Alexandria Real Estate Equities, Inc. Reports: 4Q24 and 2024 Net (Loss) Income per Share - Diluted of $(0.38) and $1.80, respectively; 4Q24 and 2024 FFO per Share - Diluted, as Adjusted, of $2.39 and $9.47, respectively

Rhea-AI Summary

Alexandria Real Estate Equities (NYSE: ARE) reported mixed financial results for Q4 2024 and full-year 2024. The company posted a Q4 net loss of $(0.38) per share but achieved total revenues of $788.9 million, up 4.2% year-over-year. Full-year revenues reached $3.1 billion, with net income of $1.80 per share.

Key operational highlights include a strong 94.6% occupancy rate, with 77% of annual rental revenue coming from their Megacampus platform. The company maintains a solid tenant base, with 52% of rental revenue from investment-grade or large-cap tenants. Leasing volume reached 1.3 million RSF in Q4, up 19% compared to the previous five-quarter average.

The company announced a $500 million stock repurchase program through December 2025, with $200.1 million already executed at an average price of $98.16 per share. ARE declared a Q4 dividend of $1.32 per share, bringing the 2024 total to $5.19, a 5% increase from 2023.

Positive

• Total revenues increased 4.2% YoY to $788.9M in Q4 2024
• Strong occupancy rate of 94.6% in operating properties
• Leasing volume up 19% to 1.3M RSF in Q4 2024
• Rental rate increases of 18.1% on lease renewals in Q4 2024
• 5.4% average annual dividend growth from 2020-2024
• Completed $1.1B in strategic dispositions in Q4 2024

Negative

• Q4 2024 net loss of $(0.38) per share
• Investment loss of $68.0M in Q4 2024
• Real estate impairment charges of $186.6M in Q4 2024
• Decline in same property net operating income growth to 0.6% in Q4 2024

Insights

Financial Analyst

Alexandria's Q4 2024 results demonstrate operational resilience amid market headwinds. The company achieved FFO per share of $2.39, a 4.8% increase from Q4 2023, outpacing many peers in the REIT sector. Total revenues grew to $788.9 million, up 4.2% year-over-year.

The operational metrics are particularly strong:

• 94.6% occupancy rate in North America
• 99.9% Q4 rent collection rate
• 18.1% rental rate increases on renewals
• 7.5 years weighted-average remaining lease term

The balance sheet remains robust with a net debt to Adjusted EBITDA of 5.2x and significant liquidity of $5.7 billion. The completion of $1.1 billion in strategic dispositions in Q4 strengthens the company's financial flexibility, though it may temporarily impact near-term earnings.

The development pipeline shows promise, with expected incremental annual NOI of $395 million by 2Q28. Notable is the 89% pre-leasing rate for 2025 deliveries, indicating strong demand for Alexandria's premium life science spaces.

However, investors should note some concerns: The $68 million investment loss in Q4 2024, comprising realized gains offset by unrealized losses and impairment charges, reflects ongoing market volatility in the life sciences sector. The net loss of $64.9 million was primarily driven by non-cash items including $186.6 million in real estate impairments.

The $500 million share repurchase program, of which $200.1 million has been executed at an average price of $98.16, demonstrates management's confidence in the stock's value proposition. The 5.4% dividend yield, backed by a conservative 55% payout ratio, provides attractive income potential while maintaining capital for reinvestment.

PASADENA, Calif., Jan. 27, 2025 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) announced financial and operating results for the fourth quarter and year ended December 31, 2024.

 

Key highlights
Operating results	4Q24		4Q23		2024		2023
Total revenues:
In millions	$        788.9		$        757.2		$      3,116.4		$      2,885.7
Growth	4.2 %				8.0 %
Net (loss) income attributable to Alexandria's common stockholders – diluted:
In millions	$         (64.9)		$         (91.9)		$         309.6		$           92.4
Per share	$         (0.38)		$         (0.54)		$           1.80		$           0.54
Funds from operations attributable to Alexandria's common stockholders – diluted, as adjusted:
In millions	$        411.8		$        389.8		$      1,629.1		$      1,532.3
Per share	$          2.39		$          2.28		$           9.47		$           8.97

A sector-leading REIT with a high-quality, diverse tenant base and strong margins

(As of December 31, 2024, unless stated otherwise)
Occupancy of operating properties in North America		94.6 %
Percentage of annual rental revenue in effect from Megacampus™ platform		77 %
Percentage of annual rental revenue in effect from investment-grade or publicly traded large cap tenants		52 %
Operating margin		70 %
Adjusted EBITDA margin		72 %
Percentage of leases containing annual rent escalations		97 %
Weighted-average remaining lease term:
Top 20 tenants		9.3	years
All tenants		7.5	years
Sustained strength in tenant collections:
January 2025 tenant rents and receivables collected as of January 27, 2025		99.5 %
4Q24 tenant rents and receivables collected as of January 27, 2025		99.9 %

Strong and flexible balance sheet with significant liquidity; top 10% credit rating ranking among all publicly traded U.S. REITs

• Net debt and preferred stock to Adjusted EBITDA of 5.2x and fixed-charge coverage ratio of 4.3x for 4Q24 annualized.
• Significant liquidity of $5.7 billion.
• 32% of our total debt matures in 2049 and beyond.
• 12.7 years weighted-average remaining term of debt.
• Since 2020, an average of 98.4% of our year-end debt balances have been fixed rate.
• Total debt and preferred stock to gross assets of 28%.
• $684.1 million of capital contribution commitments from existing real estate joint venture partners to fund construction from 1Q25 through 2028.

