Alexandria Real Estate Equities, Inc 8-K, filed May 4, 2007
Alexandria Real Estate Equities, Inc. (ARE)
About this 8-K
Alexandria Real Estate Equities, Inc filed this 8-K on May 4, 2007, reporting on events of May 2, 2007.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 2007
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(Exact name of registrant as specified in its charter)
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Maryland |
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1-12993 |
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95-4502084 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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385 East Colorado Boulevard, Suite 299 |
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Pasadena, California |
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91101 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (626) 578-0777
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))
Item 1.01 Entry into a Material Definitive Agreement.
On May 2, 2007, Alexandria Real Estate Equities, Inc. (the “Company”) entered into an amendment to its amended and restated credit agreement dated December 22, 2004, as further amended October 31, 2006, pursuant to which Banc of America Securities LLC and Citigroup Global Markets Inc. serve as Joint Lead Arrangers, Bank of America, N.A. serves as Administrative Agent, Citicorp North America, Inc. serves as Syndication Agent and The Bank of Nova Scotia, The Royal Bank of Scotland, PLC, Eurohypo AG and HSH Nordbank AG serve as Documentation Agents.
Pursuant to the amendment, the maximum permitted borrowings under the credit facilities have been increased from $1.4 billion to $1.9 billion, consisting of a $1.15 billion unsecured revolving credit facility and a $750 million unsecured term loan. The Company may in the future elect to increase commitments under its unsecured credit facilities by up to an additional $500 million.
The unsecured revolving credit facility and unsecured term loan maturity dates were not amended and remain at October 2010 and October 2011, respectively, and each may be extended, at the Company’s sole option, for an additional one-year period.
The unsecured revolving and term credit facilities contain financial covenants, including, among other things, maintenance of minimum net worth, a leverage ratio and a fixed charge coverage ratio. In addition, the terms of the credit facilities restrict, among other things, certain investments, indebtedness, distributions and mergers. Aggregate borrowings under the credit facilities may be limited primarily to an amount based on the net operating income derived from a pool of unencumbered properties. These credit facilities contain customary events of default. Upon the occurrence of an event of default that remains uncured, the outstanding borrowings under these credit facilities may be accelerated and become due and payable immediately.
Item 2.02. Results of Operations and Financial Condition.
On May 3, 2007, we issued a press release entitled “Alexandria Real Estate Equities, Inc. Reports First Quarter 2007 Results” which sets forth our results of operations for the first quarter ended March 31, 2007. A copy of that press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated May 3, 2007.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ALEXANDRIA REAL ESTATE EQUITIES, INC. |
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May 3, 2007 |
By: |
/s/ Joel S. Marcus |
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Joel S. Marcus |
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Chief Executive Officer |
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(Principal Executive Officer) |
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By: |
/s/ Dean A. Shigenaga |
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Dean A. Shigenaga |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
3
EXHIBIT INDEX
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Exhibit |
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Exhibit Title |
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99.1 |
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Press Release dated May 3, 2007 |
4
Exhibit 99.1
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Contact: |
Joel S. Marcus |
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Chief Executive Officer |
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Alexandria Real Estate Equities, Inc. |
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(626) 578-9693 |
ALEXANDRIA
REAL ESTATE EQUITIES, INC.
REPORTS
FIRST QUARTER 2007 RESULTS
Highlights
First Quarter 2007:
· Alexandria to Celebrate its 10th Anniversary as a NYSE Listed Company on May 28, 2007
· Total Return Performance of 677% from May 28, 1997 to December 31, 2006, Assuming Reinvestment of All Dividends
· First Quarter 2007 Funds from Operations (FFO) Per Share (Diluted) of $1.28 Net of $0.10 Per Share Preferred Stock Redemption Charge; FFO Per Share (Diluted) of $1.38, up 11%, Before the Preferred Stock Redemption Charge, Compared to First Quarter 2006 FFO Per Share (Diluted) of $1.24
· First Quarter 2007 Total Revenues up 43%, FFO Available to Common Stockholders up 33%
· First Quarter 2007 Earnings Per Share (Diluted) of $0.52 Net of the Preferred Stock Redemption Charge; Earnings Per Share (Diluted) of $0.61, up 9%, Before the Preferred Stock Redemption Charge, Compared to First Quarter 2006 Earnings Per Share (Diluted) of $0.56
· Entry into China Market – First Development Project of 275,000 Square Feet in Partnership with International Life Science Entity
· Redeemed 9.10% Series B Cumulative Redeemable Preferred Stock and Incurred Redemption Charge of $2.8 Million, or $0.10 Per Share (Diluted)
· Executed 46 Leases for 461,000 Square Feet
· First Quarter 2007 GAAP Rental Rate Increase of 8.2% on Renewed/Released Space
· First Quarter 2007 GAAP Same Property Revenues Less Operating Expenses up 3.3%
· Acquired Two Land Parcels Aggregating 151,000 Square Feet
· Completed Redevelopment of Multiple Spaces at Two Properties Aggregating 40,349 Square Feet
· Closed $460 Million of 3.70% Convertible Notes Due 2027
· In May 2007, Increased Credit Facility to $1.9 Billion Plus a $500 Million Accordion
(more)
PASADENA, CA. – May 3, 2007 – Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the first quarter ended March 31, 2007.
For the first quarter of 2007, we reported total revenues of $97,639,000 and FFO available to common stockholders of $37,546,000, or $1.28 per share (diluted), net of $0.10 per share (diluted) preferred stock redemption charge, compared to total revenues of $68,283,000 and FFO available to common stockholders of $28,154,000, or $1.24 per share (diluted), for the first quarter of 2006. Comparing the first quarter of 2007 to the first quarter of 2006, total revenues increased 43%, FFO available to common stockholders increased 33% and FFO per share (diluted) increased 3%, net of $0.10 per share preferred stock redemption charge.
