PASADENA, Calif., April 22, 2024 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the first quarter ended March 31, 2024.   Key highlights Operating results 1Q24 1Q23 Total revenues: In millions $        769.1 $        700.8 Growth 9.7 % Net income attributable to Alexandria's common stockholders – diluted: In millions $        166.9 $          75.3 Per share $          0.97 $          0.44 Funds from operations attributable to Alexandria's common stockholders – diluted, as adjusted: In millions $        403.9 $        373.7 Per share $          2.35 $          2.19 An operationally excellent, industry-leading REIT with a high-quality, diverse client base to support growing revenues, stable cash flows, and strong margins Percentage of annual rental revenue in effect from mega campuses as of    March 31, 2024 74 % Percentage of annual rental revenue in effect from investment-grade or publicly    traded large cap tenants as of March 31, 2024 52 % Sustained strength in tenant collections: Tenant receivables as of March 31, 2024 represent 1.0% of rental revenues $     7.5 million April 2024 tenant rents and receivables collected as of April 22, 2024 99.7 % 1Q24 tenant rents and receivables collected as of April 22, 2024 99.9 % Occupancy of operating properties in North America as of March 31, 2024 94.6 % Operating margin 72 % Adjusted EBITDA margin 72 % Weighted-average remaining lease term as of March 31, 2024: Top 20 tenants 9.7 years All tenants 7.5 years Strong leasing volume and rental rate increases Strong rental rate increases of 33.0% and 19.0% (cash basis). Strong leasing volume aggregating 1.1 million RSF during 1Q24. 77% of our leasing activity during the last twelve months was generated from our existing tenant base. 1Q24 Total leasing activity – RSF 1,142,857 Leasing of development and redevelopment space – RSF 100,232 Lease renewals and re-leasing of space:   RSF (included in total leasing activity above) 994,770   Rental rate increase 33.0 %   Rental rate increase (cash basis) 19.0 % Continued solid net operating income and internal growth Net operating income (cash basis) of $1.9 billion for 1Q24 annualized, up $132.7 million, or 7.6%, compared to 1Q23 annualized. Same property net operating income growth of 1.0% and 4.2% (cash basis) for 1Q24 over 1Q23. 96% of our leases contain contractual annual rent escalations approximating 3%. 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 4.7x for 1Q24 annualized. Significant liquidity of $6.0 billion. 32% of our total debt matures in 2049 and beyond. 13.4 years weighted-average remaining term of debt. 98.9% of our debt has a fixed rate. Total debt and preferred stock to gross assets of 28%. $1.3 billion of expected capital contribution commitments from existing consolidated real estate joint venture partners to fund construction from 2Q24 through 2027. Consistent dividend strategy with a focus on retaining significant net cash flows from operating activities after dividends for reinvestment Common stock dividend declared for 1Q24 of $1.27 per common share, aggregating $5.02 per common share for the twelve months ended March 31, 2024, up 24 cents, or 5%, over the twelve months ended March 31, 2023. Dividend yield of 3.9% as of March 31, 2024. Dividend payout ratio of 54% for the three months ended March 31, 2024. Average annual dividend per-share growth of 5% from 2020 through 1Q24 annualized. Significant net cash flows from operating activities after dividends retained for reinvestment aggregating $2.1 billion for the years ended December 31, 2020 through 2023 and for the midpoint of our 2024 guidance range for net cash provided by operating activities after dividends. Alexandria's highly leased value-creation pipeline delivered incremental annual net operating income of $26 million commencing during 1Q24 and will drive future incremental annual net operating income aggregating $480 million During 1Q24, we placed into service development and redevelopment projects aggregating 343,445 RSF that are 100% leased across multiple submarkets and delivered incremental annual net operating income of $26 million. 1Q24 deliveries include: 100,624 RSF at 500 North Beacon Street located on The Arsenal on the Charles mega campus in our Cambridge/Inner Suburbs submarket; 115,598 RSF at the Alexandria Center® for Advanced Technologies – Monte Villa Parkway in our Bothell submarket; and 72,846 RSF at 99 Coolidge Avenue in our Cambridge/Inner Suburbs submarket. Annual net operating income (cash basis) is expected to increase by $101 million upon the burn-off of initial free rent from recently delivered projects. Initial free rent has a weighted-average burn-off period of approximately seven months. 