ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Maryland
|
|
95-4502084
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
Large accelerated filer
ý
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
|
Page
|
|
||
|
|
|
FINANCIAL STATEMENTS (UNAUDITED)
|
|
|
|
|
|
|
Consolidated Balance Sheets as of March 31, 2016, and December 31, 2015
|
|
|
|
|
|
Consolidated Statements of Income for the Three Months Ended March 31, 2016 and 2015
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the Three Months Ended
March 31, 2016 and 2015
|
|
|
|
|
|
Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests for the Three Months Ended March 31, 2016
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015
|
|
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
Item 5.
|
OTHER INFORMATION
|
|
|
|
|
|
|
|
ABR
|
Annualized Base Rent
|
AFFO
|
Adjusted Funds from Operations
|
ASU
|
Accounting Standards Update
|
ATM
|
At the Market
|
CIP
|
Construction in Progress
|
EBITDA
|
Earnings before Interest, Taxes, Depreciation, and Amortization
|
EPS
|
Earnings per Share
|
FASB
|
Financial Accounting Standards Board
|
FFO
|
Funds from Operations
|
GAAP
|
U.S. Generally Accepted Accounting Principles
|
HVAC
|
Heating, Ventilation, and Air Conditioning
|
JV
|
Joint Venture
|
LEED
®
|
Leadership in Energy and Environmental Design
|
LIBOR
|
London Interbank Offered Rate
|
NAREIT
|
National Association of Real Estate Investment Trusts
|
NOI
|
Net Operating Income
|
NYSE
|
New York Stock Exchange
|
R&D
|
Research & Development
|
REIT
|
Real Estate Investment Trust
|
RSF
|
Rentable Square Feet/Foot
|
SEC
|
Securities and Exchange Commission
|
SF
|
Square Feet/Foot
|
SoMa
|
South of Market (submarket of the San Francisco market)
|
U.S.
|
United States
|
VIE
|
Variable Interest Entity
|
YTD
|
Year To Date
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Investments in real estate
|
$
|
7,741,466
|
|
|
$
|
7,629,922
|
|
Investments in unconsolidated real estate joint ventures
|
127,165
|
|
|
127,212
|
|
||
Cash and cash equivalents
|
146,197
|
|
|
125,098
|
|
||
Restricted cash
|
14,885
|
|
|
28,872
|
|
||
Tenant receivables
|
9,979
|
|
|
10,485
|
|
||
Deferred rent
|
293,144
|
|
|
280,570
|
|
||
Deferred leasing costs
|
192,418
|
|
|
192,081
|
|
||
Investments
|
316,163
|
|
|
353,465
|
|
||
Other assets
|
130,115
|
|
|
133,312
|
|
||
Total assets
|
$
|
8,971,532
|
|
|
$
|
8,881,017
|
|
|
|
|
|
||||
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
||||
Secured notes payable
|
$
|
816,578
|
|
|
$
|
809,818
|
|
Unsecured senior notes payable
|
2,031,284
|
|
|
2,030,631
|
|
||
Unsecured senior line of credit
|
299,000
|
|
|
151,000
|
|
||
Unsecured senior bank term loans
|
944,637
|
|
|
944,243
|
|
||
Accounts payable, accrued expenses, and tenant security deposits
|
628,467
|
|
|
589,356
|
|
||
Dividends payable
|
64,275
|
|
|
62,005
|
|
||
Total liabilities
|
4,784,241
|
|
|
4,587,053
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
14,218
|
|
|
14,218
|
|
||
|
|
|
|
||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
|
|
|
|
||||
Series D cumulative convertible preferred stock
|
213,864
|
|
|
237,163
|
|
||
Series E cumulative redeemable preferred stock
|
130,000
|
|
|
130,000
|
|
||
Common stock
|
729
|
|
|
725
|
|
||
Additional paid-in capital
|
3,529,660
|
|
|
3,558,008
|
|
||
Accumulated other comprehensive (loss) income
|
(8,533
|
)
|
|
49,191
|
|
||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
3,865,720
|
|
|
3,975,087
|
|
||
Noncontrolling interests
|
307,353
|
|
|
304,659
|
|
||
Total equity
|
4,173,073
|
|
|
4,279,746
|
|
||
Total liabilities, noncontrolling interests, and equity
|
$
|
8,971,532
|
|
|
$
|
8,881,017
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
||||
Rental
|
$
|
158,276
|
|
|
$
|
143,608
|
|
Tenant recoveries
|
52,597
|
|
|
48,394
|
|
||
Other income
|
5,216
|
|
|
4,751
|
|
||
Total revenues
|
216,089
|
|
|
196,753
|
|
||
|
|
|
|
||||
Expenses:
|
|
|
|
||||
Rental operations
|
65,837
|
|
|
61,223
|
|
||
General and administrative
|
15,188
|
|
|
14,387
|
|
||
Interest
|
24,855
|
|
|
23,236
|
|
||
Depreciation and amortization
|
70,866
|
|
|
58,920
|
|
||
Impairment of real estate
|
28,980
|
|
|
14,510
|
|
||
Total expenses
|
205,726
|
|
|
172,276
|
|
||
|
|
|
|
||||
Equity in (losses) earnings of unconsolidated real estate joint ventures
|
(397
|
)
|
|
574
|
|
||
Income from continuing operations
|
9,966
|
|
|
25,051
|
|
||
Loss from discontinued operations
|
—
|
|
|
(43
|
)
|
||
Net income
|
9,966
|
|
|
25,008
|
|
||
Net income attributable to noncontrolling interests
|
(4,030
|
)
|
|
(492
|
)
|
||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
5,936
|
|
|
24,516
|
|
||
Dividends on preferred stock
|
(5,907
|
)
|
|
(6,247
|
)
|
||
Preferred stock redemption charge
|
(3,046
|
)
|
|
—
|
|
||
Net income attributable to unvested restricted stock awards
|
(801
|
)
|
|
(483
|
)
|
||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(3,818
|
)
|
|
$
|
17,786
|
|
|
|
|
|
||||
EPS attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted:
|
|
|
|
||||
Continuing operations
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
Discontinued operations
|
—
|
|
|
—
|
|
||
EPS – basic and diluted
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
|
|
|
|
||||
Dividends declared per share of common stock
|
$
|
0.80
|
|
|
$
|
0.74
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Net income
|
$
|
9,966
|
|
|
$
|
25,008
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Unrealized (losses) gains on available-for-sale equity securities:
|
|
|
|
|
||||
Unrealized holding (losses) gains arising during the period
|
(47,423
|
)
|
|
28,435
|
|
|
||
Reclassification adjustment for (gains) losses included in net income
|
(7,026
|
)
|
|
1,103
|
|
|
||
Unrealized (losses) gains on available-for-sale equity securities, net
|
(54,449
|
)
|
|
29,538
|
|
|
||
|
|
|
|
|
||||
Unrealized losses on interest rate swap agreements:
|
|
|
|
|
||||
Unrealized interest rate swap losses arising during the period
|
(6,961
|
)
|
|
(3,013
|
)
|
|
||
Reclassification adjustment for amortization to interest expense included in net income
|
158
|
|
|
505
|
|
|
||
Unrealized losses on interest rate swap agreements, net
|
(6,803
|
)
|
|
(2,508
|
)
|
|
||
|
|
|
|
|
||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
||||
Unrealized foreign currency translation gains (losses) arising during the period
|
3,528
|
|
|
(6,271
|
)
|
|
||
Reclassification adjustment for losses included in net income
|
—
|
|
|
9,236
|
|
|
||
Unrealized gains on foreign currency translation, net
|
3,528
|
|
|
2,965
|
|
|
||
|
|
|
|
|
||||
Total other comprehensive (loss) income
|
(57,724
|
)
|
|
29,995
|
|
|
||
Comprehensive (loss) income
|
(47,758
|
)
|
|
55,003
|
|
|
||
Less: comprehensive income attributable to noncontrolling interests
|
(4,030
|
)
|
|
(646
|
)
|
|
||
Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
$
|
(51,788
|
)
|
|
$
|
54,357
|
|
|
|
|
Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
Series D
Cumulative
Convertible
Preferred
Stock
|
|
Series E
Cumulative
Redeemable
Preferred
Stock
|
|
Number of
Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-In Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||||||
Balance as of December 31, 2015
|
|
$
|
237,163
|
|
|
$
|
130,000
|
|
|
72,548,693
|
|
|
$
|
725
|
|
|
$
|
3,558,008
|
|
|
$
|
—
|
|
|
$
|
49,191
|
|
|
$
|
304,659
|
|
|
$
|
4,279,746
|
|
|
$
|
14,218
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,936
|
|
|
—
|
|
|
3,732
|
|
|
9,668
|
|
|
298
|
|
|||||||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,724
|
)
|
|
—
|
|
|
(57,724
|
)
|
|
—
|
|
|||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,038
|
)
|
|
(1,038
|
)
|
|
(298
|
)
|
|||||||||
Issuances of common stock
|
|
—
|
|
|
—
|
|
|
293,235
|
|
|
3
|
|
|
25,275
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,278
|
|
|
—
|
|
|||||||||
Issuances pursuant to stock plan
|
|
—
|
|
|
—
|
|
|
31,604
|
|
|
1
|
|
|
7,767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,768
|
|
|
—
|
|
|||||||||
Redemption of Series D preferred stock
|
|
(23,299
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|
(3,046
|
)
|
|
—
|
|
|
—
|
|
|
(25,618
|
)
|
|
—
|
|
|||||||||
Dividends declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,100
|
)
|
|
—
|
|
|
—
|
|
|
(59,100
|
)
|
|
—
|
|
|||||||||
Dividends declared on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,907
|
)
|
|
—
|
|
|
—
|
|
|
(5,907
|
)
|
|
—
|
|
|||||||||
Distributions in excess of earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,117
|
)
|
|
62,117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance as of March 31, 2016
|
|
$
|
213,864
|
|
|
$
|
130,000
|
|
|
72,873,532
|
|
|
$
|
729
|
|
|
$
|
3,529,660
|
|
|
$
|
—
|
|
|
$
|
(8,533
|
)
|
|
$
|
307,353
|
|
|
$
|
4,173,073
|
|
|
$
|
14,218
|
|
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|||||||
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
9,966
|
|
|
$
|
25,008
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
70,866
|
|
|
58,920
|
|
||
Impairment of real estate
|
28,980
|
|
|
14,510
|
|
||
Equity in losses (earnings) of unconsolidated real estate joint ventures
|
397
|
|
|
(574
|
)
|
||
Distributions of earnings from unconsolidated real estate joint ventures
|
98
|
|
|
491
|
|
||
Amortization of loan fees
|
2,760
|
|
|
2,834
|
|
||
Amortization of debt premiums
|
(86
|
)
|
|
(82
|
)
|
||
Amortization of acquired below-market leases
|
(974
|
)
|
|
(933
|
)
|
||
Deferred rent
|
(12,138
|
)
|
|
(9,901
|
)
|
||
Stock compensation expense
|
5,439
|
|
|
3,690
|
|
||
Investment gains
|
(5,891
|
)
|
|
(5,937
|
)
|
||
Investment losses
|
1,782
|
|
|
2,225
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Restricted cash
|
671
|
|
|
(51
|
)
|
||
Tenant receivables
|
521
|
|
|
(102
|
)
|
||
Deferred leasing costs
|
(7,083
|
)
|
|
(7,131
|
)
|
||
Other assets
|
(2,525
|
)
|
|
(3,247
|
)
|
||
Accounts payable, accrued expenses, and tenant security deposits
|
8,999
|
|
|
27,121
|
|
||
Net cash provided by operating activities
|
101,782
|
|
|
106,841
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Proceeds from sales of real estate
|
—
|
|
|
67,616
|
|
||
Additions to real estate
|
(159,501
|
)
|
|
(104,632
|
)
|
||
Purchase of real estate
|
—
|
|
|
(93,938
|
)
|
||
Deposits for investing activities
|
—
|
|
|
(28,000
|
)
|
||
Investments in unconsolidated real estate joint ventures
|
(449
|
)
|
|
(2,539
|
)
|
||
Additions to investments
|
(22,085
|
)
|
|
(15,118
|
)
|
||
Sales of investments
|
10,913
|
|
|
2,345
|
|
||
Repayment of notes receivable
|
—
|
|
|
4,214
|
|
||
Net cash used in investing activities
|
$
|
(171,122
|
)
|
|
$
|
(170,052
|
)
|
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|||||||
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Financing Activities
|
|
|
|
||||
Borrowings from secured notes payable
|
$
|
64,922
|
|
|
$
|
29,585
|
|
Repayments of borrowings from secured notes payable
|
(58,657
|
)
|
|
(7,934
|
)
|
||
Borrowings from unsecured senior line of credit
|
555,000
|
|
|
167,000
|
|
||
Repayments of borrowings from unsecured senior line of credit
|
(407,000
|
)
|
|
(50,000
|
)
|
||
Change in restricted cash related to financing activities
|
8,316
|
|
|
(1,369
|
)
|
||
Payment of loan fees
|
(377
|
)
|
|
(563
|
)
|
||
Redemption of Series D cumulative convertible preferred stock
|
(25,618
|
)
|
|
—
|
|
||
Proceeds from the issuance of common stock
|
25,278
|
|
|
—
|
|
||
Dividends on common stock
|
(56,490
|
)
|
|
(53,295
|
)
|
||
Dividends on preferred stock
|
(6,247
|
)
|
|
(6,247
|
)
|
||
Financing costs paid for sales of noncontrolling interests
|
(6,420
|
)
|
|
—
|
|
||
Contributions by noncontrolling interests
|
—
|
|
|
340
|
|
||
Distributions to noncontrolling interests
|
(1,927
|
)
|
|
(9,846
|
)
|
||
Net cash provided by financing activities
|
90,780
|
|
|
67,671
|
|
||
|
|
|
|
||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(341
|
)
|
|
170
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
21,099
|
|
|
4,630
|
|
||
Cash and cash equivalents as of the beginning of period
|
125,098
|
|
|
86,011
|
|
||
Cash and cash equivalents as of the end of period
|
$
|
146,197
|
|
|
$
|
90,641
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
14,068
|
|
|
$
|
15,514
|
|
|
|
|
|
||||
Non-Cash Investing Activities
|
|
|
|
||||
Change in accrued construction
|
$
|
29,197
|
|
|
$
|
7,249
|
|
Assumption of secured notes payable in connection with purchase of real estate
|
$
|
—
|
|
|
$
|
(82,000
|
)
|
|
|
|
|
||||
Non-Cash Financing Activities
|
|
|
|
||||
Payable for purchase of noncontrolling interest
|
$
|
—
|
|
|
$
|
(113,967
|
)
|
1.
|
Background
|
|
|
Square Feet
(unaudited)
|
|
North America:
|
|
|
|
Operating properties
|
|
15,400,619
|
|
Projects under construction or pre-construction:
|
|
|
|
Projects to be delivered by 4Q16
|
|
1,465,977
|
|
Projects to be delivered in 2017 and 2018
|
|
2,036,828
|
|
Development and redevelopment projects
|
|
3,502,805
|
|
Operating properties, including development and redevelopment projects
|
|
18,903,424
|
|
Future value-creation projects
|
|
5,606,435
|
|
Value-creation pipeline
|
|
9,109,240
|
|
Total - North America
|
|
24,509,859
|
|
|
|
|
|
Asia:
|
|
|
|
Operating properties
|
|
1,200,683
|
|
Land parcels
|
|
(1)
|
|
Asia
|
|
1,200,683
|
|
(1)
|
Aggregating
196
acres.
|
•
|
Investment-grade tenants represented approximately
52%
of our total ABR;
|
•
|
Approximately
96%
of our leases (on an RSF basis) were triple net leases, requiring tenants to pay substantially all real estate taxes, insurance, utilities, common area expenses, and other operating expenses (including increases thereto) in addition to base rent;
|
•
|
Approximately
95%
of our leases (on an RSF basis) contained effective annual rent escalations that were either fixed (generally ranging from
3%
to
3.5%
)
or indexed based on a consumer price index or other index; and
|
•
|
Approximately
94%
of our leases (on an RSF basis)
provided for the recapture of certain capital expenditures (such as HVAC systems maintenance and/or replacement, roof replacement, and parking lot resurfacing) that we believe would typically be borne by the landlord in traditional office leases.
|
2.
|
Basis of presentation and summary of significant accounting policies
|
•
|
A legal structure 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
|
•
|
The entity established has variable interests – i.e. it has 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.
|
2.
|
Basis of presentation and summary of significant accounting policies (continued)
|
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., where 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 impact 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; and
|
•
|
The right to receive the entity’s expected residual returns.
|
•
|
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 impact the entity’s economic performance.
|
•
|
Kick-out rights – allow the noncontrolling equity holders to remove the general partner or managing member without cause.
|
2.
|
Basis of presentation and summary of significant accounting policies (continued)
|
2.
|
Basis of presentation and summary of significant accounting policies (continued)
|
2.
|
Basis of presentation and summary of significant accounting policies (continued)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Management fee income
|
|
$
|
253
|
|
|
$
|
554
|
|
Interest and other income
|
|
854
|
|
|
485
|
|
||
Investment income
|
|
4,109
|
|
|
3,712
|
|
||
Total other income
|
|
$
|
5,216
|
|
|
$
|
4,751
|
|
2.
|
Basis of presentation and summary of significant accounting policies (continued)
|
3.
|
Investments in real estate
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
North America:
|
|
|
|
|
||||
Land (related to rental properties)
|
|
$
|
661,881
|
|
|
$
|
677,649
|
|
Buildings and building improvements
|
|
6,608,884
|
|
|
6,644,634
|
|
||
Other improvements
|
|
288,961
|
|
|
260,605
|
|
||
Rental properties – North America
|
|
7,559,726
|
|
|
7,582,888
|
|
||
|
|
|
|
|
||||
Development and redevelopment projects (under construction or pre-construction)
|
|
1,106,138
|
|
|
917,706
|
|
||
Future value-creation projects – North America
|
|
234,142
|
|
|
206,939
|
|
||
Value-creation pipeline – North America
|
|
1,340,280
|
|
|
1,124,645
|
|
||
|
|
|
|
|
||||
Gross investments in real estate – North America
|
|
8,900,006
|
|
|
8,707,533
|
|
||
|
|
|
|
|
||||
Gross investments in real estate – Asia
|
|
218,052
|
|
|
237,728
|
|
||
|
|
|
|
|
||||
Gross investments in real estate
|
|
9,118,058
|
|
|
8,945,261
|
|
||
Less: accumulated depreciation
|
|
(1,376,592
|
)
|
|
(1,315,339
|
)
|
||
Investments in real estate
|
|
$
|
7,741,466
|
|
|
$
|
7,629,922
|
|
3.
|
Investments in real estate (continued)
|
|
|
March 31, 2016
|
||||||||||
|
|
Consolidated Real Estate Joint Ventures at 100%
|
||||||||||
|
|
225 Binney Street
|
|
1500 Owens Street
|
|
409/499 Illinois Street
|
||||||
Investments in real estate
|
|
$
|
162,484
|
|
|
$
|
82,121
|
|
|
$
|
360,224
|
|
Cash and cash equivalents
|
|
4,956
|
|
|
3,077
|
|
|
9,234
|
|
|||
Other assets
|
|
6,968
|
|
|
6,376
|
|
|
23,820
|
|
|||
Total assets
|
|
$
|
174,408
|
|
|
$
|
91,574
|
|
|
$
|
393,278
|
|
|
|
|
|
|
|
|
||||||
Secured notes payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities
|
|
3,872
|
|
|
11,288
|
|
|
29,311
|
|
|||
Total liabilities
|
|
3,872
|
|
|
11,288
|
|
|
29,311
|
|
|||
Alexandria Real Estate Equities, Inc.’s share of equity
|
|
51,161
|
|
|
40,223
|
|
|
218,380
|
|
|||
Noncontrolling interests share of equity
|
|
119,375
|
|
|
40,063
|
|
|
145,587
|
|
|||
Total liabilities and equity
|
|
$
|
174,408
|
|
|
$
|
91,574
|
|
|
$
|
393,278
|
|
|
|
|
|
|
|
|
4.
|
Investments in unconsolidated real estate joint ventures
|
1)
|
The entity does not have sufficient equity to finance its activities without additional subordinated financial support.
|
•
|
360 Longwood Avenue –
This entity has significant equity and non-recourse financing in place to fund the remainder of the development.
|
•
|
1455/1515 Third Street –
This entity has significant equity, and non-recourse financing is available to fund the remainder of the development.
|
2)
|
The entity is established with non-substantive voting rights.
|
•
|
360 Longwood Avenue –
Our 27.5% economic interest in 360 Longwood Avenue consists of an interest in a real estate joint venture with a development partner. The joint venture with our development partner holds an interest in the property with an institutional investor. Our development partner is responsible for day-to-day management of construction and development activities, and we are responsible for day-to-day administrative operations of components of the property once they are placed into service following development completion. At the property level, all major decisions (including the development plan, annual budget, leasing plan, and financing plan) require approval of all three investors. Although voting rights within the structure are disproportionate to the members’ economic interests, the activities of the ventures are conducted on behalf of all members, and therefore, the voting rights, while disproportionate, are substantive.
|
•
|
1455/1515 Third Street –
We hold a 51% economic interest in this real estate joint venture, and our joint venture partner holds a 49% economic interest. However, both members are required to approve major decisions, resulting in equal voting rights. Although voting rights within the structure are disproportionate to the members’ economic interests, the activities of the ventures are conducted on behalf of both members, and therefore, the voting rights, while disproportionate, are substantive.
|
4.
|
Investments in unconsolidated real estate joint ventures (continued)
|
3)
|
The equity holders, as a group, lack the characteristics of a controlling financial interest, as evidenced by lack of substantive kick-out rights or substantive participating rights.
|
•
|
360 Longwood Avenue –
The other members have significant participating rights, including day-to-day management of development activities and participation in decisions related to the operations of the property.
|
•
|
1455/1515 Third Street –
Our joint venture partner has significant participating rights, including joint decision making for the design of the project, overall development costs, future potential financing and operating activities of the joint venture, and disposal of the assets held by the joint venture.
|
5.
|
Investments
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Available-for-sale equity securities, cost basis
|
$
|
22,237
|
|
|
$
|
20,022
|
|
Unrealized gains
|
65,069
|
|
|
118,392
|
|
||
Unrealized losses
|
(1,919
|
)
|
|
(793
|
)
|
||
Available-for-sale equity securities, at fair value
|
85,387
|
|
|
137,621
|
|
||
Investments accounted for under cost method
|
230,776
|
|
|
215,844
|
|
||
Total investments
|
$
|
316,163
|
|
|
$
|
353,465
|
|
6.
|
Other assets
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Acquired below-market ground leases
|
$
|
13,085
|
|
|
$
|
13,142
|
|
Acquired in-place leases
|
26,860
|
|
|
27,997
|
|
||
Deferred compensation plan
|
8,547
|
|
|
8,489
|
|
||
Deferred financing costs
–
unsecured senior line of credit
|
10,916
|
|
|
11,909
|
|
||
Deposits
|
8,570
|
|
|
3,713
|
|
||
Furniture, fixtures, and equipment, net
|
14,185
|
|
|
13,682
|
|
||
Interest rate swap assets
|
25
|
|
|
596
|
|
||
Notes receivable
|
16,672
|
|
|
16,630
|
|
||
Prepaid expenses
|
10,305
|
|
|
17,651
|
|
||
Other assets
|
20,950
|
|
|
19,503
|
|
||
Total
|
$
|
130,115
|
|
|
$
|
133,312
|
|
7.
|
Fair value measurements
|
|
|
|
|
March 31, 2016
|
||||||||||||
Description
|
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
|
$
|
85,387
|
|
|
$
|
85,387
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
$
|
10,546
|
|
|
$
|
—
|
|
|
$
|
10,546
|
|
|
$
|
—
|
|
7.
|
Fair value measurements (continued)
|
|
|
|
|
December 31, 2015
|
||||||||||||
Description
|
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
|
$
|
137,621
|
|
|
$
|
137,621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
$
|
596
|
|
|
$
|
—
|
|
|
$
|
596
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
$
|
4,314
|
|
|
$
|
—
|
|
|
$
|
4,314
|
|
|
$
|
—
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Book Value
|
|
Fair Value
|
|
Book Value
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
$
|
85,387
|
|
|
$
|
85,387
|
|
|
$
|
137,621
|
|
|
$
|
137,621
|
|
Interest rate swap agreements
|
$
|
25
|
|
|
$
|
25
|
|
|
$
|
596
|
|
|
$
|
596
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
10,546
|
|
|
$
|
10,546
|
|
|
$
|
4,314
|
|
|
$
|
4,314
|
|
Secured notes payable
|
$
|
816,578
|
|
|
$
|
846,915
|
|
|
$
|
809,818
|
|
|
$
|
832,342
|
|
Unsecured senior notes payable
|
$
|
2,031,284
|
|
|
$
|
2,113,185
|
|
|
$
|
2,030,631
|
|
|
$
|
2,059,855
|
|
Unsecured senior line of credit
|
$
|
299,000
|
|
|
$
|
300,428
|
|
|
$
|
151,000
|
|
|
$
|
151,450
|
|
Unsecured senior bank term loans
|
$
|
944,637
|
|
|
$
|
957,490
|
|
|
$
|
944,243
|
|
|
$
|
951,098
|
|
8.
|
Secured and unsecured senior debt
|
|
Fixed-Rate/Hedged
Variable Rate
|
|
Unhedged
Variable Rate
|
|
|
|
|
|
Weighted-Average
|
||||||||||
|
|
|
Total
|
|
Interest
|
|
Remaining Term
(in years)
|
||||||||||||
|
|
|
Consolidated
(1)
|
|
Percentage
|
|
Rate
(2)
|
|
|||||||||||
Secured notes payable
|
$
|
359,935
|
|
|
$
|
456,643
|
|
|
$
|
816,578
|
|
|
20.0
|
%
|
|
3.90
|
%
|
|
2.6
|
Unsecured senior notes payable
|
2,031,284
|
|
|
—
|
|
|
2,031,284
|
|
|
49.6
|
|
|
4.14
|
|
|
7.5
|
|||
$1.5 billion unsecured senior line of credit
|
150,000
|
|
|
149,000
|
|
|
299,000
|
|
|
7.3
|
|
|
1.77
|
|
|
2.8
|
|||
2019 Unsecured Senior Bank Term Loan
|
597,035
|
|
|
—
|
|
|
597,035
|
|
|
14.6
|
|
|
1.88
|
|
|
2.8
|
|||
2021 Unsecured Senior Bank Term Loan
|
347,602
|
|
|
—
|
|
|
347,602
|
|
|
8.5
|
|
|
1.74
|
|
|
4.8
|
|||
Total/weighted average
|
$
|
3,485,856
|
|
|
$
|
605,643
|
|
|
$
|
4,091,499
|
|
|
100.0
|
%
|
|
3.39
|
%
|
|
5.2
|
Percentage of total debt
|
85%
|
|
|
15%
|
|
|
100%
|
|
|
|
|
|
|
|
(1)
|
In accordance with the ASU adopted in January 2016 as discussed in Note 2 – “Basis of Presentation and Summary of Significant Accounting Policies.”