In February 2007, the Company elected to redeem all 2,300,000 outstanding shares of its 9.10% Series B cumulative redeemable preferred stock (“Series B Preferred Stock”). The redemption occurred in March 2007 at a redemption price of $25.00 per share, plus $0.4107639 per share representing accumulated and unpaid dividends to the redemption date. In accordance with Emerging Issues Task Force Topic D-42 (“D-42”), the Company recorded a charge of approximately $2.8 million, or $0.10 per share (diluted), related to the redemption of our Series B Preferred Stock. Excluding the charge for the first quarter of 2007, FFO available to common stockholders increased by 43% and FFO per share (diluted) increased by 11%, net income available to common stockholders increased by 41% and earnings per share (diluted) increased by 9%, compared to the first quarter of 2006.
FFO is a non-GAAP measure widely used by publicly-traded real estate investment trusts. A reconciliation of GAAP net income available to common stockholders to FFO available to common stockholders, on both an aggregate and a per share diluted basis, is included in the financial information accompanying this press release. The primary reconciling item between GAAP net income available to common stockholders and FFO available to common stockholders is depreciation and amortization expense. Depreciation and amortization expense for the three months ended March 31, 2007 and 2006 was $23,518,000 and $15,443,000, respectively. Net income available to common stockholders for the first quarter of 2007 was $15,108,000, or $0.52 per share (diluted), net of $0.10 per share preferred stock redemption charge, compared to net income available to common stockholders of $12,733,000, or $0.56 per share (diluted) for the first quarter of 2006.
For the first quarter of 2007, we executed a total of 46 leases for approximately 461,000 square feet of space at 32 different properties (excluding month-to-month leases). Of this total, approximately 326,000 square feet related to new or renewal leases of previously leased space and approximately 135,000 square feet related to redeveloped, developed or previously vacant space. Of the 135,000 square feet, approximately 57,000 square feet were delivered from our redevelopment or development programs, with the remaining approximately 78,000 square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 8% higher (on a GAAP basis) than rental rates for expiring leases.
During the first quarter of 2007, we acquired two land parcels with approximately 151,000 developable square feet. We paid approximately $19 million cash for the land parcels.
As of March 31, 2007, approximately 90% of our leases (on a square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, as of March 31, 2007, approximately 4% of our leases (on a square footage basis) required the tenants to pay a majority of operating expenses. Additionally, as of March 31, 2007, approximately 91% of our leases (on a square footage basis) provided for the recapture of certain capital expenditures and approximately 91% of our leases (on a square footage basis) contained effective annual rent escalations that were either fixed or indexed based on the consumer price index or another index.
2
Based on our current view of existing market conditions and certain current assumptions, we have updated our prior guidance for FFO per share (diluted) and earnings per share (diluted) as follows:
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2007 |
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FFO per share (diluted) (1) |
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$ |
5.61 |
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Earnings per share (diluted) (2) |
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$ |
2.25 |
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Preferred stock redemption charge |
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$ |
(0.10 |
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(1) Includes preferred stock redemption charge and excludes gain on sale of real estate recognized in first quarter 2007.
(2) Includes preferred stock redemption charge and gain on sale of real estate recognized in first quarter 2007.
As a result of the redemption of all of the outstanding shares of the 9.10% Series B Preferred Stock, and in compliance with D-42, the Company recorded a charge of approximately $2.8 million in the first quarter of 2007 related to the costs of redemption of the Series B Preferred Stock. In providing our guidance above, the Company has included the charge for the costs of redemption of our Series B Preferred Stock in accordance with D-42.
Alexandria Real Estate Equities, Inc., Landlord and Developer of Choice to the Life Science Industry®, is a publicly-traded real estate investment trust focused principally on the ownership, operation, management, selective redevelopment, development and acquisition of life science properties. Our properties are designed and improved for lease primarily to institutional (universities and independent not-for-profit institutions), pharmaceutical, biotechnology, medical device, life science product, service, biodefense and translational medicine entities, as well as governmental agencies. We are the leading provider of real estate to the broad and diverse life science industry with a current asset base that will allow us to grow our Company to approximately 18.4 million square feet consisting of 158 properties approximating 11.1 million square feet, properties undergoing ground-up development approximating 1.2 million square feet, plus an imbedded pipeline for ground-up development approximating 6.1 million square feet.
This press release contains forward-looking statements, including earnings guidance, within the meaning of the federal securities laws. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our Annual Report on Form 10-K and our other periodic reports filed with the Securities and Exchange Commission.
(Tables follow)
3
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
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Three Months |
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Three Months |
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Ended |
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Ended |
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March 31, 2007 |
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March 31, 2006 |
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Income statement data |
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Total revenues |
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$ |
97,639 |
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$ |
68,283 |
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Expenses |
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Rental operations |
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24,129 |
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15,341 |
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General and administrative |
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8,082 |
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6,451 |
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Interest |
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20,556 |
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14,865 |
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Depreciation and amortization |
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23,466 |
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15,197 |
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76,233 |
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51,854 |
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Minority interest |
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907 |
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370 |
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Income from continuing operations |
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20,499 |
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16,059 |
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Income from discontinued operations, net |
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1,285 |
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696 |
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Net income |
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21,784 |
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16,755 |
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Dividends on preferred stock |
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3,877 |
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4,022 |
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Preferred stock redemption charge |
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2,799 |
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— |
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Net income available to common stockholders |
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$ |
15,108 |
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$ |
12,733 |
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Weighted average shares of common stock outstanding |
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Basic |
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28,899,303 |
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22,322,290 |
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Diluted |
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29,299,733 |
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22,759,795 |
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Earnings per share - basic |
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Continuing operations (net of preferred stock dividends and preferred stock redemption charge) |
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$ |
0.48 |
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$ |
0.54 |
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Discontinued operations, net |
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0.04 |
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0.03 |
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Earnings per share - basic |
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$ |
0.52 |
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$ |
0.57 |
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Earnings per share - diluted |
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Continuing operations (net of preferred stock dividends and preferred stock redemption charge) |
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$ |
0.48 |
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$ |
0.53 |
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Discontinued operations, net |
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0.04 |
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0.03 |
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Earnings per share - diluted |
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$ |
0.52 |
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$ |
0.56 |
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(Continued on next page)
4
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Financial Information
(Unaudited)
Funds from Operations
Generally accepted accounting principles (“GAAP”) basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) established the measurement tool of Funds From Operations (“FFO”). Since its introduction, FFO has become a widely used non-GAAP financial measure by REITs. We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper (the “White Paper”) and related implementation guidance, which may differ from the methodology for calculating FFO utilized by other equity REITs, and, accordingly, may not be comparable to such other REITs. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. While FFO is a relevant and widely used measure of operating performance for REITs, it should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.
