Item 1A. RISK FACTORS

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

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

contained under the caption “Item 1A. Risk factors” in our annual report on Form 10-K for the year ended December 31, 2024. Those risk

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

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

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

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

annual report on Form 10-K for the year ended December 31, 2024, except for the following updates:

Changes to U.S. government funding, staffing, trade, policies, and other federal actions could adversely affect

our business operations or those of our tenants and our venture investment portfolio companies.

Domestic and international policy shifts may introduce considerable uncertainty to the macroeconomic and regulatory

landscape in which we, our tenants, and our venture investment portfolio companies operate. Our tenants and our venture

investment portfolio companies include entities in the pharmaceutical, biotechnology, medical device, life science, and related

industries, academic and private institutions, and government institutions that determine their R&D budgets based on several

factors, including the availability of government and other funding and the operational efficiency and reliability of public

regulatory institutions.

Since January 2025, the U.S. administration has implemented and proposed substantial policy changes that affect

federal health agencies, research funding, public health priorities, and international trade. These measures, ranging from

staffing and budget reductions at the U.S. Food and Drug Administration (“FDA”) and the National Institutes of Health (“NIH”) to

sweeping tariff actions as described below, may significantly disrupt the life science ecosystem in which we, our tenants, and

our venture investment portfolio companies operate.

Reductions in FDA workforce

In 2025 to date, the FDA laid off approximately 3,500 employees, representing approximately 19% of its workforce at

the beginning of the year. Such workforce reductions at the FDA have raised some concerns regarding the agency’s capacity to

perform timely regulatory reviews and approvals of drugs and other medical products. Recent and/or potential further reductions

in workforce or other personnel changes at the FDA, including terminations, may disrupt the agency’s review and approval

processes for our tenants’ and our venture investment portfolio companies’ products. Such disruptions could lead to setbacks in

research and development timelines, negatively impacting life science companies’ ability to advance their pipelines, secure

investor funding, or achieve commercial viability, which could severely affect their operations and financial performance and, as

a result, adversely impact our operating and financial results.

Restructuring and workforce reductions at the CDC

In 2025 to date, the U.S. Centers for Disease Control and Prevention (“CDC”) underwent a significant restructuring and

workforce reduction, including the dismissal of key scientific and policy personnel and the consolidation of several vaccine

safety and surveillance programs. These developments have raised concerns among public health and industry stakeholders

about the agency’s capacity to maintain vaccine oversight, coordinate immunization programs, and respond to emerging

infectious disease threats. Reduced CDC staffing and operational realignments may disrupt the collection and dissemination of

critical epidemiological data, delay updates to vaccination guidelines, and impair public confidence in vaccine safety. For our

tenants and venture investment portfolio companies operating in the vaccine research, development, and manufacturing

sectors, diminished CDC engagement could lead to uncertainty in regulatory expectations, lower vaccine uptake rates, and

delay the adoption of new immunization technologies. Any such disruptions could undermine the commercial viability of

vaccine-related products, reduce R&D investment in the field, and in turn negatively impact demand for our specialized life

science facilities and the value of our venture investment portfolio.

NIH grant cuts and impact on research institutions

The U.S. administration has implemented significant policy changes affecting the NIH, leading to substantial

disruptions in biomedical research across the U.S. These actions have included staff layoffs and funding cuts as described

below and have resulted in the suspension of numerous research projects, posing risks to scientific advancement and

introducing uncertainty for some of our tenants and venture investment portfolio companies.

• NIH budget freeze and workforce cuts. On January 27, 2025, the U.S. administration issued an executive order to

suspend NIH grant funding, freezing much of the NIH’s nearly $48 billion budget for 2025. Though the suspension

was eventually blocked and reversed, during the first half of 2025, the NIH laid off approximately 5,000 employees

and contractors across its approximately 20,000-person workforce.

In May 2025, the White House introduced a budget proposal for fiscal year 2026 that would reduce the NIH

budget by 40%, from $48 billion to $27.5 billion. The proposal has been met with resistance from Congress, and,

until a new budget is approved Congress, the NIH budget will remain at 2024 levels through a continuing

resolution. Should the NIH budget be significantly reduced, it may affect funding of early research that drives the

formation of new life science companies, potentially impacting U.S. global life science leadership and long-term

domestic demand for life science real estate.

