ALEXANDRIA REAL ESTATE EQUITIES, INC. (ARE)

CIK: 0001035443. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-01-26.
SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1035443. Latest filing source: 0001035443-26-000013.
Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	3,026,556,000	USD	2025	2026-01-26
Net income	-1,429,570,000	USD	2025	2026-01-26
Assets	34,081,835,000	USD	2025	2026-01-26
Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-01-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001035443.json. Derived margins are computed from the extracted annual SEC facts.
Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.
Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue	921,706,000	1,128,097,000	1,327,459,000	1,531,296,000	1,885,637,000	2,114,150,000	2,588,962,000	2,885,699,000	3,116,394,000	3,026,556,000
Net income	-65,901,000	169,093,000	379,312,000	363,165,000	770,959,000	571,247,000	521,660,000	103,639,000	322,949,000	-1,429,570,000
Diluted EPS	-1.99	1.58	3.52	3.12	6.01	3.82	3.18	0.54	1.80	-8.44
Assets	10,354,888,000	12,103,953,000	14,464,956,000	18,390,503,000	22,827,878,000	30,219,373,000	35,523,399,000	36,771,402,000	37,527,449,000	34,081,835,000
Liabilities	4,972,610,000	5,620,784,000	6,570,242,000	8,224,025,000	9,384,100,000	11,186,123,000	12,840,152,000	14,148,409,000	15,128,988,000	14,925,399,000
Stockholders' equity	4,895,796,000	5,949,666,000	7,341,965,000	8,865,826,000	11,725,712,000	16,189,542,000	18,972,387,000	18,471,175,000	17,889,042,000	15,470,070,000
Cash and cash equivalents	125,032,000	254,381,000	234,181,000	189,681,000	568,532,000	361,348,000	825,193,000	618,190,000	552,146,000	549,062,000
Net margin	-7.15%	14.99%	28.57%	23.72%	40.89%	27.02%	20.15%	3.59%	10.36%	-47.23%
Financial Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-01-26. Report date: 2025-12-31.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto under

“Item 15. Exhibits and financial statement schedules” in this annual report on Form 10-K. Forward-looking statements involve inherent

risks and uncertainties regarding events, conditions, and financial trends that may affect our future plans of operations, business

strategy, results of operations, and financial position. A number of important factors could cause actual results to differ materially from

those included within or contemplated by such forward-looking statements, including, but not limited to, those described within this “Item

7. Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K. We do not

undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking

statements contained in this or any other document, whether as a result of new information, future events, or otherwise.

As used in this annual report on Form 10-K, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to

Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries.

86

Executive summary

Operating results

Year Ended December 31,

2025

2024

Net (loss) income attributable to Alexandria’s common stockholders – diluted:

In millions

$(1,438.0)

$309.6

Per share

$(8.44)

$1.80

Funds from operations attributable to Alexandria’s common stockholders – diluted, as adjusted:

In millions

$1,534.7

$1,629.1

Per share

$9.01

$9.47

For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria

Real Estate Equities, Inc.’s common stockholders” under “Definitions and reconciliations” and to the tabular presentation of these items

in “Results of operations” in Item 7 in this annual report on Form 10-K.

A best-in-class REIT with a high-quality, diverse tenant base, strong margins, and long lease terms

(As of December 31, 2025, unless stated otherwise)

Occupancy of operating properties in North America

90.9%

Percentage of total annual rental revenue in effect from Megacampus platform

78%

Percentage of total annual rental revenue in effect from investment-grade or publicly traded large cap tenants

53%

Adjusted EBITDA margin for the three months ended December 31, 2025

70%

Percentage of leases containing annual rent escalations

97%

Weighted-average remaining lease term:

Top 20 tenants

9.7

years

All tenants

7.5

years

Strong tenant collections for the three months ended December 31, 2025:

Tenant rents and receivables for the three months ended December 31, 2025 collected as of the date of this

report

99.9%

Solid leasing volume

•Leasing volume aggregating 4.2 million RSF for the year ended December 31, 2025.

•Leasing of previously vacant space aggregating 393,376 RSF, up 98%, over the quarterly average over the last five

quarters.

•Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for the year ended

December 31, 2025.

•82% of our leasing activity in 2025 was generated from our existing tenant base.

2025

Lease renewals and re-leasing of space:

Rental rate changes

7.0%

Rental rate changes (cash basis)

3.5%

RSF

2,543,473

Leasing of previously vacant space – RSF

944,362

Leasing of development and redevelopment space – RSF

704,821

Total leasing activity – RSF

4,192,656

87

Key operating metrics

•Total revenues of $3.03 billion, down 2.9%, for the year ended December 31, 2025, compared to $3.12 billion for the year

ended December 31, 2024. Excluding dispositions completed after January 1, 2024, total revenues would have increased by

2.3% for the year ended December 31, 2025.

•Net operating income (cash basis) of $1.98 billion for the year ended December 31, 2025 increased by $1.7 million, or 0.1%,

compared to the year ended December 31, 2024.

•Change in net operating income (cash basis) includes the impact of operating properties disposed of after January 1,

2024. Excluding these dispositions, net operating income (cash basis) for the year ended December 31, 2025 would have

increased by 6.2% compared to 2024.

•Same property net operating income decreased by 3.5% and increased by 0.9% (cash basis) for the year ended

December 31, 2025, compared to the year ended December 31, 2024.

•92.5% same properties’ average occupancy for the year ended December 31, 2025, compared to 95.2% average

occupancy for the year ended December 31, 2024.

Continued successful management and reduction of general and administrative expenses

•General and administrative expenses as a percentage of net operating income for the year ended December 31, 2025 were

5.6%—the lowest level in the past ten years for the Company and approximately half the average of other S&P 500 REITs. In

2025, we realized cost reductions of $51.3 million, or 30%, compared to the year ended December 31, 2024, primarily from

cost-control and efficiency initiatives. Some of these cost savings are temporary in nature, and we anticipate that

approximately half of the cost reduction achieved in 2025 will continue in 2026.

•Compared to the general and administrative expenses for the year ended December 31, 2024, we expect to achieve a

savings of $76 million of cumulative general and administrative expense in 2025 and 2026 based upon the midpoint of our

guidance range for 2026 general and administrative expenses.

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

•Common stock dividend declared of $0.72 per share for the three months ended December 31, 2025, representing a 45%

reduction from the quarterly dividend declared of $1.32 for the three months ended September 30, 2025.

•The decision to reduce the declared dividend per common share reflects our commitment to maintaining the strength of our

balance sheet, enhancing financial flexibility, and preserving liquidity of approximately $410 million on an annual basis, which

will be used to support our 2026 capital plan.

•Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating $2.36 billion for

the years ended December 31, 2021 through 2025.

•Dividend yield of 5.9% as of December 31, 2025 and dividend payout ratio of 33% for the three months ended December 31,

2025.

Successful execution of Alexandria’s capital recycling strategy

We exceeded the midpoint of our 2025 guidance for dispositions and sales of partial interests by completing $1.81 billion of

funding, primarily from sales of non-core assets and land, as well as sales to owner/users. During the three months ended December

31, 2025, we completed $1.47 billion of dispositions. As of December 31, 2025, the book value of our real estate assets designated as

held for sale aggregated $581.7 million. We expect to sell these assets in 2026. Refer to “Dispositions and sales of partial interests” in

Item 2 in this annual report Form 10-K for additional details.

(in millions)

Sales Price

During the nine months ended September 30, 2025

$341

During the three months ended December 31, 2025

1,471

Total 2025 dispositions and sales of partial interests(1)

$1,812

Types of dispositions during the year ended December 31, 2025(1)

% of Sales Price

Land

21%

Non-stabilized properties

59

Stabilized properties

20

Total 2025 dispositions

100%

(1)Excludes the exchange of partial interests in two consolidated real estate joint ventures, Pacific Technology Park and 199 East Blaine Street, during the three months

ended September 30, 2025.

88

Increased occupancy and leasing progress on temporary vacancy

Operating occupancy as of September 30, 2025

90.6%

Assets with vacancy designated as held for sale during the three months ended December 31, 2025

0.5

Early termination of one lease aggregating 170,618 RSF at 259 East Grand Avenue in South San Francisco, originally

set to expire in 2027, which is already fully re-leased to a multinational pharmaceutical tenant with occupancy

expected to commence in 2H26

(0.5)

(1)

Reclassification of 401 Park Avenue from redevelopment to operating upon our decision to pursue leasing as office

space rather than convert to laboratory space

(0.3)

Other changes in occupancy, primarily due to the commencement of leases during 4Q25

0.6

Operating occupancy as of December 31, 2025

90.9

Key vacant space leased with future delivery

2.5

(2)

Operating occupancy as of December 31, 2025, including leased but not yet delivered space

93.4%

(1)Refer to “Projected results” in item 7 for key considerations on guidance for the three months ending March 31, 2026.

(2)Represents temporary vacancies as of December 31, 2025 aggregating 899,259 RSF, primarily in the Greater Boston, San Francisco Bay Area, and Seattle markets,

that are leased and expected to be occupied upon completion of building and/or tenant improvements. The weighted-average expected delivery date is approximately

August 2026 and the expected annual rental revenue is approximately $52 million.

Reduction of capital spend and funding needs

•During the three months ended December 31, 2025, we reduced future construction funding requirements across our active

pipeline by: i) selling or designating three projects as held for sale and ii) pivoting one project to a lower investment strategy;

enabling us to redeploy future construction savings and sale proceeds into opportunities aligned with our long‑term

Megacampus™ strategy.

•We reduced the overall size of our future construction funding needs on current development and redevelopment projects

by more than $300 million over the next few years.

•3% reduction in non-income-producing assets to 17% as a percentage of gross assets.

•We are evaluating business strategy for four additional projects.

Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of $10 million, commencing

during the three months ended December 31, 2025, with an additional $97 million of incremental annual net operating income

anticipated to deliver by 4Q26 primarily from projects that are 86% leased/negotiating.

•During the three months ended December 31, 2025, we placed into service one development project aggregating 139,979

RSF that is 100% occupied at 10075 Barnes Canyon Road in our Sorrento Mesa submarket and delivered incremental annual

net operating income of $10 million.

•Annual net operating income (cash basis) from recently delivered projects is expected to increase by $26 million upon the

burn-off of initial free rent, which has a weighted-average remaining period of approximately six months.

•77% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.

(dollars in millions)

Incremental

Annual Net

Operating Income

RSF

Leased/Negotiating

Percentage

Expected to be placed into service:

Fiscal year 2026

$97

(1)

699,933

(2)

86%

(3)

Fiscal years 2027-2028

123

1,614,994

51%

$220

Projects under business strategy evaluation:

Fiscal years 2026-2028

$113

1,248,227

8%

(1)Includes expected partial deliveries through 2026 from projects expected to stabilize in 2027-2028, including speculative future leasing that is not yet fully

committed. Refer to the initial and stabilized occupancy years under “New Class A/A+ development and redevelopment properties: current projects” in Item 2 for

additional information.

(2)Represents the RSF of projects expected to stabilize in 2026. Does not include RSF for partial deliveries through 2026 from projects expected to stabilize in

2027-2028.

(3)Represents the current leased/negotiating percentage of development and redevelopment projects that are expected to stabilize through 2026.

89

Trends that may affect our future results

Currently identified key market trends and uncertainties that had or may have a negative effect on our business are discussed

below. Although we seek to minimize the risks posed by these trends and uncertainties as discussed in the mitigating factors section

below, there can be no assurance that these measures will be successful in preventing material impacts on our future results of

operations, financial position, and cash flows. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of

additional risks we face. 

New supply and reduced demand for life science space may continue to negatively affect our rental rates, occupancy, and

operating results.

•Influx of supply. During and after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements as well as

exceptionally strong demand for life science space, driven by public health urgency and supported by historically low interest

rates, prompted certain office and other real estate investors to repurpose underutilized office spaces into laboratory facilities,

initiating a wave of new development activity across the sector. Our success and the success of other laboratory operators

prompted new and existing developers to commence speculative redevelopment and/or development laboratory projects in

anticipation of demand for such facilities. These conversion and speculative development projects have contributed to a

significant influx of new laboratory properties in our top three markets—Greater Boston, San Diego, and the San Francisco

Bay Area. Life science real estate availability in these top markets—measured as the percentage of life-science RSF available

relative to total life-science RSF—rose to approximately 29% during the year ended December 31, 2025, from approximately

4% in 2021. This surge created supply that materially exceeded current demand. As pandemic-driven urgency faded, the

amount of available space became the dominant factor influencing tenant activity, with absorption unable to match the influx of

supply.

•Decrease in demand. Adding to these challenges, life science tenant demand—after reaching historically high levels in 2021—

has moderated significantly. The average tenant demand, measured by life-science tenants’ RSF requirements, has declined

by more than 60% during the year ended December 31, 2025 compared to 2021 across our top three markets: Greater

Boston, San Francisco Bay Area, and San Diego. This reflected a shift from extraordinary tenant demand driven by pandemic-

related urgency to levels more consistent with historical pre-pandemic norms, particularly those observed during 2016-2018.

Importantly, this shift occurred amid substantially higher available supply, as discussed above, further negatively impacting

occupancy in top markets.

Exacerbating the recent demand trend, the life science industry faced an unusual convergence of macroeconomic, regulatory,

policy, and political challenges in 2025, all of which are critical facets of the life science industry. These included consequential

shifts in  leadership at the Health and Human Services agency (“HHS”), tariff-related measures, operational, leadership, and

staff disruptions at the NIH and the FDA, threatened reductions in NIH funding of biomedical research and proposals to limit

NIH funding of indirect grant costs, heightened scrutiny of pharmaceutical pricing, and increased global competition from

China, discussed below. Collectively, these factors, including those described below, increased uncertainty, leading tenants to

potentially defer leasing commitments and expansion decisions pending greater clarity. As a result, absorption of available

space has been notably slower.

◦Prolonged biotech bear market and capital constraints. The life science sector experienced the fifth consecutive year

of a broad-based biotech bear market in 2025. Life science venture capital fundraising declined to its lowest level since

2016, reducing overall levels of capital venture funds available to deploy in the future. Life science venture funds also

continue to be highly risk averse, focusing investments on clinical-stage and asset based opportunities that may not drive

significant labspace needs. The initial public offering market for biotech companies has remained largely closed,

eliminating a key source of liquidity and growth capital. Elevated interest rates have further constrained access to debt

and equity financing. These factors have slowed company formation, reduced headcount growth, and delayed laboratory

expansion decisions, directly impacting leasing demand for specialized life science space.

◦Regulatory and policy factors affecting absorption. At the same time, the regulatory environment experienced

significant disruption. The FDA saw more than 50% turnover in senior leadership during the first half of 2025,

accompanied by employee layoffs and a number of  delays in regulatory review decisions. Changing expectations related

to clinical trial requirements and flexibility for rare diseases with large unmet need created additional uncertainty around

development timelines for certain regulated products. These conditions have reduced some tenants’ near-term confidence

in expansion and capital investment decisions.

Biomedical research institutions have faced increased uncertainty around federal funding policies throughout 2025. The

proposed 15% cap on NIH institutional indirect grant spending, which was recently upheld as unlawful by an appellate

court, raised concerns for biomedical research institutions about the ability to recover infrastructure and operating costs,

which materially constrained incremental real estate demand among certain federally supported entities.

Further, government actions aimed at reducing U.S. prescription drug prices have heightened uncertainty regarding future

returns on pharmaceutical and biotechnology investments. This has weighed on risk appetite across the sector and

constrained investment into some areas of research and development. As a result, some tenants have delayed or scaled

90

back expansion plans, reducing leasing activity and occupancy levels.

At the same time, global competition for life science research has intensified, with certain foreign markets, especially

China, rapidly gaining ground as biotechnology leaders through centralized funding and faster regulatory timelines.

Coupled with immigration-related restrictions implemented in the U.S. during 2025 that limit access to international

research talent, these policy actions not only affect current activities but also pose a significant threat to the long-term

viability of the U.S. biomedical industry. The cumulative effect of these developments may significantly reduce tenant

demand for U.S. life science real estate. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for more

information.

•Impact on our business. The surge in supply and decrease in demand have led to industry-wide elevated vacancy rates,

slower leasing activity, lower rental rates, higher lease concessions, and increased competition for tenants. Our operating

occupancy declined from 94.6% as of December 31, 2024 to 90.9% as of December 31, 2025, and we project our operating

occupancy to decline further to approximately 88.5% as of December 31, 2026, representing the midpoint of our guidance

range for occupancy percentage in North America as of December 31, 2026.

To remain competitive, we have realized lower rental rate changes on renewed and re-leased spaces and have offered more

tenant improvement allowances or additional tenant concessions, including free rent, to retain existing tenants, or attract new

tenants. We project the decline in rental rates to continue into 2026. Furthermore, to maintain long-term tenant relationships

and sustain occupancy levels within our core assets, our existing operating properties may require additional revenue- and

non-revenue-enhancing capital expenditures earlier than typically expected.

The table below reflects a trend of increasing revenue- and non-revenue-enhancing capital expenditures, including tenant

improvement expenditures over the last several years. The table also presents the trend, on a per RSF basis, of increasing

tenant improvements, leasing commissions, and free rent concessions, and of decreasing growth in rental rates related to our

renewed/re-leased spaces, and decreases in our operating occupancy (dollars in thousands, except per RSF amounts):

Revenue- and

Non-Revenue-

Enhancing

Capital

Expenditures

Tenant

Improvements/

Leasing

Commissions

per RSF

Free Rent

Concessions per

Annum

(leases executed in

trailing 12 months)

Rental Rate

Increases

(on renewed/

re-leased

spaces)

Operating

Occupancy

(as of each

period end)

2023

$260,392

$26.09

0.6 months

29.4%

94.6%

2024

$273,377

$46.89

0.7 months

16.9%

94.6%

2025

$324,293

$55.34

1.5 months

7.0%

90.9%

Midpoint of 2026 guidance range

$510,000

N/A

2.0%

88.5%

Additionally, we have key lease expirations with expected downtime in 2026, primarily in the Greater Boston, San Francisco

Bay Area, and San Diego markets, aggregating 1.2 million RSF with a weighted-average lease expiration date of April 2026.

These spaces are expected to become vacant at lease expiration and re-leased to new tenants. We expect downtime on the

1.2 million RSF to range approximately 6–24 months on a weighted-average basis. In addition, we have identified 1.2 million

RSF of lease expirations that are expected to have significant downtime in 2027. However, considering elevated new

laboratory supply in these markets, there can be no assurance that we will be able to re-lease some or all of this space on

acceptable terms, without significant capital expenditures, or within anticipated time frames, even at reduced rates.

As of December 31, 2025, we anticipate that 2.3 million RSF of our projects undergoing construction will be placed into service

from 2026 through 2028 and will generate $220 million in future incremental annual net operating income. These projects are

64% leased or under lease negotiations as of December 31, 2025. Furthermore, we have additional 1.2 million RSF of projects

under construction expected to be delivered through 2028, which are 8% leased or under lease negotiations. For these

projects, we are evaluating business strategy, including continuing construction, selling, or pausing development or

redevelopment. If we decide to sell or pause, such actions could be dilutive to our funds from operations and operating

metrics.

Landlord-funded tenant improvement allowances have increased significantly for first-generation space, including development

and redevelopment projects, with most space in shell condition requiring landlords to fund the full build-out cost. This trend

places additional pressure on projected returns and overall economics, and further challenges our ability to attract and secure

tenants for the remaining unleased RSF related to these projects at the expected rates, or at all, which could result in a

shortfall or delay in the commencement of the projected incremental annual net operating income.

91

Unfavorable macroeconomic and capital market conditions may continue to adversely affect the value of our real estate and

non-real estate portfolios, which could result in additional significant impairments and may impact our ability to raise capital

efficiently to further our business objectives.

The effective execution of our development and redevelopment activities is contingent on access to capital required to fund

these projects. Our construction spending in 2025 aggregated $1.44 billion. We expect funding for construction spending in

2026 to aggregate $1.75 billion at the midpoint of our 2026 guidance range for construction spending. This includes significant

remaining construction costs to complete our active pipeline and anticipated increases in both revenue- and non-revenue-

enhancing capital expenditures in our operating portfolio. As a result, our capital plan and leverage management strategy have

increased our reliance on real estate dispositions and sales of partial interests to generate capital. However, current real estate

market conditions, including lower property valuations and increased capitalization rates, will likely adversely affect the timing

and pricing of such transactions.

•Lower property valuations and increased capitalization rates. A portion of our projected construction spending and other uses

of capital is expected to be funded through dispositions and sales of partial interests in core and non-core real estate assets.

Real estate investments are generally less liquid than many other investment types, which can present challenges in selling

our properties in a timely manner or at desirable prices, especially in an environment of oversupply.