The following table presents a reconciliation of net income available to common stockholders, the most directly comparable GAAP financial measure to FFO, to funds from operations available to common stockholders for the three months ended March 31, 2007 and 2006 (in thousands, except per share data):
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Three Months |
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Three Months |
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Reconciliation of net income available to common stockholders to funds from operations available to common stockholders |
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Net income available to common stockholders (1) |
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$ |
15,108 |
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$ |
12,733 |
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Add: |
Depreciation and amortization (2) |
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23,518 |
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15,443 |
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Add: |
Minority interest |
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907 |
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370 |
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Subtract: |
Gain on sale of property (3) |
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(1,121 |
) |
— |
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Subtract: |
FFO allocable to minority interest |
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(866 |
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(392 |
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Funds from operations available to common stockholders (1) |
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$ |
37,546 |
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$ |
28,154 |
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FFO per share |
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Basic |
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$ |
1.30 |
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$ |
1.26 |
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Diluted |
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$ |
1.28 |
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$ |
1.24 |
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FFO per share (diluted) before preferred stock redemption charge (1) |
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$ |
1.38 |
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$ |
1.24 |
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Reconciliation of earnings per share (diluted) to FFO per share (diluted) |
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Earnings per share (diluted) (1) |
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$ |
0.52 |
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$ |
0.56 |
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Depreciation and amortization (2) |
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0.80 |
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0.68 |
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Minority interests |
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0.03 |
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0.02 |
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Gain on sale of property (3) |
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(0.04 |
) |
— |
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FFO allocable to minority interest |
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(0.03 |
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(0.02 |
) |
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FFO per share (diluted) (1) |
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$ |
1.28 |
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$ |
1.24 |
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(1) |
During the first quarter of 2007, we redeemed our 9.10% Series B cumulative redeemable preferred stock. Accordingly, in compliance with EITF Topic D-42, we recorded a charge of $2,799,000, or $0.10 per share (diluted), in the first quarter of 2007 for costs related to the redemption of our Series B Preferred Stock. |
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(2) |
Includes depreciation and amortization on assets “held for sale” reflected as discontinued operations (for the periods prior to when such assets were designated as “held for sale”). |
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(3) |
Gain on sale of property relates to the disposition of one property in the Suburban Washington D.C. market during the first quarter of 2007. Gain on sale of property is included in the income statement in income from discontinued operations, net. |
5
ALEXANDRIA
REAL ESTATE EQUITIES, INC.
Supplemental Financial Information
(Dollars
in thousands, except per share data)
(Unaudited)
Quarterly Supplemental Financial Information
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For the Three Months Ended |
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3/31/2007 |
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12/31/2006 |
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9/30/2006 |
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6/30/2006 |
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3/31/2006 |
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Operational data |
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Breakdown of revenues from continuing operations (a) |
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Rental income |
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$ |
73,280 |
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$ |
70,435 |
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$ |
63,996 |
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$ |
54,485 |
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$ |
52,293 |
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Tenant recoveries |
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20,609 |
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19,062 |
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17,484 |
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13,222 |
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13,992 |
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Other income |
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3,750 |
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3,943 |
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3,431 |
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2,480 |
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1,998 |
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Total |
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$ |
97,639 |
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$ |
93,440 |
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$ |
84,911 |
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$ |
70,187 |
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$ |
68,283 |
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Funds from operations per share-diluted (b) |
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$ |
1.28 |
(c) |
$ |
1.34 |
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$ |
1.32 |
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$ |
1.26 |
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$ |
1.24 |
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Dividends per share on common stock |
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$ |
0.74 |
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$ |
0.74 |
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$ |
0.72 |
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$ |
0.70 |
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$ |
0.70 |
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Dividend payout ratio (common stock) (d) |
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58.1% |
