Alexandria Real Estate Equities, Inc. · NYSE:ARE
Alexandria Real Estate Equities — Q3 2024 Earnings Presentation
74 slides from Alexandria Real Estate Equities's earnings presentation, Oct 21, 2024
Slide 1: Reserved . © 2024
Alexandria Real Estate Equities, Inc. All Rights Reserved . © 2024
Slide 2: Reserved. © 2024 iv
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 iv
Slide 3: Alexandria's Competitive Advantages
Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 v ALEXANDRIA’S COMPETITIVE ADVANTAGES First mover advantage in the top life science clusters High-quality assets aggregated in desirable and well-amenitized mega campuses High-quality cash flows and substantial embedded future net ope
Slide 4: Alexandria's Mega Campus Platform Drives Superior Operating Results
As of September 30, 2024 . Refer to “Definitions and reconciliations” in the Supplemental Information fo r additional details. Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 vi ALEXANDRIA’S MEGA CAMPUS PLATFORM DRIVES SUPERIOR OPERATING RESULTS
Slide 5: Mega Campus Occupancy Outperformance
76% 72% 69% of Alexandria’s Annual Rental Revenue of Alexandria’s Operating RSF of Total Development & Redevelopment Pipeline RSF MEGA CAMPUSES ENCOMPASS MEGA CAMPUS OCCUPANCY OUTPERFORMANCE Average Occupancy (1) Since 2020 92% 96% 4% Non-Mega Campus Mega Campus Occupancy Outperformance As of Septem
Slide 6: Alexandria's Outstanding Long-Term Value
ALEXANDRIA’S OUTSTANDING LONG-TERM VALUE
Slide 7: Total Shareholder Return Since ARE's IPO
HEALTHCARE REALTY TRUST WELLTOWER 2,833% NATIONAL HEALTH INVESTORS 1,395% FTSE NAREIT EQUITY HEALTH CARE INDEX 1,332% UNIVERSAL HEALTH REALTY INCOME TRUST 1,309% LTC PROPERTIES 1,140% VENTAS 1,114% MSCI US REIT INDEX 934% OMEGA HEALTHCARE INVESTORS 753% HEALTHPEAK PROPERTIES 715% Total Shareholder R
Slide 8: Total Shareholder Return Notes
S ource: S&P Global Market Intelligence. Assumes reinvestment of dividends. The REITs presented individually in the chart above are only those constituents of the FTSE NAREIT Equity Health Care Index as of September 30, 2024 for which TSR information since May 27, 1997 is available. (1) Alexandria’s
Slide 9: Alexandria's Internal Growth
ALEXANDRIA’S INTERNAL GROWTH Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 ix
Slide 10: 3Q24 Leasing Volume Exceeds Previous Four-Quarter Average
ALEXANDRIA 3Q24 LEASING VOLUME EXCEEDS PREVIOUS F OUR-QUARTER AVERAGE 1.0M RSF Quarterly Average (3Q23–2Q24) 1.5M RSF Exceeds Quarterly Average by 48% Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 x ALEXANDRIA’S OPERATIONAL EXCELLENCE DRIVES STEADY AND CONSISTENTLY HIGH O CCUPANC
Slide 11: Operational Excellence Drives Consistently High Occupancy
(1) R epresents the midpoint of our 2024 guidance range for occupancy percentage in North America as of December 31, 2024 . Refer to “Guidance” in the Earnings Press Release for additional details. (2) Represents o ccupancy p ercen tage of operating properties in North Americ a as of each period-end
Slide 12: Industry-Leading Client Base of Approximately 800 Tenants
ALEXANDRIA’S REIT INDUSTRY-LEADING CLIENT BASE OF APPROXIMATELY 800 TENANTS DRIVES STABLE, RESILIENT, AND LONG-DURATION CASH FLOWS
Slide 13: Tenant Mix and Top 20 Tenant Credit Quality
Life Science Product, Service, and Device Multinational Pharmaceutical Public Biotechnology – Approved or Marketed Product Public Biotechnology – Preclinical or Clinical Stage Private Biotechnology Other Investment-Grade or Large Cap Tech Other (1) Biomedical and Government Institutions 92% of Top 2
Slide 14: Sustained Operational Excellence and Tenant Collections
ALEXANDRIA’S SUSTAINED OPERATIONAL EXCELLENCE AND STRENGTH IN TENANT COLLECTIONS 99.8% Average Tenant Collections 1Q21– 3Q24 Tenant Receivables Represent 0.9% of 3Q24 Rental Revenues
Slide 15: Tenant Rents and Receivables Collected
TENANT RENTS AND RECEIVABLES COLLECTED (1) (1) Represents t enant rents and receivables collected for each quarter-end as of each respective earnings release date . Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 xiii
Slide 16: Fortress Balance Sheet and Strong Execution of Asset Recycling
ALEXANDRIA’S FORTRESS BALANCE SHEET AND STRONG EXECUTION OF ASSET RECYCLING Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 xiv ALEXANDRIA’S STRONG AND FLEXIBLE BALANCE SHEET WITH SIGNIFICANT LIQUIDITY
Slide 17: Strong and Flexible Balance Sheet with Significant Liquidity
TOP 10% CREDIT RATING RANKING AMONG ALL PUBLICLY TRADED U.S. REITS (1) WEIGHTED AVERAGE 4Q24 TARGET YEARS SIGNIFICANT LIQUIDITY (2) PERCENTAGE OF DEBT MATURING 2049 & BEYOND PERCENTAGE OF FIXED RATE DEBT SINCE 2020 (3) $5.4B 31% 97.7% Baa1 Stable BBB+ Stable NET DEBT AND PREFERRED STOCK TO ADJUSTED
Slide 18: Dividend Yield and Dividend Growth
4.4% Dividend Yield 5.4% Average Annual Dividend Per-Share Growth $2.1B Net Cash Provided by Operating Activities After Dividends (1) (2) (3)
Slide 19: Annual Common Stock Dividend Per Share
ANNUAL COMMON STOCK DIVIDEND PER SHARE (4) (1) Dividend y ield is calculated as the dividend declared for the three months ended September 30, 2024 of $1.30 per common share annualized divided by the closing price of our common stock on September 30, 2024 o f $118.75 . (2) Represents the years ended
Slide 20: Strong Execution of Asset Recycling Program
ALEXANDRIA’S STRONG EXECUTION OF OUR ASSET RECYCLING PROGRAM STRATEGIC DISPOSITIONS AND SALES OF PARTIAL INTERESTS SINCE 2019 $8.7 BILLION IN SALES $3.0 BILLION IN GAINS (1) (3) (2) (1) I ncludes amounts related to real estate dispositions and sales of partial interests completed from January 1, 201
Slide 21: Disposition of 1165 Eastlake Avenue East
$150.0M SALES PRICE 4.7% CAPITALIZATION RATE 4.9% CAPITALIZATION RATE (CASH BASIS) $1,499 SALES PRICE PER RSF $21.5M GAIN ON SALE OF REAL ESTATE Alexandria’s opportunistic sale to Fred Hutchinson Cancer Center, a longstanding tenant, deepens our relationship and enables Fred Hutch to expand its Sout
Slide 22: Disposition of 14225 Newbrook Drive
$80.5M SALES PRICE 7.6% CAPITALIZATION RATE 7.4% CAPITALIZATION RATE (CASH BASIS) $37.1M GAIN ON SALE OF REAL ESTATE Demonstrating the long-term enduring value of our laboratory facilities, Alexandria successfully operated this property from i ts acquisition in 1997 (prior to our IPO) through its sa
Slide 23: At the Heart of the $5 Trillion Life Science Industry
ALEXANDRIA: AT THE VANGUARD AND HEART OF THE $5 TRILLION SECULARLY GROWING LIFE SCIENCE INDUSTRY (1) Source: YCharts. Represents the aggregate market capitalization for the life science industry, including companies in the biotechnology and pharmaceutical sectors, as of July 12, 2024. (1) Alexandria
Slide 24: Life Science Industry Funding and R&D Data
(1) Source: YCharts. Represents the aggregate market capitalization for the life science industry, including companies in the biotechnology and pharmaceutical sectors, as of July 12, 2024 . (2) Dollar amount represents aggregate funding from all sources presented, and percentage represents the aggre
Slide 25: Novel FDA CDER Approvals
Source: U.S. Food and Drug Administration. Novel therapies approved by the FDA (Center for Drug Evaluation and Research (“CDER”)) include new molecular entities and new biologics defined as products containing active moieties that have not previously been approved by the FDA. Alexandria Real Estate
Slide 26: FDA CBER Innovative Medicine Approvals
