Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements

Certain information and statements included in this quarterly report on Form 10-Q, including, without limitation, statements containing the words “forecast,” “guidance,” “goals,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” “targets,” or “will,” or the negative of those words or similar words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 the forward-looking statements, including, but not limited to, the following:

Operating factors, such as a failure to operate our business successfully in comparison to market expectations or in comparison to our competitors, our inability to obtain capital when desired or refinance debt maturities when desired, and/or a failure to maintain our status as a REIT for federal tax purposes.
Market and industry factors, such as adverse developments concerning the life science, agtech, and technology industries and/or our tenants.
Government factors, such as any unfavorable effects resulting from federal, state, local, and/or foreign government policies, laws, and/or funding levels.
Global factors, such as negative economic, social, political, financial, credit market, and/or banking conditions.
Uncertain global, national, and local impacts of the ongoing COVID-19 pandemic.
Other factors, such as climate change, cyber intrusions, and/or changes in laws, regulations, and financial accounting standards.

This list of risks and uncertainties is not exhaustive. Additional information regarding risk factors that may affect us is included under “Item 1A. Risk factors” and “Item 7. Management’s discussion and analysis of financial condition and results of operations” of our annual report on Form 10-K for the year ended December 31, 2021 and respective sections within this quarterly report on Form 10-Q. Readers of this quarterly report on Form 10-Q should also read our other documents filed publicly with the SEC for further discussion regarding such factors.

Overview

We are a Maryland corporation formed in October 1994 that has elected to be taxed as a REIT for federal income tax purposes. We are an S&P 500® urban office REIT and the first, longest-tenured, and pioneering owner, operator, and developer uniquely focused on collaborative life science, agtech, and technology campuses in AAA innovation cluster locations, with a total market capitalization of $42.8 billion and an asset base in North America of 74.2 million SF as of March 31, 2022. The asset base in North America includes 41.9 million RSF of operating properties and 5.4 million RSF of Class A properties undergoing construction, 10.4 million RSF of near-term and intermediate-term development and redevelopment projects, and 16.5 million SF of future development projects. Founded in 1994, we pioneered this niche and have since established a significant market presence in key locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. We have a longstanding and proven track record of developing Class A properties clustered in urban life science, agtech, and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agtech, and technology companies through our venture capital platform. We believe these advantages result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

As of March 31, 2022:

Investment-grade or publicly traded large cap tenants represented 50% of our total annual rental revenue;
Approximately 97% of our leases (on an annual rental revenue basis) contained effective annual rent escalations approximating 3.0% that were either fixed or indexed based on a consumer price index or other index;
Approximately 91% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent; and
Approximately 94% of our leases (on an annual rental revenue basis) provided for the recapture of capital expenditures (such as HVAC maintenance and/or replacement, roof replacement, and parking lot resurfacing) that we believe would typically be borne by the landlord in traditional office leases.

Our primary business objective is to maximize long-term asset value and shareholder returns based on a multifaceted platform of internal and external growth. A key element of our strategy is our unique focus on Class A properties clustered in urban campuses located in AAA innovation cluster locations. These key urban campus locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space. They generally represent highly desirable locations for tenancy by life science, agtech, and technology entities because of their close proximity to concentrations of specialized skills, knowledge, institutions, and related businesses. Our strategy also includes drawing upon our deep and broad real estate, life science, agtech, and technology relationships in order to identify and attract new and leading tenants and to source additional value-creation real estate.

Executive summary

Operating results


	Three Months Ended March 31,
	2022		2021
Net (loss) income attributable to Alexandria’s common stockholders – diluted:
In millions	$	(151.7)	$	6.1
Per share	$	(0.96)	$	0.04
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:
In millions	$	324.6	$	263.0
Per share	$	2.05	$	1.91

The operating results shown above include certain items related to corporate-level investing and financing decisions. For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” in the “Non-GAAP measures and definitions” section and to the tabular presentation of these items in the “Results of operations” section within this Item 2 for additional information.

Continued strong leasing volume during the three months ended March 31, 2022, after a historic year of leasing in 2021

Strong leasing activity continued during the three months ended March 31, 2022 with the second-highest leasing volume in Company history for both total space and development and redevelopment space:



						Three Months Ended March 31, 2022
Total leasing activity – RSF						2,463,438
Leasing of development and redevelopment space – RSF						1,439,696
Lease renewals and re-leasing of space:
RSF (included in total leasing activity above)						864,077
Rental rate increases						32.2%
Rental rate increases (cash basis)						16.5%
Excluding short-term renewals executed to allow Bristol-Myers Squibb Company (“BMS”) to expand and consolidate into our Alexandria Point development project, described further below:
Rental rate increases						39.8%
Rental rate increases (cash basis)						23.2%

During the three months ended March 31, 2022, we executed the following long-term leases:
426,927 RSF with BMS, our largest tenant, for the development of BMS’s newest innovative cutting-edge research hub focused on cancer as well as immune-mediated and neurodegenerative diseases at the Alexandria Point mega campus in San Diego.
333,929 RSF with Eli Lilly and Company (“Lilly”), our third largest tenant, for the development of Lilly’s new state-of-the-art Institute for Genetic Medicine at 15 Necco Street in our Seaport Innovation District submarket of Greater Boston.

Continued strong net operating income and internal growth

Total revenues of $615.1 million, up 28.2%, for the three months ended March 31, 2022, compared to $479.8 million for the three months ended March 31, 2021.
Net operating income (cash basis) of $1.5 billion for the three months ended March 31, 2022, annualized, increased by $301.3 million, or 24.9%, compared to the three months ended March 31, 2021, annualized.
97% of our leases contain contractual annual rent escalations approximating 3%.
Same property net operating income increases of 7.6% and 7.3% (cash basis) for the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

A REIT industry-leading high-quality tenant roster with high-quality revenues and cash flows, strong margins, and operational excellence


Percentage of total annual rental revenue in effect from investment-grade or publicly traded large cap tenants	50	%

Occupancy of operating properties in North America	94.7	%
Occupancy of operating properties in North America (excluding vacancy at recently acquired properties)	98.6	%	(1)
Operating margin	71	%	(2)
Adjusted EBITDA margin	71	%	(2)
Weighted-average remaining lease term:
All tenants	7.3		years
Top 20 tenants	10.5		years

(1)Excludes 1.6 million RSF, or 3.9%, of vacancy at recently acquired properties representing lease-up opportunities that are expected to provide incremental annual rental revenue. Refer to the “Summary of occupancy percentages in North America” section within this Item 2 for additional information regarding vacancy from recently acquired properties.

(2)For the three months ended March 31, 2022.

100 Binney Street achieves $1 billion valuation milestone in recapitalization

During the three months ended March 31, 2022, we completed the sale of a 70% interest in 100 Binney Street in our Cambridge/Inner Suburbs submarket of Greater Boston for a sales price of $713.2 million, or $2,353 per RSF, at capitalization rates of 3.6% and 3.5% (cash basis), representing an excess of $413.6 million above our book value of the 70% interest sold. The sales price at 100% represents a property valuation of $1.02 billion. Proceeds from this sale will be reinvested into our highly leased value-creation pipeline and acquisitions with development and redevelopment opportunities.

Continued high demand drives visibility for future growth aggregating $665 million of incremental annual rental revenue

Our highly leased value-creation pipeline of current and key near-term projects that are under construction or that will commence construction in the next six quarters is expected to generate greater than $665 million of incremental annual rental revenue, primarily commencing from the second quarter of 2022 through the first quarter of 2025.

8.0 million RSF of our value-creation projects are either under construction or expected to commence construction in the next six quarters.
77% leased/negotiating.

Strong and flexible balance sheet with significant liquidity

Investment-grade credit ratings ranked in the top 10% among all publicly traded U.S. REITs as of March 31, 2022.
Net debt and preferred stock to Adjusted EBITDA of 5.5x and fixed-charge coverage ratio of 5.1x for the three months ended March 31, 2022, annualized.
Total debt and preferred stock to gross assets of 28% as of March 31, 2022.
$5.7 billion of liquidity as of March 31, 2022.

Continued dividend strategy to share growth in cash flows with stockholders

Common stock dividend declared for the three months ended March 31, 2022 was $1.15 per common share, aggregating $4.54 per common share for the twelve months ended March 31, 2022, up 24 cents, or 6%, over the twelve months ended March 31, 2021. Our FFO payout ratio of 57% for the three months ended March 31, 2022 allows us to continue to share growth in cash flows from operating activities with our stockholders while also retaining a significant portion for reinvestment.

External growth and investments in real estate

Alexandria at the vanguard of innovation with a focus on accommodating our tenants’ current needs and providing a path for their future growth; high-quality roster of over 1,000 tenants

During the three months ended March 31, 2022, we completed acquisitions in our key life science cluster submarkets aggregating 7.3 million SF and comprising 6.9 million RSF of future development and redevelopment opportunities and 451,760 RSF of operating space for an aggregate purchase price of $1.8 billion. These acquisitions continue to be primarily focused on future development or redevelopment opportunities to expand our mega campuses and accommodate the future growth of our tenants.

Delivery and commencement of value-creation projects

*•*During the three months ended March 31, 2022, we placed into service development and redevelopment projects aggregating 566,665 RSF across multiple submarkets.

82% of construction costs related to active development and redevelopment projects aggregating 5.4 million RSF are under a guaranteed maximum price contract or other contracts. Our budgets also include a landlord contingency that generally ranges between 3% and 5%. Refer to the definitions of “Construction costs related to active development and redevelopment projects under contract” in the “Non-GAAP measures and definitions” section within this Item 2 for additional details.
Annual net operating income (cash basis) is expected to increase by $48 million upon the burn-off of initial free rent from recently delivered projects.

*•*During the three months ended March 31, 2022, we commenced construction on five value-creation projects aggregating 1.1 million RSF, including:

345,995 RSF development project that is 97% leased at 15 Necco Street in our Seaport Innovation District submarket.
300,010 RSF project at 651 Gateway Boulevard in our South San Francisco submarket, which will be redeveloped into office/laboratory space; and
192,000 RSF development project that is 100% leased at 9810 Darnestown Road in our Rockville submarket.

Delivery and commencement of value-creation projects (continued)


Value-creation pipeline of new Class A development and redevelopment projects as a percentage of gross assets	March 31, 2022
Under construction projects 76% leased/negotiating		9%
Pre-leased/negotiating near-term projects expected to commence construction in the next six quarters 82% leased/negotiating		2%
Income-producing/potential cash flows/covered land play(1)		7%
Land		2%

(1)Includes projects that have existing buildings that are generating or can generate operating cash flows. Also includes development rights associated with existing operating campuses.

Balance sheet management

Key metrics as of March 31, 2022

$42.8 billion in total market capitalization.
$32.5 billion in total equity capitalization, which ranks in the top 10% among all publicly traded U.S. REITs as of March 31, 2022.
No debt maturing prior to 2025 as of the date of this report.
13.8 years weighted-average remaining term of debt as of March 31, 2022.


	March 31, 2022		Goal for Fourth Quarter of 2022, Annualized
	Quarter Annualized	Trailing 12 Months
Net debt and preferred stock to Adjusted EBITDA	5.5x	5.9x	Less than or equal to 5.1x
Fixed-charge coverage ratio	5.1x	5.1x	Greater than or equal to 5.1x

Key capital events

*•*During the three months ended March 31, 2022, our common equity transactions included the following:

In January 2022, we entered into new forward equity sales agreements aggregating $1.7 billion to sell 8.1 million shares of our common stock (including the exercise of an underwriters’ option) at a public offering price of $210.00 per share, before underwriting discounts and commissions.
In March 2022, we settled a portion of these forward equity sales agreements by issuing 3.2 million shares and received net proceeds of $648.2 million.
We expect to issue 4.8 million shares to settle our remaining outstanding forward equity sales agreements and receive net proceeds of approximately $1.0 billion in 2022.
In March 2022, we entered into new forward equity sales agreements aggregating $350.0 million to sell 1.8 million shares under our ATM program at an average price of $192.42 per share (before underwriting discounts). We expect to settle these forward equity sales agreements in 2022.
As of March 31, 2022, the remaining aggregate amount available under our ATM program for future sales of common stock is $650.0 million.
In February 2022, we opportunistically issued $1.8 billion of unsecured senior notes payable with a weighted-average interest rate of 3.28% and a weighted-average maturity of 22.0 years. The unsecured senior notes include:
$800.0 million of 2.95% green unsecured senior notes due 2034; and
$1.0 billion of 3.55% unsecured senior notes due 2052.

*•*In April 2022, we repaid two secured notes payable aggregating $195.0 million due in 2024 with an effective interest rate of 3.40% and recognized a loss on early extinguishment of debt of $3.3 million, including a prepayment penalty and the write-off of unamortized loan fees.

Investments

As of March 31, 2022, our investments aggregated $1.7 billion, including unrealized gains of $532.6 million.
Investment loss of $240.3 million for the three months ended March 31, 2022 consisted of $23.1 million of realized gains and $263.4 million of unrealized losses (due to changes in fair value).

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

In April 2022, 9880 Campus Point Drive, a 98,000 RSF development on the Alexandria Point mega campus in our University Town Center submarket, earned LEED Platinum certification, the highest level of certification under the U.S. Green Building Council’s Core & Shell rating system. Home to Alexandria GradLabs®, a dynamic proprietary platform purpose-built to accelerate the growth of promising post-seed-stage life science companies, the cutting-edge facility demonstrates high levels of sustainability, including decreased water consumption, significantly reduced energy use, and increased use of recycled resources and materials.
In March 2022, Alexandria’s executive chairman and founder, Joel S. Marcus, was honored by the National Medal of Honor Museum Foundation in Arlington, Texas during a groundbreaking ceremony in celebration of the historic mission-critical milestone in the development of the national museum. Mr. Marcus, who serves on the foundation’s board of directors, attended alongside fellow foundation board members, major museum donors, government officials, and 15 Medal of Honor recipients to commemorate the foundation’s remarkable progress toward its goal to build a permanent home where the inspiring stories of our country’s Medal of Honor recipients will be brought to life.
In February 2022, Alexandria was ranked the #5 most sustainable REIT, as featured in the Barron’s article, “10 Real Estate Companies That Are Both Greener and More Profitable.”
In February 2022, Alexandria earned the first-ever Fitwel Life Science certification for 300 Technology Square, located on the Alexandria Technology Square® mega campus in our Cambridge/Inner Suburbs submarket. The new rigorous, evidence-based Fitwel Life Science Scorecard — developed in partnership with the Center for Active Design exclusively for Alexandria — is the first healthy building framework dedicated to laboratory facilities, marking another pioneering effort by the company to prioritize tenant health and wellness and further differentiate our world-class laboratory buildings.
In January 2022, Alexandria Venture Investments, our strategic venture capital platform, was recognized by Silicon Valley Bank in its “Healthcare Investments and Exits: 2022 Annual Report” as the #1 most active corporate investor in biopharma by new deal volume (2020-2021) for the fifth consecutive year. In March 2022, Alexandria Venture Investments was also recognized by AgFunder in its “2022 AgriFoodTech Investment Report” as one of the five most active U.S. Investors in agrifoodtech by number of companies in which it invested (2021) for the second consecutive year.
Several of Alexandria’s facilities and campuses across our regions received awards in honor of excellence in operations, development, and design:
200 Technology Square on the Alexandria Technology Square® mega campus in our Cambridge/Inner Suburbs submarket earned a 2022 BOMA Mid-Atlantic TOBY (The Outstanding Building of the Year) award in the Corporate Category. The TOBY Awards honor and recognize quality in building operations and award excellence in building management.
The Alexandria Center® for AgTech in our Research Triangle submarket was named Top Flex/Warehouse Development in the Triangle Business Journal’s 2022 SPACE Awards. The annual SPACE Awards recognize the Research Triangle’s top real estate developments and transactions.
685 Gateway Boulevard, an amenities building on our Alexandria Technology Center® – Gateway mega campus in our South San Francisco submarket, which is on track to achieve Zero Energy Certification, was awarded one of 10 national awards issued by WoodWorks – Wood Products Council in the 2022 Wood Design Awards, an annual awards program that celebrates excellence in wood building design.

(1)Source: Barron’s, “10 Real Estate Companies That Are Both Greener and More Profitable,” February 19, 2022.

Environmental data for 2021 reflected in the chart above received independent limited assurance from DNV Business Assurance USA, Inc.

(1)2025 environmental goals relative to a 2015 baseline on a like-for-like basis for buildings in operation that Alexandria directly manages.

(2)2025 environmental goal for buildings in operation that Alexandria indirectly and directly manages.

(3)Progress toward 2025 goals.

Operating summary


Historical Same Property Net Operating Income Growth		Favorable Lease Structure(1)
		Strategic Lease Structure by Owner and Operator of Collaborative Life Science, Agtech, and Technology Campuses
	Increasing cash flows
	Percentage of leases containing annual rent escalations			97%
	Stable cash flows
	Percentage of triple net leases			91%
	Lower capex burden
	Percentage of leases providing for the recapture of capital expenditures			94%


Historical Rental Rate Growth: Renewed/Re-Leased Space		Margins(2)

	Operating		Adjusted EBITDA
	71%		71%



Net Debt and Preferred Stock to Adjusted EBITDA(4)		Fixed-Charge Coverage Ratio(4)

(1)Percentages calculated based on annual rental revenue as of March 31, 2022.

(2)Represents percentages for the three months ended March 31, 2022.

(3)Includes short-term renewals with BMS at various properties aggregating 251,860 RSF in our San Diego market to allow for expansion and consolidation into a 426,927 RSF development project at Alexandria Point. Excluding these short-term renewals, rental rate increases for the three months ended March 31, 2022 were 39.8% and 23.2% (cash basis).

(4)Quarter annualized. Refer to the definitions of “Net debt and preferred stock to Adjusted EBITDA” and “Fixed-charge coverage ratio” in the “Non-GAAP measures and definitions” section within this Item 2 for additional details.


Long-Duration Cash Flows From High-Quality, Diverse, and Innovative Tenants

Investment-Grade or Publicly Traded Large Cap Tenants						Long-Duration Lease Terms


50%						7.3 Years
of ARE’s Total						Weighted-Average
Annual Rental Revenue(1)						Remaining Term(2)

Industry Mix of 1,000+ Tenants(3)





Percentage of ARE’s Annual Rental Revenue(1)

(1)Represents annual rental revenue in effect as of March 31, 2022. Refer to the “Non-GAAP measures and definitions” section within this Item 2 for additional information.

(2)Based on aggregate annual rental revenue in effect as of March 31, 2022. Refer to definition of “Annual rental revenue” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information on our methodology on annual rental revenue for unconsolidated real estate joint ventures.

(3)Increase from prior quarter relates to the recent acquisition of 1150 El Camino Real, a retail operating mall, targeted for future development.

(4)Represents annual rental revenue currently generated from space that is targeted for a future change in use. The weighted-average remaining term of these leases is 4.3 years.

(5)Our other tenants, aggregating 4.0% of our annual rental revenue, comprise 3.0% of annual rental revenue from technology, professional services, finance, telecommunications, and construction/real estate companies and only 1.0% from retail-related tenants.


High-Quality Cash Flows From High Quality Tenants and Class A Properties in AAA Locations

Industry-Leading Tenant Roster		AAA Locations

86%
of ARE’s Top 20 Annual Rental Revenue(1) From Investment-Grade or Publicly Traded Large Cap Tenants
		Percentage of ARE’s Annual Rental Revenue(1)



Solid Historical Occupancy(2)	Occupancy Across Key Locations

96%
Over 10 Years

(1)Represents annual rental revenue in effect as of March 31, 2022. Refer to the “Non-GAAP measures and definitions” section within this Item 2 for additional information.

(2)Represents average occupancy of operating properties in North America as of each December 31 for the last 10 years and as of March 31, 2022.