In addition to the factors discussed above specifically affecting demand for life science space, broader real estate demand as

well has been impacted by macroeconomic conditions, particularly elevated interest rates. Following the onset of the

COVID-19 pandemic, the U.S. Federal Reserve reduced the federal funds target range to 0%–0.25% in March 2020 and

maintained that near-zero range until March 2022. To address inflation concerns, the U.S. Federal Reserve then increased the

target range rapidly, reaching 5.25%–5.50% in July 2023, where it remained for an extended period. Although the U.S. Federal

Reserve reduced the federal funds target range to 4.25%–4.50% during 2024, and to 3.50%–3.75% during 2025, interest rates

remain elevated. This could continue to limit access to debt and/or equity financing for prospective buyers of real estate

assets. All other aspects being equal, such challenges for buyers lead to an excess of properties available for sale, which

exerts downward pressure on property valuations and elevates capitalization rates, adversely impacting the sales proceeds we

can generate from our real estate asset sales.

The oversupply, discussed above, combined with high interest rates and reduced market liquidity, has contributed to a

prolonged period of lower property valuations and higher capitalization rates, resulting in significant real estate impairments

and making it more challenging to execute asset sales within the expected timelines and at favorable pricing. In 2026, we

expect to complete dispositions and sales of partial interests of approximately $2.90 billion at the midpoint of our 2026

guidance range. However, we may not be able to achieve this and/or other targets disclosed in our 2026 guidance as a result

of the uncertainties discussed in this “Trends that may affect our future results” section as well as in “Item 1A. Risk factors” in

this annual report on Form 10-K.

The table below presents total dispositions and a trend of increasing impairments of real estate and capitalization rates

associated with dispositions and sales of partial interests in our real estate assets over the last several years (dollars in

thousands), which is partly attributable to the quality of core and non-core assets we sold during each period. There is no

assurance that this upward trend will stabilize or reverse in the future.

Aggregate Sales Price of

Dispositions and Sales of

Partial Interests

Impairment of

Real Estate

Capitalization

Rates(1)

Capitalization

Rates

(Cash Basis)(1)

2023

$1,314,414

$461,114

6.7%

5.9%

2024

$1,382,453

$223,068

7.7%

6.5%

2025

$1,813,778

$2,202,818

7.7%

(2)

7.5%

(2)

Midpoint of 2026 guidance range

$2,900,000

(3)

(1)Capitalization rates are calculated only for stabilized operating assets sold. Refer to “Capitalization rates” under “Definitions and reconciliations” in Item 7 for

additional information.

(2)Represents the weighted-average capitalization rate for stabilized operating assets sold in 2025, which accounted for only 20% of the aggregate sales price

of dispositions and sales of partial interests in 2025.

(3)We are not able to forecast for future periods without unreasonable effort and therefore do not provide on a forward-looking basis. This is due to the inherent

difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our control.

For additional information about our dispositions and real estate impairments recognized in 2025, refer to “Sales of real estate

assets and impairment of real estate” in Note 3 – “Investments in real estate” to our consolidated financial statements in Item

15 in this annual report on Form 10-K.

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During the year ended December 31, 2025, we completed dispositions with our share of an aggregate sales price of

$1.81 billion. For 2026, we have established a disposition program with expected sales of approximately $2.90 billion at the

midpoint of our 2026 guidance for real estate dispositions and sales of partial interests.

•As of December 31, 2025, we committed to dispose in 2026 of certain assets with an aggregate book value of

$581.7 million as of December 31, 2025. These assets are classified as held for sale as of December 31, 2025, having

met the criteria for such classification during the year. Accordingly, we recognized related impairment charges aggregating

$910.7 million related to assets classified as held for sale as of December 31, 2025, which are included in the $2.20 billion

of total impairment of real estate presented in our consolidated statement of operations for 2025.

•To achieve the midpoint of our 2026 guidance range of $2.90 billion for dispositions and sales of partial interests, we

continue to evaluate a significant number of disposition targets, including non-core operating properties, both stabilized

and unstabilized, and land parcels. Under U.S. GAAP, real estate assets are evaluated for impairment upon indication of

potential impairment.

◦For real estate assets held and used, impairments are recognized if the sum of expected future undiscounted cash

flows, including estimated proceeds from eventual disposition, is less than the carrying amount. In such cases, the

carrying amount is reduced to estimated fair value.

◦For real estate assets held for sale, impairments are recognized if fair value less costs to sell is less than the carrying

amount. In evaluating potential disposition targets, we apply a probability-weighted approach and in each case, no

impairment charge is currently required.

However, if these assets meet the criteria for classification as held for sale during 2026, we may incur material real estate

impairments in 2026. For additional information on accounting for real estate impairments, refer to “Impairment of long-

lived assets” in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements in Item 15.

We expect to substantially complete our large-scale non-core asset sales program in 2026. As of December 31, 2025,

78% of our annual rental revenue is from our Megacampus platform, and we expect this percentage to continue to grow

over time, in part through our disposition program.

•Increased cost and limited availability of capital. In 2026, we expect to reduce our outstanding debt by approximately

$1.68 billion, at the midpoint of our 2026 guidance range. Our current debt repayment priorities include repaying existing short-

term borrowings, including amounts outstanding on our commercial paper program, repaying our $650 million unsecured

senior notes payable maturing in 2026 (of which $300 million was repaid in January 2026 upon maturity), using proceeds from

our dispositions, and potentially repaying other unsecured senior notes payable, including those maturing in 2027. These

expectations assume that we are able to execute our planned real estate dispositions and partial interest sales on acceptable

terms. If we are unable to sell real estate assets at our targeted prices or within our expected timeframes, we may need to

reduce the projected amount of debt repayment, delay the timing of such repayment, and/or increase our reliance on additional

debt financing to fund the approximately $1.75 billion of construction spending, based on the midpoint of our 2026 guidance

range. Elevated interest rates may result in debt financing options that are costlier, less accessible, or even unavailable,

potentially limiting our ability to complete our development and redevelopment projects on schedule and thereby delaying our

expected incremental annual net operating income generation.

The table below reflects interest rates related to unsecured senior notes payable that we have issued over the last several

years (dollars in thousands). There is no assurance that high debt costs will not continue into the future.

Debt Issued

Interest Rate(1)

2023

$1,000,000

5.07%

2024

$1,000,000

5.57%

2025

$550,000

5.66%

(1)Includes amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.

•Capitalized interest. Our capitalized interest was $330 million in 2025. During 2025, we focused on completing our projects

under construction that were highly leased. Additionally, we invested in our future pipeline to maximize value and to position

the sites for future vertical construction based on our expectation at that time of increased future demand for these projects.

Refer to “Capitalized interest” under “Definitions and reconciliations” in Item 7 in this annual report on Form 10-K for additional

information.

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The table below presents gross interest expense, capitalized interest, and interest expense for the last several years (in

thousands).

Gross Interest Expense

Capitalized Interest

Interest Expense

2023

$438,182

$(363,978)

$74,204

2024

$516,799

$(330,961)

$185,838

2025

$557,122

$(330,424)

$226,698

Midpoint of 2026 guidance range

$505,000

$(250,000)

$255,000

For 2026, we expect capitalized interest of approximately $250 million at the midpoint of our guidance range. The decrease

compared to 2025 reflects our decisions, in light of current market conditions, to re-evaluate certain projects including to cease

or pause certain pre-construction activities on land and on uncommitted projects to conserve capital as well as to dispose of

certain assets. As a result, we expect our interest expense to increase to approximately $255 million (at the midpoint of our

2026 guidance range) in 2026 from $227 million in 2025. The challenging macroeconomic environment discussed above, has

necessitated and may continue to necessitate a reevaluation of our plans. These conditions could lead to a temporary

suspension of our construction projects, delay of future projects, or sale of non-income-producing properties. This could result

in a further decline in our capitalized interest for 2026 and beyond below our current projections, and a further increase in

interest expense recognized in our consolidated statement of operations.

•Volatility in non-real estate investments. We hold strategic investments in publicly traded companies and privately held entities

primarily involved in the life science industry. These investments are subject to market and sector-specific risks that can

substantially affect their valuation. Like many other industries, the life science industry is susceptible to macroeconomic

challenges, such as ongoing economic uncertainty and a tighter capital environment. These factors may lead to increased

volatility in the valuation of our non-real estate investments.

In such a challenging environment, distributions from our investments — which we may receive as dividends, as liquidation

distributions from our investments in limited partnerships, or as a result of mergers and acquisitions that lead to our privately

held investees being acquired by other entities — may be limited and could result in lower realized gains. Gross unrealized

gains related to our non-real estate investments held as of December 31, 2025, December 31, 2024, and December 31, 2023

aggregated to $184.4 million, $228.1 million, and $320.4 million, respectively. We may not receive distributions from our

investments or otherwise may face difficulties in monetizing our non-real estate investments at optimal prices, and there can

be no assurance that we will be able to realize gains in the future. In periods with limited or no realized gains, our FFO per

share, as adjusted, may be adversely affected.

For the year ended December 31, 2025, we recognized $115.7 million in realized gains on non-real estate investments and are

projecting realized gains of $75 million in 2026 at the midpoint of our guidance range. The table below presents components of

investment income (loss) on our non-real estate investments (in thousands):

Non-Real Estate Investments

Realized Gains

Significant

Realized Losses

Impairments

Unrealized

(Losses) Gains

Investment

Loss

2023

$80,628

$—

$(74,550)

$(201,475)

$(195,397)

2024

$117,214

$—

$(58,090)

$(112,246)

$(53,122)

2025

$115,722

$(103,329)

(1)

$(95,716)

$26,980

$(56,343)

Midpoint of 2026 guidance

range

$75,000

N/A(2)

(1)In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss of $103.3 million on

one transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated

joint venture sold these securities and distributed $39.9 million to us in December 2025.

(2)We are not able to forecast investment income (loss) of future periods without unreasonable effort and therefore do not provide on a forward-looking basis.

This is due to the inherent difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our control.

Unfavorable market conditions could also lead to additional impairments of our investments in privately held entities that do not

report NAV per share, as well as other‑than‑temporary impairments of our non‑real‑estate investments accounted for under the

equity method.

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The realization of any of the aforementioned risks could have a material adverse impact on our revenues and operating

performance, including but not limited to our income from rentals, net operating income, results of operations, funds from operations,

operating margins, initial stabilized yields (unlevered) on new or existing construction projects, occupancy, EPS, FFO per share, FFO

per share, as adjusted, and net cash provided by operating activities. These impacts could decrease Adjusted EBITDA, adversely

impacting our key metrics such as our Adjusted EBITDA margin and net debt and preferred stock to Adjusted EBITDA and fixed-

charge coverage ratios, as well as our credit ratings and credit rating outlooks. To preserve liquidity and mitigate an increase to our net

debt and preferred stock to Adjusted EBITDA ratio that may be caused by potential declines in Adjusted EBITDA, we may seek

additional capital by pursuing additional sales of real and non-real estate assets, or through equity offerings, which could be dilutive to

existing stockholders. A reduction in earnings and/or net cash provided by operating activities could potentially necessitate or make

advisable a reduction in our dividends per share, as determined by our board of directors. Any of the foregoing could further negatively

affect our business and the market value of our common stock. 

•Mitigating factors:

•Reinforcing the Megacampus platform as our core growth engine. We believe our Megacampus ecosystems

represent the most competitive segment of the life science real estate market. Our Megacampus ecosystems are large-

scale (each over one million RSF in aggregate), clustered environments located in the most critical life science innovation

hubs, designed to meet the evolving needs of the world’s leading scientific and technological organizations. This proximity

is a key driver of tenant demand. These campuses are used in two distinct ways: (i) to house the research operations of

our tenants and (ii) to recruit and retain the best talent available from a limited pool, which underscores why their scale,

strategic design, and location are critical. With our Megacampus ecosystems, we aim to provide a superior set of

amenities, services, and access to transit. With inspiring design and people-centric amenities, we believe these campuses

enhance our tenants’ confidence in using these spaces as effective recruiting tools. In contrast, we believe that a

significant amount of the competitive supply in the market today consists of isolated facilities that provide operational

space but lack the scale and strategic design that our Megacampus ecosystems deliver.

Our Megacampus ecosystems, which offer both high visibility and a clear path for growth, are designed for scalability to

accommodate our tenants’ growth. Our future development and redevelopment projects aggregate 21.6 million RSF as of

December 31, 2025, of which 77% is concentrated within our Megacampus ecosystems. Their strategic locations and path

for growth serve as powerful incentives for tenants to lease space from us.

We believe our Megacampus strategy represents our most powerful competitive advantage in an oversupplied market.

This approach has enabled us to capture an outsized share of leasing demand across core life science markets, even as

overall supply has increased. The strength of this strategy is reflected in the 2025 performance metrics below, achieved

despite challenging macroeconomic, regulatory, policy, and political environments:

•Leasing volume aggregating 4.2 million RSF for the year ended December 31, 2025.

•Weighted-average lease term of 11.9 years for leases executed during the year ended December 31, 2025.

•In July 2025, we executed the largest life science lease in Company history with a long-standing multinational

pharmaceutical tenant for a 16-year build-to-suit lease expansion aggregating 466,598 RSF on the Campus

Point by Alexandria Megacampus in our University Town Center submarket.

•During 2023-2025, our leasing volume in Greater Boston, the San Francisco Bay Area, and San Diego

represented approximately 94% of the combined leasing volume of the five largest life science real estate owners

in those markets (by RSF leased).

•Rental rates on lease renewals and re-leasing of space increased by 7.0% and 3.5% (cash basis) for the year ended

December 31, 2025.

•Occupancy of 90.9% as of December 31, 2025.

•86% of development and redevelopment projects under construction that are expected to stabilize in 2026 are leased

or under lease negotiation, excluding one project for which we are evaluating business strategy.

•Expected incremental annual net operating income from projects anticipated to be placed into service from 2026 to

2028:

◦$97 million from deliveries in 2026.

◦$123 million from 2027-2028 deliveries.

◦$113 million from 2026-2028 deliveries of additional four projects which are under business strategy

evaluation.

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•Strength of our brand. As a recognized leader in the life science and real estate sectors, Alexandria has successfully

built a diverse and high-quality tenant base. Over the past three decades, we have fostered long-standing relationships

and strategic partnerships with our tenants, which have enabled us to maintain strong occupancy levels and leasing

volume, and growth in net operating income and cash flows and to effectively navigate through various economic cycles.

Key indicators of our brand strength include the following:

•In 2025, 82% of our leasing activity was generated from our existing tenant base.

•As of December 31, 2025, 84% of our top 20 tenant annual rental revenue was derived from investment-grade or

publicly traded large cap companies.

•Our tenant collections have remained consistently high, averaging 99.8% since the beginning of 2021 through

December 31, 2025.

•Prudent financial management. Our strong and flexible balance sheet and prudent balance sheet management are key

factors in our ability to navigate macroeconomic uncertainties and capitalize on new opportunities. The strength of our

financial position is highlighted by several key indicators:

•Our significant liquidity of $5.30 billion as of December 31, 2025 provides us the flexibility to address our operational

needs and to pursue strategic opportunities.

•We expect to have the ability to self-fund a large portion of our capital requirements through the following expected

sources in 2026:

•$525 million in net cash provided by operating activities after dividends, at the midpoint of our 2026 guidance

range.

•$137.0 million in capital contributions to fund construction expected from our existing consolidated real estate

joint venture partners from January 1, 2026 through 2027 and beyond.

•$2.90 billion from dispositions and sales of partial interests in real estate assets at the midpoint of our 2026

guidance range.

•As of December 31, 2025, our credit ratings from S&P Global Ratings and Moody’s Ratings were BBB+ and Baa1,

respectively, which rank in the top 15% among all publicly traded U.S. REITs.

•Our net debt and preferred stock to Adjusted EBITDA ratio target is 5.6x to 6.2x for the fourth quarter of 2026

annualized.

•As of December 31, 2025, our fixed-rate debt represents 97.2% of our total debt, which provides predictability in debt

servicing costs. Since 2021, our quarter-end fixed-rate debt has averaged 96.7%.

•Our debt maturity schedule is well laddered, which provides us with financial flexibility and reduces short-term

refinancing risks. As of December 31, 2025, only 11% of our debt matures through 2028.

•As of December 31, 2025, the weighted-average remaining term of our debt is 12.1 years, which is the longest

among S&P 500 REITs, and demonstrates our strategic approach to debt management and our focus on maintaining

manageable annual debt maturities.

•Operational excellence of our team. Alexandria focuses on operational excellence in the direct asset management and

operations of our Labspace® asset base. Our assets management and operations team is composed of highly

experienced, educated, and professionally credentialed facilities specialists. This expertise, essential in ensuring a secure

and efficient environment for groundbreaking scientific research, has been cultivated and maintained over many years.

The demanding nature of laboratory-based scientific research requires strict adherence to safety standards set by local,

state, and federal regulatory bodies. Key compliance aspects include good manufacturing practices (“GMP”) and Clinical

Laboratory Improvement Amendments (“CLIA”) certifications, adherence to national biosafety level guidelines, proper

permitting and handling of hazardous waste generation and chemical storage, maintenance of safety stations, effective

management of ultra-low temperature freezers, and careful licensing and management of radioactive materials.

•Other mitigating factors

•Improvement in office market. The increase in demand for premium office space since 2024, primarily driven by the

technology sector, particularly companies focused on AI, absorbed some of the market’s supply previously anticipated

for life science use and is now being repositioned back into office space. High ceilings, improved ventilation systems,

and abundant natural light, which are all features of life science real estate, have become highly desirable, appealing

to office and advanced technologies tenants. We expect this trend may lead to the exit from the life science sector of

inexperienced life science real estate developers and expedite the resolution of the oversupply impacting the sector.

•Proactive reduction in capital spending and funding needs. To address higher capital costs and slower market

absorption, we implemented a disciplined reduction in construction spending. Based on the midpoints of our 2026

guidance, our average annual construction spending is expected to decline to approximately $1.74 billion for 2024–

2026, representing a reduction of approximately $1.02 billion, or 37%, compared to the 2021–2023 average. Our

2026 construction spending is primarily focused on:

• Leasing vacant space at operating properties

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• Completing active committed construction projects

• Limiting future pipeline pre-construction activity

This strategy supports a more self-funded capital plan while preserving flexibility for future growth opportunities.

•Decrease in general and administrative expenses. Over the past several years, we have implemented comprehensive

measures to reduce our expenditures across our organization, including our general and administrative expenses, by

implementing a variety of cost-control and efficiency initiatives, including, but not limited to:

(•)Personnel-related matters, including:

•Reduction in headcount over the last two years.

•Restructuring of various compensation plans.

(•)Streamlining of business processes:

•Implementation of systems upgrades, process improvements, and smarter technology.

•Renegotiation of contracts related to legal, technology, and operational support services, and

elimination of redundancies through better alignment and consolidation of roles.

As a result, we have achieved the following outcomes:

•In 2025, we reduced G&A expenses by 30%, or $51.3 million, compared to 2024.

•We expect $76 million of cumulative savings in 2025 and 2026 (based upon the midpoint of our guidance

range for 2026 general and administrative expenses), compared to 2024.

•Our 2025 general and administrative expenses are only 5.6% of net operating income, the lowest level for

the Company in more than a decade, and approximately half the average of other S&P 500 REITs.

We believe the mitigating factors discussed above will help us manage prolonged market volatility while maintaining the

flexibility to act on strategic opportunities. Through disciplined execution of non-core asset recycling, targeted capital

allocation, continued focus on our Megacampus platform, moderated construction spending, and preservation of balance sheet

strength, we are building a resilient platform designed to deliver sustainable growth and value creation across multiple cycles.

We believe these actions position us to emerge from the current cycle in a position of strength.

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Execution of capital strategy

2025 capital strategy

During 2025, we continued to execute many of the long-term components of our capital strategy, as described below.

Maintained access to sources of capital strategically important to our long-term capital structure

•Generated significant net cash flows from operating activities.

•In 2025, we funded $524.7 million of our equity capital needs with net cash provided by operating activities after

dividends, reduced by distributions to noncontrolling interests (excluding liquidating distributions from asset sales), and

excluding changes in operating assets and liabilities, as they represent timing differences.

•Successfully executed our 2025 capital strategy, primarily through strategic dispositions of non-core assets and land.

•In 2025, real estate dispositions and sales of partial interests generated $1.81 billion of capital for investment into our

development and redevelopment projects.

•In February 2025, we issued $550.0 million of unsecured senior notes payable, due 2035, with an interest rate of 5.50%.

Strong and flexible balance sheet with significant liquidity; top 15% credit rating ranking among all publicly traded U.S. REITs

•Net debt and preferred stock to Adjusted EBITDA of 5.7x and fixed-charge coverage ratio of 3.7x for the three months ended

December 31, 2025, annualized.

•As of December 31, 2025:

•Our credit ratings from S&P Global Ratings and Moody’s Ratings were BBB+ and Baa1, respectively, which rank in the top

15% among all publicly traded U.S. REITs.