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55.6% |
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59.6% |
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63.7% |
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57.0% |
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Straight-line rent |
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$ |
5,082 |
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$ |
5,671 |
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$ |
4,515 |
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$ |
3,674 |
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$ |
2,977 |
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Capitalized interest |
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$ |
10,844 |
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$ |
9,010 |
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$ |
9,726 |
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$ |
8,825 |
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$ |
7,721 |
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As of |
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3/31/2007 |
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12/31/2006 |
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9/30/2006 |
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6/30/2006 |
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3/31/2006 |
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Other data |
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Number of shares of common stock outstanding at end of period |
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29,129,238 |
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29,012,135 |
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28,957,698 |
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26,387,076 |
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22,555,587 |
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Number of properties (e) |
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Acquired/added/completed during period |
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— |
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8 |
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10 |
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5 |
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6 |
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Sold/reconstructed during period |
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(1 |
) |
— |
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— |
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(3 |
) |
— |
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Owned at end of period |
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158 |
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159 |
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151 |
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141 |
|
139 |
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Rentable square feet (e) |
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Acquired/added/completed during period |
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— |
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573,027 |
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1,343,365 |
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386,776 |
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380,043 |
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Sold/reconstructed during period |
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(75,500 |
) |
— |
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— |
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(268,099 |
) |
— |
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|||||
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Owned at end of period |
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11,157,387 |
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11,232,887 |
|
10,659,860 |
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9,316,495 |
|
9,197,818 |
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Debt to total market capitalization (f) |
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Total debt |
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$ |
2,176,594 |
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$ |
2,024,866 |
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$ |
1,721,348 |
|
$ |
1,305,103 |
|
$ |
1,544,430 |
|
|
Preferred stock market capitalization |
|
140,579 |
|
193,360 |
|
194,142 |
|
193,866 |
|
193,917 |
|
|||||
|
Common stock market capitalization |
|
2,923,702 |
|
2,912,818 |
|
2,716,232 |
|
2,340,006 |
|
2,150,224 |
|
|||||
|
Total market capitalization |
|
$ |
5,240,875 |
|
$ |
5,131,044 |
|
$ |
4,631,722 |
|
$ |
3,838,975 |
|
$ |
3,888,571 |
|
|
Debt to total market capitalization |
|
41.5% |
|
39.5% |
|
37.2% |
|
34.0% |
|
39.7% |
|
|||||
|
(a) |
The historical results above exclude the results of assets “held for sale” which have been reflected as discontinued operations. |
|
(b) |
See page 5 for a reconciliation of earnings per share (diluted) to FFO per share (diluted). |
|
(c) |
During the first quarter of 2007, we redeemed our 9.10% Series B cumulative redeemable preferred stock. Accordingly, in compliance with EITF Topic D-42, we recorded a charge of $2,799,000, or $0.10 per share (diluted), in the first quarter of 2007 for costs related to the redemption of our Series B Preferred Stock. |
|
(d) |
Dividend payout ratio (common stock) is the ratio of the absolute dollar amount of dividends on our common stock (common stock shares outstanding on the respective record date multiplied by the related dividend per share) to funds from operations for the respective quarter. |
|
(e) |
Includes assets “held for sale” during the applicable periods such assets were “held for sale.” |
|
(f) |
Debt to total market capitalization is the ratio of total debt (secured notes payable, unsecured line of credit and unsecured term loan and unsecured convertible notes) to total market capitalization. Total market capitalization is equal to outstanding shares of preferred stock and common stock multiplied by the related closing price at the end of each period presented, plus total debt. |
6
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
|
|
|
March 31, |
|
December 31, |
|
||
|
|
|
2007 |
|
2006 |
|
||
|
|
|
(Unaudited) |
|
|
|
||
|
|
|
|
|
|
|
||
|
Assets |
|
|
|
|
|
||
|
Rental properties, net |
|
$ |
2,927,871 |
|
$ |
2,924,881 |
|
|
Properties undergoing development and land held for development |
|
467,001 |
|
397,701 |
|
||
|
Cash and cash equivalents |
|
9,012 |
|
2,948 |
|
||
|
Tenant security deposits and other restricted cash |
|
46,943 |
|
34,360 |
|
||
|
Tenant receivables |
|
7,104 |
|
6,330 |
|
||
|
Deferred rent |
|
71,158 |
|
68,412 |
|
||
|
Investments |
|
73,760 |
|
74,824 |
|
||
|
Other assets |
|
118,882 |
|
108,021 |
|
||
|
Total assets |
|
$ |
3,721,731 |
|
$ |
3,617,477 |
|
|
|
|
|
|
|
|
||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
||
|
Secured notes payable |
|
$ |
1,111,594 |
|
$ |
1,174,866 |
|
|
Unsecured line of credit and unsecured term loan |
|
605,000 |
|
850,000 |
|
||
|
Unsecured convertible notes |
|
460,000 |
|
— |
|
||
|
Accounts payable, accrued expenses and tenant security deposits |
|
170,593 |
|
158,119 |
|
||
|
Dividends payable |
|
24,413 |
|
25,363 |
|
||
|
Total liabilities |
|
2,371,600 |
|
2,208,348 |
|
||
|
|
|
|
|
|
|
||
|
Minority interest |
|
58,470 |
|
57,477 |
|
||
|
|
|
|
|
|
|
||
|
Stockholders’ equity |
|
|
|
|
|
||
|
Series B preferred stock |
|
— |
|
57,500 |
|
||
|
Series C preferred stock |
|
129,638 |
|
129,638 |
|
||
|
Common stock |
|
291 |
|
290 |
|
||
|
Additional paid-in capital |
|
1,142,437 |
|
1,139,629 |
|
||
|
Accumulated other comprehensive income |
|
19,295 |
|
24,595 |
|
||
|
Total stockholders’ equity |
|
1,291,661 |
|
1,351,652 |
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
3,721,731 |
|
$ |
3,617,477 |
|
7
ALEXANDRIA
