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YoY shift: Lean -
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.21pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.13pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.29pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+16
negatively+10
delay+10
unable+7
volatility+7
Positive rising
leading+5
favored+3
favorable+2
achieve+2
opportunities+2
Risk Factors (Item 1A)
39,101 words
ITEM 1A. RISK FACTORS
Overview
The following risk factors may adversely affect our overall business, financial condition, results of operations, and cash flows;
our ability to make distributions to our stockholders; our access to capital; or the market price of our common stock, as further described
in each risk factor below. In addition to the information set forth in this annual report on Form 10-K, one should carefully review and
consider the information contained in our other reports and periodic filings that we make with the SEC. Those risk factors could
materially affect our overall business, financial condition, results of operations, and cash flows; our ability to make distributions to our
stockholders; our access to capital; or the market price of our common stock. The risks that we describe in our public filings are not the
only risks that we face. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, also may
materially adversely affect our business, financial condition, and results of operations. Additional information regarding forward-looking
statements is included in the beginning of Part I in this annual report on Form 10-K.
Risk factors summary
An investment in our securities involves various risks. Such risks, including those set forth in the summary of material risks in
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairments+18
loss+10
downtime+6
losses+5
unreasonable+5
Positive rising
able+8
gains+7
stabilized+6
strength+5
opportunities+5
MD&A (Item 7)
32,369 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under
“ Item 15. Exhibits and financial statement schedules ” in this annual report on Form 10-K. Forward-looking statements involve inherent
risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business
strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from
those included within or contemplated by such forward-looking statements, including, but not limited to, those described within this “ Item
7. Management’s discussion and analysis of financial condition and results of operations ” in this annual report on Form 10-K. We do not
undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking
statements contained in this or any other document, whether as a result of new information, future events, or otherwise.
As used in this annual report on Form 10-K, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to
Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.
Executive summary
Operating results
Year Ended December 31,
Net () income attributable to Alexandria’s common stockholders – diluted:
may trigger inflationary pressure and elevate the risk of a U.S. recession.
The cost increases that may result from tariffs, trade conflicts, and financial market volatility may significantly impact our
development and redevelopment projects. Elevated material costs may lead to higher overall project budgets and extended
construction timelines or require modifications to project scope to preserve economic feasibility. Any such adjustments may prevent our
delivery of space on time and within budget, delay occupancy and commencement of rental income, and impact projected net operating
income and yields.
Any of the aforementioned and future developments may adversely affect occupancy rates, rental income, and the value of our
real estate portfolio in several ways. First, regulatory delays and reduced NIH funding may slow the pace of innovation and company
formation, leading to fewer early-stage tenants seeking laboratory space. Established tenants may face financial strain due to reduced
grant support, drug pricing pressures, and increased operational costs from tariffs, prompting them to downsize, consolidate, or defer
expansion plans. These dynamics could result in lower leasing, increased vacancy rates, and downward pressure on rental rates
across our portfolio.
Second, macroeconomic volatility and restricted access to capital markets may impair our ability to fund new developments
and redevelopments, raise new debt or equity capital at favorable terms, and impact pricing on dispositions. Rising construction costs
and supply chain disruptions could delay project completions, reduce development yields, and impact the timing of rental income
generation. Additionally, if tenants are unable to absorb higher operating costs or pass them on to customers, their financial health may
deteriorate, increasing the risk of lease defaults or renegotiations.
Finally, the growing competitiveness of international markets, particularly China’s rapidly expanding biotechnology sector, may
shift R&D activity abroad, reducing domestic demand for specialized laboratory infrastructure. If U.S.-based life science companies
increasingly rely on foreign innovation or relocate operations to more favorable regulatory or cost environments, the long-term
fundamentals of the U.S. life science real estate market could weaken. This may lead to asset devaluation, reduced investor
confidence, and a more challenging environment for sustaining growth and delivering stockholder value.
Life science industry dynamics
The life science industry is undergoing a prolonged period of structural and cyclical challenges that may materially and
adversely affect our business, financial condition, and results of operations. The venture capital ecosystem that supports early-stage
platform development has experienced several years of contraction as investors look to more de-risked later-stage assets that may not
require significant R&D laboratory requirements. Additionally, historical performance data increasingly shows that life science venture
capital returns have underperformed relative to technology-focused funds and broader public market indices. While a small number of
firms have consistently outperformed, the majority of life science-focused funds have delivered uneven results, leading institutional
investors, including endowments, foundations, and pension funds, to reassess their long-term allocations to the sector.
This reassessment may result in a long-term reduction in capital available to private biotechnology companies, which
represent a meaningful portion of our tenant base. The high failure rate of private biotechnology companies, coupled with the increasing
cost and complexity of drug development, has led many investors to shift their focus toward more de-risked clinical-stage assets, often
sourced internationally. As a result, fewer early-stage private biotechnology companies may be formed and funded in the U.S., which
may reduce demand for the specialized laboratory space we provide across our portfolio.
In addition, the private life science market has become increasingly selective, with available capital chasing a limited number
of high-quality opportunities. This dynamic has compressed potential returns, on average, and altered the risk-reward profile for
investors. While this does not necessarily indicate a permanent shift, it does reflect a more cautious and selective investment
environment that may persist for the foreseeable future. These conditions may lead to reduced biotechnology company formation in the
U.S., diminished tenant demand, slower leasing velocity, and increased turnover among higher-risk early-stage biotechnology tenants,
particularly in markets where our portfolio is heavily concentrated in emerging biotechnology.
These industry dynamics may also affect our ability to raise capital to fund future development projects. If capital markets
perceive the life science sector as structurally challenged, our cost of capital may increase and our access to equity or debt financing
may be constrained. This could limit our ability to pursue new development opportunities, reposition existing assets, or invest in
strategic initiatives that enhance long-term stockholder value.
To address these risks, we have employed and may continue to employ a range of mitigating strategies, including:
• Deepening relationships with top-tier venture capital firms and academic institutions to identify and support high-potential
tenants earlier in their life cycle.
• Expanding our proprietary products to offer operational support, shared infrastructure, and flexible leasing models that
improve capital efficiency for emerging companies.
• Enhancing our data and analytics capabilities to better assess tenant viability, monitor portfolio risk, and inform leasing
and development decisions.
• Exploring strategic partnerships with pharmaceutical companies, contract research organizations (“CROs”), and
investment-grade institutions to create more stable demand anchors within our campuses.
• Convening influential stakeholders through our industry-leading Alexandria Summit ® event series, which brings together
key decision makers, life science thought leaders, venture capital firms, members of Congress, regulatory agency
executives, and other policymakers to prioritize diseases with unmet needs and advance the development of novel
effective therapies.
• Exploring alternative uses for Alexandria’s robust laboratory and office infrastructure by, for example, technology tenants
that require specialized R&D space.
While we believe these strategies can help mitigate the impact of current industry headwinds, there can be no assurance that
they will fully offset the risks associated with reduced formation and performance of private biotechnology companies. If we are unable
to respond effectively to these evolving market conditions, our ability to lease space, maintain high occupancy levels, generate
consistent cash flows, deliver earnings growth, and provide long-term value to our stockholders may be materially and adversely
affected.
Failure of the U.S. federal government to manage its fiscal matters may negatively impact the economic environment and adversely
impact our business
An inability of the U.S. federal government to manage its fiscal matters and enact appropriate fiscal legislation may
significantly impact the national and global economic and financial environment, result in reduced economic confidence domestically
and globally, reduce investment spending, increase borrowing costs, impact availability and cost of capital, and significantly hinder or
reduce economic activity. These economic impacts could adversely affect our business and the businesses of our tenants.
In September 2025, Congress failed to enact a budget for the upcoming fiscal year, which resulted in a partial government
shutdown that lasted for 43 days. The shutdown affected certain key agencies at the federal government level, resulting in partial
closures of operations. During a shutdown, the FDA maintains critical operations but may be unable to accept or process new drug
applications. The NIH and CDC may experience staffing furloughs, suspended operations, and delayed reviews of grant applications.
Prolonged or repeated shutdowns or short-term Congressional budget resolutions could adversely affect business operations of some
of our tenants that depend on federal funding, contracts, or regulatory actions to sustain their operations. Our tenants may experience
delays in submitting or advancing new drug applications, or receiving device approvals should the operations at the FDA and other
oversight bodies be reduced. The NIH may pause peer-review meetings, issuance of new grants, and many program activities, and its
Clinical Center will be unable to launch new trials during the funding lapse. The FDA’s operations may become limited to work deemed
“safety-critical” and activities supported by carryover user fees, and the agency has stated it will be unable to accept certain new
submissions requiring fees until funding resumes. These outcomes could impede R&D progress, postpone commercialization
milestones, and delay anticipated financing. Additionally, the broader economic and capital market consequences of an extended
shutdown, such as weakened investor confidence, deferred initial public offerings (“IPOs”), and a slower pace of venture and private
equity deployment, could further strain tenants’ access to capital. Our tenants may seek to reduce cash outflows by delaying rent
payments, renegotiating lease terms, downsizing existing space commitments, or filing for bankruptcy or ceasing operations altogether.
If any of our tenants becomes a debtor in a case under the U.S. Bankruptcy Code, as amended, we cannot evict that tenant
solely because of its bankruptcy. The bankruptcy court may authorize the tenant to reject and terminate its lease with us. Our claim
against such a tenant for uncollectible future rent would be subject to a statutory limitation that will likely be substantially less than the
remaining rent actually owed to us under the tenant’s lease. Any shortfall in rent payments could adversely affect our cash flows and our
ability to make distributions to our stockholders.
We hold equity investments in certain publicly traded companies, limited partnerships, and privately held entities primarily
involved in the life science and technology industries. The valuation of these investments is affected by many external factors beyond
our control, including, but not limited to, market prices, market conditions, healthcare legislation, prospects for favorable or unfavorable
clinical trial results, new product initiatives, the manufacturing and distribution of new products, product safety and efficacy issues, and
new collaborative agreements. Reduced activities or temporary closures of agencies such as the FDA and SEC may adversely affect
business operations, financial results, IPO processing, and project funding for the companies in which we hold equity investments.
Unfavorable developments with respect to any of these factors may have an adverse impact on the valuation of our equity investments.
We cannot predict the timing or duration of appropriation lapses or the extent of any public policy changes. If a government
shutdown occurs, our business and that of our tenants and our venture investment portfolio companies could be adversely affected.
These risks may also impact our overall liquidity, our borrowing costs, or the market price of our common stock.
Changes in laws and regulations that control drug pricing for government programs may adversely impact our
operating results and our business.
On August 22, 2022, the Inflation Reduction Act of 2022 was signed into law. This legislation allows, for the first time ever, the
U.S. HHS to negotiate Medicare drug prices directly with manufacturers. Specifically, the law requires manufacturers to charge a
negotiated “maximum fair price” for select drugs covered by Medicare Part B and Part D or be subject to an excise tax for
noncompliance, introduces penalties for drug manufacturers that increase drug prices over the rate of inflation, and caps additional out-
of-pocket expenses for Medicare beneficiaries.
We cannot predict the ultimate impact of this legislation or the content and outcome of future potential reforms and changes
to the government’s ability to regulate and negotiate drug pricing. Changes in policy that limit prices may reduce the financial
incentives for the research and development efforts that lead to discovery and production of new therapies and solutions to life-
threatening conditions. Negative impacts of new policies could adversely affect our tenants’ and venture investment portfolio
companies’ businesses, including life science companies, which may reduce the demand for life science/laboratory space and
negatively impact our operating results and our business.
Global factors
The outbreak of any highly infectious or contagious disease could adversely impact or cause disruption to our
financial condition and results of operations.
The effects of any future outbreak of any highly infectious or contagious disease on our (or our tenants’) ability to successfully
operate could be adversely impacted by the following factors, among others:
• The continued service and availability of personnel, including our executive officers and other leaders who are part of our
management team, and our ability to recruit, attract, and retain skilled personnel. To the extent our management or
personnel are impacted in significant numbers by the outbreak of pandemic or epidemic disease and are not available or
allowed to conduct work, our business and operating results may be negatively impacted.
• Our (or our tenants’) ability to operate, generally or in affected areas, or delays in the supply of products or services from
our vendors that are necessary for us to operate effectively.
• Our tenants’ ability to pay rent on their leases in full and timely and, to the extent necessary, our inability to restructure our
tenants’ long-term rent obligations on terms favorable to us or to timely recapture the space for re-leasing.
• Difficulty in our accessing debt and/or equity capital on attractive terms, or at all, and a severedisruption and instability in
the global financial markets, or deterioration in credit and financing conditions, which may affect our (or our tenants’)
ability to access capital necessary to fund business operations or replace or renew maturing liabilities on a timely basis
and may adversely affect the valuation of financial assets and liabilities, any of which could affect our (or our tenants’)
ability to meet liquidity and capital expenditure requirements or could have a material adverse effect on our business,
financial condition, results of operations, and cash flows.
• Complete or partial closures of, or other operational issues at, one or more of our properties resulting from government
action or directives.
• Our (or our tenants’) ability to continue or complete construction as planned for our tenants’ operations, or delays in the
supply of materials or labor necessary for construction, which may affect our (or our tenants’) ability to complete
construction or to complete it timely, our ability to prevent a lease termination, and our ability to collect rent, which may
have a material adverse effect on our business, financial condition, results of operations, and cash flows.
• The cost of implementing precautionary measures, including, but not limited to, potential additional health insurance and
labor-related costs.
• Governmental efforts (such as moratoriums on or suspensions of eviction proceedings) that may affect our ability to collect
rent or enforce remedies for the failure of our tenants to pay rent.
• Uncertainty related to whether the U.S. Congress or state legislatures will pass additional laws providing for additional
economic stimulus packages, governmental funding, or other relief programs, whether such measures will be enacted,
whether our tenants will be eligible or will apply for any such funds, whether the funds, if available, could be used by our
tenants to pay rent, and whether such funds will be sufficient to supplement our tenants’ rent and other obligations to us.
• Deterioration of global economic conditions and job losses, which may decrease demand for and occupancy levels of our
rental properties and may cause our rental rates and property values to be negatively impacted.
• Our dependence on short-term and long-term debt sources, including our unsecured senior line of credit, commercial
paper program, and unsecured senior notes, which may affect our ability to continue our investing activities and make
distributions to our stockholders.
• Declines in the valuation of our properties, which may affect our ability to dispose of assets at attractive prices or to obtain
debt financing secured by our properties and may reduce the availability of debt funding.
• Declines in the valuation of our venture investment portfolio, which may (i) impede our ability to realize the value at which
these investments are carried if we are required to dispose of them, (ii) make it difficult for us to sell these investments on
a timely basis, and (iii) impair the value of such investments.
• Refusal, failure, or delay by one or more of our lenders under our unsecured senior line of credit to fund their financing
commitment to us, which we may not be able to replace on favorable terms, or at all.
• To the extent we enter into derivative financial instruments, one or more counterparties to our derivative financial
instruments could default on their obligations to us or could fail, increasing the risk that we may not realize the benefits of
utilizing these instruments.
• Any possession taken of our properties, in whole or in part, by governmental authorities for public purposes in eminent
domain proceedings.
• Our level of insurance coverage and recovery we receive under any insurance we maintain, which may be delayed by, or
insufficient to fully offset potential/actual losses caused by any highly infectious or contagious disease.
• Any increase in insurance premiums and imposition of large deductibles.
• Our level of dependence on the Internet, as it relates to employees’ working remotely, and increases in malware
campaigns and phishing attacks preying on the uncertainties surrounding any highly infectious or contagious disease,
which may increase our vulnerability to cyberattacks.
• Our ability to ensure business continuity in the event our continuity of operations plan is not effective or is improperly
implemented or deployed during a disruption.
• Our ability to operate, which may cause our business and operating results to decline or may impact our ability to comply
with regulatory obligations and may lead to reputational harm and regulatory issues or fines.
The rapid spread, development, and fluidity of a highly infectious or contagious disease may result in significant disruption of
the global financial market and labor markets and may lead to a deterioration of economic conditions, an economic downturn, and/or a
recession at a global scale, which could materially affect our (or our tenants’) performance, financial condition, results of operations,
and cash flows.
The outbreak or spread of any highly infectious or contagious disease could adversely impact or cause disruption to
our tenants’ financial condition and results of operations, which may adversely impact our ability to generate income
sufficient to meet operating expenses or generate income and capital appreciation .
Our tenants, many of which conduct business in the life science industry, may incur significant costs or losses responding to
any highly infectious or contagious disease, lose business due to interruption in their operations, or incur other liabilities related to
shelter-in-place orders, quarantines, infection, or other related factors. Tenants that experience deteriorating financial conditions as a
result of the outbreak or spread of such disease may be unwilling or unable to pay rent in full or timely due to bankruptcy, lack of
liquidity, lack of funding, operational failures, or other reasons. Our tenants’ defaults and delayed or partial rental payments could
adversely impact our rental revenues and operating results.
The negative effects of any highly infectious or contagious disease on our tenants in the life science industry may include, but
are not limited to:
• Delays or difficulties in enrolling patients or maintaining scheduled study visits in clinical trials;
• Delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and staff;
• Diversion of healthcare resources away from clinical trials, including the diversion of hospitals serving as our tenants’
clinical trial sites and hospital staff supporting the conduct of our tenants’ clinical trials;
• Interruptions of key clinical trial or other research activities, such as clinical trial site monitoring, due to limitations on travel
imposed or recommended by federal or state governments, employers, and others;
• Limitations in employee resources that would otherwise be focused on our tenants’ research, business, or clinical trials,
including because of sickness of employees or their families, the desire of employees to avoid contact with large groups of
people, or as a result of the governmental imposition of shelter-in-place or similar working restrictions;
• Interruptions in supply chain, manufacturing, and global shipping, or other delays that may affect the transport of materials
necessary for our tenants’ research, clinical trials, or manufacturing activities;
• Reduction in revenue projections for our tenants’ products due to the prioritization of the treatment of affected patients
over other treatments, such as specialty and elective procedures;
• Delays in necessary interactions with ethics committees, regulators, and other important agencies and contractors due to
limitations in employee resources or forced furlough of government employees;
• Delays in receiving approval from regulatory authorities to initiate planned clinical trials or research activities;
• Delays in commercialization of our tenants’ products and approval by government authorities (such as the FDA and the
federal and state Emergency Management Agencies) of our tenants’ products caused by disruptions, funding shortages,
or health concerns, as well as by the prioritization by the FDA of the review and approvals of diagnostics, therapeutics,
and vaccines that are related to an outbreak;
• Difficulty in retaining staff or rehiring staff in connection with layoffs caused by deteriorating global market conditions;
• Changes in local regulations as part of a response to an outbreak or spread that may require our tenants to change the
ways in which their clinical trials are conducted, which may result in unexpected costs or the discontinuation of the clinical
trials altogether;
• Refusal or reluctance of the FDA to accept data from clinical trials in affected geographies outside the U.S.;
• Diminishing public trust in healthcare facilities or other facilities that are treating (or have treated) patients affected by
contagious diseases; and
• Inability to access capital on terms favorable to our tenants because of changes in company valuation and/or investor
appetite due to a general downturn in economic and financial conditions and the volatility of the market.
The negative effects of any highly infectious or contagious disease on our tenants in the agtech industry may include:
• Reduction in productive capacity and profitability because of decreased labor availability due, for example, to government
restrictions, the inability of employees to report to work, or collective bargaining efforts;
• Potential contract cancellations, project reductions, and reduction in demand for our tenants’ products due to the adverse
effect on business confidence and consumer sentiments and the general downturn in economic conditions;
• Disruption of the logistics necessary to import, export, and deliver products to target companies and their customers due
to ports and other channels of entry being closed or operating at only a portion of capacity;
• Disruptions to manufacturing facilities and supply lines; and
• Inability to access capital on terms favorable to our tenants because of changes in company valuation and/or investor
appetite due to a general downturn in economic and financial conditions and the volatility of the market.
The negative effects of any highly infectious or contagious disease on our tenants in the technology industry may include:
• Reduction in staff productivity due to business closures, alternative working arrangements, or illness of staff and/or illness
in the family;
• Reduction in sales of our tenants’ services and products, longer sales cycles, reduction in subscription duration and value,
slower adoption of new technologies, and increase in price competition due to economic uncertainties and downturns;
• Disruptions to our tenants’ supply chain, manufacturing vendors, or logistics providers of products or services;
• Limitations on business and marketing activities due to travel restrictions, virtualization, or cancellation of related events;
• Adverse impact on customer relationships and our ability to recognize revenues due to our tenants’ inability to access their
clients’ sites for implementation and on-site consulting services;
• Inability to recruit and develop highly skilled employees with appropriate qualifications, to conduct background checks on
potential employees, and to provide necessary equipment and training to new and existing employees;
• Network infrastructure and technology system failures of our tenants, or of third-party services used by our tenants, which
may result in system interruptions, reputational harm, loss of intellectual property, delays in product development, lengthy
interruptions in services, breaches of data security, and loss of critical data;
• Higher employment compensation costs that may not be offset by improved productivity or increased sales; and
• Inability to access capital on terms favorable to our tenants because of changes in company valuation and/or investor
appetite due to a general downturn in economic and financial conditions and the volatility of the market.
The potential impact of any highly infectious or contagious disease with respect to our tenants or our properties is difficult to
predict and could have a material adverse impact on our tenants’ operations and, in turn, on our revenues, business, and results of
operations, as well as the value of our stock. Any highly infectious or contagious disease may directly or indirectly cause the realization
of any of the other risk factors included in this annual report on Form 10-K.
Other factors
We may incur significant costs if we fail to comply with laws or if laws change.
Our properties are subject to many federal, state, and local regulatory requirements and to state and local fire, life-safety,
environmental, and other requirements. If we do not comply with all of these requirements, we may have to pay fines to government
authorities or damage awards to private litigants or temporarily halt operations due to injunctions. We do not know whether these
requirements will change or whether new requirements will be imposed. Changes in these regulatory requirements could require us to
make significant unanticipated expenditures. These expenditures could have an adverse effect on us and our ability to make
distributions to our stockholders.
For example, the California Safe Drinking Water and Toxic Enforcement Act, also referred to as Proposition 65, requires “clear
and reasonable” warnings be given to persons who are exposed to chemicals known to the State of California to cause cancer or
reproductive toxicity. We believe that we comply with Proposition 65 requirements; however, there can be no assurance that we will not
be adversely affected by litigation or regulatory enforcement relating to Proposition 65. In addition, there can be no assurance that the
costs of compliance with new environmental laws and regulations will not be significant or will not adversely affect our ability to meet our
financial expectations, our financial condition, results of operations, and cash flows.
We may incur significant costs in complying with the Americans with Disabilities Act and similar laws.
Under the ADA, places of public accommodation and/or commercial facilities must meet federal requirements related to access
and use by disabled persons. We may be required to make substantial capital expenditures at our properties to comply with this law. In
addition, non-compliance could result in the imposition of fines or an award of damages to private litigants.
A number of additional federal, state, and local laws and regulations exist regarding access to properties by disabled persons.
These regulations may require modifications to our properties or may affect future renovations. These expenditures may have an
adverse impact on overall returns on our investments.
We face possible risks and costs associated with the effects of climate change and severe weather .
We cannot predict the rate at which climate change will progress. However, the physical effects of climate change could have a
material adverse effect on our properties, operations, and business. For example, most of our properties are located along the east and
west coasts of the U.S. To the extent that climate change impacts changes in weather patterns, our markets could experience severe
weather, including hurricanes, severe winter storms, and coastal flooding due to increases in storm intensity and rising sea levels.
Certain of our properties are also located along shorelines and may be vulnerable to coastal hazards, such as water stress, severe
weather patterns, and storm surges. In addition, properties in certain regions may face heightened exposure to wildfire and drought
conditions, which can lead to water stress and increased risk of property damage or operational disruption. Over time, these conditions
could result in declining demand for space at our properties, delays in construction, resulting in increased construction costs, or in our
inability to operate the buildings at all. Climate change and severe weather may also have indirect effects on our business by increasing
the cost of, or decreasing the availability of, property insurance on terms we find acceptable, by increasing the costs of energy,
maintenance, repair of water and/or wind damage, and snow removal at our properties.
