Alexandria Real Estate Equities 10-Q 2024-09-30

Filed 2024-10-21. 8 sections, 475K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-12993

ALEXANDRIA REAL ESTATE EQUITIES, INC.

(Exact name of registrant as specified in its charter)


Maryland		95-4502084
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

26 North Euclid Avenue**,** Pasadena**,** California 91101

(Address of principal executive offices) (Zip code)

(626) 578-0777

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ARE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and

posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period

that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting

company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 15, 2024, 174,762,259 shares of common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS (UNAUDITED)

	Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 ..................................................	1

	Consolidated Financial Statements for the Three and Nine Months Ended September 30, 2024 and 2023:

	Consolidated Statements of Operations ...................................................................................................................	2

	Consolidated Statements of Comprehensive Income ............................................................................................	3

	Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests ..........................	4

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 ...................	8

	Notes to Consolidated Financial Statements ....................................................................................................................	10

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................................................................................................................................................................	44

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .........................................................	113

Item 4.	CONTROLS AND PROCEDURES .....................................................................................................................................	114

PART II – OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS ......................................................................................................................................................	115

Item 1A.	RISK FACTORS ....................................................................................................................................................................	115

Item 5.	OTHER INFORMATION .......................................................................................................................................................	116

Item 6.	EXHIBITS ...............................................................................................................................................................................	117

SIGNATURES .................................................................................................................................................................................................		118

GLOSSARY

The following abbreviations or acronyms that may be used in this document

shall have the adjacent meanings set forth below:


ASU	Accounting Standards Update
ATM	At the Market
CIP	Construction in Progress
EPS	Earnings per Share
FASB	Financial Accounting Standards Board
FFO	Funds From Operations
GAAP	U.S. Generally Accepted Accounting Principles
IRS	Internal Revenue Service
JV	Joint Venture
Nareit	National Association of Real Estate Investment Trusts
NAV	Net Asset Value
NYSE	New York Stock Exchange
REIT	Real Estate Investment Trust
RSF	Rentable Square Feet/Foot
SEC	Securities and Exchange Commission
SF	Square Feet/Foot
SoDo	South of Downtown submarket of Seattle
SOFR	Secured Overnight Financing Rate
SoMa	South of Market submarket of the San Francisco Bay Area
U.S.	United States
VIE	Variable Interest Entity

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (UNAUDITED)

Alexandria Real Estate Equities, Inc.

Consolidated Balance Sheets

(In thousands)


	September 30, 2024	December 31, 2023
	(Unaudited)
Assets
Investments in real estate	$32,951,777	$31,633,511
Investments in unconsolidated real estate joint ventures	40,170	37,780
Cash and cash equivalents	562,606	618,190
Restricted cash	17,031	42,581
Tenant receivables	6,980	8,211
Deferred rent	1,216,176	1,050,319
Deferred leasing costs	516,872	509,398
Investments	1,519,327	1,449,518
Other assets	1,657,189	1,421,894
Total assets	$38,488,128	$36,771,402

Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$145,000	$119,662
Unsecured senior notes payable	12,092,012	11,096,028
Unsecured senior line of credit and commercial paper	454,589	99,952
Accounts payable, accrued expenses, and other liabilities	2,865,886	2,610,943
Dividends payable	227,191	221,824
Total liabilities	15,784,678	14,148,409

Commitments and contingencies

Redeemable noncontrolling interests	16,510	16,480

Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Common stock	1,722	1,719
Additional paid-in capital	18,238,438	18,485,352
Accumulated other comprehensive loss	(22,529)	(15,896)
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	18,217,631	18,471,175
Noncontrolling interests	4,469,309	4,135,338
Total equity	22,686,940	22,606,513
Total liabilities, noncontrolling interests, and equity	$38,488,128	$36,771,402

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Revenues:
Income from rentals	$775,744	$707,531	$2,286,457	$2,099,819
Other income	15,863	6,257	40,992	28,664
Total revenues	791,607	713,788	2,327,449	2,128,483

Expenses:
Rental operations	233,265	217,687	668,833	636,454
General and administrative	43,945	45,987	135,629	140,065
Interest	43,550	11,411	130,179	42,237
Depreciation and amortization	293,998	269,370	872,272	808,227
Impairment of real estate	5,741	20,649	36,504	189,224
Total expenses	620,499	565,104	1,843,417	1,816,207

