Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under

“Item 15. Exhibits and financial statement schedules” in this annual report on Form 10-K. Forward-looking statements involve inherent

risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business

strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from

those included within or contemplated by such forward-looking statements, including, but not limited to, those described within this “Item

7. Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K. We do not

undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking

statements contained in this or any other document, whether as a result of new information, future events, or otherwise.

As used in this annual report on Form 10-K, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to

Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.

Executive summary

Operating results

		Year Ended December 31,
		2025		2024
Net (loss) income attributable to Alexandria’s common stockholders – diluted:
In millions		$(1,438.0)		$309.6
Per share		$(8.44)		$1.80
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:
In millions		$1,534.7		$1,629.1
Per share		$9.01		$9.47

For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria

Real Estate Equities, Inc.’s common stockholders” under “Definitions and reconciliations” and to the tabular presentation of these items

in “Results of operations” in Item 7 in this annual report on Form 10-K.

A best-in-class REIT with a high-quality, diverse tenant base, strong margins, and long lease terms

(As of December 31, 2025, unless stated otherwise)
Occupancy of operating properties in North America			90.9%
Percentage of total annual rental revenue in effect from Megacampus platform			78%
Percentage of total annual rental revenue in effect from investment-grade or publicly traded large cap tenants			53%
Adjusted EBITDA margin for the three months ended December 31, 2025			70%
Percentage of leases containing annual rent escalations			97%
Weighted-average remaining lease term:
Top 20 tenants			9.7	years
All tenants			7.5	years
Strong tenant collections for the three months ended December 31, 2025:
Tenant rents and receivables for the three months ended December 31, 2025 collected as of the date of this report			99.9%

Solid leasing volume

• Leasing volume aggregating 4.2 million RSF for the year ended December 31, 2025.

• Leasing of previously vacant space aggregating 393,376 RSF, up 98%, over the quarterly average over the last five

quarters.

• Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for the year ended

December 31, 2025.

• 82% of our leasing activity in 2025 was generated from our existing tenant base.

		2025
Lease renewals and re-leasing of space:
Rental rate changes		7.0%
Rental rate changes (cash basis)		3.5%
RSF		2,543,473
Leasing of previously vacant space – RSF		944,362
Leasing of development and redevelopment space – RSF		704,821
Total leasing activity – RSF		4,192,656

Key operating metrics

• Total revenues of $3.03 billion, down 2.9%, for the year ended December 31, 2025, compared to $3.12 billion for the year

ended December 31, 2024. Excluding dispositions completed after January 1, 2024, total revenues would have increased by

2.3% for the year ended December 31, 2025.

• Net operating income (cash basis) of $1.98 billion for the year ended December 31, 2025 increased by $1.7 million, or 0.1%,

compared to the year ended December 31, 2024.

• Change in net operating income (cash basis) includes the impact of operating properties disposed of after January 1,

2024. Excluding these dispositions, net operating income (cash basis) for the year ended December 31, 2025 would have

increased by 6.2% compared to 2024.

• Same property net operating income decreased by 3.5% and increased by 0.9% (cash basis) for the year ended

December 31, 2025, compared to the year ended December 31, 2024.

• 92.5% same properties’ average occupancy for the year ended December 31, 2025, compared to 95.2% average

occupancy for the year ended December 31, 2024.

Continued successful management and reduction of general and administrative expenses

• General and administrative expenses as a percentage of net operating income for the year ended December 31, 2025 were

5.6%—the lowest level in the past ten years for the Company and approximately half the average of other S&P 500 REITs. In

2025, we realized cost reductions of $51.3 million, or 30%, compared to the year ended December 31, 2024, primarily from

cost-control and efficiency initiatives. Some of these cost savings are temporary in nature, and we anticipate that

approximately half of the cost reduction achieved in 2025 will continue in 2026.

• Compared to the general and administrative expenses for the year ended December 31, 2024, we expect to achieve a

savings of $76 million of cumulative general and administrative expense in 2025 and 2026 based upon the midpoint of our

guidance range for 2026 general and administrative expenses.

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

• Common stock dividend declared of $0.72 per share for the three months ended December 31, 2025, representing a 45%

reduction from the quarterly dividend declared of $1.32 for the three months ended September 30, 2025.

• The decision to reduce the declared dividend per common share reflects our commitment to maintaining the strength of our

balance sheet, enhancing financial flexibility, and preserving liquidity of approximately $410 million on an annual basis, which

will be used to support our 2026 capital plan.

• Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating $2.36 billion for

the years ended December 31, 2021 through 2025.

• Dividend yield of 5.9% as of December 31, 2025 and dividend payout ratio of 33% for the three months ended December 31,

Successful execution of Alexandria’s capital recycling strategy

We exceeded the midpoint of our 2025 guidance for dispositions and sales of partial interests by completing $1.81 billion of

funding, primarily from sales of non-core assets and land, as well as sales to owner/users. During the three months ended December

31, 2025, we completed $1.47 billion of dispositions. As of December 31, 2025, the book value of our real estate assets designated as

held for sale aggregated $581.7 million. We expect to sell these assets in 2026. Refer to “Dispositions and sales of partial interests” in