ALEXANDRIA REAL ESTATE EQUITIES, INC. [ARE] Filings

10-Q 1 are-20240630.htm 10-Q are-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-12993

ALEXANDRIA REAL ESTATE EQUITIES, INC.

(Exact name of registrant as specified in its charter)


Maryland		95-4502084
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

26 North Euclid Avenue, Pasadena, California 91101

(Address of principal executive offices) (Zip code)

(626) 578-0777

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ARE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and

posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period

that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting

company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 15, 2024, 174,926,073 shares of common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS (UNAUDITED)

	Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 .............................................................	1

	Consolidated Financial Statements for the Three and Six Months Ended June 30, 2024 and 2023:

	Consolidated Statements of Operations ...................................................................................................................	2

	Consolidated Statements of Comprehensive Income ............................................................................................	3

	Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests ..........................	4

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 ................................	8

	Notes to Consolidated Financial Statements ....................................................................................................................	10

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................................................................................................................................................................	42

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .........................................................	110

Item 4.	CONTROLS AND PROCEDURES .....................................................................................................................................	111

PART II – OTHER INFORMATION

Item 1A.	RISK FACTORS ....................................................................................................................................................................	112

Item 5.	OTHER INFORMATION .......................................................................................................................................................	113

Item 6.	EXHIBITS ...............................................................................................................................................................................	114

SIGNATURES .................................................................................................................................................................................................		115

GLOSSARY

The following abbreviations or acronyms that may be used in this document

shall have the adjacent meanings set forth below:


ASU	Accounting Standards Update
ATM	At the Market
CIP	Construction in Progress
EPS	Earnings per Share
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
FFO	Funds From Operations
GAAP	U.S. Generally Accepted Accounting Principles
IRS	Internal Revenue Service
JV	Joint Venture
Nareit	National Association of Real Estate Investment Trusts
NAV	Net Asset Value
NYSE	New York Stock Exchange
REIT	Real Estate Investment Trust
RSF	Rentable Square Feet/Foot
SEC	Securities and Exchange Commission
SF	Square Feet/Foot
SoDo	South of Downtown submarket of Seattle
SOFR	Secured Overnight Financing Rate
SoMa	South of Market submarket of the San Francisco Bay Area
U.S.	United States
VIE	Variable Interest Entity

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Alexandria Real Estate Equities, Inc.

Consolidated Balance Sheets

(In thousands)


	June 30, 2024	December 31, 2023
	(Unaudited)
Assets
Investments in real estate	$32,673,839	$31,633,511
Investments in unconsolidated real estate joint ventures	40,535	37,780
Cash and cash equivalents	561,021	618,190
Restricted cash	4,832	42,581
Tenant receivables	6,822	8,211
Deferred rent	1,190,336	1,050,319
Deferred leasing costs	519,629	509,398
Investments	1,494,348	1,449,518
Other assets	1,356,503	1,421,894
Total assets	$37,847,865	$36,771,402

Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$134,942	$119,662
Unsecured senior notes payable	12,089,561	11,096,028
Unsecured senior line of credit and commercial paper	199,552	99,952
Accounts payable, accrued expenses, and other liabilities	2,529,535	2,610,943
Dividends payable	227,408	221,824
Total liabilities	15,180,998	14,148,409

Commitments and contingencies

Redeemable noncontrolling interests	16,440	16,480

Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Common stock	1,720	1,719
Additional paid-in capital	18,284,611	18,485,352
Accumulated other comprehensive loss	(27,710)	(15,896)
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	18,258,621	18,471,175
Noncontrolling interests	4,391,806	4,135,338
Total equity	22,650,427	22,606,513
Total liabilities, noncontrolling interests, and equity	$37,847,865	$36,771,402

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Revenues:
Income from rentals	$755,162	$704,339	$1,510,713	$1,392,288
Other income	11,572	9,561	25,129	22,407
Total revenues	766,734	713,900	1,535,842	1,414,695

Expenses:
Rental operations	217,254	211,834	435,568	418,767
General and administrative	44,629	45,882	91,684	94,078
Interest	45,789	17,072	86,629	30,826
Depreciation and amortization	290,720	273,555	578,274	538,857
Impairment of real estate	30,763	168,575	30,763	168,575
Total expenses	629,155	716,918	1,222,918	1,251,103

