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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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95-4502084
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Title of Each Class
Common Stock, $.01 par value per share
7.00% Series D Cumulative Convertible Preferred Stock
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Name of Each Exchange on Which Registered
New York Stock Exchange
New York Stock Exchange
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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PART I
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Page
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PART II
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PART III
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PART IV
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ASU
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Accounting Standards Update
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ATM
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At the Market
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BBA
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British Bankers’ Association
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BPS
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Basis Points
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CIP
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Construction in Progress
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EPS
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Earnings per Share
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FASB
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Financial Accounting Standards Board
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FDIC
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Federal Deposit Insurance Corporation
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GAAP
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U.S. Generally Accepted Accounting Principles
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HVAC
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Heating, Ventilation, and Air Conditioning
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IASB
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International Accounting Standards Board
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IFRS
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International Financial Reporting Standards
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IRS
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Internal Revenue Service
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JV
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Joint Venture
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LEED
®
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Leadership in Energy and Environmental Design
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LIBOR
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London Interbank Offered Rate
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Nareit
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National Association of Real Estate Investment Trusts
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NAV
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Net Asset Value
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NYSE
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New York Stock Exchange
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REIT
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Real Estate Investment Trust
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RSF
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Rentable Square Feet/Foot
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SEC
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Securities and Exchange Commission
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SF
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Square Feet/Foot
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SoMa
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South of Market submarket of San Francisco
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U.S.
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United States
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VIE
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Variable Interest Entity
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Proximity to centers of innovation and technological advances;
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Location of the property and our strategy in the relevant market;
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Quality of existing and prospective tenants;
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Condition and capacity of the building infrastructure;
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Physical condition of the structure and common area improvements;
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Quality and generic characteristics of the improvements;
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Opportunities available for leasing vacant space and for re-tenanting or renewing occupied space;
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Availability of and/or ability to add appropriate tenant amenities;
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Availability of land for future ground-up development of new space;
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Opportunities to redevelop existing space and generate higher rent;
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The property’s unlevered yields; and
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Our ability to increase the property’s long-term financial returns.
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Maintaining access to diverse sources of capital, including operating cash flows after dividends, incremental debt, asset sales, and other capital such as the sale of equity or joint venture capital;
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Maintaining significant liquidity through borrowing capacity under our unsecured senior line of credit, available commitments under secured construction loans, marketable securities, and cash and cash equivalents;
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Continuing to improve our credit profile;
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Minimizing the amount of near-term debt maturities in a single year;
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Maintaining commitment to long-term capital to fund growth;
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Maintaining low to modest leverage;
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Minimizing variable interest rate risk;
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Generating high-quality, strong, and increasing operating cash flows;
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Selectively selling real estate assets, including land parcels and non-core/“core-like” operating assets, and reinvesting the proceeds into our highly leased value-creation development projects;
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Allocating capital to Class A properties located in collaborative life science and technology campuses in AAA urban innovation clusters;
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Maintaining geographic diversity in urban intellectual centers of innovation;
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Selectively acquiring high-quality office/laboratory and tech office space in our target urban innovation cluster submarkets at prices that enable us to realize attractive returns;
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Selectively developing properties in our target urban innovation cluster submarkets;
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Selectively redeveloping existing office, warehouse, or shell space, or newly acquired properties, into high-quality, generic, and reusable space that can be leased at higher rental rates in our target urban innovation cluster submarkets;
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Renewing existing tenant space at higher rental rates to the extent possible;
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Minimizing tenant improvement costs;
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Improving investment returns through the leasing of vacant space and the replacing of existing tenants with new tenants at higher rental rates;
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Actively monitoring tenant health and executing leases with high quality tenants;
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Maintaining solid occupancy while attaining high rental rates;
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Realizing contractual rental rate escalations; and
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Implementing effective cost control measures, including negotiating pass-through provisions in tenant leases for operating expenses and certain capital expenditures.
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Targeting and delivering a minimum of LEED
®
Gold on all new ground-up construction projects; approximately
49%
of our total annual rental revenue will be generated from LEED
®
certified projects upon completion of
12
projects currently in progress.
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Continuously improving efficiency and reducing our impact on the environment; our
86
energy optimization projects implemented in 2015 and 2016 reduced greenhouse gas pollution from our buildings by
4.7%
, more than twice the global GRESB average of
2.2%
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Implementing cutting-edge water conservation technologies, such as installing greywater systems and capturing steam condensate for use in cooling towers and irrigation, and waste management, recycling, and composting programs.
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Being the first real estate company to become a Fitwel Champion, and to receive Fitwel certifications for promoting the highest levels of occupant comfort in existing buildings.
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Earning the world’s first WELL
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certification for a newly constructed laboratory space, at the Alexandria LaunchLabs
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in New York City.
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Providing a highly competitive benefits package and a healthy workplace and employee experience, including fitness centers and incentives, healthy dining options, paid time off for volunteering activities, and an employee assistance program to meet and exceed the health, well-being, and financial needs and goals of our talented employees and their families.
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We may be unable to acquire a desired property because of competition from other real estate investors with significant capital, including both publicly traded REITs and institutional funds;
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Even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price or result in other less favorable terms;
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Even if we enter into agreements for the acquisition of properties, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction;
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We may be unable to complete an acquisition because we cannot obtain debt and/or equity financing on favorable terms or at all;
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We may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;
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We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of operating properties or portfolios of properties, into our existing operations;
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Acquired properties may be subject to reassessment, which may result in higher-than-expected property tax payments;
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Market conditions may result in higher-than-expected vacancy rates and lower-than-expected rental rates; and
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We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for the cleanup of undisclosed environmental contamination; claims by tenants, vendors, or other persons dealing with the former owners of the properties; and claims for indemnification by general partners, directors, officers, and others indemnified by the former owners of the properties.
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We may not complete development or redevelopment projects on schedule or within budgeted amounts;
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We may be unable to lease development or redevelopment projects on schedule or within budgeted amounts;
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We may encounter project delays or cancellations due to unavailability of necessary construction materials;
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We may expend funds on, and devote management’s time to, development and redevelopment projects that we may not complete;
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We may abandon development or redevelopment projects after we begin to explore them, and as a result, we may lose deposits or fail to recover costs already incurred;
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Market and economic conditions may deteriorate, which can result in lower-than-expected rental rates;
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We may face higher operating costs than we anticipated for development or redevelopment projects, including insurance premiums, utilities, real estate taxes, and costs of complying with changes in government regulations;
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We may face higher requirements for capital improvements than we anticipated for development or redevelopment projects, particularly in older structures;
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We may be unable to proceed with development or redevelopment projects because we cannot obtain debt and/or equity financing on favorable terms or at all;
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We may fail to retain tenants that have pre-leased our development or redevelopment projects if we do not complete the construction of these properties in a timely manner or to the tenants’ specifications;
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Tenants that have pre-leased our development or redevelopment projects may file for bankruptcy or become insolvent, which may adversely affect the income produced by, and the value of, our properties or require us to change the scope of the project, which may potentially result in higher construction costs and lower financial returns;
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We may encounter delays, refusals, unforeseen cost increases, and other impairments resulting from third-party litigation or severe weather conditions;
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We may encounter delays or refusals in obtaining all necessary zoning, land use, building, occupancy, and other required government permits and authorizations; and
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Development or redevelopment projects may have defects we do not discover through our inspection processes, including latent defects that may not reveal themselves until many years after we put a property in service.
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Our properties may not perform as we expect;
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We may have to lease space at rates below our expectations;
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We may not be able to obtain financing on acceptable terms; and
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We may underestimate the cost of improvements required to maintain or improve space to meet standards established for the market position intended for that property.
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Restrict our ability to incur additional indebtedness;
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Restrict our ability to make certain investments;
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Restrict our ability to merge with another company;
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Restrict our ability to make distributions to our stockholders;
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Require us to maintain financial coverage ratios; and
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Require us to maintain a pool of qualified unencumbered assets.
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Our cash flows from operations may not be sufficient to meet required payments of principal and interest;
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We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt;
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If we default on our debt obligations, the lenders or mortgagees may foreclose on our properties that secure those loans;
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A foreclosure on one of our properties could create taxable income without any accompanying cash proceeds to pay the tax;
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A default under a loan that has cross-default provisions may cause us to automatically default on another loan or interest rate hedge agreement;
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We may not be able to refinance or extend our existing debt;
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The terms of any refinancing or extension may not be as favorable as the terms of our existing debt;
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We may be subject to a significant increase in the variable interest rates on our unsecured senior line of credit, unsecured senior bank term loans, and certain other borrowings, which could adversely impact our cash flows and operations; and
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The terms of our debt obligations may require a reduction in our distributions to stockholders.
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National, local, and worldwide economic conditions;
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Competition from other properties;
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Changes in the life science and technology industries;
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Real estate conditions in our target markets;
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Our ability to collect rent payments;
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The availability of financing;
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Changes to the financial and banking industries;
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Changes in interest rate levels;
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Vacancies at our properties and our ability to re-lease space;
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Changes in tax or other regulatory laws;
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The costs of compliance with government regulation;
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The lack of liquidity of real estate investments; and
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Increases in operating costs.
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The status of the economy;
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The status of capital markets, including availability and cost of capital;
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Changes in financing terms available to us;
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Negative developments in the operating results or financial condition of tenants, including, but not limited to, their ability to pay rent;
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Our ability to re-lease space at similar rates as vacancies occur;
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Our ability to reinvest sale proceeds in a timely manner at rates similar to the rate at which assets are sold;
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Regulatory approval and market acceptance of the products and technologies of tenants;
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Liability or contract claims by or against tenants;
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Unanticipated difficulties and/or expenditures relating to future acquisitions;
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Environmental laws affecting our properties;
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Changes in rules or practices governing our financial reporting; and
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Other legal and operational matters, including REIT qualification and key management personnel recruitment and retention.
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The availability and cost of debt and/or equity capital;
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The condition of our balance sheet;
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Actual or anticipated capital requirements;
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The condition of the financial and banking industries;
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Actual or anticipated variations in our quarterly operating results or dividends;
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The amount and timing of debt maturities and other contractual obligations;
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Changes in our funds from operations or projections;
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The publication of research reports and articles about us, our tenants, the real estate industry, or the life science and technology industries;
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The general reputation of REITs and the attractiveness of their equity securities in comparison to other debt or equity securities (including securities issued by other real estate-based companies);
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General stock and bond market conditions, including changes in interest rates on fixed-income securities, that may lead prospective stockholders to demand a higher annual yield from future dividends;
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Changes in our analyst ratings;
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Changes in our corporate credit rating or credit ratings of our debt or other securities;
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Changes in market valuations of similar companies;
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Adverse market reaction to any additional debt we incur in the future;
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Additions or departures of key management personnel;
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Actions by institutional stockholders;
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Speculation in the press or investment community;
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Terrorist activity adversely affecting the markets in which our securities trade, possibly increasing market volatility and causing the further erosion of business and consumer confidence and spending;
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Government regulatory action and changes in tax laws;
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The realization of any of the other risk factors included in this annual report on Form 10-K; and
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General market and economic conditions.
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The amount of net cash provided by operating activities available for distribution;
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Our financial condition and capital requirements;
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Any decision to reinvest funds rather than to distribute such funds;
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Our capital expenditures;
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The annual distribution requirements under the REIT provisions of the Internal Revenue Code;
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Restrictions under Maryland law; and
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Other factors our Board of Directors deems relevant.
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Adverse effects of changes in exchange rates for foreign currencies;
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Challenges and/or taxation with respect to the repatriation of foreign earnings or repatriation of proceeds from the sale of one or more of our foreign investments;
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Changes in foreign political, regulatory, and economic conditions, including nationally, regionally, and locally;
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Challenges in managing international operations;
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Challenges in hiring or retaining key management personnel;
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Challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment, and legal proceedings;
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Differences in lending practices;
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Differences in languages, cultures, and time zones;
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Changes in applicable laws and regulations in the U.S. that affect foreign operations;
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Changes in tax and local regulations with potentially adverse tax consequences and penalties; and
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Foreign ownership and transfer restrictions.
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Upon bankruptcy of non-wholly owned partnerships, limited liability companies, or joint venture entities, we may become liable for the liabilities of the partnership, limited liability company, or joint venture;
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We may share certain approval rights over major decisions with third parties;
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We may be required to contribute additional capital if our partners fail to fund their share of any required capital contributions;
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Our partners, co-members, or joint venture partners might have economic or other business interests or goals that are inconsistent with our business interests or goals and that could affect our ability to lease or re-lease the property, operate the property, or maintain our qualification as a REIT;
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Our ability to sell the interest on advantageous terms when we so desire may be limited or restricted under the terms of our agreements with our partners; and
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We may not continue to own or operate the interests or assets underlying such relationships or may need to purchase such interests or assets at an above-market price to continue ownership.
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We would be subject to federal and state income taxes on our taxable income at regular corporate rates;
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We would not be allowed a deduction for distributions to our stockholders in computing taxable income;
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We would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification, unless we were entitled to relief under the Internal Revenue Code; and
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We would no longer be required by the Internal Revenue Code to make distributions to our stockholders.
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Status as a REIT;
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Incurrence of debt and debt management activities;
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Selective acquisition, disposition, development, and redevelopment activities;
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Stockholder distributions; and
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Other policies, as appropriate.
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Other REITs;
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Insurance companies;
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Pension and investment funds;
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Private equity entities;
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Partnerships;
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Developers;
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Investment companies;
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Owners/occupants; and
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Foreign investors, including sovereign wealth funds.
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Greater Boston;
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San Francisco;
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New York City;
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San Diego;
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Seattle;
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Maryland; and
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Research Triangle Park.
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Reinforced concrete floors;
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Upgraded roof loading capacity;
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Increased floor-to-ceiling heights;
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Heavy-duty HVAC systems;
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Enhanced environmental control technology;
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Significantly upgraded electrical, gas, and plumbing infrastructure; and
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Laboratory benches.
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Some of our tenants develop and manufacture drugs that require regulatory approval, including approval from the U.S. Food and Drug Administration, prior to being made, marketed, sold, and used. The regulatory approval process to manufacture and market drugs is costly, typically takes several years, requires validation through clinical trials and the use of substantial resources, and is often unpredictable. A tenant may fail to obtain or may experience significant delays in obtaining these approvals. Even if the tenant obtains regulatory approvals, marketed products will be subject to ongoing regulatory review and potential loss of approvals.
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The ability of some of our tenants to commercialize any future products successfully will depend in part on the coverage and reimbursement levels set by government authorities, private health insurers, and other third-party payers. Additionally, reimbursements may decrease in the future.
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Some of our tenants developing potential products may find that their products are not effective, or even are harmful, when tested in humans.
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Some of our tenants depend upon the commercial success of certain products. Even if a product made by a tenant is successfully developed and proven safe and effective in human clinical trials, and the requisite regulatory approvals are obtained, subsequent discovery of safety issues with these products could cause product liability events, additional regulatory scrutiny and requirements for additional labeling, loss of approval, withdrawal of products from the market, and the imposition of fines or criminal penalties.
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A drug made by a tenant may not be well accepted by doctors and patients, or may be less effective or accepted than a competitor’s drug, even if it is successfully developed.
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The negative results of safety signals arising from the clinical trials of the competitors of our tenants may prompt regulatory agencies to take actions that may adversely affect the clinical trials or products of our tenants.
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Some of our tenants require significant funding to develop and commercialize their products and technologies, which funding must be obtained from venture capital firms; private investors; the public markets; companies in the life science industry; or federal, state, and local governments. Such funding may become unavailable or difficult to obtain. The ability of each tenant to raise capital will depend on its financial and operating condition, viability of their products, and the overall condition of the financial, banking, and economic environment, as well as government budget policies.
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Even with sufficient funding, some of our tenants may not be able to discover or identify potential drug targets in humans, or potential drugs for use in humans, or to create tools or technologies that are commercially useful in the discovery or identification of potential drug targets or drugs.
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Some of our tenants may not be able to successfully manufacture their drugs economically, even if such drugs are proven through human clinical trials to be safe and effective in humans.
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Marketed products also face commercialization risk, and tenants may never realize projected levels of product utilization or revenues.
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Negative news regarding the products, the clinical trials, or other business developments of our tenants may cause their stock price or credit profile to deteriorate.
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Our tenants sell products and services in an industry that is characterized by rapid and significant technological changes, frequent new product and service introductions and enhancements, evolving industry standards, and uncertainty over the implementation of new healthcare reform legislation, which may cause them to lose competitive positions and adversely affect their operations.
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Some of our tenants and their licensors require patent, copyright, or trade secret protection to develop, make, market, and sell their products and technologies. A tenant may be unable to commercialize its products or technologies if patents covering such products or technologies are not issued or are successfully challenged, narrowed, invalidated, or circumvented by third parties, or if the tenant fails to obtain licenses to the discoveries of third parties necessary to commercialize its products or technologies.
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Many of our tenants depend upon patents to provide exclusive marketing rights for their products. As their product patents expire, competitors of these tenants may be able to legally produce and market products similar to those products of our tenants, which could have a material adverse effect on their sales and results of operations.
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Laws and regulations governing the Internet, e-commerce, electronic devices, and other services are evolving. Existing and future laws and regulations may impede the growth of our technology industry tenants. These laws and regulations may cover, among other areas, taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, business licensing, and consumer protection.
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The technology industry is characterized by rapid changes in customer requirements and preferences, frequent new product and service introductions, and the emergence of new industry standards and practices. A failure to respond in a timely manner to these market conditions could materially impair the operations of our technology industry tenants.
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Some of our tenants depend on continued and unimpeded access to the Internet by users of their products and services, as well as access to mobile networks. Internet service providers and mobile network operators may be able to block, degrade, or charge additional fees to these tenants or users.
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The Internet has experienced, and is likely to continue to experience, outages and other delays. These outages and delays, as well as problems caused by cyber attacks and computer malware, viruses, worms, and similar programs, may materially affect the ability of our technology industry tenants to conduct business.
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Security breaches or network attacks may delay or interrupt the services provided by our tenants and could harm their reputations or subject them to significant liability.
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Some of our tenants require significant funding to develop and commercialize their products and technologies, which funding must be obtained from venture capital firms; private investors; the public markets; companies in the technology industry; or federal, state, and local governments. Such funding may become unavailable or difficult to obtain. The ability of each tenant to raise capital will depend on its financial and operating condition, viability of their products, and the overall condition of the financial, banking, governmental budget policies, and economic environment.
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Even with sufficient funding, some of our tenants may not be able to discover or identify potential customers or may not be able to create tools or technologies that are commercially useful.
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Some of our tenants may not be able to successfully manufacture their products economically.
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Marketed products also face commercialization risk, and some of our tenants may never realize projected levels of product utilization or revenues.
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Negative news regarding the products or other business developments of our tenants may cause their stock price or credit profile to deteriorate.
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The products and services provided by some of our tenants are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and other inadequate protections could prevent them from enforcing or defending their proprietary technologies. These tenants may also face legal risks arising out of user-generated content.
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Trademark, copyright, patent, domain name, trade dress, and trade secret protection is very expensive to maintain and may require our technology industry tenants to incur significant costs to protect their intellectual property rights.
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Reduces the corporate income tax rate from 35% to 21% (including with respect to our taxable REIT subsidiaries);
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Reduces the rate of U.S. federal withholding tax on distributions made to non-U.S. shareholders by a REIT that are attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%;
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Allows an immediate 100% deduction of the cost of certain capital asset investments (generally excluding real estate assets), subject to a phase-down of the deduction percentage over time;
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Changes the recovery periods for certain real property and building improvements (for example, to 15 years for qualified improvement property under the modified accelerated cost recovery system, and to 30 years (previously 40 years) for residential real property and 20 years (previously 40 years) for qualified improvement property under the alternative depreciation system);
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Restricts the deductibility of interest expense by businesses (generally, to 30% of the business’ adjusted taxable income) except, among others, real property businesses electing out of such restriction; generally, we expect our business to qualify as such a real property business, but businesses conducted by our taxable REIT subsidiaries may not qualify, and we have not yet determined whether we will make such an election;
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Requires the use of the less favorable alternative depreciation system to depreciate real property in the event a real property business elects to avoid the interest deduction restriction above;
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Restricts the benefits of like-kind exchanges that defer capital gains for tax purposes to exchanges of real property;
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Permanently repeals the “technical termination” rule for partnerships, meaning sales or exchanges of the interests in a partnership will be less likely to, among other things, terminate the taxable year of, and restart the depreciable lives of assets held by, such partnership for tax purposes;
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Requires accrual method taxpayers to take certain amounts in income no later than the taxable year in which such income is taken into account as revenue in an applicable financial statement prepared under GAAP, which, with respect to certain leases, could accelerate the inclusion of rental income;
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Eliminates the corporate alternative minimum tax;
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•
|
Implements a one-time deemed repatriation tax on corporate profits (at a rate of 15.5% on cash assets and 8% on noncash assets) held offshore, which profits are not taken into account for purposes of the REIT gross income tests;
|
•
|
Reduces the highest marginal income tax rate for individuals to 37% from 39.6% (excluding, in each case, the 3.8% Medicare tax on net investment income);
|
•
|
Generally allows a deduction for individuals equal to 20% of certain income from pass-through entities, including ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income), generally resulting in a maximum effective federal income tax rate applicable to such dividends of 29.6% compared to 37% (excluding, in each case, the 3.8% Medicare tax on net investment income); and
|
•
|
Limits certain deductions for individuals, including deductions for state and local income taxes, and eliminates deductions for miscellaneous itemized deductions (including certain investment expenses).
|
•
|
The discharge of stormwater, wastewater, and any water pollutants;
|
•
|
The emission of air pollutants;
|
•
|
The generation, management, and disposal of hazardous or toxic chemicals, substances, or wastes; and
|
•
|
Workplace health and safety.
|
•
|
Asbestos surveys;
|
•
|
Radon surveys;
|
•
|
Lead-based paint surveys;
|
•
|
Mold surveys;
|
•
|
Additional public records review;
|
•
|
Subsurface sampling; and
|
•
|
Other testing.
|
•
|
Significant changes to our balance sheet relating to the recognition of operating leases as assets or liabilities based on existing lease terms and whether we are the lessor or lessee;
|
•
|
Significant changes in the timing of revenue recognition (related to lease arrangements in which we are the lessor) or expense recognition (related to the lease arrangements in which we are the lessee), stemming from the potential classification of financing or sales-type leases under the new ASU, for leases that are classified as operating leases under the current accounting standards; and
|
•
|
Significant fluctuations in our reported results of operations, including fluctuations in our expenses related to amortization of new lease-related assets and/or liabilities and assumed interest costs with leases.
|
•
|
Disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our tenants;
|
•
|
Result in misstated financial reports, violations of loan covenants, missed reporting deadlines, and/or missed permitting deadlines;
|
•
|
Result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;
|
•
|
Result in the unauthorized access to, and destruction, loss, theft, misappropriation, or release of, proprietary, confidential, sensitive, or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;
|
•
|
Result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space;
|
•
|
Require significant management attention and resources to remedy any damages that result;
|
•
|
Subject us to claims for breach of contract, damages, credits, penalties, or termination of leases or other agreements; or
|
•
|
Damage our reputation among our tenants and investors generally.
|
•
|
Reinforced concrete floors;
|
•
|
Upgraded roof loading capacity;
|
•
|
Increased floor-to-ceiling heights;
|
•
|
Heavy-duty HVAC systems;
|
•
|
Enhanced environmental control technology;
|
•
|
Significantly upgraded electrical, gas, and plumbing infrastructure; and
|
•
|
Laboratory benches.
|
•
|
Investment-grade or large cap tenants represented
55%
of our total annual rental revenue;
|
•
|
Approximately
97%
of our leases (on an RSF basis) were triple net leases, which require 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 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.
|
|
|
RSF
|
|
Number of Properties
|
|
Annual Rental Revenue
|
|||||||||||||||||||||||
Market
|
|
Operating
|
|
Development
|
|
Redevelopment
|
|
Total
|
|
% of Total
|
|
|
Total
|
|
% of Total
|
|
per RSF
|
||||||||||||
Greater Boston
|
|
6,135,551
|
|
|
255,155
|
|
|
59,173
|
|
|
6,449,879
|
|
|
29
|
%
|
|
54
|
|
|
$
|
356,178
|
|
|
38
|
%
|
|
$
|
61.05
|
|
San Francisco
|
|
4,604,736
|
|
|
1,020,918
|
|
|
—
|
|
|
5,625,654
|
|
|
26
|
|
|
39
|
|
|
216,765
|
|
|
23
|
|
|
49.37
|
|
||
New York City
|
|
727,674
|
|
|
—
|
|
|
—
|
|
|
727,674
|
|
|
3
|
|
|
2
|
|
|
63,325
|
|
|
7
|
|
|
87.20
|
|
||
San Diego
|
|
4,107,487
|
|
|
—
|
|
|
163,648
|
|
|
4,271,135
|
|
|
19
|
|
|
53
|
|
|
151,871
|
|
|
16
|
|
|
39.12
|
|
||
Seattle
|
|
1,037,920
|
|
|
—
|
|
|
—
|
|
|
1,037,920
|
|
|
5
|
|
|
11
|
|
|
48,720
|
|
|
5
|
|
|
48.03
|
|
||
Maryland
|
|
2,079,450
|
|
|
—
|
|
|
45,039
|
|
|
2,124,489
|
|
|
10
|
|
|
29
|
|
|
51,931
|
|
|
6
|
|
|
26.23
|
|
||
Research Triangle Park
|
|
1,043,726
|
|
|
—
|
|
|
175,000
|
|
|
1,218,726
|
|
|
6
|
|
|
16
|
|
|
26,544
|
|
|
3
|
|
|
25.93
|
|
||
Canada
|
|
256,967
|
|
|
—
|
|
|
—
|
|
|
256,967
|
|
|
1
|
|
|
3
|
|
|
6,652
|
|
|
1
|
|
|
26.00
|
|
||
Non-cluster markets
|
|
268,689
|
|
|
—
|
|
|
—
|
|
|
268,689
|
|
|
1
|
|
|
6
|
|
|
5,394
|
|
|
1
|
|
|
25.60
|
|
||
North America
|
|
20,262,200
|
|
|
1,276,073
|
|
|
442,860
|
|
|
21,981,133
|
|
|
100
|
%
|
|
213
|
|
|
$
|
927,380
|
|
|
100
|
%
|
|
$
|
48.01
|
|
|
|
Operating Properties
|
|
Operating and Redevelopment Properties
|
||||||||||||||
Market
|
|
12/31/17
|
|
12/31/16
|
|
12/31/15
|
|
12/31/17
|
|
12/31/16
|
|
12/31/15
|
||||||
Greater Boston
|
|
96.6
|
%
|
|
96.2
|
%
|
|
96.5
|
%
|
|
95.7
|
%
|
|
96.2
|
%
|
|
95.2
|
%
|
San Francisco
|
|
99.6
|
|
|
99.9
|
|
|
100.0
|
|
|
99.6
|
|
|
99.9
|
|
|
100.0
|
|
New York City
|
|
99.8
|
|
|
97.3
|
|
|
99.7
|
|
|
99.8
|
|
|
97.3
|
|
|
99.7
|
|
San Diego
|
|
94.5
|
|
|
94.3
|
|
|
96.4
|
|
|
90.9
|
|
|
90.4
|
|
|
82.3
|
|
Seattle
|
|
97.7
|
|
|
97.6
|
|
|
99.6
|
|
|
97.7
|
|
|
97.6
|
|
|
99.6
|
|
Maryland
|
|
95.2
|
|
|
95.8
|
|
|
96.0
|
|
|
93.2
|
|
|
95.8
|
|
|
96.0
|
|
Research Triangle Park
|
|
98.1
|
|
|
99.0
|
|
|
97.6
|
|
|
84.0
|
|
|
99.0
|
|
|
97.6
|
|
Subtotal
|
|
97.0
|
|
|
96.7
|
|
|
97.4
|
|
|
94.9
|
|
|
95.8
|
|
|
93.8
|
|
Canada
|
|
99.6
|
|
|
99.2
|
|
|
99.3
|
|
|
99.6
|
|
|
99.2
|
|
|
99.3
|
|
Non-cluster markets
|
|
78.4
|
|
|
87.7
|
|
|
80.0
|
|
|
78.4
|
|
|
87.7
|
|
|
80.0
|
|
North America
|
|
96.8
|
%
|
|
96.6
|
%
|
|
97.2
|
%
|
|
94.7
|
%
|
|
95.7
|
%
|
|
93.7
|
%
|
|
|
|
|
Remaining Lease Term in Years
(1)
|
|
Aggregate
RSF
|
|
Annual Rental Revenue
(1)
|
|
|
Percentage of Aggregate Annual Rental Revenue
(1)
|
|
Investment-Grade Ratings
|
|||||||||
|
|
Tenant
|
|
|
|
|
|
|
Moody’s
|
|
S&P
|
|||||||||||
1
|
|
|
Illumina, Inc.
|
|
|
12.6
|
|
|
|
891,495
|
|
|
$
|
34,736
|
|
|
|
3.7%
|
|
—
|
|
BBB
|
2
|
|
|
Takeda Pharmaceutical Company Ltd.
|
|
|
12.3
|
|
|
|
386,111
|
|
|
30,522
|
|
|
|
3.3
|
|
A1
|
|
A-
|
|
3
|
|
|
Eli Lilly and Company
|
|
|
11.9
|
|
|
|
469,266
|
|
|
29,335
|
|
|
|
3.2
|
|
A2
|
|
AA-
|
|
4
|
|
|
Bristol-Myers Squibb Company
|
|
|
9.9
|
|
|
|
460,050
|
|
|
28,800
|
|
|
|
3.1
|
|
A2
|
|
A+
|
|
5
|
|
|
Novartis AG
|
|
|
8.9
|
|
|
|
377,831
|
|
|
28,630
|
|
|
|
3.1
|
|
Aa3
|
|
AA-
|
|
6
|
|
|
Sanofi
|
|
|
10.2
|
|
|
|
388,242
|
|
|
24,821
|
|
|
|
2.7
|
|
A1
|
|
AA
|
|
7
|
|
|
Uber Technologies, Inc.
|
|
|
74.9
|
|
(2)
|
|
422,980
|
|
|
22,150
|
|
|
|
2.4
|
|
(3)
|
|
(3)
|
|
8
|
|
|
New York University
|
|
|
12.7
|
|
|
|
209,224
|
|
|
20,718
|
|
|
|
2.2
|
|
Aa2
|
|
AA-
|
|
9
|
|
|
bluebird bio, Inc.
|
|
|
9.1
|
|
|
|
262,261
|
|
|
20,086
|
|
|
|
2.2
|
|
—
|
|
—
|
|
10
|
|
|
Stripe, Inc.
|
|
|
9.8
|
|
|
|
295,333
|
|
|
17,822
|
|
|
|
1.9
|
|
—
|
|
—
|
|
11
|
|
|
Roche
|
|
|
4.1
|
|
|
|
343,861
|
|
|
17,597
|
|
|
|
1.9
|
|
A1
|
|
AA
|
|
12
|
|
|
Amgen Inc.
|
|
|
6.3
|
|
|
|
407,369
|
|
|
16,838
|
|
|
|
1.8
|
|
Baa1
|
|
A
|
|
13
|
|
|
Massachusetts Institute of Technology
|
|
|
7.5
|
|
|
|
256,126
|
|
|
16,729
|
|
|
|
1.8
|
|
Aaa
|
|
AAA
|
|
14
|
|
|
Celgene Corporation
|
|
|
5.7
|
|
|
|
360,014
|
|
|
15,271
|
|
|
|
1.6
|
|
Baa2
|
|
BBB+
|
|
15
|
|
|
United States Government
|
|
|
7.6
|
|
|
|
264,358
|
|
|
15,018
|
|
|
|
1.6
|
|
Aaa
|
|
AA+
|
|
16
|
|
|
FibroGen, Inc.
|
|
|
5.9
|
|
|
|
234,249
|
|
|
14,198
|
|
|
|
1.5
|
|
—
|
|
—
|
|
17
|
|
|
Juno Therapeutics, Inc.
|
|
|
11.3
|
|
|
|
266,794
|
|
|
13,815
|
|
|
|
1.5
|
|
—
|
|
—
|
|
18
|
|
|
Biogen Inc.
|
|
|
10.8
|
|
|
|
305,212
|
|
|
13,278
|
|
|
|
1.4
|
|
Baa1
|
|
A-
|
|
19
|
|
|
Facebook, Inc.
|
|
|
11.8
|
|
|
|
382,883
|
|
|
12,718
|
|
(4)
|
|
1.4
|
|
(3)
|
|
(3)
|
|
20
|
|
|
Pinterest, Inc.
|
|
|
15.2
|
|
|
|
148,146
|
|
|
12,015
|
|
|
|
1.3
|
|
(3)
|
|
(3)
|
|
|
|
Total/weighted average
|
|
|
13.4
|
|
(2)
|
|
7,131,805
|
|
|
$
|
405,097
|
|
|
|
43.6%
|
|
|
|
|
(1)
|
Based on aggregate annual rental revenue in effect
as of December 31, 2017
.
|
(2)
|
Represents a ground lease with Uber Technologies, Inc. at 1455 and 1515 Third Street in our Mission Bay/SoMa submarket. Excluding the ground lease, the weighted-average remaining lease term for our top 20 tenants is
9.9
years
as of December 31, 2017
.
|
(3)
|
Tenant with market capitalization (public or private) greater than $10 billion
as of December 31, 2017
.
|
(4)
|
Includes annual rental revenue based upon our
21%
equity interest as of
December 31, 2017
, in the
251,995
RSF Phase I property of our Menlo Gateway joint venture. Our equity interest in this project will increase to 49% by the first quarter of 2019.
|
Cash Flows from High-Quality, Diversified, and Innovative Tenants
|
||||
|
|
|
||
Annual Rental Revenue from Investment-Grade or Large Cap Tenants
A REIT Industry-Leading Tenant Roster
|
||||
55
|
%
|
|
|
|
|
|
|||
|
||||
Tenant Mix
|
||||
|
||||
Percentage of ARE’s Annual Rental Revenue
(1)
|
(1)
|
Represents annual rental revenue in effect as of
December 31, 2017
.
|
(2)
|
Leading technology entities represent investment-grade or large cap (public or private) entities.
|
(1)
|
Represents annual rental revenue in effect as of
December 31, 2017
.
|
(2)
|
Average occupancy of operating properties in North America as of each December 31 for the last 10 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy Percentage
|
||||||||||
|
|
|
|
RSF
|
|
Number of Properties
|
|
Annual Rental Revenue
|
|
|||||||||||||||||
|
|
|
|
|
|
|
Operating
|
|
Operating and Redevelopment
|
|||||||||||||||||
Market /
Submarket
/ Address
|
|
Operating
|
|
Development
|
|
Redevelopment
|
|
Total
|
|
|
|
|
||||||||||||||
Greater Boston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cambridge/Inner Suburbs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Alexandria Center
®
at Kendall Square
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
50, 60, 75/125, and 100 Binney Street, 161 and 215 First Street, 150 Second Street, 300 Third Street, and 11 Hurley Street
|
|
1,990,476
|
|
|
91,155
|
|
|
—
|
|
|
2,081,631
|
|
|
9
|
|
$
|
134,312
|
|
|
98.1
|
%
|
|
98.1
|
%
|
|
|
225 Binney Street (consolidated joint venture – 30% ownership)
|
|
305,212
|
|
|
—
|
|
|
—
|
|
|
305,212
|
|
|
1
|
|
13,278
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Alexandria Technology Square
®
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
100, 200, 300, 400, 500, 600, and 700 Technology Square
|
|
1,181,635
|
|
|
—
|
|
|
—
|
|
|
1,181,635
|
|
|
7
|
|
86,607
|
|
|
99.9
|
|
|
99.9
|
|
|
|
|
Alexandria Center
®
at One Kendall Square
|
|
644,771
|
|
|
164,000
|
|
|
—
|
|
|
808,771
|
|
|
10
|
|
48,456
|
|
|
94.6
|
|
|
94.6
|
|
|
|
|
One Kendall Square – Buildings 100, 200, 300, 400, 500, 600/700, 1400, 1800, 2000, and 399 Binney Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
480 and 500 Arsenal Street
|
|
234,260
|
|
|
—
|
|
|
—
|
|
|
234,260
|
|
|
2
|
|
10,532
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
640 Memorial Drive
|
|
225,504
|
|
|
—
|
|
|
—
|
|
|
225,504
|
|
|
1
|
|
13,771
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
780 and 790 Memorial Drive
|
|
99,658
|
|
|
—
|
|
|
—
|
|
|
99,658
|
|
|
2
|
|
7,432
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
167 Sidney Street and 99 Erie Street
|
|
54,549
|
|
|
—
|
|
|
—
|
|
|
54,549
|
|
|
2
|
|
3,735
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
79/96 13th Street (Charlestown Navy Yard)
|
|
25,309
|
|
|
—
|
|
|
—
|
|
|
25,309
|
|
|
1
|
|
620
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Cambridge/Inner Suburbs
|
|
4,761,374
|
|
|
255,155
|
|
|
—
|
|
|
5,016,529
|
|
|
35
|
|
318,743
|
|
|
98.5
|
|
|
98.5
|
|
|
|
Longwood Medical Area
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
360 Longwood Avenue (unconsolidated joint venture – 27.5% ownership)
|
|
210,709
|
|
|
—
|
|
|
—
|
|
|
210,709
|
|
|
1
|
|
2,788
|
|
|
60.3
|
|
|
60.3
|
|
|
|
Route 128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Alexandria Park at 128
|
|
343,882
|
|
|
—
|
|
|
—
|
|
|
343,882
|
|
|
8
|
|
10,478
|
|
|
95.6
|
|
|
95.6
|
|
|
|
|
3 and 6/8 Preston Court, 29, 35, and 44 Hartwell Avenue, 35 and 45/47 Wiggins Avenue, and 60 Westview Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
225, 266, and 275 Second Avenue
|
|
258,444
|
|
|
—
|
|
|
59,173
|
|
|
317,617
|
|
|
3
|
|
10,989
|
|
|
100.0
|
|
|
81.4
|
|
|
|
|
19 Presidential Way
|
|
144,892
|
|
|
—
|
|
|
—
|
|
|
144,892
|
|
|
1
|
|
3,907
|
|
|
74.4
|
|
|
74.4
|
|
|
|
|
100 Beaver Street
|
|
82,330
|
|
|
—
|
|
|
—
|
|
|
82,330
|
|
|
1
|
|
3,149
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
285 Bear Hill Road
|
|
26,270
|
|
|
—
|
|
|
—
|
|
|
26,270
|
|
|
1
|
|
1,167
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Route 128
|
|
855,818
|
|
|
—
|
|
|
59,173
|
|
|
914,991
|
|
|
14
|
|
29,690
|
|
|
93.9
|
|
|
87.8
|
|
|
|
Route 495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
111 and 130 Forbes Boulevard
|
|
155,846
|
|
|
—
|
|
|
—
|
|
|
155,846
|
|
|
2
|
|
1,543
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
20 Walkup Drive
|
|
91,045
|
|
|
—
|
|
|
—
|
|
|
91,045
|
|
|
1
|
|
649
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
30 Bearfoot Road
|
|
60,759
|
|
|
—
|
|
|
—
|
|
|
60,759
|
|
|
1
|
|
2,765
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Route 495
|
|
307,650
|
|
|
—
|
|
|
—
|
|
|
307,650
|
|
|
4
|
|
4,957
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Greater Boston
|
|
6,135,551
|
|
|
255,155
|
|
|
59,173
|
|
|
6,449,879
|
|
|
54
|
|
$
|
356,178
|
|
|
96.6
|
%
|
|
95.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy Percentage
|
||||||||||
|
|
|
|
RSF
|
|
Number of Properties
|
|
Annual Rental Revenue
|
|
|||||||||||||||||
|
|
|
|
|
|
|
Operating
|
|
Operating and Redevelopment
|
|||||||||||||||||
Market /
Submarket
/ Address
|
|
Operating
|
|
Development
|
|
Redevelopment
|
|
Total
|
|
|
|
|
||||||||||||||
Research Triangle Park
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Research Triangle Park
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Alexandria Technology Center
®
– Alston
|
|
186,870
|
|
|
—
|
|
|
—
|
|
|
186,870
|
|
|
3
|
|
$
|
3,388
|
|
|
91.0
|
%
|
|
91.0
|
%
|
|
|
100, 800, and 801 Capitola Drive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Alexandria Center
®
for AgTech – RTP
|
|
—
|
|
|
—
|
|
|
175,000
|
|
|
175,000
|
|
|
1
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
|
|
5 Laboratory Drive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
108/110/112/114 TW Alexander Drive
|
|
158,417
|
|
|
—
|
|
|
—
|
|
|
158,417
|
|
|
1
|
|
4,607
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Alexandria Innovation Center
®
– Research Triangle Park
|
|
135,677
|
|
|
—
|
|
|
—
|
|
|
135,677
|
|
|
3
|
|
3,360
|
|
|
99.2
|
|
|
99.2
|
|
|
|
|
7010, 7020, and 7030 Kit Creek Road
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
6 Davis Drive
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
1
|
|
1,787
|
|
|
97.7
|
|
|
97.7
|
|
|
|
|
7 Triangle Drive
|
|
96,626
|
|
|
—
|
|
|
—
|
|
|
96,626
|
|
|
1
|
|
3,156
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
2525 East NC Highway 54
|
|
82,996
|
|
|
—
|
|
|
—
|
|
|
82,996
|
|
|
1
|
|
3,680
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
407 Davis Drive
|
|
81,956
|
|
|
—
|
|
|
—
|
|
|
81,956
|
|
|
1
|
|
1,644
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
601 Keystone Park Drive
|
|
77,395
|
|
|
—
|
|
|
—
|
|
|
77,395
|
|
|
1
|
|
1,379
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
6040 George Watts Hill Drive
|
|
61,547
|
|
|
—
|
|
|
—
|
|
|
61,547
|
|
|
1
|
|
2,148
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
5 Triangle Drive
|
|
32,120
|
|
|
—
|
|
|
—
|
|
|
32,120
|
|
|
1
|
|
856
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
6101 Quadrangle Drive
|
|
30,122
|
|
|
—
|
|
|
—
|
|
|
30,122
|
|
|
1
|
|
539
|
|
|
100.0
|
|
|
100.0
|
|
|
|
|
Research Triangle Park
|
|
1,043,726
|
|
|
—
|
|
|
175,000
|
|
|
1,218,726
|
|
|
16
|
|
26,544
|
|
|
98.1
|
|
|
84.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Canada
|
|
256,967
|
|
|
—
|
|
|
—
|
|
|
256,967
|
|
|
3
|
|
6,652
|
|
|
99.6
|
|
|
99.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-cluster markets
|
|
268,689
|
|
|
—
|
|
|
—
|
|
|
268,689
|
|
|
6
|
|
5,394
|
|
|
78.4
|
|
|
78.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total – North America
|
|
20,262,200
|
|
|
1,276,073
|
|
|
442,860
|
|
|
21,981,133
|
|
|
213
|
|
$
|
927,380
|
|
|
96.8
|
%
|
|
94.7
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
•
|
Executed a total of
216
leases, with a weighted-average lease term of
7.9 years
, for
4,569,182
RSF, including
1,118,816
RSF related to our development and redevelopment projects during the
year ended December 31, 2017
; solid leasing activity in light of minimal contractual lease expirations at the beginning of
2017
, and a highly leased value-creation pipeline; and
|
•
|
Achieved rental rate increases of
25.1%
and
12.7%
(cash basis) for lease renewals and re-leasing of space aggregating
2,525,099
RSF (included in the
4,569,182
RSF above) during the
year ended December 31, 2017
.
