ALEXANDRIA REAL ESTATE EQUITIES, INC.
For the period ended Dec 31, 2025. Filed Jan 26, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jan 26, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-01-27.
0001035443-25-000067
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-01-26.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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721 unchanged; 334 reworded; 543 added; 511 removed; 35 previous and 30 current paragraphs rearranged.
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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (543)
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A best-in-class REIT with a high-quality, diverse tenant base, strong margins, and long lease terms
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Solid leasing volume
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•Leasing of previously vacant space aggregating 393,376 RSF, up 98%, over the quarterly average over the last five
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quarters.
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Key operating metrics
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•Total revenuesof$3.03 billion, down 2.9%, for theyear ended December 31, 2025, compared to$3.12 billion for theyear
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ended December 31, 2024. Excluding dispositions completed after January 1, 2024, total revenues would have increased by
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2.3% for theyear ended December 31, 2025.
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•Net operating income (cash basis) of$1.98 billion for theyear ended December 31, 2025 increased by$1.7 million, or 0.1%,
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compared to theyear ended December 31, 2024.
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•Change in net operating income (cash basis) includes the impact of operating properties disposed of after January 1,
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Excluding these dispositions, net operating income (cash basis) for theyear ended December 31, 2025 would have
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increased by 6.2% compared to 2024.
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•92.5% same properties’ average occupancy for theyear ended December 31, 2025, compared to 95.2% average
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occupancy for theyear ended December 31, 2024.
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Continued successful management and reduction of general and administrative expenses
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•General and administrative expensesas a percentage of net operating income for the year ended December 31, 2025 were
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5.6%—thelowest level in the past ten years for the Company andapproximately half the average of other S&P 500 REITs. In
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2025, we realized cost reductions of$51.3 million, or 30%, compared to theyear ended December 31, 2024, primarily from
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cost-control and efficiency initiatives. Some of these cost savings are temporary in nature, and we anticipate that
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approximately half of the cost reduction achieved in 2025 will continue in 2026.
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•Compared to the general and administrative expenses for the year ended December 31,2024, we expect to achieve a
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guidance range for 2026 general and administrative expenses.
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reduction from the quarterly dividend declared of $1.32 for the three months ended September 30, 2025.
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•The decision to reduce the declared dividend per common share reflects our commitment to maintaining the strength of our
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balance sheet, enhancing financial flexibility, and preserving liquidity of approximately$410 million on an annual basis, which
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will be used to support our 2026 capital plan.
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the years ended December 31,2021 through 2025.
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•Dividend yield of 5.9% as of December 31, 2025 and dividend payout ratio of 33% for the three months ended December 31,
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Successful execution of Alexandria’s capital recycling strategy
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We exceeded the midpoint of our 2025 guidance for dispositions and sales of partial interests by completing $1.81 billion of
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funding, primarily from sales of non-core assets and land, as well as sales to owner/users. During the three months ended December
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31,2025, we completed$1.47 billion of dispositions. As of December 31,2025, the book value of our real estate assets designated as
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held for sale aggregated $581.7 million. We expect to sell these assets in 2026. Refer to “Dispositions and sales of partial interests” in
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(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
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Increased occupancy and leasing progress on temporary vacancy
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(1)Refer to “Projected results” in item 7 for key considerations on guidance for the three months ending March 31, 2026.
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(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,
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that are leased and expected to be occupied upon completion of building and/or tenant improvements. The weighted-average expected delivery date is approximately
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August 2026 and the expected annual rental revenue is approximately$52 million.
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Continued operational excellence and solid results amid challenging macroeconomic environment
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Continued solid leasing volume and rental rate increases
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2014–2020 average of 4.3 million RSF.
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•Tenant improvements and leasing commissions on renewed and re-leased space executed during the year ended December
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31, 2024 represented only 8.4% of total lease term rents, the second lowest percentage of total lease term rents in the past
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five years.
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Continued solid net operating income and internal growth
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•Net operating income (cash basis) of$2.0 billion for theyear ended December 31, 2024, up$176.9 million, or 9.8%, compared
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to theyear ended December 31, 2023.
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to theyear ended December 31, 2023.
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•97% of our leases contain contractual annual rent escalations approximating 3%.
