Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. FINANCIAL STATEMENTS (UNAUDITED)

Alexandria Real Estate Equities, Inc.

Consolidated Balance Sheets

(In thousands)

June 30, 2025December 31, 2024
(Unaudited)
Assets
Investments in real estate$32,160,600$32,110,039
Investments in unconsolidated real estate joint ventures40,23439,873
Cash and cash equivalents520,545552,146
Restricted cash7,4037,701
Tenant receivables6,2676,409
Deferred rent1,232,7191,187,031
Deferred leasing costs491,074485,959
Investments1,476,6961,476,985
Other assets1,688,0911,661,306
Total assets$37,623,629$37,527,449
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable$153,500$149,909
Unsecured senior notes payable12,042,60712,094,465
Unsecured senior line of credit and commercial paper1,097,993—
Accounts payable, accrued expenses, and other liabilities2,360,8402,654,351
Dividends payable229,686230,263
Total liabilities15,884,62615,128,988
Commitments and contingencies
Redeemable noncontrolling interests9,61219,972
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Common stock1,7011,722
Additional paid-in capital17,200,94917,933,572
Accumulated other comprehensive loss(27,415)(46,252)
Alexandria Real Estate Equities, Inc.’s stockholders’ equity17,175,23517,889,042
Noncontrolling interests4,554,1564,489,447
Total equity21,729,39122,378,489
Total liabilities, noncontrolling interests, and equity$37,623,629$37,527,449

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 June 30,Six Months Ended June 30,
2025202420252024
Revenues:
Income from rentals$737,279$755,162$1,480,454$1,510,713
Other income24,76111,57239,74425,129
Total revenues762,040766,7341,520,1981,535,842
Expenses:
Rental operations224,433217,254450,828435,568
General and administrative29,12844,62959,80391,684
Interest55,29645,789106,17286,629
Depreciation and amortization346,123290,720688,185578,274
Impairment of real estate129,60630,763161,76030,763
Total expenses784,586629,1551,466,7481,222,918
Equity in (losses) earnings of unconsolidated real estate joint ventures(9,021)130(9,528)285
Investment loss(30,622)(43,660)(80,614)(376)
Gain on sales of real estate——13,165392
Net (loss) income(62,189)94,049(23,527)313,225
Net income attributable to noncontrolling interests(44,813)(47,347)(92,414)(95,978)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders(107,002)46,702(115,941)217,247
Net income attributable to unvested restricted stock awards(2,609)(3,785)(5,269)(7,444)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders$(109,611)$42,917$(121,210)$209,803
Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
Basic$(0.64)$0.25$(0.71)$1.22
Diluted$(0.64)$0.25$(0.71)$1.22

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 June 30,Six Months Ended June 30,
2025202420252024
Net (loss) income$(62,189)$94,049$(23,527)$313,225
Other comprehensive income (loss)
Unrealized gains (losses) on foreign currency translation:
Unrealized foreign currency translation gains (losses) arising during the period18,787(3,895)18,837(11,814)
Unrealized gains (losses) on foreign currency translation, net18,787(3,895)18,837(11,814)
Total other comprehensive income (loss)18,787(3,895)18,837(11,814)
Comprehensive (loss) income(43,402)90,154(4,690)301,411
Less: comprehensive income attributable to noncontrolling interests(44,813)(47,347)(92,414)(95,978)
Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders$(88,215)$42,807$(97,104)$205,433

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 SharesCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossNoncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance as of March 31, 2025170,129,883$1,701$17,509,148$—$(46,202)$4,525,299$21,989,946$9,612
Net (loss) income———(107,002)—44,612(62,390)201
Total other comprehensive income————18,787—18,787—
Contributions from and sales of noncontrolling interests——19——41,62841,647—
Distributions to and redemption of noncontrolling interests—————(57,383)(57,383)(201)
Issuance pursuant to stock plan25,786—27,776———27,776—
Taxes related to net settlement of equity awards(9,600)—(693)———(693)—
Repurchase of common stock————————
Dividends declared on common stock ($1.32 per share)———(228,299)——(228,299)—
Reclassification of distributions and net loss——(335,301)335,301————
Balance as of June 30, 2025170,146,069$1,701$17,200,949$—$(27,415)$4,554,156$21,729,391$9,612

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 SharesCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossNoncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance as of March 31, 2024172,007,967$1,720$18,434,690$—$(23,815)$4,326,703$22,739,298$16,620
Net income———46,702—47,07693,778271
Total other comprehensive loss————(3,895)—(3,895)—
Contributions from and sales of noncontrolling interests——499——77,90778,406—
Distributions to and redemption of noncontrolling interests——(14)——(59,880)(59,894)(451)
Issuance pursuant to stock plan14,394—30,691———30,691—
Taxes related to net settlement of equity awards(4,687)—(549)———(549)—
Dividends declared on common stock ($1.30 per share)———(227,408)——(227,408)—
Reclassification of distributions in excess of earnings——(180,706)180,706————
Balance as of June 30, 2024172,017,674$1,720$18,284,611$—$(27,710)$4,391,806$22,650,427$16,440

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 SharesCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossNoncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance as of December 31, 2024172,203,443$1,722$17,933,572$—$(46,252)$4,489,447$22,378,489$19,972
Net (loss) income———(115,941)—91,943(23,998)471
Total other comprehensive income————18,837—18,837—
Contributions from and sales of noncontrolling interests——73——95,98296,055—
Distributions to and redemption of noncontrolling interests——(7,048)——(123,216)(130,264)(10,831)
Issuance pursuant to stock plan151,066160,531———60,532—
Taxes related to net settlement of equity awards(56,147)—(5,428)———(5,428)—
Repurchase of common stock(2,152,293)(22)(208,165)———(208,187)—
Dividends declared on common stock ($2.64 per share)———(456,645)——(456,645)—
Reclassification of distributions and net loss——(572,586)572,586————
Balance as of June 30, 2025170,146,069$1,701$17,200,949$—$(27,415)$4,554,156$21,729,391$9,612

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 SharesCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossNoncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance as of December 31, 2023171,910,599$1,719$18,485,352$—$(15,896)$4,135,338$22,606,513$16,480
Net income———217,247—95,435312,682543
Total other comprehensive loss————(11,814)—(11,814)—
Contributions from and sales of noncontrolling interests——7,700——258,885266,585—
Distributions to and redemption of noncontrolling interests——(8,084)——(127,787)(135,871)(833)
Transfer of noncontrolling interests—————(250)(250)250
Reallocation of capital to joint venture partner——(30,185)——30,185——
Issuance pursuant to stock plan179,178270,067———70,069—
Taxes related to net settlement of equity awards(72,103)(1)(7,944)———(7,945)—
Dividends declared on common stock ($2.57 per share)———(449,542)——(449,542)—
Reclassification of distributions in excess of earnings——(232,295)232,295————
Balance as of June 30, 2024172,017,674$1,720$18,284,611$—$(27,710)$4,391,806$22,650,427$16,440

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

Alexandria Real Estate Equities, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)
Six Months Ended June 30,
20252024
Operating Activities:
Net (loss) income$(23,527)$313,225
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization688,185578,274
Impairment of real estate161,76030,763
Gain on sales of real estate(13,165)(392)
Equity in losses (earnings) of unconsolidated real estate joint ventures9,528(285)
Distributions of earnings from unconsolidated real estate joint ventures1,2891,652
Amortization of loan fees9,3068,288
Amortization of debt discounts684646
Amortization of acquired above- and below-market leases(25,418)(52,855)
Deferred rent(40,559)(96,589)
Stock compensation expense22,59431,632
Investment loss80,614376
Changes in operating assets and liabilities:
Tenant receivables1681,373
Deferred leasing costs(43,727)(54,560)
Other assets(10,750)(3,046)
Accounts payable, accrued expenses, and other liabilities(148,792)(5,548)
Net cash provided by operating activities668,190752,954
Investing Activities:
Proceeds from sales of real estate149,02716,670
Additions to real estate(1,081,006)(1,241,214)
Purchases of real estate—(201,049)
Change in escrow deposits(8,108)(2,473)
Investments in unconsolidated real estate joint ventures(11,055)(3,713)
Additions to non-real estate investments(120,645)(122,708)
Sales of and distributions from non-real estate investments42,13486,008
Net cash used in investing activities$(1,029,653)$(1,468,479)

Alexandria Real Estate Equities, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited)
Six Months Ended June 30,
20252024
Financing Activities:
Borrowings under secured note payable$4,029$14,974
Proceeds from issuance of unsecured senior notes payable548,532998,806
Repayment of unsecured senior notes payable(600,000)—
Proceeds from issuances under commercial paper program8,468,0155,006,950
Repayments of borrowings under commercial paper program(7,368,015)(4,906,950)
Payments of loan fees(5,406)(10,118)
Taxes paid related to net settlement of equity awards(6,271)(27,017)
Repurchase of common stock(208,187)—
Dividends on common stock(457,217)(443,958)
Contributions from and sales of noncontrolling interests96,055159,644
Distributions to and purchases of noncontrolling interests(141,436)(171,871)
Net cash provided by financing activities330,099620,460
Effect of foreign exchange rate changes on cash and cash equivalents(535)147
Net decrease in cash, cash equivalents, and restricted cash(31,899)(94,918)
Cash, cash equivalents, and restricted cash as of the beginning of period559,847660,771
Cash, cash equivalents, and restricted cash as of the end of period$527,948$565,853
Supplemental Disclosure and Non-Cash Investing and Financing Activities:
Cash paid during the period for interest, net of interest capitalized$87,986$56,878
Accrued construction for current-period additions to real estate$206,036$402,923
Transfer of real estate assets and/or equipment from tenants$171,153$45,719
Notes receivable issued in connection with sales of real estate$91,000$—
Derecognition of net investment in real estate from sales-type lease$4,677$—
Contribution of assets from and issuance of noncontrolling interest to real estate joint venture partner$—$103,547
Reallocation of additional paid-in capital to consolidated joint venture partner’s non- controlling interest$—$30,185

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

Alexandria Real Estate Equities, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

**1.**ORGANIZATION AND BASIS OF PRESENTATION

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® life science REIT, is the pioneer of the life science real estate

niche since its founding in 1994. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative

Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area,

San Diego, Seattle, Maryland, Research Triangle, and New York City. As of June 30, 2025, Alexandria has a total market capitalization

of $25.7 billion and an asset base in North America that includes 39.7 million RSF of operating properties and 4.4 million RSF of Class

A/A+ properties undergoing construction and one 100% pre-leased committed near-term project expected to commence construction in

the next year. As used in this quarterly report on Form 10-Q, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our”

refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. The accompanying unaudited consolidated financial

statements include the accounts of Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. All significant intercompany

balances and transactions have been eliminated.

We have prepared the accompanying interim consolidated financial statements in accordance with GAAP and in conformity

with the rules and regulations of the SEC. In our opinion, these interim consolidated financial statements presented herein reflect all

adjustments, of a normal recurring nature, that are necessary to fairly present the interim consolidated financial statements. The results

of operations for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31,

  1. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial

statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024. Any references to

our total market capitalization, number or quality of buildings or tenants, quality of location, square footage, number of leases, or

occupancy percentage, and any amounts derived from these values in these notes to consolidated financial statements are outside the

scope of our independent registered public accounting firm’s procedures.

**2.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

On an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly

owned by us in accordance with the consolidation accounting guidance. Our evaluation considers all of our variable interests, including

equity ownership, as well as fees paid to us for our involvement in the management of each partially owned entity. To fall within the

scope of the consolidation guidance, an entity must meet both of the following criteria:

  • The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity

can be in the form of a partnership, limited liability company, or corporation, among others; and

  • We have a variable interest in the legal entity — i.e., variable interests that are contractual, such as equity ownership, or

other financial interests that change with changes in the fair value of the entity’s net assets.

If an entity does not meet both criteria above, we apply other accounting literature, such as the equity method of accounting. If

an entity does meet both criteria above, we evaluate such entity for consolidation under either the variable interest model if the legal

entity meets any of the characteristics below to qualify as a VIE, or under the voting model for all other legal entities that are not VIEs.

A legal entity is determined to be a VIE if it has any of the following three characteristics:

1)The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2)The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest

holder(s) of voting rights); or

3)The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion

if they lack any of the following:

  • The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence

the entity’s economic performance, as evidenced by:

  • Substantive participating rights in day-to-day management of the entity’s activities; or

  • Substantive kick-out rights over the party responsible for significant decisions;

  • The obligation to absorb the entity’s expected losses; or

  • The right to receive the entity’s expected residual returns.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

For an entity, including our real estate joint ventures, structured as a limited partnership or a limited liability company, our

evaluation of whether the equity holders (equity partners other than the general partner or the managing member of a joint venture) lack

the characteristics of a controlling financial interest includes the evaluation of whether the limited partners or non-managing members

(the noncontrolling equity holders) lack both substantive participating rights and substantive kick-out rights, defined as follows:

  • Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating

decisions made in the ordinary course of business that most significantly influence the entity’s economic performance.

  • Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause.

If we conclude that any of the three characteristics of a VIE are met, including that the equity holders lack the characteristics of

a controlling financial interest because they lack both substantive participating rights and substantive kick-out rights, we conclude that

the entity is a VIE and evaluate it for consolidation under the variable interest model.

Variable interest model

If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is

a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits — that is, (i) we have the

power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power) and (ii) we have the

obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE (benefits). We

consolidate VIEs whenever we determine that we are the primary beneficiary. Refer to Note 4 – “Consolidated and unconsolidated real

estate joint ventures” and Note 7 – “Investments” to our unaudited consolidated financial statements for information on specific entities

that qualify as VIEs. If we have a variable interest in a VIE but are not the primary beneficiary, we account for our investment using the

equity method.

Voting model

If a legal entity fails to meet any of the three characteristics of a VIE (i.e., insufficiency of equity, existence of non-substantive

voting rights, or lack of a controlling financial interest), we then evaluate such entity under the voting model. Under the voting model, we

consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares (or own a majority of the

limited partnership’s kick-out rights through voting interests), and that other equity holders do not have substantive participating rights.

Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for

information on specific joint ventures that qualify for evaluation under the voting model.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions

that affect the reported amounts of assets, liabilities, and equity; the disclosure of contingent assets and liabilities as of the date of the

consolidated financial statements; and the amounts of revenues and expenses during the reporting period. Actual results could

materially differ from those estimates.

Investments in real estate

Evaluation of business combination or asset acquisition

We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly

hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and

needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the

definition of a business is accounted for as an asset acquisition. If either of the following criteria is met, the integrated set of assets and

activities acquired would not qualify as a business:

  • Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group

of similar identifiable assets; or

  • The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together

significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction).

An acquired process is considered substantive if:

  • The process includes an organized workforce (or includes an acquired contract that provides access to an organized

workforce) that is skilled, knowledgeable, and experienced in performing the process;

  • The process cannot be replaced without significant cost, effort, or delay; or

  • The process is considered unique or scarce.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Generally, our acquisitions of real estate or in-substance real estate do not meet the definition of a business because

substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings,

and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or

an acquired contract that cannot be replaced without significant cost, effort, or delay. When evaluating acquired service or management

contracts, we consider the nature of the services performed, the terms of the contract relative to similar arm’s-length contracts, and the

availability of comparable vendors in evaluating whether the acquired contract constitutes a substantive process.

Recognition of real estate acquired

We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly

hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and

needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the

definition of a business is accounted for as an asset acquisition.

For acquisitions of real estate or in-substance real estate that are accounted for as business combinations, we allocate the

acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and

previously existing ownership interests at fair value as of the acquisition date. Assets include intangible assets such as tenant

relationships, acquired in-place leases, and favorable intangibles associated with in-place leases in which we are the lessor. Liabilities

include unfavorable intangibles associated with in-place leases in which we are the lessor. In addition, for acquired in-place finance or

operating leases in which we are the lessee, acquisition consideration is allocated to lease liabilities and related right-of-use assets,

adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Any excess (deficit) of the

consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill (bargain purchase gain).

Acquisition costs related to business combinations are expensed as incurred.

Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the definition of a business

because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land,

buildings, and related intangible assets). The accounting model for asset acquisitions is similar to the accounting model for business

combinations, except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and

liabilities assumed on a relative fair value basis. Any excess (deficit) of the consideration transferred relative to the sum of the fair value

of the assets acquired and liabilities assumed is allocated to the individual assets and liabilities based on their relative fair values. As a

result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. Incremental and external direct

acquisition costs related to acquisitions of real estate or in-substance real estate (such as legal and other third-party services) are

capitalized.

We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its

components. The allocation of the consideration to the various components of properties acquired during the year can have an effect on

our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related

depreciation and amortization expense in our consolidated statements of operations. We apply judgment in utilizing available

comparable market information to assess relative fair value. We assess the relative fair values of tangible and intangible assets and

liabilities based on available comparable market information, including estimated replacement costs, rental rates, and recent market

transactions. In addition, we may use estimated cash flow projections that utilize appropriate discount and capitalization rates.

Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated

trends, and market/economic conditions that may affect the property.

The value of tangible assets acquired is based upon our estimation of fair value on an “as if vacant” basis. The value of

acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been

incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. If there is a

bargain fixed-rate renewal option for the period beyond the noncancelable lease term of an in-place lease, we evaluate intangible

factors, such as the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the

property is located, and the ability of the lessee to sublease the property during the renewal term, in order to determine the likelihood

that the lessee will renew. When we determine that there is reasonable assurance that such bargain purchase option will be exercised,

we consider the option in determining the intangible value of such lease and its related amortization period. We also recognize the

relative fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100%

interest when the acquisition constitutes a change in control of the acquired entity.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Depreciation and amortization

The values allocated to buildings and building improvements, land improvements, tenant improvements, and equipment are

depreciated on a straight-line basis. For buildings and building improvements, we depreciate using the shorter of the respective ground

lease terms or their estimated useful lives, not to exceed 40 years. Land improvements are depreciated over their estimated useful

lives, not to exceed 20 years. Tenant improvements are depreciated over their respective lease terms or estimated useful lives, and

equipment is depreciated over the shorter of the lease term or its estimated useful life. The values of the right-of-use assets are

amortized on a straight-line basis over the remaining terms of each related lease. The values of acquired in-place leases and

associated favorable intangibles (i.e., acquired above-market leases) are classified in other assets in our consolidated balance sheets

and are amortized over the remaining terms of the related leases as a reduction of income from rentals in our consolidated statements

of operations. The values of unfavorable intangibles (i.e., acquired below-market leases) associated with acquired in-place leases are

classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets and are amortized over the

remaining terms of the related leases as an increase in income from rentals in our consolidated statements of operations.

Capitalized project costs

We capitalize project costs, including pre-construction costs, interest, property taxes, insurance, and other costs directly

related and essential to the development, redevelopment, pre-construction, or construction of a project. Capitalization of development,

redevelopment, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use.

Fluctuations in our development, redevelopment, pre-construction, and construction activities could result in significant changes to total

expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as

incurred. Should development, redevelopment, pre-construction, or construction activity cease, interest, property taxes, insurance, and

certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and

maintenance are expensed as incurred.

Real estate sales

A property is classified as held for sale when all of the following criteria for a plan of sale have been met: (i) management,

having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its

present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions

required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within

one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

(vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the

plan will be withdrawn. Depreciation of assets ceases upon designation of a property as held for sale.

If the disposal of a property represents a strategic shift that has (or will have) a major effect on our operations or financial

results, such as (i) a major line of business, (ii) a major geographic area, (iii) a major equity method investment, or (iv) other major parts

of an entity, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued

operations in our consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing

operations to discontinued operations. The disposal of an individual property generally will not represent a strategic shift and therefore

will typically not meet the criteria for classification as a discontinued operation.

We recognize gains or losses on real estate sales in accordance with the accounting standard on the derecognition of

nonfinancial assets arising from contracts with noncustomers. Our ordinary output activities consist of the leasing of space to our

tenants in our operating properties, not the sales of real estate. Therefore, sales of real estate (in which we are the seller) qualify as

contracts with noncustomers. In our transactions with noncustomers, we apply certain recognition and measurement principles

consistent with our method of recognizing revenue arising from contracts with customers. Derecognition of the asset is based on the

transfer of control. If a real estate sales contract includes our ongoing involvement with the property, then we evaluate each promised

good or service under the contract to determine whether it represents a separate performance obligation, constitutes a guarantee, or

prevents the transfer of control. If a good or service is considered a separate performance obligation, an allocated portion of the

transaction price is recognized as revenue as we transfer the related good or service to the buyer.

The recognition of gain or loss on the sale of a partial interest also depends on whether we retain a controlling or

noncontrolling interest in the property. If we retain a controlling interest in the property upon completion of the sale, we continue to

reflect the asset at its book value, record a noncontrolling interest for the book value of the partial interest sold, and recognize additional

paid-in capital for the difference between the consideration received and the partial interest at book value. Conversely, if we retain a

noncontrolling interest upon completion of the sale of a partial interest of real estate, we recognize a gain or loss as if 100% of the asset

were sold.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of long-lived assets

Prior to and subsequent to the end of each quarter, we review current activities and changes in the business conditions of all of

our long-lived assets to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If

triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows, including, if

necessary, a probability-weighted approach if multiple outcomes are under consideration.

Long-lived assets to be held and used, including our rental properties, CIP, land held for development, right-of-use assets

related to operating leases in which we are the lessee, and intangibles, are individually evaluated for impairment when conditions exist

that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be

held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual

disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by project

and include significant fluctuations in estimated net operating income, occupancy changes, significant near-term lease expirations,

current and historical operating and/or cash flow losses, construction costs, estimated completion dates, rental rates, and other market

factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, projected rental

rates, estimated exit capitalization rates, and anticipated construction costs for projects under construction, which are based on

available market information, current and historical operating results, known trends, current market/economic conditions that may affect

the asset, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes

are under consideration.

Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount of the asset to

its estimated fair value. If an impairment charge is not required to be recognized, the recognition of depreciation or amortization is

adjusted prospectively, as necessary, to reduce the carrying amount of the asset to its estimated disposition value over the remaining

period that the asset is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or

redeveloped prior to the end of their useful lives.

We use the held for sale impairment model for our properties classified as held for sale, which is different from the held and

used impairment model. Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the

long-lived asset classified as held for sale exceeds its fair value less cost to sell. Because of these two different models, it is possible for

a long-lived asset previously classified as held and used to require the recognition of an impairment charge upon classification as held

for sale.

International operations

In addition to operating properties in the U.S., we have 11 properties in Canada. The functional currency for our subsidiaries

operating in the U.S. is the U.S. dollar. The local currency of a foreign subsidiary serves as its functional currency. The assets and

liabilities of our foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect as of the financial statement date.

Revenue and expense accounts of our foreign subsidiaries are translated using the weighted-average exchange rate for the periods

presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive income (loss) as a

separate component of total equity and are excluded from net income (loss).

Whenever a foreign investment meets the criteria for classification as held for sale, we evaluate the recoverability of the

investment under the held for sale impairment model. We may recognize an impairment charge if the carrying amount of the investment

exceeds its fair value less cost to sell. In determining an investment’s carrying amount, we consider its net book value and any

cumulative unrealized foreign currency translation adjustment related to the investment.

The appropriate amounts of foreign exchange rate gains or losses classified in accumulated other comprehensive income

(loss) are reclassified to net income (loss) when realized upon the sale of our investment or upon the complete or substantially

complete liquidation of our investment.

Investments

We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. As a

REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to

determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in

which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption

that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such

ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a

board seat or whether we participate in the investee’s policymaking process, among other criteria, to determine if we have the ability to

exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment

under the equity method, as described below. From time to time, we may hold equity investments in publicly traded companies that are

subject to temporary contractual sale restrictions. We do not recognize a discount related to a contractual sale restriction.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments accounted for under the equity method

Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying

amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary

impairments. For additional information about our investments accounted for under the equity method, refer to Note 7 – “Investments” to

our unaudited consolidated financial statements.

Investments that do not qualify for the equity method of accounting

For investees over which we determine that we do not have the ability to exercise significant influence or control, we account

for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV

per share, or (iii) privately held entity that does not report NAV per share, as described below.

Investments in publicly traded companies

Our investments in publicly traded companies are classified as investments with readily determinable fair values and are

presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales

prices or quotes available on securities exchanges.

Investments in privately held companies

Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held

entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are

accounted for as follows:

Investments in privately held entities that report NAV per share

Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships,

are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we

are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the

investment at our reporting date.

Investments in privately held entities that do not report NAV per share

Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative

under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified

in investment income (loss) in our consolidated statements of operations.

An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is

observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity

transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity

transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we

evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution

preferences, and conversion rights to the investments we hold.

I****mpairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share

We monitor equity method investments and investments in privately held entities that do not report NAV per share for new

developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements,

capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment

for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators:

(i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee;

(ii)a significant adverse change in the regulatory, economic, or technological environment of the investee;

(iii)a significant adverse change in the general market condition, including the research and development of technology and

products that the investee is bringing or attempting to bring to the market;

(iv)significant concerns about the investee’s ability to continue as a going concern; and/or

(v)a decision by investors to cease providing support or reduce their financial commitment to the investee.

