Alexandria Real Estate Equities, Inc 8-K, filed Nov 7, 2003
Alexandria Real Estate Equities, Inc. (ARE)
About this 8-K
Alexandria Real Estate Equities, Inc filed this 8-K on November 7, 2003, reporting on events of November 5, 2003.
Items reported
- Item 12
- Item 7
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): November 5, 2003
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(Exact name of registrant as specified in its charter)
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135 North Los Robles Avenue, Suite 250
Pasadena, California 91101
(Address of principal executive offices including zip code)
(626) 578-0777
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated November 5, 2003.
Item 12. Results of Operations and Financial Condition
On November 5, 2003, we issued a press release entitled "Alexandria Real Estate Equities, Inc. Reports Third Quarter 2003 Results" which sets forth our results of operations for the third quarter of 2003. A copy of that press release is attached hereto as Exhibit 99.1.
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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November 6, 2003 |
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/ PETER J. NELSON |
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Peter J. Nelson |
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Chief Financial Officer and Treasurer |
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(Principal Financial and Accounting Officer) |
EXHIBIT INDEX
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Exhibit Title |
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* Also provided in PDF format as a courtesy.
Exhibit 99.1
Contact: Joel S. Marcus
Chief Executive Officer
Alexandria Real Estate Equities, Inc.
(626) 578-9693
Alexandria Real Estate Equities, Inc.
Reports
Third Quarter 2003 Results
- Company Reports Funds from Operations of $1.06 Per Share
(Diluted), Up 8%, and
Net Income Available to Common
Stockholders of $1.00 Per Share (Diluted),
Up 117%, for Third Quarter 2003 Over Third Quarter 2002
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Highlights
- Third Quarter 2003 Funds from Operations (FFO) of $1.06 Per Share (Diluted)
- Third Quarter 2003 Total Revenues Up 11%, FFO Up 13% and FFO Per Share (Diluted) Up 8% Over Third Quarter 2002
- Third Quarter 2003 Net Income Available to Common Stockholders of $1.00 Per Share (Diluted), Up 117% Over Third Quarter 2002
- Signed 20 Leases for 212,000 Square Feet of Space
- Closed $150 Million Five Year Unsecured Term Loan
- Renewed and Extended $440 Million Unsecured Credit Facility
- Closed Sale of 96,000 Square Foot Property in Eastern Massachusetts
PASADENA, CA. - November 5, 2003 -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the quarter ended September 30, 2003.
For the third quarter of 2003, Alexandria reported FFO of $20,405,000, or $1.06 per share (diluted), on total revenues of $40,782,000, compared to FFO of $18,114,000, or 98 cents per share (diluted), on total revenues of $36,864,000 for the third quarter of 2002. Comparing the third quarter of 2003 to the third quarter of 2002, total revenues increased 11%, FFO increased 13% and FFO per share (diluted) increased 8%. FFO is a non-GAAP measure widely used by publicly-traded real estate investment trusts. A reconciliation of FFO to GAAP net income is included in the financial information accompanying this press release. Net income available to common stockholders for the third quarter of 2003 was $19,369,000, or $1.00 per share (diluted), compared to net income available to common stockholders of $8,530,000, or 46 cents per share (diluted), for the third quarter of 2002. Net income for the third quarter of 2003 includes a gain on sale of property aggregating $8,777,000. Net income available to common stockholders for the third quarter of 2003 before the gains and losses on sales of property and the loss on early extinguishment of debt was $10,592,000, or 55 cents per share (diluted), compared to $9,532,000, or 51 cents per share (diluted), an 8% increase on a per share basis over the third quarter of 2002.
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ALEXANDRIA REAL ESTATE EQUITIES, INC. REPORTS THIRD QUARTER 2003
RESULTS
Page 2
For the nine months ended September 30, 2003, Alexandria reported FFO of $60,330,000, or $3.14 per share (diluted), on total revenues of $121,453,000, compared to FFO of $50,602,000, or $2.90 per share (diluted), on total revenues of $105,377,000 for the nine months ended September 30, 2002. Net income available to common stockholders for the nine months ended September 30, 2003 was $39,618,000, or $2.06 per share (diluted), as compared to $24,224,000, or $1.39 per share (diluted), for the nine months ended September 30, 2002. Net income available to common stockholders for the nine months ended September 30, 2003 before the gains and losses on sales of property and the loss on early extinguishment of debt was $31,296,000, or $1.63 per share (diluted), compared to $25,226,000, or $1.44 per share (diluted), a 13% increase on a per share basis over the nine months ended September 30, 2002.