|
(2)
|
Represents the weighted-average interest rate as of the end of the period plus the impact of debt premiums/discounts, interest rate swap agreements, and deferred financing costs.
|
8.
|
Secured and unsecured senior debt (continued)
|
|
|
Stated
Rate
|
|
Weighted-Average
Interest Rate
(1)
|
|
Maturity
|
|
Principal Payments Remaining for the Periods Ending December 31,
|
|
|
|
|
|
Unamortized Premium/(Discount), (Deferred Financing Costs)
|
|
|
||||||||||||||||||||||||||||
Debt
|
|
|
|
Date
(2)
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Principal
|
|
|
Total
|
|||||||||||||||||||||||
Secured notes payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
San Francisco
|
|
6.35
|
%
|
|
6.64
|
%
|
|
(3)
|
|
$
|
126,020
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,020
|
|
|
$
|
(34
|
)
|
|
$
|
125,986
|
|
San Francisco
|
|
L+1.50
|
|
|
2.83
|
|
|
(3)
|
|
47,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,821
|
|
|
(104
|
)
|
|
47,717
|
|
|||||||||
Maryland
|
|
2.44
|
|
|
2.91
|
|
|
1/20/17
|
|
—
|
|
|
76,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,000
|
|
|
(208
|
)
|
|
75,792
|
|
|||||||||
Greater Boston
|
|
L+1.35
|
|
|
2.00
|
|
|
8/23/17
|
(4)
|
—
|
|
|
188,120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188,120
|
|
|
(1,857
|
)
|
|
186,263
|
|
|||||||||
Greater Boston
|
|
L+1.50
|
|
|
1.85
|
|
|
1/28/19
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
150,162
|
|
|
—
|
|
|
—
|
|
|
150,162
|
|
|
(3,291
|
)
|
|
146,871
|
|
|||||||||
San Diego, Seattle, and Maryland
|
|
7.75
|
|
|
8.07
|
|
|
4/1/20
|
|
1,285
|
|
|
1,832
|
|
|
1,979
|
|
|
2,138
|
|
|
104,352
|
|
|
—
|
|
|
111,586
|
|
|
(1,336
|
)
|
|
110,250
|
|
|||||||||
San Diego
|
|
4.66
|
|
|
4.92
|
|
|
1/1/23
|
|
1,103
|
|
|
1,540
|
|
|
1,614
|
|
|
1,692
|
|
|
1,770
|
|
|
29,904
|
|
|
37,623
|
|
|
(444
|
)
|
|
37,179
|
|
|||||||||
Greater Boston
|
|
3.93
|
|
|
3.18
|
|
|
3/10/23
|
|
—
|
|
|
—
|
|
|
1,091
|
|
|
1,505
|
|
|
1,566
|
|
|
77,838
|
|
|
82,000
|
|
|
3,708
|
|
|
85,708
|
|
|||||||||
San Francisco
|
|
6.50
|
|
|
6.64
|
|
|
7/1/36
|
|
19
|
|
|
20
|
|
|
22
|
|
|
23
|
|
|
25
|
|
|
703
|
|
|
812
|
|
|
—
|
|
|
812
|
|
|||||||||
Weighted-average interest rate/subtotal
|
|
3.83
|
%
|
|
3.90
|
|
|
|
|
176,248
|
|
|
267,512
|
|
|
4,706
|
|
|
155,520
|
|
|
107,713
|
|
|
108,445
|
|
|
820,144
|
|
|
(3,566
|
)
|
|
816,578
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
$1.5 billion unsecured senior line of credit
|
|
L+1.10
|
%
|
(6)
|
1.77
|
|
|
1/3/19
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,000
|
|
|
—
|
|
|
—
|
|
|
299,000
|
|
|
—
|
|
|
299,000
|
|
|||||||||
2019 Unsecured Senior Bank Term Loan
|
|
L+1.20
|
%
|
|
1.88
|
|
|
1/3/19
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600,000
|
|
|
—
|
|
|
—
|
|
|
600,000
|
|
|
(2,965
|
)
|
|
597,035
|
|
|||||||||
2021 Unsecured Senior Bank Term Loan
|
|
L+1.10
|
%
|
|
1.74
|
|
|
1/15/21
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
|
350,000
|
|
|
(2,398
|
)
|
|
347,602
|
|
|||||||||
Unsecured senior notes payable
|
|
2.75
|
%
|
|
2.95
|
|
|
1/15/20
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
—
|
|
|
400,000
|
|
|
(2,986
|
)
|
|
397,014
|
|
|||||||||
Unsecured senior notes payable
|
|
4.60
|
%
|
|
4.72
|
|
|
4/1/22
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
550,000
|
|
|
550,000
|
|
|
(3,886
|
)
|
|
546,114
|
|
|||||||||
Unsecured senior notes payable
|
|
3.90
|
%
|
|
4.02
|
|
|
6/15/23
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
500,000
|
|
|
(4,236
|
)
|
|
495,764
|
|
|||||||||
Unsecured senior notes payable
|
|
4.30
|
%
|
|
4.46
|
|
|
1/15/26
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
300,000
|
|
|
(4,669
|
)
|
|
295,331
|
|
|||||||||
Unsecured senior notes payable
|
|
4.50
|
%
|
|
4.58
|
|
|
7/30/29
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
300,000
|
|
|
(2,939
|
)
|
|
297,061
|
|
|||||||||
Unsecured debt weighted average/subtotal
|
|
|
|
3.26
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
899,000
|
|
|
400,000
|
|
|
2,000,000
|
|
|
3,299,000
|
|
|
(24,079
|
)
|
|
3,274,921
|
|
||||||||||
Weighted-average interest rate/total
|
|
|
|
3.39
|
%
|
|
|
|
$
|
176,248
|
|
|
$
|
267,512
|
|
|
$
|
4,706
|
|
|
$
|
1,054,520
|
|
|
$
|
507,713
|
|
|
$
|
2,108,445
|
|
|
$
|
4,119,144
|
|
|
$
|
(27,645
|
)
|
|
$
|
4,091,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Balloon payments
|
|
|
|
|
|
|
|
$
|
173,135
|
|
|
$
|
264,120
|
|
|
$
|
—
|
|
|
$
|
1,049,162
|
|
|
$
|
503,979
|
|
|
$
|
2,100,487
|
|
|
$
|
4,090,883
|
|
|
$
|
—
|
|
|
$
|
4,090,883
|
|
||
Principal amortization
|
|
|
|
|
|
|
|
3,113
|
|
|
3,392
|
|
|
4,706
|
|
|
5,358
|
|
|
3,734
|
|
|
7,958
|
|
|
28,261
|
|
|
(27,645
|
)
|
|
616
|
|
|||||||||||
Total debt
|
|
|
|
|
|
|
|
$
|
176,248
|
|
|
$
|
267,512
|
|
|
$
|
4,706
|
|
|
$
|
1,054,520
|
|
|
$
|
507,713
|
|
|
$
|
2,108,445
|
|
|
$
|
4,119,144
|
|
|
$
|
(27,645
|
)
|
|
$
|
4,091,499
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Fixed-rate/hedged variable-rate debt
|
|
|
|
|
|
|
|
$
|
128,427
|
|
|
$
|
3,392
|
|
|
$
|
4,706
|
|
|
$
|
755,358
|
|
|
$
|
507,713
|
|
|
$
|
2,108,445
|
|
|
$
|
3,508,041
|
|
|
$
|
(22,185
|
)
|
|
$
|
3,485,856
|
|
||
Unhedged variable-rate debt
|
|
|
|
|
|
|
|
47,821
|
|
|
264,120
|
|
|
—
|
|
|
299,162
|
|
|
—
|
|
|
—
|
|
|
611,103
|
|
|
(5,460
|
)
|
|
605,643
|
|
|||||||||||
Total debt
|
|
|
|
|
|
|
|
$
|
176,248
|
|
|
$
|
267,512
|
|
|
$
|
4,706
|
|
|
$
|
1,054,520
|
|
|
$
|
507,713
|
|
|
$
|
2,108,445
|
|
|
$
|
4,119,144
|
|
|
$
|
(27,645
|
)
|
|
$
|
4,091,499
|
|
(1)
|
Represents the weighted-average interest rate as of the end of the period plus the impact of debt premiums/discounts, interest rate swap agreements, and deferred financing costs.
|
(2)
|
Reflects any extension options that we control.
|
(3)
|
In April 2016, we repaid the
$47.8 million
secured note payable with an effective interest rate of
2.83%
. In May 2016, we repaid the
$126.0 million
secured note payable with an effective interest rate of
6.64%
.
|
(4)
|
We have a
one
-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.
|
(5)
|
We have
two
,
one
-year options to extend the stated maturity date to January 28, 2021, subject to certain conditions.
|
(6)
|
Our unsecured senior line of credit contains a feature that allows lenders to competitively bid on the interest rate for borrowings under the facility. This may result in an interest rate that is below the stated rate of LIBOR+1.10%. In addition to the cost of borrowing, the facility is subject to an annual facility fee of
0.20%
, based on the aggregate commitments. Unamortized deferred financing costs related to our unsecured senior line of credit are classified in other assets and are excluded from the calculation of the weighted-average interest rate. Refer to the ASU adopted in January 2016 as described in Note 2 – “Basis of Presentation and Summary of Significant Accounting Policies.”
|
8.
|
Secured and unsecured senior debt (continued)
|
Market
|
|
Stated Rate
|
|
Maturity Date
|
|
Outstanding Balance
|
|
Remaining Commitments
|
|
Total Aggregate Commitments
|
|||||||||
259 East Grand Avenue/San Francisco
|
|
|
L+1.50%
|
|
(1)
|
|
|
$
|
47,821
|
|
|
$
|
7,179
|
|
|
$
|
55,000
|
|
|
75/125 Binney Street/Greater Boston
|
|
|
L+1.35%
|
|
8/23/17
|
(2)
|
|
188,120
|
|
|
62,280
|
|
|
250,400
|
|
||||
50/60 Binney Street/Greater Boston
|
|
|
L+1.50%
|
|
1/28/19
|
(3)
|
|
150,162
|
|
|
199,838
|
|
|
350,000
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
386,103
|
|
|
$
|
269,297
|
|
|
$
|
655,400
|
|
(1)
|
In April 2016, we repaid this secured note payable with an effective interest rate of
2.83%
.
|
(2)
|
We have a
one
-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions.
|
(3)
|
We have
two
,
one
-year options to extend the stated maturity date to January 28, 2021, subject to certain conditions.
|
Market
|
|
Stated Rate
|
|
Maturity Date
|
|
Outstanding Balance
|
|
Remaining Commitments
|
|
Total Aggregate Commitments
|
|||||||||
100 Binney Street/Greater Boston
|
|
|
L+2.00%
|
|
4/20/19
|
(1)
|
|
$
|
—
|
|
|
$
|
304,281
|
|
|
$
|
304,281
|
|
(1)
|
We have
two
,
one
-year options to extend the stated maturity date to April 20, 2021, subject to certain conditions.
|
9.
|
Interest rate swap agreements
|
|
|
|
|
Number of Contracts
|
|
Weighted-Average Interest Pay Rate
(1)
|
|
Fair Value as of 3/31/16
|
|
Notional Amount in Effect as of
|
||||||||||||||||
Effective Date
|
|
Maturity Date
|
|
|
|
|
3/31/16
|
|
12/31/16
|
|
12/31/17
|
|
12/31/18
|
|||||||||||||
September 1, 2015
|
|
March 31, 2017
|
|
2
|
|
0.57%
|
|
$
|
(5
|
)
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
March 31, 2016
|
|
March 31, 2017
|
|
11
|
|
1.15%
|
|
(5,830
|
)
|
|
1,000,000
|
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|||||
March 31, 2017
|
|
March 31, 2018
|
|
15
|
|
1.31%
|
|
(4,636
|
)
|
|
—
|
|
|
—
|
|
|
900,000
|
|
|
—
|
|
|||||
March 29, 2018
|
|
March 31, 2019
|
|
4
|
|
1.06%
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|||||
Total
|
|
|
|
|
|
|
|
$
|
(10,521
|
)
|
(2)
|
$
|
1,100,000
|
|
|
$
|
1,100,000
|
|
|
$
|
900,000
|
|
|
$
|
250,000
|
|
(1)
|
In addition to the interest pay rate for each swap agreement, interest is payable at an applicable margin for borrowings outstanding as of
March 31, 2016
. Borrowings under our 2019 unsecured senior bank term loan (“2019 Unsecured Senior Bank Term Loan”) include an applicable margin of
1.20%
, and borrowings outstanding under our unsecured senior line of credit and 2021 Unsecured Senior Bank Term Loan include an applicable margin of
1.10%
.
|
(2)
|
This total represents the net of the fair value of interest rate swap agreements in liability position of
$10.5 million
and fair value of interest rate swap agreements in asset position of
$25 thousand
. Refer to Note 7 – “Fair Value Measurements” to our unaudited consolidated financial statements under Item 1 of this report.
|
10.
|
Accounts payable, accrued expenses, and tenant security deposits
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Accounts payable and accrued expenses
|
$
|
266,266
|
|
|
$
|
239,838
|
|
Acquired below-market leases
|
24,986
|
|
|
26,018
|
|
||
Conditional asset retirement obligations
|
5,727
|
|
|
5,777
|
|
||
Deferred rent liabilities
|
26,261
|
|
|
27,664
|
|
||
Interest rate swap liabilities
|
10,546
|
|
|
4,314
|
|
||
Unearned rent and tenant security deposits
|
213,072
|
|
|
211,605
|
|
||
Other liabilities
(1)
|
81,609
|
|
|
74,140
|
|
||
Total
|
$
|
628,467
|
|
|
$
|
589,356
|
|
(1)
|
The balance
as of March 31, 2016
includes a
$54.0 million
liability related to the second installment paid on April 1, 2016, for our acquisition of the remaining noncontrolling interest in our
1.2 million
RSF campus at Alexandria Technology Square® in our Cambridge submarket. Refer to Note 15 – “Subsequent Events” to our unaudited consolidated financial statements under Item 1 of this report for additional information.
|
11.
|
Earnings per share
|
11.
|
Earnings per share (continued)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Income from continuing operations
|
$
|
9,966
|
|
|
$
|
25,051
|
|
Net income attributable to noncontrolling interests
|
(4,030
|
)
|
|
(492
|
)
|
||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
5,936
|
|
|
24,559
|
|
||
Dividends on preferred stock
|
(5,907
|
)
|
|
(6,247
|
)
|
||
Preferred stock redemption charge
|
(3,046
|
)
|
|
—
|
|
||
Net income attributable to unvested restricted stock awards
|
(801
|
)
|
|
(483
|
)
|
||
(Loss) income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
|
(3,818
|
)
|
|
17,829
|
|
||
Loss from discontinued operations
|
—
|
|
|
(43
|
)
|
||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
|
$
|
(3,818
|
)
|
|
$
|
17,786
|
|
|
|
|
|
||||
Weighted-average shares of common stock outstanding – basic and diluted
|
72,584
|
|
|
71,366
|
|
||
|
|
|
|
||||
EPS attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted:
|
|
|
|
||||
Continuing operations
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
Discontinued operations
|
—
|
|
|
—
|
|
||
EPS – basic and diluted
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
12.
|
Stockholders’ equity
|
|
|
Net Unrealized Gain on Available-for- Sale Equity Securities
|
|
Net Unrealized Loss on Interest Rate
Swap Agreements |
|
Net Unrealized Loss on Foreign Currency Translation
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
|
$
|
117,599
|
|
|
$
|
(3,718
|
)
|
|
$
|
(64,690
|
)
|
|
$
|
49,191
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income before reclassifications
|
|
(47,423
|
)
|
|
(6,961
|
)
|
|
3,528
|
|
|
(50,856
|
)
|
||||
Amounts reclassified from other comprehensive (income) loss
|
|
(7,026
|
)
|
|
158
|
|
|
—
|
|
|
(6,868
|
)
|
||||
|
|
(54,449
|
)
|
|
(6,803
|
)
|
|
3,528
|
|
|
(57,724
|
)
|
||||
Amounts attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net other comprehensive (loss) income
|
|
(54,449
|
)
|
|
(6,803
|
)
|
|
3,528
|
|
|
(57,724
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2016
|
|
$
|
63,150
|
|
|
$
|
(10,521
|
)
|
|
$
|
(61,162
|
)
|
|
$
|
(8,533
|
)
|
13.
|
Noncontrolling interests
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Income from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
|
$
|
5,936
|
|
|
$
|
24,559
|
|
Loss from discontinued operations
|
|
—
|
|
|
(43
|
)
|
||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
|
$
|
5,936
|
|
|
$
|
24,516
|
|
14.
|
Assets classified as held for sale
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Total assets
|
$
|
19,356
|
|
|
$
|
19,083
|
|
Total liabilities
|
—
|
|
|
—
|
|
||
Net assets classified as held for sale – North America
|
$
|
19,356
|
|
|
$
|
19,083
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Total revenues
|
|
$
|
1,003
|
|
|
$
|
1,671
|
|
Operating expenses
|
|
(359
|
)
|
|
(560
|
)
|
||
Total revenues less operating expenses
|
|
644
|
|
|
1,111
|
|
||
Depreciation expense
|
|
(105
|
)
|
|
(335
|
)
|
||
Income from assets classified as held for sale – North America
(1)
|
|
$
|
539
|
|
|
$
|
776
|
|
(1)
|
Includes the results of operations of
three
properties with an aggregate
161,690
RSF that were classified as held for sale as of
March 31, 2016
, and
four
properties with an aggregate
279,733
RSF that were sold subsequent to
three months ended March 31, 2015
. These properties did not qualify for classification as discontinued operations. For additional information, refer to Note 2 – “Basis of Presentation and Summary of Significant Accounting Policies” to our unaudited consolidated financial statements under Item 1 of this report.
|
14.
|
Assets classified as held for sale (continued)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Total assets
|
$
|
220,424
|
|
|
$
|
247,560
|
|
Total liabilities
|
(12,866
|
)
|
|
(11,566
|
)
|
||
Total accumulated other comprehensive loss
(1)
|
49,787
|
|
|
49,838
|
|
||
Net assets located in Asia as of March 31, 2016
(2)
|
$
|
257,345
|
|
|
$
|
285,832
|
|
Impairment recognized in April 2016
|
(152,968
|
)
|
|
|
|||
Net assets located in Asia after impairment recognized in April 2016
(3)
|
$
|
104,377
|
|
|
|
(1)
|
Represents the cumulative foreign currency translation losses of
$52.6 million
and gains of
$1.8 million
related to our investments located in our India and China submarkets, respectively, that will be reclassified to net income only when realized upon sale or disposition.
|
(2)
|
This amount includes a
$29.0 million
impairment charge we recognized in March 2016, for
two
land parcels that met the criteria for classification as held for sale. The estimated sales price of these
two
land parcels is approximately
$11.9 million
.
|
(3)
|
Represents estimated sales price of
$113.0 million
less costs to sell.
|
14.
|
Assets classified as held for sale (continued)
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
|
2016
|
|
2015
|
||||
Total revenues
|
|
$
|
3,219
|
|
|
$
|
2,823
|
|
Operating expenses
|
|
(2,588
|
)
|
|
(1,754
|
)
|
||
|
|
631
|
|
|
1,069
|
|
||
General and administrative expense
|
|
(684
|
)
|
|
(1,374
|
)
|
||
|
|
(53
|
)
|
|
(305
|
)
|
||
Depreciation expense
|
|
(2,248
|
)
|
|
(2,125
|
)
|
||
Impairment of real estate
(1)
|
|
(28,980
|
)
|
|
(14,510
|
)
|
||
Net loss related to real estate located in Asia
|
|
$
|
(31,281
|
)
|
|
$
|
(16,940
|
)
|
(1)
|
Represents the impairment charge we recognized in March 2016, for
two
land parcels in India that met the criteria for classification as held for sale. The estimated sales price of these
two
land parcels is approximately
$11.9 million
.
|
15.
|
Subsequent events
|
16.
|
Condensed consolidating financial information
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria Real Estate Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,741,466
|
|
|
$
|
—
|
|
|
$
|
7,741,466
|
|
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
127,165
|
|
|
—
|
|
|
127,165
|
|
|||||
Cash and cash equivalents
|
34,027
|
|
|
—
|
|
|
112,170
|
|
|
—
|
|
|
146,197
|
|
|||||
Restricted cash
|
81
|
|
|
—
|
|
|
14,804
|
|
|
—
|
|
|
14,885
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
9,979
|
|
|
—
|
|
|
9,979
|
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
293,144
|
|
|
—
|
|
|
293,144
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
192,418
|
|
|
—
|
|
|
192,418
|
|
|||||
Investments
|
—
|
|
|
4,687
|
|
|
311,476
|
|
|
—
|
|
|
316,163
|
|
|||||
Investments in and advances to affiliates
|
7,253,538
|
|
|
6,584,962
|
|
|
134,034
|
|
|
(13,972,534
|
)
|
|
—
|
|
|||||
Other assets
|
35,367
|
|
|
—
|
|
|
94,748
|
|
|
—
|
|
|
130,115
|
|
|||||
Total assets
|
$
|
7,323,013
|
|
|
$
|
6,589,649
|
|
|
$
|
9,031,404
|
|
|
$
|
(13,972,534
|
)
|
|
$
|
8,971,532
|
|
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
816,578
|
|
|
$
|
—
|
|
|
$
|
816,578
|
|
Unsecured senior notes payable
|
2,031,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,031,284
|
|
|||||
Unsecured senior line of credit
|
299,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,000
|
|
|||||
Unsecured senior bank term loans
|
944,637
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
944,637
|
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
118,384
|
|
|
—
|
|
|
510,083
|
|
|
—
|
|
|
628,467
|
|
|||||
Dividends payable
|
63,988
|
|
|
—
|
|
|
287
|
|
|
—
|
|
|
64,275
|
|
|||||
Total liabilities
|
3,457,293
|
|
|
—
|
|
|
1,326,948
|
|
|
—
|
|
|
4,784,241
|
|
|||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
14,218
|
|
|
—
|
|
|
14,218
|
|
|||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
3,865,720
|
|
|
6,589,649
|
|
|
7,382,885
|
|
|
(13,972,534
|
)
|
|
3,865,720
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
307,353
|
|
|
—
|
|
|
307,353
|
|
|||||
Total equity
|
3,865,720
|
|
|
6,589,649
|
|
|
7,690,238
|
|
|
(13,972,534
|
)
|
|
4,173,073
|
|
|||||
Total liabilities, noncontrolling interests, and equity
|
$
|
7,323,013
|
|
|
$
|
6,589,649
|
|
|
$
|
9,031,404
|
|
|
$
|
(13,972,534
|
)
|
|
$
|
8,971,532
|
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria
Real Estate
Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,629,922
|
|
|
$
|
—
|
|
|
$
|
7,629,922
|
|
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
127,212
|
|
|
—
|
|
|
127,212
|
|
|||||
Cash and cash equivalents
|
31,982
|
|
|
—
|
|
|
93,116
|
|
|
—
|
|
|
125,098
|
|
|||||
Restricted cash
|
91
|
|
|
—
|
|
|
28,781
|
|
|
—
|
|
|
28,872
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
10,485
|
|
|
—
|
|
|
10,485
|
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
280,570
|
|
|
—
|
|
|
280,570
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
192,081
|
|
|
—
|
|
|
192,081
|
|
|||||
Investments
|
—
|
|
|
4,702
|
|
|
348,763
|
|
|
—
|
|
|
353,465
|
|
|||||
Investments in and advances to affiliates
|
7,194,092
|
|
|
6,490,009
|
|
|
132,121
|
|
|
(13,816,222
|
)
|
|
—
|
|
|||||
Other assets
|
36,808
|
|
|
—
|
|
|
96,504
|
|
|
—
|
|
|
133,312
|
|
|||||
Total assets
|
$
|
7,262,973
|
|
|
$
|
6,494,711
|
|
|
$
|
8,939,555
|
|
|
$
|
(13,816,222
|
)
|
|
$
|
8,881,017
|
|
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
809,818
|
|
|
$
|
—
|
|
|
$
|
809,818
|
|
Unsecured senior notes payable
|
2,030,631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,030,631
|
|
|||||
Unsecured senior line of credit
|
151,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151,000
|
|
|||||
Unsecured senior bank term loans
|
944,243
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
944,243
|
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
100,294
|
|
|
—
|
|
|
489,062
|
|
|
—
|
|
|
589,356
|
|
|||||
Dividends payable
|
61,718
|
|
|
—
|
|
|
287
|
|
|
—
|
|
|
62,005
|
|
|||||
Total liabilities
|
3,287,886
|
|
|
—
|
|
|
1,299,167
|
|
|
—
|
|
|
4,587,053
|
|
|||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
14,218
|
|
|
—
|
|
|
14,218
|
|
|||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
3,975,087
|
|
|
6,494,711
|
|
|
7,321,511
|
|
|
(13,816,222
|
)
|
|
3,975,087
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
304,659
|
|
|
—
|
|
|
304,659
|
|
|||||
Total equity
|
3,975,087
|
|
|
6,494,711
|
|
|
7,626,170
|
|
|
(13,816,222
|
)
|
|
4,279,746
|
|
|||||
Total liabilities, noncontrolling interests, and equity
|
$
|
7,262,973
|
|
|
$
|
6,494,711
|
|
|
$
|
8,939,555
|
|
|
$
|
(13,816,222
|
)
|
|
$
|
8,881,017
|
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria
Real Estate
Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,276
|
|
|
$
|
—
|
|
|
$
|
158,276
|
|
Tenant recoveries
|
—
|
|
|
—
|
|
|
52,597
|
|
|
—
|
|
|
52,597
|
|
|||||
Other income
|
3,075
|
|
|
(4
|
)
|
|
5,741
|
|
|
(3,596
|
)
|
|
5,216
|
|
|||||
Total revenues
|
3,075
|
|
|
(4
|
)
|
|
216,614
|
|
|
(3,596
|
)
|
|
216,089
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
—
|
|
|
—
|
|
|
65,837
|
|
|
—
|
|
|
65,837
|
|
|||||
General and administrative
|
14,318
|
|
|
—
|
|
|
4,466
|
|
|
(3,596
|
)
|
|
15,188
|
|
|||||
Interest
|
19,222
|
|
|
—
|
|
|
5,633
|
|
|
—
|
|
|
24,855
|
|
|||||
Depreciation and amortization
|
1,614
|
|
|
—
|
|
|
69,252
|
|
|
—
|
|
|
70,866
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
28,980
|
|
|
—
|
|
|
28,980
|
|
|||||
Total expenses
|
35,154
|
|
|
—
|
|
|
174,168
|
|
|
(3,596
|
)
|
|
205,726
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity in loss of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(397
|
)
|
|
—
|
|
|
(397
|
)
|
|||||
Equity in earnings of affiliates
|
38,015
|
|
|
30,679
|
|
|
639
|
|
|
(69,333
|
)
|
|
—
|
|
|||||
Net income
|
5,936
|
|
|
30,675
|
|
|
42,688
|
|
|
(69,333
|
)
|
|
9,966
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4,030
|
)
|
|
—
|
|
|
(4,030
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
5,936
|
|
|
30,675
|
|
|
38,658
|
|
|
(69,333
|
)
|
|
5,936
|
|
|||||
Dividends on preferred stock
|
(5,907
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,907
|
)
|
|||||
Preferred stock redemption charge
|
(3,046
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,046
|
)
|
|||||
Net income attributable to unvested restricted stock awards
|
(801
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(801
|
)
|
|||||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(3,818
|
)
|
|
$
|
30,675
|
|
|
$
|
38,658
|
|
|
$
|
(69,333
|
)
|
|
$
|
(3,818
|
)
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria
Real Estate
Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
143,608
|
|
|
$
|
—
|
|
|
$
|
143,608
|
|
Tenant recoveries
|
—
|
|
|
—
|
|
|
48,394
|
|
|
—
|
|
|
48,394
|
|
|||||
Other income
|
3,026
|
|
|
(41
|
)
|
|
5,564
|
|
|
(3,798
|
)
|
|
4,751
|
|
|||||
Total revenues
|
3,026
|
|
|
(41
|
)
|
|
197,566
|
|
|
(3,798
|
)
|
|
196,753
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
—
|
|
|
—
|
|
|
61,223
|
|
|
—
|
|
|
61,223
|
|
|||||
General and administrative
|
12,226
|
|
|
—
|
|
|
5,959
|
|
|
(3,798
|
)
|
|
14,387
|
|
|||||
Interest
|
17,157
|
|
|
—
|
|
|
6,079
|
|
|
—
|
|
|
23,236
|
|
|||||
Depreciation and amortization
|
1,247
|
|
|
—
|
|
|
57,673
|
|
|
—
|
|
|
58,920
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
14,510
|
|
|
—
|
|
|
14,510
|
|
|||||
Total expenses
|
30,630
|
|
|
—
|
|
|
145,444
|
|
|
(3,798
|
)
|
|
172,276
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
574
|
|
|
—
|
|
|
574
|
|
|||||
Equity in earnings of affiliates
|
52,120
|
|
|
45,590
|
|
|
917
|
|
|
(98,627
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
24,516
|
|
|
45,549
|
|
|
53,613
|
|
|
(98,627
|
)
|
|
25,051
|
|
|||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Net income
|
24,516
|
|
|
45,549
|
|
|
53,570
|
|
|
(98,627
|
)
|
|
25,008
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(492
|
)
|
|
—
|
|
|
(492
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
24,516
|
|
|
45,549
|
|
|
53,078
|
|
|
(98,627
|
)
|
|
24,516
|
|
|||||
Dividends on preferred stock
|
(6,247
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,247
|
)
|
|||||
Net income attributable to unvested restricted stock awards
|
(483
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
17,786
|
|
|
$
|
45,549
|
|
|
$
|
53,078
|
|
|
$
|
(98,627
|
)
|
|
$
|
17,786
|
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria
Real Estate
Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
5,936
|
|
|
$
|
30,675
|
|
|
$
|
42,688
|
|
|
$
|
(69,333
|
)
|
|
$
|
9,966
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized (losses) gains on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized holding losses arising during the period
|
—
|
|
|
(23
|
)
|
|
(47,400
|
)
|
|
—
|
|
|
(47,423
|
)
|
|||||
Reclassification adjustment for losses (gains) included in net income
|
—
|
|
|
11
|
|
|
(7,037
|
)
|
|
—
|
|
|
(7,026
|
)
|
|||||
Unrealized (losses) gains on available-for-sale equity securities, net
|
—
|
|
|
(12
|
)
|
|
(54,437
|
)
|
|
—
|
|
|
(54,449
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized losses on interest rate swap agreements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized interest rate swap losses arising during the period
|
(6,961
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,961
|
)
|
|||||
Reclassification adjustment for amortization of interest expense included in net income
|
158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|||||
Unrealized losses on interest rate swap agreements, net
|
(6,803
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,803
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized foreign currency translation gains during the period
|
—
|
|
|
—
|
|
|
3,528
|
|
|
—
|
|
|
3,528
|
|
|||||
Unrealized gains on foreign currency translation, net
|
—
|
|
|
—
|
|
|
3,528
|
|
|
—
|
|
|
3,528
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive loss
|
(6,803
|
)
|
|
(12
|
)
|
|
(50,909
|
)
|
|
—
|
|
|
(57,724
|
)
|
|||||
Comprehensive (loss) income
|
(867
|
)
|
|
30,663
|
|
|
(8,221
|
)
|
|
(69,333
|
)
|
|
(47,758
|
)
|
|||||
Less: comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4,030
|
)
|
|
—
|
|
|
(4,030
|
)
|
|||||
Comprehensive income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(867
|
)
|
|
$
|
30,663
|
|
|
$
|
(12,251
|
)
|
|
$
|
(69,333
|
)
|
|
$
|
(51,788
|
)
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria
Real Estate
Equities, Inc.