REAL ESTATE EQUITIES, INC.
Summary of Debt
March 31, 2007
(Dollars
in thousands)
(Unaudited)
|
|
|
Secured Debt |
|
Unsecured Debt |
|
||||||
|
|
|
|
|
Weighted |
|
|
|
Weighted |
|
||
|
|
|
|
|
Average |
|
|
|
Average |
|
||
|
Year |
|
Amount |
|
Interest Rate |
|
Amount |
|
Interest Rate |
|
||
|
2007 |
|
$ |
43,518 |
|
6.37%(1) |
|
$ |
— |
|
— |
|
|
2008 |
|
256,100 |
|
6.34%(2) |
|
— |
|
— |
|
||
|
2009 |
|
45,986 |
|
6.50%(2) |
|
— |
|
— |
|
||
|
2010 |
|
93,259 |
|
6.48%(2) |
|
5,000 |
|
6.47%(3) |
|
||
|
2011 |
|
108,191 |
|
6.34%(2) |
|
600,000 |
|
5.76%(3) |
|
||
|
Thereafter |
|
564,540 |
|
6.29%(2) |
|
460,000 |
|
3.70%(4) |
|
||
|
Total |
|
$ |
1,111,594 |
|
|
|
$ |
1,065,000 |
|
|
|
Secured and Unsecured Debt Analysis
|
|
|
|
|
Percentage |
|
Weighted |
|
Weighted |
|
|||||
|
|
|
|
|
of |
|
Average |
|
Average |
|
|||||
|
|
|
Balance |
|
Balance |
|
Interest Rate |
|
Maturity |
|
|||||
|
Secured Debt |
|
$ |
1,111,594 |
|
|
51.1% |
|
|
|
6.18% |
|
|
5.3 Years |
|
|
Unsecured Debt |
|
1,065,000 |
|
|
48.9% |
|
|
|
4.87% |
(5) |
|
4.6 Years |
|
|
|
Total Debt |
|
$ |
2,176,594 |
|
|
100.0% |
|
|
|
5.54% |
|
|
5.0 Years |
|
Fixed and Floating Rate Debt Analysis
|
|
|
|
|
Percentage |
|
Weighted |
|
Weighted |
|
|||||
|
|
|
|
|
of |
|
Average |
|
Average |
|
|||||
|
|
|
Balance |
|
Balance |
|
Interest Rate |
|
Maturity |
|
|||||
|
Fixed Rate Debt |
|
$ |
1,370,921 |
|
|
63.0% |
|
|
|
5.29% |
|
|
5.6 Years |
|
|
Floating Rate Debt - Hedged |
|
628,500 |
|
|
28.9% |
|
|
|
5.78% |
(5) |
|
5.0 Years |
|
|
|
Floating Rate Debt - Unhedged |
|
177,173 |
|
|
8.1% |
|
|
|
6.64% |
|
|
2.1 Years |
|
|
|
Total Debt |
|
$ |
2,176,594 |
|
|
100.0% |
|
|
|
5.54% |
|
|
5.0 Years |
|
|
(1) |
The weighted average interest rate is calculated based on outstanding debt as of March 31, 2007. |
|
(2) |
The weighted average interest rate is calculated based on outstanding debt as of December 31st of the year immediately preceding the year presented. |
|
(3) |
The weighted average interest rates related to our unsecured line of credit and unsecured term loan are calculated based on borrowings outstanding as of March 31, 2007. The unsecured line of credit matures in October 2010 and may be extended at our sole option for an additional one year period. The unsecured term loan matures in October 2011 and may be extended at our sole option for an additional one year period. The weighted average interest rate includes the impact of our interest rate swap agreements. |
|
(4) |
On or after January 15, 2012, we have the right to redeem our unsecured convertible notes, in whole or in part, at any time from time to time, for cash equal to 100% of the principal amounts of the notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption date. Holders of the notes may require us to repurchase their notes, in whole or in part, on January 15, 2012, 2017 and 2022 for cash equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Additional information regarding our unsecured convertible notes is contained in our Form 10-K filed with the Securities and Exchange Commission. |
|
(5) |
The weighted average interest rates include the impact of our interest rate swap agreements. See page 9 for further details of our interest rate swap agreements. |
8
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Interest Rate Swap Agreements
March 31, 2007
(Dollars in thousands)
(Unaudited)
|
Transaction Dates |
|
Effective |
|
Notional |
|
Effective at |
|
Interest Pay |
|
Termination |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2003 |
|
December 29, 2006 |
|
$ |
50,000 |
|
$ |
50,000 |
|
5.090% |
|
October 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
April 2004 |
|
April 28, 2006 |
|
50,000 |
|
50,000 |
|
4.230% |
|
April 30, 2007 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
April 2004 |
|
April 30, 2007 |
|
50,000 |
|
— |
|
4.850% |
|
April 30, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2004 |
|
June 30, 2005 |
|
50,000 |
|
50,000 |
|
4.343% |
|
June 29, 2007 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2004 |
|
December 31, 2004 |
|
50,000 |
|
50,000 |
|
3.590% |
|
January 2, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2004 |
|
January 3, 2006 |
|
50,000 |
|
50,000 |
|
3.927% |
|
July 1, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
June 30, 2006 |
|
50,000 |
|
50,000 |
|
4.270% |
|
June 29, 2007 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
November 30, 2006 |
|
25,000 |
|
25,000 |
|
4.330% |
|
November 30, 2007 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
June 29, 2007 |
|
50,000 |
|
— |
|
4.400% |
|
June 30, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
November 30, 2007 |
|
25,000 |
|
— |
|
4.460% |
|
November 28, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
June 30, 2008 |
|
50,000 |
|
— |
|
4.509% |
|
June 30, 2009 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
May 2005 |
|
November 28, 2008 |
|
25,000 |
|
— |
|
4.615% |
|
November 30, 2009 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2005 |
|
December 29, 2006 |
|
50,000 |
|
50,000 |
|
4.730% |
|
November 30, 2009 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2005 |
|
December 29, 2006 |
|
50,000 |
|
50,000 |
|
4.740% |
|
November 30, 2009 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2005 |
|
January 2, 2008 |
|
50,000 |
|
— |
|
4.768% |
|
December 31, 2010 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2006 |
|
June 30, 2006 |
|
125,000 |
|
125,000 |
|
5.299% |
|
September 30, 2009 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2006 |
|
October 31, 2008 |
|
50,000 |
|
— |
|
5.340% |
|
December 31, 2010 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2006 |
|
October 31, 2008 |
|
50,000 |
|
— |
|
5.347% |
|
December 31, 2010 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2006 |
|
June 30, 2008 |
|
50,000 |
|
— |
|
5.325% |
|
June 30, 2010 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
June 2006 |
|
June 30, 2008 |
|
50,000 |
|
— |
|
5.325% |
|
June 30, 2010 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
December 31, 2006 |
|
50,000 |
|
50,000 |
|
4.990% |
|
March 31, 2014 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
June 29, 2007 |
|
50,000 |
|
— |
|
4.920% |
|
October 31, 2008 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
November 30, 2009 |
|
75,000 |
|
— |
|
5.015% |
|
March 31, 2014 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
November 30, 2009 |
|
75,000 |
|
— |
|
5.023% |
|
March 31, 2014 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
December 31, 2010 |
|
100,000 |
|
— |
|
5.015% |
|
October 31, 2012 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
December 2006 |
|
January 2, 2007 |
|
28,500 |
|
28,500 |
|
5.003% |
|
January 3, 2011 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Total |
|
|
|
|
|
$ |
628,500 |
|
|
|
|
|
|
|
(1) |
The interest pay rates represent the interest rate we will pay for one month LIBOR under the respective interest rate swap agreement. These rates do not include any spread in addition to one month LIBOR that is due monthly as interest expense. |
9
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Same Property Comparisons
(Dollars in thousands)
(Unaudited)
|
|
|
GAAP Basis (1) |
|
Cash Basis (1) |
|
||||||||||||
|
|
|
Quarter Ended |
|
Quarter Ended |
|
||||||||||||
|
|
|
3/31/2007 |
|
3/31/2006 |
|
% Change |
|
3/31/2007 |
|
3/31/2006 |
|
% Change |
|
||||
|
Revenue (2) |
|
$ |
55,826 |
|
$ |
52,372 |
|
6.6% |
|
$ |
54,283 |
|
$ |
50,613 |
|
7.3% |
|
|
Operating expenses |
|
13,596 |
|
11,498 |
|
18.2% |
|
13,596 |
|
11,498 |
|
18.2% |
|
||||
|
Revenue less operating expenses |
|
$ |
42,230 |
|
$ |
40,874 |
|
3.3% |
|
$ |
40,687 |
|
$ |
39,115 |
|
4.0% |
|
NOTE: This summary represents operating data for all properties that were owned and fully operating for the entire periods presented (the “First Quarter Same Properties”). Same property occupancy for the quarters ended March 31, 2007 and 2006 was 94.1% and 94.9%, respectively. Properties undergoing redevelopment are excluded from same property results.