Source: U.S. Food and Drug Administration. Innovative medicine approvals by the FDA (Center for Biologics Evaluation and Research (“CBER”)) include novel vaccines and next-generation modalities such as cell therapies, gene therapies , mRNA products, live biotherapeutics, and oncolytic viruses. These
Slide 27: Prescription Medicine Spending Sources
(1) Source: PhRMA, “Understanding Prescription Medicine Spending,” 2022. (2) Source: Centers for Medicare & Medicaid Services, “National Health Expenditures 2022 Highlights,” 2022. (3) Source: U.S. House Committee on Energy and Commerce, “The 21st Century Cures Discussion Document White Paper,” Janu
Slide 28: Industry and Corporate Responsibility Leadership
ALEXANDRIA’S INDUSTRY AND CORPORATE RESPONSIBILITY LEADERSHIP Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 xxv
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Alexandria Real Estate Equities, Inc. All Rights Reserved. © 2024 xxvi
Slide 30: Reserved . © 2024
Alexandria Real Estate Equities, Inc. All Rights Reserved . © 2024 1
Slide 31: Reports 3Q24 and YTD 3Q24 Results
Alexandria Real Estate Equities, Inc. Reports: 3Q24 and YTD 3Q24 Net Income per Share – Diluted of $0.96 and $2.18 , respectively; and 3Q24 and YTD 3Q24 FFO per Share – Diluted, as Adjusted, of $2.37 and $7.08 , respectively PASADENA, Calif. – October 21, 2024 – Alexandria Real Estate Equities, Inc.
Slide 32: Tenant Mix by Annual Rental Revenue
Life Science Product, Service, and Device Multinational Pharmaceutical Public Biotechnology – Approved or Marketed Product Public Biotechnology – Preclinical or Clinical Stage Private Biotechnology Other (1) Other Investment-Grade or Large Cap Tech Biomedical and Government Institutions As of Septem
Slide 33: Occupancy by Submarket
94.7% i) T T T T T T T Mr North Greater San San Seattle Maryland Research New Texas America Boston Francisco Diego Triangle York Bay Area City
Slide 34: Mega Campuses vs Non-Mega Campuses
76% Mega Campuses 24% Non-Mega Campuses As of September 30, 2024 . Annual rental revenue represents amounts in effect as of September 30, 2024 . Refer to “Definitions and reconciliations” in the Supplemental Information for additional details. (1) Represents average occupancy of operating properties
Slide 35: 2023 YTD
3.4% 1.6% 2023 YTD 9/30/24
Slide 36: 2023 YTD
4.6% 4.6% 2023 YTD 9/30/24 Cash Basis
Slide 37: 2023 YTD
29.4% 16.4% 2023 YTD 9/30/24
Slide 38: Same Property Performance
Refer to “Same property performance” and “Definitions and reconciliations” in the Supplemental Information for additional details. “Definitions and reconciliations” contains the definition of “Net operating income” and its reconciliation from the most directly comparable financial measure presented
Slide 39: Future Growth in Annual Net Operating Income from Deliveries
ALEXANDRIA’S FUTURE GROWTH IN ANNUAL NET OPERATING INCOME FROM DEVELOPMENT AND REDEVELOPMENT DELIVERIES $510 MILLION (1) P laced Into Service Expected to Be Placed Into Service (2) YTD 3Q24 3Q24 $63M $21M 945,118 RSF 316,691 RSF 100% Leased (3) 4Q24 – 4Q25 1Q26 – 1Q28 $158M $352M Aggregating 5.5M RS
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Slide 42: Recent Deliveries: Rockville, Maryland
9810 Darnestown Road 9820 Darnestown Road 9808 Medical Center Drive Maryland/Rockville Maryland/Rockville Maryland/Rockville 195,435 RSF 250,000 RSF 65,171 RSF 100% Occupancy 100% Occupancy 100% Occupancy
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Slide 45: Recent Deliveries (continued)
(1) Image represents 500 North Beacon Street on The Arsenal on the Charles mega campus. Alexandria Real Estate Equities, Inc. All Rights Reserved . © 2024 36 New Class A/A+ Development and Redevelopment Properties: Recent Deliveries (continued)