(Issuer)
|
|
Alexandria
Real Estate
Equities, L.P.
(Guarantor
Subsidiary)
|
|
Combined
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
24,516
|
|
|
$
|
45,549
|
|
|
$
|
53,570
|
|
|
$
|
(98,627
|
)
|
|
$
|
25,008
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized (losses) gains on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized holding (losses) gains arising during the period
|
—
|
|
|
(54
|
)
|
|
28,489
|
|
|
—
|
|
|
28,435
|
|
|||||
Reclassification adjustment for losses included in net income
|
—
|
|
|
41
|
|
|
1,062
|
|
|
—
|
|
|
1,103
|
|
|||||
Unrealized (losses) gains on available-for-sale equity securities, net
|
—
|
|
|
(13
|
)
|
|
29,551
|
|
|
—
|
|
|
29,538
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized losses on interest rate swap agreements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized interest rate swap losses arising during the period
|
(3,013
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,013
|
)
|
|||||
Reclassification adjustment for amortization of interest expense included in net income
|
505
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
|||||
Unrealized losses on interest rate swap agreements, net
|
(2,508
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,508
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized foreign currency translation losses during the period
|
—
|
|
|
—
|
|
|
(6,271
|
)
|
|
—
|
|
|
(6,271
|
)
|
|||||
Reclassification adjustment for losses included in net income
|
—
|
|
|
—
|
|
|
9,236
|
|
|
—
|
|
|
9,236
|
|
|||||
Unrealized gains on foreign currency translation, net
|
—
|
|
|
—
|
|
|
2,965
|
|
|
—
|
|
|
2,965
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive (loss) income
|
(2,508
|
)
|
|
(13
|
)
|
|
32,516
|
|
|
—
|
|
|
29,995
|
|
|||||
Comprehensive income
|
22,008
|
|
|
45,536
|
|
|
86,086
|
|
|
(98,627
|
)
|
|
55,003
|
|
|||||
Less: comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(646
|
)
|
|
—
|
|
|
(646
|
)
|
|||||
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
22,008
|
|
|
$
|
45,536
|
|
|
$
|
85,440
|
|
|
$
|
(98,627
|
)
|
|
$
|
54,357
|
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria Real
Estate Equities,
Inc. (Issuer)
|
|
Alexandria Real
Estate Equities,
L.P. (Guarantor
Subsidiary)
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
5,936
|
|
|
$
|
30,675
|
|
|
$
|
42,688
|
|
|
$
|
(69,333
|
)
|
|
$
|
9,966
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
1,614
|
|
|
—
|
|
|
69,252
|
|
|
—
|
|
|
70,866
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
28,980
|
|
|
—
|
|
|
28,980
|
|
|||||
Equity in losses of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
397
|
|
|||||
Distributions of earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
98
|
|
|||||
Amortization of loan fees
|
1,934
|
|
|
—
|
|
|
826
|
|
|
—
|
|
|
2,760
|
|
|||||
Amortization of debt discounts (premiums)
|
106
|
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Amortization of acquired below-market leases
|
—
|
|
|
—
|
|
|
(974
|
)
|
|
—
|
|
|
(974
|
)
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
(12,138
|
)
|
|
—
|
|
|
(12,138
|
)
|
|||||
Stock compensation expense
|
5,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,439
|
|
|||||
Equity in earnings of affiliates
|
(38,015
|
)
|
|
(30,679
|
)
|
|
(639
|
)
|
|
69,333
|
|
|
—
|
|
|||||
Investment gains
|
—
|
|
|
(7
|
)
|
|
(5,884
|
)
|
|
—
|
|
|
(5,891
|
)
|
|||||
Investment losses
|
—
|
|
|
11
|
|
|
1,771
|
|
|
—
|
|
|
1,782
|
|
|||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restricted cash
|
10
|
|
|
—
|
|
|
661
|
|
|
—
|
|
|
671
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
521
|
|
|
—
|
|
|
521
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
(7,083
|
)
|
|
—
|
|
|
(7,083
|
)
|
|||||
Other assets
|
(1,733
|
)
|
|
—
|
|
|
(792
|
)
|
|
—
|
|
|
(2,525
|
)
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
11,856
|
|
|
—
|
|
|
(2,857
|
)
|
|
—
|
|
|
8,999
|
|
|||||
Net cash (used in) provided by operating activities
|
(12,853
|
)
|
|
—
|
|
|
114,635
|
|
|
—
|
|
|
101,782
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to real estate
|
—
|
|
|
—
|
|
|
(159,501
|
)
|
|
—
|
|
|
(159,501
|
)
|
|||||
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(449
|
)
|
|
—
|
|
|
(449
|
)
|
|||||
Investments in subsidiaries
|
(21,431
|
)
|
|
(64,275
|
)
|
|
(1,273
|
)
|
|
86,979
|
|
|
—
|
|
|||||
Additions to investments
|
—
|
|
|
—
|
|
|
(22,085
|
)
|
|
—
|
|
|
(22,085
|
)
|
|||||
Sales of investments
|
—
|
|
|
—
|
|
|
10,913
|
|
|
—
|
|
|
10,913
|
|
|||||
Net cash used in investing activities
|
$
|
(21,431
|
)
|
|
$
|
(64,275
|
)
|
|
$
|
(172,395
|
)
|
|
$
|
86,979
|
|
|
$
|
(171,122
|
)
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria Real
Estate Equities, Inc. (Issuer) |
|
Alexandria Real
Estate Equities, L.P. (Guarantor Subsidiary) |
|
Combined
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,922
|
|
|
$
|
—
|
|
|
$
|
64,922
|
|
Repayments of borrowings from secured notes payable
|
—
|
|
|
—
|
|
|
(58,657
|
)
|
|
—
|
|
|
(58,657
|
)
|
|||||
Borrowings from unsecured senior line of credit
|
555,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
555,000
|
|
|||||
Repayments of borrowings from unsecured senior line of credit
|
(407,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(407,000
|
)
|
|||||
Transfer to/from parent company
|
(48,594
|
)
|
|
64,275
|
|
|
71,298
|
|
|
(86,979
|
)
|
|
—
|
|
|||||
Change in restricted cash related to financing activities
|
—
|
|
|
—
|
|
|
8,316
|
|
|
—
|
|
|
8,316
|
|
|||||
Payment of loan fees
|
—
|
|
|
—
|
|
|
(377
|
)
|
|
—
|
|
|
(377
|
)
|
|||||
Redemption of Series D cumulative convertible preferred stock
|
(25,618
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,618
|
)
|
|||||
Proceeds from the issuance of common stock
|
25,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,278
|
|
|||||
Dividends on common stock
|
(56,490
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,490
|
)
|
|||||
Dividends on preferred stock
|
(6,247
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,247
|
)
|
|||||
Financing costs paid for sales of noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,420
|
)
|
|
—
|
|
|
(6,420
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,927
|
)
|
|
—
|
|
|
(1,927
|
)
|
|||||
Net cash provided by financing activities
|
36,329
|
|
|
64,275
|
|
|
77,155
|
|
|
(86,979
|
)
|
|
90,780
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(341
|
)
|
|
—
|
|
|
(341
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
2,045
|
|
|
—
|
|
|
19,054
|
|
|
—
|
|
|
21,099
|
|
|||||
Cash and cash equivalents as of the beginning of period
|
31,982
|
|
|
—
|
|
|
93,116
|
|
|
—
|
|
|
125,098
|
|
|||||
Cash and cash equivalents as of the end of period
|
$
|
34,027
|
|
|
$
|
—
|
|
|
$
|
112,170
|
|
|
$
|
—
|
|
|
$
|
146,197
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
8,889
|
|
|
$
|
—
|
|
|
$
|
5,179
|
|
|
$
|
—
|
|
|
$
|
14,068
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in accrued construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,197
|
|
|
$
|
29,197
|
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria Real
Estate Equities,
Inc. (Issuer)
|
|
Alexandria Real
Estate Equities,
L.P. (Guarantor
Subsidiary)
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
24,516
|
|
|
$
|
45,549
|
|
|
$
|
53,570
|
|
|
$
|
(98,627
|
)
|
|
$
|
25,008
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
1,247
|
|
|
—
|
|
|
57,673
|
|
|
—
|
|
|
58,920
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
14,510
|
|
|
—
|
|
|
14,510
|
|
|||||
Equity in earnings of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(574
|
)
|
|
—
|
|
|
(574
|
)
|
|||||
Distributions of earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
491
|
|
|
—
|
|
|
491
|
|
|||||
Amortization of loan fees
|
1,925
|
|
|
—
|
|
|
909
|
|
|
—
|
|
|
2,834
|
|
|||||
Amortization of debt discounts (premiums)
|
80
|
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
(82
|
)
|
|||||
Amortization of acquired below-market leases
|
—
|
|
|
—
|
|
|
(933
|
)
|
|
—
|
|
|
(933
|
)
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
(9,901
|
)
|
|
—
|
|
|
(9,901
|
)
|
|||||
Stock compensation expense
|
3,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,690
|
|
|||||
Equity in earnings of affiliates
|
(52,120
|
)
|
|
(45,590
|
)
|
|
(917
|
)
|
|
98,627
|
|
|
—
|
|
|||||
Investment gains
|
—
|
|
|
—
|
|
|
(5,937
|
)
|
|
—
|
|
|
(5,937
|
)
|
|||||
Investment losses
|
—
|
|
|
41
|
|
|
2,184
|
|
|
—
|
|
|
2,225
|
|
|||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Restricted cash
|
4
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(51
|
)
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
(102
|
)
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
(7,131
|
)
|
|
—
|
|
|
(7,131
|
)
|
|||||
Other assets
|
(3,437
|
)
|
|
—
|
|
|
190
|
|
|
—
|
|
|
(3,247
|
)
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
32,795
|
|
|
(23
|
)
|
|
(5,651
|
)
|
|
—
|
|
|
27,121
|
|
|||||
Net cash provided by (used in) operating activities
|
8,700
|
|
|
(23
|
)
|
|
98,164
|
|
|
—
|
|
|
106,841
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sales of real estate
|
—
|
|
|
—
|
|
|
67,616
|
|
|
—
|
|
|
67,616
|
|
|||||
Additions to real estate
|
—
|
|
|
—
|
|
|
(104,632
|
)
|
|
—
|
|
|
(104,632
|
)
|
|||||
Purchase of real estate
|
—
|
|
|
—
|
|
|
(93,938
|
)
|
|
—
|
|
|
(93,938
|
)
|
|||||
Deposit for investing activities
|
—
|
|
|
—
|
|
|
(28,000
|
)
|
|
—
|
|
|
(28,000
|
)
|
|||||
Change in restricted cash related to construction projects
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(2,539
|
)
|
|
—
|
|
|
(2,539
|
)
|
|||||
Investments in subsidiaries
|
(44,375
|
)
|
|
(2,977
|
)
|
|
(70
|
)
|
|
47,422
|
|
|
—
|
|
|||||
Additions to investments
|
—
|
|
|
—
|
|
|
(15,118
|
)
|
|
—
|
|
|
(15,118
|
)
|
|||||
Sales of investments
|
—
|
|
|
—
|
|
|
2,345
|
|
|
—
|
|
|
2,345
|
|
|||||
Proceeds from repayment of notes receivable
|
—
|
|
|
—
|
|
|
4,214
|
|
|
—
|
|
|
4,214
|
|
|||||
Net cash used in investing activities
|
$
|
(44,375
|
)
|
|
$
|
(2,977
|
)
|
|
$
|
(170,122
|
)
|
|
$
|
47,422
|
|
|
$
|
(170,052
|
)
|
16.
|
Condensed consolidating financial information (continued)
|
|
Alexandria Real
Estate Equities,
Inc. (Issuer)
|
|
Alexandria Real
Estate Equities,
L.P. (Guarantor
Subsidiary)
|
|
Combined
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,585
|
|
|
$
|
—
|
|
|
$
|
29,585
|
|
Repayments of borrowings from secured notes payable
|
—
|
|
|
—
|
|
|
(7,934
|
)
|
|
—
|
|
|
(7,934
|
)
|
|||||
Principal borrowings from unsecured senior line of credit
|
167,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167,000
|
|
|||||
Repayments of borrowings from unsecured senior line of credit
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
|||||
Transfer to/from parent company
|
(14,038
|
)
|
|
3,000
|
|
|
58,460
|
|
|
(47,422
|
)
|
|
—
|
|
|||||
Change in restricted cash related to financing activities
|
—
|
|
|
—
|
|
|
(1,369
|
)
|
|
—
|
|
|
(1,369
|
)
|
|||||
Payment of loan fees
|
—
|
|
|
—
|
|
|
(563
|
)
|
|
—
|
|
|
(563
|
)
|
|||||
Dividends on common stock
|
(53,295
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,295
|
)
|
|||||
Dividends on preferred stock
|
(6,247
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,247
|
)
|
|||||
Contributions by noncontrolling interests
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
340
|
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(9,846
|
)
|
|
—
|
|
|
(9,846
|
)
|
|||||
Net cash provided by financing activities
|
43,420
|
|
|
3,000
|
|
|
68,673
|
|
|
(47,422
|
)
|
|
67,671
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
170
|
|
|
—
|
|
|
170
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
7,745
|
|
|
—
|
|
|
(3,115
|
)
|
|
—
|
|
|
4,630
|
|
|||||
Cash and cash equivalents as of the beginning of period
|
52,491
|
|
|
63
|
|
|
33,457
|
|
|
—
|
|
|
86,011
|
|
|||||
Cash and cash equivalents as of the end of period
|
$
|
60,236
|
|
|
$
|
63
|
|
|
$
|
30,342
|
|
|
$
|
—
|
|
|
$
|
90,641
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
10,412
|
|
|
$
|
—
|
|
|
$
|
5,102
|
|
|
$
|
—
|
|
|
$
|
15,514
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in accrued construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,249
|
|
|
$
|
—
|
|
|
$
|
7,249
|
|
Assumption of secured notes payable in connection with purchase of properties
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(82,000
|
)
|
|
$
|
—
|
|
|
$
|
(82,000
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Financing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Payable for purchase of noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(113,967
|
)
|
|
$
|
—
|
|
|
$
|
(113,967
|
)
|
•
|
Operating factors such as a failure to operate our business successfully in comparison to market expectations or in comparison to our competitors, our inability to obtain capital when desired or refinance debt maturities when desired, and/or a failure to maintain our status as a REIT for federal tax purposes.
|
•
|
Market and industry factors such as adverse developments concerning the science and technology industries and/or our tenants.
|
•
|
Government factors such as any unfavorable effects resulting from federal, state, local, and/or foreign government policies, laws, and/or funding levels.
|
•
|
Global factors such as negative economic, political, financial, credit market, and/or banking conditions.
|
•
|
Other factors such as climate change, cyber intrusions, and/or changes in laws, regulations, and financial accounting standards.
|
•
|
FFO per share – diluted, as adjusted, for the
three months ended March 31, 2016
, of
$1.34
, up
4.7%
, compared to
$1.28
for the
three months ended March 31, 2015
;
|
•
|
During the
three months ended March 31, 2016
, Verily, Alphabet Inc.’s life science subsidiary, subleased
407,369
RSF at 249/259/269 East Grand Avenue in our South San Francisco submarket from Amgen Inc. The sublease highlights the continued demand from high-quality science and technology companies in our key urban innovation clusters;
|
•
|
Executed leases for
388,872
RSF during the
three months ended March 31, 2016
, despite minimal contractual lease expirations in 2016 and our highly pre-leased value-creation pipeline;
|
•
|
Rental rate increases of
33.6%
and
16.9%
(cash basis) on lease renewals and re-leasing of space aggregating
218,342
RSF (included in the
388,872
RSF above);
|
•
|
Same property NOI growth of
5.3%
and
6.2%
(cash basis) for the
three months ended March 31, 2016
, compared to the
three months ended March 31, 2015
;
|
Year of Delivery
|
|
RSF
|
|
Leased %
|
|
Incremental Annual NOI
|
|
2016
|
|
1,465,977
|
|
|
90%
|
|
$75 million to $80 million
|
2017-2018
|
|
2,036,828
|
|
|
72%
|
|
$120 million to $130 million
|
|
|
3,502,805
|
|
|
81%
|
|
$195 million to $210 million
|
•
|
Recycling estimated proceeds of
$104.4 million
from disposition of all our investments in Asia in several separate transactions over the next 12 months. Proceeds will be allocated to development of Class A facilities in high value urban innovation clusters
|
•
|
In March 2016, we recognized an impairment charge of
$29.0 million
for two land parcels in India that met the criteria for classification as held for sale in March 2016. As of March 31, 2016, we only had one binding sale agreement related to one land parcel. This land parcel was sold on
May 2, 2016
, at a sales price of
$7.5 million
with no gain or loss.
|
•
|
On April 22, 2016, our Board of Directors approved the monetization of our remaining real estate investments in Asia. As a result of this decision, we recognized an aggregate impairment charge of
$153.0 million
to reduce our net book value to fair value less cost to sell for all of our remaining investments in Asia;
|
•
|
$2.0 billion
of liquidity, including availability on our
$304.3 million
secured construction loan for 100 Binney Street closed in April 2016;
|
•
|
7.4x
net debt to Adjusted EBITDA –
first quarter of 2016
annualized, goal of achieving less than
6.0x
;
|
•
|
7.2x
net debt to Adjusted EBITDA – trailing 12 months ended
March 31, 2016
;
|
•
|
Common stock dividend for the
three months ended March 31, 2016
, of
$0.80
per common share, up
3 cents
, or
4%
, over the three months ended
December 31, 2015
; continuation of our strategy to share growth in cash flows from operating activities with our stockholders while also importantly retaining capital for reinvestment.
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In millions)
|
|
2016
|
|
2015
|
|
Change
|
|||||||||
Total revenues
|
|
$
|
216.1
|
|
|
$
|
196.8
|
|
|
$
|
19.3
|
|
|
9.8
|
%
|
NOI, including our share of consolidated and unconsolidated real estate JVs
|
|
$
|
145.3
|
|
|
$
|
136.4
|
|
|
$
|
8.9
|
|
|
6.5
|
%
|
FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
|
$
|
97.1
|
|
|
$
|
91.3
|
|
|
$
|
5.7
|
|
|
6.3
|
%
|
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
(1)
|
|
$
|
(3.8
|
)
|
|
$
|
17.8
|
|
|
$
|
(21.6
|
)
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|||||||
(Per share)
|
|
|
|
|
|
|
|
|
|||||||
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
|
$
|
1.34
|
|
|
$
|
1.28
|
|
|
$
|
0.06
|
|
|
4.7
|
%
|
EPS attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
(1)
|
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
|
$
|
(0.30
|
)
|
|
N/A
|
|
(1)
|
Results include impairment of real estate of
$29.0 million
and
$14.5 million
, or
$0.40
and
$0.20
per share, and net income attributable to noncontrolling interest of
$4.0 million
and
$492 thousand
, or
$0.06
and
$0.01
per share, for the three months ended
March 31, 2016
and
2015
, respectively. We also recognized a preferred stock redemption charge of
$3.0 million
, or
$0.04
per share, during the three months ended
March 31, 2016
.
|
•
|
All tenants:
|
•
|
52%
of ABR from investment-grade tenants as of
March 31, 2016
|
•
|
Top 20 tenants as of
March 31, 2016
:
|
•
|
81%
of ABR from investment-grade tenants
|
•
|
8.2
years weighted-average remaining lease term
|
•
|
During the
three months ended March 31, 2015
, Verily, Alphabet Inc.’s life science subsidiary, subleased
407,369
RSF at 249/259/269 East Grand Avenue in our South San Francisco submarket from Amgen Inc. The sublease highlights the continued demand from high-quality science and technology companies in our key urban innovation clusters
|
•
|
Executed leases for
388,872
RSF during the
three months ended March 31, 2016
, despite minimal contractual lease expirations in 2016 and our highly pre-leased value-creation pipeline:
|
•
|
33.6%
and
16.9%
(cash basis) rental rate increases on lease renewals and re-leasing of space aggregating
218,342
RSF (included in the
388,872
RSF above)
|
•
|
Same property NOI growth of
5.3%
and
6.2%
(cash basis) for the
three months ended March 31, 2016
, compared to the
three months ended March 31, 2015
|
•
|
Occupancy for operating properties in North America of
97.3%
as of
March 31, 2016
|
•
|
Operating margins at
70%
for the
three months ended March 31, 2016
|
•
|
Adjusted EBITDA margin –
first quarter of 2016
annualized at
65%
|
•
|
Disciplined allocation of capital to value-creation pipeline of highly leased Class A buildings in urban innovation clusters:
|
Year of Delivery
|
|
RSF
|
|
Leased %
|
|
Incremental Annual NOI
|
|
2016
|
|
1,465,977
|
|
|
90%
|
|
$75 million to $80 million
|
2017-2018
|
|
2,036,828
|
|
|
72%
|
|
$120 million to $130 million
|
|
|
3,502,805
|
|
|
81%
|
|
$195 million to $210 million
|
•
|
Commencement of development project during the
three months ended March 31, 2016
:
|
•
|
150,000
RSF development project at 505 Brannan Street in our Mission Bay/SoMa submarket;
100%
leased to Pinterest, Inc.
