Alexandria Real Estate Equities Raises FY24 EPS Outlook From $2.98-$3.10 To $3.60-$3.72 Vs $3.38 Est.
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Real Estate Investment Trusts
Real Estate
| 2024 Guidance Midpoint | ||||||||||
| Summary of Key Changes in Guidance | As of 7/22/24 | As of 4/22/24 | Summary of Key Changes in Sources and Uses of Capital | As of 7/22/24 | As of 4/22/24 | |||||
| EPS, FFO per share, and FFO per share, as adjusted | See updates below | Dispositions, sales of partial interests, and common equity | $1,550 | $1,400 | ||||||
| Ground lease prepayment(1) | $135 | $— | ||||||||
| Key Credit Metric Targets(2) | ||
| Net debt and preferred stock to Adjusted EBITDA – 4Q24 annualized | Less than or equal to 5.1x | |
| Fixed-charge coverage ratio – 4Q24 annualized | Greater than or equal to 4.5x | |
Projected 2024 Earnings per Share and Funds From Operations per Share Attributable to Alexandria's Common Stockholders – Diluted | |||||||||
| As of 7/22/24 | As of 4/22/24 | ||||||||
| Earnings per share(3) | $2.98 to $3.10 | $3.60 to $3.72 | |||||||
| Depreciation and amortization of real estate assets | 5.95 | 5.95 | |||||||
| Impairment of real estate – rental properties and land | 0.01 | — | |||||||
| Allocation to unvested restricted stock awards | (0.05) | (0.06) | |||||||
| Funds from operations per share(2) | $8.89 to $9.01 | $9.49 to $9.61 | |||||||
| Unrealized losses (gains) on non-real estate investments | 0.20 | (0.17) | |||||||
| Impairment of non-real estate investments | 0.16 | 0.09 | |||||||
| Impairment of real estate | 0.17 | — | |||||||
| Allocation to unvested restricted stock awards | (0.01) | — | |||||||
| Funds from operations per share, as adjusted(2) | $9.41 to $9.53 | $9.41 to $9.53 | |||||||
| Midpoint | $9.47 | $9.47 | |||||||
Certain Completed Items | |||||||||
| Key Sources and Uses of Capital | Range | Midpoint | |||||||
| Sources of capital: | |||||||||
| Incremental debt | $ 885 | $ 885 | $ 885 | See below | |||||
Net cash provided by operating activities after dividends | 400 | 500 | 450 | ||||||
Dispositions, sales of partial interests, and common equity(4) (refer to page 6) | 1,050 | 2,050 | 1,550 | (4) | |||||
| Total sources of capital | $ 2,335 | $ 3,435 | $ 2,885 | ||||||
| Uses of capital: | |||||||||
| Construction | $ 1,950 | $ 2,550 | $ 2,250 | ||||||
| Acquisitions (refer to page 5) | 250 | 750 | 500 | $ 202 | |||||
| Ground lease prepayment(1) | 135 | 135 | 135 | ||||||
| Total uses of capital | $ 2,335 | $ 3,435 | $ 2,885 | ||||||
| Incremental debt (included above): | |||||||||
| Issuance of unsecured senior notes payable(5) | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | (5) | ||||
Unsecured senior line of credit, commercial paper, and other | (115) | (115) | (115) | ||||||
| Net incremental debt | $ 885 | $ 885 | $ 885 | ||||||
| Key Assumptions | Low | High | |||
| Occupancy percentage in North America as of December 31, 2024 | 94.6 % | 95.6 % | |||
| Lease renewals and re-leasing of space: | |||||
| Rental rate increases | 11.0 % | 19.0 % | |||
| Rental rate increases (cash basis) | 5.0 % | 13.0 % | |||
| Same property performance: | |||||
| Net operating income increases | 0.5 % | 2.5 % | |||
| Net operating income increases (cash basis) | 3.0 % | 5.0 % | |||
| Straight-line rent revenue | $ 169 | $ 184 | |||
| General and administrative expenses | $ 181 | $ 191 | |||
| Capitalization of interest | $ 325 | $ 355 | |||
| Interest expense | $ 154 | $ 184 | |||
| Realized gains on non-real estate investments(6) | $ 95 | $ 125 | |||
| (1) | Refer to "Subsequent event" in the Earnings Press Release for additional details. |
| (2) | Refer to "Definitions and reconciliations" in the Supplemental Information for additional details. |
| (3) | Excludes unrealized gains or losses on non-real estate investments after June 30, 2024 that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted. |
| (4) | We expect to continue pursuing our strategy to fund a significant portion of our capital requirements for the year ending December 31, 2024 with dispositions and sales of partial interests in properties not integral to our mega campus strategy and are actively pursuing several dispositions and partial interest sale opportunities. As of July 22, 2024, we completed dispositions aggregating $77.2 million, have additional pending transactions subject to letters of intent or purchase and sale agreement negotiations aggregating $806.7 million, and entered into new forward equity sales agreements aggregating $27.8 million, which, in aggregate, represents 59% of the $1.55 billion midpoint of our guidance range. |
| (5) | Represents $1.0 billion of unsecured senior notes payable issued in February 2024. Subject to market conditions, we may seek additional opportunities in 2024 to fund the repayment of our $600.0 million of 3.45% unsecured senior notes payable due on April 30, 2025 through issuance of additional unsecured senior notes payable, which is not assumed in our current 2024 guidance. |
| (6) | Represents realized gains and losses included in funds from operations per share – diluted, as adjusted, and excludes significant impairments realized on non-real estate investments, if any. Refer to "Investments" in the Supplemental Information for additional details. |