filings.toolsItem 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) and (2)Financial Statements and Financial Statement Schedule
The financial statements and financial statement schedule required by this Item are included as a separate section in this
annual report on Form 10-K beginning on page F-1.
| Page | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID: 00042) ................................................................................... | F-1 |
| Audited Consolidated Financial Statements of Alexandria Real Estate Equities, Inc.: | |
| Consolidated Balance Sheets as of December 31, 2025 and 2024 ................................................................................................ | F-3 |
| Consolidated Financial Statements for the Years Ended December 31, 2025, 2024, and 2023: ............................................... | |
| Consolidated Statements of Operations ........................................................................................................................................ | F-4 |
| Consolidated Statements of Comprehensive Income ................................................................................................................. | F-5 |
| Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests ............................................... | F-6 |
| Consolidated Statements of Cash Flows ...................................................................................................................................... | F-8 |
| Notes to Consolidated Financial Statements ....................................................................................................................................... | F-10 |
| Schedule III – Consolidated Financial Statement Schedule of Real Estate and Accumulated Depreciation ............................ | F-57 |
(a)(3) Exhibits
| Exhibit Number | Exhibit Title | Incorporated by Reference to: | Date Filed | |||
| 10.23(1) | Amended and Restated Executive Employment Agreement between the Company and John Hart Cole, entered into on January 9, 2026 and effective as of January 1, 2026 | N/A | Filed herewith | |||
| 10.24(1) | Summary of Director Compensation Arrangements | N/A | Filed herewith | |||
| 10.25(1) | Anniversary Bonus Plan of the Company | N/A | Filed herewith | |||
| 10.26(1) | Form of Indemnification Agreement between the Company and each of its directors and officers | Form 10-K | March 1, 2011 | |||
| 14.1 | The Company’s Business Integrity Policy and Procedures for Reporting Non-Compliance (code of ethics pursuant to Item 406 of Regulation S-K) | N/A | Filed herewith | |||
| 19.1 | Alexandria Real Estate Equities, Inc. Amended and Restated Policy Statement on Trading in Securities | N/A | Filed herewith | |||
| 21.1 | List of Subsidiaries of the Company | N/A | Filed herewith | |||
| 22.1 | List of Guarantor Subsidiaries of the Company | N/A | Filed herewith | |||
| 23.1 | Consent of Ernst & Young LLP | N/A | Filed herewith | |||
| 31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | N/A | Filed herewith | |||
| 31.2 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | N/A | Filed herewith | |||
| 31.3 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | N/A | Filed herewith | |||
| 32.0 | Certification of Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | N/A | Filed herewith | |||
| 97.1(1) | Incentive Compensation Recoupment Policy | N/A | Filed herewith | |||
| 101.1 | The following materials from the Company’s annual report on Form 10-K for the year ended December 31, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2025 and 2024, (ii) Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024, and 2023, (iv) Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests for the years ended December 31, 2025, 2024, and 2023, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023, (vi) Notes to Consolidated Financial Statements, and (vii) Schedule III — Consolidated Financial Statement Schedule of Real Estate and Accumulated Depreciation of the Company. | N/A | Filed herewith | |||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | N/A | Filed herewith |
(1) Management contract or compensatory arrangement.
S-1
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
| ALEXANDRIA REAL ESTATE EQUITIES, INC. | |||
| Dated: | January 26, 2026 | By: | /s/ Joel S. Marcus |
| Joel S. Marcus Executive Chairman (Principal Executive Officer) | |||
| /s/ Peter M. Moglia | |||
| Peter M. Moglia Chief Executive Officer and Chief Investment Officer (Principal Executive Officer) |
S-2
KNOW ALL THOSE BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joel
S. Marcus, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in
his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K, and to
file the same, with exhibits thereto and other documents in connection therewith, if any, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent of their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report on Form 10-K has been signed below
by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Joel S. Marcus | Executive Chairman (Principal Executive Officer) | January 26, 2026 | ||
| Joel S. Marcus | ||||
| /s/ Peter M. Moglia | Chief Executive Officer and Chief Investment Officer (Principal Executive Officer) | January 26, 2026 | ||
| Peter M. Moglia | ||||
| /s/ Marc E. Binda | Chief Financial Officer and Treasurer (Principal Financial Officer) | January 26, 2026 | ||
| Marc E. Binda | ||||
| /s/ Andres R. Gavinet | Chief Accounting Officer (Principal Accounting Officer) | January 26, 2026 | ||
| Andres R. Gavinet | ||||
| /s/ Steven R. Hash | Lead Director | January 26, 2026 | ||
| Steven R. Hash | ||||
| /s/ Claire Aldridge | Director | January 26, 2026 | ||
| Claire Aldridge | ||||
| /s/ James P. Cain | Director | January 26, 2026 | ||
| James P. Cain | ||||
| /s/ Maria C. Freire | Director | January 26, 2026 | ||
| Maria C. Freire | ||||
| /s/ Richard H. Klein | Director | January 26, 2026 | ||
| Richard H. Klein | ||||
| /s/ Sheila K. McGrath | Director | January 26, 2026 | ||
| Sheila K. McGrath | ||||
| /s/ Michael A. Woronoff | Director | January 26, 2026 | ||
| Michael A. Woronoff |
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Alexandria Real Estate Equities, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alexandria Real Estate Equities, Inc. (the Company) as of
December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in stockholders’
equity and noncontrolling interests and cash flows for each of the three years in the period ended December 31, 2025, and the related
notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our
report dated January 26, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
F-2
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the
critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures
to which it relates.
Impairment of investments in real estate
| Description of the Matter | At December 31, 2025, the carrying value of the Company’s investments in real estate was $28.7 billion including $556.7 million of investments in real estate held for sale. For the year ended December 31, 2025, the impairment of real estate was $2.2 billion. As discussed in Note 2 to the consolidated financial statements, the Company reviews current activities and changes in the business conditions of its investment in real estate to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, the Company will review an estimate of the future undiscounted cash flows of the particular investment in real estate which will include a probability-weighted approach if multiple outcomes are under consideration. Impairment is recognized to reduce the carrying amount of a particular long-lived asset to be held and used to its estimated fair value when the estimate of future undiscounted cash flows for that asset is less than its carrying amount. When a long-lived asset is classified as held for sale, an impairment charge is recognized if the carrying amount of the asset exceeds its fair value less cost to sell. Auditing the Company’s evaluation of whether its investments in real estate to be held and used are recoverable was complex and involved a high degree of subjectivity in evaluating management’s key assumptions used in estimating the undiscounted future cash flows including projected rental rates, exit capitalization rates, construction costs for projects under development and probability-weighting multiple scenarios under consideration, as they were based on assumptions about construction costs, available market information, current and historical operating results, known trends and current market/economic conditions that may affect the asset, and management’s assumptions about the use of the asset. Further, auditing the measurement of the impairment charges recognized for investments in real estate held for sale was complex and involved a high degree of subjectivity in evaluating management’s estimates of certain assets’ fair values less costs to sell, which were based on valuations provided by third-party real estate brokers or management’s conclusion on fair value based on recent comparable transactions. | |
| How we Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the Company’s investments in real estate impairment assessment process. For example, we tested controls over management’s process for estimating and evaluating the assumptions used in the calculations of the future undiscounted cash flows for investments in real estate where impairment indicators existed as well as controls related to management’s development of the fair value estimates for investments in real estate held for sale. In auditing the Company’s undiscounted future cash flows for investments in real estate to be held and used with identified indicators of impairment and measurement of impairment charges recognized for investments in real estate held for sale, we performed audit procedures over the Company’s estimation of these assets’ future cash flows or fair values, and for a sample of real estate assets, we involved a valuation specialist to assist in our assessment. For example, we compared fair value estimates and significant assumptions used to estimate future cash flows to the Company’s historical accounting records or to available market data. We also tested the mathematical accuracy of management’s forecasted cash flows. Additionally, for certain assumptions, we assessed management’s sensitivity analyses in addition to performing our own sensitivity analyses to evaluate the changes in the cash flows of the investments in real estate that would result from changes in the assumptions. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1994.
Los Angeles, California
January 26, 2026
F-3
Alexandria Real Estate Equities, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
| December 31, | |||
| 2025 | 2024 | ||
| Assets | |||
| Investments in real estate | $28,689,996 | $32,110,039 | |
| Investments in unconsolidated real estate joint ventures | 30,677 | 39,873 | |
| Cash and cash equivalents | 549,062 | 552,146 | |
| Restricted cash | 4,693 | 7,701 | |
| Tenant receivables | 6,672 | 6,409 | |
| Deferred rent | 1,179,403 | 1,187,031 | |
| Deferred leasing costs | 458,311 | 485,959 | |
| Investments | 1,501,249 | 1,476,985 | |
| Other assets | 1,661,772 | 1,661,306 | |
| Total assets | $34,081,835 | $37,527,449 | |
| Liabilities, Noncontrolling Interests, and Equity | |||
| Secured notes payable | $— | $149,909 | |
| Unsecured senior notes payable | 12,047,394 | 12,094,465 | |
| Unsecured senior line of credit and commercial paper | 353,161 | — | |
| Accounts payable, accrued expenses, and other liabilities | 2,397,073 | 2,654,351 | |
| Dividends payable | 127,771 | 230,263 | |
| Total liabilities | 14,925,399 | 15,128,988 | |
| Commitments and contingencies | |||
| Redeemable noncontrolling interests | 58,788 | 19,972 | |
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity: | |||
| Common stock, $0.01 par value per share, 400,000,000 shares authorized as of December 31, 2025 and 2024; 170,537,867 and 172,203,443 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 1,705 | 1,722 | |
| Additional paid-in capital | 15,497,760 | 17,933,572 | |
| Accumulated other comprehensive loss | (29,395) | (46,252) | |
| Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 15,470,070 | 17,889,042 | |
| Noncontrolling interests | 3,627,578 | 4,489,447 | |
| Total equity | 19,097,648 | 22,378,489 | |
| Total liabilities, noncontrolling interests, and equity | $34,081,835 | $37,527,449 |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Revenues: | |||||
| Income from rentals | $2,945,175 | $3,049,706 | $2,842,456 | ||
| Other income | 81,381 | 66,688 | 43,243 | ||
| Total revenues | 3,026,556 | 3,116,394 | 2,885,699 | ||
| Expenses: | |||||
| Rental operations | 922,605 | 909,265 | 859,180 | ||
| General and administrative | 117,047 | 168,359 | 199,354 | ||
| Interest | 226,698 | 185,838 | 74,204 | ||
| Depreciation and amortization | 1,350,478 | 1,202,380 | 1,093,473 | ||
| Impairment of real estate | 2,202,818 | 223,068 | 461,114 | ||
| Loss on early extinguishment of debt | 107 | — | — | ||
| Total expenses | 4,819,753 | 2,688,910 | 2,687,325 | ||
| Equity in (losses) earnings of unconsolidated real estate joint ventures | (9,631) | 7,059 | 980 | ||
| Investment loss | (56,343) | (53,122) | (195,397) | ||
| Gain on sales of real estate | 642,445 | 129,312 | 277,037 | ||
| Net (loss) income | (1,216,726) | 510,733 | 280,994 | ||
| Net income attributable to noncontrolling interests | (212,844) | (187,784) | (177,355) | ||
| Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | (1,429,570) | 322,949 | 103,639 | ||
| Net income attributable to unvested restricted stock awards | (8,417) | (13,394) | (11,195) | ||
| Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $(1,437,987) | $309,555 | $92,444 | ||
| Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders: | |||||
| Basic | $(8.44) | $1.80 | $0.54 | ||
| Diluted | $(8.44) | $1.80 | $0.54 |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Comprehensive Income
(In thousands)
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Net (loss) income | $(1,216,726) | $510,733 | $280,994 | ||
| Other comprehensive income (loss) | |||||
| Change in foreign currency translation adjustments: | |||||
| Unrealized foreign currency translation gains (losses) during the period | 15,160 | (29,719) | 4,916 | ||
| Reclassification of losses (gains) | 1,697 | (637) | — | ||
| Unrealized gains (losses) on foreign currency translation, net | 16,857 | (30,356) | 4,916 | ||
| Total other comprehensive income (loss) | 16,857 | (30,356) | 4,916 | ||
| Comprehensive (loss) income | (1,199,869) | 480,377 | 285,910 | ||
| Less: comprehensive income attributable to noncontrolling interests | (212,844) | (187,784) | (177,355) | ||
| Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $(1,412,713) | $292,593 | $108,555 |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests
(Dollars in thousands)
| Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity | ||||||||||||||||
| Number of Common Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | Redeemable Noncontrolling Interests | |||||||||
| Balance as of December 31, 2022 | 170,748,395 | $1,707 | $18,991,492 | $— | $(20,812) | $3,701,248 | $22,673,635 | $9,612 | ||||||||
| Net income | — | — | — | 103,639 | — | 176,431 | 280,070 | 924 | ||||||||
| Total other comprehensive income | — | — | — | — | 4,916 | — | 4,916 | — | ||||||||
| Contributions from and sales of noncontrolling interests | — | — | 33,896 | — | — | 508,693 | 542,589 | 35,250 | ||||||||
| Distributions to and redemption of noncontrolling interests | — | — | — | — | — | (243,268) | (243,268) | (37,072) | ||||||||
| Transfer of noncontrolling interest | — | — | — | — | — | (7,766) | (7,766) | 7,766 | ||||||||
| Issuance of common stock | 699,274 | 7 | 103,839 | — | — | — | 103,846 | — | ||||||||
| Issuance pursuant to stock plan | 798,729 | 8 | 156,257 | — | — | — | 156,265 | — | ||||||||
| Taxes related to net settlement of equity awards | (335,799) | (3) | (43,595) | — | — | — | (43,598) | — | ||||||||
| Dividends declared on common stock ($4.96 per share) | — | — | — | (860,176) | — | — | (860,176) | — | ||||||||
| Reclassification of distributions in excess of earnings | — | — | (756,537) | 756,537 | — | — | — | — | ||||||||
| Balance as of December 31, 2023 | 171,910,599 | 1,719 | 18,485,352 | — | (15,896) | 4,135,338 | 22,606,513 | 16,480 | ||||||||
| Net income | — | — | — | 322,949 | — | 186,694 | 509,643 | 1,090 | ||||||||
| Total other comprehensive loss | — | — | — | — | (30,356) | — | (30,356) | — | ||||||||
| Contributions from and sales of noncontrolling interests | — | — | 8,396 | — | — | 405,016 | 413,412 | — | ||||||||
| Distributions to and redemption of noncontrolling interests | — | — | (8,084) | — | — | (264,149) | (272,233) | (1,235) | ||||||||
| Transfer of noncontrolling interest | — | — | — | — | — | (3,637) | (3,637) | 3,637 | ||||||||
| Reallocation of capital to joint venture partner | — | — | (30,185) | — | — | 30,185 | — | — | ||||||||
| Issuance of common stock | 229,558 | 2 | 27,101 | — | — | — | 27,103 | — | ||||||||
| Issuance pursuant to stock plan | 951,195 | 10 | 129,288 | — | — | — | 129,298 | — | ||||||||
| Taxes related to net settlement of equity awards | (391,633) | (4) | (44,147) | — | — | — | (44,151) | — | ||||||||
| Repurchase of common stock | (496,276) | (5) | (50,102) | — | — | — | (50,107) | — | ||||||||
| Dividends declared on common stock ($5.19 per share) | — | — | — | (906,996) | — | — | (906,996) | — | ||||||||
| Reclassification of distributions in excess of earnings | — | — | (584,047) | 584,047 | — | — | — | — | ||||||||
| Balance as of December 31, 2024 | 172,203,443 | $1,722 | $17,933,572 | $— | $(46,252) | $4,489,447 | $22,378,489 | $19,972 |
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests (continued)
(Dollars in thousands)
| Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity | ||||||||||||||||
| Number of Common Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | Redeemable Noncontrolling Interests | |||||||||
| Balance as of December 31, 2024 | 172,203,443 | $1,722 | $17,933,572 | $— | $(46,252) | $4,489,447 | $22,378,489 | $19,972 | ||||||||
| Net (loss) income | — | — | — | (1,429,570) | — | 211,133 | (1,218,437) | 1,711 | ||||||||
| Total other comprehensive income | — | — | — | — | 16,857 | — | 16,857 | — | ||||||||
| Contributions from and sales of noncontrolling interests | — | — | (2,354) | — | — | 167,841 | 165,487 | — | ||||||||
| Distributions to and redemption of noncontrolling interests | — | — | (73,365) | — | — | (1,045,489) | (1,118,854) | (11,605) | ||||||||
| Deconsolidation of noncontrolling interests upon real estate asset sales | — | — | — | — | — | (153,475) | (153,475) | — | ||||||||
| Transfer of noncontrolling interests | — | — | — | — | — | (48,710) | (48,710) | 48,710 | ||||||||
| Reallocation of capital to joint venture partner | — | — | (6,831) | — | — | 6,831 | — | — | ||||||||
| Issuance pursuant to stock plan | 817,304 | 8 | 117,280 | — | — | — | 117,288 | — | ||||||||
| Taxes related to net settlement of equity awards | (330,587) | (3) | (23,549) | — | — | — | (23,552) | — | ||||||||
| Repurchase of common stock | (2,152,293) | (22) | (208,165) | — | — | — | (208,187) | — | ||||||||
| Dividends declared on common stock ($4.68 per share) | — | — | — | (809,258) | — | — | (809,258) | — | ||||||||
| Reclassification of distributions in excess of earnings | — | — | (2,238,828) | 2,238,828 | — | — | — | — | ||||||||
| Balance as of December 31, 2025 | 170,537,867 | $1,705 | $15,497,760 | $— | $(29,395) | $3,627,578 | $19,097,648 | $58,788 |
The accompanying notes are an integral part of these consolidated financial statements.
F-8
| Alexandria Real Estate Equities, Inc. Consolidated Statements of Cash Flows (In thousands) | |||||
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Operating Activities | |||||
| Net (loss) income | $(1,216,726) | $510,733 | $280,994 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation and amortization | 1,350,478 | 1,202,380 | 1,093,473 | ||
| Impairment of real estate | 2,202,818 | 223,068 | 461,114 | ||
| Gain on sales of real estate | (642,445) | (129,312) | (277,037) | ||
| Loss on early extinguishment of debt | 107 | — | — | ||
| Equity in losses (earnings) of unconsolidated real estate joint ventures | 9,631 | (7,059) | (980) | ||
| Distributions of earnings from unconsolidated real estate joint ventures | 2,179 | 2,982 | 3,257 | ||
| Amortization of loan fees | 18,292 | 17,130 | 15,486 | ||
| Amortization of debt discounts | 1,336 | 1,309 | 1,207 | ||
| Amortization of acquired above- and below-market leases | (37,763) | (85,679) | (93,331) | ||
| Deferred rent | (73,476) | (143,329) | (133,917) | ||
| Stock compensation expense | 41,119 | 59,634 | 82,858 | ||
| Investment loss | 56,343 | 53,122 | 195,397 | ||
| Changes in operating assets and liabilities: | |||||
| Tenant receivables | (252) | 1,766 | (102) | ||
| Deferred leasing costs | (123,195) | (108,346) | (109,339) | ||
| Other assets | (56,577) | (37,052) | 798 | ||
| Accounts payable, accrued expenses, and other liabilities | (117,823) | (56,823) | 110,672 | ||
| Net cash provided by operating activities | 1,414,046 | 1,504,524 | 1,630,550 | ||
| Investing Activities | |||||
| Proceeds from sales of real estate | 2,320,875 | 1,220,206 | 1,195,743 | ||
| Additions to real estate | (1,870,924) | (2,422,625) | (3,418,296) | ||
| Purchases of real estate | — | (248,699) | (265,750) | ||
| Change in escrow deposits | (7,364) | 3,864 | (5,582) | ||
| Investments in unconsolidated real estate joint ventures | (11,296) | (3,927) | (658) | ||
| Return of capital from unconsolidated real estate joint ventures | 566 | 2,916 | — | ||
| Additions to non-real estate investments | (238,763) | (236,357) | (189,472) | ||
| Sales of and distributions from non-real estate investments | 169,003 | 173,927 | 183,396 | ||
| Net cash provided by (used in) investing activities | $362,097 | $(1,510,695) | $(2,500,619) | ||
| The accompanying notes are an integral part of these consolidated financial statements. |
F-9
| Alexandria Real Estate Equities, Inc. Consolidated Statements of Cash Flows (In thousands) | |||||
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Financing Activities | |||||
| Borrowings under secured notes payable | $4,031 | $29,919 | $59,957 | ||
| Repayments of borrowings under secured notes payable | (154,212) | (32) | (30) | ||
| Proceeds from issuances of unsecured senior notes payable | 548,532 | 998,806 | 996,205 | ||
| Repayment of unsecured senior notes payable | (600,000) | — | — | ||
| Borrowings under unsecured senior line of credit | 700,000 | — | 1,245,000 | ||
| Repayments of borrowings under unsecured senior line of credit | (700,000) | — | (1,245,000) | ||
| Proceeds from issuances under commercial paper program | 25,426,375 | 13,010,600 | 9,234,000 | ||
| Repayments of borrowings under commercial paper program | (25,072,875) | (13,110,600) | (9,134,000) | ||
| Payments of loan fees | (5,307) | (35,871) | (16,047) | ||
| Taxes paid related to net settlement of equity awards | (24,409) | (62,413) | (24,592) | ||
| Proceeds from issuance of common stock | — | 27,103 | 103,846 | ||
| Repurchase of common stock | (208,187) | (50,107) | — | ||
| Dividends on common stock | (911,450) | (898,557) | (847,483) | ||
| Contributions from and sales of noncontrolling interests | 165,488 | 306,473 | 547,391 | ||
| Distributions to and purchases of noncontrolling interests | (951,780) | (308,636) | (245,091) | ||
| Net cash (used in) provided by financing activities | (1,783,794) | (93,315) | 674,156 | ||
| Effect of foreign exchange rate changes on cash and cash equivalents | 1,559 | (1,438) | (1,291) | ||
| Net decrease in cash, cash equivalents, and restricted cash | (6,092) | (100,924) | (197,204) | ||
| Cash, cash equivalents, and restricted cash as of the beginning of period | 559,847 | 660,771 | 857,975 | ||
| Cash, cash equivalents, and restricted cash as of the end of period | $553,755 | $559,847 | $660,771 | ||
| Supplemental Disclosure and Non-Cash Investing and Financing Activities: | |||||
| Cash paid during the period for interest, net of interest capitalized | $204,030 | $160,082 | $46,583 | ||
| Accrued construction for current-period additions to real estate | $339,481 | $465,611 | $629,351 | ||
| Derecognition of net investment in real estate from sales-type lease | $4,677 | $— | $— | ||
| Deconsolidation of noncontrolling interests upon real estate sales | $153,475 | $— | $— | ||
| Contribution of assets from and issuance of noncontrolling interest to real estate joint venture partner | $— | $106,941 | $33,250 | ||
| Transfer of real estate assets and/or equipment from tenants | $178,651 | $129,154 | $31,310 | ||
| Reallocation of additional paid-in-capital to consolidated joint venture partner’s noncontrolling interest | $6,831 | $30,185 | $— | ||
| Notes receivable issued in connection with sales of real estate | $123,950 | $104,166 | $— | ||
| Initial recognition of right-of-use asset and lease liability | $— | $265,203 | $— | ||
| Payable for purchase of noncontrolling interest | $— | $— | $(35,250) | ||
| Exchange of joint venture interests:(1) | |||||
| Disposition of our interest in Pacific Technology Park | $82,392 | $— | $— | ||
| Acquisition of our partner’s noncontrolling interest in 199 East Blaine Street | $96,543 | $— | $— |
(1)Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” for additional information.