The Company announced that it had signed a total of 20 leases during the third quarter for approximately 212,000 square feet of space at 15 different properties (excluding 14 month-to-month leases for approximately 62,000 square feet which were effective during the quarter). Of this total, approximately 65,000 square feet were for redeveloped, developed or previously vacant space at eight properties, approximately 39,000 square feet of which were delivered from the Company's redevelopment or development programs, with the remaining approximately 26,000 square feet for previously vacant space. The remaining approximately 147,000 square feet were for new or renewal leases related to previously leased space. Rental rates for new or renewal leases were on average approximately 20% higher than expiring leases. For the nine months ended September 30, 2003, the Company signed a total of 49 leases for approximately 444,000 square feet of space at 26 different properties (excluding month-to- month leases). Of this total, approximately 162,000 square feet were for redeveloped, developed or previously vacant space at 17 properties, of which approximately 95,000 square feet were delivered from the Company's redevelopment or development programs. The remaining 282,000 square feet were for new or renewal space with rental rates on average approximately 4% higher than expiring leases. Excluding one lease for approximately 21,000 square feet in the San Francisco Bay market, rental rates for new or renewal leases for the nine months period were on average approximately 12% higher than expiring rates.
The Company announced that it closed a $150 million unsecured term loan in November 2003, which loan matures in November 2008. Proceeds from the term loan were used to pay down outstanding borrowings on the Company's unsecured credit facility.
The Company also announced that it closed on the early renewal and extension of its $440 million unsecured credit facility in November 2003, which facility matures in November 2006. The Company has the right to extend the facility for an additional one year at its option.
The Company announced the closing of the sale in August 2003 of an office/laboratory property containing approximately 96,000 square feet in Eastern Massachusetts at a gain of approximately $8.8 million.
Based on the Company's current view of existing market conditions and certain assumptions, the Company has updated its prior earnings guidance:
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2003 |
2004 |
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Fully diluted net income per common share * |
$2.20 |
$2.70 |
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Fully diluted FFO per common share |
$4.23 |
$4.55 |
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* excludes gains or losses on sales |
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ALEXANDRIA REAL ESTATE EQUITIES, INC. REPORTS THIRD QUARTER 2003
RESULTS
Page 3
Alexandria Real Estate Equities, Inc. is a publicly traded real estate operating company principally focused on the ownership, operation, management, acquisition, expansion and selective redevelopment and development of properties containing office/laboratory space. Such properties are designed and improved for lease primarily to pharmaceutical, biotechnology, life science product and service companies, not-for-profit scientific research institutions, universities and related government agencies. Alexandria's portfolio currently consists of 87 properties comprising approximately 5.6 million square feet of office/laboratory space.
This press release contains forward-looking statements within the meaning of the federal securities laws. The Company's 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 the Company's Form 10-K Annual Report and other periodic reports filed with the Securities and Exchange Commission.
(Tables follow)
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, 2003 Sept. 30, 2002 Sept. 30, 2003 Sept. 30, 2002
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Income statement data
Total revenues $ 40,782 $ 36,864 $ 121,453 $ 105,377
Expenses
Rental operations 8,463 8,255 25,596 21,811
General and administrative 3,568 3,203 10,661 9,984
Interest 6,532 5,726 19,915 18,602
Depreciation and amortization 9,813 8,334 29,034 24,642
Loss on early extinguishment of debt (3) -- 1,002 -- 1,002
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28,376 26,520 85,206 76,041
Income from continuing operations 12,406 10,344 36,247 29,336
Income from discontinued operations 9,188 411 10,045 1,242
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Net income 21,594 10,755 46,292 30,578
Dividends on preferred stock 2,225 2,225 6,674 6,354
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Net income available to common stockholders $ 19,369 $ 8,530 39,618 24,224
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Weighted average shares of
common stock outstanding
-Basic 19,023,162 18,329,443 18,957,609 17,169,003
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-Diluted 19,276,932 18,556,300 19,191,021 17,463,727
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Basic income per common share
Income from continuing operations $ 0.65 $ 0.56 $ 1.91 $ 1.71
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Income from discontinued operations $ 0.48 $ 0.02 $ 0.53 $ 0.07
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Net income $ 1.14 $ 0.59 $ 2.44 $ 1.78
