10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-12993

ALEXANDRIA REAL ESTATE EQUITIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	95-4502084
(State or other jurisdiction of<br><br>incorporation or organization)	(I.R.S. Employer Identification Number)

26 North Euclid Avenue, Pasadena, California 91101

(Address of principal executive offices) (Zip code)

(626) 578-0777

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ARE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and

posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period

that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting

company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 15, 2025, 172,988,874 shares of common stock, par value $0.01 per share, were outstanding.

		Page
PART I – FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS (UNAUDITED)
	Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 ..........................................................	1
	Consolidated Financial Statements for the Three Months Ended March 31, 2025 and 2024:
	Consolidated Statements of Operations ...................................................................................................................	2
	Consolidated Statements of Comprehensive Income ............................................................................................	3
	Consolidated Statements of Changes in Stockholders’ Equity and Noncontrolling Interests ..........................	4
	Consolidated Statements of Cash Flows ................................................................................................................	6
	Notes to Consolidated Financial Statements ....................................................................................................................	8
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF<br><br>OPERATIONS ........................................................................................................................................................................	44
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .........................................................	104
Item 4.	CONTROLS AND PROCEDURES .....................................................................................................................................	105
PART II – OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS ......................................................................................................................................................	106
Item 1A.	RISK FACTORS ....................................................................................................................................................................	107
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS ...................................................	109
Item 5.	OTHER INFORMATION .......................................................................................................................................................	109
Item 6.	EXHIBITS ...............................................................................................................................................................................	110
SIGNATURES .................................................................................................................................................................................................		111

GLOSSARY

The following abbreviations or acronyms that may be used in this document

shall have the adjacent meanings set forth below:

ASU	Accounting Standards Update
ATM	At the Market
CIP	Construction in Progress
EPS	Earnings per Share
FASB	Financial Accounting Standards Board
FFO	Funds From Operations
GAAP	U.S. Generally Accepted Accounting Principles
IRS	Internal Revenue Service
JV	Joint Venture
Nareit	National Association of Real Estate Investment Trusts
NAV	Net Asset Value
NYSE	New York Stock Exchange
REIT	Real Estate Investment Trust
RSF	Rentable Square Feet/Foot
SEC	Securities and Exchange Commission
SF	Square Feet/Foot
SoDo	South of Downtown submarket of Seattle
SOFR	Secured Overnight Financing Rate
SoMa	South of Market submarket of the San Francisco Bay Area
U.S.	United States
VIE	Variable Interest Entity

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Alexandria Real Estate Equities, Inc.

Consolidated Balance Sheets

(In thousands)

	March 31, 2025	December 31, 2024
	(Unaudited)
Assets
Investments in real estate	$32,121,712	$32,110,039
Investments in unconsolidated real estate joint ventures	50,086	39,873
Cash and cash equivalents	476,430	552,146
Restricted cash	7,324	7,701
Tenant receivables	6,875	6,409
Deferred rent	1,210,584	1,187,031
Deferred leasing costs	489,287	485,959
Investments	1,479,688	1,476,985
Other assets	1,758,442	1,661,306
Total assets	$37,600,428	$37,527,449
Liabilities, Noncontrolling Interests, and Equity
Secured notes payable	$150,807	$149,909
Unsecured senior notes payable	12,640,144	12,094,465
Unsecured senior line of credit and commercial paper	299,883	—
Accounts payable, accrued expenses, and other liabilities	2,281,414	2,654,351
Dividends payable	228,622	230,263
Total liabilities	15,600,870	15,128,988
Commitments and contingencies
Redeemable noncontrolling interests	9,612	19,972
Alexandria Real Estate Equities, Inc.’s stockholders’ equity:
Common stock	1,701	1,722
Additional paid-in capital	17,509,148	17,933,572
Accumulated other comprehensive loss	(46,202)	(46,252)
Alexandria Real Estate Equities, Inc.’s stockholders’ equity	17,464,647	17,889,042
Noncontrolling interests	4,525,299	4,489,447
Total equity	21,989,946	22,378,489
Total liabilities, noncontrolling interests, and equity	$37,600,428	$37,527,449

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2025	2024
Revenues:
Income from rentals	$743,175	$755,551
Other income	14,983	13,557
Total revenues	758,158	769,108
Expenses:
Rental operations	226,395	218,314
General and administrative	30,675	47,055
Interest	50,876	40,840
Depreciation and amortization	342,062	287,554
Impairment of real estate	32,154	—
Total expenses	682,162	593,763
Equity in (losses) earnings of unconsolidated real estate joint ventures	(507)	155
Investment (loss) income	(49,992)	43,284
Gain on sales of real estate	13,165	392
Net income	38,662	219,176
Net income attributable to noncontrolling interests	(47,601)	(48,631)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	(8,939)	170,545
Net income attributable to unvested restricted stock awards	(2,660)	(3,659)
Net (loss) income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders	$(11,599)	$166,886
Net (loss) income per share attributable to Alexandria Real Estate Equities, Inc.’s common<br><br>stockholders:
Basic	$(0.07)	$0.97
Diluted	$(0.07)	$0.97

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2025	2024
Net income	$38,662	$219,176
Other comprehensive income (loss)
Unrealized gains (losses) on foreign currency translation:
Unrealized foreign currency translation gains (losses) arising during the period	50	(7,919)
Unrealized gains (losses) on foreign currency translation, net	50	(7,919)
Total other comprehensive income (loss)	50	(7,919)
Comprehensive income	38,712	211,257
Less: comprehensive income attributable to noncontrolling interests	(47,601)	(48,631)
Comprehensive (loss) income attributable to Alexandria Real Estate Equities, Inc.’s stockholders	$(8,889)	$162,626

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of<br><br>Common<br><br>Shares	Common<br><br>Stock	Additional<br><br>Paid-In<br><br>Capital	Retained<br><br>Earnings	Accumulated<br><br>Other<br><br>Comprehensive<br><br>Loss	Noncontrolling<br><br>Interests	Total<br><br>Equity	Redeemable<br><br>Noncontrolling<br><br>Interests
Balance as of December 31, 2024	172,203,443	$1,722	$17,933,572	$—	$(46,252)	$4,489,447	$22,378,489	$19,972
Net (loss) income	—	—	—	(8,939)	—	47,331	38,392	270
Total other comprehensive income	—	—	—	—	50	—	50	—
Contributions from and sales of noncontrolling interests	—	—	54	—	—	54,354	54,408	—
Distributions to and redemption of noncontrolling interests	—	—	(7,048)	—	—	(65,833)	(72,881)	(10,630)
Issuance pursuant to stock plan	125,280	1	32,755	—	—	—	32,756	—
Taxes related to net settlement of equity awards	(46,547)	—	(4,735)	—	—	—	(4,735)	—
Repurchase of common stock	(2,152,293)	(22)	(208,165)	—	—	—	(208,187)	—
Dividends declared on common stock ($1.32 per share)	—	—	—	(228,346)	—	—	(228,346)	—
Reclassification of distributions and net loss	—	—	(237,285)	237,285	—	—	—	—
Balance as of March 31, 2025	170,129,883	$1,701	$17,509,148	$—	$(46,202)	$4,525,299	$21,989,946	$9,612

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Consolidated Statement of Changes in Stockholders’ Equity and Noncontrolling Interests

(Dollars in thousands)

(Unaudited)

	Alexandria Real Estate Equities, Inc.’s Stockholders’ Equity
	Number of<br><br>Common<br><br>Shares	Common<br><br>Stock	Additional<br><br>Paid-In<br><br>Capital	Retained<br><br>Earnings	Accumulated<br><br>Other<br><br>Comprehensive<br><br>Loss	Noncontrolling<br><br>Interests	Total<br><br>Equity	Redeemable<br><br>Noncontrolling<br><br>Interests
Balance as of December 31, 2023	171,910,599	$1,719	$18,485,352	$—	$(15,896)	$4,135,338	$22,606,513	$16,480
Net income	—	—	—	170,545	—	48,359	218,904	272
Total other comprehensive loss	—	—	—	—	(7,919)	—	(7,919)	—
Contributions from and sales of noncontrolling interests	—	—	7,201	—	—	180,978	188,179	—
Distributions to and redemption of noncontrolling interests	—	—	(8,070)	—	—	(67,907)	(75,977)	(382)
Transfer of noncontrolling interests	—	—	—	—	—	(250)	(250)	250
Reallocation of capital to joint venture partner	—	—	(30,185)	—	—	30,185	—	—
Issuance pursuant to stock plan	164,784	2	39,376	—	—	—	39,378	—
Taxes related to net settlement of equity awards	(67,416)	(1)	(7,395)	—	—	—	(7,396)	—
Dividends declared on common stock ($1.27 per share)	—	—	—	(222,134)	—	—	(222,134)	—
Reclassification of distributions in excess of earnings	—	—	(51,589)	51,589	—	—	—	—
Balance as of March 31, 2024	172,007,967	$1,720	$18,434,690	$—	$(23,815)	$4,326,703	$22,739,298	$16,620