(3)Refer to the “Summary of occupancy percentages in North America” section within this Item 2 for additional information on vacancy at recently acquired properties.

Leasing

The following table summarizes our leasing activity at our properties:


	Three Months Ended				Year Ended
	March 31, 2022				December 31, 2021
		Including Straight-Line Rent			Cash Basis		Including Straight-Line Rent		Cash Basis
(Dollars per RSF)
Leasing activity:
Renewed/re-leased space(1)
Rental rate changes			32.2%	(2)		16.5%	(2)	37.9%		22.6%
New rates			$59.46			$57.18		$59.00		$55.60
Expiring rates			$44.97			$49.07		$42.80		$45.36
RSF			864,077					4,614,040
Tenant improvements/leasing commissions			$32.16					$41.05
Weighted-average lease term			4.3 years					6.3 years

Developed/redeveloped/ previously vacant space leased(3)
New rates			$81.99			$71.55		$78.52		$69.42
RSF			1,599,361					4,902,261
Weighted-average lease term			13.0 years					11.2 years

Leasing activity summary (totals):
New rates			$74.09			$66.51		$69.05		$62.72
RSF			2,463,438	(4)				9,516,301
Weighted-average lease term			9.9 years					8.8 years

Lease expirations(1)
Expiring rates			$41.60			$40.40		$41.53		$43.70
RSF			1,522,582					5,747,192

Leasing activity includes 100% of results for each property in which we have an investment in North America.

(1)Excludes month-to-month leases aggregating 250,724 RSF and 110,180 RSF as of March 31, 2022 and December 31, 2021, respectively.

(2)Includes short-term renewals with BMS at various properties aggregating 251,860 RSF in our San Diego market to allow for expansion and consolidation into a 426,927 RSF development project at Alexandria Point. Excluding these short-term renewals, rental rate increases for the three months ended March 31, 2022 were 39.8% and 23.2% (cash basis).

(3)Refer to “New Class A development and redevelopment properties: summary of pipeline” section within this Item 2 for additional details on total project costs.

(4)During the three months ended March 31, 2022, we granted tenant concessions/free rent averaging 2.6 months with respect to the 2,463,438 RSF leased. Approximately 57% of the leases executed during the three months ended March 31, 2022 did not include concessions for free rent.

Summary of contractual lease expirations

The following table summarizes information with respect to the contractual lease expirations at our properties as of March 31, 2022:


Year			RSF		Percentage of Occupied RSF			Annual Rental Revenue (per RSF)(1)			Percentage of Total Annual Rental Revenue

	2022	(2)		1,805,956		4.6	%		$	39.40		3.8	%
	2023			3,826,609		9.7	%		$	39.64		8.0	%
	2024			3,438,769		8.7	%		$	43.96		8.0	%
	2025			3,640,356		9.2	%		$	47.54		9.2	%
	2026			2,657,842		6.7	%		$	51.19		7.2	%
	2027			2,749,767		7.0	%		$	51.62		7.5	%
	2028			3,593,127		9.1	%		$	50.45		9.6	%
	2029			2,360,823		6.0	%		$	55.89		7.0	%
	2030			2,195,949		5.6	%		$	58.28		6.8	%
	2031			3,181,073		8.1	%		$	53.00		8.9	%
Thereafter				10,006,555		25.3	%		$	45.14		24.0	%

(1)Represents amounts in effect as of March 31, 2022.

(2)Excludes month-to-month leases aggregating 250,724 RSF as of March 31, 2022.

The following tables present information by market with respect to our lease expirations in North America as of March 31, 2022, for the remainder of 2022, and for all of 2023:


	2022 Contractual Lease Expirations (in RSF)										Annual Rental Revenue (per RSF)(4)
Market	Leased		Negotiating/ Anticipating		Targeted for Development/ Redevelopment(1)		Remaining Expiring Leases(2)		Total(3)

Greater Boston	90,810		65,361		102,728		54,380		313,279		$	48.05
San Francisco Bay Area	1,800		100,579		250,000		101,115		453,494		47.12
New York City	14,891		—		—		830		15,721		N/A
San Diego	111,796		33,734		92,275		102,766		340,571		38.99
Seattle	11,000		—		56,841		95,689		163,530		25.76
Maryland	83,392		21,241		—		66,587		171,220		19.11
Research Triangle	—		5,258		62,490		104,152		171,900		26.82
Canada	—		—		—		2,197		2,197		N/A
Non-cluster/other markets	65,188		30,507		70,700		7,649		174,044		36.07
Total	378,877		256,680		635,034		535,365		1,805,956		$	39.40
Percentage of expiring leases	21	%	14	%	35	%	30	%	100	%

	2023 Contractual Lease Expirations (in RSF)										Annual Rental Revenue (per RSF)(4)
Market	Leased		Negotiating/ Anticipating		Targeted for Development/ Redevelopment		Remaining Expiring Leases		Total

Greater Boston	112,470		9,646		323,110		716,758		1,161,984		$	51.00
San Francisco Bay Area	—		12,456		—		568,753		581,209		55.45
New York City	—		—		—		70,962		70,962		N/A
San Diego	17,182		44,681		269,048		722,617		1,053,528		29.10
Seattle	—		—		105,635		231,631		337,266		21.87
Maryland	—		138,331		—		204,422		342,753		26.35
Research Triangle	—		—		—		247,691		247,691		30.01
Canada	—		—		—		13,321		13,321		N/A
Non-cluster/other markets	—		—		—		17,895		17,895		N/A
Total	129,652		205,114		697,793		2,794,050		3,826,609		$	39.64
Percentage of expiring leases	3	%	5	%	18	%	74	%	100	%

(1)Represents RSF targeted for development or redevelopment upon expiration of existing in-place leases primarily related to recently acquired properties with an average contractual lease expiration date of June 18, 2022, weighted by annual rental revenue. Refer to “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional details on value-creation square feet currently included in rental properties.

(2)There are no remaining expiring leases greater than 50,000 RSF in 2022.

(3)Excludes month-to-month leases aggregating 250,724 RSF as of March 31, 2022.

(4)Represents amounts in effect as of March 31, 2022.

Top 20 tenants

86% of Top 20 Annual Rental Revenue From Investment-Grade

or Publicly Traded Large Cap Tenants**(1)**

Our properties are leased to a high-quality and diverse group of tenants, with no individual tenant accounting for more than 3.5% of our annual rental revenue in effect as of March 31, 2022. The following table sets forth information regarding leases with our 20 largest tenants in North America based upon annual rental revenue in effect as of March 31, 2022 (dollars in thousands, except average market cap):


		Remaining Lease Term(1) (in Years)			Aggregate RSF		Annual Rental Revenue(1)		Percentage of Aggregate Annual Rental Revenue (1)		Investment-Grade Credit Ratings		Average Market Cap(1) (in billions)

	Tenant					Moody’s	S&P
1	Bristol-Myers Squibb Company		6.3		916,223		$	66,301	3.5	%	A2	A+	$	142.3
2	Moderna, Inc.		14.8		878,933			52,579	2.8		—	—	$	101.8
3	Eli Lilly and Company		7.2		733,781			48,999	2.6		A2	A+	$	229.2
4	Sanofi		6.1		589,464			43,303	2.3		A1	AA	$	128.9
5	Takeda Pharmaceutical Company Limited		7.8		549,760			37,399	2.0		Baa2	BBB+	$	49.4
6	Illumina, Inc.		8.4		891,495			36,174	1.9		Baa3	BBB	$	61.8
7	2seventy bio, Inc.		11.4		312,805			33,558	1.8		—	—	$	0.6
8	Novartis AG		6.3		447,831			30,582	1.6		A1	AA-	$	213.1
9	TIBCO Software Inc.		4.9	(2)	292,013			28,537	1.5		—	—	$	—
10	Uber Technologies, Inc.		60.5	(3)	1,009,188			27,666	1.5		—	—	$	83.3
11	Roche		7.3		425,131			26,507	1.4		Aa3	AA	$	329.5
12	Maxar Technologies		3.5	(4)	478,000			21,803	1.1		—	—	$	2.3
13	Merck & Co., Inc.		10.7		339,344			21,796	1.1		A1	A+	$	196.9
14	Massachusetts Institute of Technology		6.7		257,626			21,165	1.1		Aaa	AAA	$	—
15	United States Government		13.3		911,289			20,331	1.1		Aaa	AA+	$	—
16	The Children's Hospital Corporation		14.6		269,816			20,066	1.1		Aa2	AA	$	—
17	New York University		9.6		203,500			19,241	1.0		Aa2	AA-	$	—
18	Pfizer Inc.		3.3		416,996			17,742	0.9		A2	A+	$	258.8
19	Apple Inc.		3.1		604,382			17,512	0.9		Aaa	AA+	$	2,487.7
20	Alphabet Inc.		4.7		354,304			16,917	0.9		Aa2	AA+	$	1,782.7
	Total/weighted-average		10.5	(3)	10,881,881		$	608,178	32.1	%

Annual rental revenue and RSF include 100% of each property managed by us in North America.

(1)Based on aggregate annual rental revenue in effect as of March 31, 2022. Refer to the definitions of “Annual rental revenue” and “Investment-grade or publicly traded large cap tenants” in the “Non-GAAP measures and definitions” section within this Item 2 for our methodologies on annual rental revenue from unconsolidated real estate joint ventures and average market capitalization, respectively.

(2)Represents the remaining lease term at four recently acquired properties with future redevelopment and development opportunities. The leases with this tenant were in place when we acquired the properties during the three months ended March 31, 2022.

(3)Includes (i) ground leases for land at 1455 and 1515 Third Street (two buildings aggregating 422,980 RSF) and (ii) leases at 1655 and 1725 Third Street (two buildings aggregating 586,208 RSF) owned by our unconsolidated real estate joint venture in which we have an ownership interest of 10%. Annual rental revenue is presented using 100% of the annual rental revenue from our consolidated properties and our share of annual rental revenue from our unconsolidated real estate joint ventures. Refer to footnote 1 for additional details. Excluding the ground leases, the weighted-average remaining lease term for our top 20 tenants was 8.2 years as of March 31, 2022.

(4)Represents the remaining lease term at two acquired properties with future redevelopment and development opportunities. The leases with this tenant were in place when we acquired the properties in 2019.

Locations of properties

The locations of our properties are diversified among a number of life science, agtech, and technology cluster markets. The following table sets forth the total RSF, number of properties, and annual rental revenue in effect as of March 31, 2022 in each of our markets in North America (dollars in thousands, except per RSF amounts):


	RSF						Number of Properties		Annual Rental Revenue
Market	Operating	Development	Redevelopment	Total	% of Total			Total			% of Total			Per RSF
Greater Boston	11,120,069	1,318,211	1,350,944	13,789,224	29	%	93		$	658,335		35	%		$	62.07
San Francisco Bay Area	8,678,996	230,592	300,010	9,209,598	19		72		474,500			25			61.06
New York City	1,186,453	—	83,566	1,270,019	3		5		87,699			5			75.11
San Diego	7,898,303	339,548	121,662	8,359,513	18		104		308,414			16			41.47
Seattle	2,813,803	311,631	213,976	3,339,410	7		46		106,869			6			38.79
Maryland	3,423,559	192,000	127,050	3,742,609	8		49		111,250			6			33.16
Research Triangle	3,464,603	381,453	325,936	4,171,992	9		41		89,819			5			27.70
Canada	549,777	—	—	549,777	1		6		9,813			1			23.33
Non-cluster/other markets	2,147,046	—	130,765	2,277,811	5		26		55,154			1			31.97
Properties held for sale	654,114	—	—	654,114	1		4		1,964			—			N/A
North America	41,936,723	2,773,435	2,653,909	47,364,067	100	%	446		$	1,903,817		100	%		$	49.42
		5,427,344

Summary of occupancy percentages in North America

The following table sets forth the occupancy percentages for our operating properties and our operating and redevelopment properties in each of our North America markets, excluding properties held for sale, as of the following dates:


	Operating Properties							Operating and Redevelopment Properties
Market	3/31/22			12/31/21		3/31/21		3/31/22		12/31/21		3/31/21
Greater Boston	95.4	%	(1)	95.2	%	96.2	%	85.0	%	83.2	%	91.5	%
San Francisco Bay Area	95.6		(1)	93.0		95.4		92.4		92.6		94.3
New York City	98.4			98.4		99.4		91.9		91.0		89.8
San Diego	94.2			93.1		93.3		92.7		91.7		90.3
Seattle	97.9			95.6		96.8		91.0		88.5		89.6
Maryland	100.0			99.8		97.9		96.4		96.0		90.4
Research Triangle	93.6		(1)	94.6		90.8		85.5		86.1		73.7
Subtotal	95.7			94.9		95.3		89.8		89.1		89.9
Canada	76.5			78.6		81.6		76.5		78.6		81.6
Non-cluster/other markets	80.4		(1)	75.1		52.6		75.7		75.1		52.6
North America	94.7	%	(1)	94.0	%	94.5	%	88.9	%	88.5	%	89.2	%

(1)Includes 1.6 million RSF, or 3.9%, of vacancy at recently acquired properties, representing lease-up opportunities that are expected to generate incremental annual rental revenue. Approximately 34% of the vacant 1.6 million RSF is currently leased/negotiating. Additionally, approximately 12% of the vacant 1.6 million RSF represents spaces, spread across multiple recently acquired properties, that are expected to be converted to laboratory/office space in the future. We expect to deliver 30% to 40% of the 1.6 million RSF over the next three quarters. Excluding recently acquired vacancies, occupancy of operating properties in North America was 98.6% as of March 31, 2022. The following table provides vacancy detail for our recent acquisitions:


		As of March 31, 2022							Percentage of Vacancy Leased/Negotiating RSF
		Vacant RSF		Operating Properties Occupancy Impact
Property	Market/Submarket		Region			North America
Intersection Campus	Other/Texas	185,136		8.6	%		0.5	%	35	%
Alexandria Center® for Life Science – Durham	Research Triangle/Research Triangle	162,382		4.7	%		0.4		60
601, 611, and 651 Gateway Boulevard	San Francisco Bay Area/South San Francisco	143,317		1.7	%		0.4		46
275 Grove Street	Greater Boston/Route 128	137,940		1.2	%		0.3		47
Other	Greater Boston/Other	95,501		0.9	%		0.2		—
Alexandria Center® for Life Science – Fenway	Greater Boston/Fenway	89,055		0.8	%		0.2		—
Other acquisitions	Various	783,389		N/A			1.9		32
		1,596,720					3.9	%	34	%

Investments in real estate

A key component of our business model is our disciplined allocation of capital to the development and redevelopment of new Class A properties located in collaborative life science, agtech, and technology campuses in AAA innovation clusters. These projects are focused on providing high-quality, generic, and reusable spaces that meet the real estate requirements of, and are reusable by, a wide range of tenants. Upon completion, each value-creation project is expected to generate a significant increase in rental income, net operating income, and cash flows. Our development and redevelopment projects are generally in locations that are highly desirable to high-quality entities, which we believe results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. Our pre-construction activities are undertaken in order to prepare the property for its intended use and include entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building improvements.

Our investments in real estate consisted of the following as of March 31, 2022 (dollars in thousands):


			Development and Redevelopment
	Operating		Under Construction		Near Term			Intermediate Term		Future		Subtotal		Total
Investments in real estate
Gross book value as of March 31, 2022(1)	$	23,803,710	$	3,381,675	$	1,548,861		$	627,550	$	1,670,988	$	7,229,074	$	31,032,784

Square footage
Operating	41,936,723		—		—			—		—		—		41,936,723
New Class A development and redevelopment properties	—		5,427,344		7,650,119		(2)	3,850,000		19,660,365		36,587,828		36,587,828
Value-creation square feet currently included in rental properties(3)	—		—		(1,033,365)			(88,380)		(3,216,947)		(4,338,692)		(4,338,692)
Total square footage	41,936,723		5,427,344		6,616,754			3,761,620		16,443,418		32,249,136		74,185,859

(1)Balances exclude accumulated depreciation and our share of the cost basis associated with our properties held by our unconsolidated real estate joint ventures, which is classified as investments in unconsolidated real estate joint ventures in our consolidated balance sheets.

(2)Includes 2.6 million RSF currently 82% leased/negotiating and expected to commence construction in the next six quarters. Refer to “New Class A development and redevelopment properties: current projects” within this Item 2 for additional details.

(3)Refer to “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional details on value-creation square feet currently included in rental properties.

Acquisitions

Our real estate asset acquisitions for the three months ended March 31, 2022 consisted of the following (dollars in thousands):


Property	Submarket/Market	Date of Purchase	Number of Properties	Operating Occupancy			Square Footage								Purchase Price
		Acquisitions With Development and Redevelopment Opportunities(1)
		Future Development	Active Development/Redevelopment	Operating With Future Development/ Redevelopment		Operating(2)		Operating		Total(3)

Three months ended March 31, 2022:
421 Park Drive(4)	Fenway/Greater Boston	1/13/22	—	N/A			202,997	(4)	—		—	—	—	202,997		$	81,119	(4)
225 and 235 Presidential Way	Route 128/Greater Boston	1/28/22	2	100%			—		—		440,130	—	—	440,130			124,673
1150 El Camino Real	South San Francisco/San Francisco Bay Area	2/8/22	1	99			610,000		—		431,940	70,000	—	680,000			118,000
3301, 3303, 3305, and 3307 Hillview Avenue	Greater Stanford/ San Francisco Bay Area	1/6/22	4	100			—		—		292,013	—	—	292,013			446,000
Costa Verde by Alexandria	University Town Center/ San Diego	1/11/22	2	100			537,000		—		8,730	—	—	545,730			125,000
800 Mercer Street (60% interest in consolidated JV)	Lake Union/Seattle	3/18/22	—	N/A			869,000		—		—	—	—	869,000			87,608
Alexandria Center® for Life Science – Durham	Research Triangle/Research Triangle	1/11/22	—	N/A			1,175,000		—		—	—	—	1,175,000			99,428
104 and 108/110/112/114 TW Alexander Drive, 2752 East NC Highway 54, and 10 South Triangle Drive(5)	Research Triangle/Research Triangle	1/6/22	4	89			750,000		—		69,485	—	—	819,485			80,000
Intersection Campus	Texas	2/18/22	9	81			—		—		998,099	—	—	998,099			400,400
Other	Various	Various	7	92			473,994		—		428,097	381,760	—	1,283,851			278,489




			29	91	%		4,617,991		—		2,668,494	451,760	—	7,306,305		$	1,840,717

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

(2)Represents the operating component of our value-creation acquisitions that is not expected to undergo future development or redevelopment.

(3)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operations with future development or redevelopment opportunities. We intend to demolish and develop or redevelop the existing properties upon expiration of the existing in-place leases. Refer to the definition of “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information.

(4)Represents the incremental purchase price related to the achievement of additional entitlement rights aggregating 202,997 SF at our Alexandria Center® for Life Science – Fenway mega campus.

(5)Includes the acquisition of fee simple interests in the land underlying our recently acquired 108/110/112/114 TW Alexander Drive buildings, which were previously subject to ground leases.

Dispositions and sales of partial interest

Our completed dispositions of and sales of partial interests in real estate assets during the three months ended March 31, 2022 consisted of the following (dollars in thousands, except for sales price per RSF):


								Capitalization Rate (Cash Basis)						Sales Price per RSF		Consideration in Excess of Book Value
Property	Submarket/Market	Date of Sale	Interest Sold		RSF	Capitalization Rate				Sales Price
Three months ended March 31, 2022:
100 Binney Street	Cambridge/Greater Boston	3/30/22	70	%	432,931	3.6	%	3.5	%		$	713,228	(1)	$	2,353	$	413,615	(2)

(1)Represents the contractual sales price for the percentage interest of the property sold by us.