|
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
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
|
|
25.1%
|
|
|
12.7%
|
|
|
27.6%
|
|
|
12.0%
|
|
||||
New rates
|
|
$
|
51.05
|
|
|
$
|
47.99
|
|
|
$
|
48.60
|
|
|
$
|
45.83
|
|
Expiring rates
|
|
$
|
40.80
|
|
|
$
|
42.60
|
|
|
$
|
38.09
|
|
|
$
|
40.92
|
|
Rentable square footage
|
|
2,525,099
|
|
|
|
|
2,129,608
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
18.74
|
|
|
|
|
$
|
15.69
|
|
|
|
||||
Average lease term
|
|
6.2 years
|
|
|
|
|
5.5 years
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Developed/redeveloped/previously vacant space leased
|
|
|
|
|
|
|
|
|
||||||||
New rates
|
|
$
|
47.56
|
|
(2)
|
$
|
42.93
|
|
(2)
|
$
|
50.24
|
|
|
$
|
38.72
|
|
Rentable square footage
|
|
2,044,083
|
|
|
|
|
1,260,459
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
9.83
|
|
|
|
|
$
|
12.42
|
|
|
|
||||
Average lease term
|
|
10.1 years
|
|
|
|
|
32.6 years
|
|
(3)
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Leasing activity summary (totals):
|
|
|
|
|
|
|
|
|
||||||||
New rates
|
|
$
|
49.49
|
|
|
$
|
45.72
|
|
|
$
|
49.21
|
|
|
$
|
43.19
|
|
Rentable square footage
|
|
4,569,182
|
|
(4)
|
|
|
3,390,067
|
|
|
|
||||||
Tenant improvements/leasing commissions
|
|
$
|
14.75
|
|
|
|
|
$
|
14.48
|
|
|
|
||||
Average lease term
|
|
7.9 years
|
|
|
|
|
15.6 years
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Lease expirations
(1)
|
|
|
|
|
|
|
|
|
||||||||
Expiring rates
|
|
$
|
39.99
|
|
|
$
|
41.71
|
|
|
$
|
36.70
|
|
|
$
|
39.32
|
|
Rentable square footage
|
|
2,919,259
|
|
|
|
|
2,484,169
|
|
|
|
(1)
|
Excludes
25
month-to-month leases aggregating
37,006
RSF and
20
month-to-month leases aggregating
31,207
RSF as of
December 31, 2017
and
2016
, respectively.
|
(2)
|
New rental rates include 100% of the RSF and rates for the
520,988
RSF lease executed for the Phase II development project of our Menlo Gateway joint venture. Adjusting for our
21%
ownership of the Menlo Gateway joint venture, our weighted-average new rental rates were
$38.84
and
$35.70
(cash basis) per RSF for the year ended December 31, 2017.
|
(3)
|
2016 information includes the 75-year ground lease with Uber Technologies, Inc. at 1455 and 1515 Third Street in our Mission Bay/SoMa submarket. The average lease term, excluding this ground lease, was
10.7 years
.
|
(4)
|
During the
year ended December 31, 2017
, we granted tenant concessions/free rent averaging
2.5
months with respect to the
4,569,182
RSF leased. Approximately
69%
of the leases executed during the
year ended December 31, 2017
, did not include concessions for free rent.
|
Year
|
|
Number of Leases
|
|
RSF
|
|
Percentage of
Occupied RSF |
|
Annual Rental Revenue
(per RSF) (1) |
|
Percentage of Total
Annual Rental Revenue |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2018
|
(2)
|
|
|
98
|
|
|
|
|
1,282,567
|
|
|
|
|
6.6
|
%
|
|
|
|
$
|
41.57
|
|
|
|
|
5.8
|
%
|
|
|
2019
|
|
|
|
85
|
|
|
|
|
1,349,444
|
|
|
|
|
6.9
|
%
|
|
|
|
$
|
40.34
|
|
|
|
|
5.9
|
%
|
|
|
2020
|
|
|
|
102
|
|
|
|
|
1,682,954
|
|
|
|
|
8.6
|
%
|
|
|
|
$
|
38.27
|
|
|
|
|
7.0
|
%
|
|
|
2021
|
|
|
|
88
|
|
|
|
|
1,741,892
|
|
|
|
|
8.9
|
%
|
|
|
|
$
|
41.83
|
|
|
|
|
7.9
|
%
|
|
|
2022
|
|
|
|
81
|
|
|
|
|
1,429,544
|
|
|
|
|
7.3
|
%
|
|
|
|
$
|
45.13
|
|
|
|
|
7.0
|
%
|
|
|
2023
|
|
|
|
50
|
|
|
|
|
1,855,662
|
|
|
|
|
9.5
|
%
|
|
|
|
$
|
43.13
|
|
|
|
|
8.7
|
%
|
|
|
2024
|
|
|
|
32
|
|
|
|
|
1,402,704
|
|
|
|
|
7.2
|
%
|
|
|
|
$
|
48.47
|
|
|
|
|
7.4
|
%
|
|
|
2025
|
|
|
|
22
|
|
|
|
|
698,697
|
|
|
|
|
3.6
|
%
|
|
|
|
$
|
47.72
|
|
|
|
|
3.6
|
%
|
|
|
2026
|
|
|
|
17
|
|
|
|
|
729,295
|
|
|
|
|
3.7
|
%
|
|
|
|
$
|
44.38
|
|
|
|
|
3.5
|
%
|
|
|
2027
|
|
|
|
24
|
|
|
|
|
1,834,072
|
|
|
|
|
9.4
|
%
|
|
|
|
$
|
44.39
|
|
|
|
|
8.8
|
%
|
|
Thereafter
|
|
|
44
|
|
|
|
|
5,564,341
|
|
|
|
|
28.3
|
%
|
|
|
|
$
|
57.55
|
|
|
|
|
34.4
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents amounts in effect as of
December 31, 2017
.
|
(2)
|
Excludes
25
month-to-month leases aggregating
37,006
RSF as of
December 31, 2017
.
|
|
|
2018 Contractual Lease Expirations
|
|
Annual Rental Revenue
(per RSF) (2) |
|
|||||||||||||||
|
|
Leased
|
|
Negotiating/
Anticipating |
|
Targeted for
Redevelopment |
|
Remaining
Expiring Leases |
|
Total
(1)
|
|
|
||||||||
Market
|
|
|
|
|
|
|
|
|||||||||||||
Greater Boston
|
|
37,850
|
|
|
73,516
|
|
|
—
|
|
|
187,598
|
|
|
298,964
|
|
|
$
|
58.03
|
|
|
San Francisco
|
|
32,488
|
|
|
—
|
|
|
345,811
|
|
(3)
|
66,903
|
|
|
445,202
|
|
|
35.32
|
|
|
|
New York City
|
|
15,517
|
|
|
3,827
|
|
|
—
|
|
|
12,184
|
|
|
31,528
|
|
|
N/A
|
|
|
|
San Diego
|
|
19,870
|
|
|
—
|
|
|
71,510
|
|
(4)
|
227,503
|
|
|
318,883
|
|
|
34.54
|
|
|
|
Seattle
|
|
2,468
|
|
|
—
|
|
|
—
|
|
|
6,272
|
|
|
8,740
|
|
|
52.56
|
|
|
|
Maryland
|
|
5,104
|
|
|
2,951
|
|
|
—
|
|
|
36,265
|
|
|
44,320
|
|
|
19.39
|
|
|
|
Research Triangle Park
|
|
3,088
|
|
|
18,833
|
|
|
—
|
|
|
38,399
|
|
|
60,320
|
|
|
26.29
|
|
|
|
Canada
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,465
|
|
|
63,465
|
|
|
19.38
|
|
|
|
Non-cluster markets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,145
|
|
|
11,145
|
|
|
26.02
|
|
|
|
Total
|
|
116,385
|
|
|
99,127
|
|
|
417,321
|
|
|
649,734
|
|
|
1,282,567
|
|
|
$
|
41.57
|
|
|
Percentage of expiring leases
|
|
9
|
%
|
|
8
|
%
|
|
33
|
%
|
|
50
|
%
|
|
100
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2019 Contractual Lease Expirations
|
|
Annual Rental Revenue
(per RSF) (2) |
|
|||||||||||||||
|
|
Leased
|
|
Negotiating/
Anticipating |
|
Targeted for
Redevelopment |
|
Remaining
Expiring Leases |
|
Total
|
|
|
||||||||
Market
|
|
|
|
|
|
|
|
|||||||||||||
Greater Boston
|
|
16,188
|
|
|
76,463
|
|
|
—
|
|
|
262,186
|
|
|
354,837
|
|
|
$
|
50.85
|
|
|
San Francisco
|
|
24,612
|
|
|
—
|
|
|
—
|
|
|
155,604
|
|
|
180,216
|
|
|
43.12
|
|
|
|
New York City
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,399
|
|
|
32,399
|
|
|
N/A
|
|
|
|
San Diego
|
|
17,415
|
|
|
—
|
|
|
44,034
|
|
(5)
|
253,901
|
|
|
315,350
|
|
|
31.55
|
|
|
|
Seattle
|
|
1,283
|
|
|
—
|
|
|
—
|
|
|
212,010
|
|
|
213,293
|
|
|
43.67
|
|
|
|
Maryland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156,089
|
|
|
156,089
|
|
|
26.05
|
|
|
|
Research Triangle Park
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,235
|
|
|
40,235
|
|
|
20.25
|
|
|
|
Canada
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,562
|
|
|
6,562
|
|
|
22.16
|
|
|
|
Non-cluster markets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,463
|
|
|
50,463
|
|
|
22.25
|
|
|
|
Total
|
|
59,498
|
|
|
76,463
|
|
|
44,034
|
|
|
1,169,449
|
|
|
1,349,444
|
|
|
$
|
40.34
|
|
|
Percentage of expiring leases
|
|
4
|
%
|
|
6
|
%
|
|
3
|
%
|
|
87
|
%
|
|
100
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes
25
month-to-month leases aggregating
37,006
RSF as of
December 31, 2017
.
|
(2)
|
Represents amounts in effect as of
December 31, 2017
.
|
(3)
|
Includes
195,000
RSF expiring during the three months ending March 31, 2018, at 960 Industrial Road, a recently acquired property located in our Greater Stanford submarket, and
23,840
RSF expiring during the three months ending March 31, 2018 at 201 Haskins Way, a recently acquired property in our South San Francisco submarket. We are pursuing entitlements aggregating
500,000
RSF for a multi-building development at 960 Industrial Road and entitlements aggregating
280,000
RSF at 201 Haskins Way. Also includes
126,971
RSF of office space targeted for redevelopment into office/laboratory space upon expiration of the existing lease during the three months ending September 30, 2018 at 681 Gateway Boulevard in our South San Francisco submarket. Concurrent with our redevelopment, we anticipate expanding 681 Gateway Boulevard by an additional 15,000-30,000 RSF and expect initial occupancy in 2019.
|
(4)
|
Represents
71,510
RSF that expired in January 2018 at 9880 Campus Point Drive in our University Town Center submarket. We expect to demolish the existing R&D building and develop a 98,000 RSF Class A office/laboratory property.
|
(5)
|
Represents
44,034
RSF expiring in January 2019 at 4110 Campus Point Court, a recently acquired property in our University Town Center submarket, which we expect to redevelop into tech office or office/laboratory space.
|
|
Investments in Real Estate
|
|
Square Feet
|
||||||||||
|
|
Consolidated
|
|
Unconsolidated
(1)
|
|
Total
|
|||||||
Investments in real estate:
|
|
|
|
|
|
|
|
||||||
Rental properties
|
$
|
11,092,815
|
|
|
19,799,496
|
|
|
462,704
|
|
|
20,262,200
|
|
|
|
|
|
|
|
|
|
|
||||||
Development and redevelopment projects of new Class A properties:
|
|
|
|
|
|
|
|
||||||
Undergoing construction – target delivery in 2018 – 2020
|
|
|
|
|
|
|
|
||||||
Development projects
|
310,825
|
|
|
755,085
|
|
|
520,988
|
|
|
1,276,073
|
|
||
Redevelopment projects
|
72,282
|
|
|
442,860
|
|
|
—
|
|
|
442,860
|
|
||
|
|
|
|
1,197,945
|
|
|
520,988
|
|
|
1,718,933
|
|
||
|
|
|
|
|
|
|
|
||||||
|
|
|
20,997,441
|
|
|
983,692
|
|
|
21,981,133
|
|
|||
|
|
|
|
|
|
|
|
||||||
Near-term projects undergoing marketing and pre-construction; target delivery in 2019 and 2020
|
163,764
|
|
|
1,015,000
|
|
|
580,000
|
|
|
1,595,000
|
|
||
Intermediate-term development projects
|
408,347
|
|
|
3,798,961
|
|
|
—
|
|
|
3,798,961
|
|
||
Future development projects
|
96,112
|
|
|
2,639,437
|
|
|
—
|
|
|
2,639,437
|
|
||
Portion of developable square feet that will replace existing RSF included in rental properties
(2)
|
N/A
|
|
|
(451,310
|
)
|
|
—
|
|
|
(451,310
|
)
|
||
|
|
|
7,002,088
|
|
|
580,000
|
|
|
7,582,088
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
Gross investments in real estate
|
12,144,145
|
|
|
27,999,529
|
|
|
$
|
1,563,692
|
|
|
29,563,221
|
|
|
|
|
|
|
|
|
|
|
||||||
Less: accumulated depreciation
|
(1,875,810
|
)
|
|
|
|
|
|
|
|||||
Net investments in real estate – North America
|
10,268,335
|
|
|
|
|
|
|
|
|||||
Net investments in real estate – Asia
|
29,684
|
|
|
|
|
|
|
|
|||||
Investments in real estate
|
$
|
10,298,019
|
|
|
|
|
|
|
|
(1)
|
Our share of the cost basis associated with unconsolidated square feet is classified in investments in unconsolidated real estate joint ventures in our consolidated balance sheets.
|
(2)
|
Refer to footnotes 5, 7, and 8 in the “Summary of Pipeline” section within this Item 2.
|
Property
|
|
Submarket/Market
|
|
Date of Purchase
|
|
Number of Properties
|
|
Occupancy
|
|
Square Footage
|
|
Purchase Price
|
|
|||||||||||
|
|
|
|
Operating
|
|
Development/Redevelopment
|
|
Future Development
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Nine months ended September 30, 2017 acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
325 Binney Street
|
|
Cambridge/Greater Boston
|
|
3/29/17
|
|
—
|
|
N/A
|
|
—
|
|
|
|
—
|
|
|
208,965
|
|
|
|
$
|
80,250
|
|
|
266 and 275 Second Avenue
|
|
Route 128/Greater Boston
|
|
7/11/17
|
|
2
|
|
100%
|
|
144,584
|
|
|
|
59,173
|
|
|
—
|
|
|
|
71,000
|
|
|
|
88 Bluxome Street
|
|
Mission Bay/SoMa/San Francisco
|
|
1/10/17
|
|
1
|
|
100%
|
|
232,470
|
|
|
|
—
|
|
|
1,070,925
|
|
|
|
130,000
|
|
|
|
201 Haskins Way
|
|
South San Francisco/San Francisco
|
|
9/11/17
|
|
1
|
|
100%
|
|
23,840
|
|
|
|
—
|
|
|
280,000
|
|
|
|
33,000
|
|
|
|
960 Industrial Road
|
|
Greater Stanford/San Francisco
|
|
5/17/17
|
|
1
|
|
100%
|
|
195,000
|
|
|
|
—
|
|
|
500,000
|
|
|
|
64,959
|
|
|
|
825 and 835 Industrial Road
|
|
Greater Stanford/San Francisco
|
|
6/1/17
|
|
—
|
|
N/A
|
|
—
|
|
|
|
—
|
|
|
530,000
|
|
|
|
85,000
|
|
|
|
1450 Page Mill Road
(1)
|
|
Greater Stanford/San Francisco
|
|
6/1/17
|
|
1
|
|
100%
|
|
77,634
|
|
|
|
—
|
|
|
—
|
|
|
|
85,300
|
|
|
|
3050 Callan Road and Vista Wateridge
|
|
Torrey Pines/Sorrento Mesa/San Diego
|
|
3/24/17
|
|
—
|
|
N/A
|
|
—
|
|
|
|
—
|
|
|
229,000
|
|
|
|
8,250
|
|
|
|
9900 Medical Center Drive
|
|
Rockville/Maryland
|
|
8/4/17
|
|
1
|
|
N/A
|
|
—
|
|
|
|
45,039
|
|
|
—
|
|
|
|
6,700
|
|
|
|
5 Laboratory Drive
|
|
Research Triangle Park/RTP
|
|
5/25/17
|
|
1
|
|
N/A
|
|
—
|
|
|
|
175,000
|
|
|
—
|
|
|
|
8,750
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
673,528
|
|
|
|
279,212
|
|
|
2,818,890
|
|
|
|
573,209
|
|
|
|
Fourth quarter of 2017 acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
701 Gateway Boulevard
(2)
|
|
South San Francisco/San Francisco
|
|
12/19/17
|
|
1
|
|
90.6%
|
|
170,862
|
|
|
|
—
|
|
|
—
|
|
|
|
76,000
|
|
|
|
Menlo Gateway (unconsolidated JV)
(3)
|
|
Greater Stanford/San Francisco
|
|
11/27/17
|
|
3
|
|
100%
|
|
251,995
|
|
|
|
520,988
|
|
|
—
|
|
|
|
59,936
|
|
|
|
4110 Campus Point Court (55% interest)
(4)
|
|
University Town Center/San Diego
|
|
12/28/17
|
|
1
|
|
100%
|
|
44,034
|
|
|
|
—
|
|
|
—
|
|
|
|
10,450
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
466,891
|
|
|
|
520,988
|
|
|
—
|
|
|
|
146,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800,200
|
|
|
2,818,890
|
|
|
|
$
|
719,595
|
|
|
(1)
|
Technology office building, subject to a 51-year ground lease, located in Stanford Research Park, a collaborative business community that supports innovative companies in their research and development pursuits. This recently constructed building is 100% leased to Infosys Limited for
12
years, and we expect initial stabilized yields of
7.3%
and
5.8%
(cash basis).
|
(2)
|
Office building located within our Alexandria Technology Center
®
– Gateway campus. The property is
90.6%
leased as of December 31, 2017, to multiple tenants with minimal near-term lease expirations, and we expect initial stabilized yields of
7.2%
and
6.3%
(cash basis) upon lease-up of the existing vacant office space. In addition, the property provides future opportunities to enhance our returns through the conversion of existing office space to office/laboratory space through redevelopment, and development of a new building.
|
(3)
|
See below within this Item 2 for additional information on our acquisition in this real estate joint venture.
|
(4)
|
Represents a 55% interest in a real estate joint venture with TIAA, which owns a property that expands our Campus Pointe by Alexandria campus. The joint venture leased the existing
44,034
RSF property back to the seller for one year, after which the joint venture may consider options to redevelop the existing property into tech office or office/laboratory space.
|
Property
|
|
Submarket/Market
|
|
Date of Purchase
|
|
Number of Properties
|
|
Anticipated Use
|
|
Occupancy
|
|
Square Footage
|
|
Purchase Price
|
|
|||||||||||||
|
|
|
|
Operating
|
|
Development/Redevelopment
|
|
Future Development
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
First quarter of 2018 acquisitions under purchase agreement/letter of intent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
1455 and 1515 Third Street
(acquisition of remaining 49% interest) (1) |
|
Mission Bay/SoMa/
San Francisco
|
|
N/A
|
|
2
|
|
Office
|
|
100%
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
37,800
|
|
|
|
|
1655 and 1715 Third Street
(10% interest in unconsolidated JV)
(2)
|
|
Mission Bay/SoMa/
San Francisco
|
|
February 2018
|
|
2
|
|
Office
|
|
N/A
|
|
—
|
|
|
|
580,000
|
|
|
—
|
|
|
|
|
31,000
|
|
(2)
|
|
|
2100-2400 Geng Road
(3)
|
|
Greater Stanford/San Francisco
|
|
1/25/18
|
|
4
|
|
Office/lab
|
|
77%
|
|
165,811
|
|
|
|
31,687
|
|
|
—
|
|
|
|
|
136,000
|
|
|
|
|
9965-9995 Summers Ridge Road
(4)
|
|
Sorrento Mesa/San Diego
|
|
1/5/18
|
|
4
|
|
Office/lab
|
|
100%
|
|
316,531
|
|
|
|
—
|
|
|
50,000
|
|
|
|
|
148,650
|
|
|
|
|
Pending | San Diego
|
|
|
|
2Q18
|
|
—
|
|
Office or lab
|
|
N/A
|
|
—
|
|
|
|
—
|
|
|
120,000
|
|
|
|
|
17,000
|
|
|
|
|
Pending | Maryland
|
|
|
|
March 2018
|
|
1
|
|
Office/lab
|
|
31%
|
|
24,846
|
|
|
|
54,485
|
|
|
—
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
507,188
|
|
|
|
666,172
|
|
|
170,000
|
|
|
|
|
375,450
|
|
|
|
|
Additional projected acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
295,000 - 395,000
|
|
|||||||
2018 Guidance range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$670,000 - $770,000
|
|
(1)
|
The first installment of
$18.9 million
related to our November 2016 acquisition was paid during the three months ended June 30, 2017, the second installment of
$18.9 million
was paid in January 2018, and we expect the final installment to be paid during the first half of 2018.
|
(2)
|
Represents a 10% interest in a joint venture with Uber and the Golden State Warriors expected to be formed in February 2018. The joint venture is developing two office buildings aggregating
580,000
RSF, adjacent to the Golden State Warriors arena, which are 100% leased to Uber. Our initial equity contribution of
$31.0 million
will be funded at formation of the joint venture, and the project will transfer from pre-construction to under construction, with initial occupancy expected in 2019.
|
(3)
|
Four-building office campus on
11
acres with
14
in-place leases with a weighted-average remaining lease term of
three years
. We are evaluating options for the conversion of existing office space into office/laboratory space through redevelopment. We expect to provide total estimated costs at completion and related yields in the future.
|
(4)
|
A campus, with on-site amenities, consisting of four operating properties aggregating
316,531
RSF. The property also includes a future development opportunity for an additional 50,000 RSF building. The properties are 100% leased as of December 31, 2017, to Quidel Corporation and Abbott Laboratories, for aggregate terms of 15 years. We expect initial stabilized yields of
8.2%
and
6.3%
(cash basis) with an opportunity to enhance our initial return through future development.
|
|
|
|
|
|
|
Net Operating
Income
(1)
|
|
Net Operating Income
(Cash Basis)
(1)
|
|
Contractual Sales Price
|
|
Gain
|
|
|||||||||
Property/Market/Submarket
|
|
Date of Sale
|
|
RSF
|
|
|
|
|
|
|||||||||||||
360 Longwood Avenue/Greater Boston/Longwood Medical Area
|
|
7/6/17
|
|
203,090
|
|
|
$
|
4,313
|
|
|
$
|
4,168
|
|
|
$
|
65,701
|
|
|
$
|
14,106
|
|
|
9625 Towne Centre Drive/San Diego/University Town Center
(sale of partial interest)
(2)
|
|
12/19/17
|
|
163,648
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
13,470
|
|
|
N/A
|
|
|
|
Campus Point Drive, Development Rights/San Diego/University Town Center
(sale of 45% interest)
(3)
|
|
12/19/17
|
|
318,383
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
12,895
|
|
|
N/A
|
|
|
|
6146 Nancy Ridge Drive/San Diego/Sorrento Mesa
|
|
1/6/17
|
|
21,940
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
3,000
|
|
|
270
|
|
|
|
1401/1413 Research Boulevard/Maryland/Rockville
(4)
|
|
5/17/17
|
|
90,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
7,937
|
|
|
111
|
|
|
|
Operating property in China
|
|
11/27/17
|
|
300,184
|
|
|
$
|
365
|
|
|
$
|
392
|
|
|
|
11,167
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
114,170
|
|
|
$
|
14,487
|
|
|
(1)
|
Represents annualized amounts for the quarter ended prior to the date of sale. Net operating income (cash basis) excludes straight-line rent and amortization of acquired below-market leases.
|
(2)
|
In December 2017, we entered into a joint venture agreement to sell to TIAA a
49.9%
interest in 9625 Towne Centre Drive, a
163,648
RSF redevelopment project undergoing construction in our University Town Center submarket, which is 100% leased to Takeda Pharmaceutical Company Ltd. We received an initial contribution of
$13.5 million
from TIAA for a
35.9%
initial ownership interest as of
December 31, 2017
, and expect TIAA’s ownership interest to increase to
49.9%
by the end of the three months ending June 30, 2018 through additional capital contributions to fund construction.
|
(3)
|
In connection with the agreement to sell a 45% partial interest in 10290 Campus Point Drive to TIAA in 2016, we also agreed to sell to TIAA a 45% partial interest in the related development rights aggregating
318,383
RSF in our Campus Pointe by Alexandria campus at a sales price of $90 per SF. The sale of the development rights was contingent upon the completion of certain entitlement milestones. Upon completion of the entitlement milestones, we completed the 45% partial interest sale of the related development rights in December 2017.
|
(4)
|
Joint venture with a distinguished retail real estate developer for the development of a
90,000
RSF retail shopping center, with remaining construction costs to be funded from a
$25.0 million
non-recourse secured construction loan.
|
100 Binney Street
|
|
510 Townsend Street
|
|
505 Brannan Street, Phase I
|
Greater Boston/Cambridge
|
|
San Francisco/Mission Bay/SoMa
|
|
San Francisco/Mission Bay/SoMa
|
341,776 RSF
|
|
295,333 RSF
|
|
148,146 RSF
|
Bristol-Myers Squibb Company
Facebook, Inc.
|
|
Stripe, Inc.
|
|
Pinterest, Inc.
|
|
|
|
|
|
ARE Spectrum
|
|
5200 Illumina Way, Parking Structure
|
|
400 Dexter Avenue North
|
San Diego/Torrey Pines
|
|
San Diego/University Town Center
|
|
Seattle/Lake Union
|
336,461 RSF
|
|
N/A
|
|
290,111 RSF
|
The Medicines Company
Celgene Corporation Wellspring Biosciences LLC Vertex Pharmaceuticals Incorporated |
|
Illumina, Inc.
|
|
Juno Therapeutics, Inc.
ClubCorp Holdings, Inc.
|
|
|
|
|
|
100 Binney Street
|
|
399 Binney Street
|
|
266 and 275 Second Avenue
|
|
1655 and 1715 Third Street
|
Greater Boston/Cambridge
|
|
Greater Boston/Cambridge
|
|
Greater Boston/Route 128
|
|
San Francisco/Mission Bay/SoMa
|
91,155 RSF
|
|
164,000 RSF
|
|
59,173 RSF
|
|
580,000 RSF
|
Foghorn Therapeutics, Inc.
Sigilon Therapeutics, Inc. Tango Therapeutics, Inc. TCR 2 Therapeutics, Inc. |
|
Rubius Therapeutics, Inc.
Relay Therapeutics, Inc. Celsius Therapeutics, Inc. Marketing |
|
Visterra, Inc.
Marketing |
|
Uber Technologies, Inc.
|
|
|
|
|
|
|
|
213 East Grand Avenue
|
|
279 East Grand Avenue
|
|
201 Haskins Way
|
|
681 Gateway Boulevard
|
San Francisco/South San Francisco
|
|
San Francisco/South San Francisco
|
|
San Francisco/South San Francisco
|
|
San Francisco/South San Francisco
|
300,930 RSF
|
|
199,000 RSF
|
|
280,000 RSF
|
|
126,971 RSF
|
Merck & Co., Inc.
|
|
Multi-Tenant
|
|
Marketing
|
|
Multi-Tenant/Marketing
|
|
|
|
|
|
|
|
Menlo Gateway
|
|
825 and 835 Industrial Road
|
|
9625 Towne Centre Drive
|
San Francisco/Greater Stanford
|
|
San Francisco/Greater Stanford
|
|
San Diego/University Town Center
|
520,988 RSF
|
|
530,000 RSF
|
|
163,648 RSF
|
Facebook, Inc.
|
|
Marketing
|
|
Takeda Pharmaceutical
Company Ltd. |
|
|
|
|
|
9880 Campus Point Drive
|
|
1818 Fairview Avenue East
|
|
9900 Medical Center Drive
|
|
5 Laboratory Drive
|
San Diego/University Town Center
|
|
Seattle/Lake Union
|
|
Maryland/Rockville
|
|
Research Triangle Park/RTP
|
71,510 RSF
|
|
205,000 RSF
|
|
45,039 RSF
|
|
175,000 RSF
|
Marketing
|
|
Multi-Tenant
|
|
Marketing
|
|
Multi-Tenant
|
|
|
|
|
|
|
|
Property/Market/Submarket
|
|
Our Ownership Interest
|
|
Project RSF
|
|
Percentage
|
|
Project
Start
|
|
Occupancy
(1)
|
|||||||||||||||||||
|
|
In Service
|
|
CIP
|
|
Total
|
|
Leased
|
|
Negotiating
|
|
Total
|
|
|
Initial
|
|
Stabilized
|
||||||||||||
Consolidated developments under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
100 Binney Street/Greater Boston/Cambridge
|
|
100
|
%
|
|
|
341,776
|
|
|
91,155
|
|
|
432,931
|
|
100
|
%
|
|
|
—
|
%
|
|
|
100
|
%
|
|
3Q15
|
|
3Q17
|
|
1Q18
|
399 Binney Street/Greater Boston/Cambridge
|
|
100
|
%
|
|
|
—
|
|
|
164,000
|
|
|
164,000
|
|
75
|
%
|
|
|
—
|
%
|
|
|
75
|
%
|
|
4Q17
|
|
4Q18
|
|
2019
|
213 East Grand Avenue/San Francisco/South San Francisco
|
|
100
|
%
|
|
|
—
|
|
|
300,930
|
|
|
300,930
|
|
100
|
%
|
|
|
—
|
%
|
|
|
100
|
%
|
|
2Q17
|
|
1Q19
|
|
2019
|
279 East Grand Avenue/San Francisco/South San Francisco
|
|
100
|
%
|
|
|
—
|
|
|
199,000
|
|
|
199,000
|
|
—
|
%
|
|
|
52
|
%
|
|
|
52
|
%
|
|
4Q17
|
|
2019
|
|
2020
|
|
|
|
|
|
341,776
|
|
|
755,085
|
|
|
1,096,861
|
|
78
|
%
|
|
|
10
|
%
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated redevelopments under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
266 and 275 Second Avenue/Greater Boston/Route 128
|
|
100
|
%
|
|
|
144,584
|
|
|
59,173
|
|
|
203,757
|
|
84
|
%
|
|
|
—
|
%
|
|
|
84
|
%
|
|
3Q17
|
|
2Q18
|
|
2018
|
9900 Medical Center Drive/Maryland/Rockville
|
|
100
|
%
|
|
|
—
|
|
|
45,039
|
|
|
45,039
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
3Q17
|
|
2Q18
|
|
2018
|
5 Laboratory Drive/Research Triangle Park/RTP
|
|
100
|
%
|
|
|
—
|
|
|
175,000
|
|
|
175,000
|
|
15
|
%
|
|
|
24
|
%
|
|
|
39
|
%
|
|
2Q17
|
|
3Q18
|
|
2019
|
9625 Towne Centre Drive/San Diego/University Town Center
|
|
50.1
|
%
|
(2)
|
|
—
|
|
|
163,648
|
|
|
163,648
|
|
100
|
%
|
|
|
—
|
%
|
|
|
100
|
%
|
|
3Q15
|
|
4Q18
|
|
2018
|
|
|
|
|
|
144,584
|
|
|
442,860
|
|
|
587,444
|
|
61
|
%
|
|
|
8
|
%
|
|
|
69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
486,360
|
|
|
1,197,945
|
|
|
1,684,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unconsolidated joint venture development under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Menlo Gateway/San Francisco/Greater Stanford
|
|
(3
|
)
|
|
|
251,995
|
|
|
520,988
|
|
|
772,983
|
|
100
|
%
|
|
|
—
|
%
|
|
|
100
|
%
|
|
4Q17
|
|
4Q19
|
|
4Q19
|
|
|
|
|
|
738,355
|
|
|
1,718,933
|
|
|
2,457,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unconsolidated joint venture development under pre-construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1655 and 1715 Third Street/San Francisco/Mission Bay/SoMa
(4)
|
|
10
|
%
|
|
|
—
|
|
|
580,000
|
|
|
580,000
|
|
100
|
%
|
(4)
|
|
—
|
%
|
|
|
100
|
%
|
|
1Q18
|
|
2019
|
|
2019
|
Total
|
|
|
|
|
738,355
|
|
|
2,298,933
|
|
|
3,037,288
|
|
85
|
%
|
|
|
4
|
%
|
|
|
89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Near-term development projects undergoing marketing and pre-construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
1818 Fairview Avenue East/Seattle/Lake Union
|
|
100
|
%
|
|
|
—
|
|
|
205,000
|
|
|
205,000
|
|
TBD
|
|
TBD
|
|
TBD
|
|
2019
|
|
TBD
|
|||||||
825 and 835 Industrial Road/San Francisco/Greater Stanford
|
|
100
|
%
|
|
|
—
|
|
|
530,000
|
|
|
530,000
|
|
|
|
TBD
|
|||||||||||||
201 Haskins Way/San Francisco/South San Francisco
|
|
100
|
%
|
|
|
—
|
|
|
280,000
|
|
|
280,000
|
|
|
|
||||||||||||||
|
|
|
|
|
—
|
|
|
1,015,000
|
|
|
1,015,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Near-term redevelopment projects undergoing marketing and pre-construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
681 Gateway Boulevard/San Francisco/South San Francisco
(5)
|
|
100
|
%
|
|
|
126,971
|
|
|
—
|
|
|
126,971
|
|
—
|
%
|
|
|
35
|
%
|
(5)
|
|
35
|
%
|
|
4Q18
|
|
2019
|
|
TBD
|
9880 Campus Point Drive/San Diego/University Town Center
(6)
|
|
100
|
%
|
|
|
71,510
|
|
|
—
|
|
|
71,510
|
|
TBD
|
|||||||||||||||
|
|
|
|
|
198,481
|
|
|
—
|
|
|
198,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Near-term projects undergoing marketing and pre-construction
(includes 1655 and 1715 Third Street)
|
|
|
|
|
198,481
|
|
|
1,595,000
|
|
|
1,793,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
|
|
|
936,836
|
|
|
3,313,933
|
|
|
4,250,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Initial occupancy dates are subject to leasing and/or market conditions. Stabilized occupancy may vary depending on single tenancy versus multi-tenancy.
|
(2)
|
Refer to “Dispositions” in the section above within this Item 2 for additional information on our partial interest sale at 9625 Towne Centre Drive.
|
(3)
|
Refer to “Acquisitions: Menlo Gateway” in the section above within this Item 2 for additional information on our acquisition at Menlo Gateway.
|
(4)
|
Refer to “Acquisitions” in the section above within this Item 2 for additional information.
|
(5)
|
The building is 100% occupied through September 2018, after which we expect to redevelop the building from office to office/laboratory space and expand by an additional 15,000 to 30,000 RSF. We have a letter of intent for a lease under negotiation aggregating
45,000
RSF, or
35%
of the project.
|
(6)
|
This building is 100% occupied through January 2018, after which we expect to demolish the existing R&D building and develop a 98,000 RSF Class A office/laboratory property. We expect initial stabilized yields for our entire Campus Pointe by Alexandria campus to be in the low 7% range.