|
•
|
$2.0 billion
of liquidity, including availability on our
$304.3 million
secured construction loan for 100 Binney Street closed in April 2016
|
•
|
7.4x
net debt to Adjusted EBITDA –
first quarter of 2016
annualized, with goal of achieving less than
6.0x
|
•
|
7.2x
net debt to Adjusted EBITDA – trailing 12 months ended
March 31, 2016
|
•
|
3.3x
fixed-charge coverage ratio –
first quarter of 2016
annualized
|
•
|
3.4x
fixed-charge coverage ratio – trailing 12 months ended
March 31, 2016
|
•
|
Proceeds from sales of investments in life science entities aggregated
$10.9 million
during the
three months ended March 31, 2016
|
•
|
Repurchased
931,934
outstanding shares of our Series D Cumulative Convertible Preferred Stock at an aggregate price of
$25.6 million
, or
$27.49
per share, and recognized a preferred stock redemption charge of
$3.0 million
during the
three months ended March 31, 2016
|
•
|
Sold an aggregate of
293,235
shares of common stock under our ATM program for gross proceeds of
$25.9 million
, or
$88.44
per share, and net proceeds of approximately
$25.3 million
during the
three months ended March 31, 2016
|
•
|
$11.1 billion
total market capitalization
as of March 31, 2016
|
•
|
16%
of gross investments in real estate – North America in value-creation pipeline
as of March 31, 2016
, with a target range from 10% to 15% as of December 31, 2016
|
•
|
Limited debt maturities through 2018 and well-laddered maturity profile
|
•
|
15%
unhedged variable-rate debt as a percentage of total debt
as of March 31, 2016
|
•
|
Executed additional interest rate swap agreements during the
three months ended March 31, 2016
, with an aggregate notional amount of
$500 million
, to increase notional hedged variable-rate debt to a minimum of
$900 million
and
$250 million
during 2017 and 2018, respectively
|
•
|
57%
of our total ABR will be generated from LEED
projects upon completion of our in-process projects
|
•
|
In April 2016, we closed a secured construction loan with commitments available for borrowing of
$304.3 million
for our development project at 100 Binney Street in our Cambridge submarket, which bears interest at a rate of LIBOR+200 bps
|
•
|
On May 2, 2016, we repaid a
$126.0 million
secured note payable with an effective interest rate of
6.64%
|
•
|
In April 2016, we completed the purchase of the remaining outstanding noncontrolling interest in our
1.2 million
RSF campus at Alexandria Technology Square
®
in our Cambridge submarket for
$54 million
|
•
|
In April 2016, we completed the sale of 16020 Industrial Drive in our Gaithersburg submarket of Maryland for a sales price of
$6.4 million
|
•
|
Recycling estimated proceeds of
$104.4 million
from disposition of all our investments in Asia in several separate transactions over the next 12 months. Proceeds will be allocated to development of Class A facilities in high value urban innovation clusters
|
•
|
In March 2016, we recognized an impairment charge of
$29.0 million
for two land parcels in India that met the criteria for classification as held for sale in March 2016. As of March 31, 2016, we only had one binding sale agreement related to one land parcel. This land parcel was sold on
May 2, 2016
, at a sales price of
$7.5 million
with no gain or loss
|
•
|
On April 22, 2016, our Board of Directors approved the monetization of our remaining real estate investments in Asia. As a result of this decision, we recognized an aggregate impairment charge of
$153.0 million
to reduce our net book value to fair value less cost to sell for all of our remaining investments in Asia
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
(RSF)
|
|
|
|
||||
Operating properties
|
15,400,619
|
|
|
15,538,280
|
|
||
Development properties
|
2,927,660
|
|
|
2,761,428
|
|
||
Redevelopment properties
|
575,145
|
|
|
574,362
|
|
||
Total properties – North America
|
18,903,424
|
|
|
18,874,070
|
|
||
Total properties – Asia
|
1,200,683
|
|
|
1,199,714
|
|
||
|
|
|
|
||||
Number of properties
|
198
|
|
|
199
|
|
||
Occupancy in North America at year-end – operating
|
97.3%
|
|
97.2%
|
||||
Occupancy in North America at year-end – operating and redevelopment
|
93.8%
|
|
93.7%
|
||||
ABR per occupied RSF – North America
|
$
|
41.67
|
|
|
$
|
41.17
|
|
•
|
Executed a total of
41
leases, with a weighted-average lease term of
5.5 years
, for
388,872
RSF, including
76,421
RSF related to our development and redevelopment projects during the
three months ended March 31, 2016
, despite minimal contractual lease expirations in 2016 and our highly pre-leased value-creation pipeline
|
•
|
Achieved rental rate increases of
33.6%
and
16.9%
(cash basis) for lease renewals and re-leasing of space aggregating
218,342
RSF (included in
388,872
RSF above) during the
three months ended March 31, 2016
|
•
|
Increased the occupancy percentage for operating properties in North America by
50
bps to
97.3%
since
March 31, 2015
|
|
|
Three Months Ended
March 31, 2016
|
|
Year Ended
December 31, 2015
|
||||||||||||
|
|
Including
Straight-Line Rent
|
|
Cash Basis
|
|
Including
Straight-Line Rent
|
|
Cash Basis
|
||||||||
(Dollars are per RSF)
|
|
|
|
|
|
|
|
|
||||||||
Leasing activity:
|
|
|
|
|
|
|
|
|
||||||||
Renewed/re-leased space
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental rate changes
|
|
33.6%
|
|
(2)
|
16.9%
|
|
(2)
|
19.6%
|
|
|
9.9%
|
|
||||
New rates
|
|
$
|
44.45
|
|
|
$
|
42.06
|
|
|
$
|
35.70
|
|
|
$
|
35.97
|
|
Expiring rates
|
|
$
|
33.27
|
|
|
$
|
35.97
|
|
|
$
|
29.84
|
|
|
$
|
32.73
|
|
Rentable square footage
|
|
218,342
|
|
|
|
|
2,209,893
|
|
|
|
||||||
Number of leases
|
|
24
|
|
|
|
|
146
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
11.34
|
|
|
|
|
$
|
10.02
|
|
|
|
||||
Average lease terms
|
|
3.8 years
|
|
|
|
|
4.7 years
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Developed/redeveloped/previously vacant space leased
|
|
|
|
|
|
|
|
|
||||||||
New rates
|
|
$
|
48.30
|
|
|
$
|
45.69
|
|
|
$
|
55.24
|
|
|
$
|
50.65
|
|
Rentable square footage
|
|
170,530
|
|
|
|
|
2,762,149
|
|
|
|
||||||
Number of leases
|
|
17
|
|
|
|
|
72
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
21.60
|
|
|
|
|
$
|
19.63
|
|
|
|
||||
Average lease terms
|
|
7.7 years
|
|
|
|
|
11.9 years
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Leasing activity summary (totals):
|
|
|
|
|
|
|
|
|
||||||||
New rates
|
|
$
|
46.14
|
|
|
$
|
43.65
|
|
|
$
|
46.55
|
|
|
$
|
44.13
|
|
Rentable square footage
|
|
388,872
|
|
(3)
|
|
|
4,972,042
|
|
|
|
||||||
Number of leases
|
|
41
|
|
|
|
|
218
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
15.84
|
|
|
|
|
$
|
15.36
|
|
|
|
||||
Average lease terms
|
|
5.5 years
|
|
|
|
|
8.7 years
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Lease expirations
(1)
|
|
|
|
|
|
|
|
|
||||||||
Expiring rates
|
|
$
|
31.18
|
|
|
$
|
33.41
|
|
|
$
|
28.32
|
|
|
$
|
30.80
|
|
Rentable square footage
|
|
364,566
|
|
|
|
|
2,801,883
|
|
|
|
||||||
Number of leases
|
|
30
|
|
|
|
|
197
|
|
|
|
(1)
|
Excludes
14
month-to-month leases for
27,108
RSF and
16
month-to-month leases for
30,810
RSF as of
March 31, 2016
, and December 31, 2015, respectively.
|
(2)
|
Rental rate increases for the
three months ended March 31, 2016
, were driven by four leases that generated average increases in rental rates of 47%, and 29% on a cash basis. Refer to our “Projected Results” on page
81
for estimated rental rate growth for the year ending December 31, 2016.
|
(3)
|
During the
three months ended March 31, 2016
, we granted tenant concessions/free rent averaging
1.1
months with respect to the
388,872
RSF leased.
|
Year
|
|
Number of Leases
|
|
RSF
|
|
Percentage of
Aggregate Total RSF
|
|
ABR (per RSF)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2016
|
|
|
58
|
|
(1)
|
|
|
798,034
|
|
(1)
|
|
|
5.0
|
%
|
|
|
|
$
|
34.42
|
|
|
2017
|
|
|
83
|
|
|
|
|
1,344,211
|
|
|
|
|
8.5
|
%
|
|
|
|
$
|
28.96
|
|
|
2018
|
|
|
92
|
|
|
|
|
1,861,899
|
|
|
|
|
11.8
|
%
|
|
|
|
$
|
38.84
|
|
|
2019
|
|
|
73
|
|
|
|
|
1,393,567
|
|
|
|
|
8.8
|
%
|
|
|
|
$
|
36.80
|
|
|
2020
|
|
|
68
|
|
|
|
|
1,599,106
|
|
|
|
|
10.1
|
%
|
|
|
|
$
|
36.50
|
|
|
2021
|
|
|
55
|
|
|
|
|
1,536,252
|
|
|
|
|
9.7
|
%
|
|
|
|
$
|
39.03
|
|
|
2022
|
|
|
33
|
|
|
|
|
1,074,181
|
|
|
|
|
6.8
|
%
|
|
|
|
$
|
34.51
|
|
|
2023
|
|
|
24
|
|
|
|
|
1,284,999
|
|
|
|
|
8.1
|
%
|
|
|
|
$
|
37.87
|
|
|
2024
|
|
|
17
|
|
|
|
|
867,256
|
|
|
|
|
5.5
|
%
|
|
|
|
$
|
46.43
|
|
|
2025
|
|
|
18
|
|
|
|
|
677,456
|
|
|
|
|
4.3
|
%
|
|
|
|
$
|
34.49
|
|
|
Thereafter
|
|
|
39
|
|
|
|
|
3,373,335
|
|
|
|
|
21.4
|
%
|
|
|
|
$
|
48.10
|
|
|
(1)
|
Excludes
14
month-to-month leases for
27,108
RSF.
|
|
|
2016 Contractual Lease Expirations
|
|
ABR of
Expiring Leases (per RSF) |
|||||||||||||||
|
|
Leased
|
|
Negotiating/
Anticipating |
|
Targeted for
Redevelopment |
|
Remaining
Expiring Leases |
|
Total
(1)
|
|
||||||||
Market
|
|
|
|
|
|
|
|||||||||||||
Greater Boston
|
|
38,803
|
|
|
1,845
|
|
|
—
|
|
|
46,716
|
|
|
87,364
|
|
|
$
|
42.97
|
|
San Francisco
|
|
27,015
|
|
|
50,400
|
|
|
—
|
|
|
15,162
|
|
|
92,577
|
|
|
26.41
|
|
|
New York City
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,456
|
|
|
14,456
|
|
|
N/A
|
|
|
San Diego
|
|
46,033
|
|
|
14,685
|
|
|
—
|
|
|
251,119
|
|
(2)
|
311,837
|
|
|
36.14
|
|
|
Seattle
|
|
2,468
|
|
|
—
|
|
|
—
|
|
|
36,288
|
|
|
38,756
|
|
|
29.56
|
|
|
Maryland
|
|
4,457
|
|
|
69,559
|
|
|
—
|
|
|
33,055
|
|
|
107,071
|
|
|
27.78
|
|
|
Research Triangle Park
|
|
32,008
|
|
|
28,494
|
|
|
—
|
|
|
41,504
|
|
|
102,006
|
|
|
26.15
|
|
|
Non-cluster markets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Asia
|
|
—
|
|
|
35,335
|
|
|
—
|
|
|
8,632
|
|
|
43,967
|
|
|
14.26
|
|
|
Total
|
|
150,784
|
|
|
200,318
|
|
|
—
|
|
|
446,932
|
|
|
798,034
|
|
|
$
|
34.42
|
|
Percentage of expiring leases
|
|
19
|
%
|
|
25
|
%
|
|
—
|
%
|
|
56
|
%
|
|
100
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2017 Contractual Lease Expirations
|
|
ABR of
Expiring Leases (per RSF) |
|||||||||||||||
|
|
Leased
|
|
Negotiating/
Anticipating |
|
Targeted for
Redevelopment |
|
Remaining
Expiring Leases |
|
Total
|
|
||||||||
Market
|
|
|
|
|
|
|
|||||||||||||
Greater Boston
|
|
—
|
|
|
11,825
|
|
|
—
|
|
|
337,965
|
|
|
349,790
|
|
|
$
|
38.67
|
|
San Francisco
|
|
—
|
|
|
53,980
|
|
|
—
|
|
|
128,488
|
|
|
182,468
|
|
|
35.58
|
|
|
New York City
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,418
|
|
|
5,418
|
|
|
N/A
|
|
|
San Diego
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,187
|
|
|
249,187
|
|
|
30.59
|
|
|
Seattle
|
|
20,133
|
|
|
—
|
|
|
—
|
|
|
47,326
|
|
|
67,459
|
|
|
45.28
|
|
|
Maryland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101,228
|
|
|
101,228
|
|
|
20.36
|
|
|
Research Triangle Park
|
|
3,566
|
|
|
109,664
|
|
|
—
|
|
|
111,233
|
|
|
224,463
|
|
|
14.04
|
|
|
Non-cluster markets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,045
|
|
|
43,045
|
|
|
20.33
|
|
|
Asia
|
|
39,676
|
|
|
56,800
|
|
|
—
|
|
|
24,677
|
|
|
121,153
|
|
|
14.52
|
|
|
Total
|
|
63,375
|
|
|
232,269
|
|
|
—
|
|
|
1,048,567
|
|
|
1,344,211
|
|
|
$
|
28.96
|
|
Percentage of expiring leases
|
|
5
|
%
|
|
17
|
%
|
|
—
|
%
|
|
78
|
%
|
|
100
|
%
|
|
|
(1)
|
Excludes
14
month-to-month leases for
27,108
RSF.
|
(2)
|
Includes
125,409
RSF leased to Eli Lilly and Company at 10300 Campus Point Drive with a contractual expiration in the fourth quarter of 2016. This tenant will relocate and expand into
304,326
RSF at our recently acquired redevelopment project at 10290 Campus Point Drive.
|
(1)
|
Represents
48.6%
of total ABR.
|
(2)
|
Office and tech office space compose
2.3%
and
0.7%
of total ABR, respectively.
|
(1)
|
Average occupancy of operating properties in North America as of December 31 for the last 10 years, and the period ended
March 31, 2016
.
|
(2)
|
As of
March 31, 2016
.
|
|
|
RSF
|
|
Number of Properties
|
|
ABR
|
|||||||||||||||||||||||
Market
|
|
Operating
|
|
Development
|
|
Redevelopment
|
|
Total
|
|
% of Total
|
|
|
Total
|
|
% of Total
|
|
Per RSF
|
||||||||||||
Greater Boston
|
|
4,462,540
|
|
|
1,113,392
|
|
|
59,783
|
|
|
5,635,715
|
|
|
28
|
%
|
|
42
|
|
|
$
|
223,394
|
|
|
36
|
%
|
|
$
|
51.28
|
|
San Francisco
|
|
2,786,476
|
|
|
872,980
|
|
|
—
|
|
|
3,659,456
|
|
|
18
|
|
|
29
|
|
|
123,521
|
|
|
20
|
|
|
44.33
|
|
||
New York City
|
|
665,079
|
|
|
62,595
|
|
|
—
|
|
|
727,674
|
|
|
4
|
|
|
2
|
|
|
56,539
|
|
|
9
|
|
|
85.30
|
|
||
San Diego
|
|
2,858,511
|
|
|
590,887
|
|
|
515,362
|
|
|
3,964,760
|
|
|
20
|
|
|
50
|
|
|
94,997
|
|
|
15
|
|
|
35.17
|
|
||
Seattle
|
|
746,260
|
|
|
287,806
|
|
|
—
|
|
|
1,034,066
|
|
|
5
|
|
|
11
|
|
|
33,066
|
|
|
5
|
|
|
44.68
|
|
||
Maryland
|
|
2,085,196
|
|
|
—
|
|
|
—
|
|
|
2,085,196
|
|
|
10
|
|
|
28
|
|
|
50,273
|
|
|
8
|
|
|
25.14
|
|
||
Research Triangle Park
|
|
1,043,211
|
|
|
—
|
|
|
—
|
|
|
1,043,211
|
|
|
5
|
|
|
15
|
|
|
22,875
|
|
|
4
|
|
|
22.24
|
|
||
Canada
|
|
322,967
|
|
|
—
|
|
|
—
|
|
|
322,967
|
|
|
2
|
|
|
4
|
|
|
7,138
|
|
|
1
|
|
|
22.25
|
|
||
Non-cluster markets
|
|
268,689
|
|
|
—
|
|
|
—
|
|
|
268,689
|
|
|
1
|
|
|
6
|
|
|
6,233
|
|
|
1
|
|
|
26.32
|
|
||
Properties held for sale
|
|
161,690
|
|
|
—
|
|
|
—
|
|
|
161,690
|
|
|
1
|
|
|
3
|
|
|
2,153
|
|
|
—
|
|
|
N/A
|
|
||
North America
|
|
15,400,619
|
|
|
2,927,660
|
|
|
575,145
|
|
|
18,903,424
|
|
|
94
|
|
|
190
|
|
|
620,189
|
|
|
99
|
|
|
41.67
|
|
||
Asia
|
|
1,200,683
|
|
|
—
|
|
|
—
|
|
|
1,200,683
|
|
|
6
|
|
|
8
|
|
|
7,485
|
|
|
1
|
|
|
8.88
|
|
||
Total
|
|
16,601,302
|
|
|
2,927,660
|
|
|
575,145
|
|
|
20,104,107
|
|
|
100
|
%
|
|
198
|
|
|
$
|
627,674
|
|
|
100
|
%
|
|
$
|
39.63
|
|
|
|
Operating Properties
|
|
Operating and Redevelopment Properties
|
||||||||||||||
Market
|
|
3/31/16
|
|
12/31/15
|
|
3/31/15
|
|
3/31/16
|
|
12/31/15
|
|
3/31/15
|
||||||
Greater Boston
|
|
97.6
|
%
|
|
96.5
|
%
|
|
98.9
|
%
|
|
96.3
|
%
|
|
95.2
|
%
|
|
96.4
|
%
|
San Francisco
|
|
100.0
|
|
|
100.0
|
|
|
98.5
|
|
|
100.0
|
|
|
100.0
|
|
|
98.5
|
|
New York City
|
|
99.7
|
|
|
99.7
|
|
|
99.5
|
|
|
99.7
|
|
|
99.7
|
|
|
99.5
|
|
San Diego
|
|
94.5
|
|
|
96.4
|
|
|
94.9
|
|
|
80.1
|
|
|
82.3
|
|
|
93.9
|
|
Seattle
|
|
99.2
|
|
|
99.6
|
|
|
96.2
|
|
|
99.2
|
|
|
99.6
|
|
|
96.2
|
|
Maryland
|
|
95.9
|
|
|
96.0
|
|
|
93.2
|
|
|
95.9
|
|
|
96.0
|
|
|
93.2
|
|
Research Triangle Park
|
|
98.6
|
|
|
97.6
|
|
|
98.8
|
|
|
98.6
|
|
|
97.6
|
|
|
98.8
|
|
Subtotal
|
|
97.5
|
|
|
97.4
|
|
|
97.0
|
|
|
93.8
|
|
|
93.8
|
|
|
96.1
|
|
Canada
|
|
99.3
|
|
|
99.3
|
|
|
99.0
|
|
|
99.3
|
|
|
99.3
|
|
|
99.0
|
|
Non-cluster markets
|
|
88.1
|
|
|
80.0
|
|
|
68.0
|
|
|
88.1
|
|
|
80.0
|
|
|
68.0
|
|
North America
|
|
97.3
|
%
|
|
97.2
|
%
|
|
96.8
|
%
|
|
93.8
|
%
|
|
93.7
|
%
|
|
95.9
|
%
|
|
|
|
|
Remaining Lease Term in Years
(2)
|
|
Aggregate RSF
|
|
ABR
|
|
Percentage of Aggregate ABR
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
Investment-Grade Ratings
|
|||||||||||||||
|
|
Tenant
|
|
|
|
|
|
Fitch
|
|
Moody’s
|
|
S&P
|
|||||||||||
1
|
|
|
ARIAD Pharmaceuticals, Inc.
(3)
|
|
|
14.0
|
|
|
|
386,111
|
|
(3)
|
$
|
29,994
|
|
|
4.8%
|
|
—
|
|
—
|
|
—
|
2
|
|
|
Novartis AG
|
|
|
1.9
|
|
|
|
564,873
|
|
(4)
|
29,302
|
|
|
4.7
|
|
AA
|
|
Aa3
|
|
AA-
|
|
3
|
|
|
Illumina, Inc.
|
|
|
13.9
|
|
|
|
595,886
|
|
|
25,452
|
|
|
4.1
|
|
—
|
|
—
|
|
BBB
|
|
4
|
|
|
New York University
|
|
|
14.3
|
|
|
|
209,224
|
|
|
20,354
|
|
|
3.2
|
|
—
|
|
Aa3
|
|
AA-
|
|
5
|
|
|
Eli Lilly and Company
|
|
|
7.1
|
|
|
|
287,527
|
|
|
19,353
|
|
|
3.1
|
|
A
|
|
A2
|
|
AA-
|
|
6
|
|
|
Amgen Inc.
|
|
|
7.1
|
|
|
|
473,369
|
|
|
17,456
|
|
|
2.8
|
|
BBB
|
|
Baa1
|
|
A
|
|
7
|
|
|
Roche
|
|
|
4.5
|
|
|
|
345,786
|
|
|
16,517
|
|
|
2.6
|
|
AA
|
|
A1
|
|
AA
|
|
8
|
|
|
Dana-Farber Cancer Institute, Inc.
|
|
|
14.3
|
|
|
|
203,090
|
|
|
15,145
|
|
|
2.4
|
|
—
|
|
A1
|
|
—
|
|
9
|
|
|
Celgene Corporation
|
|
|
5.9
|
|
|
|
373,797
|
|
|
15,035
|
|
|
2.4
|
|
—
|
|
Baa2
|
|
BBB+
|
|
10
|
|
|
United States Government
|
|
|
9.1
|
|
|
|
263,147
|
|
|
14,772
|
|
|
2.4
|
|
AAA
|
|
Aaa
|
|
AA+
|
|
11
|
|
|
FibroGen, Inc.
|
|
|
7.6
|
|
|
|
234,249
|
|
|
14,198
|
|
|
2.3
|
|
—
|
|
—
|
|
—
|
|
12
|
|
|
Biogen Inc.
|
|
|
12.5
|
|
|
|
305,212
|
|
|
13,278
|
|
|
2.1
|
|
—
|
|
Baa1
|
|
A-
|
|
13
|
|
|
Massachusetts Institute of Technology
|
|
|
4.4
|
|
|
|
233,620
|
|
|
12,409
|
|
|
2.0
|
|
—
|
|
Aaa
|
|
AAA
|
|
14
|
|
|
GlaxoSmithKline plc
|
|
|
3.4
|
|
|
|
296,604
|
|
|
11,098
|
|
|
1.8
|
|
A+
|
|
A2
|
|
A+
|
|
15
|
|
|
Bristol-Myers Squibb Company
|
|
|
2.9
|
|
|
|
251,316
|
|
|
10,742
|
|
|
1.7
|
|
A-
|
|
A2
|
|
A+
|
|
16
|
|
|
The Regents of the University of California
|
|
|
7.5
|
|
|
|
230,633
|
|
|
10,511
|
|
|
1.7
|
|
AA
|
|
Aa2
|
|
AA
|
|
17
|
|
|
Sanofi
|
|
|
5.4
|
|
|
|
179,697
|
|
|
8,042
|
|
|
1.3
|
|
AA-
|
|
A1
|
|
AA
|
|
18
|
|
|
Alnylam Pharmaceuticals, Inc.
|
|
|
5.6
|
|
|
|
129,424
|
|
|
7,313
|
|
|
1.2
|
|
—
|
|
—
|
|
—
|
|
19
|
|
|
Sumitomo Dainippon Pharma Co., Ltd.
|
|
|
7.0
|
|
|
|
106,232
|
|
|
6,533
|
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
20
|
|
|
Pfizer Inc.
|
|
|
3.6
|
|
|
|
128,348
|
|
|
6,396
|
|
|
1.0
|
|
A+
|
|
A1
|
|
AA
|
|
|
|
Total/weighted-average
|
|
|
8.2
|
|
|
|
5,798,145
|
|
|
$
|
303,900
|
|
|
48.6%
|
|
|
|
|
|
|
(1)
|
Represents ABR from investment-grade rated tenants as a percentage of ABR from top 20 tenants.
|
(2)
|
Based on percentage of aggregate ABR in effect
as of March 31, 2016
.
|
(3)
|
IBM Watson Health, a digital health venture of IBM, currently subleases
163,186
RSF at 75 Binney Street with an initial lease term of 10 years. IBM holds investment-grade ratings of A+ (Fitch), Aa3 (Moody’s), and AA- (S&P).
|
(4)
|
As of
March 31, 2016
, number of leases, RSF, and ABR consisted of the following (dollars in thousands):
|
|
Number of leases
|
|
RSF
|
|
ABR
|
||||
Cambridge, MA
|
9
|
|
|
425,020
|
|
|
$
|
26,266
|
|
San Diego, CA
|
1
|
|
|
46,033
|
|
|
1,434
|
|
|
India
|
3
|
|
|
93,820
|
|
|
1,602
|
|
|
|
13
|
|
|
564,873
|
|
|
$
|
29,302
|
|
Incremental Annual NOI by Year of Delivery from
|
|
|
|||||||||
Development and Redevelopment Projects
(1)
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
2016
|
|
|
|
2017 & 2018
|
|
|
$
|
195
|
M
|
=
|
$
|
75
|
M
|
+
|
$
|
120
|
M
|
|
|
to
|
|
|
to
|
|
|
to
|
|
|
||
$
|
210
|
M
|
$
|
80
|
M
|
$
|
130
|
M
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
RSF
|
|
|
|
1.5M
|
|
|
|
2.0M
|
|
|
PERCENTAGE LEASED
|
|
|
|
90%
|
|
|
|
72%
|
|
|
|
INITIAL CASH YIELD
|
|
|
|
7.1%
|
|
|
|
|
|
|
(1)
|
Represents incremental annual NOI upon stabilization of our development and redevelopment projects, including our share of real estate joint venture development projects. Excludes NOI related to spaces delivered and in service prior to
March 31, 2016
.
|
2016 Disciplined Allocation of Capital
(1)
|
|
16% of Gross Investments in Real Estate in North America Value-Creation Pipeline
|
||
|
|
|
||
|
|
|
|
|
Pre-Leased
(2)
Percentage of Ground-Up Developments Since January 1, 2009
|
|
Ground-Up Developments Commenced & Delivered Since January 1, 2009
|
||
|
|
|
|
|
Single-Tenant
100% Pre-Leased 2.6M RSF |
Multi-Tenant
38% Pre-Leased 2.5M RSF |
|
Average
Initial Stabilized Yield 7.9% |
Average
Initial Stabilized Yield (Cash Basis) 7.6% |
(1)
|
Includes projected construction and acquisitions for the year ending
December 31, 2016
.