Continued solid leasing volume and rental rate increases

• Continued solid leasing volume:
  • 1.3 million RSF for 4Q24, up 19% compared to our previous five-quarter average.
  • Fourth consecutive quarter with leasing volume exceeding 1 million RSF.
  • 5.1 million RSF for 2024, up 19% compared to our 2014–2020 average of 4.3 million RSF.
• Rental rate increases on lease renewals and re-leasing of space were 18.1% and 3.3% (cash basis) for 4Q24 and 16.9% and 7.2% (cash basis) for 2024.
• 84% of our leasing activity during the last twelve months was generated from our existing tenant base.
• Tenant improvements and leasing commissions on renewed and re-leased space executed during the year ended December 31, 2024 represented only 8.4% of total lease term rents, the second lowest percentage of total lease term rents in the past five years.

					4Q24			2024
			Total leasing activity – RSF		1,310,999			5,053,954
			Leasing of development and redevelopment space – RSF		12,999	(1)		493,341
			Lease renewals and re-leasing of space:
			RSF (included in total leasing activity above)		1,024,862			3,888,139
			Rental rate increase		18.1 %			16.9 %
			Rental rate increase (cash basis)		3.3 %			7.2 %
			(1)   As of December 31, 2024, our projects expected to stabilize in 2025 were 89% leased/negotiating.

 

Attractive dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment

• Common stock dividend declared for 4Q24 of $1.32 per common share aggregating $5.19 per common share for the year ended December 31, 2024, up 23 cents, or 5%, over the year ended December 31, 2023.
• Dividend yield of 5.4% as of December 31, 2024.
• Dividend payout ratio of 55% for the three months ended December 31, 2024.
• Average annual dividend per-share growth of 5.4% from 2020 through 2024.
• Significant net cash flows from operating activities after dividends retained for reinvestment aggregating $2.2 billion for the years ended December 31, 2020 through 2024.

Strong execution of Alexandria's 2024 capital strategy

Our 2024 capital plan included $1.4 billion in funding from strategic dispositions that focused on a portfolio of diversified assets, of which $1.1 billion was completed during 4Q24. Refer to "Dispositions" in the Earnings Press Release for additional details.

(in millions)
YTD 3Q24		$            239
4Q24		1,128
Total 2024 dispositions		$         1,367

• As of January 27, 2025, our share of pending dispositions subject to negotiations aggregated $539.5 million. These transactions represent approximately 32% of the $1.7 billion midpoint of our 2025 guidance range for dispositions and sales of partial interests.

Alexandria's development and redevelopment pipeline delivered incremental annual net operating income of $55 million commencing during 4Q24 and is expected to deliver incremental annual net operating income aggregating $395 million by 2Q28

• During 4Q24, we placed into service Megacampus development and redevelopment projects aggregating 602,593 RSF that are 98% occupied across multiple submarkets and delivered incremental annual net operating income of $55 million. Key 4Q24 deliveries included:
  • 171,102 RSF at 4155 Campus Point Court located on the Campus Point by Alexandria Megacampus in our University Town Center submarket;
  • 139,984 RSF at 840 Winter Street located on the Alexandria Center^® for Life Science – Waltham Megacampus in our Route 128 submarket; and
  • 93,492 RSF at 10935, 10945, and 10955 Alexandria Way located on the One Alexandria Square Megacampus in our Torrey Pines submarket.
• Annual net operating income (cash basis) is expected to increase by $70 million upon the burn-off of initial free rent, with a weighted-average burn-off period of approximately three months, from recently delivered projects.
• 68% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.

		Development and Redevelopment Projects		Incremental Annual Net Operating Income		RSF		Occupancy Percentage
		(dollars in millions)
		Placed into service:
		YTD 3Q24		$                       63		945,118			100 %
		4Q24		55		602,593			98
		Placed into service in 2024		$                     118		1,547,711			98 %
		Expected to be placed into service:
		2025		$                       83	(1)	4,357,276
		1Q26 through 2Q28		312
				$                     395

			(1)	Includes (i) 461,101 RSF that is expected to stabilize through 2025 and is 89% leased/negotiating and (ii) expected partial deliveries through 4Q25 from projects expected to stabilize in 2026 and beyond. Refer to the initial and stabilized occupancy years under "New Class A/A+ development and redevelopment properties: current projects" in the Supplemental Information for additional details.

Continued solid net operating income and internal growth

• Net operating income (cash basis) growth:
  • $2.1 billion for 4Q24 annualized, up $177.9 million, or 9.5%, compared to 4Q23 annualized.
  • $2.0 billion for 2024, up $176.9 million, or 9.8%, compared to 2023.
• Same property net operating income growth of 0.6% and 6.3% (cash basis) for 4Q24 over 4Q23 and 1.2% and 4.6% (cash basis) for 2024 over 2023.
• 97% of our leases contain contractual annual rent escalations approximating 3%.