(2)We retained control over the newly formed real estate joint venture and therefore continue to consolidate this property. We accounted for the difference between the consideration received and the book value of the interest sold as an equity transaction, with no gain or loss recognized in earnings.

New Class A development and redevelopment properties

Demand for our value-creation development and redevelopment projects consisting of high-quality office/laboratory space, and for our continued operational excellence at our world-class and sophisticated laboratory facilities, has translated into record leasing activity.


Projects Either Under Construction or Expected to Commence Construction in the Next Six Quarters(1)
>$665 Million Projected Incremental Annual Rental Revenue Primarily Commencing From the Second Quarter of 2022 Through the First Quarter of 2025

8.0 million RSF(2)

77% Leased/Negotiating

As of March 31, 2022.

(1)We also expect other projects to commence construction in this time frame.

(2)Includes 5.4 million RSF under construction that is 76% leased/negotiating and 2.6 million RSF expected to commence construction in the next six quarters that is 82% leased/negotiating.

New Class A development and redevelopment properties: recent deliveries


The Arsenal on the Charles	201 Haskins Way	825 and 835 Industrial Road
Greater Boston/ Cambridge/Inner Suburbs	San Francisco Bay Area/ South San Francisco	San Francisco Bay Area/ Greater Stanford
236,907 RSF	323,190 RSF	526,129 RSF
100% Occupancy	100% Occupancy	100% Occupancy


3160 Porter Drive	30-02 48 Avenue	5505 Morehouse Drive
San Francisco Bay Area/ Greater Stanford	New York City/New York City	San Diego/Sorrento Mesa
92,300 RSF	52,940 RSF	28,324 RSF
83% Occupancy	100% Occupancy	100% Occupancy

New Class A development and redevelopment properties: recent deliveries (continued)


3115 Merryfield Row	9601 and 9603 Medical Center Drive	9950 Medical Center Drive
San Diego/Torrey Pines	Maryland/Rockville	Maryland/Rockville
146,456 RSF	17,378 RSF	84,264 RSF
93% Occupancy	100% Occupancy	100% Occupancy


20400 Century Boulevard	2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive(1)	5 and 9 Laboratory Drive(2)	8 and 10 Davis Drive(3)
Maryland/Gaithersburg	Research Triangle/Research Triangle	Research Triangle/Research Triangle	Research Triangle/Research Triangle
32,033 RSF	326,445 RSF	278,720 RSF	110,227 RSF
100% Occupancy	100% Occupancy	100% Occupancy	100% Occupancy

(1)Image represents 2400 Ellis Road in our Alexandria Center® for Life Science – Durham mega campus.

(2)Image represents 9 Laboratory Drive in our Alexandria Center® for AgTech campus.

(3)Image represents 10 Davis Drive in our Alexandria Center® for Advanced Technologies mega campus.

New Class A development and redevelopment properties: recent deliveries (continued)

The following table presents value-creation development and redevelopment of new Class A properties placed into service during the three months ended March 31, 2022 (dollars in thousands):


Property/Market/Submarket	1Q22 Delivery Date(1)		Our Ownership Interest		RSF Placed in Service										Occupancy Percentage(3)		Total Project			Unlevered Yields
		Prior to 1/1/21		1Q21		2Q21		3Q21		4Q21		1Q22(2)				Total		Initial Stabilized			Initial Stabilized (Cash Basis)
													RSF	Investment
Development projects
201 Haskins Way/San Francisco Bay Area/South San Francisco	1/1/22		100%		—		—		171,042		55,358		44,479	52,311			323,190		100%			323,190	$	367,000	6.3	%	6.0	%
825 and 835 Industrial Road/San Francisco Bay Area/Greater Stanford	2/1/22		100%		96,463		99,557		114,157		6,369		159,665	49,918			526,129		100%			526,129	631,000		6.7		6.5
3115 Merryfield Row/San Diego/Torrey Pines	3/27/22		100%		—		—		—		—		—	146,456			146,456		93%			146,456	150,000		6.3		6.2
1165 Eastlake Avenue East/Seattle/ Lake Union	N/A		100%		—		100,086		—		—		—	—			100,086		100%			100,086	138,000		6.3		6.4
9804 Medical Center Drive/Maryland/Rockville	N/A		100%		—		176,832		—		—		—	—			176,832		100%			176,832	89,300		8.3		8.0
9950 Medical Center Drive/Maryland/Rockville	2/1/22		100%		—		—		—		—		—	84,264			84,264		100%			84,264	57,000		8.9		7.8
5 and 9 Laboratory Drive/Research Triangle/Research Triangle	1/15/22		100%		180,400		—		—		25,812		61,297	11,211			278,720		100%			340,400	216,000		7.2		7.1
8 and 10 Davis Drive/Research Triangle/Research Triangle	1/25/22		100%		—		—		—		20,500		44,747	44,980			110,227		100%			250,000	151,000		7.5		7.3

Redevelopment projects
The Arsenal on the Charles/Greater Boston/Cambridge/Inner Suburbs	3/2/22		100%		—		—		—		86,546		50,565	99,796			236,907		100%			872,665	831,000		6.3		5.5
3160 Porter Drive/San Francisco Bay Area/Greater Stanford	1/18/22		100%		—		—		—		43,578		14,118	34,604			92,300		83%			92,300	117,000		4.6		4.6
30-02 48th Avenue/New York City/New York City	1/3/22		100%		17,716		—		15,176		—		8,956	11,092			52,940		100%			179,100	224,000		5.8		5.8
5505 Morehouse Drive/San Diego/Sorrento Mesa	N/A		100%		—		—		—		—		28,324	—			28,324		100%			79,945	67,000		6.9		7.0
Other/San Diego	N/A		100%		—		—		128,745		—		—	—			128,745		100%			128,745	47,000		8.0		8.0
9601 and 9603 Medical Center Drive/Maryland/Rockville	N/A		100%		—		—		—		—		17,378	—			17,378		100%			95,911	54,000		8.4		7.1
700 Quince Orchard Road/Maryland/Gaithersburg	N/A		100%		—		—		—		—		171,239	—			171,239		100%			171,239	79,000		8.8		7.4
20400 Century Boulevard/Maryland/Gaithersburg	3/1/22		100%		—		—		—		—		—	32,033			32,033		100%			80,550	35,000		8.5		8.6
2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive/Research Triangle/Research Triangle	N/A		100%		—		—		326,445		—		—	—			326,445		100%			652,381	245,000		7.5		6.7
Total	2/14/22				294,579		376,475		755,565		238,163		600,768	566,665			2,832,215					4,300,193	$	3,498,300	6.7	%	6.3	%

(1)Represents the average delivery date for deliveries that occurred during the three months ended March 31, 2022, weighted by annual rental revenue.

(2)We expect the development and redevelopment RSF placed in service during the three months ended March 31, 2022 to generate initial annual net operating income of approximately $36 million for the twelve months following delivery.

(3)Relates to total operating RSF placed in service as of the most recent delivery.

New Class A development and redevelopment properties: current projects


325 Binney Street	One Rogers Street	The Arsenal on the Charles	201 Brookline Avenue	15 Necco Street
Greater Boston/ Cambridge/Inner Suburbs	Greater Boston/ Cambridge/Inner Suburbs	Greater Boston/ Cambridge/Inner Suburbs	Greater Boston/Fenway	Greater Boston/ Seaport Innovation District
462,100 RSF	403,892 RSF	150,771 RSF	510,116 RSF	345,995 RSF
100% Leased	100% Leased	95% Leased/Negotiating	96% Leased/Negotiating	97% Leased/Negotiating


40, 50, and 60 Sylvan Road	840 Winter Street	651 Gateway Boulevard	751 Gateway Boulevard	30-02 48th Avenue
Greater Boston/Route 128	Greater Boston/Route 128	San Francisco Bay Area/ South San Francisco	San Francisco Bay Area/ South San Francisco	New York City/New York City
202,428 RSF	139,984 RSF	300,010 RSF	230,592 RSF	83,566 RSF
61% Leased/Negotiating	100% Leased	—% Leased/Negotiating	100% Leased	72% Leased/Negotiating

New Class A development and redevelopment properties: current projects (continued)


10055 Barnes Canyon Road	5505 Morehouse Drive	1150 Eastlake Avenue East	9810 Darnestown Road	9601 and 9603 Medical Center Drive
San Diego/Sorrento Mesa	San Diego/Sorrento Mesa	Seattle/Lake Union	Maryland/Rockville	Maryland/Rockville
195,435 RSF	51,621 RSF	311,631 RSF	192,000 RSF	78,533 RSF
100% Leased	100% Leased	66% Leased/Negotiating	100% Leased	100% Leased


20400 Century Boulevard	2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive(1)	5 and 9 Laboratory Drive(2)	8 and 10 Davis Drive(3)	4 Davis Drive
Maryland/Gaithersburg	Research Triangle/Research Triangle	Research Triangle/Research Triangle	Research Triangle/Research Triangle	Research Triangle/Research Triangle
48,517 RSF	325,936 RSF	61,680 RSF	139,773 RSF	180,000 RSF
78% Leased/Negotiating	92% Leased/Negotiating	96% Leased/Negotiating	91% Leased/Negotiating	—% Leased/Negotiating

(1)Image represents 14 TW Alexander Drive in our Alexandria Center® for Life Science – Durham mega campus.

(2)Image represents 9 Laboratory Drive in our Alexandria Center® for AgTech campus.

(3)Image represents 10 Davis Drive in our Alexandria Center® for Advanced Technologies mega campus.

New Class A development and redevelopment properties: current projects (continued)

The following tables set forth a summary of our new Class A development and redevelopment properties under construction, pre-leased/negotiating near-term projects, and key pending acquisition as of March 31, 2022 (dollars in thousands):


Market Property/Submarket				Square Footage						Percentage						Occupancy(1)
	Dev/Redev		In Service		CIP		Total		Leased			Leased/Negotiating			Initial			Stabilized
Under construction
Greater Boston
325 Binney Street/Cambridge/Inner Suburbs		Dev		—		462,100		462,100		100	%		100	%			2023		2024
One Rogers Street/Cambridge/Inner Suburbs		Redev		4,367		403,892		408,259		100			100				2023		2023
The Arsenal on the Charles/Cambridge/Inner Suburbs		Redev		721,894		150,771		872,665		93			95				3Q21		2022
201 Brookline Avenue/Fenway		Dev		—		510,116		510,116		96			96				2022		2023
15 Necco Street/Seaport Innovation District		Dev		—		345,995		345,995		97			97				2024		2024
40, 50, and 60 Sylvan Road/Route 128		Redev		312,845		202,428		515,273		61			61				2023		2024
840 Winter Street/Route 128		Redev		28,230		139,984		168,214		100			100				2024		2024
Other		Redev		—		453,869		453,869		—			—			2023			TBD
San Francisco Bay Area
651 Gateway Boulevard/South San Francisco		Redev		—		300,010		300,010		—			—				2023		2025
751 Gateway Boulevard/South San Francisco		Dev		—		230,592		230,592		100			100				2023		2023
New York City
30-02 48th Avenue/New York City		Redev		95,534		83,566		179,100		59			72			4Q20			2022
San Diego
10055 Barnes Canyon Road/Sorrento Mesa		Dev		—		195,435		195,435		100			100				2022		2022
5505 Morehouse Drive/Sorrento Mesa		Redev		28,324		51,621		79,945		100			100				4Q21		2022
10102 Hoyt Park Drive/Other		Dev		—		144,113		144,113		100			100				2023		2023
10277 Scripps Ranch Boulevard/Other		Redev		—		70,041		70,041		—			—				2023		TBD
Seattle
1150 Eastlake Avenue East/Lake Union		Dev		—		311,631		311,631		52			66				2023		2024
3301, 3555, and 3755 Monte Villa Parkway/Bothell		Redev		246,647		213,976		460,623		53			53				2022		2023
Maryland
9810 Darnestown Road/Rockville		Dev		—		192,000		192,000		100			100				2024		2024
9601 and 9603 Medical Center Drive/Rockville		Redev		17,378		78,533		95,911		100			100				4Q21		2023
20400 Century Boulevard/Gaithersburg		Redev		32,033		48,517		80,550		45			78				1Q22		2023
Research Triangle
2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive/Research Triangle		Redev		326,445		325,936		652,381		77			92			2Q21			2022
5 and 9 Laboratory Drive/Research Triangle		Redev/Dev		278,720		61,680		340,400		93			96				3Q21		2022
8 and 10 Davis Drive/Research Triangle		Dev		110,227		139,773		250,000		84			91			3Q21			2022
4 Davis Drive/Research Triangle		Dev		—		180,000		180,000		—			—				2023		TBD
Other
Other		Redev		—		130,765		130,765		36			36				2023		TBD
				2,202,644		5,427,344		7,629,988		73	%		76	%
(1)Initial occupancy dates are subject to leasing and/or market conditions. Multi-tenant projects may have occupancy by tenants over a period of time. Stabilized occupancy may vary depending on single tenancy versus multi-tenancy.

New Class A development and redevelopment properties: current projects (continued)


Market Property/Submarket				Square Footage						Percentage
	Dev/Redev		In Service		CIP		Total		Leased			Leased/Negotiating
Pre-leased/negotiating near-term projects expected to commence construction in the next six quarters
Greater Boston
99 Coolidge Avenue/Cambridge/Inner Suburbs		Dev		—		275,000		275,000		—	%		38	%
The Arsenal on the Charles, Phase I/Cambridge/Inner Suburbs		Dev		—		120,454		120,454		84			84
The Arsenal on the Charles, Phase II/Cambridge/Inner Suburbs		Dev		—		127,564		127,564		30			87
San Francisco Bay Area
230 Harriet Tubman Way/South San Francisco		Dev		—		289,000		289,000		—			100
San Diego
11255 and 11355 North Torrey Pines Road/Torrey Pines		Dev		—		309,094		309,094		100			100
10931 and 10933 North Torrey Pines Road/Torrey Pines		Dev		—		299,158		299,158		100			100
Alexandria Point, Phase II/University Town Center		Dev		—		426,927		426,927		100			100
Alexandria Point, Phase I/University Town Center		Dev		—		171,102		171,102		100			100
Seattle
701 Dexter Avenue North/Lake Union		Dev		—		226,586		226,586		—			9
Maryland
9820 Darnestown Road/Rockville		Dev		—		250,000		250,000		—			100
9808 Medical Center Drive/Rockville		Dev		—		90,000		90,000		29			29
				—		2,584,885		2,584,885		53			82
				2,202,644		8,012,229		10,214,873		68	%		77	%

New Class A development and redevelopment properties: current projects (continued)


	Our Ownership Interest													Unlevered Yields
Market Property/Submarket			In Service	CIP		Cost to Complete		Total at Completion			Initial Stabilized						Initial Stabilized (Cash Basis)

Under construction
Greater Boston
325 Binney Street/Cambridge/Inner Suburbs	100	%		$	—	$	275,455	$	505,545		$	781,000			8.6	%		7.2	%
One Rogers Street/Cambridge/Inner Suburbs	100	%		10,731		872,239		323,030			1,206,000				5.2	%		4.2	%
The Arsenal on the Charles/Cambridge/Inner Suburbs	100	%		616,058		155,479		59,463			831,000				6.3	%		5.5	%
201 Brookline Avenue/Fenway	98.4	%		—		511,895		222,105			734,000				7.2	%		6.2	%
15 Necco Street/Seaport Innovation District	90.0	%		—		244,695		322,305			567,000				6.7	%		5.5	%
40, 50, and 60 Sylvan Road/Route 128	100	%		173,672		98,679		TBD
840 Winter Street/Route 128	100	%		14,285		74,926		118,789			208,000				7.5	%		6.5	%
Other	100	%		—		117,910		TBD
San Francisco Bay Area
651 Gateway Boulevard/South San Francisco	50.0	%		—		106,651		TBD
751 Gateway Boulevard/South San Francisco	50.0	%		—		106,563		183,437			290,000				6.5	%		6.3	%
New York City
30-02 48th Avenue/New York City	100	%		86,370		103,587		34,043			224,000				5.8	%		5.8	%
San Diego
10055 Barnes Canyon Road/Sorrento Mesa	50.0	%		—		99,550		81,450			181,000				7.2	%		6.6	%
5505 Morehouse Drive/Sorrento Mesa	100	%		17,571		44,569		4,860			67,000				6.9	%		7.0	%
10102 Hoyt Park Drive/Other	100	%		—		55,121		58,879			114,000				7.4	%		6.5	%
10277 Scripps Ranch Boulevard/Other	100	%		—		27,044		TBD
Seattle
1150 Eastlake Avenue East/Lake Union	100	%		—		129,539		275,461			405,000				6.4	%		6.2	%
3301, 3555, and 3755 Monte Villa Parkway/Bothell	100	%		56,483		73,892		TBD
Maryland
9810 Darnestown Road/Rockville	100	%		—		37,279		95,721			133,000				6.9	%		6.2	%
9601 and 9603 Medical Center Drive/Rockville	100	%		6,183		26,587		21,230			54,000				8.4	%		7.1	%
20400 Century Boulevard/Gaithersburg	100	%		13,226		9,196		12,578			35,000				8.5	%		8.6	%
Research Triangle
2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive/Research Triangle	100	%		95,238		83,501		66,261			245,000				7.5	%		6.7	%
5 and 9 Laboratory Drive/Research Triangle	100	%		158,131		31,726		26,143			216,000				7.2	%		7.1	%
8 and 10 Davis Drive/Research Triangle	100	%		59,910		64,454		26,636			151,000				7.5	%		7.3	%
4 Davis Drive/Research Triangle	100	%		—		15,734		TBD
Other
Other	100	%		—		15,404		TBD

				$	1,307,858	$	3,381,675	$	3,790,000	(1)	$	8,480,000	(1)

(1)Amounts rounded to the nearest $10 million.

New Class A development and redevelopment properties: summary of pipeline

The following table summarizes the key information for all our development and redevelopment projects in North America as of March 31, 2022 (dollars in thousands):


Market Property/Submarket	Our Ownership Interest			Book Value		Square Footage
			Development and Redevelopment					Total(1)
			Under Construction	Near Term		Intermediate Term	Future

Greater Boston
Mega Campus: Alexandria Center® at One Kendall Square/Cambridge/Inner Suburbs	100	%		$	275,455	462,100	—	—	—	462,100
325 Binney Street
Mega Campus: Alexandria Center® at Kendall Square/Cambridge/ Inner Suburbs	100	%		872,239		403,892	—	—	—	403,892
One Rogers Street
Mega Campus: The Arsenal on the Charles/Cambridge/Inner Suburbs	100	%		202,920		150,771	248,018	—	34,157	432,946
311 Arsenal Street, 400 North Beacon Street, and 100 and 200 Talcott Avenue
Mega Campus: Alexandria Center® for Life Science – Fenway/Fenway	(2)			763,523		510,116	507,997	—	—	1,018,113
201 Brookline Avenue and 421 Park Drive
15 Necco Street/Seaport Innovation District	90.0	%		244,695		345,995	—	—	—	345,995
Reservoir Woods/Route 128	100	%		147,531		202,428	312,845	—	440,000	955,273
40, 50, and 60 Sylvan Road
840 Winter Street/Route 128	100	%		74,926		139,984	28,230	—	—	168,214
99 Coolidge Avenue/Cambridge/Inner Suburbs	75.0	%		73,515		—	275,000	—	—	275,000
275 Grove Street/Route 128	100	%		—		—	160,251	—	—	160,251
10 Necco Street/Seaport Innovation District	100	%		95,605		—	—	175,000	—	175,000
215 Presidential Way/Route 128	100	%		6,808		—	—	112,000	—	112,000
Mega Campus: 480 Arsenal Way and 500 and 550 Arsenal Street/Cambridge/Inner Suburbs	100	%		56,258		—	—	—	775,000	775,000
550 Arsenal Street
Mega Campus: Alexandria Technology Square®/Cambridge/ Inner Suburbs	100	%		7,881		—	—	—	100,000	100,000
Mega Campus: 380 and 420 E Street/Seaport Innovation District	100	%		122,082		—	—	—	1,000,000	1,000,000
99 A Street/Seaport Innovation District	100	%		48,476		—	—	—	235,000	235,000
Mega Campus: One Upland Road, 100 Tech Drive, and One Investors Way/Route 128	100	%		23,848		—	—	—	1,100,000	1,100,000
Other value-creation projects	100	%		169,414		453,869	190,992	—	466,504	1,111,365
				$	3,185,176	2,669,155	1,723,333	287,000	4,150,661	8,830,149
(1)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operation at properties that also have inherent future development or redevelopment opportunities. Upon expiration of existing in-place leases, we have the intent to demolish or redevelop the existing property and commence future construction. Refer to the definition of “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information. (2)We have a 98.4% ownership interest in 201 Brookline Avenue aggregating 510,116 SF, which is currently under construction. We have a 100% ownership interest in the near-term development project at 421 Park Drive aggregating 507,997 SF.