If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an

impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment income/loss recognition and classification

We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in

investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent:

(i)changes in fair value for investments in publicly traded companies;

(ii)changes in NAV for investments in privately held entities that report NAV per share;

(iii)observable price changes for investments in privately held entities that do not report NAV per share; and

(iv)our share of unrealized gains or losses reported by our equity method investees.

Realized gains and losses on our investments represent the difference between proceeds received upon disposition of

investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our

share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and

represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity

method investments, if impairments are deemed other than temporary, to their estimated fair value.

Revenues

The table below provides details of our consolidated total revenues for the three and six months ended June 30, 2025 and

2024 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Income from rentals:
Revenues subject to the lease accounting standard:
Operating leases$722,935$745,626$1,454,356$1,491,687
Direct financing and sales-type leases1,0896621,8991,321
Revenues subject to the lease accounting standard724,024746,2881,456,2551,493,008
Revenues subject to the revenue recognition accounting standard13,2558,87424,19917,705
Income from rentals737,279755,1621,480,4541,510,713
Other income24,76111,57239,74425,129
Total revenues$762,040$766,734$1,520,198$1,535,842

During the three and six months ended June 30, 2025, revenues that were subject to the lease accounting standard

aggregated $724.0 million and $1.5 billion, respectively, and represented 95.0% and 95.8% of our total revenues. During the three and

six months ended June 30, 2024, revenues that were subject to the lease accounting standard aggregated $746.3 million and

$1.5 billion, respectively, and represented 97.3% and 97.2% of our total revenues. Our other income consisted primarily of management

fees and interest income earned during each period presented. For a detailed discussion related to our revenue streams, refer to

“Lease accounting” and “Recognition of revenue arising from contracts with customers” in Note 2 – “Summary of significant accounting

policies” to our unaudited consolidated financial statements.

Lease accounting

Definition and classification of a lease

When we enter into a contract or amend an existing contract, we evaluate whether the contract meets the definition of a lease.

To meet the definition of a lease, the contract must meet all three criteria:

(i)One party (lessor) must hold an identified asset;

(ii)The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset

throughout the period of the contract; and

(iii)The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

We classify our leases as either finance leases or operating leases if we are the lessee, or sales-type, direct financing, or

operating leases if we are the lessor. We use the following criteria to determine if a lease is a finance lease (as a lessee) or sales-type

or direct financing lease (as a lessor):

(i)Ownership is transferred from lessor to lessee by the end of the lease term;

(ii)An option to purchase is reasonably certain to be exercised;

(iii)The lease term is for the major part of the underlying asset’s remaining economic life;

(iv)The present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset; or

(v)The underlying asset is specialized and is expected to have no alternative use at the end of the lease term.

If we meet any of the above criteria, we account for the lease as a finance, a sales-type, or a direct financing lease. If we do

not meet any of the criteria, we account for the lease as an operating lease.

A lease is accounted for as a sales-type lease if it is considered to transfer control of the underlying asset to the lessee. A

lease is accounted for as a direct financing lease if risks and rewards are conveyed without the transfer of control, which is normally

indicated by the existence of a residual value guarantee from an unrelated third party other than the lessee.

This classification will determine the method of recognition of the lease:

  • For an operating lease, we recognize income from rentals if we are the lessor, or rental operations expense if we are the

lessee, over the term of the lease on a straight-line basis.

  • For a sales-type lease or a direct financing lease, we recognize the income from rentals, or for a finance lease, we

recognize rental operations expense, over the term of the lease using the effective interest method.

  • At inception of a sales-type lease or a direct financing lease, if we determine the fair value of the leased property is lower

than its carrying amount, we recognize a selling loss immediately at lease commencement. If fair value exceeds the

carrying amount of a lease, a gain is recognized at lease commencement on a sales-type lease. For a direct financing

lease, a gain is deferred at lease commencement and amortized over the lease term.

Lessor accounting

Costs to execute leases

We capitalize initial direct costs, which represent only incremental costs to execute a lease that would not have been incurred

if the lease had not been obtained. Costs that we incur to negotiate or arrange a lease, regardless of its outcome, such as for fixed

employee compensation, tax or legal advice to negotiate lease terms, and other costs, are expensed as incurred.

Operating leases

We account for the revenue from our lease contracts by utilizing the single component accounting policy. This policy requires

us to account for, by class of underlying asset, the lease component and nonlease component(s) associated with each lease as a single

component if two criteria are met:

(i)The timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and

(ii)The lease component would be classified as an operating lease if it were accounted for separately.

Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our

leases, and contingent rental payments. Nonlease components consist primarily of tenant recoveries representing reimbursements of

rental operating expenses under our triple net lease structure, including recoveries for property taxes, insurance, utilities, repairs and

maintenance, and common area expenses.

If the lease component is the predominant component, we account for all revenues under such lease as a single component in

accordance with the lease accounting standard. Conversely, if the nonlease component is the predominant component, all revenues

under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for

the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all

revenues from our operating leases under the lease accounting standard and classify these revenues as income from rentals in our

consolidated statements of operations.

We commence recognition of income from rentals related to the operating leases at the date the property is ready for its

intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. When a lease includes

construction of improvements, we determine whether the improvements are landlord or tenant assets. In determining if the

improvements are landlord or tenant improvements, we consider various factors, including, but not limited to, the following:

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

  • Which party retains legal title to the improvements upon lease expiration;

  • Whether the improvements are expected to have significant residual value at the end of the lease term;

  • Whether the improvements are unique to the tenant;

  • What happens to the improvements upon lease expiration (i.e., whether they are removed or preserved for the landlord);

  • Which party bears all costs of the improvements (including the risk of cost overruns); and

  • Which party supervises the construction of the improvements.

If the improvements are landlord assets, we capitalize such improvements. If the improvements are tenant assets, we do not

capitalize these assets. Improvements that qualify as tenant assets, if funded by us, are accounted for as lease incentives and

amortized as a reduction of revenue over the term of the lease. If the tenant funds improvements without reimbursement from us, and

we determine these improvements to be landlord assets, we consider the amount associated with the improvements to be non-cash

lease payments, which are recognized as incremental revenue over the term of the lease.

Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the

respective operating lease terms. We classify amounts expected to be received in later periods as deferred rent in our consolidated

balance sheets. Amounts received currently but recognized as revenue in future periods are classified in accounts payable, accrued

expenses, and other liabilities in our consolidated balance sheets.

Income from rentals related to variable payments includes tenant recoveries and contingent rental payments. Tenant

recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance,

and other operating expenses, are recognized as revenue in the period during which the applicable expenses are incurred and the

tenant’s obligation to reimburse us arises. Income from rentals related to other variable payments is recognized when associated

contingencies are removed.

We assess collectibility from our tenants of future lease payments for each of our operating leases. If we determine that

collectibility is probable, we recognize income from rentals based on the methodology described above. If we determine that

collectibility is not probable, we recognize an adjustment to lower our income from rentals. Furthermore, we may recognize a general

allowance at a portfolio level (not the individual level) if we do not expect to collect future lease payments in full.

For each lease for which we determine that collectibility of future lease payments is not probable, we cease the recognition of

income from rentals on a straight-line basis and limit the recognition of income to the lesser of payments collected from the lessee or

lease income that would have been recognized on a straight-line basis. We do not resume straight-line recognition of income from

rentals for these leases until we determine that the collectibility of future payments related to these leases is probable. We also record a

general allowance related to the deferred rent balances that at the portfolio level (not the individual level) are not expected to be

collected in full through the lease term. As of June 30, 2025 and December 31, 2024, our general allowance balance aggregated

$14.3 million and $21.3 million, respectively.

Direct financing and sales-type leases

Income from rentals related to direct financing and sales-type leases is recognized over the lease term using the effective

interest rate method. At lease commencement, we derecognize the underlying asset classified within investments in real estate and

record net investment in a lease within other assets in our consolidated balance sheets. This initial net investment is determined by

aggregating the present values of the total future lease payments and the estimated residual value of the property, less any unearned

income related to a direct financing lease. Over the lease term, the investment in the lease accretes in value, producing a constant

periodic rate of return on the net investment in the lease. Income from these leases is classified in income from rentals in our

consolidated statements of operations. Our net investment is reduced over time as lease payments are received.

We evaluate our net investment in direct financing and sales-type leases for impairment under the current expected credit

losses accounting standard. For additional information, refer to “Provision for expected credit losses” in Note 2 – “Summary of

significant accounting policies” to our unaudited consolidated financial statements.

As a lessor, we classify a lease with variable lease payments that do not depend on an index or a rate as an operating lease

on the commencement date of the lease if both of the following criteria are met:

(i)The lease would have been classified as a sales-type lease or direct financing lease under the current lease accounting

standard; and

(ii)The sales-type lease or direct financing lease classification would have resulted in a selling loss at lease commencement.

We do not derecognize the underlying asset and do not recognize a loss upon lease commencement but continue to

depreciate the underlying asset over its useful life.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Lessee accounting

We have operating lease agreements in which we are the lessee consisting of ground and office leases. At the lease

commencement date (or at the acquisition date if the lease is acquired as part of a real estate acquisition), we are required to recognize

a liability to account for our future obligations under these operating leases, and a corresponding right-of-use asset.

The lease liability is measured based on the present value of the future lease payments, including payments during the term

under our extension options that we are reasonably certain to exercise. The present value of the future lease payments is calculated for

each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is

the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to

the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement

date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. We classify

the operating lease liability in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets.

The right-of-use asset is measured based on the corresponding lease liability, adjusted for initial direct leasing costs and any

other consideration exchanged with the landlord prior to the commencement of the lease, as well as adjustments to reflect favorable or

unfavorable terms of an acquired lease when compared with market terms at the time of acquisition. Subsequently, the right-of-use

asset is amortized on a straight-line basis during the lease term. We classify the right-of-use asset in other assets in our consolidated

balance sheets.

Recognition of revenue arising from contracts with customers

We recognize revenues associated with transactions arising from contracts with customers, excluding revenues subject to the

lease accounting standard discussed in “Lease accounting” above, in accordance with the revenue recognition accounting standard. A

customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with

goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial

assets that are outside of a company’s ordinary output activities.

We generally recognize revenue representing the transfer of goods and services to customers in an amount that reflects the

consideration to which we expect to be entitled in the exchange. In order to determine the recognition of revenue from customer

contracts, we use a five-step model to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract,

(iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will

not occur, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we

satisfy the performance obligation.

We identify contractual performance obligations and determine whether revenue should be recognized at a point in time or

over time, based on when control of goods and services transfers to a customer. We consider whether we control the goods or services

prior to the transfer to the customer in order to determine whether we should account for the arrangement as a principal or agent. If we

determine that we control the goods or services provided to the customer, then we are the principal to the transaction, and we recognize

the gross amount of consideration expected in the exchange. If we simply arrange but do not control the goods or services being

transferred to the customer, then we are considered to be an agent to the transaction, and we recognize the net amount of

consideration we are entitled to retain in the exchange.

Total revenues subject to the revenue recognition accounting standard and classified within income from rentals in our

consolidated statements of operations for the three and six months ended June 30, 2025 included $13.3 million and $24.2 million,

respectively, primarily related to short-term parking revenues associated with long-term lease agreements. Short-term parking revenues

do not qualify for the single component accounting policy, as discussed in “Lessor accounting” in Note 2 – “Summary of significant

accounting policies,” due to the difference in the timing and pattern of transfer of our parking service obligations and associated lease

components within the same lease agreement. We recognize short-term parking revenues in accordance with the revenue recognition

accounting standard when the service is provided and the performance obligation is satisfied, which normally occurs at a point in time.

Monitoring of tenant credit quality

During the term of each lease, we monitor the credit quality and any related material changes of our tenants by (i) monitoring

the credit rating of tenants that are rated by a nationally recognized credit rating agency, (ii) reviewing financial statements of the

tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (iii) monitoring news

reports regarding our tenants and their respective businesses, and (iv) monitoring the timeliness of lease payments.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Notes receivable

We carry notes receivable at amortized cost, adjusted for an estimated provision for expected credit losses. Interest income on

notes receivable is recognized using the effective interest rate method and is classified within other income in our consolidated

statements of operations. Direct costs incurred in originating notes, along with any premium or discount, are deferred and amortized as

an adjustment to interest income over the note’s term using the effective interest rate method. Notes receivable are classified within

other assets in our consolidated balance sheets. Refer to Note 8 – “Other assets” to our unuaudited consolidated financial statements

for additional details.

Provision for expected credit losses

We are required to estimate and recognize lifetime expected losses, rather than incurred losses, for most of our financial

assets measured at amortized cost and certain other instruments, including trade, notes, and other receivables (excluding receivables

arising from operating leases), loans, held-to-maturity debt securities, net investments in leases arising from sales-type and direct

financing leases, and off-balance-sheet credit exposures (e.g., loan commitments). The recognition of such expected losses, even if the

expected risk of credit loss is remote, typically results in earlier recognition of credit losses. At each reporting date, we reassess our

provision for expected credit losses, and, if necessary, we recognize an adjustment for our current estimate of expected credit losses.