Equity in earnings of unconsolidated real estate joint ventures	139	242	424	617
Investment income (loss)	15,242	(80,672)	14,866	(204,051)
Gain on sales of real estate	27,114	—	27,506	214,810
Net income	213,603	68,254	526,828	323,652
Net income attributable to noncontrolling interests	(45,656)	(43,985)	(141,634)	(131,584)
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	167,947	24,269	385,194	192,068
Net income attributable to unvested restricted stock awards	(3,273)	(2,414)	(10,717)	(7,697)
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$164,674	$21,855	$374,477	$184,371

Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
Basic	$0.96	$0.13	$2.18	$1.08
Diluted	$0.96	$0.13	$2.18	$1.08

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Net income	$213,603	$68,254	$526,828	$323,652
Other comprehensive income (loss)
Unrealized gains (losses) on foreign currency translation:
Unrealized foreign currency translation gains (losses) arising during the period	5,056	(8,395)	(6,758)	(4,172)
Reclassification adjustment for losses included in net income	125	—	125	—
Unrealized gains (losses) on foreign currency translation, net	5,181	(8,395)	(6,633)	(4,172)

Total other comprehensive income (loss)	5,181	(8,395)	(6,633)	(4,172)
Comprehensive income	218,784	59,859	520,195	319,480
Less: comprehensive income attributable to noncontrolling interests	(45,656)	(43,985)	(141,634)	(131,584)
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	$173,128	$15,874	$378,561	$187,896

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)


	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of Common Shares	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Total Equity	Redeemable Noncontrolling Interests
Balance as of June 30, 2024	172,017,674	$1,720	$18,284,611	$—	$(27,710)	$4,391,806	$22,650,427	$16,440
Net income	—	—	—	167,947	—	45,385	213,332	271
Total other comprehensive income	—	—	—	—	5,181	—	5,181	—
Contributions from and sales of noncontrolling interests	—	—	490	—	—	91,118	91,608	—
Distributions to and redemption of noncontrolling interests	—	—	—	—	—	(59,000)	(59,000)	(201)
Issuance pursuant to stock plan	376,781	4	31,235	—	—	—	31,239	—
Taxes related to net settlement of equity awards	(150,054)	(2)	(18,654)	—	—	—	(18,656)	—
Dividends declared on common stock ($1.30 per share)	—	—	—	(227,191)	—	—	(227,191)	—
Reclassification of distributions in excess of earnings	—	—	(59,244)	59,244	—	—	—	—
Balance as of September 30, 2024	172,244,401	$1,722	$18,238,438	$—	$(22,529)	$4,469,309	$22,686,940	$16,510

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)

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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 industry 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, banking conditions, and/or regional

armed hostilities; and

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 Part I; “Item 1A. Risk factors”; and “Item 7. Management’s discussion and analysis of financial condition and results of

operations” in our annual report on Form 10-K for the year ended December 31, 2023 and under respective sections in 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. Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® company, is a best-in-class, mission-driven life science

REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche with our founding in 1994,

Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative mega campuses in AAA life science

innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle,

and New York City. As of September 30, 2024, Alexandria has a total market capitalization of $33.1 billion and an asset base in North

America that includes 41.8 million RSF of operating properties, 5.3 million RSF of Class A/A+ properties undergoing construction, and

one committed near-term project expected to commence construction in the next two years. Alexandria has a longstanding and proven

track record of developing Class A/A+ properties clustered in mega 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 companies through our

venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base

that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

As of September 30, 2024:

Investment-grade or publicly traded large cap tenants represented 53% of our annual rental revenue;
Approximately 96% of our leases (on an annual rental revenue basis) contained effective annual rent escalations

approximating 3% that were either fixed or indexed based on a consumer price index or other index;

Approximately 93% 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 92% 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; and

80% of our leasing activity during the last twelve months was generated from our existing tenant base.

Our primary business objective is to maximize long-term asset value and stockholder returns based on a multifaceted platform

of internal and external growth. A key element of our strategy is our unique focus on Class A/A+ properties located in collaborative

mega campuses in AAA life science innovation clusters. Our mega campuses are designed for scalability, offering our tenants a clear

path for growth, including through our future developments and redevelopments. Strategically located near top academic medical

institutions and equipped with curated amenities, services, and transit access, our mega campuses are designed to support our tenants

in attracting and retaining top talent, which we believe is a key driver of tenant demand for our properties. Our strategy also includes

drawing upon our deep and broad real estate and life science 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 September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Net income attributable to Alexandria’s common stockholders – diluted:
In millions	$164.7	$21.9	$374.5	$184.4
Per share	$0.96	$0.13	$2.18	$1.08
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:
In millions	$407.9	$386.4	$1,217.3	$1,142.5
Per share	$2.37	$2.26	$7.08	$6.69

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

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

in “Results of operations” in Item 2.