The accompanying notes are an integral part of these consolidated financial statements.
F-10
Alexandria Real Estate Equities, Inc.
Notes to Consolidated Financial Statements
**1.**ORGANIZATION AND BASIS OF PRESENTATION
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® life science REIT, is the pioneer of the life science real estate
niche since its founding in 1994. 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, 2025, Alexandria has a total market capitalization
of $20.75 billion and an asset base in North America that includes 35.9 million RSF of operating properties and 3.5 million RSF of Class
A/A+ properties undergoing construction. 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. The accompanying
consolidated financial statements include the accounts of Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. All
significant intercompany balances and transactions have been eliminated.
Any references to our total market capitalization, number or quality of buildings or tenants, quality of location, square footage,
number of leases, or occupancy percentage, and any amounts derived from these values in these notes to consolidated financial
statements are outside the scope of our independent registered public accounting firm’s procedures.
**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
On an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly
owned by us in accordance with the consolidation accounting guidance. Our evaluation considers all of our variable interests, including
equity ownership, as well as fees paid to us for our involvement in the management of each partially owned entity. To fall within the
scope of the consolidation guidance, an entity must meet both of the following criteria:
- The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can
be in the form of a partnership, limited liability company, or corporation, among others; and
- We have a variable interest in the legal entity — i.e., variable interests that are contractual, such as equity ownership, or
other financial interests that change with changes in the fair value of the entity’s net assets.
If an entity does not meet both criteria above, we apply other accounting literature, such as the equity method of accounting. If
an entity does meet both criteria above, we evaluate such entity for consolidation under either the variable interest model if the legal
entity meets any of the characteristics below to qualify as a VIE, or under the voting model for all other legal entities that are not VIEs.
A legal entity is determined to be a VIE if it has any of the following three characteristics:
1)The entity does not have sufficient equity to finance its activities without additional subordinated financial support;
2)The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest holder(s)
of voting rights); or
3)The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion if
they lack any of the following:
- The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence the
entity’s economic performance, as evidenced by:
-
Substantive participating rights in day-to-day management of the entity’s activities; or
-
Substantive kick-out rights over the party responsible for significant decisions;
-
The obligation to absorb the entity’s expected losses; or
-
The right to receive the entity’s expected residual returns.
For an entity, including our real estate joint ventures, structured as a limited partnership or a limited liability company, our
evaluation of whether the equity holders (equity partners other than the general partner or the managing member of a joint venture) lack
the characteristics of a controlling financial interest includes the evaluation of whether the limited partners or non-managing members
(the noncontrolling equity holders) lack both substantive participating rights and substantive kick-out rights, defined as follows:
- Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating decisions
made in the ordinary course of business that most significantly influence the entity’s economic performance.
- Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause.
If we conclude that any of the three characteristics of a VIE are met, including that the equity holders lack the characteristics of
a controlling financial interest because they lack both substantive participating rights and substantive kick-out rights, we conclude that
the entity is a VIE and evaluate it for consolidation under the variable interest model.
F-11
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Variable interest model
If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is
a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits — that is, (i) we have the
power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power) and (ii) we have the
obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE (benefits). We
consolidate VIEs whenever we determine that we are the primary beneficiary. Refer to Note 4 – “Consolidated and unconsolidated real
estate joint ventures” and Note 7 – “Investments” to our consolidated financial statements for information on specific entities that qualify
as VIEs. If we have a variable interest in a VIE but are not the primary beneficiary, we account for our investment using the equity
method.
Voting model
If a legal entity fails to meet any of the three characteristics of a VIE (i.e., insufficiency of equity, existence of non-substantive
voting rights, or lack of a controlling financial interest), we then evaluate such entity under the voting model. Under the voting model, we
consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares (or own a majority of the
limited partnership’s kick-out rights through voting interests), and that other equity holders do not have substantive participating rights.
Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements for
information on specific joint ventures that qualify for evaluation under the voting model.
Noncontrolling interests in consolidated real estate joint ventures
Noncontrolling interests represent the third-party interests in consolidated real estate joint ventures in which we have a
controlling interest. Certain of our partners’ noncontrolling interests have the right to require us to redeem their ownership interests in
the respective entities. We classify the ownership interests in these entities as redeemable noncontrolling interests outside of total
equity in our consolidated balance sheets. Redeemable noncontrolling interests are adjusted for additional contributions and
distributions, the proportionate share of net earnings or losses, and other comprehensive income or loss. If the amount of a redeemable
noncontrolling interest is less than the maximum redemption value at the balance sheet date, such amount is adjusted to the maximum
redemption value. Subsequent declines in the redemption value are recognized only to the extent that previous increases have been
recognized.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and equity; the disclosure of contingent assets and liabilities as of the date of the
consolidated financial statements; and the amounts of revenues and expenses during the reporting period. Actual results could
materially differ from those estimates.
Investments in real estate
Evaluation of business combination or asset acquisition
We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly
hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and
needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the
definition of a business is accounted for as an asset acquisition. If either of the following criteria is met, the integrated set of assets and
activities acquired would not qualify as a business:
- Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group
of similar identifiable assets; or
- The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together
significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction).
An acquired process is considered substantive if:
- The process includes an organized workforce (or includes an acquired contract that provides access to an organized
workforce) that is skilled, knowledgeable, and experienced in performing the process;
-
The process cannot be replaced without significant cost, effort, or delay; or
-
The process is considered unique or scarce.
F-12
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Generally, our acquisitions of real estate or in-substance real estate do not meet the definition of a business 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) or because the acquisition does not include a substantive process in the form of an acquired workforce or
an acquired contract that cannot be replaced without significant cost, effort, or delay. When evaluating acquired service or management
contracts, we consider the nature of the services performed, the terms of the contract relative to similar arm’s-length contracts, and the
availability of comparable vendors in evaluating whether the acquired contract constitutes a substantive process.
Recognition of real estate acquired
We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly
hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and
needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the
definition of a business is accounted for as an asset acquisition.
For acquisitions of real estate or in-substance real estate that are accounted for as business combinations, we allocate the
acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and
previously existing ownership interests at fair value as of the acquisition date. Assets include intangible assets such as tenant
relationships, acquired in-place leases, and favorable intangibles associated with in-place leases in which we are the lessor. Liabilities
include unfavorable intangibles associated with in-place leases in which we are the lessor. In addition, for acquired in-place finance or
operating leases in which we are the lessee, acquisition consideration is allocated to lease liabilities and related right-of-use assets,
adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Any excess (deficit) of the
consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill (bargain purchase gain).
Acquisition costs related to business combinations are expensed as incurred.
Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the definition of a business
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 is similar to the accounting model for business
combinations, except that the acquisition consideration (including acquisition costs) is 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. As a
result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. Incremental and external direct
acquisition costs related to acquisitions of real estate or in-substance real estate (such as legal and other third-party services) are
capitalized.
We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its
components. The allocation of the consideration to the various components of properties acquired during the year can have an effect on
our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related
depreciation and amortization expense in our consolidated statements of operations. We apply judgment in utilizing available
comparable market information to assess relative fair value. We assess the relative fair values of tangible and intangible assets and
liabilities based on available comparable market information, including estimated replacement costs, rental rates, and recent market
transactions. In addition, we may use estimated cash flow projections that utilize appropriate discount and capitalization rates.
Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated
trends, and market/economic conditions that may affect the property.
The value of tangible assets acquired is based upon our estimation of fair value on an “as if vacant” basis. The value of
acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been
incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. If there is a
bargain fixed-rate renewal option for the period beyond the noncancelable lease term of an in-place lease, we evaluate intangible
factors, such as the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the
property is located, and the ability of the lessee to sublease the property during the renewal term, in order to determine the likelihood
that the lessee will renew. When we determine that there is reasonable assurance that such bargain purchase option will be exercised,
we consider the option in determining the intangible value of such lease and its related amortization period. We also recognize the
relative fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100%
interest when the acquisition constitutes a change in control of the acquired entity.
F-13
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Depreciation and amortization
The values allocated to buildings and building improvements, land improvements, tenant improvements, and equipment are
depreciated on a straight-line basis. For buildings and building improvements, we depreciate using the shorter of the respective ground
lease terms or their estimated useful lives, not to exceed 40 years. Land improvements are depreciated over their estimated useful
lives, not to exceed 20 years. Tenant improvements are depreciated over their respective lease terms or estimated useful lives, and
equipment is depreciated over the shorter of the lease term or its estimated useful life. The values of the right-of-use assets are
amortized on a straight-line basis over the remaining terms of each related lease. The values of acquired in-place leases and
associated favorable intangibles (i.e., acquired above-market leases) are classified in other assets in our consolidated balance sheets
and are amortized over the remaining terms of the related leases as a reduction of income from rentals in our consolidated statements
of operations. The values of unfavorable intangibles (i.e., acquired below-market leases) associated with acquired in-place leases are
classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets and are amortized over the
remaining terms of the related leases as an increase in income from rentals in our consolidated statements of operations.
Capitalized project costs
We capitalize project costs, including pre-construction costs, interest, property taxes, insurance, and other costs directly
related and essential to the development, redevelopment, pre-construction, or construction of a project. Capitalization of development,
redevelopment, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use.
Fluctuations in our development, redevelopment, pre-construction, and construction activities could result in significant changes to total
expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as
incurred. Should development, redevelopment, pre-construction, or construction activity cease, interest, property taxes, insurance, and
certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and
maintenance are expensed as incurred.
Real estate sales
A property is classified as held for sale when all of the following criteria for a plan of sale have been met: (i) management,
having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its
present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions
required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within
one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
(vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the
plan will be withdrawn. Depreciation of assets ceases upon designation of a property as held for sale.
If the disposal of a property represents a strategic shift that has (or will have) a major effect on our operations or financial
results, such as (i) a major line of business, (ii) a major geographic area, (iii) a major equity method investment, or (iv) other major parts
of an entity, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued
operations in our consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing
operations to discontinued operations. The disposal of an individual property generally will not represent a strategic shift and therefore
will typically not meet the criteria for classification as a discontinued operation.
We recognize gains or losses on real estate sales in accordance with the accounting standard on the derecognition of
nonfinancial assets arising from contracts with noncustomers. Our ordinary output activities consist of the leasing of space to our
tenants in our operating properties, not the sales of real estate. Therefore, sales of real estate (in which we are the seller) qualify as
contracts with noncustomers. In our transactions with noncustomers, we apply certain recognition and measurement principles
consistent with our method of recognizing revenue arising from contracts with customers. Derecognition of the asset is based on the
transfer of control. If a real estate sales contract includes our ongoing involvement with the property, then we evaluate each promised
good or service under the contract to determine whether it represents a separate performance obligation, constitutes a guarantee, or
prevents the transfer of control. If a good or service is considered a separate performance obligation, an allocated portion of the
transaction price is recognized as revenue as we transfer the related good or service to the buyer.
The recognition of gain or loss on the sale of a partial interest also depends on whether we retain a controlling or
noncontrolling interest in the property. If we retain a controlling interest in the property upon completion of the sale, we continue to
reflect the asset at its book value, record a noncontrolling interest for the book value of the partial interest sold, and recognize additional
paid-in capital for the difference between the consideration received and the partial interest at book value. Conversely, if we retain a
noncontrolling interest upon completion of the sale of a partial interest of real estate, we recognize a gain or loss as if 100% of the asset
were sold.
F-14
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of long-lived assets
Prior to and subsequent to the end of each quarter, we review current activities and changes in the business conditions of all of
our long-lived assets 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, 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, 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 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, estimated exit capitalization rates, and anticipated construction costs for projects under construction, which are based on
available market information, current and historical operating results, known trends, current market/economic conditions that may affect
the asset, 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 of the asset to
its estimated fair value. If an impairment charge is not required to be recognized, the recognition of depreciation or amortization is
adjusted prospectively, as necessary, to reduce the carrying amount of the asset to its estimated disposition value over the remaining
period that the asset is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or
redeveloped prior to the end of their useful lives.
We use the held for sale impairment model for our properties classified as held for sale, which is different from the held and
used impairment model. Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the
long-lived asset classified as held for sale exceeds its fair value less cost to sell. 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.
International operations
In addition to operating properties in the U.S., we have 11 properties in Canada. The functional currency for our subsidiaries
operating in the U.S. is the U.S. dollar. The local currency of a foreign subsidiary serves as its functional currency. The assets and
liabilities of our foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect as of the financial statement date.
Revenue and expense accounts of our foreign subsidiaries are translated using the weighted-average exchange rate for the periods
presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive income (loss) as a
separate component of total equity and are excluded from net income (loss).
Whenever a foreign investment meets the criteria for classification as held for sale, we evaluate the recoverability of the
investment under the held for sale impairment model. We may recognize an impairment charge if the carrying amount of the investment
exceeds its fair value less cost to sell. In determining an investment’s carrying amount, we consider its net book value and any
cumulative unrealized foreign currency translation adjustment related to the investment.
The appropriate amounts of foreign exchange rate gains or losses classified in accumulated other comprehensive income
(loss) are reclassified to net income (loss) when realized upon the sale of our investment or upon the complete or substantially
complete liquidation of our investment.
F-15
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
I****nvestments
We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. As a
REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to
determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in
which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption
that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such
ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a
board seat or whether we participate in the investee’s policymaking process, among other criteria, to determine if we have the ability to
exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment
under the equity method, as described below. From time to time, we may hold equity investments in publicly traded companies that are
subject to temporary contractual sale restrictions. We do not recognize a discount related to a contractual sale restriction.
Investments accounted for under the equity method
Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying
amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary
impairments. For additional information about our investments accounted for under the equity method, refer to Note 7 – “Investments” to
our consolidated financial statements.
Investments that do not qualify for the equity method of accounting
For investees over which we determine that we do not have the ability to exercise significant influence or control, we account
for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV
per share, or (iii) privately held entity that does not report NAV per share, as described below.
Investments in publicly traded companies
Our investments in publicly traded companies are classified as investments with readily determinable fair values and are
presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our
consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales
prices or quotes available on securities exchanges.
Investments in privately held companies
Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held
entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are
accounted for as follows:
Investments in privately held entities that report NAV per share
Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships,
are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our
consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we
are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the
investment at our reporting date.
Investments in privately held entities that do not report NAV per share
Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative
under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified
in investment income (loss) in our consolidated statements of operations.
An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is
observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity
transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity
transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we
evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution
preferences, and conversion rights to the investments we hold.
F-16
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per
share
We monitor equity method investments and investments in privately held entities that do not report NAV per share 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. These investments are evaluated 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 or 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
impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.
Investment income/loss recognition and classification
We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in
investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent:
(i)changes in fair value for investments in publicly traded companies;
(ii)changes in NAV for investments in privately held entities that report NAV per share;
(iii)observable price changes for investments in privately held entities that do not report NAV per share; and
(iv)our share of unrealized gains or losses reported by our equity method investees.
Realized gains and losses on our investments represent the difference between proceeds received upon disposition of
investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our
share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and
represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity
method investments, if impairments are deemed other than temporary, to their estimated fair value.
Revenues
The table below provides details of our consolidated total revenues for the years ended December 31, 2025, 2024, and 2023
(in thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Income from rentals: | ||||||
| Revenues subject to the lease accounting standard: | ||||||
| Operating leases | $2,889,721 | $3,005,137 | $2,802,567 | |||
| Direct financing and sales-type leases | 4,496 | 2,653 | 2,608 | |||
| Revenues subject to the lease accounting standard | 2,894,217 | 3,007,790 | 2,805,175 | |||
| Revenues subject to the revenue recognition accounting standard | 50,958 | 41,916 | 37,281 | |||
| Income from rentals | 2,945,175 | 3,049,706 | 2,842,456 | |||
| Other income | 81,381 | 66,688 | 43,243 | |||
| Total revenues | $3,026,556 | $3,116,394 | $2,885,699 |
During the years ended December 31, 2025, 2024, and 2023, revenues that were subject to the lease accounting standard
aggregated $2.89 billion, $3.01 billion, and $2.81 billion, respectively, and represented 95.6%, 96.5%, and 97.2%, respectively, of our
total revenues. Our other income consisted primarily of management fees and interest income earned during each year presented. For
a detailed discussion related to our revenue streams, refer to “Lease accounting” and “Recognition of revenue arising from contracts
with customers” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements.
F-17
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Lease accounting
Definition and classification of a lease
When we enter into a contract or amend an existing contract, we evaluate whether the contract meets the definition of a lease.
To meet the definition of a lease, the contract must meet all three criteria:
(i)One party (lessor) must hold an identified asset;
(ii)The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of the contract; and
(iii)The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.
We classify our leases as either finance leases or operating leases if we are the lessee, or sales-type, direct financing, or
operating leases if we are the lessor. We use the following criteria to determine if a lease is a finance lease (as a lessee) or sales-type
or direct financing lease (as a lessor):
(i)Ownership is transferred from lessor to lessee by the end of the lease term;
(ii)An option to purchase is reasonably certain to be exercised;
(iii)The lease term is for the major part of the underlying asset’s remaining economic life;
(iv)The present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset; or
(v)The underlying asset is specialized and is expected to have no alternative use at the end of the lease term.
If we meet any of the above criteria, we account for the lease as a finance, a sales-type, or a direct financing lease. If we do
not meet any of the criteria, we account for the lease as an operating lease.
A lease is accounted for as a sales-type lease if it is considered to transfer control of the underlying asset to the lessee. A
lease is accounted for as a direct financing lease if risks and rewards are conveyed without the transfer of control, which is normally
indicated by the existence of a residual value guarantee from an unrelated third party other than the lessee.
This classification will determine the method of recognition of the lease:
- For an operating lease, we recognize income from rentals if we are the lessor, or rental operations expense if we are the
lessee, over the term of the lease on a straight-line basis.
- For a sales-type lease or a direct financing lease, we recognize the income from rentals, or for a finance lease, we
recognize rental operations expense, over the term of the lease using the effective interest method.
- At inception of a sales-type lease or a direct financing lease, if we determine the fair value of the leased property is lower
than its carrying amount, we recognize a selling loss immediately at lease commencement. If fair value exceeds the
carrying amount of a lease, a gain is recognized at lease commencement on a sales-type lease. For a direct financing
lease, a gain is deferred at lease commencement and amortized over the lease term.
Lessor accounting
Costs to execute leases
We capitalize initial direct costs, which represent only incremental costs to execute a lease that would not have been incurred
if the lease had not been obtained. Costs that we incur to negotiate or arrange a lease, regardless of its outcome, such as for fixed
employee compensation, tax or legal advice to negotiate lease terms, and other costs, are expensed as incurred.
Operating leases
We account for the revenue from our lease contracts by utilizing the single component accounting policy. This policy requires
us to account for, by class of underlying asset, the lease component and nonlease component(s) associated with each lease as a single
component if two criteria are met:
(i)The timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and
(ii)The lease component would be classified as an operating lease if it were accounted for separately.
Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our
leases, and contingent rental payments. Nonlease components consist primarily of tenant recoveries representing reimbursements of
rental operating expenses under our triple net lease structure, including recoveries for property taxes, insurance, utilities, repairs and
maintenance, and common area expenses.
F-18
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
If the lease component is the predominant component, we account for all revenues under such lease as a single component in
accordance with the lease accounting standard. Conversely, if the nonlease component is the predominant component, all revenues
under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for
the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all
revenues from our operating leases under the lease accounting standard and classify these revenues as income from rentals in our
consolidated statements of operations.