|
(1) |
Revenue less operating expenses computed under GAAP is total revenue associated with the First Quarter Same Properties (excluding lease termination fees, if any) less property operating expenses. Under GAAP, rental revenue is recognized on a straight-line basis over the respective lease terms. Revenue less operating expenses on a cash basis is total revenue associated with the First Quarter Same Properties (excluding lease termination fees, if any) less property operating expenses, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. Straight-line rent adjustments for the quarters ended March 31, 2007 and 2006 for the First Quarter Same Properties were $1,543,000 and $1,759,000 respectively. We believe that revenue less operating expenses on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent adjustments to rental revenue. |
|
|
|
|
(2) |
Fees received from tenants in connection with termination of their leases, if any, are excluded from revenue in the Summary of Same Property Comparisons. As of March 31, 2007, approximately 90% of our leases (on a square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, as of March 31, 2007, approximately 4% of our leases (on a square footage basis) required the tenants to pay a majority of operating expenses. |
10
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Properties
(Dollars in thousands)
|
|
|
March 31, 2007 |
|
December 31, 2006 |
|
|||||||||||
|
|
|
Number of |
|
Rentable Square Feet |
|
Annualized |
|
Occupancy |
|
Occupancy |
|
|||||
|
|
|
Properties |
|
Operating |
|
Redevelopment |
|
Total |
|
Base Rent (1) |
|
Percentage (1) |
|
Percentage (2) |
|
|
|
Markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - Los Angeles Metro |
|
2 |
|
31,343 |
|
29,660 |
|
61,003 |
|
$ |
697 |
|
70.8% |
|
82.5% |
|
|
California - San Diego |
|
27 |
|
1,062,407 |
|
247,849 |
|
1,310,256 |
|
27,387 |
|
90.4% |
|
89.5% |
|
|
|
California - San Francisco Bay |
|
23 |
|
1,637,474 |
|
37,377 |
|
1,674,851 |
|
51,050 |
|
96.2% |
|
94.0% |
|
|
|
Eastern Massachusetts |
|
39 |
|
3,003,552 |
|
272,087 |
|
3,275,639 |
|
97,827 |
|
95.2% |
|
95.9% |
|
|
|
International - Canada |
|
3 |
|
296,362 |
|
— |
|
296,362 |
|
6,278 |
|
100.0% |
|
100.0% |
|
|
|
New Jersey/Suburban Philadelphia |
|
8 |
|
443,349 |
|
— |
|
443,349 |
|
8,907 |
|
96.6% |
|
96.6% |
|
|
|
Southeast |
|
12 |
|
596,172 |
|
62,234 |
|
658,406 |
|
9,492 |
|
84.3% |
(3) |
78.1% |
(3) |
|
|
Suburban Washington D.C. |
|
31 |
|
2,391,314 |
|
108,556 |
|
2,499,870 |
|
46,792 |
|
90.1% |
|
92.5% |
|
|
|
Washington - Seattle |
|
12 |
|
806,759 |
|
72,492 |
|
879,251 |
|
25,667 |
|
95.1% |
|
94.9% |
|
|
|
Total Properties |
|
157 |
|
10,268,732 |
|
830,255 |
|
11,098,987 |
|
$ |
274,097 |
|
93.1% |
(4) |
93.1% |
(5) |
|
(1) |
Excludes spaces at properties totaling 830,255 square feet undergoing a permanent change in use to office/laboratory space through redevelopment and one property totaling 58,400 square feet that is classified as “held for sale” as of March 31, 2007. |
|
(2) |
Excludes spaces at properties totaling 612,699 square feet undergoing a permanent change in use to office/laboratory space through redevelopment. |
|
(3) |
Substantially all of the vacant space is office or warehouse space. |
|
(4) |
Including spaces undergoing a permanent change in use to office/laboratory space through redevelopment, occupancy as of March 31, 2007 was 85.7%. See page 15 for additional information on our redevelopment program. |
|
(5) |
Including spaces undergoing a permanent change in use to office/laboratory space through redevelopment, occupancy as of December 31, 2006 was 88.0%. See page 15 for additional information on our redevelopment program. |
11
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Leasing Activity
For the Quarter Ended March 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
TI’s/Lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
|
Commissions |
|
Average |
|
|
|
|
Number |
|
Square |
|
Expiring |
|
New |
|
Rate |
|
Per |
|
Lease |
|
|
|
|
of Leases |
|
Footage |
|
Rates |
|
Rates |
|
Changes |
|
Square Foot |
|
Terms |
|
|
Leasing Activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Expirations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
60 |
|
735,863 |
|
$23.20 |
|
— |
|
— |
|
— |
|
— |
|
|
GAAP Basis |
|
60 |
|
735,863 |
|
$27.31 |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewed/Releasable Space Leased |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
23 |
|
325,442 |
|
$24.27 |
|
$26.02 |
|
7.2% |
|
$4.91 |
|
3.7 years |
|
|
GAAP Basis |
|
23 |
|
325,442 |
|
$24.59 |
|
$26.61 |
|
8.2% |
|
$4.91 |
|
3.7 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Month-to-Month Leases In Effect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
23 |
|
46,810 |
|
$28.41 |
|
$28.43 |
|
— |
|
— |
|
— |
|
|
GAAP Basis |
|
23 |
|
46,810 |
|
$28.25 |
|
$28.43 |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeveloped/Developed/ Vacant Space Leased |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
23 |
|
135,156 |
|
— |
|
$32.21 |
|
— |
|
$6.21 |
|
3.9 years |
|
|
GAAP Basis |
|
23 |
|
135,156 |
|
— |
|
$32.85 |
|
— |
|
$6.21 |
|
3.9 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasing Activity Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Month-to-Month Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
46 |
|
460,598 |
|
— |
|
$27.84 |
|
— |
|
$5.30 |
|
3.8 years |
|
|
GAAP Basis |
|
46 |
|
460,598 |
|
— |
|
$28.44 |
|
— |
|
$5.30 |
|
3.8 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Including Month-to-Month Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Basis |
|
69 |
|
507,408 |
|
— |
|
$27.89 |
|
— |
|
— |
|
— |
|
|
