Alexandria Real Estate Equities, Inc. Reports: 4Q24 and 2024 Net (Loss) Income per Share - Diluted of $(0.38) and $1.80, respectively; 4Q24 and 2024 FFO per Share - Diluted, as Adjusted, of $2.39 and $9.47, respectively
PASADENA, Calif., Jan. 27, 2025 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) announced financial and operating results for the fourth quarter and year ended December 31, 2024.
Key highlights
---
Operating results 4Q24 4Q23 2024 2023
---
Total revenues:
In millions $788.9 $757.2 $3,116.4 $2,885.7
Growth 4.2 % 8.0 %
Net (loss) income attributable to Alexandria's common stockholders - diluted:
In millions $(64.9) $(91.9) $309.6 $92.4
Per share $(0.38) $(0.54) $1.80 $0.54
Funds from operations attributable to Alexandria's common stockholders - diluted, as adjusted:
In millions $411.8 $389.8 $1,629.1 $1,532.3
Per share $2.39 $2.28 $9.47 $8.97
A sector-leading REIT with a high-quality, diverse tenant base and strong margins
(As of December 31, 2024, unless stated otherwise)
Occupancy of operating properties in North America 94.6 %
Percentage of annual rental revenue in effect from Megacampus(TM) platform 77 %
Percentage of annual rental revenue in effect from investment-grade or publicly traded large cap tenants 52 %
Operating margin 70 %
Adjusted EBITDA margin 72 %
Percentage of leases containing annual rent escalations 97 %
Weighted-average remaining lease term:
Top 20 tenants 9.3 years
All tenants 7.5 years
Sustained strength in tenant collections:
January 2025 tenant rents and receivables collected as of January 27, 2025 99.5 %
4Q24 tenant rents and receivables collected as of January 27, 2025 99.9 %
Strong and flexible balance sheet with significant liquidity; top 10% credit rating ranking among all publicly traded U.S. REITs
-- Net debt and preferred stock to Adjusted EBITDA of 5.2x and fixed-charge
coverage ratio of 4.3x for 4Q24 annualized.
-- Significant liquidity of $5.7 billion.
-- 32% of our total debt matures in 2049 and beyond.
-- 12.7 years weighted-average remaining term of debt.
-- Since 2020, an average of 98.4% of our year-end debt balances have been
fixed rate.
-- Total debt and preferred stock to gross assets of 28%.
-- $684.1 million of capital contribution commitments from existing real
estate joint venture partners to fund construction from 1Q25 through
2028.
Continued solid leasing volume and rental rate increases
-- Continued solid leasing volume:
-- 1.3 million RSF for 4Q24, up 19% compared to our previous
five-quarter average.
-- Fourth consecutive quarter with leasing volume exceeding 1 million
RSF.
-- 5.1 million RSF for 2024, up 19% compared to our 2014-2020 average
of 4.3 million RSF.
-- Rental rate increases on lease renewals and re-leasing of space were
18.1% and 3.3% (cash basis) for 4Q24 and 16.9% and 7.2% (cash basis) for
2024.
-- 84% of our leasing activity during the last twelve months was generated
from our existing tenant base.
-- Tenant improvements and leasing commissions on renewed and re-leased
space executed during the year ended December 31, 2024 represented only
8.4% of total lease term rents, the second lowest percentage of total
lease term rents in the past five years.
4Q24 2024
Total leasing activity - RSF 1,310,999 5,053,954
Leasing of development and redevelopment space - RSF 12,999 (1) 493,341
Lease renewals and re-leasing of space:
RSF (included in total leasing activity above) 1,024,862 3,888,139
Rental rate increase 18.1 % 16.9 %
Rental rate increase (cash basis) 3.3 % 7.2 %
(1) As of December 31, 2024, our projects expected to stabilize in 2025 were 89%
leased/negotiating.
Attractive dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment
-- Common stock dividend declared for 4Q24 of $1.32 per common share
aggregating $5.19 per common share for the year ended December 31, 2024,
up 23 cents, or 5%, over the year ended December 31, 2023.
-- Dividend yield of 5.4% as of December 31, 2024.
-- Dividend payout ratio of 55% for the three months ended December 31,
2024.
-- Average annual dividend per-share growth of 5.4% from 2020 through 2024.
-- Significant net cash flows from operating activities after dividends
retained for reinvestment aggregating $2.2 billion for the years ended
December 31, 2020 through 2024.
Strong execution of Alexandria's 2024 capital strategy
Our 2024 capital plan included $1.4 billion in funding from strategic dispositions that focused on a portfolio of diversified assets, of which $1.1 billion was completed during 4Q24. Refer to "Dispositions" in the Earnings Press Release for additional details.