Continued rigorous focus on management of general and administrative costs

• General and administrative expenses as a percentage of net operating income of 7.6% for 2024, compared to 9.8% for 2023.
• We expect general and administrative cost savings of approximately $32 million in 2025, based on the midpoint of our guidance, compared to 2024, from a variety of cost-control and efficiency initiatives, including:
  • Personnel-related matters: reduction in headcount over the last two years and restructuring of compensation plans.
  • Streamlining of business processes: systems upgrades, process improvements, and cost reduction in legal, technology, and operational support services.

Strong balance sheet management
Key metrics as of or for the three months ended December 31, 2024

• $29.0 billion in total market capitalization.
• $16.8 billion in total equity capitalization.

						4Q24				Target
						Quarter Annualized		Trailing 12 Months		4Q25 Annualized
				Net debt and preferred stock to      Adjusted EBITDA		5.2x		5.3x		Less than or equal to 5.2x
				Fixed-charge coverage ratio		4.3x		4.5x		4.0x to 4.5x

Key capital events

• On December 9, 2024, we announced that our board of directors authorized a common stock repurchase program under which we may repurchase up to $500.0 million of our common stock through December 31, 2025. Repurchases are expected to be funded on a leverage-neutral basis.
  • In December 2024, we repurchased $50.1 million of common stock.
  • From January 1, 2025 through January 27, 2025, we repurchased $150.0 million of additional common stock.
  • As of January 27, 2025, cumulative repurchases under the program aggregated $200.1 million and 2.0 million shares of common stock at an average price per share of $98.16.
  • As of January 27, 2025, the approximate value of shares authorized and remaining under this program was $299.9 million.
• During 4Q24, we settled all outstanding forward equity sales agreements by issuing 230 thousand shares of common stock at an average price per share of $120.93 and received net proceeds of $27.8 million. As of January 27, 2025, the remaining aggregate amount available for future sales of common stock under our ATM program was $1.47 billion.

Investments

• As of December 31, 2024:
  • Our non-real estate investments aggregated $1.5 billion.
  • Unrealized gains presented in our consolidated balance sheet were $83.6 million, comprising gross unrealized gains and losses aggregating $228.1 million and $144.5 million, respectively.
• Investment loss of $68.0 million for 4Q24 presented in our consolidated statement of operations consisted of $32.1 million of realized gains, $79.8 million of unrealized losses, and $20.3 million of impairment charges.
• Investment loss of $53.1 million for 2024 presented in our consolidated statement of operations consisted of $117.2 million of realized gains, $112.2 million of unrealized losses, and $58.1 million of impairment charges.

Other key highlights
Executive management change, effective December 31, 2024

Effective on December 31, 2024, Vincent Ciruzzi retired from his position as Chief Development Officer after nearly 30 years of exemplary service. His responsibilities will be assumed by multiple members within our Real Estate Development Team, which Mr. Ciruzzi formed and led over his tenure with Alexandria.

Key items included in net income attributable to Alexandria's common stockholders:
	4Q24		4Q23		4Q24		4Q23		2024		2023		2024		2023
(in millions, except per share amounts)	Amount				Per Share – Diluted				Amount				Per Share – Diluted
Unrealized (losses) gains on  non-real estate investments	$ (79.8)		$   19.5		$  (0.46)		$  0.11		$  (112.2)		$  (201.5)		$  (0.65)		$  (1.18)
Gain on sales of real estate	101.8		62.2		0.59		0.36		129.3		277.0		0.75		1.62
Impairment of non-real estate  investments	(20.3)		(23.1)		(0.12)		(0.13)		(58.1)		(74.6)		(0.34)		(0.44)
Impairment of real estate(1)	(186.6)		(271.9)		(1.08)		(1.59)		(223.1)		(461.1)		(1.30)		(2.70)
Acceleration of stock  compensation expense due  to executive officer  resignations	—		(18.4)		—		(0.11)		—		(20.3)		—		(0.12)
Provision for expected credit  losses on financial  instruments(1)	0.4		—		—		—		0.4		—		—		—
Total	$  (184.5)		$  (231.7)		$  (1.07)		$  (1.36)		$  (263.7)		$  (480.5)		$  (1.54)		$  (2.82)
(1)     Refer to "Funds from operations and funds from operations per share" in the Earnings Press Release for additional details.

Subsequent events

• In January 2025, pursuant to an amendment executed in July 2024 to our existing ground lease agreement at the Alexandria Technology Square^® Megacampus, we made the second and final installment payment aggregating $135.0 million related to our rent obligation for the extended ground lease term.

Industry and corporate responsibility leadership: catalyzing and leading the way for positive change to benefit human health and society

• Alexandria's longstanding sustainability leadership and performance was reinforced by our achievements in the 2024 GRESB Real Estate Assessment. We received the GRESB Green Star designation for the eighth consecutive year and an "A" disclosure score for the seventh consecutive year, signifying best-in-class transparency regarding our sustainability practices and reporting.
• 325 Binney Street, a 462,100 RSF development on the Alexandria Center^® at One Kendall Square Megacampus in our Cambridge submarket, earned LEED Platinum certification, the highest level of certification under the U.S. Green Building Council's Core and Shell rating system. Home to Moderna's global headquarters and R&D center, the ultra-efficient building is targeting LEED Zero Energy certification, reduced fossil fuel use through the implementation of a geothermal system, and 100% renewable electricity, resulting in an estimated 97% reduction of greenhouse gas emissions relative to the MA 2020 Stretch Code baseline.
• 8 Davis Drive on the Alexandria Center^® for Advanced Technologies and AgTech – Research Triangle Megacampus won a BOMA Raleigh-Durham TOBY (The Outstanding Building of the Year) Award in the Life Science category. The TOBY Awards are the commercial real estate industry's highest recognition honoring excellence in commercial building management and operations.