•Significant liquidity of $5.30 billion, or 3.7x of our debt maturities through 2028.

•Only 11% of our total debt matures through 2028.

•12.1 years weighted-average remaining term of debt, longest among S&P 500 REITs.

•Our fixed-rate debt represents 97.2% of our total debt, which provides predictability in debt servicing costs. Since 2021,

our quarter-end fixed-rate debt has averaged 96.7%.

•Total debt and preferred stock to gross assets of 31%.

Key capital metrics as of or for the year ended December 31, 2025

•$20.75 billion in total market capitalization.

•$8.3 billion in total equity capitalization.

•Non-real estate investments aggregating $1.50 billion:

•Unrealized gains presented in our consolidated balance sheet were $133.4 million, comprising gross unrealized gains and

losses aggregating $184.4 million and $51.1 million, respectively.

•Investment loss of $56.3 million for the year ended December 31, 2025 presented in our consolidated statement of operations

consisted of $115.7 million of realized gains, $103.3 million from a significant realized loss on one transaction, $27.0 million of

unrealized gains, and $95.7 million of impairment charges.

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2026 capital strategy

During 2026, we intend to continue executing our capital strategy with a focus on the strength of our credit profile, which will

allow us to seek opportunities to improve our cost of capital and continue our disciplined approach to capital allocation. Consistent with

2025, our capital strategy for 2026 includes the following elements:

•Allocate capital to Class A/A+ properties located in Megacampus ecosystems in AAA life science innovation clusters.

•Maintain prudent access to diverse sources of capital, which include net cash flows from operating activities after dividends,

strategic asset recycling through real estate disposition and partial interest sales, non-real estate investment sales, joint

venture capital, sales of equity, and other sources of capital.

•Prudently evaluate our dividend policy to share cash flows with investors while also retaining significant cash flows for

reinvestment.

•Focusing on opportunities to improve our credit profile.

•Maintain commitment to long-term capital to fund growth.

•Prudently ladder debt maturities and manage short-term variable-rate debt.

•Prudently manage non-real estate equity investments to support corporate-level investment strategies.

•Maintain a stable and flexible balance sheet with significant liquidity.

•Consider opportunistic repurchases, in privately negotiated transactions, of our common stock.

We expect to continue to maintain access to diverse sources of capital, including unsecured senior notes payable and secured

construction loans for our development and redevelopment projects from time to time. We expect to continue to maintain a significant

proportion of our net operating income on an unencumbered basis to allow for future flexibility for accessing both unsecured and

secured debt markets, although we expect traditional secured mortgage notes payable will remain a small component of our capital

structure. We intend to supplement our remaining capital needs with net cash flows from operating activities after dividends as well as

proceeds from real estate asset sales, partial interest sales, and equity capital. For further information, refer to “Projected results”,

“Sources of capital,” and “Uses of capital” in Item 7 in this annual report on Form 10-K. Our ability to meet our 2026 capital strategy

objectives and expectations will depend in part on capital market conditions, real estate market conditions, and other factors beyond our

control. Accordingly, there can be no assurance that we will be able to achieve these objectives and expectations. Refer to our

discussion of “Forward-looking statements” under Part I and “Item 1A. Risk factors” in this annual report on Form 10-K.

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Operating summary

Same Property Performance:

  Net Operating Income Changes

Rental Rate Growth:

Renewed/Re-Leased Space

Margins(1)

Favorable Lease Structure(2)

Operating

Adjusted EBITDA

Strategic Lease Structure by Owner and

Operator of Collaborative Megacampus Ecosystems

69%

70%

Increasing cash flows

Percentage of leases containing annual

rent escalations

97%

Stable cash flows

Long-Duration Lease Terms(3)

Percentage of triple

net leases

92%

9.7 Years

7.5 Years

Lower capex burden

Percentage of leases providing for the

recapture of capital expenditures

92%

Top 20 Tenants

All Tenants

Net Debt and Preferred Stock

to Adjusted EBITDA(4)

Fixed-Charge Coverage Ratio(4)

(3.5)%

2024

2025

5.6x to 6.2x

3.6x to 4.1x

Refer to “Same properties” and “Definitions and reconciliations” in Item 7 for additional details. “Definitions and reconciliations” contains the definitions of “Fixed-charge

coverage ratio,” “Net debt and preferred stock to Adjusted EBITDA,” and “Net operating income” and their respective reconciliations from the most directly comparable

financial measures presented in accordance with GAAP.

(1)For the three months ended December 31, 2025.

(2)Percentages calculated based on our annual rental revenue in effect as of December 31, 2025.

(3)Represents the weighted-average remaining term based on annual rental revenue in effect as of December 31, 2025.

(4)Quarter annualized.

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Climate change

We cannot predict the rate at which climate change will progress. However, the physical effects of climate change may

potentially have a material adverse effect on our properties, operations, and business. For example, most of our properties are located

along the east and west coasts of the U.S. and some of our properties are located in close proximity to shorelines. To the extent that

climate change impacts weather patterns, our markets could experience severe weather, including hurricanes, severe winter storms,

wildfires, droughts, and coastal flooding due to increases in storm intensity and rising sea levels. Over time, these conditions could

result in declining demand for space at our properties, delays in construction and resulting increased construction costs, or our inability

to operate the buildings at all. Climate change and severe weather may also have indirect effects on our business by increasing the

cost of, or decreasing the availability of, property insurance on terms we find acceptable, and by increasing the costs of energy,

maintenance, repair of water and/or wind damage, and snow removal at our properties.

We are monitoring considerations such as shifting market demands and regulation. Numerous states and municipalities have

adopted state and local laws and policies on climate change, including climate disclosures and emission reduction targets impacting the

building sector. For example, the State of California enacted legislation requiring certain companies to disclose GHG and climate-

related financial risk information. Further cities including Boston, Cambridge, New York, and Seattle have passed ordinances that set

limits on GHG emissions associated with building operations. Some municipalities, including the Cities of New York and San Francisco,

have also implemented legislation to eliminate the use of natural gas in new construction projects. Refer to “We face possible risks and

costs associated with the effects of climate change and severe weather” in “Other factors” within “Item 1A. Risk factors” in this annual

report on Form 10-K for additional information.

Our approach to assessing and mitigating physical climate-related risk through our climate resilience roadmap, and transition

risk through our GHG emissions mitigation strategy, are outlined below.

Climate resilience

We continue to assess potential physical risks associated with climate change, analyze climate data and property damage

losses associated with past weather events, and review the potential for future climate hazards such as water stress, precipitation

flooding, coastal flooding, wildfire, and heat stress. We also consider local climate change vulnerability assessments and resilience

planning efforts. Our climate resilience roadmap uses climate models and scenario analyses to identify potential future hazards at the

building level. Additionally, we conduct physical inspections to further assess resilience at certain properties, as appropriate, and to

determine whether additional mitigation is needed.

In our evaluation of physical risks, Alexandria considers two climate change scenarios for 2030 and 2050: (i) a high-emissions

scenario in which GHG emissions continue to increase with time (RCP 8.5); and (ii) an intermediate scenario in which GHG emissions

level off by 2050 and decline thereafter (RCP 4.5). RCP 8.5 generally predicts more significant future climate hazard impacts than RCP

4.5.

After modeling the potential hazards out to year 2050, we undertake a physical inspection for sites that may have high

exposure to one or more climate hazards. We use this process to assess resilience to current and/or future stresses and to determine

whether additional mitigation is needed. We continue to refine this process through improved climate risk data and structured

approaches to resilience planning across our portfolio.

For a number of buildings, we are implementing augmented emergency preparedness plans and additional operating

procedures that include preparations for potential future events. For certain buildings, mitigation may include nominal capital

improvement work. We may find that other buildings require more significant planning and investment to incorporate more complex

resilience measures. We are building on our existing emergency preparedness efforts by more directly planning for climate-driven risks

like flooding and wildfire. Resilience measures under consideration at some of our properties are described below.

In our operating properties located in areas prone to flooding, we may consider options such as waterproofing the building

envelope up to the projected flood elevation, protecting critical building mechanical equipment, storing temporary flood barriers on site

to be deployed at building entrances prior to a flood event, and installing backflow preventers on stormwater/sewer utilities that

discharge from the building. At several properties, we are currently conducting conceptual studies to evaluate potential options for

consideration.

We are monitoring our exposure to wildfire. Most of our properties in San Diego are located in low-density fire-resistant

commercial campuses with separations between structures and response capabilities that help reduce wildfire risk. These settings differ

meaningfully from more fire-prone residential areas. At some of our operating properties located in areas prone to wildfire, we have

begun a multiyear effort to implement landscaping improvements that include the replacement of fire-prone materials and the

installation of fire-resistant vegetation. We continue to strengthen our wildfire preparedness efforts by advancing site-specific planning

and evaluating measures that promote business continuity and occupant safety during smoke and fire events.

101

For our development of new Class A/A+ properties, we will aim to design for climate resilience. In 2023, Alexandria adopted

resilient design guidelines to address future climate conditions based on climate risk models. These guidelines have been applied in

some of our recent development projects.

In accordance with such guidelines, we endeavor to design buildings that incorporate materials, systems, and features to

manage predicted climate hazards and maintain building operability during and after a climate event. As feasible, we will consider

designs that accommodate potential expansion of cooling infrastructure to meet future building needs. In water-scarce areas, we

consider planting drought-resistant vegetation and equipping buildings to capture, treat, and reuse available water from building

systems and precipitation events where feasible. In areas prone to wildfire, we consider incorporating brush management practices into

landscape design and installing enhanced air filtration systems to support safe and healthy indoor air.

For acquisitions in our portfolio, we continue to use climate modeling as part of our due diligence in assessing potential risk

and to inform our financial modeling and transactional decisions.

We are subject to evolving federal, state, and local laws and regulations related to climate change. For example, the State of

California enacted legislation requiring certain companies to disclose GHG and climate-related financial risk information. Further cities

including Boston, Cambridge, New York, and Seattle have passed ordinances that set limits on GHG emissions associated with building

operations. Some municipalities, including the Cities of New York and San Francisco, have also implemented legislation to eliminate the

use of natural gas in new construction projects. Refer to “We face possible risks and costs associated with the effects of climate change

and severe weather” in “Other factors” within “Item 1A. Risk factors” in this annual report on Form 10-K for additional information.

As a part of Alexandria’s risk management program, we maintain all-risk property insurance at the portfolio level, including

properties under development, to help mitigate the risk of extreme weather events and potential impact from losses associated with

natural catastrophes, such as flood, wildfire, and wind events. However, there can be no assurance that our insurance will cover all our

potential losses and that climate change and severe weather will not have a material adverse effect on our properties, operations, or

business. For additional information on our risk management strategies related to insurance coverage, refer to “Our insurance may not

adequately cover all potential losses” in “Operating factors” in “Item 1A. Risk factors” in this annual report on Form 10-K.

Board of directors and leadership oversight

The Audit Committee oversees the management of the Company’s financial and other risks, including climate-related risks. At

the management level, Alexandria’s Sustainability Committee, which comprises members of the executive team and senior decision

makers spanning the Company’s real estate development, asset management, risk management, and sustainability teams, leads the

development and execution of our approach to climate-related risk.

Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for discussion of the risks we face from climate change.

102

Results of operations

Same properties

We supplement an evaluation of our results of operations with an evaluation of operating performance of certain of our

properties, referred to as “Same Properties.” For additional information on the determination of our Same Properties portfolio, refer to

“Same property comparisons” under “Definitions and reconciliations” in Item 7 in this annual report on Form 10-K. The following table

presents information regarding our Same Properties as of December 31, 2025 and 2024:

December 31,

2025

2024

Percentage change in net operating income over comparable period from prior year

(3.5)%

1.2%

Percentage change in net operating income (cash basis) over comparable period from prior

year

0.9%

(1)

4.6%

Operating margin

68%

68%

Number of Same Properties

282

321

RSF

29,774,548

31,670,359

Occupancy – current-period average

92.5%

94.2%

Occupancy – same-period prior-year average

95.2%

93.9%

(1)Includes the impact of initial free rent concessions that burned off after January 1, 2024 for development and redevelopment projects that were placed into service in

2023 and accordingly are part of our same property pool for the year ended December 31, 2025, including at 325 Binney Street in our Cambridge submarket and 15

Necco Street in our Seaport Innovation District submarket. Excluding the impact of these initial free rent concessions, same property net operating income (cash basis)

for the year ended December 31, 2025 would have decreased by 1.4%.

The following table reconciles the number of Same Properties to total properties for the year ended December 31, 2025:

Development – under construction

Properties

Redevelopment – placed into service after

January 1, 2024

Properties

99 Coolidge Avenue

1

840 Winter Street

1

1450 Owens Street

1

Alexandria Center® for Advanced Technologies – Monte

Villa Parkway

6

10075 Barnes Canyon Road

1

421 Park Drive

1

7

4135 Campus Point Court

1

Acquisitions after January 1, 2024

Properties

701 Dexter Avenue North

1

Other

2

Campus Point by Alexandria

—

2

6

Unconsolidated real estate JVs

3

Development – placed into service after January 1, 2024

Properties

Properties held for sale

20

1150 Eastlake Avenue East

1

Total properties excluded from Same Properties

58

9810 Darnestown Road

1

Same Properties

282

9820 Darnestown Road

1

Total properties in North America as of December 31,

2025

340

4155 Campus Point Court

1

201 Brookline Avenue

1

9808 Medical Center Drive

1

230 Harriet Tubman Way

1

500 North Beacon Street and 4 Kingsbury Avenue

2

10935, 10945, and 10955 Alexandria Way

3

12

Redevelopment – under construction

Properties

40, 50, and 60 Sylvan Road

3

269 East Grand Avenue

1

8800 Technology Forest Place

1

311 Arsenal Street

1

Other

2

8

103

Comparison of results for the year ended December 31, 2025 to the year ended December 31, 2024

The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same

Properties for the year ended December 31, 2025, compared to the year ended December 31, 2024 (dollars in thousands). We provide

a comparison of the results for the year ended December 31, 2024 to the year ended December 31, 2023, including a comparison of

the components of net operating income for our Same Properties and Non-Same Properties for the year ended December 31, 2024,

compared to the year ended December 31, 2023, in “Results of operations” in Item 7 of our annual report on Form 10-K for the year

ended December 31, 2024. Refer to “Definitions and reconciliations” in Item 7 in this annual report on Form 10-K for definitions of

“Tenant recoveries” and “Net operating income” and their reconciliations from the most directly comparable financial measures

presented in accordance with GAAP, income from rentals and net income, respectively.

Year Ended December 31,

2025

2024

$ Change

% Change

Income from rentals:

Same Properties

$1,687,734

$1,732,019

$(44,285)

(2.6)%

Non-Same Properties

497,155

572,320

(75,165)

(13.1)

Rental revenues

2,184,889

2,304,339

(119,450)

(5.2)

Same Properties

627,224

594,471

32,753

5.5

Non-Same Properties

133,062

150,896

(17,834)

(11.8)

Tenant recoveries

760,286

745,367

14,919

2.0

Income from rentals

2,945,175

3,049,706

(104,531)

(3.4)

Same Properties

1,791

1,267

524

41.4

Non-Same Properties

79,590

65,421

14,169

21.7

Other income

81,381

66,688

14,693

22.0

Same Properties

2,316,749

2,327,757

(11,008)

(0.5)

Non-Same Properties

709,807

788,637

(78,830)

(10.0)

Total revenues

3,026,556

3,116,394

(89,838)

(2.9)

Same Properties

752,481

706,904

45,577

6.4

Non-Same Properties

170,124

202,361

(32,237)

(15.9)

Rental operations

922,605

909,265

13,340

1.5

Same Properties

1,564,268

1,620,853

(56,585)

(3.5)

Non-Same Properties

539,683

586,276

(46,593)

(7.9)

Net operating income

$2,103,951

$2,207,129

$(103,178)

(4.7)%

(1)

Net operating income – Same Properties

$1,564,268

$1,620,853

$(56,585)

(3.5)%

Straight-line rent revenue

(25,078)

(94,232)

69,154

(73.4)

Amortization of acquired below-market leases and deferred

revenue related to tenant-funded and -built landlord

improvements

(36,763)

(37,512)

749

(2.0)

Net operating income – Same Properties (cash basis)

$1,502,427

$1,489,109

$13,318

0.9%

(1)Decrease in total net operating income includes the impact of operating properties disposed of after January 1, 2024. Excluding these dispositions, net operating income

for the year ended December 31, 2025 would have increased by 0.9% compared to 2024.

104

Income from rentals

Total income from rentals for the year ended December 31, 2025 decreased by $104.5 million, or 3.4%, to $2.95 billion,

compared to $3.05 billion for the year ended December 31, 2024, due to a decrease in rental revenues, partially offset by an increase in

tenant recoveries, as discussed below.

Rental revenues

Total rental revenues for the year ended December 31, 2025 decreased by $119.5 million, or 5.2%, to $2.18 billion, compared

to $2.30 billion for the year ended December 31, 2024. The decrease was primarily related to dispositions of real estate assets within

our Non-Same Properties since January 1, 2024.

Same Properties’ rental revenues for the year ended December 31, 2025 decreased by $44.3 million, or 2.6%, to $1.69 billion,

compared to $1.73 billion for the year ended December 31, 2024. This decrease was primarily attributable to a decrease in Same

Properties’ average occupancy to 92.5% for the year ended December 31, 2025 from 95.2% for the year ended December 31, 2024,

including the impact of the following lease expirations in the first quarter of 2025 that were vacant for most of the year ended

December 31, 2025: (i) 182,054 RSF at the Alexandria Technology Square® Megacampus in our Cambridge submarket and (ii) two

properties aggregating 247,246 RSF in our Austin submarket.

Tenant recoveries

Tenant recoveries for the year ended December 31, 2025 increased by $14.9 million, or 2.0%, to $760.3 million, compared to

$745.4 million for the year ended December 31, 2024, primarily related to Same Properties, partially offset by a decrease in Non-Same

Properties tenant recoveries primarily due to dispositions of real estate assets within our Non-Same Properties since January 1, 2024.

Same Properties’ tenant recoveries for the year ended December 31, 2025 increased by $32.8 million, or 5.5%, to

$627.2 million, compared to $594.5 million for the year ended December 31, 2024, primarily due to the $45.6 million increase in the

operating expenses during the year ended December 31, 2025, as discussed under “Rental operations” below. As of December 31,

2025, 92% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real

estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases

thereto) in addition to base rent. This increase was partially offset by a decrease in Same Properties’ tenant recoveries resulting from a

decrease in Same Properties’ average occupancy to 92.5% for the year ended December 31, 2025 from 95.2% for the year ended

December 31, 2024.

Other income

Other income for the year ended December 31, 2025 increased by $14.7 million, or 22.0%, to $81.4 million, compared to

$66.7 million for the year ended December 31, 2024. Other income represented approximately 2.7% and 2.1% of total revenues during

each respective period and primarily consisted of interest income and management fee income during both periods.

Rental operations

Total rental operating expenses for the year ended December 31, 2025 increased by $13.3 million, or 1.5%, to $922.6 million,

compared to $909.3 million for the year ended December 31, 2024. The increase was primarily due to incremental expenses related to

our Same Properties’ rental operating expenses as discussed below, partially offset by the decrease in Non-Same Properties’ rental

operating expenses of $32.2 million primarily as a result of dispositions of real estate assets since January 1, 2024.

Same Properties’ rental operating expenses increased by $45.6 million, or 6.4%, to $752.5 million during the year ended

December 31, 2025, compared to $706.9 million for the year ended December 31, 2024, primarily as the result of the increase in

(i) utilities expenses and contractual costs aggregating $20.3 million primarily due to higher consumption related to certain tenants’

increased operations, and higher electricity and HVAC contract services rates in our San Diego market; (ii) property taxes aggregating

$12.8 million primarily due to annual property tax increases; and (iii) repair and maintenance expenses aggregating $9.0 million

primarily due to a more severe winter in 2025 compared to 2024 in the Greater Boston market.

105

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2025 increased by $148.1 million, or 12.3%, to

$1.35 billion, compared to $1.20 billion for the year ended December 31, 2024, primarily as a result of (i) the change in useful lives of

certain buildings, (ii) 3.1 million RSF of development and redevelopment projects placed into service subsequent to January 1, 2024,

(iii) two operating properties aggregating 383,360 RSF acquired subsequent to January 1, 2024, and (iv) partially offset by sales of real

estate assets subsequent to January 1, 2024.

Impairment of real estate

During the year ended December 31, 2025, we recognized impairment charges aggregating $2.20 billion, classified in

impairment of real estate in our consolidated statement of operations. For additional information, refer to “Sales of real estate assets

and impairment of real estate” in Note 3 – “Investments in real estate” to our consolidated financial statements in Item 15 in this annual

report on Form 10-K.