New Class A development and redevelopment properties: summary of pipeline (continued)


Market Property/Submarket	Our Ownership Interest			Book Value		Square Footage
			Development and Redevelopment					Total(1)
			Under Construction	Near Term		Intermediate Term	Future

San Francisco Bay Area
Mega Campus: Alexandria Technology Center® – Gateway/ South San Francisco	50.0	%		$	235,804	530,602	—	—		291,000	821,602
651 and 751 Gateway Boulevard
Mega Campus: Alexandria Center® for Science and Technology – Mission Bay/Mission Bay	100	%		60,822		—	191,000	—		—	191,000
1450 Owens Street
Alexandria Center® for Life Science – Millbrae/South San Francisco	42.3	%		140,493		—	637,401	—		—	637,401
230 Harriet Tubman Way, 201 and 231 Adrian Road, and 6 and 30 Rollins Road
3825 and 3875 Fabian Way/Greater Stanford	100	%		—		—	250,000	—		228,000	478,000
Mega Campus: Alexandria Center® for Life Science – San Carlos/Greater Stanford	100	%		357,374		—	105,000	700,000		692,830	1,497,830
960 Industrial Road, 987 and 1075 Commercial Street, and 888 Bransten Road
901 California Avenue/Greater Stanford	100	%		5,039		—	56,924	—		—	56,924
Mega Campus: 88 Bluxome Street/SoMa	100	%		327,684		—	1,070,925	—		—	1,070,925
Mega Campus: 1122, 1150, and 1178 El Camino Real/South San Francisco	100	%		330,402		—	—	—		1,930,000	1,930,000
Mega Campus: 211(2), 213(2), 249, 259, 269, and 279 East Grand Avenue/ South San Francisco	100	%		6,480		—	—	—		90,000	90,000
211 East Grand Avenue
Other value-creation projects	100	%		—		—	—	—		25,000	25,000
				1,464,098		530,602	2,311,250	700,000		3,256,830	6,798,682
New York City
Alexandria Center® for Life Science – Long Island City/New York City	100	%		134,581		83,566	135,938	—		—	219,504
30-02 48th Avenue and 47-50 30th Street
Mega Campus: Alexandria Center® for Life Science – New York City/ New York City	100	%		86,963		—	—	550,000	(3)	—	550,000
219 East 42nd Street/New York City	100	%		—		—	—	—		579,947	579,947
				$	221,544	83,566	135,938	550,000		579,947	1,349,451
(1)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operation at properties that also have inherent future development or redevelopment opportunities. Upon expiration of existing in-place leases, we have the intent to demolish or redevelop the existing property and commence future construction. Refer to the definition of “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information. (2)We own a partial interest in this property through a real estate joint venture. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report for additional details. (3)Pursuant to an option agreement, we are currently negotiating a long-term ground lease with the City of New York for the future site of a new building approximating 550,000 SF.

New Class A development and redevelopment properties: summary of pipeline (continued)


Market Property/Submarket	Our Ownership Interest			Book Value		Square Footage
			Development and Redevelopment					Total(1)
			Under Construction	Near Term		Intermediate Term	Future

San Diego
Mega Campus: SD Tech by Alexandria/Sorrento Mesa	50.0	%		$	236,230	247,056	190,074	160,000	333,845	930,975
9805 Scranton Road, 5505 Morehouse Drive(2), and 10055 and 10075 Barnes Canyon Road
10102 Hoyt Park Drive/Other	100	%		55,121		144,113	—	—	—	144,113
10277 Scripps Ranch Boulevard/Other	100	%		27,044		70,041	—	—	—	70,041
Mega Campus: One Alexandria Square/Torrey Pines	100	%		167,385		—	608,252	—	125,280	733,532
10931, 10933, 11255, and 11355 North Torrey Pines Road and 10975 and 10995 Torreyana Road
Mega Campus: Alexandria Point/University Town Center	55.0	%		123,143		—	598,029	—	324,445	922,474
10260 Campus Point Drive and 4110, 4150, and 4161 Campus Point Court
Mega Campus: Sequence District by Alexandria/Sorrento Mesa	100	%		40,289		—	200,000	509,000	1,089,915	1,798,915
6260, 6290, 6310, 6340, 6350, and 6450 Sequence Drive
Mega Campus: University District/University Town Center	100	%		185,201		—	—	1,137,000	—	1,137,000
9363, 9373, 9393 Towne Centre Drive, 4555 Executive Drive, 8410-8750 Genesee Avenue, and 4282 Esplanade Court
9444 Waples Street/Sorrento Mesa	50.0	%		19,061		—	—	149,000	—	149,000
Mega Campus: 5200 Illumina Way/University Town Center	51.0	%		13,643		—	—	—	451,832	451,832
4025, 4031, 4045, and 4075 Sorrento Valley Boulevard/Sorrento Valley	100	%		14,951		—	—	—	247,000	247,000
Other value-creation projects	100	%		14,432		—	54,000	—	114,235	168,235
				896,500		461,210	1,650,355	1,955,000	2,686,552	6,753,117
Seattle
Mega Campus: The Eastlake Life Science Campus by Alexandria/ Lake Union	100	%		129,539		311,631	—	—	—	311,631
1150 Eastlake Avenue East
Alexandria Center® for Advanced Technologies – Monte Villa Parkway/Bothell	100	%		73,892		213,976	50,552	—	—	264,528
3301, 3555, and 3755 Monte Villa Parkway
Mega Campus: Alexandria Center® for Life Science – South Lake Union/ Lake Union	(3)			$	314,591	—	1,095,586	—	188,400	1,283,986
601 and 701 Dexter Avenue North and 800 Mercer Street
(1)Represents total square footage upon completion of development or redevelopment of a new Class A property. Square footage presented includes RSF of buildings currently in operation at properties that also have inherent future development or redevelopment opportunities. Upon expiration of existing in-place leases, we have the intent to demolish or redevelop the existing property and commence future construction. Refer to the definition of “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information. (2)We own 100% of this property. (3)We have a 100% ownership interest in 601 and 701 Dexter Avenue North aggregating 414,986 SF and a 60% ownership interest in the near-term development project at 800 Mercer Street aggregating 869,000 SF.

New Class A development and redevelopment properties: summary of pipeline (continued)


Market Property/Submarket	Our Ownership Interest			Book Value			Square Footage
			Development and Redevelopment						Total(1)
			Under Construction	Near Term			Intermediate Term	Future

Seattle (continued)
830 and 1010 4th Avenue South/SoDo	100	%		$	51,967		—	—	—	597,313	597,313
Mega Campus: Alexandria Center® for Advanced Technologies – Canyon Park/Bothell	100	%		13,063			—	—	—	230,000	230,000
21660 20th Avenue Southeast
Other value-creation projects	100	%		77,798			—	—	—	691,000	691,000
				660,850			525,607	1,146,138	—	1,706,713	3,378,458
Maryland
Mega Campus: Alexandria Center® for Life Science – Shady Grove/Rockville	100	%		116,831			270,533	340,000	258,000	38,000	906,533
9601, 9603, and 9808 Medical Center Drive and 9810, 9820, and 9830 Darnestown Road											—
20400 Century Boulevard/Gaithersburg	100	%		9,196			48,517	—	—	—	48,517
				126,027			319,050	340,000	258,000	38,000	955,050
Research Triangle
Mega Campus: Alexandria Center® for Life Science – Durham/ Research Triangle	100	%		228,493			325,936	100,000	—	2,060,000	2,485,936
40 and 41 Moore Drive and 14 TW Alexander Drive
Mega Campus: Alexandria Center® for Advanced Technologies/ Research Triangle	100	%		114,798			319,773	—	—	990,000	1,309,773
4, 8, and 10 Davis Drive
Alexandria Center® for AgTech/Research Triangle	100	%		31,726			61,680	—	—	—	61,680
9 Laboratory Drive
Mega Campus: Alexandria Center® for NextGen Medicines/ Research Triangle	100	%		96,998			—	100,000	100,000	855,000	1,055,000
3029 East Cornwallis Road
120 TW Alexander Drive, 2752 East NC Highway 54, and 10 South Triangle Drive/Research Triangle	100	%		49,611			—	—	—	750,000	750,000
Other value-creation projects	100	%		4,185			—	—	—	76,262	76,262
				525,811			707,389	200,000	100,000	4,731,262	5,738,651
Other value-creation projects	100	%		149,068			130,765	143,105	—	2,510,400	2,784,270
Total pipeline as of March 31, 2022				$	7,229,074	(2)	5,427,344	7,650,119	3,850,000	19,660,365	36,587,828	(1)

(1)Total square footage includes 4,338,692 RSF of buildings currently in operation that will be redeveloped or replaced with new development RSF upon commencement of future construction. Refer to the definition of “Investments in real estate – value-creation square footage currently in rental properties” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information.

(2)Total book value includes $3.4 billion of projects currently under construction that are 76% leased/negotiating. We also expect to commence construction on pre-leased/negotiating near-term projects aggregating $479.5 million in the next six quarters that are 82% leased/negotiating.

Results of operations

We present a tabular comparison of items, whether gain or loss, that may facilitate a high-level understanding of our results and provide context for the disclosures included in our annual report on Form 10-K for the year ended December 31, 2021 and our subsequent quarterly reports on Form 10-Q. We believe that such tabular presentation promotes a better understanding for investors of the corporate-level decisions made and activities performed that significantly affect comparison of our operating results from period to period. We also believe that this tabular presentation will supplement for investors an understanding of our disclosures and real estate operating results. Gains or losses on sales of real estate and impairments of held for sale assets are related to corporate-level decisions to dispose of real estate. Gains or losses on early extinguishment of debt are related to corporate-level financing decisions focused on our capital structure strategy. Significant realized and unrealized gains or losses on non-real estate investments and impairments of real estate and non-real estate investments are not related to the operating performance of our real estate assets as they result from strategic, corporate-level non-real estate investment decisions and external market conditions. Impairments of non-real estate investments are not related to the operating performance of our real estate as they represent the write-down of non-real estate investments when their fair values decrease below their respective carrying values due to changes in general market or other conditions outside of our control. Significant items included in the tabular disclosure for current periods are described in further detail within this Item 2. Key items included in net (loss) income attributable to Alexandria’s common stockholders for the three months ended March 31, 2022 and 2021 and the related per share amounts were as follows (in millions, except per share amounts):


	Three Months Ended March 31,
	2022		2021		2022		2021
	Amount				Per Share – Diluted
Unrealized losses on non-real estate investments	$	(263.4)	$	(46.3)	$	(1.67)	$	(0.34)
Significant realized gains on non-real estate investments	—		22.9		—		0.17
Gain on sales of real estate	—		2.8		—		0.02
Impairment of real estate	—		(5.1)		—		(0.04)
Loss on early extinguishment of debt	—		(67.3)		—		(0.49)
Total	$	(263.4)	$	(93.0)	$	(1.67)	$	(0.68)

Same properties

We supplement an evaluation of our results of operations with an evaluation of operating performance of certain of our properties, referred to as Same Properties. For additional information on the determination of our Same Properties portfolio, refer to the definition of “Same property comparisons” in the “Non-GAAP measures and definitions” section within this Item 2. The following table presents information regarding our Same Properties for the three months ended March 31, 2022:



						Three Months Ended March 31, 2022
Percentage change in net operating income over comparable period from prior year						7.6%
Percentage change in net operating income (cash basis) over comparable period from prior year						7.3%
Operating margin						72%
Number of Same Properties						281
RSF						27,779,677
Occupancy – current-period average						95.5%
Occupancy – same-period prior-year average						94.4%

The following table reconciles the number of Same Properties to total properties for the three months ended March 31, 2022:


Development – under construction						Properties
5 and 9 Laboratory Drive						2
4, 8, and 10 Davis Drive						3
201 Brookline Avenue						1
10055 Barnes Canyon Road						1
15 Necco Street						1
751 Gateway Boulevard						1
325 Binney Street						1
1150 Eastlake Avenue East						1
10102 Hoyt Park Drive						1
9810 Darnestown Road						1
						13
Development – placed into service after January 1, 2021						Properties
1165 Eastlake Avenue East						1
201 Haskins Way						1
825 and 835 Industrial Road						2
9950 Medical Center Drive						1
3115 Merryfield Row						1
						6
Redevelopment – under construction						Properties
5505 Morehouse Drive						1
30-02 48th Avenue						1
The Arsenal on the Charles						11
2400 Ellis Road, 40 Moore Drive, and 14 TW Alexander Drive						3
840 Winter Street						1
20400 Century Boulevard						1
10277 Scripps Ranch Boulevard						1
9601 and 9603 Medical Center Drive						2
One Rogers Street						1
40, 50, and 60 Sylvan Road						3
3301, 3555, and 3755 Monte Villa Parkway						3
651 Gateway Boulevard						1
Other						3
						32


Redevelopment – placed into service after January 1, 2021						Properties
700 Quince Orchard Road						1
3160 Porter Drive						1
Other						1
						3
Acquisitions after January 1, 2021						Properties
3301, 3303, 3305, 3307, 3420, and 3440 Hillview Avenue						6
Sequence District by Alexandria						5
Alexandria Center® for Life Science – Fenway						1
550 Arsenal Street						1
1501-1599 Industrial Road						6
One Investors Way						2
2475 Hanover Street						1
10975 and 10995 Torreyana Road						2
Pacific Technology Park						6
1122 and 1150 El Camino Real						2
12 Davis Drive						1
7360 Carroll Road						1
3303, 3305, and 3307 Monte Villa Parkway						3
8505 Costa Verde Boulevard and 4260 Nobel Drive						2
225 and 235 Presidential Way						2
104 TW Alexander Drive						4
Other						58
						103
Unconsolidated real estate JVs						4
Properties held for sale						4
Total properties excluded from Same Properties						165
Same Properties						281
Total properties in North America as of March 31, 2022						446

Comparison of results for the three months ended March 31, 2022 to the three months ended March 31, 2021

The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same Properties for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. Refer to the “Non-GAAP measures and definitions” section within this Item 2 for definitions of “Tenant recoveries” and “Net operating income” and their reconciliations from the most directly comparable financial measures presented in accordance with GAAP, income from rentals, and net income (loss), respectively.


	Three Months Ended March 31,
(Dollars in thousands)	2022		2021		$ Change		% Change
Income from rentals:
Same Properties	$	357,299	$	331,179	$	26,120	7.9	%
Non-Same Properties	112,238		39,054		73,184		187.4
Rental revenues	469,537		370,233		99,304		26.8

Same Properties	117,283		101,081		16,202		16.0
Non-Same Properties	25,734		7,381		18,353		248.7
Tenant recoveries	143,017		108,462		34,555		31.9

Income from rentals	612,554		478,695		133,859		28.0

Same Properties	177		104		73		70.2
Non-Same Properties	2,334		1,050		1,284		122.3
Other income	2,511		1,154		1,357		117.6

Same Properties	474,759		432,364		42,395		9.8
Non-Same Properties	140,306		47,485		92,821		195.5
Total revenues	615,065		479,849		135,216		28.2

Same Properties	135,179		116,781		18,398		15.8
Non-Same Properties	46,149		21,107		25,042		118.6
Rental operations	181,328		137,888		43,440		31.5

Same Properties	339,580		315,583		23,997		7.6
Non-Same Properties	94,157		26,378		67,779		257.0
Net operating income	$	433,737	$	341,961	$	91,776	26.8	%

Net operating income – Same Properties	$	339,580	$	315,583	$	23,997	7.6	%
Straight-line rent revenue	(26,695)		(22,577)		(4,118)		18.2
Amortization of acquired below-market leases	(6,178)		(7,267)		1,089		(15.0)
Net operating income – Same Properties (cash basis)	$	306,707	$	285,739	$	20,968	7.3	%

Income from rentals

Total income from rentals for the three months ended March 31, 2022 increased by $133.9 million, or 28.0%, to $612.6 million, compared to $478.7 million for the three months ended March 31, 2021 as a result of increase in rental revenues and tenant recoveries, as discussed below.

Rental revenues

Total rental revenues for the three months ended March 31, 2022 increased by $99.3 million, or 26.8%, to $469.5 million, compared to $370.2 million for the three months ended March 31, 2021. The increase was primarily due to an increase in rental revenues from our Non-Same Properties related to 2.4 million RSF of development and redevelopment projects placed into service subsequent to January 1, 2021 and 103 operating properties aggregating 9.1 million RSF acquired subsequent to January 1, 2021.

Rental revenues from our Same Properties for the three months ended March 31, 2022 increased by $26.1 million, or 7.9%, to $357.3 million, compared to $331.2 million for the three months ended March 31, 2021. The increase was primarily due to rental rate increases on lease renewals and re-leasing of space since January 1, 2021.

Tenant recoveries

Tenant recoveries for the three months ended March 31, 2022 increased by $34.6 million, or 31.9%, to $143.0 million, compared to $108.5 million for the three months ended March 31, 2021. The increase was primarily from our Non-Same Properties related to our development and redevelopment projects placed into service and properties acquired subsequent to January 1, 2021, as discussed above under “Rental revenues.”

Same Properties’ tenant recoveries for the three months ended March 31, 2022 increased by $16.2 million, or 16.0%, primarily due to higher operating expenses during the three months ended March 31, 2022, as discussed under “Rental operations” below. As of March 31, 2022, 91% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent.

Rental operations

Total rental operating expenses for the three months ended March 31, 2022 increased by $43.4 million, or 31.5%, to $181.3 million, compared to $137.9 million for the three months ended March 31, 2021. The increase was primarily due to incremental expenses related to our Non-Same Properties, which consist of development and redevelopment projects placed into service and acquired properties, as discussed above under “Income from rentals.”

Same Properties’ rental operating expenses increased by $18.4 million, or 15.8%, to $135.2 million during the three months ended March 31, 2022, compared to $116.8 million for the three months ended March 31, 2021. The increase was primarily the result of higher utilities expenses, an increase in property tax expenses resulting from higher assessed values of our properties, and higher contract services and repairs and maintenance expenses.

General and administrative expenses

General and administrative expenses for the three months ended March 31, 2022 increased by $6.9 million, or 20.4%, to $40.9 million, compared to $34.0 million for the three months ended March 31, 2021. The increase was primarily due to costs related to the continued growth in the depth and breadth of our operations in multiple markets, including development and redevelopment projects placed into service and properties acquired, as discussed above under “Income from rentals.” As a percentage of net operating income, our general and administrative expenses for the trailing twelve months ended March 31, 2022 and 2021 were 10.0% and 9.8%, respectively.