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Net income available to common stockholders $ 1.02 $ 0.47 $ 2.09 $ 1.41
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Diluted income per common share
Income from continuing operations $ 0.64 $ 0.56 $ 1.89 $ 1.68
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Income from discontinued operations $ 0.48 $ 0.02 $ 0.52 $ 0.07
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Net income $ 1.12 $ 0.58 $ 2.41 $ 1.75
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Net income available to common stockholders $ 1.00 $ 0.46 $ 2.06 $ 1.39
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(Continued on next page)
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, 2003 Sept. 30, 2002 Sept. 30,2003 Sept. 30, 2002
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Funds from operations (1)
Net income $ 21,594 $ 10,755 $ 46,292 $ 30,578
Add
Depreciation and amortization (2) 9,813 8,582 29,034 25,376
Loss on early extinguishment of debt (3) -- 1,002 -- 1,002
Subtract
Dividends on preferred stock (2,225) (2,225) (6,674) (6,354)
Gain/loss on sales of property (4) (8,777) -- (8,322) --
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Funds from operations (FFO) $ 20,405 $ 18,114 $ 60,330 $ 50,602
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FFO per common share
-Basic $ 1.07 $ 0.99 $ 3.18 $ 2.95
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-Diluted $ 1.06 $ 0.98 $ 3.14 $ 2.90
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Reconciliation of net income available to common
stockholders per share (diluted) to FFO per
common share (diluted)
Net income available to common stockholders per
share (diluted) $ 1.00 $ 0.46 $ 2.06 $ 1.39
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Depreciation and amortization per common share (2) $ 0.51 $ 0.46 $ 1.51 $ 1.45
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Loss on early extinguishment of debt
per common share (3) $ -- $ 0.05 $ -- $ 0.06
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Gain/loss on sales of property per common share (4) $ (0.46) $ -- $ (0.43) $ --
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FFO per common share (diluted) $ 1.06 $ 0.98 $ 3.14 $ 2.90
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As of As of
Sept. 30, 2003 Sept. 30, 2002
Balance sheet data -------------- --------------
Rental properties, net $ 942,794 $ 911,971
Total assets $ 1,211,145 $ 1,079,325
Total liabilities $ 709,783 $ 592,706
Stockholders' equity $ 501,362 $ 486,619
- 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 mis-correlation 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"), 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 of REITs, it should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our 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. We believe that net income is the most directly comparable GAAP financial measure to FFO.
- 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).
- Pursuant to SFAS 145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections", in 2003 we reclassified the 2002 loss on early extinguishment of debt to continuing operations. In 2002, this loss was classified as an extraordinary item as previously required under SFAS 4, "Reporting Gains and Losses from Extinguishment of Debt". FFO for the three and nine months ended September 30, 2002 has been adjusted for this loss to maintain comparability to previously reported FFO.
- Gain/loss on sales of property relates to the disposition of a property in the Eastern Massachusetts market during the quarter ended September 30, 2003 and the disposition of a property in the San Francisco Bay market during the quarter ended March 31, 2003. Gain/loss on sales of property is included on the income statement in income from discontinued operations.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Supplemental Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarterly Supplemental Financial Information
For the Three Months Ended
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Operational data ----------- ----------- ----------- ----------- -----------
Breakdown of revenues from continuing operations (a)
Rental income $ 31,702 31,670 31,646 30,412 28,654
Tenant recoveries 8,355 7,975 8,623 8,360 7,911
Interest and other income 725 413 344 523 299
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Total $ 40,782 40,058 40,613 39,295 36,864
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Funds from operations per share - diluted (b) $ 1.06 1.05 1.04 1.03 0.98
Dividends per share on common stock $ 0.56 0.53 0.53 0.50 0.50
Dividend payout ratio (common stock) 52.6% 50.5% 50.8% 48.4% 52.4%
As of
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Other data ----------- ----------- ----------- ----------- -----------
Number of shares of common stock outstanding
at end of period 19,161,756 19,058,773 19,006,223 18,973,957 18,969,425
Number of properties (c)
Acquired/completed during period -- -- 1 2 2
Sold/reconstruction during period (1) -- (2) -- --
Owned at end of period 87 88 88 89 87
Square feet (c)
Acquired/completed during period -- -- 51,340 158,336 98,497
Sold/reconstruction during period (96,500) -- (70,281) -- --
Owned at end of period 5,623,466 5,719,966 5,719,966 5,738,907 5,580,571
- The historical results above exclude the results of assets held for sale which have been reflected as discontinued operations.
