Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 14, 2022 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001035443 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-12993 | |
Entity Registrant Name | ALEXANDRIA REAL ESTATE EQUITIES, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 95-4502084 | |
Entity Address, Address Line One | 26 North Euclid Avenue | |
Entity Address, City or Town | Pasadena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91101 | |
City Area Code | 626 | |
Local Phone Number | 578-0777 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | ARE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 164,087,276 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Investments in real estate | $ 28,771,745 | $ 24,980,669 |
Investments in unconsolidated real estate joint ventures | 38,285 | 38,483 |
Cash and cash equivalents | 533,824 | 361,348 |
Restricted cash | 332,344 | 53,879 |
Tenant receivables | 7,759 | 7,379 |
Deferred rent | 918,995 | 839,335 |
Deferred leasing costs | 506,864 | 402,898 |
Investments | 1,624,921 | 1,876,564 |
Other assets | 1,633,877 | 1,658,818 |
Total assets | 34,368,614 | 30,219,373 |
Liabilities, Noncontrolling Interests, and Equity | ||
Secured notes payable | 40,594 | 205,198 |
Unsecured senior notes payable | 10,098,588 | 8,316,678 |
Unsecured senior line of credit and commercial paper | 386,666 | 269,990 |
Accounts payable, accrued expenses, and other liabilities | 2,393,764 | 2,210,410 |
Dividends payable | 193,623 | 183,847 |
Total liabilities | 13,113,235 | 11,186,123 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 9,612 | 9,612 |
Alexandria Real Estate Equities, Inc.’s stockholders’ equity: | ||
Common stock | 1,626 | 1,580 |
Additional paid-in capital | 17,639,434 | 16,195,256 |
Accumulated other comprehensive loss | (24,725) | (7,294) |
Alexandria Real Estate Equities, Inc.’s stockholders’ equity | 17,616,335 | 16,189,542 |
Noncontrolling interests | 3,629,432 | 2,834,096 |
Total equity | 21,245,767 | 19,023,638 |
Total liabilities, noncontrolling interests, and equity | $ 34,368,614 | $ 30,219,373 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | $ 659,852 | $ 547,759 | $ 1,918,681 | $ 1,537,227 |
Expenses: | ||||
Rental operations | 201,189 | 165,995 | 578,801 | 447,838 |
General and administrative | 49,958 | 37,931 | 134,286 | 109,807 |
Interest | 22,984 | 35,678 | 76,681 | 107,303 |
Depreciation and amortization | 254,929 | 210,842 | 737,666 | 581,807 |
Impairment of real estate | 38,783 | 42,620 | 38,783 | 52,675 |
Loss on early extinguishment of debt | 0 | 0 | 3,317 | 67,253 |
Total expenses | 567,843 | 493,066 | 1,569,534 | 1,366,683 |
Equity in earnings of unconsolidated real estate joint ventures | 40 | 3,091 | 473 | 9,237 |
Investment (loss) income | (32,305) | 67,084 | (312,105) | 372,361 |
Gain on sales of real estate | 323,699 | (435) | 537,918 | 2,344 |
Net income | 383,443 | 124,433 | 575,433 | 554,486 |
Net income attributable to noncontrolling interests | (38,747) | (21,286) | (108,092) | (58,134) |
Net income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | 344,696 | 103,147 | 467,341 | 496,352 |
Net income attributable to unvested restricted stock awards | (3,257) | (1,883) | (5,866) | (5,750) |
Net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ 341,439 | $ 101,264 | $ 461,475 | $ 490,602 |
Earnings (loss) per share – basic (USD per share) | $ 2.11 | $ 0.67 | $ 2.88 | $ 3.39 |
Earnings (loss) per share - diluted (USD per share) | $ 2.11 | $ 0.67 | $ 2.88 | $ 3.38 |
Income from rentals | ||||
Revenue | $ 656,853 | $ 546,527 | $ 1,910,366 | $ 1,533,593 |
Other income | ||||
Revenue | $ 2,999 | $ 1,232 | $ 8,315 | $ 3,634 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 383,443 | $ 124,433 | $ 575,433 | $ 554,486 |
Unrealized (losses) gains on foreign currency translation: | ||||
Unrealized foreign currency translation (losses) gains arising during the period | (12,874) | (1,521) | (17,431) | 596 |
Unrealized (losses) gains on foreign currency translation, net | (12,874) | (1,521) | (17,431) | 596 |
Total other comprehensive (loss) income | (12,874) | (1,521) | (17,431) | 596 |
Comprehensive income | 370,569 | 122,912 | 558,002 | 555,082 |
Less: comprehensive income attributable to noncontrolling interests | (38,747) | (21,286) | (108,092) | (58,134) |
Comprehensive income attributable to Alexandria Real Estate Equities, Inc.’s stockholders | $ 331,822 | $ 101,626 | $ 449,910 | $ 496,948 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity and Noncontrolling Interests - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Redeemable Noncontrolling Interests |
Beginning balance (shares) at Dec. 31, 2020 | 136,690,329 | ||||||
Beginning balance at Dec. 31, 2020 | $ 13,432,436 | $ 1,367 | $ 11,730,970 | $ 0 | $ (6,625) | $ 1,706,724 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 553,827 | 496,352 | 57,475 | ||||
Total other comprehensive income (loss) | 596 | 596 | |||||
Contributions from and sales of noncontrolling interests | 753,971 | 199,644 | 554,327 | ||||
Distributions to and redemption of noncontrolling interests | (81,324) | (81,324) | |||||
Issuances of common stock (in shares) | 16,215,052 | ||||||
Issuance of common stock | 2,758,545 | $ 162 | 2,758,383 | ||||
Issuances pursuant to stock plan (in shares) | 518,090 | ||||||
Issuance pursuant to stock plan | 72,287 | $ 5 | 72,282 | ||||
Taxes paid related to net settlement of equity awards (in shares) | (139,961) | ||||||
Taxes related to net settlement of equity awards | (24,912) | $ (2) | (24,910) | ||||
Dividends declared on common stock | (504,986) | (504,986) | |||||
Reclassification of earnings in excess of distributions | 0 | (8,634) | 8,634 | ||||
Ending balance (shares) at Sep. 30, 2021 | 153,283,510 | ||||||
Ending balance at Sep. 30, 2021 | 16,960,440 | $ 1,532 | 14,727,735 | 0 | (6,029) | 2,237,202 | |
Beginning balance at Dec. 31, 2020 | $ 11,342 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income | 659 | ||||||
Contributions from and sales of noncontrolling interests | 282 | ||||||
Distributions to noncontrolling interests | (602) | ||||||
Ending balance at Sep. 30, 2021 | 11,681 | ||||||
Beginning balance (shares) at Jun. 30, 2021 | 150,707,878 | ||||||
Beginning balance at Jun. 30, 2021 | 16,170,250 | $ 1,507 | 14,194,023 | 0 | (4,508) | 1,979,228 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 124,211 | 103,147 | 21,064 | ||||
Total other comprehensive income (loss) | (1,521) | (1,521) | |||||
Contributions from and sales of noncontrolling interests | 360,551 | 95,729 | 264,822 | ||||
Distributions to and redemption of noncontrolling interests | (27,912) | (27,912) | |||||
Issuances of common stock (in shares) | 2,452,349 | ||||||
Issuance of common stock | 492,081 | $ 24 | 492,057 | ||||
Issuances pursuant to stock plan (in shares) | 147,162 | ||||||
Issuance pursuant to stock plan | 21,040 | $ 1 | 21,039 | ||||
Taxes paid related to net settlement of equity awards (in shares) | (23,879) | ||||||
Taxes related to net settlement of equity awards | (4,699) | $ 0 | (4,699) | ||||
Dividends declared on common stock | (173,561) | (173,561) | |||||
Reclassification of earnings in excess of distributions | 0 | (70,414) | 70,414 | ||||
Ending balance (shares) at Sep. 30, 2021 | 153,283,510 | ||||||
Ending balance at Sep. 30, 2021 | 16,960,440 | $ 1,532 | 14,727,735 | 0 | (6,029) | 2,237,202 | |
Beginning balance at Jun. 30, 2021 | 11,567 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income | 222 | ||||||
Contributions from and sales of noncontrolling interests | 94 | ||||||
Distributions to noncontrolling interests | (202) | ||||||
Ending balance at Sep. 30, 2021 | 11,681 | ||||||
Beginning balance (shares) at Dec. 31, 2021 | 158,043,880 | ||||||
Beginning balance at Dec. 31, 2021 | 19,023,638 | $ 1,580 | 16,195,256 | 0 | (7,294) | 2,834,096 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 574,829 | 467,341 | 107,488 | ||||
Total other comprehensive income (loss) | (17,431) | (17,431) | |||||
Contributions from and sales of noncontrolling interests | 1,479,520 | 652,591 | 826,929 | ||||
Distributions to and redemption of noncontrolling interests | (139,192) | (111) | (139,081) | ||||
Issuances of common stock (in shares) | 4,220,000 | ||||||
Issuance of common stock | 845,746 | $ 42 | 845,704 | ||||
Issuances pursuant to stock plan (in shares) | 563,121 | ||||||
Issuance pursuant to stock plan | 86,801 | $ 6 | 86,795 | ||||
Taxes paid related to net settlement of equity awards (in shares) | (207,466) | ||||||
Taxes related to net settlement of equity awards | (34,250) | $ (2) | (34,248) | ||||
Dividends declared on common stock | (573,894) | (573,894) | |||||
Reclassification of earnings in excess of distributions | 0 | (106,553) | 106,553 | ||||
Ending balance (shares) at Sep. 30, 2022 | 162,619,535 | ||||||
Ending balance at Sep. 30, 2022 | 21,245,767 | $ 1,626 | 17,639,434 | 0 | (24,725) | 3,629,432 | |
Beginning balance at Dec. 31, 2021 | 9,612 | 9,612 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income | 604 | ||||||
Contributions from and sales of noncontrolling interests | 0 | ||||||
Distributions to noncontrolling interests | (604) | ||||||
Ending balance at Sep. 30, 2022 | 9,612 | 9,612 | |||||
Beginning balance (shares) at Jun. 30, 2022 | 161,456,046 | ||||||
Beginning balance at Jun. 30, 2022 | 20,452,524 | $ 1,615 | 17,149,571 | 0 | (11,851) | 3,313,189 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 383,241 | 344,696 | 38,545 | ||||
Total other comprehensive income (loss) | (12,874) | (12,874) | |||||
Contributions from and sales of noncontrolling interests | 450,913 | 125,956 | 324,957 | ||||
Distributions to and redemption of noncontrolling interests | (47,259) | 0 | (47,259) | ||||
Issuances of common stock (in shares) | 1,000,000 | ||||||
Issuance of common stock | 199,430 | $ 10 | 199,420 | ||||
Issuances pursuant to stock plan (in shares) | 269,934 | ||||||
Issuance pursuant to stock plan | 29,201 | $ 3 | 29,198 | ||||
Taxes paid related to net settlement of equity awards (in shares) | (106,445) | ||||||
Taxes related to net settlement of equity awards | (15,786) | $ (2) | (15,784) | ||||
Dividends declared on common stock | (193,623) | (193,623) | |||||
Reclassification of earnings in excess of distributions | 0 | 151,073 | (151,073) | ||||
Ending balance (shares) at Sep. 30, 2022 | 162,619,535 | ||||||
Ending balance at Sep. 30, 2022 | 21,245,767 | $ 1,626 | $ 17,639,434 | $ 0 | $ (24,725) | $ 3,629,432 | |
Beginning balance at Jun. 30, 2022 | 9,612 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income | 202 | ||||||
Distributions to noncontrolling interests | (202) | ||||||
Ending balance at Sep. 30, 2022 | $ 9,612 | $ 9,612 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income | $ 575,433 | $ 554,486 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 737,666 | 581,807 |
Impairment of real estate | 38,783 | 52,675 |
Gain on sales of real estate | (537,918) | (2,344) |
Loss on early extinguishment of debt | 3,317 | 67,253 |
Equity in earnings of unconsolidated real estate joint ventures | (473) | (9,237) |
Distributions of earnings from unconsolidated real estate joint ventures | 2,754 | 15,579 |
Amortization of loan fees | 9,574 | 8,530 |
Amortization of debt discounts (premiums) | 112 | (1,539) |
Amortization of acquired above- and below-market leases | (54,221) | (39,043) |
Deferred rent | (93,818) | (89,203) |
Stock compensation expense | 46,154 | 34,416 |
Investment loss (income) | 312,105 | (372,361) |
Changes in operating assets and liabilities: | ||
Tenant receivables | (422) | (415) |
Deferred leasing costs | (149,234) | (74,974) |
Other assets | (17,719) | (27,311) |
Accounts payable, accrued expenses, and other liabilities | 21,065 | 62,318 |
Net cash provided by operating activities | 893,158 | 760,637 |
Investing Activities | ||
Proceeds from sales of real estate | 994,331 | 65,245 |
Additions to real estate | (2,324,017) | (1,542,210) |
Purchases of real estate | (2,499,772) | (3,758,704) |
Change in escrow deposits | 146,640 | (147,414) |
Acquisition of interest in unconsolidated real estate joint venture | 0 | (9,048) |
Investments in unconsolidated real estate joint ventures | (1,245) | (739) |
Return of capital from unconsolidated real estate joint ventures | 471 | 0 |
Additions to non-real estate investments | (186,692) | (319,077) |
Sales of and distributions from non-real estate investments | 149,666 | 278,554 |
Net cash used in investing activities | (3,720,618) | (5,433,393) |
Financing Activities | ||
Borrowings from secured notes payable | 31,436 | 0 |
Repayments of borrowings from secured notes payable | (934) | (17,108) |
Payment for the defeasance of secured note payable | (198,304) | 0 |
Proceeds from issuance of unsecured senior notes payable | 1,793,318 | 1,743,716 |
Repayments of unsecured senior notes payable | 0 | (650,000) |
Premium paid for early extinguishment of debt | 0 | (66,829) |
Borrowings from unsecured senior line of credit | 1,180,000 | 2,101,000 |
Repayments of borrowings from unsecured senior line of credit | (1,180,000) | (2,101,000) |
Proceeds from issuances under commercial paper program | 11,661,500 | 21,850,000 |
Repayments of borrowings under commercial paper program | (11,544,685) | (21,200,000) |
Payments of loan fees | (35,598) | (16,870) |
Taxes paid related to net settlement of equity awards | (33,105) | (23,495) |
Proceeds from issuance of common stock | 845,746 | 2,758,545 |
Dividends on common stock | (564,118) | (482,408) |
Contributions from and sales of noncontrolling interests | 1,463,454 | 629,138 |
Distributions to and purchases of noncontrolling interests | (139,685) | (81,926) |
Net cash provided by financing activities | 3,279,025 | 4,442,763 |
Effect of foreign exchange rate changes on cash and cash equivalents | (624) | 342 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 450,941 | (229,651) |
Cash, cash equivalents, and restricted cash as of the beginning of period | 415,227 | 597,705 |
Cash, cash equivalents, and restricted cash as of the end of period | 866,168 | 368,054 |
Supplemental Disclosure and Non-Cash Investing and Financing Activities: | ||
Cash paid during the period for interest, net of interest capitalized | 67,852 | 110,391 |
Accrued construction for current-period additions to real estate | 553,928 | 377,193 |
Right-of-use asset | 21,776 | 27,802 |
Lease liability | (21,776) | (27,802) |
Contribution of assets from real estate joint venture partner | 19,146 | 118,750 |
Issuance of noncontrolling interest to joint venture partner | (19,146) | (118,750) |
Consolidation of real estate assets in connection with our acquisition of partner’s interest in unconsolidated real estate joint venture | 0 | 19,613 |
Assumption of secured note payable in connection with acquisition of partner’s interest in unconsolidated real estate joint venture | 0 | (14,558) |
Deferred purchase price in connection with acquisitions of real estate | 0 | (185,179) |
Assignment of secured notes payable in connection with the sale of real estate | $ 0 | $ 28,200 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Stockholders' Equity and Noncontrolling Interests (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends declared on common stock (per share) | $ 1.18 | $ 1.18 | $ 1.15 | $ 1.12 | $ 3.51 | $ 3.33 |
Organization and basis of prese
Organization and basis of presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and basis of presentation | ORGANIZATION AND BASIS OF PRESENTATION Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500 ® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since its founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and technology campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. The trusted partner to over 1,000 tenants, as of September 30, 2022, Alexandria has a total market capitalization of $33.3 billion and an asset base in North America of 74.5 million SF. As used in this quarterly report on Form 10-Q, references to the “Company,” “Alexandria,” “ARE,” “we,” “us,” and “our” refer to Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. The accompanying unaudited consolidated financial statements include the accounts of Alexandria Real Estate Equities, Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated. We have prepared the accompanying interim consolidated financial statements in accordance with GAAP and in conformity with the rules and regulations of the SEC. In our opinion, these interim consolidated financial statements presented herein reflect all adjustments, of a normal recurring nature, that are necessary to fairly present the interim consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for the year ended December 31, 2021. Any references to our market capitalization, number or quality of buildings or tenants, quality of location, square footage, number of leases, or occupancy percentage, and any amounts derived from these values, in these notes to consolidated financial statements are outside the scope of our independent registered public accounting firm’s review. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of significant accounting policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation On an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly owned by us in accordance with the consolidation guidance. Our evaluation considers all of our variable interests, including equity ownership, as well as fees paid to us for our involvement in the management of each partially owned entity. To fall within the scope of the consolidation guidance, an entity must meet both of the following criteria: • The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can be in the form of a partnership, limited liability company, or corporation, among others; and • We have a variable interest in the legal entity — i.e., variable interests that are contractual, such as equity ownership, or other financial interests that change with changes in the fair value of the entity’s net assets. If an entity does not meet both criteria above, we apply other accounting literature, such as the cost or equity method of accounting. If an entity does meet both criteria above, we evaluate such entity for consolidation under either the variable interest model if the legal entity meets any of the following characteristics to qualify as a VIE, or under the voting model for all other legal entities that are not VIEs. A legal entity is determined to be a VIE if it has any of the following three characteristics: 1) The entity does not have sufficient equity to finance its activities without additional subordinated financial support; 2) The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest holder(s) of voting rights); or 3) The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion if they lack any of the following: • The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence the entity’s economic performance, as evidenced by: • Substantive participating rights in day-to-day management of the entity’s activities; or • Substantive kick-out rights over the party responsible for significant decisions; • The obligation to absorb the entity’s expected losses; or • The right to receive the entity’s expected residual returns. Our real estate joint ventures consist of limited partnerships or limited liability companies. For an entity structured as a limited partnership or a limited liability company, our evaluation of whether the equity holders (equity partners other than the general partner or the managing member of a joint venture) lack the characteristics of a controlling financial interest includes the evaluation of whether the limited partners or non-managing members (the noncontrolling equity holders) lack both substantive participating rights and substantive kick-out rights, defined as follows: • Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating decisions made in the ordinary course of business that most significantly influence the entity’s economic performance. • Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause. If we conclude that any of the three characteristics of a VIE are met, including that the equity holders lack the characteristics of a controlling financial interest because they lack both substantive participating rights and substantive kick-out rights, we conclude that the entity is a VIE and evaluate it for consolidation under the variable interest model. Variable interest model If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits — that is, (i) we have the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power) and (ii) we have the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE (benefits). We consolidate VIEs whenever we determine that we are the primary beneficiary. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for information on specific joint ventures that qualify as VIEs. If we have a variable interest in a VIE but are not the primary beneficiary, we account for our investment using the equity method of accounting. Voting model If a legal entity fails to meet any of the three characteristics of a VIE (i.e., insufficiency of equity, existence of non-substantive voting rights, or lack of a controlling financial interest), we then evaluate such entity under the voting model. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares and that other equity holders do not have substantive participating rights. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for further information on our unconsolidated real estate joint ventures that qualify for evaluation under the voting model. Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and equity; the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements; and the amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Investments in real estate Evaluation of business combination or asset acquisition We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business: • Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or • The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction). An acquired process is considered substantive if: • The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable, and experienced in performing the process; • The process cannot be replaced without significant cost, effort, or delay; or • The process is considered unique or scarce. Generally, our acquisitions of real estate or in-substance real estate do not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort, or delay. When evaluating acquired service or management contracts, we consider the nature of the services performed, the terms of the contract relative to similar arm’s-length contracts, and the availability of comparable vendors in evaluating whether the acquired contract constitutes a substantive process. Recognition of real estate acquired We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For acquisitions of real estate or in-substance real estate that are accounted for as business combinations, we allocate the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and previously existing ownership interests at fair value as of the acquisition date. Assets include intangible assets such as tenant relationships, acquired in-place leases, and favorable intangibles associated with in-place leases in which we are the lessor. Liabilities include unfavorable intangibles associated with in-place leases in which we are the lessor. In addition, for acquired in-place finance or operating leases in which we are the lessee, acquisition consideration is allocated to lease liabilities and related right-of-use assets, adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Any excess (deficit) of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill (bargain purchase gain). Acquisition costs related to business combinations are expensed as incurred. Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings, and related intangible assets). The accounting model for asset acquisitions is similar to the accounting model for business combinations, except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Any excess (deficit) of the consideration transferred relative to the sum of the fair value of the assets acquired and liabilities assumed is allocated to the individual assets and liabilities based on their relative fair values. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. Incremental and external direct acquisition costs (such as legal and other third-party services) are capitalized. We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its components. The allocation of the consideration to the various components of properties acquired during the year can have an effect on our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related depreciation and amortization expense in our consolidated statements of operations. We apply judgment in utilizing available comparable market information to assess relative fair value. We assess the relative fair values of tangible and intangible assets and liabilities based on available comparable market information, including estimated replacement costs, rental rates, and recent market transactions. In addition, we may use estimated cash flow projections that utilize appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated trends, and market/economic conditions that may affect the property. The value of tangible assets acquired is based upon our estimation of fair value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. If there is a bargain fixed-rate renewal option for the period beyond the noncancelable lease term of an in-place lease, we evaluate intangible factors, such as the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the property is located, and the ability of the lessee to sublease the property during the renewal term, in order to determine the likelihood that the lessee will renew. When we determine that there is reasonable assurance that such bargain purchase option will be exercised, we consider the option in determining the intangible value of such lease and its related amortization period. We also recognize the relative fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100% interest when the acquisition constitutes a change in control of the acquired entity. Depreciation and amortization The values allocated to buildings and building improvements, land improvements, tenant improvements, and equipment are depreciated on a straight-line basis. For buildings and building improvements, we depreciate using the shorter of the respective ground lease terms or their estimated useful lives, not to exceed 40 years. Land improvements are depreciated over their estimated useful lives, not to exceed 20 years. Tenant improvements are depreciated over their respective lease terms or estimated useful lives, and equipment is depreciated over the shorter of the lease term or its estimated useful life. The values of the right-of-use assets are amortized on a straight-line basis over the remaining terms of each related lease. The values of acquired in-place leases and associated favorable intangibles (i.e., acquired above-market leases) are classified in other assets in our consolidated balance sheets and are amortized over the remaining terms of the related leases as a reduction of income from rentals in our consolidated statements of operations. The values of unfavorable intangibles (i.e., acquired below-market leases) associated with acquired in-place leases are classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets and are amortized over the remaining terms of the related leases as an increase in income from rentals in our statements of operations. Capitalized project costs We capitalize project costs, including pre-construction costs, interest, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, pre-construction, or construction of a project. Capitalization of development, redevelopment, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use. Fluctuations in our development, redevelopment, pre-construction, and construction activities could result in significant changes to total expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Should development, redevelopment, pre-construction, or construction activity cease, interest, property taxes, insurance, and certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred. Real estate sales A property is classified as held for sale when all of the following criteria for a plan of sale have been met: (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation of assets ceases upon designation of a property as held for sale. For additional details, refer to Note 15 – “Assets classified as held for sale” to our unaudited consolidated financial statements. If the disposal of a property represents a strategic shift that has (or will have) a major effect on our operations or financial results, such as (i) a major line of business, (ii) a major geographic area, (iii) a major equity method investment, or (iv) other major parts of an entity, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued operations in our consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. The disposal of an individual property generally will not represent a strategic shift and therefore will typically not meet the criteria for classification as a discontinued operation. We recognize gains or losses on real estate sales in accordance with the accounting standard on the derecognition of nonfinancial assets arising from contracts with noncustomers. Our ordinary output activities consist of the leasing of space to our tenants in our operating properties, not the sales of real estate. Therefore, sales of real estate (in which we are the seller) qualify as contracts with noncustomers. In our transactions with noncustomers, we apply certain recognition and measurement principles consistent with our method of recognizing revenue arising from contracts with customers. Derecognition of the asset is based on the transfer of control. If a real estate sales contract includes our ongoing involvement with the property, then we evaluate each promised good or service under the contract to determine whether it represents a separate performance obligation, constitutes a guarantee, or prevents the transfer of control. If a good or service is considered a separate performance obligation, an allocated portion of the transaction price is recognized as revenue as we transfer the related good or service to the buyer. The recognition of gain or loss on the sale of a partial interest also depends on whether we retain a controlling or noncontrolling interest in the property. If we retain a controlling interest in the property upon completion of the sale, we continue to reflect the asset at its book value, record a noncontrolling interest for the book value of the partial interest sold, and recognize additional paid-in capital for the difference between the consideration received and the partial interest at book value. Conversely, if we retain a noncontrolling interest upon completion of the sale of a partial interest of real estate, we recognize a gain or loss as if 100% of the asset were sold. Impairment of long-lived assets Prior to and subsequent to the end of each quarter, we review current activities and changes in the business conditions of all of our long-lived assets to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Long-lived assets to be held and used, including our rental properties, CIP, land held for development, right-of-use assets related to operating leases in which we are the lessee, and intangibles, are individually evaluated for impairment when conditions exist that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by project and include significant fluctuations in estimated net operating income, occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, current and historical operating results, known trends, current market/economic conditions that may affect the asset, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount of the asset to its estimated fair value. If an impairment charge is not required to be recognized, the recognition of depreciation or amortization is adjusted prospectively, as necessary, to reduce the carrying amount of the asset to its estimated disposition value over the remaining period that the asset is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or redeveloped prior to the end of their useful lives. We use the held for sale impairment model for our properties classified as held for sale, which is different from the held and used impairment model. Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the long-lived asset classified as held for sale exceeds its fair value less cost to sell. Because of these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an impairment charge upon classification as held for sale. International operations In addition to operating properties in the U.S., we have eight properties in Canada and one operating property in China. The functional currency for our subsidiaries operating in the U.S. is the U.S. dollar. The functional currencies for our foreign subsidiaries are the local currencies in each respective country. The assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect as of the financial statement date. Revenue and expense accounts of our foreign subsidiaries are translated using the weighted-average exchange rate for the periods presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive income (loss) as a separate component of total equity and are excluded from net income (loss). Whenever a foreign investment meets the criteria for classification as held for sale, we evaluate the recoverability of the investment under the held for sale impairment model. We may recognize an impairment charge if the carrying amount of the investment exceeds its fair value less cost to sell. In determining an investment’s carrying amount, we consider its net book value and any cumulative unrealized foreign currency translation adjustment related to the investment. The appropriate amounts of foreign exchange rate gains or losses classified in accumulated other comprehensive income (loss) are reclassified to net income when realized upon the sale of our investment or upon the complete or substantially complete liquidation of our investment. Investments accounted for under the equity method Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary impairments. For more information about our investments accounted for under the equity method, refer to Note 7 – “Investments” to our unaudited consolidated financial statements. Investments that do not qualify for the equity method of accounting For investees over which we determine that we do not have the ability to exercise significant influence or control, we account for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV per share, or (iii) privately held entity that does not report NAV per share, as described below. Investments in publicly traded companies Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales prices or quotes available on securities exchanges. Investments in privately held companies Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are accounted for as follows: Investments in privately held entities that report NAV per share Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date. Investments in privately held entities that do not report NAV per share Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative, under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold. Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share We monitor equity method investments and investments in privately held entities that do not report NAV per share for new developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements, capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators: (i) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse change in the regulatory, economic, or technological environment of the investee; (iii) a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market; (iv) significant concerns about the investee’s ability to continue as a going concern; and/or (v) a decision by investors to cease providing support or reduce their financial commitment to the investee. If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. Investment income/loss recognition and classification We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified within investment income. Unrealized gains and losses represent: (i) changes in fair value for investments in publicly traded companies; (ii) changes in NAV for investments in privately held entities that report NAV per share; (iii) observable price changes for investments in privately held entities that do not report NAV per share; and (iv) our share of unrealized gains or losses reported by our equity method investees. Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary, to their estimated fair value. Revenues The table below provides details of our consolidated total revenues for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals 656,853 546,527 1,910,366 1,533,593 Other income 2,999 1,232 8,315 3,634 Total revenues $ 659,852 $ 547,759 $ 1,918,681 $ 1,537,227 During the three and nine months ended September 30, 2022, revenues that were subject to the lease accounting standard aggregated $647.3 million, or 98.1%, and $1.9 billion, or 98.1%, respectively, of our total revenues. During the three and nine months ended September 30, 2022, our total revenues also included $12.5 million, or 1.9%, and $36.7 million, or 1.9%, respectively, subject to other accounting guidance. Our other income consisted primarily of construction management fees and interest income earned during the three and nine months ended September 30, 2022. For a detailed discussion related to our revenue streams, refer to the “Lease accounting” and “Recognition of revenue arising from contracts with customers” sections within this Note 2 to our unaudited consolidated financial statements. Lease accounting Definition and classification of a lease When we enter into a contract or amend an existing contract, we evaluate whether the contract meets the definition of a lease. To meet the definition of a lease, the contract must meet all three criteria: (i) One party (lessor) must hold an identified asset; (ii) The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract; and (iii) The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract. We classify our leases as either finance leases or operating leases if we are the lessee, or sales-type, direct financing, or operating leases if we are the lessor. We use the following criteria to determine if a lease is a finance lease (as a lessee) or sales-type or direct financing lease (as a lessor): (i) Ownership is transferred from lessor to lessee by the end of the lease term; (ii) An option to purchase is reasonably certain to be exercised; (iii) The lease term is for the major part of the underlying as |
Investments in real estate
Investments in real estate | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Investments in real estate | Our consolidated investments in real estate, including real estate assets held for sale as described in Note 15 – “Assets classified as held for sale” to our unaudited consolidated financial statements, consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Rental properties: Land (related to rental properties) $ 4,156,888 $ 3,782,182 Buildings and building improvements 17,857,504 16,312,402 Other improvements 2,537,926 2,109,884 Rental properties 24,552,318 22,204,468 Development and redevelopment projects 8,352,598 6,528,640 Gross investments in real estate – North America 32,904,916 28,733,108 Less: accumulated depreciation – North America (4,144,019) (3,766,758) Net investments in real estate – North America 28,760,897 24,966,350 Net investments in real estate – Asia 10,848 14,319 Investments in real estate $ 28,771,745 $ 24,980,669 Acquisitions Our real estate asset acquisitions during the nine months ended September 30, 2022 consisted of the following (dollars in thousands): Square Footage Market Number of Properties Future Development Operating With Future Development/Redevelopment Operating Purchase Price Greater Boston 2 202,997 440,130 — $ 205,792 San Francisco Bay Area 5 610,000 723,953 70,000 564,000 San Diego 2 537,000 8,730 — 125,000 Seattle — 869,000 — — 87,608 Research Triangle 4 1,925,000 69,485 — 179,428 Texas 9 — 998,099 — 400,400 Other 7 473,994 428,097 381,760 278,489 Three months ended March 31, 2022 29 4,617,991 2,668,494 451,760 1,840,717 Greater Boston 1 — 88,591 — 140,000 Other 2 869,000 109,557 — 140,146 Three months ended June 30, 2022 3 869,000 198,148 — 280,146 Greater Boston 1 — 104,500 — 170,000 San Diego 3 750,000 226,144 — 106,380 Other 3 302,000 108,478 — 40,349 Three months ended September 30, 2022 7 1,052,000 439,122 — 316,729 Nine months ended September 30, 2022 39 6,538,991 3,305,764 451,760 $ 2,437,592 (1) (1) Represents the aggregate contractual purchase price of our acquisitions, which differs from purchases of real estate in our unaudited consolidated statements of cash flows due to the timing of payment, closing costs, and other acquisition adjustments such as prorations of rents and expenses. Based upon our evaluation of each acquisition, we determined that substantially all of the fair value related to each acquisition is concentrated in a single identifiable asset or a group of similar identifiable assets or is associated with a land parcel with no operations. Accordingly, each transaction did not meet the definition of a business and therefore was accounted for as an asset acquisition. In each of these transactions, we allocated the total consideration for each acquisition to the individual assets and liabilities acquired on a relative fair value basis. During the nine months ended September 30, 2022, we acquired 39 properties for an aggregate purchase price of $2.4 billion. In connection with our acquisitions, we recorded in-place lease assets aggregating $164.2 million and below-market lease liabilities in which we are the lessor aggregating $96.3 million. As of September 30, 2022, the weighted-average amortization period remaining on our in-place leases and below-market leases acquired during the nine months ended September 30, 2022 was 8.1 years and 17.1 years, respectively, and 11.5 years in total. Real estate assets acquired in October 2022 In October 2022, we completed the acquisition of two properties in our Austin submarket for an aggregate purchase price of $108.0 million comprising 198,972 RSF of operating properties with future development and redevelopment opportunities and 123,976 RSF of future value-creation opportunities. Sales of real estate assets and impairment charges Our completed dispositions of and sales of