• Termination of NIH grants and funding commitments to major research institutions. On January 20, 2025,

President Trump issued an executive order directing every U.S. agency, including the NIH, to “terminate, to the

maximum extent allowed by law” all grants relating to diversity, equity, and inclusion. Further, on January 29, 2025,

the President issued an executive order to make it “the policy of the United States to combat anti-Semitism

vigorously, using all available and appropriate legal tools, to prosecute, remove, or otherwise hold to account the

perpetrators of unlawful anti-Semitic harassment and violence.” As a result of one or both executive orders, the

NIH, the world’s largest funder of biomedical research, has withheld funding from certain U.S. research

institutions.

• 15% cap on indirect cost reimbursements of all NIH grants. On February 7, 2025, the NIH introduced a policy

limiting indirect cost reimbursements to 15% for all NIH grants, representing a significant reduction from historic

levels, which were approximately double that rate on average, and in some cases significantly higher. This change

threatens to substantially impact the ability of research institutions to support their infrastructure and administrative

costs, including their ability to lease life science facilities.

A coalition of 22 state attorneys general, along with organizations such as the Association of American Medical

Colleges, filed lawsuits challenging the NIH’s policy changes, particularly the 15% cap on indirect costs. On April 7, 2025, a

federal court issued a permanent injunction blocking the enforcement of this cap. However, the U.S. administration has signaled

its intent to appeal and/or pursue similar funding restrictions through future legislative or administrative actions. If implemented,

any such funding cap could negatively impact our tenants that depend on grant funding for its operations. It could also reduce

the financial resources available to such tenants, forcing them to scale back operations, reduce leased space, or delay their

plans for lease expansion.

Termination of federal research funding that affected prominent academic institutions has already led to reductions in

postdoctoral hiring and the closure of critical programs. Moreover, recent changes to visa and immigration rules have introduced

new uncertainty around the ability of international graduate students and postdoctoral researchers to remain in the U.S.

following graduation. Many of these individuals represent years of training investment and historically have formed a key

segment of the U.S. biotechnology workforce. As limitations on their residency and employment take effect, a growing share of

talent is migrating to foreign markets. The U.S. life science real estate market has historically benefited from robust domestic

R&D activity and venture capital investment. However, other countries are increasingly positioned to attract top-tier biomedical

talent, venture capital, and clinical trials. The global leadership in biotechnology currently held by the U.S. may begin to shift

abroad. The reduced attractiveness of the U.S. as a destination for research and commercialization could lead to a substantial

long-term decline in the size of our life science tenant base and of life science real estate.

Drug pricing regulation — Most-Favored Nation Executive Order

On May 12, 2025, President Trump issued an executive order titled “Delivering Most-Favored-Nation Prescription Drug

Pricing to American Patients,” directing the Department of Health and Human Services to set U.S. drug price benchmarks at the

lowest prices paid in comparable developed countries. Although the President projected price reductions of 30%-80%, most

reforms would require formal rulemaking and are likely to face legal obstacles. In July 2025, the White House sent letters to the

chief executive officers of 17 major drug manufacturers, demanding compliance within 60 days and noting that noncompliance

could result in the federal government's enforcement through "every tool in our arsenal." Most recently, the Trump

administration and AstraZeneca and Pfizer reached public agreements under which both companies will offer many drugs at

“most-favored-nation” (“MFN”) pricing through Medicaid and via a new direct-to-consumer platform, and in return AstraZeneca

and Pfizer will receive a three-year tariff reprieve. While these developments signal accelerating government pressure on

industry pricing, they also inject significant ambiguity into commercial forecasts for pharmaceutical and biotechnology firms. If

widely adopted, MFN pricing could materially compress margins, reduce investment in R&D, and suppress expansions by our

life science tenants, adversely impacting demand for laboratory and related technical office space and manufacturing space,

and thereby posing downside risk to property income and investment valuations.

Reductions in Medicaid funding under the One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act was signed into law. Included in the bill is an estimated $1 trillion in cuts

to Medicaid spending, implemented through Medicaid work requirements, patient cost-sharing, and a phase-down of Medicaid

provider taxes and state-directed payments. Such reductions in Medicaid spending could result in lower revenue for some life

science tenants, adversely impacting financial performance and potentially resulting in reduced life science investment and real

estate requirements.

Rapid expansion of China’s biotechnology sector and potential adverse impact on demand for U.S. life science real estate

The U.S. life science real estate market has historically benefited from robust domestic R&D activity and venture

capital investment. The accelerated growth of China’s biotechnology industry, fueled by state subsidies, regulatory reform, and

inexpensive talent, could negatively impact demand for U.S. laboratory space. Given lower operational costs and faster clinical

trial recruitment timelines, China may attract biotechnology firms to conduct their R&D activities, including clinical trials, in China

rather than in the U.S.