On March 6, 2024, the SEC adopted new standards that would require quantitative disclosures of certain climate-related
metrics and greenhouse gas (“GHG”) emissions, including within the footnotes to our consolidated financial statements, which were
originally set to take effect in May 28, 2024. However, on April 4, 2024, the SEC issued an order to stay these rules pending judicial
review following legal challenges. In March 2025, the SEC voted to withdraw its defense of the rules, and since that time it has
maintained the stay. As of the date of this report, the rules remain stayed indefinitely, and their future implementation is uncertain.
In addition, California introduced climate-related reporting requirements under the Climate Corporate Data Accountability Act
(SB 253) and the Climate-Related Financial Risk Act (SB 261), which were signed into law in October 2023. SB 253 requires
companies doing business in California to report their greenhouse gas emissions (Scope 1 and 2, and later Scope 3) according to a
schedule to be implemented through rulemaking by the California Air Resources Board (“CARB”). SB 261 requires covered companies
to prepare biennial climate‑related financial risk reports; however, a court order has delayed implementation of SB 261 pending appeal,
and CARB has indicated it will not enforce the January 1, 2026 deadline while the injunction remains in effect.
In August 2022, the U.S. Congress enacted the Inflation Reduction Act of 2022, which directed nearly $400 billion of federal
spending toward reducing carbon emissions and funding clean energy over the next 10 years and was designed to encourage private
investment in clean energy, transport, and manufacturing. Since its inaugural year in 2023, nearly $500 billion in new green investments
and 334,000 new green jobs across the U.S. have been attributed to the IRA. However, long-term impacts and benefits, if any, resulting
from the IRA are still to be determined.
Numerous states and municipalities have adopted state and local laws and policies on climate change and emission reduction
targets impacting the building sector. For example, certain cities, including Boston, Cambridge, New York, and Seattle, have adopted or
are implementing requirements relating to GHG emissions associated with building operations. Some municipalities, including the Cities
of New York and San Francisco, have also implemented electrification and/or restrictions on certain natural-gas uses in certain new
construction projects.
Following the 2024 U.S. elections and changes in U.S. federal policy priorities, developments may create regulatory
uncertainty with respect to climate change policy. For example, in January 2025, the U.S. submitted notice of withdrawal from the Paris
Agreement, marking a significant shift in U.S. climate policy. It remains unclear what further actions with respect to domestic and
international programs and initiatives will be taken and what support U.S. policymakers would have for any potential changes to such
legislative programs and initiatives in the U.N. or the U.S. Congress.
Changes in federal, state, and local legislation and regulation based on concerns about climate change could result in
increased capital expenditures on our existing properties and our new development properties (for example, to improve their energy
efficiency and/or resistance to severe weather), and in our and our tenants’ increased compliance and other costs, without a
corresponding increase in revenue, which may result in adverse impacts to our and our tenants’ operating results.
We rely on a limited number of vendors to provide key services, including, but not limited to, utilities and construction services,
at certain of our properties. If, as a result of unanticipated events, including those resulting from climate change, these vendors fail to
adequately provide key services, we may experience significant interruptions in service and disruptions to business operations at our
properties, incur remediation costs, and become subject to claims and damage to our reputation.
Nearly 33% of the properties we own and operate are located in California, where climate change has been linked to the
progressively warmer and drier weather associated with ideal conditions for highly destructive wildfires. For example, most of our
properties located in our San Francisco Bay Area market depend on PG&E for the delivery of electric and gas services. In January
2019, in response to potential liabilities arising from a series of catastrophic wildfires that occurred in Northern California in 2017 and
2018, PG&E initiated voluntary reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code. While PG&E emerged from
bankruptcy in July 2020, there is no guarantee that PG&E will be able to sustain safe operations and continue to provide consistent
utilities services. During periods of high winds and high fire danger in recent fire seasons, PG&E has preemptively shut off power to
areas of Central and Northern California. The shutoffs were designed to help guard against fires ignited in areas with high winds and dry
conditions. PG&E has warned that it may have to employ shutoffs while the utility company addresses maintenance issues. Future
shutoffs of power may impact the reliability of access to a stable power supply at our properties. There is no guarantee that in the future
climate change and severe weather will not adversely affect PG&E or any of our other key vendors, which in turn could have a material
adverse effect on our properties and our tenants’ operations, as well as on our financial condition, results of operations, and cash flows.
There can be no assurance that climate change and severe weather, or the potential impacts of these events on our vendors
and suppliers, will not have a material adverse effect on our properties, operations, or business.
We may incur significant costs in complying with environmental laws.
Federal, state, and local environmental laws and regulations may require us, as a current or prior owner or operator of real
estate, to investigate and remediate hazardous or toxic substances or petroleum products released at or from any of our properties. The
cost of investigating and remediating contamination could be substantial and could exceed the amount of any insurance coverage
available to us. In addition, the presence of contamination, or the failure to properly remediate, may adversely affect our ability to lease
or sell an affected property, or to borrow funds using that property as collateral.
Under environmental laws and regulations, we may have to pay government entities or third parties for property damage and
for investigation and remediation costs incurred by those parties relating to contaminated properties regardless of whether we knew of
or caused the contamination. Even if more than one party was responsible for the contamination, we may be held responsible for all of
the remediation costs. In addition, third parties may sue us for damages and costs resulting from environmental contamination, or jointly
responsible parties may contest their responsibility or be financially unable to pay their share of such costs.
Environmental laws also govern the presence, maintenance, and removal of asbestos-containing building materials. These
laws may impose fines and penalties on us for the release of asbestos-containing building materials and may allow third parties to seek
recovery from us for personal injury from exposure to asbestos fibers. We have detected asbestos-containing building materials at
some of our properties, but we do not expect that they will result in material environmental costs or liabilities for us.
Environmental laws and regulations also require the removal or upgrading of certain underground storage tanks and regulate:
• The discharge of stormwater, wastewater, and any water pollutants;
• The emission of air pollutants;
• The generation, management, and disposal of hazardous or toxic chemicals, substances, or wastes; and
• Workplace health and safety.
Many of our tenants routinely handle hazardous substances and wastes as part of their operations at our properties.
Environmental laws and regulations subject our tenants, and potentially us, to liability resulting from these activities. Environmental
liabilities could also affect a tenant’s ability to make rental payments to us. We require our tenants to comply with these environmental
laws and regulations and to indemnify us against any related liabilities.
Independent environmental consultants have conducted Phase I or similar environmental assessments at our properties. We
intend to use consultants to conduct similar environmental assessments on our future acquisitions. These types of assessments
generally include a site inspection, interviews, and a public records review, but no subsurface sampling. These assessments and
certain additional investigations of our properties have not to date revealed any environmental liability that we believe would have a
material adverse effect on our business, assets, or results of operations.
Additional investigations have included, as appropriate:
• Asbestos surveys;
• Radon surveys;
• Lead-based paint surveys;
• Mold surveys;
• Additional public records review;
• Subsurface sampling; and
• Other testing.
Nevertheless, it is possible that the assessments on our current properties have not revealed, and that assessments on future
acquisitions will not reveal, all environmental liabilities. Consequently, there may be material environmental liabilities of which we are
unaware that may result in substantial costs to us or our tenants and that could have a material adverse effect on our business.
Environmental, health, or safety matters are subject to evolving regulatory requirements. Costs and capital expenditures
relating to the evolving requirements depend on the timing of the promulgation and enforcement of new standards. As discussed in the
immediately preceding risk factor, due to concern over the risks of climate change, a more restrictive regulatory framework to reduce
GHG pollution might be implemented, including the adoption of carbon taxes, restrictive permitting, and increased efficiency standards.
These requirements could make our operations more expensive and lengthen our project timelines. The costs of complying with
evolving regulatory requirements, including GHG regulations and policies, could negatively impact our financial results. Moreover,
changes in environmental regulations could inhibit or interrupt our operations or require modifications to our facilities. Accordingly,
environmental, health, or safety regulatory matters could result in significant unanticipated costs or liabilities and could have a material
adverse effect on our business, financial condition, results of operations, and cash flows, and the market price of our common stock.
We may be unable to meet our sustainability goals.
We seek to make a positive and meaningful impact on the health, safety, and well-being of our tenants, stockholders,
employees, and the communities in which we live and work. In support of these efforts, we have set sustainability goals for
development projects, including energy and water use reduction, diversion of construction waste from landfills, and targeted levels of
certification by third-party green and healthy building rating organizations and programs. For our operating properties, we have set a
2030 target to reduce operational emissions per RSF, and we continue to pursue measures aimed at reducing water consumption and
increasing waste diversion. There are significant risks that may prevent us from achieving such goals, including, but not limited to, the
following possibilities:
• Change in market conditions may affect our ability to deploy capital for projects such as those that reduce energy, water
consumption, and GHG emissions and that provide waste savings.
• Investment-grade renewable energy projects available for contracting by 2030 have declined due to interconnection
delays, transmission constraints, and rising demand from large buyers. Contract costs have increased, driven by higher
material and labor costs, tariffs, extended interconnection timelines, and competition. Additionally, changes in federal,
state, and local laws, incentive programs, and tax credits, as well as volatility in renewable energy credit markets are risks
that may impact project economics and timelines. Such changes in the availability, costs, regulatory environment, and
market dynamics for renewable energy may impact our ability to procure renewable energy to reduce GHG emissions
from purchased electricity.
• Our tenants may be unwilling or unable to accept potential incremental expenses associated with sustainability programs,
including expenses to procure renewable electricity, and comply with requirements stipulated under building certification
standards such as LEED, Fitwel, and WELL.
The realization of any of the above risks could significantly impact our reputation, our ability to reduce operational emissions
per RSF to meet our 2030 target, our ability to attract tenants that have set GHG emissions reduction goals and/or include LEED
certification among their priorities when selecting a location to lease, and our ability to continue developing properties in markets where
high levels of LEED certification contribute to our efforts to obtain building permits and entitlements.
Changes in U.S. accounting standards may adversely impact us.
The regulatory boards and government agencies that determine financial accounting standards and disclosures in the U.S.,
which include the FASB and the SEC, continually change and update the financial accounting standards we must follow.
From time to time, the FASB issues ASUs that could have a material effect on our financial condition or results of operations,
which in turn could also significantly impact the market price of our common stock. Such potential impacts include, without limitation,
significant changes to our balance sheet, significant changes to the timing or methodology of revenue or expense recognition, or
significant fluctuations in our reported results of operations, including an increase in our operating expenses or general and
administrative expenses related to payroll costs, legal costs, and other out-of-pocket costs incurred in order to comply with the
requirements of these ASUs.
Any difficulties in the implementation of changes in accounting principles, including the ability to modify our accounting
systems and to update our policies, procedures, information systems, and internal control over financial reporting, could result in
materially inaccurate financial statements, which in turn could harm our operating results or cause us to fail to meet our reporting
obligations. Significant changes that may be introduced by ASUs could cause fluctuations in revenue and expense recognition and
materially affect our results of operations. We may also experience an increase in general and administrative expenses resulting from
additional resources required for the initial implementation of such ASUs. This could adversely affect our reported results of operations,
profitability, and financial statements. Additionally, the adoption of new accounting standards could affect the results of our debt
covenant calculations. It cannot be assured that we will be able to work with our lenders to successfully amend our debt covenants in
response to changes in accounting standards.
We and the third parties with whom we work are subject to evolving privacy and information security laws,
regulations, policies, and contractual obligations related to data privacy and security. Changes to these requirements, or
actual or perceived noncompliance by us or the third parties with whom we work, could subject us to fines or penalties,
increased costs of doing business, compliance risks, and potential liability and could materially and adversely affect our
business, financial condition, and results of operations.
In the ordinary course of business, we process personal information and other sensitive data, including that of our tenants,
vendors, and employees. As such, we are subject to numerous data privacy and security obligations, including laws, regulations,
external and internal data privacy and security policies, and contractual requirements.
In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws. For example, the
California Consumer Privacy Act of 2018, as amended (“CCPA”), applies to personal information of job applicants, employees, and
independent contractors who are California residents and requires businesses to provide specific disclosures in privacy notices and
honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by
certain data breaches to recover significant statutory damages.
We have taken actions to proactivelyenhance our handling of personal information, including, but not limited to:
• Updating external and internal privacy notices and policies;
• Implementing procedures to comply with the CCPA, including procedures to effectively address potential requests from
California residents, including our employees, regarding their personal information;
• Revising our document retention policy to minimize the storage of information subject to the CCPA; and
• Amending contracts with our partners and vendors to incorporate data use restrictions, security measures, and other required
provisions.
However, there is no guarantee that we will adequately address the requirements of the CCPA, or evolving laws in other
jurisdictions.
Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process
personal information. For example, some of our data processing practices have been and may in the future be subject to challenges or
lawsuits under data privacy and communications laws, including for example under wiretapping laws, if we share personal information
with third parties through various methods, including cookies or via third-party marketing pixels. These practices may be subject to
increased challenges by class action plaintiffs. Our inability or failure to obtain consent for these practices could result in adverse
consequences, including class action litigation and mass arbitration demands.
Our employees and personnel use generative artificial intelligence (“AI”) and/or automated decision-making technologies to
perform their work, and the disclosure and use of personal information in AI technologies is subject to various privacy laws and other
privacy obligations. Governments have passed and are likely to pass additional laws and regulations regulating AI and/or automated
decision-making technologies. Our use of this technology could result in additional compliance costs, regulatory investigations and
actions, and lawsuits. If we are unable to use AI and/or automated decision-making technologies, it could make our business less
efficient and result in competitive disadvantages.
We publish privacy policies, marketing materials, and other statements concerning data privacy and security. Regulators in the
U.S. are increasingly scrutinizing these statements, and if these policies, materials, or statements are found to be deficient, lacking in
transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement
actions by regulators or other adverse consequences.
The data privacy and security landscape is becoming increasingly complex. Differing regulations may result in inconsistent
applications and interpretations across multiple jurisdictions. As such, we may be required to devote significant resources and
implement or significantly change existing technologies, systems, or practices in order to prepare for and comply with new regulations.
Our actual or perceived failure to comply with applicable federal, state, and local privacy laws could lead to:
• Damage to our reputation;
• Increased remediation and compliance costs;
• Government investigations and enforcement actions;
• Fines, penalties, or litigation, including class actions;
• Challenges in raising capital; and
• Inability to execute on our business strategy, including our growth plans.
Changes in the aforementioned laws and obligations may subject us to increased compliance risks and potential liability, and
materially and adversely impact our business, financial condition, and results of operations.
If our information technology networks or data, or those of third parties with whom we work, are or were disrupted or
otherwise compromised, we could experience adverse consequences resulting from such compromise, including, but not
limited to, costly remediation or other expenses, liability under federal and state laws, litigation and investigations,
reputational damage, disruptions to our business operations, decreased cash flows, and other adverse consequences.
Information technology, communication networks, enterprise applications, and related systems, including those in our
properties, are essential to the operation of our business. In the ordinary course of our business, we use these systems to service our
tenants, manage our tenant and vendor relationships, and for internal communications, accounting, financial reporting, record-keeping,
and many other key aspects of our business. These operations rely on the secure collection, storage, transmission, and other
processing of confidential and other sensitive data in our computer systems and networks and subject us, and the third parties with
whom we work, to a variety of evolving threats, including, but not limited to, ransomware attacks, which could cause security incidents.
Cyberattacks, malicious Internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality,
integrity, and availability of our confidential, proprietary, and sensitive data and information technology systems, and those of the third
parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety
of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminalthreat actors, personnel (such as
through theft or misuse), sophisticated nation states, and nation-state-supported actors.
Some actors now engage and are expected to continue to engage in cyberattacks, including, without limitation, nation-state
actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major
conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory
cyberattacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our
services.
We and the third parties with whom we work are subject to a variety of evolving threats, including, but not limited to, physical
break-ins; disruptions due to power outages or catastrophic events, such as fires, floods, hurricanes, and earthquakes; breaches of our
secure network by an unauthorized party (including those caused by supply chain breaches); software vulnerabilities or bugs; malware
(including as a result of advanced persistentthreat intrusions); malicious code (such as computer viruses and worms); attachments to
emails; denial-of-service attacks; credential stuffing; credential harvesting; employee error, theft, or misuse; social engineering attacks
(including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks); ransomware attacks;
server malfunctions; software or hardware failures; loss of data or other information technology assets; adware; telecommunications
failures; attacks enhanced or facilitated by AI; or other similar threats. For example, we have been the target of phishing attempts in the
past and expect such attempts will continue in the future.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our
operations and properties; loss of confidential, proprietary, and sensitive data; reputational harm; loss of income; and diversion of funds.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such
payments due to, for example, applicable laws or regulations prohibiting such payments. Ransomware and similar attacks that
adversely impact the operations of our properties could adversely impact our tenants’ ability to access and use our properties and
services, disrupt their operations, or result in an adverse impact to their business.
It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our efforts to do so
may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and
remediate a security incident could result in outages, data losses, and disruptions of our business.
Remote work has increased risks to our information technology systems and confidential, proprietary, and sensitive data as
more of our employees utilize network connections, computers, and devices outside our premises or network, including working at
home, while in transit, and in public locations. Future or past business transactions (such as acquisitions or integrations) could expose
us to additional cybersecurity risks and vulnerabilities as our systems could be negatively affected by vulnerabilities present in acquired
or integrated entities’ systems and technologies outside of our control. Furthermore, we may discover security issues that were not
found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information
technology environment and security program.
In addition, our reliance on third parties introduces new cybersecurity risks and vulnerabilities, including supply chain attacks,
and other threats to our business operations. We rely on third parties and technologies to operate critical business systems to process
confidential, proprietary, and sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center
facilities, encryption and authentication technology, employee emails, and other functions. We also rely on third parties to provide other
products, services, or otherwise to operate our business. Our ability to monitor these third parties’ information security practices is
limited, and these third parties may not have adequate information security measures in place. When the third parties with whom we
work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to
damages if the third parties with whom we work fail to satisfy their data privacy or security-related obligations to us, any award may be
insufficient to cover our damages, or we may be unable to recover such award. In addition, supply chain attacks have increased in
frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with
whom we work have not been compromised.
We may expend significant resources or modify our business activities to try to protect against security incidents. Additionally,
certain data privacy and security obligations may require us to implement and maintain certain security measures or industry-standard
or reasonable security measures to protect our information technology systems and confidential, proprietary, and sensitive data.
While we have implemented security measures designed to safeguard our systems and confidential, proprietary, and sensitive
data from security incidents and to manage cybersecurity risks, there can be no assurance that these measures will be effective. We
take steps to monitor and develop our information technology networks and infrastructure and invest in the development and
enhancement of our controls designed to prevent, detect, respond to, and mitigate the risk of unauthorized access, misuse, computer
viruses, and other events that could have a security impact. Additionally, we take steps designed to detect, mitigate, and remediate
vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work), but
we may not be able to detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in
developing and deploying remedial measures and patches designed to address any such identified vulnerabilities. Vulnerabilities could
be exploited and result in a security incident.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in
unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our
confidential, proprietary, and sensitive data or our information technology systems, or those of the third parties with whom we work. A
security incident or other interruption involving our information systems or those of our tenants, vendors, software creators, cloud
providers, cybersecurity service providers, or other third parties with whom we work could lead to, among other things:
• Theft of our cash, cash equivalents, or other liquid assets, including publicly traded securities;
• Unauthorized access to, and destruction, loss, theft, misappropriation, or release of, proprietary, confidential, sensitive, or
otherwise valuable information of ours or our tenants, and other business partners, which could be used to compete
against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;
• Our inability to produce financial and operational data necessary to comply with rules and regulations from the SEC, the
IRS, or other state and federal regulatory agencies;
• Our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;
• Violation of our lease agreements or other agreements;
• Difficulties in employee retention and recruitment;
• Unauthorized access to, and destruction, disruption, loss, or denial of service to our buildings;
• Increase in the cost of proactivedefensive measures to prevent future cyber incidents, including hiring personnel and
consultants or investing in additional technologies; and
• Increase in our cybersecurity insurance premiums.
Furthermore, the extent of a particular security incident and the steps that we may need to take to investigate the security
incident may not be immediately clear. Therefore, in the event of a security incident, it may take a significant amount of time before such
an investigation can be completed. During an investigation, we may not necessarily know the extent of the damage incurred or how
best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, which
could further increase the costs and consequences of a security incident. Additionally, applicable data privacy and security obligations
may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors of security incidents
or to implement other requirements, such as providing credit monitoring. Such disclosures and compliance with such requirements are
costly, and the disclosure or the failure to comply with such disclosure requirements could lead to adverse consequences.
If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security
incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations,
fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data
(including personal information); litigation (including class claims); indemnification obligations; negative publicity; reputational harm;
monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial
loss; and other similar harms. Security incidents and attendant material consequences may prevent or cause customers to stop using
our services, deter new customers from using our products/services, and negatively impact our ability to grow and operate our
business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of
liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security
obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities
arising out of our data privacy and security practices, that such coverage will continue to be available on commercially reasonable terms
or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public
sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to
undermine our competitive advantage or market position. Additionally, proprietary, confidential, and/or sensitive data of the Company or
our tenants could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of
generative AI technologies.
Even if we are not targeted directly, cyberattacks on the U.S. government, financial markets, financial institutions, or other
businesses, including our tenants, vendors, software creators, cloud providers, cybersecurity service providers, and other third parties
with whom we work, may occur, and such events could disrupt our normal business operations and networks in the future.
The increased use of AI and automation in life science research and development activities may change the uses,
space configurations, and tenant requirements for our laboratory properties in currently unforeseen ways.
In recent years, some life science companies have augmented their traditional laboratory-based R&D efforts by integrating AI,
cloud computing, quantum computing, and other advanced computational technologies into their R&D programs. It is expected that
such technologies will accelerate and streamline a number of R&D functions, including, for example, through the targeted design and
evaluation of clinical trials and the efficient identification of the most promising drug development candidates from among multiple
possible drugs. In addition, life science companies, like companies in many other industries, are increasingly integrating new
technologies, such as robotics and advanced automation of recurring tasks, into their businesses, including their R&D activities. It is
widely thought that the life science and healthcare industries, like most industries, are in only the early stages of an advanced
technology revolution that may have profound, and largely currently unknown, impacts on their businesses, including the processes and
strategies underlying R&D and commercialization of new products.
We have always strived to provide our tenants with state-of-the-art laboratory facilities incorporating cutting-edge infrastructure
features (including energy delivery, environmental, sustainability, security, and waste disposal features) to enable our tenants to perform
at the highest levels. It is currently unknown how the ongoing adoption of advanced technologies and automation in the life science
industry will impact the optimal space configurations and infrastructure features of the “laboratory of the future,” and we may face new
tenant requirements and requests that will require significant expenditures that may not be entirely recoverable through increased rents.
For example, the adoption of AI by our tenants may lead to infrastructure requirements that our buildings currently do not
accommodate, such as increased power needs due to high-performance computing. Infrastructure upgrades may necessitate
substantial capital expenditures and could potentially impact the environmental footprint of our building operations.
If technological developments result in a reduction or reconfiguration in space requirements by our tenants, demand by
individual tenants and prospective tenants for space may decrease over time. If we are not able to offset any reduction in demand from
the foregoing developments through repurposing space, property dispositions, or other means, the realization of any of the
aforementioned risks could have a material adverse impact on our revenues, net operating income, results of operations, funds from
operations, operating margins, occupancy, earnings per share, FFO per share, our overall business, and the market value of our
common stock.
General risk factors
We face risks associated with short-term liquid investments.
From time to time, we may have significant cash balances that we invested in a variety of short-term investments that are
intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments may
include (either directly or indirectly) obligations (including certificates of deposit) of banks, money market funds, treasury bank
securities, and other short-term securities. Investments in these securities and funds are not insured againstloss of principal. Under
certain circumstances, we may be required to redeem all or part of these securities or funds at less than par value. A decline in the
value of our investments, or a delay or suspension of our right to redeem them, may have a material adverse effect on our results of
operations or financial condition and our ability to pay our obligations as they become due.
Competition for skilled personnel could increase labor costs.
We compete with various other companies in attracting and retaining qualified and skilled personnel. We depend on our ability
to attract and retain skilled management personnel who are responsible for the day-to-day operations of the Company. Competitive
pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to
offset such additional costs by increasing the rates we charge tenants. If there is an increase in these costs or if we fail to attract and
retain qualified and skilled personnel, our business and operating results could be adversely affected.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
From time to time, we may enter into interest rate hedge agreements to manage some of our exposure to interest rate
volatility. Interest rate hedge agreements involve risks, such as the risk that counterparties may fail to honor their obligations under
these arrangements. In addition, these arrangements may not be effective in reducing our exposure to changes in interest rates. These
risk factors may lead to failure to hedge effectively against changes in interest rates and therefore could adversely affect our results of
operations. As of December 31, 2025 , we had no interest rate hedge agreements outstanding.