partial interests in real estate assets during the nine months ended September 30, 2022 consisted of the following (dollars in thousands): Gain on Sale of Real Estate Consideration in Excess of Book Value Property Submarket/Market Date of Sale Interest Sold RSF Sales Price Three months ended March 31, 2022: 100 Binney Street Cambridge/Inner Suburbs/Greater Boston 3/30/22 70 % 432,931 $ 713,228 N/A $ 413,615 Three months ended June 30, 2022: 300 Third Street Cambridge/Inner Suburbs/Greater Boston 6/27/22 70 % 131,963 166,485 N/A 113,020 Alexandria Park at 128, 285 Bear Hill Road, 111 and 130 Forbes Boulevard, and 20 Walkup Drive Route 128 and Route 495/Greater Boston 6/8/22 100 % 617,043 334,397 $ 202,325 N/A Other 47,800 11,894 N/A 548,682 214,219 113,020 Three months ended September 30, 2022: 1450 Owens Street Mission Bay/San Francisco Bay Area 7/1/22 20 % 191,000 25,039 N/A 10,083 341 and 343 Oyster Point Boulevard, 7000 Shoreline Court, and Shoreway Science Center South San Francisco and Greater Stanford/San Francisco Bay Area 9/15/22 100 % 330,379 383,635 223,127 N/A 3215 Merryfield Row Torrey Pines/San Diego 9/1/22 70 % 170,523 149,940 N/A 42,214 Summers Ridge Science Park Sorrento Mesa/San Diego 9/15/22 70 % 316,531 159,600 N/A 65,097 7330 and 7360 Carroll Road Sorrento Mesa/San Diego 9/15/22 100 % 84,442 59,476 35,463 N/A 13112 Evening Creek Drive Other/San Diego 9/26/22 100 % 109,780 55,500 31,001 N/A Other Various 127,196 34,108 N/A 960,386 323,699 117,394 Nine months ended September 30, 2022 $ 2,222,296 (1) $ 537,918 $ 644,029 (1) Represents the aggregate contractual sales price of our sales, which differs from proceeds from sales of real estate and contributions from and sales of noncontrolling interests within Investing and Financing sections of our consolidated statements of cash flows primarily due to the timing of payment, closing costs, and other sales adjustments such as prorations of rents and expenses. During the three and nine months ended September 30, 2022, we completed dispositions of and sales of partial interests in real estate assets for an aggregate sales price of $960.4 million and $2.2 billion, respectively, as described below. • During the three and nine months ended September 30, 2022, we completed our dispositions of real estate assets for sales prices aggregating $625.8 million and $1.0 billion, respectively, and recognized gains on sales of real estate aggregating $323.7 million and $537.9 million, respectively, within our consolidated statements of operations. • In addition, during the three and nine months ended September 30, 2022, we completed sales of partial noncontrolling interests in real estate assets for considerations aggregating $334.6 million and $1.2 billion, respectively. These partial sales resulted in considerations in excess of book values aggregating $117.4 million and $644.0 million, respectively. We accounted for our partial interest sales as equity transactions, with the excess recognized in additional paid-in capital within our consolidated statements of changes in stockholders’ equity, and no gain or loss recognized in earning since we continue to consolidate the resulting joint ventures. For more detail, refer to the “Formation of consolidated real estate joint ventures and sales of partial interests” section within Note 4 – “Consolidated and unconsolidated real estate joint ventures” to these consolidated financial statements. Impairment charges During the second quarter of 2021, we made an initial investment in a future development project aggregating over 600,000 RSF in one of our existing submarkets in California. Since our initial investment, the macroeconomic environment has deteriorated and negatively impacted the financial outlook for the project. During the third quarter of 2022, we decided not to proceed with this project and as a result recognized a $38.3 million impairment charge to write off our entire investment in the project, which is included in the impairment of real estate balance of $38.8 million within our consolidated statements of operations for the three and nine months ended September 30, 2022. |
Consolidated and unconsolidated
Consolidated and unconsolidated real estate joint ventures | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Consolidated and unconsolidated real estate joint ventures | From time to time, we enter into joint venture agreements through which we own a partial interest in real estate entities that own, develop, and operate real estate properties. As of September 30, 2022, our real estate joint ventures held the following properties: Property Market Submarket Our Ownership Interest (1) Consolidated joint ventures (2) : 50 and 60 Binney Street Greater Boston Cambridge/Inner Suburbs 34.0 % 75/125 Binney Street Greater Boston Cambridge/Inner Suburbs 40.0 % 100 and 225 Binney Street and 300 Third Street Greater Boston Cambridge/Inner Suburbs 30.0 % (3) 99 Coolidge Avenue Greater Boston Cambridge/Inner Suburbs 75.0 % Alexandria Center ® for Science and Technology – Mission Bay (4) San Francisco Bay Area Mission Bay 25.0 % 1450 Owens Street San Francisco Bay Area Mission Bay 65.5 % (5) 601, 611, 651, 681, 685, and 701 Gateway Boulevard San Francisco Bay Area South San Francisco 50.0 % 751 Gateway Boulevard San Francisco Bay Area South San Francisco 51.0 % 213 East Grand Avenue San Francisco Bay Area South San Francisco 30.0 % 500 Forbes Boulevard San Francisco Bay Area South San Francisco 10.0 % Alexandria Center ® for Life Science – Millbrae San Francisco Bay Area South San Francisco 44.3 % 3215 Merryfield Row San Diego Torrey Pines 30.0 % Alexandria Point (6) San Diego University Town Center 55.0 % 5200 Illumina Way San Diego University Town Center 51.0 % 9625 Towne Centre Drive San Diego University Town Center 50.1 % SD Tech by Alexandria (7) San Diego Sorrento Mesa 50.0 % Pacific Technology Park San Diego Sorrento Mesa 50.0 % Summers Ridge Science Park (8) San Diego Sorrento Mesa 30.0 % 1201 and 1208 Eastlake Avenue East and 199 East Blaine Street Seattle Lake Union 30.0 % 400 Dexter Avenue North Seattle Lake Union 30.0 % 800 Mercer Street Seattle Lake Union 60.0 % Unconsolidated joint ventures (2) : 1655 and 1725 Third Street San Francisco Bay Area Mission Bay 10.0 % 1401/1413 Research Boulevard Maryland Rockville 65.0 % (9) 1450 Research Boulevard Maryland Rockville 73.2 % (10) 101 West Dickman Street Maryland Beltsville 57.9 % (10) (1) Refer to the table on the next page that shows the categorization of our joint ventures under the consolidation framework. (2) In addition to the real estate joint ventures listed, various partners hold insignificant noncontrolling interests in three other consolidated joint ventures in North America and we hold an interest in one other insignificant unconsolidated real estate joint venture in North America. (3) 225 Binney Street is owned through a tenancy in common arrangement. We directly own 26.316% of the tenancy in common and a real estate joint venture owns the remaining 73.684% of the tenancy in common. We own 5% of this real estate joint venture, resulting in an aggregate ownership of 30% of this property. We determined that we are the primary beneficiary of the real estate joint venture and as such, we consolidate this joint venture under the variable interest model. (4) Includes 409 and 499 Illinois Street, 1500 and 1700 Owens Street, and 455 Mission Bay Boulevard South. (5) The noncontrolling interest share of our joint venture partner is anticipated to increase to 75% as our partner contributes capital for construction over time. (6) Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4150, 4161, 4224, and 4242 Campus Point Court. (7) Includes 9605, 9645, 9675, 9685, 9725, 9735, 9808, 9855, and 9868 Scranton Road and 10055 and 10065 Barnes Canyon Road. (8) Includes 9965, 9975, 9985 and 9995 Summers Ridge Road. (9) Represents our ownership interest; our voting interest is limited to 50%. (10) Represents a joint venture with a local real estate operator in which our partner manages the day-to-day activities that significantly affect the economic performance of the joint venture. Our consolidation policy is described under the “Consolidation” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Consolidation accounting is highly technical, but its framework is primarily based on the controlling financial interests and benefits of the joint ventures. We generally consolidate a joint venture that is a legal entity that we control (i.e., we have the power to direct the activities of the joint venture that most significantly affect its economic performance) through contractual rights, regardless of our ownership interest, and where we determine that we have benefits through the allocation of earnings or losses and fees paid to us that could be significant to the joint venture (the “VIE model”). We also generally consolidate joint ventures when we have a controlling financial interest through voting rights and where our voting interest is greater than 50% (the “voting model”). Voting interest differs from ownership interest for some joint ventures. We account for joint ventures that do not meet the consolidation criteria under the equity method of accounting by recognizing our share of income and losses. The table below shows the categorization of our joint ventures under the consolidation framework: Property (1) Consolidation Model Voting Interest Consolidation Analysis Conclusion 50 and 60 Binney Street VIE model Not applicable under VIE model Consolidated 75/125 Binney Street We have: 100 and 225 Binney Street and 300 Third Street 99 Coolidge Avenue (i) The power to direct the activities of the joint venture that most significantly affect its economic performance; and Alexandria Center ® for Science and Technology – Mission Bay 1450 Owens Street 601, 611, 651, 681, 685, and 701 Gateway Boulevard 751 Gateway Boulevard 213 East Grand Avenue (ii) Benefits that can be significant to the joint venture. 500 Forbes Boulevard Alexandria Center ® for Life Science – Millbrae 3215 Merryfield Row Alexandria Point 5200 Illumina Way Therefore, we are the primary beneficiary of each VIE 9625 Towne Centre Drive SD Tech by Alexandria Pacific Technology Park Summers Ridge Science Park 1201 and 1208 Eastlake Avenue East and 199 East Blaine Street 400 Dexter Avenue North 800 Mercer Street 1401/1413 Research Boulevard We do not control the joint venture and are therefore not the primary beneficiary Equity method of accounting 1450 Research Boulevard 101 West Dickman Street 1655 and 1725 Third Street Voting model Does not exceed 50% Our voting interest is 50% or less (1) In addition to the real estate joint ventures listed, various partners hold insignificant noncontrolling interests in three other consolidated joint ventures in North America and we hold an interest in one other insignificant unconsolidated real estate joint venture in North America. Formation of consolidated real estate joint ventures and sales of partial interests In each of the joint ventures described below, we are contractually responsible for activities that most significantly impact the economic performance of the joint venture. In addition, our joint venture partner(s) in each of the following joint ventures lacks kick-out rights over our role as property manager. Therefore, we determined that our joint venture partner does not have a controlling financial interest, and consequently each joint venture should be accounted for as a VIE. We also determined that we are the primary beneficiary of each joint venture because we are responsible for activities that most significantly impact their economic performance, and also have the obligation to absorb losses of, or the right to receive benefits from, each joint venture that could potentially be significant to the joint venture. Accordingly, we consolidate each joint venture under the variable interest model. Refer to the “Consolidation” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. For a summary of our completed dispositions and sales of partial interests in real estate assets during the nine months ended September 30, 2022, refer to the “Sales of real estate assets and impairment charges” section in Note 3 – “Investments in real estate” to our unaudited consolidated financial statements. 800 Mercer Street In March 2022, we formed a real estate joint venture with an institutional investor to acquire a land parcel aggregating 869,000 SF at 800 Mercer Street in our Lake Union submarket. We have a 60% ownership interest in the joint venture, and our share of the contractual purchase price aggregated $87.6 million. Upon completion of the transaction in March 2022, we determined that we had control over the newly formed real estate joint venture and therefore consolidated the real estate asset. Sales of partial interests Upon completion of the transactions described below, we determined that we had control over each of the newly formed real estate joint ventures and therefore continued to consolidate these properties. Accordingly, we accounted for these partial interest sales as equity transactions, with no gain or loss recognized in earnings. 100 Binney Street In March 2022, we formed a real estate joint venture in our Cambridge/Inner Suburbs submarket by contributing our 100 Binney Street property and sold to our joint venture partner a 70% interest in the joint venture for an aggregate sales price of $713.2 million, or $2,353 per RSF, representing $413.6 million of consideration in excess of the book value of our 70% interest sold. 300 Third Street In June 2022, we sold a 70% interest in our 300 Third Street property located in our Cambridge/Inner Suburbs submarket for an aggregate sales price of $166.5 million, or $1,802 per RSF, representing $113.0 million of consideration in excess of the book value of our 70% interest sold. 1450 Owens Street In July 2022, we formed a real estate joint venture in our Mission Bay submarket by contributing a land parcel aggregating 191,000 SF at 1450 Owens Street with an aggregate fair market value of $125.2 million. Upon completion of the transaction, we received proceeds of $25.0 million from our joint venture partner for a noncontrolling interest share of 20%, which is anticipated to increase to 75% as our partner contributes capital for construction over time. The proceeds represent $10.1 million of consideration in excess of the book value of our 20% interest sold. As of September 30, 2022, the noncontrolling interest share of our joint venture partner was 34.5%. 3215 Merryfield Row In September 2022, we formed a real estate joint venture in our Torrey Pines submarket by selling a 70% interest in our 3215 Merryfield Row property for an aggregate sales price of $149.9 million, or $1,256 per RSF, representing $42.2 million of consideration in excess of the book value of our 70% interest sold. Summers Ridge Science Park In September 2022, we sold a 70% interest in our Summers Ridge Science Park campus at 9965, 9975, 9985, and 9995 Summers Ridge Road located in our Sorrento Mesa submarket for an aggregate sales price of $159.6 million, or $720 per RSF, representing $65.1 million of consideration in excess of the book value of our 70% interest sold, and formed a new real estate joint venture with our institutional partner. Consolidated VIEs’ balance sheet information The table below aggregates the balance sheet information of our consolidated VIEs as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Investments in real estate $ 6,581,901 $ 5,014,842 Cash and cash equivalents 253,426 181,074 Other assets 678,889 509,281 Total assets $ 7,514,216 $ 5,705,197 Secured notes payable $ 39,945 $ 7,991 Other liabilities 453,619 269,605 Total liabilities 493,564 277,596 Alexandria Real Estate Equities, Inc.’s share of equity 3,391,220 2,593,505 Noncontrolling interests’ share of equity 3,629,432 2,834,096 Total liabilities and equity $ 7,514,216 $ 5,705,197 In determining whether to aggregate the balance sheet information of consolidated VIEs, we considered the similarity of each VIE, including the primary purpose of these entities to own, manage, operate, and lease real estate properties owned by the VIEs, and the similar nature of our involvement in each VIE as a managing member. Due to the similarity of the characteristics, we present the balance sheet information of these entities on an aggregated basis. None of our consolidated VIEs’ assets have restrictions that limit their use to settle specific obligations of the VIE. There are no creditors or other partners of our consolidated VIEs that have recourse to our general credit, and our maximum exposure to our consolidated VIEs is limited to our variable interests in each VIE, except for our 99 Coolidge Avenue joint venture, in which the VIE’s secured construction loan is guaranteed by us. For additional information, refer to Note 10 – “Secured and unsecured senior debt” to our unaudited consolidated financial statements. Unconsolidated real estate joint ventures Our maximum exposure to our unconsolidated VIEs is limited to our investment in each VIE. Our investments in unconsolidated real estate joint ventures, accounted for under the equity method of accounting presented in our consolidated balance sheets as of September 30, 2022 and December 31, 2021, consisted of the following (in thousands): Property September 30, 2022 December 31, 2021 1655 and 1725 Third Street $ 12,990 $ 14,034 1450 Research Boulevard 5,532 4,455 101 West Dickman Street 8,537 8,481 Other 11,226 11,513 $ 38,285 $ 38,483 The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of September 30, 2022 (dollars in thousands): Interest Rate (1) At 100% Our Share Unconsolidated Joint Venture Maturity Date Stated Rate Aggregate Commitment Debt Balance (2) 1401/1413 Research Boulevard 12/23/24 2.70% 3.32% $ 28,500 $ 28,079 65.0% 1655 and 1725 Third Street 3/10/25 4.50% 4.57% 600,000 598,974 10.0% 101 West Dickman Street 11/10/26 SOFR+1.95% (3) 4.33% 26,750 10,439 57.9% 1450 Research Boulevard 12/10/26 SOFR+1.95% (3) N/A 13,000 — 73.2% $ 668,250 $ 637,492 (1) Includes interest expense and amortization of loan fees. (2) Represents outstanding principal, net of unamortized deferred financing costs, as of September 30, 2022. (3) This loan is subject to a fixed SOFR floor rate of 0.75%. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Refer to the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). Leases in which we are the lessor As of September 30, 2022, we had 431 properties aggregating 41.1 million operating RSF locate d in key clusters, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. We focus on developing Class A properties in AAA innovation cluster locations, which we consider to be highly desirable for tenancy by life science, agtech, and technology entities. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space. As of September 30, 2022, a ll leases in which we are the lessor were classified as operating leases, with the exception of one direct financing lease. Our leases are described below. Operating leases As of September 30, 2022, our 431 properties were subject to operating lease agreements. Two of these properties, representing two land parcels, are subject to lease agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 70.2 years. Our leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain operating leases contain early termination options that require advance notification and payment of a penalty, which in most cases is substantial enough to be deemed economically disadvantageous by a tenant to exercise. Future lease payments to be received under the terms of our operating lease agreements, excluding expense reimbursements, in effect as of September 30, 2022 are outlined in the table below (in thousands): Year Amount 2022 $ 413,509 2023 1,743,452 2024 1,831,621 2025 1,816,651 2026 1,771,008 Thereafter 13,261,005 Total $ 20,837,246 Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information about our owned real estate assets, which are the underlying assets under our operating leases. Direct financing and sales-type leases As of September 30, 2022, we had one direct financing lease agreement, with a net investment balance of $39.2 million, for a parking structure with a remaining lease term of 70.2 years. The lessee has an option to purchase the underlying asset at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The components of our aggregate net investment in our direct financing and sales-type leases as of September 30, 2022 and December 31, 2021 are summarized in the table below (in thousands): September 30, 2022 December 31, 2021 Gross investment in direct financing and sales-type leases $ 255,641 $ 403,388 Add: estimated unguaranteed residual value of the underlying assets — 31,839 Less: unearned income on direct financing lease (213,640) (215,557) Less: effect of discounting on sales-type leases — (146,175) Less: allowance for credit losses (2,839) (2,839) Net investment in direct financing and sales-type leases $ 39,162 $ 70,656 In May 2022, we completed the sale of land at 9609, 9613, and 9615 Medical Center Drive in our Rockville submarket, which was subject to long-term sales-type leases, for the sales price of $47.8 million and recognized a gain of $11.9 million classified in gain on sales of real estate within our unaudited consolidated statements of operations for the nine months ended September 30, 2022. As of September 30, 2022, we had no sales-type leases. As of September 30, 2022, our estimated credit loss related to our direct financing lease was $2.8 million. No adjustment to the estimated credit loss balance was required during the three and nine months ended September 30, 2022. For further details, refer to the “Allowance for credit losses” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Future lease payments to be received under the terms of our direct financing lease as of September 30, 2022 are outlined in the table below (in thousands): Year Total 2022 $ 454 2023 1,863 2024 1,919 2025 1,976 2026 2,036 Thereafter 247,393 Total $ 255,641 Income from rentals Our total income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals $ 656,853 $ 546,527 $ 1,910,366 $ 1,533,593 Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to the “Revenues” and “Recognition of revenue arising from contracts with customers” sections in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. Residual value risk management strategy Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business objective to invest primarily in high-demand markets with limited supply of available space, (ii) directly managing our leased properties, conducting frequent property inspections, proactively addressing potential maintenance issues before they arise, and timely resolving any occurring issues, and (iii) carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Leases in which we are the lessee Operating lease agreements We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to the “Lessee accounting” subsection of the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. As of September 30, 2022, the present value of the remaining contractual payments aggregating $910.8 million under our operating lease agreements, including our extension options that we are reasonably certain to exercise, was $409.0 million. Our corresponding operating lease right-of-use assets, adjusted for initial direct leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $561.9 million. As of September 30, 2022, the weighted-average remaining lease term of operating leases in which we are the lessee was approximately 42 years, and the weighted-average discount rate was 4.6%. The weighted-average discount rate is based on the incremental borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Ground lease obligations as of September 30, 2022, included leases for 40 of our properties, which accounted for approximately 9% of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book value of $6.4 million as of September 30, 2022, our ground lease obligations have remaining lease terms ranging from approximately 31 years to 99 years, including extension options which we are reasonably certain to exercise. The reconciliation of future lease payments, under noncancelable operating ground and office leases in which we are the lessee, to the operating lease liability reflected in our unaudited consolidated balance sheet as of September 30, 2022 is presented in the table below (in thousands): Year Total 2022 $ 6,586 2023 24,073 2024 24,389 2025 24,475 2026 24,543 Thereafter 806,749 Total future payments under our operating leases in which we are the lessee 910,815 Effect of discounting (501,785) Operating lease liability $ 409,030 Lessee operating costs Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed annual rent payments and may also include escalation clauses and renewal options. Our operating lease obligations related to our office leases have remaining terms of up to 13 years, exclusive of extension options. For the three and nine months ended September 30, 2022 and 2021, our costs for operating leases in which we are the lessee were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross operating lease costs $ 9,349 $ 7,055 $ 26,843 $ 20,580 Capitalized lease costs (847) (827) (2,699) (2,273) Expenses for operating leases in which we are the lessee $ 8,502 $ 6,228 $ 24,144 $ 18,307 For the nine months ended September 30, 2022 and 2021, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we are the lessee were $46.8 million and $18.0 million, respectively. The increase primarily relates to a $26.3 million payment made during the three months ended March 31, 2022 in connection with the execution of lease extensions at two properties in our Greater Stanford submarket. |
Leases | Refer to the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). Leases in which we are the lessor As of September 30, 2022, we had 431 properties aggregating 41.1 million operating RSF locate d in key clusters, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. We focus on developing Class A properties in AAA innovation cluster locations, which we consider to be highly desirable for tenancy by life science, agtech, and technology entities. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space. As of September 30, 2022, a ll leases in which we are the lessor were classified as operating leases, with the exception of one direct financing lease. Our leases are described below. Operating leases As of September 30, 2022, our 431 properties were subject to operating lease agreements. Two of these properties, representing two land parcels, are subject to lease agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 70.2 years. Our leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain operating leases contain early termination options that require advance notification and payment of a penalty, which in most cases is substantial enough to be deemed economically disadvantageous by a tenant to exercise. Future lease payments to be received under the terms of our operating lease agreements, excluding expense reimbursements, in effect as of September 30, 2022 are outlined in the table below (in thousands): Year Amount 2022 $ 413,509 2023 1,743,452 2024 1,831,621 2025 1,816,651 2026 1,771,008 Thereafter 13,261,005 Total $ 20,837,246 Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information about our owned real estate assets, which are the underlying assets under our operating leases. Direct financing and sales-type leases As of September 30, 2022, we had one direct financing lease agreement, with a net investment balance of $39.2 million, for a parking structure with a remaining lease term of 70.2 years. The lessee has an option to purchase the underlying asset at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The components of our aggregate net investment in our direct financing and sales-type leases as of September 30, 2022 and December 31, 2021 are summarized in the table below (in thousands): September 30, 2022 December 31, 2021 Gross investment in direct financing and sales-type leases $ 255,641 $ 403,388 Add: estimated unguaranteed residual value of the underlying assets — 31,839 Less: unearned income on direct financing lease (213,640) (215,557) Less: effect of discounting on sales-type leases — (146,175) Less: allowance for credit losses (2,839) (2,839) Net investment in direct financing and sales-type leases $ 39,162 $ 70,656 In May 2022, we completed the sale of land at 9609, 9613, and 9615 Medical Center Drive in our Rockville submarket, which was subject to long-term sales-type leases, for the sales price of $47.8 million and recognized a gain of $11.9 million classified in gain on sales of real estate within our unaudited consolidated statements of operations for the nine months ended September 30, 2022. As of September 30, 2022, we had no sales-type leases. As of September 30, 2022, our estimated credit loss related to our direct financing lease was $2.8 million. No adjustment to the estimated credit loss balance was required during the three and nine months ended September 30, 2022. For further details, refer to the “Allowance for credit losses” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Future lease payments to be received under the terms of our direct financing lease as of September 30, 2022 are outlined in the table below (in thousands): Year Total 2022 $ 454 2023 1,863 2024 1,919 2025 1,976 2026 2,036 Thereafter 247,393 Total $ 255,641 Income from rentals Our total income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals $ 656,853 $ 546,527 $ 1,910,366 $ 1,533,593 Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to the “Revenues” and “Recognition of revenue arising from contracts with customers” sections in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. Residual value risk management strategy Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business objective to invest primarily in high-demand markets with limited supply of available space, (ii) directly managing our leased properties, conducting frequent property inspections, proactively addressing potential maintenance issues before they arise, and timely resolving any occurring issues, and (iii) carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Leases in which we are the lessee Operating lease agreements We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to the “Lessee accounting” subsection of the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. As of September 30, 2022, the present value of the remaining contractual payments aggregating $910.8 million under our operating lease agreements, including our extension options that we are reasonably certain to exercise, was $409.0 million. Our corresponding operating lease right-of-use assets, adjusted for initial direct leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $561.9 million. As of September 30, 2022, the weighted-average remaining lease term of operating leases in which we are the lessee was approximately 42 years, and the weighted-average discount rate was 4.6%. The weighted-average discount rate is based on the incremental borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Ground lease obligations as of September 30, 2022, included leases for 40 of our properties, which accounted for approximately 9% of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book value of $6.4 million as of September 30, 2022, our ground lease obligations have remaining lease terms ranging from approximately 31 years to 99 years, including extension options which we are reasonably certain to exercise. The reconciliation of future lease payments, under noncancelable operating ground and office leases in which we are the lessee, to the operating lease liability reflected in our unaudited consolidated balance sheet as of September 30, 2022 is presented in the table below (in thousands): Year Total 2022 $ 6,586 2023 24,073 2024 24,389 2025 24,475 2026 24,543 Thereafter 806,749 Total future payments under our operating leases in which we are the lessee 910,815 Effect of discounting (501,785) Operating lease liability $ 409,030 Lessee operating costs Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed annual rent payments and may also include escalation clauses and renewal options. Our operating lease obligations related to our office leases have remaining terms of up to 13 years, exclusive of extension options. For the three and nine months ended September 30, 2022 and 2021, our costs for operating leases in which we are the lessee were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross operating lease costs $ 9,349 $ 7,055 $ 26,843 $ 20,580 Capitalized lease costs (847) (827) (2,699) (2,273) Expenses for operating leases in which we are the lessee $ 8,502 $ 6,228 $ 24,144 $ 18,307 For the nine months ended September 30, 2022 and 2021, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we are the lessee were $46.8 million and $18.0 million, respectively. The increase primarily relates to a $26.3 million payment made during the three months ended March 31, 2022 in connection with the execution of lease extensions at two properties in our Greater Stanford submarket. |
Leases | Refer to the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). Leases in which we are the lessor As of September 30, 2022, we had 431 properties aggregating 41.1 million operating RSF locate d in key clusters, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. We focus on developing Class A properties in AAA innovation cluster locations, which we consider to be highly desirable for tenancy by life science, agtech, and technology entities. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space. As of September 30, 2022, a ll leases in which we are the lessor were classified as operating leases, with the exception of one direct financing lease. Our leases are described below. Operating leases As of September 30, 2022, our 431 properties were subject to operating lease agreements. Two of these properties, representing two land parcels, are subject to lease agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 70.2 years. Our leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain operating leases contain early termination options that require advance notification and payment of a penalty, which in most cases is substantial enough to be deemed economically disadvantageous by a tenant to exercise. Future lease payments to be received under the terms of our operating lease agreements, excluding expense reimbursements, in effect as of September 30, 2022 are outlined in the table below (in thousands): Year Amount 2022 $ 413,509 2023 1,743,452 2024 1,831,621 2025 1,816,651 2026 1,771,008 Thereafter 13,261,005 Total $ 20,837,246 Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information about our owned real estate assets, which are the underlying assets under our operating leases. Direct financing and sales-type leases As of September 30, 2022, we had one direct financing lease agreement, with a net investment balance of $39.2 million, for a parking structure with a remaining lease term of 70.2 years. The lessee has an option to purchase the underlying asset at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The components of our aggregate net investment in our direct financing and sales-type leases as of September 30, 2022 and December 31, 2021 are summarized in the table below (in thousands): September 30, 2022 December 31, 2021 Gross investment in direct financing and sales-type leases $ 255,641 $ 403,388 Add: estimated unguaranteed residual value of the underlying assets — 31,839 Less: unearned income on direct financing lease (213,640) (215,557) Less: effect of discounting on sales-type leases — (146,175) Less: allowance for credit losses (2,839) (2,839) Net investment in direct financing and sales-type leases $ 39,162 $ 70,656 In May 2022, we completed the sale of land at 9609, 9613, and 9615 Medical Center Drive in our Rockville submarket, which was subject to long-term sales-type leases, for the sales price of $47.8 million and recognized a gain of $11.9 million classified in gain on sales of real estate within our unaudited consolidated statements of operations for the nine months ended September 30, 2022. As of September 30, 2022, we had no sales-type leases. As of September 30, 2022, our estimated credit loss related to our direct financing lease was $2.8 million. No adjustment to the estimated credit loss balance was required during the three and nine months ended September 30, 2022. For further details, refer to the “Allowance for credit losses” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Future lease payments to be received under the terms of our direct financing lease as of September 30, 2022 are outlined in the table below (in thousands): Year Total 2022 $ 454 2023 1,863 2024 1,919 2025 1,976 2026 2,036 Thereafter 247,393 Total $ 255,641 Income from rentals Our total income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals $ 656,853 $ 546,527 $ 1,910,366 $ 1,533,593 Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to the “Revenues” and “Recognition of revenue arising from contracts with customers” sections in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. Residual value risk management strategy Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business objective to invest primarily in high-demand markets with limited supply of available space, (ii) directly managing our leased properties, conducting frequent property inspections, proactively addressing potential maintenance issues before they arise, and timely resolving any occurring issues, and (iii) carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Leases in which we are the lessee Operating lease agreements We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to the “Lessee accounting” subsection of the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. As of September 30, 2022, the present value of the remaining contractual payments aggregating $910.8 million under our operating lease agreements, including our extension options that we are reasonably certain to exercise, was $409.0 million. Our corresponding operating lease right-of-use assets, adjusted for initial direct leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $561.9 million. As of September 30, 2022, the weighted-average remaining lease term of operating leases in which we are the lessee was approximately 42 years, and the weighted-average discount rate was 4.6%. The weighted-average discount rate is based on the incremental borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Ground lease obligations as of September 30, 2022, included leases for 40 of our properties, which accounted for approximately 9% of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book value of $6.4 million as of September 30, 2022, our ground lease obligations have remaining lease terms ranging from approximately 31 years to 99 years, including extension options which we are reasonably certain to exercise. The reconciliation of future lease payments, under noncancelable operating ground and office leases in which we are the lessee, to the operating lease liability reflected in our unaudited consolidated balance sheet as of September 30, 2022 is presented in the table below (in thousands): Year Total 2022 $ 6,586 2023 24,073 2024 24,389 2025 24,475 2026 24,543 Thereafter 806,749 Total future payments under our operating leases in which we are the lessee 910,815 Effect of discounting (501,785) Operating lease liability $ 409,030 Lessee operating costs Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed annual rent payments and may also include escalation clauses and renewal options. Our operating lease obligations related to our office leases have remaining terms of up to 13 years, exclusive of extension options. For the three and nine months ended September 30, 2022 and 2021, our costs for operating leases in which we are the lessee were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross operating lease costs $ 9,349 $ 7,055 $ 26,843 $ 20,580 Capitalized lease costs (847) (827) (2,699) (2,273) Expenses for operating leases in which we are the lessee $ 8,502 $ 6,228 $ 24,144 $ 18,307 For the nine months ended September 30, 2022 and 2021, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we are the lessee were $46.8 million and $18.0 million, respectively. The increase primarily relates to a $26.3 million payment made during the three months ended March 31, 2022 in connection with the execution of lease extensions at two properties in our Greater Stanford submarket. |