Additionally, the U.S. biopharmaceutical sector is increasingly sourcing innovative assets from China, with over one-

third of in-licensed molecules at major U.S. pharmaceutical companies now originating from Chinese firms. If biopharmaceutical

companies increasingly rely on acquiring or in-licensing assets from China instead of those developed in the U.S., it could

negatively impact the fundamentals of the U.S. biotechnology market, leading to reduced investment and fewer U.S.-based

biotechnology companies. Should this occur, demand for domestic laboratory space could decline.

Tariff escalation, trade disruption, and financial market instability

Beginning in March 2025, the U.S. government implemented a series of trade actions that have reshaped global

economic relations and triggered market volatility, specifically:

• On February 1, 2025, President Trump signed executive orders imposing a 25% tariff on all goods from Mexico

and Canada and a 10% tariff on China.

• On March 3, 2025, the President increased tariffs on all products from China from 10% to 20%. He also

implemented new 25% tariffs on imports from Mexico and Canada.

• On April 2, 2025, the President declared a national emergency to address the U.S. trade deficit and imposed a

10% universal import tariff on all goods, with higher rates for 57 trading partners. This announcement led to a

significant stock market decline, with the S&P 500 Index, Dow Jones Industrial Average, and the Nasdaq

Composite dropping by approximately 6.0%, 5.5%, and 5.8%, respectively.

• On April 9, 2025, facing a global financial market meltdown, the President announced a 90-day pause on tariffs for

most countries but raised the tax rate on Chinese imports to 125%. Following the announcement, the S&P 500

Index surged 9.5%. However, on April 10, 2025, U.S. stocks fell as the initial euphoria over the pause on tariffs

faded. Subsequently, on June 12, 2025, the President announced that the 125% tariff would be replaced with a

55% tariff on select Chinese goods. Pharmaceutical ingredients and critical materials remained partially exempt.

• On April 14, 2025, the U.S. government launched an investigation into pharmaceuticals to justify tariffs that may

be implemented on pharmaceutical products. In 2024, over $200 billion in pharmaceutical products were imported

to the U.S., and it is estimated that U.S. tariffs could add $46 billion in costs to the pharmaceutical industry.

• On August 21, 2025, the U.S. and the European Union reached a trade agreement establishing a 15% ceiling on

tariffs applied to pharmaceutical products traded between the two regions. The accord preserves supply chain

continuity for a significant share of imported active pharmaceutical ingredients and finished drug products sourced

from Europe while signaling potential divergence in tariff treatment for manufacturers based outside allied markets

such as India and China.

• On September 25, 2025, President Trump announced, effective October 1, pharmaceutical manufacturers would

be subject to a 100% tariff on all branded and patented drugs imported into the U.S. The President stated that

manufacturers could avoid these tariffs by establishing U.S.-based production operations, with qualifying activity

defined as either projects that have broken ground or are already under construction. The measure excludes

generic drugs and exempts companies actively developing or constructing domestic manufacturing facilities.

If tariff uncertainty, its associated costs, and the disruption of broader financial markets continue, we may face the

following risks:

• Restricted access to capital. Market instability may hinder our ability to raise capital, including through

dispositions, sales of partial interests, and new debt capital, and could potentially delay our current or future

development and redevelopment projects.

• Rising construction costs. Our general contractors may face difficulty procuring construction materials at

reasonable prices, particularly those subject to tariffs or disrupted supply, which may lead to project delays and/or

increased costs. Rising costs and procurement challenges could significantly impact the yields and delay

commencement of net operating income from our current and future development and redevelopment pipeline.

• Risks to tenant operations. Many of our tenants rely on the import and export of materials, components, and/or

specialized equipment. As a result, their products may become prohibitively expensive to manufacture or sell.

These challenges may adversely affect our tenants’ ability to meet their lease obligations or to renew their leases

with us.

• Macroeconomic impact. Widespread tariffs, restricted trade, increased market volatility, and reduced investor

confidence may trigger inflationary pressure and elevate the risk of a U.S. recession.

The cost increases that may result from tariffs, trade conflicts, and financial market volatility may significantly impact

our development and redevelopment projects. Elevated material costs may lead to higher overall project budgets and extended

construction timelines or require modifications to project scope to preserve economic feasibility. Any such adjustments may

prevent our delivery of space on time and within budget, delay occupancy and commencement of rental income, and impact

projected net operating income and yields.