Market volatility may negatively affect our business.
From time to time, the capital and credit markets experience volatility. In some cases, the markets have produced downward
pressure on stock prices and credit capacity for certain issuers without regard to those issuers’ underlying financial and/or operating
strength. If market disruption and volatility occur, there can be no assurance that we will not experience an adverse effect, which may
be material, on our business, financial condition, and results of operations. Market disruption and volatility may adversely affect the
value of the companies in which we hold equity investments, including through our non-real estate venture investment portfolio, and we
may be required to recognize losses in our earnings. Disruptions, uncertainty, or volatility in the capital markets may also limit our
access to capital from financial institutions on favorable terms, or altogether, and our ability to raise capital through the issuance of
equity securities could be adversely affected by causes beyond our control through extraordinary disruptions in the global economy and
financial systems or through other events.
Changes in financial accounting standards may adversely impact our compliance with financial debt covenants .
Our unsecured senior notes payable contain financial covenants that are calculated based on GAAP at the date the
instruments were issued. However, certain debt agreements, including those related to our unsecured senior line of credit, contain
financial covenants whose calculations are based on current GAAP, which is subject to future changes. Our unsecured senior line of
credit agreement provides that our financial debt covenants be renegotiated in good faith to preserve the original intent of the existing
financial covenant when such covenant is affected by an accounting standard change. For those debt agreements that require the
renegotiation of financial covenants upon changes in accounting standards, there is no assurance that we will be successful in such
negotiations or that the renegotiated covenants will not be more restrictive to us.
Extreme weather and natural or other unforeseendisasters may cause property damage or disrupt operations, which
could harm our business and operating results.
We have properties located in areas that may be subject to extreme weather and natural or other disasters, including, but not
limited to, earthquakes, winds, floods, hurricanes, fires, power shortages, telecommunication failures, medical epidemics, explosions, or
other natural or man-made accidents or incidents. Our corporate headquarters and certain properties are located in areas of California
that have historically been subject to earthquakes and wildfires. Such conditions and disastrous events may damage our properties,
disrupt our operations, or adversely impact our tenants’ or third-party vendors’ operations. These events may affect our ability to operate
our business and have significant negative consequences on our financial and operating results. Damage caused by these events may
result in costly repairs for damaged properties or equipment, delays in the development or redevelopment of our construction projects,
or interruption of our daily business operations, which may result in increased costs and decreased revenues.
We maintain insurance coverage at levels that we believe are appropriate for our business. However, we cannot be certain
that the amount of coverage will be adequate to satisfydamages or losses incurred in the event of another wildfire or other natural or
man-made disaster, which may lead to a material adverse effect on our properties, operations, and our business, or those of our
tenants.
Failure of the U.S. federal government to manage its fiscal matters or to avoid a government shutdown may
negatively impact the economic environment and adversely impact our results of operations.
Congressional disagreement over the federal budget and the maximum amount of debt the federal government is permitted to
have outstanding (commonly referred to as the “debt ceiling”) has previously caused the U.S. federal government to shut down for
periods of time. Generally, if effective legislation to fund government operations and manage the level of federal debt is not enacted, the
federal government may suspend its investments for certain government accounts, among other available options, in order to prioritize
payments on its obligations. A failure by the U.S. Congress to pass spending bills or address the debt ceiling at any point in the future
would increase the risk of default by the U.S. on its obligations, the risk of a lowering of the U.S. federal government’s credit rating, and
the risk of other economic dislocations. Such a failure, or the perceived risk of such a failure, could consequently have a material
adverse effect on the financial markets and economic conditions in the U.S. and globally. Twice in the past decade, by the
appropriations legislation deadline, Congress failed to pass a new appropriations bill or continuing resolution to temporarily extend
funding, resulting in U.S. government shutdowns that caused federal agencies to halt non-essential operations. If economic conditions
severelydeteriorate as a result of U.S. federal government fiscal gridlock, our operations, or those of our tenants, could be affected,
which may adversely impact our financial condition and results of operations. These risks may also impact our overall liquidity, our
borrowing costs, or the market price of our common stock .
Changes in laws, regulations, and financial accounting standards may adversely affect our reported results of
operations.
As a response, in large part, to perceived abuses and deficiencies in current regulations believed to have caused or
exacerbated the 2008 global financial crisis, legislative, regulatory, and accounting standard-setting bodies around the world are
engaged in an intensive, wide-ranging examination and rewriting of the laws, regulations, and accounting standards that have
constituted the basic playing field of global and domestic business for several decades. In many jurisdictions, including the U.S., the
legislative and regulatory response has included the extensive reorganization of existing regulatory and rule-making agencies and
organizations, and the establishment of new agencies with broad powers. This reorganization has disturbed longstanding regulatory
and industry relationships and established procedures.
The rule-making and administrative efforts have focused principally on the areas perceived as having contributed to the
financial crisis, including banking, investment banking, securities regulation, and real estate finance, with spillover impacts on many
other areas. These initiatives have created a degree of uncertainty regarding the basic rules governing the real estate industry, and
many other businesses, that is unprecedented in the U.S. at least since the wave of lawmaking, regulatory reform, and government
reorganization that followed the Great Depression.
The global financial crisis and the aggressive reaction of the government and accounting profession thereto have occurred
against a backdrop of increasing globalization and internationalization of financial and securities regulation that began prior to the 2008
financial crisis. As a result of this ongoing trend, financial and investment activities previously regulated almost exclusively at a local or
national level are increasingly being regulated, or at least coordinated, on an international basis, with national rule-making and
standard-setting groups relinquishing varying degrees of local and national control to achieve more uniform regulation and reduce the
ability of market participants to engage in regulatory arbitrage between jurisdictions. This globalization trend has continued, arguably
with an increased sense of urgency and importance, since the financial crisis.
This high degree of regulatory uncertainty, coupled with considerable additional uncertainty regarding the underlying condition
and prospects of global, domestic, and local economies, has created a business environment that makes business planning and
projections even more uncertain than is ordinarily the case for businesses in the financial and real estate sectors.
In the commercial real estate sector in which we operate, the uncertainties posed by various initiatives of accounting standard-
setting authorities to fundamentally rewrite major bodies of accounting literature constitute a significant source of uncertainty as to the
basic rules of business engagement. Changes in accounting standards may have a significant effect on our financial results and on the
results of our tenants, which would in turn have a secondary impact on us.
Global financial stressors, high structural unemployment levels, and other events or circumstances beyond our
control may adversely affect our industry, business, results of operations, contractual commitments, and access to capital.
From 2008 through 2010, significant concerns over energy costs, geopolitical issues, the availability and cost of credit, the
U.S. mortgage market, and a declining real estate market in the U.S. contributed to increased volatility, diminished expectations for the
economy and the markets, and high levels of structural unemployment by historical standards. These factors, combined with volatile oil
prices and fluctuating business and consumer confidence, precipitated a steep economic decline. Further, severe financial and
structural strains on the banking and financial systems have led to significant lack of trust and confidence in the global credit and
financial system. Consumers and money managers have liquidated and may liquidate equity investments, and consumers and banks
have held and may hold cash and other lower-risk investments, which has resulted in significant and, in some cases, catastrophic
declines in the equity capitalization of companies and failures of financial institutions. Although U.S. bank earnings and liquidity have
rebounded, the potential of significant future bank credit losses creates uncertainty for the lending outlook.
Downgrades of the U.S. federal government’s sovereign credit rating and an economic crisis in Europe could
negatively impact our liquidity, financial condition, and earnings.
Previous U.S. debt ceiling and budget deficitconcerns, together with sovereign debt conditions in Europe, have increased the
possibility of additional downgrades of sovereign credit ratings and economic slowdowns. There is no guarantee that future debt ceiling
or federal spending legislation will not fail and cause the U.S. to default on its obligations, which would likely cause the U.S. credit rating
to degrade.
S&P Global Ratings lowered its long-term sovereign credit rating of the U.S. from “AAA” to “AA+” in 2011, which it affirmed in
August 2025. Similarly, Fitch Ratings downgraded the sovereign credit rating of the U.S. from “AAA” to “AA+” in 2023 and affirmed the
“AA+” rating in August 2025. However, further fiscal impasses within the federal government may result in future downgrades. The
impact of any further downgrades to the U.S. government’s sovereign credit rating, or its perceived creditworthiness, is inherently
unpredictable and could adversely affect the U.S. and global financial markets and economic conditions. This could cause further
increases in interest rates and borrowing costs, which may negatively impact our ability to access the debt markets on favorable terms.
In addition, the lowered credit rating could create broader financial turmoil and uncertainty, which may exert downward pressure on the
market price of our common stock. Continued adverse economic conditions could have a material adverse effect on our business,
financial condition, and results of operations.
Economic and social volatility and geopolitical instability outside of the U.S. due to large-scale conflicts, including
warfare among countries, may adversely impact us, the U.S., and global economies.
From time to time, tensions between countries may erupt into warfare and may adversely affect neighboring countries and
those who conduct trade or foreign relations with those affected regions. Such acts of war may cause widespread and lingeringdamage
on a global scale, including, but not limited to, (i) safety and cyber security, (ii) the economy, and (iii) global relations.
Disruption, instability, volatility, and decline in economic activity, regardless of where it occurs, whether caused by acts of war,
other acts of aggression, or terrorism, could in turn also harm the demand for, the safety of, and the value of our properties. As a result
of the factors discussed above, we may be unable to operate our business as usual, which may adversely affect our cash flows,
financial condition, and results of operations.
Adoption of the Basel III standards and other regulatory standards affecting financial institutions may negatively
impact our access to financing or affect the terms of our future financing arrangements.
In response to various financial crises and the volatility of financial markets, the Basel Committee on Banking Supervision (the
“Basel Committee”) adopted the Basel III regulatory capital framework (“Basel III” or the “Basel III Standards”). The final package of
Basel III reforms was approved by the G20 leaders in November 2010. However, due to global events and industry feedback, the
implementation timeline has been extended multiple times. The final regulations were tentatively set to be released and to take effect by
mid-2025. The Federal Reserve’s vice chair for supervision announced in September 2025 that a revised, more industry-friendly version
is expected by early 2026.
U.S. regulators have implemented various measures under the Basel III framework, including supplementary leverage ratio
standards (SLR Standards) and a risk-based capital surcharge for global systemically important banking organizations (GSIBs), fully
effective as of 2019. Additionally, the Liquidity Coverage Ratio (LCR), finalized in 2014, aims to enhance the resilience of internationally
active banks by requiring adequate high-quality liquid assets to cover net cash outflows, with stricter U.S. requirements phased in by
The Volcker Rule, introduced under the Dodd-Frank Act, restricts proprietary trading and certain relationships with private
equity and hedge funds. Amendments in 2020 simplified compliance and reduced restrictions, but further changes to “covered funds”
are anticipated. These regulations, alongside the Basel Committee’s deferred final Basel III implementation now targeted for early
2026, may increase capital requirements and constrain financing availability or terms from both U.S. and foreign financial institutions.
Social, political, and economic changes or instability, and other circumstances beyond our control, could adversely
affect our business operations.
Our business may be adversely affected by social, political, and economic instability, unrest, or disruption in a geographic
region in which we operate, regardless of cause, including legal, regulatory, and policy changes by a new U.S. presidential
administration or protests, demonstrations, strikes, riots, civil disturbance, disobedience, insurrection, or social and other political
unrest.
Such events may result in restrictions, curfews, or other actions and give rise to significant changes in regional and global
economic conditions and cycles, which may adversely affect our financial condition and operations. For example, past instances of
unrest in cities throughout the U.S. in connection with civil rights, liberties, and social and governmental reform led in some locations to
the imposition of mandatory curfews and deployment of the U.S. National Guard. Government actions in an effort to protect people and
property, including curfews and restrictions on business operations, may disrupt operations, harm perceptions of personal well-being,
and increase the need for additional expenditures on security resources. In addition, action resulting from such social or political unrest
may pose significant risks to our personnel, facilities, and operations. We cannot ensure there will not be further political or social unrest
in the future or that there will not be other events that could lead to social, political, and economic disruptions. If such events or
disruptionspersist for a prolonged period of time, our overall business and results of operations may be adversely affected.
Changes in federal policy, including tax policies, and at regulatory agencies occur over time through policy and personnel
changes following elections, which can lead to changes involving the level of oversight and focus on certain industries and corporate
entities. For example, as a federal government contractor, we maintain plans to ensure compliance with nondiscrimination and
regulatory requirements for qualified employees on the basis of gender, race, disability, and veteran status. Consequently, we may be
subject to executive orders and regulatory changes affecting various aspects of our operations, including compliance with
nondiscrimination plans. Any required elimination or modification of such plans in response to new executive orders could pose
challenges in hiring or retaining employees and may lead to other adverse operational impacts. Failure to comply with these
requirements could expose us to administrative, civil, or criminal liabilities, including fines, penalties, repayments, or suspension or
debarment from eligibility for future U.S. government contracts.
The nature, timing, and economic and political effects of potential changes to the current legal and regulatory frameworks
affecting the life science industry, as well as the real estate industry in general, remain highly uncertain. For example, any proposals to
make changes related to U.S. tax law, including those related to Section 1031 Exchanges, may have a material adverse effect on our
business, financial condition, results of operations, and growth prospects. From time to time, we dispose of properties in transactions
qualified as Section 1031 Exchanges. If the laws surrounding Section 1031 Exchanges were amended or repealed, we may not be able
to dispose of properties on a tax-deferred basis. In such a case, our earnings and profits and our taxable income would increase, which
could increase dividend income and reduce the return of capital to our stockholders. As a result, we may be required to pay additional
dividends to stockholders, or, if we do not pay additional dividends, our corporate income tax liability could increase and we may be
subject to interest and penalties.
Similarly, changes in federal policy that affect the geopolitical landscape could give rise to circumstances outside our control
that could have negative impacts on our business operations. During the prior Trump administration, increased tariffs were implemented
on goods imported into the U.S., particularly from China, Canada, and Mexico. As China was and is a major global exporter of steel,
solar panels, and aluminum, the tariffs on these specific imports led to a trade war between not only the U.S. and China, but also
between the U.S. and the international community. Other countries, including China, Canada, and the EU, implemented retaliatory
tariffs in response to these policies on U.S. goods. In early 2025, President Trump imposed additional tariffs on certain exports from
Canada, Mexico, and China. These and similar types of trade policies could lead to issues with global supply chains on a
macroeconomic scale, including steel, pharmaceuticals, and construction equipment, all of which are critical to our and our tenant’s
businesses. For example, several of our largest tenants are European companies whose U.S. business operations could be directly
impacted by the tariffs on the EU due to increased costs on operations and supply chains. Similarly, many of our tenants are in the
pharmaceutical industry. As China is a global leader in the market for active pharmaceutical ingredients, the imposition of tariffs,
especially at such unprecedented rates, could potentially raise the cost of generic drugs in the U.S., which would in turn have direct
consequences on our tenants in the pharmaceutical industry. Such tariffs and changes to U.S. trade policy previously had, and in the
future could, lead to further adverse effects on the U.S. domestic economy and our or our tenant’s businesses.
Terrorist attacks may have an adverse impact on our business and operating results and could decrease the value of
our assets.
Terrorist attacks such as those that took place on September 11, 2001, could have a material adverse impact on our business,
our operating results, and the market price of our common stock. Future foreign or domestic terrorist attacks may result in declining
economic activity, which could reduce the demand for, and the value of, our properties. To the extent that any future foreign or domestic
terrorist attacks impact our tenants, their businesses similarly could be adversely affected, including their ability to continue to honor
their lease obligations.
Our business and operations would suffer in the event of information technology system failures.
Despite system redundancy, the implementation of security measures, and the existence of a disaster recovery plan for our
internal information technology systems, our systems are vulnerable to damages from any number of sources, including computer
viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war, and telecommunications failures. Any system failure
or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional
significant costs to remedy damages caused by such disruptions.
Short sellers may engage in manipulative activity intended to drive down the market price of our common stock,
which could result in a material diversion of our management’s time and may also lead to related governmental or regulatory
inquiries or other legal actions, among other effects.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from
a third party with the intention of subsequently buying lower-priced identical securities to return to the lender. Accordingly, it is in the
interest of a short seller to want the price of our common stock to decline. At any time, short sellers may publish, or arrange for the
dissemination of, opinions, or characterizations that are intended to create negative market momentum, including through the use of
social media. In light of the recent proliferation of generative AI tools and large language models, there is also a risk that the
dissemination of such opinions, characterizations or disinformation may negatively impact the conclusions that these tools and models
draw about our business and prospects.
Short selling reports may potentially lead to increased volatility in an issuer’s stock price and to regulatory and governmental
inquiries. In June 2023, a short seller published reports that contained certain negative and falseallegations regarding our business and
financial prospects. Regardless of merit, these allegations and false statements may spread quickly and diminish confidence in our
business, financial prospects, or reputation. As a result, maintaining or reinforcing our reputation may require us to devote significant
resources to refuting incorrect or misleadingallegations, pursuing or defending related legal actions, or engaging in other activities that
could be costly, time consuming, or unsuccessful. Additionally, any potential inquiry or formal investigation from a governmental
organization or other regulatory body, including an inquiry from the SEC, arising from the presence of such allegations could result in a
material diversion of our management’s time and may have a material adverse effect on our business and results of operations.
We hold a portion of our cash and cash equivalents in deposit accounts that could be adversely affected if the
financial institutions holding such deposits fail.
We maintain our cash and cash equivalents at insured financial institutions. The combined account balances at each institution
periodically substantially exceed the FDIC insurance coverage of $250,000 , and, as a result, there is a concentration of credit risk
related to amounts in excess of FDIC insurance coverage. As such, we may be subject to a risk of loss or delay in accessing all or a
portion of our funds exceeding the FDIC insurance coverage, which could adversely impact our short-term liquidity, ability to operate our
business, and financial performance.
Any or all of the foregoing could have a material adverse effect on our financial condition, results of operations, and cash
flows, or the market price of our common stock. Additional risks and uncertainties not currently known to us, or that we presently deem
to be immaterial, may also have potential to materially adversely affect our business, financial condition, and results of operations.
loss
In millions
Per share
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:
In millions
Per share
For additional information, refer to “ Funds from operations and funds from operations, as adjusted, attributable to Alexandria
Real Estate Equities, Inc.’s common stockholders ” under “ Definitions and reconciliations ” and to the tabular presentation of these items
in “ Results of operations ” in Item 7 in this annual report on Form 10-K.
A best-in-class REIT with a high-quality, diverse tenant base, strong margins, and long lease terms
(As of December 31, 2025 , unless stated otherwise)
Occupancy of operating properties in North America
Percentage of total annual rental revenue in effect from Megacampus platform
Percentage of total annual rental revenue in effect from investment-grade or publicly traded large cap tenants
Adjusted EBITDA margin for the three months ended December 31, 2025
Percentage of leases containing annual rent escalations
Weighted-average remaining lease term:
Top 20 tenants
years
All tenants
years
Strong tenant collections for the three months ended December 31, 2025 :
Tenant rents and receivables for the three months ended December 31, 2025 collected as of the date of this
report
Solid leasing volume
• Leasing volume aggregating 4.2 million RSF for the year ended December 31, 2025 .
• Leasing of previously vacant space aggregating 393,376 RSF, up 98% , over the quarterly average over the last five
quarters.
• Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for the year ended
December 31, 2025 .
• 82% of our leasing activity in 2025 was generated from our existing tenant base.
Lease renewals and re-leasing of space:
Rental rate changes
Rental rate changes (cash basis)
RSF
Leasing of previously vacant space – RSF
Leasing of development and redevelopment space – RSF
Total leasing activity – RSF
Key operating metrics
• T otal revenues of $3.03 billion , down 2.9% , f or the year ended December 31, 2025 , compared to $3.12 billion f or the year
ended December 31, 2024 . Excluding dispositions completed after January 1, 2024 , total revenues would have increased by
2.3% for the year ended December 31, 2025 .
• Net operating income (cash basis) of $1.98 billion for the year ended December 31, 2025 increased by $1.7 million , or 0.1% ,
compared to the year ended December 31, 2024 .
• Change in net operating income (cash basis) includes the impact of operating properties disposed of after January 1,
2024 . Excluding these dispositions, net operating income (cash basis) for the year ended December 31, 2025 would have
increased by 6.2% compared to 2024 .
• Same property net operating income decreased by 3.5% and increased by 0.9% (cash basis) for the year ended
December 31, 2025 , compared to the year ended December 31, 2024 .
• 92.5% same properties’ average occupancy for the year ended December 31, 2025 , compared to 95.2% average
occupancy for the year ended December 31, 2024 .
Continued successful management and reduction of general and administrative expenses
• General and administrative expenses as a percentage of net operating income for the year ended December 31, 2025 were
5.6% —the lowest level in the past ten years for the Company and approximately half the average of other S&P 500 REITs. In
2025 , we realized cost reductions of $51.3 million , or 30% , compared to the year ended December 31, 2024 , primarily from
cost-control and efficiency initiatives. Some of these cost savings are temporary in nature, and we anticipate that
approximately half of the cost reduction achieved in 2025 will continue in 2026 .
• Compared to the general and administrative expenses for the year ended December 31, 2024 , we expect to achieve a
savings of $76 million of cumulative general and administrative expense in 2025 and 2026 based upon the midpoint of our
guidance range for 2026 general and administrative expenses.
Dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment
• Common stock dividend declared of $0.72 per share for the three months ended December 31, 2025 , representing a 45%
reduction from the quarterly dividend declared of $1.32 for the three months ended September 30, 2025 .
• The decision to reduce the declared dividend per common share reflects our commitment to maintaining the strength of our
balance sheet, enhancing financial flexibility, and preserving liquidity of approximately $410 million on an annual basis, which
will be used to support our 2026 capital plan.
• Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating $2.36 billion for
the years ended December 31, 2021 through 2025 .
• Dividend yield of 5.9% as of December 31, 2025 and dividend payout ratio of 33% for the three months ended December 31,
Successful execution of Alexandria’s capital recycling strategy
We exceeded the midpoint of our 2025 guidance for dispositions and sales of partial interests by completing $1.81 billion of
funding, primarily from sales of non-core assets and land, as well as sales to owner/users. During the three months ended December
31, 2025 , we completed $1.47 billion of dispositions. As of December 31, 2025 , the book value of our real estate assets designated as
held for sale aggregated $581.7 million . We expect to sell these assets in 2026. Refer to “Dispositions and sales of partial interests” in
Item 2 in this annual report Form 10-K for additional details.
(in millions)
Sales Price
During the nine months ended September 30, 2025
During the three months ended December 31, 2025
Total 2025 dispositions and sales of partial interests (1)
Types of dispositions during the year ended December 31, 2025 (1)
% of Sales Price
Land
Non-stabilized properties
Stabilized properties
Total 2025 dispositions
(1) Excludes the exchange of partial interests in two consolidated real estate joint ventures, Pacific Technology Park and 199 East Blaine Street, during the three months
ended September 30, 2025.
Increased occupancy and leasing progress on temporary vacancy
Operating occupancy as of September 30, 2025
Assets with vacancy designated as held for sale during the three months ended December 31, 2025
Early termination of one lease aggregating 170,618 RSF at 259 East Grand Avenue in South San Francisco, originally
set to expire in 2027, which is already fully re-leased to a multinational pharmaceutical tenant with occupancy
expected to commence in 2H26
Reclassification of 401 Park Avenue from redevelopment to operating upon our decision to pursue leasing as office
space rather than convert to laboratory space
Other changes in occupancy, primarily due to the commencement of leases during 4Q25
Operating occupancy as of December 31, 2025
Key vacant space leased with future delivery
Operating occupancy as of December 31, 2025 , including leased but not yet delivered space
(1) Refer to “Projected results” in item 7 for key considerations on guidance for the three months ending March 31, 2026.
(2) Represents temporary vacancies as of December 31, 2025 aggregating 899,259 RSF, primarily in the Greater Boston, San Francisco Bay Area, and Seattle markets,
that are leased and expected to be occupied upon completion of building and/or tenant improveme nts. The weighted-average expected delivery date is approximately
August 2026 and the expected annual rental revenue is approximately $52 million .