69% of the RSF in our total value-creation pipeline is within our mega campuses. Development and Redevelopment Projects Incremental Annual Net  Operating Income RSF Leased/ Negotiating Percentage (dollars in millions) Placed into service in 1Q24 $                      26 343,445 100 % Expected to be placed into service(1): 2Q24 through 4Q24 $                    120 (2) 5,541,380 63 % 2025 109 (3) (4) 1Q26 through 4Q27 251 $                    480 (1) Represents expected incremental annual net operating income to be placed into service from deliveries of projects undergoing construction and one committed near-term project expected to commence construction in the next two years, including partial deliveries of projects that stabilize in future years. (2) Includes 1.2 million RSF that is expected to stabilize in 2024 and is 98% leased/negotiating. Refer to the initial and stabilized occupancy years under "New Class A/A+ development and redevelopment properties: current projects" in the Supplemental Information for additional details. (3) In addition to the projects represented, we are evaluating one priority anticipated development project that could commence active construction in 2024 and may have initial delivery in 2025. (4) 72% of the leased RSF of our value-creation projects was generated from our existing tenant base. Strong balance sheet managementKey metrics as of or for the three months ended March 31, 2024 $34.4 billion in total market capitalization. $22.2 billion in total equity capitalization, which ranks in the top 10% among all publicly traded U.S. REITs. 1Q24 Target QuarterAnnualized Trailing12 Months 4Q24Annualized Net debt and preferred stock to     Adjusted EBITDA 5.2x 5.6x Less than or equal to 5.1x Fixed-charge coverage ratio 4.7x 4.7x Greater than or equal to 4.5x Key capital events In February 2024, we issued $1.0 billion of unsecured senior notes payable with a weighted-average interest rate of 5.48% and a weighted-average maturity of 23.1 years. The unsecured senior notes include: $400.0 million of 5.25% unsecured senior notes due 2036; and $600.0 million of 5.625% unsecured senior notes due 2054. In January 2024, our ATM program became inactive upon expiration of the associated shelf registration. In February 2024, we entered into a new ATM common stock offering program, which allows us to sell up to an aggregate of $1.5 billion of our common stock. As of April 22, 2024, the full amount remained available for future sales of our common stock. Investments As of March 31, 2024: Our non-real estate investments aggregated $1.5 billion. Unrealized gains presented in our consolidated balance sheet were $220.2 million, comprising gross unrealized gains and losses aggregating $320.4 million and $100.2 million, respectively. Investment income of $43.3 million for 1Q24 presented in our consolidated statement of operations consisted of $28.8 million of realized gains, partially offset by impairment charges of $14.7 million, and $29.2 million of unrealized gains. Other key highlights Key items included in net income attributable to Alexandria's common stockholders:   1Q24 1Q23 1Q24 1Q23 (in millions, except per share amounts) Amount Per Share – Diluted Unrealized gains (losses) on non-real estate investments $   29.2 $  (65.9) $  0.17 $ (0.39) Gain on sales of real estate 0.4 — — — Impairment of non-real estate investments (14.7) — (0.09) —  Total $   14.9 $  (65.9) $  0.08 $ (0.39) Refer to "Funds from operations and funds from operations per share" in the Earnings Press Release for additional details. Industry and corporate responsibility leadership: catalyzing and leading the way for positive change to benefit human health and society In March 2024, Alexandria was named one of Newsweek's Most Trustworthy Companies in America for the second consecutive year based on three touchpoints of trust: customer trust, investor trust, and employee trust. On the 2024 list, Alexandria holds the top rank among the three S&P 500 REITs recognized in the real estate and housing category. In March 2024, Alexandria's executive chairman and founder, Joel S. Marcus, was selected to receive the inaugural Bisnow Life Sciences Icon & Influencer Award. This prestigious award highlights Mr. Marcus and the company's significant contributions to and lasting impact on the life science real estate sector and broader life science industry. Mr. Marcus will accept the award on behalf of Alexandria at Bisnow's International Life Sciences & Biotech Conference in September 2024. During 1Q24, Alexandria earned