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Slide 50: Current Projects: Development and Redevelopment
421 Park Drive 40, 50, and 60 Sylvan Road (2) 840 Winter Street 1450 Owens Street (3) 651 Gateway Boulevard Greater Boston/Fenway Greater Boston/Route 128 Greater Boston/Route 128 San Francisco Bay Area/ Mission Bay San Francisco Bay Area/ South San Francisco 392,011 RSF 596,064 RSF 139,680 RSF 212,
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Slide 55: Current Projects (continued)
(1) Image represents 500 North Beacon Street on The Arsenal on the Charles mega campus. (2) Image represents 60 Sylvan Road on the Alexandria Center ® for Life Science – Waltham mega campus. The project is expected to capture demand in our Route 128 submarket. (3) I mage represents a multi-tenant pr
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Slide 59: Current Projects: Development and Redevelopment
10075 Barnes Canyon Road 701 Dexter Avenue North (2) Alexandria Center ® for Advanced Technologies – Monte Villa Parkway (3) 9808 Medical Center Drive 8800 Technology Forest Place San Diego/Sorrento Mesa Seattle/Lake Union Seattle/Bothell Maryland/Rockville Texas/Greater Houston 253,079 RSF 227,577
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Slide 64: Current Projects (continued)
(1) Image represents 10955 Alexandria Way on the One Alexandria Square mega campus . (2) We initially started this project due to strong demand from neighboring tenants but strategically paused in the first quarter of 2023. We have resumed construction activities at this project in order to maintain
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Slide 66: Campus Point and South Lake Union Mega Campuses
Campus Point by Alexandria Alexandria Center ® for Life Science – South Lake Union San Diego/University Town Center Seattle/Lake Union 1.7 million active and future SF 1.3 million active and future SF
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Slide 68: Mega Campus Definitions
Refer to “ Mega campus ” under “Definitions and reconciliations” in the Supplemental Information for additional details. Alexandria Real Estate Equities, Inc. All Rights Reserved . © 2024 48
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Slide 70: Investments
14% Public 27% Tenant 86% Private 73% Non-Tenant (1) Consists of realized gains of $23.0 million and $85.2 million , partially offset by impairment charges of $10.3 million and $37.8 million during the three and nine months ended September 30, 2024 , respectively. (2) Consists of re alized gains of
Slide 71: Liquidity as of September 30, 2024
(in millions) Availability under our unsecured senior line of credit, net of amounts outstanding under our commercial paper program $ 4,545 Outstanding forward equity sales agreements (1) 28 Cash, cash equivalents, and restricted cash 580 Availability under our secured construction loan 51 Investmen
Slide 72: Net Debt to Adjusted EBITDA and Fixed-Charge Coverage
51x 9.5X <5.1x 12/31/23 9/30/24 12/31/24 Target
Slide 73: Summary of Debt
Refer to “Definitions and reconciliations” in the Supplemental Information for additional details. (1) Represents expected net proceeds from the future settlement of 230 thousand shares of common stock under forward equity sales agreements after underwriter discounts. (2) Quarter annualized. Alexand
Slide 74: Summary of Debt (continued)
(1) In September 2024, we amended and restated our unsecured senior line of credit to, among other changes, extend the maturity date from January 22, 2028 to January 22, 2030 , including extension options that we control. We anticipate further extending the maturity date in the next two to three yea
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