Leases | Refer to the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for information about lease accounting standards that set principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). Leases in which we are the lessor As of September 30, 2022, we had 431 properties aggregating 41.1 million operating RSF locate d in key clusters, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. We focus on developing Class A properties in AAA innovation cluster locations, which we consider to be highly desirable for tenancy by life science, agtech, and technology entities. Such locations are generally characterized by high barriers to entry for new landlords, high barriers to exit for tenants, and a limited supply of available space. As of September 30, 2022, a ll leases in which we are the lessor were classified as operating leases, with the exception of one direct financing lease. Our leases are described below. Operating leases As of September 30, 2022, our 431 properties were subject to operating lease agreements. Two of these properties, representing two land parcels, are subject to lease agreements that each contain an option for the lessee to purchase the underlying asset from us at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The remaining lease term related to each of the two land parcels is 70.2 years. Our leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain operating leases contain early termination options that require advance notification and payment of a penalty, which in most cases is substantial enough to be deemed economically disadvantageous by a tenant to exercise. Future lease payments to be received under the terms of our operating lease agreements, excluding expense reimbursements, in effect as of September 30, 2022 are outlined in the table below (in thousands): Year Amount 2022 $ 413,509 2023 1,743,452 2024 1,831,621 2025 1,816,651 2026 1,771,008 Thereafter 13,261,005 Total $ 20,837,246 Refer to Note 3 – “Investments in real estate” to our unaudited consolidated financial statements for additional information about our owned real estate assets, which are the underlying assets under our operating leases. Direct financing and sales-type leases As of September 30, 2022, we had one direct financing lease agreement, with a net investment balance of $39.2 million, for a parking structure with a remaining lease term of 70.2 years. The lessee has an option to purchase the underlying asset at fair market value during each of the 30-day periods commencing on the dates that are 15 years, 30 years, and 74.5 years after the rent commencement date of October 1, 2017. The components of our aggregate net investment in our direct financing and sales-type leases as of September 30, 2022 and December 31, 2021 are summarized in the table below (in thousands): September 30, 2022 December 31, 2021 Gross investment in direct financing and sales-type leases $ 255,641 $ 403,388 Add: estimated unguaranteed residual value of the underlying assets — 31,839 Less: unearned income on direct financing lease (213,640) (215,557) Less: effect of discounting on sales-type leases — (146,175) Less: allowance for credit losses (2,839) (2,839) Net investment in direct financing and sales-type leases $ 39,162 $ 70,656 In May 2022, we completed the sale of land at 9609, 9613, and 9615 Medical Center Drive in our Rockville submarket, which was subject to long-term sales-type leases, for the sales price of $47.8 million and recognized a gain of $11.9 million classified in gain on sales of real estate within our unaudited consolidated statements of operations for the nine months ended September 30, 2022. As of September 30, 2022, we had no sales-type leases. As of September 30, 2022, our estimated credit loss related to our direct financing lease was $2.8 million. No adjustment to the estimated credit loss balance was required during the three and nine months ended September 30, 2022. For further details, refer to the “Allowance for credit losses” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Future lease payments to be received under the terms of our direct financing lease as of September 30, 2022 are outlined in the table below (in thousands): Year Total 2022 $ 454 2023 1,863 2024 1,919 2025 1,976 2026 2,036 Thereafter 247,393 Total $ 255,641 Income from rentals Our total income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals $ 656,853 $ 546,527 $ 1,910,366 $ 1,533,593 Our revenues that are subject to the revenue recognition accounting standard and are classified in income from rentals consist primarily of short-term parking revenues that are not considered lease revenues under the lease accounting standard. Refer to the “Revenues” and “Recognition of revenue arising from contracts with customers” sections in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. Residual value risk management strategy Our leases do not have guarantees of residual value on the underlying assets. We manage risk associated with the residual value of our leased assets by (i) evaluating each potential acquisition of real estate to determine whether it meets our business objective to invest primarily in high-demand markets with limited supply of available space, (ii) directly managing our leased properties, conducting frequent property inspections, proactively addressing potential maintenance issues before they arise, and timely resolving any occurring issues, and (iii) carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Leases in which we are the lessee Operating lease agreements We have operating lease agreements in which we are the lessee consisting of ground and office leases. Certain of these leases have options to extend or terminate the contract terms upon meeting certain criteria. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. We recognize a right-of-use asset, which is classified within other assets in our consolidated balance sheets, and a related liability, which is classified within accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets, to account for our future obligations under ground and office lease arrangements in which we are the lessee. Refer to the “Lessee accounting” subsection of the “Lease accounting” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. As of September 30, 2022, the present value of the remaining contractual payments aggregating $910.8 million under our operating lease agreements, including our extension options that we are reasonably certain to exercise, was $409.0 million. Our corresponding operating lease right-of-use assets, adjusted for initial direct leasing costs and other consideration exchanged with the landlord prior to the commencement of the lease, aggregated $561.9 million. As of September 30, 2022, the weighted-average remaining lease term of operating leases in which we are the lessee was approximately 42 years, and the weighted-average discount rate was 4.6%. The weighted-average discount rate is based on the incremental borrowing rate estimated for each lease, which is the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Ground lease obligations as of September 30, 2022, included leases for 40 of our properties, which accounted for approximately 9% of our total number of properties. Excluding one ground lease that expires in 2036 related to one operating property with a net book value of $6.4 million as of September 30, 2022, our ground lease obligations have remaining lease terms ranging from approximately 31 years to 99 years, including extension options which we are reasonably certain to exercise. The reconciliation of future lease payments, under noncancelable operating ground and office leases in which we are the lessee, to the operating lease liability reflected in our unaudited consolidated balance sheet as of September 30, 2022 is presented in the table below (in thousands): Year Total 2022 $ 6,586 2023 24,073 2024 24,389 2025 24,475 2026 24,543 Thereafter 806,749 Total future payments under our operating leases in which we are the lessee 910,815 Effect of discounting (501,785) Operating lease liability $ 409,030 Lessee operating costs Operating lease costs relate to our ground and office leases in which we are the lessee. Ground leases generally require fixed annual rent payments and may also include escalation clauses and renewal options. Our operating lease obligations related to our office leases have remaining terms of up to 13 years, exclusive of extension options. For the three and nine months ended September 30, 2022 and 2021, our costs for operating leases in which we are the lessee were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross operating lease costs $ 9,349 $ 7,055 $ 26,843 $ 20,580 Capitalized lease costs (847) (827) (2,699) (2,273) Expenses for operating leases in which we are the lessee $ 8,502 $ 6,228 $ 24,144 $ 18,307 For the nine months ended September 30, 2022 and 2021, amounts paid and classified as operating activities in our unaudited consolidated statements of cash flows for leases in which we are the lessee were $46.8 million and $18.0 million, respectively. The increase primarily relates to a $26.3 million payment made during the three months ended March 31, 2022 in connection with the execution of lease extensions at two properties in our Greater Stanford submarket. |
Cash, cash equivalents, and res
Cash, cash equivalents, and restricted cash | 9 Months Ended |
Sep. 30, 2022 | |
Cash, cash equivalents, and restricted cash [Abstract] | |
Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Cash and cash equivalents $ 533,824 $ 361,348 Restricted cash: Funds held in trust under the terms of certain secured notes payable — 17,264 Funds held in escrow for real estate acquisitions 329,448 30,000 Other 2,896 6,615 332,344 53,879 Total $ 866,168 $ 415,227 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Investments | We hold investments in publicly traded companies and privately held entities primarily involved in the life science, agtech, and technology industries. As a REIT, we generally limit our ownership of each individual entity’s voting stock to less than 10%. We evaluate each investment to determine whether we have the ability to exercise significant influence, but not control, over an investee. We evaluate investments in which our ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee’s voting stock with a presumption that we have this ability. For our investments in limited partnerships that maintain specific ownership accounts, we presume that such ability exists when our ownership interest exceeds 3% to 5%. In addition to our ownership interest, we consider whether we have a board seat or whether we participate in the policy-making process, among other criteria, to determine if we have the ability to exert significant influence, but not control, over an investee. If we determine that we have such ability, we account for the investment under the equity method of accounting, as described below. Investments accounted for under the equity method Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary impairments. As of September 30, 2022, we had six investments in limited partnerships aggregating $56.4 million that maintain specific ownership accounts for each investor, which were accounted for under the equity method. Our ownership interest in each of these six investments was greater than 5%. Investments that do not qualify for the equity method of accounting For investees over which we determine that we do not have the ability to exercise significant influence or control, we account for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV per share, or (iii) privately held entity that does not report NAV per share, as described below. Investments in publicly traded companies Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales prices or quotes available on securities exchanges. Investments in privately held companies Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are accounted for as follows: Investments in privately held entities that report NAV per share Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date. Investments in privately held entities that do not report NAV per share Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative, under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold. Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share We monitor equity method investments and investments in privately held entities that do not report NAV per share for new developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements, capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators: (i) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse change in the regulatory, economic, or technological environment of the investee; (iii) a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market; (iv) significant concerns about the investee’s ability to continue as a going concern; and/or (v) a decision by investors to cease providing support or reduce their financial commitment to the investee. If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. Investment income/loss recognition and classification We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified within investment income. Unrealized gains and losses represent: (i) changes in fair value for investments in publicly traded companies; (ii) changes in NAV for investments in privately held entities that report NAV per share; (iii) observable price changes for investments in privately held entities that do not report NAV per share; and (iv) our share of unrealized gains or losses reported by our equity method investees. Realized gains and losses on our investments represent the difference between proceeds received upon disposition of investments and their historical or adjusted cost basis. For our equity method investments, realized gains and losses represent our share of realized gains or losses reported by the investee. Impairments are realized losses, which result in an adjusted cost basis, and represent charges to reduce the carrying values of investments in privately held entities that do not report NAV per share and equity method investments, if impairments are deemed other than temporary, to their estimated fair value. Commitments on investments in privately held entities that report NAV We are committed to funding approximately $384.1 million for all investments in privately held entities that report NAV. Our funding commitments expire at various dates over the next 12 years, with a weighted-average expiration of 8.8 years as of September 30, 2022. These investments are not redeemable by us, but we may receive distributions from these investments throughout their terms. Our investments in privately held entities that report NAV generally have expected initial terms in excess of 10 years. The weighted-average remaining term during which these investments are expected to be liquidated was 5.6 years as of September 30, 2022. The following tables summarize our investments as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 Cost Unrealized Gains Unrealized Carrying Amount Publicly traded companies $ 220,787 $ 102,196 $ (99,441) $ 223,542 Entities that report NAV 438,087 331,477 (6,297) 763,267 Entities that do not report NAV: Entities with observable price changes 104,337 95,289 (2,166) 197,460 Entities without observable price changes 384,278 — — 384,278 Investments accounted for under the equity method N/A N/A N/A 56,374 Total investments $ 1,147,489 $ 528,962 $ (107,904) $ 1,624,921 December 31, 2021 Cost Unrealized Gains Unrealized Carrying Amount Publicly traded companies $ 203,290 $ 309,998 $ (29,471) $ 483,817 Entities that report NAV 385,692 446,586 (2,414) 829,864 Entities that do not report NAV: Entities with observable price changes 56,257 74,279 (1,305) 129,231 Entities without observable price changes 362,064 — — 362,064 Investments accounted for under the equity method N/A N/A N/A 71,588 Total investments $ 1,007,303 $ 830,863 $ (33,190) $ 1,876,564 Cumulative gains and losses (realized and unrealized) on investments in privately held entities that do not report NAV still held as of September 30, 2022 aggregated to a gain of $39.0 million, which consisted of upward adjustments aggregating $95.3 million, downward adjustments aggregating $2.2 million, and impairments aggregating $54.2 million. Our investment (loss) income for the three and nine months ended September 30, 2022 and 2021 consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Realized gains $ 24,210 $ 81,516 $ 75,971 $ 189,013 Unrealized (losses) gains (56,515) (14,432) (388,076) 183,348 Investment (loss) income $ (32,305) $ 67,084 $ (312,105) $ 372,361 During the nine months ended September 30, 2022, gains and losses on investments in privately held entities that do not report NAV still held as of September 30, 2022 aggregated to a gain of $1.8 million, which consisted of upward adjustments aggregating $25.2 million and downward adjustments and impairments aggregating $23.4 million. During the nine months ended September 30, 2021, gains and losses on investments in privately held entities that do not report NAV still held as of September 30, 2021 aggregated to a loss of $28.0 million, which consisted of downward adjustments and impairments aggregating $57.9 million and upward adjustments aggregating $29.9 million. Unrealized losses related to investments still held (excluding investments accounted for under the equity method of accounting) as of September 30, 2022 and 2021 aggregated to losses of $301.8 million and gains of $231.5 million during the nine months ended September 30, 2022 and 2021, respectively. Our investment losses for the nine months ended September 30, 2022 also included $2.8 million of equity in earnings of our equity method investments. Refer to the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements for additional information. |
Other assets
Other assets | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other assets | The following table summarizes the components of other assets as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Acquired in-place leases $ 638,024 $ 609,872 Deferred compensation plan 31,957 38,937 Deferred financing costs – unsecured senior line of credit 33,692 19,294 Deposits 30,007 176,077 Furniture, fixtures, and equipment 23,493 26,429 Net investment in direct financing and sales-type leases (1) 39,162 70,656 Notes receivable 18,029 13,088 Operating lease right-of-use asset 561,866 474,299 Other assets 78,330 53,985 Prepaid expenses 30,007 24,806 Property, plant, and equipment 149,310 151,375 Total $ 1,633,877 $ 1,658,818 (1) We completed the sale of our real estate assets subject to sales-type leases in May 2022. As of September 30, 2022, we had no remaining sales-type leases. Refer to Note 5 – “Leases” to these unaudited consolidated financial statements for additional detail. |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | FAIR VALUE MEASUREMENTS We provide fair value information about all financial instruments for which it is practicable to estimate fair value. We measure and disclose the estimated fair value of financial assets and liabilities by utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities (Level 1), (ii) significant other observable inputs (Level 2), and (iii) significant unobservable inputs (Level 3). Significant other observable inputs can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves. Significant unobservable inputs are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Assets and liabilities measured at fair value on a recurring basis The following table sets forth the assets that we measure at fair value on a recurring basis by level in the fair value hierarchy (in thousands). There were no liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021. In addition, there were no transfers of assets measured at fair value on a recurring basis to or from Level 3 in the fair value hierarchy during the nine months ended September 30, 2022. Fair Value Measurement Using Description Total Quoted Prices in Significant Significant Investments in publicly traded companies: As of September 30, 2022 $ 223,542 $ 223,542 $ — $ — As of December 31, 2021 $ 483,817 $ 483,817 $ — $ — Our investments in publicly traded companies represent investments with readily determinable fair values, and are carried at fair value, with changes in fair value classified in investment income in our consolidated financial statements. We also hold investments in privately held entities, which consist of (i) investments that report NAV and (ii) investments that do not report NAV, as further described below. Our investments in privately held entities that report NAV, such as our privately held investments in limited partnerships, are carried at fair value using NAV as a practical expedient, with changes in fair value classified in net income. As of September 30, 2022 and December 31, 2021, the carrying values of investments in privately held entities that report NAV aggregated $763.3 million and $829.9 million, respectively. These investments are excluded from the fair value hierarchy above as required by the fair value accounting standards. We estimate the fair value of each of our investments in limited partnerships based on the most recent NAV reported by each limited partnership. As a result, the determination of fair values of our investments in privately held entities that report NAV generally does not involve significant estimates, assumptions, or judgments. Assets and liabilities measured at fair value on a nonrecurring basis The following table sets forth the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands). These investments were measured at various times during the period from January 1, 2018 to September 30, 2022. Fair Value Measurement Using Description Total Quoted Prices in Significant Significant Investments in privately held entities that do not report NAV As of September 30, 2022 $ 212,413 $ — $ 197,460 (1) $ 14,953 (2) As of December 31, 2021 $ 138,011 $ — $ 129,231 $ 8,780 (1) This balance represents the total carrying amount of our equity investments in privately held entities with observable price changes, included in our total investments balance of $1.6 billion in our unaudited consolidated balance sheet as of September 30, 2022. For more information, refer to Note 7 – “Investments” to our unaudited consolidated financial statements. (2) This amount is included in the $384.3 million balance of investments in privately held entities without observable price changes disclosed in Note 7 – “Investments” to our unaudited consolidated financial statements and represents the carrying amount of investments in privately held entities that do not report NAV for which impairments have been recognized in accordance with the measurement alternative guidance described within the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. Our investments in privately held entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. These investments are adjusted based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of our investments in privately held entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. We also subject our investments in privately held entities that do not report NAV to a qualitative assessment for indicators of impairment. If indicators of impairment are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. The estimates of fair value typically incorporate valuation techniques that include an income approach reflecting a discounted cash flow analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated by market participants. In certain instances, we may use multiple valuation techniques for a particular investment and estimate its fair value based on an average of multiple valuation results. Our real estate assets classified as held for sale are measured at fair value less cost to sell, with changes recognized in net income. We evaluate these assets utilizing an agreed-upon contractual sales price and available comparable market information. If this information is not available, we use estimated replacement costs or estimated cash flow projections that utilize appropriate discount and capitalization rates. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures,” Note 7 – “Investments,” and Note 15 – “Assets classified as held for sale” to our unaudited consolidated financial statements for additional information. The carrying values of cash and cash equivalents, restricted cash, tenant receivables, deposits, notes receivable, accounts payable, accrued expenses, and other short-term liabilities approximate their fair value. The fair values of our secured notes payable, unsecured senior notes payable, and the amounts outstanding on our unsecured senior line of credit and commercial paper program were estimated using widely accepted valuation techniques, including discounted cash flow analyses using significant other observable inputs such as available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. Because the valuations of our financial instruments are based on these types of estimates, the actual fair value of our financial instruments may differ materially if our estimates do not prove to be accurate. Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. As of September 30, 2022 and December 31, 2021, the book and estimated fair values of our secured notes payable, unsecured senior notes payable, and amounts outstanding under our unsecured senior line of credit and commercial paper program, including the level within the fair value hierarchy for which the estimates were derived, were as follows (in thousands): September 30, 2022 Book Value Fair Value Hierarchy Estimated Fair Value Quoted Prices in Significant Significant Liabilities: Secured notes payable $ 40,594 $ — $ 42,611 $ — $ 42,611 Unsecured senior notes payable $ 10,098,588 $ — $ 8,226,370 $ — $ 8,226,370 Unsecured senior line of credit $ — $ — $ — $ — $ — Commercial paper program $ 386,666 $ — $ 385,838 $ — $ 385,838 December 31, 2021 Book Value Fair Value Hierarchy Estimated Fair Value Quoted Prices in Significant Significant Liabilities: Secured notes payable $ 205,198 $ — $ 214,097 $ — $ 214,097 Unsecured senior notes payable $ 8,316,678 $ — $ 8,995,913 $ — $ 8,995,913 Unsecured senior line of credit $ — $ — $ — $ — $ — Commercial paper program $ 269,990 $ — $ 269,994 $ — $ 269,994 |