We commence recognition of income from rentals related to the operating leases at the date the property is ready for its
intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. When a lease includes
construction of improvements, we determine whether the improvements are landlord or tenant assets. In determining if the
improvements are landlord or tenant improvements, we consider various factors, including, but not limited to, the following:
-
Which party retains legal title to the improvements upon lease expiration;
-
Whether the improvements are expected to have significant residual value at the end of the lease term;
-
Whether the improvements are unique to the tenant;
-
What happens to the improvements upon lease expiration (i.e., whether they are removed or preserved for the landlord);
-
Which party bears all costs of the improvements (including the risk of cost overruns); and
-
Which party supervises the construction of the improvements.
If the improvements are landlord assets, we capitalize such improvements. If the improvements are tenant assets, we do not
capitalize these assets. Improvements that qualify as tenant assets, if funded by us, are accounted for as lease incentives and
amortized as a reduction of revenue over the term of the lease. If the tenant funds improvements without reimbursement from us, and
we determine these improvements to be landlord assets, we consider the amount associated with the improvements to be non-cash
lease payments, which are recognized as incremental revenue over the term of the lease.
Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the
respective operating lease terms. We classify amounts expected to be received in later periods as deferred rent in our consolidated
balance sheets. Amounts received currently but recognized as revenue in future periods are classified in accounts payable, accrued
expenses, and other liabilities in our consolidated balance sheets.
Income from rentals related to variable payments includes tenant recoveries and contingent rental payments. Tenant
recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance,
and other operating expenses, are recognized as revenue in the period during which the applicable expenses are incurred and the
tenant’s obligation to reimburse us arises. Income from rentals related to other variable payments is recognized when associated
contingencies are removed.
We assess collectibility from our tenants of future lease payments for each of our operating leases. If we determine that
collectibility is probable, we recognize income from rentals based on the methodology described above. If we determine that
collectibility is not probable, we recognize an adjustment to lower our income from rentals. Furthermore, we may recognize a general
allowance at a portfolio level (not the individual level) if we do not expect to collect future lease payments in full.
For each lease for which we determine that collectibility of future lease payments is not probable, we cease the recognition of
income from rentals on a straight-line basis and limit the recognition of income to the lesser of payments collected from the lessee or
lease income that would have been recognized on a straight-line basis. We do not resume straight-line recognition of income from
rentals for these leases until we determine that the collectibility of future payments related to these leases is probable. We also record a
general allowance related to the deferred rent balances that at the portfolio level (not the individual level) are not expected to be
collected in full through the lease term. As of December 31, 2025 and 2024, our general allowance balance aggregated $14.3 million
and $21.3 million, respectively.
Direct financing and sales-type leases
Income from rentals related to direct financing and sales-type leases is recognized over the lease term using the effective
interest rate method. At lease commencement, we derecognize the underlying asset classified within investments in real estate and
record net investment in a lease within other assets in our consolidated balance sheets. This initial net investment is determined by
aggregating the present values of the total future lease payments and the estimated residual value of the property, less any unearned
income related to a direct financing lease. Over the lease term, the investment in the lease accretes in value, producing a constant
periodic rate of return on the net investment in the lease. Income from these leases is classified in income from rentals in our
consolidated statements of operations. Our net investment is reduced over time as lease payments are received.
We evaluate our net investment in direct financing and sales-type leases for impairment under the current expected credit
losses accounting standard. For additional information, refer to “Provision for expected credit losses” in Note 2 – “Summary of
significant accounting policies” to our consolidated financial statements.
F-19
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
As a lessor, we classify a lease with variable lease payments that do not depend on an index or a rate as an operating lease
on the commencement date of the lease if both of the following criteria are met:
(i)The lease would have been classified as a sales-type lease or direct financing lease under the current lease accounting
standard; and
(ii)The sales-type lease or direct financing lease classification would have resulted in a selling loss at lease commencement.
We do not derecognize the underlying asset and do not recognize a loss upon lease commencement but continue to
depreciate the underlying asset over its useful life.
Lessee accounting
We have operating lease agreements in which we are the lessee consisting of ground and office leases. At the lease
commencement date (or at the acquisition date if the lease is acquired as part of a real estate acquisition), we are required to recognize
a liability to account for our future obligations under these operating leases, and a corresponding right-of-use asset.
The lease liability is measured based on the present value of the future lease payments, including payments during the term
under our extension options that we are reasonably certain to exercise. The present value of the future lease payments is calculated for
each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is
the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to
the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement
date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. We classify
the operating lease liability in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets.
The right-of-use asset is measured based on the corresponding lease liability, adjusted for initial direct leasing costs and any
other consideration exchanged with the landlord prior to the commencement of the lease, as well as adjustments to reflect favorable or
unfavorable terms of an acquired lease when compared with market terms at the time of acquisition. Subsequently, the right-of-use
asset is amortized on a straight-line basis during the lease term. We classify the right-of-use asset in other assets in our consolidated
balance sheets.
Recognition of revenue arising from contracts with customers
We recognize revenues associated with transactions arising from contracts with customers, excluding revenues subject to the
lease accounting standard discussed in “Lease accounting” above, in accordance with the revenue recognition accounting standard. A
customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with
goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial
assets that are outside of a company’s ordinary output activities.
We generally recognize revenue representing the transfer of goods and services to customers in an amount that reflects the
consideration to which we expect to be entitled in the exchange. In order to determine the recognition of revenue from customer
contracts, we use a five-step model to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract,
(iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will
not occur, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we
satisfy the performance obligation.
We identify contractual performance obligations and determine whether revenue should be recognized at a point in time or
over time, based on when control of goods and services transfers to a customer. We consider whether we control the goods or services
prior to the transfer to the customer in order to determine whether we should account for the arrangement as a principal or agent. If we
determine that we control the goods or services provided to the customer, then we are the principal to the transaction, and we recognize
the gross amount of consideration expected in the exchange. If we simply arrange but do not control the goods or services being
transferred to the customer, then we are considered to be an agent to the transaction, and we recognize the net amount of
consideration we are entitled to retain in the exchange.
Total revenues subject to the revenue recognition accounting standard and classified within income from rentals in our
consolidated statements of operations for the years ended December 31, 2025 and 2024 included $51.0 million and $41.9 million,
respectively, primarily related to short-term parking revenues associated with long-term lease agreements. Short-term parking revenues
do not qualify for the single component accounting policy, as discussed in “Lessor accounting” in Note 2 – “Summary of significant
accounting policies,” due to the difference in the timing and pattern of transfer of our parking service obligations and associated lease
components within the same lease agreement. We recognize short-term parking revenues in accordance with the revenue recognition
accounting standard when the service is provided and the performance obligation is satisfied, which normally occurs at a point in time.
F-20
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Monitoring of tenant credit quality
During the term of each lease, we monitor 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 (iv) monitoring the timeliness of lease payments.
Notes receivable
We carry notes receivable at amortized cost, adjusted for an estimated provision for expected credit losses. Interest income on
notes receivable is recognized using the effective interest rate method and is classified within other income in our consolidated
statements of operations. Direct costs incurred in originating notes, along with any premium or discount, are deferred and amortized as
an adjustment to interest income over the note’s term using the effective interest rate method. Notes receivable are classified within
other assets in our consolidated balance sheets. Refer to Note 8 – “Other assets” to our consolidated financial statements for additional
details.
Provision for expected credit losses
We are required to estimate and recognize lifetime expected losses, rather than incurred losses, for most financial assets
measured at amortized cost and certain other instruments, including trade, notes, and other receivables (excluding receivables arising
from operating leases), loans, held-to-maturity debt securities, net investments in leases arising from sales-type and direct financing
leases, and off-balance-sheet credit exposures (e.g., loan commitments). The recognition of such expected losses, even if the expected
risk of credit loss is remote, typically results in earlier recognition of credit losses. At each reporting date, we reassess our provision for
expected credit losses, and, if necessary, we recognize an adjustment for our current estimate of expected credit losses. Refer to Note
5 – “Leases” and Note 8 – “Other assets” to our consolidated financial statements for additional details.
An assessment of the collectibility of operating lease payments and the recognition of an adjustment to lease income based
on this assessment is governed by the lease accounting standard discussed in “Lease accounting” earlier in Note 2 – “Summary of
significant accounting policies” to our consolidated financial statements.
Income taxes
We are organized and operate as a REIT pursuant to the Internal Revenue Code (the “Code”). Under the Code, a REIT that
distributes at least 90% of its REIT taxable income to its stockholders annually (excluding net capital gains) and meets certain other
conditions is not subject to federal income tax on its distributed taxable income, but could be subject to certain federal, foreign, state,
and local taxes. We distribute 100% of our taxable income annually; therefore, a provision for federal income taxes is not required. In
addition to our REIT returns, we file federal, foreign, state, and local tax returns for our subsidiaries. We file with jurisdictions located in
the U.S., Canada, and other international locations. Our tax returns are subject to routine examination in various jurisdictions for the
2019 through 2024 calendar years.
Employee and non-employee share-based payments
We have implemented an entity-wide accounting policy to account for forfeitures related to unmet service conditions of share-
based awards granted to employees and non-employees when they occur. Under this policy, when forfeitures occur, any previously
recognized expense related to those forfeited awards is reversed in the period of forfeiture.
Our employee and non-employee share-based awards are measured at fair value on the grant date and recognized over the
recipient’s required service period. For share-based awards with performance conditions, we continue to assess the probability of
achieving the performance conditions and recognize expense only when it becomes probable that the performance targets will be met.
Conversely, for share-based awards with market conditions, expense is recognized regardless of whether the market condition is met.
Dividends paid on share-based awards with nonforfeitable dividends are initially classified in retained earnings and reclassified
to compensation cost only if the underlying awards are forfeited. Conversely, for share-based awards with forfeitable dividends,
declared dividends are initially classified in retained earnings and in dividends payable within our consolidated balance sheets. If the
underlying awards are forfeited, the corresponding accrued dividend is reversed in the period of forfeiture. Upon vesting of the
underlying share-based awards with forfeitable dividends, the accumulated dividend payment is made and the dividend payable liability
is settled.
F-21
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Forward equity sales agreements
From time to time, we enter into forward equity sales agreements and account for them in accordance with the accounting
guidance governing financial instruments and derivatives. Under the accounting guidance, our forward equity sales agreements are not
deemed to be liabilities as they do not embody obligations to repurchase our shares, nor do they embody obligations to issue a variable
number of shares for which the monetary value is predominantly fixed, varied with something other than the fair value of our shares, or
varied inversely in relation to our shares. We also evaluate whether the agreements meet the derivatives and hedging guidance scope
exception to be accounted for as equity instruments. Our forward equity sales agreements are classified as equity contracts based on
the following assessment: (i) none of the agreements’ exercise contingencies are based on observable markets or indices besides
those related to the market for our own stock price and operations; and (ii) none of the settlement provisions preclude the agreements
from being indexed to our own stock.
Hedge accounting
From time to time, we utilize derivative instruments to manage our exposure to certain risks. We are exposed to foreign
currency exchange rate risk related to our business operations in Canada. To mitigate the impact of fluctuations in the USD-CAD
exchange rate associated with our net investment in Canada, we use cross-currency swap agreements designated and qualifying as
net investment hedges under applicable derivatives and hedging standards.
We designate the USD-CAD cross-currency swap agreements as net investment hedges using the spot method to assess
hedge effectiveness. The spot component represents changes in fair value attributable to movements in the USD-CAD spot exchange
rate, which reflects the market exchange rate between the two currencies as of each reporting date. Changes in the fair value of the
designated spot component are recorded in other comprehensive income (loss) as part of the foreign currency translation adjustment,
to the extent the relationship is highly effective, until the net investment is sold or substantially liquidated. The related amounts due from
or due to counterparties are included in other assets or in accounts payable, accrued expenses, and other liabilities, respectively, within
our consolidated balance sheet.
We have elected to account for the forward points (the portion of the derivative’s fair value attributable to the difference
between the forward exchange rate and spot exchange rate) as an excluded component in accordance with applicable derivatives and
hedging accounting standards. The excluded component is recognized over the life of the cross-currency swap agreements using a
systematic and rational basis (as interest settlements occur) and is classified within other income in our consolidated statement of
operations.
Issuer and guarantor subsidiaries of guaranteed securities
Generally, a parent entity of an issuer that holds guaranteed securities must provide separate subsidiary issuer or guarantor
financial statements, unless it qualifies for disclosure exceptions. A parent entity may be eligible for disclosure exceptions if it meets the
following criteria:
(i)The subsidiary issuer or guarantor is a consolidated subsidiary of the parent company, and
(ii)The subsidiary issues a registered security that is:
-
issued jointly and severally with the parent company, or
-
fully and unconditionally guaranteed by the parent company.
A parent entity that meets the above criteria may instead present summarized financial information (“alternative disclosures”)
either within the consolidated financial statements or in “Item 7. Management’s discussion and analysis of financial condition and results
of operations” (“Item 7”). We evaluated the criteria and determined that we are eligible for the disclosure exceptions, which allow us to
provide alternative disclosures; as such, we present alternative disclosures in Item 7.
Loan fees
Fees incurred in obtaining long-term financing are capitalized and classified with the corresponding debt instrument appearing
on our consolidated balance sheets. Loan fees related to our unsecured senior line of credit are capitalized and classified within other
assets. Capitalized amounts are amortized over the term of the related loan, and the amortization is classified in interest expense in our
consolidated statements of operations.
F-22
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Distributions from equity method investments
We use the “nature of the distribution” approach to determine the classification within our consolidated statements of cash
flows of cash distributions received from equity method investments, including our unconsolidated real estate joint ventures and equity
method non-real estate investments. Under this approach, distributions are classified based on the nature of the underlying activity that
generated the cash distributions. If we lack the information necessary to apply this approach in the future, we will be required to apply
the “cumulative earnings” approach as an accounting change on a retrospective basis. Under the cumulative earnings approach,
distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and
those in excess of that amount are classified as cash inflows from investing activities.
Restricted cash
We present cash and cash equivalents separately from restricted cash within our consolidated balance sheets. However, we
include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown
in the consolidated statements of cash flows. We provide a reconciliation between the consolidated balance sheets and the
consolidated statements of cash flows, which is required when the balance includes greater than one line item for cash, cash
equivalents, and restricted cash. We also provide a disclosure of the nature of the restrictions related to material restricted cash
balances.
Recent accounting pronouncements
On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which will require
entities to provide enhanced disclosures related to certain expense categories included in line items on the statement of operations.
The ASU aims to increase transparency and provide investors with additional detailed information about the nature of expenses
reported on the face of the income statement. The new standard does not change the requirements for the presentation of expenses on
the face of the statement of operations.
Under this ASU, entities are required to disaggregate, in a tabular format, expense line items presented on the face of the
statement of operations — excluding earnings or losses from equity method investments — if they include any of the following expense
categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion.
For any remaining items within each relevant expense line item, entities must provide a qualitative description of the nature of those
expenses. The new ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods
beginning after December 15, 2027. Early adoption is permitted. We expect to adopt this ASU on January 1, 2027. Although the
adoption is not expected to have an impact on our financial statements, it is expected to result in incremental disclosures within the
footnotes to our consolidated financial statements.
F-23
3.INVESTMENTS IN REAL ESTATE
Our consolidated investments in real estate consisted of the following as of December 31, 2025 and 2024 (in thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Rental properties: | ||||
| Land (related to rental properties) | $3,204,479 | $3,863,027 | ||
| Buildings and building improvements | 19,738,825 | 20,377,935 | ||
| Other improvements | 4,371,720 | 4,354,785 | ||
| Rental properties | 27,315,024 | 28,595,747 | ||
| Current and future development and redevelopment projects | 6,788,464 | 8,618,727 | ||
| Gross investments in real estate | 34,103,488 | 37,214,474 | ||
| Less: accumulated depreciation | (5,970,171) | (5,477,082) | ||
| Investments in real estate assets held for sale, less accumulated depreciation(1) | 556,679 | 372,647 | ||
| Investments in real estate | $28,689,996 | $32,110,039 |
(1)Refer to “Assets held for sale” below.
Assets held for sale
As of December 31, 2025, we had 20 operating properties aggregating 1.6 million RSF and land parcels aggregating
1.9 million SF that were classified as held for sale.
The disposal of properties classified as held for sale does not represent a strategic shift that has, or will have, a major effect on
our operations or financial results, as the dispositions relate to individual assets across multiple markets and do not represent the exit
from any significant market. Accordingly, these assets do not meet the criteria for classification as a discontinued operation. We cease
depreciation of our properties upon their classification as held for sale.
The following is a summary of net assets as of December 31, 2025 and 2024 for our real estate investments that were
classified as held for sale as of each respective date (in thousands):
| December 31, | |||
| 2025 | 2024 | ||
| Investments in real estate, less accumulated depreciation | $556,679 | $372,647 | |
| Other assets | 37,859 | 9,488 | |
| Total assets | 594,538 | 382,135 | |
| Total liabilities | (12,235) | (13,462) | |
| Total accumulated other comprehensive (loss) income | (566) | 2,584 | |
| Net assets classified as held for sale | $581,737 | $371,257 |
For additional information, refer to “Real estate sales” in Note 2 – “Summary of significant accounting policies” to our
consolidated financial statements.
Acquired below-market leases
The balances of acquired below-market tenant leases existing as of December 31, 2025 and 2024 and related accumulated
amortization, classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets as of
December 31, 2025 and 2024, were as follows (in thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Acquired below-market leases | $715,898 | $652,757 | ||
| Accumulated amortization | (582,865) | (472,350) | ||
| $133,033 | $180,407 |
F-24
3.INVESTMENTS IN REAL ESTATE (continued)
For the years ended December 31, 2025, 2024, and 2023, we recognized in rental revenues approximately $41.3 million,
$89.4 million, and $96.9 million, respectively, related to the amortization of acquired below-market leases existing as of the end of each
respective year.
The weighted-average amortization period of the value of acquired below-market leases existing as of December 31, 2025
was approximately 7.9 years, and the estimated annual amortization of the value of acquired below-market leases as of December 31,
2025 is as follows (in thousands):
| Year | Amount | |
| 2026 | $24,126 | |
| 2027 | 22,721 | |
| 2028 | 10,962 | |
| 2029 | 8,634 | |
| 2030 | 8,164 | |
| Thereafter | 58,426 | |
| Total | $133,033 |
Acquired in-place leases
The balances of acquired in-place leases and related accumulated amortization, classified in other assets in our consolidated
balance sheets as of December 31, 2025 and 2024, were as follows (in thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Acquired in-place leases | $943,097 | $1,032,744 | ||
| Accumulated amortization | (739,089) | (727,600) | ||
| $204,008 | $305,144 |
Amortization for these intangible assets, classified in depreciation and amortization expense in our consolidated statements of
operations, was approximately $83.0 million, $108.7 million, and $160.6 million for the years ended December 31, 2025, 2024, and
2023, respectively. The weighted-average amortization period of the value of acquired in-place leases was approximately 7.8 years, and
the estimated annual amortization of the value of acquired in-place leases as of December 31, 2025 is as follows (in thousands):
| Year | Amount | |
| 2026 | $43,811 | |
| 2027 | 33,492 | |
| 2028 | 23,946 | |
| 2029 | 19,060 | |
| 2030 | 16,736 | |
| Thereafter | 66,963 | |
| Total | $204,008 |
F-25
3.INVESTMENTS IN REAL ESTATE (continued)
Sales of real estate assets and impairment of real estate
Our completed dispositions of real estate assets during the year ended December 31, 2025 consisted of the following (dollars
in thousands):
| Square Footage | Gain on Sales of Real Estate | ||||||||||||||
| Property | Submarket/Market | Date of Sale | Interest Sold | Operating | Land and Future | Sales Price | |||||||||
| 550 Arsenal Street | Cambridge/Inner Suburbs/ Greater Boston | 10/15/25 | 100% | 249,275 | 281,592 | $99,250 | $— | ||||||||
| 285, 299, 307, and 345 Dorchester Avenue (consolidated JV) | Seaport Innovation District/ Greater Boston | 12/30/25 | 60% | — | 1,040,000 | 33,500 | (1) | — | |||||||
| 409 and 499 Illinois Street (consolidated JV) | Mission Bay/San Francisco Bay Area | 12/17/25 | 25% | 466,297 | — | 180,273 | (2) | 416,749 | (2) | ||||||
| 601, 611, 651, 681, 685, 701, and 751 Gateway Boulevard (consolidated JVs) | South San Francisco/San Francisco Bay Area | 12/30/25 | (3) | 1,104,826 | 528,684 | 283,173 | (3) | — | |||||||
| 2425 Garcia Avenue and 2400/2450 Bayshore Parkway | Greater Stanford/San Francisco Bay Area | 6/30/25 | 100% | 95,901 | — | 11,000 | — | ||||||||
| ARE Nautilus | Torrey Pines/San Diego | 12/10/25 | 100% | 218,640 | — | 192,000 | 86,260 | ||||||||
| Costa Verde by Alexandria | University Town Center/San Diego | 1/31/25 | 100% | 8,730 | 537,000 | 124,000 | (4) | — | |||||||
| 4767 Nexus Center Drive | University Town Center/San Diego | 12/31/25 | 100% | 65,280 | — | 50,000 | (5) | 15,330 | |||||||
| 9363, 9373, and 9393 Towne Centre Drive | University Town Center/San Diego | 12/18/25 | 100% | — | 230,000 | 40,000 | 17,978 | ||||||||
| Pacific Technology Park | Sorrento Mesa/San Diego | 9/9/25 | 50% | 544,352 | — | 1,570 | (6) | 9,290 | |||||||
| 6260 Sequence Drive | Sorrento Mesa/San Diego | 12/16/25 | 100% | 130,536 | — | 70,000 | — | ||||||||
| 5505 Morehouse Drive | Sorrento Mesa/San Diego | 8/26/25 | 100% | 79,945 | — | 45,000 | — | ||||||||
| 5600 Avenida Encinas | Carlsbad/San Diego | 12/17/25 | 100% | 182,276 | — | 64,100 | — | ||||||||
| 21540 30th Drive Southeast | Bothell/Seattle | 12/22/25 | 100% | 144,738 | — | 43,829 | — | ||||||||
| 14 TW Alexander Drive | Research Triangle/Research Triangle | 11/20/25 | 100% | 173,820 | — | 155,000 | 78,489 | ||||||||
| 3029 East Cornwallis Road | Research Triangle/Research Triangle | 12/31/25 | 100% | — | 600,000 | 29,500 | — | ||||||||
| 601 Keystone Park Drive | Research Triangle/Research Triangle | 10/3/25 | 100% | 77,595 | — | 24,879 | 4,362 | ||||||||
| Alexandria Center for Life Science – Long Island City | New York City/New York City | 12/19/25 | 100% | 179,100 | — | 34,500 | — | ||||||||
| Land parcel | Texas | 5/7/25 | 100% | — | 1,350,000 | 73,287 | — | ||||||||
| Other | Various | 258,917 | 13,987 | ||||||||||||
| $1,813,778 | (7) | $642,445 | |||||||||||||
(1)Represents sales price of interest sold.