- The White Paper on Funds from Operations ("FFO") issued by the Board of Governors of the National Association of Real Estate Investment Trusts in April 2002 defines FFO as net income, computed in accordance with generally accepted accounting principles, excluding gains or (losses) from sales, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. See page 5 for a reconciliation of FFO for the current quarter to net income, the most directly comparable GAAP financial measure.
- Includes assets held for sale during the applicable periods such assets were held for sale. No such assets were held for sale as of September 30, 2003.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2003 2002
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Assets
Rental properties, net $ 942,794 $ 976,422
Properties under development 143,287 68,386
Cash and cash equivalents 3,225 3,790
Tenant security deposits and other restricted cash 9,246 8,020
Tenant receivables 1,821 2,641
Deferred rent 29,967 26,063
Other assets 80,805 73,921
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Total assets $ 1,211,145 $ 1,159,243
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Liabilities and stockholders' equity
Secured notes payable $ 321,316 $ 276,878
Unsecured line of credit 334,000 338,000
Accounts payable, accrued expenses and tenant
security deposits 41,883 47,118
Dividends payable 12,584 11,394
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Total liabilities 709,783 673,390
Total stockholders' equity 501,362 485,853
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Total liabilities and stockholders' equity $ 1,211,145 $ 1,159,243
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ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Debt
September 30, 2003
(Dollars in thousands)
(Unaudited)
Principal Amortization/Maturities (1)
Year Amount
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2003 $ 1,278
2004 9,415
2005 28,370 (2)
2006 25,571
2007 15,123
Thereafter 241,276
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Subtotal 321,033
Unamortized Premium 283
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Total $ 321,316
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Secured and Unsecured Debt Analysis
Weighted Average Weighted
% of Effective Average
Balance Balance Interest Rate Maturity
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Secured Debt $ 321,316 49.03% 7.06% 7.1 Years
Unsecured Debt 334,000 50.97% 2.75%(3) 1.8 Years
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Total Debt $ 655,316 100.00% 4.86% 4.4 Years
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Floating and Fixed Rate Debt Analysis
Weighted Average Weighted
% of Effective Average
Balance Balance Interest Rate Maturity
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Fixed Rate Debt $ 298,796 45.60% 7.37% 7.6 Years
Floating Rate Debt 356,520 (3) 54.40% 2.76%(3) 1.8 Years
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Total Debt $ 655,316 100.00% 4.86% 4.4 Years
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- Excludes the line of credit
- Of this amount, $22,520,000 represents the outstanding balance on a loan related to a property developed in the San Francisco Bay market, which has a maturity of January 2005, and may be extended, at the borrower's option, for an additional year.
- Floating rate debt is hedged by existing swap agreements (see page 9). The interest rate on floating rate debt shown above does not reflect the impact of such swap agreements.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Interest Rate Swap Agreements
September 30, 2003
(Dollars in thousands)
(Unaudited)
Notional Interest
Transaction Dates Effective Dates Amounts Pay Rates (1) Termination Dates
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March 2002 December 31, 2002 $ 50,000 5.364% December 31, 2004
July 2002 January 1, 2003 $ 25,000 3.855% June 30, 2005
July 2002 January 1, 2003 $ 25,000 3.865% June 30, 2005
December 2002 January 2, 2003 $ 25,000 3.285% June 30, 2006
December 2002 January 2, 2003 $ 25,000 3.285% June 30, 2006
November 2002 June 1, 2003 $ 25,000 3.115% December 31, 2005
November 2002 June 1, 2003 $ 25,000 3.155% December 31, 2005
- For all interest rate swap agreements, interest is received based on one month LIBOR.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Operating Portfolio
September 30, 2003
(Dollars in thousands)
Number of Rentable Annualized Occupancy
Properties Square Feet Base Rent Percentages(2)
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Markets
California - Pasadena 1 31,343 $ 307 31.9%(1)
California - San Diego 22 970,848 26,889 93.7%
California - San Francisco Bay 8 483,452 14,921 100.0%
Eastern Massachusetts 9 598,894 20,314 89.9%
New Jersey/Suburban Philadelphia 6 346,919 6,251 100.0%
Southeast 5 259,414 3,718 73.8%(1)
Suburban Washington D.C. 21 1,722,633 28,438 96.2%
Washington - Seattle 5 439,964 16,159 99.2%
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Total 77 4,853,467 $ 116,997 94.2%
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- All, or substantially all, of the vacant space is office or warehouse space.