GAAP Basis |
|
69 |
|
507,408 |
|
— |
|
$28.44 |
|
— |
|
— |
|
— |
|
12
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Lease Expirations
March 31, 2007
|
|
|
|
|
Square |
|
Percentage of |
|
Annualized Base Rent |
|
|
Year of Lease |
|
Number of |
|
Footage of |
|
Aggregate |
|
of Expiring Leases |
|
|
Expiration |
|
Leases Expiring |
|
Expiring Leases |
|
Leased Square Feet |
|
(per square foot) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
66(1) |
|
788,496 |
|
8.2% |
|
$24.23 |
|
|
2008 |
|
49 |
|
850,478 |
|
8.9% |
|
$26.89 |
|
|
2009 |
|
53 |
|
695,176 |
|
7.3% |
|
$22.57 |
|
|
2010 |
|
41 |
|
1,008,501 |
|
10.5% |
|
$27.03 |
|
|
2011 |
|
50 |
|
1,384,876 |
|
14.5% |
|
$27.81 |
|
|
|
|
Square Footage of |
|
||
|
Markets |
|
2007 |
|
2008 |
|
|
|
|
|
|
|
|
|
California - Los Angeles Metro |
|
— |
|
4,006 |
|
|
California - San Diego |
|
98,087 |
|
97,186 |
|
|
California - San Francisco Bay |
|
160,913 |
|
252,028 |
|
|
Eastern Massachusetts |
|
378,663 |
|
248,898 |
|
|
International - Canada |
|
— |
|
— |
|
|
New Jersey/Suburban Philadelphia |
|
— |
|
40,000 |
|
|
Southeast |
|
21,564 |
|
16,103 |
|
|
Suburban Washington D.C. |
|
89,151 |
|
56,986 |
|
|
Washington - Seattle |
|
40,118 |
|
135,271 |
|
|
|
|
|
|
|
|
|
Total |
|
788,496 |
(1) |
850,478 |
|
(1) Includes month-to-month leases for approximately 47,000 square feet.
13
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Additions and Dispositions of Properties
For the Quarter Ended March 31, 2007
(Dollars in thousands)
|
|
|
Acquisition |
|
Month of |
|
Developable |
|
|
|
Markets |
|
Amount |
|
Acquisition |
|
Square Footage |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions of Land: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Francisco Bay |
|
$ |
5,200 |
|
January |
|
70,000 |
|
|
Eastern Massachusetts |
|
13,750 |
|
February |
|
81,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Additions of Land |
|
$ |
18,950 |
|
|
|
151,000 |
|
|
|
|
Disposition |
|
Month of |
|
Rentable |
|
|
|
Markets |
|
Amount |
|
Disposition |
|
Square Feet |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban Washington D.C. |
|
$ |
8,664 |
|
March |
|
75,500 |
|
14
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Square Footage Undergoing Redevelopment
March 31, 2007
|
|
|
|
|
|
|
|
|
Square Footage |
|
|
|
|
|
|
|
Placed |
|
Estimated |
|
Estimated |
|
Undergoing |
|
|
|
|
|
|
|
in |
|
In-Service |
|
Investment |
|
Redevelopment/ |
|
|
|
|
|
Markets/Submarkets |
|
Redevelopment |
|
Dates |
|
Per Square Foot |
|
Total Property |
|
Status |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - Los Angeles Metro |
|
2006 |
|
2008 |
|
$ |
80-100 |
|
29,660/29,660 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Diego/Torrey Pines (1) |
|
2004 |
|
2009 |
|
$ |
100-120 |
|
87,140/87,140 |
|
Redesign/Construction (Entitlements Just Completed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Diego/Torrey Pines |
|
2006 |
|
2009 |
|
$ |
80-100 |
|
43,600/43,600 |
|
Redesign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Diego/Sorrento |
|
2006 |
|
2008 |
|
$ |
70-80 |
|
30,147/30,147 |
|
Redesign/Demolition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Diego/Torrey Pines |
|
2007 |
|
2009 |
|
$ |
80-100 |
|
86,962/86,962 |
|
Redesign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Francisco Bay/Peninsula |
|
2007 |
|
2008 |
|
$ |
80-100 |
|
37,377/82,712 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Massachusetts/Cambridge |
|
2005 |
|
2007 |
|
$ |
80-100 |
|
26,589/26,589 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Massachusetts/Cambridge |
|
2006 |
|
2008 |
|
$ |
120-140 |
|
155,090/155,090 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Massachusetts/Suburban |
|
2006 |
|
2008 |
|
$ |
100-120 |
|
23,391/82,330 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Massachusetts/Cambridge |
|
2007 |
|
TBD |
|
$ |
120-140 |
|
67,017/184,577 |
|
Entitlements/Redesign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southeast/Florida |
|
2006 |
|
2008 |
|
$ |
80-100 |
|
45,841/45,841 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southeast/Research Triangle Park |
|
2007 |
|
2008 |
|
$ |
80-100 |
|
16,393/77,395 |
|
Design |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban Washington DC/Shady Grove |
|
2007 |
|
2008 |
|
$ |
70-80 |
|
10,170/60,495 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban Washington DC/Shady Grove |
|
2007 |
|
2009 |
|
$ |
70-80 |
|
98,386/125,004 |
|
Redesign/Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington - Seattle/Lake Union |
|
2005 |
|
2007 |
|
$ |
80-100 |
|
12,719/27,633 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington - Seattle/First Hill |
|
2006 |
|
2007 |
|
$ |
70-80 |
|
59,773/164,345 |
|
Construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
830,255/1,309,520 |
|
|
|
|
Our redevelopment program involves ongoing activities necessary for the permanent change of use of applicable redevelopment space to office/laboratory space. Spaces currently built out with laboratory improvements are generally not placed into our value-add redevelopment program. As required under GAAP, interest and other costs directly related and essential to the project are capitalized on redevelopment properties on the basis allocable only to that portion of space undergoing redevelopment. In addition to properties undergoing redevelopment, as of March 31, 2007 our asset base contains imbedded opportunities for future permanent change of use to office/laboratory space through redevelopment aggregating approximately 942,000 rentable square feet. See Summary of Imbedded Future Development and Redevelopment Square Footage on page 17.