Continued operational excellence and solid results amid challenging macroeconomics environment


(As of September 30, 2024, unless stated otherwise)
Occupancy of operating properties in North America			94.7%
Percentage of annual rental revenue in effect from mega campuses			76%
Percentage of annual rental revenue in effect from investment-grade or publicly traded large cap tenants			53%

Adjusted EBITDA margin for the three months ended September 30, 2024			70%
Percentage of leases containing annual rent escalations			96%

Weighted-av

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

The primary market risk to which we believe we may be exposed is interest rate risk, which may result from many factors,

including government monetary and tax policies, domestic and international economic and political considerations, and other factors

that are beyond our control.

In order to modify and manage the interest rate characteristics of our outstanding debt and to limit the effects of interest rate

risks on our operations, we may utilize a variety of financial instruments, including interest rate hedge agreements, caps, floors, and

other interest rate exchange contracts. The use of these types of instruments to hedge a portion of our exposure to changes in interest

rates may carry additional risks, such as counterparty credit risk and the legal enforceability of hedge agreements. As of September 30,

2024, we did not have any outstanding interest rate hedge agreements.

Our future earnings and fair values relating to our outstanding debt are primarily dependent upon prevalent market rates of

interest. The following tables illustrate the effect of a 1% change in interest rates, assuming a zero percent interest rate floor, on our

fixed- and variable-rate debt as of September 30, 2024 (in thousands):


Annualized effect on future earnings due to variable-rate debt:
Rate increase of 1%	$(1,166)
Rate decrease of 1%	$1,166

Effect on fair value of total consolidated debt:
Rate increase of 1%	$(824,796)
Rate decrease of 1%	$945,937

These amounts are determined by considering the effect of the hypothetical interest rates on our borrowings as of

September 30, 2024. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in

such an environment. Furthermore, in the event of a change of such magnitude, we would consider taking actions to further mitigate our

exposure to the change. Because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity

analyses assume no changes in our capital structure.

Equity price risk

We have exposure to equity price market risk because we hold equity investments in publicly traded companies and privately

held entities. All of our investments in actively traded public companies are reflected in our consolidated balance sheets at fair value.

Our investments in privately held entities that report NAV per share are measured at fair value using NAV as a practical expedient to fair

value. Our equity investments in privately held entities that do not report NAV per share are measured at cost less impairments,

adjusted for observable price changes during the period. Changes in fair value of public investments, changes in NAV per share

reported by privately held entities, and observable price changes of privately held entities that do not report NAV per share are

classified as investment income in our consolidated statements of operations. There is no assurance that future declines in value will

not have a material adverse effect on our future results of operations. The following table illustrates the effect that a 10% change in the

value of our equity investments would have on earnings as of September 30, 2024 (in thousands):


Equity price risk:
Fair value increase of 10%	$151,933
Fair value decrease of 10%	$(151,933)

Foreign currency exchange rate risk

We have exposure to foreign currency exchange rate risk related to our subsidiaries operating in Canada. The functional

currencies of our foreign subsidiaries are the local currencies in each respective country. Gains or losses resulting from the translation

of our foreign subsidiaries’ balance sheets and statements of operations are classified in accumulated other comprehensive income

(loss) as a separate component of total equity and are excluded from net income (loss). Gains or losses will be reflected in our

consolidated statements of operations when there is a sale or partial sale of our investment in these operations or upon a complete or

substantially complete liquidation of the investment. The following tables illustrate the effect that a 10% change in foreign currency rates

relative to the U.S. dollar would have on our potential future earnings and on the fair value of our net investment in foreign subsidiaries

based on our current operating assets outside the U.S. as of September 30, 2024 (in thousands):


Effect on potential future earnings due to foreign currency exchange rate:
Rate increase of 10%	$223
Rate decrease of 10%	$(223)

Effect on the fair value of net investment in foreign subsidiaries due to foreign currency exchange rate:
Rate increase of 10%	$40,407
Rate decrease of 10%	$(40,407)

The sensitivity analyses assume a parallel shift of all foreign currency exchange rates with respect to the U.S. dollar; however,

foreign currency exchange rates do not typically move in such a manner, and actual results may differ materially.

Our exposure to market risk elements for the nine months ended September 30, 2024 was consistent with the risk elements

presented above, including the effects of changes in interest rates, equity prices, and foreign currency exchange rates.