Reduction of capital spend and funding needs
• During the three months ended December 31, 2025, we reduced future construction funding requirements across our active
pipeline by: i) selling or designating three projects as held for sale and ii) pivoting one project to a lower investment strategy;
enabling us to redeploy future construction savings and sale proceeds into opportunities aligned with our long‑term
Megacampus ™ strategy .
• We r educed the overall size of our future construction funding needs on current development and redevelopment projects
by more than $300 million over the next few years.
• 3% reduction in non-income-producing assets to 17% as a percentage of gross assets .
• We are evaluating business strategy for four additional projects.
Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of $10 million , commencing
during the three months ended December 31, 2025 , with an additional $97 million of incremental annual net operating income
anticipated to deliver by 4Q26 primarily from projects that are 86% leased/negotiating .
• During the three months ended December 31, 2025 , we placed into service one development project aggregating 139,979
RSF that is 100% occupied at 10075 Barnes Canyon Road in our Sorrento Mesa submarket and delivered incremental annual
net operating income of $10 million .
• Annual net operating income (cash basis) from recently delivered projects is expected to increase by $26 million upon the
burn-off of initial free rent, which has a weighted-average remaining period of approximately six months .
• 77% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.
(dollars in millions)
Incremental
Annual Net
Operating Income
RSF
Leased/Negotiating
Percentage
Expected to be placed into service:
Fiscal year 2026
Fiscal years 2027 - 2028
Projects under business strategy evaluation:
Fiscal years 2026-2028
(1) Includes expected partial deliveries through 2026 from projects expected to stabilize in 2027-2028, including speculative future leasing that is not yet fully
committed. Refer to the initial and stabilized occupancy years under “New Class A/A+ development and redevelopment properties: current projects” in Item 2 for
additional information.
(2) Represents the RSF of projects expected to stabilize in 2026 . Does not include RSF for partial deliveries through 2026 from projects expected to stabilize in
(3) Represents the current leased/negotiating percentage of development and redevelopment projects that are expected to stabilize through 2026 .
Trends that may affect our future results
Currently identified key market trends and uncertainties that had or may have a negative effect on our business are discussed
below. Although we seek to minimize the risks posed by these trends and uncertainties as discussed in the mitigating factors section
below, there can be no assurance that these measures will be successful in preventing material impacts on our future results of
operations, financial position, and cash flows. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of
additional risks we face.
New supply and reduced demand for life science space may continue to negatively affect our rental rates, occupancy, and
operating results.
• Influx of supply . During and after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements as well as
exceptionallystrong demand for life science space, driven by public health urgency and supported by historically low interest
rates, prompted certain office and other real estate investors to repurpose underutilized office spaces into laboratory facilities,
initiating a wave of new development activity across the sector. Our success and the success of other laboratory operators
prompted new and existing developers to commence speculative redevelopment and/or development laboratory projects in
anticipation of demand for such facilities. These conversion and speculative development projects have contributed to a
significant influx of new laboratory properties in our top three markets—Greater Boston, San Diego, and the San Francisco
Bay Area. Life science real estate availability in these top markets—measured as the percentage of life-science RSF available
relative to total life-science RSF— rose to approximately 29% during the year ended December 31, 2025 , from approximately
4% in 2021 . This surge created supply that materially exceeded current demand. As pandemic-driven urgency faded, the
amount of available space became the dominant factor influencing tenant activity, with absorption unable to match the influx of
supply.
• Decrease in demand . Adding to these challenges, life science tenant demand—after reaching historically high levels in 2021—
has moderated significantly. The average tenant demand, measured by life-science tenants’ RSF requirements, has declined
by more than 60% during the year ended December 31, 2025 compared to 2021 across our top three markets: Greater
Boston, San Francisco Bay Area, and San Diego. This reflected a shift from extraordinary tenant demand driven by pandemic-
related urgency to levels more consistent with historical pre-pandemic norms, particularly those observed during 2016-2018.
Importantly, this shift occurred amid substantially higher available supply, as discussed above, further negatively impacting
occupancy in top markets.
Exacerbating the recent demand trend, the life science industry faced an unusual convergence of macroeconomic, regulatory,
policy, and political challenges in 2025, all of which are critical facets of the life science industry. These included consequential
shifts in leadership at the Health and Human Services agency (“HHS”), tariff-related measures, operational, leadership, and
staff disruptions at the NIH and the FDA, threatened reductions in NIH funding of biomedical research and proposals to limit
NIH funding of indirect grant costs, heightened scrutiny of pharmaceutical pricing, and increased global competition from
China, discussed below. Collectively, these factors, including those described below, increased uncertainty, leading tenants to
potentially defer leasing commitments and expansion decisions pending greater clarity. As a result, absorption of available
space has been notably slower.
◦ Prolonged biotech bear market and capital constraints. The life science sector experienced the fifth consecutive year
of a broad-based biotech bear market in 2025. Life science venture capital fundraising declined to its lowest level since
2016, reducing overall levels of capital venture funds available to deploy in the future. Life science venture funds also
continue to be highly risk averse, focusing investments on clinical-stage and asset based opportunities that may not drive
significant labspace needs. The initial public offering market for biotech companies has remained largely closed,
eliminating a key source of liquidity and growth capital. Elevated interest rates have further constrained access to debt
and equity financing. These factors have slowed company formation, reduced headcount growth, and delayed laboratory
expansion decisions, directly impacting leasing demand for specialized life science space.
◦ Regulatory and policy factors affecting absorption. At the same time, the regulatory environment experienced
significant disruption. The FDA saw more than 50% turnover in senior leadership during the first half of 2025,
accompanied by employee layoffs and a number of delays in regulatory review decisions. Changing expectations related
to clinical trial requirements and flexibility for rare diseases with large unmet need created additional uncertainty around
development timelines for certain regulated products. These conditions have reduced some tenants’ near-term confidence
in expansion and capital investment decisions.
Biomedical research institutions have faced increased uncertainty around federal funding policies throughout 2025. The
proposed 15% c ap on NIH institutional indirect grant spending, which was recently upheld as unlawful by an appellate
court, raised concerns for biomedical research institutions about the ability to recover infrastructure and operating costs,
which materially constrained incremental real estate demand among certain federally supported entities.
Further, government actions aimed at reducing U.S. prescription drug prices have heightened uncertainty regarding future
returns on pharmaceutical and biotechnology investments. This has weighed on risk appetite across the sector and
constrained investment into some areas of research and development. As a result, some tenants have delayed or scaled
back expansion plans, reducing leasing activity and occupancy levels.
At the same time, global competition for life science research has intensified, with certain foreign markets, especially
China, rapidly gaining ground as biotechnology leaders through centralized funding and faster regulatory timelines.
Coupled with immigration-related restrictions implemented in the U.S. during 2025 that limit access to international
research talent, these policy actions not only affect current activities but also pose a significant threat to the long-term
viability of the U.S. biomedical industry. The cumulative effect of these developments may significantly reduce tenant
demand for U.S. life science real estate. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for more
information.
• Impact on our business . The surge in supply and decrease in demand have led to industry-wide elevated vacancy rates,
slower leasing activity, lower rental rates, higher lease concessions, and increased competition for tenants. Our operating
occupancy declined from 94.6% as of December 31, 2024 to 90.9% as of December 31, 2025 , and we project our operating
occupancy to decline further to approximately 88.5% as of December 31, 2026 , representing the midpoint of our guidance
range for occupancy percentage in North America as of December 31, 2026.
To remain competitive, we have realized lower rental rate changes on renewed and re-leased spaces and have offered more
tenant improvement allowances or additional tenant concessions, including free rent, to retain existing tenants, or attract new
tenants. We project the decline in rental rates to continue into 2026 . Furthermore, to maintain long-term tenant relationships
and sustain occupancy levels within our core assets, our existing operating properties may require additional revenue- and
non-revenue-enhancing capital expenditures earlier than typically expected.
The table below reflects a trend of increasing revenue- and non-revenue-enhancing capital expenditures, including tenant
improvement expenditures over the last several years. The table also presents the trend, on a per RSF basis, of increasing
tenant improvements, leasing commissions, and free rent concessions, and of decreasing growth in rental rates related to our
renewed/re-leased spaces, and decreases in our operating occupancy (dollars in thousands, except per RSF amounts):
Revenue- and
Non-Revenue-
Enhancing
Capital
Expenditures
Tenant
Improvements/
Leasing
Commissions
per RSF
Free Rent
Concessions per
Annum
(leases executed in
trailing 12 months)
Rental Rate
Increases
(on renewed/
re-leased
spaces)
Operating
Occupancy
(as of each
period end)
0.6 months
0.7 months
1.5 months
Midpoint of 2026 guidance range
Additionally, we have key lease expirations with expected downtime in 2026, primarily in the Greater Boston, San Francisco
Bay Area, and San Diego markets, aggregating 1.2 million RSF with a weighted-average lease expiration date of April 2026 .
These spaces are expected to become vacant at lease expiration and re-leased to new tenants. We expect downtime on the
1.2 million RSF to range approximately 6 – 24 months on a weighted-average basis. In addition, we have identified 1.2 million
RSF of lease expirations that are expected to have significant downtime in 2027. H owever, considering elevated new
laboratory supply in these markets, there can be no assurance that we will be able to re-lease some or all of this space on
acceptable terms, without significant capital expenditures, or within anticipated time frames, even at reduced rates.
As of December 31, 2025 , we anticipate that 2.3 million RSF of our projects undergoing construction will be placed into service
from 2026 through 2028 and will generate $220 million in future incremental annual net operating income. These projects are
64% leased or under lease negotiations as of December 31, 2025 . Furthermore, we have additional 1.2 million RSF of projects
under construction expected to be delivered through 2028 , which are 8% leased or under lease negotiations . For these
projects, we are evaluating business strategy, including continuing construction, selling, or pausing development or
redevelopment. If we decide to sell or pause, such actions could be dilutive to our funds from operations and operating
metrics.
Landlord-funded tenant improvement allowances have increased significantly for first-generation space, including development
and redevelopment projects, with most space in shell condition requiring landlords to fund the full build-out cost. This trend
places additional pressure on projected returns and overall economics, and further challenges our ability to attract and secure
tenants for the remaining unleased RSF related to these projects at the expected rates, or at all, which could result in a
shortfall or delay in the commencement of the projected incremental annual net operating income.
Unfavorable macroeconomic and capital market conditions may continue to adversely affect the value of our real estate and
non-real estate portfolios, which could result in additional significant impairments and may impact our ability to raise capital
efficiently to further our business objectives.
The effective execution of our development and redevelopment activities is contingent on access to capital required to fund
these projects. Our construction spending in 2025 aggregated $1.44 billion . We expect funding for construction spending in
2026 to aggregate $1.75 billion at the midpoint of our 2026 guidance range for construction spending . This includes significant
remaining construction costs to complete our active pipeline and anticipated increases in both revenue- and non-revenue-
enhancing capital expenditures in our operating portfolio. As a result, our capital plan and leverage management strategy have
increased our reliance on real estate dispositions and sales of partial interests to generate capital. However, current real estate
market conditions, including lower property valuations and increased capitalization rates, will likely adversely affect the timing
and pricing of such transactions.
• Lower property valuations and increased capitalization rates . A portion of our projected construction spending and other uses
of capital is expected to be funded through dispositions and sales of partial interests in core and non-core real estate assets.
Real estate investments are generally less liquid than many other investment types, which can present challenges in selling
our properties in a timely manner or at desirable prices, especially in an environment of oversupply.
In addition to the factors discussed above specifically affecting demand for life science space, broader real estate demand as
well has been impacted by macroeconomic conditions, particularly elevated interest rates. Following the onset of the
COVID-19 pandemic, the U.S. Federal Reserve reduced the federal funds target range to 0% – 0.25% in March 2020 and
maintained that near-zero range until March 2022. To address inflation concerns, the U.S. Federal Reserve then increased the
target range rapidly, reaching 5.25% – 5.50% in July 2023, where it remained for an extended period. Although the U.S. Federal
Reserve reduced the federal funds target range to 4.25% – 4.50% during 2024, and to 3.50% – 3.75% during 2025, interest rates
remain elevated. This could continue to limit access to debt and/or equity financing for prospective buyers of real estate
assets. All other aspects being equal, such challenges for buyers lead to an excess of properties available for sale, which
exerts downward pressure on property valuations and elevates capitalization rates, adversely impacting the sales proceeds we
can generate from our real estate asset sales.
The oversupply, discussed above, combined with high interest rates and reduced market liquidity, has contributed to a
prolonged period of lower property valuations and higher capitalization rates, resulting in significant real estate impairments
and making it more challenging to execute asset sales within the expected timelines and at favorable pricing. In 2026 , we
expect to complete dispositions and sales of partial interests of approximately $2.90 billion at the midpoint of our 2026
guidance range. However, we may not be able to achieve this and/or other targets disclosed in our 2026 guidance as a result
of the uncertainties discussed in this “Trends that may affect our future results” section as well as in “Item 1A. Risk factors” in
this annual report on Form 10-K.
The table below presents total dispositions and a trend of increasing impairments of real estate and capitalization rates
associated with dispositions and sales of partial interests in our real estate assets over the last several years (dollars in
thousands), which is partly attributable to the quality of core and non-core assets we sold during each period. There is no
assurance that this upward trend will stabilize or reverse in the future.
Aggregate Sales Price of
Dispositions and Sales of
Partial Interests
Impairment of
Real Estate
Capitalization
Rates (1)
Capitalization
Rates
(Cash Basis) (1)
Midpoint of 2026 guidance range
(1) Capitalization rates are calculated only for stabilized operating assets sold. Refer to “Capitalization rates” under “ Definitions and reconciliations ” in Item 7 for
additional information.
(2) Represents the weighted-average capitalization rate for stabilized operating assets sold in 2025, which accounted for only 20% of the aggregate sales price
of dispositions and sales of partial interests in 2025.
(3) We are not able to forecast for future periods without unreasonable effort and therefore do not provide on a forward-looking basis. This is due to the inherent
difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our control.
For additional information about our dispositions and real estate impairments recognized in 2025, refer to “ Sales of real estate
assets and impairment of real estate ” in Note 3 – “Investments in real estate” to our consolidated financial statements in Item
15 in this annual report on Form 10-K.
During the year ended December 31, 2025 , we completed dispositions with our share of an aggregate sales price of
$1.81 billion . For 2026 , we have established a disposition program with expected sales of approximately $2.90 billion at the
midpoin t of our 2026 guidance for real estate dispositions and sales of partial interests.
• As of December 31, 2025 , we committed to dispose in 2026 of certain assets with an aggregate book value of
$581.7 million as of December 31, 2025 . These assets are classified as held for sale as of December 31, 2025 , having
met the criteria for such classification during the year. Accordingly, we recognized related impairment charges aggregating
$910.7 million related to assets classified as held for sale as of December 31, 2025 , which are included in the $2.20 billion
of total impairment of real estate presented in our consolidated statement of operations for 2025 .
• To achieve the midpoint of our 2026 guidance range of $2.90 billion for dispositions and sales of partial interests , we
continue to evaluate a significant number of disposition targets, including non-core operating properties, both stabilized
and unstabilized, and land parcels. Under U.S. GAAP, real estate assets are evaluated for impairment upon indication of
potential impairment.
◦ For real estate assets held and used, impairments are recognized if the sum of expected future undiscounted cash
flows, including estimated proceeds from eventual disposition, is less than the carrying amount. In such cases, the
carrying amount is reduced to estimated fair value.
◦ For real estate assets held for sale, impairments are recognized if fair value less costs to sell is less than the carrying
amount. In evaluating potential disposition targets, we apply a probability-weighted approach and in each case, no
impairment charge is currently required.
However, if these assets meet the criteria for classification as held for sale during 2026 , we may incur material real estate
impairments in 2026 . For additional information on accounting for real estate impairments, refer to “Impairment of long-
lived assets” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements in Item 15.
We expect to substantially complete our large-scale non-core asset sales program in 2026. As of December 31, 2025 ,
78% of our annual rental revenue is from our Megacampus platform, and we expect this percentage to continue to grow
over time, in part through our disposition program.
• Increased cost and limited availability of capital. In 2026 , we expect to reduce our outstanding debt by approximately
$1.68 billion , at the midpoint of our 2026 guidance range. Our current debt repayment priorities include repaying existing short-
term borrowings, including amounts outstanding on our commercial paper program, repaying our $650 million unsecured
senior notes payable maturing in 2026 (of which $300 million was repaid in January 2026 upon maturity), using proceeds from
our dispositions , and potentially repaying other unsecured senior notes payable, including those maturing in 2027. These
expectations assume that we are able to execute our planned real estate dispositions and partial interest sales on acceptable
terms. If we are unable to sell real estate assets at our targeted prices or within our expected timeframes, we may need to
reduce the projected amount of debt repayment, delay the timing of such repayment, and/or increase our reliance on additional
debt financing to fund the approximately $1.75 billion of construction spending, based on the midpoint of our 2026 guidance
range . Elevated interest rates may result in debt financing options that are costlier, less accessible, or even unavailable,
potentially limiting our ability to complete our development and redevelopment projects on schedule and thereby delaying our
expected incremental annual net operating income generation.
The table below reflects interest rates related to unsecured senior notes payable that we have issued over the last several
years (dollars in thousands). There is no assurance that high debt costs will not continue into the future.
Debt Issued
Interest Rate (1)
(1) Includes amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
• Capitalized interest. O ur capitalized interest w as $330 million in 2025 . During 2025 , we focused on completing our projects
under construction that were highly leased. Additionally, we invested in our future pipeline to maximize value and to position
the sites for future vertical construction based on our expectation at that time of increased future demand for these projects.
Refer to “ Capitalized interest ” under “ Definitions and reconciliations ” in Item 7 in this annual report on Form 10-K for additional
information.
The table below presents gross interest expense, capitalized interest, and interest expense for the last several years (in
thousands).
Gross Interest Expense
Capitalized Interest
Interest Expense
Midpoint of 2026 guidance range
For 2026 , we expect capitalized interest of approximately $250 million at the midpoint of our guidance range. The decrease
compared to 2025 reflects our decisions, in light of current market conditions, to re-evaluate certain projects including to cease
or pause certain pre-construction activities on land and on uncommitted projects to conserve capital as well as to dispose of
certain assets. As a result, we expect our interest expense to increase to approximately $255 million (at the midpoint of our
2026 guidance range) in 2026 from $227 million in 2025 . The challenging macroeconomic environment discussed above, has
necessitated and may continue to necessitate a reevaluation of our plans. These conditions could lead to a temporary
suspension of our construction projects, delay of future projects, or sale of non-income-producing properties. This could result
in a further decline in our capitalized interest for 2026 and beyond below our current projections, and a further increase in
interest expense recognized in our consolidated statement of operations.
• Volatility in non-real estate investments . We hold strategic investments in publicly traded companies and privately held entities
primarily involved in the life science industry. These investments are subject to market and sector-specific risks that can
substantially affect their valuation. Like many other industries, the life science industry is susceptible to macroeconomic
challenges, such as ongoing economic uncertainty and a tighter capital environment. These factors may lead to increased
volatility in the valuation of our non-real estate investments.
In such a challenging environment, distributions from our investments — which we may receive as dividends, as liquidation
distributions from our investments in limited partnerships, or as a result of mergers and acquisitions that lead to our privately
held investees being acquired by other entities — may be limited and could result in lower realized gains. Gross unrealized
gains related to our non-real estate investments held as of December 31, 2025 , December 31, 2024 , and December 31, 2023
aggregated to $184.4 million , $228.1 million , and $320.4 million , respectively. We may not receive distributions from our
investments or otherwise may face difficulties in monetizing our non-real estate investments at optimal prices, and there can
be no assurance that we will be able to realize gains in the future. In periods with limited or no realized gains, our FFO per
share, as adjusted, may be adversely affected.
For the year ended December 31, 2025 , we recognized $115.7 million in realized gains on non-real estate investments and are
projecting realized gains of $75 million in 2026 at the midpoint of our guidance range. The table below presents components of
investment income (loss) on our non-real estate investments (in thousands):
Non-Real Estate Investments
Realized Gains
Significant
Realized Losses
Impairments
Unrealized
(Losses) Gains
Investment
Loss
Midpoint of 2026 guidance
range
(1) In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss o f $103.3 million on
one transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated
joint venture sold these securities an d distributed $39.9 million to us in December 2025 .
(2) We are not able to forecast investment income (loss) of future periods without unreasonable effort and therefore do not provide on a forward-looking basis.
This is due to the inherent difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our control.
Unfavorable market conditions could also lead to additional impairments of our investments in privately held entities that do not
report NAV per share, as well as other‑than‑temporary impairments of our non‑real‑estate investments accounted for under the
equity method .
The realization of any of the aforementioned risks could have a material adverse impact on our revenues and operating
performance, including but not limited to our income from rentals, net operating income, results of operations, funds from operations,
operating margins, initial stabilized yields (unlevered) on new or existing construction projects, occupancy, EPS, FFO per share, FFO
per share, as adjusted, and net cash provided by operating activities. These impacts could decrease Adjusted EBITDA, adversely
impacting our key metrics such as our Adjusted EBITDA margin and net debt and preferred stock to Adjusted EBITDA and fixed-
charge coverage ratios, as well as our credit ratings and credit rating outlooks. To preserve liquidity and mitigate an increase to our net
debt and preferred stock to Adjusted EBITDA ratio that may be caused by potential declines in Adjusted EBITDA, we may seek
additional capital by pursuing additional sales of real and non-real estate assets, or through equity offerings, which could be dilutive to
existing stockholders. A reduction in earnings and/or net cash provided by operating activities could potentially necessitate or make
advisable a reduction in our dividends per share, as determined by our board of directors. Any of the foregoing could further negatively
affect our business and the market value of our common stock.
• Mitigating factors:
• Reinforcing the Megacampus platform as our core growth engine. We believe our Megacampus ecosystems
represent the most competitive segment of the life science real estate market. Our Megacampus ecosystems are large-
scale (each over one million RSF in aggregate), clustered environments located in the most critical life science innovation
hubs, designed to meet the evolving needs of the world’s leading scientific and technological organizations. This proximity
is a key driver of tenant demand. These campuses are used in two distinct ways: (i) to house the research operations of
our tenants and (ii) to recruit and retain the best talent available from a limited pool, which underscores why their scale,
strategic design, and location are critical. With our Megacampus ecosystems, we aim to provide a superior set of
amenities, services, and access to transit. With inspiring design and people-centric amenities, we believe these campuses
enhance our tenants’ confidence in using these spaces as effective recruiting tools. In contrast, we believe that a
significant amount of the competitive supply in the market today consists of isolated facilities that provide operational
space but lack the scale and strategic design that our Megacampus ecosystems deliver.
Our Megacampus ecosystems, which offer both high visibility and a clear path for growth, are designed for scalability to
accommodate our tenants’ growth. Our future development and redevelopment projects aggregate 21.6 million RSF as of
December 31, 2025 , of which 77% is concentrated within our Megacampus ecosystems. Their strategic locations and path
for growth serve as powerful incentives for tenants to lease space from us.
We believe our Megacampus strategy represents our most powerful competitive advantage in an oversupplied market.
This approach has enabled us to capture an outsized share of leasing demand across core life science markets, even as
overall supply has increased. The strength of this strategy is reflected in the 2025 performance metrics below, achieved
despitechallenging macroeconomic, regulatory, policy, and political environments:
• Leasing volume aggregating 4.2 million RSF for the year ended December 31, 2025 .
• Weighted-average lease term of 11.9 years for leases executed during the year ended December 31, 2025 .
• In July 2025, we executed the largest life science lease in Company history with a long-standing multinational
pharmaceutical tenant for a 16-year build-to-suit lease expansion aggregating 466,598 RSF on the Campus
Point by Alexandria Megacampus in our University Town Center submarket .
• During 2023-2025, our leasing volume in Greater Boston, the San Francisco Bay Area, and San Diego
represented approximately 94% of the combined leasing volume of the five largest life science real estate owners
in those markets (by RSF leased).
• Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for the year ended
December 31, 2025 .
• Occupancy of 90.9% as of December 31, 2025 .
• 86% of development and redevelopment projects under construction that are expected to stabilize in 2026 are leased
or under lease negotiation, excluding one project for which we are evaluating business strategy.
• Expected incremental annual net operating income from projects anticipated to be placed into service from 2026 to
◦ $97 million from deliveries i n 2026 .