|
(1) |
This redevelopment project includes the redevelopment of approximately 87,000 square feet. This project also includes site work and a multi-story below and above ground parking structure to support both the existing building undergoing redevelopment (for which entitlements have just been received) and an additional building targeted for development in the future. |
15
ALEXANDRIA
REAL ESTATE EQUITIES, INC.
Summary of Properties Undergoing Ground-Up Development
March 31, 2007
In accordance with Statement of Financial Accounting Standards No. 34, “Capitalization of Interest Cost” (“SFAS 34”) and Statement of Financial Accounting Standards No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects” (“SFAS 67”), we are required to capitalize direct construction, including pre-construction costs, interest, property taxes, insurance and other costs directly related and essential to the construction of a project while activities are ongoing to prepare an asset for its intended use. Pre-construction costs includes costs related to the development of plans and the process of obtaining entitlements and permits from government authorities. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Should development, redevelopment or construction activity cease, construction costs, including interest, would no longer be eligible for capitalization, under SFAS 34 and SFAS 67, and would be expensed as incurred.
|
(1) |
Our aggregate construction costs to date approximate $115 per developable square foot. |
|
(2) |
In addition, we have the right to develop an additional parcel with approximately 420,000 square feet. This square footage is not included in the imbedded developable square footage shown on page 17. |
16
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Imbedded Future Development and Redevelopment Square Footage
March 31, 2007
|
|
|
Imbedded Future Development |
|
|
|
|
|
||
|
|
|
Development/ |
|
Total Imbedded |
|
Imbedded Future |
|
|
|
|
|
|
Pre-construction |
|
Development |
|
Redevelopment |
|
|
|
|
Markets |
|
Square Footage (1) |
|
Square Footage |
|
Square Footage |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San Diego |
|
427,000 |
|
467,000 |
|
56,000 |
|
523,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San
Francisco Bay/ |
|
1,994,000 |
|
2,544,000 |
|
— |
|
2,544,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
California - San
Francisco Bay/ |
|
799,000 |
|
850,000 |
|
100,000 |
|
950,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern Massachusetts |
|
338,000 |
|
563,000 |
|
157,000 |
|
720,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Suburban Washington D.C. |
|
494,000 |
|
857,000 |
|
377,000 |
|
1,234,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington - Seattle |
|
245,000 |
|
386,000 |
|
120,000 |
|
506,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
54,000 |
|
384,000 |
|
132,000 |
|
516,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
4,351,000 |
|
6,051,000 |
(2) |
942,000 |
|
6,993,000 |
|
The imbedded future development and redevelopment square footage shown above represents future ground-up development projects and future redevelopment (permanent change in use of applicable space to office/laboratory space) projects. A significant portion of our imbedded future development square footage is in the development/pre-construction phase (entitlement, permitting, design, etc.). See discussion on SFAS 34 and SFAS 67 on page 16. The exact date of physical construction will depend on successful completion of development/pre-construction activities and management’s assessment of overall market conditions. As required under GAAP, direct construction, interest, property taxes, insurance and other costs directly related and essential to the development/pre-construction, or construction of a project, is mandated to be capitalized during pre-construction when activities are ongoing to bring these assets to their intended use.
|
(1) |
Development/pre-construction square footage is included in Imbedded Future Development-Total Imbedded Development Square Footage shown above. |
|
(2) |
In addition, we have the right to develop an additional parcel with approximately 420,000 square feet. This square footage is not included in the imbedded developable square footage shown above. |
17
ALEXANDRIA
REAL ESTATE EQUITIES, INC.
Summary of Capital Costs
For the Quarter Ended March 31, 2007
(In thousands)
|
Property-related capital expenditures (1) |
|
$ |
193 |
|
|
|
|
|
|
|
|
Leasing costs (2) |
|
$ |
84 |
|
|
|
|
|
|
|
|
Property-related redevelopment costs (3) |
|
$ |
30,359 |
|
|
|
|
|
|
|
|
Property-related development costs (3) |
|
$ |
69,990 |
|
|
(1) |
Property-related capital expenditures include all major capital and recurring capital expenditures except capital expenditures that are recoverable from tenants, revenue-enhancing capital expenditures, or costs related to the redevelopment of a property. Major capital expenditures consist of roof replacements and HVAC systems which are typically identified and considered at the time the property is acquired. Capital expenditures fluctuate in any given period due to the nature, extent or timing of improvements required and the extent to which they are recoverable from tenants. Approximately 91% of our leases (based on rentable square feet) provide for the recapture of certain capital expenditures (such as HVAC systems maintenance and/or replacement, roof replacement and parking lot resurfacing). In addition, we implement an active preventative maintenance program at each of our properties to minimize capital expenditures. |
|
|
|
|
(2) |
Leasing costs consist of tenant improvements and leasing commissions related to leasing of acquired vacant space and second generation space. |
|
|
|
|
(3) |
Amount includes leasing costs related to development and redevelopment projects. |
18
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Conference Call Information
For the First Quarter Ended March 31, 2007
Alexandria Real Estate Equities, Inc. will be hosting a conference call to discuss its operating and financial results for the first quarter ended March 31, 2007:
|
Date: |
|
May 4, 2007 |
|
|
|
|
|
|
|
|
Time: |
|
2:00 P.M. Eastern Daylight Time/11:00 A.M. Pacific Daylight Time |
|
|
|
|
|
|
|
Phone Number: |
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(913) 981-5558 |
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Confirmation Code: |
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5197240 |
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