Equity in earnings of unconsolidated real estate joint ventures	130	181	285	375
Investment loss	(43,660)	(78,268)	(376)	(123,379)
Gain on sales of real estate	—	214,810	392	214,810
Net income	94,049	133,705	313,225	255,398
Net income attributable to noncontrolling interests	(47,347)	(43,768)	(95,978)	(87,599)
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	46,702	89,937	217,247	167,799
Net income attributable to unvested restricted stock awards	(3,785)	(2,677)	(7,444)	(5,283)
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$42,917	$87,260	$209,803	$162,516

Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
Basic	$0.25	$0.51	$1.22	$0.95
Diluted	$0.25	$0.51	$1.22	$0.95

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Net income	$94,049	$133,705	$313,225	$255,398
Other comprehensive (loss) income
Unrealized (losses) gains on foreign currency translation:
Unrealized foreign currency translation (losses) gains arising during the period	(3,895)	3,947	(11,814)	4,223
Unrealized (losses) gains on foreign currency translation, net	(3,895)	3,947	(11,814)	4,223

Total other comprehensive (loss) income	(3,895)	3,947	(11,814)	4,223
Comprehensive income	90,154	137,652	301,411	259,621
Less: comprehensive income attributable to noncontrolling interests	(47,347)	(43,768)	(95,978)	(87,599)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	$42,807	$93,884	$205,433	$172,022

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)


	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of Common Shares	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Total Equity	Redeemable Noncontrolling Interests
Balance as of March 31, 2024	172,007,967	$1,720	$18,434,690	$—	$(23,815)	$4,326,703	$22,739,298	$16,620
Net income	—	—	—	46,702	—	47,076	93,778	271
Total other comprehensive loss	—	—	—	—	(3,895)	—	(3,895)	—
Contributions from and sales of noncontrolling interests	—	—	499	—	—	77,907	78,406	—
Distributions to and redemption of noncontrolling interests	—	—	(14)	—	—	(59,880)	(59,894)	(451)
Issuance pursuant to stock plan	14,394	—	30,691	—	—	—	30,691	—
Taxes related to net settlement of equity awards	(4,687)	—	(549)	—	—	—	(549)	—
Dividends declared on common stock ($1.30 per share)	—	—	—	(227,408)	—	—	(227,408)	—
Reclassification of distributions in excess of earnings	—	—	(180,706)	180,706	—	—	—	—
Balance as of June 30, 2024	172,017,674	$1,720	$18,284,611	$—	$(27,710)	$4,391,806	$22,650,427	$16,440

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)


	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of Common Shares	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Total Equity	Redeemable Noncontrolling Interests
Balance as of March 31, 2023	170,859,704	$1,709	$18,902,821	$—	$(20,536)	$3,757,911	$22,641,905	$44,862
Net income	—	—	—	89,937	—	43,567	133,504	201
Total other comprehensive income	—	—	—	—	3,947	—	3,947	—
Contributions from and sales of noncontrolling interests	—	—	4,946	—	—	194,704	199,650	—
Distributions to and redemption of noncontrolling interests	—	—	—	—	—	(71,230)	(71,230)	(201)
Transfer of noncontrolling interests	—	—	—	—	—	(7,766)	(7,766)	7,766
Issuance pursuant to stock plan	14,343	—	29,670	—	—	—	29,670	—
Taxes related to net settlement of equity awards	(4,269)	—	(501)	—	—	—	(501)	—
Dividends declared on common stock ($1.24 per share)	—	—	—	(214,555)	—	—	(214,555)	—
Reclassification of distributions in excess of earnings	—	—	(124,618)	124,618	—	—	—	—
Balance as of June 30, 2023	170,869,778	$1,709	$18,812,318	$—	$(16,589)	$3,917,186	$22,714,624	$52,628

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)


	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of Common Shares	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Total Equity	Redeemable Noncontrolling Interests
Balance as of December 31, 2023	171,910,599	$1,719	$18,485,352	$—	$(15,896)	$4,135,338	$22,606,513	$16,480
Net income	—	—	—	217,247	—	95,435	312,682	543
Total other comprehensive loss	—	—	—	—	(11,814)	—	(11,814)	—
Contributions from and sales of noncontrolling interests	—	—	7,700	—	—	258,885	266,585	—
Distributions to and redemption of noncontrolling interests	—	—	(8,084)	—	—	(127,787)	(135,871)	(833)
Transfer of noncontrolling interests	—	—	—	—	—	(250)	(250)	250
Reallocation of capital to joint venture partner	—	—	(30,185)	—	—	30,185	—	—
Issuance pursuant to stock plan	179,178	2	70,067	—	—	—	70,069	—
Taxes related to net settlement of equity awards	(72,103)	(1)	(7,944)	—	—	—	(7,945)	—
Dividends declared on common stock ($2.57 per share)	—	—	—	(449,542)	—	—	(449,542)	—
Reclassification of distributions in excess of earnings	—	—	(232,295)	232,295	—	—	—	—
Balance as of June 30, 2024	172,017,674	$1,720	$18,284,611	$—	$(27,710)	$4,391,806	$22,650,427	$16,440