◦ $123 million from 2027 - 2028 deliveries.
◦ $113 million from 2026 - 2028 deliveries of additional four projects which are under business strategy
evaluation.
• Strength of our brand. As a recognized leader in the life science and real estate sectors, Alexandria has successfully
built a diverse and high-quality tenant base. Over the past three decades, we have fostered long-standing relationships
and strategic partnerships with our tenants, which have enabled us to maintain strong occupancy levels and leasing
volume, and growth in net operating income and cash flows and to effectively navigate through various economic cycles.
Key indicators of our brand strength include the following:
• In 2025 , 82% of our leasing activity was generated from our existing tenant base.
• As of December 31, 2025 , 84% of our top 20 tenant annual rental revenue was derived from investment-grade or
publicly traded large cap companies.
• Our tenant collections have remained consistently high, averaging 99.8% since the beginning of 2021 through
December 31, 2025 .
• Prudent financial management. Our strong and flexible balance sheet and prudent balance sheet management are key
factors in our ability to navigate macroeconomic uncertainties and capitalize on new opportunities. The strength of our
financial position is highlighted by several key indicators:
• Our significant liquidity of $5.30 billion as of December 31, 2025 provides us the flexibility to address our operational
needs and to pursue strategic opportunities.
• We expect to have the ability to self-fund a large portion of our capital requirements through the following expected
sources in 2026 :
• $525 million in net cash provided by operating activities after dividends, at the midpoint of our 2026 guidance
range.
• $137.0 million in capital contributions to fund construction expected from our existing consolidated real estate
joint venture partners from January 1, 2026 through 2027 and beyond .
• $2.90 billion from dispositions and sales of partial interests in real estate assets at the midpoint of our 2026
guidance range.
• As of December 31, 2025 , our credit ratings from S&P Global Ratings and Moody’s Ratings were BBB+ and Baa1 ,
respectively, which rank in the top 15% among all publicly traded U.S. REITs.
• Our net debt and preferred stock to Adjusted EBITDA ratio target is 5.6x to 6.2x for the fourth quarter of 2026
annualized.
• As of December 31, 2025 , our fixed-rate debt represents 97.2% of our total debt , which provides predictability in debt
servicing costs. Since 2021 , our quarter-end fixed-rate debt has averaged 96.7% .
• Our debt maturity schedule is well laddered, which provides us with financial flexibility and reduces short-term
refinancing risks. As of December 31, 2025 , only 11% of our debt matures through 2028 .
• As of December 31, 2025 , the weighted-average remaining term of our debt is 12.1 years , which is the longest
among S&P 500 REITs, and demonstrates our strategic approach to debt management and our focus on maintaining
manageable annual debt maturities.
• Operational excellence of our team. Alexandria focuses on operational excellence in the direct asset management and
operations of our Labspace ® asset base. Our assets management and operations team is composed of highly
experienced, educated, and professionally credentialed facilities specialists. This expertise, essential in ensuring a secure
and efficient environment for groundbreaking scientific research, has been cultivated and maintained over many years.
The demanding nature of laboratory-based scientific research requires strict adherence to safety standards set by local,
state, and federal regulatory bodies. Key compliance aspects include good manufacturing practices (“GMP”) and Clinical
Laboratory Improvement Amendments (“CLIA”) certifications, adherence to national biosafety level guidelines, proper
permitting and handling of hazardous waste generation and chemical storage, maintenance of safety stations, effective
management of ultra-low temperature freezers, and careful licensing and management of radioactive materials.
• Other mitigating factors
• Improvement in office market. The increase in demand for premium office space since 2024, primarily driven by the
technology sector, particularly companies focused on AI, absorbed some of the market’s supply previously anticipated
for life science use and is now being repositioned back into office space. High ceilings, improved ventilation systems,
and abundant natural light, which are all features of life science real estate, have become highly desirable, appealing
to office and advanced technologies tenants. We expect this trend may lead to the exit from the life science sector of
inexperienced life science real estate developers and expedite the resolution of the oversupply impacting the sector.
• Proactive reduction in capital spending and funding needs . To address higher capital costs and slower market
absorption, we implemented a disciplined reduction in construction spending. Based on the midpoints of our 2026
guidance, our average annual construction spending is expected to decline to approximately $1.74 billion for 2024–
2026, representing a reduction of approximately $1.02 billion , or 37% , compared to the 2021–2023 average . Our
2026 construction spending is primarily focused on:
• Leasing vacant space at operating properties
• Completing active committed construction projects
• Unrealized gains presented in our consolidated balance sheet were $133.4 million , comprising gross unrealized gains and
losses aggregating $184.4 million and $51.1 million , respectively.
• Investment loss of $56.3 million for the year ended December 31, 2025 presented in our consolidated statement of operations
consisted of $115.7 million of realized gains , $103.3 million from a significant realized loss on one transaction, $27.0 million of
unrealized gains , and $95.7 million of impairment charges.
2026 capital strategy
During 2026 , we intend to continue executing our capital strategy with a focus on the strength of our credit profile, which will
allow us to seek opportunities to improve our cost of capital and continue our disciplined approach to capital allocation. Consistent with
2025 , our capital strategy for 2026 includes the following elements:
• Allocate capital to Class A/A+ properties located in Megacampus ecosystems in AAA life science innovation clusters.
• Maintain prudent access to diverse sources of capital, which include net cash flows from operating activities after dividends,
strategic asset recycling through real estate disposition and partial interest sales, non-real estate investment sales, joint
venture capital, sales of equity, and other sources of capital.
• Prudently evaluate our dividend policy to share cash flows with investors while also retaining significant cash flows for
reinvestment.
• Focusing on opportunities to improve our credit profile.
• Maintain commitment to long-term capital to fund growth.
• Prudently ladder debt maturities and manage short-term variable-rate debt.
• Prudently manage non-real estate equity investments to support corporate-level investment strategies.
• Maintain a stable and flexible balance sheet with significant liquidity.
• Consider opportunistic repurchases, in privately negotiated transactions, of our common stock.
We expect to continue to maintain access to diverse sources of capital, including unsecured senior notes payable and secured
construction loans for our development and redevelopment projects from time to time. We expect to continue to maintain a significant
proportion of our net operating income on an unencumbered basis to allow for future flexibility for accessing both unsecured and
secured debt markets, although we expect traditional secured mortgage notes payable will remain a small component of our capital
structure. We intend to supplement our remaining capital needs with net cash flows from operating activities after dividends as well as
proceeds from real estate asset sales, partial interest sales, and equity capital. For further information, refer to “Projected results”,
“Sources of capital,” and “Uses of capital” in Item 7 in this annual report on Form 10-K. Our ability to meet our 2026 capital strategy
objectives and expectations will depend in part on capital market conditions, real estate market conditions, and other factors beyond our
control. Accordingly, there can be no assurance that we will be able to achieve these objectives and expectations. Refer to our
discussion of “ Forward-looking statements ” under Part I and “Item 1A. Risk factors” in this annual report on Form 10-K.
Operating summary
Same Property Performance:
Net Operating Income Changes
Rental Rate Growth:
Renewed/Re-Leased Space
Margins (1)
Favorable Lease Structure (2)
Operating
Adjusted EBITDA
Strategic Lease Structure by Owner and
Operator of Collaborative Megacampus Ecosystems
Increasing cash flows
Percentage of leases containing annual
rent escalations
Stable cash flows
Long-Duration Lease Terms (3)
Percentage of triple
net leases
9.7 Years
7.5 Years
Lower capex burden
Percentage of leases providing for the
recapture of capital expenditures
Top 20 Tenants
All Tenants
Net Debt and Preferred Stock
to Adjusted EBITDA (4)
Fixed-Charge Coverage Ratio (4)
Refer to “ Same properties ” and “ Definitions and reconciliations ” in Item 7 for additional details. “ Definitions and reconciliations ” contains the definitions of “Fixed-charge
coverage ratio,” “Net debt and preferred stock to Adjusted EBITDA,” and “Net operating income” and their respective reconciliations from the most directly comparable
financial measures presented in accordance with GAAP.
(1) For the three months ended December 31, 2025 .
(2) Percentages calculated based on our annual rental revenue in effect as of December 31, 2025 .
(3) Represents the weighted-average remaining term based on annual rental revenue in effect as of December 31, 2025 .
(4) Quarter annualized.
Climate change
We cannot predict the rate at which climate change will progress. However, the physical effects of climate change may
potentially have a material adverse effect on our properties, operations, and business. For example, most of our properties are located
along the east and west coasts of the U.S. and some of our properties are located in close proximity to shorelines. To the extent that
climate change impacts weather patterns, our markets could experience severe weather, including hurricanes, severe winter storms,
wildfires, droughts, and coastal flooding due to increases in storm intensity and rising sea levels. Over time, these conditions could
result in declining demand for space at our properties, delays in construction and resulting increased construction costs, or our inability
to operate the buildings at all. Climate change and severe weather may also have indirect effects on our business by increasing the
cost of, or decreasing the availability of, property insurance on terms we find acceptable, and by increasing the costs of energy,
maintenance, repair of water and/or wind damage, and snow removal at our properties.
We are monitoring considerations such as shifting market demands and regulation. Numerous states and municipalities have
adopted state and local laws and policies on climate change, including climate disclosures and emission reduction targets impacting the
building sector. For example, the State of California enacted legislation requiring certain companies to disclose GHG and climate-
related financial risk information. Further cities including Boston, Cambridge, New York, and Seattle have passed ordinances that set
limits on GHG emissions associated with building operations. Some municipalities, including the Cities of New York and San Francisco,
have also implemented legislation to eliminate the use of natural gas in new construction projects. Refer to “ We face possible risks and
costs associated with the effects of climate change and severe weather ” in “ Other factors ” within “ Item 1A. Risk factors ” in this annual
report on Form 10-K for additional information.
Our approach to assessing and mitigating physical climate-related risk through our climate resilience roadmap, and transition
risk through our GHG emissions mitigation strategy, are outlined below.
Climate resilience
We continue to assess potential physical risks associated with climate change, analyze climate data and property damage
losses associated with past weather events, and review the potential for future climate hazards such as water stress, precipitation
flooding, coastal flooding, wildfire, and heat stress. We also consider local climate change vulnerability assessments and resilience
planning efforts. Our climate resilience roadmap uses climate models and scenario analyses to identify potential future hazards at the
building level. Additionally, we conduct physical inspections to further assess resilience at certain properties, as appropriate, and to
determine whether additional mitigation is needed.
In our evaluation of physical risks, Alexandria considers two climate change scenarios for 2030 and 2050: (i) a high-emissions
scenario in which GHG emissions continue to increase with time (RCP 8.5 ); and (ii) an intermediate scenario in which GHG emissions
level off by 2050 and decline thereafter (RCP 4.5 ). RCP 8.5 generally predicts more significant future climate hazard impacts than RCP
After modeling the potential hazards out to year 2050, we undertake a physical inspection for sites that may have high
exposure to one or more climate hazards. We use this process to assess resilience to current and/or future stresses and to determine
whether additional mitigation is needed. We continue to refine this process through improved climate risk data and structured
approaches to resilience planning across our portfolio.
For a number of buildings, we are implementing augmented emergency preparedness plans and additional operating
procedures that include preparations for potential future events. For certain buildings, mitigation may include nominal capital
improvement work. We may find that other buildings require more significant planning and investment to incorporate more complex
resilience measures. We are building on our existing emergency preparedness efforts by more directly planning for climate-driven risks
like flooding and wildfire. Resilience measures under consideration at some of our properties are described below.
In our operating properties located in areas prone to flooding, we may consider options such as waterproofing the building
envelope up to the projected flood elevation, protecting critical building mechanical equipment, storing temporary flood barriers on site
to be deployed at building entrances prior to a flood event, and installing backflow preventers on stormwater/sewer utilities that
discharge from the building. At several properties, we are currently conducting conceptual studies to evaluate potential options for
consideration.
We are monitoring our exposure to wildfire. Most of our properties in San Diego are located in low-density fire-resistant
commercial campuses with separations between structures and response capabilities that help reduce wildfire risk. These settings differ
meaningfully from more fire-prone residential areas. At some of our operating properties located in areas prone to wildfire, we have
begun a multiyear effort to implement landscaping improvements that include the replacement of fire-prone materials and the
installation of fire-resistant vegetation. We continue to strengthen our wildfire preparedness efforts by advancing site-specific planning
and evaluating measures that promote business continuity and occupant safety during smoke and fire events.
For our development of new Class A/A+ properties, we will aim to design for climate resilience. In 2023, Alexandria adopted
resilient design guidelines to address future climate conditions based on climate risk models. These guidelines have been applied in
some of our recent development projects.
In accordance with such guidelines, we endeavor to design buildings that incorporate materials, systems, and features to
manage predicted climate hazards and maintain building operability during and after a climate event. As feasible, we will consider
designs that accommodate potential expansion of cooling infrastructure to meet future building needs. In water-scarce areas, we
consider planting drought-resistant vegetation and equipping buildings to capture, treat, and reuse available water from building
systems and precipitation events where feasible. In areas prone to wildfire, we consider incorporating brush management practices into
landscape design and installing enhanced air filtration systems to support safe and healthy indoor air.
For acquisitions in our portfolio, we continue to use climate modeling as part of our due diligence in assessing potential risk
and to inform our financial modeling and transactional decisions.
We are subject to evolving federal, state, and local laws and regulations related to climate change. For example, the State of
California enacted legislation requiring certain companies to disclose GHG and climate-related financial risk information. Further cities
including Boston, Cambridge, New York, and Seattle have passed ordinances that set limits on GHG emissions associated with building
operations. Some municipalities, including the Cities of New York and San Francisco, have also implemented legislation to eliminate the
use of natural gas in new construction projects. Refer to “ We face possible risks and costs associated with the effects of climate change
and severe weather ” in “ Other factors ” within “ Item 1A. Risk factors ” in this annual report on Form 10-K for additional information.
As a part of Alexandria’s risk management program, we maintain all-risk property insurance at the portfolio level, including
properties under development, to help mitigate the risk of extreme weather events and potential impact from losses associated with
natural catastrophes, such as flood, wildfire, and wind events. However, there can be no assurance that our insurance will cover all our
potential losses and that climate change and severe weather will not have a material adverse effect on our properties, operations, or
business. For additional information on our risk management strategies related to insurance coverage, refer to “ Our insurance may not
adequately cover all potential losses ” in “ Operating factors ” in “ Item 1A. Risk factors ” in this annual report on Form 10-K.
Board of directors and leadership oversight
The Audit Committee oversees the management of the Company’s financial and other risks, including climate-related risks. At
the management level, Alexandria’s Sustainability Committee, which comprises members of the executive team and senior decision
makers spanning the Company’s real estate development, asset management, risk management, and sustainability teams, leads the
development and execution of our approach to climate-related risk.
Refer to “ Item 1A. Risk factors ” in this annual report on Form 10-K for discussion of the risks we face from climate change.
Results of operations
Same properties
We supplement an evaluation of our results of operations with an evaluation of operating performance of certain of our
properties, referred to as “Same Properties.” For additional information on the determination of our Same Properties portfolio, refer to
“ Same property comparisons ” under “ Definitions and reconciliations ” in Item 7 in this annual report on Form 10-K. The following table
presents information regarding our Same Properties as of December 31, 2025 and 2024 :
December 31,
Percentage change in net operating income over comparable period from prior year
Percentage change in net operating income (cash basis) over comparable period from prior
year
Operating margin
Number of Same Properties
RSF
Occupancy – current-period average
Occupancy – same-period prior-year average
(1) Includes the impact of initial free rent concessions that burned off after January 1, 2024 for development and redevelopment projects that were placed into service in
2023 and accordingly are part of our same property pool for the year ended December 31, 2025 , including at 325 Binney Street in our Cambridge submarket and 15
Necco Street in our Seaport Innovation District submarket. Excluding the impact of these initial free rent concessions, same property net operating income (cash basis)
for the year ended December 31, 2025 would have decreased by 1.4% .
The following table reconciles the number of Same Properties to total properties for the year ended December 31, 2025 :
Development – under construction
Properties
Redevelopment – placed into service after
January 1, 2024
Properties
99 Coolidge Avenue
840 Winter Street
1450 Owens Street
Alexandria Center ® for Advanced Technologies – Monte
Villa Parkway
10075 Barnes Canyon Road
421 Park Drive
4135 Campus Point Court
Acquisitions after January 1, 2024
Properties
701 Dexter Avenue North
Other
Campus Point by Alexandria
Unconsolidated real estate JVs
Development – placed into service after January 1, 2024
Properties
Properties held for sale
1150 Eastlake Avenue East
Total properties excluded from Same Properties
9810 Darnestown Road
Same Properties
9820 Darnestown Road
Total properties in North America as of December 31,
4155 Campus Point Court
201 Brookline Avenue
9808 Medical Center Drive
230 Harriet Tubman Way
500 North Beacon Street and 4 Kingsbury Avenue
10935, 10945, and 10955 Alexandria Way
Redevelopment – under construction
Properties
40, 50, and 60 Sylvan Road
269 East Grand Avenue
8800 Technology Forest Place
311 Arsenal Street
Other
Comparison of results for the year ended December 31, 2025 to the year ended December 31, 2024
The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same
Properties for the year ended December 31, 2025 , compared to the year ended December 31, 2024 (dollars in thousands). We provide
a comparison of the results for the year ended December 31, 2024 to the year ended December 31, 2023 , including a comparison of
the components of net operating income for our Same Properties and Non-Same Properties for the year ended December 31, 2024 ,
compared to the year ended December 31, 2023 , in “ Results of operations ” in Item 7 of our annual report on Form 10-K for the year
ended December 31, 2024 . Refer to “ Definitions and reconciliations ” in Item 7 in this annual report on Form 10-K for definitions of
“ Tenant recoveries ” and “Net operating income” and their reconciliations from the most directly comparable financial measures
presented in accordance with GAAP, income from rentals and net income, respectively.
Year Ended December 31,
$ Change
% Change
Income from rentals:
Same Properties
Non-Same Properties
Rental revenues
Same Properties
Non-Same Properties
Tenant recoveries
Income from rentals
Same Properties
Non-Same Properties
Other income
Same Properties
Non-Same Properties
Total revenues
Same Properties
Non-Same Properties
Rental operations
Same Properties
Non-Same Properties
Net operating income
Net operating income – Same Properties
Straight-line rent revenue
Amortization of acquired below-market leases and deferred
revenue related to tenant-funded and -built landlord
improvements
Net operating income – Same Properties (cash basis)
(1) Decrease in total net operating income includes the impact of operating properties disposed of after January 1, 2024 . Excluding these dispositions, net operating income
for the year ended December 31, 2025 would have increased by 0.9% compared to 2024 .
Income from rentals
T otal income from rentals for the year ended December 31, 2025 decreased by $104.5 million , or 3.4% , to $2.95 billion ,
compared to $3.05 billion for the year ended December 31, 2024 , due to a decrease in rental revenues, partially offset by an increase in
tenant recoveries, as discussed below.
Rental revenues
Total rental revenues for the year ended December 31, 2025 decreased by $119.5 million , or 5.2% , to $2.18 billion , compared
to $2.30 billion for the year ended December 31, 2024 . The decrease was primarily related to dispositions of real estate assets within
our Non-Same Properties since January 1, 2024 .
S ame Properties’ rental revenues for the year ended December 31, 2025 decreased by $44.3 million , or 2.6% , to $1.69 billion ,
compared to $1.73 billion for the year ended December 31, 2024 . This decrease was primarily attributable to a decrease in Same
Properties’ average occupancy to 92.5% for the year ended December 31, 2025 from 95.2% for the year ended December 31, 2024 ,
including the impact of the following lease expirations in the first quarter of 2025 that were vacant for most of the year ended
December 31, 2025 : (i) 182,054 RSF at the Alexandria Technology Square ® Megacampus in our Cambridge submarket and (ii) two
properties aggregating 247,246 RSF in our Austin submarket.
Tenant recoveries
Tenant recoveries for the year ended December 31, 2025 increased by $14.9 million , or 2.0% , to $760.3 million , compared to
$745.4 million for the year ended December 31, 2024 , primarily related to Same Properties, partially offset by a decrease in Non-Same
Properties tenant recoveries primarily due to dispositions of real estate assets within our Non-Same Properties since January 1, 2024 .
Same Properties’ tenant recoveries for the year ended December 31, 2025 increased by $32.8 million , or 5.5% , to
$627.2 million , compared to $594.5 million for the year ended December 31, 2024 , primarily due to the $45.6 million increase in the
operating expenses during the year ended December 31, 2025 , as discussed under “Rental operations” below. As of December 31,
2025 , 92% of our leases (on an annual rental revenue 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. This increase was partially offset by a decrease in Same Properties’ tenant recoveries resulting from a
decrease in Same Properties’ average occupancy to 92.5% for the year ended December 31, 2025 from 95.2% for the year ended
December 31, 2024 .
Other income
Other income for the year ended December 31, 2025 increased by $14.7 million , or 22.0% , to $81.4 million , compared to
$66.7 million for the year ended December 31, 2024 . Other income represented approximately 2.7% and 2.1% of total revenues during
each respective period and primarily consisted of interest income and management fee income during both periods.
Rental operations
Total rental operating expenses for the year ended December 31, 2025 increased by $13.3 million , or 1.5% , to $922.6 million ,
compared to $909.3 million for the year ended December 31, 2024 . The increase was primarily due to incremental expenses related to
our Same Properties’ rental operating expenses as discussed below, partially offset by the decrease in Non-Same Properties’ rental
operating expenses of $32.2 million primarily as a result of dispositions of real estate assets since January 1, 2024 .
Same Properties’ rental operating expenses increased by $45.6 million , or 6.4% , to $752.5 million during the year ended
December 31, 2025 , compared to $706.9 million for the year ended December 31, 2024 , primarily as the result of the increase in
(i) utilities expenses and contractual costs aggregating $20.3 million primarily due to higher consumption related to certain tenants’
increased operations, and higher electricity and HVAC contract services rates in our San Diego market; (ii) property taxes aggregating
$12.8 million primarily due to annual property tax increases; and (iii) repair and maintenance expenses aggregating $9.0 million
primarily due to a more severe winter in 2025 compared to 2024 in the Greater Boston market.
Depreciation and amortization
Depreciation and amortization expense for the year ended December 31, 2025 increased by $148.1 million , or 12.3% , to
$1.35 billion , compared to $1.20 billion for the year ended December 31, 2024 , primarily as a result of (i) the change in useful lives of
certain buildings, (ii) 3.1 million RSF of development and redevelopment projects placed into service subsequent to January 1, 2024 ,
(iii) two operating properties aggregating 383,360 RSF acquired subsequent to January 1, 2024 , and (iv) partially offset by sales of real
estate assets subsequent to January 1, 2024 .
Impairment of real estate
During the year ended December 31, 2025 , we recognized impairment charges aggregating $2.20 billion , classified in
impairment of real estate in our consolidated statement of operations. For additional information, refer to “ Sales of real estate assets
and impairment of real estate ” in Note 3 – “Investments in real estate” to our consolidated financial statements in Item 15 in this annual
report on Form 10-K.
During the year ended December 31, 2024 , we recognized real estate impairment charges aggregating $223.1 million , which
primarily consisted of (i) pre-acquisition costs related to two potential acquisitions in the Greater Boston market that we decided to no
longer proceed with as a result of the macroeconomic environment that negatively impacted the financial outlooks of these potential
acquisitions, (ii) impairment charges for five operating properties in our Sorrento Mesa and University Town Center submarkets to
reduce the carrying amounts to their estimated fair values less costs to sell, and (iii) impairment charges for four properties at One
Moderna Way in our Route 128 submarket that were sold to a single tenant.
General and administrative expenses
General and administrative expenses for the year ended December 31, 2025 decreased by $51.3 million , or 30.5% , to
$117.0 million , compared to $168.4 million for the year ended December 31, 2024 , primarily due to cost-control and efficiency
initiatives implemented since 2024, including reduction in headcount, restructuring of compensation plans, systems upgrades, and
process improvements. As a percentage of net operating income, our general and administrative expenses for the years ended
December 31, 2025 and 2024 were 5.6% and 7.6% , respectively.
Interest expense
Interest expense for the years ended December 31, 2025 and 2024 consisted of the following (dollars in thousands):
Year Ended December 31,
Component
Change
Gross interest
Capitalized interest
Interest expense
Average debt balance outstanding (1)
Weighted-average annual interest rate (2)
(1) Represents the average debt balance outstanding during the respective periods.
(2) Represents annualized total interest incurred divided by the average debt balance outstanding during the respective periods.
The net change in interest expense during the year ended December 31, 2025 , compared to the year ended December 31,
2024 , resulted from the following (dollars in thousands):
Component
Interest Rate (1)
Effective Date
Change
Increases in interest incurred due to:
Issuances of debt:
$550 million of unsecured senior notes payable due 2035
February 2025
$600 million of unsecured senior notes payable due 2054
February 2024
$400 million of unsecured senior notes payable due 2036
February 2024
Higher average outstanding balances under commercial paper program
and/or unsecured senior line of credit
Other increase in interest
Total increases
Decreases in interest incurred due to:
Repayment of debt:
$600 million of unsecured senior notes payable due 2025
April 2025
Secured notes payable
August 2025
Total decreases
Change in gross interest
Decrease in capitalized interest
Total change in interest expense
(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.
Investment loss
During the year ended December 31, 2025 , we recognized an investment loss aggregating $56.3 million , which consisted of
$115.7 million of realized gains , $103.3 million of realized losses on one transaction , $27.0 million of unrealized gains , and impairment
charges of $95.7 million .
During the year ended December 31, 2024 , we recognized an investment loss aggregating $53.1 million , which consisted of
$117.2 million of realized gains , $112.2 million of unrealized losses , and impairment charges of $58.1 million .
For more information about our investments, refer to Note 7 – “Investments” and “ Investments ” in Note 2 – “Summary of
significant accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K.
Gain on sales of real estate
During the year ended December 31, 2025 , we recognized $642.4 million of gains classified in gain on sales of real estate in
our consolidated statement of operations. For additional information, refer to “ Sales of real estate assets and impairment of real estate ”
in Note 3 – “Investments in real estate” and Note 4 — “Consolidated and unconsolidated real estate joint ventures” to our consolidated
financial statements in Item 15 in this annual report on Form 10-K.
During the year ended December 31, 2024 , we recognized $129.3 million of gains primarily related to dispositions o f seven
real estate assets in our San Diego, Seattle, Maryland, and Research Triangle markets. The gains were classified in gain on sales of
real estate in our consolidated statement of operations for the year ended December 31, 2024 .
Other comprehensive income
Other comprehensive income of $16.9 million for the year ended December 31, 2025 , was primarily due to unrealized foreign
currency translation gains of $15.3 million related to our operations in Canada and a $1.7 million reclassification of previously
unrealized foreign currency translation losses upon completion of the disposition of our remaining asset in Asia. This was partially offset
by $148 thousand of unrealized losses resulting from the changes in the fair value of our cross-currency swap agreements due to the
strengthening of the Canadian dollar since the execution of these agreements on July 29, 2025. Refer to Note 11 – “Hedge
agreements” to our consolidated financial statements for additional information.
Total other comprehensive loss o f $30.4 million for the year ended December 31, 2024 was primarily due to an unrealized
foreign currency translation loss related to our operations in Canada.
Summary of capital expenditures
Our construction spending for the year ended December 31, 2025 and projected spending for the year ending December 31,
2026 consisted of the following (in thousands):
Year Ended
December 31, 2025
Projected Midpoint for the
Year Ending
December 31, 2026
Construction of Class A/A+ properties:
Active construction projects
Includes development and redevelopment under construction (1)
Future pipeline pre-construction
Primarily Megacampus expansion pre-construction work (entitlement, design,
and site work)
Revenue- and non-revenue-enhancing capital expenditures (3)
Construction spending (before contributions from noncontrolling interests or
tenants)
Contributions from noncontrolling interests (consolidated real estate joint
ventures)
Tenant-funded and -built landlord improvements
Total construction spending
2026 guidance range for construction spending
(1) Includes smaller conversions to laboratory space through redevelopment.
(2) Approximately 75% represents capitalized costs.
(3) Represents revenue- and non-revenue-enhancing capital expenditures before contributions from noncontrolling interests and tenant-funded and tenant-built landlord
improvements.
(4) The top two revenue- and non-revenue-enhancing capital expenditure projects in 2026 represent approximately 55% of the total spending within this category. The first
project relates to a property located at the Alexandria Center ® for Advanced Technologies – South San Francisco Megacampus in our South San Francisco submarket,
which is leased to a multinational pharmaceutical tenant and is undergoing its first major renovation in 12 years. The second project relates to a property at the
Alexandria Technology Square ® Megacampus in our Cambridge submarket, which is undergoing its first major renovation in 16 years.
(5) Represents contractual capital commitments from existing consolidated real estate joint venture partners to fund construction.
Projected capital contributions from partners in consolidated real estate joint ventures to fund construction
The following table summarizes projected capital contributions from partners in our existing consolidated joint ventures to fund
construction through 2027 and beyond (in thousands):
Projected timing
Amount (1)
Fiscal year 2026
2027 and beyond
Total
(1) Amounts represent reductions to our consolidated construction spending.
Average real estate basis used for capitalization of interest
Our construction spending includes capitalized interest. The table below provides key categories of interest capitalized during
the year ended December 31, 2025 (in thousands):
Average Real Estate
Basis Capitalized
During 2025
Percentage of Total
Average Real Estate
Basis Capitalized
Construction of Class A/A+ properties:
Development and redevelopment of projects under construction:
2026 stabilization
2027-2028 stabilization
Evaluating business strategy
Repositioning and smaller redevelopment projects
Future pipeline projects with critical pre-construction milestones during 2026:
Megacampus projects
Non-Megacampus projects
Assets sold in 2025 or designated as held for sale as of December 31, 2025 (3)
Total average real estate basis capitalized (4)
(1) Includes the real estate basis related to the 899,259 RSF of vacant space as of December 31, 2025 that is leased with future delivery. The weighted-average expected
delivery date is approximately August 2026 .
(2) Approximately 74% of future pipeline projects are expected to reach anticipated pre-construction milestones, including various phases of entitlement, design, site work,
and other activities necessary to begin aboveground vertical construction, on a weighted-average real estate investment basis by May 2026 . At each milestone date, we
will evaluate whether to proceed with additional pre-construction and/or construction activities based on leasing demand and/or market conditions, pause future
investments, or consider the potential dispositions of real estate assets.
(3) The weighted-average date as of which capitalization of interest ceased was in early December 2025.
(4) In addition to capitalized interest, we incur additional capitalized project costs, including property taxes, insurance, payroll, and other costs directly related and essential
to the construction of Class A/A+ properties. If we cease activities necessary to prepare a project for its intended use, costs related to such project are expensed as
incurred. Annualized capitalized operating expenses and payroll represent approximately 2% and 1% , respectively, of the total average real estate basis subject to
capitalization for the year ended December 31, 2025 .
Projected results
Our 2026 guidance includes certain forward-looking non-GAAP financial measures, such as funds from operations as
adjusted, net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2026 annualized, and fixed-charge coverage ratio – fourth
quarter of 2026 annualized, that differ from measures calculated in accordance with GAAP. These non-GAAP measures are in addition
to, and not a substitute for or superior to, financial measures prepared in accordance with GAAP and should be considered in
conjunction with our GAAP financial measures. We are unable to provide corresponding GAAP measures on a forward-looking basis, or
a reconciliation from these GAAP measures to the non-GAAP measures on a forward-looking basis, as we are not able to forecast the
net income or loss of future periods without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or
amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
financing decisions, as well as quarterly and annual components such as gain on sales of real estate, impairments of real estate and
non-real estate investments, and unrealized gains or losses on non-real estate investments. Our attempt to predict these amounts may
produce significant but inaccurate estimates, which would be potentially misleading for our investors. Refer to “ Definitions and
reconciliations ” included in Part II in this annual report on Form 10-K for additional details about these non-GAAP measures.
Projected 2026 Funds From Operations per Share Attributable to Alexandria’s Common Stockholders – Diluted
Funds from operations per share and funds from operations per share, as adjusted
Midpoint
Key Assumptions (1)
(Dollars in millions)
2026 Guidance
Low
High
Occupancy percentage for operating properties in North America as of December 31, 2026 (2)
Lease renewals and re-leasing of space:
Rental rate changes
Rental rate changes (cash basis)
Same property performance:
Net operating income
Net operating income (cash basis)
Straight-line rent revenue
General and administrative expenses
Capitalization of interest (3)
Interest expense
Realized gains on non-real estate investments (4)
(1) Our assumptions presented in the table above are subject to a number of variables and uncertainties, including those discussed as “ Forward-looking statements ” under
Part I; “ Item 1A. Risk factors ”; and “ Item 7. Management’s discussion and analysis of financial condition and results of operations ”. To the extent our full-year earnings
guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance.
(2) Our guidance for operating occupancy percentage in North America as of December 31, 2026 assumes an approximate 2% benefi t related to a range of assets with
vacancy that could potentially be sold during 2026 and/or qualify for designation as held for sale by December 31, 2026 but that have not yet qualified for such
designation as of December 31, 2025.
(3) Refer to “Average real estate basis used for capitalization of interest” in Item 7 for additional details.
(4) Represents realized gains and losses included in funds from operations per share – diluted, as adjusted. Excludes unrealized gains and losses and significant
impairments realized on non-real estate investments, if any. Refer to Note 7 – “Investments” to our consolidated financial statements in Item 15 for additional details.
Key Credit Metric Targets (1)
2026 Guidance
Net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2026 annualized
Fixed-charge coverage ratio – fourth quarter of 2026 annualized
(1) Refer to “ Definitions and reconciliations ” in Item 7 for additional information.
Capital resources
We expect that our principal liquidity needs for the year ending December 31, 2026 will be satisfied by the following multiple
sources of capital, as shown in the table below. There can be no assurance that our sources and uses of capital will not be materially
higher or lower than these expectations.
Key Sources and Uses of Capital
(In millions)
2026 Guidance
Range
Midpoint
Sources of capital:
Reduction in debt (1)
Net cash provided by operating activities after dividends
Dispositions and sales of partial interests (2)
Total sources of capital
Uses of capital:
Construction
Total uses of capital
Reduction in debt (included above):
Repayment of secured notes payable with 2026 maturities (3)
Unsecured senior line of credit, commercial paper program, and other
Reduction in debt
(1) Our debt repayment goals include repaying existing short-term borrowings, including amounts outstanding on our commercial paper program, repaying our 2026
unsecured senior note payable maturities aggregating $650 million, and potentially repaying other unsecured senior notes payable, including our 2027 maturity.
(2) We expect to achieve a weighted-average capitalization rate on our projected 2026 non-core operating dispositions (includes stabilized and non-stabilized properties and
excludes land) in the 8.5%–9.5% range. We expect dispositions of land to represent 25%–35% of our total dispositions and sales of partial interests for the year ending
December 31, 2026. We expect the remaining balance to include approximately 25%–35% core assets and 35%–45% non-core assets. As of January 26, 2026 , our
share of pending transactions subject to non-refundable deposits, signed letters of intent, or purchase and sale agreement negotiations aggregated $180.7 million .
(3) In January 2026 , we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity, funded temporarily with short-term borrowings under our commercial
paper program. We expect to repay these temporary borrowings with proceeds from future dispositions and sales of partial interests. No gain or loss was incurred in
connection with this repayment.
The key assumptions behind the sources and uses of capital in the table above include a favorable real estate transaction and
capital market environments, performance of our core operating properties, lease-up and delivery of current and future development
and redevelopment projects, and leasing activity. Our expected sources and uses of capital are subject to a number of variables and
uncertainties, including those discussed as “Forward-looking statements” under Part I; “ Item 1A. Risk factors ”; and “ Item 7.
Management’s discussion and analysis of financial condition and results of operations ” in this annual report on Form 10-K. We expect to
update our forecast for key sources and uses of capital on a quarterly basis.
Key considerations for funds from operations and adjusted EBITDA for the three months ending March 31, 2026
The following key considerations are expected to impact our funds from operations per share for the three months ended
March 31, 2026. These items will also affect our Adjusted EBITDA beginning in the first quarter of 2026. As a result, we expect our net
debt and preferred stock to Adjusted EBITDA ratio to temporarily increase in the first quarter of 2026 (on a quarter annualized basis) by
approximately 1.0x to 1.5x highe r th an our annualized fourth quarter 2025 ratio of 5.7x . We expect this ratio to trend downward through
the remainder of 2026 as we make progress on our disposition and sales of partial interests program, with a target net debt and
preferred stock to Adjusted EBITDA ratio of 5.6x to 6.2x for the annualized fourth quarter of 2026, which is unchanged from the initial
2026 guidance provided on December 3, 2025.
Dispositions for the three months ended December 31, 2025
• We completed $1.47 billion of dispositions during the three months ended December 31, 2025. These dispositions had annual
net operating income of $118 million (based on consolidated third quarter of 2025 annualized results) with a weighted-average
disposition date of December 9, 2025 . Refer to “Dispositions and sales of partial interests” in Item 2 for additional details.
2026 key lease expirations with expected downtime
• There are key lease expirations primarily in our Greater Boston, San Francisco Bay Area, and San Diego markets, aggregating
1.2 million RSF, with a weighted‑average lease expiration date in April 2026 and annual rental revenue of $71 million . These
leases are expected to become vacant upon expiration, and we anticipate downtime on these spaces to range from 6 to 24
months on a weighted‑average basis. 150,822 RSF has been leased or is under negotiations and we have identified
prospective tenants or have early negotiations for another 468,470 RSF . We expect a decline in net operating income of
approximately $14 million for the three months ending March 31, 2026, compared to the three months ended December 31,
2025, related to the portion of these leases that are scheduled to expire in the first quarter of 2026, which includes operating
expenses that will not be recoverable once the spaces become vacant. Refer to “Contractual lease expirations” in Item 2 for
additional details.
Certain items included in fourth quarter 2025 results not expected to reoccur in the first quarter of 2026
• During the fourth quarter of 2025, we terminated a lease at one property in our South San Francisco submarket aggregating
170,618 RSF, which had generated annual rental revenue of $11.4 million , ahead of its contractual expiration in early 2027 .
The termination allowed us to re‑lease 100% of the space to a multinational pharmaceutical tenant, with occupancy expected
to commence in the second half of 2026 following the completion of tenant improvements. As a result of the termination, we
recognized incremental rental revenue of $8.4 million during the fourth quarter of 2025, primarily from a termination fee, net of
the deferred rent balances written off.
• We recognized an asset management fee paid by our joint venture partner aggregating $7.0 million in connection with the
disposition of 409 and 499 Illinois Street during the fourth quarter of 2025, which is included in other income. Other income for
the three months ended December 31, 2025 was $25.5 million , or 3.4% of total revenues, compared to an average of
$19.5 million , or 2.5% of total revenues, for the preceding five quarters.
Potential tenant wind-downs
• Our 2026 guidance assumes reduction of rent in 2026 aggregatin g $20–$25 million (or approximately $6 million per quarter at
the midpoint of the range) related to potential tenant wind-downs and downtime without immediate backfill.
General and administrative expenses
• General and administrative expenses for the year ended December 31, 2025 was $117.0 million and $28.0 million for the
fourth quarter of 2025. Our guidance range for 2026 general and administrative expenses is $134 million to $154 million , with a
midpoint of $144 million , or a quarterly average of approximately $36 million . Despite the anticipated increase in general and
administrative expenses in 2026 compared to 2025, the midpoint of our guidance range for 2026 of $144 million , represents a
14% reduction compared to 2024, and cumulative anticipated savings aggregating $76 million for 2025 and 2026.
R ealized gains on non-real estate investments
• Realized gains included in funds from operations per share – diluted, as adjusted, for the year ended December 31, 2025 were
$115.7 million and $21.1 million fo r the fourth quarter of 2025. O ur guidance range for 2026 realized gains on non-real estate
investments is $60 million to $90 million , with a midpoint of $75 million (or a quarterly average of approximately $18.8 million ).
Refer to “Investments” in Item 7 for additional details.
Consolidated and unconsolidated real estate joint ventures
We present components of balance sheet and operating results information for the noncontrolling interest share of our
consolidated real estate joint ventures and for our share of investments in unconsolidated real estate joint ventures to help investors
estimate balance sheet and operating results information related to our partially owned entities. These amounts are estimated by
computing, for each joint venture that we consolidate in our financial statements, the noncontrolling interest percentage of each financial
item to arrive at the cumulative noncontrolling interest share of each component presented. In addition, for our real estate joint ventures
that we do not control and do not consolidate, we apply our economic ownership percentage to the unconsolidated real estate joint
ventures to arrive at our proportionate share of each component presented. Refer to Note 4 – “Consolidated and unconsolidated real
estate joint ventures” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for further discussion.
Consolidated Real Estate Joint Ventures (1)
Property/Market/Submarket
Noncontrolling
Interest Share
Operating RSF
50 and 60 Binney Street/Greater Boston/Cambridge/Inner Suburbs
1201 and 1208 Eastlake Avenue East/Seattle/Lake Union
400 Dexter Avenue North/Seattle/Lake Union
800 Mercer Street/Seattle/Lake Union
Unconsolidated Real Estate Joint Ventures
Property/Market/Submarket
Our Ownership
Share (8)
Operating RSF
1655 and 1725 Third Street/San Francisco Bay Area/Mission Bay
101 West Dickman Street/Maryland/Beltsville
Refer to “ Joint venture financial information ” under “ Definitions and reconciliations ” in Item 7 for additional details.
(1) In addition to the real estate joint ventures listed, we have one consolidated real estate joint venture in the Greater Boston market in which a partner holds a $49.6 million
redeemable noncontrolling interest earning a fixed return as of December 31, 2025 .
(2) Represents a property currently under construction or in our future development and redevelopment pipeline. Refer to “New Class A/A+ development and redevelopment
properties” in Item 2 for additional details.
(3) Includes 1450, 1500, and 1700 Owens Street and 455 Mission Bay Boulevard South.
(4) Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4135, 4155, 4161, 4165, 4224, and 4242 Campus Point Court.
(5) The noncontrolling interest share of our real estate joint venture partner is anticipated to decrease to 25%, as we expect to fund the majority of future construction costs
at the campus until our ownership interest increases to 75%, after which future capital would be contributed pro rata with our partner. Refer to “New Class A/A+
development and redevelopment properties: current projects” in Item 2 for additional details.
(6) Includes 9605, 9645, 9675, 9725, 9735, 9805, 9808, 9855, and 9868 Scranton Road and 10055, 10065, and 10075 Barnes Canyon Road.
(7) Includes 9965, 9975, 9985, and 9995 Summers Ridge Road.
(8) In addition to the real estate joint ventures listed, we hold an interest in two insignificant unconsolidated real estate joint ventures.
(9) Represents a joint venture with a local real estate operator in which our joint venture partner manages the day-to-day activities that significantly affect the economic
performance of the joint venture.
The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of December
31, 2025 (dollars in thousands):
Maturity
Date
Stated Rate
Interest
Rate (1)
Our
Share
Unconsolidated Joint Venture
Aggregate
Commitment
Debt Balance (2)
101 West Dickman Street
SOFR+1.95%
1655 and 1725 Third Street (4)
(1) Includes interest expense and amortization of loan fees.
(2) Represents outstanding principal, net of unamortized deferred financing costs, as of December 31, 2025 .
(3) This loan is subject to a fixed SOFR floor of 0.75%.
(4) During the three months ended March 31, 2025, the unconsolidated real estate joint venture refinanced $500 million of its $600 million existing fixed-rate debt with a new
secured note payable maturing in 2035 . The remaining debt balance of approximately $100 million was repaid through contributions from the unconsolidated joint
venture partners, including our share of $10.8 million .
The following tables present information related to the operating results and financial positions of our consolidated and
unconsolidated real estate joint ventures as of and for the three months and year ended December 31, 2025 (in thousands):
Noncontrolling Interest Share of Consolidated
Real Estate Joint Ventures
Our Share of Unconsolidated
Real Estate Joint Ventures
December 31, 2025
December 31, 2025
Three Months Ended
Year Ended
Three Months Ended
Year Ended
Total revenues
Rental operations
General and administrative
Interest
Depreciation and amortization of
real estate assets
Impairment of real estate
Gain on sale of real estate of
consolidated JV
Gain on sale of interest in
unconsolidated JV
Fixed returns allocated to
redeemable noncontrolling
interests (3)
Straight-line rent and below-market
lease revenue
Funds from operations (4)
Refer to “ Joint venture financial information ” under “ Definitions and reconciliations ” in Item 7 for additional details.
(1) Represents our partners’ share of impairment charges recognized in connection with real estate properties held by consolidated joint ventures at 601, 611, 651, 681,
685, 701, and 751 Gateway Boulevard and 285, 299, 307, and 345 Dorchester Avenue. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to
our consolidated financial statements in Item 15 for additional information.
(2) Relates to our partner’s share of the gain on sale of real estate recognized upon the disposition of the properties at 409 and 499 Illinois Street.
(3) Represents an allocation of joint venture earnings to redeemable noncontrolling interests for properties in the Greater Boston and San Francisco Bay Area markets.
These redeemable noncontrolling interests earn a fixed return on their investment rather than participate in the operating results of the properties.
(4) Refer to “ Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders ” under “ Definitions
and reconciliations ” in Item 7 for the definition and its reconciliation from the most directly comparable financial measure presented in accordance with GAAP.
As of December 31, 2025
Noncontrolling Interest
Share of Consolidated
Real Estate Joint Ventures
Our Share of
Unconsolidated
Real Estate Joint Ventures
Investments in real estate
Cash, cash equivalents, and restricted cash
Other assets
Secured notes payable
Other liabilities
Redeemable noncontrolling interests
During the years ended December 31, 2025 and 2024 , our consolidated real estate joint ventures distributed an aggregate of
$951.8 million and $256.7 million , respectively, to our joint venture partners. Refer to our consolidated statements of cash flows and
Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 in this annual
report on Form 10-K for additional information.
Investments
We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. The
tables below summarize components of our investment income (loss) and non-real estate investments (in thousands). Refer to Note 7
– “Investments” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.
Year Ended
December 31, 2025
December 31, 2024
Realized (losses) gains:
Realized gains
Impairment of non-real estate investments
Significant realized loss
Unrealized gains (losses)
Investment loss
December 31, 2025
December 31, 2024
Investments
Cost
Unrealized
Gains
Unrealized
Losses
Carrying
Amount
Carrying Amount
Publicly traded companies
Entities that report NAV
Entities that do not report NAV:
Entities with observable price changes
Entities without observable price changes
Investments accounted for under the equity method
December 31, 2025
December 31, 2024
Public/Private Mix (Cost)
Tenant/Non-Tenant Mix (Cost)
Tenant
Public
Non-Tenant
Private
(1) In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss of $103.3 million on one
transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated joint venture
sold these securities and distributed $39.9 million to us in December 2025.
(2) Primarily relates to the increase in fair values of our investments in publicly traded entities during the year ended December 31, 2025 .
(3) Primarily relates to the accounting reclassifications of unrealized gains recognized in prior periods into realized gains upon our realization of investments during the
year ended December 31, 2024 .
(4) Represents 2.5% of gross assets as of December 31, 2025 . Refer to “ Gross assets ” under “ Definitions and reconciliations ” in Item 7 for additional details.
Liquidity
Liquidity
Limited Outstanding Borrowings and
Significant Availability on
Unsecured Senior Line of Credit
(in millions)
(In millions)
Availability under our unsecured senior line of credit, net of
amounts outstanding under our commercial paper program
Cash, cash equivalents, and restricted cash
Investments in publicly traded companies
Liquidity as of December 31, 2025
We expect to meet certain long-term liquidity requirements, such as requirements for development, redevelopment, other
construction projects, capital improvements, tenant improvements, property acquisitions, equity repurchases, leasing costs, revenue-
and non-revenue-enhancing capital expenditures, scheduled debt maturities, distributions to noncontrolling interests, and payment of
dividends, through net cash provided by operating activities, periodic asset dispositions, strategic real estate joint ventures, long-term
secured and unsecured indebtedness, borrowings under our unsecured senior line of credit, issuances under our commercial paper
program, and issuances of additional debt and/or equity securities.
We also expect to continue meeting our short-term liquidity and capital requirements, as further detailed in this section,
generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating
activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT.
For additional information on our liquidity requirements related to our contractual obligations and commitments, refer to
Note 5 – “Leases” and Note 10 – “Secured and unsecured senior debt” to our consolidated financial statements in Item 15 in this annual
report on Form 10-K.