Refer to Note 5 – “Leases” and Note 8 – “Other assets” to our unaudited consolidated financial statements for additional details.

An assessment of the collectibility of operating lease payments and the recognition of an adjustment to lease income based on

this assessment is governed by the lease accounting standard discussed in “Lease accounting” earlier in Note 2 — “Summary of

significant accounting policies” to our unaudited consolidated financial statements.

Income taxes

We are organized and operate as a REIT pursuant to the Internal Revenue Code (the “Code”). Under the Code, a REIT that

distributes at least 90% of its REIT taxable income to its stockholders annually (excluding net capital gains) and meets certain other

conditions is not subject to federal income tax on its distributed taxable income, but could be subject to certain federal, foreign, state,

and local taxes. We distribute 100% of our taxable income annually; therefore, a provision for federal income taxes is not required. In

addition to our REIT returns, we file federal, foreign, state, and local tax returns for our subsidiaries. We file with jurisdictions located in

the U.S., Canada, and other international locations. Our tax returns are subject to routine examination in various jurisdictions for the

2019 through 2024 calendar years.

Employee and non-employee share-based payments

We have implemented an entity-wide accounting policy to account for forfeitures related to unmet service conditions of share-

based awards granted to employees and non-employees when they occur. Under this policy, when forfeitures occur, any previously

recognized expense related to those forfeited awards is reversed in the period of forfeiture.

Our employee and non-employee share-based awards are measured at fair value on the grant date and recognized over the

recipient’s required service period. For share-based awards with performance conditions, we continue to assess the probability of

achieving the performance conditions and recognize expense only when it becomes probable that the performance targets will be met.

Conversely, for share-based awards with market conditions, expense is recognized regardless of whether the market condition is met.

Dividends paid on share-based awards with nonforfeitable dividends are initially classified in retained earnings and reclassified

to compensation cost only if the underlying awards are forfeited. Conversely, for share-based awards with forfeitable dividends,

declared dividends are initially classified in retained earnings and in dividends payable within our consolidated balance sheets. If the

underlying awards are forfeited, the corresponding accrued dividend is reversed in the period of forfeiture. Upon vesting of the

underlying share-based awards with forfeitable dividends, the accumulated dividend payment is made and the dividend payable liability

is settled.

Forward equity sales agreements

From time to time, we enter into forward equity sales agreements and account for them in accordance with the accounting

guidance governing financial instruments and derivatives. Under the accounting guidance, our forward equity sales agreements are not

deemed to be liabilities as they do not embody obligations to repurchase our shares, nor do they embody obligations to issue a variable

number of shares for which the monetary value is predominantly fixed, varied with something other than the fair value of our shares, or

varied inversely in relation to our shares. We also evaluate whether the agreements meet the derivatives and hedging guidance scope

exception to be accounted for as equity instruments. Our forward equity sales agreements are classified as equity contracts based on

the following assessment: (i) none of the agreements’ exercise contingencies are based on observable markets or indices besides

those related to the market for our own stock price and operations; and (ii) none of the settlement provisions preclude the agreements

from being indexed to our own stock.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Issuer and guarantor subsidiaries of guaranteed securities

Generally, a parent entity of an issuer that holds guaranteed securities must provide separate subsidiary issuer or guarantor

financial statements, unless it qualifies for disclosure exceptions. A parent entity may be eligible for disclosure exceptions if it meets the

following criteria:

(i)The subsidiary issuer or guarantor is a consolidated subsidiary of the parent company, and

(ii)The subsidiary issues a registered security that is:

  • issued jointly and severally with the parent company, or

  • fully and unconditionally guaranteed by the parent company.

A parent entity that meets the above criteria may instead present summarized financial information (“alternative disclosures”)

either within the consolidated financial statements or in “Management’s discussion and analysis of financial condition and results of

operations” in Item 2. We evaluated the criteria and determined that we are eligible for the disclosure exceptions, which allow us to

provide alternative disclosures; as such, we present alternative disclosures in “Management’s discussion and analysis of financial

condition and results of operations” in Item 2.

Loan fees

Fees incurred in obtaining long-term financing are capitalized and classified with the corresponding debt instrument appearing

on our consolidated balance sheets. Loan fees related to our unsecured senior line of credit are capitalized and classified within other

assets. Capitalized amounts are amortized over the term of the related loan, and the amortization is classified in interest expense in our

consolidated statements of operations.

Distributions from equity method investments

We use the “nature of the distribution” approach to determine the classification within our consolidated statements of cash

flows of cash distributions received from equity method investments, including our unconsolidated real estate joint ventures and equity

method non-real estate investments. Under this approach, distributions are classified based on the nature of the underlying activity that

generated the cash distributions. If we lack the information necessary to apply this approach in the future, we will be required to apply

the “cumulative earnings” approach as an accounting change on a retrospective basis. Under the cumulative earnings approach,

distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and

those in excess of that amount are classified as cash inflows from investing activities.

Restricted cash

We present cash and cash equivalents separately from restricted cash within our consolidated balance sheets. However, we

include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown

in the consolidated statements of cash flows. We provide a reconciliation between the consolidated balance sheets and the

consolidated statements of cash flows, which is required when the balance includes greater than one line item for cash, cash

equivalents, and restricted cash. We also provide a disclosure of the nature of the restrictions related to material restricted cash

balances.

Recent accounting pronouncements

On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, that will require

entities to provide enhanced disclosures related to certain expense categories included in income statement captions. The ASU aims to

increase transparency and provide investors with additional detailed information about the nature of expenses reported on the face of

the income statement. The new standard does not change the requirements for the presentation of expenses on the face of the income

statement.

Under this ASU, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the

income statement — excluding earnings or losses from equity method investments — if they include any of the following expense

categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion.

For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those

expenses. The new ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods

beginning after December 15, 2027. Early adoption is permitted. We expect to adopt this ASU on January 1, 2027. Although the

adoption is not expected to have an impact on our financial statements, it is expected to result in incremental disclosures within the

footnotes to our consolidated financial statements.

3.INVESTMENTS IN REAL ESTATE

Our consolidated investments in real estate consisted of the following as of June 30, 2025 and December 31, 2024 (in

thousands):

June 30, 2025December 31, 2024
Rental properties:
Land (related to rental properties)$3,536,029$3,863,027
Buildings and building improvements21,218,38020,377,935
Other improvements4,585,0854,354,785
Rental properties29,339,49428,595,747
Current and future development and redevelopment projects8,543,0838,618,727
Gross investments in real estate37,882,57737,214,474
Less: accumulated depreciation(6,034,352)(5,477,082)
Investments in real estate assets held for sale(1)312,375372,647
Investments in real estate$32,160,600$32,110,039

(1)Refer to “Assets held for sale” below.

Assets held for sale

As of June 30, 2025, we had eight operating properties aggregating 679,383 RSF and land parcels aggregating 878,205 SF

that were classified as held for sale.

The disposal of properties classified as held for sale does not represent a strategic shift that has (or will have) a major effect

on our operations or financial results and therefore does not meet the criteria for classification as a discontinued operation. We cease

depreciation of our properties upon their classification as held for sale.

The following is a summary of net assets as of June 30, 2025 and December 31, 2024 for our real estate investments that

were classified as held for sale as of each respective date (in thousands):

June 30, 2025December 31, 2024
Investments in real estate$312,375$372,647
Other assets20,2749,488
Total assets332,649382,135
Total liabilities(11,040)(13,462)
Total accumulated other comprehensive income2,0572,584
Net assets classified as held for sale$323,666$371,257

For additional information, refer to “Real estate sales” in Note 2 – “Summary of significant accounting policies” to our unaudited

consolidated financial statements.

3.INVESTMENTS IN REAL ESTATE (continued)

Sales of real estate assets and impairment of real estate

Our completed dispositions of real estate assets during the six months ended June 30, 2025 consisted of the following (dollars

in thousands):

Square FootageGain on Sales of Real Estate
PropertySubmarket/MarketDate of SaleInterest SoldOperatingLand and FutureSales Price
Costa Verde by AlexandriaUniversity Town Center/ San Diego1/31/25100%8,730537,000$124,000(1)$—
2425 Garcia Avenue and 2400/2450 Bayshore ParkwayGreater Stanford/San Francisco Bay Area6/30/25100%95,901—11,000—
Land parcelTexas5/7/25100%—1,350,00073,287—
Other52,35213,165
$260,639(2)$13,165

(1)As part of the transaction, we provided $91.0 million of seller financing during the three months ended March 31, 2025. This note receivable is classified within “Other

assets” in our consolidated balance sheet. Refer to Note 8 – “Other assets” to our consolidated financial statements for additional information.

(2)Represents the aggregate contractual sales price of our dispositions, which differs from proceeds from sales of real estate and contributions from and sales of

noncontrolling interests in our consolidated statement of cash flows under “Investing activities” and “Financing activities,” respectively, primarily due to the timing of

payment, closing costs, and other sales adjustments such as prorations of rents and expenses.

Impairment of real estate

During the six months ended June 30, 2025, we recognized impairment of real estate aggregating $161.8 million, which

primarily included the following:

  • During the three months ended March 31, 2025, we recognized an impairment charge of $32.2 million related to a ground

lease entered into in 2021 for a future development site in our San Francisco Bay Area market. Refer to “Lessee operating

costs” in Note 5 – “Leases” to our unaudited consolidated financial statements for additional information.

  • In April 2025, an office property aggregating 182,276 RSF, located in Carlsbad, San Diego, met the criteria for classification as

held for sale based on our decision to dispose of this property. We expect to complete the sale within 12 months. Upon our

decision to commit to sell this property, we recognized an impairment charge of $35.4 million to reduce the carrying amount of

this asset to its estimated fair value less costs to sell of approximately $68.8 million.

  • In June 2025, two operating properties aggregating 210,481 RSF located in our Sorrento Mesa submarket met the criteria for

classification as held for sale based on current negotiations with prospective buyers and our decision to dispose of these

properties. We expect to complete these sales within 12 months. Upon our decision to commit to sell these properties, we

recognized impairment charges aggregating $18.1 million to reduce the carrying amounts of these assets to their estimated

fair values less costs to sell of approximately $112.7 million.

  • In June 2025, land parcels aggregating 374,349 SF in our non-cluster/other submarket met the criteria for classification as held

for sale based on current negotiations with a prospective buyer and our decision to dispose of this asset. We expect to

complete this sale within 12 months. Upon our decision to sell this land parcel, we recognized an impairment charge of

$47.5 million to reduce the carrying amount of the asset to its estimated fair value less costs to sell of approximately

$28.5 million.

3.INVESTMENTS IN REAL ESTATE (continued)

Other

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

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

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

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

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

survey/title, and permitting and legal costs, aggregated $173.8 million as of June 30, 2025.

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”). On January 24, 2025, ARE-East River Science Park, LLC filed a first amended complaint. The

lawsuit alleges two principal claims against H+H and EDC: fraud in the inducement, and, in the alternative, breach of contract in

violation of the implied covenant of good faith and fair dealing. As alleged in the complaint, ARE-East River Science Park, LLC’s claims

arise from H+H’s and EDC’s misrepresentations and concealment of material facts in connection with a floodwall, which H+H and EDC

are seeking to require ARE-East River Science Park, LLC to integrate into the development of the Option Parcel. ARE-East River

Science Park, LLC alleges that H+H’s and EDC’s misconduct have prevented it from commencing the development of the Option

Parcel. In light of the pending litigation, the closing date for our option and thus the commencement date for construction of the third

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

damages and equitable relief from the court to confirm our understanding that the option is in full force and effect.

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

$173.8 million as of June 30, 2025, depending on any collection of damages and/or the ability to develop the project. We performed a

probability-weighted recoverability analysis based on estimates of various possible outcomes and determined no impairment was

present as of June 30, 2025.