|
|
|
Our Ownership Interest
|
|
|
|
|
|
|
|
|
|
|
Unlevered Yields
|
|||||||||||||||||||
Property/Market/Submarket
|
|
|
In Service
|
|
CIP
|
|
Cost to
Complete
|
|
Total at
Completion
|
|
Initial Stabilized
|
|
Initial Stabilized (Cash Basis)
|
|||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Consolidated developments under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
100 Binney Street/Greater Boston/Cambridge
|
|
100
|
%
|
|
|
$
|
302,933
|
|
|
$
|
80,860
|
|
|
$
|
55,207
|
|
|
|
$
|
439,000
|
|
|
|
|
8.2
|
%
|
|
|
|
7.4
|
%
|
|
399 Binney Street/Greater Boston/Cambridge
|
|
100
|
%
|
|
|
—
|
|
|
85,772
|
|
|
|
88,228
|
|
|
|
|
174,000
|
|
|
|
|
7.3
|
%
|
|
|
|
6.7
|
%
|
|
||
213 East Grand Avenue/San Francisco/South San Francisco
|
|
100
|
%
|
|
|
—
|
|
|
102,803
|
|
|
|
157,197
|
|
|
|
|
260,000
|
|
|
|
|
7.2
|
%
|
|
|
|
6.4
|
%
|
|
||
279 East Grand Avenue/San Francisco/South San Francisco
|
|
100
|
%
|
|
|
—
|
|
|
41,390
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
||
|
|
|
|
|
$
|
302,933
|
|
|
$
|
310,825
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consolidated redevelopments under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
266 and 275 Second Avenue/Greater Boston/Route 128
|
|
100
|
%
|
|
|
$
|
60,658
|
|
|
$
|
11,788
|
|
|
$
|
16,554
|
|
|
|
$
|
89,000
|
|
|
|
|
8.4
|
%
|
|
|
|
7.1
|
%
|
|
9900 Medical Center Drive/Maryland/Rockville
|
|
100
|
%
|
|
|
—
|
|
|
7,639
|
|
|
|
6,661
|
|
|
|
|
14,300
|
|
|
|
|
8.4
|
%
|
|
|
|
8.4
|
%
|
|
||
5 Laboratory Drive/Research Triangle Park/RTP
|
|
100
|
%
|
|
|
—
|
|
|
12,748
|
|
|
|
49,752
|
|
|
|
|
62,500
|
|
|
|
|
7.7
|
%
|
|
|
|
7.6
|
%
|
|
||
9625 Towne Centre Drive/San Diego/University Town Center
|
|
50.1
|
%
|
(1)
|
|
—
|
|
|
40,107
|
|
|
|
52,893
|
|
(1)
|
|
|
93,000
|
|
|
|
|
7.0
|
%
|
|
|
|
7.0
|
%
|
|
||
|
|
|
|
|
60,658
|
|
|
72,282
|
|
|
|
125,860
|
|
|
|
|
258,800
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
|
|
|
$
|
363,591
|
|
|
$
|
383,107
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
|
|
|
|
|
|
|
|
Our Ownership Interest
|
|
|
|
|
|
|
Cost to Complete
|
|
|
|
|
Unlevered Yields
|
|||||||||||||||||||
Property/Market/Submarket
|
|
|
In Service
|
|
CIP
|
|
Construction Loan
|
|
ARE Funding
|
|
Total at
Completion
|
|
Initial Stabilized
|
|
Initial Stabilized (Cash Basis)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Unconsolidated joint venture development under construction and
pre-construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Menlo Gateway/San Francisco/Greater Stanford
|
|
(2)
|
|
|
$
|
49,053
|
|
|
$
|
41,395
|
|
|
|
$
|
124,223
|
|
|
$
|
215,329
|
|
|
|
$
|
430,000
|
|
|
|
6.9%
|
|
|
|
6.3%
|
|
1655 and 1715 Third Street/San Francisco/Mission Bay/SoMa
(3)
|
|
10%
|
|
|
(3)
|
|
(3)
|
|
|
|
37,500
|
|
|
|
40,500
|
|
(3)
|
|
|
78,000
|
|
|
|
7.8%
|
|
|
|
6.0%
|
|
||||
|
|
|
|
|
49,053
|
|
|
41,395
|
|
|
|
|
161,723
|
|
|
|
255,829
|
|
|
|
|
508,000
|
|
|
|
|
|
|
|
|
|
||
Consolidated developments/redevelopments under construction
|
|
|
|
|
363,591
|
|
|
383,107
|
|
|
|
|
—
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
|
|
|
|
|
||
Total
|
|
|
|
|
$
|
412,644
|
|
|
$
|
424,502
|
|
|
|
$
|
161,723
|
|
|
|
TBD
|
|
|
|
|
TBD
|
|
|
|
|
|
(1)
|
We expect to receive contributions from our joint venture partner of
$30.7 million
to fund construction. Refer to “Dispositions” in the section above within this Item 2 for additional information on our partial interest sale at 9625 Towne Centre Drive.
|
(2)
|
Refer to “Acquisitions: Menlo Gateway” in the section above within this Item 2 for additional information on our acquisition at Menlo Gateway.
|
(3)
|
Refer to “Acquisitions” in the section above within this Item 2 for additional information.
|
325 Binney Street
|
|
88 Bluxome Street
|
|
505 Brannan Street, Phase II
|
|
960 Industrial Road
|
|
Alexandria Center
®
for Life Science
|
Greater Boston/Cambridge
|
|
San Francisco/Mission Bay/SoMa
|
|
San Francisco/Mission Bay/SoMa
|
|
San Francisco/Greater Stanford
|
|
New York City/Manhattan
|
208,965 RSF
|
|
1,070,925 RSF
|
|
165,000 RSF
|
|
500,000 RSF
|
|
420,000 RSF
|
|
|
|
|
|
|
|
|
|
5200 Illumina Way
|
|
Campus Point Drive
|
|
1150 Eastlake Avenue East
|
|
1165/1166 Eastlake Avenue East
|
|
9800 Medical Center Drive
|
San Diego/University Town Center
|
|
San Diego/University Town Center
|
|
Seattle/Lake Union
|
|
Seattle/Lake Union
|
|
Maryland/Rockville
|
386,044 RSF
|
|
318,383 RSF
|
|
260,000 RSF
|
|
106,000 RSF
|
|
180,000 RSF
|
|
|
|
|
|
|
|
|
|
Property/Submarket
|
|
Our
Ownership
Interest
|
|
Book Value
|
|
Square Footage
|
|
||||||||||||||||||||||||
|
|
|
|
|
Development Projects
|
|
|
|
|||||||||||||||||||||||
|
|
|
Undergoing
Construction |
|
Near-Term Projects Undergoing Marketing and Pre-Construction
|
|
Intermediate-Term Development
|
|
Future Development
|
|
Total
(1)
|
|
|||||||||||||||||||
San Diego
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Undergoing construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
9625 Towne Centre Drive/University Town Center
|
|
|
50.1
|
%
|
(2)
|
|
|
$
|
40,107
|
|
|
|
163,648
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
163,648
|
|
|
|
Intermediate-term development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
5200 Illumina Way/University Town Center
|
|
|
100
|
%
|
|
|
|
11,562
|
|
|
|
—
|
|
|
—
|
|
|
|
386,044
|
|
|
|
—
|
|
|
|
386,044
|
|
|
||
Campus Point Drive/University Town Center
|
|
|
55
|
%
|
|
|
|
14,890
|
|
|
|
—
|
|
|
—
|
|
|
|
318,383
|
|
|
|
—
|
|
|
|
318,383
|
|
|
||
Future development projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Vista Wateridge/Sorrento Mesa
|
|
|
100
|
%
|
|
|
|
3,971
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
163,000
|
|
|
|
163,000
|
|
|
||
Other future projects
|
|
|
100
|
%
|
|
|
|
30,295
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
259,895
|
|
|
|
259,895
|
|
|
||
|
|
|
|
|
|
|
100,825
|
|
|
|
163,648
|
|
|
—
|
|
|
|
704,427
|
|
|
|
422,895
|
|
|
|
1,290,970
|
|
|
|||
Seattle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Near-term projects undergoing marketing and pre-construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1818 Fairview Avenue East/Lake Union
|
|
|
100
|
%
|
|
|
|
32,482
|
|
|
|
—
|
|
|
205,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
205,000
|
|
|
||
Intermediate-term development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1150 Eastlake Avenue East/Lake Union
|
|
|
100
|
%
|
|
|
|
19,269
|
|
|
|
—
|
|
|
—
|
|
|
|
260,000
|
|
|
|
—
|
|
|
|
260,000
|
|
|
||
1165/1166 Eastlake Avenue East/Lake Union
|
|
|
100
|
%
|
|
|
|
15,115
|
|
|
|
—
|
|
|
—
|
|
|
|
106,000
|
|
|
—
|
|
—
|
|
|
|
106,000
|
|
|
|
|
|
|
|
|
|
|
66,866
|
|
|
|
—
|
|
|
205,000
|
|
|
|
366,000
|
|
|
|
—
|
|
|
|
571,000
|
|
|
|||
Maryland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Undergoing construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
9900 Medical Center Drive/Rockville
|
|
|
100
|
%
|
|
|
|
7,639
|
|
|
|
45,039
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,039
|
|
|
||
Intermediate-term development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
9800 Medical Center Drive/Rockville
|
|
|
100
|
%
|
|
|
|
7,217
|
|
|
|
—
|
|
|
—
|
|
|
|
180,000
|
|
|
|
—
|
|
|
|
180,000
|
|
|
||
Future development projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other future projects
|
|
|
100
|
%
|
|
|
|
4,035
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
61,000
|
|
|
|
61,000
|
|
|
||
|
|
|
|
|
|
|
18,891
|
|
|
|
45,039
|
|
|
—
|
|
|
|
180,000
|
|
|
|
61,000
|
|
|
|
286,039
|
|
|
|||
Research Triangle Park
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Undergoing construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
5 Laboratory Drive/Research Triangle Park
|
|
|
100
|
%
|
|
|
|
12,748
|
|
|
|
175,000
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
175,000
|
|
|
||
Future development projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
6 Davis Drive/Research Triangle Park
|
|
|
100
|
%
|
|
|
|
16,671
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
||
Other future projects
|
|
|
100
|
%
|
|
|
|
4,149
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
76,262
|
|
|
|
76,262
|
|
|
||
|
|
|
|
|
|
|
33,568
|
|
|
|
175,000
|
|
|
—
|
|
|
|
—
|
|
|
|
1,076,262
|
|
|
|
1,251,262
|
|
|
|||
Non-cluster markets – other future projects
|
|
|
100
|
%
|
|
|
|
15,376
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
571,705
|
|
|
|
571,705
|
|
|
||
|
|
|
|
|
|
|
$
|
1,051,330
|
|
|
|
1,718,933
|
|
|
1,595,000
|
|
|
|
3,798,961
|
|
|
|
2,639,437
|
|
|
|
9,752,331
|
|
|
(1)
|
Total pipeline SF represents operating RSF plus incremental SF targeted for near-term and intermediate-term development.
|
(2)
|
Refer to “Dispositions” in the section above within this Item 2 for additional information on our partial interest sale at 9625 Towne Centre Drive.
|
(1)
|
Includes revenue-enhancing projects and non-revenue-enhancing capital expenditures.
|
Projected Construction Spending
|
|
Year Ending
December 31, 2018 |
|
||||||||
Development and redevelopment projects
|
|
$
|
814,000
|
|
|
||||||
Investments in unconsolidated real estate joint ventures
|
|
|
149,000
|
|
|
||||||
Contributions from noncontrolling interests (consolidated real estate joint ventures)
|
|
|
(37,000
|
)
|
|
||||||
Generic laboratory infrastructure/building improvement projects
|
|
|
153,000
|
|
(1)
|
||||||
Non-revenue-enhancing capital expenditures and tenant improvements
|
|
|
21,000
|
|
|
||||||
Total projected construction spending
|
|
|
1,100,000
|
|
|
||||||
Guidance range
|
|
$
|
1,050,000
|
|
–
|
$
|
1,150,000
|
|
|
(1)
|
Includes $25 million to $30 million of projected construction spending related to the demolition of the existing R&D building and development of a new 98,000 RSF Class A office/laboratory property at 9880 Campus Point Drive in our University Town Center submarket.
|
Non-Revenue-Enhancing Capital Expenditures, Tenant Improvements, and Leasing Costs
(1)
|
|
Year Ended December 31, 2017
|
|
Recent Average
per RSF (2) |
|||||||||||
|
Amount
|
|
RSF
|
|
Per RSF
|
|
|||||||||
Non-revenue-enhancing capital expenditures
|
|
$
|
7,900
|
|
|
19,156,245
|
|
|
$
|
0.41
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|||||||
Tenant improvements and leasing costs:
|
|
|
|
|
|
|
|
|
|||||||
Re-tenanted space
|
|
$
|
17,437
|
|
|
688,722
|
|
|
$
|
25.32
|
|
|
$
|
18.47
|
|
Renewal space
|
|
29,884
|
|
|
1,836,377
|
|
|
16.27
|
|
|
10.89
|
|
|||
Total tenant improvements and leasing costs/weighted average
|
|
$
|
47,321
|
|
|
2,525,099
|
|
|
$
|
18.74
|
|
(3)
|
$
|
13.20
|
|
(1)
|
Excludes amounts that are recoverable from tenants, revenue-enhancing, or related to properties that have undergone redevelopment.
|
(2)
|
Represents the average for the five years ended
December 31, 2017
.
|
(3)
|
Includes approximately
$12.3 million
, or
$16.92
per RSF, of leasing commissions related to lease renewals and re-leasing space for seven leases in our Greater Boston and San Francisco markets with a weighted-average lease term of
10
years and rental rate increases of
33.3%
and
19.4%
(cash basis).
|
|
|
2017
|
|
2016
|
||||||||||||
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Second Quarter
|
|
First Quarter
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Second Quarter
|
|
First Quarter
|
High
|
|
$134.37
|
|
$123.89
|
|
$122.28
|
|
$120.96
|
|
$114.02
|
|
$114.67
|
|
$103.60
|
|
$91.25
|
Low
|
|
$118.42
|
|
$116.20
|
|
$109.85
|
|
$106.89
|
|
$101.51
|
|
$100.53
|
|
$89.43
|
|
$70.69
|
Per share distribution
|
|
$0.90
|
|
$0.86
|
|
$0.86
|
|
$0.83
|
|
$0.83
|
|
$0.80
|
|
$0.80
|
|
$0.80
|
|
Common Stock
|
|
Series D Convertible Preferred Stock
|
|
Series E Redeemable Preferred Stock
|
||||||||||||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Ordinary income
|
62.1
|
%
|
|
25.2
|
%
|
|
50.1
|
%
|
|
85.3
|
%
|
|
44.8
|
%
|
|
54.4
|
%
|
|
85.3
|
%
|
|
44.8
|
%
|
|
54.4
|
%
|
|||||||||
Return of capital
|
27.2
|
|
|
43.9
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Capital gains at 25%
|
0.7
|
|
|
—
|
|
|
8.5
|
|
|
1.0
|
|
|
—
|
|
|
9.2
|
|
|
1.0
|
|
|
—
|
|
|
9.2
|
|
|||||||||
Capital gains at 20%
|
10.0
|
|
|
30.9
|
|
|
33.5
|
|
|
13.7
|
|
|
55.2
|
|
|
36.4
|
|
|
13.7
|
|
|
55.2
|
|
|
36.4
|
|
|||||||||
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends declared
|
$
|
3.45
|
|
|
$
|
3.23
|
|
|
$
|
3.05
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
$
|
0.4031
|
|
|
$
|
1.6125
|
|
|
$
|
1.6125
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(Dollars in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental
|
|
$
|
863,181
|
|
|
$
|
673,820
|
|
|
$
|
608,824
|
|
|
$
|
544,153
|
|
|
$
|
467,764
|
|
Tenant recoveries
|
|
259,144
|
|
|
223,655
|
|
|
209,063
|
|
|
173,480
|
|
|
150,095
|
|
|||||
Other income
|
|
5,772
|
|
|
24,231
|
|
|
25,587
|
|
|
9,244
|
|
|
13,292
|
|
|||||
Total revenues
|
|
1,128,097
|
|
|
921,706
|
|
|
843,474
|
|
|
726,877
|
|
|
631,151
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
|
325,609
|
|
|
278,408
|
|
|
261,232
|
|
|
219,164
|
|
|
189,039
|
|
|||||
General and administrative
|
|
75,009
|
|
|
63,884
|
|
|
59,621
|
|
|
53,530
|
|
|
48,520
|
|
|||||
Interest
|
|
128,645
|
|
|
106,953
|
|
|
105,813
|
|
|
79,299
|
|
|
67,952
|
|
|||||
Depreciation and amortization
|
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|
224,096
|
|
|
189,123
|
|
|||||
Impairment of real estate
|
|
203
|
|
|
209,261
|
|
(1)
|
23,250
|
|
|
51,675
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt
|
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|
525
|
|
|
1,992
|
|
|||||
Total expenses
|
|
949,700
|
|
|
975,126
|
|
|
711,394
|
|
|
628,289
|
|
|
496,626
|
|
|||||
Equity in earnings (losses) of unconsolidated real estate JVs
|
|
15,426
|
|
|
(184
|
)
|
|
1,651
|
|
|
554
|
|
|
—
|
|
|||||
Gain on sales of real estate – rental properties
|
|
270
|
|
|
3,715
|
|
|
12,426
|
|
|
—
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
|
194,093
|
|
|
(49,889
|
)
|
|
146,157
|
|
|
99,142
|
|
|
134,525
|
|
|||||
(Loss) income from discontinued operations
(1)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
1,233
|
|
|
900
|
|
|||||
Gain on sales of real estate – land parcels
|
|
111
|
|
|
90
|
|
|
—
|
|
|
6,403
|
|
|
4,824
|
|
|||||
Net income (loss)
|
|
194,204
|
|
|
(49,799
|
)
|
|
146,114
|
|
|
106,778
|
|
|
140,249
|
|
|||||
Net income attributable to noncontrolling interests
|
|
(25,111
|
)
|
|
(16,102
|
)
|
|
(1,897
|
)
|
|
(5,204
|
)
|
|
(4,032
|
)
|
|||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
|
169,093
|
|
|
(65,901
|
)
|
|
144,217
|
|
|
101,574
|
|
|
136,217
|
|
|||||
Dividends on preferred stock
|
|
(7,666
|
)
|
|
(20,223
|
)
|
|
(24,986
|
)
|
|
(25,698
|
)
|
|
(25,885
|
)
|
|||||
Preferred stock redemption charge
|
|
(11,279
|
)
|
|
(61,267
|
)
|
|
—
|
|
|
(1,989
|
)
|
|
—
|
|
|||||
Net income attributable to unvested restricted stock awards
|
|
(4,753
|
)
|
|
(3,750
|
)
|
|
(2,364
|
)
|
|
(1,774
|
)
|
|
(1,581
|
)
|
|||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
|
$
|
145,395
|
|
|
$
|
(151,141
|
)
|
|
$
|
116,867
|
|
|
$
|
72,113
|
|
|
$
|
108,751
|
|
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
$
|
0.99
|
|
|
$
|
1.59
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.01
|
|
|||||
Net income (loss) per share
|
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
$
|
1.01
|
|
|
$
|
1.60
|
|
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
$
|
1.01
|
|
|
$
|
1.60
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) per share
|
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
$
|
1.01
|
|
|
$
|
1.60
|
|
Weighted-average shares of common stock outstanding – basic
|
|
91,546,495
|
|
|
76,102,617
|
|
|
71,528,843
|
|
|
71,169,694
|
|
|
68,038,195
|
|
|||||
Weighted-average shares of common stock outstanding – diluted
|
|
92,063,276
|
|
|
76,102,617
|
|
|
71,528,843
|
|
|
71,169,694
|
|
|
68,038,195
|
|
|||||
Dividends declared per share of common stock
|
|
$
|
3.45
|
|
|
$
|
3.23
|
|
|
$
|
3.05
|
|
|
$
|
2.88
|
|
|
$
|
2.61
|
|
Balance Sheet Data (at year end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in real estate
|
|
$
|
10,298,019
|
|
|
$
|
9,077,972
|
|
|
$
|
7,629,922
|
|
|
$
|
7,108,610
|
|
|
$
|
6,730,270
|
|
Total assets
|
|
$
|
12,103,953
|
|
|
$
|
10,354,888
|
|
|
$
|
8,881,017
|
|
|
$
|
8,109,038
|
|
|
$
|
7,503,965
|
|
Total debt
|
|
$
|
4,764,807
|
|
|
$
|
4,164,025
|
|
|
$
|
3,935,692
|
|
|
$
|
3,651,581
|
|
|
$
|
3,035,262
|
|
Total liabilities
|
|
$
|
5,620,784
|
|
|
$
|
4,972,610
|
|
|
$
|
4,587,053
|
|
|
$
|
4,199,480
|
|
|
$
|
3,525,024
|
|
Redeemable noncontrolling interests
|
|
$
|
11,509
|
|
|
$
|
11,307
|
|
|
$
|
14,218
|
|
|
$
|
14,315
|
|
|
$
|
14,444
|
|
Total equity
|
|
$
|
6,471,660
|
|
|
$
|
5,370,971
|
|
|
$
|
4,279,746
|
|
|
$
|
3,895,243
|
|
|
$
|
3,964,497
|
|
(1)
|
Refer to Note 2 – “Summary of Significant Accounting Policies” to our consolidated financial statements under Item 15 in this annual report on Form 10-K regarding discontinued operations to our consolidated financial statements.
|
|
|
Year Ended December 31,
|
|
||||||||||||||||||
(Dollars in thousands, except per occupied RSF amounts)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
450,325
|
|
|
$
|
392,501
|
|
|
$
|
342,611
|
|
|
$
|
334,325
|
|
|
$
|
312,727
|
|
|
Net cash used in investing activities
|
|
$
|
1,738,126
|
|
|
$
|
1,496,628
|
|
|
$
|
722,395
|
|
|
$
|
634,829
|
|
|
$
|
591,375
|
|
|
Net cash provided by financing activities
|
|
$
|
1,415,427
|
|
|
$
|
1,105,521
|
|
|
$
|
419,126
|
|
|
$
|
331,312
|
|
|
$
|
197,570
|
|
|
Number of properties – North America
|
|
213
|
|
|
199
|
|
|
191
|
|
|
184
|
|
|
175
|
|
|
|||||
RSF (including development and redevelopment projects under construction) – North America
|
|
21,981,133
|
|
19,869,729
|
|
18,874,070
|
|
17,356,818
|
|
16,092,344
|
|
||||||||||
Occupancy of operating properties – North America
|
|
96.8%
|
|
96.6%
|
|
97.2%
|
|
97.0%
|
|
96.0%
|
|
||||||||||
Occupancy of operating and redevelopment properties – North America
|
|
94.7%
|
|
95.7%
|
|
93.7%
|
|
96.1%
|
|
96.0%
|
|
||||||||||
Annual rental revenue per occupied RSF – North America
|
|
$
|
48.01
|
|
|
$
|
45.15
|
|
|
$
|
41.17
|
|
|
$
|
38.68
|
|
|
$
|
37.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of net income (loss) attributable to Alexandria’s common stockholders to funds from operations attributable to Alexandria’s common stockholders – diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
|
$
|
145,395
|
|
|
$
|
(151,141
|
)
|
|
$
|
116,867
|
|
|
$
|
72,113
|
|
|
$
|
108,751
|
|
|
Depreciation and amortization
(1)
|
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|
224,096
|
|
|
190,778
|
|
|
|||||
Noncontrolling share of depreciation and amortization from consolidated real estate JVs
|
|
(14,762
|
)
|
|
(9,349
|
)
|
|
(372
|
)
|
|
—
|
|
|
—
|
|
|
|||||
Our share of depreciation and amortization from unconsolidated real estate JVs
|
|
1,551
|
|
|
2,707
|
|
|
1,734
|
|
|
329
|
|
|
—
|
|
|
|||||
(Gain) loss on sales of real estate – rental properties
|
|
(270
|
)
|
|
(3,715
|
)
|
|
(12,426
|
)
|
|
(1,838
|
)
|
(2)
|
121
|
|
(2)
|
|||||
Our share of gain on sales of real estate from unconsolidated real estate JVs
|
|
(14,106
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Gain on sales of real estate – land parcels
|
|
(111
|
)
|
|
(90
|
)
|
|
—
|
|
|
(6,403
|
)
|
|
(4,824
|
)
|
|
|||||
Impairment of real estate – rental properties
|
|
203
|
|
|
98,194
|
|
|
23,250
|
|
|
26,975
|
|
|
—
|
|
|
|||||
Allocation to unvested restricted stock awards
|
|
(2,920
|
)
|
|
—
|
|
|
(1,758
|
)
|
|
(690
|
)
|
|
36
|
|
|
|||||
Funds from operations attributable to Alexandria’s common stockholders – basic
(3)
|
|
531,763
|
|
|
249,996
|
|
|
388,584
|
|
|
314,582
|
|
|
294,862
|
|
|
|||||
Effect of dilutive securities and assumed conversion:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assumed conversion of unsecured senior convertible notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|||||
Funds from operations attributable to Alexandria’s common stockholders – diluted
(3)
|
|
531,763
|
|
|
249,996
|
|
|
388,584
|
|
|
314,582
|
|
|
294,877
|
|
|
|||||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,446
|
|
|
|||||
Non-real estate investment income
|
|
—
|
|
|
(4,361
|
)
|
|
(13,109
|
)
|
|
—
|
|
|
—
|
|
|
|||||
Impairments of land parcels and non-real estate investments
|
|
8,296
|
|
|
113,539
|
|
|
—
|
|
|
24,700
|
|
|
853
|
|
|
|||||
Loss on early extinguishment of debt
|
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|
525
|
|
|
1,992
|
|
|
|||||
Preferred stock redemption charge
|
|
11,279
|
|
|
61,267
|
|
|
—
|
|
|
1,989
|
|
|
—
|
|
|
|||||
Allocation to unvested restricted stock awards
|
|
(321
|
)
|
|
(2,356
|
)
|
|
110
|
|
|
(226
|
)
|
|
(35
|
)
|
|
|||||
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted
(3)
|
|
$
|
554,468
|
|
|
$
|
421,315
|
|
|
$
|
375,774
|
|
|
$
|
341,570
|
|
|
$
|
299,133
|
|
|
(1)
|
Includes depreciation and amortization classified in discontinued operations related to assets held for sale (for the periods prior to when such assets were designated as held for sale).
|
(2)
|
(Gain) loss on sales of real estate – rental properties recognized prior to the fourth quarter of 2014 is classified in (loss) income from discontinued operations in the consolidated statements of operations.
|
(3)
|
Refer to “Funds From Operations and Funds From Operations, as Adjusted Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders” in the “Non-GAAP Measures” section under Item 7 in this annual report on Form 10-K.
|
•
|
Total revenues of
$1.1 billion
, up
22.4%
, for the
year ended December 31, 2017
, compared to
$921.7 million
for the
year ended December 31, 2016
;
|
•
|
Executed key leases during the
year ended December 31, 2017
:
|
RSF Leased
|
|
Property
|
|
Submarket
|
|
Tenant
|
520,988
|
|
Menlo Gateway
|
|
Greater Stanford
|
|
Facebook, Inc.
|
302,626
|
|
100 and 200 Technology Square
|
|
Cambridge
|
|
Novartis AG
|
170,244
|
|
901 and 951 Gateway Boulevard
|
|
South San Francisco
|
|
Theravance Biopharma U.S., Inc.
|
163,648
|
|
9625 Towne Centre Drive
|
|
University Town Center
|
|
Takeda Pharmaceutical Company Ltd.
|
155,685
|
|
500 Forbes Boulevard
|
|
South San Francisco
|
|
Genentech, Inc.
|
153,203
|
|
455 Mission Bay Boulevard South
|
|
Mission Bay/SoMa
|
|
Nektar Therapeutics
|
130,803
|
|
100 Binney Street
|
|
Cambridge
|
|
Facebook, Inc.
|
109,780
|
|
13112 Evening Creek Drive
|
|
I-15 Corridor
|
|
Laboratory Corporation of America
|
•
|
Continued substantial leasing activity and strong rental rate growth, in light of minimal contractual lease expirations for 2017, and a highly leased value-creation pipeline:
|
|
|
2017
|
|
Total leasing activity – RSF
|
|
4,569,182
|
|
Lease renewals and re-leasing of space:
|
|
|
|
Rental rate increases
|
|
25.1%
|
|
Rental rate increases (cash basis)
|
|
12.7%
|
|
RSF
|
|
2,525,099
|
|
•
|
Same property net operating income growth of
3.1%
and
6.8%
(cash basis) for the
year ended December 31, 2017
, compared to the
year ended December 31, 2016
.
|
•
|
Development projects, all 100% leased and placed into service during the
year ended December 31, 2017
:
|
Property
|
|
Submarket
|
|
RSF
|
|
|
Tenant
|
|
100 Binney Street
|
|
Cambridge
|
|
341,776
|
|
|
|
Bristol-Myers Squibb Company; Facebook, Inc.
|
510 Townsend Street
|
|
Mission Bay/SoMa
|
|
295,333
|
|
|
|
Stripe, Inc.
|
400 Dexter Avenue North
|
|
Lake Union
|
|
290,111
|
|
|
|
Juno Therapeutics, Inc.; ClubCorp Holdings, Inc.
|
ARE Spectrum
|
|
Torrey Pines
|
|
233,523
|
|
|
|
The Medicines Company; Celgene Corporation; Wellspring Biosciences LLC; Vertex Pharmaceuticals Incorporated
|
505 Brannan Street
|
|
Mission Bay/SoMa
|
|
148,146
|
|
|
|
Pinterest, Inc.
|
5200 Illumina Way, parking structure
|
|
University Town Center
|
|
N/A
|
|
|
|
Illumina, Inc.
|
•
|
Significant contractual near-term growth in annual cash rents of
$96 million
, of which
$78 million
will commence through the fourth quarter of 2018 (
$26 million
in the first quarter of 2018,
$31 million
in the second quarter of 2018,
$10 million
in third quarter of 2018, and
$11 million
in the fourth quarter of 2018). This is related to development and redevelopment projects recently placed into service that are currently generating rental revenue.
|
•
|
80%
leased on
2.3 million
RSF (development and redevelopment projects undergoing construction and
580,000
RSF undergoing pre-construction).
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|||||||||
Net income (loss) attributable to Alexandria’s common stockholders – diluted:
|
|
|
|
|
|
|
|
|
|||||||
In Millions
|
|
$
|
145.4
|
|
|
$
|
(151.1
|
)
|
|
$
|
296.5
|
|
|
N/A
|
|
Per Share
|
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
3.57
|
|
|
N/A
|
|
Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:
|
|
|
|
|
|
|
|
|
|||||||
In Millions
|
|
$
|
554.5
|
|
|
$
|
421.3
|
|
|
$
|
133.2
|
|
|
31.6
|
%
|
Per Share
|
|
$
|
6.02
|
|
|
$
|
5.51
|
|
|
$
|
0.51
|
|
|
9.3
|
%
|
•
|
Percentage of annual rental revenue in effect from:
|
•
|
Investment-grade or large cap tenants:
55%
|
•
|
Class A properties in AAA locations:
80%
|
•
|
Occupancy in North America:
96.8%
|
•
|
Operating margin:
71%
|
•
|
Adjusted EBITDA margin:
68%
|
•
|
Weighted-average remaining lease term of top 20 tenants:
13.4
years
|
•
|
See “Strong Internal Growth” in the above section for information on our leasing activity, rental rate growth, total revenue, and same property net operating income growth.
|
•
|
In January 2018, Alexandria Venture Investments launched the Alexandria Seed Capital Platform, an innovative seed-stage life science funding model and extension of Alexandria LaunchLabs, which will focus on providing seed-stage financing in transformative life science investments.
|
•
|
In November 2017, Joel S. Marcus, Chairman, Chief Executive Officer & Founder, was elected as a member of Nareit’s 2018 Executive Board.
|
•
|
Refer to “Leader in the Light award” under the “Executive Summary” section earlier within this Item 7.
|
•
|
In November 2017, Alexandria LaunchLabs
®
- New York City was certified as the world’s first WELL laboratory, and achieved Gold-level recognition from the International WELL Building Institute.
|
•
|
In November 2017, the Center for Active Design, an international nonprofit organization and operator of the Fitwel Certification System, appointed us to the Fitwel Leadership Advisory Board as a founding member.
|
•
|
In January 2018, we were awarded a 2017 Governor’s Environmental and Economic Leadership Award, California’s highest environmental honor recognizing entities that have demonstrated exceptional leadership and made notable contributions to conserving precious natural resources while promoting economic growth.
|
•
|
During three months ended
December 31, 2017
, we obtained LEED Gold certifications for properties within our Alexandria Center
®
at Kendall Square campus at 50 and 60 Binney Street and 11 Hurley Street in our Cambridge submarket.
|
•
|
49%
of annual rental revenue expected from LEED
®
certified projects upon completion of
12
in-process projects.
|
Favorable Lease Structure
(1)
|
|
Same Property Net Operating Income Growth
|
|
|||||||
|
|
|
|
|
||||||
Stable cash flows
|
|
97%
|
|
|
||||||
Percentage of triple
net leases
|
|
|
||||||||
Increasing cash flows
|
|
95%
|
|
|
||||||
Percentage of leases containing annual rent escalations
|
|
|
||||||||
Lower capex burden
|
|
94%
|
|
|
||||||
Percentage of leases providing for the recapture of capital expenditures
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Margins
(2)
|
|
Rental Rate Growth:
Renewed/Re-Leased Space |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
Operating
|
|
|
||||
68%
|
|
|
|
71%
|
|
|
||||
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
(1)
|
Percentages calculated based on RSF as of
December 31, 2017
.
|
(2)
|
Represents the
year ended December 31, 2017
.
|
|
As of
|
||
|
December 31, 2017
|
||
Total market capitalization
|
$
|
17.9
|
billion
|
Liquidity
|
$
|
2.0
|
billion
|
|
|
||
Net debt to Adjusted EBITDA:
|
|
||
Quarter annualized
|
5.5x
|
|
|
Trailing 12 months
|
5.9x
|
|
|
|
|
||
Fixed-charge coverage ratio:
|
|
||
Quarter annualized
|
4.2x
|
|
|
Trailing 12 months
|
4.1x
|
|
|
|
|
||
Unhedged variable-rate debt as a percentage of total debt
|
1%
|
|
|
Current and future value-creation pipeline as a percentage of gross investments in real estate in North America
|
9%
|
|
Issuances of unsecured senior notes
|
|
|
|
|
|
|
|
|
|
Date
|
|
Maturity Date
|
|
Interest Rate
|
|
Face Amount
|
|
Net Proceeds
|
|
March
|
|
2028
|
|
3.95%
|
|
$425.0
|
|
$420.5
|
|
|
November
|
|
2025
|
|
3.45%
|
|
$600.0
|
|
$593.5
|
|
|
|
|
|
|
|
$1,025.0
|
|
$1,014.0
|
(1)
|
As a result of this debt repayment,
$200 million
of principal remains outstanding as of
December 31, 2017
.
|
Real estate asset sales
|
|
|
|
|
|
|
Date
|
|
Property/Market/Submarket
|
|
Proceeds
|
|
January
|
|
6146 Nancy Ridge Drive/San Diego/Sorrento Mesa
|
|
$3.0
|
|
July
|
|
360 Longwood Avenue/Greater Boston/Longwood Medical Area
|
|
$38.6
|
|
November
|
|
Operating property in China
|
|
$11.2
|
|
December
|
|
9625 Towne Centre Drive/San Diego/University Town Center
(sale of 49.9% interest) (1) |
|
$13.5
|
|
December
|
|
Campus Point Drive, Development Rights/San Diego/University Town Center (sale of 45% interest)
(1)
|
|
$12.9
|
|
|
|
|
|
$79.2
|
(1)
|
See the “Real Estate Asset Sales” section under Item 2 of this annual report on Form 10-K for additional information.
|
Issuances of equity
|
|
|
|
|
|
|
|
|
Date
|
|
Program
|
|
Number of Shares Sold
|
|
Net Proceeds
|
|
March
|
|
Overnight
|
|
2,100,000
|
|
$217.8
|
|
December
|
|
Forward
|
|
4,755,000
|
|
$484.6
|
|
January - December
|
|
ATM
|
|
4,839,101
|
|
$573.0
|
|
|
|
|
|
11,694,101
|
|
$1,275.4
|
(1)
|
Represents the complete redemption of all outstanding shares of our Series E cumulative redeemable preferred stock.
|
•
|
Allocate capital to Class A properties located in collaborative life science and technology campuses in AAA urban innovation clusters;
|
•
|
Continue to improve our credit profile;
|
•
|
Maintain access to diverse sources of capital, which include cash flows from operating activities after dividends, incremental debt supported by our growth in EBITDA, asset sales, joint venture capital, and other capital such as sales of equity;
|
•
|
Maintain commitment to long-term capital to fund growth;
|
•
|
Prudently ladder debt maturities;
|
•
|
Reduce short-term variable-rate debt
|
•
|
Prudently manage equity investments to support corporate-level investment strategies;
|
•
|
Maintain significant balance sheet liquidity; and
|
•
|
Maintain a stable and flexible balance sheet.
|
Public/Private Mix (Cost)
|
|
Tenant/Non-Tenant Mix (Cost)
|
|
|
|
|
Investments (in millions)
|
|
|
260
|
||
Public investments:
|
|
|
|||
Cost basis
|
$
|
60
|
|
|
Holdings
|
Net unrealized gains
|
49
|
|
|
$1.8M
|
|
Private investments
|
414
|
|
|
||
|
$
|
523
|
|
|
|
|
|
|
Average Investment
Amount |
(1)
|
In
2017
, we completed the sale of a
49%
condominium interest at our 360 Longwood Ave unconsolidated real estate joint venture. We recognized our share of the gain aggregating
$14.1 million
in our equity in earnings of unconsolidated real estate joint ventures in our consolidated statements of operations during the
year ended December 31, 2017
.
|
(2)
|
Refer to Note 3 – “Investments in Real Estate” under the “Sales of Real Estate Assets and Impairment Charges” section to our consolidated financial statements under Item 15 of this annual report on Form 10-K for more information.
|
(3)
|
Non-real estate investments impairment of approximately
$8.3 million
relate primarily to three investments for the
year ended December 31, 2017
, and
$3.1 million
relate to one investment for the
year ended December 31, 2016
.
|
(4)
|
The preferred stock redemption charge for the
year ended December 31, 2017
relates to our repurchase of
501,115
outstanding shares of our Series D Convertible Preferred Stock and the redemption of all
5.2 million
outstanding shares of our Series E Redeemable Preferred Stock. The preferred stock redemption charge for the
year ended December 31, 2016
relates to our repurchase of
6.0 million
outstanding shares of our Series D Convertible Preferred Stock.
