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Investments (Notes)

12 Months Ended

Dec. 31, 2021

We hold investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. Our accounting for non-real estate investments is summarized below. Refer to the “Investments” section in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements for additional information.

Investments in publicly traded companies

Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income in our consolidated statements of operations.

Investments in privately held companies

Our investments in privately held entities consist of (i) investments in privately held entities that report NAV, and (ii) investments in privately held entities that do not report NAV. These investments are accounted for as follows:

Investments in privately held entities that report NAV

Investments in entities that report NAV, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date.

Investments in privately held entities that do not report NAV

Investments in privately held entities that do not report NAV are carried at cost, adjusted for observable price changes and impairments, with changes recognized in net income. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold.

These investments continue to be evaluated on the basis of a qualitative assessment for indicators of impairment by utilizing the monitoring criteria described in the “Investments” section in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements, and by monitoring the presence of the following impairment indicators:

(i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee;

(ii)a significant adverse change in the regulatory, economic, or technological environment of the investee;

(iii)a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market;

(iv)significant concerns about the investee’s ability to continue as a going concern; and/or

(v)a decision by investors to cease providing support or reduce their financial commitment to the investee.

If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

Investments accounted for under the equity method

We account for our investments under the equity method whenever we are deemed to have significant influence over the investee’s operating and financial policies. Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of the investee’s earnings or losses, distributions received, and other-than-temporary impairments. Refer to the “Investments” section in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements for additional information on the criteria used to determine whether an investment should be accounted for under the equity method, and for our impairment assessment of our equity method investments.

As of December 31, 2021, we had six investments in privately held entities aggregating $71.6 million accounted for under the equity method. Our ownership interest in each of our investments accounted for under the equity method of accounting is less than 20%. Our equity in earnings or losses of our equity method investees is recognized in each period for which these earnings or losses are reported by the investee, and is classified within investment income in our consolidated statements of operations.

Investment income/loss recognition and classification

We classify unrealized and realized gains and losses on our investments within investment income in our consolidated statements of operations. Unrealized gains and losses represent:

(i)changes in fair value for investments in publicly traded companies;

(ii)changes in NAV as a practical expedient to estimate fair value for investments in privately held entities that report NAV per share;

(iii)observable price changes for investments in privately held entities that do not report NAV per share; and

(iv)our share of unrealized gains or losses reported by our equity method investees.

Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary to their estimated fair value.

The following tables summarize our investments as of December 31, 2021 and 2020 (in thousands):


	December 31, 2021
	Cost		Unrealized Gains (Losses)		Carrying Amount
Publicly traded companies	$	203,290	$	280,527	$	483,817
Entities that report NAV	385,692		444,172		829,864
Entities that do not report NAV:
Entities with observable price changes	56,257		72,974		129,231
Entities without observable price changes	362,064		—		362,064
Investments accounted for under the equity method	N/A		N/A		71,588
Total investments	$	1,007,303	$	797,673	1,876,564


	December 31, 2020
	Cost		Unrealized Gains (Losses)		Carrying Amount
Publicly traded companies	$	208,754	$	351,076	$	559,830
Entities that report NAV	334,341		327,741		662,082
Entities that do not report NAV:
Entities with observable price changes	47,545		96,859		144,404
Entities without observable price changes	244,798		—		244,798
Total investments	$	835,438	$	775,676	$	1,611,114

Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held as of December 31, 2021 aggregated to a gain of $31.2 million, which consisted of upward adjustments of $74.3 million, downward adjustments of $1.3 million, and impairments of $41.8 million.

Our investment income for the years ended December 31, 2021, 2020, and 2019 consisted of the following (in thousands):


	Year Ended December 31,
	2021		2020		2019
Realized gains	$	215,845	$	47,288	$	33,158
Unrealized gains	43,632		374,033		161,489
Investment income	$	259,477	$	421,321	$	194,647

During the year ended December 31, 2021, gains and losses on investments in privately held entities that do not report NAV still held at December 31, 2021 aggregated to a loss of $33.3 million, which consisted of upward adjustments of $32.7 million and downward adjustments primarily related to observable prices changes aggregating $66.0 million.

During the year ended December 31, 2020, gains and losses on investments in privately held entities that do not report NAV still held at December 31, 2020 aggregated to a gain of $3.1 million, which consisted of upward adjustments of $36.7 million and downward adjustments and impairments of $33.6 million.

During the year ended December 31, 2019, gains and losses on investments in privately held entities that do not report NAV still held at December 31, 2019 aggregated to a loss of $12.7 million, which consisted of upward adjustments of $5.2 million and downward adjustments and impairments of $18.0 million.

Unrealized gains related to investments still held (excluding investments accounted for under the equity method of accounting) at December 31, 2021, 2020, and 2019 aggregated $109.4 million, $392.7 million, and $184.6 million during the years ended December 31, 2021, 2020, and 2019, respectively.

Our investment income for the year ended December 31, 2021 also included $19.7 million of equity in earnings of our equity method investments.

Commitments on investments in privately held entities that report NAV

We are committed to funding approximately $358.0 million for all investments in privately held entities that report NAV. Our funding commitments expire at various dates over the next 11 years, with a weighted-average expiration of 9.0 years as of December 31, 2021. These investments are not redeemable by us, but we may receive distributions from these investments throughout their terms. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted-average remaining term during which these investments are expected to be liquidated was 5.2 years as of December 31, 2021.