(2)Represents two life science buildings in which we held a 25% ownership interest. At the time of sale, the properties were 40% occupied, with a weighted-average
remaining lease term of 8.3 years. These properties were sold by the joint venture to an existing tenant following its exercise of a purchase right included in its lease
agreement. The gross sales price was $767.1 million ($721.1 million net of seller credits and sales costs), of which our share of the price (after seller credits) was
$180.3 million. Our share of gain on sales of real estate was $103.9 million.
(3)We held a 50% ownership interest at 601, 611, 651, 681, 685, and 701 Gateway Boulevard consolidated joint venture and a 51% interest at 751 Gateway Boulevard
consolidated joint venture. At the time of sale, these properties had operating and redevelopment properties occupancy of 62%, with a weighted-average lease term of
5.1 years. Due to macroeconomic conditions in South San Francisco, including significant new supply, lower life science tenant demand, and ongoing challenges leasing
both laboratory and office space, we reassessed the project’s financial outlook and the substantial capital required to lease vacant space and to complete the
redevelopment of 651 Gateway Boulevard and future development opportunities. As a result, we sold the consolidated joint ventures for a gross price of $600.0 million
($560.4 million net of customary seller credits and sales costs), of which our share of the price (after seller credits) was $283.2 million.
(4)We provided $91.0 million of seller financing during the three months ended March 31, 2025. This note receivable is classified within “Other assets” in our consolidated
balance sheet. Refer to Note 8 – “Other assets” to our consolidated financial statements for additional information.
(5)We provided $33.0 million of seller financing during the three months ended December 31, 2025. This note receivable is classified within “Other assets” in our
consolidated balance sheet. Refer to Note 8 – “Other assets” to our consolidated financial statements for additional information.
(6)$94.4 million of the sales price represents non-cash consideration. Refer to “Pacific Technology Park and 199 East Blaine Street” in Note 4 – “Consolidated and
unconsolidated real estate joint ventures” to our consolidated financial statements for additional information regarding this sale.
(7)Represents our share of the aggregate sales price from our dispositions, less sales credits, which differs from the sum of amounts disclosed in our consolidated
statement of cash flows under “Investing activities” (proceeds from sales of real estate), “Financing activities” (contributions from and sales of noncontrolling interests),
and “Supplemental disclosure and non-cash investing and financing activities" (non-cash sales) primarily due to the timing of payments, closing costs, other sales-
related adjustments (including prorations of rents and expenses), and our consolidated joint venture partners’ share of the sales price, aggregating $685.4 million,
reflected in our consolidated statement of cash flows.
F-26
3.INVESTMENTS IN REAL ESTATE (continued)
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, primarily related to the following assets:
Greater Boston market
- Impairment charge of $236.0 million (including our share of $149.7 million) was recognized to reduce the carrying amount of
multiple land parcels aggregating 1.0 million of future development SF owned by a consolidated real estate joint venture in our
Seaport Innovation District submarket of our Greater Boston market, to their estimated fair values less costs to sell. We held a
60% ownership interest in the land parcels. These industrial- and retail-zoned land parcels were originally acquired with the
intent to develop laboratory space. The decision not to proceed with the project reflects a lack of tenant demand for laboratory
space in the Seaport Innovation District submarket and aligns with our strategy to recycle capital into projects with greater
value-creation potential. In December 2025, we completed the sale of our interest in this joint venture for $33.5 million, with no
gain or loss recognized. As of December 31, 2025, we no longer have an ownership interest in this consolidated real estate
joint venture.
- Impairment charge of $43.4 million was recognized to reduce the carrying amount of a retail shopping center aggregating
249,275 RSF with a future development opportunity aggregating 281,592 SF in our Cambridge/Inner Suburbs submarket of
our Greater Boston market to its estimated fair value less costs to sell. This property met the held for sale criteria in September
2025 upon our commitment to dispose of this asset and allocate sales proceeds toward other projects with higher value-
creation opportunities and obtaining all required approvals to sell. In October 2025, we completed the sale of this property for
$99.3 million, with no gain or loss recognized.
- Impairment charge of $262.1 million was recognized to reduce the carrying amount of one development project and one
redevelopment project, aggregating 279,456 RSF in our Cambridge submarket of our Greater Boston market, to their
estimated fair values of approximately $116.4 million less costs to sell. These assets were originally acquired with the intent to
expand our Megacampus ecosystem. Following an updated assessment of the projects’ financial outlook, including the capital
required to complete the development and redevelopment and lease the properties, we decided to sell these assets and
reinvest the sales proceeds in other projects with greater value-creation opportunities. We expect to complete the sale within
the next 12 months.
San Diego market
- Impairment charge of $42.4 million was recognized to reduce the carrying amount of an office property aggregating 182,276
RSF in Carlsbad, San Diego to its estimated fair value less costs to sell. This property met the criteria for classification as held
for sale in April 2025 upon our commitment to sell, at which time we recognized an impairment of $35.4 million based on
negotiations with a potential buyer at that time. Subsequently, we recognized an additional impairment charge of $7.0 million to
adjust the asset’s carrying amount to the currently negotiated reduced sales price less costs to sell. In December 2025, we
completed the sale of this property for $64.1 million, with no gain or loss recognized.
- Impairment charge of $27.8 million was recognized to reduce the carrying amounts of land parcels aggregating 154,308 SF on
a non-Megacampus property in our Sorrento Mesa submarket of our San Diego market to their estimated fair values, less
costs to sell, upon meeting the criteria for classification as held for sale in September 2025. These assets met the criteria for
classification as held for sale upon our reevaluation of their alignment with our Megacampus strategy and our decision to
reallocate capital toward our other projects with greater value-creation opportunities. In November 2025, we completed the
sale of these assets for $14.6 million, with no gain or loss recognized.
- Impairment charge of $17.3 million was recognized to reduce the carrying amounts of two operating properties aggregating
210,481 RSF in our Sorrento Mesa submarket of our San Diego market to their estimated fair values less costs to sell. These
properties met the criteria for classification as held for sale in June 2025, based on negotiations with then‑prospective buyers
and our decision to dispose of these properties. In 2025, we completed the sales of these properties for a sales price
aggregating $115.0 million, with no gain or loss recognized.
- Impairment charge of $31.7 million was recognized to primarily reduce the carrying amounts of seven operating properties
aggregating 330,192 RSF located in non-strategic locations that are not integral to our Megacampus strategy in our University
Town Center and Sorrento Mesa submarkets of our San Diego market, to their estimated fair values less costs to sell of
approximately $117.8 million upon meeting the criteria for classification as held for sale. We expect to complete the sale within
the next 12 months.
F-27
3.INVESTMENTS IN REAL ESTATE (continued)
San Francisco Bay market
- We held a 50% ownership interest at 601, 611, 651, 681, 685, and 701 Gateway Boulevard consolidated joint venture and a
51% interest at 751 Gateway Boulevard joint venture, which owned seven properties aggregating 1.6 million RSF, located in
our South San Francisco submarket of our San Francisco Bay market.
In December 2025, we recognized impairment charges aggregating $385.0 million (including our share of $206.0 million) to
reduce the carrying amounts of these assets to their aggregate sales price of $560.4 million ($600.0 million agreed upon price
less sales credits) less costs to sell. The decision to sell these Megacampus assets followed a reevaluation of the project’s
financial outlook and the capital required to lease vacant space and redevelop certain properties, leading to our strategic
decision to reinvest the sales proceeds toward other projects with greater value-creation opportunities.
On December 30, 2025, we completed the sales of our interests in these joint ventures for $283.2 million (representing our
share) with no gain or loss recognized. As of December 31, 2025, we no longer have ownership interests in these consolidated
real estate joint ventures.
- Impairment charge of $478.1 million was recognized to reduce the carrying amount of one operating property aggregating
228,000 RSF and two future development projects aggregating 1.3 million SF, in our SoMa and Greater Stanford submarkets
in our San Francisco Bay Area market, to their estimated fair values of approximately $205.8 million less costs to sell. These
assets, acquired in 2017 and 2019 with the intent to develop for life science use, are no longer aligned with our strategy due to
the macroeconomic outlook and our focus on recycling capital into projects with greater value-creation potential. In 2020, we
received a lease termination payment of $89.5 million for one of these properties prior to the commencement of development.
We have begun marketing these properties to residential developers, and we expect to complete the sales within the next 12
months.
Research Triangle market
- Impairment charge of $82.5 million was recognized to reduce the carrying amount of land parcels aggregating 600,000 SF
located in our Research Triangle market to their estimated fair values less costs to sell. The decision to sell these land parcels
reflects lower-than-anticipated biomanufacturing demand at this location, leading to our strategic decision to reinvest the sales
proceeds toward other projects with greater value-creation opportunities. In December 2025, we completed the sale of this
asset for $29.5 million, with no gain or loss recognized.
- Impairment charge of $31.8 million was recognized to reduce the carrying amount of one vacant property aggregating 104,531
RSF in the Research Triangle market to its estimated fair value less costs to sell of approximately $1.2 million upon meeting
the criteria for classification as held for sale in September 2025. The held for sale criteria were met upon our decision to sell
this asset, due to its noncontiguous location relative to most other properties on the Alexandria Center® for Sustainable
Technologies Megacampus, and to allocate the sales proceeds, and other capital necessary to lease the property, toward
other projects with greater value-creation opportunities. We expect to complete the sale within the next 12 months.
New York City market
- Impairment charge of $206.2 million was recognized to reduce the carrying amount of a non-Megacampus property
aggregating 179,100 RSF in Long Island City, a non-core location within our New York City market, to its estimated fair value
less costs to sell. This property met the held for sale criteria in September 2025, when we committed to dispose of it following
our reevaluation of its alignment with our Megacampus strategy and decided to allocate sales proceeds toward other projects
with higher value-creation opportunities. As of September 30, 2025, the property was 52% occupied. In December 2025, we
completed the sale of this property for $34.5 million, with no gain or loss recognized.
Seattle market
- Impairment charge of $28.2 million was recognized to reduce the carrying amounts of three operating properties aggregating
250,132 RSF in our Bothell submarket of Seattle market to their estimated fair values less costs to sell upon meeting the
criteria for classification as held for sale. These assets were classified as held for sale upon our evaluation of their alignment
with our Megacampus strategy and our decision to reallocate substantial near-term capital that the repositioning of these
assets would have otherwise required toward our other projects with greater value-creation opportunities. In December 2025,
we completed the sales of these properties for the sale price of $60.1 million, with no gain or loss recognized.
F-28
3.INVESTMENTS IN REAL ESTATE (continued)
Canada market
- Impairment charge of $107.1 million was recognized to reduce the carrying amounts of 10 non-Megacampus properties
aggregating 787,698 RSF, located in our Canada market, to their estimated fair values aggregating approximately $140.5
million less costs to sell. This decision reflects our assessment that the next phase of value creation for these assets would
require significant capital investment to generate leasing activity, our strategic decision to reinvest the sales proceeds toward
other projects with greater value-creation opportunities, and our decision to exit the Montreal submarket. The disposition of
these properties will represent our complete exit from the Montreal submarket, leaving us with one remaining asset in Canada.
This disposition does not represent a strategic shift that has, or will have, a major effect on our operations or financial results
and therefore does not meet the criteria for classification as a discontinued operation. We expect to complete the sale within
the next 12 months.
Non-cluster
- Impairment charge of $71.9 million was recognized in connection with four operating properties aggregating 182,626 RSF in
our non-cluster market, reducing their carrying amounts to estimated fair values less costs to sell. These properties were
originally acquired based on their proximity to Amgen, Inc., a large public biotechnology company, and with the intent of
accommodating a pipeline of early-stage tenants. However, demand from these tenants has substantially declined since our
acquisition. As a result, we decided to sell these assets and to reinvest the sales proceeds and other capital necessary to
lease the properties toward other projects with greater value-creation opportunities. In December 2025, we completed the sale
of these properties for $37.5 million, with no gain or loss recognized.
- Impairment charge of $47.3 million was recognized to reduce the carrying amount of land parcels aggregating 374,349 SF in a
non-cluster/other market to its estimated fair value less costs to sell upon meeting the criteria for classification as held for sale.
The held for sale criteria were met in June 2025 based on negotiations with a then‑prospective buyer and our decision to
dispose of this asset. In September 2025, we completed the sale of this asset for a sales price of $30.3 million, with no gain or
loss recognized.
Various
- Impairment charge of $45.1 million was recognized primarily related to a ground lease entered into in 2021 for a future
development opportunity in the San Francisco Bay Area market. Refer to “Lessee operating costs” in Note 5 – “Leases” to our
consolidated financial statements for additional information.
- Additional impairment charges aggregating $59.0 million were recognized in connection with real estate assets across various
markets, to reduce carrying amounts of these assets to their estimated fair values aggregating approximately $129.4 million
less costs to sell. All of these properties were located outside of a Megacampus ecosystem, and their disposition aligns with
our strategy to recycle capital into projects with greater value-creation potential. In 2025, we completed the sales of these
properties for an aggregate sales price of $170.4 million and recognized a gain on sale of real estate of $30.6 million.
Other
In 2006, ARE-East River Science Park, LLC, a subsidiary of Alexandria Real Estate Equities, Inc., was granted an option to
incorporate a land parcel adjacent to and north of the Alexandria Center® for Life Science – New York City (“ACLS-NYC”) campus
(“Option Parcel”) into the existing ground lease of that campus. The Option Parcel will allow ARE-East River Science Park, LLC to
develop a future world-class life science building within the ACLS-NYC campus. ARE-East River Science Park, LLC’s investment in pre-
construction costs related to the development of the Option Parcel, including costs related to design, engineering, environmental,
survey/title, and permitting and legal costs, aggregated $178.1 million as of December 31, 2025.
On August 6, 2024, ARE-East River Science Park, LLC filed a lawsuit in the U.S. District Court for the Southern District of New
York against its landlord, New York City Health + Hospitals Corporation (“H+H”), and the New York City Economic Development
Corporation (“EDC”). On January 24, 2025, ARE-East River Science Park, LLC filed a first amended complaint. The lawsuit alleges two
principal claims against H+H and EDC: fraud in the inducement, and, in the alternative, breach of contract in violation of the implied
covenant of good faith and fair dealing. As alleged in the complaint, ARE-East River Science Park, LLC’s claims arise from H+H’s and
EDC’s misrepresentations and concealment of material facts in connection with a floodwall, which H+H and EDC are seeking to require
ARE-East River Science Park, LLC to integrate into the development of the Option Parcel. ARE-East River Science Park, LLC alleges
that H+H’s and EDC’s misconduct have prevented it from commencing the development of the Option Parcel. In light of the pending
litigation, the closing date for our option and thus the commencement date for construction of the third tower at the campus are
presently indeterminate. Among other things, ARE-East River Science Park, LLC is seeking significant damages and equitable relief
from the court to confirm our understanding that the option is in full force and effect.
This matter exposes us to potential losses ranging from zero to the full amount of our investment in the project aggregating
$178.1 million as of December 31, 2025, depending on any collection of damages and/or the ability to develop the project. We
performed a probability-weighted recoverability analysis based on estimates of various possible outcomes and determined no
impairment was present as of December 31, 2025.
F-29
4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES
From time to time, we enter into joint venture agreements through which we own a partial interest in real estate entities that
own, develop, and operate real estate properties. As of December 31, 2025, our real estate joint ventures held the following properties:
| Property(1) | Market | Submarket | Our Ownership Interest | ||||||
| Consolidated real estate joint ventures*(2)**:* | |||||||||
| 50 and 60 Binney Street | Greater Boston | Cambridge/Inner Suburbs | 34.0% | ||||||
| 75/125 Binney Street | Greater Boston | Cambridge/Inner Suburbs | 40.0% | ||||||
| 100 and 225 Binney Street and 300 Third Street | Greater Boston | Cambridge/Inner Suburbs | 30.0% | ||||||
| 15 Necco Street | Greater Boston | Seaport Innovation District | 56.7% | ||||||
| Alexandria Center® for Science and Technology – Mission Bay(3) | San Francisco Bay Area | Mission Bay | 25.0% | ||||||
| 211 and 213 East Grand Avenue | San Francisco Bay Area | South San Francisco | 30.0% | ||||||
| 500 Forbes Boulevard | San Francisco Bay Area | South San Francisco | 10.0% | ||||||
| Alexandria Center® for Life Science – Millbrae | San Francisco Bay Area | South San Francisco | 48.6% | ||||||
| 3215 Merryfield Row | San Diego | Torrey Pines | 30.0% | ||||||
| Campus Point by Alexandria(4) | San Diego | University Town Center | 56.4% | (5) | |||||
| 5200 Illumina Way | San Diego | University Town Center | 51.0% | ||||||
| 9625 Towne Centre Drive | San Diego | University Town Center | 30.0% | ||||||
| SD Tech by Alexandria(6) | San Diego | Sorrento Mesa | 50.0% | ||||||
| Summers Ridge Science Park(7) | San Diego | Sorrento Mesa | 30.0% | ||||||
| 1201 and 1208 Eastlake Avenue East | Seattle | Lake Union | 30.0% | ||||||
| 400 Dexter Avenue North | Seattle | Lake Union | 30.0% | ||||||
| 800 Mercer Street | Seattle | Lake Union | 60.0% | ||||||
| Unconsolidated real estate joint ventures*(8)**:* | |||||||||
| 1655 and 1725 Third Street | San Francisco Bay Area | Mission Bay | 10.0% | ||||||
| 101 West Dickman Street | Maryland | Beltsville | 58.4% | (9) |
(1)Refer to the table on the next page that shows the categorization of our real estate joint ventures under the consolidation framework.
(2)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.
(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 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.
(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.
Our consolidation policy is described under “Consolidation” in Note 2 – “Summary of significant accounting policies” to our
consolidated financial statements. Consolidation accounting is highly technical, but its framework is primarily based on the controlling
financial interests and benefits of the joint ventures. We generally consolidate a joint venture that is a legal entity that we control (i.e.,
we have the power to direct the activities of the joint venture that most significantly affect its economic performance) through contractual
rights, regardless of our ownership interest, and where we determine that we have benefits through the allocation of earnings or losses
and fees paid to us that could be significant to the joint venture (the “VIE model”).
We also generally consolidate joint ventures when we have a controlling financial interest through voting rights and where our
voting interest is greater than 50% (the “voting model”). Voting interest differs from ownership interest for some joint ventures. We
account for joint ventures that do not meet the consolidation criteria under the equity method of accounting by recognizing our share of
income and losses.
F-30
4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)
The table below shows the categorization of our real estate joint ventures under the consolidation framework:
| Property(1) | Consolidation Model | Voting Interest | Consolidation Analysis | Conclusion | |||||
| 50 and 60 Binney Street | VIE model | Not applicable under VIE model | Consolidated | ||||||
| 75/125 Binney Street | We have: | ||||||||
| 100 and 225 Binney Street and 300 Third Street | |||||||||
| 15 Necco Street | (i) | The power to direct the activities of the joint venture that most significantly affect its economic performance; and | |||||||
| Alexandria Center® for Science and Technology – Mission Bay | |||||||||
| 211 and 213 East Grand Avenue | |||||||||
| 500 Forbes Boulevard | |||||||||
| Alexandria Center® for Life Science – Millbrae | (ii) | Benefits that can be significant to the joint venture. | |||||||
| 3215 Merryfield Row | |||||||||
| Campus Point by Alexandria | |||||||||
| 5200 Illumina Way | Therefore, we are the primary beneficiary of each VIE. | ||||||||
| 9625 Towne Centre Drive | |||||||||
| SD Tech by Alexandria | |||||||||
| Summers Ridge Science Park | |||||||||
| 1201 and 1208 Eastlake Avenue East | |||||||||
| 400 Dexter Avenue North | |||||||||
| 800 Mercer Street | |||||||||
| 101 West Dickman Street | We do not control the joint venture and are therefore not the primary beneficiary. | Equity method of accounting | |||||||
| 1655 and 1725 Third Street | Voting model | Does not exceed 50% | Our voting interest is 50% or less. | ||||||
(1)In addition to the real estate joint ventures listed, we have one real estate joint venture that we control and consolidate under the VIE model. We also hold an interest in
two insignificant unconsolidated real estate joint ventures.