Interest expense

Interest expense for the three months ended March 31, 2022 and 2021 consisted of the following (dollars in thousands):


	Three Months Ended March 31,
Component	2022			2021			Change
Gross interest	$	87,203		$	76,353		$	10,850
Capitalized interest	(57,763)			(39,886)			(17,877)
Interest expense	$	29,440		$	36,467		$	(7,027)

Average debt balance outstanding(1)	$	10,104,928		$	8,683,228		$	1,421,700
Weighted-average annual interest rate(2)	3.5		%	3.5		%	—		%

(1)Represents the average debt balance outstanding during the respective periods.

(2)Represents annualized total interest incurred divided by the average debt balance outstanding during the respective periods.

The net change in interest expense during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, resulted from the following (dollars in thousands):


Component	Interest Rate(1)			Effective Date	Change
Increases in interest incurred due to:
Issuances of debt:
$900 million unsecured senior notes payable due 2032 – green bond		2.12	%	February 2021	$	2,381
$850 million unsecured senior notes payable due 2051		3.08	%	February 2021	3,340
$800 million unsecured senior notes payable due 2034 – green bond		3.07	%	February 2022	2,971
$1.0 billion unsecured senior notes payable due 2052		3.63	%	February 2022	4,448
Other increases in interest incurred					655
Total increases					13,795
Decreases in interest incurred due to:
Repayments of debt:
$650 million unsecured senior notes payable due 2024 – green bond		4.03	%	March 2021	(2,945)
Total decreases					(2,945)
Change in gross interest					10,850
Increase in capitalized interest					(17,877)
Total change in interest expense					$	(7,027)

(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.

Depreciation and amortization

Depreciation and amortization expense for the three months ended March 31, 2022 increased by $59.7 million, or 33.0%, to $240.7 million, compared to $180.9 million for the three months ended March 31, 2021. The increase was primarily due to additional depreciation from 2.4 million RSF of development and redevelopment projects placed into service subsequent to January 1, 2021 and 103 operating properties aggregating 9.1 million RSF acquired subsequent to January 1, 2021.

Impairments of real estate

During the three months ended March 31, 2021, we recognized impairment charges aggregating $5.1 million to reduce the carrying amounts of three office properties located in our San Francisco Bay Area and Seattle markets to their estimated fair values less costs to sell. We completed the sales of these properties during the three months ended September 30, 2021.

Loss on early extinguishment of debt

During the three months ended March 31, 2021, we recognized a loss on early extinguishment of debt of $67.3 million, including the write-off of unamortized loan fees, primarily related to the refinancing of our 4.00% unsecured senior notes payable aggregating $650.0 million due in 2024.

Equity in earnings of unconsolidated real estate joint ventures

During the three months ended March 31, 2022 and 2021, we recognized equity in earnings of unconsolidated real estate joint ventures of $220 thousand and $3.5 million, respectively.

Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

Investment loss

During the three months ended March 31, 2022, we recognized investment losses aggregating $240.3 million, which consisted of $23.1 million of realized gains and $263.4 million of unrealized losses. Realized gains were primarily related to sales of investments and distributions received. Unrealized losses of $263.4 million primarily consisted of decreases in fair values of our investments in publicly traded companies and investments in privately held entities that report NAV, partially offset by increases in the fair values of our investments in privately held entities that do not report NAV and our share of unrealized gains reported by our equity method investees.

During the three months ended March 31, 2021, we recognized investment income aggregating $1.0 million, which consisted of $47.3 million of realized gains and $46.3 million of unrealized losses.

For more information about our investments, refer to Note 7 – “Investments” to our unaudited consolidated financial statements under Item 1 of this report. For our impairments accounting policy, refer to the “Investments” section of Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements under Item 1 of this report.

Gain on sales of real estate

During the three months ended March 31, 2021, we recognized $2.8 million of gains related to the completion of two real estate dispositions. These gains were classified in gain on sales of real estate within our unaudited consolidated statements of operations for the three months ended March 31, 2021.

Other comprehensive income

Total other comprehensive income for the three months ended March 31, 2022, increased by $741 thousand to aggregate net unrealized gains of $1.6 million, compared to net unrealized gains of $826 thousand for the three months ended March 31, 2021, primarily due to the unrealized gains on foreign currency translation related to our operations in Canada and China.

Summary of capital expenditures

Our construction spending for the three months ended March 31, 2022 consisted of the following (in thousands):


Construction Spending	Three Months Ended March 31, 2022
Additions to real estate – consolidated projects	$	666,364
Investments in unconsolidated real estate joint ventures	335
Contributions from noncontrolling interests	(45,182)
Construction spending (cash basis)	621,517
Change in accrued construction	(35,417)
Construction spending for the three months ended March 31, 2022	586,100
Projected construction spending for the nine months ending December 31, 2022	2,363,900
Guidance midpoint	$	2,950,000

The following table summarizes the total projected construction spending for the year ending December 31, 2022, which includes interest, property taxes, insurance, payroll, and other indirect project costs (in thousands):


Projected Construction Spending	Year Ending December 31, 2022
Development, redevelopment, and pre-construction projects	$	3,056,000
Contributions from noncontrolling interests (consolidated real estate joint ventures)		(286,000)
Revenue-enhancing and repositioning capital expenditures		98,000
Non-revenue-enhancing capital expenditures		82,000
Guidance midpoint	$	2,950,000

Projected results

We present updated guidance for EPS attributable to Alexandria’s common stockholders – diluted, funds from operations per share attributable to Alexandria’s common stockholders – diluted, and funds from operations per share attributable to Alexandria’s common stockholders – diluted, as adjusted, based on our current view of existing market conditions and other assumptions for the year ending December 31, 2022 as set forth in the tables below. The tables below also provide a reconciliation of EPS attributable to Alexandria’s common stockholders – diluted, the most directly comparable financial measure presented in accordance with GAAP, to funds from operations per share, a non-GAAP measure, and other key assumptions included in our updated guidance for the year ending December 31, 2022. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. Refer to our discussion of “Forward-looking statements” within this Item 2.


Projected 2022 Earnings per Share and Funds From Operations per Share Attributable to Alexandria’s Common Stockholders – Diluted	As of 4/25/22		As of 1/31/22
Earnings per share(1)	$1.08 to $1.18		$2.65 to $2.85
Depreciation and amortization of real estate assets		5.65		5.65


Allocation of unvested restricted stock awards		(0.02)		(0.04)
Funds from operations per share(2)	$6.71 to $6.81		$8.26 to $8.46
Unrealized losses on non-real estate investments		1.67		—



Loss on early extinguishment of debt(3)		0.02		—
Allocation to unvested restricted stock awards		(0.02)		—
Other		(0.05)		—
Funds from operations per share, as adjusted(2)	$8.33 to $8.43		$8.26 to $8.46
Midpoint		$8.38		$8.36

(1)Excludes unrealized gains or losses after March 31, 2022 that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted.

(2)Calculated in accordance with standards established by the Advisory Board of Governors of Nareit (the “Nareit Board of Governors”). Refer to the definition of “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” in the “Non-GAAP measures and definitions” section within this Item 2 for additional information.

(3)Refer to the “Extinguishment of secured notes payable” section in Note 10 – “Secured and unsecured senior debt” to our unaudited consolidated financial statements of this report for additional information.


Key Assumptions(1) (Dollars in millions)		2022 Guidance
	Low			High
Occupancy percentage for operating properties in North America as of December 31, 2022		95.2%			95.8%
Lease renewals and re-leasing of space:
Rental rate increases		30.0%			35.0%
Rental rate increases (cash basis)		18.0%			23.0%
Same property performance:
Net operating income increase		5.9%			7.9%
Net operating income increase (cash basis)		6.5%			8.5%
Straight-line rent revenue		$	154		$	164
General and administrative expenses		$	168		$	176
Capitalization of interest		$	269		$	279
Interest expense		$	90		$	100

(1)Our assumptions presented in the table above are subject to a number of variables and uncertainties, including those discussed as “Forward-looking statements” under Part I; “Item 1A. Risk factors”; and “Item 7. Management’s discussion and analysis of financial condition and results of operations” of our annual report on Form 10-K for the year ended December 31, 2021, as well as in “Item 1A. Risk factors” within “Part II – Other information” of this quarterly report on Form 10-Q.


Key Credit Metrics						2022 Guidance
Net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2022, annualized						Less than or equal to 5.1x
Fixed-charge coverage ratio – fourth quarter of 2022, annualized						Greater than or equal to 5.1x

Consolidated and unconsolidated real estate joint ventures

We present components of balance sheet and operating results information for the noncontrolling interest share of our consolidated real estate joint ventures and for our share of investments in unconsolidated real estate joint ventures to help investors estimate balance sheet and operating results information related to our partially owned entities. These amounts are estimated by computing, for each joint venture that we consolidate in our financial statements, the noncontrolling interest percentage of each financial item to arrive at the cumulative noncontrolling interest share of each component presented. In addition, for our real estate joint ventures that we do not control and do not consolidate, we apply our economic ownership percentage to the unconsolidated real estate joint ventures to arrive at our proportionate share of each component presented. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report for further discussion.


Consolidated Real Estate Joint Ventures
Property/Market/Submarket	Noncontrolling(1) Interest Share				Operating RSF at 100%
50 and 60 Binney Street/Greater Boston/Cambridge/Inner Suburbs		66.0	%			532,395
75/125 Binney Street/Greater Boston/Cambridge/Inner Suburbs		60.0	%			388,270
100 Binney Street/Greater Boston/Cambridge/Inner Suburbs		70.0	%	(2)		432,931
225 Binney Street/Greater Boston/Cambridge/Inner Suburbs		70.0	%			305,212
99 Coolidge Avenue/Greater Boston/Cambridge/Inner Suburbs		25.0	%			—	(3)
Alexandria Center® for Science and Technology – Mission Bay/San Francisco Bay Area/Mission Bay(4)		75.0	%			1,005,989
Alexandria Technology Center® – Gateway/San Francisco Bay Area/South San Francisco(5)		50.0	%			789,567
213 East Grand Avenue/San Francisco Bay Area/South San Francisco		70.0	%			300,930
500 Forbes Boulevard/San Francisco Bay Area/South San Francisco		90.0	%			155,685
Alexandria Center® for Life Science – Millbrae/San Francisco Bay Area/South San Francisco		57.7	%			—
Alexandria Point/San Diego/University Town Center(6)		45.0	%			1,337,916
5200 Illumina Way/San Diego/University Town Center		49.0	%			792,687
9625 Towne Centre Drive/San Diego/University Town Center		49.9	%			163,648
SD Tech by Alexandria/San Diego/Sorrento Mesa(7)		50.0	%			683,503
Pacific Technology Park/San Diego/Sorrento Mesa		50.0	%			632,732
1201 and 1208 Eastlake Avenue East and 199 East Blaine Street /Seattle/Lake Union		70.0	%			321,218
400 Dexter Avenue North/Seattle/Lake Union		70.0	%			290,111
800 Mercer Street/Seattle/Lake Union		40.0	%	(2)		—

Unconsolidated Real Estate Joint Ventures
Property/Market/Submarket	Our Ownership Share(8)				Operating RSF at 100%
1655 and 1725 Third Street/San Francisco Bay Area/Mission Bay		10.0	%			586,208
1401/1413 Research Boulevard/Maryland/Rockville		65.0	%	(9)		(10)
1450 Research Boulevard/Maryland/Rockville		73.2	%	(11)		42,679
101 West Dickman Street/Maryland/Beltsville		57.9	%	(11)		135,423

(1)In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in three other real estate joint ventures in North America.

(2)Refer to the “Formation of consolidated real estate joint ventures and sales of partial interests” subsection in Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

(3)We expect to commence vertical construction of 275,000 RSF during 2022.

(4)Includes 409 and 499 Illinois Street, 1500 and 1700 Owens Street, and 455 Mission Bay Boulevard South.

(5)Includes 601, 611, 651, 681, 685, 701, and 751 Gateway Boulevard in our South San Francisco submarket. Noncontrolling interest share is anticipated to be 49% as we make further contributions into the joint venture over time.

(6)Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4150, 4161, 4224, and 4242 Campus Point Court in our University Town Center submarket.

(7)Includes 9605, 9645, 9675, 9685, 9725, 9735, 9808, 9855, and 9868 Scranton Road and 10055 and 10065 Barnes Canyon Road in our Sorrento Mesa submarket.

(8)In addition to the unconsolidated real estate joint ventures listed, we hold an interest in one other insignificant unconsolidated real estate joint venture in North America.

(9)Represents our ownership interest; our voting interest is limited to 50%.

(10)Represents a joint venture with a distinguished retail real estate developer for an approximately 90,000 RSF retail shopping center.

(11)Represents a joint venture with a local real estate operator in which our partner manages the day-to-day activities that significantly affect the economic performance of the joint venture.

The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of March 31, 2022 (dollars in thousands):


		Maturity Date		Stated Rate		Interest Rate(1)			Aggregate Commitment at 100%		Debt Balance at 100%(2)
Unconsolidated Joint Venture	Our Share
1401/1413 Research Boulevard	65.0%		12/23/24	2.70%			3.32	%	$	28,500	$	28,005
1655 and 1725 Third Street	10.0%		3/10/25	4.50%			4.57	%	600,000		598,763
101 West Dickman Street	57.9%		11/10/26	SOFR+1.95%	(3)		2.81	%	26,750		9,975
1450 Research Boulevard	73.2%		12/10/26	SOFR+1.95%	(3)		N/A		13,000		—
									$	668,250	$	636,743

(1)Includes interest expense and amortization of loan fees.

(2)Represents outstanding principal, net of unamortized deferred financing costs, as of March 31, 2022.

(3)This loan is subject to a fixed SOFR floor rate of 0.75%.

The following tables present information related to the operating results and financial position of our consolidated and unconsolidated real estate joint ventures as of and for the three months ended March 31, 2022 (in thousands):


	Three Months Ended March 31, 2022
	Noncontrolling Interest Share of Consolidated Real Estate Joint Ventures		Our Share of Unconsolidated Real Estate Joint Ventures


Total revenues	$	78,677		$	2,838
Rental operations	(22,697)			(732)
	55,980			2,106
General and administrative	(323)			(71)
Interest	—			(860)
Depreciation and amortization of real estate assets	(23,681)			(955)

Fixed returns allocated to redeemable noncontrolling interests(1)	201			—
	$	32,177		$	220

Straight-line rent and below-market lease revenue	$	4,324		$	253
Funds from operations(2)	$	55,858		$	1,175

(1)Represents an allocation of joint venture earnings to redeemable noncontrolling interests primarily in one property in our South San Francisco submarket. These redeemable noncontrolling interests earn a fixed return on their investment rather than participate in the operating results of the property.

(2)Refer to the definition of “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” in the “Non-GAAP measures and definitions” section within this Item 2 for the definition and the reconciliation from the most directly comparable financial measure, presented in accordance with GAAP.


	As of March 31, 2022
	Noncontrolling Interest Share of Consolidated Real Estate Joint Ventures		Our Share of Unconsolidated Real Estate Joint Ventures
Investments in real estate	$	2,962,080	$	110,530
Cash, cash equivalents, and restricted cash	97,149		4,899
Other assets	339,658		10,465
Secured notes payable	(3,311)		(83,860)
Other liabilities	(144,941)		(3,578)
Redeemable noncontrolling interests	(9,612)		—
	$	3,241,023	$	38,456

During the three months ended March 31, 2022 and 2021, our consolidated real estate joint ventures distributed an aggregate of $30.5 million and $25.9 million, respectively, to our joint venture partners. Refer to our consolidated statements of cash flows and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

Investments

We hold investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. The tables below summarize components of our non-real estate investments and investment income. For additional information, refer to Note 7 – “Investments” to our unaudited consolidated financial statements under Item 1 of this report.



(In thousands)	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Realized gains	$	23,114		$	215,845	(1)
Unrealized (losses) gains	(263,433)			43,632
Investment (loss) income	$	(240,319)		$	259,477


Investments (In thousands)	Cost			Unrealized Gains			Carrying Amount
Publicly traded companies	$	200,955		$	105,974	(2)	$	306,929
Entities that report NAV	406,420			351,455			757,875
Entities that do not report NAV:
Entities with observable price changes	62,099			75,219			137,318
Entities without observable price changes	386,513			—			386,513
Investments accounted for under the equity method of accounting	N/A			N/A			72,466
March 31, 2022	$	1,055,987	(3)	$	532,648		$	1,661,101

December 31, 2021	$	1,007,303		$	797,673		$	1,876,564

(1)Includes six separate significant realized gains aggregating $110.1 million related to the following transactions: (i) the sales of investments in three publicly traded biotechnology companies, (ii) a distribution received from a limited partnership investment, and (iii) the acquisition of two of our privately held non-real estate investments in a biopharmaceutical company and a biotechnology company.

(2)Represents gross unrealized gains and losses of $175.5 million and $69.5 million, respectively, as of March 31, 2022.

(3)Represents 2.9% of gross assets as of March 31, 2022.


			Public/Private Mix (Cost)


			Tenant/Non-Tenant Mix (Cost)

Liquidity


Liquidity			Minimal Outstanding Borrowings and Significant Availability on Unsecured Senior Line of Credit

$5.7B			(in millions)





(In millions)
Availability under our unsecured senior line of credit, net of amounts outstanding under our commercial paper program	$	3,000
Outstanding forward equity sales agreements(1)	1,309
Remaining construction loan commitments	180
Cash, cash equivalents, and restricted cash	870
Investments in publicly traded companies	307
Liquidity as of March 31, 2022	$	5,666

(1)Represents expected net proceeds from the future settlement of 6.6 million shares of forward equity sales agreements.

We expect to meet certain long-term liquidity requirements, such as requirements for development, redevelopment, other construction projects, capital improvements, tenant improvements, property acquisitions, leasing costs, non-revenue-enhancing capital expenditures, scheduled debt maturities, distributions to noncontrolling interests, and payment of dividends through net cash provided by operating activities, periodic asset sales, strategic real estate joint venture capital, long-term secured and unsecured indebtedness, borrowings under our unsecured senior line of credit, issuances under our commercial paper program, and issuances of additional debt and/or equity securities.

We also expect to continue meeting our short-term liquidity and capital requirements, as further detailed in this section, generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT.

For additional information on our liquidity requirements related to our contractual obligations and commitments, refer to Note 5 – “Leases” and Note 10 – “Secured and unsecured senior debt” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

Over the next several years, our balance sheet, capital structure, and liquidity objectives are as follows:

Retain positive cash flows from operating activities after payment of dividends and distributions to noncontrolling interests for investment in development and redevelopment projects and/or acquisitions;
Improve credit profile and relative long-term cost of capital;
Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt, secured debt, selective real estate asset sales, partial interest sales, non-real estate investment sales, and common stock;
Maintain commitment to long-term capital to fund growth;
Maintain prudent laddering of debt maturities;
Maintain solid credit metrics;
Maintain significant balance sheet liquidity;
Prudently manage variable-rate debt exposure through the reduction of short-term and medium-term variable-rate debt;
Maintain a large unencumbered asset pool to provide financial flexibility;
Fund common stock dividends and distributions to noncontrolling interests from net cash provided by operating activities;
Manage a disciplined level of value-creation projects as a percentage of our gross real estate assets; and
Maintain high levels of pre-leasing and percentage leased in value-creation projects.

The following table presents the availability under our unsecured senior line of credit, net of amounts outstanding under our commercial paper program; availability under our secured construction loan; outstanding forward equity sales agreements; cash, cash equivalents, and restricted cash; and investments in publicly traded companies as of March 31, 2022 (dollars in thousands):


Description	Stated Rate	Aggregate Commitments		Outstanding Balance(1)		Remaining Commitments/Liquidity
Availability under our unsecured senior line of credit, net of amounts outstanding under our commercial paper program	L+0.815%	$	3,000,000	$	—	$	3,000,000
Remaining construction loan commitments	SOFR+2.70%	$	195,300	$	13,245	180,216
Outstanding forward equity sales agreements(2)						1,309,236
Cash, cash equivalents, and restricted cash						870,166
Investments in publicly traded companies						306,929
Liquidity as of March 31, 2022						$	5,666,547

(1)Represents outstanding principal, net of unamortized deferred financing costs, as of March 31, 2022.