|
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||
Percentage change in net operating income over comparable period from prior year
|
|
3.1%
|
|
|
4.7%
|
|
Percentage change in net operating income (cash basis) over comparable period from prior year
|
|
6.8%
|
|
|
6.0%
|
|
Operating margin
|
|
70%
|
|
|
70%
|
|
Number of Same Properties
|
|
166
|
|
|
159
|
|
RSF
|
|
14,414,434
|
|
13,521,141
|
||
Occupancy – current-period average
|
|
96.0%
|
|
97.1%
|
||
Occupancy – same-period prior-year average
|
|
97.2%
|
|
96.3%
|
Development – under construction
|
|
Properties
|
|
|
213 East Grand Avenue
|
|
1
|
|
|
100 Binney Street
|
|
1
|
|
|
399 Binney Street
|
|
1
|
|
|
279 East Grand Avenue
|
|
1
|
|
|
Menlo Gateway
(unconsolidated real estate joint venture)
|
|
3
|
|
|
|
|
7
|
|
|
Development – placed into service after January 1, 2016
|
|
Properties
|
|
|
50 and 60 Binney Street
|
|
2
|
|
|
430 East 29th Street
|
|
1
|
|
|
5200 Illumina Way, Building 6
|
|
1
|
|
|
4796 Executive Drive
|
|
1
|
|
|
360 Longwood Avenue
(unconsolidated real estate joint venture)
|
|
1
|
|
|
1455 and 1515 Third Street
|
|
2
|
|
|
505 Brannan Street
|
|
1
|
|
|
510 Townsend Street
|
|
1
|
|
|
ARE Spectrum
|
|
3
|
|
|
400 Dexter Avenue North
|
|
1
|
|
|
|
|
14
|
|
|
|
|
|
|
Redevelopment – under construction
|
|
Properties
|
|
9625 Towne Centre Drive
|
|
1
|
|
5 Laboratory Drive
|
|
1
|
|
9900 Medical Center Drive
|
|
1
|
|
266 and 275 Second Avenue
|
|
2
|
|
|
|
5
|
|
Redevelopment – placed into service after January 1, 2016
|
|
Properties
|
|
10151 Barnes Canyon Road
|
|
1
|
|
11 Hurley Street
|
|
1
|
|
10290 Campus Point Drive
|
|
1
|
|
|
|
3
|
|
Acquisitions after January 1, 2016
|
|
Properties
|
|
Torrey Ridge Science Center
|
|
3
|
|
Alexandria Center
®
at One Kendall Square
|
|
9
|
|
88 Bluxome Street
|
|
1
|
|
960 Industrial Road
|
|
1
|
|
1450 Page Mill Road
|
|
1
|
|
201 Haskins Way
|
|
1
|
|
701 Gateway Boulevard
|
|
1
|
|
4110 Campus Point Court
|
|
1
|
|
|
|
18
|
|
|
|
|
|
Total properties excluded from Same Properties
|
|
47
|
|
Same Properties
|
|
166
|
|
Total properties in North America as of
December 31, 2017
|
|
213
|
|
|
|
|
Year Ended December 31,
|
|
|||||||||||||
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
|||||||
Same Properties
|
|
$
|
613,866
|
|
|
$
|
596,898
|
|
|
$
|
16,968
|
|
|
2.8
|
%
|
|
Non-Same Properties
|
|
249,315
|
|
|
76,922
|
|
|
172,393
|
|
|
224.1
|
|
|
|||
Total rental
|
|
863,181
|
|
|
673,820
|
|
|
189,361
|
|
|
28.1
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
209,273
|
|
|
202,565
|
|
|
6,708
|
|
|
3.3
|
|
|
|||
Non-Same Properties
|
|
49,871
|
|
|
21,090
|
|
|
28,781
|
|
|
136.5
|
|
|
|||
Total tenant recoveries
|
|
259,144
|
|
|
223,655
|
|
|
35,489
|
|
|
15.9
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
447
|
|
|
117
|
|
|
330
|
|
|
282.1
|
|
|
|||
Non-Same Properties
|
|
5,325
|
|
|
24,114
|
|
|
(18,789
|
)
|
|
(77.9
|
)
|
|
|||
Total other income
|
|
5,772
|
|
|
24,231
|
|
|
(18,459
|
)
|
|
(76.2
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
823,586
|
|
|
799,580
|
|
|
24,006
|
|
|
3.0
|
|
|
|||
Non-Same Properties
|
|
304,511
|
|
|
122,126
|
|
|
182,385
|
|
|
149.3
|
|
|
|||
Total revenues
|
|
1,128,097
|
|
|
921,706
|
|
|
206,391
|
|
|
22.4
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
244,819
|
|
|
237,960
|
|
|
6,859
|
|
|
2.9
|
|
|
|||
Non-Same Properties
|
|
80,790
|
|
|
40,448
|
|
|
40,342
|
|
|
99.7
|
|
|
|||
Total rental operations
|
|
325,609
|
|
|
278,408
|
|
|
47,201
|
|
|
17.0
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
578,767
|
|
|
561,620
|
|
|
17,147
|
|
|
3.1
|
|
|
|||
Non-Same Properties
|
|
223,721
|
|
|
81,678
|
|
|
142,043
|
|
|
173.9
|
|
|
|||
Net operating income
|
|
$
|
802,488
|
|
|
$
|
643,298
|
|
|
$
|
159,190
|
|
|
24.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net operating income – Same Properties
|
|
$
|
578,767
|
|
|
$
|
561,620
|
|
|
$
|
17,147
|
|
|
3.1
|
%
|
|
Straight-line rent revenue and amortization of acquired below-market leases
|
|
(19,176
|
)
|
|
(37,424
|
)
|
|
18,248
|
|
|
(48.8
|
)
|
|
|||
Net operating income – Same Properties (cash basis)
|
|
$
|
559,591
|
|
|
$
|
524,196
|
|
|
$
|
35,395
|
|
|
6.8
|
%
|
|
|
|
Year Ended December 31,
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
Change
|
||||||
Management fee income
|
|
$
|
2,186
|
|
|
$
|
418
|
|
|
$
|
1,768
|
|
Interest and other income
|
|
2,257
|
|
|
6,680
|
|
|
(4,423
|
)
|
|||
Investment income
|
|
1,329
|
|
|
17,133
|
|
|
(15,804
|
)
|
|||
Total other income
|
|
$
|
5,772
|
|
|
$
|
24,231
|
|
|
$
|
(18,459
|
)
|
|
|
Year Ended December 31,
|
|
|
||||||||
Component
|
|
2017
|
|
2016
|
|
Change
|
||||||
Interest incurred
|
|
$
|
186,867
|
|
|
$
|
159,403
|
|
|
$
|
27,464
|
|
Capitalized interest
|
|
(58,222
|
)
|
|
(52,450
|
)
|
|
(5,772
|
)
|
|||
Interest expense
|
|
$
|
128,645
|
|
|
$
|
106,953
|
|
|
$
|
21,692
|
|
|
|
|
|
|
|
|
||||||
Average debt balance outstanding
(1)
|
|
$
|
4,740,081
|
|
|
$
|
4,256,306
|
|
|
$
|
483,775
|
|
Weighted-average annual interest rate
(2)
|
|
3.9
|
%
|
|
3.7
|
%
|
|
0.2
|
%
|
(1)
|
Represents the average total debt balance outstanding during the years ended
December 31, 2017
and
2016
.
|
(2)
|
Represents total interest incurred divided by the average debt balance outstanding in the respective periods.
|
Component
|
|
Interest Rate
(1)
|
|
Effective Date
|
|
Change
|
||||
Increases in interest incurred due to:
|
|
|
|
|
|
|
|
|
||
Issuances of debt:
|
|
|
|
|
|
|
|
|
||
$425 million unsecured senior note payable
|
|
|
4.08%
|
|
|
March 2017
|
|
$
|
13,940
|
|
Secured construction loans
|
|
|
Various
|
|
|
Various
|
|
8,355
|
|
|
$350 million unsecured senior note payable
|
|
|
4.14%
|
|
|
June 2016
|
|
6,160
|
|
|
$600 million unsecured senior note payable
|
|
|
3.56%
|
|
|
November 2017
|
|
2,375
|
|
|
Assumption of $203 million secured note payable
|
|
|
3.41%
|
|
|
November 2016
|
|
6,255
|
|
|
Higher average balance and interest rate on unhedged secured construction loans
|
|
|
|
|
|
|
|
3,305
|
|
|
Total increases
|
|
|
|
|
|
|
|
40,390
|
|
|
Decreases in interest incurred due to:
|
|
|
|
|
|
|
|
|
||
Repayments of debt:
|
|
|
|
|
|
|
|
|
||
Secured notes payable
(2)
|
|
|
Various
|
|
|
Various
|
|
(5,710
|
)
|
|
Unsecured senior bank term loan
|
|
|
Various
|
|
|
Various
|
|
(3,500
|
)
|
|
Lower average notional amounts of interest rate hedge agreements in effect
|
|
|
|
|
|
|
|
(3,325
|
)
|
|
Amortization of deferred financing fees
|
|
|
|
|
|
|
|
(215
|
)
|
|
Other decrease in interest
|
|
|
|
|
|
|
|
(176
|
)
|
|
Total decreases
|
|
|
|
|
|
|
|
(12,926
|
)
|
|
Change in interest incurred
|
|
|
|
|
|
|
|
27,464
|
|
|
Increase in capitalized interest
(3)
|
|
|
|
|
|
|
|
(5,772
|
)
|
|
Total change in interest expense
|
|
|
|
|
|
|
|
$
|
21,692
|
|
(1)
|
Represents the interest rate as of the end of the applicable period, plus the impact of debt premiums/discounts, interest rate hedge agreements, and deferred financing costs.
|
(2)
|
Decrease is primarily due to the repayment of
four
secured notes payable aggregating
$270.6 million
during 2016.
|
(3)
|
Increase in capitalized interest is primarily due to an increase in our highly leased development and redevelopment projects undergoing construction in our value-creation pipeline during the
year ended December 31, 2017
, compared to the
year ended December 31, 2016
. The increase was also partially due to the increase in the weighted-average interest rate used for capitalization of interest to
3.9%
in effect during the
year ended December 31, 2017
, from
3.7%
in effect during the
year ended December 31, 2016
, as a result of the increase in rates applicable to borrowings outstanding during each respective period.
|
|
|
Year Ended December 31,
|
|||||||||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Same Properties
|
|
$
|
541,164
|
|
|
$
|
521,954
|
|
|
$
|
19,210
|
|
|
3.7
|
%
|
Non-Same Properties
|
|
132,656
|
|
|
86,870
|
|
|
45,786
|
|
|
52.7
|
|
|||
Total rental
|
|
673,820
|
|
|
608,824
|
|
|
64,996
|
|
|
10.7
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
189,270
|
|
|
183,885
|
|
|
5,385
|
|
|
2.9
|
|
|||
Non-Same Properties
|
|
34,385
|
|
|
25,178
|
|
|
9,207
|
|
|
36.6
|
|
|||
Total tenant recoveries
|
|
223,655
|
|
|
209,063
|
|
|
14,592
|
|
|
7.0
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
171
|
|
|
475
|
|
|
(304
|
)
|
|
(64.0
|
)
|
|||
Non-Same Properties
|
|
24,060
|
|
|
25,112
|
|
|
(1,052
|
)
|
|
(4.2
|
)
|
|||
Total other income
|
|
24,231
|
|
|
25,587
|
|
|
(1,356
|
)
|
|
(5.3
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
730,605
|
|
|
706,314
|
|
|
24,291
|
|
|
3.4
|
|
|||
Non-Same Properties
|
|
191,101
|
|
|
137,160
|
|
|
53,941
|
|
|
39.3
|
|
|||
Total revenues
|
|
921,706
|
|
|
843,474
|
|
|
78,232
|
|
|
9.3
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
219,235
|
|
|
217,888
|
|
|
1,347
|
|
|
0.6
|
|
|||
Non-Same Properties
|
|
59,173
|
|
|
43,344
|
|
|
15,829
|
|
|
36.5
|
|
|||
Total rental operations
|
|
278,408
|
|
|
261,232
|
|
|
17,176
|
|
|
6.6
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Same Properties
|
|
511,370
|
|
|
488,426
|
|
|
22,944
|
|
|
4.7
|
|
|||
Non-Same Properties
|
|
131,928
|
|
|
93,816
|
|
|
38,112
|
|
|
40.6
|
|
|||
Net operating income
|
|
$
|
643,298
|
|
|
$
|
582,242
|
|
|
$
|
61,056
|
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Net operating income – Same Properties
|
|
$
|
511,370
|
|
|
$
|
488,426
|
|
|
$
|
22,944
|
|
|
4.7
|
%
|
Straight-line rent revenue and amortization of acquired below-market leases
|
|
(14,085
|
)
|
|
(19,314
|
)
|
|
5,229
|
|
|
(27.1
|
)
|
|||
Net operating income – Same Properties (cash basis)
|
|
$
|
497,285
|
|
|
$
|
469,112
|
|
|
$
|
28,173
|
|
|
6.0
|
%
|
|
|
Year Ended December 31,
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Management fee income
|
|
$
|
418
|
|
|
$
|
1,667
|
|
|
$
|
(1,249
|
)
|
Interest and other income
|
|
6,680
|
|
|
4,978
|
|
|
1,702
|
|
|||
Investment income
|
|
17,133
|
|
|
18,942
|
|
|
(1,809
|
)
|
|||
Total other income
|
|
$
|
24,231
|
|
|
$
|
25,587
|
|
|
$
|
(1,356
|
)
|
|
|
Year Ended December 31,
|
|
|
||||||||
Component
|
|
2016
|
|
2015
|
|
Change
|
||||||
Interest incurred
|
|
$
|
159,403
|
|
|
$
|
142,353
|
|
|
$
|
17,050
|
|
Capitalized interest
|
|
(52,450
|
)
|
|
(36,540
|
)
|
|
(15,910
|
)
|
|||
Interest expense
|
|
$
|
106,953
|
|
|
$
|
105,813
|
|
|
$
|
1,140
|
|
|
|
|
|
|
|
|
||||||
Average debt balance outstanding
(1)
|
|
$
|
4,256,306
|
|
|
$
|
4,078,381
|
|
|
$
|
177,925
|
|
Weighted-average annual interest rate
(2)
|
|
3.7
|
%
|
|
3.5
|
%
|
|
0.2
|
%
|
(1)
|
Represents the average total debt balance outstanding during the years ended
December 31, 2016
and
2015
.
|
(2)
|
Represents total interest incurred divided by the average debt balance outstanding in the respective periods.
|
Component
|
|
Interest Rate
(1)
|
|
Effective Date
|
|
Change
|
||||
Increases in interest incurred due to:
|
|
|
|
|
|
|
|
|
||
Issuances of debt:
|
|
|
|
|
|
|
|
|
||
$300 million unsecured senior note payable
|
|
|
4.46%
|
|
|
November 2015
|
|
$
|
11,410
|
|
$350 million unsecured senior note payable
|
|
|
4.11%
|
|
|
June 2016
|
|
7,780
|
|
|
Secured construction loans
|
|
|
Various
|
|
|
Various
|
|
5,860
|
|
|
Assumption of $203 million secured note payable
|
|
|
3.38%
|
|
|
November 2016
|
|
1,120
|
|
|
Fluctuations in interest rate:
|
|
|
|
|
|
|
|
|
||
Interest rate hedge agreements
|
|
|
|
|
|
|
|
2,550
|
|
|
Variable-rate senior bank term loans
|
|
|
|
|
|
|
|
1,050
|
|
|
Amortization of deferred financing fees
|
|
|
|
|
|
|
|
870
|
|
|
Total increases
|
|
|
|
|
|
|
|
30,640
|
|
|
Decreases in interest incurred due to:
|
|
|
|
|
|
|
|
|
||
Repayments of debt:
(2)
|
|
|
|
|
|
|
|
|
||
Secured notes payable repaid in 2016
|
|
|
Various
|
|
|
Various
|
|
(8,210
|
)
|
|
Secured notes payable repaid in 2015
|
|
|
Various
|
|
|
Various
|
|
(3,360
|
)
|
|
Lower average balance on unsecured line of credit
|
|
|
|
|
|
|
|
(1,820
|
)
|
|
Other decrease in interest
|
|
|
|
|
|
|
|
(200
|
)
|
|
Total decreases
|
|
|
|
|
|
|
|
(13,590
|
)
|
|
Change in interest incurred
|
|
|
|
|
|
|
|
17,050
|
|
|
Increase in capitalized interest
(3)
|
|
|
|
|
|
|
|
(15,910
|
)
|
|
Total change in interest expense
|
|
|
|
|
|
|
|
$
|
1,140
|
|
(1)
|
Represents the interest rate as of the end of the applicable period, plus the impact of debt premiums/discounts, interest rate hedge agreements, and deferred financing costs.
|
(2)
|
Refer to Note 9 – “Secured and Unsecured Senior Debt” to our consolidated financial statements under Item 15 of this annual report on Form 10-K for information on debt repayments.
|
(3)
|
Increase in capitalized interest is due to increased construction activity on our highly leased development and redevelopment projects in our value-creation pipeline aggregating 1.9 million RSF as of December 31, 2016.
|
Key Assumptions
(2)
(Dollars in millions)
|
|
2018 Guidance
|
|||||||
|
Low
|
|
High
|
||||||
Occupancy percentage for operating properties in North America as of December 31, 2018
|
|
96.9%
|
|
|
97.5%
|
|
|
||
|
|
|
|
|
|
||||
Lease renewals and re-leasing of space:
|
|
|
|
|
|
||||
Rental rate increases
|
|
13.0%
|
|
|
16.0%
|
|
|
||
Rental rate increases (cash basis)
|
|
7.5%
|
|
|
10.5%
|
|
|
||
|
|
|
|
|
|
||||
Same Properties performance:
|
|
|
|
|
|
||||
Net operating income increase
|
|
2.5%
|
|
|
4.5%
|
|
|
||
Net operating income increase (cash basis)
|
|
9.0%
|
|
|
11.0%
|
|
|
||
|
|
|
|
|
|
||||
Straight-line rent revenue
|
|
$
|
92
|
|
|
$
|
102
|
|
(3)
|
General and administrative expenses
|
|
$
|
85
|
|
|
$
|
90
|
|
|
Capitalization of interest
|
|
$
|
55
|
|
|
$
|
65
|
|
|
Interest expense
|
|
$
|
155
|
|
|
$
|
165
|
|
|
(1)
|
Excludes the impact of changes in fair value for equity investments pursuant to new accounting standard effective January 1, 2018. Refer to “Financial Instruments” under the “Recent Accounting Pronouncements” section in Note 2 – “Summary of Significant Accounting Policies” to these consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information.
|
(2)
|
The completion of our development and redevelopment projects will result in an increase in interest expense and other project costs, because these project costs will no longer qualify for capitalization and will, therefore, be expensed as incurred. Our projection assumptions for Same Properties’ net operating income growth, rental rate growth, straight-line rent revenue, general and administrative expenses, capitalization of interest, and interest expense, are included in the tables above and are subject to a number of variables and uncertainties, including those discussed in Item 1A and within this Item 7 of this annual report on Form 10-K. To the extent our full-year earnings guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such guidance.
|
(3)
|
Approximately 50% of straight-line rent revenue represents initial free rent on recently delivered and expected 2018 deliveries of new Class A properties from our development and redevelopment pipeline.
|
Key Credit Metrics
|
|
2018 Guidance
|
Net debt to Adjusted EBITDA – fourth quarter of 2018, annualized
|
|
Less than 5.5x
|
Net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2018, annualized
|
|
Less than 5.5x
|
Fixed-charge coverage ratio – fourth quarter of 2018, annualized
|
|
Greater than 4.0x
|
Value-creation pipeline as a percentage of gross investments in real estate as of December 31, 2018
|
|
8% to 12%
|
Consolidated Real Estate Joint Ventures
|
|
|
||||
Property/Market/Submarket
|
|
Noncontrolling
Interest Share
(1)
|
|
|||
225 Binney Street/Greater Boston/Cambridge
|
|
|
70.0
|
%
|
|
|
409 and 499 Illinois Street/San Francisco/Mission Bay/SoMa
|
|
|
40.0
|
%
|
|
|
1500 Owens Street/San Francisco/Mission Bay/SoMa
|
|
|
49.9
|
%
|
|
|
10290 and 10300 Campus Point Drive and 4110 Campus Point Court/San Diego/University Town Center
|
|
|
45.0
|
%
|
|
|
9625 Towne Centre Drive/San Diego/University Town Center
|
|
|
49.9
|
%
|
(2)
|
|
|
|
|
|
|
|
|
Unconsolidated Real Estate Joint Ventures
|
|
|
||||
Property/Market/Submarket
|
|
Our Share
|
|
|||
360 Longwood Avenue/Greater Boston/Longwood Medical Area
|
|
|
27.5
|
%
|
|
|
Menlo Gateway/San Francisco/Greater Stanford
|
|
|
49.0
|
%
|
(3)
|
|
1401/1413 Research Boulevard/Maryland/Rockville
|
|
|
65.0
|
%
|
|
|
(1)
|
In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in three other properties in North America.
|
(2)
|
Refer to the “Dispositions” section under “Investments in Real Estate” within this Item 2 for additional information on our partial interest sale at 9625 Towne Centre Drive.
|
(3)
|
Refer to the “Acquisitions” section under “Investments in Real Estate” within this Item 2 for additional information on our acquisition at Menlo Gateway.
|
Unconsolidated Joint Venture
|
|
Initial
Maturity Date
|
|
Extension Option Maturity Date
(1)
|
|
Interest Rate
(2)
|
|
Debt Balance
(3)
|
|
Remaining Commitments
|
|
|||||||
360 Longwood Avenue
|
|
|
9/1/22
|
|
|
9/1/24
|
|
3.54
|
%
|
|
$
|
94,040
|
|
|
$
|
17,000
|
|
(4)
|
1401/1413 Research Boulevard
|
|
|
5/17/20
|
|
|
7/1/20
|
|
4.42
|
%
|
|
5,972
|
|
|
18,488
|
|
|
||
Menlo Gateway, Phase I
|
|
|
3/1/19
|
|
|
3/3/20
|
|
4.66
|
%
|
|
111,015
|
|
|
38,926
|
|
|
||
|
|
|
|
|
|
|
|
|
|
$
|
211,027
|
|
|
$
|
74,414
|
|
|
(1)
|
Reflects extension options that exist, which may be subject to certain conditions.
|
(2)
|
Represents interest rate, including interest expense and amortization of loan fees and discount/premium.
|
(3)
|
Represents outstanding principal, net of unamortized deferred financing costs and discount/premium.
|
(4)
|
The remaining loan commitment balance excludes an earn-out advance provision that allows for incremental borrowings up to
$48.0 million
, subject to certain conditions.
|
|
Noncontrolling Interest Share of Consolidated Real Estate Joint Ventures
(1)
|
|
Our Share of Unconsolidated
Real Estate Joint Ventures |
||||||||||||
|
December 31, 2017
|
|
December 31, 2017
|
||||||||||||
|
Three Months Ended
|
|
Year Ended
|
|
Three Months Ended
|
|
Year Ended
|
||||||||
Total revenues
|
$
|
13,790
|
|
|
$
|
54,812
|
|
|
$
|
1,471
|
|
|
$
|
7,320
|
|
Rental operations
|
(4,080
|
)
|
|
(15,852
|
)
|
|
(405
|
)
|
|
(2,599
|
)
|
||||
|
9,710
|
|
|
38,960
|
|
|
1,066
|
|
|
4,721
|
|
||||
General and administrative
|
(19
|
)
|
|
(145
|
)
|
|
(26
|
)
|
|
(66
|
)
|
||||
Interest
|
—
|
|
|
—
|
|
|
(232
|
)
|
|
(1,784
|
)
|
||||
Depreciation and amortization
|
(3,777
|
)
|
|
(14,762
|
)
|
|
(432
|
)
|
|
(1,551
|
)
|
||||
Gain on sale of real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
14,106
|
|
||||
|
$
|
5,914
|
|
|
$
|
24,053
|
|
|
$
|
376
|
|
|
$
|
15,426
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
||||||
|
Noncontrolling Interest Share of Consolidated Real Estate JVs
|
|
Our Share of Unconsolidated
Real Estate JVs
|
|
||||
Investments in real estate
|
$
|
507,207
|
|
|
$
|
149,466
|
|
|
Cash and cash equivalents
|
19,047
|
|
|
6,440
|
|
|
||
Restricted cash
|
—
|
|
|
1,420
|
|
|
||
Other assets
|
31,966
|
|
|
11,529
|
|
|
||
Secured notes payable
|
—
|
|
|
(53,482
|
)
|
|
||
Other liabilities
|
(24,717
|
)
|
|
(4,755
|
)
|
|
||
Redeemable noncontrolling interests
|
(11,509
|
)
|
|
—
|
|
|
||
|
$
|
521,994
|
|
|
$
|
110,618
|
|
|
(1)
|
Quarter annualized.
|
(2)
|
As of
December 31, 2017
.
|
•
|
Retain positive cash flows from operating activities after payment of dividends and distributions to noncontrolling interests for investment in development and redevelopment projects and/or acquisitions;
|
•
|
Improve credit profile and long-term cost of capital;
|
•
|
Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt, secured debt, selective asset sales, partial interests sales, preferred stock, and common stock;
|
•
|
Maintain commitment to long-term capital to fund growth;
|
•
|
Maintain prudent laddering of debt maturities;
|
•
|
Maintain solid credit metrics;
|
•
|
Maintain significant balance sheet
liquidity;
|
•
|
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 and distributions to noncontrolling interests 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; and
|
•
|
Maintain high levels of pre-leasing and percentage leased in value-creation projects.
|
Description
|
|
Stated
Rate
|
|
Aggregate
Commitments
|
|
Outstanding
Balance
|
|
Remaining Commitments/Liquidity
|
||||||
$1.65 billion unsecured senior line of credit
|
|
L+1.00%
|
|
$
|
1,650,000
|
|
|
$
|
50,000
|
|
|
$
|
1,600,000
|
|
50 and 60 Binney Street/Greater Boston secured construction loan
|
|
L+1.50%
|
|
350,000
|
|
|
325,319
|
|
|
24,681
|
|
|||
|
|
|
|
$
|
2,000,000
|
|
|
$
|
375,319
|
|
|
1,624,681
|
|
|
Available-for-sale equity securities, at fair value
|
|
|
|
|
|
|
|
109,511
|
|
|||||
Cash, cash equivalents, and restricted cash
|
|
|
|
|
|
|
|
277,186
|
|
|||||
Total liquidity
|
|
|
|
|
|
|
|
$
|
2,011,378
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Funds held in trust under the terms of certain secured notes payable
|
$
|
12,301
|
|
|
$
|
7,387
|
|
Funds held in escrow related to construction projects and investing activities
|
4,546
|
|
|
4,541
|
|
||
Other
|
5,958
|
|
|
4,406
|
|
||
Total
|
$
|
22,805
|
|
|
$
|
16,334
|
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
450,325
|
|
|
$
|
392,501
|
|
|
$
|
57,824
|
|
Net cash used in investing activities
|
$
|
(1,738,126
|
)
|
|
$
|
(1,496,628
|
)
|
|
$
|
(241,498
|
)
|
Net cash provided by financing activities
|
$
|
1,415,427
|
|
|
$
|
1,105,521
|
|
|
$
|
309,906
|
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Proceeds from sales of real estate
|
$
|
15,432
|
|
|
$
|
123,081
|
|
|
$
|
(107,649
|
)
|
Additions to real estate
|
(893,685
|
)
|
|
(821,690
|
)
|
|
(71,995
|
)
|
|||
Purchase of real estate
|
(675,584
|
)
|
|
(737,900
|
)
|
|
62,316
|
|
|||
Deposits for investing activities
|
(3,300
|
)
|
|
(450
|
)
|
|
(2,850
|
)
|
|||
Additions to investments
|
(171,881
|
)
|
|
(102,284
|
)
|
|
(69,597
|
)
|
|||
Sales of investments
|
30,483
|
|
|
38,946
|
|
|
(8,463
|
)
|
|||
Repayment of notes receivable
|
—
|
|
|
15,198
|
|
|
(15,198
|
)
|
|||
Acquisition of interest in unconsolidated real estate joint ventures
|
(60,291
|
)
|
|
—
|
|
|
(60,291
|
)
|
|||
Contributions to unconsolidated real estate joint ventures
|
(17,876
|
)
|
|
(11,529
|
)
|
|
(6,347
|
)
|
|||
Return of capital from unconsolidated real estate joint ventures
|
38,576
|
|
|
—
|
|
|
38,576
|
|
|||
Net cash used in investing activities
|
$
|
(1,738,126
|
)
|
|
$
|
(1,496,628
|
)
|
|
$
|
(241,498
|
)
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Borrowings from secured notes payable
|
$
|
153,405
|
|
|
$
|
291,400
|
|
|
$
|
(137,995
|
)
|
Repayments of borrowings from secured notes payable
|
(396,240
|
)
|
|
(310,903
|
)
|
|
(85,337
|
)
|
|||
Proceeds from issuance of unsecured senior notes payable
|
1,023,262
|
|
|
348,604
|
|
|
674,658
|
|
|||
Borrowings from unsecured senior line of credit
|
3,858,000
|
|
|
4,117,000
|
|
|
(259,000
|
)
|
|||
Repayments of borrowings from unsecured senior line of credit
|
(3,836,000
|
)
|
|
(4,240,000
|
)
|
|
404,000
|
|
|||
Repayments of borrowings from unsecured senior bank term loan
|
(200,000
|
)
|
|
(200,000
|
)
|
|
—
|
|
|||
Total changes related to debt
|
602,427
|
|
|
6,101
|
|
|
596,326
|
|
|||
|
|
|
|
|
|
||||||
Repurchases of 7.00% Series D cumulative convertible preferred stock
|
(17,934
|
)
|
|
(206,826
|
)
|
|
188,892
|
|
|||
Redemption of 6.45% Series E cumulative redeemable preferred stock
|
(130,350
|
)
|
|
—
|
|
|
(130,350
|
)
|
|||
Proceeds from the issuance of common stock
|
1,275,397
|
|
|
1,432,177
|
|
|
(156,780
|
)
|
|||
Dividend payments
|
(321,750
|
)
|
|
(262,761
|
)
|
|
(58,989
|
)
|
|||
Contributions from and sales of noncontrolling interests
|
44,931
|
|
|
221,487
|
|
|
(176,556
|
)
|
|||
Distributions to and purchases of noncontrolling interests
|
(22,361
|
)
|
|
(69,678
|
)
|
|
47,317
|
|
|||
Other
|
(14,933
|
)
|
|
(14,979
|
)
|
|
46
|
|
|||
Net cash provided by financing activities
|
$
|
1,415,427
|
|
|
$
|
1,105,521
|
|
|
$
|
309,906
|
|
Sources and Uses of Capital
(In millions)
|
|
2018 Guidance
|
|
Key Completed Items
|
|||||||||||||
|
Range
|
|
Midpoint
|
|
|||||||||||||
Sources of capital:
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities after dividends
|
|
$
|
140
|
|
|
$
|
180
|
|
|
$
|
160
|
|
|
|
|
||
Incremental debt
|
|
470
|
|
|
430
|
|
|
450
|
|
|
|
|
|||||
Real estate dispositions, partial interest sales, and common equity
|
|
1,110
|
|
|
1,310
|
|
|
1,210
|
|
|
$
|
817
|
|
(1)
|
|||
Total sources of capital
|
|
$
|
1,720
|
|
|
$
|
1,920
|
|
|
$
|
1,820
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Uses of capital:
|
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
1,050
|
|
|
$
|
1,150
|
|
|
$
|
1,100
|
|
|
|
|
||
Acquisitions
|
|
670
|
|
|
770
|
|
|
720
|
|
|
(2)
|
||||||
Total uses of capital
|
|
$
|
1,720
|
|
|
$
|
1,920
|
|
|
$
|
1,820
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Incremental debt (included above):
|
|
|
|
|
|
|
|
|
|
||||||||
Issuance of unsecured senior notes payable
|
|
$
|
550
|
|
|
$
|
650
|
|
|
$
|
600
|
|
|
|
|
||
Repayments of secured notes payable
|
|
(10
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
|
|
|||||
Repayment of unsecured senior term loan
|
|
(200
|
)
|
|
(200
|
)
|
|
(200
|
)
|
|
|
|
|||||
$1.65 billion unsecured senior line of credit/other
|
|
130
|
|
|
(5
|
)
|
|
63
|
|
|
|
|
|||||
Incremental debt
|
|
$
|
470
|
|
|
$
|
430
|
|
|
$
|
450
|
|
|
|
|
(1)
|
Represents
6.9 million
shares of our common stock subject to forward equity sales agreements executed in January 2018, with anticipated aggregate net proceeds of
$817.3 million
, subject to adjustments as provided in the forward equity sales agreements. The forward equity sales agreements expire no later than April 2019, and we expect to settle these agreements in 2018.
|
(2)
|
Refer to the “Acquisitions” section under Item 2 of this annual report on Form 10-K for additional information.
|
(Dollars in thousands)
|
|
As of December 31, 2017
|
||||||||
Facility
|
|
Balance
|
|
Maturity Date
(1)
|
|
Applicable Margin
|
|
Facility Fee
|
||
$1.65 billion unsecured senior line of credit
|
|
$
|
50,000
|
|
|
October 2021
|
|
L+1.00%
|
|
0.20%
|
2019 Unsecured Senior Bank Term Loan
|
|
199,496
|
|
|
January 2019
|
|
L+1.20%
|
|
N/A
|
|
2021 Unsecured Senior Bank Term Loan
|
|
348,446
|
|
|
January 2021
|
|
L+1.10%
|
|
N/A
|
|
|
|
$
|
597,942
|
|
|
|
|
|
|
|
(1)
|
Includes any extension options that we control.
|
•
|
2.1 million
shares issued at closing in March 2017 with net proceeds of
$217.8 million
; and
|
•
|
4.8 million
shares issued in December 2017 with net proceeds of
$484.6 million
.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Common stock dividends
|
$
|
312,131
|
|
|
$
|
240,347
|
|
|
$
|
71,784
|
|
7.00% Series D cumulative convertible preferred stock dividends
|
5,426
|
|
|
14,029
|
|
|
(8,603
|
)
|
|||
6.45% Series E cumulative redeemable preferred stock dividends
|
4,193
|
|
|
8,385
|
|
|
(4,192
|
)
|
|||
|
$
|
321,750
|
|
|
$
|
262,761
|
|
|
$
|
58,989
|
|
|
|
|
Payments by Period
|
||||||||||||||||
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Secured and unsecured debt
(1) (2)
|
$
|
4,779,542
|
|
|
$
|
7,291
|
|
|
$
|
1,044,684
|
|
|
$
|
964,151
|
|
|
$
|
2,763,416
|
|
Estimated interest payments on fixed-rate and hedged variable-rate debt
(3)
|
1,122,688
|
|
|
177,315
|
|
|
318,752
|
|
|
259,769
|
|
|
366,852
|
|
|||||
Estimated interest payments on variable-rate debt
(4)
|
739
|
|
|
739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Ground lease obligations
|
580,012
|
|
|
12,098
|
|
|
24,333
|
|
|
23,376
|
|
|
520,205
|
|
|||||
Other obligations
|
4,214
|
|
|
1,840
|
|
|
2,104
|
|
|
270
|
|
|
—
|
|
|||||
Total
|
$
|
6,487,195
|
|
|
$
|
199,283
|
|
|
$
|
1,389,873
|
|
|
$
|
1,247,566
|
|
|
$
|
3,650,473
|
|
(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)
|
Amounts are based upon contractual interest rates, including the expense related to our interest rate hedge 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
December 31, 2017
.
|
Covenant Ratios
(1)
|
|
Requirement
|
|
Actual
|
Total Debt to Total Assets
|
Less than or equal to 60%
|
|
35%
|
|
Secured Debt to Total Assets
|
Less than or equal to 40%
|
|
6%
|
|
Consolidated EBITDA
(2)
to Interest Expense
|
Greater than or equal to 1.5x
|
|
5.9x
|
|
Unencumbered Total Asset Value to Unsecured Debt
|
Greater than or equal to 150%
|
|
278%
|
(1)
|
For definitions of the ratios, refer to the indenture at Exhibits 4.3, 4.12, and 4.17 hereto and the related supplemental indentures at Exhibits 4.4, 4.6, 4.8, 4.10, 4.13, 4.15, 4.18, and 4.20 hereto, which are each listed under Item 15 of this annual report on Form 10-K.
|
(2)
|
The calculation of consolidated EBITDA is based on the definitions contained in our loan agreements and is not directly comparable to the computation of EBITDA as described in Exchange Act Release No. 47226.
|
Covenant Ratios
(1)
|
|
Requirement
|
|
Actual
|
Leverage Ratio
|
|
Less than or equal to 60.0%
|
|
28.7%
|
Secured Debt Ratio
|
|
Less than or equal to 45.0%
|
|
4.6%
|
Fixed-Charge Coverage Ratio
|
|
Greater than or equal to 1.50x
|
|
3.94x
|
Unsecured Leverage Ratio
|
|
Less than or equal to 60.0%
|
|
30.8%
|
Unsecured Interest Coverage Ratio
|
|
Greater than or equal to 1.50x
|
|
6.91x
|
(1)
|
For definitions of the ratios, refer to the amended $1.65 billion unsecured senior line of credit and unsecured senior bank term loan agreements filed as Exhibits 10.1, 10.2, and 10.3, which are listed under Item 15 of this annual report on Form 10-K.
|
|
|
Net Unrealized Gain (Loss) on:
|
|
|
||||||||||||
|
|
Available-for- Sale Equity Securities
|
|
Interest Rate
Hedge Agreements |
|
Foreign Currency Translation
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
|
$
|
19,293
|
|
|
$
|
405
|
|
|
$
|
(14,343
|
)
|
|
$
|
5,355
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
24,360
|
|
|
2,837
|
|
|
7,774
|
|
|
34,971
|
|
||||
Amounts reclassified from other comprehensive income
|
|
6,118
|
|
|
1,915
|
|
|
1,599
|
|
|
9,632
|
|
||||
|
|
30,478
|
|
|
4,752
|
|
|
9,373
|
|
|
44,603
|
|
||||
Amounts attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
66
|
|
|
66
|
|
||||
Net other comprehensive income
|
|
30,478
|
|
|
4,752
|
|
|
9,439
|
|
|
44,669
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017
|
|
$
|
49,771
|
|
|
$
|
5,157
|
|
|
$
|
(4,904
|
)
|
|
$
|
50,024
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
145,395
|
|
|
$
|
(151,141
|
)
|
|
$
|
116,867
|
|
Depreciation and amortization
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|||
Noncontrolling share of depreciation and amortization from consolidated real estate JVs
|
(14,762
|
)
|
|
(9,349
|
)
|
|
(372
|
)
|
|||
Our share of depreciation and amortization from unconsolidated real estate JVs
|
1,551
|
|
|
2,707
|
|
|
1,734
|
|
|||
Gain on sales of real estate – rental properties
|
(270
|
)
|
|
(3,715
|
)
|
|
(12,426
|
)
|
|||
Our share of gain on sales of real estate from unconsolidated real estate JVs
|
(14,106
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sales of real estate – land parcels
|
(111
|
)
|
|
(90
|
)
|
|
—
|
|
|||
Impairment of real estate – rental properties
|
203
|
|
|
98,194
|
|
|
23,250
|
|
|||
Allocation to unvested restricted stock awards
|
(2,920
|
)
|
|
—
|
|
|
(1,758
|
)
|
|||
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
(1)
|
531,763
|
|
|
249,996
|
|
|
388,584
|
|
|||
Non-real estate investment income
|
—
|
|
|
(4,361
|
)
|
|
(13,109
|
)
|
|||
Impairments of land parcels and non-real estate investments
|
8,296
|
|
|
113,539
|
|
|
—
|
|
|||
Loss on early extinguishment of debt
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|||
Preferred stock redemption charge
|
11,279
|
|
|
61,267
|
|
|
—
|
|
|||
Allocation to unvested restricted stock awards
|
(321
|
)
|
|
(2,356
|
)
|
|
110
|
|
|||
Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
$
|
554,468
|
|
|
$
|
421,315
|
|
|
$
|
375,774
|
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars per share)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted
|
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
Depreciation and amortization
|
|
4.35
|
|
|
4.02
|
|
|
3.64
|
|
|||
Gain on sales of real estate – rental properties
|
|
—
|
|
|
(0.05
|
)
|
|
(0.17
|
)
|
|||
Our share of gain on sales of real estate from unconsolidated real estate JVs
|
|
(0.15
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of real estate – rental properties
|
|
—
|
|
|
1.29
|
|
|
0.33
|
|
|||
Funds from operations per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic and diluted
(1)
|
|
5.78
|
|
|
3.27
|
|
|
5.43
|
|
|||
Non-real estate investment income
|
|
—
|
|
|
(0.06
|
)
|
|
(0.18
|
)
|
|||
Impairments of land parcels and non-real estate investments
|
|
0.09
|
|
|
1.47
|
|
|
—
|
|
|||
Loss on early extinguishment of debt
|
|
0.03
|
|
|
0.04
|
|
|
—
|
|
|||
Preferred stock redemption charge
|
|
0.12
|
|
|
0.79
|
|
|
—
|
|
|||
Funds from operations per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted, as adjusted
|
|
$
|
6.02
|
|
|
$
|
5.51
|
|
|
$
|
5.25
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares of common stock outstanding for calculating funds from operations per share and funds from operations, as adjusted, per share – diluted
|
|
92,063
|
|
|
76,412
|
|
|
71,529
|
|
(1)
|
Calculated in accordance with standards established by the Advisory Board of Governors of the National Association of Real Estate Investment Trusts (the “Nareit Board of Governors”) in its April 2002 White Paper and related implementation guidance.