(in millions)
YTD 3Q24 $239
4Q24 1,128
Total 2024 dispositions $1,367
-- As of January 27, 2025, our share of pending dispositions subject to
negotiations aggregated $539.5 million. These transactions represent
approximately 32% of the $1.7 billion midpoint of our 2025 guidance
range for dispositions and sales of partial interests.
Alexandria's development and redevelopment pipeline delivered incremental annual net operating income of $55 million commencing during 4Q24 and is expected to deliver incremental annual net operating income aggregating $395 million by 2Q28
-- During 4Q24, we placed into service Megacampus development and
redevelopment projects aggregating 602,593 RSF that are 98% occupied
across multiple submarkets and delivered incremental annual net
operating income of $55 million. Key 4Q24 deliveries included:
-- 171,102 RSF at 4155 Campus Point Court located on the Campus Point
by Alexandria Megacampus in our University Town Center submarket;
-- 139,984 RSF at 840 Winter Street located on the Alexandria Center(®
)for Life Science - Waltham Megacampus in our Route 128 submarket;
and
-- 93,492 RSF at 10935, 10945, and 10955 Alexandria Way located on the
One Alexandria Square Megacampus in our Torrey Pines submarket.
-- Annual net operating income (cash basis) is expected to increase by $70
million upon the burn-off of initial free rent, with a weighted-average
burn-off period of approximately three months, from recently delivered
projects.
-- 68% of the RSF in our total development and redevelopment pipeline is
within our Megacampus ecosystems.
Development and Redevelopment
Projects Incremental RSF Occupancy
Annual Net Percentage
Operating Income
(dollars in millions)
Placed into service:
YTD 3Q24 $63 945,118 100 %
4Q24 55 602,593 98
Placed into service in 2024 $118 1,547,711 98 %
Expected to be placed into service:
2025 $83 (1) 4,357,276
1Q26 through 2Q28 312
$395
(1) Includes (i) 461,101 RSF that is expected to stabilize through 2025 and is 89% leased/negotiating and (ii) expected partial deliveries through 4Q25 from projects expected to stabilize in 2026 and
beyond. Refer to the initial and stabilized occupancy years under "New Class A/A+ development and redevelopment properties: current projects" in the Supplemental Information for additional
details.
Continued solid net operating income and internal growth
-- Net operating income (cash basis) growth:
-- $2.1 billion for 4Q24 annualized, up $177.9 million, or 9.5%,
compared to 4Q23 annualized.
-- $2.0 billion for 2024, up $176.9 million, or 9.8%, compared to 2023.
-- Same property net operating income growth of 0.6% and 6.3% (cash basis)
for 4Q24 over 4Q23 and 1.2% and 4.6% (cash basis) for 2024 over 2023.
-- 97% of our leases contain contractual annual rent escalations
approximating 3%.
Continued rigorous focus on management of general and administrative costs
-- General and administrative expenses as a percentage of net operating
income of 7.6% for 2024, compared to 9.8% for 2023.
-- We expect general and administrative cost savings of approximately $32
million in 2025, based on the midpoint of our guidance, compared to
2024, from a variety of cost-control and efficiency initiatives,
including:
-- Personnel-related matters: reduction in headcount over the last two
years and restructuring of compensation plans.
-- Streamlining of business processes: systems upgrades, process
improvements, and cost reduction in legal, technology, and
operational support services.
Strong balance sheet management
Key metrics as of or for the three months ended December 31, 2024
-- $29.0 billion in total market capitalization.
-- $16.8 billion in total equity capitalization.
4Q24
Target
Quarter Trailing
4Q25
Annualized 12 Months Annualized
Net Less than or equal to
debt 5.2x
and
preferred
stock
to 5.2x 5.3x
Adjusted
EBITDA
Fixed-
charge
coverage
ratio 4.3x 4.5x 4.0x to 4.5x
Key capital events
-- On December 9, 2024, we announced that our board of directors authorized
a common stock repurchase program under which we may repurchase up to
$500.0 million of our common stock through December 31, 2025.
Repurchases are expected to be funded on a leverage-neutral basis.
-- In December 2024, we repurchased $50.1 million of common stock.
-- From January 1, 2025 through January 27, 2025, we repurchased $150.0
million of additional common stock.
-- As of January 27, 2025, cumulative repurchases under the program
aggregated $200.1 million and 2.0 million shares of common stock at
an average price per share of $98.16.
-- As of January 27, 2025, the approximate value of shares authorized
and remaining under this program was $299.9 million.
-- During 4Q24, we settled all outstanding forward equity sales agreements
by issuing 230 thousand shares of common stock at an average price per
share of $120.93 and received net proceeds of $27.8 million. As of
January 27, 2025, the remaining aggregate amount available for future
sales of common stock under our ATM program was $1.47 billion.