During the year ended December 31, 2024, we recognized real estate impairment charges aggregating $223.1 million, which

primarily consisted of (i) pre-acquisition costs related to two potential acquisitions in the Greater Boston market that we decided to no

longer proceed with as a result of the macroeconomic environment that negatively impacted the financial outlooks of these potential

acquisitions, (ii) impairment charges for five operating properties in our Sorrento Mesa and University Town Center submarkets to

reduce the carrying amounts to their estimated fair values less costs to sell, and (iii) impairment charges for four properties at One

Moderna Way in our Route 128 submarket that were sold to a single tenant.

General and administrative expenses

General and administrative expenses for the year ended December 31, 2025 decreased by $51.3 million, or 30.5%, to

$117.0 million, compared to $168.4 million for the year ended December 31, 2024, primarily due to cost-control and efficiency

initiatives implemented since 2024, including reduction in headcount, restructuring of compensation plans, systems upgrades, and

process improvements. As a percentage of net operating income, our general and administrative expenses for the years ended

December 31, 2025 and 2024 were 5.6% and 7.6%, respectively.

Interest expense

Interest expense for the years ended December 31, 2025 and 2024 consisted of the following (dollars in thousands):

Year Ended December 31,

Component

2025

2024

Change

Gross interest

$557,122

$516,799

$40,323

Capitalized interest

(330,424)

(330,961)

537

Interest expense

$226,698

$185,838

$40,860

Average debt balance outstanding(1)

$13,339,458

$12,583,339

$756,119

Weighted-average annual interest rate(2)

4.2%

4.1%

0.1%

(1)Represents the average debt balance outstanding during the respective periods.

(2)Represents annualized total interest incurred divided by the average debt balance outstanding during the respective periods.

106

The net change in interest expense during the year ended December 31, 2025, compared to the year ended December 31,

2024, resulted from the following (dollars in thousands):

Component

Interest Rate(1)

Effective Date

Change

Increases in interest incurred due to:

Issuances of debt:

$550 million of unsecured senior notes payable due 2035

5.66%

February 2025

$26,817

$600 million of unsecured senior notes payable due 2054

5.71%

February 2024

4,127

$400 million of unsecured senior notes payable due 2036

5.38%

February 2024

2,577

Higher average outstanding balances under commercial paper program

and/or unsecured senior line of credit

24,069

Other increase in interest

1,357

Total increases

58,947

Decreases in interest incurred due to:

Repayment of debt:

$600 million of unsecured senior notes payable due 2025

3.62%

April 2025

(13,968)

Secured notes payable

7.18%

August 2025

(4,656)

Total decreases

(18,624)

Change in gross interest

40,323

Decrease in capitalized interest

537

Total change in interest expense

$40,860

(1)Represents the weighted-average interest rate as of the end of the applicable period, including amortization of loan fees, amortization of debt premiums (discounts), and

other bank fees.

Investment loss

During the year ended December 31, 2025, we recognized an investment loss aggregating $56.3 million, which consisted of

$115.7 million of realized gains, $103.3 million of realized losses on one transaction, $27.0 million of unrealized gains, and impairment

charges of $95.7 million.

During the year ended December 31, 2024, we recognized an investment loss aggregating $53.1 million, which consisted of

$117.2 million of realized gains, $112.2 million of unrealized losses, and impairment charges of $58.1 million.

For more information about our investments, refer to Note 7 – “Investments” and “Investments” in Note 2 – “Summary of

significant accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K.

Gain on sales of real estate

During the year ended December 31, 2025, we recognized $642.4 million of gains classified in gain on sales of real estate in

our consolidated statement of operations. For additional information, refer to “Sales of real estate assets and impairment of real estate”

in Note 3 – “Investments in real estate” and Note 4 — “Consolidated and unconsolidated real estate joint ventures” to our consolidated

financial statements in Item 15 in this annual report on Form 10-K.

During the year ended December 31, 2024, we recognized $129.3 million of gains primarily related to dispositions of seven

real estate assets in our San Diego, Seattle, Maryland, and Research Triangle markets. The gains were classified in gain on sales of

real estate in our consolidated statement of operations for the year ended December 31, 2024.

Other comprehensive income

Other comprehensive income of $16.9 million for the year ended December 31, 2025, was primarily due to unrealized foreign

currency translation gains of $15.3 million related to our operations in Canada and a $1.7 million reclassification of previously

unrealized foreign currency translation losses upon completion of the disposition of our remaining asset in Asia. This was partially offset

by $148 thousand of unrealized losses resulting from the changes in the fair value of our cross-currency swap agreements due to the

strengthening of the Canadian dollar since the execution of these agreements on July 29, 2025. Refer to Note 11 – “Hedge

agreements” to our consolidated financial statements for additional information.

Total other comprehensive loss of $30.4 million for the year ended December 31, 2024 was primarily due to an unrealized

foreign currency translation loss related to our operations in Canada. 

107

Summary of capital expenditures

Our construction spending for the year ended December 31, 2025 and projected spending for the year ending December 31,

2026 consisted of the following (in thousands):

Year Ended

December 31, 2025

Projected Midpoint for the

Year Ending

December 31, 2026

Construction of Class A/A+ properties:

Active construction projects

Includes development and redevelopment under construction(1)

$

1,216,572

$

1,445,000

Future pipeline pre-construction

Primarily Megacampus expansion pre-construction work (entitlement, design,

and site work)

275,971

210,000

(2)

Revenue- and non-revenue-enhancing capital expenditures(3)

324,293

510,000

(4)

Construction spending (before contributions from noncontrolling interests or

tenants)

1,816,836

2,165,000

Contributions from noncontrolling interests (consolidated real estate joint

ventures)

(193,936)

(100,000)

(5)

Tenant-funded and -built landlord improvements

(178,651)

(315,000)

Total construction spending

$

1,444,249

$

1,750,000

2026 guidance range for construction spending

$1,500,000 – $2,000,000

(1)Includes smaller conversions to laboratory space through redevelopment.

(2)Approximately 75% represents capitalized costs.

(3)Represents revenue- and non-revenue-enhancing capital expenditures before contributions from noncontrolling interests and tenant-funded and tenant-built landlord

improvements.

(4)The top two revenue- and non-revenue-enhancing capital expenditure projects in 2026 represent approximately 55% of the total spending within this category. The first

project relates to a property located at the Alexandria Center® for Advanced Technologies – South San Francisco Megacampus in our South San Francisco submarket,

which is leased to a multinational pharmaceutical tenant and is undergoing its first major renovation in 12 years. The second project relates to a property at the

Alexandria Technology Square® Megacampus in our Cambridge submarket, which is undergoing its first major renovation in 16 years. 

(5)Represents contractual capital commitments from existing consolidated real estate joint venture partners to fund construction.

Projected capital contributions from partners in consolidated real estate joint ventures to fund construction

The following table summarizes projected capital contributions from partners in our existing consolidated joint ventures to fund

construction through 2027 and beyond (in thousands):

Projected timing

Amount(1)

Fiscal year 2026

$100,000

2027 and beyond

37,000

Total

$137,000

(1)Amounts represent reductions to our consolidated construction spending.

108

Average real estate basis used for capitalization of interest

Our construction spending includes capitalized interest. The table below provides key categories of interest capitalized during

the year ended December 31, 2025 (in thousands):

Average Real Estate

Basis Capitalized

During 2025

Percentage of Total

Average Real Estate

Basis Capitalized

Construction of Class A/A+ properties:

Development and redevelopment of projects under construction:

2026 stabilization

$590,069

7%

2027-2028 stabilization

1,308,800

16

Evaluating business strategy

878,661

11

Repositioning and smaller redevelopment projects

1,187,460

(1)

15

Future pipeline projects with critical pre-construction milestones during 2026:

Megacampus projects

2,078,801

(2)

25

Non-Megacampus projects

987,518

(2)

12

Assets sold in 2025 or designated as held for sale as of December 31, 2025(3)

1,115,707

14

Total average real estate basis capitalized(4)

$8,147,016

100%

(1)Includes the real estate basis related to the 899,259 RSF of vacant space as of December 31, 2025 that is leased with future delivery. The weighted-average expected

delivery date is approximately August 2026.

(2)Approximately 74% of future pipeline projects are expected to reach anticipated pre-construction milestones, including various phases of entitlement, design, site work,

and other activities necessary to begin aboveground vertical construction, on a weighted-average real estate investment basis by May 2026. At each milestone date, we

will evaluate whether to proceed with additional pre-construction and/or construction activities based on leasing demand and/or market conditions, pause future

investments, or consider the potential dispositions of real estate assets.

(3)The weighted-average date as of which capitalization of interest ceased was in early December 2025.

(4)In addition to capitalized interest, we incur additional capitalized project costs, including property taxes, insurance, payroll, and other costs directly related and essential

to the construction of Class A/A+ properties. If we cease activities necessary to prepare a project for its intended use, costs related to such project are expensed as

incurred. Annualized capitalized operating expenses and payroll represent approximately 2% and 1%, respectively, of the total average real estate basis subject to

capitalization for the year ended December 31, 2025.

109

Projected results

Our 2026 guidance includes certain forward-looking non-GAAP financial measures, such as funds from operations as

adjusted, net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2026 annualized, and fixed-charge coverage ratio – fourth

quarter of 2026 annualized, that differ from measures calculated in accordance with GAAP. These non-GAAP measures are in addition

to, and not a substitute for or superior to, financial measures prepared in accordance with GAAP and should be considered in

conjunction with our GAAP financial measures. We are unable to provide corresponding GAAP measures on a forward-looking basis, or

a reconciliation from these GAAP measures to the non-GAAP measures on a forward-looking basis, as we are not able to forecast the

net income or loss of future periods without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or

amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and

financing decisions, as well as quarterly and annual components such as gain on sales of real estate, impairments of real estate and

non-real estate investments, and unrealized gains or losses on non-real estate investments. Our attempt to predict these amounts may

produce significant but inaccurate estimates, which would be potentially misleading for our investors. Refer to “Definitions and

reconciliations” included in Part II in this annual report on Form 10-K for additional details about these non-GAAP measures.

Projected 2026 Funds From Operations per Share Attributable to Alexandria’s Common Stockholders – Diluted

Funds from operations per share and funds from operations per share, as adjusted

$6.25 to $6.55

Midpoint

$6.40

Key Assumptions(1)

(Dollars in millions)

2026 Guidance

Low

High

Occupancy percentage for operating properties in North America as of December 31, 2026(2)

87.7%

89.3%

Lease renewals and re-leasing of space:

Rental rate changes

(2.0)%

6.0%

Rental rate changes (cash basis)

(12.0)%

(4.0)%

Same property performance:

Net operating income

(9.5)%

(7.5)%

Net operating income (cash basis)

(9.5)%

(7.5)%

Straight-line rent revenue

$65

$95

General and administrative expenses

$134

$154

Capitalization of interest(3)

$225

$275

Interest expense

$230

$280

Realized gains on non-real estate investments(4)

$60

$90

(1)Our assumptions presented in the table above are subject to a number of variables and uncertainties, including those discussed as “Forward-looking statements” under

Part I; “Item 1A. Risk factors”; and “Item 7. Management’s discussion and analysis of financial condition and results of operations”. 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.

(2)Our guidance for operating occupancy percentage in North America as of December 31, 2026 assumes an approximate 2% benefit related to a range of assets with

vacancy that could potentially be sold during 2026 and/or qualify for designation as held for sale by December 31, 2026 but that have not yet qualified for such

designation as of December 31, 2025.

(3)Refer to “Average real estate basis used for capitalization of interest” in Item 7 for additional details.

(4)Represents realized gains and losses included in funds from operations per share – diluted, as adjusted. Excludes unrealized gains and losses and significant

impairments realized on non-real estate investments, if any. Refer to Note 7 – “Investments” to our consolidated financial statements in Item 15 for additional details.

Key Credit Metric Targets(1)

2026 Guidance

Net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2026 annualized

5.6x to 6.2x

Fixed-charge coverage ratio – fourth quarter of 2026 annualized

3.6x to 4.1x

(1)Refer to “Definitions and reconciliations” in Item 7 for additional information.

110

Capital resources

We expect that our principal liquidity needs for the year ending December 31, 2026 will be satisfied by the following multiple

sources of capital, as shown in the table below. There can be no assurance that our sources and uses of capital will not be materially

higher or lower than these expectations.

Key Sources and Uses of Capital

(In millions)

2026 Guidance

Range

Midpoint

Sources of capital:

Reduction in debt(1)

$(1,075)

$(2,275)

$(1,675)

Net cash provided by operating activities after dividends

475

575

525

Dispositions and sales of partial interests(2)

2,100

3,700

2,900

Total sources of capital

$1,500

$2,000

$1,750

Uses of capital:

Construction

$1,500

$2,000

$1,750

Total uses of capital

$1,500

$2,000

$1,750

Reduction in debt (included above):

Repayment of secured notes payable with 2026 maturities(3)

$(650)

$(650)

$(650)

Unsecured senior line of credit, commercial paper program, and other

(425)

(1,625)

(1,025)

Reduction in debt

$(1,075)

$(2,275)

$(1,675)

(1)Our debt repayment goals include repaying existing short-term borrowings, including amounts outstanding on our commercial paper program, repaying our 2026

unsecured senior note payable maturities aggregating $650 million, and potentially repaying other unsecured senior notes payable, including our 2027 maturity.

(2)We expect to achieve a weighted-average capitalization rate on our projected 2026 non-core operating dispositions (includes stabilized and non-stabilized properties and

excludes land) in the 8.5%–9.5% range. We expect dispositions of land to represent 25%–35% of our total dispositions and sales of partial interests for the year ending

December 31, 2026. We expect the remaining balance to include approximately 25%–35% core assets and 35%–45% non-core assets. As of January 26, 2026, our

share of pending transactions subject to non-refundable deposits, signed letters of intent, or purchase and sale agreement negotiations aggregated $180.7 million.

(3)In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity, funded temporarily with short-term borrowings under our commercial

paper program. We expect to repay these temporary borrowings with proceeds from future dispositions and sales of partial interests. No gain or loss was incurred in

connection with this repayment.

The key assumptions behind the sources and uses of capital in the table above include a favorable real estate transaction and

capital market environments, performance of our core operating properties, lease-up and delivery of current and future development

and redevelopment projects, and leasing activity. Our expected sources and uses of capital are subject to a number of variables and

uncertainties, including those discussed as “Forward-looking statements” under Part I; “Item 1A. Risk factors”; and “Item 7.

Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K. We expect to

update our forecast for key sources and uses of capital on a quarterly basis.

111

Key considerations for funds from operations and adjusted EBITDA for the three months ending March 31, 2026

The following key considerations are expected to impact our funds from operations per share for the three months ended

March 31, 2026. These items will also affect our Adjusted EBITDA beginning in the first quarter of 2026. As a result, we expect our net

debt and preferred stock to Adjusted EBITDA ratio to temporarily increase in the first quarter of 2026 (on a quarter annualized basis) by

approximately 1.0x to 1.5x higher than our annualized fourth quarter 2025 ratio of 5.7x. We expect this ratio to trend downward through

the remainder of 2026 as we make progress on our disposition and sales of partial interests program, with a target net debt and

preferred stock to Adjusted EBITDA ratio of 5.6x to 6.2x for the annualized fourth quarter of 2026, which is unchanged from the initial

2026 guidance provided on December 3, 2025.

Dispositions for the three months ended December 31, 2025

•We completed $1.47 billion of dispositions during the three months ended December 31, 2025. These dispositions had annual

net operating income of $118 million (based on consolidated third quarter of 2025 annualized results) with a weighted-average

disposition date of December 9, 2025. Refer to “Dispositions and sales of partial interests” in Item 2 for additional details.

2026 key lease expirations with expected downtime

•There are key lease expirations primarily in our Greater Boston, San Francisco Bay Area, and San Diego markets, aggregating

1.2 million RSF, with a weighted‑average lease expiration date in April 2026 and annual rental revenue of $71 million. These

leases are expected to become vacant upon expiration, and we anticipate downtime on these spaces to range from 6 to 24

months on a weighted‑average basis. 150,822 RSF has been leased or is under negotiations and we have identified

prospective tenants or have early negotiations for another 468,470 RSF. We expect a decline in net operating income of

approximately $14 million for the three months ending March 31, 2026, compared to the three months ended December 31,

2025, related to the portion of these leases that are scheduled to expire in the first quarter of 2026, which includes operating

expenses that will not be recoverable once the spaces become vacant. Refer to “Contractual lease expirations” in Item 2 for

additional details.

Certain items included in fourth quarter 2025 results not expected to reoccur in the first quarter of 2026

•During the fourth quarter of 2025, we terminated a lease at one property in our South San Francisco submarket aggregating

170,618 RSF, which had generated annual rental revenue of $11.4 million, ahead of its contractual expiration in early 2027.

The termination allowed us to re‑lease 100% of the space to a multinational pharmaceutical tenant, with occupancy expected

to commence in the second half of 2026 following the completion of tenant improvements. As a result of the termination, we

recognized incremental rental revenue of $8.4 million during the fourth quarter of 2025, primarily from a termination fee, net of

the deferred rent balances written off.

•We recognized an asset management fee paid by our joint venture partner aggregating $7.0 million in connection with the

disposition of 409 and 499 Illinois Street during the fourth quarter of 2025, which is included in other income. Other income for

the three months ended December 31, 2025 was $25.5 million, or 3.4% of total revenues, compared to an average of

$19.5 million, or 2.5% of total revenues, for the preceding five quarters.

Potential tenant wind-downs

•Our 2026 guidance assumes reduction of rent in 2026 aggregating $20–$25 million (or approximately $6 million per quarter at

the midpoint of the range) related to potential tenant wind-downs and downtime without immediate backfill.

General and administrative expenses

•General and administrative expenses for the year ended December 31, 2025 was $117.0 million and $28.0 million for the

fourth quarter of 2025. Our guidance range for 2026 general and administrative expenses is $134 million to $154 million, with a

midpoint of $144 million, or a quarterly average of approximately $36 million. Despite the anticipated increase in general and

administrative expenses in 2026 compared to 2025, the midpoint of our guidance range for 2026 of $144 million, represents a

14% reduction compared to 2024, and cumulative anticipated savings aggregating $76 million for 2025 and 2026.

Realized gains on non-real estate investments

•Realized gains included in funds from operations per share – diluted, as adjusted, for the year ended December 31, 2025 were

$115.7 million and $21.1 million for the fourth quarter of 2025. Our guidance range for 2026 realized gains on non-real estate

investments is $60 million to $90 million, with a midpoint of $75 million (or a quarterly average of approximately $18.8 million).

Refer to “Investments” in Item 7 for additional details.

112

Consolidated and unconsolidated real estate joint ventures

We present components of balance sheet and operating results information for the noncontrolling interest share of our

consolidated real estate joint ventures and for our share of investments in unconsolidated real estate joint ventures to help investors

estimate balance sheet and operating results information related to our partially owned entities. These amounts are estimated by

computing, for each joint venture that we consolidate in our financial statements, the noncontrolling interest percentage of each financial

item to arrive at the cumulative noncontrolling interest share of each component presented. In addition, for our real estate joint ventures

that we do not control and do not consolidate, we apply our economic ownership percentage to the unconsolidated real estate joint

ventures to arrive at our proportionate share of each component presented. Refer to Note 4 – “Consolidated and unconsolidated real

estate joint ventures” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for further discussion.

Consolidated Real Estate Joint Ventures(1)

Property/Market/Submarket

Noncontrolling

Interest Share

Operating RSF

at 100%

50 and 60 Binney Street/Greater Boston/Cambridge/Inner Suburbs

66.0%

532,395

75/125 Binney Street/Greater Boston/Cambridge/Inner Suburbs

60.0%

388,270

100 and 225 Binney Street and 300 Third Street/Greater Boston/Cambridge/Inner Suburbs

70.0%

870,641

15 Necco Street/Greater Boston/Seaport Innovation District

43.3%

345,996

Alexandria Center® for Science and Technology – Mission Bay/San Francisco Bay Area/

Mission Bay(3)

75.0%

548,215

211 and 213 East Grand Avenue/San Francisco Bay Area/South San Francisco

70.0%

300,930

500 Forbes Boulevard/San Francisco Bay Area/South San Francisco

90.0%

155,685

Alexandria Center® for Life Science – Millbrae/San Francisco Bay Area/South San Francisco

51.4%

285,346

3215 Merryfield Row/San Diego/Torrey Pines

70.0%

170,523

Campus Point by Alexandria/San Diego/University Town Center(2)(4)

43.6%

(5)

1,212,414

5200 Illumina Way/San Diego/University Town Center

49.0%

792,687

9625 Towne Centre Drive/San Diego/University Town Center

70.0%

163,648

SD Tech by Alexandria/San Diego/Sorrento Mesa(2)(6)

50.0%

969,416

Summers Ridge Science Park/San Diego/Sorrento Mesa(7)

70.0%

316,531

1201 and 1208 Eastlake Avenue East/Seattle/Lake Union

70.0%

206,134

400 Dexter Avenue North/Seattle/Lake Union

70.0%

290,754

800 Mercer Street/Seattle/Lake Union

40.0%

—

(2)

Unconsolidated Real Estate Joint Ventures

Property/Market/Submarket

Our Ownership

Share(8)

Operating RSF

at 100%

1655 and 1725 Third Street/San Francisco Bay Area/Mission Bay

10.0%

586,208

101 West Dickman Street/Maryland/Beltsville

58.4%

(9)

142,933

Refer to “Joint venture financial information” under “Definitions and reconciliations” in Item 7 for additional details.