Secured and unsecured senior de
Secured and unsecured senior debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Secured and unsecured senior debt | SECURED AND UNSECURED SENIOR DEBT The following table summarizes our outstanding indebtedness and respective principal payments remaining as of September 30, 2022 (dollars in thousands): Stated Interest Rate (1) Maturity Date (2) Principal Payments Remaining for the Periods Ending December 31, Unamortized (Deferred Financing Cost), (Discount)/ Premium Debt 2022 2023 2024 2025 2026 Thereafter Principal Total Secured notes payable Greater Boston (3) SOFR+2.70 % 5.34 % 11/19/26 $ — $ — $ — $ — $ 41,438 $ — $ 41,438 $ (1,494) $ 39,944 San Francisco Bay Area 6.50 % 6.50 7/1/36 — 30 32 34 36 518 650 — 650 Secured debt weighted-average interest rate/subtotal 5.36 — 30 32 34 41,474 518 42,088 (1,494) 40,594 Unsecured senior line of credit and commercial paper program (4) (4) 3.48 (4) 1/22/28 (4) (4) — — — — 386,815 (4) 386,815 (149) 386,666 Unsecured senior notes payable 3.45 % 3.62 4/30/25 — — — 600,000 — — 600,000 (2,280) 597,720 Unsecured senior notes payable 4.30 % 4.50 1/15/26 — — — — 300,000 — 300,000 (1,628) 298,372 Unsecured senior notes payable – green bond 3.80 % 3.96 4/15/26 — — — — 350,000 — 350,000 (1,752) 348,248 Unsecured senior notes payable 3.95 % 4.13 1/15/27 — — — — — 350,000 350,000 (2,199) 347,801 Unsecured senior notes payable 3.95 % 4.07 1/15/28 — — — — — 425,000 425,000 (2,257) 422,743 Unsecured senior notes payable 4.50 % 4.60 7/30/29 — — — — — 300,000 300,000 (1,524) 298,476 Unsecured senior notes payable 2.75 % 2.87 12/15/29 — — — — — 400,000 400,000 (2,981) 397,019 Unsecured senior notes payable 4.70 % 4.81 7/1/30 — — — — — 450,000 450,000 (2,889) 447,111 Unsecured senior notes payable 4.90 % 5.05 12/15/30 — — — — — 700,000 700,000 (6,485) 693,515 Unsecured senior notes payable 3.375 % 3.48 8/15/31 — — — — — 750,000 750,000 (5,787) 744,213 Unsecured senior notes payable – green bond 2.00 % 2.12 5/18/32 — — — — — 900,000 900,000 (9,029) 890,971 Unsecured senior notes payable 1.875 % 1.97 2/1/33 — — — — — 1,000,000 1,000,000 (9,055) 990,945 Unsecured senior notes payable – green bond 2.95 % 3.07 3/15/34 — — — — — 800,000 800,000 (8,923) 791,077 Unsecured senior notes payable 4.85 % 4.93 4/15/49 — — — — — 300,000 300,000 (3,131) 296,869 Unsecured senior notes payable 4.00 % 3.91 2/1/50 — — — — — 700,000 700,000 10,248 710,248 Unsecured senior notes payable 3.00 % 3.08 5/18/51 — — — — — 850,000 850,000 (12,082) 837,918 Unsecured senior notes payable 3.55 % 3.63 3/15/52 — — — — — 1,000,000 1,000,000 (14,658) 985,342 Unsecured debt weighted-average interest rate/subtotal 3.51 — — — 600,000 650,000 9,311,815 10,561,815 (76,561) 10,485,254 Weighted-average interest rate/total 3.52 % $ — $ 30 $ 32 $ 600,034 $ 691,474 $ 9,312,333 $ 10,603,903 $ (78,055) $ 10,525,848 (1) Represents the weighted-average interest rate as of the end of the applicable period, including amortization of loan fees, amortization of debt premiums (discounts), and other bank fees. (2) Reflects any extension options that we control. (3) Represents a secured construction loan held by our consolidated real estate joint venture at 99 Coolidge Avenue, of which we own a 75.0% interest. As of September 30, 2022, this joint venture has $153.9 million available under the existing lender commitments. The interest rate shall be reduced from SOFR+2.70% to SOFR+2.10% over time upon the completion of certain leasing, construction, and financial covenant milestones. (4) Refer to “Amendment of our unsecured senior line of credit” and “$2.0 billion commercial paper program” on the next page. The following table summarizes our secured and unsecured senior debt and amounts outstanding under our unsecured senior line of credit and commercial paper program as of September 30, 2022 (dollars in thousands): Fixed-Rate Debt Variable-Rate Debt Weighted-Average Interest Remaining Term Total Percentage Rate (1) Secured notes payable $ 650 $ 39,944 $ 40,594 0.4 % 5.36 % 4.3 Unsecured senior notes payable 10,098,588 — 10,098,588 95.9 3.51 13.5 Unsecured senior line of credit and commercial paper program — 386,666 386,666 (2) 3.7 3.48 (2) 5.3 (3) Total/weighted average $ 10,099,238 $ 426,610 $ 10,525,848 100.0 % 3.52 % 13.2 (3) Percentage of total debt 95.9 % 4.1 % 100.0 % (1) Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to the amortization of loan fees, amortization of debt premiums (discounts), and other bank fees. (2) As of September 30, 2022, we had no outstanding balance on our unsecured senior line of credit. Our unsecured senior line of credit has aggregate commitments of $4.0 billion and bears an interest rate of SOFR plus 0.875%. In addition, the rate is subject to a sustainability adjustment of +/- four basis points based upon our ability to achieve certain annual sustainability targets. As of September 30, 2022, we had $386.7 million of commercial paper notes outstanding with a weighted-average interest rate of 3.48%. (3) We calculate the weighted-average remaining term of our commercial paper notes by using the maturity date of our unsecured senior line of credit. Using the maturity date of our outstanding commercial paper, the consolidated weighted-average maturity of our debt is 13.0 years. The commercial paper notes sold during the three months ended September 30, 2022 were issued at a weighted-average yield to maturity of 2.69% and had a weighted-average maturity term of 13 days. Unsecured senior notes payable In February 2022, we opportunistically issued $1.8 billion of unsecured senior notes payable with a weighted-average interest rate of 3.28% and a weighted-average maturity of 22.0 years. The unsecured senior notes consisted of $800.0 million of 2.95% green unsecured senior notes due 2034 and $1.0 billion of 3.55% unsecured senior notes due 2052. Amendment of our unsecured senior line of credit On September 22, 2022, we amended our unsecured senior line of credit and the key changes are summarized below: New Agreement Change Commitments available for borrowing $4.0 billion Up $1.0 billion Maturity date January 22, 2028 Extended by 2 years Interest rate SOFR+0.875% Converted to SOFR In addition, the interest rate under our amended unsecured senior line of credit is subject to upward or downward adjustments of up to four basis points based upon our ability to achieve certain annual sustainability targets. As of September 30, 2022, we had no outstanding balance on our unsecured senior line of credit. $2.0 billion co mmercial paper program In September 2022, we increased the aggregate amount we may issue from time to time under our commercial paper program to $2.0 billion from $1.5 billion. Our commercial paper program provides us with the ability to issue up to $2.0 billion of commercial paper notes that bear interest at short-term fixed rates with a maturity of generally 30 days or less and with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is backed by our unsecured senior line of credit, and at all times we expect to retain a minimum undrawn amount of borrowing capacity under our unsecured senior line of credit equal to any outstanding notes issued under our commercial paper program. We use the net proceeds from the issuances of the notes for general working capital and other general corporate purposes. General corporate purposes may include, but are not limited to, the repayment of other debt and selective development, redevelopment, or acquisition of properties. As of September 30, 2022, we had an outstanding balance of $386.7 million under our commercial paper program with a weighted-average interest rate of 3.48%. Extinguishment of secured notes payable In April 2022, we repaid two secured notes payable aggregating $195.0 million due in 2024 with an effective interest rate of 3.40% and recognized a loss on early extinguishment of debt of $3.3 million, including a prepayment penalty and the write-off of unamortized loan fees. Interest expense The following table summarizes interest expense for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Interest incurred $ 96,173 $ 78,863 $ 275,835 $ 233,866 Capitalized interest (73,189) (43,185) (199,154) (126,563) Interest expense $ 22,984 $ 35,678 $ 76,681 $ 107,303 |
Accounts payable, accrued expen
Accounts payable, accrued expenses, and other liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts payable, accrued expenses, and other liabilities | The following table summarizes the components of accounts payable, accrued expenses, and other liabilities as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Accounts payable and accrued expenses $ 458,760 $ 513,416 Accrued construction 606,413 438,866 Acquired below-market leases 378,790 341,585 Conditional asset retirement obligations 54,354 59,797 Deferred rent liabilities 18,468 12,384 Operating lease liability 409,030 434,745 Unearned rent and tenant security deposits 373,937 326,924 Other liabilities 94,012 82,693 Total $ 2,393,764 $ 2,210,410 As of September 30, 2022 and December 31, 2021, our conditional asset retirement obligations liability primarily consisted of the soil and groundwater remediation liabilities associated with certain of our properties. Some of our properties may contain asbestos or may be subjected to other hazardous or toxic substances, which, under certain conditions, requires remediation. We engage independent environmental consultants to conduct Phase I or similar environmental assessments at our properties. This type of assessment generally includes a site inspection, interviews, and a public records review; asbestos, lead-based paint, and mold surveys; subsurface sampling; and other testing. We recognize a liability for the fair value of a conditional asset retirement obligation (including asbestos) when the fair value of the liability can be reasonably estimated. In addition, environmental laws and regulations subject our tenants, and potentially us, to liability that may result from our tenants’ routine handling of hazardous substances and wastes as part of their operations at our properties. These assessments and investigations of our properties have not to date revealed any additional environmental liability we believe would have a material adverse effect on our business and financial statements or that would require additional disclosures or recognition in our consolidated financial statements. |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | EARNINGS PER SHARE From time to time, we enter into forward equity sales agreements, which are discussed in Note 13 – “Stockholders’ equity” to our unaudited consolidated financial statements. We consider the potential dilution resulting from the forward equity sales agreements on the EPS calculations. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. The common shares issued upon the settlement of the forward equity sales agreements, weighted for the period these common shares were outstanding, are included in the denominator of basic EPS. To determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the number of weighted-average shares outstanding – diluted using the treasury stock method. We account for unvested restricted stock awards that contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of EPS using the two-class method. Our forward equity sales agreements are not participating securities and are therefore not included in the computation of EPS using the two-class method. Under the two-class method, we allocate net income (after amounts attributable to noncontrolling interests) to common stockholders and unvested restricted stock awards by using the weighted-average shares of each class outstanding for quarter-to-date and year-to-date periods independently, based on their respective participation rights to dividends declared (or accumulated) and undistributed earnings. The table reconciles the numerators and denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 383,443 $ 124,433 $ 575,433 $ 554,486 Net income attributable to noncontrolling interests (38,747) (21,286) (108,092) (58,134) Net income attributable to unvested restricted stock awards (3,257) (1,883) (5,866) (5,750) Numerator for basic and diluted EPS – net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders $ 341,439 $ 101,264 $ 461,475 $ 490,602 Denominator for basic EPS – weighted-average shares of common stock outstanding 161,554 150,854 160,400 144,716 Dilutive effect of forward equity sales agreements — 707 — 437 Denominator for diluted EPS – weighted-average shares of common stock outstanding 161,554 151,561 160,400 145,153 Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders: Basic $ 2.11 $ 0.67 $ 2.88 $ 3.39 Diluted $ 2.11 $ 0.67 $ 2.88 $ 3.38 |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' equity | STOCKHOLDERS’ EQUITY Common equity transactions During the nine months ended September 30, 2022, our common equity transactions included the following: • In January 2022, we entered into new forward equity sales agreements aggregating $1.7 billion to sell 8.1 million shares of our common stock (including the exercise of an underwriters’ option) at a public offering price of $210.00 per share, before underwriting discounts and commissions. • In March 2022, we settled a portion of these forward equity sales agreements by issuing 3.2 million shares and received net proceeds of $648.2 million. • In September 2022, we settled a portion of our outstanding forward equity agreements by issuing 1.0 million shares and received net proceeds of $199.7 million. • In December 2021, we entered into a new ATM common stock offering program, which allows us to sell up to an aggregate of $1.0 billion of our common stock. • We entered into new forward equity sales agreements aggregating $753.4 million to sell 4.2 million shares under our ATM program at an average price of $179.36 per share (before underwriting discounts). • As of September 30, 2022, the remaining aggregate amount available under our ATM program for future sales of common stock was $246.6 million. As of September 30, 2022, we expect to issue an aggregate of 8.0 million shares at an average price of $186.03 per share to settle all our outstanding forward equity sales agreements and receive net proceeds of approximately $1.5 billion during the three months ended December 31, 2022. Dividends During the three months ended March 31, 2022, we declared cash dividends on our common stock aggregating $187.7 million, or $1.15 per share. In April 2022, we paid the cash dividends on our common stock declared for the three months ended March 31, 2022. During the three months ended June 30, 2022, we declared cash dividends on our common stock aggregating $192.6 million, or $1.18 per share. In July 2022, we paid the cash dividends on our common stock declared for the three months ended June 30, 2022. During the three months ended September 30, 2022, we declared cash dividends on our common stock aggregating $193.6 million, or $1.18 per share. In October 2022, we paid the cash dividends on our common stock declared for the three months ended September 30, 2022. Accumulated other comprehensive loss The change in accumulated other comprehensive loss attributable to Alexandria Real Estate Equities, Inc.’s stockholders during the nine months ended September 30, 2022 was entirely due to net unrealized losses of $17.4 million on foreign currency translation related to our operations in Canada and China. Common stock, preferred stock, and excess stock authorizations In May 2022, our stockholders approved an amendment to our charter to increase the authorized number of shares of common stock from 200.0 million to 400.0 million, of which 162.6 million shares were issued and outstanding as of September 30, 2022. Our charter also authorizes the issuance of up to 100.0 million shares of preferred stock, none of which were issued and outstanding as of September 30, 2022. In addition, 200.0 million shares of “excess stock” (as defined in our charter) are authorized, none of which were issued and outstanding as of September 30, 2022. |
Noncontrolling interests
Noncontrolling interests | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling interests | NONCONTROLLING INTERESTS Noncontrolling interests represent the third-party interests in certain entities in which we have a controlling interest. These entities owned 63 properties as of September 30, 2022 and are included in our consolidated financial statements. Noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. Distributions, profits, and losses related to these entities are allocated in accordance with the respective operating agreements. During the nine months ended September 30, 2022 and 2021, we distributed $139.5 million and $81.9 million, respectively, to our consolidated real estate joint venture partners. Certain of our noncontrolling interests have the right to require us to redeem their ownership interests in the respective entities. We classify these ownership interests in the entities as redeemable noncontrolling interests outside of total equity in our consolidated balance sheets. Redeemable noncontrolling interests are adjusted for additional contributions and distributions, the proportionate share of the net earnings or losses, and other comprehensive income or loss. If the amount of a redeemable noncontrolling interest is less than the maximum redemption value at the balance sheet date, such amount is adjusted to the maximum redemption value. Subsequent declines in the redemption value are recognized only to the extent that previous increases have been recognized. Refer to the “Formation of consolidated real estate joint ventures and sales of partial interests” section in Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for additional information. |
Assets classified as held for s