Investments
-- As of December 31, 2024:
-- Our non-real estate investments aggregated $1.5 billion.
-- Unrealized gains presented in our consolidated balance sheet were
$83.6 million, comprising gross unrealized gains and losses
aggregating $228.1 million and $144.5 million, respectively.
-- Investment loss of $68.0 million for 4Q24 presented in our consolidated
statement of operations consisted of $32.1 million of realized gains,
$79.8 million of unrealized losses, and $20.3 million of impairment
charges.
-- Investment loss of $53.1 million for 2024 presented in our consolidated
statement of operations consisted of $117.2 million of realized gains,
$112.2 million of unrealized losses, and $58.1 million of impairment
charges.
Other key highlights
Executive management change, effective December 31, 2024
Effective on December 31, 2024, Vincent Ciruzzi retired from his position as Chief Development Officer after nearly 30 years of exemplary service. His responsibilities will be assumed by multiple members within our Real Estate Development Team, which Mr. Ciruzzi formed and led over his tenure with Alexandria.
Key items included in net income attributable to Alexandria's common stockholders:
---
4Q24 4Q23 4Q24 4Q23 2024 2023 2024 2023
(in millions, except per share amounts)
Amount Per Share -
Amount Per Share -
Diluted Diluted
Unrealized (losses) gains on $(79.8) $19.5 $(0.46) $0.11 $(112.2) $(201.5) $(0.65) $(1.18)
non-real estate investments
Gain on sales of real estate 101.8 62.2 0.59 0.36 129.3 277.0 0.75 1.62
Impairment of non-real estate (20.3) (23.1) (0.12) (0.13) (58.1) (74.6) (0.34) (0.44)
investments
Impairment of real estate(1) (186.6) (271.9) (1.08) (1.59) (223.1) (461.1) (1.30) (2.70)
Acceleration of stock - (18.4) (0.11) (20.3) (0.12)
compensation expense due
to executive officer
resignations
Provision for expected credit 0.4 0.4
losses on financial
instruments(1)
Total $(184.5) $(231.7) $(1.07) $(1.36) $(263.7) $(480.5) $(1.54) $(2.82)
(1) Refer to "Funds from operations and funds from operations per share" in the Earnings Press Release for additional details.
Subsequent events
-- In January 2025, pursuant to an amendment executed in July 2024 to our
existing ground lease agreement at the Alexandria Technology Square(®
)Megacampus, we made the second and final installment payment
aggregating $135.0 million related to our rent obligation for the
extended ground lease term.
Industry and corporate responsibility leadership: catalyzing and leading the way for positive change to benefit human health and society
-- Alexandria's longstanding sustainability leadership and performance was
reinforced by our achievements in the 2024 GRESB Real Estate Assessment.
We received the GRESB Green Star designation for the eighth consecutive
year and an "A" disclosure score for the seventh consecutive year,
signifying best-in-class transparency regarding our sustainability
practices and reporting.
-- 325 Binney Street, a 462,100 RSF development on the Alexandria
Center(®) at One Kendall Square Megacampus in our Cambridge submarket,
earned LEED Platinum certification, the highest level of certification
under the U.S. Green Building Council's Core and Shell rating system.
Home to Moderna's global headquarters and R&D center, the
ultra-efficient building is targeting LEED Zero Energy certification,
reduced fossil fuel use through the implementation of a geothermal
system, and 100% renewable electricity, resulting in an estimated 97%
reduction of greenhouse gas emissions relative to the MA 2020 Stretch
Code baseline.
-- 8 Davis Drive on the Alexandria Center(®) for Advanced Technologies and
AgTech - Research Triangle Megacampus won a BOMA Raleigh-Durham TOBY
(The Outstanding Building of the Year) Award in the Life Science
category. The TOBY Awards are the commercial real estate industry's
highest recognition honoring excellence in commercial building
management and operations.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500(®) company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus(TM) ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' 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 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 more information on Alexandria, please visit www.are.com.
Guidance
December 31, 2024
(Dollars in millions, except per share amounts)
The following guidance for 2025 has been updated to reflect our current view of existing market conditions and assumptions for the year ending December 31, 2025. There can be no assurance that actual results will not be materially higher or lower than these expectations. Also, refer to our discussion of "forward-looking statements" of the Earnings Press Release for additional details. Key updates to our 2025 guidance from December 4, 2024 are summarized in the tables below and include changes to
the midpoints of our guidance ranges for key sources of capital as follows: (i) a $150 million increase in dispositions and sales of partial interests representing pending transactions that were originally expected to close in 4Q24, and are now anticipated to be completed in 2025 and (ii) a corresponding $150 million decrease in excess 2024 bond capital held as cash at December 31, 2024.