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.<br><br>Consolidated Statements of Cash Flows<br><br>(In thousands)<br><br>(Unaudited)
	Three Months Ended March 31,
	2025	2024
Operating Activities:
Net income	$38,662	$219,176
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	342,062	287,554
Impairment of real estate	32,154	—
Gain on sales of real estate	(13,165)	(392)
Equity in losses (earnings) of unconsolidated real estate joint ventures	507	(155)
Distributions of earnings from unconsolidated real estate joint ventures	172	884
Amortization of loan fees	4,691	4,142
Amortization of debt discounts	349	318
Amortization of acquired above- and below-market leases	(15,222)	(30,340)
Deferred rent	(22,023)	(48,251)
Stock compensation expense	10,064	17,125
Investment loss (income)	49,992	(43,284)
Changes in operating assets and liabilities:
Tenant receivables	(467)	731
Deferred leasing costs	(26,645)	(23,970)
Other assets	(37,034)	(40,728)
Accounts payable, accrued expenses, and other liabilities	(156,148)	(1,653)
Net cash provided by operating activities	207,949	341,157
Investing Activities:
Proceeds from sales of real estate	68,182	16,670
Additions to real estate	(645,841)	(693,268)
Purchases of real estate	—	(194,002)
Change in escrow deposits	(9,506)	(1,008)
Investments in unconsolidated real estate joint ventures	(10,994)	(3,224)
Additions to non-real estate investments	(69,311)	(60,572)
Sales of and distributions from non-real estate investments	12,691	40,550
Net cash used in investing activities	$(654,779)	$(894,854)

Alexandria Real Estate Equities, Inc.<br><br>Consolidated Statements of Cash Flows<br><br>(In thousands)<br><br>(Unaudited)
	Three Months Ended March 31,
	2025	2024
Financing Activities:
Borrowings under secured notes payable	$824	$10,216
Proceeds from issuance of unsecured senior notes payable	548,532	998,806
Proceeds from issuances under commercial paper program	2,700,000	3,170,000
Repayments of borrowings under commercial paper program	(2,400,000)	(3,270,000)
Payments of loan fees	(5,406)	(10,118)
Taxes paid related to net settlement of equity awards	(5,558)	(23,964)
Repurchase of common stock	(208,187)	—
Dividends on common stock	(229,987)	(221,824)
Contributions from and sales of noncontrolling interests	54,409	82,853
Distributions to and purchases of noncontrolling interests	(83,852)	(111,540)
Net cash provided by financing activities	370,775	624,429
Effect of foreign exchange rate changes on cash and cash equivalents	(38)	192
Net (decrease) increase in cash, cash equivalents, and restricted cash	(76,093)	70,924
Cash, cash equivalents, and restricted cash as of the beginning of period	559,847	660,771
Cash, cash equivalents, and restricted cash as of the end of period	$483,754	$731,695
Supplemental Disclosure and Non-Cash Investing and Financing Activities:
Cash paid during the period for interest, net of interest capitalized	$33,776	$34,901
Accrued construction for current-period additions to real estate	$147,045	$318,041
Transfer of real estate assets and/or equipment from tenants	$39,950	$11,965
Notes receivable issued in connection with sales of real estate	$91,000	$—
Derecognition of net investment in real estate from sales-type lease	$4,677	$—
Contribution of assets from and issuance of noncontrolling interest to real estate joint<br><br>venture partner	$—	$103,547
Reallocation of additional paid-in-capital to consolidated joint venture partner’s non-<br><br>controlling interest	$—	$30,185

The accompanying notes are an integral part of these consolidated financial statements.

Alexandria Real Estate Equities, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1.ORGANIZATION AND BASIS OF PRESENTATION

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® life science REIT, is the pioneer of the life science real estate

niche since its founding in 1994. 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 March 31, 2025, Alexandria has a total market capitalization

of $28.8 billion and an asset base in North America that includes 39.6 million RSF of operating properties and 4.0 million RSF of Class

A/A+ properties undergoing construction. As used in this quarterly report on Form 10-Q, references to the “Company,” “Alexandria,”

“ARE,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. The accompanying

unaudited consolidated financial statements include the accounts of Alexandria Real Estate Equities, Inc. and its consolidated

subsidiaries. All significant intercompany balances and transactions have been eliminated.

We have prepared the accompanying interim consolidated financial statements in accordance with GAAP and in conformity

with the rules and regulations of the SEC. In our opinion, these interim consolidated financial statements presented herein reflect all

adjustments, of a normal recurring nature, that are necessary to fairly present the interim consolidated financial statements. The results

of operations for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31,

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial

statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024. Any references to

our total market capitalization, number or quality of buildings or tenants, quality of location, square footage, number of leases, or

occupancy percentage, and any amounts derived from these values in these notes to consolidated financial statements are outside the

scope of our independent registered public accounting firm’s procedures.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

On an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly

owned by us in accordance with the consolidation accounting guidance. Our evaluation considers all of our variable interests, including

equity ownership, as well as fees paid to us for our involvement in the management of each partially owned entity. To fall within the

scope of the consolidation guidance, an entity must meet both of the following criteria:

•The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity

can be in the form of a partnership, limited liability company, or corporation, among others; and

•We have a variable interest in the legal entity — i.e., variable interests that are contractual, such as equity ownership, or

other financial interests that change with changes in the fair value of the entity’s net assets.

If an entity does not meet both criteria above, we apply other accounting literature, such as the equity method of accounting. If

an entity does meet both criteria above, we evaluate such entity for consolidation under either the variable interest model if the legal

entity meets any of the characteristics below to qualify as a VIE, or under the voting model for all other legal entities that are not VIEs.

A legal entity is determined to be a VIE if it has any of the following three characteristics:

1)The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2)The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest

holder(s) of voting rights); or

3)The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion

if they lack any of the following:

•The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence

the entity’s economic performance, as evidenced by:

•Substantive participating rights in day-to-day management of the entity’s activities; or

•Substantive kick-out rights over the party responsible for significant decisions;

•The obligation to absorb the entity’s expected losses; or

•The right to receive the entity’s expected residual returns.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

For an entity, including our real estate joint ventures, structured as a limited partnership or a limited liability company, our

evaluation of whether the equity holders (equity partners other than the general partner or the managing member of a joint venture) lack

the characteristics of a controlling financial interest includes the evaluation of whether the limited partners or non-managing members

(the noncontrolling equity holders) lack both substantive participating rights and substantive kick-out rights, defined as follows:

•Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating

decisions made in the ordinary course of business that most significantly influence the entity’s economic performance.

•Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause.

If we conclude that any of the three characteristics of a VIE are met, including that the equity holders lack the characteristics of

a controlling financial interest because they lack both substantive participating rights and substantive kick-out rights, we conclude that

the entity is a VIE and evaluate it for consolidation under the variable interest model.

Variable interest model

If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is

a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits — that is, (i) we have the

power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power) and (ii) we have the

obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE (benefits). We

consolidate VIEs whenever we determine that we are the primary beneficiary. Refer to Note 4 – “Consolidated and unconsolidated real

estate joint ventures” and Note 7 – “Investments” to our unaudited consolidated financial statements for information on specific entities

that qualify as VIEs. If we have a variable interest in a VIE but are not the primary beneficiary, we account for our investment using the

equity method.

Voting model

If a legal entity fails to meet any of the three characteristics of a VIE (i.e., insufficiency of equity, existence of non-substantive

voting rights, or lack of a controlling financial interest), we then evaluate such entity under the voting model. Under the voting model, we

consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares (or own a majority of the

limited partnership’s kick-out rights through voting interests), and that other equity holders do not have substantive participating rights.

Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for

information on specific joint ventures that qualify for evaluation under the voting model.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions

that affect the reported amounts of assets, liabilities, and equity; the disclosure of contingent assets and liabilities as of the date of the

consolidated financial statements; and the amounts of revenues and expenses during the reporting period. Actual results could

materially differ from those estimates.

Investments in real estate

Evaluation of business combination or asset acquisition

We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly

hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and

needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the

definition of a business is accounted for as an asset acquisition. If either of the following criteria is met, the integrated set of assets and

activities acquired would not qualify as a business:

•Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group

of similar identifiable assets; or

•The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together

significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction).