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
|
$
|
45,607
|
|
|
$
|
19,792
|
|
|
$
|
194,204
|
|
|
$
|
(49,799
|
)
|
Interest expense
|
|
36,082
|
|
|
31,223
|
|
|
128,645
|
|
|
106,953
|
|
||||
Income taxes
|
|
1,398
|
|
|
737
|
|
|
4,803
|
|
|
3,111
|
|
||||
Depreciation and amortization
|
|
107,714
|
|
|
95,222
|
|
|
416,783
|
|
|
313,390
|
|
||||
Stock compensation expense
|
|
6,961
|
|
|
6,426
|
|
|
25,610
|
|
|
25,433
|
|
||||
Loss on early extinguishment of debt
|
|
2,781
|
|
|
—
|
|
|
3,451
|
|
|
3,230
|
|
||||
Gain on sales of real estate – rental properties
|
|
—
|
|
|
(3,715
|
)
|
|
(270
|
)
|
|
(3,715
|
)
|
||||
Our share of gain on sales of real estate from unconsolidated real estate JVs
|
|
—
|
|
|
—
|
|
|
(14,106
|
)
|
|
—
|
|
||||
Gain on sales of real estate – land parcels
|
|
—
|
|
|
—
|
|
|
(111
|
)
|
|
(90
|
)
|
||||
Impairment of real estate and non-real estate investments
|
|
3,805
|
|
|
16,024
|
|
|
8,499
|
|
|
212,326
|
|
||||
Adjusted EBITDA
|
|
$
|
204,348
|
|
|
$
|
165,709
|
|
|
$
|
767,508
|
|
|
$
|
610,839
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
302,596
|
|
(1)
|
$
|
249,162
|
|
|
$
|
1,136,393
|
|
(1)
|
$
|
924,771
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA margins
|
|
68%
|
|
|
67%
|
|
|
68%
|
|
|
66%
|
|
(1)
|
Excludes impairment charges aggregating
$3.8 million
and
$8.3 million
for the three and twelve months ended
December 31, 2017
, respectively, which relate primarily to three non-real estate investments. We believe excluding impairment of non-real estate investments improves the consistency and comparability of the Adjusted EBITDA margins from period to period.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Adjusted EBITDA
|
|
$
|
204,348
|
|
|
$
|
165,709
|
|
|
|
|
|
|
||||
Interest expense
|
|
$
|
36,082
|
|
|
$
|
31,223
|
|
Capitalized interest
|
|
12,897
|
|
|
11,659
|
|
||
Amortization of loan fees
|
|
(2,571
|
)
|
|
(3,080
|
)
|
||
Amortization of debt premiums
|
|
639
|
|
|
383
|
|
||
Cash interest
|
|
47,047
|
|
|
40,185
|
|
||
Dividends on preferred stock
|
|
1,302
|
|
|
3,835
|
|
||
Fixed charges
|
|
$
|
48,349
|
|
|
$
|
44,020
|
|
|
|
|
|
|
||||
Fixed-charge coverage ratio:
|
|
|
|
|
||||
– period annualized
|
|
4.2x
|
|
|
3.8x
|
|
||
– trailing 12 months
|
|
4.1x
|
|
|
3.6x
|
|
•
|
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 and our total cash investment in the property.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Secured notes payable
|
$
|
771,061
|
|
|
$
|
1,011,292
|
|
Unsecured senior notes payable
|
3,395,804
|
|
|
2,378,262
|
|
||
Unsecured senior line of credit
|
50,000
|
|
|
28,000
|
|
||
Unsecured senior bank term loans
|
547,942
|
|
|
746,471
|
|
||
Unamortized deferred financing costs
|
29,051
|
|
|
29,917
|
|
||
Cash and cash equivalents
|
(254,381
|
)
|
|
(125,032
|
)
|
||
Restricted cash
|
(22,805
|
)
|
|
(16,334
|
)
|
||
Net debt
|
$
|
4,516,672
|
|
|
$
|
4,052,576
|
|
|
|
|
|
||||
Net debt
|
$
|
4,516,672
|
|
|
$
|
4,052,576
|
|
7.00% Series D cumulative convertible preferred stock
|
74,386
|
|
|
86,914
|
|
||
6.45% Series E cumulative redeemable preferred stock
|
—
|
|
|
130,000
|
|
||
Net debt and preferred stock
|
$
|
4,591,058
|
|
|
$
|
4,269,490
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
– quarter annualized
|
$
|
817,392
|
|
|
$
|
662,836
|
|
– trailing 12 months
|
$
|
767,508
|
|
|
$
|
610,839
|
|
|
|
|
|
||||
Net debt to Adjusted EBITDA:
|
|
|
|
||||
– quarter annualized
|
5.5
|
x
|
|
6.1
|
x
|
||
– trailing 12 months
|
5.9
|
x
|
|
6.6
|
x
|
||
|
|
|
|
||||
Net debt and preferred stock to Adjusted EBITDA:
|
|
|
|
||||
– quarter annualized
|
5.6
|
x
|
|
6.4
|
x
|
||
– trailing 12 months
|
6.0
|
x
|
|
7.0
|
x
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from continuing operations
|
|
$
|
194,093
|
|
|
$
|
(49,889
|
)
|
|
$
|
146,157
|
|
|
|
|
|
|
|
|
||||||
Equity in (earnings) losses of unconsolidated real estate joint ventures
|
|
(15,426
|
)
|
|
184
|
|
|
(1,651
|
)
|
|||
General and administrative expenses
|
|
75,009
|
|
|
63,884
|
|
|
59,621
|
|
|||
Interest expense
|
|
128,645
|
|
|
106,953
|
|
|
105,813
|
|
|||
Depreciation and amortization
|
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|||
Impairment of real estate
|
|
203
|
|
|
209,261
|
|
|
23,250
|
|
|||
Loss on early extinguishment of debt
|
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|||
Gain on sales of real estate – rental properties
|
|
(270
|
)
|
|
(3,715
|
)
|
|
(12,426
|
)
|
|||
Total net operating income
|
|
$
|
802,488
|
|
|
$
|
643,298
|
|
|
$
|
582,242
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
1,128,097
|
|
|
$
|
921,706
|
|
|
$
|
843,474
|
|
|
|
|
|
|
|
|
||||||
Operating margin
|
|
71%
|
|
70%
|
|
69%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Unencumbered net operating income
|
$
|
661,473
|
|
|
$
|
543,597
|
|
Encumbered net operating income
|
141,015
|
|
|
99,701
|
|
||
Total net operating income
|
$
|
802,488
|
|
|
$
|
643,298
|
|
Unencumbered net operating income as a percentage of total net operating income
|
82%
|
|
|
85%
|
|
Annualized effect on future earnings due to variable-rate debt:
|
|
||
Rate increase of 1%
|
$
|
(187
|
)
|
Rate decrease of 1%
|
$
|
187
|
|
|
|
||
Effect on fair value of total consolidated debt and interest rate hedge agreements:
|
|
||
Rate increase of 1%
|
$
|
(236,463
|
)
|
Rate decrease of 1%
|
$
|
254,372
|
|
Equity price risk:
|
|
||
Fair value increase of 10%
|
$
|
52,325
|
|
Fair value decrease of 10%
|
$
|
(52,325
|
)
|
Effect of potential future earnings due to foreign currency exchange rate:
|
|
||
Rate increase of 10%
|
$
|
91
|
|
Rate decrease of 10%
|
$
|
(91
|
)
|
|
|
||
Effect on the fair value of net investment in foreign subsidiaries due to foreign currency exchange rate:
|
|
||
Rate increase of 10%
|
$
|
11,121
|
|
Rate decrease of 10%
|
$
|
(11,121
|
)
|
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants, and rights
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
Equity Compensation Plan Approved by Stockholders — Amended and Restated 1997 Stock Award and Incentive Plan
|
|
—
|
|
—
|
|
3,825,236
|
|
Page
|
|
|
Audited Consolidated Financial Statements of Alexandria Real Estate Equities, Inc.:
|
|
Exhibit
Number
|
|
Exhibit Title
|
|
Incorporated by Reference to:
|
|
Date Filed
|
3.1*
|
|
|
Form 10-Q
|
|
August 14, 1997
|
|
3.2*
|
|
|
Form 10-Q
|
|
August 14, 1997
|
|
3.3*
|
|
|
Form 8-K
|
|
May 12, 2017
|
|
3.4*
|
|
|
Form 8-K
|
|
January 9, 2018
|
|
3.5*
|
|
|
Form 10-Q
|
|
August 13, 1999
|
|
3.6*
|
|
|
Form 8-K
|
|
February 10, 2000
|
|
3.7*
|
|
|
Form 8-K
|
|
February 10, 2000
|
|
3.8*
|
|
|
Form 8-A
|
|
January 18, 2002
|
|
3.9*
|
|
|
Form 8-A
|
|
June 28, 2004
|
|
3.10*
|
|
|
Form 8-K
|
|
March 25, 2008
|
|
3.11*
|
|
|
Form 8-K
|
|
March 14, 2012
|
|
3.12*
|
|
|
Form 8-K
|
|
May 12, 2017
|
|
4.1*
|
|
|
Form 10-Q
|
|
May 5, 2011
|
|
4.2*
|
|
|
Form 8-K
|
|
March 25, 2008
|
Exhibit
Number
|
|
Exhibit Title
|
|
Incorporated by Reference to:
|
|
Date Filed
|
4.3*
|
|
|
Form 8-K
|
|
February 29, 2012
|
|
4.4*
|
|
|
Form 8-K
|
|
February 29, 2012
|
|
4.5*
|
|
|
Form 8-K
|
|
February 29, 2012
|
|
4.6*
|
|
|
Form 8-K
|
|
June 7, 2013
|
|
4.7*
|
|
|
Form 8-K
|
|
June 7, 2013
|
|
4.8*
|
|
|
Form 8-K
|
|
July 18, 2014
|
|
4.9*
|
|
|
Form 8-K
|
|
July 18, 2014
|
|
4.10*
|
|
|
Form 8-K
|
|
July 18, 2014
|
|
4.11*
|
|
|
Form 8-K
|
|
July 18, 2014
|
|
4.12*
|
|
|
Form 8-K
|
|
November 17, 2015
|
|
4.13*
|
|
|
Form 8-K
|
|
November 17, 2015
|
|
4.14*
|
|
|
Form 8-K
|
|
November 17, 2015
|
|
4.15*
|
|
|
Form 8-K
|
|
June 10, 2016
|
|
4.16*
|
|
|
Form 8-K
|
|
June 10, 2016
|
|
4.17*
|
|
|
Form 8-K
|
|
March 3, 2017
|
|
4.18*
|
|
|
Form 8-K
|
|
March 3, 2017
|
|
4.19*
|
|
|
Form 8-K
|
|
March 3, 2017
|
|
4.20*
|
|
|
|
Form 8-K
|
|
November 20, 2017
|
4.21*
|
|
|
Form 8-K
|
|
November 20, 2017
|
|
10.1*
|
|
|
Form 10-Q
|
|
November 2, 2016
|
Exhibit
Number
|
|
Exhibit Title
|
|
Incorporated by Reference to:
|
|
Date Filed
|
10.2*
|
|
|
Form 10-Q
|
|
November 2, 2016
|
|
10.3*
|
|
|
Form 10-Q
|
|
November 2, 2016
|
|
10.4*
|
(1)
|
|
Form 8-K
|
|
May 16, 2016
|
|
10.5*
|
(1)
|
|
Form S-11
|
|
May 5, 1997
|
|
10.6*
|
(1)
|
|
Form S-11
|
|
May 5, 1997
|
|
10.7*
|
(1)
|
|
Form S-11
|
|
May 5, 1997
|
|
10.8*
|
(1)
|
|
|
|
Filed herewith
|
|
10.9*
|
(1)
|
|
|
|
|
Filed herewith
|
10.10*
|
(1)
|
|
|
|
|
Filed herewith
|
10.11*
|
(1)
|
|
|
|
Filed herewith
|
|
10.12*
|
(1)
|
|
Form 10-K
|
|
March 1, 2011
|
|
10.13*
|
(1)
|
|
Form 10-K
|
|
March 1, 2011
|
|
10.14*
|
(1)
|
|
Form 8-K
|
|
April 7, 2015
|
|
10.15*
|
(1)
|
|
|
Form 8-K
|
|
July 3, 2017
|
10.16*
|
(1)
|
|
Form 10-Q
|
|
May 4, 2016
|
Exhibit
Number
|
|
Exhibit Title
|
|
Incorporated by Reference to:
|
|
Date Filed
|
10.17*
|
(1)
|
|
Form 10-Q
|
|
May 4, 2016
|
|
10.18*
|
(1)
|
|
Form 10-Q
|
|
May 4, 2016
|
|
10.19*
|
(1)
|
|
Form 10-Q
|
|
May 4, 2016
|
|
10.20*
|
(1)
|
|
Form 10-K
|
|
March 3, 2014
|
|
10.21
|
(1)
|
|
|
|
||
10.22*
|
(1)
|
|
Form 8-K
|
|
June 17, 2010
|
|
10.23*
|
(1)
|
|
Form 10-Q
|
|
November 9, 2011
|
|
10.24*
|
|
|
Form 10-K
|
|
March 1, 2011
|
|
11.1
|
|
|
|
|
Filed herewith
|
|
12.1
|
|
|
|
|
Filed herewith
|
|
14.1*
|
|
|
Form 10-K
|
|
February 24, 2015
|
|
21.1
|
|
|
|
|
Filed herewith
|
|
23.1
|
|
|
|
|
Filed herewith
|
|
31.1
|
|
|
|
|
Filed herewith
|
|
31.2
|
|
|
|
|
Filed herewith
|
|
32.0
|
|
|
|
|
Filed herewith
|
|
99.1
|
|
|
|
|
Filed herewith
|
|
101
|
|
The following materials from the Company’s annual report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017 and 2016, (ii) Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015, (iv) Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests for the years ended December 31, 2017, 2016, and 2015, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016, and 2015, (vi) Notes to Consolidated Financial Statements, and (vii) Schedule III - Consolidated Financial Statement Schedule of Real Estate and Accumulated Depreciation of Alexandria Real Estate Equities, Inc.
|
|
|
|
Filed herewith
|
|
|
ALEXANDRIA REAL ESTATE EQUITIES, INC.
|
Dated:
|
January 30, 2018
|
By:
/s/ Joel S. Marcus
Joel S. Marcus
Chief Executive Officer
|
Signature
|
Title
|
Date
|
/s/ Joel S. Marcus
Joel S. Marcus
|
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
|
January 30, 2018
|
/s/ Dean A. Shigenaga
Dean A. Shigenaga
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
January 30, 2018
|
/s/ Steven R. Hash
Steven R. Hash
|
Lead Director
|
January 30, 2018
|
/s/ John L. Atkins, III
John L. Atkins, III
|
Director
|
January 30, 2018
|
/s/ James P. Cain
James P. Cain
|
Director
|
January 30, 2018
|
/s/ Maria C. Freire
Maria C. Freire
|
Director
|
January 30, 2018
|
/s/ Richard H. Klein
Richard H. Klein
|
Director
|
January 30, 2018
|
/s/ James H. Richardson
James H. Richardson
|
Director
|
January 30, 2018
|
/s/ Michael A. Woronoff
Michael A. Woronoff
|
Director
|
January 30, 2018
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
|
||
Investments in real estate
|
$
|
10,298,019
|
|
|
$
|
9,077,972
|
|
Investments in unconsolidated real estate joint ventures
|
110,618
|
|
|
50,221
|
|
||
Cash and cash equivalents
|
254,381
|
|
|
125,032
|
|
||
Restricted cash
|
22,805
|
|
|
16,334
|
|
||
Tenant receivables
|
10,262
|
|
|
9,744
|
|
||
Deferred rent
|
434,731
|
|
|
335,974
|
|
||
Deferred leasing costs
|
221,430
|
|
|
195,937
|
|
||
Investments
|
523,254
|
|
|
342,477
|
|
||
Other assets
|
228,453
|
|
|
201,197
|
|
||
Total assets
|
$
|
12,103,953
|
|
|
$
|
10,354,888
|
|
|
|
|
|
|
|
||
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
|
|
||
Secured notes payable
|
$
|
771,061
|
|
|
$
|
1,011,292
|
|
Unsecured senior notes payable
|
3,395,804
|
|
|
2,378,262
|
|
||
Unsecured senior line of credit
|
50,000
|
|
|
28,000
|
|
||
Unsecured senior bank term loans
|
547,942
|
|
|
746,471
|
|
||
Accounts payable, accrued expenses, and tenant security deposits
|
763,832
|
|
|
731,671
|
|
||
Dividends payable
|
92,145
|
|
|
76,914
|
|
||
Total liabilities
|
5,620,784
|
|
|
4,972,610
|
|
||
|
|
|
|
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
11,509
|
|
|
11,307
|
|
||
|
|
|
|
|
|
||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
|
|
|
|
|
|
||
7.00% Series D cumulative convertible preferred stock, $0.01 par value per share, 10,000,000 shares authorized; 2,975,432 and 3,476,547 shares issued and outstanding as of December 31, 2017 and 2016, respectively; $25 liquidation value per share
|
74,386
|
|
|
86,914
|
|
||
6.45% Series E cumulative redeemable preferred stock, $0.01 par value per share, 5,200,000 shares authorized; 0 and 5,200,000 shares issued and outstanding as of December 31, 2017 and 2016, respectively; $25 liquidation value per share
|
—
|
|
|
130,000
|
|
||
Common stock, $0.01 par value per share, 200,000,000 and 100,000,000 shares authorized as of December 31, 2017 and 2016, respectively; 99,783,686 and 87,665,880 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
998
|
|
|
877
|
|
||
Additional paid-in capital
|
5,824,258
|
|
|
4,672,650
|
|
||
Accumulated other comprehensive income
|
50,024
|
|
|
5,355
|
|
||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
5,949,666
|
|
|
4,895,796
|
|
||
Noncontrolling interests
|
521,994
|
|
|
475,175
|
|
||
Total equity
|
6,471,660
|
|
|
5,370,971
|
|
||
Total liabilities, noncontrolling interests, and equity
|
$
|
12,103,953
|
|
|
$
|
10,354,888
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||
Rental
|
$
|
863,181
|
|
|
$
|
673,820
|
|
|
$
|
608,824
|
|
Tenant recoveries
|
259,144
|
|
|
223,655
|
|
|
209,063
|
|
|||
Other income
|
5,772
|
|
|
24,231
|
|
|
25,587
|
|
|||
Total revenues
|
1,128,097
|
|
|
921,706
|
|
|
843,474
|
|
|||
|
|
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||
Rental operations
|
325,609
|
|
|
278,408
|
|
|
261,232
|
|
|||
General and administrative
|
75,009
|
|
|
63,884
|
|
|
59,621
|
|
|||
Interest
|
128,645
|
|
|
106,953
|
|
|
105,813
|
|
|||
Depreciation and amortization
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|||
Impairment of real estate
|
203
|
|
|
209,261
|
|
|
23,250
|
|
|||
Loss on early extinguishment of debt
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|||
Total expenses
|
949,700
|
|
|
975,126
|
|
|
711,394
|
|
|||
|
|
|
|
|
|
|
|
||||
Equity in earnings (losses) of unconsolidated real estate joint ventures
|
15,426
|
|
|
(184
|
)
|
|
1,651
|
|
|||
Gain on sales of real estate – rental properties
|
270
|
|
|
3,715
|
|
|
12,426
|
|
|||
Income (loss) from continuing operations
|
194,093
|
|
|
(49,889
|
)
|
|
146,157
|
|
|||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|||
Gain on sales of real estate – land parcels
|
111
|
|
|
90
|
|
|
—
|
|
|||
Net income (loss)
|
194,204
|
|
|
(49,799
|
)
|
|
146,114
|
|
|||
Net income attributable to noncontrolling interests
|
(25,111
|
)
|
|
(16,102
|
)
|
|
(1,897
|
)
|
|||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
169,093
|
|
|
(65,901
|
)
|
|
144,217
|
|
|||
Dividends on preferred stock
|
(7,666
|
)
|
|
(20,223
|
)
|
|
(24,986
|
)
|
|||
Preferred stock redemption charge
|
(11,279
|
)
|
|
(61,267
|
)
|
|
—
|
|
|||
Net income attributable to unvested restricted stock awards
|
(4,753
|
)
|
|
(3,750
|
)
|
|
(2,364
|
)
|
|||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
145,395
|
|
|
$
|
(151,141
|
)
|
|
$
|
116,867
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic:
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) per share
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) per share
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
194,204
|
|
|
$
|
(49,799
|
)
|
|
$
|
146,114
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|||
Unrealized holding gains (losses) arising during the period
|
24,360
|
|
|
(79,833
|
)
|
|
77,370
|
|
|||
Reclassification adjustment for losses (gains) included in net income (loss)
|
6,118
|
|
|
(18,473
|
)
|
|
(12,138
|
)
|
|||
Unrealized gains (losses) on available-for-sale equity securities, net
|
30,478
|
|
|
(98,306
|
)
|
|
65,232
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) on interest rate hedge agreements:
|
|
|
|
|
|
|
|
|
|||
Unrealized interest rate hedge gains (losses) arising during the period
|
2,837
|
|
|
(1,150
|
)
|
|
(5,516
|
)
|
|||
Reclassification adjustment for amortization to interest expense included in net income (loss)
|
1,915
|
|
|
5,273
|
|
|
2,707
|
|
|||
Unrealized gains (losses) on interest rate hedge agreements, net
|
4,752
|
|
|
4,123
|
|
|
(2,809
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) on foreign currency translation:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign currency translation gains (losses) arising during the period
|
7,774
|
|
|
(2,579
|
)
|
|
(21,844
|
)
|
|||
Reclassification adjustment for cumulative foreign currency translation losses included in net income (loss) upon sale or liquidation
|
1,599
|
|
|
52,926
|
|
|
9,236
|
|
|||
Unrealized gains (losses) on foreign currency translation, net
|
9,373
|
|
|
50,347
|
|
|
(12,608
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Total other comprehensive income (loss)
|
44,603
|
|
|
(43,836
|
)
|
|
49,815
|
|
|||
Comprehensive income (loss)
|
238,807
|
|
|
(93,635
|
)
|
|
195,929
|
|
|||
Less: comprehensive income attributable to noncontrolling interests
|
(25,045
|
)
|
|
(16,102
|
)
|
|
(1,893
|
)
|
|||
Comprehensive income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
213,762
|
|
|
$
|
(109,737
|
)
|
|
$
|
194,036
|
|
|
|
Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
7.00% Series D
Cumulative Convertible Preferred Stock |
|
6.45% Series E
Cumulative Redeemable Preferred Stock |
|
Number of
Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-In Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||||||
Balance as of December 31, 2014
|
|
$
|
237,163
|
|
|
$
|
130,000
|
|
|
71,463,876
|
|
|
$
|
715
|
|
|
$
|
3,461,189
|
|
|
$
|
—
|
|
|
$
|
(628
|
)
|
|
$
|
66,804
|
|
|
$
|
3,895,243
|
|
|
$
|
14,315
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,217
|
|
|
—
|
|
|
804
|
|
|
145,021
|
|
|
1,093
|
|
|||||||||
Total other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,819
|
|
|
(4
|
)
|
|
49,815
|
|
|
—
|
|
|||||||||
Contributions from noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
964
|
|
|
964
|
|
|
—
|
|
|||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,190
|
)
|
|||||||||
Issuances of common stock
|
|
—
|
|
|
—
|
|
|
889,856
|
|
|
9
|
|
|
78,454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,463
|
|
|
—
|
|
|||||||||
Issuances pursuant to stock plan
|
|
—
|
|
|
—
|
|
|
194,961
|
|
|
1
|
|
|
27,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,047
|
|
|
—
|
|
|||||||||
Sales of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141,850
|
|
|
—
|
|
|
—
|
|
|
301,595
|
|
|
443,445
|
|
|
—
|
|
|||||||||
Purchases of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,465
|
)
|
|
—
|
|
|
—
|
|
|
(65,504
|
)
|
|
(113,969
|
)
|
|
—
|
|
|||||||||
Dividends declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(221,297
|
)
|
|
—
|
|
|
—
|
|
|
(221,297
|
)
|
|
—
|
|
|||||||||
Dividends declared on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,986
|
)
|
|
—
|
|
|
—
|
|
|
(24,986
|
)
|
|
—
|
|
|||||||||
Distributions in excess of earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,066
|
)
|
|
102,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
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 (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,901
|
)
|
|
—
|
|
|
15,086
|
|
|
(50,815
|
)
|
|
1,016
|
|
|||||||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,836
|
)
|
|
—
|
|
|
(43,836
|
)
|
|
—
|
|
|||||||||
Redemption of redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,206
|
)
|
|||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,241
|
)
|
|
(17,241
|
)
|
|
(985
|
)
|
|||||||||
Contributions from and sales of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,512
|
|
|
—
|
|
|
—
|
|
|
172,671
|
|
|
217,183
|
|
|
2,264
|
|
|||||||||
Issuances of common stock
|
|
—
|
|
|
—
|
|
|
14,773,593
|
|
|
148
|
|
|
1,432,029
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,432,177
|
|
|
—
|
|
|||||||||
Issuances pursuant to stock plan
|
|
—
|
|
|
—
|
|
|
343,594
|
|
|
4
|
|
|
38,365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,369
|
|
|
—
|
|
|||||||||
Repurchase of 7.00% Series D preferred stock
|
|
(150,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,690
|
|
|
(61,267
|
)
|
|
—
|
|
|
—
|
|
|
(206,826
|
)
|
|
—
|
|
|||||||||
Dividends declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(257,563
|
)
|
|
—
|
|
|
—
|
|
|
(257,563
|
)
|
|
—
|
|
|||||||||
Dividends declared on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,223
|
)
|
|
—
|
|
|
—
|
|
|
(20,223
|
)
|
|
—
|
|
|||||||||
Distributions in excess of earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(404,954
|
)
|
|
404,954
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance as of December 31, 2016
|
|
$
|
86,914
|
|
|
$
|
130,000
|
|
|
87,665,880
|
|
|
$
|
877
|
|
|
$
|
4,672,650
|
|
|
$
|
—
|
|
|
$
|
5,355
|
|
|
$
|
475,175
|
|
|
$
|
5,370,971
|
|
|
$
|
11,307
|
|
|
|
Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
7.00% Series D
Cumulative Convertible Preferred Stock |
|
6.45% 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, 2016
|
|
$
|
86,914
|
|
|
$
|
130,000
|
|
|
87,665,880
|
|
|
$
|
877
|
|
|
$
|
4,672,650
|
|
|
$
|
—
|
|
|
$
|
5,355
|
|
|
$
|
475,175
|
|
|
$
|
5,370,971
|
|
|
$
|
11,307
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169,093
|
|
|
—
|
|
|
24,053
|
|
|
193,146
|
|
|
1,058
|
|
|||||||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,669
|
|
|
(66
|
)
|
|
44,603
|
|
|
—
|
|
|||||||||
Redemption of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(541
|
)
|
|
(541
|
)
|
|
—
|
|
|||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,505
|
)
|
|
(21,505
|
)
|
|
(856
|
)
|
|||||||||
Contributions from and sales of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,747
|
|
|
—
|
|
|
—
|
|
|
44,878
|
|
|
52,625
|
|
|
—
|
|
|||||||||
Issuances of common stock
|
|
—
|
|
|
—
|
|
|
11,694,101
|
|
|
117
|
|
|
1,275,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,275,397
|
|
|
—
|
|
|||||||||
Issuances pursuant to stock plan
|
|
—
|
|
|
—
|
|
|
423,705
|
|
|
4
|
|
|
42,395
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,399
|
|
|
—
|
|
|||||||||
Repurchases of 7.00% Series D preferred stock
|
|
(12,528
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|
(5,797
|
)
|
|
—
|
|
|
—
|
|
|
(17,934
|
)
|
|
—
|
|
|||||||||
Redemption of 6.45% Series E preferred stock
|
|
—
|
|
|
(130,000
|
)
|
|
—
|
|
|
—
|
|
|
5,132
|
|
|
(5,482
|
)
|
|
—
|
|
|
—
|
|
|
(130,350
|
)
|
|
—
|
|
|||||||||
Dividends declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(329,485
|
)
|
|
—
|
|
|
—
|
|
|
(329,485
|
)
|
|
—
|
|
|||||||||
Dividends declared on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,666
|
)
|
|
—
|
|
|
—
|
|
|
(7,666
|
)
|
|
—
|
|
|||||||||
Distributions in excess of earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179,337
|
)
|
|
179,337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance as of December 31, 2017
|
|
$
|
74,386
|
|
|
$
|
—
|
|
|
99,783,686
|
|
|
$
|
998
|
|
|
$
|
5,824,258
|
|
|
$
|
—
|
|
|
$
|
50,024
|
|
|
$
|
521,994
|
|
|
$
|
6,471,660
|
|
|
$
|
11,509
|
|
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Cash Flows
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
194,204
|
|
|
$
|
(49,799
|
)
|
|
$
|
146,114
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
416,783
|
|
|
313,390
|
|
|
261,289
|
|
|||
Loss on early extinguishment of debt
|
3,451
|
|
|
3,230
|
|
|
189
|
|
|||
Impairment of real estate
|
203
|
|
|
209,261
|
|
|
23,250
|
|
|||
Gain on sales of real estate
–
rental properties
|
(270
|
)
|
|
(3,715
|
)
|
|
(12,426
|
)
|
|||
Gain on sales of real estate – land parcels
|
(111
|
)
|
|
(90
|
)
|
|
—
|
|
|||
Equity in (earnings) losses of unconsolidated real estate joint ventures
|
(15,426
|
)
|
|
184
|
|
|
(1,651
|
)
|
|||
Distributions of earnings from unconsolidated real estate joint ventures
|
1,618
|
|
|
406
|
|
|
873
|
|
|||
Amortization of loan fees
|
11,149
|
|
|
11,872
|
|
|
11,003
|
|
|||
Amortization of debt (premiums) discounts
|
(2,512
|
)
|
|
(500
|
)
|
|
(372
|
)
|
|||
Amortization of acquired below-market leases
|
(19,055
|
)
|
|
(5,723
|
)
|
|
(6,118
|
)
|
|||
Deferred rent
|
(107,643
|
)
|
|
(51,673
|
)
|
|
(47,483
|
)
|
|||
Stock compensation expense
|
25,610
|
|
|
25,433
|
|
|
17,512
|
|
|||
Investment gains
|
(12,352
|
)
|
|
(28,530
|
)
|
|
(35,035
|
)
|
|||
Investment losses
|
11,023
|
|
|
11,397
|
|
|
16,093
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Restricted cash
|
(557
|
)
|
|
(986
|
)
|
|
60
|
|
|||
Tenant receivables
|
(502
|
)
|
|
(285
|
)
|
|
7
|
|
|||
Deferred leasing costs
|
(62,639
|
)
|
|
(35,273
|
)
|
|
(65,415
|
)
|
|||
Other assets
|
(18,222
|
)
|
|
(11,420
|
)
|
|
(9,079
|
)
|
|||
Accounts payable, accrued expenses, and tenant security deposits
|
25,573
|
|
|
5,322
|
|
|
43,800
|
|
|||
Net cash provided by operating activities
|
450,325
|
|
|
392,501
|
|
|
342,611
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Proceeds from sales of real estate
|
15,432
|
|
|
123,081
|
|
|
129,799
|
|
|||
Additions to real estate
|
(893,685
|
)
|
|
(821,690
|
)
|
|
(564,206
|
)
|
|||
Purchase of real estate
|
(675,584
|
)
|
|
(737,900
|
)
|
|
(248,933
|
)
|
|||
Deposits for investing activities
|
(3,300
|
)
|
|
(450
|
)
|
|
(5,501
|
)
|
|||
Acquisition of interest in unconsolidated real estate joint ventures
|
(60,291
|
)
|
|
—
|
|
|
—
|
|
|||
Contributions to unconsolidated real estate joint ventures
|
(17,876
|
)
|
|
(11,529
|
)
|
|
(9,027
|
)
|
|||
Return of capital from unconsolidated real estate joint ventures
|
38,576
|
|
|
—
|
|
|
—
|
|
|||
Additions to investments
|
(171,881
|
)
|
|
(102,284
|
)
|
|
(95,945
|
)
|
|||
Sales of investments
|
30,483
|
|
|
38,946
|
|
|
67,136
|
|
|||
Repayment of notes receivable
|
—
|
|
|
15,198
|
|
|
4,282
|
|
|||
Net cash used in investing activities
|
$
|
(1,738,126
|
)
|
|
$
|
(1,496,628
|
)
|
|
$
|
(722,395
|
)
|
Alexandria Real Estate Equities, Inc.
Consolidated Statements of Cash Flows
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Borrowings from secured notes payable
|
$
|
153,405
|
|
|
$
|
291,400
|
|
|
$
|
169,754
|
|
Repayments of borrowings from secured notes payable
|
(396,240
|
)
|
|
(310,903
|
)
|
|
(89,815
|
)
|
|||
Proceeds from issuance of unsecured senior notes payable
|
1,023,262
|
|
|
348,604
|
|
|
298,872
|
|
|||
Borrowings from unsecured senior line of credit
|
3,858,000
|
|
|
4,117,000
|
|
|
2,145,000
|
|
|||
Repayments of borrowings from unsecured senior line of credit
|
(3,836,000
|
)
|
|
(4,240,000
|
)
|
|
(2,298,000
|
)
|
|||
Repayments of borrowings from unsecured senior bank term loan
|
(200,000
|
)
|
|
(200,000
|
)
|
|
(25,000
|
)
|
|||
Change in restricted cash related to financing activities
|
(4,914
|
)
|
|
11,746
|
|
|
3,842
|
|
|||
Payment of loan fees
|
(10,019
|
)
|
|
(16,681
|
)
|
|
(10,584
|
)
|
|||
Repurchases of 7.00% Series D cumulative convertible preferred stock
|
(17,934
|
)
|
|
(206,826
|
)
|
|
—
|
|
|||
Redemption of 6.45% Series E cumulative redeemable preferred stock
|
(130,350
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the issuance of common stock
|
1,275,397
|
|
|
1,432,177
|
|
|
78,463
|
|
|||
Dividends on common stock
|
(312,131
|
)
|
|
(240,347
|
)
|
|
(218,104
|
)
|
|||
Dividends on preferred stock
|
(9,619
|
)
|
|
(22,414
|
)
|
|
(24,986
|
)
|
|||
Financing costs paid for sales of noncontrolling interests
|
—
|
|
|
(10,044
|
)
|
|
—
|
|
|||
Contributions from and sales of noncontrolling interests
|
44,931
|
|
|
221,487
|
|
|
453,750
|
|
|||
Distributions to and purchases of noncontrolling interests
|
(22,361
|
)
|
|
(69,678
|
)
|
|
(64,066
|
)
|
|||
Net cash provided by financing activities
|
1,415,427
|
|
|
1,105,521
|
|
|
419,126
|
|
|||
|
|
|
|
|
|
||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
1,723
|
|
|
(1,460
|
)
|
|
(255
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
129,349
|
|
|
(66
|
)
|
|
39,087
|
|
|||
Cash and cash equivalents at beginning of period
|
125,032
|
|
|
125,098
|
|
|
86,011
|
|
|||
Cash and cash equivalents at end of period
|
$
|
254,381
|
|
|
$
|
125,032
|
|
|
$
|
125,098
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
112,113
|
|
|
$
|
84,907
|
|
|
$
|
93,856
|
|
|
|
|
|
|
|
||||||
Non-Cash Investing Activities:
|
|
|
|
|
|
||||||
Assumption of secured notes payable in connection with purchase of real estate
|
$
|
—
|
|
|
$
|
(203,000
|
)
|
|
$
|
(82,000
|
)
|
Change in accrued construction
|
$
|
(11,034
|
)
|
|
$
|
76,848
|
|
|
$
|
(10,070
|
)
|
Payable for purchase of real estate
|
$
|
—
|
|
|
$
|
(56,800
|
)
|
|
$
|
—
|
|
Distribution of real estate in connection with purchase of remaining 49% interest in real estate joint venture with Uber Technologies, Inc.
|
$
|
—
|
|
|
$
|
(25,546
|
)
|
|
$
|
—
|
|
Contribution of real estate to an unconsolidated real estate joint venture
|
$
|
6,998
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Consolidation of previously unconsolidated real estate joint venture
|
$
|
—
|
|
|
$
|
87,930
|
|
|
$
|
—
|
|
Net investment in direct financing lease
|
$
|
—
|
|
|
$
|
36,975
|
|
|
$
|
—
|
|
Contribution of real estate from noncontrolling interests
|
$
|
8,597
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Non-Cash Financing Activities:
|
|
|
|
|
|
||||||
Redemption of redeemable noncontrolling interest
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
$
|
—
|
|
Contribution from redeemable noncontrolling interest
|
$
|
—
|
|
|
$
|
2,264
|
|
|
$
|
—
|
|
Payable for purchase of noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(51,092
|
)
|
1.
|
Organization and basis of presentation
|
2.
|
Summary of significant accounting policies
|
•
|
The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can be in the form of a partnership, limited liability company, or corporation, among others; and
|
•
|
We have a variable interest in the legal entity – i.e., variable interests that are contractual, such as equity ownership, or other financial interests that change with changes in the fair value of the entity’s net assets.
|
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 influence the entity’s economic performance, as evidenced by:
|
•
|
Substantive participating rights in day-to-day management of the entity’s activities; or
|
•
|
Substantive kick-out rights over the party responsible for significant decisions;
|
•
|
The obligation to absorb the entity’s expected losses; or
|
•
|
The right to receive the entity’s expected residual returns.
|
2.
|
Summary of significant accounting policies (continued)
|
•
|
Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating decisions made in the ordinary course of business that most significantly influence the entity’s economic performance.
|
•
|
Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause.
|
2.
|
Summary of significant accounting policies (continued)
|
•
|
Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or
|
•
|
The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction).
|
•
|
The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable, and experienced in performing the process;
|
•
|
The process cannot be replaced without significant cost, effort, or delay; or
|
•
|
The process is considered unique or scarce.
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
|
Date of ASU Adoption
|
|
|
Year Ended December 31, 2017
|
|
|||||
Revenues subject to the new lease ASU:
|
|
|
|
|
|
|
||||
Rental revenues
|
1/1/19
|
|
$
|
821,209
|
|
|
|
|||
Tenant recoveries
(1)
|
1/1/19
|
|
259,144
|
|
|
|
||||
|
|
|
|
|
$
|
1,080,353
|
|
|||
|
|
|
|
|
|
|
||||
Revenues subject to the new revenue recognition ASU:
|
|
|
|
|
|
|
||||
Parking and other revenues
|
1/1/18
|
|
|
|
44,309
|
|
||||
|
|
|
|
|
|
|
||||
Revenues not subject to the new lease or revenue recognition ASUs:
|
|
|
|
|
|
|
||||
Investment income subject to the new financial instruments ASU
|
1/1/18
|
|
$
|
1,329
|
|
|
|
|||
Interest and other income within the scope of other existing accounting standards
|
N/A
|
|
2,106
|
|
|
|
||||
|
|
|
|
|
3,435
|
|
||||
|
|
|
|
|
|
|
||||
Total revenues
|
|
|
|
|
$
|
1,128,097
|
|
|||
|
|
|
|
|
|
|
||||
Gains on sales of real estate subject to the new revenue recognition ASU
|
1/1/18
|
|
|
|
$
|
381
|
|
(1)
|
Certain non-lease components, including tenant recoveries, may be subject to the new revenue recognition ASU upon adoption of the new lease ASU effective January 1, 2019. See further discussion below.
|
2.
|
Summary of significant accounting policies (continued)
|
•
|
An entity need not reassess whether any expired or existing contracts are or contain leases;
|
•
|
An entity need not reassess the lease classification for any expired or existing leases; and
|
•
|
An entity need not reassess initial direct costs for any existing leases.