Item 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As of September 30, 2024, we had performed an evaluation, under the supervision of our principal executive officers and

principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and

procedures have been designed to ensure that information required for disclosure is recorded, processed, summarized, and reported

within the requisite time periods. Based on our evaluation, the principal executive officers and principal financial officer concluded that

our disclosure controls and procedures were effective as of September 30, 2024.

Changes in internal control over financial reporting

There has not been any change in our internal control over financial reporting during the three months ended September 30,

2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In 2006, ARE-East River Science Park, LLC, a subsidiary of Alexandria Real Estate Equities, Inc., was granted an option to

incorporate a land parcel adjacent to and north of the Alexandria Center® for Life Science – New York City (“ACLS-NYC”) campus

(“Option Parcel”) into the existing ground lease of that campus. The Option Parcel will allow ARE-East River Science Park, LLC to

develop a future world-class life science building within the ACLS-NYC campus. ARE-East River Science Park, LLC’s investment in pre-

construction costs related to the development of the Option Parcel, including costs related to design, engineering, environmental,

survey/title, and permitting and legal costs, aggregate $165.1 million as of September 30, 2024.

On August 6, 2024, ARE-East River Science Park, LLC filed a lawsuit in the United States District Court for the Southern

District of New York against its landlord, New York City Health + Hospitals Corporation (“H+H”), and the New York City Economic

Development Corporation (“EDC”). The lawsuit alleges two principal claims against H+H and EDC: fraud in the inducement, and, in the

alternative, breach of contract in violation of the implied covenant of good faith and fair dealing. As alleged in the complaint, ARE-East

River Science Park, LLC’s claims arise from H+H’s and EDC’s misrepresentations and concealment of material facts in connection with

a floodwall, which H+H and EDC are seeking to require ARE-East River Science Park, LLC to integrate into the development of the

Option Parcel. ARE-East River Science Park, LLC alleges that H+H’s and EDC’s misconduct have prevented it from commencing the

development of the Option Parcel. In light of the pending litigation, the closing date for the option and thus the commencement date for

construction of the third tower at the campus are presently indeterminate. Among other things, ARE-East River Science Park, LLC is

seeking significant damages and equitable relief to maintain the option.

This matter exposes us to potential losses ranging from zero to the full amount of the investment in the project aggregating

$165.1 million as of September 30, 2024, depending on any collection of damages and/or the ability to develop the project. We

performed a probability-weighted recoverability analysis based on initial estimates of various possible outcomes and determined no

impairment was present as of September 30, 2024.

Item 1A. RISK FACTORS

In addition to the information set forth in this quarterly report on Form 10-Q, one should also carefully review and consider the

information contained in the other reports and periodic filings that we make with the SEC, including, without limitation, the information

contained under the caption “Item 1A. Risk factors” in our annual report on Form 10-K for the year ended December 31, 2023. Those

risk factors could materially affect our business, financial condition, and results of operations. The risks that we describe in our public

filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be

immaterial, also may materially adversely affect our business, financial condition, and results of operations.

There have been no material changes in our risk factors from those disclosed under the caption “Item 1A. Risk factors” in our

annual report on Form 10-K for the year ended December 31, 2023, except for the following updates:

The increased use of artificial intelligence (“AI”) and automation in life science research and development

(“R&D”) activities may change the uses, space configurations and tenant requirements for our laboratory properties

in currently unforeseen ways.

In recent years, some life science companies have augmented their traditional laboratory-based R&D efforts by

integrating AI, cloud computing, quantum computing and other advanced computational technologies into their R&D programs.

It is expected that such technologies will accelerate and streamline a number of R&D functions, including, for example, through

the targeted design and evaluation of clinical trials and the efficient identification of the most promising drug development

candidates from among multiple possible drugs. In addition, life science companies, like companies in many other industries,

are increasingly integrating new technologies, such as robotics and advanced automation of recurring tasks, into their

businesses, including their R&D activities. It is widely thought that the life science and healthcare industries, like most

industries, are in only the early stages of an advanced technology revolution that may have profound, and largely currently

unknown, impacts on their businesses, including the processes and strategies underlying R&D and commercialization of new

products.

We have always strived to provide our tenants with state-of-the-art laboratory facilities incorporating cutting-edge

infrastructure features (including energy delivery, environmental, sustainability, security, and waste disposal features) to enable

our tenants to perform at the highest levels. It is currently unknown how the ongoing adoption of advanced technologies and

automation in the life science industry will impact the optimal space configurations and infrastructure features of the “laboratory

of the future,” and we may face new tenant requirements and requests that will require significant expenditures that may not be

entirely recoverable through increased rents. For example, the adoption of AI by our tenants may lead to infrastructure

requirements that our buildings currently do not accommodate, such as increased power needs due to high-performance

computing. Infrastructure upgrades may necessitate substantial capital expenditures and could potentially impact the

environmental footprint of our building operations.