Consolidated real estate joint ventures
99 Coolidge Avenue
In July 2025, we amended the agreement for our consolidated real estate joint venture at 99 Coolidge Avenue in our
Cambridge/Inner Suburbs submarket, pursuant to which the carrying amount of our partner’s noncontrolling interest was adjusted from
$42.0 million to $48.7 million. We continued to control and consolidate the joint venture. Accordingly, we accounted for the $6.7 million
adjustment as an equity transaction and recognized it in additional paid-in capital.
Pursuant to the amended agreement, our partner’s noncontrolling interest was converted into a $48.7 million redeemable
noncontrolling interest that accrues a fixed 4.05% annual preferred return (“distributions”) and no longer participates in the joint
venture’s earnings or distributions in excess of preferred return.
As of December 31, 2025, the contractual preferred interest amount of $48.7 million and accrued distribution of
$844 thousand were classified as redeemable noncontrolling interests within temporary equity in our consolidated balance sheet and
consolidated statement of stockholders’ equity. The amended agreement provides our partner with the option to require us to purchase
its preferred interest for $48.7 million, plus any unpaid distributions. This option was exercised in January 2026, and we expect to
complete the redemption in the first quarter of 2026.
F-31
4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)
Pacific Technology Park and 199 East Blaine Street
Prior to September 2025, we had two consolidated real estate joint ventures with one partner through its affiliates: (i) a joint
venture that owned Pacific Technology Park, a non-Megacampus of five non-laboratory properties aggregating 544,352 RSF in our
Sorrento Mesa submarket, in which we had a 50% ownership interest and our partner held the remaining 50% ownership interest, and
(ii) a joint venture that owned a laboratory building at 199 East Blaine Street, aggregating 115,084 RSF on the Alexandria Center® for
Life Science – Eastlake Megacampus in our Lake Union submarket, in which we had a 30% ownership interest and our partner held the
remaining 70% ownership interest.
In September 2025, we completed the following transaction with our partner through its affiliates:
(i)We sold our 50% controlling interest in the consolidated joint venture that owned Pacific Technology Park for a sales price
of $96.0 million. In connection with this disposition, we derecognized our partner’s noncontrolling interest of $82.4 million
and recognized a gain on sale of real estate of $9.3 million in our consolidated statement of operations for the year ended
December 31, 2025; and
(ii)We acquired our partner’s 70% noncontrolling interest at 199 East Blaine Street for a purchase price of $94.4 million. We
accounted for this acquisition as an equity transaction, with the $66.3 million excess of the purchase price over the
$30.3 million book value of the noncontrolling interest acquired less costs to sell, recognized in additional paid-in capital
and no gain or loss recognized in earnings.
As a result of this transaction, we received proceeds of $1.6 million. As of December 31, 2025, we own 100% of 199 East
Blaine Street and no longer have an ownership interest in Pacific Technology Park.
409 and 499 Illinois Street
In December 2025, our consolidated joint venture that owned properties at 409 and 499 Illinois Street in our Mission Bay
submarket of San Francisco Bay market, sold these properties, aggregating 466,297 RSF, to the existing tenant following its exercise of
a purchase right included in its lease agreement. We had a 25.0% ownership interest in this joint venture. The properties were sold for a
sales price of $721.1 million, of which our share is $180.3 million. We recognized a gain on sale of real estate of $416.7 million
(including our $103.9 million share) in our consolidated statement of operations for the year end December 31, 2025. As of December
31, 2025, we no longer have an ownership interest in this joint venture.
601, 611, 651, 681, 685, 701, 705, and 751 Gateway Boulevard
We held a 50% ownership interest in 601, 611, 651, 681, 685, and 701 Gateway Boulevard consolidated joint venture and a
51% interest in 751 Gateway Boulevard consolidated joint venture, aggregating 1.6 million RSF, located in our South San Francisco
submarket of San Francisco Bay market.
On December 30, 2025, we completed the sales of our interests in these joint ventures for $283.2 million (representing our
share) with no gain or loss recognized. As of December 31, 2025, we no longer have ownership interests in these consolidated real
estate joint ventures. Refer to Note 3 – “Sales of real estate assets and impairment of real estate” for information about real estate
impairments recognized in connection with this disposition.
285, 299, 307, and 345 Dorchester Avenue
Prior to December 2025, we held a 60.0% ownership interest in a consolidated joint venture that owned land parcels at 285,
299, 307, and 345 Dorchester Avenue, aggregating 1.0 million SF, located in our Seaport Innovation District submarket of Greater
Boston market.
In December 2025, we sold our 60.0% ownership interest in the consolidated joint venture to our partner for a sales price of
$33.5 million. As of December 31, 2025, we no longer have an ownership interest in this real estate joint venture. Refer to Note 3 –
“Sales of real estate assets and impairment of real estate” for information about real estate impairments recognized in connection with
this disposition.
F-32
4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)
Consolidated VIEs’ balance sheet information
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.
The table below aggregates the balance sheet information of our consolidated VIEs as of December 31, 2025 and 2024 (in
thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Investments in real estate | $6,129,668 | (1) | $8,917,718 | |
| Cash and cash equivalents | 258,755 | 335,223 | ||
| Other assets | 712,154 | 777,033 | ||
| Total assets | $7,100,577 | $10,029,974 | ||
| Secured note payable | $— | $149,321 | ||
| Other liabilities | 324,513 | 626,460 | ||
| Total liabilities | 324,513 | 775,781 | ||
| Redeemable noncontrolling interests | 49,554 | 10,360 | ||
| Alexandria Real Estate Equities, Inc.’s share of equity | 3,098,932 | 4,754,386 | ||
| Noncontrolling interests’ share of equity | 3,627,578 | 4,489,447 | ||
| Total liabilities and equity | $7,100,577 | $10,029,974 | ||
(1)The decrease in this balance as of December 31, 2025 compared to December 31, 2024, is primarily due to the sale of our interests and the acquisition of noncontrolling
interests in various consolidated joint ventures during 2025, as discussed in the “Consolidated real estate joint ventures” section above within this Note 4 – Consolidated
and unconsolidated real estate joint ventures.
In determining whether to aggregate the balance sheet information of consolidated VIEs, we considered the similarity of each
VIE, including the primary purpose of these entities to own, manage, operate, and lease real estate properties owned by the VIEs, and
the similar nature of our involvement in each VIE as a managing member. Due to the similarity of the characteristics, we present the
balance sheet information of these entities on an aggregated basis. None of our consolidated VIEs’ assets have restrictions that limit
their use to settle specific obligations of the VIE. Other than a put option described in “99 Coolidge Avenue” above, there are no
creditors or other partners of our consolidated VIEs that have recourse to our general credit, and our maximum exposure to our
consolidated VIEs is limited to our variable interests in each VIE.
Noncontrolling interests in consolidated real estate joint ventures
Noncontrolling interests represent the third-party interests in consolidated real estate joint ventures in which we have a
controlling interest. Noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net
earnings or losses, and other comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in
accordance with the respective operating agreements. During the years ended December 31, 2025 and 2024, we distributed
$951.8 million and $256.7 million, respectively, to our consolidated real estate joint venture partners.
Unconsolidated real estate joint ventures
Our investments in unconsolidated real estate joint ventures, accounted for under the equity method and classified in
investments in unconsolidated real estate joint ventures in our consolidated balance sheets, consisted of the following as of
December 31, 2025 and 2024 (in thousands):
| December 31, | ||||
| Property | 2025 | 2024 | ||
| 1655 and 1725 Third Street | $19,484 | $10,574 | ||
| 101 West Dickman Street | 9,669 | 9,749 | ||
| Other(1) | 1,524 | 19,550 | ||
| $30,677 | $39,873 |
(1)The decrease is primarily due to an impairment charge of $11.7 million recognized in December 2025 to write off the carrying amount of our investment in our
unconsolidated real estate joint venture at 1450 Research Boulevard, which owns a property aggregating 42,012 RSF located in our Maryland market, upon our
determination that the impairment was other than temporary.
F-33
4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)
Our maximum exposure to our unconsolidated VIEs is limited to our investment in each VIE, except for our 101 West Dickman
Street unconsolidated real estate joint venture in which we guarantee up to $6.7 million of the outstanding balance related to the VIE’s
secured construction loan.
Below are key terms of unconsolidated real estate joint ventures’ secured loans as of December 31, 2025 (dollars in
thousands):
| At 100% | Our Share | |||||||||||||||
| Unconsolidated Joint Venture | Maturity Date | Stated Rate | Interest Rate(1) | Aggregate Commitment | Debt Balance(2) | |||||||||||
| 101 West Dickman Street | 10/29/26 | SOFR+1.95% | (3) | 5.74% | $26,750 | $19,136 | 58.4% | |||||||||
| 1655 and 1725 Third Street(4) | 2/10/35 | 6.37% | 6.44% | 500,000 | 496,881 | 10.0% | ||||||||||
| $526,750 | $516,017 |
(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.
F-34
5.LEASES
Refer to “Lease accounting” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements
for information about lease accounting standards that set principles for the recognition, measurement, presentation, and disclosure of
leases for both parties to a lease agreement (i.e., lessees and lessors).
Leases in which we are the lessor
As of December 31, 2025, we had 340 properties aggregating 35.9 million operating RSF in key cluster locations, including
Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. We primarily focus
on developing Class A/A+ properties in AAA life science innovation clusters that offer the scale and strategic design integral to our
Megacampus strategy. Strategically located near top academic and medical research institutions, our Megacampus ecosystems feature
curated amenities and services, and convenient access to transit, creating environments that help our tenants attract and retain top
talent.
As of December 31, 2025, all leases in which we are the lessor were classified as operating leases, with the exception of one
direct financing and one sales-type lease. Our leases are described below.
Operating leases
As of December 31, 2025, our 340 properties were subject to operating lease agreements. Five of these properties are subject
to operating lease agreements that each contain a purchase option as described below:
(i)Two of these properties, representing two land parcels in the San Francisco Bay Area market, are subject to lease
agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during
each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent
commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 66.9 years.
(ii)Two operating properties in the Seattle market, held by a consolidated real estate joint venture, are subject to purchase
options held by our partner in this joint venture, which is also a tenant at these properties. One purchase option allows our
partner to purchase our 30% interest in one property for $40.0 million in 2031. Contingent upon the exercise of this option,
the second purchase option allows our partner to purchase our 30% interest in one property for $69.1 million in 2034. Our
partner’s remaining lease terms for these operating leases are 7.2 years and 18.7 years, respectively.
(iii)One property subject to an operating lease agreement contains a purchase option with an exercise date of March 2034.
Certain operating leases contain options for the tenant to extend their lease at prevailing market rates at the time of expiration.
In addition, certain operating leases contain an early termination option that requires advance notification and payment of an early
termination fee by the tenant.
At the commencement of each lease, we establish the lease term comprising the noncancelable period for each lease together
with periods covered by options to extend or terminate the lease that we determine the lessee is reasonably certain to exercise. Our
assessment of whether a lessee is reasonably certain to exercise or not exercise an option considers all economic factors relevant to
the assessment, including property-based, market-based, and tenant-based factors. We do not reassess the lease term or a lessee
option to purchase the underlying asset unless there is a lease modification that is not accounted for as a separate contract.
Future lease payments to be received under the terms of our operating lease agreements, excluding expense
reimbursements, in effect as of December 31, 2025 are outlined in the table below (in thousands):
| Year | Amount | |
| 2026 | $1,612,549 | |
| 2027 | 1,500,507 | |
| 2028 | 1,364,651 | |
| 2029 | 1,267,782 | |
| 2030 | 1,198,685 | |
| Thereafter | 7,125,656 | |
| Total | $14,069,830 |
Refer to Note 3 – “Investments in real estate” to our consolidated financial statements for additional information about our
owned real estate assets, which are the underlying assets under our operating leases.
F-35
5.LEASES (continued)
Direct financing and sales-type leases
As of December 31, 2025, we have one direct financing lease agreement, with a n
et investment balance of $42.6 million, for a parking structure with a remaining lease term of 66.9 years. The lessee has an option to
purchase the underlying asset at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30
years, and 74.5 years after the rent commencement date of October 1, 2017.
As of December 31, 2025, we also have one sales-type lease for a property in the Seattle market. As of December 31, 2025,
the net investment in this lease is $16.4 million. Upon recognition of the sales-type lease during the three months ended
March 31, 2025, we recognized a gain on sale of real estate aggregating $12.7 million classified in gain on sales of real estate in our
consolidated statement of operations for the year ended December 31, 2025. At the end of the lease term in March 2026, the property
under this lease transfers to the tenant for a sales price of approximately $18.0 million.
As of December 31, 2025, our estimated provision for expected credit loss related to our direct financing lease and sales-type
lease aggregated $1.8 million, which was predominantly related to our direct financing lease. We estimate the provision for expected
credit loss related to our direct financing lease using a probability of default methodology, which incorporates the borrower’s investment-
grade credit rating from S&P Global Ratings, to evaluate the probability of default. Additionally, we incorporate the projected value of the
real estate securing the investments to estimate potential recoveries in the event of default, among other inputs. The estimate of the
expected credit loss related to our sales-type lease was determined using historical industry losses and transaction-specific information,
including the estimated fair value of the underlying real estate asset securing this transaction, the short-term nature of this lease, and
other available information. For further details, refer to “Provision for expected credit losses” in Note 2 – “Summary of significant
accounting policies” to our consolidated financial statements.
The components of our aggregate net investment in our direct financing and sales-type leases as of December 31, 2025 and
2024 are summarized in the table below (in thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Gross investment in direct financing and sales-type leases | $265,839 | $251,405 | ||
| Less: unearned income on direct financing lease | (205,037) | (207,734) | ||
| Less: provision for expected credit losses | (1,817) | (2,168) | ||
| Net investment in leases | $58,985 | $41,503 |
Future lease payments to be received under the terms of our direct financing and sales-type leases as of December 31, 2025
are outlined in the table below (in thousands):
| Year | Total | |
| 2026 | $18,446 | |
| 2027 | 2,097 | |
| 2028 | 2,160 | |
| 2029 | 2,224 | |
| 2030 | 2,291 | |
| Thereafter | 238,621 | |
| Total | $265,839 |
Income from rentals
Our income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes
revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Income from rentals: | ||||||
| Revenues subject to the lease accounting standard: | ||||||
| Operating leases | $2,889,721 | $3,005,137 | $2,802,567 | |||
| Direct financing and sales-type leases | 4,496 | 2,653 | 2,608 | |||
| Revenues subject to the lease accounting standard | 2,894,217 | 3,007,790 | 2,805,175 | |||
| Revenues subject to the revenue recognition accounting standard | 50,958 | 41,916 | 37,281 | |||
| Income from rentals | $2,945,175 | $3,049,706 | $2,842,456 |
F-36
5.LEASES (continued)
Revenues subject to the revenue recognition accounting standard and classified in income from rentals consist primarily of
short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to “Revenues” and
“Recognition of revenue arising from contracts with customers” in Note 2 – “Summary of significant accounting policies” to our
consolidated financial statements for additional information.
Deferred leasing costs
The following table summarizes our deferred leasing costs as of December 31, 2025 and 2024 (in thousands):
| December 31, | ||||
| 2025 | 2024 | |||
| Deferred leasing costs | $1,054,765 | $1,061,924 | ||
| Accumulated amortization | (596,454) | (575,965) | ||
| Deferred leasing costs, net | $458,311 | $485,959 |
Residual value risk management strategy
Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual
value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business
objective to invest primarily in high-demand markets, (ii) directly managing our leased properties, conducting frequent property
inspections, proactively addressing potential maintenance issues, and/or timely resolving any occurring issues, and (iii) carefully
selecting our tenants and monitoring their credit quality throughout their respective lease terms.
Leases in which we are the lessee
Operating lease agreements
We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these
leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or
covenants imposed by the leases, nor guarantees of residual value.
We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related
liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to
account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to “Lessee accounting”
in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements.
As of December 31, 2025, the present value of the remaining contractual 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. 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. 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%. The weighted-average discount rate is based on
the incremental borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on
a collateralized basis over a similar term for an amount equal to the lease payments.
Ground lease obligations as of December 31, 2025, included leases for 31 of our properties, which accounted for
approximately 9% of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property
with a net book value of $5.1 million as of December 31, 2025, our ground lease obligations have remaining lease terms ranging from
approximately 29 to 97 years, including extension options that we are reasonably certain to exercise.
F-37
5.LEASES (continued)
The reconciliation of future lease payments under noncancelable operating leases in which we are the lessee to the operating
lease liability reflected in our consolidated balance sheet as of December 31, 2025 is in the table below (in thousands):
| Year | Total | |
| 2026 | $22,768 | |
| 2027 | 21,849 | |
| 2028 | 21,517 | |
| 2029 | 21,024 | |
| 2030 | 20,744 | |
| Thereafter | 665,496 | |
| Total future payments under our operating leases in which we are the lessee | 773,398 | |
| Effect of discounting | (412,855) | |
| Operating lease liability | $360,543 |
Lessee operating costs
Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed
annual rent payments and may also include escalation clauses and renewal options. For the years ended December 31, 2025, 2024,
and 2023, amounts paid and classified as operating activities in our consolidated statements of cash flows for leases in which we are
the lessee aggregated $171.9 million, $167.8 million, and $32.2 million, respectively. The increases in both 2024 and 2025 primarily
relate to two separate payments of $135.0 million made in connection with amendments to our ground lease agreement at the
Alexandria Technology Square® Megacampus in our Cambridge submarket. One payment was made in December 2024 and the other
in January 2025 as prepayments for a 24-year lease extension.
Our operating lease obligations related to our office leases have remaining terms of up to 11 years, exclusive of extension
options. For the years ended December 31, 2025, 2024, and 2023, our costs for operating leases in which we are the lessee were as
follows (in thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Gross operating lease costs | $45,965 | $40,740 | $39,879 | |||
| Capitalized lease costs | (2,949) | (1,780) | (5,544) | |||
| Expenses for operating leases in which we are the lessee | $43,016 | $38,960 | $34,335 | |||
During the year ended December 31, 2025, we recognized lease impairment charges aggregating $45.1 million, primarily
related to a ground lease entered into in 2021 for a future development opportunity in the San Francisco Bay Area market. Based on
our financial outlook for this project, we made the determination to no longer proceed with this project and recognized an impairment
charge to write off our remaining right-of-use asset balance. As of December 31, 2025 and 2024, we had no operating lease liability
associated with this ground lease, as the related lease obligation had been fully prepaid.
6.CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
Cash, cash equivalents, and restricted cash consisted of the following as of December 31, 2025 and 2024 (in thousands):
| December 31, | |||
| 2025 | 2024 | ||
| Cash and cash equivalents | $549,062 | $552,146 | |
| Restricted cash: | |||
| Funds held in escrow for real estate acquisitions | — | 2,954 | |
| Other | 4,693 | 4,747 | |
| 4,693 | 7,701 | ||
| Total | $553,755 | $559,847 |
F-38
7.INVESTMENTS
We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. As a
REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to
determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in
which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption
that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such
ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a
board seat or whether we participate in the investee’s policymaking process, among other criteria, to determine if we have the ability to
exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment
under the equity method, as described below.
From time to time, we may hold equity investments in publicly traded companies that are subject to temporary contractual sale
restrictions. We do not recognize a discount related to such contractual sale restrictions.
Investments accounted for under the equity method
Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying
amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary
impairments.
As of December 31, 2025, we had ten investments in limited partnerships maintaining specific ownership accounts for each
investor, which were accounted for under the equity method. These investments aggregated $357.4 million. Our ownership interest in
each of these ten investments was greater than 5%.
Investments that do not qualify for the equity method of accounting
For investees over which we determine that we do not have the ability to exercise significant influence or control, we account
for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV
per share, or (iii) privately held entity that does not report NAV per share, as described below.
Investments in publicly traded companies
Our investments in publicly traded companies are classified as investments with readily determinable fair values and are
presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our
consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales
prices or quotes available on securities exchanges.
Investments in privately held companies
Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held
entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are
accounted for as follows:
Investments in privately held entities that report NAV per share
Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships,
are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our
consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we
are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the
investment at our reporting date.
Investments in privately held entities that do not report NAV per share
Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative
under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified
in investment income (loss) in our consolidated statements of operations.
An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is
observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity
transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity
transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we
evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution
preferences, and conversion rights to the investments we hold.
F-39
7.INVESTMENTS (continued)
Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per
share
We monitor equity method investments and investments in privately held entities that do not report NAV per share 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. These investments are evaluated 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 or 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
impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.
Investment income/loss recognition and classification
We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in
investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent:
(i)changes in fair value for investments in publicly traded companies;
(ii)changes in NAV for investments in privately held entities that report NAV per share;
(iii)observable price changes for investments in privately held entities that do not report NAV per share; and
(iv)our share of unrealized gains or losses reported by our equity method investees.
Realized gains and losses on our investments represent the difference between proceeds received upon disposition of
investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our
share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and
represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity
method investments, if impairments are deemed other than temporary, to their estimated fair value.