|
(2)
|
Represents average pre-leased percentage at the time development commenced.
|
|
Investments in Real Estate
|
|
Square Feet
|
|
|
||||||||||||||||||||||||||
|
Consolidated
|
|
Noncontrolling Share of Consolidated Real Estate Joint Ventures
|
|
ARE Share of Unconsolidated Real Estate
Joint Ventures
|
|
Total ARE Share
|
|
|
|
Unconsolidated Real Estate Joint Ventures
at 100%
|
|
|
|
|
||||||||||||||||
|
|
|
|
Amount
|
|
%
|
|
Consolidated
|
|
|
Total
|
|
Per SF
(1)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental properties
–
North America
|
$
|
7,559,726
|
|
|
$
|
(322,442
|
)
|
|
$
|
71,092
|
|
|
$
|
7,308,376
|
|
|
84
|
%
|
|
15,138,252
|
|
|
262,367
|
|
|
15,400,619
|
|
|
$
|
506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Development and redevelopment projects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Projects to be delivered by 4Q16
|
617,952
|
|
|
—
|
|
|
35,832
|
|
|
653,784
|
|
|
8
|
|
|
1,314,545
|
|
|
151,432
|
|
|
1,465,977
|
|
|
504
|
|
|||||
Projects to be delivered by 2017 and 2018
|
488,186
|
|
|
(223
|
)
|
|
67,162
|
|
|
555,125
|
|
|
6
|
|
|
1,613,848
|
|
|
422,980
|
|
|
2,036,828
|
|
|
302
|
|
|||||
Development and redevelopment projects
|
1,106,138
|
|
|
(223
|
)
|
|
102,994
|
|
|
1,208,909
|
|
|
14
|
|
|
2,928,393
|
|
|
574,412
|
|
|
3,502,805
|
|
|
387
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental properties and development/redevelopment projects
|
8,665,864
|
|
|
(322,665
|
)
|
|
174,086
|
|
|
8,517,285
|
|
|
|
|
18,066,645
|
|
|
836,779
|
|
|
18,903,424
|
|
|
484
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Future value-creation projects – North America
|
234,142
|
|
|
(12,275
|
)
|
|
—
|
|
|
221,867
|
|
|
2
|
|
|
5,606,435
|
|
|
—
|
|
|
5,606,435
|
|
|
42
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value-creation pipeline – North America
|
1,340,280
|
|
|
(12,498
|
)
|
|
102,994
|
|
|
1,430,776
|
|
|
16
|
|
|
8,534,828
|
|
|
574,412
|
|
|
9,109,240
|
|
|
174
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross investments in real estate – North America
|
8,900,006
|
|
|
(334,940
|
)
|
|
174,086
|
|
|
8,739,152
|
|
|
100
|
%
|
|
23,673,080
|
|
|
836,779
|
|
|
24,509,859
|
|
|
382
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Asia:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental properties
|
163,386
|
|
|
(1,441
|
)
|
|
—
|
|
|
161,945
|
|
|
|
|
1,200,683
|
|
|
—
|
|
|
1,200,683
|
|
|
$
|
136
|
|
|||||
Land parcels
|
54,666
|
|
|
—
|
|
|
—
|
|
|
54,666
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross investments in real estate – Asia
|
218,052
|
|
|
(1,441
|
)
|
|
—
|
|
|
216,611
|
|
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross investments in real estate
|
9,118,058
|
|
|
(336,381
|
)
|
|
174,086
|
|
|
$
|
8,955,763
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Less: accumulated depreciation – North America
|
(1,358,820
|
)
|
|
23,033
|
|
|
(2,515
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: accumulated depreciation – Asia
|
(17,772
|
)
|
|
172
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Investments in real estate
|
$
|
7,741,466
|
|
|
$
|
(313,176
|
)
|
|
$
|
171,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The per square foot amounts represent our investment in our real estate, including our partners’ share of consolidated and unconsolidated real estate joint ventures, divided by 100% of the rentable or developable square feet of the respective properties.
|
(2)
|
In late April 2016, we recognized an aggregate impairment charge of
$153.0 million
. Refer to Note 14 –“Assets Classified as Held for Sale” to our unaudited consolidated financial statements under Item 1 of this report for net assets of
$104.4 million
after impairment charge recognized in April 2016 related to our real estate investments in Asia.
|
|
|
Dev/ Redev
|
|
Project RSF
|
|
Percentage
|
|
Total Leased/Negotiating
|
|
Project Start
|
|
Occupancy
|
|||||||||||||||||
Property/Market/Submarket
|
|
|
In Service
|
|
CIP
|
|
Total
|
|
Leased
|
|
Negotiating
|
|
RSF
|
|
%
|
|
|
Initial
|
|
Stabilized
|
|||||||||
430 East 29th Street/New York City/Manhattan
|
|
Dev
|
|
356,044
|
|
|
62,595
|
|
|
418,639
|
|
|
90
|
%
|
|
10
|
%
|
|
418,639
|
|
|
100
|
%
|
|
4Q12
|
|
4Q13
|
|
2Q16
|
5200 Illumina Way, Bldg 6/San Diego/University Town Center
|
|
Dev
|
|
—
|
|
|
295,609
|
|
|
295,609
|
|
|
100
|
%
|
|
—
|
%
|
|
295,609
|
|
|
100
|
%
|
|
3Q14
|
|
3Q16
|
|
3Q16
|
50/60 Binney Street/Greater Boston/Cambridge
|
|
Dev
|
|
—
|
|
|
530,477
|
|
|
530,477
|
|
|
98
|
%
|
|
—
|
%
|
|
520,385
|
|
|
98
|
%
|
|
1Q15
|
|
4Q16
|
|
4Q16
|
360 Longwood Avenue/Greater Boston/Longwood Medical Area
|
|
Dev
|
|
262,367
|
|
|
151,432
|
|
|
413,799
|
|
|
63
|
%
|
|
13
|
%
|
|
313,350
|
|
|
76
|
%
|
|
2Q12
|
|
3Q14
|
|
4Q16
|
4796 Executive Drive/San Diego/University Town Center
|
|
Dev
|
|
—
|
|
|
61,755
|
|
|
61,755
|
|
|
100
|
%
|
|
—
|
%
|
|
61,755
|
|
|
100
|
%
|
|
4Q15
|
|
4Q16
|
|
4Q16
|
10290 Campus Point Drive/San Diego/University Town Center
|
|
Redev
|
|
—
|
|
|
304,326
|
|
|
304,326
|
|
|
100
|
%
|
|
—
|
%
|
|
304,326
|
|
|
100
|
%
|
|
3Q15
|
|
4Q16
|
|
4Q16
|
11 Hurley Street/Greater Boston/Cambridge
|
|
Redev
|
|
—
|
|
|
59,783
|
|
|
59,783
|
|
|
100
|
%
|
|
—
|
%
|
|
59,783
|
|
|
100
|
%
|
|
3Q15
|
|
4Q16
|
|
4Q16
|
Total/weighted average
|
|
|
|
618,411
|
|
|
1,465,977
|
|
|
2,084,388
|
|
|
90
|
%
|
|
5
|
%
|
|
1,973,847
|
|
|
95
|
%
|
|
|
|
|
|
|
|
|
|
|
Our Share of Investment
|
|
Unlevered Yields
|
|
|||||||||||||||||||||||||
Property/Market/Submarket
|
|
Our Ownership Interest
|
|
|
|
Cost to Complete
|
|
|
|
|
Average Cash
|
|
Initial Stabilized Cash Basis
|
|
Initial Stabilized
|
|
||||||||||||||||
|
|
In Service
|
|
CIP
|
|
Construction
Financing
|
|
Other
|
|
Total at Completion
|
|
|
|
|
||||||||||||||||||
430 East 29th Street/New York City/Manhattan
|
|
100%
|
|
$
|
382,277
|
|
|
$
|
72,775
|
|
|
$
|
—
|
|
|
$
|
8,193
|
|
|
$
|
463,245
|
|
|
7.1%
|
|
6.6%
|
|
6.5%
|
|
|||
5200 Illumina Way, Bldg 6/San Diego/University Town Center
|
|
100%
|
|
—
|
|
|
55,225
|
|
|
—
|
|
|
14,675
|
|
|
|
69,900
|
|
|
8.6%
|
|
7.0%
|
|
8.4%
|
|
|||||||
50/60 Binney Street/Greater Boston/Cambridge
|
|
100%
|
|
—
|
|
|
327,786
|
|
|
172,214
|
|
(1)
|
—
|
|
|
|
500,000
|
|
|
8.1%
|
|
7.3%
|
|
7.4%
|
|
|||||||
360 Longwood Avenue/Greater Boston/Longwood Medical Area
|
|
27.5%
|
|
60,305
|
|
|
35,832
|
|
|
9,103
|
|
(2)
|
3,725
|
|
|
|
108,965
|
|
(3)
|
8.2%
|
(3)
|
7.3%
|
(3)
|
7.8%
|
(3)
|
|||||||
4796 Executive Drive/San Diego/University Town Center
|
|
100%
|
|
—
|
|
|
15,978
|
|
|
—
|
|
|
26,222
|
|
|
|
42,200
|
|
|
7.7%
|
|
6.8%
|
|
7.1%
|
|
|||||||
10290 Campus Point Drive/San Diego/University Town Center
|
|
100%
|
|
—
|
|
|
133,492
|
|
|
—
|
|
|
107,508
|
|
|
|
241,000
|
|
|
7.6%
|
|
6.8%
|
|
7.0%
|
|
|||||||
11 Hurley Street/Greater Boston/Cambridge
|
|
100%
|
|
—
|
|
|
12,696
|
|
|
—
|
|
|
28,304
|
|
|
|
41,000
|
|
|
8.8%
|
|
7.9%
|
|
8.6%
|
|
|||||||
Total
|
|
|
|
$
|
442,582
|
|
|
$
|
653,784
|
|
|
$
|
181,317
|
|
|
$
|
188,627
|
|
|
$
|
1,466,310
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Note 8 – “Secured and Unsecured Senior Debt” under Item 1 for additional information related to our secured construction loans.
|
(2)
|
Refer to the “Unconsolidated Real Estate Joint Ventures” section under Item 2 for additional information related to our secured construction loan held by our unconsolidated real estate joint venture.
|
(3)
|
Our projected cost at completion and unlevered yields are based upon our share of the investment in real estate, including costs incurred directly by us outside of the real estate joint venture. Development management fees earned from these development projects have been excluded from our estimate of unlevered yields. The RSF related to the project in the table above represents 100% of the project RSF.
|
430 East 29th Street
|
|
5200 Illumina Way, Building 6
|
|
50 Binney Street
|
|
60 Binney Street
|
New York City/Manhattan
|
|
San Diego/University Town Center
|
|
Greater Boston/Cambridge
|
|
Greater Boston/Cambridge
|
62,595 RSF
|
|
295,609 RSF
|
|
274,734 RSF
|
|
255,743 RSF
|
Roche/New York University/Others
|
|
Illumina, Inc.
|
|
Sanofi Genzyme
|
|
bluebird bio, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
360 Longwood Avenue
|
|
4796 Executive Drive
|
|
10290 Campus Point Drive
|
|
11 Hurley Street
|
Greater Boston/Longwood Medical Area
|
|
San Diego/University Town Center
|
|
San Diego/University Town Center
|
|
Greater Boston/Cambridge
|
151,432 RSF
|
|
61,755 RSF
|
|
304,326 RSF
|
|
59,783 RSF
|
Dana-Farber Cancer Institute, Inc.
The Children’s Hospital Corporation |
|
Otonomy, Inc.
|
|
Eli Lilly and Company
|
|
Editas Medicine, Inc.
|
|
|
|
|
|
|
|
|
|
Dev/ Redev
|
|
Project RSF
|
|
Percentage
|
|
Total Leased/Negotiating
|
|
Project Start
|
|
Occupancy
|
|||||||||||||||||
Property/Market/Submarket
|
|
|
In Service
|
|
CIP
|
|
Total
|
|
Leased
|
|
Negotiating
|
|
RSF
|
|
%
|
|
|
Initial
|
|
Stabilized
|
|||||||||
100 Binney Street/Greater Boston/Cambridge
|
|
Dev
|
|
—
|
|
|
431,483
|
|
|
431,483
|
|
|
48
|
%
|
|
26
|
%
|
|
320,683
|
|
|
74
|
%
|
|
3Q15
|
|
4Q17
|
|
2017
|
510 Townsend Street/San Francisco/Mission Bay/SoMa
|
|
Dev
|
|
—
|
|
|
300,000
|
|
|
300,000
|
|
|
100
|
%
|
|
—
|
%
|
|
300,000
|
|
|
100
|
%
|
|
3Q15
|
|
3Q17
|
|
2017
|
505 Brannan Street, Phase I/San Francisco/Mission Bay/SoMa
|
|
Dev
|
|
—
|
|
|
150,000
|
|
|
150,000
|
|
|
100
|
%
|
|
—
|
%
|
|
150,000
|
|
|
100
|
%
|
|
1Q16
|
|
2H17
|
|
2017
|
1455/1515 Third Street/San Francisco/Mission Bay/SoMa
|
|
Dev
|
|
—
|
|
|
422,980
|
|
|
422,980
|
|
|
100
|
%
|
|
—
|
%
|
|
422,980
|
|
|
100
|
%
|
|
3Q14
|
|
2Q/3Q18
|
|
2018
|
400 Dexter Avenue North/Seattle/Lake Union
|
|
Dev
|
|
—
|
|
|
287,806
|
|
|
287,806
|
|
|
56
|
%
|
|
34
|
%
|
|
259,594
|
|
|
90
|
%
|
(1)
|
2Q15
|
|
1Q17
|
|
2018
|
ARE Spectrum/San Diego/Torrey Pines
(2)
|
|
Dev
|
|
102,938
|
|
|
233,523
|
|
|
336,461
|
|
|
91
|
%
|
|
—
|
%
|
|
305,525
|
|
|
91
|
%
|
|
2Q16
|
|
2H17
|
|
2017
|
9625 Towne Centre Drive/San Diego/University Town Center
|
|
Redev
|
|
—
|
|
|
162,156
|
|
|
162,156
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
3Q15
|
|
1Q17
|
|
2017
|
10151 Barnes Canyon Road/San Diego/Sorrento Mesa
|
|
Redev
|
|
—
|
|
|
48,880
|
|
|
48,880
|
|
|
—
|
%
|
|
100
|
%
|
|
48,880
|
|
|
100
|
%
|
|
4Q15
|
|
1H17
|
|
2017
|
Total/weighted average
|
|
|
|
102,938
|
|
|
2,036,828
|
|
|
2,139,766
|
|
|
72
|
%
|
|
12
|
%
|
|
1,807,662
|
|
|
84
|
%
|
|
|
|
|
|
|
|
|
|
|
Our Share of Investment
|
|
Unlevered Yields
|
|||||||||||||||||||||||||
Property/Market/Submarket
|
|
Our Ownership Interest
|
|
|
|
Cost to Complete
|
|
|
|
|
Average Cash
|
|
Initial Stabilized Cash Basis
|
|
Initial Stabilized
|
||||||||||||||||
|
|
In Service
|
|
CIP
|
|
Construction Financing
|
|
Other
|
|
Total at Completion
|
|
|
|
||||||||||||||||||
100 Binney Street/Greater Boston/Cambridge
|
|
100%
|
|
$
|
—
|
|
|
$
|
188,869
|
|
|
$
|
304,281
|
|
(3)
|
$
|
41,850
|
|
|
$
|
535,000
|
|
|
7.9%
|
|
7.0%
|
|
7.7%
|
|||
510 Townsend Street/San Francisco/Mission Bay/SoMa
|
|
100%
|
|
—
|
|
|
77,753
|
|
|
—
|
|
|
|
160,247
|
|
|
|
238,000
|
|
|
7.9%
|
|
7.0%
|
|
7.2%
|
||||||
505 Brannan Street, Phase I/San Francisco/Mission Bay/SoMa
|
|
99.2%
|
|
—
|
|
|
29,528
|
|
|
—
|
|
|
|
111,472
|
|
|
|
141,000
|
|
|
8.6%
|
|
7.0%
|
|
8.2%
|
||||||
1455/1515 Third Street/San Francisco/Mission Bay/SoMa
|
|
51.0%
|
|
10,787
|
|
(4)
|
67,162
|
|
(4)
|
—
|
|
|
|
—
|
|
|
|
TBD
|
|
|
(5)
|
|
(5)
|
|
(5)
|
||||||
400 Dexter Avenue North/Seattle/Lake Union
|
|
100%
|
|
—
|
|
|
68,494
|
|
|
—
|
|
|
|
163,506
|
|
|
|
232,000
|
|
|
7.3%
|
|
6.9%
|
|
7.2%
|
||||||
ARE Spectrum/San Diego/Torrey Pines
(2)
|
|
100%
|
|
54,132
|
|
|
92,902
|
|
|
—
|
|
|
|
130,966
|
|
|
|
278,000
|
|
|
6.9%
|
|
6.1%
|
|
6.4%
|
||||||
9625 Towne Centre Drive/San Diego/University Town Center
|
|
100%
|
|
—
|
|
|
23,577
|
|
|
—
|
|
|
|
—
|
|
|
|
TBD
|
|
|
(5)
|
|
(5)
|
|
(5)
|
||||||
10151 Barnes Canyon Road/San Diego/Sorrento Mesa
|
|
100%
|
|
—
|
|
|
6,840
|
|
|
—
|
|
|
|
—
|
|
|
|
TBD
|
|
|
(5)
|
|
(5)
|
|
(5)
|
||||||
Total/weighted average
|
|
|
|
$
|
64,919
|
|
|
$
|
555,125
|
|
|
$
|
304,281
|
|
|
$
|
TBD
|
|
|
$
|
TBD
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Remaining 10% RSF includes 5% of retail space expected to be leased closer to initial occupancy.
|
(2)
|
As of
March 31, 2016
, the ARE Spectrum project was expanded to include 3215 Merryfield Row, an additional building aggregating
170,523
RSF. We expect to commence construction on the 3215 Merryfield Row building during the second quarter of 2016. The building was leased 100% to Vertex Pharmaceuticals Incorporated, with an estimated initial occupancy date in the second half of 2017.
|
(3)
|
Funding for this project will be provided primarily by a secured construction loan that we closed in April 2016 with commitments available for borrowing of
$304.3 million
at a rate of LIBOR+200bps. We have
two
,
one
-year options to extend the stated maturity date to April 20, 2021, subject to certain conditions.
|
(4)
|
The in-service and CIP costs are based on our share of the investment in real estate, including costs incurred directly by us outside of the real estate joint venture. The RSF related to the project in the table above represents 100% of the project RSF.
|
(5)
|
The design and budget of these projects are in process, and the estimated project costs with related yields will be disclosed in the future.
|
100 Binney Street
|
|
510 Townsend Street
|
|
505 Brannan Street, Phase I
|
|
1455/1515 Third Street
|
Greater Boston/Cambridge
|
|
San Francisco/Mission Bay/SoMa
|
|
San Francisco/Mission Bay/SoMa
|
|
San Francisco/Mission Bay/SoMa
|
431,483 RSF
|
|
300,000 RSF
|
|
150,000 RSF
|
|
422,980 RSF
|
Bristol-Myers Squibb Company
|
|
Stripe, Inc.
|
|
Pinterest, Inc.
|
|
Uber Technologies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400 Dexter Avenue North
|
|
ARE Spectrum
|
|
9625 Towne Centre Drive
|
|
10151 Barnes Canyon Road
|
Seattle/Lake Union
|
|
San Diego/Torrey Pines
|
|
San Diego/University Town Center
|
|
San Diego/Sorrento Mesa
|
287,806 RSF
|
|
233,523 RSF
|
|
162,156 RSF
|
|
48,880 RSF
|
Juno Therapeutics, Inc.
|
|
Celgene Corporation
The Medicines Company Vertex Pharmaceuticals Incorporated |
|
Marketing
|
|
Negotiating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property/Market/Submarket
|
|
Our Ownership Interest
|
|
Book Value
|
|
Square Feet
|
|
Per SF
(1)
|
|||||||
Alexandria Technology Square
®
/Greater Boston/Cambridge
|
|
|
100%
|
|
|
$
|
7,787
|
|
|
100,000
|
|
|
$
|
78
|
|
505 Brannan Street, Phase II/San Francisco/Mission Bay/SoMa
|
|
|
99.2%
|
|
|
12,695
|
|
|
165,000
|
|
|
78
|
|
||
Grand Avenue/San Francisco/South San Francisco
(2)
|
|
|
Various
|
(3)
|
|
33,131
|
|
|
397,132
|
|
|
114
|
|
||
560 Eccles Avenue/San Francisco/South San Francisco
(4)
|
|
|
100%
|
|
|
17,655
|
|
|
144,000
|
|
|
123
|
|
||
East 29th Street/New York City/Manhattan
|
|
|
100%
|
|
|
—
|
|
|
420,000
|
|
|
—
|
|
||
5200 Illumina Way/San Diego/University Town Center
|
|
|
100%
|
|
|
10,407
|
|
|
386,044
|
|
|
27
|
|
||
10300 Campus Point Drive/San Diego/University Town Center
|
|
|
100%
|
|
|
7,945
|
|
|
292,387
|
|
|
27
|
|
||
1150/1165/1166 Eastlake Avenue East/Seattle/Lake Union
|
|
|
100%
|
|
|
34,715
|
|
|
366,000
|
|
|
95
|
|
||
1818 Fairview Avenue East/Seattle/Lake Union
|
|
|
100%
|
|
|
8,791
|
|
|
188,490
|
|
|
47
|
|
||
6 Davis Drive/Research Triangle Park/Research Triangle Park
|
|
|
100%
|
|
|
16,419
|
|
|
1,000,000
|
|
|
16
|
|
||
Other:
|
|
|
|
|
|
|
|
|
|
|
|||||
Greater Boston
|
|
|
100%
|
|
|
9,281
|
|
|
395,599
|
|
|
23
|
|
||
San Francisco
|
|
|
100%
|
|
|
—
|
|
|
95,620
|
|
|
—
|
|
||
San Diego
|
|
|
100%
|
|
|
24,862
|
|
|
193,895
|
|
|
128
|
|
||
Maryland
|
|
|
100%
|
|
|
21,482
|
|
|
763,721
|
|
|
28
|
|
||
Research Triangle Park
|
|
|
100%
|
|
|
4,149
|
|
|
76,262
|
|
|
54
|
|
||
Non-cluster Markets
|
|
|
100%
|
|
|
12,548
|
|
|
622,285
|
|
|
20
|
|
||
Future value-creation projects
|
|
|
|
|
|
$
|
221,867
|
|
|
5,606,435
|
|
|
$
|
42
|
|
(1)
|
The per square foot amounts represent our investment in our real estate, including our partners’ share of consolidated real estate joint ventures, divided by 100% of developable square feet of the respective properties.
|
(2)
|
In March 2016, Verily, Alphabet Inc.’s life science subsidiary, entered into a sublease for
407,369
RSF at 249/259/269 East Grand Avenue with Amgen Inc., with potential expansion space on the two additional land parcels, aggregating 397,132 SF,
located adjacent to/surrounding the recently developed campus in South San Francisco.
|
(3)
|
Includes a redeemable noncontrolling interest, aggregating 37% ownership in one of our consolidated real estate joint ventures, at our 213 East Grand Avenue property aggregating 275,500 SF.
|
(4)
|
Represents an additional parcel located near our 341/343 Oyster Point Boulevard properties and within walking distance of Roche’s campus in South San Francisco.
|
Projected Construction Spending
|
|
Year Ending
December 31, 2016 |
|
||||||
Development and redevelopment projects
(1)
|
|
$
|
589,000
|
|
|
||||
Other building improvement projects
(2)
|
|
|
71,000
|
|
|
||||
Total construction spending for the nine months ending December 31, 2016
|
|
$
|
660,000
|
|
|
||||
Actual construction spending for the three months ended March 31, 2016
|
|
|
189,147
|
|
|
||||
Guidance range for the year ending December 31, 2016
|
|
$
|
800,000
|
–
|
900,000
|
|
(2)
|
Includes generic laboratory infrastructure/building improvement projects and non-revenue-enhancing capital expenditures and tenant improvements.
|
Historical Construction Spending
|
|
Three Months Ended March 31, 2016
|
|
||
Total construction costs
(1)
|
|
$
|
189,147
|
|
|
Increase in accrued construction
|
|
(29,197
|
)
|
|
|
Total construction spending (cash basis)
|
|
$
|
159,950
|
|
|
|
|
|
|
||
Additions to real estate
|
|
$
|
159,501
|
|
|
Investments in unconsolidated real estate joint ventures
|
|
449
|
|
|
|
Total construction spending (cash basis)
|
|
$
|
159,950
|
|
|
(1)
|
Includes revenue-enhancing projects and non-revenue enhancing capital expenditures shown in the table below.
|
Non-Revenue-Enhancing Capital Expenditures, Tenant Improvements, and Leasing Costs
(1)
|
|
Three Months Ended March 31, 2016
|
|
Five Year Average
per RSF
(2)
|
|||||||||||
|
Amount
|
|
RSF
|
|
Per RSF
|
|
|||||||||
Non-revenue-enhancing capital expenditures
|
|
$
|
2,318
|
|
|
16,845,444
|
|
|
$
|
0.14
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|||||||
Tenant improvements and leasing costs:
|
|
|
|
|
|
|
|
|
|||||||
Re-tenanted space
|
|
$
|
2,093
|
|
|
108,989
|
|
|
$
|
19.20
|
|
|
$
|
15.54
|
|
Renewal space
|
|
382
|
|
|
109,353
|
|
|
3.49
|
|
|
6.82
|
|
|||
Total tenant improvements and leasing costs/weighted average
|
|
$
|
2,475
|
|
|
218,342
|
|
|
$
|
11.34
|
|
|
$
|
9.22
|
|
(1)
|
Excludes amounts that are recoverable from tenants, revenue-enhancing, or related to parties that have undergone redevelopment.
|
(2)
|
Represents the average of 2012 through 2015 and the three months ended
March 31, 2016
, annualized.
|
Property/Market/Submarket
|
|
RSF/Acres
|
|
NOI
(1)
|
|
Cash
NOI
(1)
|
|
Actual/Estimated
Sales Price |
|
||||||||
Assets held for sale in North America:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
16020 Industrial Drive/Maryland/Gaithersburg
|
|
71,000
|
RSF
|
|
$
|
1,022
|
|
|
$
|
896
|
|
(2)
|
$
|
6,400
|
|
|
|
306 Belmont Street and 350 Plantation Street/Greater Boston/Route 495/Worcester
|
|
90,690
|
RSF
|
|
$
|
1,557
|
|
|
$
|
1,347
|
|
(3)
|
|
17,550
|
|
|
|
Assets held for sale in North America
|
|
|
|
|
|
|
|
|
23,950
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Asia assets pending disposition:
(4)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating properties
|
|
1,200,683
|
RSF
|
|
(5)
|
|
(5)
|
|
|
113,000
|
|
|
|||||
Land parcels
|
|
196
|
acres
|
|
(5)
|
|
(5)
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
$
|
136,950
|
|
|
(1)
|
Cash NOI excludes straight-line rent and amortization of acquired below-market leases. NOI amounts represent the annualized amounts for
three months ended March 31, 2016
.