2025 Guidance Midpoint 2025 Guidance Midpoint
Summary of Key Changes in Guidance As of As of Summary of Key Changes in Sources and Uses of As of As of
1/27/25 12/4/24 Capital 1/27/25 12/4/24
EPS, FFO per share, and FFO per share, as adjusted
No Change Excess 2024 bond capital expected to be held as
cash at
$ - $150
December 31, 2024
Dispositions and sales of partial interests $1,700 $1,550
Key Credit Metric Targets(1)
Net debt and preferred stock to Adjusted EBITDA - 4Q25 annualized Less than or equal to
5.2x
Fixed-charge coverage ratio - 4Q25 annualized 4.0x to 4.5x
Projected 2025 Earnings per Share and Funds From Operations per Share Attributable to
Alexandria's Common Stockholders - Diluted
Earnings per share(2)
$2.57 to $2.77
Depreciation and amortization of real estate assets 6.70
Allocation to unvested restricted stock awards (0.04)
Funds from operations per share and funds from operations per share, as adjusted(1)
$9.23 to $9.43
Midpoint $9.33
Key Sources and Uses of Capital Range Midpoint
Sources of capital:
Reduction in debt $(40) $(340) $(190)
Net cash provided by operating activities after dividends 425 525 475
Dispositions and sales of partial interests(3) 1,200 2,200 1,700
Total sources of capital $1,585 $2,385 $1,985
Uses of capital:
Construction $1,450 $2,050 $1,750
Acquisitions and other opportunistic uses of capital(4) 200 100
Ground lease prepayment(5) 135 135 135
Total uses of capital $1,585 $2,385 $1,985
Reduction in debt (included above):
Issuance of unsecured senior notes payable $300 $900 $600
Repayment of secured notes payable (600) (600) (600)
Unsecured senior line of credit, commercial paper, and other 260 (640) (190)
Net reduction in debt $(40) $(340) $(190)
Key Assumptions Low High
Occupancy percentage in North America as of December 31, 2025 91.6 % 93.2 %
Lease renewals and re-leasing of space:
Rental rate changes 9.0 % 17.0 %
Rental rate changes (cash basis) 0.5 % 8.5 %
Same property performance:
Net operating income (3.0) % (1.0) %
Net operating income (cash basis) (1.0) % 1.0 %
Straight-line rent revenue $111 $131
General and administrative expenses $129 $144
Capitalization of interest $340 $370
Interest expense $165 $195
Realized gains on non-real estate investments(6) $100 $130
(1)
Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(2) Excludes unrealized gains or losses on non-real estate investments after December 31, 2024 that are required to be recognized in earnings and are excluded from funds from operations per share, as
adjusted.
(3) As of January 27, 2025, our share of pending dispositions subject to negotiations aggregated $539.5 million. These transactions represent approximately 32% of the $1.7 billion midpoint of our 2025
guidance range for dispositions and sales of partial interests.
(4) On December 9, 2024, we announced that our board of directors authorized a common stock repurchase program under which we may repurchase up to $500.0 million of our common stock in the open market or in
privately negotiated transactions through December 31, 2025. In January 2025, we repurchased common stock aggregating $150.0 million at an average price per share of $97.26. As of January 27, 2025, the
approximate value of shares authorized and remaining under this program was $299.9 million.
(5)
Refer to "Subsequent event" in the Earnings Press Release for additional information.
(6) Represents realized gains and losses included in funds from operations per share - diluted, as adjusted, and excludes significant impairments realized on non-real estate investments, if any. Refer to
"Investments" in the Supplemental Information for additional details.
Acquisitions
December 31, 2024
(Dollars in thousands)
Property Submarket/Market Date of Number of Operating Square Footage Purchase Price
Properties
Purchase Occupancy
Future Operating With
Development(1) Future
Development/
Redevelopment(1)
Completed in 2024:
285, 299, 307, and 345 Dorchester Avenue (60% Seaport Innovation District/
Greater 1/30/24 N/A 1,040,000 $
155,321
interest in consolidated JV) Boston
428 Westlake Avenue North Lake Union/Seattle 10/1/24 1 100 % 90,626 47,600
Other 46,490
Total 2024 acquisitions $
249,411
(1) We expect to provide total estimated costs and related yields for development and significant redevelopment projects in the future, subsequent
to the commencement of construction.