An acquired process is considered substantive if:

•The process includes an organized workforce (or includes an acquired contract that provides access to an organized

workforce) that is skilled, knowledgeable, and experienced in performing the process;

•The process cannot be replaced without significant cost, effort, or delay; or

•The process is considered unique or scarce.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Generally, our acquisitions of real estate or in-substance real estate do not meet the definition of a business 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) or because the acquisition does not include a substantive process in the form of an acquired workforce or

an acquired contract that cannot be replaced without significant cost, effort, or delay. When evaluating acquired service or management

contracts, we consider the nature of the services performed, the terms of the contract relative to similar arm’s-length contracts, and the

availability of comparable vendors in evaluating whether the acquired contract constitutes a substantive process.

Recognition of real estate acquired

We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly

hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and

needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the

definition of a business is accounted for as an asset acquisition.

For acquisitions of real estate or in-substance real estate that are accounted for as business combinations, we allocate the

acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and

previously existing ownership interests at fair value as of the acquisition date. Assets include intangible assets such as tenant

relationships, acquired in-place leases, and favorable intangibles associated with in-place leases in which we are the lessor. Liabilities

include unfavorable intangibles associated with in-place leases in which we are the lessor. In addition, for acquired in-place finance or

operating leases in which we are the lessee, acquisition consideration is allocated to lease liabilities and related right-of-use assets,

adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Any excess (deficit) of the

consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill (bargain purchase gain).

Acquisition costs related to business combinations are expensed as incurred.

Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the definition of a business

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 is similar to the accounting model for business

combinations, except that the acquisition consideration (including acquisition costs) is 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. As a

result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. Incremental and external direct

acquisition costs related to acquisitions of real estate or in-substance real estate (such as legal and other third-party services) are

capitalized.

We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its

components. The allocation of the consideration to the various components of properties acquired during the year can have an effect on

our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related

depreciation and amortization expense in our consolidated statements of operations. We apply judgment in utilizing available

comparable market information to assess relative fair value. We assess the relative fair values of tangible and intangible assets and

liabilities based on available comparable market information, including estimated replacement costs, rental rates, and recent market

transactions. In addition, we may use estimated cash flow projections that utilize appropriate discount and capitalization rates.

Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated

trends, and market/economic conditions that may affect the property.

The value of tangible assets acquired is based upon our estimation of fair value on an “as if vacant” basis. The value of

acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been

incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. If there is a

bargain fixed-rate renewal option for the period beyond the noncancelable lease term of an in-place lease, we evaluate intangible

factors, such as the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the

property is located, and the ability of the lessee to sublease the property during the renewal term, in order to determine the likelihood

that the lessee will renew. When we determine that there is reasonable assurance that such bargain purchase option will be exercised,

we consider the option in determining the intangible value of such lease and its related amortization period. We also recognize the

relative fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100%

interest when the acquisition constitutes a change in control of the acquired entity.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Depreciation and amortization

The values allocated to buildings and building improvements, land improvements, tenant improvements, and equipment are

depreciated on a straight-line basis. For buildings and building improvements, we depreciate using the shorter of the respective ground

lease terms or their estimated useful lives, not to exceed 40 years. Land improvements are depreciated over their estimated useful

lives, not to exceed 20 years. Tenant improvements are depreciated over their respective lease terms or estimated useful lives, and

equipment is depreciated over the shorter of the lease term or its estimated useful life. The values of the right-of-use assets are

amortized on a straight-line basis over the remaining terms of each related lease. The values of acquired in-place leases and

associated favorable intangibles (i.e., acquired above-market leases) are classified in other assets in our consolidated balance sheets

and are amortized over the remaining terms of the related leases as a reduction of income from rentals in our consolidated statements

of operations. The values of unfavorable intangibles (i.e., acquired below-market leases) associated with acquired in-place leases are

classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets and are amortized over the

remaining terms of the related leases as an increase in income from rentals in our consolidated statements of operations.

Capitalized project costs

We capitalize project costs, including pre-construction costs, interest, property taxes, insurance, and other costs directly

related and essential to the development, redevelopment, pre-construction, or construction of a project. Capitalization of development,

redevelopment, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use.

Fluctuations in our development, redevelopment, pre-construction, and construction activities could result in significant changes to total

expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as

incurred. Should development, redevelopment, pre-construction, or construction activity cease, interest, property taxes, insurance, and

certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and

maintenance are expensed as incurred.

Real estate sales

A property is classified as held for sale when all of the following criteria for a plan of sale have been met: (i) management,

having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its

present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions

required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within

one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

(vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the

plan will be withdrawn. Depreciation of assets ceases upon designation of a property as held for sale.

If the disposal of a property represents a strategic shift that has (or will have) a major effect on our operations or financial

results, such as (i) a major line of business, (ii) a major geographic area, (iii) a major equity method investment, or (iv) other major parts

of an entity, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued

operations in our consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing

operations to discontinued operations. The disposal of an individual property generally will not represent a strategic shift and therefore

will typically not meet the criteria for classification as a discontinued operation.

We recognize gains or losses on real estate sales in accordance with the accounting standard on the derecognition of

nonfinancial assets arising from contracts with noncustomers. Our ordinary output activities consist of the leasing of space to our

tenants in our operating properties, not the sales of real estate. Therefore, sales of real estate (in which we are the seller) qualify as

contracts with noncustomers. In our transactions with noncustomers, we apply certain recognition and measurement principles

consistent with our method of recognizing revenue arising from contracts with customers. Derecognition of the asset is based on the

transfer of control. If a real estate sales contract includes our ongoing involvement with the property, then we evaluate each promised

good or service under the contract to determine whether it represents a separate performance obligation, constitutes a guarantee, or

prevents the transfer of control. If a good or service is considered a separate performance obligation, an allocated portion of the

transaction price is recognized as revenue as we transfer the related good or service to the buyer.

The recognition of gain or loss on the sale of a partial interest also depends on whether we retain a controlling or

noncontrolling interest in the property. If we retain a controlling interest in the property upon completion of the sale, we continue to

reflect the asset at its book value, record a noncontrolling interest for the book value of the partial interest sold, and recognize additional

paid-in capital for the difference between the consideration received and the partial interest at book value. Conversely, if we retain a

noncontrolling interest upon completion of the sale of a partial interest of real estate, we recognize a gain or loss as if 100% of the asset

were sold.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of long-lived assets

Prior to and subsequent to the end of each quarter, we review current activities and changes in the business conditions of all of

our long-lived assets 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, 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, 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 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, estimated exit capitalization rates, and anticipated construction costs for projects under construction, which are based on

available market information, current and historical operating results, known trends, current market/economic conditions that may affect

the asset, 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 of the asset to

its estimated fair value. If an impairment charge is not required to be recognized, the recognition of depreciation or amortization is

adjusted prospectively, as necessary, to reduce the carrying amount of the asset to its estimated disposition value over the remaining

period that the asset is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or

redeveloped prior to the end of their useful lives.

We use the held for sale impairment model for our properties classified as held for sale, which is different from the held and

used impairment model. Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the

long-lived asset classified as held for sale exceeds its fair value less cost to sell. 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.

International operations

In addition to operating properties in the U.S., we have 11 properties in Canada. The functional currency for our subsidiaries

operating in the U.S. is the U.S. dollar. The local currency of a foreign subsidiary serves as its functional currency. The assets and

liabilities of our foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect as of the financial statement date.

Revenue and expense accounts of our foreign subsidiaries are translated using the weighted-average exchange rate for the periods

presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive income (loss) as a

separate component of total equity and are excluded from net income (loss).

Whenever a foreign investment meets the criteria for classification as held for sale, we evaluate the recoverability of the

investment under the held for sale impairment model. We may recognize an impairment charge if the carrying amount of the investment

exceeds its fair value less cost to sell. In determining an investment’s carrying amount, we consider its net book value and any

cumulative unrealized foreign currency translation adjustment related to the investment.

The appropriate amounts of foreign exchange rate gains or losses classified in accumulated other comprehensive income

(loss) are reclassified to net income (loss) when realized upon the sale of our investment or upon the complete or substantially

complete liquidation of our investment.

Investments

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

REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to

determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in

which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption

that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such

ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a

board seat or whether we participate in the investee’s policymaking process, among other criteria, to determine if we have the ability to

exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment

under the equity method, as described below. From time to time, we may hold equity investments in publicly traded companies that are

subject to contractual sale restrictions. We do not recognize a discount related to a contractual sale restriction.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments accounted for under the equity method

Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying

amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary

impairments. For additional information about our investments accounted for under the equity method, refer to Note 7 – “Investments” to

our unaudited consolidated financial statements.