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)


	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of Common Shares	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Total Equity	Redeemable Noncontrolling Interests
Balance as of December 31, 2022	170,748,395	$1,707	$18,991,492	$—	$(20,812)	$3,701,248	$22,673,635	$9,612
Net income	—	—	—	167,799	—	87,197	254,996	402
Total other comprehensive income	—	—	—	—	4,223	—	4,223	—
Contributions from and sales of noncontrolling interests	—	—	23,945	—	—	270,722	294,667	35,250
Distributions to and redemption of noncontrolling interests	—	—	—	—	—	(134,215)	(134,215)	(402)
Transfer of noncontrolling interests	—	—	—	—	—	(7,766)	(7,766)	7,766
Issuance pursuant to stock plan	208,929	2	65,452	—	—	—	65,454	—
Taxes related to net settlement of equity awards	(87,546)	—	(12,469)	—	—	—	(12,469)	—
Dividends declared on common stock ($2.45 per share)	—	—	—	(423,901)	—	—	(423,901)	—
Reclassification of distributions in excess of earnings	—	—	(256,102)	256,102	—	—	—	—
Balance as of June 30, 2023	170,869,778	$1,709	$18,812,318	$—	$(16,589)	$3,917,186	$22,714,624	$52,628

The accompanying notes are an integral part of these consolidated financial statements.


Alexandria Real Estate Equities, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)
	Six Months Ended June 30,
	2024	2023
Operating Activities:
Net income	$313,225	$255,398
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	578,274	538,857
Impairment of real estate	30,763	168,575
Gain on sales of real estate	(392)	(214,810)
Equity in earnings of unconsolidated real estate joint ventures	(285)	(375)
Distributions of earnings from unconsolidated real estate joint ventures	1,652	1,649
Amortization of loan fees	8,288	7,368
Amortization of debt discounts	646	592
Amortization of acquired above- and below-market leases	(52,855)	(46,425)
Deferred rent	(96,589)	(62,526)
Stock compensation expense	31,632	31,978
Investment loss	376	123,379
Changes in operating assets and liabilities:
Tenant receivables	1,373	1,152
Deferred leasing costs	(54,560)	(56,367)
Other assets	(3,046)	4,735
Accounts payable, accrued expenses, and other liabilities	(5,548)	30,863
Net cash provided by operating activities	752,954	784,043

Investing Activities:
Proceeds from sales of real estate	16,670

ALEXANDRIA REAL ESTATE EQUITIES, INC. [ARE] Filings
10-Q	[2024-07-22]
10-Q	[2024-04-22]
10-K	[2024-01-29]
10-Q	[2023-10-23]
10-Q	[2023-07-24]
10-Q	[2023-04-24]
10-K	[2023-01-30]
10-Q	[2022-10-24]
10-Q	[2022-07-25]
10-Q	[2022-04-25]
10-K	[2022-01-31]
10-Q	[2021-10-25]
10-Q	[2021-07-26]
10-Q	[2021-04-26]
10-K	[2021-02-01]
10-Q	[2020-10-26]
10-Q	[2020-07-27]
10-Q	[2020-04-27]
10-K	[2020-02-04]
10-Q	[2019-10-29]
10-Q	[2019-07-30]
10-Q	[2019-04-30]
10-K	[2019-02-05]
10-Q	[2018-10-30]
10-Q	[2018-07-31]
10-Q	[2018-05-01]
10-K	[2018-01-30]
10-Q	[2017-10-31]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-01-31]
10-Q	[2016-11-02]
10-Q	[2016-08-04]
10-Q	[2016-05-04]
10-K	[2016-02-03]
10-Q	[2015-11-04]
10-Q	[2015-07-29]
10-Q	[2015-04-29]
10-K	[2015-02-24]
10-Q	[2014-11-04]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-03-03]
10-Q	[2013-11-07]
10-Q	[2013-08-07]
10-Q	[2013-05-03]
10-K	[2013-02-26]
10-Q	[2012-11-09]
10-Q	[2012-08-08]
10-Q	[2012-05-04]
10-K	[2012-02-21]