About Alexandria Real Estate Equities, Inc. 

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500^® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For more information on Alexandria, please visit www.are.com. 

Guidance December 31, 2024 (Dollars in millions, except per share amounts)

The following guidance for 2025 has been updated to reflect our current view of existing market conditions and assumptions for the year ending December 31, 2025. There can be no assurance that actual results will not be materially higher or lower than these expectations. Also, refer to our discussion of "forward-looking statements" of the Earnings Press Release for additional details. Key updates to our 2025 guidance from December 4, 2024 are summarized in the tables below and include changes to the midpoints of our guidance ranges for key sources of capital as follows: (i) a $150 million increase in dispositions and sales of partial interests representing pending transactions that were originally expected to close in 4Q24, and are now anticipated to be completed in 2025 and (ii) a corresponding $150 million decrease in excess 2024 bond capital held as cash at December 31, 2024.

		2025 Guidance Midpoint						2025 Guidance Midpoint
Summary of Key Changes in Guidance		As of 1/27/25		As of 12/4/24		Summary of Key Changes in Sources and Uses of Capital		As of 1/27/25		As of 12/4/24
EPS, FFO per share, and FFO per share, as adjusted		No Change				Excess 2024 bond capital expected to be held as cash at  December 31, 2024		$                 —		$               150
						Dispositions and sales of partial interests		$            1,700		$            1,550

 

Key Credit Metric Targets(1)
Net debt and preferred stock to Adjusted EBITDA – 4Q25 annualized		Less than or equal to 5.2x
Fixed-charge coverage ratio – 4Q25 annualized		4.0x to 4.5x

 

Projected 2025 Earnings per Share and Funds From Operations per Share Attributable to Alexandria's Common Stockholders – Diluted
Earnings per share(2)		$2.57 to $2.77
Depreciation and amortization of real estate assets			6.70
Allocation to unvested restricted stock awards			(0.04)
Funds from operations per share and funds from operations per share, as adjusted(1)		$9.23 to $9.43
Midpoint		$9.33

 

Key Sources and Uses of Capital		Range				Midpoint
Sources of capital:
Reduction in debt		$       (40)		$     (340)		$     (190)
Net cash provided by operating activities after dividends		425		525		475
Dispositions and sales of partial interests(3)		1,200		2,200		1,700
Total sources of capital		$   1,585		$   2,385		$    1,985
Uses of capital:
Construction		$   1,450		$   2,050		$    1,750
Acquisitions and other opportunistic uses of capital(4)		—		200		100
Ground lease prepayment(5)		135		135		135
Total uses of capital		$   1,585		$   2,385		$    1,985
Reduction in debt (included above):
Issuance of unsecured senior notes payable		$      300		$      900		$       600
Repayment of secured notes payable		(600)		(600)		(600)
Unsecured senior line of credit, commercial paper, and other		260		(640)		(190)
Net reduction in debt		$       (40)		$     (340)		$     (190)

 

Key Assumptions		Low		High
Occupancy percentage in North America as of December 31, 2025		91.6 %		93.2 %
Lease renewals and re-leasing of space:
Rental rate changes		9.0 %		17.0 %
Rental rate changes (cash basis)		0.5 %		8.5 %
Same property performance:
Net operating income		(3.0) %		(1.0) %
Net operating income (cash basis)		(1.0) %		1.0 %
Straight-line rent revenue		$             111		$            131
General and administrative expenses		$            129		$            144
Capitalization of interest		$            340		$            370
Interest expense		$            165		$            195
Realized gains on non-real estate investments(6)		$            100		$            130

(1)	Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(2)	Excludes unrealized gains or losses on non-real estate investments after December 31, 2024 that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted.
(3)	As of January 27, 2025, our share of pending dispositions subject to negotiations aggregated $539.5 million. These transactions represent approximately 32% of the $1.7 billion midpoint of our 2025 guidance range for dispositions and sales of partial interests.
(4)	On December 9, 2024, we announced that our board of directors authorized a common stock repurchase program under which we may repurchase up to $500.0 million of our common stock in the open market or in privately negotiated transactions through December 31, 2025. In January 2025, we repurchased common stock aggregating $150.0 million at an average price per share of $97.26. As of January 27, 2025, the approximate value of shares authorized and remaining under this program was $299.9 million.
(5)	Refer to "Subsequent event" in the Earnings Press Release for additional information.
(6)	Represents realized gains and losses included in funds from operations per share – diluted, as adjusted, and excludes significant impairments realized on non-real estate investments, if any. Refer to "Investments" in the Supplemental Information for additional details.