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
|
Year Ended December 31, 2017
|
||
Parking and other revenue
|
$
|
44,309
|
|
Gain on sales of real estate
|
$
|
381
|
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
|
December 31, 2017
|
||
Public investments
|
|
||
Cost basis
|
$
|
59,740
|
|
Net unrealized gains
|
49,771
|
|
|
Private investments
|
413,743
|
|
|
|
$
|
523,254
|
|
|
Year Ended December 31, 2017
|
||
Investment income recognized in net income
|
$
|
1,329
|
|
Unrealized gain recognized in other comprehensive income (component of stockholder’s equity)
|
$
|
24,360
|
|
2.
|
Summary of significant accounting policies (continued)
|
•
|
Equity investments that qualify for the practical expedient to be measured at net asset value in accordance with ASC 820,
Fair Value Measurement,
such as our privately held investments in limited partnerships, are required to be measured using the reported NAV per share or otherwise valued at fair value using other accepted valuation techniques. The aggregate NAV per share of our investments in limited partnerships exceeds our cost basis by approximately
$91.1 million
as of
December 31, 2017
. This cumulative difference is required to be recognized as a one time adjustment to retained earnings on the date of adoption. We recognized a cumulative adjustment aggregating approximately
$91.1 million
on January 1, 2018 related to our private investments in limited partnerships that report NAV per share. Subsequent changes in NAV per share will be recognized in earnings each reporting period. The year-to-date change in unrealized holding gains of investments in limited partnerships aggregating approximately
$32.8 million
for the
year ended December 31, 2017
, would have been recognized in net income under this new ASU.
|
•
|
Equity investments that do not qualify for the NAV practical expedient, such as our other privately held investments, will be measured at cost less impairments, adjusted for observable price changes that are known or can be reasonably known. An “observable price” is a price observed in an orderly transaction for an identical or similar investment of the same issuer. Investments will be evaluated on the basis of a qualitative assessment for indicators of impairment. If such indicators are present, we are required to estimate the investment’s fair value and recognize an impairment loss equal to the amount by which the investment’s carrying value exceeds its fair value. The FASB has a clarifying amendment currently out for vote by written ballot that confirms a prospective transition approach for securities without readily determinable fair values that do not qualify for the NAV practical expedient above, because it may be difficult for entities to determine the last observable transaction price existing prior to the adoption of this ASU. Since equity securities which qualify for this measurement alternative will be subject to a prospective transition approach, initial valuation adjustments made subsequent to January 1, 2018 will include recognition of cumulative gains or losses equal to the difference between the carrying basis of the investment and the observable price at the date of measurement.
|
2.
|
Summary of significant accounting policies (continued)
|
2.
|
Summary of significant accounting policies (continued)
|
3.
|
Investments in real estate
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Land (related to rental properties)
|
|
$
|
1,312,072
|
|
|
$
|
1,131,416
|
|
Buildings and building improvements
|
|
9,000,626
|
|
|
7,810,269
|
|
||
Other improvements
|
|
780,117
|
|
|
584,565
|
|
||
Rental properties
|
|
11,092,815
|
|
|
9,526,250
|
|
||
Development and redevelopment of new Class A properties:
|
|
|
|
|
||||
Development and redevelopment projects (under construction or pre-construction)
|
|
955,218
|
|
|
809,254
|
|
||
Future development projects
|
|
96,112
|
|
|
253,551
|
|
||
Gross investments in real estate – North America
|
|
12,144,145
|
|
|
10,589,055
|
|
||
Less: accumulated depreciation
|
|
(1,875,810
|
)
|
|
(1,546,798
|
)
|
||
Net investments in real estate – North America
|
|
10,268,335
|
|
|
9,042,257
|
|
||
Net investments in real estate – Asia
|
|
29,684
|
|
|
35,715
|
|
||
Investments in real estate
|
|
$
|
10,298,019
|
|
|
$
|
9,077,972
|
|
|
|
Square Footage
|
|
|
|||||||||
Three Months Ended
|
|
Operating
|
|
Development/Redevelopment
|
|
Future Development
|
|
Purchase Price
|
|||||
March 31, 2017
|
|
232,470
|
|
|
—
|
|
|
1,508,890
|
|
|
$
|
218,500
|
|
June 30, 2017
|
|
272,634
|
|
|
175,000
|
|
|
1,030,000
|
|
|
244,009
|
|
|
September 30, 2017
|
|
168,424
|
|
|
104,212
|
|
|
280,000
|
|
|
110,700
|
|
|
December 31, 2017
|
|
214,896
|
|
|
—
|
|
|
—
|
|
|
86,450
|
|
|
|
|
888,424
|
|
|
279,212
|
|
|
2,818,890
|
|
|
$
|
659,659
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Acquired below-market leases
|
|
$
|
167,146
|
|
|
$
|
119,187
|
|
Accumulated amortization
|
|
(78,962
|
)
|
|
(59,678
|
)
|
||
|
|
$
|
88,184
|
|
|
$
|
59,509
|
|
Year
|
|
Amount
|
||
2018
|
|
$
|
15,452
|
|
2019
|
|
13,393
|
|
|
2020
|
|
10,440
|
|
|
2021
|
|
9,329
|
|
|
2022
|
|
8,191
|
|
|
Thereafter
|
|
31,379
|
|
|
Total
|
|
$
|
88,184
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Acquired in-place leases
|
|
$
|
126,859
|
|
|
$
|
105,708
|
|
Accumulated amortization
|
|
(61,880
|
)
|
|
(42,300
|
)
|
||
|
|
$
|
64,979
|
|
|
$
|
63,408
|
|
Year
|
|
Amount
|
||
2018
|
|
$
|
15,226
|
|
2019
|
|
12,399
|
|
|
2020
|
|
9,624
|
|
|
2021
|
|
7,985
|
|
|
2022
|
|
5,743
|
|
|
Thereafter
|
|
14,002
|
|
|
Total
|
|
$
|
64,979
|
|
Year
|
|
Amount
|
||
2018
|
|
$
|
756,979
|
|
2019
|
|
767,454
|
|
|
2020
|
|
751,657
|
|
|
2021
|
|
708,838
|
|
|
2022
|
|
647,283
|
|
|
Thereafter
|
|
4,975,237
|
|
|
Total
|
|
$
|
8,607,448
|
|
Property/Market/Submarket
|
|
Our Share
|
|
|||
225 Binney Street/Greater Boston/Cambridge
|
|
|
30.0
|
%
|
|
|
409 and 499 Illinois Street/San Francisco/Mission Bay/SoMa
|
|
|
60.0
|
%
|
|
|
1500 Owens Street/San Francisco/Mission Bay/SoMa
|
|
|
50.1
|
%
|
|
|
10290 and 10300 Campus Point Drive and 4110 Campus Point Court/San Diego/University Town Center
|
|
|
55.0
|
%
|
|
|
9625 Towne Centre Drive/San Diego/University Town Center
|
|
|
64.1
|
%
|
(1)
|
|
(1)
|
As of
December 31, 2017
, TIAA’s ownership interest is
35.9%
and is expected to increase to
49.9%
through construction funding.
|
1)
|
The entity does not have sufficient equity to finance its activities without additional subordinated financial support.
|
•
|
Each joint venture has significant equity at risk to fund its activities as the ventures are primarily capitalized by contributions from the members and could obtain, if necessary, non-recourse commercial financing arrangements on customary terms.
|
2)
|
The entity is established with non-substantive voting rights.
|
•
|
The voting rights of each joint venture require both members to approve major decisions, which results in voting rights that are disproportionate to the members’ economic interest. However, the activities of each joint venture are conducted on behalf of both members, so the voting rights, while disproportionate, are substantive.
|
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.
|
•
|
TIAA lacks substantive kick-out rights as it may not remove us as the managing member without cause.
|
•
|
TIAA also lacks substantive participating rights as day-to-day control is vested in us as the managing member and the major decisions that require unanimous consent are primarily protective in nature.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Investments in real estate
|
|
$
|
1,047,472
|
|
|
$
|
993,710
|
|
Cash and cash equivalents
|
|
41,112
|
|
|
27,498
|
|
||
Other assets
|
|
68,754
|
|
|
57,166
|
|
||
Total assets
|
|
$
|
1,157,338
|
|
|
$
|
1,078,374
|
|
|
|
|
|
|
||||
Secured notes payable
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities
|
|
52,201
|
|
|
66,711
|
|
||
Total liabilities
|
|
52,201
|
|
|
66,711
|
|
||
Alexandria Real Estate Equities, Inc.’s share of equity
|
|
584,160
|
|
|
538,069
|
|
||
Noncontrolling interests’ share of equity
|
|
520,977
|
|
|
473,594
|
|
||
Total liabilities and equity
|
|
$
|
1,157,338
|
|
|
$
|
1,078,374
|
|
|
|
|
|
|
4.
|
Investments in unconsolidated real estate joint ventures
|
Initial Maturity Date
|
|
Extension Option Maturity Date
(1)
|
|
Interest Rate
(2)
|
|
Debt Balance
(3)
|
|
Remaining Commitments
|
|
||||||||
|
9/1/2022
|
|
|
9/1/2024
|
|
|
3.54%
|
|
|
$
|
94,040
|
|
|
$
|
17,000
|
|
(4)
|
(1)
|
Reflects extension options that exist, which may be subject to certain conditions.
|
(2)
|
Represents interest rate including interest expense and amortization of loan fees and discount/premium.
|
(3)
|
Represents outstanding principal, net of unamortized deferred financing costs and discount/premium.
|
(4)
|
The remaining loan commitment balance excludes an earn-out advance provision that allows for incremental borrowings up to
$48.0 million
, subject to certain conditions.
|
4.
|
Investments in unconsolidated real estate joint ventures (continued)
|
Initial Maturity Date
|
|
Extension Option Maturity Date
(1)
|
|
Interest Rate
(2)
|
|
Debt Balance
(3)
|
|
Remaining Commitments
|
||||||||
|
3/1/2019
|
|
|
3/3/2020
|
|
|
4.66%
|
|
|
$
|
111,015
|
|
|
$
|
38,926
|
|
(1)
|
Reflects extension options that exist, which may be subject to certain conditions.
|
(2)
|
Represents interest rate including interest expense and amortization of loan fees and discount/premium.
|
(3)
|
Represents outstanding principal, net of unamortized discount/premium.
|
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 support operations as of
December 31, 2017
.
|
•
|
Menlo Gateway –
This entity does not have sufficient equity to finance its activities and to complete its projects under construction without additional financial support by us through equity contributions and debt financing as of December 31, 2017.
|
2)
|
The entity is established with non-substantive voting rights.
|
•
|
360 Longwood Avenue
– Our
27.5%
ownership interest in 360 Longwood Avenue consists of an interest in a joint venture with a development partner. The joint venture with our development partner holds an interest in the property. Our development partner was responsible for the day-to-day management of construction and development activities, and we are responsible for the day-to-day administrative operations of components of the property following development completion. At the property level, all major decisions (including the development, annual budget, leasing, and financing) 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.
|
•
|
Menlo Gateway
– Our current
21.4%
ownership interest as of December 31, 2017, will increase to
49%
ownership interest through subsequent contributions to fund construction. Our partner, the managing member, is responsible for the day-to-day management of the construction and development activities, as well as the day-to-day administrative operations of the operating property. All major decisions, including but not limited to the business plan, annual budget, leasing plan, and financing plan, require approval of both investors. Although voting rights within the structure are disproportionate to the members’ economic interests, the activities of the venture are conducted on behalf of both members, and therefore, the voting rights, while disproportionate, are substantive.
|
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 non-managing members have significant participating rights, including in the day-to-day management of development activities and the participation in decisions related to the operations of the property.
|
•
|
Menlo Gateway
– We lack substantive kick-out rights and substantive participating rights in this entity as the day-to-day control is vested in our partner, the managing member, and the major decisions that require unanimous consent are primarily protective in nature.
|
4.
|
Investments in unconsolidated real estate joint ventures (continued)
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred leasing costs
|
|
$
|
496,387
|
|
|
$
|
430,455
|
|
Accumulated amortization
|
|
(274,957
|
)
|
|
(234,518
|
)
|
||
Deferred leasing costs, net
|
|
$
|
221,430
|
|
|
$
|
195,937
|
|
6.
|
Investments
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Available-for-sale equity securities, cost basis
|
$
|
59,740
|
|
|
$
|
41,392
|
|
Unrealized gains
|
52,193
|
|
|
25,076
|
|
||
Unrealized losses
|
(2,422
|
)
|
|
(5,783
|
)
|
||
Available-for-sale equity securities, at fair value
|
109,511
|
|
|
60,685
|
|
||
Investments accounted for under cost method
|
413,743
|
|
|
281,792
|
|
||
Total investments
|
$
|
523,254
|
|
|
$
|
342,477
|
|
7.
|
Other assets
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Acquired below-market ground leases
|
$
|
12,684
|
|
|
$
|
12,913
|
|
Acquired in-place leases
|
64,979
|
|
|
63,408
|
|
||
Deferred compensation plan
|
15,534
|
|
|
11,632
|
|
||
Deferred financing costs
–
$1.65 billion unsecured senior line of credit
|
10,525
|
|
|
14,239
|
|
||
Deposits
|
10,576
|
|
|
3,302
|
|
||
Furniture, fixtures, and equipment
|
11,070
|
|
|
12,839
|
|
||
Interest rate hedge assets
|
5,260
|
|
|
4,115
|
|
||
Net investment in direct financing lease
|
38,382
|
|
|
37,297
|
|
||
Notes receivable
|
614
|
|
|
694
|
|
||
Prepaid expenses
|
10,972
|
|
|
9,724
|
|
||
Property, plant, and equipment
|
32,073
|
|
|
19,891
|
|
||
Other assets
|
15,784
|
|
|
11,143
|
|
||
Total
|
$
|
228,453
|
|
|
$
|
201,197
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Gross investment in direct financing lease
|
|
$
|
263,719
|
|
|
$
|
264,954
|
|
Less: unearned income
|
|
(225,337
|
)
|
|
(227,657
|
)
|
||
Net investment in direct financing lease
|
|
$
|
38,382
|
|
|
$
|
37,297
|
|
Year
|
|
Total
|
||
2018
|
|
$
|
1,607
|
|
2019
|
|
1,655
|
|
|
2020
|
|
1,705
|
|
|
2021
|
|
1,756
|
|
|
2022
|
|
1,809
|
|
|
Thereafter
|
|
255,187
|
|
|
Total
|
|
$
|
263,719
|
|
8.
|
Fair value measurements
|
|
|
|
|
December 31, 2017
|
||||||||||||
Description
|
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
|
$
|
109,511
|
|
|
$
|
109,511
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate hedge agreements
|
|
$
|
5,260
|
|
|
$
|
—
|
|
|
$
|
5,260
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate hedge agreements
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
$
|
—
|
|
|
|
|
|
December 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
|
|
$
|
60,685
|
|
|
$
|
60,685
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate hedge agreements
|
|
$
|
4,115
|
|
|
$
|
—
|
|
|
$
|
4,115
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate hedge agreements
|
|
$
|
3,587
|
|
|
$
|
—
|
|
|
$
|
3,587
|
|
|
$
|
—
|
|
8.
|
Fair value measurements (continued)
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Book Value
|
|
Fair Value
|
|
Book Value
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
$
|
109,511
|
|
|
$
|
109,511
|
|
|
$
|
60,685
|
|
|
$
|
60,685
|
|
Interest rate hedge agreements
|
$
|
5,260
|
|
|
$
|
5,260
|
|
|
$
|
4,115
|
|
|
$
|
4,115
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate hedge agreements
|
$
|
103
|
|
|
$
|
103
|
|
|
$
|
3,587
|
|
|
$
|
3,587
|
|
Secured notes payable
|
$
|
771,061
|
|
|
$
|
776,222
|
|
|
$
|
1,011,292
|
|
|
$
|
1,016,782
|
|
Unsecured senior notes payable
|
$
|
3,395,804
|
|
|
$
|
3,529,713
|
|
|
$
|
2,378,262
|
|
|
$
|
2,431,470
|
|
Unsecured senior line of credit
|
$
|
50,000
|
|
|
$
|
49,986
|
|
|
$
|
28,000
|
|
|
$
|
27,998
|
|
Unsecured senior bank term loans
|
$
|
547,942
|
|
|
$
|
549,361
|
|
|
$
|
746,471
|
|
|
$
|
750,422
|
|
9.
|
Secured and unsecured senior debt
|
|
Fixed Rate/Hedged
Variable-Rate Debt
|
|
Unhedged
Variable-Rate Debt
|
|
|
|
|
|
Weighted-Average
|
||||||||||
|
|
|
|
|
|
|
Interest Rate
(1)
|
|
Remaining Term
(in years)
|
||||||||||
|
|
|
Total
|
|
Percentage
|
|
|
||||||||||||
Secured notes payable
|
$
|
745,742
|
|
|
$
|
25,319
|
|
|
$
|
771,061
|
|
|
16.2
|
%
|
|
4.04
|
%
|
|
3.3
|
Unsecured senior notes payable
|
3,395,804
|
|
|
—
|
|
|
3,395,804
|
|
|
71.3
|
|
|
4.05
|
|
|
6.9
|
|||
$1.65 billion unsecured senior line of credit
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
1.0
|
|
|
2.05
|
|
|
3.8
|
|||
2019 Unsecured Senior Bank Term Loan
|
199,496
|
|
|
—
|
|
|
199,496
|
|
|
4.2
|
|
|
2.85
|
|
|
1.0
|
|||
2021 Unsecured Senior Bank Term Loan
|
348,446
|
|
|
—
|
|
|
348,446
|
|
|
7.3
|
|
|
2.59
|
|
|
3.0
|
|||
Total/weighted average
|
$
|
4,739,488
|
|
|
$
|
25,319
|
|
|
$
|
4,764,807
|
|
|
100.0
|
%
|
|
3.87
|
%
|
|
5.7
|
Percentage of total debt
|
99
|
%
|
|
1
|
%
|
|
100
|
%
|
|
|
|
|
|
|
(1)
|
Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to our interest rate hedge agreements, amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
|
9.
|
Secured and unsecured senior debt (continued)
|
|
|
Stated
Rate
|
|
Interest Rate
(1)
|
|
Maturity
|
|
|
|
|
Unamortized (Deferred Financing Cost), (Discount) Premium
|
|
|
||||||||
Debt
|
|
|
|
Date
(2)
|
|
|
Principal
|
|
|
Total
|
|||||||||||
Secured notes payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater Boston
|
|
L+1.50
|
%
|
|
3.22
|
%
|
|
1/28/19
|
(3)
|
|
$
|
325,319
|
|
|
$
|
(1,296
|
)
|
|
$
|
324,023
|
|
Greater Boston, San Diego, Seattle, and Maryland
|
|
7.75
|
%
|
|
8.13
|
|
|
4/1/20
|
|
|
108,469
|
|
|
(752
|
)
|
|
107,717
|
|
|||
San Diego
|
|
4.66
|
%
|
|
4.97
|
|
|
1/1/23
|
|
|
34,981
|
|
|
(329
|
)
|
|
34,652
|
|
|||
Greater Boston
|
|
3.93
|
%
|
|
3.19
|
|
|
3/10/23
|
|
|
82,000
|
|
|
2,828
|
|
|
84,828
|
|
|||
Greater Boston
|
|
4.82
|
%
|
|
3.39
|
|
|
2/6/24
|
|
|
203,000
|
|
|
16,068
|
|
|
219,068
|
|
|||
San Francisco
|
|
6.50
|
%
|
|
6.67
|
|
|
7/1/36
|
|
|
773
|
|
|
—
|
|
|
773
|
|
|||
Secured debt weighted-average interest rate/subtotal
|
|
4.39
|
%
|
|
4.04
|
|
|
|
|
|
754,542
|
|
|
16,519
|
|
|
771,061
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2019 Unsecured Senior Bank Term Loan
|
|
L+1.20
|
%
|
|
2.85
|
|
|
1/3/19
|
|
|
200,000
|
|
|
(504
|
)
|
|
199,496
|
|
|||
2021 Unsecured Senior Bank Term Loan
|
|
L+1.10
|
%
|
|
2.59
|
|
|
1/15/21
|
|
|
350,000
|
|
|
(1,554
|
)
|
|
348,446
|
|
|||
$1.65 billion unsecured senior line of credit
|
|
L+1.00
|
%
|
|
2.05
|
|
|
10/29/21
|
|
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|||
Unsecured senior notes payable
|
|
2.75
|
%
|
|
2.96
|
|
|
1/15/20
|
|
|
400,000
|
|
|
(1,628
|
)
|
|
398,372
|
|
|||
Unsecured senior notes payable
|
|
4.60
|
%
|
|
4.74
|
|
|
4/1/22
|
|
|
550,000
|
|
|
(2,760
|
)
|
|
547,240
|
|
|||
Unsecured senior notes payable
|
|
3.90
|
%
|
|
4.04
|
|
|
6/15/23
|
|
|
500,000
|
|
|
(3,236
|
)
|
|
496,764
|
|
|||
Unsecured senior notes payable
|
|
3.45
|
%
|
|
3.56
|
|
|
4/30/25
|
|
|
600,000
|
|
|
(4,057
|
)
|
|
595,943
|
|
|||
Unsecured senior notes payable
|
|
4.30
|
%
|
|
4.52
|
|
|
1/15/26
|
|
|
300,000
|
|
|
(6,205
|
)
|
|
293,795
|
|
|||
Unsecured senior notes payable
|
|
3.95
|
%
|
|
4.14
|
|
|
1/15/27
|
|
|
350,000
|
|
|
(4,518
|
)
|
|
345,482
|
|
|||
Unsecured senior notes payable
|
|
3.95
|
%
|
|
4.08
|
|
|
1/15/28
|
|
|
425,000
|
|
|
(4,231
|
)
|
|
420,769
|
|
|||
Unsecured senior notes payable
|
|
4.50
|
%
|
|
4.62
|
|
|
7/30/29
|
|
|
300,000
|
|
|
(2,561
|
)
|
|
297,439
|
|
|||
Unsecured debt weighted average/subtotal
|
|
|
|
3.84
|
|
|
|
|
|
4,025,000
|
|
|
(31,254
|
)
|
|
3,993,746
|
|
||||
Weighted-average interest rate/total
|
|
|
|
3.87
|
%
|
|
|
|
|
$
|
4,779,542
|
|
|
$
|
(14,735
|
)
|
|
$
|
4,764,807
|
|
(1)
|
Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to our interest rate hedge agreements, amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.
|
(2)
|
Reflects any extension options that we control.
|
(3)
|
Secured construction loan for our property at 50 and 60 Binney Street in our Cambridge submarket with aggregate commitments of
$350.0 million
. We have
two
,
one
-year options to extend the stated maturity date to January 28, 2021, subject to certain conditions. As of
December 31, 2017
, the aggregate remaining commitments are
$24.7 million
.
|
|
|
As of December 31, 2017
|
||||||||
Facility
|
|
Balance
|
|
Maturity Date
(1)
|
|
Applicable Rate
|
|
Facility Fee
|
||
$1.65 billion unsecured senior line of credit
|
|
$
|
50,000
|
|
|
October 2021
|
|
L+1.00%
|
|
0.20%
|
2019 Unsecured Senior Bank Term Loan
|
|
199,496
|
|
|
January 2019
|
|
L+1.20%
|
|
N/A
|
|
2021 Unsecured Senior Bank Term Loan
|
|
348,446
|
|
|
January 2021
|
|
L+1.10%
|
|
N/A
|
|
|
|
$
|
597,942
|
|
|
|
|
|
|
|
(1)
|
Reflects any extension options that we control.
|
9.
|
Secured and unsecured senior debt (continued)
|
9.
|
Secured and unsecured senior debt (continued)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest incurred
|
|
$
|
186,867
|
|
|
$
|
159,403
|
|
|
$
|
142,353
|
|
Capitalized interest
|
|
(58,222
|
)
|
|
(52,450
|
)
|
|
(36,540
|
)
|
|||
Interest expense
|
|
$
|
128,645
|
|
|
$
|
106,953
|
|
|
$
|
105,813
|
|
10.
|
Interest rate hedge agreements
|
|
|
|
|
Number of Contracts
|
|
Weighted-Average Interest Pay Rate
(1)
|
|
Fair Value
as of 12/31/17
|
|
Notional Amount in Effect as of
|
||||||||||||
Effective Date
|
|
Maturity Date
|
|
|
|
|
12/31/17
|
|
12/31/18
|
|
12/31/19
|
|||||||||||
March 31, 2017
|
|
March 31, 2018
|
|
11
|
|
1.18%
|
|
$
|
618
|
|
|
$
|
700,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
March 31, 2017
|
|
March 31, 2018
|
|
4
|
|
1.76%
|
|
(103
|
)
|
|
200,000
|
|
|
—
|
|
|
—
|
|
||||
March 29, 2018
|
|
March 31, 2019
|
|
8
|
|
1.16%
|
|
4,373
|
|
|
—
|
|
|
600,000
|
|
|
—
|
|
||||
March 29, 2019
|
|
March 31, 2020
|
|
1
|
|
1.89%
|
|
269
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
||||
Total
|
|
|
|
|
|
|
|
$
|
5,157
|
|
|
$
|
900,000
|
|
|
$
|
600,000
|
|
|
$
|
100,000
|
|
(1)
|
In addition to the interest pay rate for each swap agreement, interest is payable at an applicable margin over LIBOR for borrowings outstanding as of
December 31, 2017
, as listed under the column heading “Stated Rate” in our summary table of outstanding indebtedness and respective principal payments under Note 9 – “Secured and Unsecured Senior Debt” to these consolidated financial statements.
|
11.
|
Accounts payable, accrued expenses, and tenant security deposits
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts payable and accrued expenses
|
$
|
349,884
|
|
|
$
|
366,174
|
|
Acquired below-market leases
|
88,184
|
|
|
59,509
|
|
||
Conditional asset retirement obligations
|
7,397
|
|
|
3,095
|
|
||
Deferred rent liabilities
|
27,953
|
|
|
34,426
|
|
||
Interest rate hedge liabilities
|
103
|
|
|
3,587
|
|
||
Unearned rent and tenant security deposits
|
248,924
|
|
|
231,416
|
|
||
Other liabilities
|
41,387
|
|
|
33,464
|
|
||
Total
|
$
|
763,832
|
|
|
$
|
731,671
|
|
12.
|
Earnings per share
|
12.
|
Earnings per share (continued)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from continuing operations
|
$
|
194,093
|
|
|
$
|
(49,889
|
)
|
|
$
|
146,157
|
|
Gain on sales of real estate – land parcels
|
111
|
|
|
90
|
|
|
—
|
|
|||
Net income attributable to noncontrolling interests
|
(25,111
|
)
|
|
(16,102
|
)
|
|
(1,897
|
)
|
|||
Dividends on preferred stock
|
(7,666
|
)
|
|
(20,223
|
)
|
|
(24,986
|
)
|
|||
Preferred stock redemption charge
|
(11,279
|
)
|
|
(61,267
|
)
|
|
—
|
|
|||
Net income attributable to unvested restricted stock awards
|
(4,753
|
)
|
|
(3,750
|
)
|
|
(2,364
|
)
|
|||
Numerator for basic and diluted EPS – net income (loss) from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
145,395
|
|
|
(151,141
|
)
|
|
116,910
|
|
|||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|||
Numerator for basic and diluted EPS – net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
145,395
|
|
|
$
|
(151,141
|
)
|
|
$
|
116,867
|
|
|
|
|
|
|
|
||||||
Denominator for basic EPS – weighted-average shares of common stock outstanding
|
91,546
|
|
|
76,103
|
|
|
71,529
|
|
|||
Dilutive effect of forward equity sales agreements
|
517
|
|
|
—
|
|
|
—
|
|
|||
Denominator for diluted EPS – weighted-average shares of common stock outstanding
|
92,063
|
|
|
76,103
|
|
|
71,529
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) per share
|
$
|
1.59
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders – diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) per share
|
$
|
1.58
|
|
|
$
|
(1.99
|
)
|
|
$
|
1.63
|
|
13.
|
Income taxes
|
|
Common Stock
|
|
Series D Convertible Preferred Stock
|
|
Series E Redeemable Preferred Stock
|
||||||||||||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Ordinary income
|
62.1
|
%
|
|
25.2
|
%
|
|
50.1
|
%
|
|
85.3
|
%
|
|
44.8
|
%
|
|
54.4
|
%
|
|
85.3
|
%
|
|
44.8
|
%
|
|
54.4
|
%
|
|||||||||
Return of capital
|
27.2
|
|
|
43.9
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Capital gains at 25%
|
0.7
|
|
|
—
|
|
|
8.5
|
|
|
1.0
|
|
|
—
|
|
|
9.2
|
|
|
1.0
|
|
|
—
|
|
|
9.2
|
|
|||||||||
Capital gains at 20%
|
10.0
|
|
|
30.9
|
|
|
33.5
|
|
|
13.7
|
|
|
55.2
|
|
|
36.4
|
|
|
13.7
|
|
|
55.2
|
|
|
36.4
|
|
|||||||||
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dividends declared
|
$
|
3.45
|
|
|
$
|
3.23
|
|
|
$
|
3.05
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
$
|
0.4031
|
|
|
$
|
1.6125
|
|
|
$
|
1.6125
|
|
13.
|
Income taxes (continued)
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Net (loss) income
|
|
$
|
(49,799
|
)
|
|
$
|
146,114
|
|
Net income attributable to noncontrolling interests
|
|
(16,102
|
)
|
|
(1,897
|
)
|
||
Book/tax differences:
|
|
|
|
|
||||
Rental revenue recognition
|
|
(36,022
|
)
|
|
(42,815
|
)
|
||
Depreciation and amortization
|
|
79,710
|
|
|
46,641
|
|
||
Share-based compensation
|
|
15,568
|
|
|
12,705
|
|
||
Interest expense
|
|
(2,597
|
)
|
|
(58,909
|
)
|
||
Sales of property
|
|
100,047
|
|
|
66,102
|
|
||
Impairments
|
|
61,593
|
|
|
35,177
|
|
||
Other
|
|
358
|
|
|
11,479
|
|
||
Taxable income before dividend deduction
|
|
152,756
|
|
|
214,597
|
|
||
Dividend deduction necessary to eliminate taxable income
(1)
|
|
(152,756
|
)
|
|
(214,597
|
)
|
||
Estimated income subject to federal income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Total common stock and preferred stock dividend distributions paid were approximately
$262.8 million
and
$243.1 million
for the years ended
December 31, 2016
and
2015
, respectively.
|
14.
|
Commitments and contingencies
|
14.
|
Commitments and contingencies (continued)
|
Year
|
|
Office Leases
|
|
Ground Leases
|
|
Total
|
||||||
2018
|
|
$
|
1,840
|
|
|
$
|
12,098
|
|
|
$
|
13,938
|
|
2019
|
|
1,777
|
|
|
12,249
|
|
|
14,026
|
|
|||
2020
|
|
327
|
|
|
12,084
|
|
|
12,411
|
|
|||
2021
|
|
270
|
|
|
11,641
|
|
|
11,911
|
|
|||
2022
|
|
—
|
|
|
11,735
|
|
|
11,735
|
|
|||
Thereafter
|
|
—
|
|
|
520,205
|
|
|
520,205
|
|
|||
Total
|
|
$
|
4,214
|
|
|
$
|
580,012
|
|
|
$
|
584,226
|
|
15.
|
Stockholders’ equity
|
15.
|
Stockholders’ equity (continued)
|
|
Net Unrealized Gains (Losses) on:
|
|
|
||||||||||||
|
Available-for- Sale Equity Securities
|
|
Interest Rate
Hedge Agreements |
|
Foreign Currency Translation
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
19,293
|
|
|
$
|
405
|
|
|
$
|
(14,343
|
)
|
|
$
|
5,355
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
24,360
|
|
|
2,837
|
|
|
7,774
|
|
|
34,971
|
|
||||
Amounts reclassified from other comprehensive income
|
6,118
|
|
|
1,915
|
|
|
1,599
|
|
|
9,632
|
|
||||
|
30,478
|
|
|
4,752
|
|
|
9,373
|
|
|
44,603
|
|
||||
Amounts attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
66
|
|
|
66
|
|
||||
Net other comprehensive income
|
30,478
|
|
|
4,752
|
|
|
9,439
|
|
|
44,669
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017
|
$
|
49,771
|
|
|
$
|
5,157
|
|
|
$
|
(4,904
|
)
|
|
$
|
50,024
|
|
15.
|
Stockholders’ equity (continued)
|
16.
|
Share-based compensation
|
|
|
|
|
Number of Share Awards
|
|
Weighted-Average
Grant Date
Fair Value Per Share
|
|||||||||
Outstanding at December 31, 2014
|
|
|
|
674,969
|
|
|
$
|
69.46
|
|
|
|||||
Granted
|
|
|
|
449,559
|
|
|
$
|
89.72
|
|
|
|||||
Vested
|
|
|
|
(307,511
|
)
|
|
$
|
71.78
|
|
|
|||||
Forfeited
|
|
|
|
(2,999
|
)
|
|
$
|
79.81
|
|
|
|||||
Outstanding at December 31, 2015
|
|
|
|
814,018
|
|
|
$
|
80.95
|
|
|
|||||
Granted
|
|
|
|
661,409
|
|
|
$
|
88.98
|
|
|
|||||
Vested
|
|
|
|
(325,537
|
)
|
|
$
|
78.73
|
|
|
|||||
Forfeited
|
|
|
|
(14,102
|
)
|
|
$
|
79.10
|
|
|
|||||
Outstanding at December 31, 2016
|
|
|
|
1,135,788
|
|
|
$
|
87.21
|
|
|
|||||
Granted
|
|
|
|
688,295
|
|
|
$
|
108.22
|
|
|
|||||
Vested
|
|
|
|
(423,705
|
)
|
|
$
|
85.16
|
|
|
|||||
Forfeited
|
|
|
|
(5,796
|
)
|
|
$
|
101.45
|
|
|
|||||
Outstanding at December 31, 2017
|
|
|
|
1,394,582
|
|
|
$
|
95.79
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
Year Ended December 31,
|
|||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
Total grant date fair value of stock awards vested
|
|
$
|
36,083
|
|
|
$
|
25,630
|
|
|
$
|
22,073
|
|
|||
Total compensation recognized for stock awards, net of capitalization
|
|
$
|
25,610
|
|
|
$
|
25,433
|
|
|
$
|
17,512
|
|
|||
Capitalized stock compensation
|
|
$
|
16,682
|
|
|
$
|
11,604
|
|
|
$
|
9,177
|
|
16.
|
Share-based compensation (continued)
|
17.
|
Noncontrolling interests
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from continuing operations attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
$
|
169,093
|
|
|
$
|
(65,901
|
)
|
|
$
|
144,260
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|||
Net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
$
|
169,093
|
|
|
$
|
(65,901
|
)
|
|
$
|
144,217
|
|
18.
|
Assets classified as held for sale
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Total assets
|
$
|
31,578
|
|
|
$
|
39,643
|
|
Total liabilities
|
(1,809
|
)
|
|
(2,342
|
)
|
||
Total accumulated other comprehensive loss (gain)
|
(1,021
|
)
|
|
828
|
|
||
Net assets classified as held for sale – Asia
|
$
|
28,748
|
|
|
$
|
38,129
|
|
19.
|
Quarterly financial data (unaudited)
|
|
|
Quarter
|
|
||||||||||||||
2017
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
||||||||
Revenues
|
|
$
|
270,877
|
|
|
$
|
273,059
|
|
|
$
|
285,370
|
|
|
$
|
298,791
|
|
|
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
|
$
|
25,661
|
|
|
$
|
31,630
|
|
|
$
|
51,273
|
|
|
$
|
36,831
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
(1)
|
|
$
|
0.29
|
|
|
$
|
0.35
|
|
|
$
|
0.55
|
|
|
$
|
0.39
|
|
|
Diluted
(1)
|
|
$
|
0.29
|
|
|
$
|
0.35
|
|
|
$
|
0.55
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarter
|
|
||||||||||||||
2016
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
||||||||
Revenues
|
|
$
|
216,089
|
|
|
$
|
226,076
|
|
|
$
|
230,379
|
|
|
$
|
249,162
|
|
|
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
|
$
|
(3,818
|
)
|
|
$
|
(127,648
|
)
|
|
$
|
5,452
|
|
|
$
|
(25,127
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
(1)
|
|
$
|
(0.05
|
)
|
|
$
|
(1.72
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.31
|
)
|
|
(1)
|
Quarterly earnings per common share amounts may not total to the annual amounts due to rounding and due to the increase in the weighted-average shares of common stock outstanding
.
|
20.
|
Subsequent events
|
21.
