Alexandria Real Estate Equities, Inc. Reports: 4Q24 and 2024 Net (Loss) Income per Share - Diluted of $(0.38) and $1.80, respectively; 4Q24 and 2024 FFO per Share - Diluted, as Adjusted, of $2.39 and $9.47, respectively

PASADENA, Calif., Jan. 27, 2025 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the fourth quarter and year ended December 31, 2024.

 

A sector-leading REIT with a high-quality, diverse tenant base and strong margins

Strong and flexible balance sheet with significant liquidity; top 10% credit rating ranking among all publicly traded U.S. REITs

• Net debt and preferred stock to Adjusted EBITDA of 5.2x and fixed-charge coverage ratio of 4.3x for 4Q24 annualized.
• Significant liquidity of $5.7 billion.
• 32% of our total debt matures in 2049 and beyond.
• 12.7 years weighted-average remaining term of debt.
• Since 2020, an average of 98.4% of our year-end debt balances have been fixed rate.
• Total debt and preferred stock to gross assets of 28%.
• $684.1 million of capital contribution commitments from existing real estate joint venture partners to fund construction from 1Q25 through 2028.

Continued solid leasing volume and rental rate increases

• Continued solid leasing volume:
  • 1.3 million RSF for 4Q24, up 19% compared to our previous five-quarter average.
  • Fourth consecutive quarter with leasing volume exceeding 1 million RSF.
  • 5.1 million RSF for 2024, up 19% compared to our 2014–2020 average of 4.3 million RSF.
• Rental rate increases on lease renewals and re-leasing of space were 18.1% and 3.3% (cash basis) for 4Q24 and 16.9% and 7.2% (cash basis) for 2024.
• 84% of our leasing activity during the last twelve months was generated from our existing tenant base.
• Tenant improvements and leasing commissions on renewed and re-leased space executed during the year ended December 31, 2024 represented only 8.4% of total lease term rents, the second lowest percentage of total lease term rents in the past five years.

 

Attractive dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment

• Common stock dividend declared for 4Q24 of $1.32 per common share aggregating $5.19 per common share for the year ended December 31, 2024, up 23 cents, or 5%, over the year ended December 31, 2023.
• Dividend yield of 5.4% as of December 31, 2024.
• Dividend payout ratio of 55% for the three months ended December 31, 2024.
• Average annual dividend per-share growth of 5.4% from 2020 through 2024.
• Significant net cash flows from operating activities after dividends retained for reinvestment aggregating $2.2 billion for the years ended December 31, 2020 through 2024.

Strong execution of Alexandria's 2024 capital strategy

Our 2024 capital plan included $1.4 billion in funding from strategic dispositions that focused on a portfolio of diversified assets, of which $1.1 billion was completed during 4Q24. Refer to "Dispositions" in the Earnings Press Release for additional details.

• As of January 27, 2025, our share of pending dispositions subject to negotiations aggregated $539.5 million. These transactions represent approximately 32% of the $1.7 billion midpoint of our 2025 guidance range for dispositions and sales of partial interests.

Alexandria's development and redevelopment pipeline delivered incremental annual net operating income of $55 million commencing during 4Q24 and is expected to deliver incremental annual net operating income aggregating $395 million by 2Q28

• During 4Q24, we placed into service Megacampus development and redevelopment projects aggregating 602,593 RSF that are 98% occupied across multiple submarkets and delivered incremental annual net operating income of $55 million. Key 4Q24 deliveries included:
  • 171,102 RSF at 4155 Campus Point Court located on the Campus Point by Alexandria Megacampus in our University Town Center submarket;
  • 139,984 RSF at 840 Winter Street located on the Alexandria Center^® for Life Science – Waltham Megacampus in our Route 128 submarket; and
  • 93,492 RSF at 10935, 10945, and 10955 Alexandria Way located on the One Alexandria Square Megacampus in our Torrey Pines submarket.
• Annual net operating income (cash basis) is expected to increase by $70 million upon the burn-off of initial free rent, with a weighted-average burn-off period of approximately three months, from recently delivered projects.
• 68% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.

Continued solid net operating income and internal growth

• Net operating income (cash basis) growth:
  • $2.1 billion for 4Q24 annualized, up $177.9 million, or 9.5%, compared to 4Q23 annualized.
  • $2.0 billion for 2024, up $176.9 million, or 9.8%, compared to 2023.
• Same property net operating income growth of 0.6% and 6.3% (cash basis) for 4Q24 over 4Q23 and 1.2% and 4.6% (cash basis) for 2024 over 2023.
• 97% of our leases contain contractual annual rent escalations approximating 3%.