 

Acquisitions December 31, 2024 (Dollars in thousands)

Property

Submarket/Market

Date of Purchase

Number of Properties

Operating Occupancy

Square Footage

Purchase Price

Future Development(1)

Operating With Future Development/ Redevelopment(1)

Completed in 2024:

285, 299, 307, and 345 Dorchester Avenue (60%     interest in consolidated JV)

Seaport Innovation District/Greater   Boston

1/30/24

—

N/A

1,040,000

—

$

155,321

428 Westlake Avenue North

Lake Union/Seattle

10/1/24

1

100 %

—

90,626

47,600

Other

46,490

Total 2024 acquisitions

$

249,411

(1)	We expect to provide total estimated costs and related yields for development and significant redevelopment projects in the future, subsequent to the commencement of construction.

 

2024 Dispositions December 31, 2024 (Dollars in thousands)
Property		Submarket/Market		Date of Sale		Interest Sold			RSF		Capitalization Rate			Capitalization Rate (Cash Basis)			Sales Price		Seller Financing		Sales Price per RSF		Gain on Sale of Real Estate
Completed in YTD 3Q24																	$      238,709						$        27,506
Completed in 4Q24:
Stabilized Properties
One Moderna Way		Route 128/Greater Boston		12/17/24		100 %			722,130		8.5 %			6.3 %			369,439				$        512		—
14225 Newbrook Drive		Northern Virginia/Maryland		10/15/24		100 %			248,186		7.6 %			7.4 %			80,500				$        324		37,074
6040 George Watts Hill Drive		Research Triangle/     Research Triangle		12/10/24		100 %			149,585		8.0 %			7.1 %			93,500				$        625		5,004
Other																	78,610						4,042
																	622,049
Properties with vacancy or significant near-term capital requirements
215 First Street		Cambridge/Greater Boston		12/20/24		100 %			369,520		(1)			(1)			245,539	(1)			(1)		—
150 Second Street and 11 Hurley Street		Cambridge/Greater Boston							182,993
4755 and 4757 Nexus Center Drive and     4796 Executive Drive(2)		University Town Center/     San Diego		12/30/24		100 %			177,804		(2)			(2)			120,000	(2)	$     79,166		$        675		47,511
Other																	47,243						—
																	412,782
Land and other
10048 and 10219 Meanley Drive and     10277 Scripps Ranch Boulevard		Sorrento Mesa/San Diego		12/20/24		100 %			444,041		(3)			(3)			55,000		25,000				—
9444 Waples Street (50% consolidated JV)		Sorrento Mesa/San Diego		12/23/24		(4)			149,000		(4)			(4)			31,000	(4)					8,175	(4)
Other(5)						(5)											22,913	(5)					(5)
																	108,913
																	1,143,744	(6)
Total 2024 dispositions																	$   1,382,453		$   104,166				$      129,312
Our share of 2024 dispositions, including amounts recognized within     equity in earnings																	$   1,366,953						$      127,615	(7)

Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(1)	Represents properties that were 87% occupied as of 3Q24, with 61% of the aggregate RSF, primarily located at 215 First Street, scheduled to expire by 4Q25. These properties were not core to our Megacampus strategy due to their size, location, or existing use. They are also expected to require significant re-leasing capital over the next few years, including at 215 First Street, a historical building with infrastructure limitations and challenging floor plates. Acquired in 2007, 215 First Street came with significant entitlements which were later used to develop new adjacent projects at Alexandria Center® at Kendall Square. Since then, this property has served as a reliable asset, providing primarily office space to our tenants. However, given the low occupancy and the significant reinvestment required for upgrades, we plan to recycle the capital generated by the disposition into our development and redevelopment pipeline.
(2)	Represents properties that were 65% occupied as of 3Q24, with 26% of the aggregate RSF scheduled to expire by 2Q25.
(3)	Represents the sale of land parcels.
(4)	Represents 100% of the contractual sales price. We held a 50% interest in this property through a consolidated real estate joint venture, and our share of the sales price and gain on real estate is $15.5 million and $3.2 million, respectively.
(5)	Represents the disposition of an unconsolidated real estate joint venture for which we recognized a gain on sale of real estate of $3.3 million, which is classified as equity in earnings of unconsolidated real estate joint ventures in our consolidated statement of operations.
(6)	Dispositions completed during 4Q24 had annual net operating income of $97.9 million (based on 3Q24 annualized) with a weighted-average disposition date of December 10, 2024 (weighted by net operating income for 3Q24 annualized).
(7)	Refer to footnotes 4 and 5.

 

2025 Dispositions and Sales of Partial Interests December 31, 2024  (Dollars in thousands)
Property		Submarket/Market		Date of Expected Sale		Interest Expected to Be Sold			Sales Price
Pending 2025 dispositions and sales of partial interests expected to close subsequent to January 27, 2025:
Subject to non-refundable deposits:
Pending		San Diego		1Q25		100 %			$         124,000
Pending		Texas		1Q25		100 %			33,000
Pending		San Diego		2H25		100 %			50,000
Other									20,850
									227,850
Subject to executed letters of intent and/or purchase and sale agreement negotiations:
1450 Owens Street (25.1% consolidated JV)		Mission Bay/San Francisco Bay Area		2H25		(1)			144,705	(1)
Other		Various							276,612
									421,317
									$         649,167
Our share of 2025 dispositions									$         539,462
2025 guidance range for dispositions and sales of partial interests						$1,200,000 – $2,200,000

(1)

Represents 100% of the contractual sales price. In 4Q24, we executed a letter of intent with a biomedical institution for the sale of a condominium interest aggregating 103,361 RSF, or approximately 49% of the development project. We own a 25.1% interest in this property through a consolidated real estate joint venture, and our share of the sales price is $36 million. We expect to complete the transaction in 2025.