(2)Represents expected net proceeds from the future settlement of 6.6 million shares of forward equity sales agreements.

Cash, cash equivalents, and restricted cash

As of March 31, 2022 and December 31, 2021, we had $870.2 million and $415.2 million, respectively, of cash, cash equivalents, and restricted cash. We expect existing cash, cash equivalents, and restricted cash, net cash from operating activities, proceeds from real estate asset sales and partial interest sales, non-real estate investment sales, borrowings under our unsecured senior line of credit, issuances under our commercial paper program, issuances of unsecured notes payable, borrowings under secured construction loans, and issuances of common stock to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as regular quarterly dividends, distributions to noncontrolling interests, scheduled debt repayments, acquisitions, and certain capital expenditures, including expenditures related to construction activities.

Cash flows

We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table summarizes changes in our cash flows for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021		Change
Net cash provided by operating activities	$	191,086	$	212,053	$	(20,967)
Net cash used in investing activities	$	(2,488,798)	$	(2,437,880)	$	(50,918)
Net cash provided by financing activities	$	2,752,570	$	2,162,254	$	590,316

Operating activities

Cash flows provided by operating activities are primarily dependent upon the occupancy level of our asset base, the rental rates of our leases, the collectibility of rent and recovery of operating expenses from our tenants, the timing of completion of development and redevelopment projects, and the timing of acquisitions and dispositions of operating properties. Net cash provided by operating activities for the three months ended March 31, 2022 decreased by $21.0 million to $191.1 million, compared to $212.1 million for the three months ended March 31, 2021. This decrease was primarily attributable to an increase of $45.0 million in leasing commissions paid during the three months ended March 31, 2022, compared to the three months ended March 31, 2021. Leasing commission paid during the three months ended March 31, 2022 related to the leases executed during the three months ended December 31, 2021, which represented the quarter of the highest quarterly leasing volume in Company history. The increase in leasing commissions paid was also partially due to the execution of leases aggregating 426,927 RSF during the three months ended March 31, 2022 with Bristol-Myers Squibb Company for the development of BMS’s newest core R&D facility on the Alexandria Point mega campus in our University Town Center submarket of San Diego. The decrease was partially offset by (i) cash flows generated from our highly leased development and redevelopment projects recently placed into service, (ii) income-producing acquisitions since January 1, 2021, and (iii) increases in rental rates on lease renewals and re-leasing of space since January 1, 2021.

Investing activities

Cash used in investing activities for the three months ended March 31, 2022 and 2021 consisted of the following (in thousands):


	Three Months Ended March 31,				Increase (Decrease)
	2022		2021
Sources of cash from investing activities:
Sales of and distributions from non-real estate investments	$	44,842	$	57,569	$	(12,727)
Proceeds from sales of real estate	—		25,695		(25,695)
Return of capital from unconsolidated real estate joint ventures	471		—		471
Change in escrow deposits	100,635		—		100,635
	145,948		83,264		62,684
Uses of cash for investing activities:
Purchases of real estate	1,903,800		1,871,043		32,757
Additions to real estate	666,364		465,411		200,953
Acquisition of interest in unconsolidated real estate joint venture	—		9,048		(9,048)
Investments in unconsolidated real estate joint ventures	335		—		335
Change in escrow deposits	—		98,303		(98,303)
Additions to non-real estate investments	64,247		77,339		(13,092)
	2,634,746		2,521,144		113,602

Net cash used in investing activities	$	2,488,798	$	2,437,880	$	50,918

The increase in net cash used in investing activities for the three months ended March 31, 2022 was primarily due to an increased use of cash for property acquisitions and additions to real estate, partially offset by an increased source of cash for escrow deposits. Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

Financing activities

Cash flows provided by financing activities for the three months ended March 31, 2022 and 2021 consisted of the following (in thousands):


	Three Months Ended March 31,
	2022		2021		Change
Borrowings from secured notes payable	$	5,082	$	—	$	5,082
Repayments of borrowings from secured notes payable	(906)		(15,423)		14,517

Proceeds from issuance of unsecured senior notes payable	1,793,318		1,743,716		49,602
Repayments of unsecured senior notes payable	—		(650,000)		650,000
Premium paid for early extinguishment of debt	—		(66,829)		66,829
Borrowings from unsecured senior line of credit	1,180,000		2,101,000		(921,000)
Repayments of borrowings from unsecured senior line of credit	(1,180,000)		(2,101,000)		921,000
Proceeds from issuance under commercial paper program	6,120,000		6,810,000		(690,000)
Repayments of borrowings from commercial paper program	(6,390,000)		(6,910,000)		520,000
Payments of loan fees	(17,596)		(16,599)		(997)
Changes related to debt	1,509,898		894,865		615,033

Contributions from and sales of noncontrolling interests	819,610		48,279		771,331
Distributions to and purchases of noncontrolling interests	(30,501)		(25,879)		(4,622)
Proceeds from the issuance of common stock	646,316		1,397,649		(751,333)
Dividend payments	(183,847)		(150,982)		(32,865)
Taxes paid related to net settlement of equity awards	(8,906)		(1,678)		(7,228)
Net cash provided by financing activities	$	2,752,570	$	2,162,254	$	590,316

Capital resources

We expect that our principal liquidity needs for the year ending December 31, 2022 will be satisfied by the multiple sources of capital shown in the table below. There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations.


Key Sources and Uses of Capital (In millions)		2022 Guidance							Certain Completed Items as of 3/31/22
	Range					Midpoint
Sources of capital:
Net cash provided by operating activities after dividends		$	275	$	325		$	300
Incremental debt		1,375		525			950		See below

Dispositions and sales of partial interest (refer to the “Dispositions and sales of partial interest” section within Item 2 for additional information)		1,300		2,600			1,950		$	713
Common equity		2,250		3,250			2,750		$	2,040	(1)
Total sources of capital		$	5,200	$	6,700		$	5,950

Uses of capital:
Construction (refer to the “Summary of capital expenditures” section within Item 2 for additional information)		$	2,700	$	3,200		$	2,950
Acquisitions (refer to the “Acquisitions” section within Item 2 for additional information)		2,500		3,500			3,000		$	1,841

Total uses of capital		$	5,200	$	6,700		$	5,950

Incremental debt (included above):
Issuance of unsecured senior notes payable		$	1,800	$	1,800		$	1,800	$	1,800	(2)
Repayments of secured notes payable		(195)		(195)			(195)		$	(195)	(2)
Unsecured senior line of credit, commercial paper, and other		(230)		(1,080)			(655)
Incremental debt		$	1,375	$	525		$	950

(1)During the three months ended March 31, 2022, we entered into new forward equity sales agreements aggregating $2.0 billion to sell 9.9 million shares of our common stock. As of March 31, 2022, we settled a portion of these forward equity sales agreements by issuing 3.2 million shares and received net proceeds of $648.2 million. We expect to issue 6.6 million shares to settle our remaining outstanding forward equity sales agreements and receive net proceeds of approximately $1.3 billion in 2022. Refer to Note 13 – “Stockholders’ equity” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

(2)Refer to “Unsecured senior notes payable” and “Extinguishment of secured notes payable” within Note 10 – “Secured and unsecured senior debt” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

The key assumptions behind the sources and uses of capital in the table above include a favorable capital market environment, performance of our core operating properties, lease-up and delivery of current and future development and redevelopment projects, and leasing activity. Our expected sources and uses of capital are subject to a number of variables and uncertainties, including those discussed as “Forward-looking statements” under Part I; “Item 1A. Risk factors”; and “Item 7. Management’s discussion and analysis of financial condition and results of operations” of our annual report on Form 10-K for the year ended December 31, 2021; as well as “Item 1A. Risk factors” within “Part II – Other information” of this quarterly report on Form 10-Q. We expect to update our forecast of sources and uses of capital on a quarterly basis.

Sources of capital

Net cash provided by operating activities after dividends

We expect to retain $275.0 million to $325.0 million of net cash flows from operating activities after payment of common stock dividends, and distributions to noncontrolling interests for the year ending December 31, 2022. For purposes of this calculation, changes in operating assets and liabilities are excluded as they represent timing differences. For the year ending December 31, 2022, we expect our recently delivered projects, our highly pre-leased value-creation projects expected to be completed and contributions from Same Properties and recently acquired properties, to contribute significant increases in income from rentals, net operating income, and cash flows. We anticipate significant contractual near-term growth in annual cash rents of $48 million related to the commencement of contractual rents on the projects recently placed into service that are near the end of their initial free rent period. Refer to the “Cash flows” subsection of the “Liquidity” section within this Item 2 for a discussion of cash flows provided by operating activities for the three months ended March 31, 2022.

Debt

We expect to fund a portion of our capital needs for the remainder of 2022 from the real estate dispositions and partial interest sales, settlement of our outstanding forward equity sales agreements, sales of our common stock under our ATM program, issuances under our commercial paper program discussed below, borrowings under our unsecured senior line of credit, and borrowings under secured construction loans.

As of March 31, 2022, we have no outstanding balance on our unsecured senior line of credit. Our unsecured senior line of credit has an aggregate commitment of $3.0 billion and bears an interest rate of LIBOR plus 0.825% with a 0% LIBOR floor and is subject to certain annual sustainability measures entitling us to a temporary reduction in the interest rate margin of one basis point, but not below zero percent per year. During the year ended December 31, 2021, we achieved certain sustainability measures, as described in our unsecured senior line of credit agreement, which reduced our borrowing rate to LIBOR plus 0.815% for a one-year period. In addition to the cost of borrowing, the unsecured senior line of credit is subject to an annual facility fee of 0.15% based on the aggregate commitments outstanding.

We use our unsecured senior line of credit to fund working capital, construction activities, and, from time to time, acquisition of properties. Borrowings under the unsecured senior line of credit bear interest at a “Eurocurrency Rate,” a “LIBOR Floating Rate,” or a “Base Rate” specified in the unsecured senior line of credit agreement plus, in any case, the Applicable Margin. The Eurocurrency Rate specified in the unsecured senior line of credit agreement is, as applicable, the rate per annum equal to either (i) the LIBOR or a successor rate thereto as agreed to by the administrative agent and the Company for loans denominated in a LIBOR quoted currency (i.e., U.S. dollars, euro, sterling, or yen), (ii) the average annual yield rates applicable to Canadian dollar bankers’ acceptances for loans denominated in Canadian dollars, (iii) the Bank Bill Swap Reference Bid rate for loans denominated in Australian dollars, or (iv) the rate designated with respect to the applicable alternative currency for loans denominated in a non-LIBOR quoted currency (other than Canadian or Australian dollars). The LIBOR Floating Rate means, for any day, one-month LIBOR, or a successor rate thereto as agreed to by the administrative agent and the Company for loans denominated in U.S. dollars. The Base Rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the federal funds rate plus 1/2 of 1.00%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate,” and (iii) the Eurocurrency Rate plus 1.00%. Our unsecured senior line of credit contains a feature that allows lenders to competitively bid on the interest rate for borrowings under the facility. This may result in an interest rate that is below the stated rate.

We established a commercial paper program that provides us with the ability to issue up to $1.5 billion of commercial paper notes with a maturity of generally 30 days or less and with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is backed by our unsecured senior line of credit, and at all times we expect to retain a minimum undrawn amount of borrowing capacity under our unsecured senior line of credit equal to any outstanding balance on our commercial paper program. We use borrowings under the program to fund short-term capital needs. The notes issued under our commercial paper program are sold under customary terms in the commercial paper market. They are typically issued at a discount to par, representing a yield to maturity dictated by market conditions at the time of issuance. In the event we are unable to issue commercial paper notes or refinance outstanding commercial paper notes under terms equal to or more favorable than those under the unsecured senior line of credit, we expect to borrow under the unsecured senior line of credit at LIBOR plus 0.815%. The commercial paper notes sold during the three months ended March 31, 2022 were issued at a weighted-average yield to maturity of 0.47%. As of March 31, 2022, we had no outstanding balance under our commercial paper program.

In February 2022, we opportunistically issued $1.8 billion of unsecured senior notes payable with a weighted-average interest rate of 3.28% and a weighted-average maturity of 22.0 years. The unsecured senior notes consisted of $800.0 million of 2.95% green unsecured senior notes due 2034 and $1.0 billion of 3.55% unsecured senior notes due 2052.

In April 2022, we repaid two secured notes payable aggregating $195.0 million due in 2024 with an effective interest rate of 3.40% and recognized a loss on early extinguishment of debt of $3.3 million, including a prepayment penalty and the write-off of unamortized loan fees.

Proactive management of transition away from LIBOR

LIBOR has been used extensively in the U.S. and globally as a reference rate for various commercial and financial contracts, including variable-rate debt and interest rate swap contracts. However, based on an announcement made by the Financial Conduct Authority (“FCA”) on March 5, 2021, one-week and two-month LIBOR rates ceased to be published after December 31, 2021; all other LIBOR settings will effectively cease after June 30, 2023, and it is expected that LIBOR will no longer be used after this date. In addition, it is expected that LIBOR will no longer be used in new contracts entered into after December 31, 2021. To address the impending discontinuation of LIBOR, in the U.S. the Alternative Reference Rates Committee (“ARRC”) was established to help ensure the successful transition from LIBOR. In June 2017, the ARRC selected SOFR, a new index calculated by reference to short-term repurchase agreements backed by U.S. Treasury securities, as its preferred replacement for U.S. dollar LIBOR. We have been closely monitoring developments related to the transition away from LIBOR and have implemented numerous proactive measures to minimize the potential impact of the transition to the Company, specifically:

We have proactively eliminated outstanding LIBOR-based borrowings under our unsecured senior bank term loans and secured construction loans through repayments. From January 2017 through March 2022, we retired approximately $1.5 billion of all such debt.
During 2020, we increased the aggregate amount of our commercial paper program to $1.5 billion from $750.0 million. This program provides us with ability to issue commercial paper notes bearing interest at short-term fixed rates, with a maturity of generally 30 days or less and with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is not subject to LIBOR and is used for funding short-term working capital needs. As of March 31, 2022, we had no notes outstanding under our commercial paper program.
We continue to prudently manage outstanding borrowings under our unsecured senior line of credit. As of March 31, 2022, we had no borrowings outstanding under our unsecured senior line of credit. Additionally, new loans that we’ve entered into recently are SOFR-based rather than LIBOR-based. Our consolidated real estate joint venture at 99 Coolidge Avenue holds a SOFR-based secured construction loan with an outstanding balance of $13.2 million. In addition, two of our unconsolidated real estate joint ventures at 1450 Research Boulevard and 101 West Dickman Street each hold a SOFR-based secured construction loan. As of March 31, 2022, 1450 Research Boulevard had no outstanding balance on its secured construction loan and 101 West Dickman Street had an outstanding balance of $10.0 million.
Our unsecured senior line of credit contains fallback language generally consistent with the ARRC’s Amendment Approach, which provides a streamlined amendment approach for negotiating a benchmark replacement.
We continue to monitor developments by the FCA, the ARRC, and other governing bodies involved in LIBOR transition.

Refer to Note 10 – “Secured and unsecured senior debt” and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report and “Item 1A. Risk factors” of our annual report on Form 10-K for the year ended December 31, 2021 for additional information about our management of risks related to the transition away from LIBOR.

Real estate dispositions and partial interest sales

We expect to continue the disciplined execution of select sales of operating assets. Future sales will provide an important source of capital to fund a portion of pending and recently completed opportunistic acquisitions and our highly leased value-creation development and redevelopment projects, and also provide significant capital for growth. We may also consider additional sales of partial interests in core Class A properties and/or development projects. For 2022, we expect real estate dispositions and partial interest sales ranging from $1.3 billion to $2.6 billion. The amount of asset sales necessary to meet our forecasted sources of capital will vary depending upon the amount of EBITDA associated with the assets sold.

Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report, and the “Dispositions and sales of partial interests” subsection of “Investments in real estate” within this Item 2 for additional information on our dispositions and sales of partial interests.

As a REIT, we are generally subject to a 100% tax on the net income from real estate asset sales that the IRS characterizes as “prohibited transactions.” We do not expect our sales will be categorized as prohibited transactions. However, unless we meet certain “safe harbor” requirements, whether a real estate asset sale is a “prohibited transaction” will be based on the facts and circumstances of the sale. Our real estate asset sales may not always meet such “safe harbor” requirements. Refer to “Item 1A. Risk factors” of our annual report on Form 10-K for the year ended December 31, 2021 for additional information about the “prohibited transaction” tax.

Common equity transactions

During the three months ended March 31, 2022, our common equity transactions included the following:

In January 2022, we entered into new forward equity sales agreements aggregating $1.7 billion to sell 8.1 million shares of our common stock (including the exercise of an underwriters’ option) at a public offering price of $210.00 per share, before underwriting discounts and commissions.
In March 2022, we settled a portion of these forward equity sales agreements by issuing 3.2 million shares and received net proceeds of $648.2 million.
We expect to issue 4.8 million shares to settle our remaining outstanding forward equity sales agreements and receive net proceeds of approximately $1.0 billion in 2022.
In December 2021, we entered into a new ATM common stock offering program, which allows us to sell up to an aggregate of $1.0 billion of our common stock.
In March 2022, we entered into new forward equity sales agreements aggregating $350.0 million to sell 1.8 million shares under our ATM program at an average price of $192.42 per share (before underwriting discounts). We expect to settle these forward equity sales agreements in 2022.
As of March 31, 2022, the remaining aggregate amount available under our ATM program for future sales of common stock is $650.0 million.

Other sources

Under our current shelf registration statement filed with the SEC, we may offer common stock, preferred stock, debt, and other securities. These securities may be issued, from time to time, at our discretion based on our needs and market conditions, including, as necessary, to balance our use of incremental debt capital.

Additionally, we hold interests, together with joint venture partners, in real estate joint ventures that we consolidate in our financial statements. These joint venture partners may contribute equity into these entities primarily related to their share of funds for construction and financing-related activities. During the three months ended March 31, 2022, we received $819.6 million of contributions from and sales of noncontrolling interests.

Uses of capital

Summary of capital expenditures

One of our primary uses of capital relates to the development, redevelopment, pre-construction, and construction of properties. We currently have projects in our growth pipeline aggregating 5.4 million RSF of Class A office/laboratory, agtech, and technology office space undergoing construction, 10.4 million RSF of near-term and intermediate-term development and redevelopment projects, and 16.5 million SF of future development projects in North America. We incur capitalized construction costs related to development, redevelopment, pre-construction, and other construction activities. We also incur additional capitalized project costs, including interest, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, pre-construction, or construction of a project, during periods when activities necessary to prepare an asset for its intended use are in progress. Refer to the “New Class A development and redevelopment properties: current projects” and “Summary of capital expenditures” subsections of the “Investments in real estate” section within this Item 2 for more information on our capital expenditures.

We capitalize interest cost as a cost of the project only during the period in which activities necessary to prepare an asset for its intended use are ongoing, provided that expenditures for the asset have been made and interest cost has been incurred. Capitalized interest for the three months ended March 31, 2022 and 2021 of $57.8 million and $39.9 million, respectively, was classified in investments in real estate.

Property taxes, insurance on real estate, and indirect project costs, such as construction administration, legal fees, and office costs that clearly relate to projects under development or construction, are capitalized as incurred during the period an asset is undergoing activities to prepare it for its intended use. We capitalized payroll and other indirect costs related to development, redevelopment, pre-construction, and construction projects aggregating $20.4 million and $16.8 million and property taxes, insurance on real estate and other operating costs aggregating $21.8 million and $17.4 million for the three months ended March 31, 2022 and 2021, respectively.