Investments that do not qualify for the equity method of accounting

For investees over which we determine that we do not have the ability to exercise significant influence or control, we account

for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV

per share, or (iii) privately held entity that does not report NAV per share, as described below.

Investments in publicly traded companies

Our investments in publicly traded companies are classified as investments with readily determinable fair values and are

presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales

prices or quotes available on securities exchanges.

Investments in privately held companies

Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held

entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are

accounted for as follows:

Investments in privately held entities that report NAV per share

Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships,

are presented at fair value using NAV as a practical expedient, with changes in fair value classified in investment income (loss) in our

consolidated statements of operations. We use NAV per share reported by limited partnerships generally without adjustment, unless we

are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the

investment at our reporting date.

Investments in privately held entities that do not report NAV per share

Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative

under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes classified

in investment income (loss) in our consolidated statements of operations.

An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is

observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity

transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity

transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we

evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution

preferences, and conversion rights to the investments we hold.

Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share

We monitor equity method investments and investments in privately held entities that do not report NAV per share 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. These investments are evaluated 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 or 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 charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment income/loss recognition and classification

We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified in

investment income (loss) in our consolidated statements of operations. Unrealized gains and losses represent:

(i)changes in fair value for investments in publicly traded companies;

(ii)changes in NAV for investments in privately held entities that report NAV per share;

(iii)observable price changes for investments in privately held entities that do not report NAV per share; and

(iv)our share of unrealized gains or losses reported by our equity method investees.

Realized gains and losses on our investments represent the difference between proceeds received upon disposition of

investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our

share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and

represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity

method investments, if impairments are deemed other than temporary, to their estimated fair value.

Revenues

The table below provides details of our consolidated total revenues for the three months ended March 31, 2025 and 2024

(in thousands):

	Three Months Ended March 31,
	2025	2024
Income from rentals:
Revenues subject to the lease accounting standard:
Operating leases	$731,421	$746,061
Direct financing and sales-type leases	810	659
Revenues subject to the lease accounting standard	732,231	746,720
Revenues subject to the revenue recognition accounting standard	10,944	8,831
Income from rentals	743,175	755,551
Other income	14,983	13,557
Total revenues	$758,158	$769,108

During the three months ended March 31, 2025 and 2024, revenues that were subject to the lease accounting standard

aggregated $732.2 million, or 96.6%, and $746.7 million, or 97.1%, of our total revenue, respectively. Our other income consisted

primarily of management fees and interest income earned during each period presented. For a detailed discussion related to our

revenue streams, refer to “Lease accounting” and “Recognition of revenue arising from contracts with customers” in Note 2 – “Summary

of significant accounting policies” to our unaudited consolidated financial statements.

Lease accounting

Definition and classification of a lease

When we enter into a contract or amend an existing contract, we evaluate whether the contract meets the definition of a lease.

To meet the definition of a lease, the contract must meet all three criteria:

(i)One party (lessor) must hold an identified asset;

(ii)The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset

throughout the period of the contract; and

(iii)The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

We classify our leases as either finance leases or operating leases if we are the lessee, or sales-type, direct financing, or

operating leases if we are the lessor. We use the following criteria to determine if a lease is a finance lease (as a lessee) or sales-type

or direct financing lease (as a lessor):

(i)Ownership is transferred from lessor to lessee by the end of the lease term;

(ii)An option to purchase is reasonably certain to be exercised;

(iii)The lease term is for the major part of the underlying asset’s remaining economic life;

(iv)The present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset; or

(v)The underlying asset is specialized and is expected to have no alternative use at the end of the lease term.

If we meet any of the above criteria, we account for the lease as a finance, a sales-type, or a direct financing lease. If we do

not meet any of the criteria, we account for the lease as an operating lease.

A lease is accounted for as a sales-type lease if it is considered to transfer control of the underlying asset to the lessee. A

lease is accounted for as a direct financing lease if risks and rewards are conveyed without the transfer of control, which is normally

indicated by the existence of a residual value guarantee from an unrelated third party other than the lessee.

This classification will determine the method of recognition of the lease:

•For an operating lease, we recognize income from rentals if we are the lessor, or rental operations expense if we are the

lessee, over the term of the lease on a straight-line basis.

•For a sales-type lease or a direct financing lease, we recognize the income from rentals, or for a finance lease, we

recognize rental operations expense, over the term of the lease using the effective interest method.

•At inception of a sales-type lease or a direct financing lease, if we determine the fair value of the leased property is lower

than its carrying amount, we recognize a selling loss immediately at lease commencement. If fair value exceeds the

carrying amount of a lease, a gain is recognized at lease commencement on a sales-type lease. For a direct financing

lease, a gain is deferred at lease commencement and amortized over the lease term.

Lessor accounting

Costs to execute leases

We capitalize initial direct costs, which represent only incremental costs to execute a lease that would not have been incurred

if the lease had not been obtained. Costs that we incur to negotiate or arrange a lease, regardless of its outcome, such as for fixed

employee compensation, tax or legal advice to negotiate lease terms, and other costs, are expensed as incurred.

Operating leases

We account for the revenue from our lease contracts by utilizing the single component accounting policy. This policy requires

us to account for, by class of underlying asset, the lease component and nonlease component(s) associated with each lease as a single

component if two criteria are met:

(i)The timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and

(ii)The lease component would be classified as an operating lease if it were accounted for separately.

Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our

leases, and contingent rental payments. Nonlease components consist primarily of tenant recoveries representing reimbursements of

rental operating expenses under our triple net lease structure, including recoveries for property taxes, insurance, utilities, repairs and

maintenance, and common area expenses.

If the lease component is the predominant component, we account for all revenues under such lease as a single component in

accordance with the lease accounting standard. Conversely, if the nonlease component is the predominant component, all revenues

under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for

the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all

revenues from our operating leases under the lease accounting standard and classify these revenues as income from rentals in our

consolidated statements of operations.

We commence recognition of income from rentals related to the operating leases at the date the property is ready for its

intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. When a lease includes

construction of improvements, we determine whether the improvements are landlord or tenant assets. In determining if the

improvements are landlord or tenant improvements, we consider various factors, including, but not limited to, the following:

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

•Which party retains legal title to the improvements upon lease expiration;

•Whether the improvements are expected to have significant residual value at the end of the lease term;

•Whether the improvements are unique to the tenant;

•What happens to the improvements upon lease expiration (i.e., whether they are removed or preserved for the landlord);

•Which party bears all costs of the improvements (including the risk of cost overruns); and

•Which party supervises the construction of the improvements.

If the improvements are landlord assets, we capitalize such improvements. If the improvements are tenant assets, we do not

capitalize these assets. Improvements that qualify as tenant assets, if funded by us, are accounted for as lease incentives and

amortized as a reduction of revenue over the term of the lease. If the tenant funds improvements without reimbursement from us, and

we determine these improvements to be landlord assets, we consider the amount associated with the improvements to be non-cash

lease payments, which are recognized as incremental revenue over the term of the lease.

Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the

respective operating lease terms. We classify amounts expected to be received in later periods as deferred rent in our consolidated

balance sheets. Amounts received currently but recognized as revenue in future periods are classified in accounts payable, accrued

expenses, and other liabilities in our consolidated balance sheets.

Income from rentals related to variable payments includes tenant recoveries and contingent rental payments. Tenant

recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance,

and other operating expenses, are recognized as revenue in the period during which the applicable expenses are incurred and the

tenant’s obligation to reimburse us arises. Income from rentals related to other variable payments is recognized when associated

contingencies are removed.

We assess collectibility from our tenants of future lease payments for each of our operating leases. If we determine that

collectibility is probable, we recognize income from rentals based on the methodology described above. If we determine that

collectibility is not probable, we recognize an adjustment to lower our income from rentals. Furthermore, we may recognize a general

allowance at a portfolio level (not the individual level) if we do not expect to collect future lease payments in full.

For each lease for which we determine that collectibility of future lease payments is not probable, we cease the recognition of

income from rentals on a straight-line basis and limit the recognition of income to the lesser of payments collected from the lessee or

lease income that would have been recognized on a straight-line basis. We do not resume straight-line recognition of income from

rentals for these leases until we determine that the collectibility of future payments related to these leases is probable. We also record a

general allowance related to the deferred rent balances that at the portfolio level (not the individual level) are not expected to be

collected in full through the lease term. As of March 31, 2025 and December 31, 2024, our general allowance balance aggregated

$14.3 million and $21.3 million, respectively.