|
(2)
|
Property consists of an R&D/warehouse building acquired in 2005 with minimal capital improvements since acquisition. Buyer intends to make considerable investments in the building, including demolition of some of the existing space and re-purposing of its use.
|
(3)
|
Non-core properties located outside of our urban innovation clusters. These properties are Class B office buildings leased to non-credit tenants and represent our last investment in Worcester. The internal rate of return over our hold period, including the expected disposition of the asset, is expected to be approximately
8.9%
.
|
(4)
|
In March 2016, we recognized an impairment charge of
$29.0 million
for two land parcels in India that met the criteria for classification as held for sale in March 2016. As of March 31, 2016, we only had one binding sale agreement related to one land parcel. This land parcel was sold on
May 2, 2016
, at a sales price of
$7.5 million
with no gain or loss. On April 22, 2016, our Board of Directors approved the monetization of our real estate investments in Asia in order to invest capital into our highly leased value-creation pipeline. As a result of this decision, we recognized an aggregate impairment charge of
$153.0 million
to reduce our net book value to fair value less cost to sell for all of our remaining investments in Asia. In determining the carrying amount for evaluating the real estate for impairment, we considered the cumulative foreign currency translation losses of approximately
$32.0 million
for our land parcels located in India, and
$18.8 million
for our rental properties in our India and China submarkets, that will be reclassified to net income only when realized upon sale or disposition. We believe our real estate investments in Asia will be monetized in several separate transactions over the next 12 months.
|
(5)
|
Refer to Note 14 – “Assets Classified as Held for Sale” to our unaudited consolidated financial statements under Item 1 of this report for operating and balance sheet information related to our real estate investments in Asia.
|
Public/Private Investment Mix
(Cost) |
|
Tenant/Non-Tenant Mix
(Cost)
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
||||||||||||
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Investment
Type
|
|
Cost
|
|
Net Unrealized Gains
|
|
Total
|
|
Number of Investments
190 Average Size of Investment $1.3M |
||||||
Public
|
|
$
|
22,237
|
|
|
$
|
63,150
|
|
|
$
|
85,387
|
|
|
|
Private
|
|
230,776
|
|
|
N/A
|
|
|
230,776
|
|
|
||||
Total
|
|
$
|
253,013
|
|
|
$
|
63,150
|
|
|
$
|
316,163
|
|
|
Favorable Lease Structure
|
|
Adjusted EBITDA Margin
(3)
|
|
|
|
65%
|
|
Percentage of
triple net leases |
96%
|
|
|
Stable cash flows
|
|
||
Percentage of leases
containing annual rent escalations |
95%
|
|
|
Increasing cash flows
|
|
||
Percentage of leases
providing for the recapture of capital expenditures |
94%
|
|
|
Lower capex burden
|
|
||
|
|
|
(1)
|
As of the end of each respective period.
|
(2)
|
Rental rate increases for the
three months ended March 31, 2016
were driven by four leases that generated average increases in rental rates of 47%, and 29% on a cash basis. Refer to our “Projected Results” on page
81
for estimated rental rate growth for the year ending December 31, 2016.
|
(3)
|
Represents the
three months ended March 31, 2016
, annualized.
|
|
|
Three Months Ended March 31, 2016
|
|
Percentage change in NOI over comparable period from prior year
|
|
5.3%
|
|
Percentage change in NOI (cash basis) over comparable period from prior year
|
|
6.2%
|
|
Operating margin
|
|
70%
|
|
Number of Same Properties
|
|
169
|
|
RSF
|
|
14,855,443
|
|
Occupancy – current-period average
|
|
94.6%
|
|
Occupancy – same-period prior year average
|
|
93.6%
|
Development – under construction
|
|
Properties
|
|
50/60 Binney Street
|
|
2
|
|
100 Binney Street
|
|
1
|
|
510 Townsend Street
|
|
1
|
|
505 Brannan Street
|
|
1
|
|
ARE Spectrum
|
|
3
|
|
430 East 29th Street
|
|
1
|
|
5200 Illumina Way, Building 6
|
|
1
|
|
4796 Executive Drive
|
|
1
|
|
400 Dexter Avenue North
|
|
1
|
|
360 Longwood Avenue (unconsolidated real estate joint venture)
|
|
1
|
|
1455/1515 Third Street (unconsolidated real estate joint venture)
|
|
2
|
|
|
|
15
|
|
|
|
|
|
Development – placed into service after January 1, 2015
|
|
Properties
|
|
75/125 Binney Street
|
|
1
|
|
6040 George Watts Hill Drive
|
|
1
|
|
|
|
2
|
|
|
|
|
|
Redevelopment – under construction
|
|
Properties
|
|
11 Hurley Street
|
|
1
|
|
10290 Campus Point Drive
|
|
1
|
|
9625 Towne Centre Drive
|
|
1
|
|
10151 Barnes Canyon Road
|
|
1
|
|
|
|
4
|
|
|
|
|
|
Redevelopment – placed into service after January 1, 2015
|
|
Properties
|
|
225 Second Avenue
|
|
1
|
|
11055/11065/11075 Roselle Street
|
|
3
|
|
|
|
4
|
|
Summary
|
|
Properties
|
|
Properties under construction:
|
|
|
|
Development
|
|
15
|
|
Redevelopment
|
|
4
|
|
Projects placed into service after
January 1, 2015:
|
|
|
|
Development
|
|
2
|
|
Redevelopment
|
|
4
|
|
|
|
|
|
Acquisitions after January 1, 2015:
|
|||
640 Memorial Drive
|
|
1
|
|
|
|
|
|
Properties held for sale
|
|
3
|
|
Total properties excluded from Same Properties
|
|
29
|
|
|
|
|
|
Same Properties
|
|
169
|
|
|
|
|
|
Total properties as of March 31, 2016
|
|
198
|
|
|
|
|
Three Months Ended March 31,
|
|
|||||||||||||
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|||||||
Same Properties
|
|
$
|
127,023
|
|
|
$
|
122,626
|
|
|
$
|
4,397
|
|
|
3.6
|
%
|
|
Non-Same Properties
|
|
31,253
|
|
|
20,982
|
|
|
10,271
|
|
|
49.0
|
|
|
|||
Total rental
|
|
158,276
|
|
|
143,608
|
|
|
14,668
|
|
|
10.2
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
44,071
|
|
|
42,204
|
|
|
1,867
|
|
|
4.4
|
|
|
|||
Non-Same Properties
|
|
8,526
|
|
|
6,190
|
|
|
2,336
|
|
|
37.7
|
|
|
|||
Total tenant recoveries
|
|
52,597
|
|
|
48,394
|
|
|
4,203
|
|
|
8.7
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
11
|
|
|
12
|
|
|
(1
|
)
|
|
(8.3
|
)
|
|
|||
Non-Same Properties
|
|
5,205
|
|
|
4,739
|
|
|
466
|
|
|
9.8
|
|
|
|||
Total other income
|
|
5,216
|
|
|
4,751
|
|
|
465
|
|
|
9.8
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
171,105
|
|
|
164,842
|
|
|
6,263
|
|
|
3.8
|
|
|
|||
Non-Same Properties
|
|
44,984
|
|
|
31,911
|
|
|
13,073
|
|
|
41.0
|
|
|
|||
Total revenues
|
|
216,089
|
|
|
196,753
|
|
|
19,336
|
|
|
9.8
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
51,107
|
|
|
50,858
|
|
|
249
|
|
|
0.5
|
|
|
|||
Non-Same Properties
|
|
14,730
|
|
|
10,365
|
|
|
4,365
|
|
|
42.1
|
|
|
|||
Total rental operations
|
|
65,837
|
|
|
61,223
|
|
|
4,614
|
|
|
7.5
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same properties
|
|
119,998
|
|
|
113,984
|
|
|
6,014
|
|
|
5.3
|
|
|
|||
Non-same properties
|
|
30,254
|
|
|
21,546
|
|
|
8,708
|
|
|
40.4
|
|
|
|||
Consolidated net operating income
|
|
150,252
|
|
|
135,530
|
|
|
14,722
|
|
|
10.9
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Non-same properties
|
|
(6,055
|
)
|
|
—
|
|
|
(6,055
|
)
|
|
100.0
|
|
|
|||
Less: NOI of consolidated real estate JVs attributable to noncontrolling interest
|
|
(6,055
|
)
|
|
—
|
|
|
(6,055
|
)
|
|
100.0
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Non-same properties
|
|
1,068
|
|
|
860
|
|
|
208
|
|
|
24.2
|
|
|
|||
Our share of NOI from unconsolidated real estate JVs
|
|
1,068
|
|
|
860
|
|
|
208
|
|
|
24.2
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same properties
|
|
119,998
|
|
|
113,984
|
|
|
6,014
|
|
|
5.3
|
|
|
|||
Non-same properties
|
|
25,267
|
|
|
22,406
|
|
|
2,861
|
|
|
12.8
|
|
|
|||
Our share of total net operating income
|
|
145,265
|
|
|
136,390
|
|
|
8,875
|
|
|
6.5
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Other expenses:
|
|
|
|
|
|
|
|
|
|
|||||||
General and administrative
|
|
15,188
|
|
|
14,387
|
|
|
801
|
|
|
5.6
|
|
|
|||
Interest
|
|
24,855
|
|
|
23,236
|
|
|
1,619
|
|
|
7.0
|
|
|
|||
Depreciation and amortization
|
|
70,866
|
|
|
58,920
|
|
|
11,946
|
|
|
20.3
|
|
|
|||
Impairment of real estate
|
|
28,980
|
|
|
14,510
|
|
|
14,470
|
|
|
99.7
|
|
|
|||
|
|
139,889
|
|
|
111,053
|
|
|
28,836
|
|
|
26.0
|
|
|
|||
Plus: noncontrolling interest share of NOI
|
|
6,055
|
|
|
—
|
|
|
6,055
|
|
|
(100.0
|
)
|
|
|||
Less: our share of NOI from unconsolidated real estate JVs
|
|
(1,068
|
)
|
|
(860
|
)
|
|
(208
|
)
|
|
24.2
|
|
|
|||
Equity in (losses) earnings of unconsolidated real estate JVs
|
|
(397
|
)
|
|
574
|
|
|
(971
|
)
|
|
(169.2
|
)
|
|
|||
Income from continuing operations
|
|
$
|
9,966
|
|
|
$
|
25,051
|
|
|
$
|
(15,085
|
)
|
|
(60.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Our share of NOI – same properties
|
|
$
|
119,998
|
|
|
$
|
113,984
|
|
|
$
|
6,014
|
|
|
5.3
|
%
|
(1)
|
Our share of straight-line rent revenue & amortization of acquired below-market leases
|
|
(4,497
|
)
|
|
(5,218
|
)
|
|
721
|
|
|
(13.8
|
)
|
|
|||
Our share of NOI – same properties (cash basis)
|
|
$
|
115,501
|
|
|
$
|
108,766
|
|
|
$
|
6,735
|
|
|
6.2
|
%
|
(1)
|
(1)
|
Same property NOI increased partially due to a
1.0%
increase in our same property occupancy to
94.6%
from
93.6%
.
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Management fee income
|
|
$
|
253
|
|
|
$
|
554
|
|
|
$
|
(301
|
)
|
Interest and other income
|
|
854
|
|
|
485
|
|
|
369
|
|
|||
Investment income
|
|
4,109
|
|
|
3,712
|
|
|
397
|
|
|||
Total other income
|
|
$
|
5,216
|
|
|
$
|
4,751
|
|
|
$
|
465
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
Component
|
|
2016
|
|
2015
|
|
Change
|
||||||
Secured notes payable
|
|
$
|
7,028
|
|
|
$
|
7,709
|
|
|
$
|
(681
|
)
|
Unsecured senior notes payable
|
|
20,655
|
|
|
17,405
|
|
|
3,250
|
|
|||
Unsecured senior line of credit
|
|
2,120
|
|
|
2,072
|
|
|
48
|
|
|||
Unsecured senior bank term loans
|
|
3,827
|
|
|
3,341
|
|
|
486
|
|
|||
Interest rate swaps
|
|
158
|
|
|
505
|
|
|
(347
|
)
|
|||
Amortization of loan fees and other interest
|
|
3,166
|
|
|
3,175
|
|
|
(9
|
)
|
|||
Interest incurred
|
|
36,954
|
|
|
34,207
|
|
|
2,747
|
|
|||
Capitalized interest
|
|
(12,099
|
)
|
|
(10,971
|
)
|
|
(1,128
|
)
|
|||
Interest expense
|
|
$
|
24,855
|
|
|
$
|
23,236
|
|
|
$
|
1,619
|
|
|
|
|
|
|
|
|
||||||
Average debt balance outstanding
(1)
|
|
$
|
4,066,987
|
|
|
$
|
3,808,007
|
|
|
$
|
258,980
|
|
Weighted-average annual interest rate
(2)
|
|
3.6
|
%
|
|
3.6
|
%
|
|
—
|
%
|
(1)
|
Represents the average debt principal balance outstanding during the three months ended
March 31, 2016
and
2015
, which excludes the effect of unamortized deferred financing costs.
|
(2)
|
Represents annualized total interest expense divided by the average debt balance outstanding in the respective periods, which excludes the effect of amortization of deferred financing costs.
|
|
Three Months Ended March 31, 2016
|
|
||||||||||||||
(In thousands)
|
Consolidated
|
|
Noncontrolling Share of Consolidated JVs
|
|
Our Share of
Unconsolidated JVs
|
|
Our Total Share
|
|
||||||||
Total revenues
|
$
|
216,089
|
|
|
$
|
(8,190
|
)
|
|
$
|
1,855
|
|
|
$
|
209,754
|
|
|
Rental operations
|
65,837
|
|
|
(2,135
|
)
|
|
787
|
|
|
64,489
|
|
|
||||
|
150,252
|
|
|
(6,055
|
)
|
|
1,068
|
|
|
145,265
|
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
15,188
|
|
|
(22
|
)
|
|
36
|
|
|
15,202
|
|
|
||||
Interest
|
24,855
|
|
|
—
|
|
|
686
|
|
|
25,541
|
|
|
||||
Depreciation and amortization
|
70,866
|
|
|
(2,301
|
)
|
|
743
|
|
|
69,308
|
|
|
||||
Impairment of real estate
|
28,980
|
|
|
—
|
|
|
—
|
|
|
28,980
|
|
|
||||
|
139,889
|
|
|
(2,323
|
)
|
|
1,465
|
|
|
139,031
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Equity in loss from unconsolidated real estate JVs
|
(397
|
)
|
|
—
|
|
|
397
|
|
|
—
|
|
|
||||
Net income
|
9,966
|
|
|
(3,732
|
)
|
|
—
|
|
|
6,234
|
|
|
||||
Net income attributable to noncontrolling interests
|
(4,030
|
)
|
|
3,732
|
|
|
—
|
|
|
(298
|
)
|
(1)
|
||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
5,936
|
|
|
—
|
|
|
—
|
|
|
5,936
|
|
|
||||
Dividends on preferred stock
|
(5,907
|
)
|
|
—
|
|
|
—
|
|
|
(5,907
|
)
|
|
||||
Preferred stock redemption charge
|
(3,046
|
)
|
|
—
|
|
|
—
|
|
|
(3,046
|
)
|
|
||||
Net income attributable to unvested restricted stock awards
|
(801
|
)
|
|
—
|
|
|
—
|
|
|
(801
|
)
|
|
||||
Net loss attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(3,818
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,818
|
)
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents net income attributable to redeemable noncontrolling interests. These redeemable interests earn a fixed preferred return of
8.4%
rather than a variable return based upon their ownership percentage of the real estate joint venture. Consequently, these interests are excluded from our pro rata calculation.
|
|
March 31, 2016
|
||||||||||||||
(In thousands)
|
Consolidated
|
|
Noncontrolling Share of Consolidated JVs
|
|
Our Share of
Unconsolidated JVs
|
|
Our Total Share
|
||||||||
Investments in real estate
|
$
|
7,741,466
|
|
|
$
|
(313,176
|
)
|
|
$
|
171,571
|
|
|
$
|
7,599,861
|
|
Investments in unconsolidated real estate JVs
|
127,165
|
|
|
—
|
|
|
(127,165
|
)
|
|
—
|
|
||||
Cash and cash equivalents
|
146,197
|
|
|
(8,888
|
)
|
|
3,318
|
|
|
140,627
|
|
||||
Other assets
|
956,704
|
|
|
(19,778
|
)
|
|
8,218
|
|
|
945,144
|
|
||||
Total assets
|
$
|
8,971,532
|
|
|
$
|
(341,842
|
)
|
|
$
|
55,942
|
|
|
$
|
8,685,632
|
|
|
|
|
|
|
|
|
|
||||||||
Secured notes payable
|
$
|
816,578
|
|
|
$
|
—
|
|
|
$
|
49,485
|
|
|
$
|
866,063
|
|
Unsecured debt
|
3,274,921
|
|
|
—
|
|
|
—
|
|
|
3,274,921
|
|
||||
Other liabilities
|
692,742
|
|
|
(20,271
|
)
|
|
6,457
|
|
|
678,928
|
|
||||
Total liabilities
|
4,784,241
|
|
|
(20,271
|
)
|
|
55,942
|
|
|
4,819,912
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests
|
14,218
|
|
|
(14,218
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
3,865,720
|
|
|
—
|
|
|
—
|
|
|
3,865,720
|
|
||||
Noncontrolling interests
|
307,353
|
|
|
(307,353
|
)
|
|
—
|
|
|
—
|
|
||||
Total equity
|
4,173,073
|
|
|
(307,353
|
)
|
|
—
|
|
|
3,865,720
|
|
||||
Total liabilities and equity
|
$
|
8,971,532
|
|
|
$
|
(341,842
|
)
|
|
$
|
55,942
|
|
|
$
|
8,685,632
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||
|
|
Consolidated Real Estate Joint Ventures at 100%
|
||||||||||||||||||
|
|
225 Binney Street
|
|
1500 Owens Street
|
|
409/499 Illinois Street
|
|
Various
|
|
Total
|
||||||||||
Total revenues
|
|
$
|
3,937
|
|
|
$
|
3,047
|
|
|
$
|
9,670
|
|
|
$
|
730
|
|
|
$
|
17,384
|
|
Rental operations
|
|
615
|
|
|
985
|
|
|
2,920
|
|
|
580
|
|
|
5,100
|
|
|||||
|
|
3,322
|
|
|
2,062
|
|
|
6,750
|
|
|
150
|
|
|
12,284
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative
|
|
—
|
|
|
1
|
|
|
7
|
|
|
215
|
|
|
223
|
|
|||||
Interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
|
976
|
|
|
729
|
|
|
3,054
|
|
|
362
|
|
|
5,121
|
|
|||||
Net income (loss)
|
|
$
|
2,346
|
|
|
$
|
1,332
|
|
|
$
|
3,689
|
|
|
$
|
(427
|
)
|
|
$
|
6,940
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Noncontrolling Interests Share of Amounts Above
(1)
|
||||||||||||||||||
|
|
225 Binney Street
|
|
1500 Owens Street
|
|
409/499 Illinois Street
|
|
|
|
Total
|
||||||||||
|
|
70%
|
|
49.9%
|
|
40%
|
|
Various
(2)
|
|
|||||||||||
Total revenues
|
|
$
|
2,756
|
|
|
$
|
1,521
|
|
|
$
|
3,868
|
|
|
$
|
45
|
|
|
$
|
8,190
|
|
Rental operations
|
|
430
|
|
|
492
|
|
|
1,168
|
|
|
45
|
|
|
2,135
|
|
|||||
|
|
2,326
|
|
|
1,029
|
|
|
2,700
|
|
|
—
|
|
|
6,055
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
2
|
|
|
20
|
|
|
22
|
|
|||||
Interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
|
684
|
|
|
364
|
|
|
1,222
|
|
|
31
|
|
|
2,301
|
|
|||||
Net income (loss)
|
|
$
|
1,642
|
|
|
$
|
665
|
|
|
$
|
1,476
|
|
|
$
|
(51
|
)
|
|
$
|
3,732
|
|
(1)
|
Represents our partners’ share of operating results from consolidated real estate joint ventures.
|
(2)
|
Excludes net income attributable to redeemable noncontrolling interests, aggregating
$298 thousand
. These redeemable interests earn a fixed preferred return of
8.4%
rather than a variable return based upon their ownership percentage of the real estate joint venture. Consequently, these interests are excluded from our pro rata calculation.
|
|
|
March 31, 2016
|
||||||||||||||||||
|
|
Consolidated Real Estate Joint Ventures at 100%
|
||||||||||||||||||
|
|
225 Binney Street
|
|
1500 Owens Street
|
|
409/499 Illinois Street
|
|
Various
|
|
Total
|
||||||||||
Investments in real estate
|
|
$
|
162,484
|
|
|
$
|
82,121
|
|
|
$
|
360,224
|
|
|
$
|
120,742
|
|
|
$
|
725,571
|
|
Cash and cash equivalents
|
|
4,956
|
|
|
3,077
|
|
|
9,234
|
|
|
4,286
|
|
|
21,553
|
|
|||||
Other assets
|
|
6,968
|
|
|
6,376
|
|
|
23,820
|
|
|
10,153
|
|
|
47,317
|
|
|||||
Total assets
|
|
$
|
174,408
|
|
|
$
|
91,574
|
|
|
$
|
393,278
|
|
|
$
|
135,181
|
|
|
$
|
794,441
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities
|
|
3,872
|
|
|
11,288
|
|
|
29,311
|
|
|
10,395
|
|
|
54,866
|
|
|||||
Total liabilities
|
|
3,872
|
|
|
11,288
|
|
|
29,311
|
|
|
10,395
|
|
|
54,866
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,218
|
|
(1)
|
14,218
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
|
170,536
|
|
|
80,286
|
|
|
363,967
|
|
|
110,568
|
|
|
725,357
|
|
|||||
Total liabilities and equity
|
|
$
|
174,408
|
|
|
$
|
91,574
|
|
|
$
|
393,278
|
|
|
$
|
135,181
|
|
|
$
|
794,441
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Noncontrolling Interests Share of Amounts Above
(2)
|
||||||||||||||||||
|
|
225 Binney Street
|
|
1500 Owens Street
|
|
409/499 Illinois Street
|
|
|
|
Total
|
||||||||||
|
|
70%
|
|
49.9%
|
|
40%
|
|
Various
|
|
|||||||||||
Investments in real estate
|
|
$
|
113,739
|
|
|
$
|
40,979
|
|
|
$
|
144,089
|
|
|
$
|
14,369
|
|
|
$
|
313,176
|
|
Cash and cash equivalents
|
|
3,469
|
|
|
1,536
|
|
|
3,693
|
|
|
190
|
|
|
8,888
|
|
|||||
Other assets
|
|
4,878
|
|
|
3,180
|
|
|
9,529
|
|
|
2,191
|
|
|
19,778
|
|
|||||
Total assets
|
|
$
|
122,086
|
|
|
$
|
45,695
|
|
|
$
|
157,311
|
|
|
$
|
16,750
|
|
|
$
|
341,842
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities
|
|
2,711
|
|
|
5,632
|
|
|
11,724
|
|
|
204
|
|
|
20,271
|
|
|||||
Total liabilities
|
|
2,711
|
|
|
5,632
|
|
|
11,724
|
|
|
204
|
|
|
20,271
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,218
|
|
(1)
|
14,218
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
|
119,375
|
|
|
40,063
|
|
|
145,587
|
|
|
2,328
|
|
|
307,353
|
|
|||||
Total liabilities and equity
|
|
$
|
122,086
|
|
|
$
|
45,695
|
|
|
$
|
157,311
|
|
|
$
|
16,750
|
|
|
$
|
341,842
|
|
(1)
|
Represents redeemable noncontrolling interests aggregating approximately 37% ownership in one of our consolidated real estate joint ventures. Excluding this entity, the remaining real estate joint venture partners have approximately 3% ownership in the various consolidated real estate joint ventures.
|
(2)
|
Represents our partners’ share of balance sheet amounts from consolidated real estate joint ventures.
|
Tranche
|
|
Stated Rate
|
|
Outstanding Balance
|
|
Remaining Commitments
|
|
Total
|
||||||||
Fixed rate
|
|
|
5.25
|
%
|
|
$
|
173,226
|
|
|
$
|
2,015
|
|
|
$
|
175,241
|
|
Floating rate
(1)
|
|
|
L+3.75
|
%
|
|
7,198
|
|
|
30,761
|
|
|
37,959
|
|
|||
|
|
|
|
|
|
180,424
|
|
|
$
|
32,776
|
|
|
$
|
213,200
|
|
|
Unamortized Deferred Financing Costs
|
|
|
|
|
|
470
|
|
|
|
|
|
|||||
|
|
|
|
|
|
$
|
179,954
|
|
|
|
|
|
(1)
|
Borrowings under the floating rate tranche have an interest rate floor equal to 5.25%, and are subject to an interest rate cap on LIBOR of 3.50%.