The increase in capitalized costs for the three months ended March 31, 2022, compared to the same period in 2021, was primarily due to an increase in our value-creation pipeline projects undergoing construction and pre-construction activities in 2022 over 2021. Pre-construction activities include entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building improvements. The advancement of pre-construction efforts is focused on reducing the time required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of buildings. Should we cease activities necessary to prepare an asset for its intended use, the interest, taxes, insurance, and certain other direct and indirect project costs related to the asset would be expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred.

Fluctuations in our development, redevelopment, and construction activities could result in significant changes to total expenses and net income. For example, had we experienced a 10% reduction in development, redevelopment, and construction activities without a corresponding decrease in indirect project costs, including interest and payroll, total expenses would have increased by approximately $7.8 million for the three months ended March 31, 2022.

We use third-party brokers to assist in our leasing activity, who are paid on a contingent basis upon successful leasing. We are required to capitalize initial direct costs related to successful leasing transactions that result directly from and are essential to the lease transaction and would not have been incurred had that lease transaction not been successfully executed. During the three months ended March 31, 2022, we capitalized total initial direct leasing costs of $95.0 million. Costs that we incur to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and other costs, are expensed as incurred.

Acquisitions

Refer to the “Acquisitions” section of Note 3 – “Investments in real estate” and to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements under Item 1 of this report, and the “Acquisitions” subsection of the “Investments in real estate” section within this Item 2 for information on our acquisitions.

Dividends

During the three months ended March 31, 2022 and 2021, we paid common stock dividends of $183.8 million and $151.0 million, respectively. The increase of $32.9 million in dividends paid on our common stock during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, was primarily due to an increase in number of common shares outstanding subsequent to January 1, 2021 as a result of issuances of common stock under our ATM program and settlement of forward equity sales agreements, and partially due to the increase in the related dividends to $1.15 per common share paid during the three months ended March 31, 2022 from $1.09 per common share paid during the three months ended March 31, 2021.

Secured notes payable

Secured notes payable as of March 31, 2022 consisted of four notes secured by eight properties. Our secured notes payable typically require monthly payments of principal and interest and had a weighted-average interest rate of approximately 3.39%. As of March 31, 2022, the total book value of our investments in real estate securing debt was approximately $920.4 million. As of March 31, 2022, our secured notes payable, including unamortized discounts and deferred financing costs, comprised approximately $193.8 million and $15.1 million of fixed-rate debt and unhedged variable-rate debt, respectively.

Unsecured senior notes payable and unsecured senior line of credit

The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior notes payable as of March 31, 2022 were as follows:


Covenant Ratios(1)	Requirement	March 31, 2022
Total Debt to Total Assets	Less than or equal to 60%	29%
Secured Debt to Total Assets	Less than or equal to 40%	1%
Consolidated EBITDA(2) to Interest Expense	Greater than or equal to 1.5x	13.4x
Unencumbered Total Asset Value to Unsecured Debt	Greater than or equal to 150%	324%

(1)All covenant ratio titles utilize terms as defined in the respective debt agreements.

(2)The calculation of consolidated EBITDA is based on the definitions contained in our loan agreements and is not directly comparable to the computation of EBITDA as described in Exchange Act Release No. 47226.

In addition, the terms of the indentures, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s subsidiaries to (i) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (ii) incur certain secured or unsecured indebtedness.

The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior line of credit as of March 31, 2022 were as follows:


Covenant Ratios(1)	Requirement	March 31, 2022
Leverage Ratio	Less than or equal to 60.0%	28.8%
Secured Debt Ratio	Less than or equal to 45.0%	0.6%
Fixed-Charge Coverage Ratio	Greater than or equal to 1.50x	4.56x
Unsecured Interest Coverage Ratio	Greater than or equal to 1.75x	10.07x

(1)All covenant ratio titles utilize terms as defined in the credit agreement.

Estimated interest payments

Estimated interest payments on our fixed-rate debt were calculated based upon contractual interest rates, including interest payment dates and scheduled maturity dates. As of March 31, 2022, 100% of our debt was fixed-rate debt. For additional information regarding our debt, refer to Note 10 – “Secured and unsecured senior debt” to our unaudited consolidated financial statements under Item 1 of this report.

Ground lease obligations

Operating lease agreements

Ground lease obligations as of March 31, 2022 included leases for 41 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 $6.7 million as of March 31, 2022, our ground lease obligations have remaining lease terms ranging from approximately 32 to 93 years, including available extension options that we are reasonably certain to exercise.

As of March 31, 2022, the remaining contractual payments under ground and office lease agreements in which we are the lessee aggregated $894.5 million and $25.0 million, respectively. We are required to recognize a right-of-use asset and a related liability to account for our future obligations under operating lease arrangements in which we are the lessee. The operating lease liability is measured based on the present value of the remaining lease payments, including payments during the term under our extension options that we are reasonably certain to exercise. The right-of-use asset is equal to the corresponding operating lease liability, adjusted for the initial direct leasing cost 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. As of March 31, 2022, the present value of the remaining contractual payments aggregating $919.5 million under our operating lease agreements, including our extension options that we are reasonably certain to exercise, was $405.8 million, which was classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets. As of March 31, 2022, the weighted-average remaining lease term of operating leases in which we are the lessee was approximately 43 years, and the weighted-average discount rate was 4.61%. 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 $563.1 million. We classify the right-of-use asset in other assets in our consolidated balance sheets. Refer to the “Lease accounting” section of Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

Commitments

As of March 31, 2022, remaining aggregate costs under contract for the construction of properties undergoing development, redevelopment, and improvements under the terms of leases approximated $3.5 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 $4.3 million primarily related to construction projects.

We are committed to funding approximately $436.4 million related to our non-real estate investments. These funding commitments are primarily associated with our investments in privately held entities that report NAV, which expire at various dates over the next 11 years, with a weighted-average expiration of 9.0 years as of March 31, 2022.

Exposure to environmental liabilities

In connection with the acquisition of all of our properties, we have obtained Phase I environmental assessments to ascertain the existence of any environmental liabilities or other issues. The Phase I environmental assessments of our properties have not revealed any environmental liabilities that we believe would have a material adverse effect on our financial condition or results of operations taken as a whole, nor are we aware of any material environmental liabilities that have occurred since the Phase I environmental assessments were completed. In addition, we carry a policy of pollution legal liability insurance covering exposure to certain environmental losses at substantially all of our properties.

Foreign currency translation gains and losses

The following table presents the change in accumulated other comprehensive loss attributable to Alexandria Real Estate Equities, Inc.’s stockholders during the three months ended March 31, 2022 due to the changes in the foreign exchange rates for our real estate investments in Canada and Asia. We reclassify unrealized foreign currency translation gains and losses into net income (loss) as we dispose of these holdings.


(In thousands)	Total
Balance as of December 31, 2021	$	(7,294)

Other comprehensive income before reclassifications	1,567
Net other comprehensive income	1,567

Balance as of March 31, 2022	$	(5,727)

Inflation

As of March 31, 2022, approximately 91% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Approximately 97% of our leases (on an annual rental revenue basis) contained effective annual rent escalations that were either fixed (generally ranging from 3.0% to 3.5%) or indexed based on a consumer price index or other indices. Accordingly, we do not believe that our cash flows or earnings from real estate operations are subject to significant risks from inflation. A period of inflation, however, could cause an increase in the cost of our variable-rate borrowings, including borrowings related to our unsecured senior line of credit, commercial paper program, and secured loans held by our unconsolidated real estate joint ventures.

In addition, refer to “Item 1A. Risk factors” within “Part II – Other information” of this quarterly report on Form 10-Q for a discussion about risks that inflation directly or indirectly may pose to our business.

Issuer and guarantor subsidiary summarized financial information

Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act of 1933, as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP” or the “Guarantor Subsidiary”), an indirectly 100% owned subsidiary of the Issuer. The Issuer’s other subsidiaries, including, but not limited to, the subsidiaries that own substantially all of its real estate (collectively, the “Combined Non-Guarantor Subsidiaries”), will not provide a guarantee of such securities, including the subsidiaries that are partially or 100% owned by the LP. The following summarized financial information presents, on a combined basis, balance sheet information as of March 31, 2022 and December 31, 2021, and results of operations and comprehensive income for the three months ended March 31, 2022 and year ended December 31, 2021 for the Issuer and the Guarantor Subsidiary. The information presented below excludes eliminations necessary to arrive at the information on a consolidated basis. In presenting the summarized financial statements, the equity method of accounting has been applied to (i) the Issuer’s interests in the Guarantor Subsidiary, (ii) the Guarantor Subsidiary’s interests in the Combined Non-Guarantor Subsidiaries, and (iii) the Combined Non-Guarantor Subsidiaries’ interests in the Guarantor Subsidiary, where applicable, even though all such subsidiaries meet the requirements to be consolidated under GAAP. All assets and liabilities have been allocated to the Issuer and the Guarantor Subsidiary generally based on legal entity ownership.

The following tables present combined summarized financial information as of March 31, 2022 and December 31, 2021, for the three months ended March 31, 2022, and for the year ended December 31, 2021 for the Issuer and Guarantor Subsidiary. Amounts provided do not represent our total consolidated amounts (in thousands):


	March 31, 2022		December 31, 2021
Assets:
Cash, cash equivalents, and restricted cash	$	522,535	$	78,856
Other assets	102,514		101,956
Total assets	$	625,049	$	180,812

Liabilities:
Unsecured senior notes payable	$	10,094,337	$	8,316,678
Unsecured senior line of credit and commercial paper	—		269,990
Other liabilities	402,306		401,721
Total liabilities	$	10,496,643	$	8,988,389


	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Total revenues	$	8,059	$	26,798
Total expenses	(72,708)		(363,525)
Net loss	(64,649)		(336,727)
Net income attributable to unvested restricted stock awards	(2,081)		(7,848)
Net loss attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$	(66,730)	$	(344,575)

As of March 31, 2022, 433 of our 446 properties were held indirectly by the REIT’s wholly owned consolidated subsidiary, Alexandria Real Estate Equities, L.P.

Critical accounting policies

Refer to our annual report on Form 10-K for the year ended December 31, 2021 for a discussion of our critical accounting policies related to REIT compliance, investments in real estate, impairment of long-lived assets, equity investments, liability and right-of-use assets related to operating leases in which we are the lessee, monitoring of tenant credit quality, and allowance for credit losses.

Non-GAAP measures and definitions

This section contains additional information of certain non-GAAP financial measures and the reasons why we use these supplemental measures of performance and believe they provide useful information to investors, as well as the definitions of other terms used in this report.

Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders

GAAP-basis accounting for real estate assets utilizes historical cost accounting and assumes that real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Nareit Board of Governors established funds from operations as an improved measurement tool. Since its introduction, funds from operations has become a widely used non-GAAP financial measure among equity REITs. We believe that funds from operations is helpful to investors as an additional measure of the performance of an equity REIT. Moreover, we believe that funds from operations, as adjusted, allows investors to compare our performance to the performance of other real estate companies on a consistent basis, without having to account for differences recognized because of real estate acquisition and disposition decisions, financing decisions, capital structure, capital market transactions, variances resulting from the volatility of market conditions outside of our control, or other corporate activities that may not be representative of the operating performance of our properties.

The 2018 White Paper published by the Nareit Board of Governors (the “Nareit White Paper”) defines funds from operations as net income (computed in accordance with GAAP), excluding gains or losses on sales of real estate, and impairments of real estate, plus depreciation and amortization of operating real estate assets, and after adjustments for our share of consolidated and unconsolidated partnerships and real estate joint ventures. Impairments represent the write-down of assets when fair value over the recoverability period is less than the carrying value due to changes in general market conditions and do not necessarily reflect the operating performance of the properties during the corresponding period.

We compute funds from operations, as adjusted, as funds from operations calculated in accordance with the Nareit White Paper, excluding significant gains, losses, and impairments realized on non-real estate investments, unrealized gains or losses on non-real estate investments, gains or losses on early extinguishment of debt, significant termination fees, acceleration of stock compensation expense due to the resignation of an executive officer, deal costs, the income tax effect related to such items, and the amount of such items that is allocable to our unvested restricted stock awards. Neither funds from operations nor funds from operations, as adjusted, should be considered as alternatives to net income (determined in accordance with GAAP) as indications of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as measures of liquidity, nor are they indicative of the availability of funds for our cash needs, including our ability to make distributions.

The following table reconciles net (loss) income to funds from operations for the share of consolidated real estate joint ventures attributable to noncontrolling interests and our share of unconsolidated real estate joint ventures for the three months ended March 31, 2022 (in thousands):


	Three Months Ended March 31, 2022
	Noncontrolling Interest Share of Consolidated Real Estate Joint Ventures		Our Share of Unconsolidated Real Estate Joint Ventures


Net income	$	32,177		$	220
Depreciation and amortization of real estate assets	23,681			955

Funds from operations	$	55,858		$	1,175

The following tables present a reconciliation of net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, and funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted, and the related per share amounts for the three months ended March 31, 2022 and 2021. Per share amounts may not add due to rounding.


	Three Months Ended March 31,
(In thousands)	2022		2021
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted	$	(151,650)	$	6,107
Depreciation and amortization of real estate assets	237,160		177,720
Noncontrolling share of depreciation and amortization from consolidated real estate JVs	(23,681)		(15,443)
Our share of depreciation and amortization from unconsolidated real estate JVs	955		3,076
Gain on sales of real estate	—		(2,779)
Impairment of real estate – rental properties	—		5,129
Allocation to unvested restricted stock awards	—		(201)
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted(1)	62,784		173,609
Unrealized losses on non-real estate investments	263,433		46,251
Significant realized gains on non-real estate investments	—		(22,919)

Loss on early extinguishment of debt	—		67,253
Allocation to unvested restricted stock awards	(1,604)		(1,208)
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted	$	324,613	$	262,986

(1)Calculated in accordance with standards established by the Nareit Board of Governors.


	Three Months Ended March 31,
(Per share)	2022		2021
Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted	$	(0.96)	$	0.04
Depreciation and amortization of real estate assets	1.36		1.20
Gain on sales of real estate	—		(0.02)
Impairment of real estate – rental properties	—		0.04

Funds from operations per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted	0.40		1.26
Unrealized losses on non-real estate investments	1.67		0.34
Significant realized gains on non-real estate investments	—		(0.17)

Loss on early extinguishment of debt	—		0.49
Allocation to unvested restricted stock awards	(0.02)		(0.01)
Funds from operations per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted	$	2.05	$	1.91

Weighted-average shares of common stock outstanding for calculation of:
Earnings per share – diluted	158,198		137,688
Funds from operations, diluted, per share	158,209		137,688
Funds from operations, diluted, as adjusted, per share	158,209		137,688

Adjusted EBITDA and Adjusted EBITDA margin

We use Adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization (“EBITDA”), excluding stock compensation expense, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, impairments of real estate, and significant termination fees. Adjusted EBITDA also excludes unrealized gains or losses and significant realized gains or losses and impairments that result from our non-real estate investments. These non-real estate investment amounts are classified in our consolidated statements of operations outside of total revenues.

We believe Adjusted EBITDA provides investors with relevant and useful information as it allows investors to evaluate the operating performance of our business activities without having to account for differences recognized because of investing and financing decisions related to our real estate and non-real estate investments, our capital structure, capital market transactions, and variances resulting from the volatility of market conditions outside of our control. For example, we exclude gains or losses on the early extinguishment of debt to allow investors to measure our performance independent of our indebtedness and capital structure. We believe that adjusting for the effects of impairments and gains or losses on sales of real estate, significant impairments and realized gains or losses on non-real estate investments, and significant termination fees allows investors to evaluate performance from period to period on a consistent basis without having to account for differences recognized because of investing and financing decisions related to our real estate and non-real estate investments or other corporate activities that may not be representative of the operating performance of our properties.

In addition, we believe that excluding charges related to stock compensation and unrealized gains or losses facilitates for investors a comparison of our business activities across periods without the volatility resulting from market forces outside of our control. Adjusted EBITDA has limitations as a measure of our performance. Adjusted EBITDA does not reflect our historical expenditures or future requirements for capital expenditures or contractual commitments. While Adjusted EBITDA is a relevant measure of performance, it does not represent net income (loss) or cash flows from operations calculated and presented in accordance with GAAP, and it should not be considered as an alternative to those indicators in evaluating performance or liquidity.

In order to calculate the Adjusted EBITDA margin, we divide Adjusted EBITDA by total revenues as presented in our consolidated statements of operations. We believe that this supplemental performance measure provides investors with additional useful information regarding the profitability of our operating activities.

The following table reconciles net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and calculates the Adjusted EBITDA margin for the three months ended March 31, 2022 and 2021 (dollars in thousands):


	Three Months Ended March 31,
	2022		2021
Net (loss) income	$	(117,392)	$	25,533
Interest expense	29,440		36,467
Income taxes	3,571		1,426
Depreciation and amortization	240,659		180,913
Stock compensation expense	14,028		12,446
Loss on early extinguishment of debt	—		67,253
Gain on sales of real estate	—		(2,779)
Significant realized gains on non-real estate investments	—		(22,919)
Unrealized losses on non-real estate investments	263,433		46,251
Impairment of real estate	—		5,129
Adjusted EBITDA	$	433,739	$	349,720

Total revenues	$	615,065	$	479,849

Adjusted EBITDA margin	71%		73%

Annual rental revenue

Annual rental revenue represents the annualized fixed base rental obligations, calculated in accordance with GAAP, for leases in effect as of the end of the period, related to our operating RSF. Annual rental revenue is presented using 100% of the annual rental revenue of our consolidated properties and our share of annual rental revenue for our unconsolidated real estate joint ventures. Annual rental revenue per RSF is computed by dividing annual rental revenue by the sum of 100% of the RSF of our consolidated properties and our share of the RSF of properties held in unconsolidated real estate joint ventures. As of March 31, 2022, approximately 91% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent. Annual rental revenue excludes these operating expenses recovered from our tenants. Amounts recovered from our tenants related to these operating expenses, along with base rent, are classified in income from rentals in our consolidated statements of operations.

Capitalization rates

Capitalization rates are calculated based on net operating income and net operating income (cash basis) annualized for the quarter preceding the date on which the property is sold, or near term prospective net operating income.

Cash interest

Cash interest is equal to interest expense calculated in accordance with GAAP plus capitalized interest, less amortization of loan fees and debt premiums (discounts). Refer to the definition of “Fixed-charge coverage ratio” within this section of this Item 2 for a reconciliation of interest expense, the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest.

Class A properties and AAA locations

Class A properties are properties clustered in AAA locations that provide innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Class A properties generally command higher annual rental rates than other classes of similar properties.

AAA locations are in close proximity to concentrations of specialized skills, knowledge, institutions, and related businesses. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space.

Construction costs related to active development and redevelopment projects under contract

Includes (i) costs incurred to date, (ii) remaining costs to complete under a general contractor's guaranteed maximum price construction contract or other contracts, and (iii) our maximum committed tenant improvement allowances under our executed leases. The general contractor's guaranteed maximum price contract or other contracts reduce our exposure to costs of construction materials, labor, and services from third-party contractors and suppliers, unless the overruns result from among others, a force majeure event, or a change in the scope of work covered by the contract.