Over the next several years, our balance sheet, capital structure, and liquidity objectives are as follows:
• Retain net cash flows from operating activities after payment of dividends and distributions to noncontrolling interests for
investment in development and redevelopment projects and/or acquisitions;
• Maintain significant balance sheet liquidity;
• Maintain a strong credit profile and relative long-term cost of capital;
• Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt,
secured debt, selective real estate asset sales, strategic real estate joint ventures, non-real estate investment sales, and
common stock;
• Maintain commitment to long-term capital to fund growth;
• Maintain prudent laddering of debt maturities;
• Maintain solid credit metrics;
• Prudently manage variable-rate debt exposure;
• Maintain a large unencumbered asset pool to provide financial flexibility;
• Fund common stock dividends and distributions to noncontrolling interests from net cash provided by operating activities;
• Manage a disciplined level of development and redevelopment projects as a percentage of our gross real estate assets;
and
• Maintain high levels of pre-leasing and percentage leased in development and redevelopment projects.
The following table presents the availability under our unsecured senior line of credit, net of amounts outstanding under our
commercial paper program; cash, cash equivalents, and restricted cash; and investments in publicly traded companies as of
December 31, 2025 (in thousands):
Description
Stated Rate
Aggregate
Commitments
Outstanding
Balance
Remaining
Commitments/
Liquidity
Availability under our unsecured senior line of credit, net of
amounts outstanding under our commercial paper program
SOFR+0.855%
Cash, cash equivalents, and restricted cash
Investments in publicly traded companies
Liquidity as of December 31, 2025
Cash, cash equivalents, and restricted cash
As of December 31, 2025 and 2024 , we had $553.8 million and $559.8 million , respectively, of cash, cash equivalents, and
restricted cash. We expect existing cash, cash equivalents, and restricted cash, net cash provided by operating activities, proceeds
from real estate asset sales, sales of partial interests, strategic real estate joint ventures, non-real estate investment sales, borrowings
under our unsecured senior line of credit, issuances under our commercial paper program, issuances of unsecured senior notes
payable, and issuances of common stock to continue to be sufficient to fund our operating activities and cash commitments for investing
and financing activities, such as regular quarterly dividends, distributions to noncontrolling interests, scheduled debt repayments,
acquisitions, and certain capital expenditures, including expenditures related to construction activities and any common stock
repurchases.
Cash flows
We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following
table summarizes changes in our cash flows for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31,
Change
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Net cash used in financing activities
Operating activities
Cash flows provided by operating activities are primarily dependent upon the occupancy level of our asset base, the rental
rates of our leases, the collectibility of rent and recovery of operating expenses from our tenants, the timing of completion of
development and redevelopment projects, and the timing of acquisitions and dispositions of operating properties. Net cash provided by
operating activities for the year ended December 31, 2025 decreased by $90.5 million to $1.41 billion , compared to $1.50 billion for the
year ended December 31, 2024 . This 6.0% decrease primarily reflects a $97.4 million change in o perating assets and liabilities,
including tenant receivables, deferred leasing costs, other assets, and accounts payable, accrued expenses, and tenant security
deposits.
Investing activities
Cash provided by (used in) investing activities for the years ended December 31, 2025 and 2024 consisted of the following (in
thousands):
Year Ended December 31,
Change
Sources of cash from investing activities:
Proceeds from sales of real estate
Sales of and distributions from non-real estate investments
Change in escrow deposits
Return of capital from unconsolidated real estate joint ventures
Uses of cash for investing activities:
Purchases of real estate
Additions to real estate
Change in escrow deposits
Investments in unconsolidated real estate joint ventures
Additions to non-real estate investments
Net cash provided by (used in) investing activities
The change in net cash provided by (used in) investing activities for the year ended December 31, 2025 , compared to the year
ended December 31, 2024 , w as primarily due to an increased source of cash from proceeds from sales of real estate and decreased
use of cash for purchases of and additions to real estate. Refer to Note 3 – “Investments in real estate” to our consolidated financial
statements in Item 15 in this annual report on Form 10-K for additional information.
Financing activities
Cash flows used in financing activities for the years ended December 31, 2025 and 2024 consisted of the following (in
thousands):
Year Ended December 31,
Change
Borrowings under secured notes payable
Repayments of borrowings under secured notes payable
Proceeds from issuance of unsecured senior notes payable
Repayment of unsecured senior note payable
Proceeds from issuances under commercial paper program
Repayments of borrowings under commercial paper program
Payments of loan fees
Changes related to debt
Contributions from and sales of noncontrolling interests
Distributions to and purchases of noncontrolling interests
Proceeds from issuance of common stock
Repurchase of common stock
Dividends on common stock
Taxes paid related to net settlement of equity awards
Net cash used in financing activities
Sources of capital
Net cash provided by operating activities after dividends
We expect to retain $475 million to $575 million of net cash flows from operating activities after payment of common stock
dividends and distributions to noncontrolling interests for the year ending December 31, 2026 . For purposes of this calculation, changes
in operating assets and liabilities representing timing differences are excluded. For the year ending December 31, 2026 , we expect our
recently delivered projects, our development and redevelopment projects expected to be delivered, and contributions from Same
Properties to contribute to income from rentals, net operating income, and cash flows. We anticipate contractual near-term growth in
annual net operating income (cash basis) of $26 million related to the commencement of contractual rents on the projects recently
placed into service that are near the end of their initial free rent period. Refer to “ Cash flows ” in Item 7 in this annual report on Form 10-
K for a discussion of cash flows provided by operating activities for the year ended December 31, 2025 .
Debt
We expect to fund a portion of our capital needs for 2026 and beyond from issuances under our commercial paper program,
issuances of unsecured senior notes payable, and/or borrowings under our unsecured senior line of credit, and/or borrowings under
secured construction loans.
A s of December 31, 2025 , our unsecured senior line of credit, which matures in 2030 , including extension options under our
control, had aggregate commitments of $5.0 billion and bore an interest rate of SOFR plus 0.855% . In addition to the cost of borrowing,
the unsecured senior line of credit is subject to an annual facility fee of 0.145% based on the aggregate commitments outstanding.
Based upon our ability to achieve certain annual sustainability targets, the interest rate and facility fee rate are also subject to upward or
downward adjustments of up to four basis points with respect to the interest rate and up to one basis point with respect to the facility fee
rate.
Based on certain sustainability metrics achieved in accordance with the terms of our unsecured senior line of credit
agreement, the borrowing rate was reduced by two basis points to SOFR plus 0.855% , from SOFR plus 0.875% , and the facility fee
was reduced by 0.5 basis point to 0.145% from 0.15% . As of December 31, 2025 , we had no outstanding balance on our unsecured
senior line of credit.
Our commercial paper program provides us with the ability to issue up to $2.50 billion of commercial paper notes with a
maturity of generally 30 days or less and with a maximum maturity of 397 days from the date of issuance. Our commercial paper
program is back-stopped by our unsecured senior line of credit, and at all times we expect to retain a minimum undrawn amount of
borrowing capacity under our unsecured senior line of credit equal to any outstanding balance under our commercial paper program.
We use borrowings under the program to fund short-term capital needs. The notes issued under our commercial paper program are
sold under customary terms in the commercial paper market. They are typically issued at a discount to par, representing a yield to
maturity dictated by market conditions at the time of issuance. In the event we are unable to issue commercial paper notes or refinance
outstanding commercial paper notes under terms equal to or more favorable than those under the unsecured senior line of credit, we
expect to borrow under the unsecured senior line of credit. The commercial paper notes sold during the year ended December 31, 2025
were issued at a weighted-average yield to maturity of 4.48% . As of December 31, 2025 , we had $353.2 million of commercial paper
notes outstanding.
In February 2025, we issued $550.0 million of unsecured senior notes payable, due 2035 , with an interest rate of 5.50% .
In January 2026 , we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity, funded temporarily with
borrowings under our commercial paper program. We expect to repay these temporary borrowings with proceeds from future
dispositions and sales of partial interests. No gain or loss was incurred in connection with this repayment.
The following table presents our average debt outstanding and weighted-average interest rates during the year ended
December 31, 2025 (dollars in thousands):
Year Ended December 31, 2025
Average Debt
Outstanding
Weighted-Average
Interest Rate
Long-term fixed-rate debt
Short-term variable-rate unsecured senior line of credit and commercial paper
program debt
Blended-average interest rate
Loan fee amortization and annual facility fee related to unsecured senior line of
credit
Total/weighted average
Real estate dispositions and sales of partial interests
We expect to continue to focus on the disciplined execution of select sales of real estate. Future sales will provide an important
source of capital to fund our development and redevelopment projects and potential opportunistic share repurchases, capital for growth,
and to reduce debt. We may also consider additional sales of partial interests in core Class A/A+ properties, development projects, and/
or land. For the year ending December 31, 2026 , we expect real estate dispositions and sales of partial interests in real estate assets to
range from $2.10 billion to $3.70 billion . The amount of asset sales necessary to meet our forecasted sources of capital will vary
depending upon the amount of EBITDA associated with the assets sold.
Refer to Note 3 – “Investments in real estate” and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our
consolidated financial statements in Item 15 and to “Dispositions and sales of partial interests” in Item 2 in this annual report on Form
10-K for additional information on our real estate dispositions.
As a REIT, we are generally subject to a 100% tax on the net income from real estate asset sales that the IRS characterizes as
“prohibited transactions.” We do not expect our sales will be categorized as prohibited transactions. However, unless we meet certain
“safe harbor” requirements, whether a real estate asset sale is a “prohibited transaction” will be based on the facts and circumstances
of the sale. Our real estate asset sales may not always meet such “safe harbor” requirements. Refer to “ Item 1A. Risk factors ” in this
annual report on Form 10-K for additional information about the “prohibited transaction” tax.
Common equity transactions
During the year ended December 31, 2025 , we have not issued any common stock under our ATM program. As of
December 31, 2025 , the remaining aggregate amount available under our ATM program for future sales of common stock was $1.47
billion .
Other sources
As a well-known seasoned issuer, we may, from time to time issue securities at our discretion based on our needs and market
conditions, including, as necessary, to balance our use of incremental debt capital.
Additionally, we, together with joint venture partners, hold interests in real estate joint ventures that we consolidate in our
financial statements. These existing joint ventures provide significant equity capital to fund a portion of our future construction spending,
and our joint venture partners may also contribute equity into these entities for financing-related activities. From January 1, 2026
through December 31, 2027 and beyond, we expect to receive capital contributions aggregating $137.0 million from existing
consolidated real estate joint venture partners to fund construction. During the year ending December 31, 2026 , contributions from
noncontrolling interests from existing joint venture partners are expected to aggregate to up to $100.0 million at the midpoint of our
guidance range for 2026 construction spending.
Uses of capital
Summary of capital expenditures
One of our primary uses of capital relates to the development, redevelopment, pre-construction, and construction of properties.
We currently have projects in our development and redevelopment pipeline aggregating 3.5 million RSF of Class A/A+ properties
undergoing construction. We incur capitalized construction costs related to development, redevelopment, pre-construction, and other
construction activities. We also incur additional capitalized project costs, including interest, property taxes, insurance, and other costs
directly related and essential to the development, redevelopment, pre-construction, or construction of a project, during periods when
activities necessary to prepare an asset for its intended use are in progress. Refer to “New Class A/A+ development and redevelopment
properties: current projects” in Item 2 and “Summary of capital expenditures” in Item 7 in this annual report on Form 10-K for additional
information on our capital expenditures.
We capitalize interest cost as a cost of the project only during the period in which activities necessary to prepare an asset for
its intended use are ongoing, provided that expenditures for the asset have been made and interest cost has been incurred. Capitalized
interest, classified in investments in real estate in our consolidated balance sheets, aggregated $330.4 million for the year ended
December 31, 2025 , consistent with $331.0 million capitalized during the year ended December 31, 2024 . This reflects a consistent
weighted-average capitalized cost basis of $8.15 billion for the year ended December 31, 2025 , as compared to $8.12 billion for the
year ended December 31, 2024 .
Property taxes, insurance on real estate, and indirect project costs, such as construction, administration, legal fees, and office
costs that clearly relate to projects under development or construction, are capitalized as incurred during the period an asset is
undergoing activities to prepare it for its intended use. We capitalized payroll and other indirect costs related to development,
redevelopment, pre-construction, and construction projects, aggregating $97.1 million and $100.9 million , and property taxes, insurance
on real estate and indirect project costs aggregating $145.4 million and $132.3 million during the years ended December 31, 2025 and
2024 , respectively.
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. Should we cease activities necessary to prepare an asset for its intended use, the
interest, taxes, insurance, and certain other direct and indirect project costs related to the asset would be expensed as incurred.
Expenditures for repairs and maintenance are expensed as incurred.
Fluctuations in our development, redevelopment, and construction activities could result in significant changes to total
expenses and net income. For example, had we experienced a 10% reduction in development, redevelopment, and construction
activities without a corresponding decrease in indirect project costs, including interest and payroll, total expenses would have increased
by approximately $57.3 million for the year ended December 31, 2025 .
We use third-party brokers to assist in our leasing activity, who are paid on a contingent basis upon successful leasing. We are
required to capitalize initial direct costs related to successful leasing transactions that result directly from and are essential to the lease
transaction and would not have been incurred had that lease transaction not been successfully executed. During the year ended
December 31, 2025 , we capitalized total initial direct leasing costs of $116.8 million . Costs that we incur to negotiate or arrange a lease
regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and other costs, are
expensed as incurred.
Real estate acquisitions and common stock repurchase program
Our common stock repurchase program, authorized by our Board of Directors in December 2024 allowed for the repurchase of
up to $500.0 million of our common stock in the open market, in privately negotiated transactions, or otherwise through its expiration on
December 31, 2025 .
During January and February 2025, we repurchased 2.2 million shares of common stock under this repurchase program at an
average price per share of $96.71 , with approximately $241.8 million remaining available for additional share repurchases. No further
purchases were made under this program.
On December 8, 2025, we announced that our Board of Directors authorized a new common stock repurchase program that
allows for the repurchase of up to $500.0 million of our common stock through December 31, 2026 . This new program replaced our
prior stock repurchase program. As of the date of this report, no purchases have been made under the new program and $500.0 million
remains available for future share repurchases .
We have not made any cash acquisitions in 2025.
Dividends
During the years ended December 31, 2025 and 2024 , we paid common stock dividends of $911.5 million and $898.6 million ,
respectively. The increase of $12.9 million in dividends paid on our common stock for the year ended December 31, 2025 , compared to
the year ended December 31, 2024 , was primarily due to an increase in the related dividends to $5.28 per common share paid during
the year ended December 31, 2025 from $5.14 per common share paid during the year ended December 31, 2024 .
During the three months ended December 31, 2025 , we cut our quarterly common stock dividend to $0.72 per share from
$1.32 for the three months ended September 30, 2025, representing a 45% reduction . The decision to reduce the declared dividend per
common share reflects our commitment to maintaining the strength of our balance sheet, enhancing financial flexibility, and preserving
liquidity of approximately $410 million on an annual basis, which will be used to support our 2026 capital plan.
We have historically funded the payment of our common stock dividends using net cash provided by operating activities. We
expect to continue funding future quarterly common stock dividends from net cash provided by operating activities, which may be
supplemented by proceeds from periodic asset dispositions, issuances of additional debt and/or equity securities, and borrowings under
our unsecured senior line of credit and/or our commercial paper program. Future dividends are at the discretion of our Board and
subject to various considerations, including net income, cash flows, capital requirements, debt covenants, market conditions, dividend
yield, taxable income, payout ratios, and other factors. There can be no assurance that we will maintain our dividends at the current
level or increase dividends in the future.
Unsecured senior notes payable and unsecured senior line of credit
The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior
notes payable as of December 31, 2025 were as follows:
Covenant Ratios (1)
Requirement
December 31, 2025
Total Debt to Total Assets
Less than or equal to 60%
Secured Debt to Total Assets
Less than or equal to 40%
Consolidated EBITDA (2) to Interest Expense
Greater than or equal to 1.5x
Unencumbered Total Asset Value to Unsecured Debt
Greater than or equal to 150%
(1) All covenant ratio titles utilize terms as defined in the respective debt agreements.
(2) 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.
In addition, the terms of the indentures, among other things, limit the ability of the Company, Alexandria Real Estate Equities,
L.P., and the Company’s subsidiaries to (i) consummate a merger, or consolidate, or sell all or substantially all of the Company’s assets
and (ii) incur certain secured or unsecured indebtedness.
The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior line
of credit as of December 31, 2025 were as follows:
Covenant Ratios (1)
Requirement
December 31, 2025
Leverage Ratio
Less than or equal to 60.0%
Secured Debt Ratio
Less than or equal to 45.0%
Fixed-Charge Coverage Ratio
Greater than or equal to 1.50x
Unsecured Interest Coverage Ratio
Greater than or equal to 1.75x
(1) All covenant ratio titles utilize terms as defined in the credit agreement.
Estimated interest payments
Estimated interest payments on our fixed-rate debt are calculated based upon contractual interest rates, including interest
payment dates and scheduled maturity dates. As of December 31, 2025 , 97.2% of our debt was fixed-rate debt. For additional
information regarding our debt, refer to Note 10 – “Secured and unsecured senior debt” to our consolidated financial statements in
Item 15 in this annual report on Form 10-K.
Ground lease obligations
Ground lease obligations as of December 31, 2025 included leases for 31 of our properties and accounted for approximately
9% of our total number of properties. Among these 31 properties, 17 properties are subject to ground leases with a weighted-average
remaining lease term of 53 years , including extension options that we are reasonably certain to exercise. These leases are with a single
lessor in our Greater Stanford submarket with whom we have extended three ground leases over the past 10 years.
Our remaining 14 properties subject to ground leases are located across multiple submarkets and have remaining lease terms
ranging from approximately 45 to 81 years . The weighted-average remaining lease term of these ground leases is 73 years , including
extension options that we are reasonably certain to exercise.
In many cases, we seek to extend our ground leases well ahead of their scheduled contractual expirations. If we are
successful in extending ground leases, we could see significant up-front or increased recurring future payments to the ground lessor
and/or increased ground lease expense, which may require us to increase our capital funding needs.
Operating lease agreements
As of December 31, 2025 , the remaining contractual payments under ground and office lease agreements in which we are the
lessee aggregated $753.4 million and $20.0 million , respectively. As of December 31, 2025 , our operating lease liability, calculated as
the present value of the remaining payments aggregating $773.4 million under our operating lease agreements, including our extension
options that we are reasonably certain to exercise, was $360.5 million and was classified in accounts payable, accrued expenses, and
other liabilities in our consolidated balance sheet. As of December 31, 2025 , the weighted-average remaining lease term of operating
leases in which we are the lessee was approximately 61 years , including extension options that we are reasonably certain to exercise,
and the weighted-average discount rate was 4.7% . Our corresponding operating lease right-of-use assets, adjusted for initial direct
leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $697.9 million .
We classify the right-of-use asset in other assets in our consolidated balance sheets. Refer to “ Lease accounting ” in Note 2 –
“Summary of significant accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for
additional information.
Commitments
As of December 31, 2025 , remaining aggregate costs under contract for the construction of properties undergoing
development, redevelopment, and improvements under the terms of leases approximated $1.03 billion . We expect payments for these
obligations to occur over one to three years, subject to capital planning adjustments from time to time. We may have the ability to cease
the construction of certain projects, which would result in the reduction of our commitments. In addition, we have letters of credit and
performance obligations aggregating $5.3 million .
We are committed to funding approximately $370.3 million related to our non-real estate investments. These funding
commitments are primarily associated with our investments in privately held entities that report NAV and expire at various dates over
the next 12 years , with a weighted-average expiration of 8.1 years as of December 31, 2025 .
Our former joint venture partner in the Greater Boston market has an option, subject to certain conditions, to obtain a
$50 million secured loan from us, which, if the option is exercised, will bear interest at 6.5% , with a floor of 9.0% and a term not to
exceed five years . As of December 31, 2025 , the option has not been exercised and is set to expire in July 2027 .
In January 2026, our partner in our consolidated joint venture at 99 Coolidge Avenue in our Cambridge/Inner Suburbs
submarket exercised its option to require us to purchase its redeemable noncontrolling interest aggregating $48.7 million plus unpaid
distributions approximating $844 thousand as of December 31, 2025. We expect to complete the redemption in the first quarter of 2026 .
In connection with the sale of a property in our San Diego market, we entered into a loan agreement with the buyer under
which we committed to provide up to $165.7 million of financing through December 30, 2029 . As of December 31, 2025 , $49.2 million of
the commitment remained available to be drawn by the borrower .
Exposure to environmental liabilities
In connection with the acquisition of all of our properties, we have obtained Phase I environmental assessments to ascertain
the existence of any environmental liabilities or other issues. The Phase I environmental assessments of our properties have not
revealed any environmental liabilities that we believe would have a material adverse effect on our financial condition or results of
operations taken as a whole, nor are we aware of any material environmental liabilities that have occurred since the Phase I
environmental assessments were completed. In addition, we carry a policy of pollution legal liability insurance covering exposure to
certain environmental losses at substantially all of our properties.
Foreign currency translation gains and losses
The following table presents the change in accumulated other comprehensive loss attributable to Alexandria Real Estate
Equities, Inc.’s stockholders during the year ended December 31, 2025 primarily due to the changes in the foreign exchange rates for
our real estate investments in Canada (in thousands). We reclassify unrealized foreign currency translation gains and losses into net
income as we dispose of these holdings.
Total
Balance as of December 31, 2024
Other comprehensive income before reclassifications
Reclassification adjustment for losses included in net income
Net other comprehensive income
Balance as of December 31, 2025
(1) Relates to the completed sale of our only remaining asset located in Asia during the three months ended December 31, 2025 .
Inflation
As of December 31, 2025 , approximately 92% of our leases (on an annual rental revenue 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. Approximately 97% of our leases (on an annual rental
revenue basis) contained effective annual rent escalations approximating 3% that were either fixed or indexed based on a consumer
price index or other indices. Accordingly, we do not believe that our cash flows or earnings from real estate operations are subject to
significant risks from inflation. A period of inflation, however, could cause an increase in the cost of issuing new unsecured senior notes
payable and our variable-rate borrowings, including borrowings under our unsecured senior line of credit and commercial paper
program, and secured loans held by our unconsolidated real estate joint ventures.
In addition, refer to “Item 1A. Risk factors” in this annual report on Form 10-K for a discussion of risks that inflation directly or
indirectly may pose to our business.
Issuer and guarantor subsidiary summarized financial information
Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act of 1933,
as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP” or the “Guarantor
Subsidiary”), an indirectly 100% owned subsidiary of the Issuer. The Issuer’s other subsidiaries, including, but not limited to, the
subsidiaries that own substantially all of its real estate (collectively, the “Combined Non-Guarantor Subsidiaries”), will not provide a
guarantee of such securities, including the subsidiaries that are partially or 100% owned by the LP. The following summarized financial
information presents on a combined basis, balance sheet information as of December 31, 2025 and 2024 , and results of operations and
comprehensive income for the years ended December 31, 2025 and 2024 for the Issuer and the Guarantor Subsidiary. The information
presented below excludes eliminations necessary to arrive at the information on a consolidated basis. In presenting the summarized
financial statements, the equity method of accounting has been applied to (i) the Issuer’s interests in the Guarantor Subsidiary, (ii) the
Guarantor Subsidiary’s interests in the Combined Non-Guarantor Subsidiaries, and (iii) the Combined Non-Guarantor Subsidiaries’
interests in the Guarantor Subsidiary, where applicable, even though all such subsidiaries meet the requirements to be consolidated
under GAAP. All assets and liabilities have been allocated to the Issuer and the Guarantor Subsidiary generally based on legal entity
ownership.
The following tables present combined summarized financial information as of December 31, 2025 and 2024 and for the years
ended December 31, 2025 and 2024 for the Issuer and Guarantor Subsidiary. Amounts provided do not represent our total consolidated
amounts (in thousands):
December 31,
Assets:
Cash, cash equivalents, and restricted cash
Other assets
Total assets
Liabilities:
Unsecured senior notes payable
Unsecured senior line of credit and commercial paper
Other liabilities
Total liabilities
Year Ended December 31,
Total revenues
Total expenses
Net loss
Net income attributable to unvested restricted stock awards
Net loss attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
As of December 31, 2025 , 328 of our 340 properties were held indirectly by the REIT’s wholly owned consolidated subsidiary,
Alexandria Real Estate Equities, L.P.
