ALEXANDRIA REAL ESTATE EQUITIES, INC. (ARE) Business

ITEM 1. BUSINESS

Overview

We are a Maryland corporation formed in October 1994 that has elected to be taxed as a REIT for federal income tax

purposes. Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® company, is a best-in-class, mission-driven life science

REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate

niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems

in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle,

Maryland, Research Triangle, and New York City. As of December 31, 2025, Alexandria has a total market capitalization of

$20.75 billion and an asset base in North America that includes 35.9 million RSF of operating properties and 3.5 million RSF of

Class A/A+ properties undergoing construction.

We develop dynamic Megacampus ecosystems that enable and inspire the world’s most brilliant minds and innovative

companies to create life-changing scientific and technological innovations. We believe in the utmost professionalism, humility, and

teamwork. Our tenants include multinational pharmaceutical companies; public and private biotechnology companies; life science

product, service, and medical device companies; digital health, advanced technology, and agtech companies; academic and medical

research institutions; U.S. government research agencies; non-profit organizations; and venture capital firms. Alexandria has a

longstanding and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative

Megacampus environments that enhance our tenants’ ability to successfully recruit and retain world-class talent and inspire

productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies

through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and

diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater

long-term asset value.

As of December 31, 2025, we had 340 properties in North America consisting of approximately 39.4 million RSF of

operating properties and new Class A/A+ development and redevelopment properties under construction, including 47 operating

properties and development projects that are held by consolidated real estate joint ventures and three properties that are held by

unconsolidated real estate joint ventures. The occupancy percentage of our operating properties in North America was 90.9% as of

December 31, 2025. The 10-year average occupancy percentage of our operating properties as of December 31, 2025 was 95%.

Investment-grade or publicly traded large cap tenants represented 53% of our total annual rental revenue in effect as of

December 31, 2025. Additional information regarding our consolidated and unconsolidated real estate joint ventures is included in

“Item 7. Management’s discussion and analysis of financial condition and results of operations” in this annual report on Form 10-K.

For information regarding risk factors that may affect us, refer to “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.

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Business objective and strategies

A key element of our business strategy is our unique focus on Class A/A+ properties primarily located in collaborative

Megacampus™ ecosystems in AAA life science innovation clusters. Our Megacampus ecosystems are designed for optionality and

scalability, offering our tenants a clear path to address their growth requirements, including through our future developments and

redevelopments. Strategically located near top academic and medical research institutions and equipped with curated amenities and

services, and convenient access to transit, our Megacampus ecosystems are designed to support our tenants in attracting and retaining

top talent, which we believe is a key driver of tenant demand for our properties. Our strategy also includes drawing upon our deep,

broad, and long-standing real estate and life science industry relationships in order to retain tenants, identify and attract new and

leading tenants, and source additional real estate.

Our tenant base is broad and diverse within the life science industry. For a more detailed description of our properties and

tenants, refer to “Item 2. Properties” in this annual report on Form 10-K. We have an experienced Board of Directors (the “Board”) and

are led by an executive and senior management team with extensive experience in the real estate and life science industries.

Acquisitions

We seek to identify and acquire high-quality properties in our cluster markets. Critical evaluation of prospective property

acquisitions is an essential component of our acquisition strategy. When evaluating acquisition opportunities, we assess a full range of

matters relating to the prospective property or properties, including:

•Proximity to centers of innovation and technological advances;

•Location of the property and our strategy in the relevant market, including our Megacampus strategy;

•Quality of existing and prospective tenants;

•Condition and capacity of the building infrastructure;

•Physical condition of the structure and common area improvements;

•Quality and generic characteristics of the improvements;

•Opportunities available for leasing vacant space and for re-tenanting or renewing occupied space;

•Availability of and/or ability to add appropriate tenant amenities;

•Availability of land for future ground-up development of new space;

•Opportunities to generate higher rent through redevelopment of existing space;

•The property’s unlevered yields;

•Potential impacts of climate change and extreme weather conditions; and

•Our ability to increase the property’s long-term financial returns.