|
Condensed consolidating financial information
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,298,019
|
|
|
$
|
—
|
|
|
$
|
10,298,019
|
|
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
110,618
|
|
|
—
|
|
|
110,618
|
|
|||||
Cash and cash equivalents
|
130,364
|
|
|
9
|
|
|
124,008
|
|
|
—
|
|
|
254,381
|
|
|||||
Restricted cash
|
152
|
|
|
—
|
|
|
22,653
|
|
|
—
|
|
|
22,805
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
10,262
|
|
|
—
|
|
|
10,262
|
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
434,731
|
|
|
—
|
|
|
434,731
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
221,430
|
|
|
—
|
|
|
221,430
|
|
|||||
Investments
|
—
|
|
|
1,655
|
|
|
521,599
|
|
|
—
|
|
|
523,254
|
|
|||||
Investments in and advances to affiliates
|
9,949,861
|
|
|
9,030,994
|
|
|
183,850
|
|
|
(19,164,705
|
)
|
|
—
|
|
|||||
Other assets
|
45,108
|
|
|
—
|
|
|
183,345
|
|
|
—
|
|
|
228,453
|
|
|||||
Total assets
|
$
|
10,125,485
|
|
|
$
|
9,032,658
|
|
|
$
|
12,110,515
|
|
|
$
|
(19,164,705
|
)
|
|
$
|
12,103,953
|
|
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
771,061
|
|
|
$
|
—
|
|
|
$
|
771,061
|
|
Unsecured senior notes payable
|
3,395,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,395,804
|
|
|||||
Unsecured senior line of credit
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|||||
Unsecured senior bank term loans
|
547,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
547,942
|
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
89,928
|
|
|
—
|
|
|
673,904
|
|
|
—
|
|
|
763,832
|
|
|||||
Dividends payable
|
92,145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,145
|
|
|||||
Total liabilities
|
4,175,819
|
|
|
—
|
|
|
1,444,965
|
|
|
—
|
|
|
5,620,784
|
|
|||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
11,509
|
|
|
—
|
|
|
11,509
|
|
|||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
5,949,666
|
|
|
9,032,658
|
|
|
10,132,047
|
|
|
(19,164,705
|
)
|
|
5,949,666
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
521,994
|
|
|
—
|
|
|
521,994
|
|
|||||
Total equity
|
5,949,666
|
|
|
9,032,658
|
|
|
10,654,041
|
|
|
(19,164,705
|
)
|
|
6,471,660
|
|
|||||
Total liabilities, noncontrolling interests, and equity
|
$
|
10,125,485
|
|
|
$
|
9,032,658
|
|
|
$
|
12,110,515
|
|
|
$
|
(19,164,705
|
)
|
|
$
|
12,103,953
|
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,077,972
|
|
|
$
|
—
|
|
|
$
|
9,077,972
|
|
Investments in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
50,221
|
|
|
—
|
|
|
50,221
|
|
|||||
Cash and cash equivalents
|
30,603
|
|
|
—
|
|
|
94,429
|
|
|
—
|
|
|
125,032
|
|
|||||
Restricted cash
|
102
|
|
|
—
|
|
|
16,232
|
|
|
—
|
|
|
16,334
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
9,744
|
|
|
—
|
|
|
9,744
|
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
335,974
|
|
|
—
|
|
|
335,974
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
195,937
|
|
|
—
|
|
|
195,937
|
|
|||||
Investments
|
—
|
|
|
4,440
|
|
|
338,037
|
|
|
—
|
|
|
342,477
|
|
|||||
Investments in and advances to affiliates
|
8,152,965
|
|
|
7,444,919
|
|
|
151,594
|
|
|
(15,749,478
|
)
|
|
—
|
|
|||||
Other assets
|
45,646
|
|
|
—
|
|
|
155,551
|
|
|
—
|
|
|
201,197
|
|
|||||
Total assets
|
$
|
8,229,316
|
|
|
$
|
7,449,359
|
|
|
$
|
10,425,691
|
|
|
$
|
(15,749,478
|
)
|
|
$
|
10,354,888
|
|
Liabilities, Noncontrolling Interests, and Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,011,292
|
|
|
$
|
—
|
|
|
$
|
1,011,292
|
|
Unsecured senior notes payable
|
2,378,262
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,378,262
|
|
|||||
Unsecured senior line of credit
|
28,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,000
|
|
|||||
Unsecured senior bank term loans
|
746,471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
746,471
|
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
104,044
|
|
|
—
|
|
|
627,627
|
|
|
—
|
|
|
731,671
|
|
|||||
Dividends payable
|
76,743
|
|
|
—
|
|
|
171
|
|
|
—
|
|
|
76,914
|
|
|||||
Total liabilities
|
3,333,520
|
|
|
—
|
|
|
1,639,090
|
|
|
—
|
|
|
4,972,610
|
|
|||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
11,307
|
|
|
—
|
|
|
11,307
|
|
|||||
Alexandria Real Estate Equities, Inc.’s stockholders’ equity
|
4,895,796
|
|
|
7,449,359
|
|
|
8,300,119
|
|
|
(15,749,478
|
)
|
|
4,895,796
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
475,175
|
|
|
—
|
|
|
475,175
|
|
|||||
Total equity
|
4,895,796
|
|
|
7,449,359
|
|
|
8,775,294
|
|
|
(15,749,478
|
)
|
|
5,370,971
|
|
|||||
Total liabilities, noncontrolling interests, and equity
|
$
|
8,229,316
|
|
|
$
|
7,449,359
|
|
|
$
|
10,425,691
|
|
|
$
|
(15,749,478
|
)
|
|
$
|
10,354,888
|
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
863,181
|
|
|
$
|
—
|
|
|
$
|
863,181
|
|
Tenant recoveries
|
—
|
|
|
—
|
|
|
259,144
|
|
|
—
|
|
|
259,144
|
|
|||||
Other income (loss)
|
15,238
|
|
|
(2,575
|
)
|
|
11,278
|
|
|
(18,169
|
)
|
|
5,772
|
|
|||||
Total revenues
|
15,238
|
|
|
(2,575
|
)
|
|
1,133,603
|
|
|
(18,169
|
)
|
|
1,128,097
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
—
|
|
|
—
|
|
|
325,609
|
|
|
—
|
|
|
325,609
|
|
|||||
General and administrative
|
73,897
|
|
|
—
|
|
|
19,281
|
|
|
(18,169
|
)
|
|
75,009
|
|
|||||
Interest
|
101,876
|
|
|
—
|
|
|
26,769
|
|
|
—
|
|
|
128,645
|
|
|||||
Depreciation and amortization
|
7,625
|
|
|
—
|
|
|
409,158
|
|
|
—
|
|
|
416,783
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
|||||
Loss on early extinguishment of debt
|
670
|
|
|
—
|
|
|
2,781
|
|
|
—
|
|
|
3,451
|
|
|||||
Total expenses
|
184,068
|
|
|
—
|
|
|
783,801
|
|
|
(18,169
|
)
|
|
949,700
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in earnings of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
15,426
|
|
|
—
|
|
|
15,426
|
|
|||||
Equity in earnings of affiliates
|
337,923
|
|
|
328,230
|
|
|
6,384
|
|
|
(672,537
|
)
|
|
—
|
|
|||||
Gain on sales of real estate – rental properties
|
—
|
|
|
—
|
|
|
270
|
|
|
—
|
|
|
270
|
|
|||||
Income from continuing operations
|
169,093
|
|
|
325,655
|
|
|
371,882
|
|
|
(672,537
|
)
|
|
194,093
|
|
|||||
Gain on sales of real estate – land parcels
|
—
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
|||||
Net income
|
169,093
|
|
|
325,655
|
|
|
371,993
|
|
|
(672,537
|
)
|
|
194,204
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(25,111
|
)
|
|
—
|
|
|
(25,111
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
169,093
|
|
|
325,655
|
|
|
346,882
|
|
|
(672,537
|
)
|
|
169,093
|
|
|||||
Dividends on preferred stock
|
(7,666
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,666
|
)
|
|||||
Preferred stock redemption charge
|
(11,279
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,279
|
)
|
|||||
Net income attributable to unvested restricted stock awards
|
(4,753
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,753
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
145,395
|
|
|
$
|
325,655
|
|
|
$
|
346,882
|
|
|
$
|
(672,537
|
)
|
|
$
|
145,395
|
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
673,820
|
|
|
$
|
—
|
|
|
$
|
673,820
|
|
Tenant recoveries
|
—
|
|
|
—
|
|
|
223,655
|
|
|
—
|
|
|
223,655
|
|
|||||
Other income (loss)
|
10,607
|
|
|
147
|
|
|
27,515
|
|
|
(14,038
|
)
|
|
24,231
|
|
|||||
Total revenues
|
10,607
|
|
|
147
|
|
|
924,990
|
|
|
(14,038
|
)
|
|
921,706
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
—
|
|
|
—
|
|
|
278,408
|
|
|
—
|
|
|
278,408
|
|
|||||
General and administrative
|
62,234
|
|
|
—
|
|
|
15,688
|
|
|
(14,038
|
)
|
|
63,884
|
|
|||||
Interest
|
85,613
|
|
|
—
|
|
|
21,340
|
|
|
—
|
|
|
106,953
|
|
|||||
Depreciation and amortization
|
6,792
|
|
|
—
|
|
|
306,598
|
|
|
—
|
|
|
313,390
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
209,261
|
|
|
—
|
|
|
209,261
|
|
|||||
Loss on early extinguishment of debt
|
3,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,230
|
|
|||||
Total expenses
|
157,869
|
|
|
—
|
|
|
831,295
|
|
|
(14,038
|
)
|
|
975,126
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in earnings of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(184
|
)
|
|
—
|
|
|
(184
|
)
|
|||||
Equity in earnings of affiliates
|
81,361
|
|
|
47,215
|
|
|
959
|
|
|
(129,535
|
)
|
|
—
|
|
|||||
Gain on sales of real estate – rental properties
|
—
|
|
|
—
|
|
|
3,715
|
|
|
—
|
|
|
3,715
|
|
|||||
(Loss) income from continuing operations
|
(65,901
|
)
|
|
47,362
|
|
|
98,185
|
|
|
(129,535
|
)
|
|
(49,889
|
)
|
|||||
Gain on sales of real estate – land parcels
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Net (loss) income
|
(65,901
|
)
|
|
47,362
|
|
|
98,275
|
|
|
(129,535
|
)
|
|
(49,799
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(16,102
|
)
|
|
—
|
|
|
(16,102
|
)
|
|||||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
(65,901
|
)
|
|
47,362
|
|
|
82,173
|
|
|
(129,535
|
)
|
|
(65,901
|
)
|
|||||
Dividends on preferred stock
|
(20,223
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,223
|
)
|
|||||
Preferred stock redemption charge
|
(61,267
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,267
|
)
|
|||||
Net income attributable to unvested restricted stock awards
|
(3,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|||||
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(151,141
|
)
|
|
$
|
47,362
|
|
|
$
|
82,173
|
|
|
$
|
(129,535
|
)
|
|
$
|
(151,141
|
)
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
608,824
|
|
|
$
|
—
|
|
|
$
|
608,824
|
|
Tenant recoveries
|
—
|
|
|
—
|
|
|
209,063
|
|
|
—
|
|
|
209,063
|
|
|||||
Other income (loss)
|
12,944
|
|
|
(205
|
)
|
|
28,149
|
|
|
(15,301
|
)
|
|
25,587
|
|
|||||
Total revenues
|
12,944
|
|
|
(205
|
)
|
|
846,036
|
|
|
(15,301
|
)
|
|
843,474
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental operations
|
—
|
|
|
—
|
|
|
261,232
|
|
|
—
|
|
|
261,232
|
|
|||||
General and administrative
|
51,553
|
|
|
—
|
|
|
23,369
|
|
|
(15,301
|
)
|
|
59,621
|
|
|||||
Interest
|
79,155
|
|
|
—
|
|
|
26,658
|
|
|
—
|
|
|
105,813
|
|
|||||
Depreciation and amortization
|
5,986
|
|
|
—
|
|
|
255,303
|
|
|
—
|
|
|
261,289
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
23,250
|
|
|
—
|
|
|
23,250
|
|
|||||
Loss on early extinguishment of debt
|
189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189
|
|
|||||
Total expenses
|
136,883
|
|
|
—
|
|
|
589,812
|
|
|
(15,301
|
)
|
|
711,394
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
1,651
|
|
|
—
|
|
|
1,651
|
|
|||||
Equity in earnings of affiliates
|
268,156
|
|
|
238,691
|
|
|
4,704
|
|
|
(511,551
|
)
|
|
—
|
|
|||||
Gain on sale of real estate – rental properties
|
—
|
|
|
—
|
|
|
12,426
|
|
|
—
|
|
|
12,426
|
|
|||||
Income from continuing operations
|
144,217
|
|
|
238,486
|
|
|
275,005
|
|
|
(511,551
|
)
|
|
146,157
|
|
|||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Net income
|
144,217
|
|
|
238,486
|
|
|
274,962
|
|
|
(511,551
|
)
|
|
146,114
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,897
|
)
|
|
—
|
|
|
(1,897
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders
|
144,217
|
|
|
238,486
|
|
|
273,065
|
|
|
(511,551
|
)
|
|
144,217
|
|
|||||
Dividends on preferred stock
|
(24,986
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,986
|
)
|
|||||
Net income attributable to unvested restricted stock awards
|
(2,364
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,364
|
)
|
|||||
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
116,867
|
|
|
$
|
238,486
|
|
|
$
|
273,065
|
|
|
$
|
(511,551
|
)
|
|
$
|
116,867
|
|
21.
|
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
|
$
|
169,093
|
|
|
$
|
325,655
|
|
|
$
|
371,993
|
|
|
$
|
(672,537
|
)
|
|
$
|
194,204
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized holding gains (losses) arising during the period
|
—
|
|
|
(5
|
)
|
|
24,365
|
|
|
—
|
|
|
24,360
|
|
|||||
Reclassification adjustment for losses included in net income
|
—
|
|
|
2
|
|
|
6,116
|
|
|
—
|
|
|
6,118
|
|
|||||
Unrealized gains (losses) on available-for-sale equity securities, net
|
—
|
|
|
(3
|
)
|
|
30,481
|
|
|
—
|
|
|
30,478
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) on interest rate hedge agreements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized interest rate hedge gains (losses) arising during the period
|
3,025
|
|
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
2,837
|
|
|||||
Reclassification adjustment for amortization of interest expense included in net income
|
1,914
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1,915
|
|
|||||
Unrealized gains (losses) on interest rate hedge agreements, net
|
4,939
|
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
4,752
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized foreign currency translation gains arising during the period
|
—
|
|
|
—
|
|
|
7,774
|
|
|
—
|
|
|
7,774
|
|
|||||
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation
|
—
|
|
|
—
|
|
|
1,599
|
|
|
—
|
|
|
1,599
|
|
|||||
Unrealized gains on foreign currency translation, net
|
—
|
|
|
—
|
|
|
9,373
|
|
|
—
|
|
|
9,373
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive income (loss)
|
4,939
|
|
|
(3
|
)
|
|
39,667
|
|
|
—
|
|
|
44,603
|
|
|||||
Comprehensive income
|
174,032
|
|
|
325,652
|
|
|
411,660
|
|
|
(672,537
|
)
|
|
238,807
|
|
|||||
Less: comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(25,045
|
)
|
|
—
|
|
|
(25,045
|
)
|
|||||
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
174,032
|
|
|
$
|
325,652
|
|
|
$
|
386,615
|
|
|
$
|
(672,537
|
)
|
|
$
|
213,762
|
|
21.
|
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 (loss) income
|
$
|
(65,901
|
)
|
|
$
|
47,362
|
|
|
$
|
98,275
|
|
|
$
|
(129,535
|
)
|
|
$
|
(49,799
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized holding gains (losses) arising during the period
|
—
|
|
|
135
|
|
|
(79,968
|
)
|
|
—
|
|
|
(79,833
|
)
|
|||||
Reclassification adjustment for losses (gains) included in net income
|
—
|
|
|
(148
|
)
|
|
(18,325
|
)
|
|
—
|
|
|
(18,473
|
)
|
|||||
Unrealized gains (losses) on available-for-sale equity securities, net
|
—
|
|
|
(13
|
)
|
|
(98,293
|
)
|
|
—
|
|
|
(98,306
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains on interest rate hedge agreements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized interest rate hedge (losses) gains arising during the period
|
(1,338
|
)
|
|
—
|
|
|
188
|
|
|
—
|
|
|
(1,150
|
)
|
|||||
Reclassification adjustment for amortization of interest expense included in net income
|
5,272
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5,273
|
|
|||||
Unrealized gains on interest rate hedge agreements, net
|
3,934
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
4,123
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized foreign currency translation gains (losses) arising during the period
|
—
|
|
|
—
|
|
|
(2,579
|
)
|
|
—
|
|
|
(2,579
|
)
|
|||||
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation
|
—
|
|
|
—
|
|
|
52,926
|
|
|
—
|
|
|
52,926
|
|
|||||
Unrealized gains on foreign currency translation, net
|
—
|
|
|
—
|
|
|
50,347
|
|
|
—
|
|
|
50,347
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive income (loss)
|
3,934
|
|
|
(13
|
)
|
|
(47,757
|
)
|
|
—
|
|
|
(43,836
|
)
|
|||||
Comprehensive (loss) income
|
(61,967
|
)
|
|
47,349
|
|
|
50,518
|
|
|
(129,535
|
)
|
|
(93,635
|
)
|
|||||
Less: comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(16,102
|
)
|
|
—
|
|
|
(16,102
|
)
|
|||||
Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
(61,967
|
)
|
|
$
|
47,349
|
|
|
$
|
34,416
|
|
|
$
|
(129,535
|
)
|
|
$
|
(109,737
|
)
|
21.
|
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
|
$
|
144,217
|
|
|
$
|
238,486
|
|
|
$
|
274,962
|
|
|
$
|
(511,551
|
)
|
|
$
|
146,114
|
|
Other comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) on available-for-sale equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized holding gains (losses) arising during the period
|
—
|
|
|
(21
|
)
|
|
77,391
|
|
|
—
|
|
|
77,370
|
|
|||||
Reclassification adjustment for losses (gains) included in net income
|
—
|
|
|
1
|
|
|
(12,139
|
)
|
|
—
|
|
|
(12,138
|
)
|
|||||
Unrealized gains (losses) on available-for-sale equity securities, net
|
—
|
|
|
(20
|
)
|
|
65,252
|
|
|
—
|
|
|
65,232
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized (losses) gains on interest rate hedge agreements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized interest rate hedge (losses) gains arising during the period
|
(5,516
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,516
|
)
|
|||||
Reclassification adjustment for amortization of interest expense included in net income
|
2,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,707
|
|
|||||
Unrealized (losses) gains on interest rate hedge agreements, net
|
(2,809
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,809
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized foreign currency translation gains (losses) arising during the period
|
—
|
|
|
—
|
|
|
(21,844
|
)
|
|
—
|
|
|
(21,844
|
)
|
|||||
Reclassification adjustment for cumulative foreign currency translation losses included in net income upon sale or liquidation
|
—
|
|
|
—
|
|
|
9,236
|
|
|
—
|
|
|
9,236
|
|
|||||
Unrealized gains (losses) on foreign currency translation, net
|
—
|
|
|
—
|
|
|
(12,608
|
)
|
|
—
|
|
|
(12,608
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive (loss) income
|
(2,809
|
)
|
|
(20
|
)
|
|
52,644
|
|
|
—
|
|
|
49,815
|
|
|||||
Comprehensive income
|
141,408
|
|
|
238,466
|
|
|
327,606
|
|
|
(511,551
|
)
|
|
195,929
|
|
|||||
Less: comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,893
|
)
|
|
—
|
|
|
(1,893
|
)
|
|||||
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders
|
$
|
141,408
|
|
|
$
|
238,466
|
|
|
$
|
325,713
|
|
|
$
|
(511,551
|
)
|
|
$
|
194,036
|
|
21.
|
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
|
$
|
169,093
|
|
|
$
|
325,655
|
|
|
$
|
371,993
|
|
|
$
|
(672,537
|
)
|
|
$
|
194,204
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
7,625
|
|
|
—
|
|
|
409,158
|
|
|
—
|
|
|
416,783
|
|
|||||
Loss on early extinguishment of debt
|
670
|
|
|
—
|
|
|
2,781
|
|
|
—
|
|
|
3,451
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
|||||
Gain on sales of real estate – rental properties
|
—
|
|
|
—
|
|
|
(270
|
)
|
|
—
|
|
|
(270
|
)
|
|||||
Gain on sales of real estate – land parcels
|
—
|
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
|
(111
|
)
|
|||||
Equity in losses of unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(15,426
|
)
|
|
—
|
|
|
(15,426
|
)
|
|||||
Distributions of earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
1,618
|
|
|
—
|
|
|
1,618
|
|
|||||
Amortization of loan fees
|
7,627
|
|
|
—
|
|
|
3,522
|
|
|
—
|
|
|
11,149
|
|
|||||
Amortization of debt discounts (premiums)
|
608
|
|
|
—
|
|
|
(3,120
|
)
|
|
—
|
|
|
(2,512
|
)
|
|||||
Amortization of acquired below-market leases
|
—
|
|
|
—
|
|
|
(19,055
|
)
|
|
—
|
|
|
(19,055
|
)
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
(107,643
|
)
|
|
—
|
|
|
(107,643
|
)
|
|||||
Stock compensation expense
|
25,610
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,610
|
|
|||||
Equity in earnings of affiliates
|
(337,923
|
)
|
|
(328,230
|
)
|
|
(6,384
|
)
|
|
672,537
|
|
|
—
|
|
|||||
Investment gains
|
—
|
|
|
(19
|
)
|
|
(12,333
|
)
|
|
—
|
|
|
(12,352
|
)
|
|||||
Investment losses
|
—
|
|
|
2,594
|
|
|
8,429
|
|
|
—
|
|
|
11,023
|
|
|||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restricted cash
|
(50
|
)
|
|
—
|
|
|
(507
|
)
|
|
—
|
|
|
(557
|
)
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
(502
|
)
|
|
—
|
|
|
(502
|
)
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
(62,639
|
)
|
|
—
|
|
|
(62,639
|
)
|
|||||
Other assets
|
(9,343
|
)
|
|
—
|
|
|
(8,879
|
)
|
|
—
|
|
|
(18,222
|
)
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
(10,524
|
)
|
|
—
|
|
|
36,097
|
|
|
—
|
|
|
25,573
|
|
|||||
Net cash (used in) provided by operating activities
|
(146,607
|
)
|
|
—
|
|
|
596,932
|
|
|
—
|
|
|
450,325
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sales of real estate
|
—
|
|
|
—
|
|
|
15,432
|
|
|
—
|
|
|
15,432
|
|
|||||
Additions to real estate
|
—
|
|
|
—
|
|
|
(893,685
|
)
|
|
—
|
|
|
(893,685
|
)
|
|||||
Purchase of real estate
|
—
|
|
|
—
|
|
|
(675,584
|
)
|
|
—
|
|
|
(675,584
|
)
|
|||||
Deposits for investing activities
|
—
|
|
|
—
|
|
|
(3,300
|
)
|
|
—
|
|
|
(3,300
|
)
|
|||||
Investments in subsidiaries
|
(1,458,973
|
)
|
|
(1,257,845
|
)
|
|
(25,872
|
)
|
|
2,742,690
|
|
|
—
|
|
|||||
Acquisition of interest in unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(60,291
|
)
|
|
—
|
|
|
(60,291
|
)
|
|||||
Contributions to unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(17,876
|
)
|
|
—
|
|
|
(17,876
|
)
|
|||||
Return of capital from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
38,576
|
|
|
—
|
|
|
38,576
|
|
|||||
Additions to investments
|
—
|
|
|
—
|
|
|
(171,881
|
)
|
|
—
|
|
|
(171,881
|
)
|
|||||
Sales of investments
|
—
|
|
|
208
|
|
|
30,275
|
|
|
—
|
|
|
30,483
|
|
|||||
Net cash used in investing activities
|
$
|
(1,458,973
|
)
|
|
$
|
(1,257,637
|
)
|
|
$
|
(1,764,206
|
)
|
|
$
|
2,742,690
|
|
|
$
|
(1,738,126
|
)
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
153,405
|
|
|
$
|
—
|
|
|
$
|
153,405
|
|
Repayments of borrowings from secured notes payable
|
—
|
|
|
—
|
|
|
(396,240
|
)
|
|
—
|
|
|
(396,240
|
)
|
|||||
Proceeds from issuance of unsecured senior notes payable
|
1,023,262
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,023,262
|
|
|||||
Borrowings from unsecured senior line of credit
|
3,858,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,858,000
|
|
|||||
Repayments of borrowings from unsecured senior line of credit
|
(3,836,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,836,000
|
)
|
|||||
Repayments of borrowings from unsecured senior bank term loan
|
(200,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200,000
|
)
|
|||||
Transfer to/from parent company
|
64,156
|
|
|
1,257,646
|
|
|
1,420,888
|
|
|
(2,742,690
|
)
|
|
—
|
|
|||||
Change in restricted cash related to financing activities
|
—
|
|
|
—
|
|
|
(4,914
|
)
|
|
—
|
|
|
(4,914
|
)
|
|||||
Payment of loan fees
|
(9,440
|
)
|
|
—
|
|
|
(579
|
)
|
|
—
|
|
|
(10,019
|
)
|
|||||
Repurchases of 7.00% Series D cumulative convertible preferred stock
|
(17,934
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,934
|
)
|
|||||
Redemption of 6.45% Series E cumulative redeemable preferred stock
|
(130,350
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130,350
|
)
|
|||||
Proceeds from the issuance of common stock
|
1,275,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,275,397
|
|
|||||
Dividends on common stock
|
(312,131
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312,131
|
)
|
|||||
Dividends on preferred stock
|
(9,619
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,619
|
)
|
|||||
Contributions from and sales of noncontrolling interests
|
—
|
|
|
—
|
|
|
44,931
|
|
|
—
|
|
|
44,931
|
|
|||||
Distributions to and purchase of noncontrolling interests
|
—
|
|
|
—
|
|
|
(22,361
|
)
|
|
—
|
|
|
(22,361
|
)
|
|||||
Net cash provided by financing activities
|
1,705,341
|
|
|
1,257,646
|
|
|
1,195,130
|
|
|
(2,742,690
|
)
|
|
1,415,427
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
1,723
|
|
|
—
|
|
|
1,723
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
99,761
|
|
|
9
|
|
|
29,579
|
|
|
—
|
|
|
129,349
|
|
|||||
Cash and cash equivalents at beginning of period
|
30,603
|
|
|
—
|
|
|
94,429
|
|
|
—
|
|
|
125,032
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
130,364
|
|
|
$
|
9
|
|
|
$
|
124,008
|
|
|
$
|
—
|
|
|
$
|
254,381
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
85,705
|
|
|
$
|
—
|
|
|
$
|
26,408
|
|
|
$
|
—
|
|
|
$
|
112,113
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Changes in accrued capital expenditures
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,034
|
)
|
|
$
|
—
|
|
|
$
|
(11,034
|
)
|
Contribution of real estate from noncontrolling interests
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,597
|
|
|
$
|
—
|
|
|
$
|
8,597
|
|
Contribution of real estate to an unconsolidated real estate JV
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,998
|
|
|
$
|
—
|
|
|
$
|
6,998
|
|
21.
|
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 (loss) income
|
$
|
(65,901
|
)
|
|
$
|
47,362
|
|
|
$
|
98,275
|
|
|
$
|
(129,535
|
)
|
|
$
|
(49,799
|
)
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
6,792
|
|
|
—
|
|
|
306,598
|
|
|
—
|
|
|
313,390
|
|
|||||
Loss on early extinguishment of debt
|
3,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,230
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
209,261
|
|
|
—
|
|
|
209,261
|
|
|||||
Gain on sales of real estate – rental properties
|
—
|
|
|
—
|
|
|
(3,715
|
)
|
|
—
|
|
|
(3,715
|
)
|
|||||
Gain on sales of real estate – land parcels
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
(90
|
)
|
|||||
Equity in earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
184
|
|
|||||
Distributions of earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
406
|
|
|
—
|
|
|
406
|
|
|||||
Amortization of loan fees
|
7,709
|
|
|
—
|
|
|
4,163
|
|
|
—
|
|
|
11,872
|
|
|||||
Amortization of debt discounts (premiums)
|
488
|
|
|
—
|
|
|
(988
|
)
|
|
—
|
|
|
(500
|
)
|
|||||
Amortization of acquired below-market leases
|
—
|
|
|
—
|
|
|
(5,723
|
)
|
|
—
|
|
|
(5,723
|
)
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
(51,673
|
)
|
|
—
|
|
|
(51,673
|
)
|
|||||
Stock compensation expense
|
25,433
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,433
|
|
|||||
Equity in earnings of affiliates
|
(81,361
|
)
|
|
(47,215
|
)
|
|
(959
|
)
|
|
129,535
|
|
|
—
|
|
|||||
Investment gains
|
—
|
|
|
(567
|
)
|
|
(27,963
|
)
|
|
—
|
|
|
(28,530
|
)
|
|||||
Investment losses
|
—
|
|
|
188
|
|
|
11,209
|
|
|
—
|
|
|
11,397
|
|
|||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restricted cash
|
(11
|
)
|
|
—
|
|
|
(975
|
)
|
|
—
|
|
|
(986
|
)
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
|
(285
|
)
|
|||||
Deferred leasing costs
|
—
|
|
|
(14
|
)
|
|
(35,259
|
)
|
|
—
|
|
|
(35,273
|
)
|
|||||
Other assets
|
(10,191
|
)
|
|
(1
|
)
|
|
(1,228
|
)
|
|
—
|
|
|
(11,420
|
)
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
5,806
|
|
|
(609
|
)
|
|
125
|
|
|
—
|
|
|
5,322
|
|
|||||
Net cash (used in) provided by operating activities
|
(108,006
|
)
|
|
(856
|
)
|
|
501,363
|
|
|
—
|
|
|
392,501
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sales of real estate
|
—
|
|
|
—
|
|
|
123,081
|
|
|
—
|
|
|
123,081
|
|
|||||
Additions to real estate
|
—
|
|
|
—
|
|
|
(821,690
|
)
|
|
—
|
|
|
(821,690
|
)
|
|||||
Purchase of real estate
|
—
|
|
|
—
|
|
|
(737,900
|
)
|
|
—
|
|
|
(737,900
|
)
|
|||||
Deposits for investing activities
|
—
|
|
|
—
|
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
|||||
Investments in subsidiaries
|
(877,512
|
)
|
|
(907,695
|
)
|
|
(18,514
|
)
|
|
1,803,721
|
|
|
—
|
|
|||||
Contributions to unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(11,529
|
)
|
|
—
|
|
|
(11,529
|
)
|
|||||
Additions to investments
|
—
|
|
|
—
|
|
|
(102,284
|
)
|
|
—
|
|
|
(102,284
|
)
|
|||||
Sales of investments
|
—
|
|
|
1,251
|
|
|
37,695
|
|
|
—
|
|
|
38,946
|
|
|||||
Repayment of notes receivable
|
—
|
|
|
—
|
|
|
15,198
|
|
|
—
|
|
|
15,198
|
|
|||||
Net cash (used in) provided by investing activities
|
$
|
(877,512
|
)
|
|
$
|
(906,444
|
)
|
|
$
|
(1,516,393
|
)
|
|
$
|
1,803,721
|
|
|
$
|
(1,496,628
|
)
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
291,400
|
|
|
$
|
—
|
|
|
$
|
291,400
|
|
Repayments of borrowings from secured notes payable
|
—
|
|
|
—
|
|
|
(310,903
|
)
|
|
—
|
|
|
(310,903
|
)
|
|||||
Proceeds from issuance of unsecured senior notes payable
|
348,604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
348,604
|
|
|||||
Borrowings from unsecured senior line of credit
|
4,117,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,117,000
|
|
|||||
Repayments of borrowings from unsecured senior line of credit
|
(4,240,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,240,000
|
)
|
|||||
Repayment of borrowings from unsecured senior bank term loan
|
(200,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200,000
|
)
|
|||||
Transfer to/from parent company
|
8,346
|
|
|
907,300
|
|
|
888,075
|
|
|
(1,803,721
|
)
|
|
—
|
|
|||||
Change in restricted cash related to financing activities
|
—
|
|
|
—
|
|
|
11,746
|
|
|
—
|
|
|
11,746
|
|
|||||
Payment of loan fees
|
(12,401
|
)
|
|
—
|
|
|
(4,280
|
)
|
|
—
|
|
|
(16,681
|
)
|
|||||
Repurchases of 7.00% Series D cumulative convertible preferred stock
|
(206,826
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206,826
|
)
|
|||||
Proceeds from the issuance of common stock
|
1,432,177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,432,177
|
|
|||||
Dividends on common stock
|
(240,347
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240,347
|
)
|
|||||
Dividends on preferred stock
|
(22,414
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,414
|
)
|
|||||
Financing costs paid for sales of noncontrolling interests
|
—
|
|
|
—
|
|
|
(10,044
|
)
|
|
—
|
|
|
(10,044
|
)
|
|||||
Contributions from and sales of noncontrolling interests
|
—
|
|
|
—
|
|
|
221,487
|
|
|
—
|
|
|
221,487
|
|
|||||
Distributions to and purchases of noncontrolling interests
|
—
|
|
|
—
|
|
|
(69,678
|
)
|
|
—
|
|
|
(69,678
|
)
|
|||||
Net cash provided by financing activities
|
984,139
|
|
|
907,300
|
|
|
1,017,803
|
|
|
(1,803,721
|
)
|
|
1,105,521
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1,460
|
)
|
|
—
|
|
|
(1,460
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(1,379
|
)
|
|
—
|
|
|
1,313
|
|
|
—
|
|
|
(66
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
31,982
|
|
|
—
|
|
|
93,116
|
|
|
—
|
|
|
125,098
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
30,603
|
|
|
$
|
—
|
|
|
$
|
94,429
|
|
|
$
|
—
|
|
|
$
|
125,032
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
67,066
|
|
|
$
|
—
|
|
|
$
|
17,841
|
|
|
$
|
—
|
|
|
$
|
84,907
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assumption of secured notes payable in connection with purchase of real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(203,000
|
)
|
|
$
|
—
|
|
|
$
|
(203,000
|
)
|
Changes in accrued construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,848
|
|
|
$
|
—
|
|
|
$
|
76,848
|
|
Payable for purchase of real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(56,800
|
)
|
|
$
|
—
|
|
|
$
|
(56,800
|
)
|
Distribution of real estate in connection with purchase of remaining 49% interest in real estate joint venture with Uber Technologies, Inc.
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(25,546
|
)
|
|
$
|
—
|
|
|
$
|
(25,546
|
)
|
Consolidation of previously unconsolidated real estate JV
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87,930
|
|
|
$
|
—
|
|
|
$
|
87,930
|
|
Net investment in direct financing lease
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,975
|
|
|
$
|
—
|
|
|
$
|
36,975
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Redemption of redeemable noncontrolling interests
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
Contribution from redeemable noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,264
|
|
|
$
|
—
|
|
|
$
|
2,264
|
|
21.
|
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
|
$
|
144,217
|
|
|
$
|
238,486
|
|
|
$
|
274,962
|
|
|
$
|
(511,551
|
)
|
|
$
|
146,114
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
5,986
|
|
|
—
|
|
|
255,303
|
|
|
—
|
|
|
261,289
|
|
|||||
Loss on early extinguishment of debt
|
189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189
|
|
|||||
Impairment of real estate
|
—
|
|
|
—
|
|
|
23,250
|
|
|
—
|
|
|
23,250
|
|
|||||
Gain on sales of real estate – rental properties
|
—
|
|
|
—
|
|
|
(12,426
|
)
|
|
—
|
|
|
(12,426
|
)
|
|||||
Equity in earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(1,651
|
)
|
|
—
|
|
|
(1,651
|
)
|
|||||
Distributions of earnings from unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
873
|
|
|
—
|
|
|
873
|
|
|||||
Amortization of loan fees
|
7,605
|
|
|
—
|
|
|
3,398
|
|
|
—
|
|
|
11,003
|
|
|||||
Amortization of debt discounts (premiums)
|
337
|
|
|
—
|
|
|
(709
|
)
|
|
—
|
|
|
(372
|
)
|
|||||
Amortization of acquired below-market leases
|
—
|
|
|
—
|
|
|
(6,118
|
)
|
|
—
|
|
|
(6,118
|
)
|
|||||
Deferred rent
|
—
|
|
|
—
|
|
|
(47,483
|
)
|
|
—
|
|
|
(47,483
|
)
|
|||||
Stock compensation expense
|
17,512
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,512
|
|
|||||
Equity in earnings of affiliates
|
(268,156
|
)
|
|
(238,691
|
)
|
|
(4,704
|
)
|
|
511,551
|
|
|
—
|
|
|||||
Investment gains
|
—
|
|
|
—
|
|
|
(35,035
|
)
|
|
—
|
|
|
(35,035
|
)
|
|||||
Investment losses
|
—
|
|
|
346
|
|
|
15,747
|
|
|
—
|
|
|
16,093
|
|
|||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted cash
|
(24
|
)
|
|
—
|
|
|
84
|
|
|
—
|
|
|
60
|
|
|||||
Tenant receivables
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
(65,415
|
)
|
|
—
|
|
|
(65,415
|
)
|
|||||
Other assets
|
(10,797
|
)
|
|
—
|
|
|
1,718
|
|
|
—
|
|
|
(9,079
|
)
|
|||||
Accounts payable, accrued expenses, and tenant security deposits
|
28,078
|
|
|
8
|
|
|
15,714
|
|
|
—
|
|
|
43,800
|
|
|||||
Net cash (used in) provided by operating activities
|
(75,053
|
)
|
|
149
|
|
|
417,515
|
|
|
—
|
|
|
342,611
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sales of real estate
|
—
|
|
|
—
|
|
|
129,799
|
|
|
—
|
|
|
129,799
|
|
|||||
Additions to real estate
|
—
|
|
|
—
|
|
|
(564,206
|
)
|
|
—
|
|
|
(564,206
|
)
|
|||||
Purchase of real estate
|
—
|
|
|
—
|
|
|
(248,933
|
)
|
|
—
|
|
|
(248,933
|
)
|
|||||
Deposit for investing activities
|
—
|
|
|
—
|
|
|
(5,501
|
)
|
|
—
|
|
|
(5,501
|
)
|
|||||
Investments in subsidiaries
|
(51,070
|
)
|
|
44,687
|
|
|
1,374
|
|
|
5,009
|
|
|
—
|
|
|||||
Contributions to unconsolidated real estate JVs
|
—
|
|
|
—
|
|
|
(9,027
|
)
|
|
—
|
|
|
(9,027
|
)
|
|||||
Additions to investments
|
—
|
|
|
—
|
|
|
(95,945
|
)
|
|
—
|
|
|
(95,945
|
)
|
|||||
Sales of investments
|
—
|
|
|
6
|
|
|
67,130
|
|
|
—
|
|
|
67,136
|
|
|||||
Repayment of notes receivable
|
—
|
|
|
—
|
|
|
4,282
|
|
|
—
|
|
|
4,282
|
|
|||||
Net cash (used in) provided by investing activities
|
$
|
(51,070
|
)
|
|
$
|
44,693
|
|
|
$
|
(721,027
|
)
|
|
$
|
5,009
|
|
|
$
|
(722,395
|
)
|
21.