Development, redevelopment, and pre-construction

A key component of our business model is our disciplined allocation of capital to the development and redevelopment of new Class A properties, and property enhancements identified during the underwriting of certain acquired properties, located in collaborative life science, agtech, and technology campuses in AAA innovation clusters. These projects are generally focused on providing high-quality, generic, and reusable spaces that meet the real estate requirements of, and are reusable by, a wide range of tenants. Upon completion, each value-creation project is expected to generate a significant increase in rental income, net operating income, and cash flows. Our development and redevelopment projects are generally in locations that are highly desirable to high-quality entities, which we believe results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

Development projects generally consist of the ground-up development of generic and reusable facilities. Redevelopment projects consist of the permanent change in use of office, warehouse, and shell space into office/laboratory, agtech, or tech office space. We generally will not commence new development projects for aboveground construction of new Class A office/laboratory, agtech, and tech office space without first securing significant pre-leasing for such space, except when there is solid market demand for high-quality Class A properties.

Pre-construction activities include entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building improvements. The advancement of pre-construction efforts is focused on reducing the time required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of buildings. Ultimately, these projects will provide high-quality facilities and are expected to generate significant revenue and cash flows.

Development, redevelopment, and pre-construction spending also includes the following costs: (i) amounts to bring certain acquired properties up to market standard and/or other costs identified during the acquisition process (generally within two years of acquisition) and (ii) permanent conversion of space for highly flexible, move-in-ready office/laboratory space to foster the growth of promising early- and growth-stage life science companies.

Revenue-enhancing and repositioning capital expenditures represent spending to reposition or significantly change the use of a property, including through improvement in the asset quality from Class B to Class A.

Non-revenue-enhancing capital expenditures represent costs required to maintain the current revenues of a stabilized property, including the associated costs for renewed and re-leased space.

Fixed-charge coverage ratio

Fixed-charge coverage ratio is a non-GAAP financial measure representing the ratio of Adjusted EBITDA to fixed charges. We believe that this ratio is useful to investors as a supplemental measure of our ability to satisfy fixed financing obligations and preferred stock dividends. Cash interest is equal to interest expense calculated in accordance with GAAP plus capitalized interest, less amortization of loan fees and debt premiums (discounts).

The following table reconciles interest expense, the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest and fixed charges and computes the fixed-charge coverage ratio for the three months ended March 31, 2022 and 2021 (dollars in thousands):


	Three Months Ended March 31,
	2022		2021
Adjusted EBITDA	$	433,739	$	349,720

Interest expense	$	29,440	$	36,467
Capitalized interest	57,763		39,886
Amortization of loan fees	(3,103)		(2,817)
Amortization of debt premiums	424		576
Cash interest and fixed charges	$	84,524	$	74,112

Fixed-charge coverage ratio:
– period annualized	5.1x		4.7x
– trailing 12 months	5.1x		4.4x

Gross assets

Gross assets are calculated as total assets plus accumulated depreciation as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022		December 31, 2021
Total assets	$	32,844,256	$	30,219,373
Accumulated depreciation	3,951,666		3,771,241
Gross assets	$	36,795,922	$	33,990,614

Initial stabilized yield (unlevered)

Initial stabilized yield is calculated as the estimated amounts of net operating income at stabilization divided by our investment in the property. Our initial stabilized yield excludes the benefit of leverage. Our cash rents related to our value-creation projects are generally expected to increase over time due to contractual annual rent escalations. Our estimates for initial stabilized yields, initial stabilized yields (cash basis), and total costs at completion represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs.

Initial stabilized yield reflects rental income, including contractual rent escalations and any rent concessions over the term(s) of the lease(s), calculated on a straight-line basis.
Initial stabilized yield (cash basis) reflects cash rents at the stabilization date after initial rental concessions, if any, have elapsed and our total cash investment in the property.

Investment-grade or publicly traded large cap tenants

Investment-grade or publicly traded large cap tenants represent tenants that are investment-grade rated or publicly traded companies with an average daily market capitalization greater than $10 billion for the twelve months ended March 31, 2022, as reported by Bloomberg Professional Services. Credit ratings from Moody’s Investors Service and S&P Global Ratings reflect credit ratings of the tenant’s parent entity, and there can be no assurance that a tenant’s parent entity will satisfy the tenant’s lease obligation upon such tenant’s default. We monitor the credit quality and related material changes of our tenants. Material changes that cause a tenant’s market capitalization to decrease below $10 billion, which are not immediately reflected in the twelve-month average, may result in their exclusion from this measure.

Investments in real estate – value-creation square footage currently in rental properties

The square footage presented in the table below includes RSF of buildings in operation as of March 31, 2022, primarily representing lease expirations at recently acquired properties that also have inherent future development or redevelopment opportunities and for which we have the intent to demolish or redevelop the existing property upon expiration of the existing in-place leases and commencement of future construction:


	Dev/Redev		RSF of Lease Expirations Targeted for Development and Redevelopment
Property/Submarket		2022		2023		Thereafter		Total
Near-term projects:
40 Sylvan Road/Route 128	Redev		—		312,845		—		312,845
275 Grove Street/Route 128	Redev		102,728		—		57,523	(1)	160,251
840 Winter Street/Route 128	Redev		—		10,265		17,965		28,230
3825 Fabian Way/Greater Stanford	Redev		250,000		—		—		250,000
10931 and 10933 North Torrey Pines Road/Torrey Pines	Dev		25,892		—		—		25,892
3301 Monte Villa Parkway/Bothell	Redev		50,552		—		—		50,552
41 Moore Drive/Research Triangle	Redev		62,490		—		—		62,490
Other	Redev		70,700		—		72,405	(1)	143,105
			562,362		323,110		147,893		1,033,365
Intermediate-term projects:
9444 Waples Street/Sorrento Mesa	Dev		23,789		—		64,591	(1)	88,380
			23,789		—		64,591		88,380
Future projects:
550 Arsenal Street/Cambridge/Inner Suburbs	Dev		—		—		260,867	(1)	260,867
380 and 420 E Street/Seaport Innovation District	Dev		—		—		195,506		195,506
Other/Greater Boston	Redev		—		—		167,549	(1)	167,549
1122 El Camino Real/South San Francisco	Dev		—		—		223,232		223,232
1150 El Camino Real/South San Francisco	Dev		—		—		431,940	(1)	431,940
3875 Fabian Way/Greater Stanford	Redev		—		—		228,000		228,000
960 Industrial Road/Greater Stanford	Dev		—		—		110,000		110,000
219 East 42nd Street/New York City	Dev		—		—		349,947		349,947
10975 and 10995 Torreyana Road/Torrey Pines	Dev		—		—		84,829		84,829
4161 Campus Point Court/University Town Center	Dev		—		159,884		—		159,884
10260 Campus Point Drive/University Town Center	Dev		—		109,164		—		109,164
Sequence District by Alexandria/Sorrento Mesa	Dev/Redev		—		—		689,938		689,938
4025, 4031, and 4045 Sorrento Valley Boulevard/Sorrento Valley	Dev		42,594		—		—		42,594
601 Dexter Avenue North/Lake Union	Dev		—		18,680		—		18,680
830 4th Avenue South/SoDo	Dev		—		—		42,380	(1)	42,380
Other/Seattle	Dev		6,289		86,955		9,193	(1)	102,437
			48,883		374,683		2,793,381		3,216,947
			635,034		697,793		3,005,865		4,338,692

(1)Includes vacant square footage as of March 31, 2022.

Joint venture financial information

We present components of balance sheet and operating results information related to our real estate joint ventures, which are not presented, or intended to be presented, in accordance with GAAP. We present the proportionate share of certain financial line items as follows: (i) for each real estate joint venture that we consolidate in our financial statements, which are controlled by us through contractual rights or majority voting rights, but of which we own less than 100%, we apply the noncontrolling interest economic ownership percentage to each financial item to arrive at the amount of such cumulative noncontrolling interest share of each component presented; and (ii) for each real estate joint venture that we do not control and do not consolidate, and are instead controlled jointly or by our joint venture partners through contractual rights or majority voting rights, we apply our economic ownership percentage to each financial item to arrive at our proportionate share of each component presented.

The components of balance sheet and operating results information related to our real estate joint ventures do not represent our legal claim to those items. For each entity that we do not wholly own, the joint venture agreement generally determines what equity holders can receive upon capital events, such as sales or refinancing, or in the event of a liquidation. Equity holders are normally entitled to their respective legal ownership of any residual cash from a joint venture only after all liabilities, priority distributions, and claims have been repaid or satisfied.

We believe that this information can help investors estimate the balance sheet and operating results information related to our partially owned entities. Presenting this information provides a perspective not immediately available from consolidated financial statements and one that can supplement an understanding of the joint venture assets, liabilities, revenues, and expenses included in our consolidated results.

The components of balance sheet and operating results information related to our real estate joint ventures are limited as an analytical tool as the overall economic ownership interest does not represent our legal claim to each of our joint ventures’ assets, liabilities, or results of operations. In addition, joint venture financial information may include financial information related to the unconsolidated real estate joint ventures that we do not control. We believe that in order to facilitate for investors a clear understanding of our operating results and our total assets and liabilities, joint venture financial information should be examined in conjunction with our consolidated statements of operations and balance sheets. Joint venture financial information should not be considered an alternative to our consolidated financial statements, which are presented and prepared in accordance with GAAP.

Mega campus

Mega campuses are cluster campuses that consist of approximately 1 million RSF or more, including operating, active development/redevelopment, and land RSF less operating RSF expected to be demolished. The following table reconciles our operating RSF as of March 31, 2022:


	Operating RSF
Mega campus	25,165,682
Non-mega campus	16,771,041
Total	41,936,723

Mega campus RSF as a percentage of total operating property RSF	60	%

Net cash provided by operating activities after dividends

Net cash provided by operating activities after dividends includes the deduction for distributions to noncontrolling interests. For purposes of this calculation, changes in operating assets and liabilities are excluded as they represent timing differences.

Net debt and preferred stock to Adjusted EBITDA

Net debt and preferred stock to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure of evaluating our balance sheet leverage. Net debt and preferred stock is equal to the sum of total consolidated debt less cash, cash equivalents, and restricted cash, plus preferred stock outstanding as of the end of the period. Refer to the definition of “Adjusted EBITDA and Adjusted EBITDA margin” within this section of this Item 2 for further information on the calculation of Adjusted EBITDA.

The following table reconciles debt to net debt and preferred stock and computes the ratio to Adjusted EBITDA as of March 31, 2022 and December 31, 2021 (dollars in thousands):


	March 31, 2022			December 31, 2021
Secured notes payable	$	208,910		$	205,198
Unsecured senior notes payable	10,094,337			8,316,678
Unsecured senior line of credit and commercial paper	—			269,990
Unamortized deferred financing costs	81,175			65,476
Cash and cash equivalents	(775,060)			(361,348)
Restricted cash	(95,106)			(53,879)
Preferred stock	—			—
Net debt and preferred stock	$	9,514,256		$	8,442,115

Adjusted EBITDA:
– quarter annualized	$	1,734,956		$	1,631,244
– trailing 12 months	$	1,601,857		$	1,517,838

Net debt and preferred stock to Adjusted EBITDA:
– quarter annualized	5.5		x	5.2		x
– trailing 12 months	5.9		x	5.6		x

Net operating income, net operating income (cash basis), and operating margin

The following table reconciles net (loss) income to net operating income and net operating income (cash basis) and computes operating margin for the three months ended March 31, 2022 and 2021 (dollars in thousands):


	Three Months Ended March 31,
	2022		2021
Net (loss) income	$	(117,392)	$	25,533

Equity in earnings of unconsolidated real estate joint ventures	(220)		(3,537)
General and administrative expenses	40,931		33,996
Interest expense	29,440		36,467
Depreciation and amortization	240,659		180,913
Impairment of real estate	—		5,129
Loss on early extinguishment of debt	—		67,253
Gain on sales of real estate	—		(2,779)
Investment loss (income)	240,319		(1,014)
Net operating income	433,737		341,961
Straight-line rent revenue	(42,025)		(27,382)
Amortization of acquired below-market leases	(13,915)		(12,112)
Net operating income (cash basis)	$	377,797	$	302,467

Net operating income (cash basis) – annualized	$	1,511,188	$	1,209,868

Net operating income (from above)	$	433,737	$	341,961
Total revenues	$	615,065	$	479,849
Operating margin	71%		71%

Net operating income is a non-GAAP financial measure calculated as net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding equity in the earnings of our unconsolidated real estate joint ventures, general and administrative expenses, interest expense, depreciation and amortization, impairments of real estate, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, and investment income or loss. We believe net operating income provides useful information to investors regarding our financial condition and results of operations because it primarily reflects those income and expense items that are incurred at the property level. Therefore, we believe net operating income is a useful measure for investors to evaluate the operating performance of our consolidated real estate assets. Net operating income on a cash basis is net operating income adjusted to exclude the effect of straight-line rent and amortization of acquired above- and below-market lease revenue adjustments required by GAAP. We believe that net operating income on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent revenue and the amortization of acquired above- and below-market leases.

Furthermore, we believe net operating income is useful to investors as a performance measure of our consolidated properties because, when compared across periods, net operating income reflects trends in occupancy rates, rental rates, and operating costs, which provide a perspective not immediately apparent from net income or loss. Net operating income can be used to measure the initial stabilized yields of our properties by calculating net operating income generated by a property divided by our investment in the property. Net operating income excludes certain components from net income in order to provide results that are more closely related to the results of operations of our properties. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level rather than at the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort comparability of operating performance at the property level. Impairments of real estate have been excluded in deriving net operating income because we do not consider impairments of real estate to be property-level operating expenses. Impairments of real estate relate to changes in the values of our assets and do not reflect the current operating performance with respect to related revenues or expenses. Our impairments of real estate represent the write-down in the value of the assets to the estimated fair value less cost to sell. These impairments result from investing decisions or a deterioration in market conditions. We also exclude realized and unrealized investment gain or loss, which results from investment decisions that occur at the corporate level related to non-real estate investments in publicly traded companies and certain privately held entities. Therefore, we do not consider these activities to be an indication of operating performance of our real estate assets at the property level. Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as losses on early extinguishment of debt, as these charges often relate to corporate strategy. Property operating expenses included in determining net operating income primarily consist of costs that are related to our operating properties, such as utilities, repairs, and maintenance; rental expense related to ground leases; contracted services, such as janitorial, engineering, and landscaping; property taxes and insurance; and property-level salaries. General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional fees, office rent, and office supplies that are incurred as part of corporate office management. We calculate operating margin as net operating income divided by total revenues.

We believe that in order to facilitate for investors a clear understanding of our operating results, net operating income should be examined in conjunction with net income or loss as presented in our consolidated statements of operations. Net operating income should not be considered as an alternative to net income or loss as an indication of our performance, nor as an alternative to cash flows as a measure of our liquidity or our ability to make distributions.

Operating statistics

We present certain operating statistics related to our properties, including number of properties, RSF, occupancy percentage, leasing activity, and contractual lease expirations as of the end of the period. We believe these measures are useful to investors because they facilitate an understanding of certain trends for our properties. We compute the number of properties, RSF, occupancy percentage, leasing activity, and contractual lease expirations at 100% for all properties in which we have an investment, including properties owned by our consolidated and unconsolidated real estate joint ventures. For operating metrics based on annual rental revenue, refer to the definition of “Annual rental revenue” in this “Non-GAAP measures and definitions” section of this Item 2.

Same property comparisons

As a result of changes within our total property portfolio during the comparative periods presented, including changes from assets acquired or sold, properties placed into development or redevelopment, and development or redevelopment properties recently placed into service, the consolidated total income from rentals, as well as rental operating expenses in our operating results, can show significant changes from period to period. In order to supplement an evaluation of our results of operations over a given quarterly or annual period, we analyze the operating performance for all consolidated properties that were fully operating for the entirety of the comparative periods presented, referred to as same properties. We separately present quarterly and year-to-date same property results to align with the interim financial information required by the SEC in our management’s discussion and analysis of our financial condition and results of operations. These same properties are analyzed separately from properties acquired subsequent to the first day in the earliest comparable quarterly or year-to-date period presented, properties that underwent development or redevelopment at any time during the comparative periods, unconsolidated real estate joint ventures, properties classified as held for sale, and corporate entities (legal entities performing general and administrative functions), which are excluded from same property results. Additionally, termination fees, if any, are excluded from the results of same properties. Refer to the “Same properties” subsection in the “Results of operations” section within this Item 2 for additional information.

Stabilized occupancy date

The stabilized occupancy date represents the estimated date on which the project is expected to reach occupancy of 95% or greater.

Tenant recoveries

Tenant recoveries represent revenues comprising reimbursement of real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses and earned in the period during which the applicable expenses are incurred and the tenant’s obligation to reimburse us arises.

We classify rental revenues and tenant recoveries generated through the leasing of real estate assets within revenue in income from rentals in our consolidated statements of operations. We provide investors with a separate presentation of rental revenues and tenant recoveries in the “Comparison of results for the three months ended March 31, 2022 to the three months ended March 31, 2021” subsection of the “Results of operations” section within this Item 2 because we believe it promotes investors’ understanding of our operating results. We believe that the presentation of tenant recoveries is useful to investors as a supplemental measure of our ability to recover operating expenses under our triple net leases, including recoveries of utilities, repairs and maintenance, insurance, property taxes, common area expenses, and other operating expenses, and of our ability to mitigate the effect to net income for any significant variability to components of our operating expenses.

The following table reconciles income from rentals to tenant recoveries for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Income from rentals	$	612,554	$	478,695
Rental revenues	(469,537)		(370,233)
Tenant recoveries	$	143,017	$	108,462

Total market capitalization

Total market capitalization is equal to the outstanding shares of common stock at the end of the period multiplied by the closing price on the last trading day of the period (i.e., total equity capitalization), plus total debt outstanding at period-end.

Unencumbered net operating income as a percentage of total net operating income

Unencumbered net operating income as a percentage of total net operating income is a non-GAAP financial measure that we believe is useful to investors as a performance measure of the results of operations of our unencumbered real estate assets as it reflects those income and expense items that are incurred at the unencumbered property level. Unencumbered net operating income is derived from assets classified in continuing operations, which are not subject to any mortgage, deed of trust, lien, or other security interest, as of the period for which income is presented.

The following table summarizes unencumbered net operating income as a percentage of total net operating income for the three months ended March 31, 2022 and 2021 (dollars in thousands):


	Three Months Ended March 31,
	2022			2021
Unencumbered net operating income	$	420,960		$	330,160
Encumbered net operating income	12,777			11,801
Total net operating income	$	433,737		$	341,961
Unencumbered net operating income as a percentage of total net operating income	97%		(1)	97%

(1)In April 2022, we repaid two secured notes payable. Excluding these secured notes payable, our unencumbered net operating income as a percentage of total net operating income for the three months ended March 31, 2022 was 99.8%.

Weighted-average shares of common stock outstanding – diluted

From time to time, we enter into capital market transactions, including forward equity sales agreements (“Forward Agreements”), to fund acquisitions, to fund construction of our highly leased development and redevelopment projects, and for general working capital purposes. We are required to consider the potential dilutive effect of our forward equity sales agreements under the treasury stock method while the forward equity sales agreements are outstanding. As of March 31, 2022, we had Forward Agreements outstanding to sell an aggregate of 6.6 million shares of common stock. Refer to Note 13 – “Stockholders’ equity” to our unaudited consolidated financial statements under Item 1 of this report for additional information.

The weighted-average shares of common stock outstanding used in calculating EPS – diluted, funds from operations per share – diluted, and funds from operations per share – diluted, as adjusted, for the three months ended March 31, 2022 and 2021 are calculated as follows (in thousands):


	Three Months Ended March 31,
	2022	2021
Basic shares for earnings per share	158,198	137,319
Forward Agreements	—	369
Diluted shares for earnings per share	158,198	137,688

Basic shares for funds from operations per share and funds from operations per share, as adjusted	158,198	137,319
Forward Agreements	11	369
Diluted shares for funds from operations per share and funds from operations per share, as adjusted	158,209	137,688

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