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES

From time to time, we enter into joint venture agreements through which we own a partial interest in real estate entities that

own, develop, and operate real estate properties. As of June 30, 2025, our real estate joint ventures held the following properties:

Property(1)MarketSubmarketOur Ownership Interest
Consolidated real estate joint ventures:
50 and 60 Binney StreetGreater BostonCambridge/Inner Suburbs34.0%
75/125 Binney StreetGreater BostonCambridge/Inner Suburbs40.0%
100 and 225 Binney Street and 300 Third StreetGreater BostonCambridge/Inner Suburbs30.0%
99 Coolidge AvenueGreater BostonCambridge/Inner Suburbs76.9%
15 Necco StreetGreater BostonSeaport Innovation District56.7%
285, 299, 307, and 345 Dorchester AvenueGreater BostonSeaport Innovation District60.0%
Alexandria Center® for Science and Technology – Mission Bay(2)San Francisco Bay AreaMission Bay25.0%
601, 611, 651, 681, 685, and 701 Gateway BoulevardSan Francisco Bay AreaSouth San Francisco50.0%
751 Gateway BoulevardSan Francisco Bay AreaSouth San Francisco51.0%
211 and 213 East Grand AvenueSan Francisco Bay AreaSouth San Francisco30.0%
500 Forbes BoulevardSan Francisco Bay AreaSouth San Francisco10.0%
Alexandria Center® for Life Science – MillbraeSan Francisco Bay AreaSouth San Francisco48.5%
3215 Merryfield RowSan DiegoTorrey Pines30.0%
Campus Point by Alexandria(3)San DiegoUniversity Town Center55.0%
5200 Illumina WaySan DiegoUniversity Town Center51.0%
9625 Towne Centre DriveSan DiegoUniversity Town Center30.0%
SD Tech by Alexandria(4)San DiegoSorrento Mesa50.0%
Pacific Technology ParkSan DiegoSorrento Mesa50.0%
Summers Ridge Science Park(5)San DiegoSorrento Mesa30.0%
1201 and 1208 Eastlake Avenue EastSeattleLake Union30.0%
199 East Blaine StreetSeattleLake Union30.0%
400 Dexter Avenue NorthSeattleLake Union30.0%
800 Mercer StreetSeattleLake Union60.0%
Unconsolidated real estate joint ventures*(6)**:*
1655 and 1725 Third StreetSan Francisco Bay AreaMission Bay10.0%
1450 Research BoulevardMarylandRockville73.2%(7)
101 West Dickman StreetMarylandBeltsville58.4%(7)

(1)Refer to the table on the next page that shows the categorization of our joint ventures under the consolidation framework.

(2)Includes 409 and 499 Illinois Street, 1450, 1500, and 1700 Owens Street, and 455 Mission Bay Boulevard South.

(3)Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4135, 4155, 4161, 4165, 4224, and 4242 Campus Point Court.

(4)Includes 9605, 9645, 9675, 9725, 9735, 9805, 9808, 9855, and 9868 Scranton Road and 10055, 10065, and 10075 Barnes Canyon Road.

(5)Includes 9965, 9975, 9985, and 9995 Summers Ridge Road.

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

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

performance of the joint venture.

Our consolidation policy is described under “Consolidation” in Note 2 – “Summary of significant accounting policies” to our

unaudited consolidated financial statements. Consolidation accounting is highly technical, but its framework is primarily based on the

controlling financial interests and benefits of the joint ventures. We generally consolidate a joint venture that is a legal entity that we

control (i.e., we have the power to direct the activities of the joint venture that most significantly affect its economic performance)

through contractual rights, regardless of our ownership interest, and where we determine that we have benefits through the allocation of

earnings or losses and fees paid to us that could be significant to the joint venture (the “VIE model”).

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)

We also generally consolidate joint ventures when we have a controlling financial interest through voting rights and where our

voting interest is greater than 50% (the “voting model”). Voting interest differs from ownership interest for some joint ventures. We

account for joint ventures that do not meet the consolidation criteria under the equity method of accounting by recognizing our share of

income and losses.

The table below shows the categorization of our real estate joint ventures under the consolidation framework:

Property(1)Consolidation ModelVoting InterestConsolidation AnalysisConclusion
50 and 60 Binney StreetVIE modelNot applicable under VIE modelConsolidated
75/125 Binney StreetWe have:
100 and 225 Binney Street and 300 Third Street
99 Coolidge Avenue(i)The power to direct the activities of the joint venture that most significantly affect its economic performance; and
15 Necco Street
285, 299, 307, and 345 Dorchester Avenue
Alexandria Center® for Science and Technology – Mission Bay
601, 611, 651, 681, 685, and 701 Gateway Boulevard
751 Gateway Boulevard
211 and 213 East Grand Avenue(ii)Benefits that can be significant to the joint venture.
500 Forbes Boulevard
Alexandria Center® for Life Science – Millbrae
3215 Merryfield Row
Campus Point by Alexandria
5200 Illumina WayTherefore, we are the primary beneficiary of each VIE
9625 Towne Centre Drive
SD Tech by Alexandria
Pacific Technology Park
Summers Ridge Science Park
1201 and 1208 Eastlake Avenue East
199 East Blaine Street
400 Dexter Avenue North
800 Mercer Street
1450 Research BoulevardWe do not control the joint venture and are therefore not the primary beneficiary.Equity method of accounting
101 West Dickman Street
1655 and 1725 Third StreetVoting modelDoes not exceed 50%Our voting interest is 50% or less.

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

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)

Consolidated VIEs’ balance sheet information

We, together with joint venture partners, hold interests in real estate joint ventures that we consolidate in our financial

statements. These existing joint ventures provide significant equity capital to fund a portion of our future construction spending, and our

joint venture partners may also contribute equity into these entities for financing-related activities.

The table below aggregates the balance sheet information of our consolidated VIEs (in thousands):

June 30, 2025December 31, 2024
Investments in real estate$7,773,223$8,917,718
Cash and cash equivalents258,718335,223
Other assets811,124777,033
Total assets$8,843,065$10,029,974
Secured note payable$153,500$149,321
Other liabilities475,757626,460
Total liabilities629,257775,781
Redeemable noncontrolling interests—10,360
Alexandria Real Estate Equities, Inc.’s share of equity3,659,6524,754,386
Noncontrolling interests’ share of equity4,554,1564,489,447
Total liabilities and equity$8,843,065$10,029,974

In determining whether to aggregate the balance sheet information of consolidated VIEs, we considered the similarity of each

VIE, including the primary purpose of these entities to own, manage, operate, and lease real estate properties owned by the VIEs, and

the similar nature of our involvement in each VIE as a managing member. Due to the similarity of the characteristics, we present the

balance sheet information of these entities on an aggregated basis. None of our consolidated VIEs’ assets have restrictions that limit

their use to settle specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to

our general credit, and our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE, except for our

99 Coolidge Avenue real estate joint venture in which the VIE’s secured construction loan is guaranteed by us. Refer to Note 10 –

“Secured and unsecured senior debt” to our unaudited consolidated financial statements for additional information.

Unconsolidated real estate joint ventures

Our maximum exposure to our unconsolidated VIEs is limited to our investment in each VIE, except for our 1450 Research

Boulevard and 101 West Dickman Street unconsolidated real estate joint ventures in which we guarantee up to $6.7 million of the

outstanding balance related to each VIE’s secured loan. Our investments in unconsolidated real estate joint ventures, accounted for

under the equity method and classified in investments in unconsolidated real estate joint ventures in our consolidated balance sheets,

consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

PropertyJune 30, 2025December 31, 2024
1655 and 1725 Third Street$20,368$10,574
1450 Research Boulevard8,6579,193
101 West Dickman Street9,6669,749
Other1,54310,357
$40,234$39,873

Below are key terms of unconsolidated real estate joint ventures’ secured loans as of June 30, 2025 (dollars in thousands):

Interest Rate(1)At 100%Our Share
Unconsolidated Joint VentureMaturity DateStated RateAggregate CommitmentDebt Balance(2)
101 West Dickman Street11/10/26SOFR+1.95%(3)6.34%$26,750$19,08158.4%
1450 Research Boulevard12/10/26SOFR+1.95%(3)6.40%13,0008,96573.2%
1655 and 1725 Third Street(4)2/10/356.37%6.44%500,000496,70910.0%
$539,750$524,755

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

(2)Represents outstanding principal, net of unamortized deferred financing costs, as of June 30, 2025.

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

(4)During the three months ended March 31, 2025, the unconsolidated real estate joint venture refinanced $500 million of its $600 million existing fixed-rate debt with a new

secured note payable maturing in 2035. The remaining debt balance of approximately $100 million was repaid through contributions from the unconsolidated joint

venture partners, including our share of $10.8 million.

5.LEASES

Refer to “Lease accounting” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial

statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and

disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors).

Leases in which we are the lessor

As of June 30, 2025, we had 384 properties aggregating 39.7 million operating RSF in key cluster locations, including Greater

Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. We primarily focus on

developing Class A/A+ properties in AAA life science innovation cluster locations that offer the scale and strategic design integral to our

Megacampus strategy. Strategically located near top academic and medical research institutions and equipped with curated amenities

and services, and convenient access to transit, our Megacampus ecosystems 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.

As of June 30, 2025, all leases in which we are the lessor were classified as operating leases, with the exception of one direct

financing and one sales-type lease. Our leases are described below.

Operating leases

As of June 30, 2025, our 384 properties were subject to operating lease agreements. Seven of these properties are subject to

operating lease agreements that each contain a purchase option as described below:

(i)Two of these properties, representing two land parcels in our San Francisco Bay Area market, are subject to lease

agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during

each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent

commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 67.4 years.

(ii)Two operating properties in our Seattle market, held by a consolidated real estate joint venture, are subject to purchase

options held by our partner in this joint venture, which is also a tenant at these properties. One purchase option allows our

partner to purchase our 30% interest in one property for $40.0 million in 2031. Contingent upon the exercise of this option,

the second purchase option allows our partner to purchase our 30% interest in one property for $69.1 million in 2034. Our

partner’s remaining lease terms for these operating leases are 5.7 years and 19.3 years, respectively.

(iii)Three properties subject to operating lease agreements contain purchase options with a weighted-average (based on

property RSF) exercise date in October 2027.

Certain operating leases contain options for the tenant to extend their lease at prevailing market rates at the time of expiration.

In addition, certain operating leases contain an early termination option that requires advance notification and payment of an early

termination fee by the tenant.

At the commencement of each lease, we establish the lease term comprising the noncancelable period for each lease together

with periods covered by options to extend or terminate the lease that we determine the lessee is reasonably certain to exercise. Our

assessment of whether a lessee is reasonably certain to exercise or not exercise an option considers all economic factors relevant to

the assessment, including property-based, market-based, and tenant-based factors. We do not reassess the lease term or a lessee

option to purchase the underlying asset unless there is a lease modification that is not accounted for as a separate contract.

Future lease payments to be received under the terms of our operating lease agreements, excluding expense

reimbursements, in effect as of June 30, 2025 are outlined in the table below (in thousands):

YearAmount
2025$917,038
20261,768,314
20271,691,484
20281,584,647
20291,482,012
Thereafter9,809,227
Total$17,252,722

Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information

about our owned real estate assets, which are the underlying assets under our operating leases.

5.LEASES (continued)

Direct financing and sales-type leases

As of June 30, 2025, we have one direct financing lease agreement, with a net investment balance of $41.9 million, for a

parking structure with a remaining lease term of 67.4 years. The lessee has an option to purchase the underlying asset at fair market

value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent

commencement date of October 1, 2017.

As of June 30, 2025, we also have one sales-type lease for a property located in the Seattle market with the lease term

through August 2025, after which the ownership of the property transfers to the tenant. As of June 30, 2025, the net investment in this

lease is $18.4 million. Upon recognition of the sales-type lease during the three months ended March 31, 2025, we recognized a gain

on sale of real estate aggregating $12.7 million classified in gain on sales of real estate within our unaudited consolidated statement of

operations for the six months ended June 30, 2025.

The components of our aggregate net investment in our direct financing lease and our sales-type lease as of June 30, 2025

and December 31, 2024 are summarized in the table below (in thousands):

June 30, 2025December 31, 2024
Gross investment in direct financing and sales-type leases$268,879$251,405
Less: unearned income on direct financing lease(206,391)(207,734)
Less: provision for expected credit losses(2,217)(2,168)
Net investment in leases$60,271$41,503

As of June 30, 2025, our estimated provision for expected credit loss related to our direct financing lease aggregated

$2.2 million, unchanged from December 31, 2024. We estimate the provision for expected credit loss related to our direct financing

lease using a probability of default methodology, which incorporates the borrower’s investment-grade credit rating from S&P Global

Ratings, to evaluate the probability of default. Additionally, we incorporate the projected value of the real estate securing the

investments to estimate potential recoveries in the event of default, among other inputs.

During the three months ended March 31, 2025, we recognized an estimated provision for expected credit loss aggregating

$49 thousand related to the sales-type lease discussed above. This estimate was determined using historical industry losses and

transaction-specific information, including the estimated fair value of the underlying real estate asset securing this transaction, the short-

term nature of this lease, and other available information. As of June 30, 2025, this estimate remained unchanged.

We classify adjustments to estimated provision for expected credit loss related to our direct financing and sales-type leases

within other income in our consolidated statement of operations. For further details, refer to “Provision for expected credit losses” in

Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements.