(1)In addition to the real estate joint ventures listed, we have one consolidated real estate joint venture in the Greater Boston market in which a partner holds a $49.6 million

redeemable noncontrolling interest earning a fixed return as of December 31, 2025.

(2)Represents a property currently under construction or in our future development and redevelopment pipeline. Refer to “New Class A/A+ development and redevelopment

properties” in Item 2 for additional details.

(3)Includes 1450, 1500, and 1700 Owens Street and 455 Mission Bay Boulevard South.

(4)Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4135, 4155, 4161, 4165, 4224, and 4242 Campus Point Court.

(5)The noncontrolling interest share of our real estate joint venture partner is anticipated to decrease to 25%, as we expect to fund the majority of future construction costs

at the campus until our ownership interest increases to 75%, after which future capital would be contributed pro rata with our partner. Refer to “New Class A/A+

development and redevelopment properties: current projects” in Item 2 for additional details.

(6)Includes 9605, 9645, 9675, 9725, 9735, 9805, 9808, 9855, and 9868 Scranton Road and 10055, 10065, and 10075 Barnes Canyon Road.

(7)Includes 9965, 9975, 9985, and 9995 Summers Ridge Road.

(8)In addition to the real estate joint ventures listed, we hold an interest in two insignificant unconsolidated real estate joint ventures.

(9)Represents a joint venture with a local real estate operator in which our joint venture partner manages the day-to-day activities that significantly affect the economic

performance of the joint venture.

113

The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of December

31, 2025 (dollars in thousands):

Maturity

Date

Stated Rate

Interest

Rate(1)

At 100%

Our

Share

Unconsolidated Joint Venture

Aggregate

Commitment

Debt Balance(2)

101 West Dickman Street

10/29/26

SOFR+1.95%

(3)

5.74%

$26,750

$19,136

58.4%

1655 and 1725 Third Street(4)

2/10/35

6.37%

6.44%

500,000

496,881

10.0%

$526,750

$516,017

(1)Includes interest expense and amortization of loan fees.

(2)Represents outstanding principal, net of unamortized deferred financing costs, as of December 31, 2025.

(3)This loan is subject to a fixed SOFR floor of 0.75%.

(4)During the three months ended March 31, 2025, the unconsolidated real estate joint venture refinanced $500 million of its $600 million existing fixed-rate debt with a new

secured note payable maturing in 2035. The remaining debt balance of approximately $100 million was repaid through contributions from the unconsolidated joint

venture partners, including our share of $10.8 million.

The following tables present information related to the operating results and financial positions of our consolidated and

unconsolidated real estate joint ventures as of and for the three months and year ended December 31, 2025 (in thousands):

Noncontrolling Interest Share of Consolidated

Real Estate Joint Ventures

Our Share of Unconsolidated

Real Estate Joint Ventures

December 31, 2025

December 31, 2025

Three Months Ended

Year Ended

Three Months Ended

Year Ended

Total revenues

$114,339

$467,580

$2,656

$10,619

Rental operations

(36,231)

(145,209)

(1,040)

(4,048)

78,108

322,371

1,616

6,571

General and administrative

(823)

(3,016)

(32)

(133)

Interest

(62)

(967)

(1,058)

(4,176)

Depreciation and amortization of

real estate assets

(39,942)

(154,727)

(855)

(3,703)

Impairment of real estate

(265,266)

(1)

(265,266)

—

(8,673)

Gain on sale of real estate of

consolidated JV

312,807

(2)

312,807

—

—

Gain on sale of interest in

unconsolidated JV

—

—

25

483

Fixed returns allocated to

redeemable noncontrolling

interests(3)

699

1,642

—

—

$85,521

$212,844

$(304)

$(9,631)

Straight-line rent and below-market

lease revenue

$2,723

$19,580

$139

$645

Funds from operations(4)

$77,922

$320,030

$526

$2,262

Refer to “Joint venture financial information” under “Definitions and reconciliations” in Item 7 for additional details.

(1)Represents our partners’ share of impairment charges recognized in connection with real estate properties held by consolidated joint ventures at 601, 611, 651, 681,

685, 701, and 751 Gateway Boulevard and 285, 299, 307, and 345 Dorchester Avenue. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to

our consolidated financial statements in Item 15 for additional information.

(2)Relates to our partner’s share of the gain on sale of real estate recognized upon the disposition of the properties at 409 and 499 Illinois Street.

(3)Represents an allocation of joint venture earnings to redeemable noncontrolling interests for properties in the Greater Boston and San Francisco Bay Area markets.

These redeemable noncontrolling interests earn a fixed return on their investment rather than participate in the operating results of the properties.

(4)Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” under “Definitions

and reconciliations” in Item 7 for the definition and its reconciliation from the most directly comparable financial measure presented in accordance with GAAP.

114

As of December 31, 2025

Noncontrolling Interest

Share of Consolidated

Real Estate Joint Ventures

Our Share of

Unconsolidated

Real Estate Joint Ventures

Investments in real estate

$3,317,283

$83,974

Cash, cash equivalents, and restricted cash

139,397

1,853

Other assets

402,602

10,238

Secured notes payable

—

(60,864)

Other liabilities

(172,916)

(4,524)

Redeemable noncontrolling interests

(58,788)

—

$3,627,578

$30,677

During the years ended December 31, 2025 and 2024, our consolidated real estate joint ventures distributed an aggregate of

$951.8 million and $256.7 million, respectively, to our joint venture partners. Refer to our consolidated statements of cash flows and

Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 in this annual

report on Form 10-K for additional information.

115

Investments

We hold investments in publicly traded companies and privately held entities primarily involved in the life science industry. The

tables below summarize components of our investment income (loss) and non-real estate investments (in thousands). Refer to Note 7

– “Investments” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.

Year Ended

December 31, 2025

December 31, 2024

Realized (losses) gains:

Realized gains

$115,722

$117,214

Impairment of non-real estate investments

(95,716)

(58,090)

Significant realized loss

(103,329)

(1)

—

(83,323)

59,124

Unrealized gains (losses)

26,980

(2)

(112,246)

(3)

Investment loss

$(56,343)

$(53,122)

December 31, 2025

December 31, 2024

Investments

Cost

Unrealized

Gains

Unrealized

Losses

Carrying

Amount

Carrying Amount

Publicly traded companies

$54,752

$44,319

$(4,143)

$94,928

$105,667

Entities that report NAV

460,160

89,514

(37,298)

512,376

609,866

Entities that do not report NAV:

Entities with observable price changes

82,252

50,601

(9,615)

123,238

174,737

Entities without observable price changes

413,324

—

—

413,324

400,487

Investments accounted for under the equity method

N/A

N/A

N/A

357,383

186,228

December 31, 2025

$1,010,488

(4)

$184,434

$(51,056)

$1,501,249

$1,476,985

December 31, 2024

$1,207,146

$228,100

$(144,489)

$1,476,985

Public/Private Mix (Cost)

Tenant/Non-Tenant Mix (Cost)

18%

Tenant

4%

Public

82%

Non-Tenant

96%

Private

(1)In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss of $103.3 million on one

transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated joint venture

sold these securities and distributed $39.9 million to us in December 2025.

(2)Primarily relates to the increase in fair values of our investments in publicly traded entities during the year ended December 31, 2025.

(3)Primarily relates to the accounting reclassifications of unrealized gains recognized in prior periods into realized gains upon our realization of investments during the

year ended December 31, 2024.

(4)Represents 2.5% of gross assets as of December 31, 2025. Refer to “Gross assets” under “Definitions and reconciliations” in Item 7 for additional details.

116

Liquidity

Liquidity

Limited Outstanding Borrowings and

Significant Availability on

Unsecured Senior Line of Credit

(in millions)

$5.3B

(In millions)

Availability under our unsecured senior line of credit, net of

amounts outstanding under our commercial paper program

$4,647

Cash, cash equivalents, and restricted cash

554

Investments in publicly traded companies

95

Liquidity as of December 31, 2025

$5,296

We expect to meet certain long-term liquidity requirements, such as requirements for development, redevelopment, other

construction projects, capital improvements, tenant improvements, property acquisitions, equity repurchases, leasing costs, revenue-

and non-revenue-enhancing capital expenditures, scheduled debt maturities, distributions to noncontrolling interests, and payment of

dividends, through net cash provided by operating activities, periodic asset dispositions, strategic real estate joint ventures, long-term

secured and unsecured indebtedness, borrowings under our unsecured senior line of credit, issuances under our commercial paper

program, and issuances of additional debt and/or equity securities.

We also expect to continue meeting our short-term liquidity and capital requirements, as further detailed in this section,

generally through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating

activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT.

For additional information on our liquidity requirements related to our contractual obligations and commitments, refer to

Note 5 – “Leases” and Note 10 – “Secured and unsecured senior debt” to our consolidated financial statements in Item 15 in this annual

report on Form 10-K.

Over the next several years, our balance sheet, capital structure, and liquidity objectives are as follows:

•Retain net cash flows from operating activities after payment of dividends and distributions to noncontrolling interests for

investment in development and redevelopment projects and/or acquisitions;

•Maintain significant balance sheet liquidity;

•Maintain a strong credit profile and relative long-term cost of capital;

•Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt,

secured debt, selective real estate asset sales, strategic real estate joint ventures, non-real estate investment sales, and

common stock;

•Maintain commitment to long-term capital to fund growth;

•Maintain prudent laddering of debt maturities;

•Maintain solid credit metrics;

•Prudently manage variable-rate debt exposure;

•Maintain a large unencumbered asset pool to provide financial flexibility;

•Fund common stock dividends and distributions to noncontrolling interests from net cash provided by operating activities;

•Manage a disciplined level of development and redevelopment projects as a percentage of our gross real estate assets;

and

•Maintain high levels of pre-leasing and percentage leased in development and redevelopment projects.

117

The following table presents the availability under our unsecured senior line of credit, net of amounts outstanding under our

commercial paper program; cash, cash equivalents, and restricted cash; and investments in publicly traded companies as of

December 31, 2025 (in thousands):

Description

Stated Rate

Aggregate

Commitments

Outstanding

Balance

Remaining

Commitments/

Liquidity

Availability under our unsecured senior line of credit, net of

amounts outstanding under our commercial paper program

SOFR+0.855%

$5,000,000

$353,500

$4,646,500

Cash, cash equivalents, and restricted cash

553,755

Investments in publicly traded companies

94,928

Liquidity as of December 31, 2025

$5,295,183

Cash, cash equivalents, and restricted cash

As of December 31, 2025 and 2024, we had $553.8 million and $559.8 million, respectively, of cash, cash equivalents, and

restricted cash. We expect existing cash, cash equivalents, and restricted cash, net cash provided by operating activities, proceeds

from real estate asset sales, sales of partial interests, strategic real estate joint ventures, non-real estate investment sales, borrowings

under our unsecured senior line of credit, issuances under our commercial paper program, issuances of unsecured senior notes

payable, and issuances of common stock to continue to be sufficient to fund our operating activities and cash commitments for investing

and financing activities, such as regular quarterly dividends, distributions to noncontrolling interests, scheduled debt repayments,

acquisitions, and certain capital expenditures, including expenditures related to construction activities and any common stock

repurchases.

Cash flows

We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following

table summarizes changes in our cash flows for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

2025

2024

Change

Net cash provided by operating activities

$1,414,046

$1,504,524

$(90,478)

Net cash provided by (used in) investing activities

$362,097

$(1,510,695)

$1,872,792

Net cash used in financing activities

$(1,783,794)

$(93,315)

$(1,690,479)

Operating activities

Cash flows provided by operating activities are primarily dependent upon the occupancy level of our asset base, the rental

rates of our leases, the collectibility of rent and recovery of operating expenses from our tenants, the timing of completion of

development and redevelopment projects, and the timing of acquisitions and dispositions of operating properties. Net cash provided by

operating activities for the year ended December 31, 2025 decreased by $90.5 million to $1.41 billion, compared to $1.50 billion for the

year ended December 31, 2024. This 6.0% decrease primarily reflects a $97.4 million change in operating assets and liabilities,

including tenant receivables, deferred leasing costs, other assets, and accounts payable, accrued expenses, and tenant security

deposits.

118

Investing activities

Cash provided by (used in) investing activities for the years ended December 31, 2025 and 2024 consisted of the following (in

thousands):

Year Ended December 31,

2025

2024

Change

Sources of cash from investing activities:

Proceeds from sales of real estate

$2,320,875

$1,220,206

$1,100,669

Sales of and distributions from non-real estate investments

169,003

173,927

(4,924)

Change in escrow deposits

—

3,864

(3,864)

Return of capital from unconsolidated real estate joint ventures

566

2,916

(2,350)

2,490,444

1,400,913

1,089,531

Uses of cash for investing activities:

Purchases of real estate

—

248,699

(248,699)

Additions to real estate

1,870,924

2,422,625

(551,701)

Change in escrow deposits

7,364

—

7,364

Investments in unconsolidated real estate joint ventures

11,296

3,927

7,369

Additions to non-real estate investments

238,763

236,357

2,406

2,128,347

2,911,608

(783,261)

Net cash provided by (used in) investing activities

$362,097

$(1,510,695)

$1,872,792

The change in net cash provided by (used in) investing activities for the year ended December 31, 2025, compared to the year

ended December 31, 2024, was primarily due to an increased source of cash from proceeds from sales of real estate and decreased

use of cash for purchases of and additions to real estate. Refer to Note 3 – “Investments in real estate” to our consolidated financial

statements in Item 15 in this annual report on Form 10-K for additional information.

Financing activities

Cash flows used in financing activities for the years ended December 31, 2025 and 2024 consisted of the following (in

thousands):

Year Ended December 31,

2025

2024

Change

Borrowings under secured notes payable

$4,031

$29,919

$(25,888)

Repayments of borrowings under secured notes payable

(154,212)

(32)

(154,180)

Proceeds from issuance of unsecured senior notes payable

548,532

998,806

(450,274)

Repayment of unsecured senior note payable

(600,000)

—

(600,000)

Proceeds from issuances under commercial paper program

25,426,375

13,010,600

12,415,775

Repayments of borrowings under commercial paper program

(25,072,875)

(13,110,600)

(11,962,275)

Payments of loan fees

(5,307)

(35,871)

30,564

Changes related to debt

146,544

892,822

(746,278)

Contributions from and sales of noncontrolling interests

165,488

306,473

(140,985)

Distributions to and purchases of noncontrolling interests

(951,780)

(308,636)

(643,144)

Proceeds from issuance of common stock

—

27,103

(27,103)

Repurchase of common stock

(208,187)

(50,107)

(158,080)

Dividends on common stock

(911,450)

(898,557)

(12,893)

Taxes paid related to net settlement of equity awards

(24,409)

(62,413)

38,004

Net cash used in financing activities

$(1,783,794)

$(93,315)

$(1,690,479)

119

Sources of capital

Net cash provided by operating activities after dividends

We expect to retain $475 million to $575 million of net cash flows from operating activities after payment of common stock

dividends and distributions to noncontrolling interests for the year ending December 31, 2026. For purposes of this calculation, changes

in operating assets and liabilities representing timing differences are excluded. For the year ending December 31, 2026, we expect our

recently delivered projects, our development and redevelopment projects expected to be delivered, and contributions from Same

Properties to contribute to income from rentals, net operating income, and cash flows. We anticipate contractual near-term growth in

annual net operating income (cash basis) of $26 million related to the commencement of contractual rents on the projects recently

placed into service that are near the end of their initial free rent period. Refer to “Cash flows” in Item 7 in this annual report on Form 10-

K for a discussion of cash flows provided by operating activities for the year ended December 31, 2025.

Debt

We expect to fund a portion of our capital needs for 2026 and beyond from issuances under our commercial paper program,

issuances of unsecured senior notes payable, and/or borrowings under our unsecured senior line of credit, and/or borrowings under

secured construction loans.

As of December 31, 2025, our unsecured senior line of credit, which matures in 2030, including extension options under our

control, had aggregate commitments of $5.0 billion and bore an interest rate of SOFR plus 0.855%. In addition to the cost of borrowing,

the unsecured senior line of credit is subject to an annual facility fee of 0.145% based on the aggregate commitments outstanding.

Based upon our ability to achieve certain annual sustainability targets, the interest rate and facility fee rate are also subject to upward or

downward adjustments of up to four basis points with respect to the interest rate and up to one basis point with respect to the facility fee

rate.

Based on certain sustainability metrics achieved in accordance with the terms of our unsecured senior line of credit

agreement, the borrowing rate was reduced by two basis points to SOFR plus 0.855%, from SOFR plus 0.875%, and the facility fee

was reduced by 0.5 basis point to 0.145% from 0.15%. As of December 31, 2025, we had no outstanding balance on our unsecured

senior line of credit.

Our commercial paper program provides us with the ability to issue up to $2.50 billion of commercial paper notes with a

maturity of generally 30 days or less and with a maximum maturity of 397 days from the date of issuance. Our commercial paper

program is back-stopped by our unsecured senior line of credit, and at all times we expect to retain a minimum undrawn amount of

borrowing capacity under our unsecured senior line of credit equal to any outstanding balance under our commercial paper program.

We use borrowings under the program to fund short-term capital needs. The notes issued under our commercial paper program are

sold under customary terms in the commercial paper market. They are typically issued at a discount to par, representing a yield to

maturity dictated by market conditions at the time of issuance. In the event we are unable to issue commercial paper notes or refinance

outstanding commercial paper notes under terms equal to or more favorable than those under the unsecured senior line of credit, we

expect to borrow under the unsecured senior line of credit. The commercial paper notes sold during the year ended December 31, 2025

were issued at a weighted-average yield to maturity of 4.48%. As of December 31, 2025, we had $353.2 million of commercial paper

notes outstanding.

In February 2025, we issued $550.0 million of unsecured senior notes payable, due 2035, with an interest rate of 5.50%.

In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity, funded temporarily with

borrowings under our commercial paper program. We expect to repay these temporary borrowings with proceeds from future

dispositions and sales of partial interests. No gain or loss was incurred in connection with this repayment.

The following table presents our average debt outstanding and weighted-average interest rates during the year ended

December 31, 2025 (dollars in thousands):

Year Ended December 31, 2025

Average Debt

Outstanding

Weighted-Average

Interest Rate

Long-term fixed-rate debt

$12,248,039

3.87%

Short-term variable-rate unsecured senior line of credit and commercial paper

program debt

1,281,104

4.55

Blended-average interest rate

13,529,143

3.93

Loan fee amortization and annual facility fee related to unsecured senior line of

credit

N/A

0.13

Total/weighted average

$13,529,143

4.06%

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Real estate dispositions and sales of partial interests

We expect to continue to focus on the disciplined execution of select sales of real estate. Future sales will provide an important

source of capital to fund our development and redevelopment projects and potential opportunistic share repurchases, capital for growth,

and to reduce debt. We may also consider additional sales of partial interests in core Class A/A+ properties, development projects, and/

or land. For the year ending December 31, 2026, we expect real estate dispositions and sales of partial interests in real estate assets to

range from $2.10 billion to $3.70 billion. The amount of asset sales necessary to meet our forecasted sources of capital will vary

depending upon the amount of EBITDA associated with the assets sold.

Refer to Note 3 – “Investments in real estate” and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our

consolidated financial statements in Item 15 and to “Dispositions and sales of partial interests” in Item 2 in this annual report on Form

10-K for additional information on our real estate dispositions.

As a REIT, we are generally subject to a 100% tax on the net income from real estate asset sales that the IRS characterizes as

“prohibited transactions.” We do not expect our sales will be categorized as prohibited transactions. However, unless we meet certain

“safe harbor” requirements, whether a real estate asset sale is a “prohibited transaction” will be based on the facts and circumstances

of the sale. Our real estate asset sales may not always meet such “safe harbor” requirements. Refer to “Item 1A. Risk factors” in this

annual report on Form 10-K for additional information about the “prohibited transaction” tax.

Common equity transactions

During the year ended December 31, 2025, we have not issued any common stock under our ATM program. As of

December 31, 2025, the remaining aggregate amount available under our ATM program for future sales of common stock was $1.47

billion.