Earnings Call Information and About the Company
December 31, 2024

We will host a conference call on Tuesday, January 28, 2025, at 3:00 p.m. Eastern Time ("ET")/noon Pacific Time ("PT"), which is open to the general public, to discuss our financial and operating results for the fourth quarter and year ended December 31, 2024. To participate in this conference call, dial (833) 366-1125 or (412) 902-6738 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the call for Alexandria Real Estate Equities, Inc. The audio webcast can be accessed at www.are.com in the "For Investors" section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, January 28, 2025. The replay number is (877) 344-7529 or (412) 317-0088, and the access code is 1012884.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2024 is available in the "For Investors" section of our website at www.are.com or by following this link: https://www.are.com/fs/2024q4.pdf. 

For any questions, please contact corporateinformation@are.com; Joel S. Marcus, executive chairman and founder; Peter M. Moglia, chief executive officer and chief investment officer; Marc E. Binda, chief financial officer and treasurer; Paula Schwartz, managing director of Rx Communications Group, at (917) 633-7790; or Sara M. Kabakoff, senior vice president – chief content officer.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500^® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City.  As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For more information on Alexandria, please visit www.are.com. 

Forward-Looking Statements

This document includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our projected 2025 earnings per share, projected 2025 funds from operations per share, projected 2025 funds from operations per share, as adjusted, projected net operating income, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as "forecast," "guidance," "goals," "projects," "estimates," "anticipates," "believes," "expects," "intends," "may," "plans," "seeks," "should," "targets," or "will," or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, lower than expected yields, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully place into service and lease any properties undergoing development or redevelopment and our existing space held for future development or redevelopment (including new properties acquired for that purpose), our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, adverse general and local economic conditions, an unfavorable capital market environment, decreased leasing activity or lease renewals, failure to obtain LEED and other healthy building certifications and efficiencies, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission ("SEC"). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this Earnings Press Release and Supplemental Information, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

This document is not an offer to sell or a solicitation to buy securities of Alexandria Real Estate Equities, Inc. Any offers to sell or solicitations to buy our securities shall be made only by means of a prospectus approved for that purpose. Unless otherwise indicated, the "Company," "Alexandria," "ARE," "we," "us," and "our" refer to Alexandria Real Estate Equities, Inc. and our consolidated subsidiaries. Alexandria^®, Lighthouse Design^® logo, Building the Future of Life-Changing Innovation^®, That's What's in Our DNA^®, Megacampus™, Labspace^®, Alexandria Summit^®, At the Vanguard and Heart of the Life Science Ecosystem™, Alexandria Center^®, Alexandria Technology Square^®, Alexandria Technology Center^®, and Alexandria Innovation Center^® are copyrights and trademarks of Alexandria Real Estate Equities, Inc. All other company names, trademarks, and logos referenced herein are the property of their respective owners.

 

Consolidated Statements of Operations December 31, 2024 (Dollars in thousands, except per share amounts)
		Three Months Ended										Year Ended
		12/31/24		9/30/24		6/30/24		3/31/24		12/31/23		12/31/24		12/31/23
Revenues:
Income from rentals		$       763,249		$       775,744		$       755,162		$       755,551		$       742,637		$    3,049,706		$    2,842,456
Other income		25,696		15,863		11,572		13,557		14,579		66,688		43,243
Total revenues		788,945		791,607		766,734		769,108		757,216		3,116,394		2,885,699
Expenses:
Rental operations		240,432		233,265		217,254		218,314		222,726		909,265		859,180
General and administrative		32,730		43,945		44,629		47,055		59,289		168,359		199,354
Interest		55,659		43,550		45,789		40,840		31,967		185,838		74,204
Depreciation and amortization		330,108		293,998		290,720		287,554		285,246		1,202,380		1,093,473
Impairment of real estate		186,564	(1)	5,741		30,763		—		271,890		223,068		461,114
Total expenses		845,493		620,499		629,155		593,763		871,118		2,688,910		2,687,325
Equity in earnings of unconsolidated real estate joint ventures		6,635	(2)	139		130		155		363		7,059		980
Investment (loss) income		(67,988)		15,242		(43,660)		43,284		8,654		(53,122)		(195,397)
Gain on sales of real estate		101,806		27,114		—		392		62,227		129,312		277,037
Net (loss) income		(16,095)		213,603		94,049		219,176		(42,658)		510,733		280,994
Net income attributable to noncontrolling interests		(46,150)		(45,656)		(47,347)		(48,631)		(45,771)		(187,784)		(177,355)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.'s     stockholders		(62,245)		167,947		46,702		170,545		(88,429)		322,949		103,639
Net income attributable to unvested restricted stock awards		(2,677)		(3,273)		(3,785)		(3,659)		(3,498)		(13,394)		(11,195)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.'s     common stockholders		$       (64,922)		$       164,674		$         42,917		$       166,886		$       (91,927)		$       309,555		$         92,444
Net (loss) income per share attributable to Alexandria Real Estate Equities,     Inc.'s common stockholders:
Basic		$            (0.38)		$             0.96		$             0.25		$             0.97		$            (0.54)		$             1.80		$             0.54
Diluted		$            (0.38)		$             0.96		$             0.25		$             0.97		$            (0.54)		$             1.80		$             0.54
Weighted-average shares of common stock outstanding – basic and     diluted		172,262		172,058		172,013		171,949		171,096		172,071		170,909
Dividends declared per share of common stock		$             1.32		$             1.30		$             1.30		$             1.27		$             1.27		$             5.19		$             4.96