Future lease payments to be received under the terms of our direct financing lease and our sales-type lease as of June 30,

2025 are outlined in the table below (in thousands):

YearTotal
2025$19,450
20262,036
20272,097
20282,160
20292,224
Thereafter240,912
Total$268,879

5.LEASES (continued)

Income from rentals

Our income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes

revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Income from rentals:
Revenues subject to the lease accounting standard:
Operating leases$722,935$745,626$1,454,356$1,491,687
Direct financing and sales-type leases1,0896621,8991,321
Revenues subject to the lease accounting standard724,024746,2881,456,2551,493,008
Revenues subject to the revenue recognition accounting standard13,2558,87424,19917,705
Income from rentals$737,279$755,162$1,480,454$1,510,713

Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist

primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to

“Revenues” and “Recognition of revenue arising from contracts with customers” in Note 2 – “Summary of significant accounting policies”

to our unaudited consolidated financial statements for additional information.

Residual value risk management strategy

Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual

value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business

objective to invest primarily in high-demand markets, (ii) directly managing our leased properties, conducting frequent property

inspections, proactively addressing potential maintenance issues, and/or timely resolving any occurring issues, and (iii) carefully

selecting our tenants and monitoring their credit quality throughout their respective lease terms.

Leases in which we are the lessee

Operating lease agreements

We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these

leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or

covenants imposed by the leases, nor guarantees of residual value.

We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related

liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to

account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to “Lessee accounting”

in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements.

As of June 30, 2025, the present value of the remaining contractual payments aggregating $784.2 million under our operating

lease agreements, including our extension options that we are reasonably certain to exercise, was $363.4 million. Our corresponding

operating lease right-of-use assets, adjusted for initial direct leasing costs and other consideration exchanged with the landlord prior to

the commencement of the lease, aggregated $717.1 million. As of June 30, 2025, the weighted-average remaining lease term of

operating leases in which we are the lessee was approximately 54 years, including extension options that we are reasonably certain to

exercise, and the weighted-average discount rate was 4.7%. The weighted-average discount rate is based on the incremental

borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized

basis over a similar term for an amount equal to the lease payments.

Ground lease obligations as of June 30, 2025 included leases for 31 of our properties, which accounted for approximately 8%

of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book

value of $5.3 million as of June 30, 2025, our ground lease obligations have remaining lease terms ranging from approximately 29 to 81

years, including extension options that we are reasonably certain to exercise.

5.LEASES (continued)

The reconciliation of future lease payments under noncancelable operating leases in which we are the lessee to the operating

lease liability reflected in our unaudited consolidated balance sheet as of June 30, 2025 is in the table below (in thousands):

YearTotal
2025$10,777
202622,768
202721,849
202821,517
202921,025
Thereafter686,242
Total future payments under our operating leases in which we are the lessee784,178
Effect of discounting(420,759)
Operating lease liability$363,419

Lessee operating costs

Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed

annual rent payments and may also include escalation clauses and renewal options. For the six months ended June 30, 2025 and

2024, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we

are the lessee aggregated $156.1 million and $16.4 million, respectively. The increase is primarily due to the second installment of a

ground lease prepayment aggregating $135.0 million made in January 2025 for a 24-year lease term extension to our existing ground

lease agreement at the Alexandria Technology Square® Megacampus in our Cambridge submarket.

Our operating lease obligations related to our office leases have remaining terms of up to 11 years, exclusive of extension

options. For the three and six months ended June 30, 2025 and 2024, our costs of operating leases in which we are the lessee were as

follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Gross operating lease costs$12,859$9,930$25,218$19,141
Capitalized lease costs(720)(518)(1,413)(1,046)
Expenses for operating leases in which we are the lessee$12,139$9,412$23,805$18,095

During the three months ended March 31, 2025, we recognized an impairment charge related to a ground lease entered into in

2021 for a future development site in the San Francisco Bay Area market. Based on our current financial outlook for this project, we

made the determination to no longer proceed with this project and recognized an impairment charge of $32.2 million to write off our

remaining right-of-use asset balance. As of June 30, 2025 and December 31, 2024, we had no operating lease liability associated with

this ground lease, as the related lease obligation had been fully prepaid.

6. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

Cash, cash equivalents, and restricted cash consisted of the following as of June 30, 2025 and December 31, 2024 (in

thousands):

June 30, 2025December 31, 2024
Cash and cash equivalents$520,545$552,146
Restricted cash:
Funds held in escrow for real estate acquisitions2,9552,954
Other4,4484,747
7,4037,701
Total$527,948$559,847

7.INVESTMENTS

We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. As a

REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to

determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in

which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption

that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such

ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a

board seat or whether we participate in the investee’s policy-making process, among other criteria, to determine if we have the ability to

exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment

under the equity method, as described below.

From time to time, we may hold equity investments in publicly traded companies that are subject to temporary contractual sale

restrictions. We do not recognize a discount related to such contractual sale restrictions.

Investments accounted for under the equity method

Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying

amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary

impairments.

As of June 30, 2025, we had ten investments in limited partnerships maintaining specific ownership accounts for each investor,

which were accounted for under the equity method. These investments aggregated $276.8 million. Our ownership interest in each of

these ten investments was greater than 5%.

Investments that do not qualify for the equity method of accounting

For investees over which we determine that we do not have the ability to exercise significant influence or control, we account

for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV

per share, or (iii) privately held entity that does not report NAV per share, as described below.

Investments in publicly traded companies

Our investments in publicly traded companies are classified as investments with readily determinable fair values and are

presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales

prices or quotes available on securities exchanges.

Investments in privately held companies

Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held

entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are

accounted for as follows:

Investments in privately held entities that report NAV per share

Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships,

are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we

are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the

investment at our reporting date.

Investments in privately held entities that do not report NAV per share

Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative

under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified

in investment income (loss) in our consolidated statements of operations.

An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is

observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity

transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity

transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we

evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution

preferences, and conversion rights to the investments we hold.

7.INVESTMENTS (continued)

I****mpairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share

We monitor equity method investments and investments in privately held entities that do not report NAV per share for new

developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements,

capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment

for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators:

(i)a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee;

(ii)a significant adverse change in the regulatory, economic, or technological environment of the investee;

(iii)a significant adverse change in the general market condition, including the research and development of technology and

products that the investee is bringing or attempting to bring to the market;

(iv)significant concerns about the investee’s ability to continue as a going concern; and/or

(v)a decision by investors to cease providing support or reduce their financial commitment to the investee.

If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an

impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

Investment income/loss recognition and classification

We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in

investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent:

(i)changes in fair value for investments in publicly traded companies;

(ii)changes in NAV for investments in privately held entities that report NAV per share;

(iii)observable price changes for investments in privately held entities that do not report NAV per share; and

(iv)our share of unrealized gains or losses reported by our equity method investees.

Realized gains and losses on our investments represent the difference between proceeds received upon disposition of

investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our

share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and

represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity

method investments, if impairments are deemed other than temporary, to their estimated fair value.

Funding commitments to investments in privately held entities that report NAV

We are committed to funding approximately $351.0 million for our investments in privately held entities that report NAV. Our

funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.0 years as of June 30,

  1. These investments are not redeemable by us, but we may receive distributions from these investments throughout their terms.

Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted-

average remaining term during which these investments are expected to be liquidated was 5.2 years as of June 30, 2025.

7.INVESTMENTS (continued)

The following tables summarize our investments as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025
CostUnrealized GainsUnrealized LossesCarrying Amount
Publicly traded companies$183,859$18,365$(120,299)$81,925
Entities that report NAV497,97597,201(43,013)552,163
Entities that do not report NAV:
Entities with observable price changes78,10564,585(9,156)133,534
Entities without observable price changes432,299——432,299
Investments accounted for under the equity methodN/AN/AN/A276,775
Total investments$1,192,238$180,151$(172,468)$1,476,696
December 31, 2024
CostUnrealized GainsUnrealized LossesCarrying Amount
Publicly traded companies$188,653$24,262$(107,248)$105,667
Entities that report NAV518,074126,077(34,285)609,866
Entities that do not report NAV:
Entities with observable price changes99,93277,761(2,956)174,737
Entities without observable price changes400,487——400,487
Investments accounted for under the equity methodN/AN/AN/A186,228
Total investments$1,207,146$228,100$(144,489)$1,476,985

Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held

as of June 30, 2025 aggregated to a loss of $123.3 million, which consisted of upward adjustments aggregating $64.6 million,

downward adjustments aggregating $9.2 million, and impairments aggregating $178.7 million.

Our investment income (loss) for the three and six months ended June 30, 2025 and 2024 consisted of the following (in

thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Realized (losses) gains$(8,684)(1)$20,578$9,469(1)$34,704
Unrealized losses(21,938)(64,238)(90,083)(35,080)
Investment loss$(30,622)$(43,660)$(80,614)$(376)

(1)Consists of realized gains of $30.5 million and $59.9 million, partially offset by impairment charges of $39.2 million and $50.4 million during the three and six months

ended June 30, 2025, respectively.

During the six months ended June 30, 2025, gains and losses on investments in privately held entities that do not report NAV

still held as of June 30, 2025 aggregated to a loss of $57.6 million, which consisted of upward adjustments aggregating $8.8 million and

downward adjustments and impairments aggregating $66.4 million.

During the six months ended June 30, 2024, gains and losses on investments in privately held entities that do not report NAV

still held as of June 30, 2024 aggregated to a loss of $13.7 million, which consisted of upward adjustments aggregating $15.7 million

and downward adjustments and impairments aggregating $29.4 million.

Unrealized gains or losses related to investments still held (excluding investments accounted for under the equity method) as

of June 30, 2025 and 2024 aggregated to a loss of $30.7 million and a loss of $1.8 million during the six months ended June 30, 2025

and 2024, respectively.

Our investment loss of $80.6 million for the six months ended June 30, 2025 also included $102 thousand of equity in losses of

our equity method investments.

Refer to “Investments” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial

statements for additional information.

8. OTHER ASSETS

The following table summarizes the components of other assets as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025December 31, 2024
Acquired in-place leases$255,170$305,144
Deferred compensation plan49,94347,727
Deferred financing costs – unsecured senior line of credit44,23149,056
Deposits29,77221,768
Furniture, fixtures, equipment, and software54,35239,558
Net investment in leases60,27141,503
Notes receivable216,762120,546
Operating lease right-of-use assets717,125(1)764,472
Other assets101,42396,690
Prepaid expenses27,10933,567
Property, plant, and equipment131,933141,275
Total$1,688,091$1,661,306

(1)Refer to “Leases in which we are the lessee" section within Note 5 – “Leases” for information about the decrease in this balance since December 31, 2024.

Notes receivable

Our notes receivable as of June 30, 2025 and December 31, 2024 consisted of the following (dollars in thousands):

As of June 30, 2025
Weighted Average
Notes ReceivableEffective Interest RateMaturity DateBalanceDecember 31, 2024
Secured by real estate assets in San Diego10.1%11/4/28$199,505$103,427
Secured by real estate assets in Greater Boston4.6%12/16/2917,73017,356
Less: provision for expected credit losses(473)(237)
Notes receivable$216,762$120,546

Our notes receivable represent held-to-maturity debt securities carried at amortized costs and are generally secured by real

estate. Under the current expected credit losses accounting standard, we are required to estimate and, if necessary, recognize a

provision for expected credit losses related to these notes. We do not have a history of losses on such securities; therefore, we utilize

available information on historical losses for the commercial real estate industry. We determine expected credit losses for our notes

receivable using historical industry losses and considering loan-specific information, including credit ratings of the borrowers, estimated

fair values of underlying real estate assets, loan-to-value ratios, the presence of guarantors, and/or other available information. During

the three months ended June 30, 2025, no adjustment to the provision for expected credit losses related to our notes receivable was

required. The provision is reevaluated on an ongoing basis, with any necessary adjustments recognized in the corresponding period.

9.FAIR VALUE MEASUREMENTS

We provide fair value information about all financial instruments for which it is practicable to estimate fair value. We measure

and disclose the estimated fair value of financial assets and liabilities by utilizing a fair value hierarchy that distinguishes between data

obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant

assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities

(Level 1), (ii) significant other observable inputs (Level 2), and (iii) significant unobservable inputs (Level 3). Significant other observable

inputs can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or

liability, such as interest rates, foreign exchange rates, and yield curves. Significant unobservable inputs are typically based on an

entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value

measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the

entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety.

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers

factors specific to the asset or liability.

Assets and liabilities measured at fair value on a recurring basis

The following table sets forth the assets that we measure at fair value on a recurring basis by level in the fair value hierarchy

(in thousands). There were no liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024. There

were no transfers of assets measured at fair value on a recurring basis to or from Level 3 in the fair value hierarchy during the six

months ended June 30, 2025.