Other sources

As a well-known seasoned issuer, we may, from time to time issue securities at our discretion based on our needs and market

conditions, including, as necessary, to balance our use of incremental debt capital.

Additionally, we, together with joint venture partners, hold interests in real estate joint ventures that we consolidate in our

financial statements. These existing joint ventures provide significant equity capital to fund a portion of our future construction spending,

and our joint venture partners may also contribute equity into these entities for financing-related activities. From January 1, 2026

through December 31, 2027 and beyond, we expect to receive capital contributions aggregating $137.0 million from existing

consolidated real estate joint venture partners to fund construction. During the year ending December 31, 2026, contributions from

noncontrolling interests from existing joint venture partners are expected to aggregate to up to $100.0 million at the midpoint of our

guidance range for 2026 construction spending.

121

Uses of capital

Summary of capital expenditures

One of our primary uses of capital relates to the development, redevelopment, pre-construction, and construction of properties.

We currently have projects in our development and redevelopment pipeline aggregating 3.5 million RSF of Class A/A+ properties

undergoing construction. We incur capitalized construction costs related to development, redevelopment, pre-construction, and other

construction activities. We also incur additional capitalized project costs, including interest, property taxes, insurance, and other costs

directly related and essential to the development, redevelopment, pre-construction, or construction of a project, during periods when

activities necessary to prepare an asset for its intended use are in progress. Refer to “New Class A/A+ development and redevelopment

properties: current projects” in Item 2 and “Summary of capital expenditures” in Item 7 in this annual report on Form 10-K for additional

information on our capital expenditures.

We capitalize interest cost as a cost of the project only during the period in which activities necessary to prepare an asset for

its intended use are ongoing, provided that expenditures for the asset have been made and interest cost has been incurred. Capitalized

interest, classified in investments in real estate in our consolidated balance sheets, aggregated $330.4 million for the year ended

December 31, 2025, consistent with $331.0 million capitalized during the year ended December 31, 2024. This reflects a consistent

weighted-average capitalized cost basis of $8.15 billion for the year ended December 31, 2025, as compared to $8.12 billion for the

year ended December 31, 2024. 

Property taxes, insurance on real estate, and indirect project costs, such as construction, administration, legal fees, and office

costs that clearly relate to projects under development or construction, are capitalized as incurred during the period an asset is

undergoing activities to prepare it for its intended use. We capitalized payroll and other indirect costs related to development,

redevelopment, pre-construction, and construction projects, aggregating $97.1 million and $100.9 million, and property taxes, insurance

on real estate and indirect project costs aggregating $145.4 million and $132.3 million during the years ended December 31, 2025 and

2024, respectively.

Pre-construction activities include entitlements, permitting, design, site work, and other activities preceding commencement of

construction of aboveground building improvements. The advancement of pre-construction efforts is focused on reducing the time

required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and

are required for the vertical construction of buildings. Should we cease activities necessary to prepare an asset for its intended use, the

interest, taxes, insurance, and certain other direct and indirect project costs related to the asset would be expensed as incurred.

Expenditures for repairs and maintenance are expensed as incurred.

Fluctuations in our development, redevelopment, and construction activities could result in significant changes to total

expenses and net income. For example, had we experienced a 10% reduction in development, redevelopment, and construction

activities without a corresponding decrease in indirect project costs, including interest and payroll, total expenses would have increased

by approximately $57.3 million for the year ended December 31, 2025.

We use third-party brokers to assist in our leasing activity, who are paid on a contingent basis upon successful leasing. We are

required to capitalize initial direct costs related to successful leasing transactions that result directly from and are essential to the lease

transaction and would not have been incurred had that lease transaction not been successfully executed. During the year ended

December 31, 2025, we capitalized total initial direct leasing costs of $116.8 million. Costs that we incur to negotiate or arrange a lease

regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and other costs, are

expensed as incurred.

Real estate acquisitions and common stock repurchase program

Our common stock repurchase program, authorized by our Board of Directors in December 2024 allowed for the repurchase of

up to $500.0 million of our common stock in the open market, in privately negotiated transactions, or otherwise through its expiration on

December 31, 2025.

During January and February 2025, we repurchased 2.2 million shares of common stock under this repurchase program at an

average price per share of $96.71, with approximately $241.8 million remaining available for additional share repurchases. No further

purchases were made under this program. 

On December 8, 2025, we announced that our Board of Directors authorized a new common stock repurchase program that

allows for the repurchase of up to $500.0 million of our common stock through December 31, 2026. This new program replaced our

prior stock repurchase program. As of the date of this report, no purchases have been made under the new program and $500.0 million

remains available for future share repurchases.

We have not made any cash acquisitions in 2025.

122

Dividends

During the years ended December 31, 2025 and 2024, we paid common stock dividends of $911.5 million and $898.6 million,

respectively. The increase of $12.9 million in dividends paid on our common stock for the year ended December 31, 2025, compared to

the year ended December 31, 2024, was primarily due to an increase in the related dividends to $5.28 per common share paid during

the year ended December 31, 2025 from $5.14 per common share paid during the year ended December 31, 2024.

During the three months ended December 31, 2025, we cut our quarterly common stock dividend to $0.72 per share from

$1.32 for the three months ended September 30, 2025, representing a 45% reduction. The decision to reduce the declared dividend per

common share reflects our commitment to maintaining the strength of our balance sheet, enhancing financial flexibility, and preserving

liquidity of approximately $410 million on an annual basis, which will be used to support our 2026 capital plan.

We have historically funded the payment of our common stock dividends using net cash provided by operating activities. We

expect to continue funding future quarterly common stock dividends from net cash provided by operating activities, which may be

supplemented by proceeds from periodic asset dispositions, issuances of additional debt and/or equity securities, and borrowings under

our unsecured senior line of credit and/or our commercial paper program. Future dividends are at the discretion of our Board and

subject to various considerations, including net income, cash flows, capital requirements, debt covenants, market conditions, dividend

yield, taxable income, payout ratios, and other factors. There can be no assurance that we will maintain our dividends at the current

level or increase dividends in the future.

Unsecured senior notes payable and unsecured senior line of credit

The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior

notes payable as of December 31, 2025 were as follows:

Covenant Ratios(1)

Requirement

December 31, 2025

Total Debt to Total Assets

Less than or equal to 60%

32%

Secured Debt to Total Assets

Less than or equal to 40%

—%

Consolidated EBITDA(2) to Interest Expense

Greater than or equal to 1.5x

7.8x

Unencumbered Total Asset Value to Unsecured Debt

Greater than or equal to 150%

302%

(1)All covenant ratio titles utilize terms as defined in the respective debt agreements.

(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.

In addition, the terms of the indentures, among other things, limit the ability of the Company, Alexandria Real Estate Equities,

L.P., and the Company’s subsidiaries to (i) consummate a merger, or consolidate, or sell all or substantially all of the Company’s assets

and (ii) incur certain secured or unsecured indebtedness.

The requirements of, and our actual performance with respect to, the key financial covenants under our unsecured senior line

of credit as of December 31, 2025 were as follows:

Covenant Ratios(1)

Requirement

December 31, 2025

Leverage Ratio

Less than or equal to 60.0%

33.5%

Secured Debt Ratio

Less than or equal to 45.0%

—%

Fixed-Charge Coverage Ratio

Greater than or equal to 1.50x

3.41x

Unsecured Interest Coverage Ratio

Greater than or equal to 1.75x

7.63x

(1)All covenant ratio titles utilize terms as defined in the credit agreement.

Estimated interest payments

Estimated interest payments on our fixed-rate debt are calculated based upon contractual interest rates, including interest

payment dates and scheduled maturity dates. As of December 31, 2025, 97.2% of our debt was fixed-rate debt. For additional

information regarding our debt, refer to Note 10 – “Secured and unsecured senior debt” to our consolidated financial statements in

Item 15 in this annual report on Form 10-K.

123

Ground lease obligations

Ground lease obligations as of December 31, 2025 included leases for 31 of our properties and accounted for approximately

9% of our total number of properties. Among these 31 properties, 17 properties are subject to ground leases with a weighted-average

remaining lease term of 53 years, including extension options that we are reasonably certain to exercise. These leases are with a single

lessor in our Greater Stanford submarket with whom we have extended three ground leases over the past 10 years.

Our remaining 14 properties subject to ground leases are located across multiple submarkets and have remaining lease terms

ranging from approximately 45 to 81 years. The weighted-average remaining lease term of these ground leases is 73 years, including

extension options that we are reasonably certain to exercise.

In many cases, we seek to extend our ground leases well ahead of their scheduled contractual expirations. If we are

successful in extending ground leases, we could see significant up-front or increased recurring future payments to the ground lessor

and/or increased ground lease expense, which may require us to increase our capital funding needs.

Operating lease agreements

As of December 31, 2025, the remaining contractual payments under ground and office lease agreements in which we are the

lessee aggregated $753.4 million and $20.0 million, respectively. As of December 31, 2025, our operating lease liability, calculated as

the present value of the remaining payments aggregating $773.4 million under our operating lease agreements, including our extension

options that we are reasonably certain to exercise, was $360.5 million and was classified in accounts payable, accrued expenses, and

other liabilities in our consolidated balance sheet. As of December 31, 2025, the weighted-average remaining lease term of operating

leases in which we are the lessee was approximately 61 years, including extension options that we are reasonably certain to exercise,

and the weighted-average discount rate was 4.7%. Our corresponding operating lease right-of-use assets, adjusted for initial direct

leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $697.9 million.

We classify the right-of-use asset in other assets in our consolidated balance sheets. Refer to “Lease accounting” in Note 2 –

“Summary of significant accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for

additional information.

Commitments

As of December 31, 2025, remaining aggregate costs under contract for the construction of properties undergoing

development, redevelopment, and improvements under the terms of leases approximated $1.03 billion. We expect payments for these

obligations to occur over one to three years, subject to capital planning adjustments from time to time. We may have the ability to cease

the construction of certain projects, which would result in the reduction of our commitments. In addition, we have letters of credit and

performance obligations aggregating $5.3 million.

We are committed to funding approximately $370.3 million related to our non-real estate investments. These funding

commitments are primarily associated with our investments in privately held entities that report NAV and expire at various dates over

the next 12 years, with a weighted-average expiration of 8.1 years as of December 31, 2025.

Our former joint venture partner in the Greater Boston market has an option, subject to certain conditions, to obtain a 

$50 million secured loan from us, which, if the option is exercised, will bear interest at 6.5%, with a floor of 9.0% and a term not to

exceed five years. As of December 31, 2025, the option has not been exercised and is set to expire in July 2027.

In January 2026, our partner in our consolidated joint venture at 99 Coolidge Avenue in our Cambridge/Inner Suburbs

submarket exercised its option to require us to purchase its redeemable noncontrolling interest aggregating $48.7 million plus unpaid

distributions approximating $844 thousand as of December 31, 2025. We expect to complete the redemption in the first quarter of 2026.

In connection with the sale of a property in our San Diego market, we entered into a loan agreement with the buyer under

which we committed to provide up to $165.7 million of financing through December 30, 2029. As of December 31, 2025, $49.2 million of

the commitment remained available to be drawn by the borrower.

Exposure to environmental liabilities

In connection with the acquisition of all of our properties, we have obtained Phase I environmental assessments to ascertain

the existence of any environmental liabilities or other issues. The Phase I environmental assessments of our properties have not

revealed any environmental liabilities that we believe would have a material adverse effect on our financial condition or results of

operations taken as a whole, nor are we aware of any material environmental liabilities that have occurred since the Phase I

environmental assessments were completed. In addition, we carry a policy of pollution legal liability insurance covering exposure to

certain environmental losses at substantially all of our properties.

124

Foreign currency translation gains and losses

The following table presents the change in accumulated other comprehensive loss attributable to Alexandria Real Estate

Equities, Inc.’s stockholders during the year ended December 31, 2025 primarily due to the changes in the foreign exchange rates for

our real estate investments in Canada (in thousands). We reclassify unrealized foreign currency translation gains and losses into net

income as we dispose of these holdings.

Total

Balance as of December 31, 2024

$(46,252)

Other comprehensive income before reclassifications

15,160

Reclassification adjustment for losses included in net income

1,697

(1)

Net other comprehensive income

16,857

Balance as of December 31, 2025

$(29,395)

(1)Relates to the completed sale of our only remaining asset located in Asia during the three months ended December 31, 2025.

Inflation

As of December 31, 2025, approximately 92% of our leases (on an annual rental revenue basis) were triple net leases, which

require tenants to pay substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and

other operating expenses (including increases thereto) in addition to base rent. Approximately 97% of our leases (on an annual rental

revenue basis) contained effective annual rent escalations approximating 3% that were either fixed or indexed based on a consumer

price index or other indices. Accordingly, we do not believe that our cash flows or earnings from real estate operations are subject to

significant risks from inflation. A period of inflation, however, could cause an increase in the cost of issuing new unsecured senior notes

payable and our variable-rate borrowings, including borrowings under our unsecured senior line of credit and commercial paper

program, and secured loans held by our unconsolidated real estate joint ventures.

In addition, refer to “Item 1A. Risk factors” in this annual report on Form 10-K for a discussion of risks that inflation directly or

indirectly may pose to our business.

125

Issuer and guarantor subsidiary summarized financial information

Alexandria Real Estate Equities, Inc. (the “Issuer”) has sold certain debt securities registered under the Securities Act of 1933,

as amended, that are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P. (the “LP” or the “Guarantor

Subsidiary”), an indirectly 100% owned subsidiary of the Issuer. The Issuer’s other subsidiaries, including, but not limited to, the

subsidiaries that own substantially all of its real estate (collectively, the “Combined Non-Guarantor Subsidiaries”), will not provide a

guarantee of such securities, including the subsidiaries that are partially or 100% owned by the LP. The following summarized financial

information presents on a combined basis, balance sheet information as of December 31, 2025 and 2024, and results of operations and

comprehensive income for the years ended December 31, 2025 and 2024 for the Issuer and the Guarantor Subsidiary. The information

presented below excludes eliminations necessary to arrive at the information on a consolidated basis. In presenting the summarized

financial statements, the equity method of accounting has been applied to (i) the Issuer’s interests in the Guarantor Subsidiary, (ii) the

Guarantor Subsidiary’s interests in the Combined Non-Guarantor Subsidiaries, and (iii) the Combined Non-Guarantor Subsidiaries’

interests in the Guarantor Subsidiary, where applicable, even though all such subsidiaries meet the requirements to be consolidated

under GAAP. All assets and liabilities have been allocated to the Issuer and the Guarantor Subsidiary generally based on legal entity

ownership.

The following tables present combined summarized financial information as of December 31, 2025 and 2024 and for the years

ended December 31, 2025 and 2024 for the Issuer and Guarantor Subsidiary. Amounts provided do not represent our total consolidated

amounts (in thousands):

December 31,

2025

2024

Assets:

Cash, cash equivalents, and restricted cash

$127,100

$103,993

Other assets

173,303

153,913

Total assets

$300,403

$257,906

Liabilities:

Unsecured senior notes payable

$12,047,394

$12,094,465

Unsecured senior line of credit and commercial paper

353,161

—

Other liabilities

433,707

542,322

Total liabilities

$12,834,262

$12,636,787

Year Ended December 31,

2025

2024

Total revenues

$48,748

$59,023

Total expenses

(350,655)

(349,437)

Net loss

(301,907)

(290,414)

Net income attributable to unvested restricted stock awards

(8,417)

(13,394)

Net loss attributable to Alexandria Real Estate Equities, Inc.’s common stockholders

$(310,324)

$(303,808)

As of December 31, 2025, 328 of our 340 properties were held indirectly by the REIT’s wholly owned consolidated subsidiary,

Alexandria Real Estate Equities, L.P.

126

Critical accounting estimates

Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial

statements in conformity with GAAP requires us to make estimates, judgments, and assumptions that affect the reported amounts of

assets, liabilities, revenues, and expenses. We base these estimates, judgments, and assumptions on historical experience, current

trends, and various other factors that we believe to be reasonable under the circumstances.

We continually evaluate the estimates, judgments, and assumptions we use to prepare our consolidated financial statements.

Changes in estimates, judgments, or assumptions could affect our financial position and our results of operations, which are used by

our stockholders, potential investors, industry analysts, and lenders in their evaluation of our performance.

Our critical accounting estimates are defined as accounting estimates or assumptions made in accordance with GAAP, which

involve a significant level of estimation uncertainty or subjectivity and have had or are reasonably likely to have a material impact on our

financial condition or results of operations. Our significant accounting policies, which utilize these critical accounting estimates, are

described in Note 2 – “Summary of significant accounting policies” to our consolidated financial statements in Item 15 in this annual

report on Form 10-K. Our critical accounting estimates are described below.

Recognition of real estate acquired

Generally, our acquisitions of real estate or in-substance real estate are accounted for as asset acquisitions and not business

combinations because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable

assets (i.e., land, buildings, and related intangible assets). The accounting model for asset acquisitions requires that the acquisition

consideration (including acquisition costs) be allocated to the individual assets acquired and liabilities assumed on a relative fair value

basis. Any excess (deficit) of the consideration transferred relative to the sum of the fair value of the assets acquired and liabilities

assumed is allocated to the individual assets and liabilities based on their relative fair values.

We assess the relative fair values of tangible and intangible assets and liabilities based on:

(i)Available comparable market information;

(ii)Estimated replacement costs; or

(iii)Discounted cash flow analysis/estimated net operating income and capitalization rates.

In certain instances, we may use multiple valuation techniques and estimate fair values based on an average of multiple

valuation results. We exercise judgment to determine key assumptions used in each valuation technique. For example, to estimate

future cash flows in the discounted cash flow analysis, we are required to use judgment and make a number of assumptions, including

those related to projected growth in rental rates and operating expenses, and anticipated trends and market/economic conditions. The

use of different assumptions in the discounted cash flow analysis can affect the amount of consideration allocated to the acquired

depreciable/amortizable asset, which in turn can impact our net income due to the recognition of the related depreciation/amortization

expense in our consolidated statements of operations.

Impairment of long-lived assets

Impairment of real estate assets classified as held for sale

A property is classified as held for sale when all of the accounting criteria for a plan of sale have been met. These criteria are

described in “Investments in real estate” in Note 2 – “Summary of significant accounting policies” to our consolidated financial

statements in Item 15 in this annual report on Form 10-K. Upon classification as held for sale, we recognize an impairment charge, if

necessary, to lower the carrying amount of the real estate asset to its estimated fair value less cost to sell. The determination of fair

value can involve significant judgments and assumptions. We develop key assumptions based on the following available factors: (i)

contractual sales price, (ii) preliminary non-binding letters of intent, or (iii) other available comparable market information. If this

information is not available, we use estimated replacement costs or estimated cash flow projections that utilize estimated discount and

capitalization rates. These estimates are subject to uncertainty and therefore require significant judgment by us. We review all assets

held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to their

estimated fair values less costs to sell. Subsequently, as a result of our quarterly assessment, we may recognize an incremental

impairment charge for any decrease in the asset’s fair value less cost to sell. Conversely, we may recognize a gain for a subsequent

increase in fair value less cost to sell, limited to the cumulative net loss previously recognized.

127

Impairment of other long-lived assets

For each reporting period, we review current activities and changes in the business conditions of all of our long-lived assets,

including our rental properties, CIP, land held for development, right-of-use assets related to operating leases in which we are the

lessee, and intangibles, to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If

triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows, including, if

necessary, a probability-weighted approach if multiple outcomes are under consideration.

Long-lived assets to be held and used are individually evaluated for impairment when conditions exist that may indicate that

the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not

recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

Triggering events or impairment indicators for long-lived assets to be held and used, including our rental properties, CIP, land held for

development, and intangibles, are assessed by project and include significant fluctuations in estimated net operating income,

occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs,

estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon

numerous factors, including, but not limited to, projected rental rates, exit capitalization rates, and construction costs for projects under

development, which are based on available market information, current and historical operating results, known trends, current market/

economic conditions that may affect the property, and our assumptions about the use of the asset, including, if necessary, a probability-

weighted approach if multiple outcomes are under consideration.

Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount to its

estimated fair value. If an impairment loss is not required to be recognized, the recognition of depreciation or amortization is adjusted

prospectively, as necessary, to reduce the carrying amount of the real estate to its estimated disposition value over the remaining period

that the asset is expected to be held and used. We may also adjust depreciation of properties that are expected to be disposed of or

redeveloped prior to the end of their useful lives.

The evaluation for impairment and calculation of the carrying amount of a long-lived asset to be held and used involves

consideration of factors and calculations that are different than the estimate of fair value of assets classified as held for sale. Because of

these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an

impairment charge upon classification as held for sale.

Impairment of non-real estate investments

We hold strategic investments in publicly traded companies and privately held entities primarily involved in the life science

industry. As a REIT, we generally limit our ownership percentage in the voting stock of each individual entity to less than 10%.