|
|
|
Three Months Ended March 31, 2016
|
||||||||||
|
|
Unconsolidated Real Estate Joint Ventures at 100%
|
||||||||||
|
|
360 Longwood Avenue
|
|
|
1455/1515 Third Street
|
|
|
Total
|
||||
Total revenue
|
|
$
|
6,253
|
|
|
$
|
111
|
|
|
$
|
6,364
|
|
Rental operations
|
|
2,483
|
|
|
204
|
|
|
2,687
|
|
|||
|
|
3,770
|
|
|
(93
|
)
|
|
3,677
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
General and administrative
|
|
127
|
|
|
—
|
|
|
127
|
|
|||
Interest
|
|
2,495
|
|
|
—
|
|
|
2,495
|
|
|||
Depreciation and amortization
|
|
1,668
|
|
|
132
|
|
|
1,800
|
|
|||
Net loss
|
|
$
|
(520
|
)
|
|
$
|
(225
|
)
|
|
$
|
(745
|
)
|
|
|
|
|
|
|
|
||||||
|
|
Our Share of Amounts Above
|
||||||||||
|
|
360 Longwood Avenue
|
|
1455/1515 Third Street
|
|
Total
|
||||||
|
|
27.5%
|
|
51%
|
|
|||||||
Total revenue
|
|
$
|
1,799
|
|
(1)
|
$
|
56
|
|
|
$
|
1,855
|
|
Rental operations
|
|
683
|
|
|
104
|
|
|
787
|
|
|||
|
|
1,116
|
|
|
(48
|
)
|
|
1,068
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
General and administrative
|
|
36
|
|
|
—
|
|
|
36
|
|
|||
Interest
|
|
686
|
|
|
—
|
|
|
686
|
|
|||
Depreciation and amortization
|
|
676
|
|
|
67
|
|
|
743
|
|
|||
Net loss
|
|
$
|
(282
|
)
|
|
$
|
(115
|
)
|
|
$
|
(397
|
)
|
|
|
March 31, 2016
|
||||||||||
|
|
Unconsolidated Real Estate Joint Ventures at 100%
|
||||||||||
|
|
360 Longwood Avenue
|
|
|
1455/1515 Third Street
|
|
|
Total
|
||||
Investments in real estate
|
|
$
|
310,679
|
|
|
$
|
142,994
|
|
|
$
|
453,673
|
|
Cash and cash equivalents
|
|
7,606
|
|
|
2,402
|
|
|
10,008
|
|
|||
Other assets
|
|
20,008
|
|
|
2,506
|
|
|
22,514
|
|
|||
Total assets
|
|
$
|
338,293
|
|
|
$
|
147,902
|
|
|
$
|
486,195
|
|
|
|
|
|
|
|
|
||||||
Secured notes payable
(1)
|
|
$
|
179,954
|
|
(2)
|
$
|
—
|
|
|
$
|
179,954
|
|
Other liabilities
|
|
10,039
|
|
|
6,159
|
|
|
16,198
|
|
|||
Total liabilities
|
|
189,993
|
|
|
6,159
|
|
|
196,152
|
|
|||
|
|
|
|
|
|
|
||||||
Total equity
|
|
148,300
|
|
|
141,743
|
|
|
290,043
|
|
|||
Total liabilities and equity
|
|
$
|
338,293
|
|
|
$
|
147,902
|
|
|
$
|
486,195
|
|
|
|
|
|
|
|
|
||||||
|
|
Our Share of Amounts Above
(3)
|
||||||||||
|
|
360 Longwood Avenue
|
|
1455/1515 Third Street
|
|
Total
|
||||||
|
|
27.5%
|
|
51%
|
|
|||||||
Investments in real estate
|
|
$
|
94,049
|
|
|
$
|
77,522
|
|
|
$
|
171,571
|
|
Cash and cash equivalents
|
|
2,093
|
|
|
1,225
|
|
|
3,318
|
|
|||
Other assets
|
|
6,701
|
|
|
1,517
|
|
|
8,218
|
|
|||
Total assets
|
|
$
|
102,843
|
|
|
$
|
80,264
|
|
|
$
|
183,107
|
|
|
|
|
|
|
|
|
||||||
Secured notes payable
(1)
|
|
$
|
49,485
|
|
(2)
|
$
|
—
|
|
|
$
|
49,485
|
|
Other liabilities
|
|
3,241
|
|
|
3,216
|
|
|
6,457
|
|
|||
Total liabilities
|
|
52,726
|
|
|
3,216
|
|
|
55,942
|
|
|||
|
|
|
|
|
|
|
||||||
Total equity
|
|
50,117
|
|
|
77,048
|
|
|
127,165
|
|
|||
Total liabilities and equity
|
|
$
|
102,843
|
|
|
$
|
80,264
|
|
|
$
|
183,107
|
|
(1)
|
Includes unamortized deferred financing costs.
|
(2)
|
Represents a non-recourse, secured construction loan with aggregate commitments of
$213.2 million
, of which
$175.2 million
bears interest at a fixed rate of 5.25% and
$38.0 million
bears interest at a floating rate of
LIBOR + 3.75%
, with a floor of
5.25%
. Borrowings under the floating rate tranche are subject to an interest rate cap on LIBOR of 3.50%. The maturity date of the loan is April 1, 2017, with
two
,
one
-year options to extend the stated maturity date to April 1, 2019, subject to certain conditions.
|
(3)
|
Amounts include costs incurred directly by us outside of the real estate joint ventures.
|
|
|
Period Recognized
|
|
Total
|
|
Per Share
|
|
FFO per
Share
–
Diluted
|
|
FFO per Share
–
Diluted,
As Adjusted
|
||||||||||
Summary of Key Changes in Guidance
|
|
1Q16
|
|
April 2016
|
|
|
|
|
||||||||||||
Preferred stock redemption charge
|
|
$
|
3,046
|
|
|
$
|
—
|
|
|
$
|
3,046
|
|
|
$
|
0.04
|
|
|
Included
|
|
Excluded
|
Impairment charge related to real estate in Asia:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Land parcels located in India
|
|
$
|
28,980
|
|
|
$
|
64,789
|
|
|
$
|
93,769
|
|
(1)
|
$
|
1.29
|
|
|
Included
|
|
Excluded
|
Rental properties
|
|
$
|
—
|
|
|
$
|
88,179
|
|
|
$
|
88,179
|
|
(1)
|
$
|
1.21
|
|
|
Excluded
|
|
Excluded
|
(1)
|
Refer to the section titled “Assets Located in Asia” in Note 14 – “Assets Classified as Held for Sale” to our accompanying consolidated financial statements under Item 1 of this report.
|
(1)
|
In 2016, we expect to amend and extend the maturity date of our $1.5 billion unsecured senior line of credit. Our guidance for the year ending December 31, 2016, excludes the potential loss on early extinguishment of debt related to the write-off of any unamortized loan fees as a result of the amendment.
|
Key Assumptions
(Dollars in thousands)
|
|
2016 Guidance
|
||||||
|
Low
|
|
High
|
|||||
Occupancy percentage for operating properties in North America as of December 31, 2016
|
|
96.5%
|
|
|
97.1%
|
|
||
|
|
|
|
|
||||
Lease renewals and re-leasing of space:
|
|
|
|
|
||||
Rental rate increases
|
|
14.0%
|
|
|
17.0%
|
|
||
Rental rate increases (cash basis)
|
|
6.0%
|
|
|
9.0%
|
|
||
|
|
|
|
|
||||
Same property performance:
|
|
|
|
|
||||
NOI increase
|
|
2.0%
|
|
|
4.0%
|
|
||
NOI increase (cash basis)
|
|
3.5%
|
|
|
5.5%
|
|
||
|
|
|
|
|
||||
Straight-line rent revenue
|
|
$
|
51,000
|
|
|
$
|
56,000
|
|
General and administrative expenses
|
|
$
|
59,000
|
|
|
$
|
64,000
|
|
Capitalization of interest
|
|
$
|
45,000
|
|
|
$
|
55,000
|
|
Interest expense
|
|
$
|
108,000
|
|
|
$
|
118,000
|
|
(1)
|
Quarter annualized.
|
(2)
|
This amount includes remaining commitments available for borrowing aggregating
$269.3 million
related to existing construction loans as of
March 31, 2016
, and additional available construction loan commitments aggregating
$304.3 million
on a secured construction loan that we closed in April 2016. This excludes
$7.2 million
of remaining commitments that were extinguished upon the repayment in April 2016 of the outstanding
$47.8 million
balance of one construction loan.
|
(3)
|
For the
three months ended March 31, 2016
.
|
•
|
Retain positive cash flows from operating activities after payment of dividends for reinvestment in development and redevelopment projects and/or acquisitions;
|
•
|
Maintain significant liquidity from net cash provided by operating activities, cash and cash equivalents, available-for-sale equity securities, and available borrowing capacity under our unsecured senior line of credit and available commitments under our secured construction loans;
|
•
|
Reduce the aggregate amount of outstanding unsecured bank debt under our unsecured senior line of credit and unsecured senior term loans;
|
•
|
Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt, secured debt, selective asset sales, joint venture capital, preferred stock, and common stock;
|
•
|
Mitigate unhedged variable-rate debt exposure through the reduction of short-term and medium-term variable-rate bank debt;
|
•
|
Maintain a large unencumbered asset pool to provide financial flexibility;
|
•
|
Fund preferred stock and common stock dividends from net cash provided by operating activities;
|
•
|
Manage a disciplined level of value-creation projects as a percentage of our gross investments in real estate;
|
•
|
Maintain high levels of pre-leasing and percentage leased in value-creation projects; and
|
•
|
Decrease the ratio of net debt to Adjusted EBITDA with some variation from quarter-to-quarter and year-to-year.
|
|
|
As of March 31, 2016
|
||||||||
Facility
|
|
Balance
|
|
Maturity Date
(2)
|
|
Applicable Margin
|
|
Facility Fee
|
||
$1.5 billion unsecured senior line of credit
|
|
$
|
299,000
|
|
|
January 2019
|
|
L+1.10%
|
|
0.20%
|
2019 Unsecured Senior Bank Term Loan
|
|
$
|
597,035
|
|
(1)
|
January 2019
|
|
L+1.20%
|
|
N/A
|
2021 Unsecured Senior Bank Term Loan
|
|
$
|
347,602
|
|
(1)
|
January 2021
|
|
L+1.10%
|
|
N/A
|
(1)
|
Amounts are net of unamortized deferred financing costs.
|
(2)
|
Includes any extension options that we control.
|
Covenant Ratios
(1)
|
|
Requirement
|
|
Actual
(2)
|
Leverage Ratio
|
|
Less than or equal to 60.0%
|
|
37.3%
|
Secured Debt Ratio
|
|
Less than or equal to 45.0%
|
|
7.5%
|
Fixed-Charge Coverage Ratio
|
|
Greater than or equal to 1.50x
|
|
3.23x
|
Unsecured Leverage Ratio
|
|
Less than or equal to 60.0%
|
|
41.7%
|
Unsecured Interest Coverage Ratio
|
|
Greater than or equal to 1.50x
|
|
5.91x
|
(1)
|
For definitions of the ratios, refer to the amended unsecured senior line of credit and unsecured senior bank term loan agreements, including (i) the agreement dated as of August 30, 2013, which was filed as an exhibit to our quarterly report on Form 10-Q filed with the SEC on November 7, 2013, and (ii) the agreement dated June 30, 2015, which was filed as an exhibit to our quarterly report on Form 10-Q filed with the SEC on July 29, 2015.
|
(2)
|
Actual covenants are calculated pursuant to the specific terms of our unsecured senior line of credit and unsecured senior bank term loan agreements.
|
Covenant Ratios
(1)
|
|
Requirement
|
|
Actual
|
Total Debt to Total Assets
|
Less than or equal to 60%
|
|
41%
|
|
Secured Debt to Total Assets
|
Less than or equal to 40%
|
|
8%
|
|
Consolidated EBITDA to Interest Expense
|
Greater than or equal to 1.5x
|
|
6.2x
|
|
Unencumbered Total Asset Value to Unsecured Debt
|
Greater than or equal to 150%
|
|
243%
|
(1)
|
For definitions of the ratios, refer to the indenture at Exhibits 4.3 and 4.13 hereto and the related supplemental indentures at Exhibits 4.4, 4.7, 4.9, 4.11, and 4.14 hereto, which are each listed under Item 6 of this report.
|
Sources and Uses of Capital
(In thousands)
|
|
2016 Guidance
|
||||||||||
|
Low
|
|
High
|
|
Mid-point
|
|||||||
Sources of capital for construction:
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities after dividends
|
|
$
|
115,000
|
|
|
$
|
135,000
|
|
|
$
|
125,000
|
|
Debt funding from growth in EBITDA
|
|
260,000
|
|
|
240,000
|
|
|
250,000
|
|
|||
Internally generated sources
|
|
375,000
|
|
|
375,000
|
|
|
375,000
|
|
|||
Asset sales minimum target
|
|
300,000
|
|
|
400,000
|
|
|
350,000
|
|
|||
Other capital/sales of available-for-sale equity securities
|
|
125,000
|
|
|
125,000
|
|
|
125,000
|
|
|||
Total sources/projected construction uses
|
|
$
|
800,000
|
|
|
$
|
900,000
|
|
|
$
|
850,000
|
|
|
|
|
|
|
|
|
||||||
Sources of capital for acquisitions:
|
|
|
|
|
|
|
||||||
Debt funding from growth in EBITDA
|
|
$
|
45,000
|
|
|
$
|
45,000
|
|
|
$
|
45,000
|
|
Other capital
|
|
105,000
|
|
|
205,000
|
|
|
155,000
|
|
|||
Total sources/projected acquisitions uses
(1)
|
|
$
|
150,000
|
|
|
$
|
250,000
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
||||||
Incremental debt (included above):
|
|
|
|
|
|
|
||||||
Issuance of unsecured senior notes payable
|
|
$
|
400,000
|
|
|
$
|
550,000
|
|
|
$
|
475,000
|
|
Borrowings under secured construction loans
|
|
175,000
|
|
|
225,000
|
|
|
200,000
|
|
|||
Repayments of secured notes payable
|
|
(190,000
|
)
|
|
(290,000
|
)
|
|
(240,000
|
)
|
|||
Unsecured senior line of credit/other
|
|
(80,000
|
)
|
|
(200,000
|
)
|
|
(140,000
|
)
|
|||
Incremental debt
|
|
$
|
305,000
|
|
|
$
|
285,000
|
|
|
$
|
295,000
|
|
(1)
|
Includes acquisition price of 88 Bluxome Street in our Mission Bay/SoMa submarket of San Francisco that we expect to complete during the second half of 2016. Also includes the purchase of the remaining noncontrolling interest outstanding at Alexandria Technology Square
®
for
$54.0 million
completed in April 2016.
|
Description
|
|
Stated
Rate
|
|
Total Aggregate
Commitments
|
|
Outstanding
Balance
|
|
Remaining Commitments
|
||||||
$1.5 billion unsecured senior line of credit
|
|
L+1.10%
|
|
$
|
1,500,000
|
|
|
$
|
299,000
|
|
|
$
|
1,201,000
|
|
259 East Grand Avenue/San Francisco
|
|
L+1.50%
|
|
55,000
|
|
|
47,821
|
|
|
7,179
|
|
|||
75/125 Binney Street/Greater Boston
|
|
L+1.35%
|
|
250,400
|
|
|
188,120
|
|
|
62,280
|
|
|||
50/60 Binney Street/Greater Boston
|
|
L+1.50%
|
|
350,000
|
|
|
150,162
|
|
|
199,838
|
|
|||
|
|
|
|
$
|
2,155,400
|
|
|
$
|
685,103
|
|
|
1,470,297
|
|
|
Available-for-sale equity securities, at fair value
|
|
|
|
|
|
|
|
85,387
|
|
|||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
146,197
|
|
|||||
Total liquidity as of March 31, 2016
|
|
|
|
|
|
|
|
$
|
1,701,881
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Commitments subsequent to March 31, 2016
(1)
|
|
L+2.00%
|
|
304,281
|
|
|
—
|
|
|
304,281
|
|
|||
Construction loan repaid in April 2016
|
|
L+1.50%
|
|
(55,000
|
)
|
|
(47,821
|
)
|
|
(7,179
|
)
|
|||
|
|
|
|
|
|
|
|
$
|
1,998,983
|
|
(1)
|
In April 2016, we closed a secured construction loan with commitments available for borrowing aggregating
$304.3 million
for our development project at 100 Binney Street in our Cambridge submarket, which bears interest at a rate of LIBOR+200 bps.
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Funds held in trust under the terms of certain secured notes payable
|
$
|
7,590
|
|
|
$
|
15,906
|
|
Funds held in escrow related to construction projects and investing activities
|
5,040
|
|
|
10,040
|
|
||
Other restricted funds
|
2,255
|
|
|
2,926
|
|
||
Total
|
$
|
14,885
|
|
|
$
|
28,872
|
|
Loan Collateral
|
|
Total Commitments
|
|
Total Outstanding
|
|
Partners’ Share
|
|
ARE’s
27.5% Share
|
|
|
Maturity Date
|
|
Interest Rate
|
|||||||||||||
360 Longwood Avenue
|
|
$
|
213,200
|
|
|
$
|
180,424
|
|
|
$
|
130,807
|
|
|
$
|
49,617
|
|
|
|
|
4/1/17
|
(1)
|
|
|
5.25
|
%
|
(2)
|
Unamortized deferred financing costs
|
|
|
|
470
|
|
|
341
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
$
|
179,954
|
|
|
$
|
130,466
|
|
|
$
|
49,485
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We have
two
,
one
-year options to extend the stated maturity date to April 1, 2019, subject to certain conditions.
|
(2)
|
Secured construction loan bears interest at
LIBOR + 3.75%
, with a floor of
5.25%
.
|
|
|
|
Payments by Period
|
||||||||||||||||
|
Total
|
|
2016
|
|
2017-2018
|
|
2019-2020
|
|
Thereafter
|
||||||||||
Secured and unsecured debt
(1) (2)
|
$
|
4,119,144
|
|
|
$
|
176,248
|
|
|
$
|
272,218
|
|
|
$
|
1,562,233
|
|
|
$
|
2,108,445
|
|
Estimated interest payments on fixed-rate and hedged variable-rate debt
(3)
|
762,073
|
|
|
93,324
|
|
|
223,308
|
|
|
175,380
|
|
|
270,061
|
|
|||||
Estimated interest payments on variable-rate debt
(4)
|
24,206
|
|
|
2,980
|
|
|
10,496
|
|
|
10,730
|
|
|
—
|
|
|||||
Ground lease obligations
|
611,428
|
|
|
10,997
|
|
|
25,478
|
|
|
22,552
|
|
|
552,401
|
|
|||||
Other obligations
|
6,637
|
|
|
1,166
|
|
|
3,322
|
|
|
1,810
|
|
|
339
|
|
|||||
Total
|
$
|
5,523,488
|
|
|
$
|
284,715
|
|
|
$
|
534,822
|
|
|
$
|
1,772,705
|
|
|
$
|
2,931,246
|
|
(1)
|
Amounts represent principal amounts due and exclude unamortized premiums, discounts, and deferred financing costs reflected on the consolidated balance sheets.
|
(2)
|
Payment dates reflect any extension options that we control.
|
(3)
|
Estimated interest payments on our fixed-rate and hedged variable-rate debt are based upon contractual interest rates, including the impact of interest rate swap agreements, interest payment dates, and scheduled maturity dates.
|
(4)
|
The interest payments on variable-rate debt are based on the interest rates in effect as of
March 31, 2016
.
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
101,782
|
|
|
$
|
106,841
|
|
|
$
|
(5,059
|
)
|
Net cash used in investing activities
|
$
|
(171,122
|
)
|
|
$
|
(170,052
|
)
|
|
$
|
(1,070
|
)
|
Net cash provided by financing activities
|
$
|
90,780
|
|
|
$
|
67,671
|
|
|
$
|
23,109
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
101,782
|
|
|
$
|
106,841
|
|
|
$
|
(5,059
|
)
|
Add: changes in operating assets and liabilities
|
(583
|
)
|
|
(16,590
|
)
|
|
16,007
|
|
|||
Net cash provided by operating activities before changes in operating assets and liabilities
|
$
|
101,199
|
|
|
$
|
90,251
|
|
|
$
|
10,948
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Proceeds from sales of real estate
|
$
|
—
|
|
|
$
|
67,616
|
|
|
$
|
(67,616
|
)
|
Additions to real estate
|
(159,501
|
)
|
|
(104,632
|
)
|
|
(54,869
|
)
|
|||
Purchase of real estate
|
—
|
|
|
(93,938
|
)
|
|
93,938
|
|
|||
Additions to investments
|
(22,085
|
)
|
|
(15,118
|
)
|
|
(6,967
|
)
|
|||
Sales of investments
|
10,913
|
|
|
2,345
|
|
|
8,568
|
|
|||
Investments in unconsolidated real estate joint ventures
|
(449
|
)
|
|
(2,539
|
)
|
|
2,090
|
|
|||
Repayment of notes receivable
|
—
|
|
|
4,214
|
|
|
(4,214
|
)
|
|||
Other
|
—
|
|
|
(28,000
|
)
|
|
28,000
|
|
|||
Net cash used in investing activities
|
$
|
(171,122
|
)
|
|
$
|
(170,052
|
)
|
|
$
|
(1,070
|
)
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Borrowings from secured notes payable
|
$
|
64,922
|
|
|
$
|
29,585
|
|
|
$
|
35,337
|
|
Repayments of borrowings from secured notes payable
|
(58,657
|
)
|
|
(7,934
|
)
|
|
(50,723
|
)
|
|||
Proceeds from issuance of unsecured senior notes payable
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from unsecured senior line of credit
|
555,000
|
|
|
167,000
|
|
|
388,000
|
|
|||
Repayments of borrowings from unsecured senior line of credit
|
(407,000
|
)
|
|
(50,000
|
)
|
|
(357,000
|
)
|
|||
Repayments of borrowings from unsecured senior bank term loans
|
—
|
|
|
—
|
|
|
—
|
|
|||
Changes related to debt
|
154,265
|
|
|
138,651
|
|
|
15,614
|
|
|||
|
|
|
|
|
|
||||||
Redemption of Series D cumulative convertible preferred stock
|
(25,618
|
)
|
|
—
|
|
|
(25,618
|
)
|
|||
Proceeds from the issuance of common stock
|
25,278
|
|
|
—
|
|
|
25,278
|
|
|||
Dividend payments
|
(62,737
|
)
|
|
(59,542
|
)
|
|
(3,195
|
)
|
|||
Contributions by noncontrolling interests
|
—
|
|
|
340
|
|
|
(340
|
)
|
|||
Distributions to noncontrolling interests
|
(1,927
|
)
|
|
(9,846
|
)
|
|
7,919
|
|
|||
Other
|
7,939
|
|
|
(1,932
|
)
|
|
9,871
|
|
|||
Net cash provided by financing activities
|
$
|
97,200
|
|
|
$
|
67,671
|
|
|
$
|
29,529
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Common stock dividends
|
$
|
56,490
|
|
|
$
|
53,295
|
|
|
$
|
3,195
|
|
Series D convertible preferred stock dividends
|
4,150
|
|
|
4,150
|
|
|
—
|
|
|||
Series E preferred stock dividends
|
2,097
|
|
|
2,097
|
|
|
—
|
|
|||
|
$
|
62,737
|
|
|
$
|
59,542
|
|
|
$
|
3,195
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2016
|
|
2015
|
|
||||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic
|
|
$
|
(3,818
|
)
|
|
$
|
17,786
|
|
|
Depreciation and amortization
|
|
69,308
|
|
|
59,202
|
|
|
||
Impairment of real estate – rental properties
|
|
—
|
|
|
14,510
|
|
|
||
Allocation to unvested restricted stock awards
|
|
(80
|
)
|
|
(166
|
)
|
|
||
FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
(1)
|
|
65,410
|
|
|
91,332
|
|
|
||
Impairment of real estate – land parcels
(2)
|
|
28,980
|
|
|
—
|
|
|
||
Preferred stock redemption charge
|
|
3,046
|
|
|
—
|
|
|
||
Allocation to unvested restricted stock awards
|
|
(358
|
)
|
|
—
|
|
|
||
FFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
|
97,078
|
|
|
91,332
|
|
|
||
Non-revenue-enhancing capital expenditures:
|
|
|
|
|
|
||||
Building improvements
|
|
(2,318
|
)
|
|
(2,278
|
)
|
|
||
Tenant improvements and leasing commissions
|
|
(2,475
|
)
|
|
(5,775
|
)
|
|
||
Straight-line rent revenue
|
|
(12,492
|
)
|
|
(10,697
|
)
|
|
||
Straight-line rent expense on ground leases
|
|
592
|
|
|
363
|
|
|
||
Amortization of acquired below-market leases
|
|
(974
|
)
|
|
(933
|
)
|
|
||
Amortization of loan fees
|
|
2,792
|
|
|
2,835
|
|
|
||
Amortization of debt premiums
|
|
(86
|
)
|
|
(82
|
)
|
|
||
Stock compensation expense
|
|
5,439
|
|
|
3,690
|
|
|
||
Allocation to unvested restricted stock awards
|
|
106
|
|
|
118
|
|
|
||
AFFO attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
|
|
$
|
87,662
|
|
|
$
|
78,573
|
|
|
(1)
|
Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance.
|
(2)
|
Refer to the section titled “Assets Located in Asia” in Note 14 – “Assets Classified as Held for Sale” to our accompanying consolidated financial statements under Item 1 of this report.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
EPS attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic
|
|
$
|
(0.05
|
)
|
|
$
|
0.25
|
|
Depreciation and amortization
|
|
0.95
|
|
|
0.83
|
|
||
Impairment of real estate – rental properties
|
|
—
|
|
|
0.20
|
|
||
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
(1)
|
|
0.90
|
|
|
1.28
|
|
||
Impairment of real estate – land parcels
|
|
0.40
|
|
|
—
|
|
||
Preferred stock redemption charge
|
|
0.04
|
|
|
—
|
|
||
FFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
|
1.34
|
|
|
1.28
|
|
||
Non-revenue-enhancing capital expenditures:
|
|
|
|
|
||||
Building improvements
|
|
(0.03
|
)
|
|
(0.03
|
)
|
||
Tenant improvements and leasing commissions
|
|
(0.04
|
)
|
|
(0.08
|
)
|
||
Straight-line rent revenue
|
|
(0.17
|
)
|
|
(0.15
|
)
|
||
Straight-line rent expense on ground leases
|
|
0.01
|
|
|
0.01
|
|
||
Amortization of acquired below-market leases
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Amortization of loan fees
|
|
0.04
|
|
|
0.03
|
|
||
Stock compensation expense
|
|
0.07
|
|
|
0.05
|
|
||
AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
|
|
$
|
1.21
|
|
|
$
|
1.10
|
|
|
|
|
|
|
||||
Weighted-average shares of common stock outstanding for calculating FFO, FFO, as adjusted, and AFFO per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
|
|
72,584
|
|
|
71,366
|
|
(1)
|
Calculated in accordance with standards established by the NAREIT Board of Governors in its April 2002 White Paper and related implementation guidance.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Net income
|
$
|
9,966
|
|
|
$
|
25,008
|
|
|
Net income attributable to noncontrolling interests
|
(4,030
|
)
|
|
—
|
|
|
||
Interest
(1)
|
25,541
|
|
|
23,240
|
|
|
||
Income taxes
|
1,095
|
|
|
1,122
|
|
|
||
Depreciation and amortization:
|
|
|
|
|
||||
Consolidated
|
70,866
|
|
|
58,920
|
|
|
||
Noncontrolling interests share of consolidated real estate joint ventures
|
(2,301
|
)
|
|
—
|
|
|
||
Our share of unconsolidated real estate joint ventures
|
743
|
|
|
282
|
|
|
||
Depreciation and amortization
|
69,308
|
|
|
59,202
|
|
|
||
EBITDA
|
101,880
|
|
|
108,572
|
|
|
||
Stock compensation expense
|
5,439
|
|
|
3,690
|
|
|
||
Impairment of real estate
|
28,980
|
|
|
14,510
|
|
|
||
Adjusted EBITDA
|
$
|
136,299
|
|
|
$
|
126,772
|
|
|
(1)
|
Refer to calculation under “Fixed-charge coverage ratio” within this section.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Adjusted EBITDA
|
$
|
136,299
|
|
|
$
|
126,772
|
|
Add back: operating loss from discontinued operations
|
—
|
|
|
43
|
|
||
Adjusted EBITDA – excluding discontinued operations
|
$
|
136,299
|
|
|
$
|
126,815
|
|
|
|
|
|
||||
Revenues:
|
|
|
|
||||
Consolidated
|
$
|
216,089
|
|
|
$
|
196,753
|
|
Noncontrolling interests share of consolidated real estate joint ventures
|
(8,190
|
)
|
|
—
|
|
||
Our share of unconsolidated real estate joint ventures
|
1,855
|
|
|
—
|
|
||
Revenues
|
$
|
209,754
|
|
|
$
|
196,753
|
|
|
|
|
|
||||
Adjusted EBITDA margins
|
65%
|
|
|
64%
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2016
|
|
2015
|
|
||||
Adjusted EBITDA
|
|
$
|
136,299
|
|
|
$
|
126,772
|
|
|
|
|
|
|
|
|
||||
Interest:
|
|
|
|
|
|
||||
Consolidated
|
|
$
|
24,855
|
|
|
$
|
23,236
|
|
|
Noncontrolling interests share of consolidated real estate joint ventures
|
|
—
|
|
|
—
|
|
|
||
Our share of unconsolidated real estate joint ventures
|
|
686
|
|
|
4
|
|
|
||
Interest
|
|
25,541
|
|
|
23,240
|
|
|
||
Capitalized interest:
|
|
|
|
|
|
||||
Consolidated
|
|
12,099
|
|
|
10,971
|
|
|
||
Noncontrolling interests share of consolidated real estate joint ventures
|
|
—
|
|
|
—
|
|
|
||
Our share of unconsolidated real estate joint ventures
|
|
—
|
|
|
588
|
|
|
||
Capitalized interest
|
|
12,099
|
|
|
11,559
|
|
|
||
Amortization of loan fees:
|
|
|
|
|
|
||||
Consolidated
|
|
(2,759
|
)
|
|
(2,834
|
)
|
|
||
Noncontrolling interests share of consolidated real estate joint ventures
|
|
—
|
|
|
—
|
|
|
||
Our share of unconsolidated real estate joint ventures
|
|
(33
|
)
|
|
(1
|
)
|
|
||
Amortization of loan fees
|
|
(2,792
|
)
|
|
(2,835
|
)
|
|
||
Amortization of debt premium
|
|
86
|
|
|
82
|
|
|
||
Cash interest
|
|
34,934
|
|
|
32,046
|
|
|
||
Dividends on preferred stock
|
|
5,907
|
|
|
6,247
|
|
|
||
Fixed charges
|
|
$
|
40,841
|
|
|
$
|
38,293
|
|
|
|
|
|
|
|
|
||||
Fixed-charge coverage ratio:
|
|
|
|
|
|
||||
– period annualized
|
|
3.3x
|
|
|
3.3x
|
|
|
||
– trailing 12 months
|
|
3.4x
|
|
|
3.3x
|
|
|
•
|
Initial stabilized yield reflects rental income, including contractual rent escalations and any rent concessions over the term(s) of the lease(s), calculated on a straight-line basis.
|
•
|
Initial stabilized yield (cash basis) reflects cash rents at the stabilization date after initial rental concessions, if any, have elapsed.