Funding commitments to investments in privately held entities that report NAV
We are committed to funding approximately $343.3 million for our investments in privately held entities that report NAV. Our
funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.1 years as of December
31, 2025. These investments are not redeemable by us, but we may receive distributions from these investments throughout their
terms. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The
weighted-average remaining term during which these investments are expected to be liquidated was 5.5 years as of December 31,
F-40
7.INVESTMENTS (continued)
The following tables summarize our investments as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | |||||||
| Cost | Unrealized Gains | Unrealized Losses | Carrying Amount | ||||
| Publicly traded companies | $54,752 | $44,319 | $(4,143) | $94,928 | |||
| Entities that report NAV | 460,160 | 89,514 | (37,298) | 512,376 | |||
| Entities that do not report NAV: | |||||||
| Entities with observable price changes | 82,252 | 50,601 | (9,615) | 123,238 | |||
| Entities without observable price changes | 413,324 | — | — | 413,324 | |||
| Investments accounted for under the equity method | N/A | N/A | N/A | 357,383 | |||
| Total investments | $1,010,488 | $184,434 | $(51,056) | $1,501,249 |
| December 31, 2024 | |||||||
| Cost | Unrealized Gains | Unrealized Losses | Carrying Amount | ||||
| Publicly traded companies | $188,653 | $24,262 | $(107,248) | $105,667 | |||
| Entities that report NAV | 518,074 | 126,077 | (34,285) | 609,866 | |||
| Entities that do not report NAV: | |||||||
| Entities with observable price changes | 99,932 | 77,761 | (2,956) | 174,737 | |||
| Entities without observable price changes | 400,487 | — | — | 400,487 | |||
| Investments accounted for under the equity method | N/A | N/A | N/A | 186,228 | |||
| Total investments | $1,207,146 | $228,100 | $(144,489) | $1,476,985 | |||
Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held
as of December 31, 2025 aggregated to a loss of $131.6 million, which consisted of upward adjustments aggregating $50.6 million,
downward adjustments aggregating $9.6 million, and impairments aggregating $172.6 million.
Our investment income (loss) for the years ended December 31, 2025, 2024, and 2023 consisted of the following (in
thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Realized (losses) gains | $(83,323) | (1) | $59,124 | $6,078 | ||
| Unrealized gains (losses) | 26,980 | (2) | (112,246) | (201,475) | ||
| Investment loss | $(56,343) | $(53,122) | $(195,397) | |||
(1)Consists of realized gains of $115.7 million, offset by impairment charges of $95.7 million and a significant realized loss of $103.3 million, resulting from a reclassification
of unrealized losses that were recognized within investment income in our consolidated statement of operations prior to 2025. During the year ended December 31, 2025,
these unrealized losses were reclassified into realized losses in connection with the contribution of certain publicly traded securities to an unconsolidated joint venture.
(2)Includes unrealized losses of $76.3 million offset by a reclassification of unrealized losses of $103.3 million into realized losses, described in footnote 1.
Additional information about our non-real estate investments still held as of the end of each year is presented below (in
thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Investments in privately held entities that do not report NAV still held as of the end of each year: | ||||||
| Upward adjustments | $18,905 | $22,763 | $16,812 | |||
| Downward adjustments and impairments | (117,574) | (60,485) | (94,559) | |||
| $(98,669) | $(37,722) | $(77,747) | ||||
| Unrealized gains (losses) on non-real estate investments still held as of the end of each year (excluding equity method investments) | $55,545 | $(32,700) | $(58,820) |
Our investment loss of $56.3 million for the year ended December 31, 2025 also included $12.0 million of equity in losses of
our equity method investments.
Refer to “Investments” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements for
additional information.
F-41
8. OTHER ASSETS
The following table summarizes the components of other assets as of December 31, 2025 and 2024 (in thousands):
| December 31, | |||
| 2025 | 2024 | ||
| Acquired in-place leases | $204,008 | $305,144 | |
| Deferred compensation plan | 53,529 | 47,727 | |
| Deferred financing costs – unsecured senior line of credit | 39,406 | 49,056 | |
| Deposits | 28,618 | 21,768 | |
| Furniture, fixtures, equipment, and software | 70,311 | 39,558 | |
| Net investment in leases | 58,985 | 41,503 | |
| Notes receivable | 258,033 | 120,546 | |
| Operating lease right-of-use assets | 697,865 | 764,472 | |
| Other assets | 87,036 | 96,690 | |
| Prepaid expenses | 33,718 | 33,567 | |
| Property, plant, and equipment | 130,263 | 141,275 | |
| Total | $1,661,772 | $1,661,306 |
Notes receivable
Our notes receivable as of December 31, 2025 consisted of the following (dollars in thousands):
| As of December 31, 2025 | ||||||||
| Weighted-Average | ||||||||
| Notes Receivable | Effective Interest Rate | Maturity Date | Balance | December 31, 2024 | ||||
| Secured by real estate assets in San Diego | 9.9% | 1/10/29 | $240,476 | $103,427 | ||||
| Secured by real estate assets in Greater Boston | 6.6% | 12/16/29 | 18,089 | 17,356 | ||||
| Less: provision for expected credit losses | (532) | (237) | ||||||
| Notes receivable | $258,033 | $120,546 |
Our notes receivable represent held-to-maturity debt securities carried at amortized cost and are generally secured by real
estate. Under the current expected credit losses accounting standard, we are required to estimate and, if necessary, recognize a
provision for expected credit losses related to these notes. We do not have a history of losses on such securities; therefore, we utilize
available information on historical losses for the commercial real estate industry. We determine expected credit losses for our notes
receivable using historical industry losses and considering loan-specific information, including credit ratings of the borrowers, estimated
fair values of underlying real estate assets, loan-to-value ratios, the presence of guarantors, and/or other available information. During
the year ended December 31, 2025, we recorded a $295 thousand adjustment to the provision for expected credit losses related to our
notes receivable. The provision is evaluated on an ongoing basis, with any necessary adjustments recognized in the corresponding
period.
F-42
9.FAIR VALUE MEASUREMENTS
We provide fair value information about all financial instruments for which it is practicable to estimate fair value. We measure
and disclose the estimated fair value of financial assets and liabilities by utilizing a fair value hierarchy that distinguishes between data
obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant
assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities
(Level 1), (ii) significant other observable inputs (Level 2), and (iii) significant unobservable inputs (Level 3). Significant other observable
inputs can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or
liability, such as interest rates, foreign exchange rates, and yield curves. Significant unobservable inputs are typically based on an
entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value
measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the
entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety.
Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers
factors specific to the asset or liability.
Assets and liabilities measured at fair value on a recurring basis
The following table sets forth the assets and liabilities that we measure at fair value on a recurring basis by level in the fair
value hierarchy as of December 31, 2025 and 2024 (in thousands). There were no transfers of assets measured at fair value on a
recurring basis to or from Level 3 in the fair value hierarchy during the year ended December 31, 2025.
| Fair Value Measurement Using | ||||||||
| Description | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||
| Assets: | ||||||||
| Investments in publicly traded companies: | ||||||||
| As of December 31, 2025 | $94,928 | $94,928 | $— | $— | ||||
| As of December 31, 2024 | $105,667 | $105,667 | $— | $— | ||||
| Liabilities: | ||||||||
| Cross-currency swap agreements: | ||||||||
| As of December 31, 2025 | $928 | $— | $928 | $— | ||||
| As of December 31, 2024 | $— | $— | $— | $— |
Our investments in publicly traded companies represent investments with readily determinable fair values, and are carried at
fair value, with changes in fair value classified in investment income (loss) in our consolidated financial statements. We also hold
investments in privately held entities, which consist of (i) investments that report NAV and (ii) investments that do not report NAV, as
further described below.
Our investments in privately held entities that report NAV, such as our privately held investments in limited partnerships, are
carried at fair value using NAV as a practical expedient, with changes in fair value classified in net income. As of December 31, 2025
and 2024, the carrying values of investments in privately held entities that report NAV aggregated $512.4 million and $609.9 million,
respectively. These investments are excluded from the fair value hierarchy above as required by the fair value accounting standard. We
estimate the fair value of each of our investments in limited partnerships based on the most recent NAV prepared by the general partner
and reported by each limited partnership. As a result, the determination of fair values of our investments in privately held entities that
report NAV generally does not involve significant estimates, assumptions, or judgments on our part.
Our cross-currency swap agreements are recognized at fair value. Refer to Note 2 – “Summary of significant accounting
policies” and Note 11 – “Hedge agreements” to our consolidated financial statements for additional information.
F-43
9.FAIR VALUE MEASUREMENTS (continued)
Assets and liabilities measured at fair value on a nonrecurring basis
The following table sets forth the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy
as of December 31, 2025 and 2024 (in thousands).
| Fair Value Measurement Using | |||||||||||
| Description | Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||
| Real estate assets held for sale with carrying values adjusted to fair value less costs to sell: | |||||||||||
| As of December 31, 2025 | $581,737 | (1) | $— | $— | $581,737 | (2) | |||||
| As of December 31, 2024 | $322,662 | (1) | $— | $— | $322,662 | (2) | |||||
| Investments in privately held entities that do not report NAV: | |||||||||||
| As of December 31, 2025 | $139,251 | $— | $123,238 | (3) | $16,013 | (4) | |||||
| As of December 31, 2024 | $184,236 | $— | $174,737 | (3) | $9,499 | (4) |
(1)These amounts are included in the total balances of our net assets classified as held for sale aggregating $581.7 million and $371.3 million as of December 31, 2025
and 2024, respectively, disclosed in Note 3 – “Investments in real estate” and represent assets held for sale as of December 31, 2025 and 2024, respectively, for which
impairments were recognized.
(2)These amounts represent the aggregate carrying amounts of assets held for sale after adjustments to their respective fair values less costs to sell based on executed
purchase and sale agreements, letters of intent, valuations provided by third-party real estate brokers, or market comparables from recent transactions.
(3)These amounts represent the total carrying amounts of our equity investments in privately held entities with observable price changes, which are included in the
investments balances of $1.50 billion and $1.48 billion in our consolidated balance sheets as of December 31, 2025 and 2024, respectively, disclosed in Note 7 –
“Investments” to our consolidated financial statements.
(4)These amounts are included in the investments in privately held entities without observable price changes balances aggregating $413.3 million and $400.5 million as of
December 31, 2025 and 2024, respectively, disclosed in Note 7 – “Investments” to our consolidated financial statements, and represent the carrying amounts of
investments in privately held entities that do not report NAV for which impairments have been recognized in accordance with the measurement alternative guidance
described in “Investments” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements.
Real estate assets classified as held for sale measured at fair value less costs to sell
Our real estate assets classified as held for sale and measured at fair value less costs to sell are presented in the table above.
These properties represent a subset of our total real estate assets classified as held for sale as of December 31, 2025 and 2024,
respectively. The fair values for these real estate assets were estimated based on executed purchase and sale agreements, letters of
intent, valuations provided by third-party real estate brokers, or market comparables from recent transactions. Refer to “Investments in
real estate” in Note 2 – “Summary of significant accounting policies,” and “Assets held for sale” in Note 3 – “Investments in real estate”
to our consolidated financial statements for additional information.
Investments in privately held entities that do not report NAV
Our investments in privately held entities that do not report NAV are measured at cost, adjusted for observable price changes
and impairments, with changes recognized in net income (loss). These investments are adjusted based on the observable price
changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until
another observable transaction occurs. Therefore, the determination of fair values of our investments in privately held entities that do
not report NAV does not involve significant estimates and assumptions or subjective and complex judgments.
We also subject our investments in privately held entities that do not report NAV to a qualitative assessment for indicators of
impairment. If indicators of impairment are present, we are required to estimate the investment’s fair value and immediately recognize
an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.
The estimates of fair value typically incorporate valuation techniques that include an income approach reflecting a discounted
cash flow analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated
by market participants. In certain instances, we may use multiple valuation techniques for a particular investment and estimate its fair
value based on an average of multiple valuation results.
Refer to Note 7 – “Investments” to our consolidated financial statements for additional information.
F-44
9.FAIR VALUE MEASUREMENTS (continued)
Assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed
The fair value of our secured note payable and unsecured senior notes payable, and the amounts outstanding on our
unsecured senior line of credit and commercial paper program, were estimated using widely accepted valuation techniques, including
discounted cash flow analyses using significant other observable inputs such as available market information on discount and
borrowing rates with similar terms, maturities, and credit ratings. Because the valuations of our financial instruments are based on these
types of estimates, the actual fair value of our financial instruments may differ materially if our estimates do not prove to be accurate.
Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value
amounts.
As of December 31, 2025 and 2024, the book and estimated fair values of our secured note payable and unsecured senior
notes payable and the amounts outstanding under our unsecured senior line of credit and commercial paper program, including the
level within the fair value hierarchy for which the estimates were derived, were as follows (in thousands):
| December 31, 2025 | |||||||||
| Book Value | Fair Value Hierarchy | Estimated Fair Value | |||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||
| Liabilities: | |||||||||
| Secured notes payable | $— | $— | $— | $— | $— | ||||
| Unsecured senior notes payable | $12,047,394 | $— | $10,675,433 | $— | $10,675,433 | ||||
| Unsecured senior line of credit | $— | $— | $— | $— | $— | ||||
| Commercial paper program | $353,161 | $— | $353,189 | $— | $353,189 |
| December 31, 2024 | |||||||||
| Book Value | Fair Value Hierarchy | Estimated Fair Value | |||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||
| Liabilities: | |||||||||
| Secured notes payable | $149,909 | $— | $149,413 | $— | $149,413 | ||||
| Unsecured senior notes payable | $12,094,465 | $— | $10,472,993 | $— | $10,472,993 | ||||
| Unsecured senior line of credit | $— | $— | $— | $— | $— | ||||
| Commercial paper program | $— | $— | $— | $— | $— |
The carrying values of cash and cash equivalents, restricted cash, tenant receivables, deposits, notes receivable, accounts
payable, accrued expenses, and other short-term liabilities approximate their fair value.
F-45
10.SECURED AND UNSECURED SENIOR DEBT
The following table summarizes our outstanding indebtedness and respective principal payments remaining as of December 31, 2025 (dollars in thousands):
| Stated Rate | Interest Rate(1) | Maturity Date(2) | Principal Payments Remaining for the Periods Ending December 31, | Unamortized (Deferred Financing Cost), (Discount) Premium | ||||||||||||||||||||
| Debt | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Principal | Total | ||||||||||||||||
| Unsecured senior line of credit and commercial paper program(3) | (3) | 4.33% | (3) | 1/22/30 | (3) | $— | $— | $— | $— | $353,500 | $— | $353,500 | $(339) | $353,161 | ||||||||||
| Unsecured senior notes payable | 4.30% | 4.50 | 1/15/26 | (4) | 300,000 | — | — | — | — | — | 300,000 | (36) | 299,964 | |||||||||||
| Unsecured senior notes payable | 3.80% | 3.96 | 4/15/26 | 350,000 | — | — | — | — | — | 350,000 | (162) | 349,838 | ||||||||||||
| Unsecured senior notes payable | 3.95% | 4.13 | 1/15/27 | — | 350,000 | — | — | — | — | 350,000 | (555) | 349,445 | ||||||||||||
| Unsecured senior notes payable | 3.95% | 4.07 | 1/15/28 | — | — | 425,000 | — | — | — | 425,000 | (888) | 424,112 | ||||||||||||
| Unsecured senior notes payable | 4.50% | 4.60 | 7/30/29 | — | — | — | 300,000 | — | — | 300,000 | (805) | 299,195 | ||||||||||||
| Unsecured senior notes payable | 2.75% | 2.87 | 12/15/29 | — | — | — | 400,000 | — | — | 400,000 | (1,655) | 398,345 | ||||||||||||
| Unsecured senior notes payable | 4.70% | 4.81 | 7/1/30 | — | — | — | — | 450,000 | — | 450,000 | (1,686) | 448,314 | ||||||||||||
| Unsecured senior notes payable | 4.90% | 5.05 | 12/15/30 | — | — | — | — | 700,000 | — | 700,000 | (3,947) | 696,053 | ||||||||||||
| Unsecured senior notes payable | 3.375% | 3.48 | 8/15/31 | — | — | — | — | — | 750,000 | 750,000 | (3,704) | 746,296 | ||||||||||||
| Unsecured senior notes payable | 2.00% | 2.12 | 5/18/32 | — | — | — | — | — | 900,000 | 900,000 | (6,043) | 893,957 | ||||||||||||
| Unsecured senior notes payable | 1.875% | 1.97 | 2/1/33 | — | — | — | — | — | 1,000,000 | 1,000,000 | (6,240) | 993,760 | ||||||||||||
| Unsecured senior notes payable | 2.95% | 3.07 | 3/15/34 | — | — | — | — | — | 800,000 | 800,000 | (6,477) | 793,523 | ||||||||||||
| Unsecured senior notes payable | 4.75% | 4.88 | 4/15/35 | — | — | — | — | — | 500,000 | 500,000 | (4,500) | 495,500 | ||||||||||||
| Unsecured senior notes payable | 5.50% | 5.66 | 10/1/35 | — | — | — | — | — | 550,000 | 550,000 | (6,316) | 543,684 | ||||||||||||
| Unsecured senior notes payable | 5.25% | 5.38 | 5/15/36 | — | — | — | — | — | 400,000 | 400,000 | (3,767) | 396,233 | ||||||||||||
| Unsecured senior notes payable | 4.85% | 4.93 | 4/15/49 | — | — | — | — | — | 300,000 | 300,000 | (2,756) | 297,244 | ||||||||||||
| Unsecured senior notes payable | 4.00% | 3.91 | 2/1/50 | — | — | — | — | — | 700,000 | 700,000 | 9,844 | 709,844 | ||||||||||||
| Unsecured senior notes payable | 3.00% | 3.08 | 5/18/51 | — | — | — | — | — | 850,000 | 850,000 | (10,842) | 839,158 | ||||||||||||
| Unsecured senior notes payable | 3.55% | 3.63 | 3/15/52 | — | — | — | — | — | 1,000,000 | 1,000,000 | (13,228) | 986,772 | ||||||||||||
| Unsecured senior notes payable | 5.15% | 5.26 | 4/15/53 | — | — | — | — | — | 500,000 | 500,000 | (7,373) | 492,627 | ||||||||||||
| Unsecured senior notes payable | 5.625% | 5.71 | 5/15/54 | — | — | — | — | — | 600,000 | 600,000 | (6,470) | 593,530 | ||||||||||||
| Unsecured debt weighted-average interest rate/total | 3.91% | $650,000 | $350,000 | $425,000 | $700,000 | $1,503,500 | $8,850,000 | $12,478,500 | $(77,945) | $12,400,555 |
(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.
(2)Reflects any extension options that we control.
(3)Refer to footnote 3 on the following page.
(4)In January 2026, we repaid our 4.30% unsecured senior notes payable upon maturity. No gain or loss was incurred in connection with this repayment.
F-46
10.SECURED AND UNSECURED SENIOR DEBT (continued)
The following table summarizes our unsecured senior debt and amounts outstanding under our unsecured senior line of credit
and commercial paper program as of December 31, 2025 (dollars in thousands):
| Fixed-Rate Debt | Variable- Rate Debt | Weighted-Average | ||||||||||
| Interest | Remaining Term (in years) | |||||||||||
| Total | Percentage | Rate(1) | ||||||||||
| Unsecured senior notes payable | $12,047,394 | $— | $12,047,394 | 97.2% | 3.90% | 12.3 | ||||||
| Unsecured senior line of credit and commercial paper program | — | 353,161 | 353,161 | (2) | 2.8 | 4.33 | (2) | 4.1 | (3) | |||
| Total/weighted average | $12,047,394 | $353,161 | $12,400,555 | 100.0% | 3.91% | 12.1 | (3) | |||||
| Percentage of total debt | 97.2% | 2.8% | 100% |
(1)Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to the amortization of loan fees, amortization of
debt premiums (discounts), and other bank fees.
(2)As of December 31, 2025, we had no outstanding balance on our unsecured senior line of credit and $353.2 million of commercial paper notes outstanding.
(3)We calculate the weighted-average remaining term of our commercial paper notes by using the maturity date of our unsecured senior line of credit. Using the maturity
date of our outstanding commercial paper notes, the consolidated weighted-average maturity of our debt is 12.0 years. The commercial paper notes sold during the year
ended December 31, 2025 were issued at a weighted-average yield to maturity of 4.48% and had a weighted-average maturity term of 19 days.
Issuance and repayment of u****nsecured senior notes payable
In February 2025, we issued $550.0 million of unsecured senior notes payable, due 2035, with an interest rate of 5.50%. In
April 2025, we repaid our 3.45% unsecured senior notes payable aggregating $600.0 million upon their maturity, using proceeds from
our February 2025 unsecured senior notes payable offering, with no gain or loss incurred.
In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity. No gain or loss was
incurred in connection with this repayment.
$5.0 billion unsecured senior line of credit
As 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 on achievement of certain annual sustainability metrics, 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.
$2.50 billion co****mmercial paper program
Our commercial paper program allows us to issue up to $2.50 billion of commercial paper notes that bear interest at short-term
fixed rates with a maturity of generally 30 days or less and a maximum maturity of 397 days from the date of issuance. This 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 the amount of commercial paper notes outstanding. We use the net
proceeds from the issuances of the notes for general working capital and other general corporate purposes, which may include, but are
not limited to, the repayment of other debt and selective development, redevelopment, or acquisition of properties. In 2025, the notes
were issued at a weighted-average yield to maturity of 4.48% and had a weighted-average maturity term of 19 days. As of
December 31, 2025, we had $353.2 million outstanding under our commercial paper program.
Repayment of secured note payable
In August 2025, we repaid a secured construction loan aggregating $154.6 million with an interest rate of 7.18%, which was
related to our development project at 99 Coolidge Avenue in our Cambridge/Inner Suburbs submarket. In connection with the
repayment, we recognized a loss on early extinguishment of debt of $107 thousand for the write-off of unamortized deferred financing
costs during the year ended December 31, 2025.