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Continued rigorous focus on management of general and administrative costs
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•General and administrative expenses as a percentage of net operating income of 7.6% for theyear ended
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December 31, 2024, compared to 9.8% for theyear ended December 31, 2023.
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•We expect general and administrative cost savings of approximately$32 million in 2025, based on the midpoint of our
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•Personnel-related matters: reduction in headcount over the last two years and restructuring of compensation plans.
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•Streamlining of business processes: systems upgrades, process improvements, and cost reduction in legal, technology,
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and operational support services.
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$5.19 per common share for theyear ended December 31, 2024, up 23 cents, or 5%, over theyear ended December 31,
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•Dividend yield of 5.4% as of December 31, 2024.
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•Dividend payout ratio of 55% for the three months ended December 31, 2024.
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•Average annual dividend per-share growth of 5.4% from 2020 to 2024.
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years ended December 31, 2019 through 2024.
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Strong execution of Alexandria’s 2024 capital strategy
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Our 2024 capital plan included$1.4 billion in funding from strategic dispositions that focused on a portfolio of diversified
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assets, of which$1.1 billion was completed during the three months ended December 31, 2024. Refer to “Dispositions” in Item 2 in this
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As of the date of this report, our share of pending dispositions subject to negotiations aggregated $539.5 million. These
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transactions represent approximately 32% of the$1.7 billion midpoint of our 2025 guidance range for dispositions and sales of partial
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interests.
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External growth and investments in real estate
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$118 million, commencing during the three months andyear ended December 31, 2024, respectively, and isexpected to deliver
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incremental annual net operating income aggregating$395 million by thesecond quarter of 2028.
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projects aggregating 602,593 RSF that are 98% occupied across multiple submarkets anddelivered incremental annual net
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operating income of$55 million. Key deliveries during thethree months ended December 31, 2024 include:
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Town Center submarket;
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•139,984 RSF at 840 Winter Street located on the Alexandria Center®for Life Science – Waltham Megacampus in our
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Route 128 submarket; and
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•93,492 RSF at 10935, 10945, and 10955 Alexandria Way located on the One Alexandria Square Megacampus in our
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Torrey Pines submarket.
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weighted-average burn-off period of approximately three months, from recently delivered projects.
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•Strong leasing volume aggregating 5.1 million RSF for theyear ended December 31, 2024, up 17% compared to our
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•Leasing volume aggregating 4.2 million RSF for theyear ended December 31, 2025.
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•Rental rate increases on lease renewals and re-leasing of space were 16.9% and 7.2% (cash basis) for theyear ended
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•Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for theyear ended
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•As of December 31, 2024, 84% of our leasing activity during the last twelve months was generated from our existing
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•82% of our leasing activity in 2025 was generated from our existing tenant base.
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•Same property net operating income growth of 1.2% and 4.6% (cash basis) for theyear ended December 31, 2024, compared
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•Same property net operating income decreased by 3.5% and increased by 0.9% (cash basis) for theyear ended
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•Total revenues of$3.1 billion, up 8.0%, for theyear ended December 31, 2024, compared to$2.9 billion for theyear ended
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December 31, 2025, compared to theyear ended December 31, 2024.
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(1)Based upon the midpoint of our guidance range for 2025 capitalization of interest.
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savings of$76 million of cumulative general and administrative expense in 2025 and 2026 based upon the midpoint of our
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Attractive dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for
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Dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment
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•Common stock dividend declared for thethree months ended December 31, 2024 of$1.32 per common share, aggregating
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•Common stock dividend declared of$0.72 per share for thethree months ended December 31, 2025, representing a 45%
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•Significant net cash flows from operating activities after dividends retained for reinvestment aggregating$2.2 billion for the
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•Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating$2.36 billion for
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annual report Form 10-K for additional details.
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Item 2 in this annual report Form 10-K for additional details.
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Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of$55 million and
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Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of$10 million, commencing
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•During thethree months ended December 31, 2024, we placed into service Megacampus development and redevelopment
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•During thethree months ended December 31, 2025, we placed into service one development project aggregating 139,979
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•Annual net operating income (cash basis) is expected to increase by $70 million upon the burn-off of initial free rent, with a
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•Annual net operating income (cash basis) from recently delivered projects is expected to increase by$26 million upon the
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•68% of RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.
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•77% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.