Continued rigorous focus on management of general and administrative costs

• General and administrative expenses as a percentage of net operating income of 7.6% for 2024, compared to 9.8% for 2023.
• We expect general and administrative cost savings of approximately $32 million in 2025, based on the midpoint of our guidance, compared to 2024, from a variety of cost-control and efficiency initiatives, including:
  • Personnel-related matters: reduction in headcount over the last two years and restructuring of compensation plans.
  • Streamlining of business processes: systems upgrades, process improvements, and cost reduction in legal, technology, and operational support services.

Strong balance sheet management

Key metrics as of or for the three months ended December 31, 2024

• $29.0 billion in total market capitalization.
• $16.8 billion in total equity capitalization.

Key capital events

• On December 9, 2024, we announced that our board of directors authorized a common stock repurchase program under which we may repurchase up to $500.0 million of our common stock through December 31, 2025. Repurchases are expected to be funded on a leverage-neutral basis.
  • In December 2024, we repurchased $50.1 million of common stock.
  • From January 1, 2025 through January 27, 2025, we repurchased $150.0 million of additional common stock.
  • As of January 27, 2025, cumulative repurchases under the program aggregated $200.1 million and 2.0 million shares of common stock at an average price per share of $98.16.
  • As of January 27, 2025, the approximate value of shares authorized and remaining under this program was $299.9 million.
• During 4Q24, we settled all outstanding forward equity sales agreements by issuing 230 thousand shares of common stock at an average price per share of $120.93 and received net proceeds of $27.8 million. As of January 27, 2025, the remaining aggregate amount available for future sales of common stock under our ATM program was $1.47 billion.

Investments

• As of December 31, 2024:
  • Our non-real estate investments aggregated $1.5 billion.
  • Unrealized gains presented in our consolidated balance sheet were $83.6 million, comprising gross unrealized gains and losses aggregating $228.1 million and $144.5 million, respectively.
• Investment loss of $68.0 million for 4Q24 presented in our consolidated statement of operations consisted of $32.1 million of realized gains, $79.8 million of unrealized losses, and $20.3 million of impairment charges.
• Investment loss of $53.1 million for 2024 presented in our consolidated statement of operations consisted of $117.2 million of realized gains, $112.2 million of unrealized losses, and $58.1 million of impairment charges.

Other key highlights

Executive management change, effective December 31, 2024

Effective on December 31, 2024, Vincent Ciruzzi retired from his position as Chief Development Officer after nearly 30 years of exemplary service. His responsibilities will be assumed by multiple members within our Real Estate Development Team, which Mr. Ciruzzi formed and led over his tenure with Alexandria.

Subsequent events

• In January 2025, pursuant to an amendment executed in July 2024 to our existing ground lease agreement at the Alexandria Technology Square^® Megacampus, we made the second and final installment payment aggregating $135.0 million related to our rent obligation for the extended ground lease term.

Industry and corporate responsibility leadership: catalyzing and leading the way for positive change to benefit human health and society

• Alexandria's longstanding sustainability leadership and performance was reinforced by our achievements in the 2024 GRESB Real Estate Assessment. We received the GRESB Green Star designation for the eighth consecutive year and an "A" disclosure score for the seventh consecutive year, signifying best-in-class transparency regarding our sustainability practices and reporting.
• 325 Binney Street, a 462,100 RSF development on the Alexandria Center^® at One Kendall Square Megacampus in our Cambridge submarket, earned LEED Platinum certification, the highest level of certification under the U.S. Green Building Council's Core and Shell rating system. Home to Moderna's global headquarters and R&D center, the ultra-efficient building is targeting LEED Zero Energy certification, reduced fossil fuel use through the implementation of a geothermal system, and 100% renewable electricity, resulting in an estimated 97% reduction of greenhouse gas emissions relative to the MA 2020 Stretch Code baseline.
• 8 Davis Drive on the Alexandria Center^® for Advanced Technologies and AgTech – Research Triangle Megacampus won a BOMA Raleigh-Durham TOBY (The Outstanding Building of the Year) Award in the Life Science category. The TOBY Awards are the commercial real estate industry's highest recognition honoring excellence in commercial building management and operations.

About Alexandria Real Estate Equities, Inc. 