- Excludes occupancy at properties under full or partial redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Same Property Comparisons
(Dollars in thousands)
(Unaudited)
GAAP Basis (1) Cash Basis (1)
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Quarter Ended Quarter Ended
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9/30/03 9/30/02 % Change 9/30/03 9/30/02 % Change
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Revenue $ 29,760 $ 29,527 0.8% $ 29,052 $ 28,654 1.4%
Operating expenses 6,389 6,631 -3.6% 6,389 6,631 -3.6%
Revenue less ---------- ---------- --------- ---------- ---------- --------
operating expenses $ 23,371 $ 22,896 2.1% $ 22,663 $ 22,023 2.9%
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GAAP Basis (1) Cash Basis (1)
-------------------------------- -------------------------------
Nine Months Ended Nine Months Ended
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9/30/03 9/30/02 % Change 9/30/03 9/30/02 % Change
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Revenue $ 81,881 $ 79,232 3.3% $ 80,034 $ 76,955 4.0%
Operating expenses 17,703 16,512 7.2% 17,703 16,512 7.2%
Revenue less ---------- ---------- --------- ---------- ---------- --------
operating expenses $ 64,178 $ 62,720 2.3% $ 62,331 $ 60,443 3.1%
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NOTE: This summary represents operating data for all properties that were owned and fully operating for the entire periods presented (the "Third Quarter Same Properties" for the Quarterly periods and "Nine Months Same Properties" for the Nine Month periods).
- Revenue less operating expenses computed under GAAP is total revenue associated with the Third Quarter Same Properties and the Nine Months Same Properties, as applicable, (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 Third Quarter Same Properties and the Nine Months Same Properties, as applicable, (excluding termination fees, if any) less property operating expenses, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. Straight-line adjustments for the quarter ended September 30, 2003 and 2002 for the Third Quarter Same Properties were $708,000 and $873,000, respectively. Straight-line rent adjustments for the nine months ended September 30, 2003 and 2002 for the Nine Months Same Properties were $1,847,000 and $2,277,000, 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 non-cash adjustments to rental revenue.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Leasing Activity
For the Quarter Ended September 30, 2003
Rental TI's/Lease Average
Number Square Expiring New Rate Commissions Lease
of Leases Footage Rates Rates Changes Per Foot Terms
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Leasing Activity
Lease Expirations
Cash Basis 37 326,054 $19.11 -- -- -- --
GAAP Basis 37 326,054 $18.50 -- -- -- --
Renewed / Releasable Space Leased
Cash Basis 12 147,002 $18.90 $20.99 11.1% $0.18 2.2 years
GAAP Basis 12 147,002 $17.63 $21.22 20.4% $0.18 2.2 years
Month-to-Month Leases In Effect
Cash Basis 14 62,006 $20.25 $20.35 0.5% -- --
GAAP Basis 14 62,006 $20.25 $20.35 0.5% -- --
Redeveloped/Developed/
Vacant Space Leased
Cash Basis 8 65,197 -- $24.12 -- $6.55 4.2 Years
GAAP Basis 8 65,197 -- $24.20 -- $6.55 4.2 Years
Leasing Activity Summary
Excluding Month-to-Month Leases
Cash Basis 20 212,199 -- $21.95 -- -- --
GAAP Basis 20 212,199 -- $22.14 -- -- --
Including Month-to-Month Leases
Cash Basis 34 274,205 -- $21.59 -- -- --
GAAP Basis 34 274,205 -- $21.73 -- -- --
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Leasing Activity
For the Nine Months Ended September 30, 2003
Rental TI's/Lease Average
Number Square Expiring New Rate Commissions Lease
of Leases Footage Rates Rates Changes Per Foot Terms
--------- --------- --------- --------- -------- ----------- ---------
Leasing Activity
Lease Expirations
Cash Basis 56 586,455 $21.87 -- -- -- --
GAAP Basis 56 586,455 $21.50 -- -- -- --
Renewed / Releasable Space Leased
Cash Basis 23 282,600 $22.49 $21.82 -3.0% (a) $0.62 2.3 Years
GAAP Basis 23 282,600 $21.90 $22.78 4.0% (a) $0.62 2.3 Years
Month-to-Month Leases In Effect
Cash Basis 14 62,006 $20.53 $20.35 -0.9% -- --
GAAP Basis 14 62,006 $20.37 $20.35 -0.1% -- --
Redeveloped/Developed/
Vacant Space Leased
Cash Basis 26 161,568 -- $26.00 -- $4.11 4.1 Years
GAAP Basis 26 161,568 -- $26.22 -- $4.11 4.1 Years
Leasing Activity Summary
Excluding Month-to-Month Leases
Cash Basis 49 444,168 -- $23.34 -- -- --
GAAP Basis 49 444,168 -- $24.03 -- -- --