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Secured notes payable:
|
|
|
|
||||
Consolidated
|
$
|
816,578
|
|
|
$
|
809,818
|
|
Noncontrolling interests share of consolidated real estate joint ventures
|
—
|
|
|
—
|
|
||
Our share of unconsolidated real estate joint ventures
|
49,485
|
|
|
48,561
|
|
||
Secured notes payable
|
866,063
|
|
|
858,379
|
|
||
Unsecured senior notes payable
(1)
|
2,031,284
|
|
|
2,030,631
|
|
||
Unsecured senior line of credit
|
299,000
|
|
|
151,000
|
|
||
Unsecured senior bank term loans
(1)
|
944,637
|
|
|
944,243
|
|
||
Unamortized deferred financing costs:
|
|
|
|
||||
Consolidated
|
28,474
|
|
|
30,103
|
|
||
Noncontrolling interests share of consolidated real estate joint ventures
|
—
|
|
|
—
|
|
||
Our share of unconsolidated real estate joint ventures
|
131
|
|
|
165
|
|
||
Unamortized deferred financing costs
|
28,605
|
|
|
30,268
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Consolidated
|
(146,197
|
)
|
|
(125,098
|
)
|
||
Noncontrolling interests share of consolidated real estate joint ventures
|
8,888
|
|
|
1,385
|
|
||
Our share of unconsolidated real estate joint ventures
|
(3,318
|
)
|
|
(4,209
|
)
|
||
Cash and cash equivalents
|
(140,627
|
)
|
|
(127,922
|
)
|
||
Less: restricted cash
|
(14,885
|
)
|
|
(28,872
|
)
|
||
Net debt
|
$
|
4,014,077
|
|
|
$
|
3,857,727
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
– quarter annualized
|
$
|
545,196
|
|
|
$
|
586,120
|
|
– trailing 12 months
|
$
|
558,643
|
|
|
$
|
549,116
|
|
|
|
|
|
||||
Net debt to Adjusted EBITDA:
|
|
|
|
||||
– quarter annualized
|
7.4
|
x
|
|
6.6
|
x
|
||
– trailing 12 months
|
7.2
|
x
|
|
7.0
|
x
|
(1)
|
In accordance with the ASU adopted in January 2016 as discussed in Note 2 – “Basis of Presentation and Summary of Significant Accounting Policies.”
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Our share of unencumbered NOI
|
$
|
117,698
|
|
|
$
|
111,957
|
|
|
Our share of encumbered NOI
|
27,567
|
|
|
24,433
|
|
|
||
Our share of total NOI
|
$
|
145,265
|
|
|
$
|
136,390
|
|
|
Our share of unencumbered NOI as a percentage of total NOI
|
81%
|
|
|
82%
|
|
|
Annualized impact to future earnings due to variable-rate debt:
|
|
||
Rate increase of 1%
|
$
|
(3,956
|
)
|
Rate decrease of 1%
|
$
|
1,717
|
|
|
|
||
Effect on fair value of total consolidated debt and interest rate swap agreements:
|
|
||
Rate increase of 1%
|
$
|
(162,291
|
)
|
Rate decrease of 1%
|
$
|
160,618
|
|
Equity price risk:
|
|
||
Fair value increase of 10%
|
$
|
31,616
|
|
Fair value decrease of 10%
|
$
|
(31,616
|
)
|
Impact of potential future earnings due to foreign currency exchange rate:
|
|
||
Rate increase of 10%
|
$
|
(6
|
)
|
Rate decrease of 10%
|
$
|
6
|
|
|
|
||
Effect on the fair value of net investment in foreign subsidiaries due to foreign currency exchange rate:
|
|
||
Rate increase of 10%
|
$
|
22,169
|
|
Rate decrease of 10%
|
$
|
(22,169
|
)
|
Exhibit
Number
|
|
Exhibit Title
|
|
|
|
3.1*
|
|
Articles of Amendment and Restatement of the Company, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 14, 1997.
|
3.2*
|
|
Certificate of Correction of the Company, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 14, 1997.
|
3.3*
|
|
Bylaws of the Company (as amended May 7, 2015), filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on May 11, 2015.
|
3.4*
|
|
Articles Supplementary, dated June 9, 1999, relating to the 9.50% Series A Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 13, 1999.
|
3.5*
|
|
Articles Supplementary, dated February 10, 2000, relating to the election to be subject to Subtitle 8 of Title 3 of the Maryland General Corporation Law, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 10, 2000.
|
3.6*
|
|
Articles Supplementary, dated February 10, 2000, relating to the Series A Junior Participating Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 10, 2000.
|
3.7*
|
|
Articles Supplementary, dated January 18, 2002, relating to the 9.10% Series B Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on January 18, 2002.
|
3.8*
|
|
Articles Supplementary, dated June 22, 2004, relating to the 8.375% Series C Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on June 28, 2004.
|
3.9*
|
|
Articles Supplementary, dated March 25, 2008, relating to the 7.00% Series D Cumulative Convertible Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 25, 2008.
|
3.10*
|
|
Articles Supplementary, dated March 12, 2012, relating to the 6.45% Series E Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 14, 2012.
|
4.1*
|
|
Specimen certificate representing shares of common stock, filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on May 5, 2011.
|
4.2*
|
|
Specimen certificate representing shares of 7.00% Series D Cumulative Convertible Preferred Stock, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on March 25, 2008.
|
4.3*
|
|
Indenture, dated as of February 29, 2012, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 29, 2012.
|
4.4*
|
|
Supplemental Indenture No. 1, dated as of February 29, 2012, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on February 29, 2012.
|
4.5*
|
|
Form of 4.60% Senior Note due 2022 (included in Exhibit 4.4 above).
|
4.6*
|
|
Specimen certificate representing shares of 6.45% Series E Cumulative Redeemable Preferred Stock, filed as an exhibit to the Company’s Form 8-A for registration of certain classes of securities filed with the SEC on March 12, 2012.
|
4.7*
|
|
Supplemental Indenture No. 2, dated as of June 7, 2013, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on June 7, 2013.
|
4.8*
|
|
Form of 3.90% Senior Note due 2023 (included in Exhibit 4.7 above).
|
4.9*
|
|
Supplemental Indenture No. 3, dated as of July 18, 2014, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on July 18, 2014.
|
4.10*
|
|
Form of 2.750% Senior Note due 2020 (included in Exhibit 4.9 above).
|
4.11*
|
|
Supplemental Indenture No. 4, dated as of July 18, 2014, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and the Bank of New York Mellon Trust Company, N.A., as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on July 18, 2014.
|
4.12*
|
|
Form of 4.500% Senior Note due 2029 (included in Exhibit 4.11 above).
|
4.13*
|
|
Indenture, dated as of November 17, 2015, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and Wilmington Trust, National Association, as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on November 17, 2015.
|
4.14*
|
|
Supplemental Indenture No. 1, dated as of November 17, 2015, among the Company, as Issuer, Alexandria Real Estate Equities, L.P., as Guarantor, and Wilmington Trust, National Association, as Trustee, filed as an exhibit to the Company’s current report on Form 8-K filed with the SEC on November 17, 2015.
|
4.15*
|
|
Form of 4.30% Senior Note due 2026 (included in Exhibit 4.14 above).
|
10.1
|
(1)
|
Third Amended and Restated Executive Employment Agreement between the Company and Dean A. Shigenaga, effective January 1, 2016.
|
10.2
|
(1)
|
Fourth Amended and Restated Executive Employment Agreement between the Company and Stephen A. Richardson, effective January 1, 2016.
|
10.3
|
(1)
|
Amended and Restated Executive Employment Agreement between the Company and Peter M. Moglia, effective January 1, 2016.
|
10.4
|
(1)
|
Third Amended and Restated Executive Employment Agreement between the Company and Thomas J. Andrews, effective January 1, 2016.
|
12.1
|
|
Computation of Consolidated Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends.
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.0
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
99.1
|
|
Federal Income Tax Considerations
|
101
|
|
The following materials from the Company’s quarterly report on Form 10-Q for the three months ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2016, and December 31, 2015 (unaudited), (ii) Consolidated Statements of Income for the three months ended March 31, 2016 and 2015 (unaudited), (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015 (unaudited), (iv) Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests for the three months ended March 31, 2016 (unaudited), (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited).
|
|
ALEXANDRIA REAL ESTATE EQUITIES, INC.
|
|
|
|
|
|
/s/ Joel S. Marcus
|
|
Joel S. Marcus
Chairman/Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Dean A. Shigenaga
|
|
Dean A. Shigenaga
Chief Financial Officer
(Principal Financial Officer)
|
SECTION 1.
|
POSITION; DUTIES; LOCATION.
|
SECTION 2.
|
COMPENSATION AND OTHER BENEFITS.
|
SECTION 3.
|
TERMINATION; SEVERANCE.
|
SECTION 4.
|
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
|
SECTION 5.
|
COMPANY POLICIES.
|
SECTION 6.
|
ASSIGNABILITY.
|
SECTION 7.
|
NOTICES.
|
SECTION 8.
|
ARBITRATION.
|
SECTION 9.
|
MISCELLANEOUS.
|
SECTION 1.
|
POSITION; DUTIES; LOCATION.
|
SECTION 2.
|
COMPENSATION AND OTHER BENEFITS.
|
SECTION 3.
|
TERMINATION; SEVERANCE.
|
SECTION 4.
|
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
|
SECTION 5.
|
COMPANY POLICIES.
|
SECTION 6.
|
ASSIGNABILITY.
|
SECTION 7.
|
NOTICES.
|
SECTION 8.
|
ARBITRATION.
|
SECTION 9.
|
MISCELLANEOUS.
|
SECTION 1.
|
POSITION; DUTIES; LOCATION.
|
SECTION 2.
|
COMPENSATION AND OTHER BENEFITS.
|
SECTION 3.
|
TERMINATION; SEVERANCE.
|
SECTION 4.
|
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
|
SECTION 5.
|
COMPANY POLICIES.
|
SECTION 6.
|
ASSIGNABILITY.
|
SECTION 7.
|
NOTICES.
|
SECTION 8.
|
ARBITRATION.
|
SECTION 9.
|
MISCELLANEOUS.
|
SECTION 1.
|
POSITION; DUTIES; LOCATION.
|
SECTION 2.
|
COMPENSATION AND OTHER BENEFITS.
|
SECTION 3.
|
TERMINATION; SEVERANCE.
|
SECTION 4.
|
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
|
SECTION 5.
|
COMPANY POLICIES.
|
SECTION 6.
|
ASSIGNABILITY.
|
SECTION 7.
|
NOTICES.
|
SECTION 8.
|
ARBITRATION.
|
SECTION 9.
|
MISCELLANEOUS.
|
|
|
Three Months Ended March 31, 2016
|
|
Years Ended December 31,
|
|
||||||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations before noncontrolling interests
(a)
|
|
$
|
10,363
|
|
|
$
|
144,506
|
|
|
$
|
104,991
|
|
|
$
|
139,349
|
|
|
$
|
96,712
|
|
|
$
|
117,316
|
|
|
Add: interest expense
|
|
24,855
|
|
|
105,813
|
|
|
79,299
|
|
|
67,952
|
|
|
69,184
|
|
|
63,373
|
|
|
||||||
Subtract: noncontrolling interests in income of subsidiaries that have not incurred fixed charges
|
|
(4,030
|
)
|
|
(1,897
|
)
|
|
(4,856
|
)
|
|
(954
|
)
|
|
(955
|
)
|
|
(1,323
|
)
|
|
||||||
Earnings available for fixed charges
(b)
|
|
$
|
31,188
|
|
|
$
|
248,422
|
|
|
$
|
179,434
|
|
|
$
|
206,347
|
|
|
$
|
164,941
|
|
|
$
|
179,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest incurred
|
|
$
|
36,954
|
|
|
$
|
142,353
|
|
|
$
|
126,287
|
|
|
$
|
128,038
|
|
|
$
|
131,424
|
|
|
$
|
120,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock dividends
|
|
5,907
|
|
|
24,986
|
|
|
25,698
|
|
|
25,885
|
|
|
27,328
|
|
|
28,357
|
|
|
||||||
Preferred stock redemption charge
|
|
3,046
|
|
|
—
|
|
|
1,989
|
|
|
—
|
|
|
5,978
|
|
|
—
|
|
|
||||||
Total combined fixed charges and preferred stock dividends
|
|
$
|
45,907
|
|
|
$
|
167,339
|
|
|
$
|
153,974
|
|
|
$
|
153,923
|
|
|
$
|
164,730
|
|
|
$
|
148,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated ratio of earnings to fixed charges
|
|
0.84
|
|
(c)
|
1.75
|
|
(d)
|
1.42
|
|
(e)
|
1.61
|
|
|
1.26
|
|
(f)
|
1.49
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends
|
|
0.68
|
|
(c)
|
1.48
|
|
(d)
|
1.17
|
|
(e)
|
1.34
|
|
|
1.00
|
|
(f)
|
1.20
|
|
|
(a)
|
Includes gains on sales of land parcels that are not attributable to discontinued operations and excludes equity in earnings from unconsolidated joint ventures.
|
(b)
|
For purposes of calculating the consolidated ratio of earnings to fixed charges and consolidated ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of income from continuing operations before noncontrolling interests and interest expense less noncontrolling interests in income of subsidiaries that have not incurred fixed charges. Fixed charges consist of interest incurred (including amortization of deferred financing costs and capitalized interest).
|
(c)
|
Ratios for the
three months ended March 31, 2016
, include the effect of a preferred stock redemption charge of
$3.0 million
and impairment of real estate of
$29.0 million
. Excluding the impact of the preferred stock redemption charge and the impairment of real estate, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the
three months ended March 31, 2016
, were
1.63
and
1.38
, respectively.
|
(d)
|
Ratios for the year ended December 31, 2015, include the effect of losses on early extinguishment of debt of $189 thousand and impairment of real estate of $23.3 million. Excluding the impact of losses on early extinguishment of debt and the impairment of real estate, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2015, were 1.91 and 1.62, respectively.
|
(e)
|
Ratios for the year ended December 31, 2014, include the effect of losses on early extinguishment of debt aggregating $525 thousand, a preferred stock redemption charge of $2.0 million, impairment of land parcel of $24.7 million, and impairment of real estate of $27.0 million. Excluding the impact of losses on early extinguishment of debt, the preferred stock redemption charge, the impairment of land parcel, and the impairment of real estate, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2014, were 1.83 and 1.52, respectively.
|
(f)
|
Ratios for the year ended December 31, 2012, include the effect of losses on early extinguishment of debt aggregating $2.2 million, a preferred stock redemption charge of $6.0 million, impairment of land parcel of $2.1 million, and impairment of real estate of $11.4 million. Excluding the impact of losses on early extinguishment of debt, the preferred stock redemption charge, the impairment of land parcel, and the impairment of real estate, the consolidated ratio of earnings to fixed charges and the consolidated ratio of earnings to combined fixed charges and preferred stock dividends for the year ended December 31, 2012, were 1.42 and 1.13, respectively.
|
|
/s/ Joel S. Marcus
|
|
Joel S. Marcus
|
|
Chief Executive Officer
|
|
/s/ Dean A. Shigenaga
|
|
Dean A. Shigenaga
|
|
Chief Financial Officer
|
|
/s/ Joel S. Marcus
|
|
Joel S. Marcus
|
|
Chief Executive Officer
|
|
/s/ Dean A. Shigenaga
|
|
Dean A. Shigenaga
|
|
Chief Financial Officer
|
•
|
We will be subject to tax at normal corporate tax rates upon any undistributed taxable income or capital gain. If we elect to retain and pay income tax on our net long-term capital gain, stockholders would be required to include their proportionate share of such undistributed gain in income but would receive a credit for their share of any taxes paid on such gain by us. A stockholder would increase his tax basis in his or her shares by the amount of income included less his or her credit or refund. Any undistributed net long-term capital gain would be designated in a notice mailed to stockholders. Through December 31, 2015, we have never made such a designation.
|
•
|
If we fail to satisfy either the 75% or the 95% gross income test discussed below, but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax on (i) the greater of the amount by which we fail to satisfy either the 75% or the 95% gross income test (ii) multiplied by a fraction intended to reflect our profitability.
|
•
|
If we fail to satisfy the 5% asset test or the 10% vote and value test (and we do not qualify for a de minimis safe harbor) or we fail to satisfy the other asset tests, each of which are discussed below, and nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a tax equal to the greater of $50,000 or an amount determined by multiplying the highest corporate tax rate by the net income generated by the assets that caused the failure for the period during which we failed to satisfy the tests.
|
•
|
If we fail to satisfy one or more REIT requirements other than the gross income or asset tests, but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a penalty of $50,000 for each such failure.
|
•
|
We will be subject to a tax of 100% on net income from any “prohibited transaction,” as described below.
|
•
|
We will be subject to tax at the highest corporate tax rate on net income from the sale or other disposition of certain foreclosure properties held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property.
|
•
|
If we acquire any asset from a “C” corporation in a carry-over basis transaction and we subsequently recognize gain on the disposition of such asset during the five-year period beginning on the date of acquisition, such gain will be subject to tax at the highest regular corporate tax rate to the extent of any built-in gain. Built-in gain means the excess of (i) the fair market value of the asset over (ii) the adjusted basis in such asset on the date of acquisition.
|
•
|
We will be subject to a tax of 100% on the amount of any rents from real property, deductions, excess interest or services income that would be reapportioned between us and any of our “taxable REIT subsidiaries” in order to more clearly reflect the income of such subsidiaries. A taxable REIT subsidiary is any corporation (or an entity treated as a corporation under the Code) for which a joint election has been made by a REIT and such corporation to treat such corporation as a taxable REIT subsidiary with respect to such REIT.
|
•
|
If we fail to distribute during each calendar year at least the sum of (i) 85% of our REIT ordinary income for such year, (ii) 95% of our REIT capital gain net income for such year, other than capital gains we elect to retain and pay tax on and (iii) any undistributed taxable income from prior years, we will be subject to a 4% nondeductible excise tax on the excess of such sum over the amounts actually distributed. To the extent we elect to retain and pay income tax on our net long-term capital gain, such retained amounts will be treated as having been distributed for purposes of the 4% excise tax.
|
•
|
We may also be subject to the corporate “alternative minimum tax” as well as tax in various situations and on some types of transactions not presently contemplated.
|
•
|
At least 75% of the value of our total assets must be represented by interests in real property, interests in mortgages on real property, shares in other REITs, cash (generally including the functional currency of any of our “qualified business units” when used in the normal course of activities that produce income qualifying under the 95% or 75% gross income test discussed below), cash items, government securities, qualified temporary investments, and, for taxable years beginning after December 31, 2015, interests in mortgages secured by both real property and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property, personal property leased in connection with real property for which the rent attributable to personal property is not greater than 15% of the total rent received under the lease, and debt instruments issued by “publicly offered REITs.”
|
•
|
No more than 25% of the value of our total assets may be represented by securities other than those in the 75% asset class described above.
|
•
|
Excluding securities of a qualified REIT subsidiary, another REIT, a taxable REIT subsidiary, or other securities that qualify for the 75% asset test, we are prohibited from owning securities representing more than 10% of either the vote or the value of the outstanding securities of any one issuer, and no more than 5% of the value of our total assets may be represented by securities of any one issuer. For purposes of the 10% value test, certain additional securities are excluded, including certain “straight debt,” loans to individuals or estates, and obligations to pay rents from real property.
|
•
|
No more than 25% (20% for taxable years beginning after December 31, 2017) of the value of our total assets may be represented by securities of one or more taxable REIT subsidiaries.
|
•
|
For taxable years beginning after December 31, 2015, not more than 25% of the value of our total assets may be represented by debt instruments of “publicly offered REITs” to the extent those debt instruments would not be real estate assets but for the inclusion of debt instruments of “publicly offered REITs” in the meaning of real estate assets for taxable years beginning after December 31, 2015.
|
•
|
our interest as a partner in a partnership is not considered a security;
|
•
|
any debt instrument issued by a partnership (other than “straight debt” or other excluded securities) will not be considered a security issued by the partnership if at least 75% of the partnership’s gross income is derived from sources that would qualify for the 75% REIT gross income test; and
|
•
|
any debt instrument issued by a partnership (other than “straight debt” or other excluded securities) will not be considered a security issued by the partnership to the extent of our interest as a partner in the partnership.
|
•
|
“rents from real property”;
|
•
|
interest on obligations secured by mortgages on, or interests in, real property, and, for taxable years after December 31, 2015, interest on debt secured by mortgages on both real and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property;
|
•
|
gains from the disposition of interests in real estate assets (excluding gain from the sale of a nonqualified “publicly offered REIT” debt instrument) and real estate mortgages, other than gain from property held primarily for sale to customers (“dealer property”);
|
•
|
distributions on shares in other REITs, as well as gain from the sale of such shares;
|
•
|
abatements and refunds of real property taxes;
|
•
|
income from the operation, and gain from the sale, of “foreclosure property”;
|
•
|
commitment fees received for agreeing to make loans secured by mortgages on real property or to purchase or lease real property; and
|
•
|
certain qualified temporary investment income.
|
•
|
Rent will not qualify if we, or a direct or constructive owner of 10% or more of our shares, directly or constructively own 10% or more of a tenant unless the tenant is a taxable REIT subsidiary of ours and certain other requirements are met with respect to the real property being rented.
|
•
|
If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to such personal property will not qualify as rent from real property. The determination of whether an item of property constitutes real property or personal property under the REIT provisions of the Code is subject to both legal and factual considerations and, as such, is subject to differing interpretations. Our accountants and counsel have advised us with respect to applicable considerations underlying such determination. After consulting with our accountants and counsel and considering such advice, we have reviewed our properties and have determined that rents attributable to personal property do not exceed 15% of the total rent with respect to any particular lease. Due to the specialized nature of our properties, however, there can be no assurance that the IRS will not assert the rent attributable to personal property with respect to a particular lease is greater than 15% of the total rent with respect to such lease. If the IRS were successful, and the amount of such non-qualifying income, together with other non-qualifying income, exceeds 5% of our taxable income, we may fail to qualify as a REIT.
|
•
|
An amount received or accrued will not qualify as rent from real property if it is based in whole or in part on the income or profits of any person, although an amount received or accrued generally will not be excluded from “rents from real property” solely by reason of being based on a fixed percentage or percentages of receipts or sales.
|
•
|
For rents received to qualify as rents from real property, generally we must not furnish or render services to tenants, other than through a taxable REIT subsidiary or an “independent contractor” from whom we derive no income, unless such services are “usually or customarily rendered” in connection with the rental of property and are not otherwise considered “rendered to the occupant.” A REIT is permitted to render a de minimis amount of impermissible services and still treat amounts otherwise received with respect to a property as rents from real property. The amount received or accrued by the REIT during the taxable year for impermissible services with respect to a property may not exceed 1% of all amounts received or accrued by the REIT directly or indirectly from the property. For this purpose, the amount received for any service or management operation will be deemed not less than 150% of the direct cost of the REIT in furnishing or rendering the service.
|
•
|
following our identification of the failure, we file a schedule with a description of each item of gross income that caused the failure in accordance with regulations prescribed by the Treasury; and
|
•
|
our failure to comply was due to reasonable cause and not due to willful neglect.
|
•
|
the distribution is made with respect to a class of shares regularly traded on an established securities market in the United States; and
|
•
|
the foreign stockholder does not own more than 10% of such class at any time during the year within which the distribution is received.
|
•
|
your long-term capital gains, if any, recognized on the disposition of our shares;
|
•
|
our distributions designated as long-term capital gain dividends (except to the extent attributable to real estate depreciation, in which case such distributions are subject to a 25% tax rate to such extent);
|
•
|
our dividends attributable to dividends received by us from non-REIT corporations, such as taxable REIT subsidiaries; and
|
•
|
our dividends to the extent attributable to income upon which we have paid corporate income tax (e.g., to the extent that we distribute less than 100% of our taxable income).
|