Direct financing and sales-type leases

Income from rentals related to direct financing and sales-type leases is recognized over the lease term using the effective

interest rate method. At lease commencement, we derecognize the underlying asset classified within investments in real estate and

record net investment in a lease within other assets in our consolidated balance sheets. This initial net investment is determined by

aggregating the present values of the total future lease payments and the estimated residual value of the property, less any unearned

income related to a direct financing lease. Over the lease term, the investment in the lease accretes in value, producing a constant

periodic rate of return on the net investment in the lease. Income from these leases is classified in income from rentals in our

consolidated statements of operations. Our net investment is reduced over time as lease payments are received.

We evaluate our net investment in direct financing and sales-type leases for impairment under the current expected credit

losses accounting standard. For more information, refer to “Provision for expected credit losses” in Note 2 – “Summary of significant

accounting policies” to our unaudited consolidated financial statements.

As a lessor, we classify a lease with variable lease payments that do not depend on an index or a rate as an operating lease

on the commencement date of the lease if both of the following criteria are met:

(i)The lease would have been classified as a sales-type lease or direct financing lease under the current lease accounting

standard; and

(ii)The sales-type lease or direct financing lease classification would have resulted in a selling loss at lease commencement.

We do not derecognize the underlying asset and do not recognize a loss upon lease commencement but continue to

depreciate the underlying asset over its useful life.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Lessee accounting

We have operating lease agreements in which we are the lessee consisting of ground and office leases. At the lease

commencement date (or at the acquisition date if the lease is acquired as part of a real estate acquisition), we are required to recognize

a liability to account for our future obligations under these operating leases, and a corresponding right-of-use asset.

The lease liability is measured based on the present value of the future lease payments, including payments during the term

under our extension options that we are reasonably certain to exercise. The present value of the future lease payments is calculated for

each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is

the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to

the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement

date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. We classify

the operating lease liability in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets.

The right-of-use asset is measured based on the corresponding lease liability, adjusted for initial direct leasing costs and any

other consideration exchanged with the landlord prior to the commencement of the lease, as well as adjustments to reflect favorable or

unfavorable terms of an acquired lease when compared with market terms at the time of acquisition. Subsequently, the right-of-use

asset is amortized on a straight-line basis during the lease term. We classify the right-of-use asset in other assets in our consolidated

balance sheets.

Recognition of revenue arising from contracts with customers

We recognize revenues associated with transactions arising from contracts with customers, excluding revenues subject to the

lease accounting standard discussed in “Lease accounting” above, in accordance with the revenue recognition accounting standard. A

customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with

goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial

assets that are outside of a company’s ordinary output activities.

We generally recognize revenue representing the transfer of goods and services to customers in an amount that reflects the

consideration to which we expect to be entitled in the exchange. In order to determine the recognition of revenue from customer

contracts, we use a five-step model to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract,

(iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will

not occur, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we

satisfy the performance obligation.

We identify contractual performance obligations and determine whether revenue should be recognized at a point in time or

over time, based on when control of goods and services transfers to a customer. We consider whether we control the goods or services

prior to the transfer to the customer in order to determine whether we should account for the arrangement as a principal or agent. If we

determine that we control the goods or services provided to the customer, then we are the principal to the transaction, and we recognize

the gross amount of consideration expected in the exchange. If we simply arrange but do not control the goods or services being

transferred to the customer, then we are considered to be an agent to the transaction, and we recognize the net amount of

consideration we are entitled to retain in the exchange.

Total revenues subject to the revenue recognition accounting standard and classified within income from rentals in our

consolidated statements of operations for the three months ended March 31, 2025 included $10.9 million primarily related to short-term

parking revenues associated with long-term lease agreements. Short-term parking revenues do not qualify for the single component

accounting policy, as discussed in “Lessor accounting” in Note 2 – “Summary of significant accounting policies,” due to the difference in

the timing and pattern of transfer of our parking service obligations and associated lease components within the same lease agreement.

We recognize short-term parking revenues in accordance with the revenue recognition accounting standard when the service is

provided and the performance obligation is satisfied, which normally occurs at a point in time.

Monitoring of tenant credit quality

During the term of each lease, we monitor 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 (iv) monitoring the timeliness of lease payments.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Notes receivable

We carry notes receivable at amortized cost, adjusted for an estimated provision for expected credit losses. Interest income on

notes receivable is recognized using the effective interest rate method and is classified within other income in our consolidated

statements of operations. Direct costs incurred in originating notes, along with any premium or discount, are deferred and amortized as

an adjustment to interest income over the note’s term using the effective interest rate method. Notes receivable are classified within

other assets in our consolidated balance sheets. Refer to Note 8 – “Other assets” to our unuaudited consolidated financial statements

for additional details.

Provision for expected credit losses

We are required to estimate and recognize lifetime expected losses, rather than incurred losses, for most of our financial

assets measured at amortized cost and certain other instruments, including trade, notes, and other receivables (excluding receivables

arising from operating leases), loans, held-to-maturity debt securities, net investments in leases arising from sales-type and direct

financing leases, and off-balance-sheet credit exposures (e.g., loan commitments). The recognition of such expected losses, even if the

expected risk of credit loss is remote, typically results in earlier recognition of credit losses. At each reporting date, we reassess our

provision for expected credit losses, and, if necessary, we recognize an adjustment for our current estimate of expected credit losses.

Refer to Note 5 – “Leases” and Note 8 – “Other assets” to our unaudited consolidated financial statements for additional details.

An assessment of the collectibility of operating lease payments and the recognition of an adjustment to lease income based on

this assessment is governed by the lease accounting standard discussed in “Lease accounting” earlier in Note 2 — “Summary of

significant accounting policies” to our unaudited consolidated financial statements.

Income taxes

We are organized and operate as a REIT pursuant to the Internal Revenue Code (the “Code”). Under the Code, a REIT that

distributes at least 90% of its REIT taxable income to its stockholders annually (excluding net capital gains) and meets certain other

conditions is not subject to federal income tax on its distributed taxable income, but could be subject to certain federal, foreign, state,

and local taxes. We distribute 100% of our taxable income annually; therefore, a provision for federal income taxes is not required. In

addition to our REIT returns, we file federal, foreign, state, and local tax returns for our subsidiaries. We file with jurisdictions located in

the U.S., Canada, and other international locations. Our tax returns are subject to routine examination in various jurisdictions for the

2019 through 2024 calendar years.

Employee and non-employee share-based payments

We have implemented an entity-wide accounting policy to account for forfeitures related to unmet service conditions of share-

based awards granted to employees and non-employees when they occur. Under this policy, when forfeitures occur, any previously

recognized expense related to those forfeited awards is reversed in the period of forfeiture.

Our employee and non-employee share-based awards are measured at fair value on the grant date and recognized over the

recipient’s required service period. For share-based awards with performance conditions, we continue to assess the probability of

achieving the performance conditions and recognize expense only when it becomes probable that the performance targets will be met.

Conversely, for share-based awards with market conditions, expense is recognized regardless of whether the market condition is met.

Dividends paid on share-based awards with nonforfeitable dividends are initially classified in retained earnings and reclassified

to compensation cost only if the underlying awards are forfeited. Conversely, for share-based awards with forfeitable dividends,

declared dividends are initially classified in retained earnings and in dividends payable within our consolidated balance sheets. If the

underlying awards are forfeited, the corresponding accrued dividend is reversed in the period of forfeiture. Upon vesting of the

underlying share-based awards with forfeitable dividends, the accumulated dividend payment is made and the dividend payable liability

is settled.

Forward equity sales agreements

From time to time, we enter into forward equity sales agreements and account for them in accordance with the accounting

guidance governing financial instruments and derivatives. Under the accounting guidance, our forward equity sales agreements are not

deemed to be liabilities as they do not embody obligations to repurchase our shares, nor do they embody obligations to issue a variable

number of shares for which the monetary value is predominantly fixed, varied with something other than the fair value of our shares, or

varied inversely in relation to our shares. We also evaluate whether the agreements meet the derivatives and hedging guidance scope

exception to be accounted for as equity instruments. Our forward equity sales agreements are classified as equity contracts based on

the following assessment: (i) none of the agreements’ exercise contingencies are based on observable markets or indices besides

those related to the market for our own stock price and operations; and (ii) none of the settlement provisions preclude the agreements

from being indexed to our own stock.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Issuer and guarantor subsidiaries of guaranteed securities

Generally, a parent entity of an issuer that holds guaranteed securities must provide separate subsidiary issuer or guarantor

financial statements, unless it qualifies for disclosure exceptions. A parent entity may be eligible for disclosure exceptions if it meets the

following criteria:

(i)The subsidiary issuer or guarantor is a consolidated subsidiary of the parent company, and

(ii)The subsidiary issues a registered security that is:

•issued jointly and severally with the parent company, or

•fully and unconditionally guaranteed by the parent company.