Including Month-to-Month Leases
Cash Basis 63 506,174 -- $22.98 -- -- --
GAAP Basis 63 506,174 -- $23.58 -- -- --
- Excluding a lease for 21,316 square feet in the San Francisco Bay market, rental rates for renewed or released space were on average 6.9% higher than expiring rates on a Cash Basis and 12.1% higher than expiring rates on a GAAP Basis.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Lease Expirations
September 30, 2003
Square Percentage of Annualized Base
Year of Number of Footage of Aggregate Rent of Expiring
Lease Leases Expiring Portfolio Lease Leases (per
Expiration Expiring Leases Square Feet square foot)
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2003 30 (1) 254,297 5.1% $19.97
2004 49 574,175 11.6% $21.61
2005 22 302,043 6.1% $28.41
2006 32 792,369 16.0% $24.33
2007 14 330,562 6.7% $24.33
- Includes 17 month-to-month leases for approximately 62,000 square feet and leases expiring between October 1, 2003 and December 31, 2003.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Properties Under Development
September 30, 2003
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Estimated |
Total |
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|
In-Service |
Rentable |
|
|
Markets |
Dates |
Square Footage |
|
California - San Diego |
2Q04 |
45,000 |
|
Southeast |
3Q04 |
96,000 |
|
Suburban Washington D.C. |
4Q03 |
95,000 |
|
Suburban Washington D.C. |
4Q04 |
76,000 |
|
Washington - Seattle |
3Q04 |
165,000 |
|
Total |
477,000 |
|
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Properties Under Redevelopment
September 30, 2003
|
Estimated |
Total Rentable |
Total Square |
|
|
In-Service |
Square Footage |
Footage Being |
|
|
Markets |
Dates |
of Property (1) |
Redeveloped |
|
California - San Francisco Bay |
Various |
153,837 |
31,612 |
|
California - San Francisco Bay |
Various |
98,964 |
21,316 |
|
California - San Francisco Bay |
3Q04 |
32,074 |
9,497 |
|
Eastern Massachusetts |
4Q03 |
40,000 |
40,000 |
|
Eastern Massachusetts |
2Q04 |
96,150 |
96,150 |
|
Eastern Massachusetts |
4Q04 |
51,340 |
51,340 |
|
Southeast |
Various |
119,916 |
50,519 |
|
Suburban Washington D.C. |
Various |
131,415 |
67,709 |
|
Washington - Seattle |
TBD |
46,303 |
22,244 |
|
Total |
769,999 |
390,387 (2) |
- Average occupancy for properties under full or partial redevelopment as of September 30, 2003 was approximately 49.3% and is not included in the occupancy of the operating portfolio.
- The Company's redevelopment program involves activities necessary for the permanent change of use of applicable redevelopment space to office/laboratory space. For properties undergoing redevelopment, the entire property is excluded from the operating portfolio and related statistics (e.g. occupancy information, same property performance). As required under GAAP, interest is capitalized on redevelopment properties on the basis allocable only to the portion undergoing redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Capital Costs
For the Nine Months Ended September 30, 2003
(Dollars in thousands)
|
Property-related capital expenditures (1) |
$ 1,201 |
|
Leasing costs (2) |
$ 539 |
|
Property-related redevelopment costs (3) |
$ 29,321 |
|
Property-related development costs |
$ 31,902 |
|
Purchase of property under development |
$ 36,332 |
|
Purchase of rental property (4) |
$ 7,089 |
- Property-related capital expenditures include all capital expenditures except capital expenditures that are recoverable from tenants, revenue-enhancing capital expenditures or costs related to the redevelopment of a property. 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 88% 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.
- Leasing costs consist of tenant improvements and leasing commissions related to leasing of acquired vacant space and second generation space. Leasing costs exclude tenant improvements that are revenue-enhancing.
- Includes certain capital expenditures recoverable from tenants.
- Purchase amount includes the assumption of a secured note payable of approximately $3,384,000.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Conference Call Information
For the Third Quarter Ended September 30, 2003
Alexandria Real Estate Equities, Inc. will be hosting a conference call to discuss its operating and financial results for the third quarter ended September 30, 2003:
Date: November 6, 2003
Time: 1:00 P.M. Eastern Standard Time
Phone Number: (913) 981-5510
Confirmation Code: 661283