Any of the aforementioned and future developments may adversely affect occupancy rates, rental income, and the

value of our real estate portfolio in several ways. First, regulatory delays and reduced NIH funding may slow the pace of

innovation and company formation, leading to fewer early-stage tenants seeking laboratory space. Established tenants may

face financial strain due to reduced grant support, drug pricing pressures, and increased operational costs from tariffs,

prompting them to downsize, consolidate, or defer expansion plans. These dynamics could result in lower leasing, increased

vacancy rates, and downward pressure on rental rates across our portfolio.

Second, macroeconomic volatility and restricted access to capital markets may impair our ability to fund new

developments, raise new debt or equity capital at favorable terms, and impact pricing on dispositions. Rising construction costs

and supply chain disruptions could delay project completions, reduce development yields, and impact the timing of rental

income generation. Additionally, if tenants are unable to absorb higher operating costs or pass them on to customers, their

financial health may deteriorate, increasing the risk of lease defaults or renegotiations.

Finally, the growing competitiveness of international markets, particularly China’s rapidly expanding biotechnology

sector, may shift R&D activity abroad, reducing domestic demand for specialized laboratory infrastructure. If U.S.-based life

science companies increasingly rely on foreign innovation or relocate operations to more favorable regulatory or cost

environments, the long-term fundamentals of the U.S. life science real estate market could weaken. This may lead to asset

devaluation, reduced investor confidence, and a more challenging environment for sustaining growth and delivering stockholder

value.

Life science industry dynamics

The life science industry is undergoing a prolonged period of structural and cyclical challenges that may materially and

adversely affect our business, financial condition, and results of operations. The venture capital ecosystem that supports early-

stage platform development has experienced several years of contraction as investors look to more de-risked later-stage assets

that may not require significant R&D laboratory requirements. Additionally, historical performance data increasingly shows that

life science venture capital returns have underperformed relative to technology-focused funds and broader public market

indices. While a small number of firms have demonstrated consistently outperformed, the majority of life science-focused funds

have delivered uneven results, leading institutional investors, including endowments, foundations, and pension funds, to

reassess their long-term allocations to the sector.

This reassessment may result in a long-term reduction in capital available to private biotechnology companies, which

represent a meaningful portion of our tenant base. The high failure rate of private biotechnology companies, coupled with the

increasing cost and complexity of drug development, has led many investors to shift their focus toward more de-risked clinical-

stage assets, often sourced internationally. As a result, fewer early-stage private biotechnology companies may be formed and

funded in the U.S., which may reduce demand for the specialized laboratory space we provide across our campuses.

In addition, the private life science market has become increasingly selective, with available capital chasing a limited

number of high-quality opportunities. This dynamic has compressed potential returns, on average, and altered the risk-reward

profile for investors. While this does not necessarily indicate a permanent shift, it does reflect a more cautious and selective

investment environment that may persist for the foreseeable future. These conditions may lead to reduced biotechnology

company formation in the U.S., diminished tenant demand, slower leasing velocity, and increased turnover among higher-risk

early-stage biotechnology tenants, particularly in markets where our portfolio is heavily concentrated in emerging biotechnology.

These industry dynamics may also affect our ability to raise capital to fund future development projects. If capital

markets perceive the life science sector as structurally challenged, our cost of capital may increase and our access to equity or

debt financing may be constrained. This could limit our ability to pursue new development opportunities, reposition existing

assets, or invest in strategic initiatives that enhance long-term stockholder value.

To address these risks, we have employed and may continue to employ a range of mitigating strategies, including:

• Deepening relationships with top-tier venture capital firms and academic institutions to identify and support high-

potential tenants earlier in their life cycle.

• Expanding our proprietary products to offer operational support, shared infrastructure, and flexible leasing models

that improve capital efficiency for emerging companies.

• Enhancing our data and analytics capabilities to better assess tenant viability, monitor portfolio risk, and inform

leasing and development decisions.

• Exploring strategic partnerships with pharmaceutical companies, contract research organizations (“CROs”), and

investment-grade institutions to create more stable demand anchors within our campuses.

• Convening influential stakeholders through our industry-leading Alexandria Summit® event series, which brings

together key decision makers, life science thought leaders, venture capital firms, members of Congress,

regulatory agency executives, and other policymakers to prioritize diseases with unmet needs and advance the

development of novel, effective therapies.

• Exploring alternative uses for Alexandria’s robust laboratory and office infrastructure by, for example, technology

tenants that require specialized R&D space.