Assets classified as held for sale | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets classified as held for sale | ASSETS CLASSIFIED AS HELD FOR SALE As of September 30, 2022, we had one property aggregating 334,144 RSF that was classified as held for sale in our consolidated financial statements. The disposal of properties classified as held for sale does not represent a strategic shift and therefore does not meet the criteria for classification as a discontinued operation. We cease depreciation of our properties upon their classification as held for sale. Refer to the “Real estate sales” subsection of the “Investments in real estate” section within Note 2 – “Summary of significant accounting policies” for additional information. The following is a summary of net assets as of September 30, 2022 and December 31, 2021 for our real estate investments that were classified as held for sale as of each respective date (in thousands): September 30, 2022 December 31, 2021 Total assets $ 14,169 $ 17,749 Total liabilities (1,179) (1,083) Total accumulated other comprehensive income (loss) 1,839 (1,750) Net assets classified as held for sale $ 14,829 $ 14,916 |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Real estate assets acquired in October 2022 In October 2022, we completed the acquisition of two properties for an aggregate purchase price of $108.0 million. Refer to the “Acquisitions” section in Note 3 – “Investments in real estate” for additional information. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Consolidation On an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly owned by us in accordance with the consolidation guidance. Our evaluation considers all of our variable interests, including equity ownership, as well as fees paid to us for our involvement in the management of each partially owned entity. To fall within the scope of the consolidation guidance, an entity must meet both of the following criteria: • The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can be in the form of a partnership, limited liability company, or corporation, among others; and • We have a variable interest in the legal entity — i.e., variable interests that are contractual, such as equity ownership, or other financial interests that change with changes in the fair value of the entity’s net assets. If an entity does not meet both criteria above, we apply other accounting literature, such as the cost or equity method of accounting. If an entity does meet both criteria above, we evaluate such entity for consolidation under either the variable interest model if the legal entity meets any of the following characteristics to qualify as a VIE, or under the voting model for all other legal entities that are not VIEs. A legal entity is determined to be a VIE if it has any of the following three characteristics: 1) The entity does not have sufficient equity to finance its activities without additional subordinated financial support; 2) The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest holder(s) of voting rights); or 3) The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion if they lack any of the following: • The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence the entity’s economic performance, as evidenced by: • Substantive participating rights in day-to-day management of the entity’s activities; or • Substantive kick-out rights over the party responsible for significant decisions; • The obligation to absorb the entity’s expected losses; or • The right to receive the entity’s expected residual returns. Our real estate joint ventures consist of limited partnerships or limited liability companies. For an entity structured as a limited partnership or a limited liability company, our evaluation of whether the equity holders (equity partners other than the general partner or the managing member of a joint venture) lack the characteristics of a controlling financial interest includes the evaluation of whether the limited partners or non-managing members (the noncontrolling equity holders) lack both substantive participating rights and substantive kick-out rights, defined as follows: • Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating decisions made in the ordinary course of business that most significantly influence the entity’s economic performance. • Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause. If we conclude that any of the three characteristics of a VIE are met, including that the equity holders lack the characteristics of a controlling financial interest because they lack both substantive participating rights and substantive kick-out rights, we conclude that the entity is a VIE and evaluate it for consolidation under the variable interest model. Variable interest model If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits — that is, (i) we have the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power) and (ii) we have the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE (benefits). We consolidate VIEs whenever we determine that we are the primary beneficiary. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for information on specific joint ventures that qualify as VIEs. If we have a variable interest in a VIE but are not the primary beneficiary, we account for our investment using the equity method of accounting. Voting model If a legal entity fails to meet any of the three characteristics of a VIE (i.e., insufficiency of equity, existence of non-substantive voting rights, or lack of a controlling financial interest), we then evaluate such entity under the voting model. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares and that other equity holders do not have substantive participating rights. Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements for further information on our unconsolidated real estate joint ventures that qualify for evaluation under the voting model. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and equity; the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements; and the amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Investments in real estate and properties classified as held for sale | Investments in real estate Evaluation of business combination or asset acquisition We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business: • Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or • The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction). An acquired process is considered substantive if: • The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable, and experienced in performing the process; • The process cannot be replaced without significant cost, effort, or delay; or • The process is considered unique or scarce. Generally, our acquisitions of real estate or in-substance real estate do not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort, or delay. When evaluating acquired service or management contracts, we consider the nature of the services performed, the terms of the contract relative to similar arm’s-length contracts, and the availability of comparable vendors in evaluating whether the acquired contract constitutes a substantive process. Recognition of real estate acquired We evaluate each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine whether the integrated set of assets and activities acquired meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For acquisitions of real estate or in-substance real estate that are accounted for as business combinations, we allocate the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and previously existing ownership interests at fair value as of the acquisition date. Assets include intangible assets such as tenant relationships, acquired in-place leases, and favorable intangibles associated with in-place leases in which we are the lessor. Liabilities include unfavorable intangibles associated with in-place leases in which we are the lessor. In addition, for acquired in-place finance or operating leases in which we are the lessee, acquisition consideration is allocated to lease liabilities and related right-of-use assets, adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Any excess (deficit) of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill (bargain purchase gain). Acquisition costs related to business combinations are expensed as incurred. Generally, we expect that acquisitions of real estate or in-substance real estate will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings, and related intangible assets). The accounting model for asset acquisitions is similar to the accounting model for business combinations, except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Any excess (deficit) of the consideration transferred relative to the sum of the fair value of the assets acquired and liabilities assumed is allocated to the individual assets and liabilities based on their relative fair values. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. Incremental and external direct acquisition costs (such as legal and other third-party services) are capitalized. We exercise judgment to determine the key assumptions used to allocate the purchase price of real estate acquired among its components. The allocation of the consideration to the various components of properties acquired during the year can have an effect on our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related depreciation and amortization expense in our consolidated statements of operations. We apply judgment in utilizing available comparable market information to assess relative fair value. We assess the relative fair values of tangible and intangible assets and liabilities based on available comparable market information, including estimated replacement costs, rental rates, and recent market transactions. In addition, we may use estimated cash flow projections that utilize appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated trends, and market/economic conditions that may affect the property. The value of tangible assets acquired is based upon our estimation of fair value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. If there is a bargain fixed-rate renewal option for the period beyond the noncancelable lease term of an in-place lease, we evaluate intangible factors, such as the business conditions in the industry in which the lessee operates, the economic conditions in the area in which the property is located, and the ability of the lessee to sublease the property during the renewal term, in order to determine the likelihood that the lessee will renew. When we determine that there is reasonable assurance that such bargain purchase option will be exercised, we consider the option in determining the intangible value of such lease and its related amortization period. We also recognize the relative fair values of assets acquired, the liabilities assumed, and any noncontrolling interest in acquisitions of less than a 100% interest when the acquisition constitutes a change in control of the acquired entity. Depreciation and amortization The values allocated to buildings and building improvements, land improvements, tenant improvements, and equipment are depreciated on a straight-line basis. For buildings and building improvements, we depreciate using the shorter of the respective ground lease terms or their estimated useful lives, not to exceed 40 years. Land improvements are depreciated over their estimated useful lives, not to exceed 20 years. Tenant improvements are depreciated over their respective lease terms or estimated useful lives, and equipment is depreciated over the shorter of the lease term or its estimated useful life. The values of the right-of-use assets are amortized on a straight-line basis over the remaining terms of each related lease. The values of acquired in-place leases and associated favorable intangibles (i.e., acquired above-market leases) are classified in other assets in our consolidated balance sheets and are amortized over the remaining terms of the related leases as a reduction of income from rentals in our consolidated statements of operations. The values of unfavorable intangibles (i.e., acquired below-market leases) associated with acquired in-place leases are classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets and are amortized over the remaining terms of the related leases as an increase in income from rentals in our statements of operations. Capitalized project costs We capitalize project costs, including pre-construction costs, interest, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, pre-construction, or construction of a project. Capitalization of development, redevelopment, pre-construction, and construction costs is required while activities are ongoing to prepare an asset for its intended use. Fluctuations in our development, redevelopment, pre-construction, and construction activities could result in significant changes to total expenses and net income. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Should development, redevelopment, pre-construction, or construction activity cease, interest, property taxes, insurance, and certain other costs would no longer be eligible for capitalization and would be expensed as incurred. Expenditures for repairs and maintenance are expensed as incurred. Real estate sales A property is classified as held for sale when all of the following criteria for a plan of sale have been met: (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation of assets ceases upon designation of a property as held for sale. For additional details, refer to Note 15 – “Assets classified as held for sale” to our unaudited consolidated financial statements. If the disposal of a property represents a strategic shift that has (or will have) a major effect on our operations or financial results, such as (i) a major line of business, (ii) a major geographic area, (iii) a major equity method investment, or (iv) other major parts of an entity, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued operations in our consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. The disposal of an individual property generally will not represent a strategic shift and therefore will typically not meet the criteria for classification as a discontinued operation. We recognize gains or losses on real estate sales in accordance with the accounting standard on the derecognition of nonfinancial assets arising from contracts with noncustomers. Our ordinary output activities consist of the leasing of space to our tenants in our operating properties, not the sales of real estate. Therefore, sales of real estate (in which we are the seller) qualify as contracts with noncustomers. In our transactions with noncustomers, we apply certain recognition and measurement principles consistent with our method of recognizing revenue arising from contracts with customers. Derecognition of the asset is based on the transfer of control. If a real estate sales contract includes our ongoing involvement with the property, then we evaluate each promised good or service under the contract to determine whether it represents a separate performance obligation, constitutes a guarantee, or prevents the transfer of control. If a good or service is considered a separate performance obligation, an allocated portion of the transaction price is recognized as revenue as we transfer the related good or service to the buyer. The recognition of gain or loss on the sale of a partial interest also depends on whether we retain a controlling or noncontrolling interest in the property. If we retain a controlling interest in the property upon completion of the sale, we continue to reflect the asset at its book value, record a noncontrolling interest for the book value of the partial interest sold, and recognize additional paid-in capital for the difference between the consideration received and the partial interest at book value. Conversely, if we retain a noncontrolling interest upon completion of the sale of a partial interest of real estate, we recognize a gain or loss as if 100% of the asset were sold. |
Impairment of long-lived assets | Impairment of long-lived assets Prior to and subsequent to the end of each quarter, we review current activities and changes in the business conditions of all of our long-lived assets to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Long-lived assets to be held and used, including our rental properties, CIP, land held for development, right-of-use assets related to operating leases in which we are the lessee, and intangibles, are individually evaluated for impairment when conditions exist that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by project and include significant fluctuations in estimated net operating income, occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, current and historical operating results, known trends, current market/economic conditions that may affect the asset, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount of the asset to its estimated fair value. If an impairment charge is not required to be recognized, the recognition of depreciation or amortization is adjusted prospectively, as necessary, to reduce the carrying amount of the asset to its estimated disposition value over the remaining period that the asset is expected to be held and used. We may adjust depreciation of properties that are expected to be disposed of or redeveloped prior to the end of their useful lives. We use the held for sale impairment model for our properties classified as held for sale, which is different from the held and used impairment model. Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the long-lived asset classified as held for sale exceeds its fair value less cost to sell. Because of these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an impairment charge upon classification as held for sale. |
International operations | International operations In addition to operating properties in the U.S., we have eight properties in Canada and one operating property in China. The functional currency for our subsidiaries operating in the U.S. is the U.S. dollar. The functional currencies for our foreign subsidiaries are the local currencies in each respective country. The assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect as of the financial statement date. Revenue and expense accounts of our foreign subsidiaries are translated using the weighted-average exchange rate for the periods presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive income (loss) as a separate component of total equity and are excluded from net income (loss). Whenever a foreign investment meets the criteria for classification as held for sale, we evaluate the recoverability of the investment under the held for sale impairment model. We may recognize an impairment charge if the carrying amount of the investment exceeds its fair value less cost to sell. In determining an investment’s carrying amount, we consider its net book value and any cumulative unrealized foreign currency translation adjustment related to the investment. The appropriate amounts of foreign exchange rate gains or losses classified in accumulated other comprehensive income (loss) are reclassified to net income when realized upon the sale of our investment or upon the complete or substantially complete liquidation of our investment. |
Investments | Investments accounted for under the equity method Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of earnings or losses reported by the investee, distributions received, and other-than-temporary impairments. For more information about our investments accounted for under the equity method, refer to Note 7 – “Investments” to our unaudited consolidated financial statements. Investments that do not qualify for the equity method of accounting For investees over which we determine that we do not have the ability to exercise significant influence or control, we account for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports NAV per share, or (iii) privately held entity that does not report NAV per share, as described below. Investments in publicly traded companies Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in investment income (loss) in our consolidated statements of operations. The fair values for our investments in publicly traded companies are determined based on sales prices or quotes available on securities exchanges. Investments in privately held companies Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are accounted for as follows: Investments in privately held entities that report NAV per share Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships, are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date. Investments in privately held entities that do not report NAV per share Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative, under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. An observable price arises from an orderly transaction for an identical or similar investment of the same issuer, which is observed by an investor without expending undue cost and effort. Observable price changes result from, among other things, equity transactions of the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. To determine whether these transactions are indicative of an observable price change, we evaluate, among other factors, whether these transactions have similar rights and obligations, including voting rights, distribution preferences, and conversion rights to the investments we hold. Impairment evaluation of equity method investments and investments in privately held entities that do not report NAV per share We monitor equity method investments and investments in privately held entities that do not report NAV per share for new developments, including operating results, prospects and results of clinical trials, new product initiatives, new collaborative agreements, capital-raising events, and merger and acquisition activities. These investments are evaluated on the basis of a qualitative assessment for indicators of impairment by monitoring the presence of the following triggering events or impairment indicators: (i) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse change in the regulatory, economic, or technological environment of the investee; (iii) a significant adverse change in the general market condition, including the research and development of technology and products that the investee is bringing or attempting to bring to the market; (iv) significant concerns about the investee’s ability to continue as a going concern; and/or (v) a decision by investors to cease providing support or reduce their financial commitment to the investee. If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. Investment income/loss recognition and classification We recognize both realized and unrealized gains and losses in our consolidated statements of operations, classified within investment income. Unrealized gains and losses represent: (i) changes in fair value for investments in publicly traded companies; (ii) changes in NAV for investments in privately held entities that report NAV per share; (iii) observable price changes for investments in privately held entities that do not report NAV per share; and (iv) our share of unrealized gains or losses reported by our equity method investees. |