Our investments in privately held entities that do not report NAV per share require our evaluation for impairment when changes

in these entities’ conditions may indicate that an impairment exists. We closely monitor these investments throughout the year for new

developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements,

capital-raising events, and merger and acquisition activities. We evaluate these investees on the basis of a qualitative assessment for

indicators of impairment by monitoring the presence of the following triggering events or impairment indicators: (i) a significant

deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse

change in the regulatory, economic, or technological environment of the investee, (iii) a significant adverse change in the general

market condition, including the research and development of technology and products that the investee is bringing or attempting to

bring to the market, (iv) significant concerns about the investee’s ability to continue as a going concern, and/or (v) a decision by

investors to cease providing support to reduce their financial commitment to the investee. If such indicators are present, we are required

to estimate the investment’s fair value and immediately recognize an impairment loss in an amount equal to the investment’s carrying

value in excess of its estimated fair value. As of each December 31, 2025, 2024, and 2023, the carrying amounts of our investments in

privately held entities that do not report NAV per share accounted for 2%, 2%, and 1% of our total assets and aggregated

$536.6 million, $575.2 million, and $542.9 million, respectively. During the years ended December 31, 2025, 2024, and 2023, we

recognized impairment charges aggregating 18%, 10%, and 14%, respectively, of the carrying amounts of our investments in privately

held entities that do not report NAV.

128

Monitoring of tenant credit quality

We monitor, on an ongoing basis, the credit quality and any related material changes of our tenants by (i) monitoring the credit

rating of tenants that are rated by a nationally recognized credit rating agency, (ii) reviewing financial statements of the tenants that are

publicly available or that are required to be delivered to us pursuant to the applicable lease, (iii) monitoring news reports regarding our

tenants and their respective businesses and industries in which they conduct business, and (iv) monitoring the timeliness of lease

payments. We have a team of employees who, among them, have an extensive educational background or experience in biology,

chemistry, industrial biotechnology, agtech, and the life science industry, as well as knowledge in finance. This team is responsible for

timely assessment, monitoring, and communication of our tenants’ credit quality and any material changes therein. During the years

ended December 31, 2025, 2024, and 2023, specific write-offs and increases to our general allowance balances related to deferred rent

balances of tenants recognized in our consolidated statements of operations have not exceeded 0.8% of our income from rentals for

each respective year. For additional information, refer to “Monitoring of tenant credit quality” in Note 2 – “Summary of significant

accounting policies” to our consolidated financial statements in Item 15 in this annual report on Form 10-K.

129

Definitions and reconciliations

This section contains additional information on certain non-GAAP financial measures including reconciliations to the most

directly comparable financial measure calculated and presented in accordance with GAAP and the reasons why we use these

supplemental measures of performance and believe they provide useful information to investors, as well as the definitions of other

terms used in this annual report on Form 10-K.

Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common

stockholders

GAAP-basis accounting for real estate assets utilizes historical cost accounting and assumes that real estate values diminish

over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the

Nareit Board of Governors established funds from operations as an improved measurement tool. Since its introduction, funds from

operations has become a widely used non-GAAP financial measure among equity REITs. We believe that funds from operations is

helpful to investors as an additional measure of the performance of an equity REIT. Moreover, we believe that funds from operations, as

adjusted, allows investors to compare our performance to the performance of other real estate companies on a consistent basis, without

having to account for differences recognized because of real estate acquisition and disposition decisions, financing decisions, capital

structure, capital market transactions, variances resulting from the volatility of market conditions outside of our control, or other

corporate activities that may not be representative of the operating performance of our properties.

The 2018 White Paper published by the Nareit Board of Governors (the “Nareit White Paper”) defines funds from operations as

net income (computed in accordance with GAAP), excluding gains or losses on sales of real estate, and impairments of real estate, plus

depreciation and amortization of operating real estate assets, and after adjustments for our share of consolidated and unconsolidated

partnerships and real estate joint ventures. Impairments represent the write-down of assets when fair value over the recoverability

period is less than the carrying value due to changes in general market conditions and do not necessarily reflect the operating

performance of the properties during the corresponding period.

We compute funds from operations, as adjusted, as funds from operations calculated in accordance with the Nareit White

Paper, excluding significant gains, losses, and impairments realized on non-real estate investments, unrealized gains or losses on non-

real estate investments, impairments of real estate primarily consisting of right-of-use assets and pre-acquisition costs related to

projects that we decided to no longer pursue, gains or losses on early extinguishment of debt, changes in the provision for expected

credit losses on financial instruments, significant termination fees, acceleration of stock compensation expense due to the resignations

of executive officers, deal costs, the income tax effect related to such items, and the amount of such items that is allocable to our

unvested restricted stock awards. We compute the amount that is allocable to our unvested restricted stock awards with nonforfeitable

dividends using the two-class method. Under the two-class method, we allocate net income (after amounts attributable to noncontrolling

interests) to common stockholders and to unvested restricted stock awards with nonforfeitable dividends by applying the respective

weighted-average shares outstanding during each quarter-to-date and year-to-date period. This may result in a difference of the

summation of the quarter-to-date and year-to-date amounts. Neither funds from operations nor funds from operations, as adjusted,

should be considered as alternatives to net income (determined in accordance with GAAP) as indications of financial performance, or to

cash flows from operating activities (determined in accordance with GAAP) as measures of liquidity, nor are they indicative of the

availability of funds for our cash needs, including our ability to make distributions.

We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a

reconciliation for funds from operations on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or

amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and

financing decisions, as well as components such as gain on sales of real estate, unrealized gains or losses on non-real estate

investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit

losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would

potentially be misleading for our investors.

The following table reconciles net income (loss) to funds from operations for the share of consolidated real estate joint

ventures attributable to noncontrolling interests and our share of unconsolidated real estate joint ventures (in thousands):

Year Ended December 31, 2025

Noncontrolling Interest

Share of Consolidated Real

Estate Joint Ventures

Our Share of

Unconsolidated

Real Estate Joint Ventures

Net income (loss)

$212,844

$(9,631)

Depreciation and amortization of real estate assets

154,727

3,703

Gain on sale of real estate

(312,807)

(483)

Impairment of real estate

$265,266

$8,673

Funds from operations

$320,030

$2,262

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The following tables present a reconciliation of net income (loss) attributable to Alexandria Real Estate Equities, Inc.’s common

stockholders, the most directly comparable financial measure presented in accordance with GAAP, including our share of amounts from

consolidated and unconsolidated real estate joint ventures, to funds from operations attributable to Alexandria Real Estate Equities,

Inc.’s common stockholders – diluted, and funds from operations attributable to Alexandria Real Estate Equities, Inc.’s common

stockholders – diluted, as adjusted, and the related per share amounts for the years ended December 31, 2025, 2024, and 2023 (in

thousands, except per share amounts). Per share amounts may not add due to rounding.

Year Ended December 31,

2025

2024

2023

Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s

common stockholders – basic and diluted

$(1,437,987)

$309,555

$92,444

Depreciation and amortization of real estate assets

1,341,157

1,191,524

1,080,529

Noncontrolling share of depreciation and amortization from consolidated real

estate JVs

(154,727)

(129,711)

(115,349)

Our share of depreciation and amortization from unconsolidated real estate

JVs

3,703

4,238

3,589

Gain on sales of real estate

(330,121)

(1)

(127,615)

(277,037)

Impairment of real estate – rental properties and land

1,894,263

(2)

192,455

450,428

Allocation to unvested restricted stock awards

(5,681)

(8,696)

(5,175)

Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s

common stockholders – diluted(3)

1,310,607

1,431,750

1,229,429

Unrealized (gains) losses on non-real estate investments

(26,980)

112,246

201,475

Significant realized losses on non-real estate investments

103,329

(4)

—

—

Impairment of non-real estate investments

95,716

(5)

58,090

74,550

Impairment of real estate

51,962

(2)

30,613

10,686

Loss on early extinguishment of debt

107

—

—

Acceleration of stock compensation expense due to executive officer

resignation

2,455

(6)

—

20,295

Decrease in provision for expected credit losses on financial instruments

(56)

(434)

—

Allocation to unvested restricted stock awards

(2,476)

(3,188)

(4,121)

Funds from operations attributable to Alexandria Real Estate Equities, Inc.’s

common stockholders – diluted, as adjusted

$1,534,664

$1,629,077

$1,532,314

(1)Excludes our partner’s share of gain on sale of real estate aggregating $312.8 million at our consolidated real estate joint venture at 409 and 499 Illinois Street. Refer to

Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements in Item 15 for additional details.

(2)Refer to the table below for a summary of impairments of real estate during the year ended December 31, 2025. Refer to Note 3 – “Investments in real estate” to our

consolidated financial statements in Item 15 for additional information.

(in thousands)

Year Ended

December 31, 2025

Impairment of real estate

$2,202,818

Add: Our share from unconsolidated joint venture

8,673

Less: Noncontrolling interest’s share from consolidated joint ventures

(265,266)

Less: Write-off primarily related to ground leases

(51,962)

Impairment of real estate – rental properties and land

1,894,263

(3)Calculated in accordance with standards established by the Nareit Board of Governors.

(4)In November 2025, we contributed certain publicly traded securities to an unconsolidated joint venture, which resulted in a realized loss of $103.3 million on one

transaction that was previously reflected as unrealized losses within investment income in our consolidated statement of operations. The unconsolidated joint venture

sold these securities and distributed $39.9 million to us in December 2025.

(5)Primarily related to four non-real estate investments in privately held entities that do not report NAV.

(6)Related to the resignation of an executive officer, Daniel J. Ryan, from his position as Co-President and Regional Marketing Director – San Diego.

131

Year Ended December 31,

(Per share)

2025

2024

2023

Net income (loss) per share attributable to Alexandria Real Estate Equities, Inc.’s

common stockholders – diluted

$(8.44)

$1.80

$0.54

Depreciation and amortization of real estate assets

6.99

6.20

5.67

Gain on sales of real estate

(1.94)

(0.74)

(1.62)

Impairment of real estate – rental properties and land

11.12

1.12

2.64

Allocation to unvested restricted stock awards

(0.04)

(0.06)

(0.04)

Funds from operations per share attributable to Alexandria Real Estate Equities,

Inc.’s common stockholders – diluted

7.69

8.32

7.19

Unrealized (gains) losses on non-real estate investments

(0.16)

0.65

1.18

Significant realized losses on non-real estate investments

0.62

—

—

Impairment of non-real estate investments

0.56

0.34

0.44

Impairment of real estate

0.30

0.18

0.06

Acceleration of stock compensation expense due to executive officer

resignation

0.01

—

0.12

Allocation to unvested restricted stock awards

(0.01)

(0.02)

(0.02)

Funds from operations per share attributable to Alexandria Real Estate Equities,

Inc.’s common stockholders – diluted, as adjusted

$9.01

$9.47

$8.97

Weighted-average shares of common stock outstanding – diluted(1)

Earnings per share – diluted

170,307

172,071

170,909

Funds from operations – diluted, per share

170,390

172,071

170,909

Funds from operations – diluted, as adjusted, per share

170,390

172,071

170,909

(1)Refer to “Weighted-average shares of common stock outstanding – diluted” in this section for additional information.

Adjusted EBITDA and Adjusted EBITDA margin

We use Adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-

making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated

as earnings before interest, taxes, depreciation, and amortization (“EBITDA”), excluding stock compensation expense, gains or losses

on early extinguishment of debt, gains or losses on sales of real estate, impairments of real estate, changes in provision for expected

credit losses on financial instruments, and significant termination fees. Adjusted EBITDA also excludes unrealized gains or losses and

significant realized gains or losses and impairments that result from our non-real estate investments. These non-real estate investment

amounts are classified in our consolidated statements of operations outside of total revenues.

We believe Adjusted EBITDA provides investors with relevant and useful information as it allows investors to evaluate the

operating performance of our business activities without having to account for differences recognized because of investing and

financing decisions related to our real estate and non-real estate investments, our capital structure, capital market transactions, and

variances resulting from the volatility of market conditions outside of our control. For example, we exclude gains or losses on the early

extinguishment of debt to allow investors to measure our performance independent of our indebtedness and capital structure. We

believe that adjusting for the effects of impairments and gains or losses on sales of real estate, significant impairments and realized

gains or losses on non-real estate investments, changes in provision for expected credit losses on financial instruments, and significant

termination fees allows investors to evaluate performance from period to period on a consistent basis without having to account for

differences recognized because of investing and financing decisions related to our real estate and non-real estate investments or other

corporate activities that may not be representative of the operating performance of our properties.

In addition, we believe that excluding charges related to stock compensation and unrealized gains or losses facilitates for

investors a comparison of our business activities across periods without the volatility resulting from market forces outside of our control.

Adjusted EBITDA has limitations as a measure of our performance. Adjusted EBITDA does not reflect our historical expenditures or

future requirements for capital expenditures or contractual commitments. While Adjusted EBITDA is a relevant measure of performance,

it does not represent net income (loss) or cash flows from operations calculated and presented in accordance with GAAP, and it should

not be considered as an alternative to those indicators in evaluating performance or liquidity.

132

In order to calculate the Adjusted EBITDA margin, we divide Adjusted EBITDA by total revenues as presented in our

consolidated statements of operations. We believe that this supplemental performance measure provides investors with additional

useful information regarding the profitability of our operating activities.

We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a

reconciliation for Adjusted EBITDA on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or

amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and

financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized gains or losses on non-real estate

investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit

losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would

potentially be misleading for our investors.

The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in

accordance with GAAP, to Adjusted EBITDA and calculates the Adjusted EBITDA margin for the three months and years ended

December 31, 2025 and 2024 (dollars in thousands):

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Net (loss) income

$(995,354)

$(16,095)

$(1,216,726)

$510,733

Interest expense

65,674

55,659

226,698

185,838

Income taxes

1,851

1,855

7,753

6,678

Depreciation and amortization

322,063

330,108

1,350,478

1,202,380

Stock compensation expense

8,232

12,477

41,119

59,634

Loss on early extinguishment of debt

—

—

107

—

Gain on sales of real estate

(619,914)

(101,806)

(642,445)

(129,312)

Unrealized (gains) losses on non-real estate

investments

(98,548)

79,776

(26,980)

112,246

Significant realized losses on non-real estate

investments

103,329

—

103,329

—

Impairment of real estate

1,717,188

186,564

2,202,818

223,068

Impairment of non-real estate investments

20,181

20,266

95,716

58,090

Decrease in provision for expected credit losses on

financial instruments

(341)

(434)

(56)

(434)

Adjusted EBITDA

$524,361

$568,370

$2,141,811

$2,228,921

Total revenues

$754,414

$788,945

$3,026,556

$3,116,394

Adjusted EBITDA margin

70%

72%

71%

72%

Annual rental revenue

Annual rental revenue represents the annualized fixed base rental obligations, calculated in accordance with GAAP. It includes

the amortization of deferred revenue related to tenant-funded and tenant-built landlord improvements for leases in effect as of the end

of the period, related to our operating RSF. Annual rental revenue is presented using 100% of the annual rental revenue from our

consolidated properties and our share of annual rental revenue for our unconsolidated real estate joint ventures. Annual rental revenue

per RSF is computed by dividing annual rental revenue by the sum of 100% of the RSF of our consolidated properties and our share of

the RSF of properties held in unconsolidated real estate joint ventures. As of December 31, 2025, approximately 92% of our leases (on

an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance,

utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to

base rent. Annual rental revenue excludes these operating expenses recovered from our tenants. Amounts recovered from our tenants

related to these operating expenses, along with base rent, are classified in income from rentals in our consolidated statements of

operations.

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Capitalization rates

Capitalization rates are calculated based on net operating income and net operating income (cash basis) annualized,

excluding lease termination fees, on stabilized operating assets for the quarter preceding the date on which the property is sold, or

near-term prospective net operating income.

Capitalized interest

We capitalize interest cost as a cost of a project during periods for which activities necessary to develop, redevelop, or

reposition a project for its intended use are ongoing, provided that expenditures for the asset have been made and interest cost has

been incurred. Activities necessary to develop, redevelop, or reposition a project include pre-construction activities such as

entitlements, permitting, design, site work, and other activities preceding commencement of construction of aboveground building

improvements. The advancement of pre-construction efforts is focused on reducing the time required to deliver projects to prospective

tenants. These critical activities add significant value for future ground-up development and are required for the vertical construction of

buildings. If we cease activities necessary to prepare a project for its intended use, interest costs related to such project are expensed

as incurred.

Cash interest

Cash interest is equal to interest expense calculated in accordance with GAAP plus capitalized interest, less amortization of

loan fees and debt premiums (discounts). Refer to “Fixed-charge coverage ratio” in this section for a reconciliation of interest expense,

the most directly comparable financial measure calculated and presented in accordance with GAAP, to cash interest.

Class A/A+ properties and AAA locations

Class A/A+ properties are properties clustered in AAA locations that provide 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. These properties are typically well-located, professionally managed, and well-maintained, offering a

wide range of amenities and featuring premium construction materials and finishes. Class A/A+ properties are generally newer or have

undergone substantial redevelopment and are generally expected to command higher annual rental rates compared to other classes of

similar properties. AAA locations are in close proximity to concentrations of specialized skills, knowledge, institutions, and related

businesses. It is important to note that our definition of property classification may not be directly comparable to other equity REITs.

Credit rating

Represents the credit ratings assigned by S&P Global Ratings or Moody’s Ratings as of December 31, 2025. A credit rating is

not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.

Development, redevelopment, and pre-construction

A key component of our business model is our disciplined allocation of capital to the development and redevelopment of new

Class A/A+ properties, as well as property enhancements identified during the underwriting of certain acquired properties. These efforts

are primarily concentrated in collaborative Megacampus™ ecosystems within AAA life science innovation clusters, as well as other

strategic locations that support innovation and growth. These projects are generally focused on providing high-quality, generic, and

reusable spaces that meet the real estate requirements of a wide range of tenants. Upon completion, each development or

redevelopment project is expected to generate increases in rental income, net operating income, and cash flows. Our development and

redevelopment projects are generally in locations that are highly desirable to high-quality entities, which we believe results in higher

occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

Development projects generally consist of the ground-up development of generic and reusable laboratory facilities.

Redevelopment projects consist of the permanent change in use of acquired office, warehouse, or shell space into laboratory space.

We generally will not commence new development projects for aboveground construction of new Class A/A+ laboratory space without

first securing significant pre-leasing for such space, except when there is solid market demand for high-quality Class A/A+ properties.

Pre-construction activities include entitlements, permitting, design, site work, and other activities preceding commencement of

construction of aboveground building improvements. The advancement of pre-construction efforts is focused on reducing the time

required to deliver projects to prospective tenants. These critical activities add significant value for future ground-up development and

are required for the vertical construction of buildings. Ultimately, these projects will provide high-quality facilities and are expected to

generate significant revenue and cash flows.

134

Development, redevelopment, and pre-construction spending also includes the following costs: (i) amounts to bring certain

acquired properties up to market standard and/or other costs identified during the acquisition process (generally within two years of

acquisition) and (ii) permanent conversion of space for highly flexible, move-in-ready laboratory space to foster the growth of promising

early- and growth-stage life science companies.

Revenue-enhancing and repositioning capital expenditures represent spending to reposition or significantly change the use of

a property, including through improvement in the asset quality from Class B to Class A/A+.

Non-revenue-enhancing capital expenditures represent costs required to maintain the current revenues of a stabilized

property, including the associated costs for renewed and re-leased space.

Dividend payout ratio (common stock)

Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (shares of

common stock outstanding on the respective record dates multiplied by the related dividend per share) to funds from operations

attributable to Alexandria’s common stockholders – diluted, as adjusted.

Dividend yield

Dividend yield for the quarter represents the annualized quarter dividend divided by the closing common stock price at the end

of the quarter.

Fixed-charge coverage ratio

Fixed-charge coverage ratio is a non-GAAP financial measure representing the ratio of Adjusted EBITDA to cash interest and

fixed charges. We believe that this ratio is useful to investors as a supplemental measure of our ability to satisfy fixed financing

obligations and preferred stock dividends. Cash interest is equal to interest expense calculated in accordance with GAAP plus

capitalized interest, less amortization of loan fees and debt premiums (discounts).

The following table reconciles interest expense, the most directly comparable financial measure calculated and presented in

accordance with GAAP, to cash interest and computes fixed-charge coverage ratio for the three months and years ended December 31,

2025 and 2024 (dollars in thousands):

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Adjusted EBITDA

$524,361

$568,370

$2,141,811

$2,228,921

Interest expense

$65,674

$55,659

$226,698

$185,838

Capitalized interest

81,845

81,586

330,424

330,961

Amortization of loan fees

(4,481)

(4,620)

(18,292)

(17,130)

Amortization of debt discounts

(327)

(333)

(1,336)

(1,309)

Cash interest and fixed charges

$142,711

$132,292

$537,494

$498,360

Fixed-charge coverage ratio:

– quarter annualized

3.7x

4.3x

N/A

N/A

– trailing 12 months

N/A

N/A

4.0x

4.5x

We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a

reconciliation for fixed-charge coverage ratio on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing

and/or amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and

financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized gains or losses on non-real estate

investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit

losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would

potentially be misleading for our investors.