If technological developments result in a reduction or reconfiguration in space requirements by our tenants, demand by

individual tenants and prospective tenants for space may decrease over time. If we are not able to offset any reduction in demand from

the foregoing developments through repurposing space, property dispositions, or other means, the realization of any of the

aforementioned risks could have a material adverse impact on our revenues, net operating income, results of operations, funds from

operations, operating margins, occupancy, earnings per share, FFO per share, our overall business, and the market value of our

common stock.

Item 5. OTHER INFORMATION

Disclosure of 10b5-1 plans

None of our officers or directors had any contract, instruction, or written plan for the purchase or sale of our securities that was

intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” in effect at any

time during the three months ended September 30, 2024.

Item 6. EXHIBITS


Exhibit Number	Exhibit Title	Incorporated by Reference to:	Date Filed
3.1*	Articles of Amendment and Restatement of the Company, dated May 21, 1997	Form 10-Q	August 14, 1997
3.2*	Certificate of Correction of the Company, dated June 20, 1997	Form 10-Q	August 14, 1997
3.3*	Articles of Amendment of the Company, effective as of May 10, 2017	Form 8-K	May 12, 2017
3.4*	Articles of Amendment of the Company, effective as of May 18, 2022	Form 8-K	May 19, 2022
3.5*	Articles Supplementary, dated June 9, 1999, relating to the 9.50% Series A Cumulative Redeemable Preferred Stock	Form 10-Q	August 13, 1999
3.6*	Articles Supplementary, dated February 10, 2000, relating to the election to be subject to Subtitle 8 of Title 3 of the Maryland General Corporation Law	Form 8-K	February 10, 2000
3.7*	Articles Supplementary, dated February 10, 2000, relating to the Series A Junior Participating Preferred Stock	Form 8-K	February 10, 2000
3.8*	Articles Supplementary, dated January 18, 2002, relating to the 9.10% Series B Cumulative Redeemable Preferred Stock	Form 8-A	January 18, 2002
3.9*	Articles Supplementary, dated June 22, 2004, relating to the 8.375% Series C Cumulative Redeemable Preferred Stock	Form 8-A	June 28, 2004
3.10*	Articles Supplementary, dated March 25, 2008, relating to the 7.00% Series D Cumulative Convertible Preferred Stock	Form 8-K	March 25, 2008
3.11*	Articles Supplementary, dated March 12, 2012, relating to the 6.45% Series E Cumulative Redeemable Preferred Stock	Form 8-K	March 14, 2012
3.12*	Articles Supplementary, effective as of May 10, 2017, relating to Reclassified Preferred Stock	Form 8-K	May 12, 2017
3.13*	Amended and Restated Bylaws of the Company (Amended September 21, 2023)	Form 8-K	September 21, 2023
10.1	Third Amended and Restated Credit Agreement, dated as of September 19, 2024, among the Company, as Borrower, Alexandria Real Estate Equities, L.P., as a Guarantor, Citibank, N.A., as Administrative Agent, and the lenders and other parties thereto	N/A	Filed herewith
22.1	List of Guarantor Subsidiaries of the Company	N/A	Filed herewith
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	N/A	Filed herewith
31.2	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	N/A	Filed herewith
31.3	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	N/A	Filed herewith
32.0	Certification of Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	N/A	Filed herewith
101.1	The following materials from the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 (unaudited), (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited), (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 (unaudited), (iv) Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests for the three and nine months ended September 30, 2024 and 2023 (unaudited), (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited)	N/A	Filed herewith
104	Cover Page Interactive Data File – the cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 is formatted in Inline XBRL and contained in Exhibit 101.1	N/A	Filed herewith

(*) Incorporated by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized, on October 21, 2024.


	ALEXANDRIA REAL ESTATE EQUITIES, INC.


	/s/ Joel S. Marcus
	Joel S. Marcus Executive Chairman (Principal Executive Officer)


	/s/ Peter M. Moglia
	Peter M. Moglia Chief Executive Officer and Chief Investment Officer (Principal Executive Officer)


	/s/ Marc E. Binda
	Marc E. Binda Chief Financial Officer and Treasurer (Principal Financial Officer)