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.

Another key component of our business model is our redevelopment of acquired office, warehouse, or shell space into high-

quality, generic, and reusable laboratory space that can be leased at higher rental rates. Our redevelopment strategy generally includes

significant pre-leasing of projects prior to the commencement of redevelopment.

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Non-real estate investments

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

invest primarily in highly innovative entities whose focus on the development of therapies and products that advance human health and

transform patients’ lives is aligned with Alexandria’s purpose of making a positive and meaningful impact on the health, safety, and well-

being of the global community. Our status as a REIT limits our ability to make such non-real estate investments. Therefore, we conduct,

and will continue to conduct, our non-real estate investment activities in a manner that complies with REIT requirements.

Balance sheet and financial strategy

We seek to maximize balance sheet liquidity and flexibility, cash flows, and cash available for distribution to our stockholders

through the ownership, operation, management, and selective acquisition, development, and redevelopment of new Class A/A+

properties primarily located in collaborative Megacampus ecosystems in AAA life science innovation clusters, as well as the prudent

management of our balance sheet. In particular, we seek to maximize balance sheet liquidity and flexibility, cash flows, and cash

available for distribution to our stockholders by:

•Maintaining access to diverse sources of capital, which include, among others, net cash flows from operating activities

after dividends, incremental leverage-neutral debt supported by growth in EBITDA, strategic value harvesting and asset

recycling through real estate dispositions and sales of partial interests, non-real estate investment sales, sales of equity,

and joint venture capital;

•Maintaining significant liquidity through borrowing capacity under our unsecured senior line of credit and commercial

paper program, secured construction loans, marketable securities, issuances of forward equity contracts from time to time,

and cash, cash equivalents, and restricted cash;

•Focusing on opportunities to improve our credit profile;

•Minimizing the amount of debt maturing in a single year;

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

•Maintaining low to modest leverage;

•Minimizing variable interest rate risk;

•Generating high-quality, strong, and increasing operating cash flows;

•Selectively selling real estate assets, including land parcels, non-core operating assets, and sales of partial interests, and

reinvesting the proceeds into our development and redevelopment projects;

•Allocating capital to Class A/A+ properties located in collaborative Megacampus ecosystems in AAA life science

innovation clusters;

•Maintaining geographic diversity in intellectual centers of innovation;

•Selectively acquiring high-quality life science space in our target innovation cluster submarkets at prices that enable us to

realize attractive returns;

•Selectively developing properties in our target innovation cluster submarkets;

•Selectively redeveloping acquired office, warehouse, or shell space, or newly acquired properties, into high-quality,

generic, and reusable laboratory space that can be leased at higher rental rates in our target innovation cluster

submarkets;

•Renewing existing tenant space at higher rental rates to the extent possible;

•Minimizing tenant improvement costs;

•Improving investment returns through the leasing of vacant space and the replacing of existing tenants with new tenants

at higher rental rates;

•Executing leases with high-quality tenants and proactively monitoring tenant health;

•Maintaining solid occupancy while attaining high rental rates;

•Realizing contractual rental rate escalations; and

•Implementing effective cost control measures, including negotiating pass-through provisions in tenant leases for operating

expenses and certain capital expenditures.

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Competition

In general, other laboratory and technology properties are located in close proximity to our properties. The amount of rentable

space available in any market could have a material effect on our ability to rent space and on the rental rates we can achieve for our

properties. In addition, we compete for investment opportunities with other REITs, insurance companies, pension and investment funds,

private equity entities, partnerships, developers, investment companies, owners/occupants, and foreign investors. Many of these

entities have substantially greater financial resources than we do and may be able to invest more than we can or accept more risk than

we are willing to accept. These entities may be less sensitive to risks with respect to the creditworthiness of a tenant or the overall

expected returns from real estate investments. In addition, as a result of their financial resources, our competitors may offer more free