While we believe these strategies can help mitigate the impact of current industry headwinds, there can be no

assurance that they will fully offset the risks associated with reduced formation and performance of private biotechnology

companies. If we are unable to respond effectively to these evolving market conditions, our ability to lease space, maintain high

occupancy levels, generate consistent cash flows, deliver earnings growth, and provide long-term value to our stockholders

may be materially and adversely affected.

Failure of the U.S. federal government to manage its fiscal matters may negatively impact the economic environment

and adversely impact our business

An inability of the U.S. federal government to manage its fiscal matters and enact appropriate fiscal legislation may

significantly impact the national and global economic and financial environment, result in reduced economic confidence

domestically and globally, reduce investment spending, increase borrowing costs, impact availability and cost of capital, and

significantly hinder or reduce economic activity. These economic impacts could adversely affect our business and the

businesses of our tenants.

In September 2025, Congress failed to enact a budget for the upcoming fiscal year, which resulted in a partial

government shutdown that began on October 1, 2025 and remains in effect as of the date of this report. The shutdown affected

certain key agencies at the federal government level, resulting in partial closures of operations. Thousands of federal

employees have been furloughed or laid off, some essential personnel are working without pay, and many non-essential agency

functions have ceased. During a shutdown, the FDA maintains critical operations but is unable to accept new drug applications.

The NIH and CDC may experience staffing furloughs, suspended operations, and delayed reviews of grant applications.

Prolonged or repeated shutdowns or short-term Congressional budget resolutions could adversely affect business operations of

some of our tenants that depend on federal funding, contracts, or regulatory actions to sustain their operations. Our tenants

may experience delays in submitting or advancing new drug applications, or receiving device approvals should the operations at

the FDA and other oversight bodies be reduced. The NIH may pause peer-review meetings, issuance of new grants, and many

program activities, and its Clinical Center will be unable to launch new trials during the funding lapse. The FDA’s operations may

become limited to work deemed “safety-critical” and activities supported by carryover user fees, and the agency has stated it

will be unable to accept certain new submissions requiring fees until funding resumes. These outcomes could impede R&D

progress, postpone commercialization milestones, and delay anticipated financing. Additionally, the broader economic and

capital market consequences of an extended shutdown, such as weakened investor confidence, deferred initial public offerings

(“IPOs”), and a slower pace of venture and private equity deployment, could further strain tenants’ access to capital. Our

tenants may seek to reduce cash outflows by delaying rent payments, renegotiating lease terms, downsizing existing space

commitments, or filing for bankruptcy or ceasing operations altogether.

If any of our tenants becomes a debtor in a case under the U.S. Bankruptcy Code, as amended, we cannot evict that

tenant solely because of its bankruptcy. The bankruptcy court may authorize the tenant to reject and terminate its lease with us.

Our claim against such a tenant for uncollectible future rent would be subject to a statutory limitation that will likely be

substantially less than the remaining rent actually owed to us under the tenant’s lease. Any shortfall in rent payments could

adversely affect our cash flows and our ability to make distributions to our stockholders.

We hold equity investments in certain publicly traded companies, limited partnerships, and privately held entities

primarily involved in the life science and technology industries. The valuation of these investments is affected by many external

factors beyond our control, including, but not limited to, market prices, market conditions, healthcare legislation, prospects for

favorable or unfavorable clinical trial results, new product initiatives, the manufacturing and distribution of new products, product

safety and efficacy issues, and new collaborative agreements. Reduced activities or temporary closures of agencies such as

the FDA and SEC may adversely affect business operations, financial results, IPO processing, and project funding for the

companies in which we hold equity investments. Unfavorable developments with respect to any of these factors may have an

adverse impact on the valuation of our equity investments.

We cannot predict the timing or duration of appropriation lapses or the extent of any public policy changes. If the

shutdown persists, or if future lapses recur, our business and that of our tenants and our venture investment portfolio

companies could be adversely affected. These risks may also impact our overall liquidity, our borrowing costs, or the market

price of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of equity securities

On December 9, 2024, we announced that our Board of Directors authorized a share repurchase program, allowing the

repurchase of shares with an aggregate value up to $500.0 million until December 31, 2025 in the open market, through privately

negotiated transactions, or otherwise, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the

Exchange Act. No shares were repurchased during the three months ended June 30, and September 30, 2025, As of September 30,

2025, we had remaining authorization to repurchase shares with an aggregate value up to $241.8 million.