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from projects expected to stabilize in 2026 and beyond. Refer to the initial and stabilized occupancy years under “New Class A/A+ development and
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committed. Refer to the initial and stabilized occupancy years under “New Class A/A+ development and redevelopment properties: current projects” in Item 2 for
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In 2024, we identified key market trends and uncertainties that had or may have a negative effect on our business. Although
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Currently identified key market trends and uncertainties that had or may have a negative effect on our business are discussed
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we have mitigating strategies to minimize the risks posed by these trends and uncertainties, there can be no assurance that these
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below. Although we seek to minimize the risks posed by these trends and uncertainties as discussed in the mitigating factors section
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measures will be successful in preventing material impacts on our future results of operations, financial position, and cash flows. Refer
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below, there can be no assurance that these measures will be successful in preventing material impacts on our future results of
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to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of additional risks we face.
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operations, financial position, and cash flows. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of
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after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements has led certain office and other real
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•Influx of supply. During and after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements as well as
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estate companies to repurpose their underutilized office spaces into laboratory facilities. Our success and the success of other
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rates, prompted certain office and other real estate investors to repurpose underutilized office spaces into laboratory facilities,
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speculative redevelopment and/or development projects in anticipation of demand for laboratory facilities. These conversion
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anticipation of demand for such facilities. These conversion and speculative development projects have contributed to a
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tenant concessions, including free rent. The table below reflects a trend of increasing tenant improvement and leasing
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The table below reflects a trend of increasing revenue- and non-revenue-enhancing capital expenditures, including tenant
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As of December 31,2024, we anticipate that 4.4 million RSF of projects undergoing construction, which are expected to be
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As of December 31,2025, we anticipate that 2.3 million RSF of our projects undergoing construction will be placed into service
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aforementioned risks could hinder our ability to secure tenants for the remaining unleased RSF related to these projects at the
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tenants for the remaining unleased RSF related to these projects at the expected rates, or at all, which could result in a
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expected rates, or at all, potentially leading to a shortfall in or delays in the commencement of the projected incremental
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shortfall or delay in the commencement of the projected incremental annual net operating income.
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estate and non-real estate portfolios may limit our ability to raise capital to further our business objectives.
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efficiently to further our business objectives.
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The effective execution of our development and redevelopment activities is contingent upon our access to the required capital.
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The effective execution of our development and redevelopment activities is contingent on access to capital required to fund
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•Lower property valuations and increased capitalization rates. A portion of our projected construction and acquisition
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•Lower property valuations and increased capitalization rates. A portion of our projected construction spending and other uses
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spending is expected to be funded through dispositions and sales of partial interests in core and non-core real estate
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of capital is expected to be funded through dispositions and sales of partial interests in core and non-core real estate assets.
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assets. Real estate investments are generally less liquid than many other investment types, which can present challenges
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Real estate investments are generally less liquid than many other investment types, which can present challenges in selling
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Although the U.S. Federal Reserve lowered the federal funds target range during 2024 to 4.25%–4.50% from 5.25%–
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COVID-19 pandemic, the U.S. Federal Reserve reduced the federal funds target range to 0%–0.25% in March 2020 and
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5.50% at the end of 2023, interest rates remain elevated. This could continue to limit access to debt and/or equity
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remain elevated. This could continue to limit access to debt and/or equity financing for prospective buyers of real estate
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The new supply, discussed above, combined with high interest rates and reduced market liquidity, may result in a
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The oversupply, discussed above, combined with high interest rates and reduced market liquidity, has contributed to a
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prolonged period of lower property valuations and higher capitalization rates, potentially leading to significant additional
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prolonged period of lower property valuations and higher capitalization rates, resulting in significant real estate impairments
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billion to$2.2 billion. However, we may not be able to achieve this and/or other targets disclosed in our 2025 guidance as
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guidance range. However, we may not be able to achieve this and/or other targets disclosed in our 2026 guidance as a result
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a result of the uncertainties discussed in this section as well as in “Item 1A. Risk factors” in this annual report on Form 10-
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of the uncertainties discussed in this “Trends that may affect our future results” section as well as in “Item 1A. Risk factors” in
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the table can partly be attributed to the quality of core and non-core assets we sold during each period, capitalization rates
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thousands), which is partly attributable to the quality of core and non-core assets we sold during each period. There is no
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in general have increased in recent years, and there is no assurance that this upward trend will stabilize or reverse in the
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assurance that this upward trend will stabilize or reverse in the future.