A parent entity that meets the above criteria may instead present summarized financial information (“alternative disclosures”)

either within the consolidated financial statements or in “Management’s discussion and analysis of financial condition and results of

operations” in Item 2. We evaluated the criteria and determined that we are eligible for the disclosure exceptions, which allow us to

provide alternative disclosures; as such, we present alternative disclosures in “Management’s discussion and analysis of financial

condition and results of operations” in Item 2.

Loan fees

Fees incurred in obtaining long-term financing are capitalized and classified with the corresponding debt instrument appearing

on our consolidated balance sheets. Loan fees related to our unsecured senior line of credit are capitalized and classified within other

assets. Capitalized amounts are amortized over the term of the related loan, and the amortization is classified in interest expense in our

consolidated statements of operations.

Distributions from equity method investments

We use the “nature of the distribution” approach to determine the classification within our consolidated statements of cash

flows of cash distributions received from equity method investments, including our unconsolidated real estate joint ventures and equity

method non-real estate investments. Under this approach, distributions are classified based on the nature of the underlying activity that

generated the cash distributions. If we lack the information necessary to apply this approach in the future, we will be required to apply

the “cumulative earnings” approach as an accounting change on a retrospective basis. Under the cumulative earnings approach,

distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and

those in excess of that amount are classified as cash inflows from investing activities.

Restricted cash

We present cash and cash equivalents separately from restricted cash within our consolidated balance sheets. However, we

include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown

in the consolidated statements of cash flows. We provide a reconciliation between the consolidated balance sheets and the

consolidated statements of cash flows, which is required when the balance includes greater than one line item for cash, cash

equivalents, and restricted cash. We also provide a disclosure of the nature of the restrictions related to material restricted cash

balances.

Recent accounting pronouncements

On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, that will require

entities to provide enhanced disclosures related to certain expense categories included in income statement captions. The ASU aims to

increase transparency and provide investors with additional detailed information about the nature of expenses reported on the face of

the income statement. The new standard does not change the requirements for the presentation of expenses on the face of the income

statement.

Under this ASU, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the

income statement — excluding earnings or losses from equity method investments — if they include any of the following expense

categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion.

For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those

expenses. The new ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods

beginning after December 15, 2027. Early adoption is permitted. We expect to adopt this ASU on January 1, 2027. Although the

adoption is not expected to have an impact on our financial statements, it is expected to result in incremental disclosures within the

footnotes to our consolidated financial statements.

3.INVESTMENTS IN REAL ESTATE

Our consolidated investments in real estate consisted of the following as of March 31, 2025 and December 31, 2024 (in

thousands):

	March 31, 2025	December 31, 2024
Rental properties:
Land (related to rental properties)	$3,897,927	$3,863,027
Buildings and building improvements	20,788,541	20,377,935
Other improvements	4,530,136	4,354,785
Rental properties	29,216,604	28,595,747
Current and future development and redevelopment projects	8,456,971	8,618,727
Gross investments in real estate	37,673,575	37,214,474
Less: accumulated depreciation	(5,768,114)	(5,477,082)
Investments in real estate assets held for sale(1)	216,251	372,647
Investments in real estate	$32,121,712	$32,110,039

(1)See “Assets held for sale” below.

Assets held for sale

As of March 31, 2025, we had six operating properties aggregating 382,527 RSF and land parcels aggregating 1.9 million SF

that were classified as held for sale.

The disposal of properties classified as held for sale does not represent a strategic shift that has (or will have) a major effect

on our operations or financial results and therefore does not meet the criteria for classification as a discontinued operation. We cease

depreciation of our properties upon their classification as held for sale.

The following is a summary of net assets as of March 31, 2025 and December 31, 2024 for our real estate investments that

were classified as held for sale as of each respective date (in thousands):

	March 31, 2025	December 31, 2024
Investments in real estate	$216,251	$372,647
Other assets	8,333	9,488
Total assets	224,584	382,135
Total liabilities	(13,068)	(13,462)
Total accumulated other comprehensive income	2,429	2,584
Net assets classified as held for sale	$213,945	$371,257

For additional information, refer to “Real estate sales” in Note 2 – “Summary of significant accounting policies” to our unaudited

consolidated financial statements.

Sales of real estate assets

Our completed dispositions of real estate assets during the three months ended March 31, 2025 consisted of the following

(dollars in thousands):

				Square Footage			Gain on<br><br>Sales of<br><br>Real Estate
Property	Submarket/Market	Date of<br><br>Sale	Interest<br><br>Sold	Operating	Land and<br><br>Future	Sales Price
Costa Verde by Alexandria	University Town Center/<br><br>San Diego	1/31/25	100%	8,730	537,000	124,000	—
Other						52,352	13,165
						176,352	$13,165

All values are in US Dollars.

(1)Represents the aggregate contractual sales price of our dispositions, which differs from proceeds from sales of real estate and contributions from and sales of

noncontrolling interests in our consolidated statement of cash flows under “Investing activities” and “Financing activities,” respectively, primarily due to the timing of

payment, closing costs, and other sales adjustments such as prorations of rents and expenses.

3.INVESTMENTS IN REAL ESTATE (continued)

Other

In 2006, ARE-East River Science Park, LLC, a subsidiary of Alexandria Real Estate Equities, Inc., was granted an option to

incorporate a land parcel adjacent to and north of the Alexandria Center® for Life Science – New York City (“ACLS-NYC”) campus

(“Option Parcel”) into the existing ground lease of that campus. The Option Parcel will allow ARE-East River Science Park, LLC to

develop a future world-class life science building within the ACLS-NYC campus. ARE-East River Science Park, LLC’s investment in pre-

construction costs related to the development of the Option Parcel, including costs related to design, engineering, environmental,

survey/title, and permitting and legal costs, aggregated $171.1 million as of March 31, 2025.

On August 6, 2024, ARE-East River Science Park, LLC filed a lawsuit in the United States District Court for the Southern

District of New York against its landlord, New York City Health + Hospitals Corporation (“H+H”), and the New York City Economic

Development Corporation (“EDC”). On January 24, 2025, ARE-East River Science Park, LLC filed a first amended complaint. The

lawsuit alleges two principal claims against H+H and EDC: fraud in the inducement, and, in the alternative, breach of contract in

violation of the implied covenant of good faith and fair dealing. As alleged in the complaint, ARE-East River Science Park, LLC’s claims

arise from H+H’s and EDC’s misrepresentations and concealment of material facts in connection with a floodwall, which H+H and EDC

are seeking to require ARE-East River Science Park, LLC to integrate into the development of the Option Parcel. ARE-East River

Science Park, LLC alleges that H+H’s and EDC’s misconduct have prevented it from commencing the development of the Option

Parcel. In light of the pending litigation, the closing date for our option and thus the commencement date for construction of the third

tower at the campus are presently indeterminate. Among other things, ARE-East River Science Park, LLC is seeking significant

damages and equitable relief from the court to confirm our understanding that the option is in full force and effect.

This matter exposes us to potential losses ranging from zero to the full amount of the investment in the project aggregating

$171.1 million as of March 31, 2025, depending on any collection of damages and/or the ability to develop the project. We performed a

probability-weighted recoverability analysis based on estimates of various possible outcomes and determined no impairment was

present as of March 31, 2025.

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES

From time to time, we enter into joint venture agreements through which we own a partial interest in real estate entities that

own, develop, and operate real estate properties. As of March 31, 2025, our real estate joint ventures held the following properties:

	Property(1)	Market	Submarket
Consolidated real estate joint ventures:
	50 and 60 Binney Street	Greater Boston	Cambridge/Inner Suburbs	34.0%
	75/125 Binney Street	Greater Boston	Cambridge/Inner Suburbs	40.0%
	100 and 225 Binney Street and 300 Third Street	Greater Boston	Cambridge/Inner Suburbs	30.0%
	99 Coolidge Avenue	Greater Boston	Cambridge/Inner Suburbs	75.7%
	15 Necco Street	Greater Boston	Seaport Innovation District	56.7%
	285, 299, 307, and 345 Dorchester Avenue	Greater Boston	Seaport Innovation District	60.0%
	Alexandria Center® for Science and Technology –<br><br>Mission Bay(2)	San Francisco Bay Area	Mission Bay	25.0%
	601, 611, 651, 681, 685, and 701 Gateway<br><br>Boulevard	San Francisco Bay Area	South San Francisco	50.0%
	751 Gateway Boulevard	San Francisco Bay Area	South San Francisco	51.0%
	211 and 213 East Grand Avenue	San Francisco Bay Area	South San Francisco	30.0%
	500 Forbes Boulevard	San Francisco Bay Area	South San Francisco	10.0%
	Alexandria Center® for Life Science – Millbrae	San Francisco Bay Area	South San Francisco	48.3%
	3215 Merryfield Row	San Diego	Torrey Pines	30.0%
	Campus Point by Alexandria(3)	San Diego	University Town Center	55.0%
	5200 Illumina Way	San Diego	University Town Center	51.0%
	9625 Towne Centre Drive	San Diego	University Town Center	30.0%
	SD Tech by Alexandria(4)	San Diego	Sorrento Mesa	50.0%
	Pacific Technology Park	San Diego	Sorrento Mesa	50.0%
	Summers Ridge Science Park(5)	San Diego	Sorrento Mesa	30.0%
	1201 and 1208 Eastlake Avenue East	Seattle	Lake Union	30.0%
	199 East Blaine Street	Seattle	Lake Union	30.0%
	400 Dexter Avenue North	Seattle	Lake Union	30.0%
	800 Mercer Street	Seattle	Lake Union	60.0%
Unconsolidated real estate joint ventures(6):
	1655 and 1725 Third Street	San Francisco Bay Area	Mission Bay	10.0%
	1450 Research Boulevard	Maryland	Rockville	73.2%	(7)
	101 West Dickman Street	Maryland	Beltsville	58.4%	(7)

(1)Refer to the table on the next page that shows the categorization of our joint ventures under the consolidation framework.

(2)Includes 409 and 499 Illinois Street, 1450, 1500, and 1700 Owens Street, and 455 Mission Bay Boulevard South.

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

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

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

(6)In addition to the real estate joint ventures listed, we hold an interest in one insignificant unconsolidated real estate joint venture in North America.

(7)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.

Our consolidation policy is described under “Consolidation” in Note 2 – “Summary of significant accounting policies” to our

unaudited consolidated financial statements. Consolidation accounting is highly technical, but its framework is primarily based on the

controlling financial interests and benefits of the joint ventures. We generally consolidate a joint venture that is a legal entity that we

control (i.e., we have the power to direct the activities of the joint venture that most significantly affect its economic performance)

through contractual rights, regardless of our ownership interest, and where we determine that we have benefits through the allocation of

earnings or losses and fees paid to us that could be significant to the joint venture (the “VIE model”).

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)

We also generally consolidate joint ventures when we have a controlling financial interest through voting rights and where our

voting interest is greater than 50% (the “voting model”). Voting interest differs from ownership interest for some joint ventures. We

account for joint ventures that do not meet the consolidation criteria under the equity method of accounting by recognizing our share of

income and losses.

The table below shows the categorization of our real estate joint ventures under the consolidation framework:

Property(1)	Consolidation<br><br>Model	Voting Interest	Consolidation Analysis		Conclusion
50 and 60 Binney Street	VIE model	Not applicable<br><br>under VIE<br><br>model			Consolidated
75/125 Binney Street			We have:
100 and 225 Binney Street and 300<br><br>Third Street
99 Coolidge Avenue			(i)	The power to direct the<br><br>activities of the joint venture<br><br>that most significantly affect its<br><br>economic performance; and
15 Necco Street
285, 299, 307, and 345 Dorchester<br><br>Avenue
Alexandria Center® for Science and<br><br>Technology – Mission Bay
601, 611, 651, 681, 685, and 701<br><br>Gateway Boulevard
751 Gateway Boulevard
211 and 213 East Grand Avenue			(ii)	Benefits that can be significant<br><br>to the joint venture.
500 Forbes Boulevard
Alexandria Center® for Life Science –<br><br>Millbrae
3215 Merryfield Row
Campus Point by Alexandria
5200 Illumina Way			Therefore, we are the primary<br><br>beneficiary of each VIE
9625 Towne Centre Drive
SD Tech by Alexandria
Pacific Technology Park
Summers Ridge Science Park
1201 and 1208 Eastlake Avenue East
199 East Blaine Street
400 Dexter Avenue North
800 Mercer Street
1450 Research Boulevard			We do not control the joint venture<br><br>and are therefore not the primary<br><br>beneficiary.		Equity method<br><br>of accounting
101 West Dickman Street
1655 and 1725 Third Street	Voting model	Does not<br><br>exceed 50%	Our voting interest is 50% or less.

(1)In addition to the real estate joint ventures listed, we hold an interest in one insignificant unconsolidated real estate joint venture in North America.

4.CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE JOINT VENTURES (continued)

Consolidated VIEs’ balance sheet information

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 spend, and our

joint venture partners may also contribute equity into these entities for financing-related activities.

The table below aggregates the balance sheet information of our consolidated VIEs (in thousands):

	March 31, 2025	December 31, 2024
Investments in real estate	$7,756,140	$8,917,718
Cash and cash equivalents	226,533	335,223
Other assets	736,953	777,033
Total assets	$8,719,626	$10,029,974
Secured notes payable	$150,220	$149,321
Other liabilities	432,154	626,460
Total liabilities	582,374	775,781
Redeemable noncontrolling interests	—	10,360
Alexandria Real Estate Equities, Inc.’s share of equity	3,611,953	4,754,386
Noncontrolling interests’ share of equity	4,525,299	4,489,447
Total liabilities and equity	$8,719,626	$10,029,974

In determining whether to aggregate the balance sheet information of consolidated VIEs, we considered the similarity of each

VIE, including the primary purpose of these entities to own, manage, operate, and lease real estate properties owned by the VIEs, and

the similar nature of our involvement in each VIE as a managing member. Due to the similarity of the characteristics, we present the

balance sheet information of these entities on an aggregated basis. None of our consolidated VIEs’ assets have restrictions that limit

their use to settle specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to

our general credit, and our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE, except for our

99 Coolidge Avenue real estate joint venture in which the VIE’s secured construction loan is guaranteed by us. Refer to Note 10 –

“Secured and unsecured senior debt” to our unaudited consolidated financial statements for additional information.

Unconsolidated real estate joint ventures

Our maximum exposure to our unconsolidated VIEs is limited to our investment in each VIE, except for our 1450 Research

Boulevard and 101 West Dickman Street unconsolidated real estate joint ventures in which we guarantee up to $6.7 million of the

outstanding balance related to each VIE’s secured loan. Our investments in unconsolidated real estate joint ventures, accounted for

under the equity method and classified in investments in unconsolidated real estate joint ventures in our consolidated balance sheets,

consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Property	March 31, 2025	December 31, 2024
1655 and 1725 Third Street	$21,224	$10,574
1450 Research Boulevard	8,941	9,193
101 West Dickman Street	9,629	9,749
Other	10,292	10,357
	$50,086	$39,873

Below are key terms of unconsolidated real estate joint ventures’ secured loans as of March 31, 2025 (dollars in thousands):

					Interest<br><br>Rate(1)	At 100%
Unconsolidated Joint Venture	Maturity Date		Stated Rate			Aggregate<br><br>Commitment	Debt Balance(2)
101 West Dickman Street		11/10/26	SOFR+1.95%	(3)	6.35%	$26,750	19,139
1450 Research Boulevard		12/10/26	SOFR+1.95%	(3)	6.41%	13,000	8,998
1655 and 1725 Third Street(4)		2/10/35	6.37%		6.44%	500,000	496,658
						$539,750	524,795

All values are in US Dollars.

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

(2)Represents outstanding principal, net of unamortized deferred financing costs, as of March 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 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. As of March 31, 2025, our investment in this unconsolidated real estate joint venture was $21.2 million.

5.LEASES

Refer to “Lease accounting” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial

statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and

disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors).

Leases in which we are the lessor

As of March 31, 2025, we had 386 properties aggregating 39.6 million operating RSF in key cluster locations, including

Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. We primarily focus

on developing Class A/A+ properties in AAA life science innovation cluster locations that offer the scale and strategic design integral to

our Megacampus strategy. 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.

As of March 31, 2025, all leases in which we are the lessor were classified as operating leases, with the exception of one

direct financing and one sales-type lease. Our leases are described below.

Operating leases

As of March 31, 2025, our 386 properties were subject to operating lease agreements. Seven of these properties are subject

to operating lease agreements that each contain a purchase option as described below:

(i)Two of these properties, representing two land parcels in our San Francisco Bay Area market, are subject to lease

agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during

each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent

commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 67.7 years.

(ii)Two operating properties in our Seattle market, held by a consolidated real estate joint venture, are subject to purchase

options held by our partner in this joint venture, which is also a tenant at these properties. One purchase option allows our

partner to purchase our 30% interest in one property for $40.0 million in 2031. Contingent upon the exercise of this option,

the second purchase option allows our partner to purchase our 30% interest in one property for $69.1 million in 2034. Our

partner’s remaining lease terms for these operating leases are 5.9 years and 19.5 years, respectively.