rent concessions, lower rental rates, or higher tenant improvement allowances in order to attract tenants. These leasing incentives

could hinder our ability to maintain or raise rents and attract or retain tenants. Competition may also reduce the number of suitable

investment opportunities available to us or may increase the bargaining power of property owners seeking to sell. Competition in

acquiring existing properties and land, both from institutional capital sources and from other REITs, has been very strong over the past

several years; however, we believe we have differentiated ourselves from our competitors. With our founding in 1994, Alexandria

pioneered the life science real estate niche. Today, we are the preeminent and longest-tenured owner, operator, and developer of

collaborative Megacampus ecosystems in AAA life science innovation cluster locations. We continue to maintain and cultivate many of

the most important and strategic relationships in the life science industry.

Segment information

As of December 31, 2025, our operating segments consist of the following geographic markets: Greater Boston, San

Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, New York City, and Texas. Refer to Note 18 – “Segment

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

Regulation

General

Properties in our markets are subject to various laws, ordinances, and regulations, including regulations relating to common

areas. We believe we have the necessary permits and approvals to operate each of our properties.

Americans with Disabilities Act

Our properties must comply with Title III of the Americans with Disabilities Act of 1990 (“ADA”) to the extent that such

properties are “public accommodations” as defined by the ADA. The ADA may require removal of structural barriers to permit access by

persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe that our

properties are in substantial compliance with the ADA and that we will not be required to incur substantial capital expenditures to

address the requirements of the ADA. However, noncompliance with the ADA could result in the imposition of fines or an award of

damages to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we continue to assess

our properties and make alterations as appropriate in this respect.

Environmental matters

Under various environmental protection laws, a current or previous owner or operator of real estate may be liable for

contamination resulting from the presence or discharge of hazardous or toxic substances at that property and may be required to

investigate and remediate contamination located on or emanating from that property. Such laws often impose liability without regard to

whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and

several. Previous owners may have used some of our properties for industrial and other purposes, so those properties may contain

some level of environmental contamination. The presence of contamination or the failure to remediate contamination at our properties

may expose us to third-party liability or may materially adversely affect our ability to sell, lease, or develop the real estate or to borrow

capital using the real estate as collateral.

State regulations, such as California’s Connelly Act and Proposition 65, among others, require certain building owners and

operators to disclose information on the presence of asbestos or other harmful substances. Some of our properties may have asbestos-

containing building materials. Environmental laws require that asbestos-containing building materials be properly managed and

maintained and may impose fines and penalties on building owners or operators for failure to comply with these requirements. These

laws may also allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos-

containing building materials.

In addition, some of our tenants handle hazardous substances and wastes as part of their routine operations at our properties.

Environmental laws and regulations subject our tenants, and potentially us, to liability resulting from such activities. Environmental

liabilities could also affect a tenant’s ability to make rental payments to us. We require our tenants to comply with these environmental

laws and regulations and to indemnify us against any related liabilities.

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Independent environmental consultants have conducted Phase I or similar environmental site assessments on the properties

in our portfolio. Site assessments are intended to discover and evaluate information regarding the environmental condition of the

surveyed property and surrounding properties and do not generally include soil samplings, subsurface investigations, or an asbestos

survey. To date, these assessments have not revealed any material environmental liability that we believe would have a material

adverse effect on our business, assets, or results of operations, and ongoing expenditures to comply with existing environmental

regulations are not expected to be material. Nevertheless, it is possible that the assessments on our properties have not revealed all

environmental conditions, liabilities, or compliance concerns that may have arisen after the review was completed or may arise in the

future; and future laws, ordinances, or regulations may also impose additional material environmental liabilities.

Insurance

With respect to our properties, we carry commercial general liability insurance, and all-risk property insurance, including

business interruption and loss of rental income coverage. We select policy specifications and insured limits that we believe to be

appropriate given the relative risk of loss and the cost of the coverage. In addition, we have obtained earthquake insurance for certain

properties located in the vicinity of known active earthquake zones in an amount and with deductibles we believe are commercially

reasonable. We also carry environmental insurance and title insurance policies on our properties. We generally obtain title insurance

policies when we acquire a property, with each policy covering an amount equal to the initial purchase price of each property.