Critical accounting estimates
Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial
statements in conformity with GAAP requires us to make estimates, judgments, and assumptions that affect the reported amounts of
assets, liabilities, revenues, and expenses. We base these estimates, judgments, and assumptions on historical experience, current
trends, and various other factors that we believe to be reasonable under the circumstances.
We continually evaluate the estimates, judgments, and assumptions we use to prepare our consolidated financial statements .
C hanges in estimates, judgments, or assumptions could affect our financial position and our results of operations, which are used by
our stockholders, potential investors, industry analysts, and lenders in their evaluation of our performance.
Our critical accounting estimates are defined as accounting estimates or assumptions made in accordance with GAAP, which
involve a significant level of estimation uncertainty or subjectivity and have had or are reasonably likely to have a material impact on our
financial condition or results of operations. Our significant accounting policies, which utilize these critical accounting estimates, are
described in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements in Item 15 in this annual
report on Form 10-K. Our critical accounting estimates are described below.
Recognition of real estate acquired
Generally, our acquisitions of real estate or in-substance real estate are accounted for as asset acquisitions and not business
combinations because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable
assets (i.e., land, buildings, and related intangible assets). The accounting model for asset acquisitions requires that the acquisition
consideration (including acquisition costs) be allocated to the individual assets acquired and liabilities assumed on a relative fair value
basis. Any excess (deficit) of the consideration transferred relative to the sum of the fair value of the assets acquired and liabilities
assumed is allocated to the individual assets and liabilities based on their relative fair values.
We assess the relative fair values of tangible and intangible assets and liabilities based on:
(i) Available comparable market information;
(ii) Estimated replacement costs; or
(iii) Discounted cash flow analysis/estimated net operating income and capitalization rates.
In certain instances, we may use multiple valuation techniques and estimate fair values based on an average of multiple
valuation results. We exercise judgment to determine key assumptions used in each valuation technique. For example, to estimate
future cash flows in the discounted cash flow analysis, we are required to use judgment and make a number of assumptions, including
those related to projected growth in rental rates and operating expenses, and anticipated trends and market/economic conditions. The
use of different assumptions in the discounted cash flow analysis can affect the amount of consideration allocated to the acquired
depreciable/amortizable asset, which in turn can impact our net income due to the recognition of the related depreciation/amortization
expense in our consolidated statements of operations.
Impairment of long-lived assets
Impairment of real estate assets classified as held for sale
A property is classified as held for sale when all of the accounting criteria for a plan of sale have been met. These criteria are
described in “Investments in real estate” in Note 2 – “Summary of significant accounting policies” to our consolidated financial
statements in Item 15 in this annual report on Form 10-K. Upon classification as held for sale, we recognize an impairment charge, if
necessary, to lower the carrying amount of the real estate asset to its estimated fair value less cost to sell. The determination of fair
value can involve significant judgments and assumptions. We develop key assumptions based on the following available factors: (i)
contractual sales price, (ii) preliminary non-binding letters of intent, or (iii) other available comparable market information. If this
information is not available, we use estimated replacement costs or estimated cash flow projections that utilize estimated discount and
capitalization rates. These estimates are subject to uncertainty and therefore require significant judgment by us. We review all assets
held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to their
estimated fair values less costs to sell. Subsequently, as a result of our quarterly assessment, we may recognize an incremental
impairment charge for any decrease in the asset’s fair value less cost to sell. Conversely, we may recognize a gain for a subsequent
increase in fair value less cost to sell, limited to the cumulative net loss previously recognized.
Impairment of other long-lived assets
For each reporting period, we review current activities and changes in the business conditions of all of our long-lived assets,
including our rental properties, CIP, land held for development, right-of-use assets related to operating leases in which we are the
lessee, and intangibles, to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If
triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows, including, if
necessary, a probability-weighted approach if multiple outcomes are under consideration.
Long-lived assets to be held and used are individually evaluated for impairment when conditions exist that may indicate that
the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not
recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.
Triggering events or impairment indicators for long-lived assets to be held and used, including our rental properties, CIP, land held for
development, and intangibles, are assessed by project and include significant fluctuations in estimated net operating income,
occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs,
estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon
numerous factors, including, but not limited to, projected rental rates, exit capitalization rates, and construction costs for projects under
development, which are based on available market information, current and historical operating results, known trends, current market/
economic conditions that may affect the property, and our assumptions about the use of the asset, including, if necessary, a probability-
weighted approach if multiple outcomes are under consideration.
Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount to its
estimated fair value. If an impairmentloss is not required to be recognized, the recognition of depreciation or amortization is adjusted
prospectively, as necessary, to reduce the carrying amount of the real estate to its estimated disposition value over the remaining period
that the asset is expected to be held and used. We may also adjust depreciation of properties that are expected to be disposed of or
redeveloped prior to the end of their useful lives.
The evaluation for impairment and calculation of the carrying amount of a long-lived asset to be held and used involves
consideration of factors and calculations that are different than the estimate of fair value of assets classified as held for sale. Because of
these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an
impairment charge upon classification as held for sale.
Impairment of non-real estate investments
We hold strategic investments in publicly traded companies and privately held entities primarily involved in the life science
industry. As a REIT, we generally limit our ownership percentage in the voting stock of each individual entity to less than 10% .
Our investments in privately held entities that do not report NAV per share require our evaluation for impairment when changes
in these entities’ conditions may indicate that an impairment exists. We closely monitor these investments throughout the year for new
developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements,
capital-raising events, and merger and acquisition activities. We evaluate these investees on the basis of a qualitative assessment for
indicators of impairment by monitoring the presence of the following triggering events or 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 to 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 impairmentloss in an amount equal to the investment’s carrying
value in excess of its estimated fair value. As of each December 31, 2025 , 2024 , and 2023 , the carrying amounts of our investments in
privately held entities that do not report NAV per share accounted for 2% , 2% , and 1% of our total assets and aggregated
$536.6 million , $575.2 million , and $542.9 million , respectively. During the years ended December 31, 2025 , 2024 , and 2023 , we
recognized impairment charges aggregating 18% , 10% , and 14% , respectively, of the carrying amounts of our investments in privately
held entities that do not report NAV.
Monitoring of tenant credit quality
We monitor, on an ongoing basis, the credit quality and any related material changes of our tenants by (i) monitoring the credit
rating of tenants that are rated by a nationally recognized credit rating agency, (ii) reviewing financial statements of the tenants that are
publicly available or that are required to be delivered to us pursuant to the applicable lease, (iii) monitoring news reports regarding our
tenants and their respective businesses and industries in which they conduct business, and (iv) monitoring the timeliness of lease
payments. We have a team of employees who, among them, have an extensive educational background or experience in biology,
chemistry, industrial biotechnology, agtech, and the life science industry, as well as knowledge in finance. This team is responsible for
timely assessment, monitoring, and communication of our tenants’ credit quality and any material changes therein. During the years
ended December 31, 2025 , 2024 , and 2023 , specific write-offs and increases to our general allowance balances related to deferred rent
balances of tenants recognized in our consolidated statements of operations have not exceeded 0.8% o f our income from rentals for
each respective year. For additional information, refer to “ Monitoring of tenant credit quality ” in Note 2 – “Summary of significant
accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K.
Definitions and reconciliations
This section contains additional information on certain non-GAAP financial measures including reconciliations to the most
directly comparable financial measure calculated and presented in accordance with GAAP and the reasons why we use these
supplemental measures of performance and believe they provide useful information to investors, as well as the definitions of other
terms used in this annual report on Form 10-K.
Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’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, impairments of real estate primarily consisting of right-of-use assets and pre-acquisition costs related to
projects that we decided to no longer pursue, gains or losses on early extinguishment of debt, changes in the provision for expected
credit losses on financial instruments, significant termination fees, acceleration of stock compensation expense due to the resignations
of executive officers, 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. We compute the amount that is allocable to our unvested restricted stock awards with nonforfeitable
dividends using the two-class method. Under the two-class method, we allocate net income (after amounts attributable to noncontrolling
interests) to common stockholders and to unvested restricted stock awards with nonforfeitable dividends by applying the respective
weighted-average shares outstanding during each quarter-to-date and year-to-date period. This may result in a difference of the
summation of the quarter-to-date and year-to-date amounts. 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.
We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a
reconciliation for funds from operations on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or
amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
financing decisions, as well as components such as gain on sales of real estate, unrealized gains or losses on non-real estate
investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit
losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would
potentially be misleading for our investors.
The following table reconciles net income (loss) 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):
Year Ended December 31, 2025
Noncontrolling Interest
Share of Consolidated Real
Estate Joint Ventures
Our Share of
Unconsolidated
Real Estate Joint Ventures
Net income (loss)
Depreciation and amortization of real estate assets
Gain on sale of real estate
Impairment of real estate
Funds from operations
The following tables present a reconciliation of net income (loss) attributable to Alexandria Real Estate Equities, Inc.’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 attributable to Alexandria Real Estate Equities,
Inc.’s common stockholders – diluted, and funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common
stockholders – diluted, as adjusted, and the related per share amounts for the years ended December 31, 2025 , 2024 , and 2023 (in
thousands, except per share amounts). Per share amounts may not add due to rounding.
Year Ended December 31,
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s
common stockholders – basic and diluted
Depreciation and amortization of real estate assets
Noncontrolling share of depreciation and amortization from consolidated real
estate JVs
Our share of depreciation and amortization from unconsolidated real estate
JVs
Gain on sales of real estate
Impairment of real estate – rental properties and land
Allocation to unvested restricted stock awards
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s
common stockholders – diluted (3)
Unrealized (gains) losses on non-real estate investments
Significant realized losses on non-real estate investments
Impairment of non-real estate investments
Impairment of real estate
Loss on early extinguishment of debt
Acceleration of stock compensation expense due to executive officer
resignation
Decrease in provision for expected credit losses on financial instruments
Allocation to unvested restricted stock awards
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s
common stockholders – diluted, as adjusted
(1) Excludes our partner’s share of gain on sale of real estate aggregating $312.8 million at our consolidated real estate joint venture at 409 and 499 Illinois Street. Refer to
Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 for additional details.
(2) Refer to the table below for a summary of impairments of real estate during the year ended December 31, 2025 . Refer to Note 3 – “Investments in real estate” to our
consolidated financial statements in Item 15 for additional information.
(in thousands)
Year Ended
December 31, 2025
Impairment of real estate
Add: Our share from unconsolidated joint venture
Less: Noncontrolling interest’s share from consolidated joint ventures
Less: Write-off primarily related to ground leases
Impairment of real estate – rental properties and land
(3) Calculated in accordance with standards established by the Nareit Board of Governors.
(4) In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss of $103.3 million on one
transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated joint venture
sold these securities and distributed $39.9 million to us in December 2025.
(5) Primarily related to four non-real estate investments in privately held entities that do not report NAV.
(6) Related to the resignation of an executive officer, Daniel J. Ryan, from his position as Co-President and Regional Marketing Director – San Diego.
Year Ended December 31,
(Per share)
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s
common stockholders – diluted
Depreciation and amortization of real estate assets
Gain on sales of real estate
Impairment of real estate – rental properties and land
Allocation to unvested restricted stock awards
Funds from operations per share attributable to Alexandria Real Estate Equities,
Inc.’s common stockholders – diluted
Unrealized (gains) losses on non-real estate investments
Significant realized losses on non-real estate investments
Impairment of non-real estate investments
Impairment of real estate
Acceleration of stock compensation expense due to executive officer
resignation
Allocation to unvested restricted stock awards
Funds from operations per share attributable to Alexandria Real Estate Equities,
Inc.’s common stockholders – diluted, as adjusted
Weighted-average shares of common stock outstanding – diluted (1)
Earnings per share – diluted
Funds from operations – diluted, per share
Funds from operations – diluted, as adjusted, per share
(1) Refer to “ Weighted-average shares of common stock outstanding – diluted ” in this section for additional information.
Adjusted EBITDA and Adjusted EBITDA margin
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, changes in provision for expected
credit losses on financial instruments, 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, changes in provision for expected credit losses on financial instruments, 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 the Adjusted EBITDA margin, we divide Adjusted EBITDA by total revenues as presented in our
consolidated statements of operations. We believe that this supplemental performance measure provides investors with additional
useful information regarding the profitability of our operating activities.
We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a
reconciliation for Adjusted EBITDA on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or
amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized gains or losses on non-real estate
investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit
losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would
potentially be misleading for our investors.
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in
accordance with GAAP, to Adjusted EBITDA and calculates the Adjusted EBITDA margin for the three months and years ended
December 31, 2025 and 2024 (dollars in thousands):
Three Months Ended December 31,
Year Ended December 31,
Net (loss) income
Interest expense
Income taxes
Depreciation and amortization
Stock compensation expense
Loss on early extinguishment of debt
Gain on sales of real estate
Unrealized (gains) losses on non-real estate
investments
Significant realized losses on non-real estate
investments
Impairment of real estate
Impairment of non-real estate investments
Decrease in provision for expected credit losses on
financial instruments
Adjusted EBITDA
Total revenues
Adjusted EBITDA margin
Annual rental revenue
Annual rental revenue represents the annualized fixed base rental obligations, calculated in accordance with GAAP. It includes
the amortization of deferred revenue related to tenant-funded and tenant-built landlord improvements 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 from 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 December 31, 2025 , approximately 92% of our leases (on
an annual rental revenue 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 on net operating income and net operating income (cash basis) annualized,
excluding lease termination fees, on stabilized operating assets for the quarter preceding the date on which the property is sold, or
near-term prospective net operating income.
Capitalized interest
We capitalize interest cost as a cost of a project during periods for which activities necessary to develop, redevelop, or
reposition a project for its intended use are ongoing, provided that expenditures for the asset have been made and interest cost has
been incurred. Activities necessary to develop, redevelop, or reposition a project include pre-construction activities such as
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. If we cease activities necessary to prepare a project for its intended use, interest costs related to such project are expensed
as incurred.
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 “ Fixed-charge coverage ratio ” in this section for a reconciliation of interest expense,
the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest.
Class A/A+ properties and AAA locations
Class A/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. These properties are typically well-located, professionally managed, and well-maintained, offering a
wide range of amenities and featuring premium construction materials and finishes. Class A/A+ properties are generally newer or have
undergone substantial redevelopment and are generally expected to command higher annual rental rates compared to other classes of
similar properties. AAA locations are in close proximity to concentrations of specialized skills, knowledge, institutions, and related
businesses. It is important to note that our definition of property classification may not be directly comparable to other equity REITs.
Credit rating
Represents the credit ratings assigned by S&P Global Ratings or Moody’s Ratings as of December 31, 2025 . A credit rating is
not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.
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/A+ properties, as well as property enhancements identified during the underwriting of certain acquired properties. These efforts
are primarily concentrated in collaborative Megacampus™ ecosystems within AAA life science innovation clusters, as well as other
strategic locations that support innovation and growth. These projects are generally focused on providing high-quality, generic, and
reusable spaces that meet the real estate requirements of a wide range of tenants. Upon completion, each development or
redevelopment project is expected to generate increases 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
Development projects generally consist of the ground-up development of generic and reusable laboratory facilities.
Redevelopment projects consist of the permanent change in use of acquired office, warehouse, or shell space into laboratory space.
We generally will not commence new development projects for aboveground construction of new Class A/A+ laboratory space without
first securing significant pre-leasing for such space, except when there is solid market demand for high-quality Class A/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) 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 (ii) permanent conversion of space for highly flexible, move-in-ready 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/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 cash interest and
fixed charges. We believe that 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 computes fixed-charge coverage ratio for the three months and years ended December 31,
2025 and 2024 (dollars in thousands):
Three Months Ended December 31,
Year Ended December 31,
Adjusted EBITDA
Interest expense
Capitalized interest
Amortization of loan fees
Amortization of debt discounts
Cash interest and fixed charges
Fixed-charge coverage ratio:
– quarter annualized
– trailing 12 months
We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a
reconciliation for fixed-charge coverage ratio on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing
and/or amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized gains or losses on non-real estate
investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit
losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would
potentially be misleading for our investors.
Gross assets
Gross assets are calculated as total assets plus accumulated depreciation as of December 31, 2025 and 2024 (in thousands):
December 31,
Total assets
Accumulated depreciation
Gross assets
Incremental annual net operating income on development and redevelopment projects
Incremental annual net operating income represents the amount of net operating income, on an annual basis, expected to be
realized upon a project being placed into service and achieving full occupancy. Incremental annual net operating income is calculated
as the initial stabilized yield multiplied by the project’s total cost at completion.
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. For this calculation, we exclude any tenant-funded and tenant-built landlord improvements from our investment in the
property. Our initial stabilized yield excludes the benefit of leverage. Our cash rents related to our development and redevelopment
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, and any amortization of deferred revenue related to tenant-
funded and tenant-built landlord improvements.
• 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 December 31, 2025 , as
reported by Bloomberg Professional Services. Credit ratings from Moody’s Ratings 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.
Investments in real estate
The following table presents our new Class A/A+ development and redevelopment pipeline, excluding properties held for sale,
as a percentage of gross assets and as a percentage of annual rental revenue as of December 31, 2025 (dollars in thousands):
Percentage of
Book Value
Gross Assets
Annual Rental
Revenue
Projects under active construction
Future development projects (1) and land parcels primarily located in
Megacampuses
Total Class A/A+ development and redevelopment pipeline, excluding
properties held for sale
Properties held for sale – land parcels
Total Class A/A+ development and redevelopment pipeline
(1) Includes projects with existing buildings that are generating or can generate operating cash flows. Also includes development rights associated with existing operating
campuses.
The square footage presented in the table below is classified as operating as of December 31, 2025 . These lease expirations
or vacant space at recently acquired properties represent future opportunities for which we have the intent, subject to market conditions
and leasing, to commence first-time conversion from non-laboratory space to laboratory space, or to commence future ground-up
development:
Dev/Redev
RSF of Lease Expirations Targeted for
Development and Redevelopment
Property/Submarket
Thereafter (1)
Total
Under construction project:
Campus Point by Alexandria/University Town Center
Dev
Future projects:
446, 458, and 500 Arsenal Street/Cambridge/Inner Suburbs
Dev
3000 Minuteman Road/Greater Boston
Redev
1122 and 1150 El Camino Real/South San Francisco
Dev
2100 and 2200 Geng Road/Greater Stanford
Dev
960 Industrial Road/Greater Stanford
Dev
Campus Point by Alexandria/University Town Center
Dev
Sequence District by Alexandria/Sorrento Mesa
Dev/Redev
410 West Harrison Street/Elliott Bay
Dev
Other/Seattle
Dev
Canada
Redev
Total
(1) Includes vacant square footage as of December 31, 2025 .
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, which 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 that 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.
Megacampus™
A Megacampus ecosystem is a cluster campus that consists of approximately 1 million RSF or greater, including operating,
active development/redevelopment, and land RSF less operating RSF expected to be demolished. We consider Megacampuses that
include a minimum of 750,000 operating RSF to be Established Megacampuses. These Megacampuses have realized the scale and
flexibility that deliver strategic optionality to our tenants. We present certain metrics related to our Established Megacampuses because
we believe they facilitate a more robust understanding of certain of our operating trends.
The following table reconciles our annual rental revenue and development and redevelopment pipeline RSF, excluding
properties classified as held for sale, as of December 31, 2025 (dollars in thousands):
Annual Rental
Revenue
Development and
Redevelopment
Pipeline RSF
Megacampus
Core and non-core
Total
Megacampus as a percentage of annual rental revenue and of total development and
redevelopment pipeline RSF
Net cash provided by operating activities after dividends
Net cash provided by operating activities after dividends is reduced by distributions to noncontrolling interests, excludes
liquidating distributions from asset sales, and excludes changes in operating assets and liabilities 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 “ Adjusted
EBITDA and Adjusted EBITDA margin ” in this section for further information on the calculation of Adjusted EBITDA.
We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a
reconciliation for net debt and preferred stock to Adjusted EBITDA on a forward-looking basis. This is due to the inherent difficulty of
forecasting the timing and/or amount of items that depend on market conditions outside of our control, including the timing of
dispositions, capital events, and financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized
gains or losses on non-real estate investments, impairments of real estate, impairments of non-real estate investments, and changes in
provision for expected credit losses on financial instruments. Our attempt to predict these amounts may produce significant but
inaccurate estimates, which would potentially be misleading for our investors.
The following table reconciles debt to net debt and preferred stock and computes the ratio to Adjusted EBITDA as of
December 31, 2025 and 2024 (dollars in thousands):
December 31,
Secured notes payable
Unsecured senior notes payable
Unsecured senior line of credit and commercial paper
Unamortized deferred financing costs
Cash and cash equivalents
Restricted cash
Preferred stock
Net debt and preferred stock
Adjusted EBITDA:
– quarter annualized
– trailing 12 months
Net debt and preferred stock to Adjusted EBITDA:
– quarter annualized
– trailing 12 months
Net operating income, net operating income (cash basis), and operating margin
The following table reconciles net income to net operating income and net operating income (cash basis) and computes
operating margin for the years ended December 31, 2025 , 2024 , and 2023 (dollars in thousands):
Year Ended December 31,
Net (loss) income
Equity in losses (earnings) of unconsolidated real estate joint ventures
General and administrative expenses
Interest expense
Depreciation and amortization
Impairment of real estate
Loss on early extinguishment of debt
Gain on sales of real estate
Investment loss
Net operating income
Straight-line rent revenue
Amortization of deferred revenue related to tenant-funded and -built
landlord improvements
Amortization of acquired below-market leases
Provision for expected credit losses on financial instruments
Net operating income (cash basis)
Net operating income (from above)
Total revenues
Operating margin
Net operating income is a non-GAAP financial measure calculated as net income (loss), 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, amortization of acquired above- and below-market lease revenue,
amortization of deferred revenue related to tenant-funded and tenant-built landlord improvements, and changes in the provision for
expected credit losses on financial instruments 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 and tenant-funded and tenant-built landlord improvements.
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 and changes in provision for expected credit losses on financial instruments, 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, rent, and 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.
We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a
reconciliation for net operating income on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or
amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
financing decisions, as well as components such as gain on sales of real estate, unrealized gains or losses on non-real estate
investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit
losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would
potentially be misleading for our investors.
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%, excluding RSF at properties classified as held for sale, 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 “ Annual rental revenue ” in this section.
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. Refer to “ Same properties ” in Item 7 in this annual report on
Form 10-K for additional information.
Stabilized occupancy date
The stabilized occupancy date represents the estimated date on which a development or redevelopment 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 revenues in
income from rentals in our consolidated statements of operations. We provide investors with a separate presentation of rental revenues
and tenant recoveries in “ Results of operations ” in Item 7 in this annual report on Form 10-K 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 for the years ended December 31, 2025 , 2024 , and
2023 (in thousands):
Year Ended December 31,
Income from rentals
Rental revenues
Tenant recoveries
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 for the
years ended December 31, 2025 , 2024 , and 2023 (dollars in thousands):
Year Ended December 31,
Unencumbered net operating income
Encumbered net operating income
Total net operating income
Unencumbered net operating income as a percentage of total
net operating income
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 development and redevelopment projects, and for general working
capital purposes. While the Forward Agreements are outstanding, we are required to consider the potential dilutive effect of our Forward
Agreements under the treasury stock method. Under this method, we also include the dilutive effect of unvested restricted stock awards
(“RSAs”) with forfeitable dividends in the calculation of diluted shares. Refer to Note 13 – “Earnings per share” and Note 16 –
“Stockholders’ equity” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.
The weighted-average shares of common stock outstanding used in calculating EPS – diluted, funds from operations per
share – diluted, and funds from operations per share – diluted, as adjusted, for the years ended December 31, 2025 , 2024 , and 2023
are calculated as follows. Also shown are the weighted-average unvested RSAs with nonforfeitable rights to dividends used in
calculating the amounts allocable to these awards pursuant to the two-class method for each of the respective periods presented below
(in thousands):
Year Ended December 31,
Basic shares for earnings per share
Unvested RSAs with forfeitable dividends
Diluted shares for earnings per share
Basic shares for funds from operations per share and funds
from operations per share, as adjusted
Unvested RSAs with forfeitable dividends
Diluted shares for funds from operations per share and
funds from operations per share, as adjusted
Weighted-average unvested RSAs with nonforfeitable
dividends used in the allocations of net income, funds
from operations, and funds from operations, as adjusted