2024 Dispositions
December 31, 2024
(Dollars in thousands)
Property Submarket/Market Date of Interest RSF Capitalization Capitalization Sales Price Seller Sales Gain on
Sale Sold Rate Rate Financing Price per Sale of Real
RSF Estate
(Cash Basis)
Completed in YTD 3Q24 $238,709 $27,506
Completed in 4Q24:
Stabilized Properties
One Moderna Way Route 128/Greater
Boston 12/17/24 100 % 722,130 8.5 % 6.3 % 369,439 $512
14225 Newbrook Drive Northern Virginia/
Maryland 10/15/24 100 % 248,186 7.6 % 7.4 % 80,500 $324 37,074
6040 George Watts Hill Drive Research Triangle/ 12/10/24 100 % 149,585 8.0 % 7.1 % 93,500 $625 5,004
Research Triangle
Other 78,610 4,042
622,049
Properties with vacancy or significant near-term capital requirements
215 First Street Cambridge/Greater
Boston 12/20/24 100 % 369,520 (1) (1) 245,539 (1) (1)
150 Second Street and 11 Hurley Street Cambridge/Greater
Boston 182,993
4755 and 4757 Nexus Center Drive and University Town
Center/ 12/30/24 100 % 177,804 (2) (2) 120,000 (2) $79,166 $675 47,511
4796 Executive Drive(2) San Diego
Other 47,243
412,782
Land and other
10048 and 10219 Meanley Drive and Sorrento Mesa/San
Diego 12/20/24 100 % 444,041 (3) (3) 55,000 25,000
10277 Scripps Ranch Boulevard
9444 Waples Street (50% consolidated JV) Sorrento Mesa/San
Diego 12/23/24 (4) 149,000 (4) (4) 31,000 (4) 8,175 (4)
Other(5) (5) 22,913 (5) (5)
108,913
1,143,744 (6)
Total 2024 dispositions $1,382,453 $104,166 $129,312
Our share of 2024 dispositions, including amounts recognized within $1,366,953 $127,615 (7)
equity in earnings
Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(1) Represents properties that were 87% occupied as of 3Q24, with 61% of the aggregate RSF, primarily located at 215 First Street, scheduled to expire by 4Q25. These properties were not core to our
Megacampus strategy due to their size, location, or existing use. They are also expected to require significant re-leasing capital over the next few years, including at 215 First Street, a historical
building with infrastructure limitations and challenging floor plates. Acquired in 2007, 215 First Street came with significant entitlements which were later used to develop new adjacent projects at
Alexandria Center(R) at Kendall Square. Since then, this property has served as a reliable asset, providing primarily office space to our tenants. However, given the low occupancy and the significant
reinvestment required for upgrades, we plan to recycle the capital generated by the disposition into our development and redevelopment pipeline.
(2)
Represents properties that were 65% occupied as of 3Q24, with 26% of the aggregate RSF scheduled to expire by 2Q25.
(3)
Represents the sale of land parcels.
(4) Represents 100% of the contractual sales price. We held a 50% interest in this property through a consolidated real estate joint venture, and our share of the sales price and gain on real estate is $15.5
million and $3.2 million, respectively.
(5) Represents the disposition of an unconsolidated real estate joint venture for which we recognized a gain on sale of real estate of $3.3 million, which is classified as equity in earnings of
unconsolidated real estate joint ventures in our consolidated statement of operations.
(6) Dispositions completed during 4Q24 had annual net operating income of $97.9 million (based on 3Q24 annualized) with a weighted-average disposition date of December 10, 2024 (weighted by net operating
income for 3Q24 annualized).
(7)
Refer to footnotes 4 and 5.
2025 Dispositions and Sales of Partial Interests
December 31, 2024
(Dollars in thousands)
Property Submarket/Market Date of Interest Sales Price
Expected Expected to
Sale Be Sold
Pending 2025 dispositions and sales of partial interests expected to close subsequent to January 27, 2025:
Subject to non-refundable deposits:
Pending
San Diego 1Q25 100 % $124,000
Pending
Texas 1Q25 100 % 33,000
Pending
San Diego 2H25 100 % 50,000
Other 20,850
227,850
Subject to executed letters of intent and/or purchase and sale agreement negotiations:
1450 Owens Street (25.1% consolidated JV) Mission Bay/San Francisco Bay
Area 2H25 (1) 144,705 (1)
Other
Various 276,612
421,317
$649,167
Our share of 2025 dispositions $539,462
2025 guidance range for dispositions and sales of partial interests
$1,200,000 - $2,200,000
(1) Represents 100% of the contractual sales price. In 4Q24, we executed a letter of intent with a biomedical institution for the sale of a condominium interest aggregating 103,361 RSF, or approximately 49%
of the development project. We own a 25.1% interest in this property through a consolidated real estate joint venture, and our share of the sales price is $36 million. We expect to complete the
transaction in 2025.