F-47
10.SECURED AND UNSECURED SENIOR DEBT (continued)
Interest expense
The following table summarizes interest expense for the years ended December 31, 2025, 2024, and 2023 (in thousands):
| Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Interest incurred | $557,122 | $516,799 | $438,182 | |||
| Capitalized interest | (330,424) | (330,961) | (363,978) | |||
| Interest expense | $226,698 | $185,838 | $74,204 |
F-48
11.HEDGE AGREEMENTS
To mitigate the impact of fluctuations in the USD–CAD exchange rate related to our real estate investment in Canada, we have
fixed-to-fixed cross-currency swap agreements designated as net investment hedges, which were deemed effective on the
commencement date. As of December 31, 2025, the aggregate notional amount of the swaps is CAD $340.0 million, and the
corresponding total USD notional is approximately $246.8 million. Under the terms of the swap agreements, USD fixed interest amounts
are payable to us and CAD fixed interest amounts are payable to the counterparty. The swap agreements mature on April 30, 2026. As
of December 31, 2025, the hedge relationships remained highly effective. Refer to “Hedge accounting” in Note 2 – “Summary of
significant accounting policies” to our consolidated financial statements for additional information.
The tables below summarize the fair value of our cross-currency swap agreements designated as net investment hedges and
the impact on our consolidated financial statements. We did not have any outstanding hedge agreements as of and during the year
ended December 31, 2024. Amounts are presented in USD (in thousands).
Fair value of cross-currency swap agreements designated as net investment hedges
| As of December 31, 2025 | ||||
| Balance Sheet Location | Fair Value – Liability | Notional Amount Outstanding | ||
| Accounts payable, accrued expenses, and other liabilities | $928 | $246,766 |
Effect on consolidated other comprehensive income
| Location in Consolidated Statement of Comprehensive Income | Year Ended December 31, 2025 | |||
| Total unrealized loss recognized in other comprehensive income | Unrealized losses on foreign currency translation, net | $148 |
Unrealized gains or losses related to our cross-currency swap agreements will be reclassified from accumulated other
comprehensive income into net income upon the substantial completion of the sale of our real estate investments in Canada. As of
December 31, 2025, a majority of our assets in Canada were designated as held for sale and are expected to sell within 12 months.
Effect on consolidated statements of operations
| Location in Consolidated Statement of Operations | Year Ended December 31, 2025 | |||
| Total gain recognized in net income(1) | Other income | $1,837 |
(1)Represents net interest expense settlements and interest rate forward points excluded from assessment of hedge effectiveness. Refer to “Hedge accounting” in Note 2 –
“Summary of significant accounting policies” to our consolidated financial statements for additional information.
F-49
12. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER LIABILITIES
The following table summarizes the components of accounts payable, accrued expenses, and other liabilities as of December
31, 2025 and 2024 (in thousands):
| December 31, | |||
| 2025 | 2024 | ||
| Accounts payable and accrued expenses | $510,580 | $534,803 | |
| Accrued construction | 314,836 | 500,890 | |
| Acquired below-market leases | 133,033 | 180,407 | |
| Conditional asset retirement obligations | 34,342 | 53,968 | |
| Deferred rent liabilities | 14,659 | 11,461 | |
| Operating lease liability | 360,543 | 507,127 | |
| Unearned rent and tenant security deposits | 876,252 | 691,873 | |
| Other liabilities | 152,828 | 173,822 | |
| Total | $2,397,073 | $2,654,351 |
As of December 31, 2025 and 2024, our conditional asset retirement obligations primarily consisted of the soil and
groundwater remediation liabilities associated with certain properties. Some of our properties may contain asbestos or may be
subjected to other hazardous or toxic substances, which, under certain conditions, requires remediation. We engage independent
environmental consultants to conduct Phase I or similar environmental assessments at our properties. This type of assessment
generally includes a site inspection, interviews, and a public records review; asbestos, lead-based paint, and mold surveys; subsurface
sampling; and other testing. We recognize a liability for the fair value of a conditional asset retirement obligation when the fair value of
the liability can be reasonably estimated. In addition, environmental laws and regulations subject our tenants, and potentially us, to
liability that may result from our tenants’ routine handling of hazardous substances and wastes as part of their operations at our
properties. As of December 31, 2025 we are not aware of any additional environmental liability that we believe would require additional
disclosures or recognition in our consolidated financial statements.
F-50
13.EARNINGS PER SHARE
We grant two types of restricted stock awards: (i) restricted stock awards with nonforfeitable dividends and (ii) restricted stock
awards with forfeitable dividends.
Unvested restricted stock awards (“RSAs”) with nonforfeitable dividends are considered participating securities and included in
the computation of EPS using the two-class method. Under this method, we allocate net income (after amounts attributable to
noncontrolling interests) to common stockholders and these RSAs by using the weighted-average shares of each class outstanding for
quarter-to-date and year-to-date periods independently, based on their respective participation rights to dividends declared (or
accumulated) and undistributed earnings.
Unvested RSAs with forfeitable dividends do not qualify as participating securities under the two-class method because the
dividends are forfeited if the awards do not vest. As a result, undistributed earnings are not allocated to these awards prior to vesting,
and these awards have no effect on the computation of basic EPS while unvested. Once these awards vest, they are included in the
denominator of basic EPS, weighted for the portion of the reporting period they were vested. Prior to vesting, these awards are included
in the denominator of diluted EPS if they are dilutive, which is determined using the treasury stock method. Under this method,
incremental shares are calculated as the difference between the total unvested shares and the number of shares that could
hypothetically be repurchased using the assumed proceeds (including unrecognized compensation cost related to these awards).
These incremental shares are weighted for the portion of the reporting period they were unvested and are included in the diluted EPS
denominator only if their inclusion reduces EPS (i.e., if they are not antidilutive).
In addition, from time to time, we enter into forward equity sales agreements. We consider the potential dilution resulting from
the forward equity sales agreements on the EPS calculations. At inception, the agreements do not have an effect on the computation of
basic EPS as no shares are delivered until settlement. The common shares issued upon the settlement of the forward equity sales
agreements, weighted for the period these common shares were outstanding, are included in the denominator of basic EPS. To
determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the
number of weighted-average shares outstanding – diluted using the treasury stock method. As of and during the year ended
December 31, 2025, no forward equity sales agreements were outstanding.
The table below reconciles the numerators and denominators of the basic and diluted EPS computations for the years ended
December 31, 2025, 2024, and 2023 (in thousands, except per share amounts):
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Net (loss) income | $(1,216,726) | $510,733 | $280,994 | ||
| Net income attributable to noncontrolling interests | (212,844) | (187,784) | (177,355) | ||
| Net income attributable to unvested RSAs with nonforfeitable dividends | (8,417) | (13,394) | (11,195) | ||
| Numerator for basic and diluted EPS – net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $(1,437,987) | $309,555 | $92,444 | ||
| Denominator for basic EPS – weighted-average shares of common stock outstanding | 170,307 | 172,071 | 170,909 | ||
| Dilutive effect of unvested RSAs with forfeitable dividends | — | — | — | ||
| Denominator for diluted EPS – weighted-average shares of common stock outstanding | 170,307 | 172,071 | 170,909 | ||
| Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders: | |||||
| Basic | $(8.44) | $1.80 | $0.54 | ||
| Diluted | $(8.44) | $1.80 | $0.54 |
F-51
14. INCOME TAXES
We have elected to be taxed as a REIT under the Code. We believe we have qualified and continue to qualify as a REIT.
Under the Code, a REIT that distributes at least 90% of its REIT taxable income to its stockholders annually and meets certain other
conditions is not subject to federal income taxes, but could be subject to certain state, local, and foreign taxes. We distribute 100% of
our taxable income annually; therefore, a provision for federal income taxes is not required.
We distributed all of our REIT taxable income in 2024 and 2023 and, as a result, did not incur federal income tax in those
years on such income. For the year ended December 31, 2025, we expect to distribute all of our REIT taxable income and, as a result,
do not expect to incur federal income tax. We expect to finalize our 2025 REIT taxable income when we file our 2025 federal income tax
return in 2026.
The income tax treatment of distributions and dividends declared on our common stock for the years ended December 31,
2025, 2024, and 2023 was as follows (unaudited):
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Ordinary income | 66.6% | 65.7% | 87.8% | ||
| Return of capital | 18.9 | 1.6 | — | ||
| Capital gains at 25% | 0.6 | 13.9 | 0.2 | ||
| Capital gains at 20% | 13.9 | 18.8 | 12.0 | ||
| Total | 100.0% | 100.0% | 100.0% | ||
| Dividends declared | $4.68 | $5.19 | $4.96 |
Beginning in 2018, the Tax Cuts and Jobs Act of 2017 added Section 199A to allow for a new tax deduction based on certain
qualified business income. Section 199A provides eligible individual taxpayers a deduction of up to 20% of their qualified REIT
dividends. This deduction applies to the portion of dividends classified as ordinary income in the table above.
Our dividends declared in a given quarter are generally paid during the subsequent quarter. The taxability information
presented above for our dividends paid in 2025 is based upon management’s estimate. Our federal tax return for 2025 is due on or
before October 15, 2026, assuming we file for an extension of the due date. Our federal tax returns for previous tax years have not
been examined by the IRS. Consequently, the taxability of distributions and dividends is subject to change.
In addition to our REIT tax returns, we file federal, state, and local tax returns for our subsidiaries. We file with jurisdictions
located in the U.S., Canada, China, and other international locations and may be subject to audits, assessments, or other actions by
local taxing authorities. We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be
sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. The
measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative
probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being
realized upon ultimate settlement with the taxing authority that has full knowledge of all relevant information.
As of December 31, 2025, there were no material unrecognized tax benefits. We do not anticipate a significant change to the
total amount of unrecognized tax benefits within the next 12 months. Interest expense and penalties, if any, are recognized in the first
period during which the interest or penalties begin accruing, according to the provisions of the relevant tax law at the applicable
statutory rate of interest. We did not incur any significant tax-related interest expense or penalties for the years ended December 31,
2025, 2024, and 2023.
F-52
14. INCOME TAXES (continued)
The following reconciles net income (determined in accordance with GAAP) to taxable income as filed with the IRS for the
years ended December 31, 2024 and 2023 (in thousands and unaudited):
| Year Ended December 31, | ||||
| 2024 | 2023 | |||
| Net income | $510,733 | $280,994 | ||
| Net income attributable to noncontrolling interests | (187,784) | (177,355) | ||
| Book/tax differences: | ||||
| Rental revenue recognition | (32,749) | 128,938 | ||
| Depreciation and amortization | 361,529 | 331,322 | ||
| Share-based compensation | 47,948 | 73,320 | ||
| Interest expense | (85,378) | (126,756) | ||
| Sales of property | 155,753 | 7,784 | ||
| Impairments | 92,738 | 80,134 | ||
| Non-real estate investments loss | 133,960 | 209,092 | ||
| Lease recognition | (127,719) | 5,840 | ||
| Other | 3,573 | 15,463 | ||
| Taxable income before dividend deduction | 872,604 | 828,776 | ||
| Dividend deduction necessary to eliminate taxable income(1) | (872,604) | (828,776) | ||
| Estimated income subject to federal income tax | $— | $— |
(1)Total common stock dividend distributions paid were approximately $898.6 million and $847.5 million during the years ended December 31, 2024 and 2023, respectively.
**15.**COMMITMENTS AND CONTINGENCIES
Employee retirement savings plan
We have a retirement savings plan pursuant to Section 401(k) of the Code whereby our employees may contribute a portion of
their compensation to their respective retirement accounts in an amount not to exceed the maximum allowed under the Code. In
addition to employee contributions, we have elected to provide company discretionary profit-sharing contributions (subject to statutory
limitations), which amounted to approximately $3.5 million, $7.8 million, and $8.6 million for the years ended December 31, 2025, 2024,
and 2023, respectively. Employees who participate in the plan are immediately vested in their contributions and in the contributions
made on their behalf by the Company.
Concentration of credit risk
We maintain our cash and cash equivalents at insured financial institutions. The combined account balances at each institution
periodically 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. We have not experienced any losses to date on our invested cash.
Our rental revenue is generated by a diverse array of many tenants. As of December 31, 2025, we had approximately 850
leases. The inability of any single tenant to make its lease payments is unlikely to have a severe or financially disruptive effect on our
operations.
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
$50.0 million secured loan from us, which, if the option is exercised, will bear interest at SOFR plus 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.
F-53
15. COMMITMENTS AND CONTINGENCIES (continued)
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.
16.STOCKHOLDERS’ EQUITY
Common equity transactions
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.
ATM common stock offering program
In February 2024, we entered into an ATM common stock offering program that allows us to sell up to an aggregate of
$1.50 billion of our common stock.
During 2024, we entered into forward equity sales agreements to sell 230 thousand shares. We settled these agreements and
received net proceeds of $27.8 million (before offering costs) in 2024.
During the year ended December 31, 2025, we had no activity 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.
Accumulated other comprehensive loss
The improvement of $16.9 million in accumulated other comprehensive loss attributable to Alexandria Real Estate Equities,
Inc.’s stockholders 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 sale of our remaining asset located in Asia. This improvement 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.
Common stock, p****referred stock, and excess stock authorizations
Our charter authorizes the issuance of 400.0 million shares of common stock, of which 170.5 million shares were issued and
outstanding as of December 31, 2025. Our charter also authorizes the issuance of up to 100.0 million shares of preferred stock, none of
which were issued and outstanding as of December 31, 2025. In addition, 200.0 million shares of “excess stock” (as defined in our
charter) are authorized, none of which were issued and outstanding as of December 31, 2025.
F-54
17.SHARE-BASED COMPENSATION
Stock award and incentive plan
To attract and retain talent, provide incentives, and promote the long-term success of our Company, we grant share-based
compensation in the form of restricted stock, pursuant to our stock award and incentive plan. Each restricted share issued reduces our
share reserve by one share (1:1 ratio). As of December 31, 2025, 4,894,632 shares remained available for future grants under our stock
award and incentive plan.
In addition, our stock award and incentive plan permits us to issue share awards to our employees, non-employees, and non-
employee directors. A share award is an award of common stock that (i) may be fully vested upon issuance or (ii) may be subject to the
risk of forfeiture under Section 83 of the Code. Shares issued generally vest over a four-year period from the date of issuance, and the
sale of the shares is restricted prior to the date of vesting. Certain restricted share awards are also subject to an additional one-year
holding period after vesting. The unearned portion of time-based share awards is amortized as share-based compensation expense on
a straight-line basis over the vesting period. Certain restricted share awards are subject to vesting based upon the satisfaction of levels
of performance or market conditions. Failure to satisfy the threshold performance conditions will result in the forfeiture of shares and in
a reversal of previously recognized share-based compensation expense. Failure to satisfy the market condition results in the forfeiture
of shares but does not result in a reversal of previously recognized share-based compensation expense, provided that the requisite
service has been rendered. Forfeiture of time-based, performance-based, or market-based awards due to the failure to meet the service
requirement results in the reversal of previously recognized share-based compensation expense.
The following is a summary of the stock awards activity under our equity incentive plan and related information for the years
ended December 31, 2025, 2024, and 2023 (dollars in thousands, except per share information):
| Number of Share Awards | Weighted-Average Grant Date Fair Value per Share | |||||||
| Outstanding at December 31, 2022 | 2,087,521 | $ | 149.96 | |||||
| Granted | 1,522,058 | $ | 108.22 | |||||
| Vested | (798,729) | $ | 149.41 | |||||
| Forfeited | (56,689) | $ | 104.65 | |||||
| Outstanding at December 31, 2023 | 2,754,161 | $ | 127.34 | |||||
| Granted | 615,192 | $ | 102.96 | |||||
| Vested | (951,195) | $ | 136.09 | |||||
| Forfeited | (180,253) | $ | 109.63 | |||||
| Outstanding at December 31, 2024 | 2,237,905 | $ | 118.34 | |||||
| Granted | 1,032,861 | $ | 73.84 | |||||
| Vested | (817,304) | $ | 131.47 | |||||
| Forfeited | (81,412) | $ | 109.34 | |||||
| Outstanding at December 31, 2025 | 2,372,050 | $ | 94.75 | |||||
| Year Ended December 31, | ||||||||
| 2025 | 2024 | 2023 | ||||||
| Total grant date fair value of stock awards vested | $107,449 | $129,449 | $119,335 | |||||
| Total gross share-based compensation recognized | $94,685 | $118,439 | $139,675 | |||||
| Capitalized share-based compensation | $53,566 | $58,805 | $56,817 |
Certain restricted stock awards granted during 2025, 2024, and 2023 are subject to performance and market conditions. The
grant date fair value of these awards is determined using a Monte Carlo simulation pricing model using the following assumptions for
2025, 2024, and 2023, respectively: (i) expected term of 3.0 years, 3.0 years, and 3.0 years (equal to the remaining performance
measurement period at the grant date), (ii) volatility of 30.7%, 28.7%, and 32.0% (approximating a blended average of implied and
historical volatilities), (iii) three-year weighted-average dividend yield of 4.2%, 3.3%, and 2.8%, and (iv) risk-free rate of 4.35%, 4.18%,
and 4.22%.
As of December 31, 2025, there was $130.9 million of unrecognized compensation related to unvested share awards under
the equity incentive plan, which is expected to be recognized over the next four years and has a weighted-average vesting period of
approximately 17 months.
F-55
18. SEGMENT INFORMATION
We are a life science REIT focused on developing, redeveloping, and operating properties that provide space for lease to
tenants primarily in the life science industry. Our properties are leased predominantly through triple-net lease agreements and share
key characteristics, including generic and reusable improvements, consistent lease structures, and business strategy. All properties are
located within North America, predominantly in the U.S., and operate within a comparable regulatory environment.
Operating segments
Our Chief Operating Decision Maker (“CODM”), represented by our Executive Chairman and our Chief Executive Officer,
evaluates operating results at the geographic market level to assess performance and allocate resources. Our operating segments align
with our markets, including Greater Boston, the San Francisco Bay Area, San Diego, and Seattle, among others. Regular market
performance updates are provided directly to the CODM. These updates include each market’s net operating income (“NOI”), which
serves as the profit or loss measure used by the CODM for performance assessment and resource allocation. NOI provides useful
information regarding performance of each market as it reflects income and expenses incurred in connection with real estate operations
in each market. This metric enables the CODM to evaluate the profitability and performance of each market on a consistent and
comparable basis, supporting decisions on capital resource allocation, including in connection with development, redevelopment,
acquisition, and disposition activities in each market.
Evaluation of economic similarity and aggregation of operating segments
In accordance with the segment reporting accounting standard, we evaluate the economic similarity of our operating
segments. Seven of our nine operating segments exhibit consistent long-term economic characteristics, including similar historical long-
term NOI margins, which are also expected to remain similar in the future. Additionally, these markets share similar operational
characteristics, including nature of services provided (i.e., leasing, operating, developing, and redeveloping life science properties),
tenant base (i.e., a variety of tenants involved in the life science industry), methods of operation (i.e., consistent lease structures,
property management practices, and business strategies), nature of the regulatory environment (consistent across North America,
where all our operating segments are located). Based on shared economic characteristics, we have aggregated our seven operating
segments into one reportable segment for segment reporting purposes. Two of our operating segments, specifically our New York City
and Canada markets, do not meet the aggregation criteria and individually do not meet the quantitative thresholds to qualify as
reportable segments. Therefore, these operating segments are included in the “all other” category in the tables below*.*
The following table presents the reportable segment profit or loss measure, NOI, for the years ended December 31, 2025,
2024, and 2023 (in thousands).
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Reportable segment revenues: | |||||
| Revenues from external customers | $2,798,270 | $2,897,524 | $2,685,027 | ||
| Other income | 37,012 | 30,028 | 21,408 | ||
| Reportable segment total revenues | 2,835,282 | 2,927,552 | 2,706,435 | ||
| Reportable segment total rental operating expenses | (868,831) | (831,258) | (763,700) | ||
| Reportable segment net operating income (reportable segment profit or loss) | $1,966,451 | $2,096,294 | $1,942,735 |
Significant expenses included in the reportable segment profit or loss measure (i.e., NOI) are represented by the reportable
segment total rental operating expenses and are disclosed in the table above. These expenses primarily include property taxes, utilities,
repairs and maintenance, engineering, janitorial, and other costs.
F-56
18.SEGMENT INFORMATION (continued)
Presented below are reconciliations of the reportable segment total revenues to the consolidated revenues, the reportable
segment total rental operating expenses to consolidated rental operations, the reportable segment net operating income to the
consolidated net income, and the reportable segment investments in real estate assets to the consolidated investments in real estate
assets (in thousands):
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| Reconciliation of reportable segment revenues to consolidated total revenues: | |||||
| Reportable segment total revenues | $2,835,282 | $2,927,552 | $2,706,435 | ||
| All other revenues | 191,274 | 188,842 | 179,264 | ||
| Consolidated total revenues | $3,026,556 | $3,116,394 | $2,885,699 | ||
| Reconciliation of reportable segment total rental operating expenses to consolidated rental operations: | |||||
| Reportable segment total rental operating expenses | $(868,831) | $(831,258) | $(763,700) | ||
| All other rental operating expenses | (53,774) | (78,007) | (95,480) | ||
| Consolidated rental operations | $(922,605) | $(909,265) | $(859,180) | ||
| Reconciliation of reportable segment net operating income to consolidated net (loss) income: | |||||
| Reportable segment net operating income (reportable segment profit or loss) | $1,966,451 | $2,096,294 | $1,942,735 | ||
| All other revenues | 191,274 | 188,842 | 179,264 | ||
| All other rental operating expenses | (53,774) | (78,007) | (95,480) | ||
| Other items not allocated to segments: | |||||
| General and administrative | (117,047) | (168,359) | (199,354) | ||
| Interest expense | (226,698) | (185,838) | (74,204) | ||
| Depreciation and amortization | (1,350,478) | (1,202,380) | (1,093,473) | ||
| Impairment of real estate | (2,202,818) | (223,068) | (461,114) | ||
| Loss on early extinguishment of debt | (107) | — | — | ||
| Equity in (losses) earnings of unconsolidated real estate joint ventures | (9,631) | 7,059 | 980 | ||
| Investment loss | (56,343) | (53,122) | (195,397) | ||
| Gain on sale of real estate | 642,445 | 129,312 | 277,037 | ||
| Consolidated net (loss) income | $(1,216,726) | $510,733 | $280,994 |
| As of December 31, | |||
| 2025 | 2024 | ||
| Reconciliation of reportable segment assets to consolidated investments in real estate assets | |||
| Reportable segment investments in real estate | $27,510,082 | $30,393,144 | |
| All other investments in real estate | 1,179,914 | 1,716,895 | |
| Consolidated investments in real estate | $28,689,996 | $32,110,039 |
**19.**SUBSEQUENT EVENTS
Repayment of unsecured senior notes payable in January 2026
In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity. No gain or loss was
incurred in connection with this repayment.