several awards in recognition of operational excellence in asset management, leasing, real estate transactions, and sustainability across our regions: In our Greater Boston market, Alexandria won two 2023 Commercial Broker Association Achievement Awards: Life Science Deal of the Year for our lease with Novo Nordisk at 60 Sylvan Road on the Alexandria Center® for Life Science – Waltham mega campus and Investment Sale of the Year – Urban for our strategic sale of partial interest in 15 Necco Street. In our San Francisco Bay Area market, the Alexandria Center® for Life Science – San Carlos mega campus won a TOBY (The Outstanding Building of the Year) Award from BOMA (Building Owners and Managers Association) in the region's new Life Science category. Alexandria also received a San Francisco Business Times' 2024 Real Estate Deal of the Year Award for our lease with CARGO Therapeutics, a clinical-stage biotechnology company, at 835 Industrial Road on this mega campus. In our Seattle market, Alexandria was an honoree in the Water Stewardship category of the Puget Sound Business Journal's 2024 Environmental and Sustainability Awards in recognition of our implementation of an innovative energy district at the Alexandria Center® for Life Science – South Lake Union mega campus featuring one of the largest wastewater heat recovery systems in North America. This wastewater heat recovery system, which will provide an alternative energy source to heat our buildings and enhance building resilience and operating performance, demonstrates our continued focus on reducing greenhouse gas emissions in our laboratory facilities. In our Research Triangle market, we earned the Top Life Sciences/Laboratory Lease in the Triangle Business Journal's 2024 SPACE Awards for our lease with Pairwise, a health-focused food and agriculture company, at 110 and 112 TW Alexander Drive on the Alexandria Center® for Sustainable Technologies mega campus. The annual SPACE Awards recognize the Research Triangle's top commercial real estate developments and transactions. In February 2024, Alexandria, in partnership with former congressman Patrick J. Kennedy and The Kennedy Forum, held its second Alexandria Summit® on Mental Health in Washington, DC. Alexandria convened a diverse set of key decision makers, influential life science industry thought leaders, members of Congress, regulatory agency executives, and other key policymakers to advance the development of novel, effective psychiatric therapies to address vast unmet need. 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. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. Alexandria has a total market capitalization of $34.4 billion and an asset base in North America of 74.1 million SF as of March 31, 2024, which includes 42.2 million RSF of operating properties, 5.3 million RSF of Class A/A+ properties undergoing construction and one committed near-term project expected to commence construction in the next two years, 2.5 million RSF of priority anticipated development and redevelopment projects, and 24.1 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their 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 additional information on Alexandria, please visit www.are.com.  GuidanceMarch 31, 2024 (Dollars in millions, except per share amounts)           The following guidance for 2024 has been updated to reflect our current view of existing market conditions and assumptions for the year ending December 31, 2024. There can be no assurance that actual results will not be materially higher or lower than these expectations. Also, refer to our discussion of "forward-looking statements"  on page 7 of this Earnings Press Release for additional details. Key updates to our 2024 guidance from January 29, 2024 include updates to earnings per share, funds  from operations per share, and funds from operations per share, as adjusted, as shown in the table below. We updated our guidance range for 2024 earnings per share  and funds from operations per share. In addition, we narrowed our guidance range for 2024 funds from operations per share, as adjusted, to 12 cents from 20 cents with  the midpoint of $9.47 unchanged from our prior guidance on January 29, 2024. Key Credit Metric Targets(1) 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 4/22/2024 As of 1/29/2024 Earnings per share(2) $3.60 to $3.72 $3.49 to $3.69 Depreciation and amortization of real estate assets 5.95 5.95 Allocation to unvested restricted stock awards (0.06) (0.07) Funds from operations per share(1) $9.49 to $9.61 $9.37 to $9.57 Unrealized gains on non-real estate investments (0.17)