Fair Value Measurement Using
DescriptionTotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Investments in publicly traded companies:
As of June 30, 2025$81,925$81,925$—$—
As of December 31, 2024$105,667$105,667$—$—

Our investments in publicly traded companies represent investments with readily determinable fair values, and are carried at

fair value, with changes in fair value classified in investment income (loss) in our consolidated financial statements. We also hold

investments in privately held entities, which consist of (i) investments that report NAV and (ii) investments that do not report NAV, as

further described below.

Our investments in privately held entities that report NAV, such as our privately held investments in limited partnerships, are

carried at fair value using NAV as a practical expedient, with changes in fair value classified in net income. As of June 30, 2025 and

December 31, 2024, the carrying values of investments in privately held entities that report NAV aggregated $552.2 million and

$609.9 million, respectively. These investments are excluded from the fair value hierarchy above as required by the fair value

accounting standard. We estimate the fair value of each of our investments in limited partnerships based on the most recent NAV

reported by each limited partnership. As a result, the determination of fair values of our investments in privately held entities that report

NAV generally does not involve significant estimates, assumptions, or judgments.

9.FAIR VALUE MEASUREMENTS (continued)

Assets and liabilities measured at fair value on a nonrecurring basis

The following table sets forth the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy

as of June 30, 2025 and December 31, 2024 (in thousands).

Fair Value Measurement Using
DescriptionCarrying AmountQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Real estate assets held for sale with carrying values adjusted to fair value less costs to sell:
As of June 30, 2025$289,673(1)$—$—$289,673(2)
As of December 31, 2024$322,662(1)$—$—$322,662(2)
Investments in privately held entities that do not report NAV:
As of June 30, 2025$150,943$—$133,534(3)$17,409(4)
As of December 31, 2024$184,236$—$174,737(3)$9,499(4)

(1)These amounts are included in the total balances of our net assets classified as held for sale aggregating $323.7 million and $371.3 million as of June 30, 2025 and

December 31, 2024, respectively, disclosed in Note 3 – “Investments in real estate,” and represent assets held for sale as of June 30, 2025 and December 31, 2024, for

which impairments were recognized.

(2)These amounts represent the aggregate carrying amounts of assets held for sale after adjustments to their respective fair values less costs to sell based on executed

purchase and sale agreements, letters of intent, or valuations provided by third-party real estate brokers.

(3)These amounts represent the total carrying amounts of our equity investments in privately held entities with observable price changes, which are included in the

investments balances of $1.5 billion and $1.5 billion in our unaudited consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively, disclosed

in Note 7 – “Investments” to our unaudited consolidated financial statements.

(4)These amounts are included in the investments in privately held entities without observable price changes balances aggregating $432.3 million and $400.5 million as of

June 30, 2025 and December 31, 2024, respectively, disclosed in Note 7 – “Investments” to our unaudited consolidated financial statements. The aforementioned

balances represent the carrying amounts of investments in privately held entities that do not report NAV for which impairments have been recognized in accordance with

the measurement alternative guidance described in “Investments” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial

statements.

Real estate assets classified as held for sale measured at fair value less costs to sell

Our real estate assets classified as held for sale and measured at fair value less costs to sell are presented in the table above.

These properties are subsets of our total real estate assets classified as held for sale as of June 30, 2025 and December 31, 2024. The

fair values for these real estate assets were estimated based on executed purchase and sale agreements, letters of intent, or valuations

provided by third-party real estate brokers. Refer to “Investments in real estate” in Note 2 – “Summary of significant accounting policies”

and “Assets held for sale” in Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional

information.

Investments in privately held entities that do not report NAV

Our investments in privately held entities that do not report NAV are measured at cost, adjusted for observable price changes

and impairments, with changes recognized in net income (loss). These investments are adjusted based on the observable price

changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until

another observable transaction occurs. Therefore, the determination of fair values of our investments in privately held entities that do

not report NAV does not involve significant estimates and assumptions or subjective and complex judgments.

We also subject our investments in privately held entities that do not report NAV to a qualitative assessment for indicators of

impairment. If indicators of impairment are present, we are required to estimate the investment’s fair value and immediately recognize

an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

The estimates of fair value typically incorporate valuation techniques that include an income approach reflecting a discounted

cash flow analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated

by market participants. In certain instances, we may use multiple valuation techniques for a particular investment and estimate its fair

value based on an average of multiple valuation results.

Refer to Note 7 – “Investments” to our unaudited consolidated financial statements for additional information.

9.FAIR VALUE MEASUREMENTS (continued)

Assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed

The fair value of our secured note payable and unsecured senior notes payable, and the amounts outstanding on our

unsecured senior line of credit and commercial paper program, were estimated using widely accepted valuation techniques, including

discounted cash flow analyses using significant other observable inputs such as available market information on discount and

borrowing rates with similar terms, maturities, and credit ratings. Because the valuations of our financial instruments are based on these

types of estimates, the actual fair value of our financial instruments may differ materially if our estimates do not prove to be accurate.

Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value

amounts.

As of June 30, 2025 and December 31, 2024, the book and estimated fair values of our secured note payable and unsecured

senior notes payable and the amounts outstanding under our unsecured senior line of credit and commercial paper program, including

the level within the fair value hierarchy for which the estimates were derived, were as follows (in thousands):

June 30, 2025
Book ValueFair Value HierarchyEstimated Fair Value
Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Liabilities:
Secured note payable$153,500$—$153,521$—$153,521
Unsecured senior notes payable$12,042,607$—$10,548,383$—$10,548,383
Unsecured senior line of credit$—$—$—$—$—
Commercial paper program$1,097,993$—$1,098,989$—$1,098,989
December 31, 2024
Book ValueFair Value HierarchyEstimated Fair Value
Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Liabilities:
Secured notes payable$149,909$—$149,413$—$149,413
Unsecured senior notes payable$12,094,465$—$10,472,993$—$10,472,993
Unsecured senior line of credit$—$—$—$—$—
Commercial paper program$—$—$—$—$—

The carrying values of cash and cash equivalents, restricted cash, tenant receivables, deposits, notes receivable, accounts

payable, accrued expenses, and other short-term liabilities approximate their fair value.

**10.**SECURED AND UNSECURED SENIOR DEBT

The following table summarizes our outstanding indebtedness and respective principal payments remaining as of June 30, 2025 (dollars in thousands):

Stated RateInterest Rate(1)Maturity Date(2)Principal Payments Remaining for the Periods Ending December 31,Unamortized (Deferred Financing Cost), (Discount)/ Premium
Debt20252026202720282029ThereafterPrincipalTotal
Secured note payable
Greater Boston(3)SOFR+2.70%7.16%11/19/26(3)$—$153,624$—$—$—$—$153,624$(124)$153,500
Unsecured senior line of credit and commercial paper program(4)(4)4.71(4)1/22/30(4)—————1,100,0001,100,000(2,007)1,097,993
Unsecured senior notes payable4.30%4.501/15/26—300,000————300,000(284)299,716
Unsecured senior notes payable3.80%3.964/15/26—350,000————350,000(408)349,592
Unsecured senior notes payable3.95%4.131/15/27——350,000———350,000(812)349,188
Unsecured senior notes payable3.95%4.071/15/28———425,000——425,000(1,100)423,900
Unsecured senior notes payable4.50%4.607/30/29————300,000—300,000(916)299,084
Unsecured senior notes payable2.75%2.8712/15/29————400,000—400,000(1,860)398,140
Unsecured senior notes payable4.70%4.817/1/30—————450,000450,000(1,872)448,128
Unsecured senior notes payable4.90%5.0512/15/30—————700,000700,000(4,339)695,661
Unsecured senior notes payable3.375%3.488/15/31—————750,000750,000(4,027)745,973
Unsecured senior notes payable2.00%2.125/18/32—————900,000900,000(6,506)893,494
Unsecured senior notes payable1.875%1.972/1/33—————1,000,0001,000,000(6,675)993,325
Unsecured senior notes payable2.95%3.073/15/34—————800,000800,000(6,857)793,143
Unsecured senior notes payable4.75%4.884/15/35—————500,000500,000(4,730)495,270
Unsecured senior notes payable5.50%5.6610/1/35—————550,000550,000(6,624)543,376
Unsecured senior notes payable5.25%5.385/15/36—————400,000400,000(3,939)396,061
Unsecured senior notes payable4.85%4.934/15/49—————300,000300,000(2,814)297,186
Unsecured senior notes payable4.00%3.912/1/50—————700,000700,0009,916709,916
Unsecured senior notes payable3.00%3.085/18/51—————850,000850,000(11,034)838,966
Unsecured senior notes payable3.55%3.633/15/52—————1,000,0001,000,000(13,450)986,550
Unsecured senior notes payable5.15%5.264/15/53—————500,000500,000(7,482)492,518
Unsecured senior notes payable5.625%5.715/15/54—————600,000600,000(6,580)593,420
Unsecured debt weighted-average interest rate/subtotal3.97—650,000350,000425,000700,00011,100,00013,225,000(84,400)13,140,600
Weighted-average interest rate/total4.01%$—$803,624$350,000$425,000$700,000$11,100,000$13,378,624$(84,524)$13,294,100

(1)Represents the weighted-average interest rate as of the end of the applicable period, including amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.

(2)Reflects any extension options that we control.

(3)Represents a secured construction loan held by our consolidated real estate joint venture for 99 Coolidge Avenue, where we have a 76.9% interest. As of June 30, 2025, this joint venture has $41.7 million available under existing lender

commitments. We expect to repay the entire $153.5 million balance in August 2025.

(4)Refer to “$5.0 billion unsecured senior line of credit” and “$2.5 billion commercial paper program” on the following page.

10.SECURED AND UNSECURED SENIOR DEBT (continued)

The following table summarizes our secured and unsecured senior debt and amounts outstanding under our unsecured senior

line of credit and commercial paper program as of June 30, 2025 (dollars in thousands):

Fixed-Rate DebtVariable-Rate DebtWeighted-Average
InterestRemaining Term (in years)
TotalPercentageRate(1)
Secured note payable$—$153,500$153,5001.2%7.16%1.4
Unsecured senior notes payable12,042,607—12,042,60790.53.9012.8
Unsecured senior line of credit and commercial paper program—1,097,9931,097,993(2)8.34.71(2)4.6(3)
Total/weighted average$12,042,607$1,251,493$13,294,100100.0%4.01%12.0(3)
Percentage of total debt90.6%9.4%100%

(1)Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to the amortization of loan fees, amortization of

debt premiums (discounts), and other bank fees.

(2)As of June 30, 2025, we had no outstanding balance on our unsecured senior line of credit and $1.1 billion of commercial paper notes outstanding.

(3)We calculate the weighted-average remaining term of our commercial paper notes by using the maturity date of our unsecured senior line of credit. Using the maturity

date of our outstanding commercial paper notes, the consolidated weighted-average maturity of our debt is 11.6 years. The commercial paper notes sold during the six

months ended June 30, 2025 were issued at a weighted-average yield to maturity of 4.67% and had a weighted-average maturity term of 16 days.

Issuance and repayment of unsecured senior notes payable

In February 2025, we issued $550.0 million of unsecured senior notes payable, due 2035, with an interest rate of 5.50%.

In April 2025, we repaid our 3.45% unsecured senior notes payable aggregating $600.0 million upon their maturity, using

proceeds from our February 2025 unsecured senior notes payable offering, with no gain or loss incurred in connection with this

repayment.

$5.0 billion unsecured senior line of credit

As of June 30, 2025, our unsecured senior line of credit, which matures in 2030, including extension options under our control,

had aggregate commitments of $5.0 billion and bore an interest rate of SOFR plus 0.855%. In addition to the cost of borrowing, the

unsecured senior line of credit is subject to an annual facility fee of 0.145% based on the aggregate commitments outstanding. Based

upon our ability to achieve certain annual sustainability metrics, the interest rate and facility fee rate are also subject to upward or

downward adjustments of up to four basis points with respect to the interest rate and up to one basis point with respect to the facility fee

rate.

Based on certain sustainability metrics achieved in accordance with the terms of our unsecured senior line of credit

agreement, the borrowing rate was reduced for a one-year period by two basis points to SOFR plus 0.855%, from SOFR plus 0.875%,

and the facility fee was reduced by 0.5 basis point to 0.145% from 0.15%. As of June 30, 2025, we had no outstanding balance on our

unsecured line of credit.

$2.5 billion co****mmercial paper program

Our commercial paper program provides us with the ability to issue up to $2.5 billion of commercial paper notes that bear

interest at short-term fixed rates with a maturity of generally 30 days or less and a maximum maturity of 397 days from the date of

issuance. 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 notes issued under

our commercial paper program. We use the net proceeds from the issuances of the notes for general working capital and other general

corporate purposes. General corporate purposes may include, but are not limited to, the repayment of other debt and selective

development, redevelopment, or acquisition of properties. During the six months ended June 30, 2025, the commercial paper notes

were issued at a weighted-average yield to maturity of 4.67% and had a weighted-average maturity term of 16 days. As of June 30,

2025, we had a $1.1 billion outstanding balance on our commercial paper program.