Earnings Call Information and About the Company
December 31, 2024
We will host a conference call on Tuesday, January 28, 2025, at 3:00 p.m. Eastern Time ("ET")/noon Pacific Time ("PT"), which is open to the general public, to discuss our financial and operating results for the fourth quarter and year ended December 31, 2024. To participate in this conference call, dial (833) 366-1125 or (412) 902-6738 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the call for Alexandria Real Estate Equities, Inc. The audio webcast can be accessed at www.are.com in the "For Investors" section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, January 28, 2025. The replay number is (877) 344-7529 or (412) 317-0088, and the access code is 1012884.
Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2024 is available in the "For Investors" section of our website at www.are.com or by following this link: https://www.are.com/fs/2024q4.pdf.
For any questions, please contact corporateinformation@are.com; Joel S. Marcus, executive chairman and founder; Peter M. Moglia, chief executive officer and chief investment officer; Marc E. Binda, chief financial officer and treasurer; Paula Schwartz, managing director of Rx Communications Group, at (917) 633-7790; or Sara M. Kabakoff, senior vice president - chief content officer.
About the Company
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500(®) company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus(TM) ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' 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 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 more information on Alexandria, please visit www.are.com.
Forward-Looking Statements
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 projected 2025 earnings per share, projected 2025 funds from operations per share, projected 2025 funds from operations per share, as adjusted, projected net operating income, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as "forecast," "guidance," "goals," "projects," "estimates," "anticipates," "believes," "expects," "intends," "may," "plans," "seeks," "should," "targets," or "will," or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, lower than expected yields, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully place into service and lease any properties undergoing development or redevelopment and our existing space held for future development or redevelopment (including new properties acquired for that purpose), our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, adverse general and local economic conditions, an unfavorable capital market environment, decreased leasing activity or lease renewals, failure to obtain LEED and other healthy building certifications and efficiencies, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission ("SEC"). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this Earnings Press Release and Supplemental Information, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.
This document is not an offer to sell or a solicitation to buy securities of Alexandria Real Estate Equities, Inc. Any offers to sell or solicitations to buy our securities shall be made only by means of a prospectus approved for that purpose. Unless otherwise indicated, the "Company," "Alexandria," "ARE," "we," "us," and "our" refer to Alexandria Real Estate Equities, Inc. and our consolidated subsidiaries. Alexandria(®), Lighthouse Design(®) logo, Building the Future of Life-Changing Innovation(®), That's What's in Our DNA(®), Megacampus(TM), Labspace(®), Alexandria Summit(®), At the Vanguard and Heart of the Life Science Ecosystem(TM), Alexandria Center(®), Alexandria Technology Square(®), Alexandria Technology Center(®), and Alexandria Innovation Center(®) are copyrights and trademarks of Alexandria Real Estate Equities, Inc. All other company names, trademarks, and logos referenced herein are the property of their respective owners.
Consolidated Statements of Operations
December 31, 2024
(Dollars in thousands, except per share amounts)
Three Months Ended Year Ended
12/31/24 9/30/24 6/30/24 3/31/24 12/31/23 12/31/24 12/31/23
Revenues:
Income from rentals $763,249 $775,744 $755,162 $755,551 $742,637 $3,049,706 $2,842,456
Other income 25,696 15,863 11,572 13,557 14,579 66,688 43,243
Total revenues 788,945 791,607 766,734 769,108 757,216 3,116,394 2,885,699
Expenses:
Rental operations 240,432 233,265 217,254 218,314 222,726 909,265 859,180
General and administrative 32,730 43,945 44,629 47,055 59,289 168,359 199,354
Interest 55,659 43,550 45,789 40,840 31,967 185,838 74,204
Depreciation and amortization 330,108 293,998 290,720 287,554 285,246 1,202,380 1,093,473
Impairment of real estate 186,564 (1) 5,741 30,763 271,890 223,068 461,114
Total expenses 845,493 620,499 629,155 593,763 871,118 2,688,910 2,687,325
Equity in earnings of unconsolidated real estate joint ventures 6,635 (2) 139 130 155 363 7,059 980
Investment (loss) income (67,988) 15,242 (43,660) 43,284 8,654 (53,122) (195,397)
Gain on sales of real estate 101,806 27,114 392 62,227 129,312 277,037
Net (loss) income (16,095) 213,603 94,049 219,176 (42,658) 510,733 280,994
Net income attributable to noncontrolling interests (46,150) (45,656) (47,347) (48,631) (45,771) (187,784) (177,355)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.'s (62,245) 167,947 46,702 170,545 (88,429) 322,949 103,639
stockholders
Net income attributable to unvested restricted stock awards (2,677) (3,273) (3,785) (3,659) (3,498) (13,394) (11,195)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.'s $(64,922) $164,674 $42,917 $166,886 $(91,927) $309,555 $92,444
common stockholders
Net (loss) income per share attributable to Alexandria Real Estate Equities,
Inc.'s common stockholders:
Basic $(0.38) $0.96 $0.25 $0.97 $(0.54) $1.80 $0.54
Diluted $(0.38) $0.96 $0.25 $0.97 $(0.54) $1.80 $0.54
Weighted-average shares of common stock outstanding - basic and 172,262 172,058 172,013 171,949 171,096 172,071 170,909
diluted
Dividends declared per share of common stock $1.32 $1.30 $1.30 $1.27 $1.27 $5.19 $4.96
(1) Refer to "Funds from operations and funds from operations per share" in the Earnings Press
Release for additional details.