(iii)Three properties subject to operating lease agreements that contain purchase options with a weighted-average (based on

property RSF) exercise date in October 2027.

Certain operating leases contain options for the tenant to extend their lease at prevailing market rates at the time of expiration.

In addition, certain operating leases contain an early termination option that requires advance notification and payment of an early

termination fee by the tenant.

At the commencement of each lease, we establish the lease term comprising the noncancelable period for each lease together

with periods covered by options to extend or terminate the lease that we determine the lessee is reasonably certain to exercise. Our

assessment of whether a lessee is reasonably certain to exercise or not exercise an option considers all economic factors relevant to

the assessment, including property-based, market-based, and tenant-based factors. We do not reassess the lease term or a lessee

option to purchase the underlying asset unless there is a lease modification that is not accounted for as a separate contract.

Future lease payments to be received under the terms of our operating lease agreements, excluding expense

reimbursements, in effect as of March 31, 2025 are outlined in the table below (in thousands):

Year	Amount
2025	$1,408,110
2026	1,804,811
2027	1,737,372
2028	1,609,987
2029	1,486,702
Thereafter	9,741,742
Total	$17,788,724

Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information

about our owned real estate assets, which are the underlying assets under our operating leases.

5.LEASES (continued)

Direct financing and sales-type leases

As of March 31, 2025, we have one direct financing lease agreement, with a net investment balance of $41.7 million, for a

parking structure with a remaining lease term of 67.7 years. The lessee has an option to purchase the underlying asset at fair market

value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent

commencement date of October 1, 2017.

As of March 31, 2025, we also have one sales-type lease for an operating property located in the Seattle market with the lease

term through August 2025. As of March 31, 2025, the net investment in this lease is $18.6 million. Upon recognition of the sales-type

lease during the three months ended March 31, 2025, we recognized a gain on sale of real estate aggregating $12.7 million classified in

gain on sales of real estate within our unaudited consolidated statement of operations for the three months ended March 31, 2025.

The components of our aggregate net investment in our direct financing lease and our sales-type lease as of March 31, 2025

and December 31, 2024 are summarized in the table below (in thousands):

	March 31, 2025	December 31, 2024
Gross investment in direct financing and sales-type leases	$269,532	$251,405
Less: unearned income on direct financing lease	(207,064)	(207,734)
Less: provision for expected credit losses	(2,217)	(2,168)
Net investment in leases	$60,251	$41,503

As of March 31, 2025, our estimated provision for expected credit loss related to our direct financing lease aggregated

$2.2 million, unchanged from December 31, 2024. We estimate the provision for expected credit loss related to our direct financing

lease using a probability of default methodology, which incorporates the borrower’s investment-grade credit rating from S&P, to evaluate

the probability of default. Additionally, we incorporate the projected value of the real estate securing the investments to estimate

potential recoveries in the event of default, among other inputs.

During the three months ended March 31, 2025, we recognized an estimated provision for expected credit loss aggregating

$49 thousand related to our sales-type lease. This estimate was determined using historical industry losses and considering

transaction-specific information, including the estimated fair value of the underlying real estate asset securing this transaction, the short-

term nature of this lease, and other available information.

We classify adjustments to estimated provision for expected credit loss related to our direct financing and sales-type leases

within other income in our consolidated statement of operations. For further details, refer to “Provision for expected credit losses” in

Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements.

Future lease payments to be received under the terms of our direct financing lease and our sales-type lease as of March 31,

2025 are outlined in the table below (in thousands):

Year	Total
2025	$20,103
2026	2,036
2027	2,097
2028	2,160
2029	2,224
Thereafter	240,912
Total	$269,532

5.LEASES (continued)

Income from rentals

Our income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes

revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands):

	Three Months Ended March 31,
	2025	2024
Income from rentals:
Revenues subject to the lease accounting standard:
Operating leases	$731,421	$746,061
Direct financing and sales-type leases	810	659
Revenues subject to the lease accounting standard	732,231	746,720
Revenues subject to the revenue recognition accounting standard	10,944	8,831
Income from rentals	$743,175	$755,551

Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist

primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to

“Revenues” and “Recognition of revenue arising from contracts with customers” in Note 2 – “Summary of significant accounting policies”

to our unaudited consolidated financial statements for additional information.

Residual value risk management strategy

Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual

value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business

objective to invest primarily in high-demand markets, (ii) directly managing our leased properties, conducting frequent property

inspections, proactively addressing potential maintenance issues before they arise, and/or timely resolving any occurring issues, and

(iii) carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms.

Leases in which we are the lessee

Operating lease agreements

We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these

leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or

covenants imposed by the leases, nor guarantees of residual value.

We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related

liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to

account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to “Lessee accounting”

in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements.

As of March 31, 2025, the present value of the remaining contractual payments aggregating $809.0 million under our operating

lease agreements, including our extension options that we are reasonably certain to exercise, was $371.4 million. 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 $728.9 million. As of March 31, 2025, the weighted-average remaining lease term of

operating leases in which we are the lessee was approximately 54 years, including extension options that we are reasonably certain to

exercise, and the weighted-average discount rate was 4.7%. The weighted-average discount rate is based on the incremental

borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized

basis over a similar term for an amount equal to the lease payments.

Ground lease obligations as of March 31, 2025 included leases for 32 of our properties, which accounted for approximately 8%

of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book

value of $5.5 million as of March 31, 2025, our ground lease obligations have remaining lease terms ranging from approximately 29 to

82 years, including extension options that we are reasonably certain to exercise.

5.LEASES (continued)

The reconciliation of future lease payments under noncancelable operating leases in which we are the lessee to the operating

lease liability reflected in our unaudited consolidated balance sheet as of March 31, 2025 is in the table below (in thousands):

Year	Total
2025	$17,434
2026	23,081
2027	22,162
2028	21,830
2029	21,338
Thereafter	703,148
Total future payments under our operating leases in which we are the lessee	808,993
Effect of discounting	(437,581)
Operating lease liability	$371,412

Lessee operating costs

Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed

annual rent payments and may also include escalation clauses and renewal options. For the three months ended March 31, 2025 and

2024, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we

are the lessee aggregated $144.6 million and $7.3 million, respectively. The increase is primarily due to the ground lease prepayment of

$135.0 million made in January 2025 for a 24-year lease term extension to our existing ground lease agreement at the Alexandria

Technology Square® Megacampus in our Cambridge submarket.

Our operating lease obligations related to our office leases have remaining terms of up to 11 years, exclusive of extension

options. For the three months ended March 31, 2025 and 2024, our costs of operating leases in which we are the lessee were as

follows (in thousands):

	Three Months Ended March 31,
	2025	2024
Gross operating lease costs	$12,359	$9,211
Capitalized lease costs	(693)	(528)
Expenses for operating leases in which we are the lessee	$11,666	$8,683

During the three months ended March 31, 2025, we recognized an impairment charge aggregating $32.2 million, related to a

ground lease entered into in 2021 for a future development site in our San Francisco Bay Area market. As of December 31, 2024, we

had a right-of-use asset aggregating $32.4 million related to our investment into this ground lease. During the three months ended

March 31, 2025, based on our current financial outlook for this project, we made the determination to no longer proceed with this

project. Consequently, we recognized an impairment charge aggregating $32.2 million to write off our remaining right-of-use asset

balance. As of March 31, 2025 and December 31, 2024, we had no operating lease liability associated with this ground lease, as the

related lease obligation had been fully prepaid. We do not expect to make additional future payments in connection with this ground

lease.

6. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

Cash, cash equivalents, and restricted cash consisted of the following as of March 31, 2025 and December 31, 2024 (in

thousands):

	March 31, 2025	December 31, 2024
Cash and cash equivalents	$476,430	$552,146
Restricted cash:
Funds held in escrow for real estate acquisitions	2,954	2,954
Other	4,370	4,747
	7,324	7,701
Total	$483,754	$559,847

7.INVESTMENTS

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

REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to

determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in

which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption

that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such

ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a

board seat or whether we participate in the investee’s policy-making process, among other criteria, to determine if we have the ability to

exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment

under the equity method, as described below.

From time to time, we may hold equity investments in publicly traded companies that are subject to temporary contractual sale

restrictions. We do not recognize a discount related to such contractual sale restrictions.

Investments accounted for under the equity method

Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying

amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary

impairments.

As of March 31, 2025, we had nine investments in limited partnerships maintaining specific ownership accounts for each

investor, which were accounted for under the equity method. These investments aggregated $224.6 million. Our ownership interest in

each of these nine investments was greater than 5%.