F-57
SCHEDULE III
Alexandria Real Estate Equities, Inc. and Subsidiaries
Schedule III
Consolidated Financial Statement Schedule of Real Estate and Accumulated Depreciation
December 31, 2025
(Dollars in thousands)
| Initial Costs | Costs Capitalized Subsequent to Acquisitions | Total Costs | ||||||||||||||||||||||
| Property | Market | Encumbrances | Land | Buildings & Improvements | Buildings & Improvements | Land | Buildings & Improvements | Total(1) | Accumulated Depreciation(2) | Net Cost Basis | Date of Construction(3) | Date Acquired | ||||||||||||
| Alexandria Center® at Kendall Square | Greater Boston | $— | $558,885 | $783,224 | $1,667,101 | $558,885 | $2,450,325 | $3,009,210 | $(542,912) | $2,466,298 | 1981 - 2023 | 2005 - 2022 | ||||||||||||
| Alexandria Center® at One Kendall Square | Greater Boston | — | 405,164 | 576,213 | 1,128,205 | 405,164 | 1,704,418 | 2,109,582 | (353,934) | 1,755,648 | 1985 - 2023 | 2016 - 2022 | ||||||||||||
| Alexandria Technology Square® | Greater Boston | — | — | 619,658 | 400,903 | — | 1,020,561 | 1,020,561 | (421,077) | 599,484 | 2001 - 2012 | 2006 | ||||||||||||
| The Arsenal on the Charles | Greater Boston | — | 191,797 | 354,611 | 833,114 | 191,797 | 1,187,725 | 1,379,522 | (183,364) | 1,196,158 | 2000 - 2025 | 2019 - 2021 | ||||||||||||
| 480 Arsenal Way 446, 458, and 500 Arsenal Street, and 99 Coolidge Avenue | Greater Boston | — | 69,803 | 15,614 | 456,626 | 69,803 | 472,240 | 542,043 | (90,938) | 451,105 | 1962 - 2023 | 2000 - 2022 | ||||||||||||
| Alexandria Center® for Life Science – Fenway | Greater Boston | — | 912,016 | 617,552 | 970,396 | 912,016 | 1,587,948 | 2,499,964 | (133,961) | 2,366,003 | 2019 - 2024 | 2021 | ||||||||||||
| 5, 10, and 15 Necco Street | Greater Boston | — | 277,554 | 55,897 | 433,568 | 277,554 | 489,465 | 767,019 | (37,419) | 729,600 | 2019 - 2023 | 2019 | ||||||||||||
| Alexandria Center® for Life Science – Waltham | Greater Boston | — | 141,629 | 513,901 | 482,225 | 141,629 | 996,126 | 1,137,755 | (47,264) | 1,090,491 | 1999 - 2024 | 2020 - 2022 | ||||||||||||
| 19, 215, 225, and 235 Presidential Way | Greater Boston | — | 32,136 | 118,391 | 30,103 | 32,136 | 148,494 | 180,630 | (41,181) | 139,449 | 1999 - 2001 | 2005 - 2022 | ||||||||||||
| 30, 200, and 3000 Minuteman Road | Greater Boston | — | 59,227 | 187,205 | 88,083 | 59,227 | 275,288 | 334,515 | (7,018) | 327,497 | 1997 - 2020 | 2021 - 2022 | ||||||||||||
| Other | Greater Boston | — | 96,995 | — | 20,014 | 96,995 | 20,014 | 117,009 | (6) | 117,003 | Various | Various | ||||||||||||
| Alexandria Center® for Science and Technology – Mission Bay | San Francisco | — | 145,025 | 8,345 | 589,408 | 145,025 | 597,753 | 742,778 | (143,028) | 599,750 | 2007 - 2009 | 2004 - 2017 | ||||||||||||
| Alexandria Center® for Advanced Technologies – South San Francisco | San Francisco | — | 59,199 | — | 642,237 | 59,199 | 642,237 | 701,436 | (165,384) | 536,052 | 2008 - 2019 | 2004 - 2005 | ||||||||||||
| Alexandria Center® for Life Science – South San Francisco | San Francisco | — | 32,245 | 1,287 | 493,804 | 32,245 | 495,091 | 527,336 | (196,343) | 330,993 | 2012 - 2022 | 2002 - 2017 | ||||||||||||
| Alexandria Center® for Advanced Technologies – Tanforan | San Francisco | — | 330,154 | 51,145 | 111,106 | 330,154 | 162,251 | 492,405 | (23,762) | 468,643 | 1971 - 2007 | 2021 - 2022 | ||||||||||||
| Alexandria Technology Center® – Gateway | San Francisco | — | 37,175 | 87,213 | 162,935 | 37,175 | 250,148 | 287,323 | (113,875) | 173,448 | 2000 - 2021 | 2002 - 2006 | ||||||||||||
| Alexandria Center® for Life Science – Millbrae | San Francisco | — | 69,989 | — | 526,673 | 69,989 | 526,673 | 596,662 | (11,190) | 585,472 | 2025 | 2021 - 2022 | ||||||||||||
| 500 Forbes Boulevard | San Francisco | — | 35,596 | 69,091 | 23,757 | 35,596 | 92,848 | 128,444 | (40,504) | 87,940 | 2001 | 2007 | ||||||||||||
| Alexandria Center® for Life Science – San Carlos | San Francisco | — | 433,634 | 28,323 | 824,729 | 433,634 | 853,052 | 1,286,686 | (147,647) | 1,139,039 | 1970 - 2022 | 2017 - 2021 | ||||||||||||
| Alexandria Stanford Life Science District | San Francisco | — | — | 599,401 | 119,819 | — | 719,220 | 719,220 | (222,457) | 496,763 | 2002 - 2022 | 2003 - 2022 | ||||||||||||
| 3412, 3420, 3440, 3450, and 3460 Hillview Avenue | San Francisco | — | — | 304,318 | 110,970 | — | 415,288 | 415,288 | (39,194) | 376,094 | 1978 - 2018 | 2020 - 2021 |
F-58
SCHEDULE III (continued)
| Initial Costs | Costs Capitalized Subsequent to Acquisitions | Total Costs | ||||||||||||||||||||||
| Property | Market | Encumbrances | Land | Buildings & Improvements | Buildings & Improvements | Land | Buildings & Improvements | Total(1) | Accumulated Depreciation(2) | Net Cost Basis | Date of Construction(3) | Date Acquired | ||||||||||||
| 2475 and 2625/2627/2631 Hanover Street and 1450 Page Mill Road | San Francisco | $— | $— | $187,472 | $33,658 | $— | $221,130 | $221,130 | $(44,011) | $177,119 | 2000 - 2017 | 1999 - 2021 | ||||||||||||
| Other | San Francisco | — | 415,834 | 129,342 | (134,119) | 415,834 | (4,777) | 411,057 | (68,158) | 342,899 | Various | Various | ||||||||||||
| One Alexandria Square | San Diego | — | 140,318 | 161,293 | 1,097,503 | 140,318 | 1,258,796 | 1,399,114 | (337,901) | 1,061,213 | 1995 - 2025 | 1994 - 2021 | ||||||||||||
| ARE Torrey Ridge | San Diego | — | 22,124 | 152,840 | 115,518 | 22,124 | 268,358 | 290,482 | (90,324) | 200,158 | 2004 - 2021 | 2016 | ||||||||||||
| One Alexandria North | San Diego | — | 103,937 | 1,354 | 56,248 | 103,937 | 57,602 | 161,539 | (1,359) | 160,180 | 1980 - 1990 | 2020 | ||||||||||||
| Campus Point by Alexandria | San Diego | — | 270,937 | 416,534 | 991,360 | 270,937 | 1,407,894 | 1,678,831 | (318,859) | 1,359,972 | 1989 - 2024 | 2010 - 2022 | ||||||||||||
| 5200 Illumina Way | San Diego | — | 39,051 | 96,606 | 201,334 | 39,051 | 297,940 | 336,991 | (98,479) | 238,512 | 2004 - 2017 | 2010 | ||||||||||||
| 9625 Towne Centre Drive | San Diego | — | 7,686 | 13,748 | 67,686 | 7,686 | 81,434 | 89,120 | (41,674) | 47,446 | 2018 | 2014 | ||||||||||||
| SD Tech by Alexandria | San Diego | — | 76,079 | 246,635 | 638,942 | 76,079 | 885,577 | 961,656 | (76,513) | 885,143 | 1988 - 2025 | 2013 - 2020 | ||||||||||||
| Sequence District by Alexandria | San Diego | — | 140,422 | 230,360 | 36,937 | 140,422 | 267,297 | 407,719 | (43,144) | 364,575 | 1997 - 2000 | 2020 - 2021 | ||||||||||||
| Summers Ridge Science Park | San Diego | — | 21,154 | 102,046 | 4,947 | 21,154 | 106,993 | 128,147 | (22,587) | 105,560 | 2005 | 2018 | ||||||||||||
| 10102 Hoyt Park Drive | San Diego | — | 21,610 | 19,986 | 80,480 | 21,610 | 100,466 | 122,076 | (13,569) | 108,507 | 2022 | 2021 | ||||||||||||
| ARE Portola | San Diego | — | 6,991 | 25,153 | 30,633 | 6,991 | 55,786 | 62,777 | (30,232) | 32,545 | 2005 - 2012 | 2007 | ||||||||||||
| 5810/5820 Nancy Ridge Drive | San Diego | — | 3,492 | 18,285 | 33,910 | 3,492 | 52,195 | 55,687 | (30,347) | 25,340 | 2021 | 2004 | ||||||||||||
| 9877 Waples Street | San Diego | — | 5,092 | 11,908 | 13,368 | 5,092 | 25,276 | 30,368 | (11,681) | 18,687 | 2020 | 2020 | ||||||||||||
| 5871 Oberlin Drive | San Diego | — | 1,349 | 8,016 | 17,824 | 1,349 | 25,840 | 27,189 | (6,849) | 20,340 | 2021 | 2010 | ||||||||||||
| 3911, 3931, 3985, 4025, 4031, 4045, and 4075 Sorrento Valley Boulevard | San Diego | — | 18,177 | 42,723 | 66,179 | 18,177 | 108,902 | 127,079 | (46,337) | 80,742 | 2007 - 2015 | 2010 - 2019 | ||||||||||||
| 11045 Roselle Street | San Diego | — | 754 | 4,288 | 22,428 | 754 | 26,716 | 27,470 | (6,990) | 20,480 | 2008 | 2000 | ||||||||||||
| Other | San Diego | — | 64,759 | — | 13,277 | 64,759 | 13,277 | 78,036 | (19) | 78,017 | Various | Various | ||||||||||||
| Alexandria Center® for Life Science – Eastlake | Seattle | — | 46,300 | 83,012 | 946,515 | 46,300 | 1,029,527 | 1,075,827 | (316,598) | 759,229 | 1997 - 2024 | 2002 - 2024 | ||||||||||||
| Alexandria Center® for Advanced Technologies – South Lake Union | Seattle | — | 245,778 | 31,252 | 616,442 | 245,778 | 647,694 | 893,472 | (81,716) | 811,756 | 1984 - 2017 | 2007 - 2024 | ||||||||||||
| 1010 4th Avenue South | Seattle | — | 46,200 | — | 16,563 | 46,200 | 16,563 | 62,763 | — | 62,763 | N/A | 2020 | ||||||||||||
| 410 West Harrison Street and 410 Elliott Avenue West | Seattle | — | 3,857 | 1,989 | 23,084 | 3,857 | 25,073 | 28,930 | (11,781) | 17,149 | 2006 - 2008 | 2004 | ||||||||||||
| Alexandria Center® for Advanced Technologies – Canyon Park | Seattle | — | 105,215 | 164,523 | 65,021 | 105,215 | 229,544 | 334,759 | (26,195) | 308,564 | 1985 - 2007 | 2021 - 2022 | ||||||||||||
| Alexandria Center® for Advanced Technologies – Monte Villa Parkway | Seattle | — | 52,464 | 64,753 | 102,478 | 52,464 | 167,231 | 219,695 | (14,567) | 205,128 | 1994 - 2024 | 2020 | ||||||||||||
| Other | Seattle | — | 108,900 | 931 | 43,181 | 108,900 | 44,112 | 153,012 | (1,254) | 151,758 | Various | Various | ||||||||||||
| Alexandria Center® for Life Science – Shady Grove | Maryland | — | 85,365 | 253,567 | 939,281 | 85,365 | 1,192,848 | 1,278,213 | (218,478) | 1,059,735 | 1998 - 2024 | 2004 - 2021 | ||||||||||||
| 1330 Piccard Drive | Maryland | — | 2,800 | 11,533 | 38,733 | 2,800 | 50,266 | 53,066 | (28,216) | 24,850 | 2005 | 1997 | ||||||||||||
| 1405 Research Boulevard | Maryland | — | 899 | 21,946 | 16,070 | 899 | 38,016 | 38,915 | (21,391) | 17,524 | 2006 | 1997 | ||||||||||||
| 1500 and 1550 East Gude Drive | Maryland | — | 1,523 | 7,731 | 10,810 | 1,523 | 18,541 | 20,064 | (13,647) | 6,417 | 1995 - 2003 | 1997 | ||||||||||||
| 5 Research Place | Maryland | — | 1,466 | 5,708 | 32,319 | 1,466 | 38,027 | 39,493 | (21,812) | 17,681 | 2010 | 2001 |
F-59
SCHEDULE III (continued)
| Initial Costs | Costs Capitalized Subsequent to Acquisitions | Total Costs | ||||||||||||||||||||||
| Property | Market | Encumbrances | Land | Buildings & Improvements | Buildings & Improvements | Land | Buildings & Improvements | Total(1) | Accumulated Depreciation(2) | Net Cost Basis | Date of Construction(3) | Date Acquired | ||||||||||||
| 5 Research Court | Maryland | $— | $1,647 | $13,258 | $24,165 | $1,647 | $37,423 | $39,070 | $(20,872) | $18,198 | 2007 | 2004 | ||||||||||||
| 12301 Parklawn Drive | Maryland | — | 1,476 | 7,267 | 1,799 | 1,476 | 9,066 | 10,542 | (5,436) | 5,106 | 2007 | 2004 | ||||||||||||
| Alexandria Technology Center® – Gaithersburg I | Maryland | — | 20,980 | 121,952 | 71,195 | 20,980 | 193,147 | 214,127 | (70,990) | 143,137 | 1992 - 2019 | 1997 - 2019 | ||||||||||||
| Alexandria Technology Center® – Gaithersburg II | Maryland | — | 17,134 | 67,825 | 109,453 | 17,134 | 177,278 | 194,412 | (60,840) | 133,572 | 2000 - 2021 | 1997 - 2020 | ||||||||||||
| 401 Professional Drive | Maryland | — | 1,129 | 6,941 | 12,511 | 1,129 | 19,452 | 20,581 | (11,054) | 9,527 | 2007 | 1996 | ||||||||||||
| 950 Wind River Lane | Maryland | — | 2,400 | 10,620 | 1,592 | 2,400 | 12,212 | 14,612 | (5,020) | 9,592 | 2009 | 2010 | ||||||||||||
| 620 Professional Drive | Maryland | — | 784 | 4,705 | 8,277 | 784 | 12,982 | 13,766 | (9,164) | 4,602 | 2012 | 2005 | ||||||||||||
| 8000/9000/10000 Virginia Manor Road | Maryland | — | — | 13,679 | 11,036 | — | 24,715 | 24,715 | (15,264) | 9,451 | 2003 | 1998 | ||||||||||||
| Alexandria Center® for Life Science – Durham | Research Triangle | — | 186,680 | 447,875 | 258,012 | 186,680 | 705,887 | 892,567 | (98,886) | 793,681 | 1985 - 2023 | 2020 - 2022 | ||||||||||||
| Alexandria Center® for Advanced Technologies and AgTech– Research Triangle | Research Triangle | — | 30,584 | 23,714 | 492,293 | 30,584 | 516,007 | 546,591 | (85,090) | 461,501 | 2007 - 2022 | 2012 - 2021 | ||||||||||||
| Alexandria Center® for Sustainable Technologies | Research Triangle | — | 54,908 | 18,849 | 114,103 | 54,908 | 132,952 | 187,860 | (69,533) | 118,327 | 1966 - 2022 | 1998 - 2022 | ||||||||||||
| Alexandria Technology Center® – Alston | Research Triangle | — | 577 | 11,688 | 26,513 | 577 | 38,201 | 38,778 | (23,906) | 14,872 | 1985 - 2009 | 1998 | ||||||||||||
| Alexandria Innovation Center® – Research Triangle | Research Triangle | — | 1,065 | 21,218 | 32,632 | 1,065 | 53,850 | 54,915 | (28,297) | 26,618 | 2005 - 2008 | 2000 | ||||||||||||
| 2525 East NC Highway 54 | Research Triangle | — | 713 | 12,827 | 21,359 | 713 | 34,186 | 34,899 | (20,599) | 14,300 | 1995 | 2004 | ||||||||||||
| 407 Davis Drive | Research Triangle | — | 1,229 | 17,733 | 13,949 | 1,229 | 31,682 | 32,911 | (7,851) | 25,060 | 1998 | 2013 | ||||||||||||
| Alexandria Center® for Life Science – New York City | New York City | — | — | — | 1,163,775 | — | 1,163,775 | 1,163,775 | (368,307) | 795,468 | 2010 - 2016 | 2006 | ||||||||||||
| Intersection Campus | Texas | — | 159,310 | 440,295 | 56,826 | 159,310 | 497,121 | 656,431 | (55,724) | 600,707 | 2000 - 2019 | 2021 - 2022 | ||||||||||||
| 1001 Trinity Street and 1020 Red River Street | Texas | — | 66,451 | 61,732 | 7,685 | 66,451 | 69,417 | 135,868 | (20,599) | 115,269 | 1987 - 1990 | 2022 | ||||||||||||
| Alexandria Center® for Advanced Technologies at The Woodlands | Texas | — | 2,116 | 9,784 | 135,850 | 2,116 | 145,634 | 147,750 | (7,759) | 139,991 | 2002 - 2023 | 2020 | ||||||||||||
| Other | Texas | — | 44,217 | — | 16,024 | 44,217 | 16,024 | 60,241 | — | 60,241 | Various | Various | ||||||||||||
| Various | Various | — | 120,565 | 219,389 | 183,091 | 120,565 | 402,480 | 523,045 | (135,188) | 387,857 | Various | Various | ||||||||||||
| — | 6,662,721 | 9,038,274 | 19,116,526 | 6,662,721 | 28,154,800 | 34,817,521 | (6,127,525) | 28,689,996 |
(1)As of December 31, 2025, the total cost of our real estate assets aggregated $34.82 billion, which was less than the cost of real estate for federal income tax purposes aggregating $35.08 billion by approximately $266.6 million.
(2)The depreciable life is up to 40 years for buildings and building improvements, up to 20 years for land improvements, and the term of the respective lease for tenant improvements.
(3)Represents the later of the original construction date or the most recent renovation date.
F-60
SCHEDULE III (continued)
Alexandria Real Estate Equities, Inc.
Consolidated Financial Statement Schedule of Rental Properties and Accumulated Depreciation
December 31, 2025
(Dollars in thousands)
A summary of activity of consolidated investments in real estate and accumulated depreciation is as follows:
| December 31, | ||||||
| Real Estate | 2025 | 2024 | 2023 | |||
| Balance at beginning of period | $37,735,218 | $36,618,530 | $34,299,503 | |||
| Acquisitions (including real estate, land, and joint venture consolidation) | — | 248,378 | 296,694 | |||
| Additions to real estate | 1,933,158 | 2,591,154 | 3,568,726 | |||
| Real estate impairment | (2,202,818) | (223,068) | (461,114) | |||
| Deductions (including dispositions and direct financing and sales-type leases) | (2,648,037) | (1,499,776) | (1,085,279) | |||
| Balance at end of period | $34,817,521 | $37,735,218 | $36,618,530 | |||
| December 31, | ||||||
| Accumulated Depreciation | 2025 | 2024 | 2023 | |||
| Balance at beginning of period | $5,625,179 | $4,985,019 | $4,354,063 | |||
| Depreciation expense on properties | 1,167,011 | 996,550 | 841,893 | |||
| Sale of properties | (664,665) | (356,390) | (210,937) | |||
| Balance at end of period | $6,127,525 | $5,625,179 | $4,985,019 |
Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES