Alexandria Real Estate Equities, Inc. · NYSE:ARE
Alexandria Real Estate Equities — Q2 2014 Earnings Presentation
53 slides from Alexandria Real Estate Equities's earnings presentation, Jul 28, 2014
Slide 1: Earnings Press Release and Supplemental Information
2 Eu) Earnings Press Release and Supplemental Information Alexandria Real Estate Equities, Inc. | NYSE:ARE A L le x A N D R I IN Second Quarter Ended June 30, 2014 , Cambridge WK ’ « '~$an Francisco Collaborative Science and Technology Campuses in Urban Innovation Clusters www.are.com
Slide 2: Table of Contents
ALEXANDRIA REAL ESTATE EQUITIES, INC. June 30, 2014 Table of Contents Page EARNINGS PRESS RELEASE Second Quarter Ended June 30, 2014, Financial and Operating Results Guidance Earnings Call Information and About the Company Consolidated Statements of Income Consolidated Balance Sheets Funds From Oper
Slide 3: Reports Second Quarter Ended June 30, 2014 Financial and Operating Results
Alexandria Real Estate Equities, Inc. Reports Second Quarter Ended June 30, 2014 Financial and Operating Results FFO Per Share – Diluted, as Adjusted, for 2Q14 up 11.2% over 2Q13 Core Operations Continue to Deliver Solid Results EPS – Diluted of $0.39 FFO Per Share – Diluted of $1.19 Total Revenues
Slide 4: Occupancy
950% 96.9% 9% 94.6% 2012 2013 2Q14
Slide 5: Same property performance
(0.5%) 2012 2013 4.5% 2Q14 YTD 5.4% 5.0% 3.5% 2012 2013 2Q14 YTD
Slide 6: Annualized rental revenue
$496.2 $442.1 $401.7 2012 2013 2Q14 Annualized
Slide 7: Leasing activity
16.2% 6.3% 4.0% (2.0%) 2012, 2013) 2Q14 2012. 2013 2Q14 YTD YTD
Slide 8: Lease structure metrics
Percentage of leases containing annual rent escalations 96% Percentage of triple net leases 94% Percentage of leases providing for the recapture of capital expenditures 93%
Slide 9: Client tenant mix
52% 80% of ARE’s TOTAL ABR of ARE’s TOP 20 ABR from Investment-Grade Client Tenants (By ABR) Multinational Pharmaceutical Institutions (Academic/Medical, Non-Profit, and U.S. Government) Life Science Product, Service, and Device Biotechnology: Public & Private • Astellas Pharma Inc. • AstraZeneca PL
Slide 10: Investments in Real Estate
Rental properties $ 6,668,458 15,804,327 $ Less: accumulated depreciation (1,039,810 ) Rental properties, net 5,628,648 Construction in progress (“CIP”)/current value-creation projects: Current development in North America 1,414,036 Current redevelopment in North America Current development in Asia
Slide 11: Investments in Real Estate (continued)
Subtotal 2,474,163 Future value-creation projects North America 4,340,401 (2) Asia 6,419,707 Subtotal 10,760,108 Land sold in July 2014 Investments in real estate, net 7,030,117 31,378,329 $ Add: accumulated depreciation 1,039,810 Gross investments in real estate $ 8,069,927 (1) Represents non-incom
Slide 12: New York City: Manhattan East 29th Street
New York City Manhattan 430 East 29th Street 69%
Slide 13: San Francisco Bay Area: Mission Bay Illinois Street
San Francisco Bay Area Mission Bay 499 Illinois Street 100%
Slide 14: South San Francisco East Grand Avenue
San Francisco Bay Area South San Francisco 269 East Grand Avenue 100%
Slide 15: San Diego: Sorrento Mesa
San Diego Sorrento Mesa 10121 Barnes Canyon Road 100%
Slide 16: San Diego: Sorrento Valley
San Diego Sorrento Valley 11055/11065/11075 Roselle Street 75%
Slide 17: Greater Boston: Cambridge 75/125 Binney Street
Greater Boston Cambridge 75/125 Binney Street 99%
Slide 18: San Diego: Torrey Pines
San Diego Torrey Pines 3013/3033 Science Park Road 63%
Slide 19: Greater Boston: Route 128 Second Avenue
Greater Boston Route 128 225 Second Avenue 100%
Slide 20: Near-term value-creation development projects: University Town Center
Near-term value-creation development projects (1) San Diego University Town Center 5200 Illumina Way – Building 6 100%
Slide 21: Research Triangle Park Davis Drive
Research Triangle Park Research Triangle Park 6 Davis Drive 40%
Slide 22: San Francisco Bay Area: SoMa Townsend Street
San Francisco Bay Area SoMa 500 Townsend Street —%
Slide 23: San Diego: University Town Center
San Diego University Town Center 10300 Campus Point Drive 76%
Slide 24: Seattle: Lake Union Dexter Avenue
Seattle Lake Union 400/416/430 Dexter Avenue —%
Slide 25: Seattle: Lake Union Eastlake Avenue East
Seattle Lake Union 1165 Eastlake Avenue East 100%
Slide 26: Greater Boston: Cambridge Binney Street
Greater Boston Cambridge 50 Binney Street —%
Slide 27: Greater Boston: Cambridge Binney Street
Greater Boston Cambridge 60 Binney Street —%
Slide 28: Greater Boston: Cambridge Binney Street
Greater Boston Cambridge 100 Binney Street —%
Slide 29: Footnote on RSF targeted for redevelopment
(1) See page 17 for RSF targeted for redevelopment.
Slide 30: Value-Creation Development Projects
Value-Creation Development Projects
Slide 31: Value-Creation Redevelopment Projects
Value-Creation Redevelopment Projects
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Slide 33: Slide 33
Slide 34: Current development projects: Science Park Road, East 29th Street, Longwood Avenue
Property 3013/3033 Science Park Road 430 East 29th Street 360 Longwood Avenue Submarket/Market Torrey Pines/San Diego Manhattan/New York City Longwood Medical Area/Greater Boston RSF (in progress) Project Type Development Development Unconsolidated JV Development Client Tenants Receptos, Inc./Others
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Slide 38: Property 10121 Barnes Canyon Road
Property 10121 Barnes Canyon Road Submarket/Market Route 128/Greater Boston RSF (in progress) Project Type Conversion of non-laboratory to laboratory Client Tenants FORUM Pharmaceuticals Inc.
Slide 39: Property 11055/11065/11075 Roselle Street
Property 11055/11065/11075 Roselle Street Submarket/Market Sorrento Mesa/San Diego RSF (in progress) Project Type Conversion to technology use Client Tenants Outerwall Inc.
Slide 40: Sorrento Valley redevelopment project
Submarket/Market Sorrento Valley/San Diego RSF (in progress) Project Type Conversion of non-laboratory to laboratory Client Tenants Tandem Diabetes Care, Inc.
Slide 41: Alexandria Center at Kendall Square: Background and Near-Term Opportunity
Background Alexandria received final approval from the City of Cambridge to develop the Alexandria Center™ at Kendall Square, a fully integrated campus featuring four world-class laboratory/office and tech office buildings, high-quality amenities, and green space. Alexandria’s entitlement efforts re
Slide 42: Townsend Street: Background and Near-Term Opportunity
Background Alexandria’s 500 Townsend Street project was acquired in April 2014 and represents an expansion of our successful Mission Bay science and technology campus into the SoMa submarket. The site is ideally located at the corner of Townsend and 6th Streets, placing it within close proximity to
Slide 43: Illumina campus: Background and Near-Term Opportunity
Background Alexandria owns and operates the headquarters campus of Illumina, Inc., the leading developer, manufacturer, and marketer of life science tools and integrated systems for large-scale analysis of genetic variation and function with a market capitalization of $19.1 billion as of March 31, 2
Slide 44: 10300 Campus Point Drive: Background and Near-Term Opportunity
Background 10300 Campus Point Drive is Alexandria’s flagship 449,759 RSF, multi-tenant laboratory/office campus in University Town Center with additional developable square footage. Near-Term Opportunity Ground-up development of at least one building aggregating approximately 140,000 RSF. We are cur
Slide 45: Lake Union: Background and Near-Term Opportunity
Background Alexandria’s Terry Avenue, Eastlake Avenue East, and Dexter Avenue North assets are located in Lake Union, home to numerous highly renowned medical research institutions, including the Fred Hutchinson Cancer Research Center and the University of Washington, as well as the corporate headqu
Slide 46: Research Triangle Park Davis Drive: Background and Near-Term Opportunity
Background Alexandria’s 6 Davis Drive is centrally located in the Research Triangle Park among three world-class research universities, Duke University, University of North Carolina at Chapel Hill, and North Carolina State University. The Research Triangle Park is home to numerous healthcare, life s
Slide 47: Net debt to adjusted EBITDA
7X 72x 72x 6.8x 4Q13 2Q14 4Q14 Projection
Slide 48: Fixed charge and interest coverage ratios
2.9x 3.2x 3.2x 3.5x 3.3x 3.3x 4Q14 Projection
Slide 49: Key credit metrics
69% 84% >80%
Slide 50: Non-income-producing assets and debt targets
15% 12% i <10% a _| : | 2Q14 4Q14 1Q15 Target Projection Projection
Slide 51: Key credit metrics footnotes
52% 80% of ARE’s TOTAL ABR of ARE’s TOP 20 ABR from Investment-Grade Client Tenants (1) Represents non-income-producing assets (CIP and land) as a percentage of gross investments in real estate. (2) Reflects our $700 million bond offering that was completed on July 18, 2014, at a weighted average ra
Slide 52: 2015 Key Capital Planning Considerations
(1) Represents non-income-producing assets as a percentage of gross investments in real estate. See pre-leasing of current projects on pages 28 and 30. (2) Represents estimated net cash provided by operating activities after dividends. (3) Represents amount of construction that can be funded by debt
Slide 53: Summary of debt footnote
(1) Reflects our $700 million bond offering that was completed on July 18, 2014, at a weighted average rate of 3.5%, consisting of $400 million of 2.75% unsecured senior notes payable due in 2020 and $300 million of 4.50% unsecured senior notes payable due in 2029. Net proceeds of $694 million were
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