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169,754
|
|
|
$
|
—
|
|
|
$
|
169,754
|
|
Repayments of borrowings from secured notes payable
|
—
|
|
|
—
|
|
|
(89,815
|
)
|
|
—
|
|
|
(89,815
|
)
|
|||||
Proceeds from issuance of unsecured senior notes payable
|
298,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
298,872
|
|
|||||
Borrowings from unsecured senior line of credit
|
2,145,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,145,000
|
|
|||||
Repayments of borrowings from unsecured senior line of credit
|
(2,298,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,298,000
|
)
|
|||||
Repayments of borrowings from unsecured senior bank term loan
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|||||
Transfer to/from parent company
|
155,194
|
|
|
(44,905
|
)
|
|
(105,280
|
)
|
|
(5,009
|
)
|
|
—
|
|
|||||
Change in restricted cash related to financings
|
—
|
|
|
—
|
|
|
3,842
|
|
|
—
|
|
|
3,842
|
|
|||||
Payment of loan fees
|
(5,825
|
)
|
|
—
|
|
|
(4,759
|
)
|
|
—
|
|
|
(10,584
|
)
|
|||||
Proceeds from the issuance of common stock
|
78,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,463
|
|
|||||
Dividends on common stock
|
(218,104
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(218,104
|
)
|
|||||
Dividends on preferred stock
|
(24,986
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,986
|
)
|
|||||
Contributions from and sales of noncontrolling interests
|
—
|
|
|
—
|
|
|
453,750
|
|
|
—
|
|
|
453,750
|
|
|||||
Distributions to and purchases of noncontrolling interests
|
—
|
|
|
—
|
|
|
(64,066
|
)
|
|
—
|
|
|
(64,066
|
)
|
|||||
Net cash (used in) provided by financing activities
|
105,614
|
|
|
(44,905
|
)
|
|
363,426
|
|
|
(5,009
|
)
|
|
419,126
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
(255
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(20,509
|
)
|
|
(63
|
)
|
|
59,659
|
|
|
—
|
|
|
39,087
|
|
|||||
Cash and cash equivalents at beginning of period
|
52,491
|
|
|
63
|
|
|
33,457
|
|
|
—
|
|
|
86,011
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
31,982
|
|
|
$
|
—
|
|
|
$
|
93,116
|
|
|
$
|
—
|
|
|
$
|
125,098
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid during the period for interest, net of interest capitalized
|
$
|
70,946
|
|
|
$
|
—
|
|
|
$
|
22,910
|
|
|
$
|
—
|
|
|
$
|
93,856
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in accrued construction
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,070
|
)
|
|
$
|
—
|
|
|
$
|
(10,070
|
)
|
Assumption of secured notes payable in connection with purchase of real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(82,000
|
)
|
|
$
|
—
|
|
|
$
|
(82,000
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payable for purchase of noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(51,092
|
)
|
|
$
|
—
|
|
|
$
|
(51,092
|
)
|
|
|
|
|
|
|
Initial Costs
|
|
Costs Capitalized Subsequent to Acquisitions
|
|
Total Costs
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Property
|
|
Market
|
|
Encumbrances
|
|
Land
|
|
Buildings & Improvements
|
|
Buildings & Improvements
|
|
Land
|
|
Buildings & Improvements
|
|
Total
(1)
|
|
Accumulated Depreciation
(2)
|
|
Net Cost Basis
|
|
Date of Construction
(3)
|
|
Date
Acquired
|
||||||||||||||||||
Alexandria Center
®
at Kendall Square
|
|
Greater Boston
|
|
$
|
339,845
|
|
(4) (5)
|
$
|
279,668
|
|
|
$
|
205,491
|
|
|
$
|
1,333,658
|
|
|
$
|
279,668
|
|
|
$
|
1,539,149
|
|
|
$
|
1,818,817
|
|
|
$
|
(137,827
|
)
|
|
$
|
1,680,990
|
|
|
2000-2017
|
|
2005-2015
|
325 Binney Street
|
|
Greater Boston
|
|
—
|
|
|
81,440
|
|
|
47
|
|
|
5,764
|
|
|
81,440
|
|
|
5,811
|
|
|
87,251
|
|
|
—
|
|
|
87,251
|
|
|
N/A
|
|
2017
|
|||||||||
Alexandria Technology Square
®
|
|
Greater Boston
|
|
—
|
|
|
—
|
|
|
619,658
|
|
|
206,529
|
|
|
—
|
|
|
826,187
|
|
|
826,187
|
|
|
(204,557
|
)
|
|
621,630
|
|
|
2001-2012
|
|
2006
|
|||||||||
Alexandria Center
®
at One Kendall Square
|
|
Greater Boston
|
|
219,068
|
|
|
265,614
|
|
|
483,769
|
|
|
38,142
|
|
|
265,614
|
|
|
521,911
|
|
|
787,525
|
|
|
(33,700
|
)
|
|
753,825
|
|
|
Various
|
|
2016
|
|||||||||
480 and 500 Arsenal Street
|
|
Greater Boston
|
|
—
|
|
|
9,773
|
|
|
12,773
|
|
|
81,834
|
|
|
9,773
|
|
|
94,607
|
|
|
104,380
|
|
|
(35,410
|
)
|
|
68,970
|
|
|
2001/2003
|
|
2000/2001
|
|||||||||
640 Memorial Drive
|
|
Greater Boston
|
|
84,828
|
|
|
—
|
|
|
174,878
|
|
|
214
|
|
|
—
|
|
|
175,092
|
|
|
175,092
|
|
|
(21,676
|
)
|
|
153,416
|
|
|
2011
|
|
2015
|
|||||||||
780 and 790 Memorial Drive
|
|
Greater Boston
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,396
|
|
|
—
|
|
|
49,396
|
|
|
49,396
|
|
|
(21,460
|
)
|
|
27,936
|
|
|
2002
|
|
2001
|
|||||||||
167 Sidney Street and 99 Erie Street
|
|
Greater Boston
|
|
—
|
|
|
—
|
|
|
12,613
|
|
|
13,605
|
|
|
—
|
|
|
26,218
|
|
|
26,218
|
|
|
(5,998
|
)
|
|
20,220
|
|
|
2006/2012
|
|
2005/2006
|
|||||||||
79/96 13th Street (Charlestown Navy Yard)
|
|
Greater Boston
|
|
—
|
|
|
—
|
|
|
6,247
|
|
|
8,671
|
|
|
—
|
|
|
14,918
|
|
|
14,918
|
|
|
(4,506
|
)
|
|
10,412
|
|
|
2012
|
|
1998
|
|||||||||
Alexandria Park at 128
|
|
Greater Boston
|
|
—
|
|
|
10,439
|
|
|
41,596
|
|
|
74,923
|
|
|
10,439
|
|
|
116,519
|
|
|
126,958
|
|
|
(37,413
|
)
|
|
89,545
|
|
|
1997-2010
|
|
1998-2008
|
|||||||||
225 Second Avenue
|
|
Greater Boston
|
|
—
|
|
|
2,925
|
|
|
14,913
|
|
|
39,727
|
|
|
2,925
|
|
|
54,640
|
|
|
57,565
|
|
|
(4,509
|
)
|
|
53,056
|
|
|
2014
|
|
2014
|
|||||||||
266 and 275 Second Avenue
|
|
Greater Boston
|
|
—
|
|
|
14,161
|
|
|
55,081
|
|
|
3,204
|
|
|
14,161
|
|
|
58,285
|
|
|
72,446
|
|
|
(1,675
|
)
|
|
70,771
|
|
|
2017
|
|
2017
|
|||||||||
19 Presidential Way
|
|
Greater Boston
|
|
—
|
|
|
12,833
|
|
|
27,333
|
|
|
15,331
|
|
|
12,833
|
|
|
42,664
|
|
|
55,497
|
|
|
(10,460
|
)
|
|
45,037
|
|
|
1999
|
|
2005
|
|||||||||
100 Beaver Street
|
|
Greater Boston
|
|
—
|
|
|
1,466
|
|
|
9,046
|
|
|
12,601
|
|
|
1,466
|
|
|
21,647
|
|
|
23,113
|
|
|
(5,800
|
)
|
|
17,313
|
|
|
2006
|
|
2005
|
|||||||||
285 Bear Hill Road
|
|
Greater Boston
|
|
—
|
|
|
422
|
|
|
3,538
|
|
|
6,844
|
|
|
422
|
|
|
10,382
|
|
|
10,804
|
|
|
(1,911
|
)
|
|
8,893
|
|
|
2013
|
|
2011
|
|||||||||
111 and 130 Forbes Boulevard
|
|
Greater Boston
|
|
—
|
|
|
3,146
|
|
|
15,725
|
|
|
2,998
|
|
|
3,146
|
|
|
18,723
|
|
|
21,869
|
|
|
(5,333
|
)
|
|
16,536
|
|
|
2006
|
|
2007/2006
|
|||||||||
20 Walkup Drive
|
|
Greater Boston
|
|
—
|
|
|
2,261
|
|
|
7,099
|
|
|
9,029
|
|
|
2,261
|
|
|
16,128
|
|
|
18,389
|
|
|
(2,956
|
)
|
|
15,433
|
|
|
2012
|
|
2006
|
|||||||||
30 Bearfoot Road
|
|
Greater Boston
|
|
—
|
|
|
1,220
|
|
|
22,375
|
|
|
44
|
|
|
1,220
|
|
|
22,419
|
|
|
23,639
|
|
|
(14,387
|
)
|
|
9,252
|
|
|
2000
|
|
2005
|
|||||||||
Alexandria Center
®
for Science & Technology
|
|
San Francisco
|
|
—
|
|
|
93,813
|
|
|
210,211
|
|
|
393,245
|
|
|
93,813
|
|
|
603,456
|
|
|
697,269
|
|
|
(106,038
|
)
|
|
591,231
|
|
|
2007-2014
|
|
2004-2011
|
|||||||||
1455 and 1515 Third Street
|
|
San Francisco
|
|
—
|
|
|
117,637
|
|
|
—
|
|
|
—
|
|
|
117,637
|
|
|
—
|
|
|
117,637
|
|
|
—
|
|
|
117,637
|
|
|
N/A
|
|
2016
|
|||||||||
510 Townsend Street
|
|
San Francisco
|
|
—
|
|
|
52,105
|
|
|
—
|
|
|
157,309
|
|
|
52,105
|
|
|
157,309
|
|
|
209,414
|
|
|
(797
|
)
|
|
208,617
|
|
|
2017
|
|
2014
|
|||||||||
88 Bluxome Street
|
|
San Francisco
|
|
—
|
|
|
148,551
|
|
|
21,514
|
|
|
15,338
|
|
|
148,551
|
|
|
36,852
|
|
|
185,403
|
|
|
(2,307
|
)
|
|
183,096
|
|
|
N/A
|
|
2017
|
|||||||||
505 Brannan Street
|
|
San Francisco
|
|
—
|
|
|
31,710
|
|
|
2,540
|
|
|
104,903
|
|
|
31,710
|
|
|
107,443
|
|
|
139,153
|
|
|
(604
|
)
|
|
138,549
|
|
|
2017
|
|
2015
|
|||||||||
213, 249, 259, 269, and 279 East Grand Avenue
|
|
San Francisco
|
|
—
|
|
|
59,199
|
|
|
—
|
|
|
272,720
|
|
|
59,199
|
|
|
272,720
|
|
|
331,919
|
|
|
(27,224
|
)
|
|
304,695
|
|
|
Various
|
|
2004
|
|||||||||
Alexandria Technology Center
®
– Gateway
|
|
San Francisco
|
|
—
|
|
|
45,425
|
|
|
121,059
|
|
|
20,465
|
|
|
45,425
|
|
|
141,524
|
|
|
186,949
|
|
|
(48,079
|
)
|
|
138,870
|
|
|
2000-2006
|
|
2002-2006
|
|||||||||
701 Gateway Boulevard
|
|
San Francisco
|
|
—
|
|
|
25,580
|
|
|
47,835
|
|
|
—
|
|
|
25,580
|
|
|
47,835
|
|
|
73,415
|
|
|
—
|
|
|
73,415
|
|
|
1998
|
|
2017
|
|||||||||
400 and 450 East Jamie Court
|
|
San Francisco
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,911
|
|
|
—
|
|
|
112,911
|
|
|
112,911
|
|
|
(35,180
|
)
|
|
77,731
|
|
|
2012
|
|
2002
|
|||||||||
500 Forbes Boulevard
|
|
San Francisco
|
|
—
|
|
|
35,596
|
|
|
69,091
|
|
|
17,439
|
|
|
35,596
|
|
|
86,530
|
|
|
122,126
|
|
|
(22,812
|
)
|
|
99,314
|
|
|
2001
|
|
2007
|
|||||||||
7000 Shoreline Court
|
|
San Francisco
|
|
—
|
|
|
7,038
|
|
|
39,704
|
|
|
13,734
|
|
|
7,038
|
|
|
53,438
|
|
|
60,476
|
|
|
(15,544
|
)
|
|
44,932
|
|
|
2001
|
|
2004
|
|
|
|
|
|
|
Initial Costs
|
|
Costs Capitalized Subsequent to Acquisitions
|
|
Total Costs
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Property
|
|
Market
|
|
Encumbrances
|
|
Land
|
|
Buildings & Improvements
|
|
Buildings & Improvements
|
|
Land
|
|
Buildings & Improvements
|
|
Total
(1)
|
|
Accumulated Depreciation
(2)
|
|
Net Cost Basis
|
|
Date of Construction
(3)
|
|
Date
Acquired
|
||||||||||||||||||
341 and 343 Oyster Point Boulevard
|
|
San Francisco
|
|
$
|
—
|
|
|
$
|
7,038
|
|
|
$
|
—
|
|
|
$
|
33,486
|
|
|
$
|
7,038
|
|
|
$
|
33,486
|
|
|
$
|
40,524
|
|
|
$
|
(15,678
|
)
|
|
$
|
24,846
|
|
|
2009/2013
|
|
2000
|
849/863 Mitten Road/866 Malcolm Road
|
|
San Francisco
|
|
—
|
|
|
3,211
|
|
|
8,665
|
|
|
22,231
|
|
|
3,211
|
|
|
30,896
|
|
|
34,107
|
|
|
(10,962
|
)
|
|
23,145
|
|
|
2012
|
|
1998
|
|||||||||
960 Industrial Road
|
|
San Francisco
|
|
—
|
|
|
60,209
|
|
|
5,104
|
|
|
3,942
|
|
|
60,209
|
|
|
9,046
|
|
|
69,255
|
|
|
(1,020
|
)
|
|
68,235
|
|
|
N/A
|
|
2017
|
|||||||||
825 and 835 Industrial Road
|
|
San Francisco
|
|
—
|
|
|
87,566
|
|
|
—
|
|
|
4,594
|
|
|
87,566
|
|
|
4,594
|
|
|
92,160
|
|
|
—
|
|
|
92,160
|
|
|
N/A
|
|
2017
|
|||||||||
2425 Garcia Avenue & 2400/2450 Bayshore Parkway
|
|
San Francisco
|
|
773
|
|
|
1,512
|
|
|
21,323
|
|
|
26,192
|
|
|
1,512
|
|
|
47,515
|
|
|
49,027
|
|
|
(20,040
|
)
|
|
28,987
|
|
|
2008
|
|
1999
|
|||||||||
3165 Porter Drive
|
|
San Francisco
|
|
—
|
|
|
—
|
|
|
19,154
|
|
|
2,130
|
|
|
—
|
|
|
21,284
|
|
|
21,284
|
|
|
(7,305
|
)
|
|
13,979
|
|
|
2002
|
|
2003
|
|||||||||
1450 Page Mill Road
|
|
San Francisco
|
|
—
|
|
|
—
|
|
|
84,467
|
|
|
83
|
|
|
—
|
|
|
84,550
|
|
|
84,550
|
|
|
(1,259
|
)
|
|
83,291
|
|
|
2017
|
|
2017
|
|||||||||
3350 West Bayshore Road
|
|
San Francisco
|
|
—
|
|
|
4,800
|
|
|
6,693
|
|
|
11,365
|
|
|
4,800
|
|
|
18,058
|
|
|
22,858
|
|
|
(4,871
|
)
|
|
17,987
|
|
|
1982
|
|
2005
|
|||||||||
2625/2627/2631 Hanover Street
|
|
San Francisco
|
|
—
|
|
|
—
|
|
|
6,628
|
|
|
11,799
|
|
|
—
|
|
|
18,427
|
|
|
18,427
|
|
|
(9,039
|
)
|
|
9,388
|
|
|
2000
|
|
1999
|
|||||||||
201 Haskins Way
|
|
San Francisco
|
|
—
|
|
|
32,245
|
|
|
1,287
|
|
|
5,591
|
|
|
32,245
|
|
|
6,878
|
|
|
39,123
|
|
|
(163
|
)
|
|
38,960
|
|
|
N/A
|
|
2017
|
|||||||||
Alexandria Center
®
for Life Science
|
|
New York City
|
|
—
|
|
|
—
|
|
|
—
|
|
|
828,801
|
|
|
—
|
|
|
828,801
|
|
|
828,801
|
|
|
(111,368
|
)
|
|
717,433
|
|
|
2010-2016
|
|
2006
|
|||||||||
ARE Spectrum
|
|
San Diego
|
|
—
|
|
|
32,361
|
|
|
80,957
|
|
|
195,383
|
|
|
32,361
|
|
|
276,340
|
|
|
308,701
|
|
|
(36,512
|
)
|
|
272,189
|
|
|
2008/2015/2017
|
|
2007/2017
|
|||||||||
ARE Torrey Ridge
|
|
San Diego
|
|
—
|
|
|
22,124
|
|
|
152,840
|
|
|
21,763
|
|
|
22,124
|
|
|
174,603
|
|
|
196,727
|
|
|
(7,903
|
)
|
|
188,824
|
|
|
2003/2004
|
|
2016
|
|||||||||
ARE Sunrise
|
|
San Diego
|
|
—
|
|
|
6,118
|
|
|
17,947
|
|
|
80,960
|
|
|
6,118
|
|
|
98,907
|
|
|
105,025
|
|
|
(39,090
|
)
|
|
65,935
|
|
|
2000-2015
|
|
1994-2000
|
|||||||||
ARE Nautilus
|
|
San Diego
|
|
—
|
|
|
6,684
|
|
|
27,600
|
|
|
114,932
|
|
|
6,684
|
|
|
142,532
|
|
|
149,216
|
|
|
(33,888
|
)
|
|
115,328
|
|
|
2010-2012
|
|
1994-1997
|
|||||||||
3545 Cray Court
|
|
San Diego
|
|
34,652
|
|
|
7,056
|
|
|
53,944
|
|
|
142
|
|
|
7,056
|
|
|
54,086
|
|
|
61,142
|
|
|
(19,258
|
)
|
|
41,884
|
|
|
1998
|
|
2014
|
|||||||||
11119 North Torrey Pines Road
|
|
San Diego
|
|
20,825
|
|
(5)
|
9,994
|
|
|
37,099
|
|
|
32,940
|
|
|
9,994
|
|
|
70,039
|
|
|
80,033
|
|
|
(15,867
|
)
|
|
64,166
|
|
|
2012
|
|
2007
|
|||||||||
5200 Illumina Way
|
|
San Diego
|
|
—
|
|
|
38,340
|
|
|
96,606
|
|
|
193,889
|
|
|
38,340
|
|
|
290,495
|
|
|
328,835
|
|
|
(32,584
|
)
|
|
296,251
|
|
|
2004-2016
|
|
2010
|
|||||||||
Campus Pointe by Alexandria
|
|
San Diego
|
|
—
|
|
|
48,644
|
|
|
211,125
|
|
|
253,393
|
|
|
48,644
|
|
|
464,518
|
|
|
513,162
|
|
|
(78,168
|
)
|
|
434,994
|
|
|
1991/1997/2016
|
|
2010/2015/2017
|
|||||||||
ARE Towne Centre
|
|
San Diego
|
|
—
|
|
|
8,539
|
|
|
18,850
|
|
|
62,514
|
|
|
8,539
|
|
|
81,364
|
|
|
89,903
|
|
|
(46,086
|
)
|
|
43,817
|
|
|
2000-2010
|
|
1999
|
|||||||||
ARE Esplanade
|
|
San Diego
|
|
10,862
|
|
(5)
|
9,682
|
|
|
29,991
|
|
|
89,121
|
|
|
9,682
|
|
|
119,112
|
|
|
128,794
|
|
|
(17,652
|
)
|
|
111,142
|
|
|
1989-2016
|
|
1998-2011
|
|||||||||
5810/5820 and 6138/6150 Nancy Ridge Drive
|
|
San Diego
|
|
—
|
|
|
5,476
|
|
|
28,682
|
|
|
12,482
|
|
|
5,476
|
|
|
41,164
|
|
|
46,640
|
|
|
(14,187
|
)
|
|
32,453
|
|
|
2000-2001
|
|
2003-2004
|
|||||||||
ARE Portola
|
|
San Diego
|
|
—
|
|
|
6,991
|
|
|
25,153
|
|
|
28,173
|
|
|
6,991
|
|
|
53,326
|
|
|
60,317
|
|
|
(8,037
|
)
|
|
52,280
|
|
|
2005-2012
|
|
2007
|
|||||||||
10121 and 10151 Barnes Canyon Road
|
|
San Diego
|
|
—
|
|
|
4,608
|
|
|
5,100
|
|
|
19,187
|
|
|
4,608
|
|
|
24,287
|
|
|
28,895
|
|
|
(2,025
|
)
|
|
26,870
|
|
|
1988/2014
|
|
2013
|
|||||||||
7330 Carroll Road
|
|
San Diego
|
|
—
|
|
|
2,650
|
|
|
19,878
|
|
|
1,876
|
|
|
2,650
|
|
|
21,754
|
|
|
24,404
|
|
|
(4,004
|
)
|
|
20,400
|
|
|
2007
|
|
2010
|
|||||||||
5871 Oberlin Drive
|
|
San Diego
|
|
—
|
|
|
1,349
|
|
|
8,016
|
|
|
3,860
|
|
|
1,349
|
|
|
11,876
|
|
|
13,225
|
|
|
(1,850
|
)
|
|
11,375
|
|
|
2004
|
|
2010
|
|||||||||
Vista Wateridge I & II
|
|
San Diego
|
|
—
|
|
|
3,286
|
|
|
—
|
|
|
685
|
|
|
3,286
|
|
|
685
|
|
|
3,971
|
|
|
—
|
|
|
3,971
|
|
|
N/A
|
|
2017
|
|||||||||
11025, 11035, 11045, 11055, 11065, and 11075 Roselle Street
|
|
San Diego
|
|
—
|
|
|
4,156
|
|
|
11,571
|
|
|
27,795
|
|
|
4,156
|
|
|
39,366
|
|
|
43,522
|
|
|
(9,439
|
)
|
|
34,083
|
|
|
2006/2008/2014
|
|
1997/2000/2014
|
|||||||||
3985, 4025, 4031, and 4045 Sorrento Valley Boulevard
|
|
San Diego
|
|
—
|
|
|
4,323
|
|
|
22,846
|
|
|
8,986
|
|
|
4,323
|
|
|
31,832
|
|
|
36,155
|
|
|
(19,605
|
)
|
|
16,550
|
|
|
2007
|
|
2010/2014
|
|||||||||
13112 Evening Creek Drive
|
|
San Diego
|
|
—
|
|
|
7,393
|
|
|
27,950
|
|
|
186
|
|
|
7,393
|
|
|
28,136
|
|
|
35,529
|
|
|
(11,074
|
)
|
|
24,455
|
|
|
2007
|
|
2007
|
|||||||||
400 Dexter Avenue North
|
|
Seattle
|
|
—
|
|
|
11,342
|
|
|
—
|
|
|
199,890
|
|
|
11,342
|
|
|
199,890
|
|
|
211,232
|
|
|
(4,535
|
)
|
|
206,697
|
|
|
2017
|
|
2007
|
|||||||||
1201 and 1208 Eastlake Avenue
|
|
Seattle
|
|
55,070
|
|
(5)
|
5,810
|
|
|
47,149
|
|
|
14,966
|
|
|
5,810
|
|
|
62,115
|
|
|
67,925
|
|
|
(29,501
|
)
|
|
38,424
|
|
|
1997
|
|
2002
|
|||||||||
1616 Eastlake Avenue
|
|
Seattle
|
|
—
|
|
|
6,940
|
|
|
—
|
|
|
95,292
|
|
|
6,940
|
|
|
95,292
|
|
|
102,232
|
|
|
(27,463
|
)
|
|
74,769
|
|
|
2013
|
|
2003
|
|||||||||
1551 Eastlake Avenue
|
|
Seattle
|
|
—
|
|
|
8,525
|
|
|
20,064
|
|
|
42,467
|
|
|
8,525
|
|
|
62,531
|
|
|
71,056
|
|
|
(12,302
|
)
|
|
58,754
|
|
|
2012
|
|
2004
|
|||||||||
199 East Blaine Street
|
|
Seattle
|
|
—
|
|
|
6,528
|
|
|
—
|
|
|
72,260
|
|
|
6,528
|
|
|
72,260
|
|
|
78,788
|
|
|
(16,264
|
)
|
|
62,524
|
|
|
2010
|
|
2004
|
|
|
|
|
|
|
Initial Costs
|
|
Costs Capitalized Subsequent to Acquisitions
|
|
Total Costs
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Property
|
|
Market
|
|
Encumbrances
|
|
Land
|
|
Buildings & Improvements
|
|
Buildings & Improvements
|
|
Land
|
|
Buildings & Improvements
|
|
Total
(1)
|
|
Accumulated Depreciation
(2)
|
|
Net Cost Basis
|
|
Date of Construction
(3)
|
|
Date
Acquired
|
||||||||||||||||||
219 Terry Avenue North
|
|
Seattle
|
|
$
|
—
|
|
|
$
|
1,819
|
|
|
$
|
2,302
|
|
|
$
|
19,703
|
|
|
$
|
1,819
|
|
|
$
|
22,005
|
|
|
$
|
23,824
|
|
|
$
|
(5,476
|
)
|
|
$
|
18,348
|
|
|
2012
|
|
2007
|
1600 Fairview Avenue
|
|
Seattle
|
|
—
|
|
|
2,212
|
|
|
6,788
|
|
|
6,081
|
|
|
2,212
|
|
|
12,869
|
|
|
15,081
|
|
|
(3,606
|
)
|
|
11,475
|
|
|
2007
|
|
2005
|
|||||||||
1818 Fairview Ave
|
|
Seattle
|
|
—
|
|
|
—
|
|
|
8,444
|
|
|
24,238
|
|
|
—
|
|
|
32,682
|
|
|
32,682
|
|
|
(97
|
)
|
|
32,585
|
|
|
N/A
|
|
2015
|
|||||||||
3000/3018 Western Avenue
|
|
Seattle
|
|
—
|
|
|
1,432
|
|
|
7,497
|
|
|
23,837
|
|
|
1,432
|
|
|
31,334
|
|
|
32,766
|
|
|
(10,416
|
)
|
|
22,350
|
|
|
2000
|
|
1998
|
|||||||||
410 West Harrison/410 Elliott Avenue West
|
|
Seattle
|
|
—
|
|
|
3,857
|
|
|
1,989
|
|
|
11,229
|
|
|
3,857
|
|
|
13,218
|
|
|
17,075
|
|
|
(4,749
|
)
|
|
12,326
|
|
|
2008/2006
|
|
2004
|
|||||||||
9800 Medical Center Drive
|
|
Maryland
|
|
—
|
|
|
12,401
|
|
|
99,696
|
|
|
107,746
|
|
|
12,401
|
|
|
207,442
|
|
|
219,843
|
|
|
(58,025
|
)
|
|
161,818
|
|
|
2010-2013
|
|
2004
|
|||||||||
9900 Medical Center Drive
|
|
Maryland
|
|
—
|
|
|
2,027
|
|
|
4,787
|
|
|
825
|
|
|
2,027
|
|
|
5,612
|
|
|
7,639
|
|
|
(10
|
)
|
|
7,629
|
|
|
1985
|
|
2017
|
|||||||||
9920 Medical Center Drive
|
|
Maryland
|
|
—
|
|
|
5,791
|
|
|
8,060
|
|
|
1,352
|
|
|
5,791
|
|
|
9,412
|
|
|
15,203
|
|
|
(2,771
|
)
|
|
12,432
|
|
|
2002
|
|
2004
|
|||||||||
1330 Piccard Drive
|
|
Maryland
|
|
—
|
|
|
2,800
|
|
|
11,533
|
|
|
34,254
|
|
|
2,800
|
|
|
45,787
|
|
|
48,587
|
|
|
(15,922
|
)
|
|
32,665
|
|
|
2005
|
|
1997
|
|||||||||
1500 and 1550 East Gude Drive
|
|
Maryland
|
|
—
|
|
|
1,523
|
|
|
7,731
|
|
|
6,326
|
|
|
1,523
|
|
|
14,057
|
|
|
15,580
|
|
|
(5,935
|
)
|
|
9,645
|
|
|
2003/1995
|
|
1997
|
|||||||||
14920 and 15010 Broschart Road
|
|
Maryland
|
|
—
|
|
|
4,904
|
|
|
15,846
|
|
|
4,555
|
|
|
4,904
|
|
|
20,401
|
|
|
25,305
|
|
|
(4,780
|
)
|
|
20,525
|
|
|
1998/1999
|
|
2010/2004
|
|||||||||
1405 Research Boulevard
|
|
Maryland
|
|
—
|
|
|
899
|
|
|
21,946
|
|
|
11,735
|
|
|
899
|
|
|
33,681
|
|
|
34,580
|
|
|
(12,840
|
)
|
|
21,740
|
|
|
2006
|
|
1997
|
|||||||||
5 Research Place
|
|
Maryland
|
|
—
|
|
|
1,466
|
|
|
5,708
|
|
|
28,383
|
|
|
1,466
|
|
|
34,091
|
|
|
35,557
|
|
|
(11,535
|
)
|
|
24,022
|
|
|
2010
|
|
2001
|
|||||||||
12301 Parklawn Drive
|
|
Maryland
|
|
—
|
|
|
1,476
|
|
|
7,267
|
|
|
1,127
|
|
|
1,476
|
|
|
8,394
|
|
|
9,870
|
|
|
(2,520
|
)
|
|
7,350
|
|
|
2007
|
|
2004
|
|||||||||
5 Research Court
|
|
Maryland
|
|
—
|
|
|
1,647
|
|
|
13,258
|
|
|
8,774
|
|
|
1,647
|
|
|
22,032
|
|
|
23,679
|
|
|
(13,790
|
)
|
|
9,889
|
|
|
2007
|
|
2004
|
|||||||||
Alexandria Technology Center
®
– Gaithersburg I
|
|
Maryland
|
|
—
|
|
|
10,183
|
|
|
59,641
|
|
|
27,783
|
|
|
10,183
|
|
|
87,424
|
|
|
97,607
|
|
|
(29,368
|
)
|
|
68,239
|
|
|
1992-2009
|
|
1997-2004
|
|||||||||
Alexandria Technology Center
®
– Gaithersburg II
|
|
Maryland
|
|
—
|
|
|
4,531
|
|
|
21,594
|
|
|
38,086
|
|
|
4,531
|
|
|
59,680
|
|
|
64,211
|
|
|
(25,355
|
)
|
|
38,856
|
|
|
2000-2003
|
|
1997-2000
|
|||||||||
401 Professional Drive
|
|
Maryland
|
|
—
|
|
|
1,129
|
|
|
6,941
|
|
|
8,713
|
|
|
1,129
|
|
|
15,654
|
|
|
16,783
|
|
|
(5,916
|
)
|
|
10,867
|
|
|
2007
|
|
1996
|
|||||||||
950 Wind River Lane
|
|
Maryland
|
|
—
|
|
|
2,400
|
|
|
10,620
|
|
|
1,050
|
|
|
2,400
|
|
|
11,670
|
|
|
14,070
|
|
|
(2,724
|
)
|
|
11,346
|
|
|
2009
|
|
2010
|
|||||||||
620 Professional Drive
|
|
Maryland
|
|
5,138
|
|
(5)
|
784
|
|
|
4,705
|
|
|
7,352
|
|
|
784
|
|
|
12,057
|
|
|
12,841
|
|
|
(3,821
|
)
|
|
9,020
|
|
|
2012
|
|
2005
|
|||||||||
8000/9000/10000 Virginia Manor Road
|
|
Maryland
|
|
—
|
|
|
—
|
|
|
13,679
|
|
|
6,842
|
|
|
—
|
|
|
20,521
|
|
|
20,521
|
|
|
(9,478
|
)
|
|
11,043
|
|
|
2003
|
|
1998
|
|||||||||
14225 Newbrook Drive
|
|
Maryland
|
|
—
|
|
|
4,800
|
|
|
27,639
|
|
|
11,562
|
|
|
4,800
|
|
|
39,201
|
|
|
44,001
|
|
|
(15,414
|
)
|
|
28,587
|
|
|
2006
|
|
1997
|
|||||||||
Alexandria Technology Center
®
– Alston
|
|
Research Triangle Park
|
|
—
|
|
|
1,430
|
|
|
17,482
|
|
|
29,628
|
|
|
1,430
|
|
|
47,110
|
|
|
48,540
|
|
|
(20,864
|
)
|
|
27,676
|
|
|
1985-2009
|
|
1998
|
|||||||||
Alexandria Center
®
for AgTech – RTP
|
|
Research Triangle Park
|
|
—
|
|
|
2,000
|
|
|
6,756
|
|
|
3,991
|
|
|
2,000
|
|
|
10,747
|
|
|
12,747
|
|
|
—
|
|
|
12,747
|
|
|
Various
|
|
2017
|
|||||||||
108/110/112/114 TW Alexander Drive
|
|
Research Triangle Park
|
|
—
|
|
|
—
|
|
|
376
|
|
|
42,382
|
|
|
—
|
|
|
42,758
|
|
|
42,758
|
|
|
(16,477
|
)
|
|
26,281
|
|
|
2000
|
|
1999
|
|||||||||
Alexandria Innovation Center
®
– Research Triangle Park
|
|
Research Triangle Park
|
|
—
|
|
|
1,065
|
|
|
21,218
|
|
|
27,769
|
|
|
1,065
|
|
|
48,987
|
|
|
50,052
|
|
|
(14,951
|
)
|
|
35,101
|
|
|
2005-2008
|
|
2000
|
|||||||||
6 Davis Drive
|
|
Research Triangle Park
|
|
—
|
|
|
9,029
|
|
|
10,712
|
|
|
10,767
|
|
|
9,029
|
|
|
21,479
|
|
|
30,508
|
|
|
(12,003
|
)
|
|
18,505
|
|
|
2012
|
|
2012
|
|||||||||
7 Triangle Drive
|
|
Research Triangle Park
|
|
—
|
|
|
701
|
|
|
—
|
|
|
32,381
|
|
|
701
|
|
|
32,381
|
|
|
33,082
|
|
|
(5,518
|
)
|
|
27,564
|
|
|
2011
|
|
2005
|
|||||||||
2525 East NC Highway 54
|
|
Research Triangle Park
|
|
—
|
|
|
713
|
|
|
12,827
|
|
|
19,891
|
|
|
713
|
|
|
32,718
|
|
|
33,431
|
|
|
(5,705
|
)
|
|
27,726
|
|
|
1995
|
|
2004
|
|||||||||
407 Davis Drive
|
|
Research Triangle Park
|
|
—
|
|
|
1,229
|
|
|
17,733
|
|
|
46
|
|
|
1,229
|
|
|
17,779
|
|
|
19,008
|
|
|
(2,325
|
)
|
|
16,683
|
|
|
1998
|
|
2013
|
|||||||||
601 Keystone Park Drive
|
|
Research Triangle Park
|
|
—
|
|
|
785
|
|
|
11,546
|
|
|
6,524
|
|
|
785
|
|
|
18,070
|
|
|
18,855
|
|
|
(4,704
|
)
|
|
14,151
|
|
|
2009
|
|
2006
|
|||||||||
6040 George Watts Hill Drive
|
|
Research Triangle Park
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,356
|
|
|
—
|
|
|
26,356
|
|
|
26,356
|
|
|
(1,537
|
)
|
|
24,819
|
|
|
2015
|
|
2014
|
|||||||||
5 Triangle Drive
|
|
Research Triangle Park
|
|
—
|
|
|
161
|
|
|
3,409
|
|
|
6,651
|
|
|
161
|
|
|
10,060
|
|
|
10,221
|
|
|
(4,289
|
)
|
|
5,932
|
|
|
1981
|
|
1998
|
|||||||||
6101 Quadrangle Drive
|
|
Research Triangle Park
|
|
—
|
|
|
951
|
|
|
3,982
|
|
|
11,084
|
|
|
951
|
|
|
15,066
|
|
|
16,017
|
|
|
(2,451
|
)
|
|
13,566
|
|
|
2012
|
|
2008
|
|
|
|
|
|
|
Initial Costs
|
|
Costs Capitalized Subsequent to Acquisitions
|
|
Total Costs
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Property
|
|
Market
|
|
Encumbrances
|
|
Land
|
|
Buildings & Improvements
|
|
Buildings & Improvements
|
|
Land
|
|
Buildings & Improvements
|
|
Total
(1)
|
|
Accumulated Depreciation
(2)
|
|
Net Cost Basis
|
|
Date of Construction
(3)
|
|
Date
Acquired
|
||||||||||||||||||
Canada
|
|
Canada
|
|
$
|
—
|
|
|
$
|
10,350
|
|
|
$
|
43,884
|
|
|
$
|
13,760
|
|
|
$
|
10,350
|
|
|
$
|
57,644
|
|
|
$
|
67,994
|
|
|
$
|
(17,888
|
)
|
|
$
|
50,106
|
|
|
2004
|
|
2005/2007
|
Various
|
|
Various
|
|
—
|
|
|
61,204
|
|
|
56,092
|
|
|
167,694
|
|
|
61,204
|
|
|
223,786
|
|
|
284,990
|
|
|
(45,388
|
)
|
|
239,602
|
|
|
Various
|
|
Various
|
|||||||||
Total – North America
|
|
|
|
771,061
|
|
|
1,925,221
|
|
|
3,894,513
|
|
|
6,324,411
|
|
|
1,925,221
|
|
|
10,218,924
|
|
|
12,144,145
|
|
|
(1,875,810
|
)
|
|
10,268,335
|
|
|
|
|
|
|||||||||
Asia
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,110
|
|
|
—
|
|
|
34,110
|
|
|
34,110
|
|
|
(4,426
|
)
|
|
29,684
|
|
|
2015
|
|
2008
|
|||||||||
|
|
|
|
$
|
771,061
|
|
|
$
|
1,925,221
|
|
|
$
|
3,894,513
|
|
|
$
|
6,358,521
|
|
|
$
|
1,925,221
|
|
|
$
|
10,253,034
|
|
|
$
|
12,178,255
|
|
|
$
|
(1,880,236
|
)
|
|
$
|
10,298,019
|
|
|
|
|
|
(1)
|
The aggregate cost of real estate for federal income tax purposes is not materially different from the cost basis under GAAP (unaudited).
|
(2)
|
The depreciable life for buildings and improvements ranges from up to
40 years
, up to
20 years
for land improvements, and the term of the respective lease for tenant improvements.
|
(3)
|
Represents the later of the date of original construction or the date of the latest renovation.
|
(4)
|
Represents
$15,822
related to the loan in footnote (5) and
$324,023
of other debt.
|
(5)
|
Loan of
$107,717
secured by
six
properties identified by this reference.
|
|
|
December 31,
|
||||||||||
Real Estate
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
|
$
|
10,632,518
|
|
|
$
|
8,945,261
|
|
|
$
|
8,228,855
|
|
Acquisitions (including real estate, land, and joint venture consolidation)
|
|
707,522
|
|
|
1,078,959
|
|
|
436,480
|
|
|||
Additions to real estate
|
|
881,463
|
|
|
914,178
|
|
|
395,555
|
|
|||
Deductions (including dispositions and direct financing lease)
|
|
(43,248
|
)
|
|
(305,880
|
)
|
|
(115,629
|
)
|
|||
Balance at end of period
|
|
$
|
12,178,255
|
|
|
$
|
10,632,518
|
|
|
$
|
8,945,261
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31,
|
||||||||||
Accumulated Depreciation
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
|
$
|
1,554,546
|
|
|
$
|
1,315,339
|
|
|
$
|
1,120,245
|
|
Depreciation expense on properties
|
|
348,064
|
|
|
265,387
|
|
|
214,041
|
|
|||
Sale of properties
|
|
(22,374
|
)
|
|
(26,180
|
)
|
|
(18,947
|
)
|
|||
Balance at end of period
|
|
$
|
1,880,236
|
|
|
$
|
1,554,546
|
|
|
$
|
1,315,339
|
|
Vesting Date
|
Number of Shares Scheduled to Vest on Vesting Date
|
|
|
|
|
|
|
|
|
Vesting Date
|
Number of Shares Scheduled to Vest on Vesting Date
|
|
|
|
|
|
|
|
|
Vesting Date
|
Number of Shares Scheduled to Vest on Vesting Date
|
|
|
|
|
|
|
|
|
Vesting Date
|
Number of Shares Scheduled to Vest on Vesting Date
|
|
|
|
|
|
|
|
|
Lead Independent Director
|
$
|
50,000
|
|
Audit Committee Chairperson
|
$
|
35,000
|
|
Compensation Committee Chairperson
|
$
|
35,000
|
|
Nominating & Governance Committee Chairperson
|
$
|
35,000
|
|
Science and Technology Committee Chairperson
|
$
|
20,000
|
|
Audit Committee Member
|
$
|
20,000
|
|
Compensation Committee Member
|
$
|
20,000
|
|
Nominating & Governance Committee Member
|
$
|
20,000
|
|
Science and Technology Committee Member
|
$
|
6,000
|
|
Pricing Committee Member
|
$
|
6,000
|
|
|
|
Years Ended December 31,
|
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations before noncontrolling interests
(a)
|
|
$
|
178,778
|
|
|
$
|
(49,615
|
)
|
|
$
|
144,506
|
|
|
$
|
104,991
|
|
|
$
|
139,349
|
|
|
Add: interest expense
|
|
128,645
|
|
|
106,953
|
|
|
105,813
|
|
|
79,299
|
|
|
67,952
|
|
|
|||||
Subtract: noncontrolling interests in income of subsidiaries that have not incurred fixed charges
|
|
(25,111
|
)
|
|
(16,102
|
)
|
|
(1,897
|
)
|
|
(4,856
|
)
|
|
(954
|
)
|
|
|||||
Earnings available for fixed charges
(b)
|
|
$
|
282,312
|
|
|
$
|
41,236
|
|
|
$
|
248,422
|
|
|
$
|
179,434
|
|
|
$
|
206,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest incurred
|
|
$
|
186,867
|
|
|
$
|
159,403
|
|
|
$
|
142,353
|
|
|
$
|
126,287
|
|
|
$
|
128,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends
|
|
7,666
|
|
|
20,223
|
|
|
24,986
|
|
|
25,698
|
|
|
25,885
|
|
|
|||||
Preferred stock redemption charge
|
|
11,279
|
|
|
61,267
|
|
|
—
|
|
|
1,989
|
|
|
—
|
|
|
|||||
Total combined fixed charges and preferred stock dividends
|
|
$
|
205,812
|
|
|
$
|
240,893
|
|
|
$
|
167,339
|
|
|
$
|
153,974
|
|
|
$
|
153,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated ratio of earnings to fixed charges
|
|
1.51
|
|
(c)
|
0.26
|
|
(d)
|
1.75
|
|
(e)
|
1.42
|
|
(f)
|
1.61
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends
|
|
1.37
|
|
(c)
|
0.17
|
|
(d)
|
1.48
|
|
(e)
|
1.17
|
|
(f)
|
1.34
|
|
|
(a)
|
Includes gains on sales of land parcels that are not attributable to discontinued operations and excludes equity in earnings from unconsolidated real estate 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
year ended December 31, 2017
, include the effect of losses on early extinguishment of debt aggregating
$3.5 million
, a preferred stock redemption charge of
$11.3 million
, and impairment of real estate of $
203 thousand
. Excluding the impact of losses on early extinguishment of debt, 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
year ended December 31, 2017
, were
1.53
and
1.47
, respectively.
|
(d)
|
Fixed charges and combined fixed charges and preferred stock dividends exceeded earnings by $118.2 million and $199.7 million, respectively, for the
year ended December 31, 2016
. Ratios for the year ended December 31, 2016, include the effect of losses on early extinguishment of debt aggregating $3.2 million, a preferred stock redemption charge of $61.3 million, and impairment of real estate of $209.3 million. Excluding the impact of losses on early extinguishment of debt, 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 year ended December 31, 2016, were 1.59 and 1.41, respectively.
|
(e)
|
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.
|
(f)
|
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.
|
Name of Subsidiary
|
|
Jurisdiction of Organization
|
ARE - QRS Corp.
|
|
Maryland
|
Alexandria Real Estate Equities, L.P.
|
|
Delaware
|
Alexandria Venture Investments, LLC
|
|
Maryland
|
ARE - Tech Square, LLC
|
|
Delaware
|
•
|
Registration Statements pertaining to the Amended and Restated 1997 Stock Award and Incentive Plan of Alexandria Real Estate Equities Inc. (Form S-8 No. 333-34223, Form S-8 No. 333-60075, Form S-8 No. 333-152433, Form S-8 No. 333-167889, Form S-8 No. 333-197212, and Form S-8 No. 333-212385);
|
•
|
Registration Statement (Form S-3/A No. 333-56449) and in the related Prospectus of Alexandria Real Estate Equities, Inc.;
|
•
|
Registration Statement (Form S-3/A No. 333-81985) and in the related Prospectus of Alexandria Real Estate Equities, Inc.;
|
•
|
Registration Statement (Form S-3ASR No. 333-207762) and in the related Prospectus of Alexandria Real Estate Equities, Inc.; and
|
•
|
Registration Statement (Form S-3ASR No. 333-222136) and in the related Prospectus of Alexandria Real Estate Equities, Inc.;
|
|
/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 the 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, 2017, we have never made such a designation.
|
•
|
If we fail to satisfy either the 75% or the 95% gross income test discussed below, and 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 (currently 21%) 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 (currently 21%) 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 (currently 21%) 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 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 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 20% of the value of our total assets may be represented by securities of one or more taxable REIT subsidiaries.
|
•
|
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.
|
•
|
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 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 subject to these gross income tests 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).
|