10.SECURED AND UNSECURED SENIOR DEBT (continued)

Interest expense

The following table summarizes interest expense for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Interest incurred$137,719$126,828$268,660$249,508
Capitalized interest(82,423)(81,039)(162,488)(162,879)
Interest expense$55,296$45,789$106,172$86,629

11. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER LIABILITIES

The following table summarizes the components of accounts payable, accrued expenses, and other liabilities as of June 30,

2025 and December 31, 2024 (in thousands):

June 30, 2025December 31, 2024
Accounts payable and accrued expenses$406,957$534,803
Accrued construction328,298500,890
Acquired below-market leases153,289180,407
Conditional asset retirement obligations45,55953,968
Deferred rent liabilities12,12311,461
Operating lease liability363,419507,127
Unearned rent and tenant security deposits890,689691,873
Other liabilities160,506173,822
Total$2,360,840$2,654,351

As of June 30, 2025 and December 31, 2024, our conditional asset retirement obligations liability primarily consisted of the soil

and groundwater remediation liabilities associated with certain of our properties. Some of our properties may contain asbestos or may

be subjected to other hazardous or toxic substances, which, under certain conditions, requires remediation. We engage independent

environmental consultants to conduct Phase I or similar environmental assessments at our properties. This type of assessment

generally includes a site inspection, interviews, and a public records review; asbestos, lead-based paint, and mold surveys; subsurface

sampling; and other testing. We recognize a liability for the fair value of a conditional asset retirement obligation (including asbestos)

when the fair value of the liability can be reasonably estimated. In addition, environmental laws and regulations subject our tenants, and

potentially us, to liability that may result from our tenants’ routine handling of hazardous substances and wastes as part of their

operations at our properties. These assessments and investigations of our properties have not to date revealed any additional

environmental liability we believe would have a material adverse effect on our business and financial statements or that would require

additional disclosures or recognition in our consolidated financial statements.

**12.**EARNINGS PER SHARE

With respect to dividend rights, we have granted two types of restricted stock awards: (i) restricted stock awards with

nonforfeitable dividends and (ii) restricted stock awards with forfeitable dividends.

We account for unvested restricted stock awards (“RSAs”) with nonforfeitable dividends as participating securities and include

these securities in the computation of EPS using the two-class method. Under the two-class method, we allocate net income (after

amounts attributable to noncontrolling interests) to common stockholders and unvested RSAs with nonforfeitable dividends by using the

weighted-average shares of each class outstanding for quarter-to-date and year-to-date periods independently, based on their

respective participation rights to dividends declared (or accumulated) and undistributed earnings.

Unvested RSAs with forfeitable dividends do not qualify as participating securities under the two-class method because the

dividends are forfeited if the awards do not vest. As a result, undistributed earnings are not allocated to these awards prior to vesting,

and these awards have no effect on the computation of basic EPS while unvested. Once these awards vest, they are included in the

denominator of basic EPS, weighted for the portion of the reporting period they were vested. Prior to vesting, these awards are included

in the denominator of diluted EPS if they are dilutive, which is determined using the treasury stock method. Under this method,

incremental shares are calculated as the difference between the total unvested shares and the number of shares that could

hypothetically be repurchased using the assumed proceeds (including unrecognized compensation cost related to these awards).

These incremental shares are weighted for the portion of the reporting period they were unvested, and are included in the diluted EPS

denominator only if their inclusion reduces EPS (i.e., if they are not antidilutive).

In addition, from time to time, we enter into forward equity sales agreements. We consider the potential dilution resulting from

the forward equity sales agreements on the EPS calculations. At inception, the agreements do not have an effect on the computation of

basic EPS as no shares are delivered until settlement. The common shares issued upon the settlement of the forward equity sales

agreements, weighted for the period these common shares were outstanding, are included in the denominator of basic EPS. To

determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the

number of weighted-average shares outstanding – diluted using the treasury stock method. As of June 30, 2025, no forward equity

sales agreements were outstanding.

The table below reconciles the numerators and denominators of the basic and diluted EPS computations for the three and six

months ended June 30, 2025 and 2024 (in thousands, except per share amounts):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Net (loss) income$(62,189)$94,049$(23,527)$313,225
Net income attributable to noncontrolling interests(44,813)(47,347)(92,414)(95,978)
Net income attributable to unvested RSAs with nonforfeitable dividends(2,609)(3,785)(5,269)(7,444)
Numerator for basic and diluted EPS – net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders$(109,611)$42,917$(121,210)$209,803
Denominator for basic EPS – weighted-average shares of common stock outstanding170,135172,013170,328171,981
Dilutive effect of unvested RSAs with forfeitable dividends————
Denominator for diluted EPS – weighted-average shares of common stock outstanding170,135172,013170,328171,981
Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
Basic$(0.64)$0.25$(0.71)$1.22
Diluted$(0.64)$0.25$(0.71)$1.22

**13.**STOCKHOLDERS’ EQUITY

Common equity transaction****s

Common stock repurchase program

Under our common stock repurchase program authorized in December 2024, we may repurchase up to $500.0 million of our

common stock in the open market, in privately negotiated transactions, or otherwise through December 31, 2025.

During the three months ended March 31, 2025, we repurchased 2.2 million shares of common stock under this repurchase

program at an average price per share of $96.71.

During the three months ended June 30, 2025, we did not repurchase any shares. As of June 30, 2025, the approximate value

of shares that may yet be purchased under this program was $241.8 million.

ATM common stock offering program

In February 2024, we entered into an ATM common stock offering program that allows us to sell up to an aggregate of

$1.5 billion of our common stock.

During the six months ended June 30, 2025, we had no activity under our ATM program. As of June 30, 2025, the remaining

aggregate amount available under our ATM program for future sales of common stock was $1.47 billion.

Dividends

During the three months ended March 31, 2025, we declared cash dividends on our common stock aggregating $228.3 million,

or $1.32 per share.

During the three months ended June 30, 2025, we declared cash dividends on our common stock aggregating $228.3 million,

or $1.32 per share.

Accumulated other comprehensive loss

The change in accumulated other comprehensive loss attributable to Alexandria Real Estate Equities, Inc.’s stockholders

during the six months ended June 30, 2025 was entirely due to net unrealized gains of $18.8 million on foreign currency translation

related to our operations primarily in Canada.

Common stock, preferred stock, and excess stock authorizations

Our charter authorizes the issuance of 400.0 million shares of common stock, of which 170.1 million shares were issued and

outstanding as of June 30, 2025. Our charter also authorizes the issuance of up to 100.0 million shares of preferred stock, none of

which were issued and outstanding as of June 30, 2025. In addition, 200.0 million shares of “excess stock” (as defined in our charter)

are authorized, none of which were issued and outstanding as of June 30, 2025.

**14.**NONCONTROLLING INTERESTS

Noncontrolling interests represent the third-party interests in certain entities in which we have a controlling interest. As of

June 30, 2025, these entities owned 63 properties, which are included in our consolidated financial statements. Noncontrolling interests

are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other

comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in accordance with the respective

operating agreements. During the six months ended June 30, 2025 and 2024, we distributed $123.6 million and $119.9 million,

respectively, to our consolidated real estate joint venture partners.

Certain of our noncontrolling interests have the right to require us to redeem their ownership interests in the respective entities.

We classify these ownership interests in the entities as redeemable noncontrolling interests outside of total equity in our consolidated

balance sheets. Redeemable noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share

of the net earnings or losses, and other comprehensive income or loss. If the amount of a redeemable noncontrolling interest is less

than the maximum redemption value at the balance sheet date, such amount is adjusted to the maximum redemption value.

Subsequent declines in the redemption value are recognized only to the extent that previous increases have been recognized.

In March 2025, we redeemed our partner’s entire noncontrolling interests in three real estate joint ventures in our Greater

Boston market, with a book value aggregating $10.4 million, and recognized $7.0 million of consideration in excess of the book value in

additional paid-in capital.

Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial

statements for additional information.

15.SEGMENT INFORMATION

We are a life science REIT focused on developing, redeveloping, and operating properties that provide space for lease to

tenants primarily in the life science industry. Our properties are leased predominantly through triple-net lease agreements and share

key characteristics, including generic and reusable improvements, consistent lease structures, and business strategy. All properties are

located within North America, predominantly in the U.S., and operate within a comparable regulatory environment.

Operating segments

Our Chief Operating Decision Maker (“CODM”), represented by our Executive Chairman and our Chief Executive Officer,

evaluates operating results at the geographic market level to assess performance and allocate resources. Our operating segments align

with our markets, including Greater Boston, San Francisco Bay Area, San Diego, and Seattle, among others. Regular market

performance updates are provided directly to the CODM. These updates include each market’s net operating income (“NOI”), which

serves as the profit or loss measure used by the CODM for performance assessment and resource allocation. NOI provides useful

information regarding performance of each market as it reflects income and expenses incurred in connection with real estate operations

in each market. This metric enables the CODM to evaluate the profitability and performance of each market on a consistent and

comparable basis, supporting decisions on capital resource allocation, including in connection with development, redevelopment,

acquisition, and disposition activities in each market.

Evaluation of economic similarity and aggregation of operating segments

In accordance with the segment reporting accounting standard, we evaluate the economic similarity of our operating

segments. Seven of our nine operating segments exhibit consistent long-term economic characteristics, including similar historical long-

term NOI margins, which are also expected to remain similar in the future. Additionally, these markets share similar operational

characteristics, including nature of services provided (i.e., leasing, operating, developing, and redeveloping life science properties),

tenant base (i.e., a variety of tenants involved in the life science industry), methods of operation (i.e., consistent lease structures,

property management practices, and business strategies), nature of the regulatory environment (consistent across North America,

where all our operating segments are located). Based on shared economic characteristics, we have aggregated our seven operating

segments into one reportable segment for segment reporting purposes. Two of our operating segments, specifically our New York City

and Canada markets, do not meet the aggregation criteria and individually do not meet the quantitative thresholds to qualify as

reportable segments. Therefore, these operating segments are included in the “all other” category in the tables below*.*

15.SEGMENT INFORMATION (continued)

The following table presents the reportable segment profit or loss measure, net operating income, for the three and six months

ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Reportable segment revenues:
Revenues from external customers$703,457$713,949$1,402,656$1,434,514
Other income10,4885,67717,01511,352
Reportable segment total revenues713,945719,6261,419,6711,445,866
Reportable segment total rental operating expenses(212,402)(199,930)(424,838)(391,021)
Reportable segment net operating income (reportable segment profit or loss)$501,543$519,696$994,833$1,054,845

Significant expenses included in the reportable segment profit or loss measure (i.e., net operating income) are represented by

the reportable segment total rental operating expenses and are disclosed in the table above. These expenses primarily include property

taxes, utilities, repairs and maintenance, engineering, janitorial, and other costs.

Presented below are reconciliations of the reportable segment total revenues to the consolidated revenues, the reportable

segment total rental operating expenses to consolidated rental operations, the reportable segment NOI to the consolidated net income,

and the reportable segment investments in real estate assets to the consolidated investments in real estate assets (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Reconciliation of reportable segment revenues to consolidated total revenues:
Reportable segment total revenues$713,945$719,626$1,419,671$1,445,866
All other revenues48,09547,108100,52789,976
Consolidated revenues$762,040$766,734$1,520,198$1,535,842
Reconciliation of reportable segment total rental operating expenses to consolidated rental operations:
Reportable segment total rental operating expenses$(212,402)$(199,930)$(424,838)$(391,021)
All other rental operating expenses(12,031)(17,324)(25,990)(44,547)
Consolidated rental operations$(224,433)$(217,254)$(450,828)$(435,568)
Reconciliation of reportable segment net operating income to consolidated net income:
Reportable segment net operating income (reportable segment profit or loss)$501,543$519,696$994,833$1,054,845
All other revenues48,09547,108100,52789,976
All other rental operating expenses(12,031)(17,324)(25,990)(44,547)
Other items not allocated to segments:
General and administrative(29,128)(44,629)(59,803)(91,684)
Interest expense(55,296)(45,789)(106,172)(86,629)
Depreciation and amortization(346,123)(290,720)(688,185)(578,274)
Impairment of real estate(129,606)(30,763)(161,760)(30,763)
Equity in (losses) earnings of unconsolidated real estate joint ventures(9,021)130(9,528)285
Investment loss(30,622)(43,660)(80,614)(376)
Gain on sale of real estate——13,165392
Consolidated net (loss) income$(62,189)$94,049$(23,527)$313,225
June 30, 2025December 31, 2024
Reconciliation of reportable segment assets to consolidated investments in real estate assets:
Reportable segment investments in real estate$30,476,127$30,393,144
All other investments in real estate1,684,4731,716,895
Consolidated investments in real estate$32,160,600$32,110,039

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