | (89,203) | (72,786) | ||||||||||||||||||||||
Amortization of acquired below-market leases | (13,664) | (13,979) | (39,043) | (43,730) | ||||||||||||||||||||||
| Net operating income (cash basis) | $ | 334,182 | $ | 361,798 | $ | 961,143 | $ | 911,944 | ||||||||||||||||||
Net operating income (cash basis) – annualized | $ | 1,336,728 | $ | 1,447,192 | $ | 1,281,524 | $ | 1,215,925 | ||||||||||||||||||
| Net operating income (from above) | $ | 381,764 | $ | 404,599 | $ | 1,089,389 | $ | 1,028,460 | ||||||||||||||||||
| Total revenues | $ | 547,759 | $ | 545,042 | $ | 1,537,227 | $ | 1,421,917 | ||||||||||||||||||
Operating margin(1) | 70% | 74% | 71% | 72% | ||||||||||||||||||||||
(1)Includes the effect of a termination fee recognized during 3Q20. Refer to “Funds from operation and funds from operations per share” in our Earnings Press Release for additional details. Excluding this effect, our operating margin for the three and nine months ended September 30, 2020, would have been 70% and 71%, respectively.
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 of 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 gain 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.
| |||||
| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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 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, termination fees, if any, are excluded from the results of same properties.
| Space Intentionally Blank | |||||
The following table reconciles the number of same properties to total properties for the nine months ended September 30, 2021:
Development – under construction | Properties | Acquisitions after January 1, 2020 | Properties | ||||||||||||||||||||
| 9950 Medical Center Drive | 1 | 3181 Porter Drive | 1 | ||||||||||||||||||||
Alexandria Center® for Life Science – San Carlos | 2 | 275 Grove Street | 1 | ||||||||||||||||||||
| 601, 611, and 651 Gateway Boulevard | 3 | ||||||||||||||||||||||
| 3115 Merryfield Row | 1 | 3330, 3412, 3450, and 3460 Hillview Avenue | 4 | ||||||||||||||||||||
Alexandria Center® for Life Science – South San Francisco | 1 | ||||||||||||||||||||||
| 9605, 9609, 9613, and 9615 Medical Center Drive | 4 | ||||||||||||||||||||||
Alexandria Center® for AgTech | 2 | ||||||||||||||||||||||
Alexandria Center® for Advanced Technologies | 2 | 9808 and 9868 Scranton Road | 2 | ||||||||||||||||||||
Alexandria Center® for Life Science – Durham | |||||||||||||||||||||||
| 201 Brookline Avenue | 1 | 13 | |||||||||||||||||||||
| SD Tech by Alexandria | 1 | Reservoir Woods | 3 | ||||||||||||||||||||
| 751 Gateway Boulevard | 1 | One Upland Road | 1 | ||||||||||||||||||||
| 325 Binney Street | 1 | 830 4th Avenue South | 1 | ||||||||||||||||||||
| 13 | 11255 and 11355 North Torrey Pines Road | 2 | |||||||||||||||||||||
Development – placed into | |||||||||||||||||||||||
| service after January 1, 2020 | Properties | Sequence District by Alexandria | 7 | ||||||||||||||||||||
| 9804 Medical Center Drive | 1 | 380 and 420 E Street | 2 | ||||||||||||||||||||
| 1165 Eastlake Avenue East | 1 | Alexandria Center® for Life Science – Fenway | 1 | ||||||||||||||||||||
| 2 | |||||||||||||||||||||||
| Redevelopment – under construction | Properties | 550 Arsenal Street | 1 | ||||||||||||||||||||
| 5505 Morehouse Drive | 1 | 1501-1599 Industrial Road | 6 | ||||||||||||||||||||
Alexandria Center® for Life Science – Long Island City | 1 | One Investors Way | 1 | ||||||||||||||||||||
| 2475 Hanover Street | 1 | ||||||||||||||||||||||
| 3160 Porter Drive | 1 | 10975 and 10995 Torreyana Road | 2 | ||||||||||||||||||||
| The Arsenal on the Charles | 11 | Pacific Technology Park | 6 | ||||||||||||||||||||
| 700 Quince Orchard Road | 1 | 1122 El Camino Real | 1 | ||||||||||||||||||||
Alexandria Center® for Life Science – Durham | 3 | 12 Davis Drive | 1 | ||||||||||||||||||||
| 7360 Carroll Road | 1 | ||||||||||||||||||||||
| 840 Winter Street | 1 | Other | 39 | ||||||||||||||||||||
| 20400 Century Boulevard | 1 | 104 | |||||||||||||||||||||
| 10277 Scripps Ranch Boulevard | 1 | Unconsolidated real estate JVs | 5 | ||||||||||||||||||||
| 9601 and 9603 Medical Center Drive | 2 | Properties held for sale | 1 | ||||||||||||||||||||
| Other | 8 | ||||||||||||||||||||||
| 31 | Total properties excluded from same properties | 158 | |||||||||||||||||||||
Redevelopment – placed into | |||||||||||||||||||||||
| service after January 1, 2020 | Properties | Same properties | 249 | ||||||||||||||||||||
| 9877 Waples Street | 1 | Total properties in North America as of September 30, 2021 | 407 | ||||||||||||||||||||
| Other | 1 | ||||||||||||||||||||||
| 2 | |||||||||||||||||||||||
| |||||
| Definitions and Reconciliations (continued) | |||||
September 30, 2021 | |||||
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 Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||||
| Income from rentals | $ | 546,527 | $ | 508,371 | $ | 478,695 | $ | 461,335 | $ | 543,412 | $ | 1,533,593 | $ | 1,416,873 | |||||||||||||||||||||||||||
| Rental revenues | (415,918) | (396,804) | (370,233) | (353,950) | (438,393) | (1,182,955) | (1,117,890) | ||||||||||||||||||||||||||||||||||
| Tenant recoveries | $ | 130,609 | $ | 111,567 | $ | 108,462 | $ | 107,385 | $ | 105,019 | $ | 350,638 | $ | 298,983 | |||||||||||||||||||||||||||
Total equity capitalization
Total equity capitalization is equal to the outstanding shares of common stock multiplied by the closing price on the last trading day 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.
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) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||||||||||||||||
Unencumbered net operating income | $ | 371,026 | $ | 353,104 | $ | 330,160 | $ | 315,586 | $ | 388,575 | |||||||||||||||||||
Encumbered net operating income | 10,738 | 12,560 | 11,801 | 11,367 | 16,024 | ||||||||||||||||||||||||
| Total net operating income | $ | 381,764 | $ | 365,664 | $ | 341,961 | $ | 326,953 | $ | 404,599 | |||||||||||||||||||
Unencumbered net operating income as a percentage of total net operating income | 97% | 97% | 97% | 97% | 96% | ||||||||||||||||||||||||
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.
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 September 30, 2021, we had Forward Agreements outstanding to sell an aggregate of 4.6 million shares of common stock.
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 Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||||||||||||||||||||||
| Weighted-average of common stock outstanding – basic | 150,854 | 145,825 | 137,319 | 133,688 | 124,901 | 144,716 | 123,561 | ||||||||||||||||||||||||||||||||||
Forward Agreements | 707 | 233 | 369 | 139 | 927 | 437 | 466 | ||||||||||||||||||||||||||||||||||
| Weighted-average of common stock outstanding – diluted | 151,561 | 146,058 | 137,688 | 133,827 | 125,828 | 145,153 | 124,027 | ||||||||||||||||||||||||||||||||||