135

Gross assets

Gross assets are calculated as total assets plus accumulated depreciation as of December 31, 2025 and 2024 (in thousands):

December 31,

2025

2024

Total assets

$34,081,835

$37,527,449

Accumulated depreciation

6,127,525

5,625,179

Gross assets

$40,209,360

$43,152,628

Incremental annual net operating income on development and redevelopment projects

Incremental annual net operating income represents the amount of net operating income, on an annual basis, expected to be

realized upon a project being placed into service and achieving full occupancy. Incremental annual net operating income is calculated

as the initial stabilized yield multiplied by the project’s total cost at completion.

Initial stabilized yield (unlevered)

Initial stabilized yield is calculated as the estimated amounts of net operating income at stabilization divided by our investment

in the property. For this calculation, we exclude any tenant-funded and tenant-built landlord improvements from our investment in the

property. Our initial stabilized yield excludes the benefit of leverage. Our cash rents related to our development and redevelopment

projects are generally expected to increase over time due to contractual annual rent escalations. Our estimates for initial stabilized

yields, initial stabilized yields (cash basis), and total costs at completion represent our initial estimates at the commencement of the

project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected

project yields or costs.

•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, and any amortization of deferred revenue related to tenant-

funded and tenant-built landlord improvements.

•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.

Investment-grade or publicly traded large cap tenants

Investment-grade or publicly traded large cap tenants represent tenants that are investment-grade rated or publicly traded

companies with an average daily market capitalization greater than $10 billion for the twelve months ended December 31, 2025, as

reported by Bloomberg Professional Services. Credit ratings from Moody’s Ratings and S&P Global Ratings reflect credit ratings of the

tenant’s parent entity, and there can be no assurance that a tenant’s parent entity will satisfy the tenant’s lease obligation upon such

tenant’s default. We monitor the credit quality and related material changes of our tenants. Material changes that cause a tenant’s

market capitalization to decrease below $10 billion, which are not immediately reflected in the twelve-month average, may result in their

exclusion from this measure.

Investments in real estate

The following table presents our new Class A/A+ development and redevelopment pipeline, excluding properties held for sale,

as a percentage of gross assets and as a percentage of annual rental revenue as of December 31, 2025 (dollars in thousands):

Percentage of

Book Value

Gross Assets

Annual Rental

Revenue

Projects under active construction

$3,181,012

8%

—%

Future development projects(1) and land parcels primarily located in

Megacampuses

3,607,452

9

1

Total Class A/A+ development and redevelopment pipeline, excluding

properties held for sale

6,788,464

17

1

Properties held for sale – land parcels

261,208

1

—

Total Class A/A+ development and redevelopment pipeline

$7,049,672

18%

1%

(1)Includes projects with existing buildings that are generating or can generate operating cash flows. Also includes development rights associated with existing operating

campuses.

136

The square footage presented in the table below is classified as operating as of December 31, 2025. These lease expirations

or vacant space at recently acquired properties represent future opportunities for which we have the intent, subject to market conditions

and leasing, to commence first-time conversion from non-laboratory space to laboratory space, or to commence future ground-up

development:

Dev/Redev

RSF of Lease Expirations Targeted for

Development and Redevelopment

Property/Submarket

2026

2027

Thereafter(1)

Total

Under construction project:

Campus Point by Alexandria/University Town Center

Dev

52,620

—

—

52,620

Future projects:

446, 458, and 500 Arsenal Street/Cambridge/Inner Suburbs

Dev

—

—

116,623

116,623

3000 Minuteman Road/Greater Boston

Redev

—

—

167,549

167,549

1122 and 1150 El Camino Real/South San Francisco

Dev

—

—

375,232

375,232

2100 and 2200 Geng Road/Greater Stanford

Dev

—

—

62,526

62,526

960 Industrial Road/Greater Stanford

Dev

—

—

112,590

112,590

Campus Point by Alexandria/University Town Center

Dev

—

—

96,805

96,805

Sequence District by Alexandria/Sorrento Mesa

Dev/Redev

—

—

555,754

555,754

410 West Harrison Street/Elliott Bay

Dev

—

—

17,205

17,205

Other/Seattle

Dev

—

—

63,057

63,057

Canada

Redev

—

—

247,743

247,743

—

—

1,815,084

1,815,084

Total

52,620

—

1,815,084

1,867,704

(1)Includes vacant square footage as of December 31, 2025.

Joint venture financial information

We present components of balance sheet and operating results information related to our real estate joint ventures, which are

not presented, or intended to be presented, in accordance with GAAP. We present the proportionate share of certain financial line items

as follows: (i) for each real estate joint venture that we consolidate in our financial statements, which are controlled by us through

contractual rights or majority voting rights, but of which we own less than 100%, we apply the noncontrolling interest economic

ownership percentage to each financial item to arrive at the amount of such cumulative noncontrolling interest share of each component

presented; and (ii) for each real estate joint venture that we do not control and do not consolidate, which are instead controlled jointly or

by our joint venture partners through contractual rights or majority voting rights, we apply our economic ownership percentage to each

financial item to arrive at our proportionate share of each component presented.

The components of balance sheet and operating results information related to our real estate joint ventures do not represent

our legal claim to those items. For each entity that we do not wholly own, the joint venture agreement generally determines what equity

holders can receive upon capital events, such as sales or refinancing, or in the event of a liquidation. Equity holders are normally

entitled to their respective legal ownership of any residual cash from a joint venture only after all liabilities, priority distributions, and

claims have been repaid or satisfied.

We believe that this information can help investors estimate the balance sheet and operating results information related to our

partially owned entities. Presenting this information provides a perspective not immediately available from consolidated financial

statements and one that can supplement an understanding of the joint venture assets, liabilities, revenues, and expenses included in

our consolidated results.

The components of balance sheet and operating results information related to our real estate joint ventures are limited as an

analytical tool as the overall economic ownership interest does not represent our legal claim to each of our joint ventures’ assets,

liabilities, or results of operations. In addition, joint venture financial information may include financial information related to the

unconsolidated real estate joint ventures that we do not control. We believe that in order to facilitate for investors a clear understanding

of our operating results and our total assets and liabilities, joint venture financial information should be examined in conjunction with our

consolidated statements of operations and balance sheets. Joint venture financial information should not be considered an alternative

to our consolidated financial statements, which are presented and prepared in accordance with GAAP.

137

Megacampus™

A Megacampus ecosystem is a cluster campus that consists of approximately 1 million RSF or greater, including operating,

active development/redevelopment, and land RSF less operating RSF expected to be demolished. We consider Megacampuses that

include a minimum of 750,000 operating RSF to be Established Megacampuses. These Megacampuses have realized the scale and

flexibility that deliver strategic optionality to our tenants. We present certain metrics related to our Established Megacampuses because

we believe they facilitate a more robust understanding of certain of our operating trends.

The following table reconciles our annual rental revenue and development and redevelopment pipeline RSF, excluding

properties classified as held for sale, as of December 31, 2025 (dollars in thousands):

Annual Rental

Revenue

Development and

Redevelopment

Pipeline RSF

Megacampus

$1,451,391

16,735,429

Core and non-core

410,665

4,867,151

Total

$1,862,056

21,602,580

Megacampus as a percentage of annual rental revenue and of total development and

redevelopment pipeline RSF

78%

77%

Net cash provided by operating activities after dividends

Net cash provided by operating activities after dividends is reduced by distributions to noncontrolling interests, excludes

liquidating distributions from asset sales, and excludes changes in operating assets and liabilities as they represent timing differences.

Net debt and preferred stock to Adjusted EBITDA

Net debt and preferred stock to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a

supplemental measure of evaluating our balance sheet leverage. Net debt and preferred stock is equal to the sum of total consolidated

debt less cash, cash equivalents, and restricted cash, plus preferred stock outstanding as of the end of the period. Refer to “Adjusted

EBITDA and Adjusted EBITDA margin” in this section for further information on the calculation of Adjusted EBITDA.

We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a

reconciliation for net debt and preferred stock to Adjusted EBITDA on a forward-looking basis. This is due to the inherent difficulty of

forecasting the timing and/or amount of items that depend on market conditions outside of our control, including the timing of

dispositions, capital events, and financing decisions, as well as quarterly components such as gain on sales of real estate, unrealized

gains or losses on non-real estate investments, impairments of real estate, impairments of non-real estate investments, and changes in

provision for expected credit losses on financial instruments. Our attempt to predict these amounts may produce significant but

inaccurate estimates, which would potentially be misleading for our investors.

138

The following table reconciles debt to net debt and preferred stock and computes the ratio to Adjusted EBITDA as of

December 31, 2025 and 2024 (dollars in thousands):

December 31,

2025

2024

Secured notes payable

$—

$149,909

Unsecured senior notes payable

12,047,394

12,094,465

Unsecured senior line of credit and commercial paper

353,161

—

Unamortized deferred financing costs

74,314

77,649

Cash and cash equivalents

(549,062)

(552,146)

Restricted cash

(4,693)

(7,701)

Preferred stock

—

—

Net debt and preferred stock

$11,921,114

$11,762,176

Adjusted EBITDA:

– quarter annualized

$2,097,444

$2,273,480

– trailing 12 months

$2,141,811

$2,228,921

Net debt and preferred stock to Adjusted EBITDA:

– quarter annualized

5.7x

5.2x

– trailing 12 months

5.6x

5.3x

Net operating income, net operating income (cash basis), and operating margin

The following table reconciles net income to net operating income and net operating income (cash basis) and computes

operating margin for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):

Year Ended December 31,

2025

2024

2023

Net (loss) income

$(1,216,726)

$510,733

$280,994

Equity in losses (earnings) of unconsolidated real estate joint ventures

9,631

(7,059)

(980)

General and administrative expenses

117,047

168,359

199,354

Interest expense

226,698

185,838

74,204

Depreciation and amortization

1,350,478

1,202,380

1,093,473

Impairment of real estate

2,202,818

223,068

461,114

Loss on early extinguishment of debt

107

—

—

Gain on sales of real estate

(642,445)

(129,312)

(277,037)

Investment loss

56,343

53,122

195,397

Net operating income

2,103,951

2,207,129

2,026,519

Straight-line rent revenue

(73,476)

(143,329)

(133,917)

Amortization of deferred revenue related to tenant-funded and -built

landlord improvements

(14,771)

(1,543)

—

Amortization of acquired below-market leases

(37,763)

(85,679)

(93,331)

Provision for expected credit losses on financial instruments

(56)

(434)

—

Net operating income (cash basis)

$1,977,885

$1,976,144

$1,799,271

Net operating income (from above)

$2,103,951

$2,207,129

$2,026,519

Total revenues

$3,026,556

$3,116,394

$2,885,699

Operating margin

70%

71%

70%

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Net operating income is a non-GAAP financial measure calculated as net income (loss), the most directly comparable financial

measure calculated and presented in accordance with GAAP, excluding equity in the earnings of our unconsolidated real estate joint

ventures, general and administrative expenses, interest expense, depreciation and amortization, impairments of real estate, gains or

losses on early extinguishment of debt, gains or losses on sales of real estate, and investment income or loss. We believe net operating

income provides useful information to investors regarding our financial condition and results of operations because it primarily reflects

those income and expense items that are incurred at the property level. Therefore, we believe net operating income is a useful measure

for investors to evaluate the operating performance of our consolidated real estate assets. Net operating income on a cash basis is net

operating income adjusted to exclude the effect of straight-line rent, amortization of acquired above- and below-market lease revenue,

amortization of deferred revenue related to tenant-funded and tenant-built landlord improvements, and changes in the provision for

expected credit losses on financial instruments required by GAAP. We believe that net operating income on a cash basis is helpful to

investors as an additional measure of operating performance because it eliminates straight-line rent revenue and the amortization of

acquired above- and below-market leases and tenant-funded and tenant-built landlord improvements.

Furthermore, we believe net operating income is useful to investors as a performance measure of our consolidated properties

because, when compared across periods, net operating income reflects trends in occupancy rates, rental rates, and operating costs,

which provide a perspective not immediately apparent from net income or loss. Net operating income can be used to measure the initial

stabilized yields of our properties by calculating net operating income generated by a property divided by our investment in the property.

Net operating income excludes certain components from net income in order to provide results that are more closely related to the

results of operations of our properties. For example, interest expense is not necessarily linked to the operating performance of a real

estate asset and is often incurred at the corporate level rather than at the property level. In addition, depreciation and amortization,

because of historical cost accounting and useful life estimates, may distort comparability of operating performance at the property level.

Impairments of real estate have been excluded in deriving net operating income because we do not consider impairments of real estate

to be property-level operating expenses. Impairments of real estate relate to changes in the values of our assets and do not reflect the

current operating performance with respect to related revenues or expenses. Our impairments of real estate represent the write-down in

the value of the assets to the estimated fair value less cost to sell. These impairments result from investing decisions or a deterioration

in market conditions. We also exclude realized and unrealized investment gain or loss, which results from investment decisions that

occur at the corporate level related to non-real estate investments in publicly traded companies and certain privately held entities.

Therefore, we do not consider these activities to be an indication of operating performance of our real estate assets at the property

level. Our calculation of net operating income also excludes charges incurred from changes in certain financing decisions, such as

losses on early extinguishment of debt and changes in provision for expected credit losses on financial instruments, as these charges

often relate to corporate strategy. Property operating expenses included in determining net operating income primarily consist of costs

that are related to our operating properties, such as utilities, repairs, and maintenance; rental expense related to ground leases;

contracted services, such as janitorial, engineering, and landscaping; property taxes and insurance; and property-level salaries.

General and administrative expenses consist primarily of accounting and corporate compensation, corporate insurance, professional

fees, rent, and supplies that are incurred as part of corporate office management. We calculate operating margin as net operating

income divided by total revenues.

We believe that in order to facilitate for investors a clear understanding of our operating results, net operating income should

be examined in conjunction with net income or loss as presented in our consolidated statements of operations. Net operating income

should not be considered as an alternative to net income or loss as an indication of our performance, nor as an alternative to cash flows

as a measure of our liquidity or our ability to make distributions.

We are not able to forecast the net income of future periods without unreasonable effort and therefore do not provide a

reconciliation for net operating income on a forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or

amount of items that depend on market conditions outside of our control, including the timing of dispositions, capital events, and

financing decisions, as well as components such as gain on sales of real estate, unrealized gains or losses on non-real estate

investments, impairments of real estate, impairments of non-real estate investments, and changes in provision for expected credit

losses on financial instruments. Our attempt to predict these amounts may produce significant but inaccurate estimates, which would

potentially be misleading for our investors.

Operating statistics

We present certain operating statistics related to our properties, including number of properties, RSF, occupancy percentage,

leasing activity, and contractual lease expirations as of the end of the period. We believe these measures are useful to investors

because they facilitate an understanding of certain trends for our properties. We compute the number of properties, RSF, occupancy

percentage, leasing activity, and contractual lease expirations at 100%, excluding RSF at properties classified as held for sale, for all

properties in which we have an investment, including properties owned by our consolidated and unconsolidated real estate joint

ventures. For operating metrics based on annual rental revenue, refer to “Annual rental revenue” in this section.

140

Same property comparisons

As a result of changes within our total property portfolio during the comparative periods presented, including changes from

assets acquired or sold, properties placed into development or redevelopment, and development or redevelopment properties recently

placed into service, the consolidated total income from rentals, as well as rental operating expenses in our operating results, can show

significant changes from period to period. In order to supplement an evaluation of our results of operations over a given quarterly or

annual period, we analyze the operating performance for all consolidated properties that were fully operating for the entirety of the

comparative periods presented, referred to as same properties. We separately present quarterly and year-to-date same property results

to align with the interim financial information required by the SEC in our management’s discussion and analysis of our financial

condition and results of operations. These same properties are analyzed separately from properties acquired subsequent to the first day

in the earliest comparable quarterly or year-to-date period presented, properties that underwent development or redevelopment at any

time during the comparative periods, unconsolidated real estate joint ventures, properties classified as held for sale, and corporate

entities (legal entities performing general and administrative functions), which are excluded from same property results. Additionally,

termination fees, if any, are excluded from the results of same properties. Refer to “Same properties” in Item 7 in this annual report on

Form 10-K for additional information.

Stabilized occupancy date

The stabilized occupancy date represents the estimated date on which a development or redevelopment project is expected to

reach occupancy of 95% or greater.

Tenant recoveries

Tenant recoveries represent revenues comprising reimbursement of real estate taxes, insurance, utilities, repairs and

maintenance, common area expenses, and other operating expenses and earned in the period during which the applicable expenses

are incurred and the tenant’s obligation to reimburse us arises.

We classify rental revenues and tenant recoveries generated through the leasing of real estate assets within revenues in

income from rentals in our consolidated statements of operations. We provide investors with a separate presentation of rental revenues

and tenant recoveries in “Results of operations” in Item 7 in this annual report on Form 10-K because we believe it promotes investors’

understanding of our operating results. We believe that the presentation of tenant recoveries is useful to investors as a supplemental

measure of our ability to recover operating expenses under our triple net leases, including recoveries of utilities, repairs and

maintenance, insurance, property taxes, common area expenses, and other operating expenses, and of our ability to mitigate the effect

to net income for any significant variability to components of our operating expenses.

The following table reconciles income from rentals to tenant recoveries for the years ended December 31, 2025, 2024, and

2023 (in thousands):

Year Ended December 31,

2025

2024

2023

Income from rentals

$2,945,175

$3,049,706

$2,842,456

Rental revenues

(2,184,889)

(2,304,339)

(2,143,971)

Tenant recoveries

$760,286

$745,367

$698,485

Total equity capitalization

Total equity capitalization is equal to the outstanding shares of common stock multiplied by the closing price on the last trading

day at the end of each period presented.

Total market capitalization

Total market capitalization is equal to the sum of total equity capitalization and total debt.

Unencumbered net operating income as a percentage of total net operating income

Unencumbered net operating income as a percentage of total net operating income is a non-GAAP financial measure that we

believe is useful to investors as a performance measure of the results of operations of our unencumbered real estate assets as it

reflects those income and expense items that are incurred at the unencumbered property level. Unencumbered net operating income is

derived from assets classified in continuing operations, which are not subject to any mortgage, deed of trust, lien, or other security

interest, as of the period for which income is presented.

141

The following table summarizes unencumbered net operating income as a percentage of total net operating income for the

years ended December 31, 2025, 2024, and 2023 (dollars in thousands):

Year Ended December 31,

2025

2024

2023

Unencumbered net operating income

$2,101,038

$2,192,608

$2,022,177

Encumbered net operating income

2,913

14,521

4,342

Total net operating income

$2,103,951

$2,207,129

$2,026,519

Unencumbered net operating income as a percentage of total

net operating income

99.9%

99.3%

99.8%

Weighted-average shares of common stock outstanding – diluted

From time to time, we enter into capital market transactions, including forward equity sales agreements (“Forward

Agreements”), to fund acquisitions, to fund construction of our development and redevelopment projects, and for general working

capital purposes. While the Forward Agreements are outstanding, we are required to consider the potential dilutive effect of our Forward

Agreements under the treasury stock method. Under this method, we also include the dilutive effect of unvested restricted stock awards

(“RSAs”) with forfeitable dividends in the calculation of diluted shares. Refer to Note 13 – “Earnings per share” and Note 16 –

“Stockholders’ equity” to our consolidated financial statements in Item 15 in this annual report on Form 10-K for additional information.

The weighted-average shares of common stock outstanding used in calculating EPS – diluted, funds from operations per

share – diluted, and funds from operations per share – diluted, as adjusted, for the years ended December 31, 2025, 2024, and 2023

are calculated as follows. Also shown are the weighted-average unvested RSAs with nonforfeitable rights to dividends used in

calculating the amounts allocable to these awards pursuant to the two-class method for each of the respective periods presented below

(in thousands):

Year Ended December 31,

2025

2024

2023

Basic shares for earnings per share

170,307

172,071

170,909

Unvested RSAs with forfeitable dividends

—

—

—

Diluted shares for earnings per share

170,307

172,071

170,909

Basic shares for funds from operations per share and funds

from operations per share, as adjusted

170,307

172,071

170,909

Unvested RSAs with forfeitable dividends

83

—

—

Diluted shares for funds from operations per share and

funds from operations per share, as adjusted

170,390

172,071

170,909

Weighted-average unvested RSAs with nonforfeitable

dividends used in the allocations of net income, funds

from operations, and funds from operations, as adjusted

1,883

2,779

2,325

142