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500^® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For more information on Alexandria, please visit www.are.com. 

 

 

 

 

 

 

 

Earnings Call Information and About the Company

December 31, 2024

We will host a conference call on Tuesday, January 28, 2025, at 3:00 p.m. Eastern Time ("ET")/noon Pacific Time ("PT"), which is open to the general public, to discuss our financial and operating results for the fourth quarter and year ended December 31, 2024. To participate in this conference call, dial (833) 366-1125 or (412) 902-6738 shortly before 3:00 p.m. ET/noon PT and ask the operator to join the call for Alexandria Real Estate Equities, Inc. The audio webcast can be accessed at www.are.com in the "For Investors" section. A replay of the call will be available for a limited time from 5:00 p.m. ET/2:00 p.m. PT on Tuesday, January 28, 2025. The replay number is (877) 344-7529 or (412) 317-0088, and the access code is 1012884.

Additionally, a copy of this Earnings Press Release and Supplemental Information for the fourth quarter and year ended December 31, 2024 is available in the "For Investors" section of our website at www.are.com or by following this link: https://www.are.com/fs/2024q4.pdf. 

For any questions, please contact [email protected]; Joel S. Marcus, executive chairman and founder; Peter M. Moglia, chief executive officer and chief investment officer; Marc E. Binda, chief financial officer and treasurer; Paula Schwartz, managing director of Rx Communications Group, at (917) 633-7790; or Sara M. Kabakoff, senior vice president – chief content officer.

About the Company

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500^® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City.  As of December 31, 2024, Alexandria has a total market capitalization of $29.0 billion and an asset base in North America that includes 39.8 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For more information on Alexandria, please visit www.are.com. 

Forward-Looking Statements

This document includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our projected 2025 earnings per share, projected 2025 funds from operations per share, projected 2025 funds from operations per share, as adjusted, projected net operating income, and our projected sources and uses of capital. You can identify the forward-looking statements by their use of forward-looking words, such as "forecast," "guidance," "goals," "projects," "estimates," "anticipates," "believes," "expects," "intends," "may," "plans," "seeks," "should," "targets," or "will," or the negative of those words or similar words. These forward-looking statements are based on our current expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, as well as a number of assumptions concerning future events. There can be no assurance that actual results will not be materially higher or lower than these expectations. These statements are subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, without limitation, our failure to obtain capital (debt, construction financing, and/or equity) or refinance debt maturities, lower than expected yields, increased interest rates and operating costs, adverse economic or real estate developments in our markets, our failure to successfully place into service and lease any properties undergoing development or redevelopment and our existing space held for future development or redevelopment (including new properties acquired for that purpose), our failure to successfully operate or lease acquired properties, decreased rental rates, increased vacancy rates or failure to renew or replace expiring leases, defaults on or non-renewal of leases by tenants, adverse general and local economic conditions, an unfavorable capital market environment, decreased leasing activity or lease renewals, failure to obtain LEED and other healthy building certifications and efficiencies, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission ("SEC"). Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made as of the date of this Earnings Press Release and Supplemental Information, and unless otherwise stated, we assume no obligation to update this information and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

This document is not an offer to sell or a solicitation to buy securities of Alexandria Real Estate Equities, Inc. Any offers to sell or solicitations to buy our securities shall be made only by means of a prospectus approved for that purpose. Unless otherwise indicated, the "Company," "Alexandria," "ARE," "we," "us," and "our" refer to Alexandria Real Estate Equities, Inc. and our consolidated subsidiaries. Alexandria^®, Lighthouse Design^® logo, Building the Future of Life-Changing Innovation^®, That's What's in Our DNA^®, Megacampus™, Labspace^®, Alexandria Summit^®, At the Vanguard and Heart of the Life Science Ecosystem™, Alexandria Center^®, Alexandria Technology Square^®, Alexandria Technology Center^®, and Alexandria Innovation Center^® are copyrights and trademarks of Alexandria Real Estate Equities, Inc. All other company names, trademarks, and logos referenced herein are the property of their respective owners.

 

 

 

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/alexandria-real-estate-equities-inc-reports-4q24-and-2024-net-loss-income-per-share--diluted-of-0-38-and-1-80--respectively-4q24-and-2024-ffo-per-share--diluted-as-adjusted-of-2-39-and-9-47--respectively-302361185.html

SOURCE Alexandria Real Estate Equities, Inc.