Accordingly, any of our title insurance policies may be in an amount less than the current value of the related property. Additional

information about risk factors that may affect us is included in “Item 1A. Risk factors” in this annual report on Form 10-K.

Available information

Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, including any

amendments to the foregoing reports, are available, free of charge, through our corporate website at www.are.com as soon as is

reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The current charters of our Board of

Directors’ Audit, Compensation, and Nominating & Governance Committees, along with our Corporate Governance Guidelines and

Business Integrity Policy and Procedures for Reporting Non-Compliance (the “Business Integrity Policy”), are also available on our

corporate website. Additionally, any amendments to, and waivers of, our Business Integrity Policy that apply to our Chief Executive

Officer or our Chief Financial Officer will be available free of charge on our corporate website in accordance with applicable SEC and

NYSE requirements. Written requests should be sent to Alexandria Real Estate Equities, Inc., 26 North Euclid Avenue, Pasadena,

California 91101, Attention: Investor Relations. The public may also download these materials from the SEC’s website at www.sec.gov.

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Human capital

As of December 31, 2025, we had 514 employees. We place a significant focus on building loyalty and trusted relationships

across our workforce. We maintain a Business Integrity Policy that applies to all employees, and its receipt and review by each

employee is documented and verified annually. To promote an exceptional corporate culture, Alexandria monitors employee satisfaction,

actively seeks feedback, and strives to enhance our benefit offerings to meet the needs of our employees. We conduct annual

performance reviews and hold regular meetings through our talent management team to gather insights and drive continuous

improvements to the overall employee experience.

We recognize that the fundamental strength of Alexandria is driven by the contributions of each team member and that our

future growth relies on their continued success. We make substantial efforts to hire, develop, and retain talented employees, and we

have an exceptional track record of promoting highly qualified candidates from within the Company. Our executive and senior

management teams, represented by 59 individuals at the senior vice president level and above, have an average of 24 years of real

estate experience, including 13 years with Alexandria. Moreover, our executive management team alone averages 15 years of

experience with the Company. Alexandria’s executive and senior management teams have unique experience and expertise in creating,

owning, and operating highly dynamic and collaborative Megacampus ecosystems in key life science cluster locations. These teams

include regional market directors with leading reputations and long-standing relationships within the life science community in their

respective markets. We believe that our expertise, experience, reputation, and key relationships in the real estate and life science

industries provide Alexandria with significant competitive advantages in attracting new business opportunities.

Our ability to retain talent further supports our business continuity and leadership stability. From 2021 to 2025, our voluntary

and total turnover rates averaged 4.6% and 9.3%, respectively, which are below the REIT industry averages of 12.0% and 17.0%,

respectively, as reported in the 2025 Nareit Compensation & Benefits Survey (data for 2024).

Offering robust benefits to support our employees’ health and overall success

We provide a robust benefits package intended to meet and exceed the needs of our employees and their families. Our

company-sponsored benefits cover 100% of insurance premiums for both employees and their dependents and include a wide range of

offerings, such as a high-coverage, low-deductible preferred provider organization (“PPO”) medical plan, PPO dental and orthodontia

coverage, a vision plan, a comprehensive prescription drug program, infertility and family planning benefits, short-term and long-term

disability benefits, and life and accidental death and dismemberment coverage.

Investing in professional development and training

We provide meaningful opportunities for growth and development through a variety of learning opportunities, including

development programs that leverage one-on-one support, social learning, instructor-led trainings, on-demand trainings and resources,

and a highly utilized mentoring program. Development programs and trainings cover topics such as leadership development, project

management, business writing, change management, interviewing, presentations, productivity, goal setting, delegation, communication,

and feedback. Our mentoring program enables employees to partner with senior leaders throughout the organization for support and

career guidance.