(2)
Refer to "2024 Dispositions" in the Earnings Press Release for additional details.
Consolidated Balance Sheets
December 31, 2024
(In thousands)
12/31/24 9/30/24 6/30/24 3/31/24 12/31/23
Assets
Investments in real estate $32,110,039 $32,951,777 $32,673,839 $32,323,138 $31,633,511
Investments in unconsolidated real estate joint ventures 39,873 40,170 40,535 40,636 37,780
Cash and cash equivalents 552,146 562,606 561,021 722,176 618,190
Restricted cash 7,701 17,031 4,832 9,519 42,581
Tenant receivables 6,409 6,980 6,822 7,469 8,211
Deferred rent 1,187,031 1,216,176 1,190,336 1,138,936 1,050,319
Deferred leasing costs 485,959 516,872 519,629 520,616 509,398
Investments 1,476,985 1,519,327 1,494,348 1,511,588 1,449,518
Other assets 1,661,306 1,657,189 1,356,503 1,424,968 1,421,894
Total assets $37,527,449 $38,488,128 $37,847,865 $37,699,046 $36,771,402
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable $149,909 $145,000 $134,942 $130,050 $119,662
Unsecured senior notes payable 12,094,465 12,092,012 12,089,561 12,087,113 11,096,028
Unsecured senior line of credit and commercial paper 454,589 199,552 99,952
Accounts payable, accrued expenses, and other liabilities 2,654,351 2,865,886 2,529,535 2,503,831 2,610,943
Dividends payable 230,263 227,191 227,408 222,134 221,824
Total liabilities 15,128,988 15,784,678 15,180,998 14,943,128 14,148,409
Commitments and contingencies
Redeemable noncontrolling interests 19,972 16,510 16,440 16,620 16,480
Alexandria Real Estate Equities, Inc.'s stockholders' equity:
Common stock 1,722 1,722 1,720 1,720 1,719
Additional paid-in capital 17,933,572 18,238,438 18,284,611 18,434,690 18,485,352
Accumulated other comprehensive loss (46,252) (22,529) (27,710) (23,815) (15,896)
Alexandria Real Estate Equities, Inc.'s stockholders' equity 17,889,042 18,217,631 18,258,621 18,412,595 18,471,175
Noncontrolling interests 4,489,447 4,469,309 4,391,806 4,326,703 4,135,338
Total equity 22,378,489 22,686,940 22,650,427 22,739,298 22,606,513
Total liabilities, noncontrolling interests, and equity $37,527,449 $38,488,128 $37,847,865 $37,699,046 $36,771,402
Funds From Operations and Funds From Operations per Share
December 31, 2024
(In thousands)
The following table presents a reconciliation of net income (loss) attributable to Alexandria's common stockholders, the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles ("GAAP"), including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria's common stockholders - diluted, and funds from operations attributable to Alexandria's common
stockholders - diluted, as adjusted, for the periods below:
Three Months Ended Year Ended
12/31/24 9/30/24 6/30/24 3/31/24 12/31/23 12/31/24 12/31/23
Net (loss) income attributable to Alexandria's common stockholders - basic $(64,922) $164,674 $42,917 $166,886 $(91,927) $309,555 $92,444
and diluted
Depreciation and amortization of real estate assets 327,198 291,258 288,118 284,950 281,939 1,191,524 1,080,529
Noncontrolling share of depreciation and amortization from consolidated real (34,986) (32,457) (31,364) (30,904) (30,137) (129,711) (115,349)
estate JVs
Our share of depreciation and amortization from unconsolidated real estate JVs 1,061 1,075 1,068 1,034 965 4,238 3,589
Gain on sales of real estate (100,109) (1) (27,114) (392) (62,227) (127,615) (277,037)
Impairment of real estate - rental properties and land 184,532 (2) 5,741 2,182 263,982 192,455 450,428
Allocation to unvested restricted stock awards (1,182) (2,908) (1,305) (3,469) (2,268) (8,696) (5,175)
Funds from operations attributable to Alexandria's common stockholders - 311,592 400,269 301,616 418,105 360,327 1,431,750 1,229,429
diluted(3)
Unrealized losses (gains) on non-real estate investments 79,776 (2,610) 64,238 (29,158) (19,479) 112,246 201,475
Impairment of non-real estate investments 20,266 (4) 10,338 12,788 14,698 23,094 58,090 74,550
Impairment of real estate 2,032 28,581 7,908 30,613 10,686
Acceleration of stock compensation expense due to executive officer resignations 18,436 20,295
Provision for expected credit losses on financial instruments (434) (5) (434)
Allocation to unvested restricted stock awards (1,407) (125) (1,738) 247 (472) (3,188) (4,121)
Funds from operations attributable to Alexandria's common stockholders - $411,825 $407,872 $405,485 $403,892 $389,814 $1,629,077 $1,532,314
diluted, as adjusted
Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(1) Includes our share of gain on sale of real estate from one consolidated real estate joint venture and one unconsolidated real estate joint venture. Refer to "2024 Dispositions" in the Earnings Press
Release for additional details.