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(1)Capitalization rates are calculated only for stabilized operating assets sold. Refer to “Capitalization rates” under “Definitions and reconciliations” in Item
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(1)Capitalization rates are calculated only for stabilized operating assets sold. Refer to “Capitalization rates” under “Definitions and reconciliations” in Item 7 for
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this annual report on Form 10-K.
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difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our control.
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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.
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•Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for theyear ended
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•Our fixed-rate debt represents 97.2% of our total debt, which provides predictability in debt servicing costs. Since 2021,
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California enacted legislation requiring certain companies to disclose GHG and climate-related financial risk information. Further cities
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including Boston, Cambridge, New York, and Seattle have passed ordinances that set limits on GHG emissions associated with building
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operations. Some municipalities, including the Cities of New York and San Francisco, have also implemented legislation to eliminate the
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use of natural gas in new construction projects. Refer to “We face possible risks and costs associated with the effects of climate change
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and severe weather” in “Other factors” within “Item 1A. Risk factors” in this annual report on Form 10-K for additional information.
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estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases
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financial statements in Item 15 in this annual report on Form 10-K.
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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
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guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance.
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(3)Refer to “Average real estate basis used for capitalization of interest” in Item 7 for additional details.
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development and redevelopment properties: current projects” in Item 2 for additional details.
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our consolidated financial statements in Item 15 for additional information.
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(4)Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” under “Definitions
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statements in Item 15 in this annual report on Form 10-K for additional information.
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annual net operating income (cash basis) of$26 million related to the commencement of contractual rents on the projects recently
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Refer to Note 3 – “Investments in real estate” and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our
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construction activities. We also incur additional capitalized project costs, including interest, property taxes, insurance, and other costs
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Expenditures for repairs and maintenance are expensed as incurred.
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“Summary of significant accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for
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summation of the quarter-to-date and year-to-date amounts. Neither funds from operations nor funds from operations, as adjusted,
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Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 for additional details.
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consolidated financial statements in Item 15 for additional information.
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properties classified as held for sale, as of December 31, 2025 (dollars in thousands):
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reconciliation for net operating income on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or
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reach occupancy of 95% or greater.
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redevelopment properties: current projects” in Item 2 for additional information.
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reconciliations” in Item 7 in this annual report on Form 10-K for additional information.
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cultivated and maintained over many years.
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and efficiency initiatives including, but not limited to, the following:
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•Generated significant net cash flows from operating activities.
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•As of the date of this report, the remaining aggregate amount available for future sales of common stock under our ATM
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stockholders” under “Definitions and reconciliations” in Item 7.
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efficiency initiatives, including implementation of systems upgrades, process improvements, and smarter technology. As a percentage of
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During theyear ended December 31, 2023, we recognized real estate impairment charges aggregating$461.1 million
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assets. The gains were classified in gain on sales of real estate within our consolidated statement of operations for theyear ended
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“Investments in real estate” to our consolidated financial statements in Item 15 in this annual report on Form 10-K.
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reasons for any significant changes to such guidance.
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(2)Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” under “Definitions
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from accounting reclassifications of unrealized gains recognized in prior periods into realized gains upon our realization of investments during thethree months ended
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investments in publicly traded companies as of December 31, 2024 (in thousands):
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(1)Represents outstanding principal, net of unamortized deferred financing costs, as of December 31, 2024.
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construction activities and any common stock repurchases.
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estate” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.
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of our common stock in the open market, in privately negotiated transactions, or otherwise through December 31, 2025. In January 2025, we repurchased common
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with respect to the facility fee rate.
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our unsecured senior line of credit.
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average yield to maturity of 5.30%. As of December 31, 2024, we hadno outstanding balance on our commercial paper program.
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note payable, which is expected to close in the first quarter of 2025. The remaining debt balance of approximately$100 million will be
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Item 15 in this annual report on Form 10-K.
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policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.
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restricted stock awards by applying the respective weighted-average shares outstanding during each quarter-to-date and year-to-date
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“Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 for additional information.
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statements in Item 15 for additional information.
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amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and
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entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building
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improvements. The advancement of pre-construction efforts is focused on reducing the time required to deliver projects to prospective
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tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of
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instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would be potentially
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which would be potentially misleading for our investors.
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Form 10-K for additional information.