(1)	Refer to "Funds from operations and funds from operations per share" in the Earnings Press Release for additional details.
(2)	Refer to "2024 Dispositions" in the Earnings Press Release for additional details.

 

Consolidated Balance Sheets December 31, 2024 (In thousands)
		12/31/24		9/30/24		6/30/24		3/31/24		12/31/23
Assets
Investments in real estate		$  32,110,039		$  32,951,777		$  32,673,839		$  32,323,138		$ 31,633,511
Investments in unconsolidated real estate joint ventures		39,873		40,170		40,535		40,636		37,780
Cash and cash equivalents		552,146		562,606		561,021		722,176		618,190
Restricted cash		7,701		17,031		4,832		9,519		42,581
Tenant receivables		6,409		6,980		6,822		7,469		8,211
Deferred rent		1,187,031		1,216,176		1,190,336		1,138,936		1,050,319
Deferred leasing costs		485,959		516,872		519,629		520,616		509,398
Investments		1,476,985		1,519,327		1,494,348		1,511,588		1,449,518
Other assets		1,661,306		1,657,189		1,356,503		1,424,968		1,421,894
Total assets		$  37,527,449		$  38,488,128		$  37,847,865		$  37,699,046		$ 36,771,402
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable		$       149,909		$       145,000		$       134,942		$       130,050		$       119,662
Unsecured senior notes payable		12,094,465		12,092,012		12,089,561		12,087,113		11,096,028
Unsecured senior line of credit and commercial paper		—		454,589		199,552		—		99,952
Accounts payable, accrued expenses, and other liabilities		2,654,351		2,865,886		2,529,535		2,503,831		2,610,943
Dividends payable		230,263		227,191		227,408		222,134		221,824
Total liabilities		15,128,988		15,784,678		15,180,998		14,943,128		14,148,409
Commitments and contingencies
Redeemable noncontrolling interests		19,972		16,510		16,440		16,620		16,480
Alexandria Real Estate Equities, Inc.'s stockholders' equity:
Common stock		1,722		1,722		1,720		1,720		1,719
Additional paid-in capital		17,933,572		18,238,438		18,284,611		18,434,690		18,485,352
Accumulated other comprehensive loss		(46,252)		(22,529)		(27,710)		(23,815)		(15,896)
Alexandria Real Estate Equities, Inc.'s stockholders' equity		17,889,042		18,217,631		18,258,621		18,412,595		18,471,175
Noncontrolling interests		4,489,447		4,469,309		4,391,806		4,326,703		4,135,338
Total equity		22,378,489		22,686,940		22,650,427		22,739,298		22,606,513
Total liabilities, noncontrolling interests, and equity		$  37,527,449		$  38,488,128		$  37,847,865		$  37,699,046		$ 36,771,402

 

Funds From Operations and Funds From Operations per Share December 31, 2024 (In thousands)

The following table presents a reconciliation of net income (loss) attributable to Alexandria's common stockholders, the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles ("GAAP"), including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria's common stockholders – diluted, and funds from operations attributable to Alexandria's common stockholders – diluted, as adjusted, for the periods below:

		Three Months Ended										Year Ended
		12/31/24		9/30/24		6/30/24		3/31/24		12/31/23		12/31/24		12/31/23
Net (loss) income attributable to Alexandria's common stockholders – basic and diluted		$   (64,922)		$   164,674		$     42,917		$   166,886		$   (91,927)		$   309,555		$     92,444
Depreciation and amortization of real estate assets		327,198		291,258		288,118		284,950		281,939		1,191,524		1,080,529
Noncontrolling share of depreciation and amortization from consolidated real     estate JVs		(34,986)		(32,457)		(31,364)		(30,904)		(30,137)		(129,711)		(115,349)
Our share of depreciation and amortization from unconsolidated real estate JVs		1,061		1,075		1,068		1,034		965		4,238		3,589
Gain on sales of real estate		(100,109)	(1)	(27,114)		—		(392)		(62,227)		(127,615)		(277,037)
Impairment of real estate – rental properties and land		184,532	(2)	5,741		2,182		—		263,982		192,455		450,428
Allocation to unvested restricted stock awards		(1,182)		(2,908)		(1,305)		(3,469)		(2,268)		(8,696)		(5,175)
Funds from operations attributable to Alexandria's common stockholders –    diluted(3)		311,592		400,269		301,616		418,105		360,327		1,431,750		1,229,429
Unrealized losses (gains) on non-real estate investments		79,776		(2,610)		64,238		(29,158)		(19,479)		112,246		201,475
Impairment of non-real estate investments		20,266	(4)	10,338		12,788		14,698		23,094		58,090		74,550
Impairment of real estate		2,032		—		28,581		—		7,908		30,613		10,686
Acceleration of stock compensation expense due to executive officer resignations		—		—		—		—		18,436		—		20,295
Provision for expected credit losses on financial instruments		(434)	(5)	—		—		—		—		(434)		—
Allocation to unvested restricted stock awards		(1,407)		(125)		(1,738)		247		(472)		(3,188)		(4,121)
Funds from operations attributable to Alexandria's common stockholders –    diluted, as adjusted		$   411,825		$   407,872		$   405,485		$   403,892		$   389,814		$  1,629,077		$  1,532,314

Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.
(1)	Includes our share of gain on sale of real estate from one consolidated real estate joint venture and one unconsolidated real estate joint venture. Refer to "2024 Dispositions" in the Earnings Press Release for additional details.
(2)	Primarily represents impairment charges to reduce the carrying amount of our investments in real estate assets to their respective estimated fair values less costs to sell upon their classification as held for sale in 4Q24, including (i) $102.8 million primarily related to land parcels in our Sorrento Mesa and University Town Center submarkets, including land parcels sold during 4Q24 for a sales price aggregating $55.0 million and additional land parcels expected to be sold in 2025 with an approximate sales price aggregating approximately $243.0 million, and (ii) $40.9 million for four properties at One Moderna Way in our Route 128 submarket, which was sold during 4Q24.
(3)	Calculated in accordance with standards established by the Nareit Board of Governors.
(4)	Primarily related to three non-real estate investments in privately held entities that do not report NAV.
(5)	Represents an adjustment to the provision for expected credit losses for a direct financing lease, as well as the initial recognition of a provision for expected credit losses for two notes receivable issued in connection with dispositions completed during 4Q24.

 

Funds From Operations and Funds From Operations per Share (continued) December 31, 2024 (In thousands, except per share amounts)

The following table presents a reconciliation of net income (loss) per share attributable to Alexandria's common stockholders, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations per share attributable to Alexandria's common stockholders – diluted, and funds from operations per share attributable to Alexandria's common stockholders – diluted, as adjusted, for the periods below. Per share amounts may not add due to rounding.

		Three Months Ended										Year Ended
		12/31/24		9/30/24		6/30/24		3/31/24		12/31/23		12/31/24		12/31/23
Net (loss) income per share attributable to Alexandria's common stockholders –    diluted		$        (0.38)		$         0.96		$         0.25		$         0.97		$        (0.54)		$         1.80		$         0.54
Depreciation and amortization of real estate assets		1.70		1.51		1.50		1.48		1.48		6.20		5.67
Gain on sales of real estate		(0.58)		(0.16)		—		—		(0.36)		(0.74)		(1.62)
Impairment of real estate – rental properties and land		1.07		0.03		0.01		—		1.54		1.12		2.64
Allocation to unvested restricted stock awards		—		(0.01)		(0.01)		(0.02)		(0.01)		(0.06)		(0.04)
Funds from operations per share attributable to Alexandria's common    stockholders – diluted		1.81		2.33		1.75		2.43		2.11		8.32		7.19
Unrealized losses (gains) on non-real estate investments		0.46		(0.02)		0.37		(0.17)		(0.11)		0.65		1.18
Impairment of non-real estate investments		0.12		0.06		0.08		0.09		0.13		0.34		0.44
Impairment of real estate		0.01		—		0.17		—		0.05		0.18		0.06
Acceleration of stock compensation expense due to executive officer resignations		—		—		—		—		0.11		—		0.12
Provision for expected credit losses on financial instruments		—		—		—		—		—		—		—
Allocation to unvested restricted stock awards		(0.01)		—		(0.01)		—		(0.01)		(0.02)		(0.02)
Funds from operations per share attributable to Alexandria's common    stockholders – diluted, as adjusted		$         2.39		$         2.37		$         2.36		$         2.35		$         2.28		$         9.47		$         8.97
Weighted-average shares of common stock outstanding – diluted		172,262		172,058		172,013		171,949		171,096		172,071		170,909

Refer to "Definitions and reconciliations" in the Supplemental Information for additional details.

 

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FAQ

What was Alexandria Real Estate's (ARE) Q4 2024 earnings per share?

Alexandria Real Estate reported a net loss of $(0.38) per share for Q4 2024, compared to a loss of $(0.54) per share in Q4 2023.

How much is Alexandria's (ARE) new stock buyback program worth?

Alexandria announced a $500 million stock repurchase program through December 31, 2025, with $200.1 million already executed as of January 27, 2025.

What was ARE's occupancy rate in Q4 2024?

Alexandria Real Estate maintained a strong occupancy rate of 94.6% in its operating properties in North America as of December 31, 2024.

How much did Alexandria Real Estate (ARE) increase its dividend in 2024?

ARE increased its annual dividend by 23 cents or 5% to $5.19 per common share for 2024, compared to 2023.

What was ARE's leasing volume in Q4 2024?

Alexandria achieved 1.3 million RSF in leasing volume for Q4 2024, representing a 19% increase compared to their previous five-quarter average.