(2) Primarily represents impairment charges to reduce the carrying amount of our investments in real estate assets to their respective estimated fair values less costs to sell upon their classification as
held for sale in 4Q24, including (i) $102.8 million primarily related to land parcels in our Sorrento Mesa and University Town Center submarkets, including land parcels sold during 4Q24 for a sales
price aggregating $55.0 million and additional land parcels expected to be sold in 2025 with an approximate sales price aggregating approximately $243.0 million, and (ii) $40.9 million for four
properties at One Moderna Way in our Route 128 submarket, which was sold during 4Q24.
(3)
Calculated in accordance with standards established by the Nareit Board of Governors.
(4)
Primarily related to three non-real estate investments in privately held entities that do not report NAV.
(5) Represents an adjustment to the provision for expected credit losses for a direct financing lease, as well as the initial recognition of a provision for expected credit losses for two notes receivable
issued in connection with dispositions completed during 4Q24.
Funds From Operations and Funds From Operations per Share (continued)
December 31, 2024
(In thousands, except per share amounts)
The following table presents a reconciliation of net income (loss) per share attributable to Alexandria's common stockholders, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations per share attributable to Alexandria's common stockholders - diluted, and funds from operations per share attributable to Alexandria's common stockholders - diluted, as
adjusted, for the periods below. Per share amounts may not add due to rounding.
Three Months Ended Year Ended
12/31/24 9/30/24 6/30/24 3/31/24 12/31/23 12/31/24 12/31/23
Net (loss) income per share attributable to Alexandria's common stockholders - $(0.38) $0.96 $0.25 $0.97 $(0.54) $1.80 $0.54
diluted
Depreciation and amortization of real estate assets 1.70 1.51 1.50 1.48 1.48 6.20 5.67
Gain on sales of real estate (0.58) (0.16) (0.36) (0.74) (1.62)
Impairment of real estate - rental properties and land 1.07 0.03 0.01 1.54 1.12 2.64
Allocation to unvested restricted stock awards (0.01) (0.01) (0.02) (0.01) (0.06) (0.04)
Funds from operations per share attributable to Alexandria's common 1.81 2.33 1.75 2.43 2.11 8.32 7.19
stockholders - diluted
Unrealized losses (gains) on non-real estate investments 0.46 (0.02) 0.37 (0.17) (0.11) 0.65 1.18
Impairment of non-real estate investments 0.12 0.06 0.08 0.09 0.13 0.34 0.44
Impairment of real estate 0.01 0.17 0.05 0.18 0.06
Acceleration of stock compensation expense due to executive officer resignations 0.11 0.12
Provision for expected credit losses on financial instruments
Allocation to unvested restricted stock awards (0.01) (0.01) (0.01) (0.02) (0.02)
Funds from operations per share attributable to Alexandria's common $2.39 $2.37 $2.36 $2.35 $2.28 $9.47 $8.97
stockholders - diluted, as adjusted
Weighted-average shares of common stock outstanding - diluted 172,262 172,058 172,013 171,949 171,096 172,071 170,909
Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
View original content to download multimedia:https://www.prnewswire.com/news-releases/alexandria-real-estate-equities-inc-reports-4q24-and-2024-net-loss-income-per-share--diluted-of-0-38-and-1-80--respectively-4q24-and-2024-ffo-per-share--diluted-as-adjusted-of-2-39-and-9-47--respectively-302361185.html
SOURCE Alexandria Real Estate Equities, Inc.