Revenues | Revenues The table below provides details of our consolidated total revenues for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals 656,853 546,527 1,910,366 1,533,593 Other income 2,999 1,232 8,315 3,634 Total revenues $ 659,852 $ 547,759 $ 1,918,681 $ 1,537,227 During the three and nine months ended September 30, 2022, revenues that were subject to the lease accounting standard aggregated $647.3 million, or 98.1%, and $1.9 billion, or 98.1%, respectively, of our total revenues. During the three and nine months ended September 30, 2022, our total revenues also included $12.5 million, or 1.9%, and $36.7 million, or 1.9%, respectively, subject to other accounting guidance. Our other income consisted primarily of construction management fees and interest income earned during the three and nine months ended September 30, 2022. For a detailed discussion related to our revenue streams, refer to the “Lease accounting” and “Recognition of revenue arising from contracts with customers” sections within this Note 2 to our unaudited consolidated financial statements. |
Leases summary | Lease accounting Definition and classification of a lease When we enter into a contract or amend an existing contract, we evaluate whether the contract meets the definition of a lease. To meet the definition of a lease, the contract must meet all three criteria: (i) One party (lessor) must hold an identified asset; (ii) The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract; and (iii) The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract. We classify our leases as either finance leases or operating leases if we are the lessee, or sales-type, direct financing, or operating leases if we are the lessor. We use the following criteria to determine if a lease is a finance lease (as a lessee) or sales-type or direct financing lease (as a lessor): (i) Ownership is transferred from lessor to lessee by the end of the lease term; (ii) An option to purchase is reasonably certain to be exercised; (iii) The lease term is for the major part of the underlying asset’s remaining economic life; (iv) The present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset; or (v) The underlying asset is specialized and is expected to have no alternative use at the end of the lease term. If we meet any of the above criteria, we account for the lease as a finance, a sales-type, or a direct financing lease. If we do not meet any of the criteria, we account for the lease as an operating lease. A lease is accounted for as a sales-type lease if it is considered to transfer control of the underlying asset to the lessee. A lease is accounted for as a direct financing lease if risks and rewards are conveyed without the transfer of control, which is normally indicated by the existence of a residual value guarantee from an unrelated third party other than the lessee. This classification will determine the method of recognition of the lease: • For an operating lease, we recognize income from rentals if we are the lessor, or rental operations expense if we are the lessee, over the term of the lease on a straight-line basis. • For a sales-type lease or a direct financing lease, we recognize the income from rentals, or for a finance lease, we recognize rental operations expense, over the term of the lease using the effective interest method. |
Leases, lessor accounting | Lessor accounting Costs to execute leases We capitalize initial direct costs, which represent only incremental costs of a lease that would not have been incurred if the lease had not been obtained. Costs that we incur to negotiate or arrange a lease, regardless of its outcome, such as for fixed employee compensation, tax, or legal advice to negotiate lease terms, and other costs, are expensed as incurred. Operating leases We account for the revenue from our lease contracts by utilizing the single component accounting policy. This policy requires us to account for, by class of underlying asset, the lease component and nonlease component(s) associated with each lease as a single component if two criteria are met: (i) The timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and (ii) The lease component would be classified as an operating lease if it were accounted for separately. Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our leases, and contingent rental payments. Nonlease components consist primarily of tenant recoveries representing reimbursements of rental operating expenses under our triple net lease structure, including recoveries for utilities, repairs and maintenance, and common area expenses. If the lease component is the predominant component, we account for all revenues under such lease as a single component in accordance with the lease accounting standard. Conversely, if the nonlease component is the predominant component, all revenues under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all revenues from our operating leases under the lease accounting standard and classify these revenues as income from rentals in our consolidated statements of operations. We commence recognition of income from rentals related to the operating leases at the date the property is ready for its intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the respective operating lease terms. We classify amounts expected to be received in later periods as deferred rent in our consolidated balance sheets. Amounts received currently but recognized as revenue in future periods are classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets. Income from rentals related to variable payments includes tenant recoveries and contingent rental payments. Tenant recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance, and other operating expenses, are recognized as revenue in the period during which the applicable expenses are incurred and the tenant’s obligation to reimburse us arises. Income from rentals related to other variable payments is recognized when associated contingencies are removed. We assess collectibility from our tenants of future lease payments for each of our operating leases. If we determine that collectibility is probable, we recognize income from rentals based on the methodology described above. If we determine that collectibility is not probable, we recognize an adjustment to lower our income from rentals. Furthermore, we may recognize a general allowance at a portfolio level (not the individual level) if we do not expect to collect future lease payments in full. For each lease for which we determine that collectibility of future lease payments is not probable, we cease the recognition of income from rentals on a straight-line basis, and limit the recognition of income to the payments collected from the lessee. We do not resume straight-line recognition of income from rentals for these leases until we determine that the collectibility of future payments related to these leases is probable. During the three and nine months ended September 30, 2022, we recognized specific write-offs for leases aggregating $6.0 million and $6.9 million, respectively, for which we determined the collectibility was not probable. We also record a general allowance related to the deferred rent balances that at the portfolio level (not the individual level) are not expected to be collected in full through the lease term. During the three and nine months ended September 30, 2022, we recorded adjustments of $4.0 million and $9.5 million, respectively, to increase the general allowance balance. As of September 30, 2022, our general allowance balance aggregated $16.3 million . Direct financing and sales-type leases Income from rentals related to our direct financing and sales-type leases is recognized over the lease term using the effective interest rate method. At lease commencement, we record an asset within other assets in our consolidated balance sheets, which represents our net investment in the lease. This initial net investment is determined by aggregating the present values of the total future lease payments attributable to the lease and the estimated residual value of the property, less any unearned income related to our direct financing lease. Over the lease term, the investment in the lease accretes in value, producing a constant periodic rate of return on the net investment in the lease. Income from these leases is classified in income from rentals in our consolidated statements of operations. Our net investment is reduced over time as lease payments are received. We evaluate our net investment in direct financing and sales-type leases for impairment under the current expected credit loss standard. For more information, refer to the “Allowance for credit losses” section within this Note 2 to our unaudited consolidated financial statements. On January 1, 2022, we adopted an accounting standard that requires a lessor to classify a lease with variable lease payments that do not depend on an index or a rate as an operating lease on the commencement date of the lease if both of the following criteria are met: (i) The lease would have been classified as a sales-type lease or direct financing lease under the current lease standard; and (ii) The sales-type lease or direct financing lease classification would have resulted in a selling loss at lease commencement. Under this accounting standard, the lessor does not derecognize the underlying asset and does not recognize a loss upon lease commencement but continues to depreciate the underlying asset over its useful life. We elected a prospective application of this accounting standard to leases that commence or are modified on or after the date this standard was adopted. Historically, substantially all our leases in which we are the lessor have been operating leases; therefore, the adoption of this accounting standard has not had and is not expected to have a material effect on our consolidated financial statements. |
Leases, lessee accounting | Lessee accounting We have operating lease agreements in which we are the lessee consisting of ground and office leases. At the lease commencement date (or at the acquisition date if the lease is acquired as part of a real estate acquisition), we are required to recognize a liability to account for our future obligations under these operating leases, and a corresponding right-of-use asset. The lease liability is measured based on the present value of the future lease payments, including payments during the term under our extension options that we are reasonably certain to exercise. The present value of the future lease payments is calculated for each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate, which is the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. We classify the operating lease liability in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets. |
Recognition of revenue arising from contracts with customers | Recognition of revenue arising from contracts with customers We recognize revenues associated with transactions arising from contracts with customers, excluding revenues subject to the lease accounting standard discussed in the “Lease accounting” section above, in accordance with the revenue recognition accounting standard. A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinary output activities. We generally recognize revenue representing the transfer of goods and services to customers in an amount that reflects the consideration to which we expect to be entitled in the exchange. In order to determine the recognition of revenue from customer contracts, we use a five-step model to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation. We identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. We consider whether we control the goods or services prior to the transfer to the customer in order to determine whether we should account for the arrangement as a principal or agent. If we determine that we control the goods or services provided to the customer, then we are the principal to the transaction, and we recognize the gross amount of consideration expected in the exchange. If we simply arrange but do not control the goods or services being transferred to the customer, then we are considered to be an agent to the transaction, and we recognize the net amount of consideration we are entitled to retain in the exchange. Total revenues subject to the revenue recognition accounting standard and classified within income from rentals in our consolidated statements of operations for the three and nine months ended September 30, 2022 included $9.5 million and $28.4 million, respectively, primarily related to short-term parking revenues associated with long-term lease agreements. Short-term parking revenues do not qualify for the single component accounting policy, as discussed in the “Lessor accounting” subsection of the “Lease accounting” section within this Note 2, due to the difference in the timing and pattern of transfer of our parking service obligations and associated lease components within the same lease agreement. We recognize short-term parking revenues in accordance with the revenue recognition accounting standard when the service is provided and the performance obligation is satisfied, which normally occurs at a point in time. |
Monitoring tenant credit quality | Monitoring of tenant credit quality During the term of each lease, we monitor the credit quality and any related material changes of our tenants by (i) monitoring the credit rating of tenants that are rated by a nationally recognized credit rating agency, (ii) reviewing financial statements of the tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (iii) monitoring news reports regarding our tenants and their respective businesses, and (iv) monitoring the timeliness of lease payments. |
Allowance for credit losses | Allowance for credit losses We are required to estimate and recognize lifetime expected losses, rather than incurred losses, for most of our financial assets measured at amortized cost and certain other instruments, including trade and other receivables (excluding receivables arising from operating leases), loans, held-to-maturity debt securities, net investments in leases arising from sales-type and direct financing leases, and off-balance-sheet credit exposures (e.g., loan commitments). The recognition of such expected losses, even if the expected risk of credit loss is remote, typically results in earlier recognition of credit losses. An assessment of the collectibility of operating lease payments and the recognition of an adjustment to lease income based on this assessment is governed by the lease accounting standard discussed in the “Lease accounting” section earlier within this Note 2 to our unaudited consolidated financial statements. At each reporting date, we reassess our credit loss allowances on the aggregate net investment of our direct financing and sales-type leases and our trade receivables. If necessary, we recognize a credit loss adjustment for our current estimate of expected credit losses, which is classified within rental operations in our consolidated statements of operations. For further details, refer to Note 5 – “Leases” to our unaudited consolidated financial statements. |
Income taxes | Income taxes We are organized and operate as a REIT pursuant to the Internal Revenue Code (the “Code”). Under the Code, a REIT that distributes at least 90% of its REIT taxable income to its stockholders annually (excluding net capital gains) and meets certain other conditions is not subject to federal income tax on its distributed taxable income, but could be subject to certain federal, foreign, state, and local taxes. We distribute 100% of our taxable income annually; therefore, a provision for federal income taxes is not required. In addition to our REIT returns, we file federal, foreign, state, and local tax returns for our subsidiaries. We file with jurisdictions located in the U.S., Canada, China, and other international locations. Our tax returns are subject to routine examination in various jurisdictions for the 2016 through 2021 calendar years. |
Employee share-based payments | Employee and non-employee share-based payments We have implemented an entity-wide accounting policy to account for forfeitures of share-based awards granted to employees and non-employees when they occur. As a result of this policy, we recognize expense on share-based awards with time-based vesting conditions without reductions for an estimate of forfeitures. This accounting policy only applies to service condition awards. For performance condition awards, we continue to assess the probability that such conditions will be achieved. Expenses related to forfeited awards are reversed as forfeitures occur. All nonforfeitable dividends paid on share-based payment awards are initially classified in retained earnings and reclassified to compensation cost only if forfeitures of the underlying awards occur. Our employee and non-employee share-based awards are measured at fair value on the grant date and recognized over the recipient’s required service period. |
Forward equity sales agreements | Forward equity sales agreements We account for our forward equity sales agreements in accordance with the accounting guidance governing financial instruments and derivatives. As of September 30, 2022, none of our forward equity sales agreements were deemed to be liabilities as they did not embody obligations to repurchase our shares, nor did they embody obligations to issue a variable number of shares for which the monetary value was predominantly fixed, varied with something other than the fair value of our shares, or varied inversely in relation to our shares. We also evaluated whether the agreements met the derivatives and hedging guidance scope exception to be accounted for as equity instruments and concluded that the agreements can be classified as equity contracts based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock. |
Issuer and guarantor subsidiaries of guaranteed securities | Issuer and guarantor subsidiaries of guaranteed securities Generally, a parent entity must provide separate subsidiary issuer or guarantor financial statements, unless it qualifies for disclosure exceptions. A parent entity may be eligible for disclosure exceptions if it meets the following criteria: • The subsidiary issuer or guarantor is a consolidated subsidiary of the parent company, and • The subsidiary issues a registered security that is: • Issued jointly and severally with the parent company, or • Fully and unconditionally guaranteed by the parent company. A parent entity that meets the above criteria may instead present summarized financial information (“alternative disclosures”) either within the consolidated financial statements or within the “Management’s discussion and analysis of financial condition and results of operations” section in Item 2. We evaluated the criteria and determined that we are eligible for the disclosure exceptions, which allow us to provide alternative disclosures. We present alternative disclosures within the “Management’s discussion and analysis of financial condition and results of operations” section in Item 2. |
Distributions from equity method investments | Distributions from equity method investments We use the “nature of the distribution” approach to determine the classification within our consolidated statements of cash flows of cash distributions received from equity method investments, including our unconsolidated real estate joint ventures and equity method non-real estate investments. Under this approach, distributions are classified based on the nature of the underlying activity that generated the cash distributions. If we lack the information necessary to apply this approach in the future, we will be required to apply the “cumulative earnings” approach as an accounting change on a retrospective basis. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and those in excess of that amount are classified as cash inflows from investing activities. |
Restricted cash | Restricted cash We present cash and cash equivalents separately from restricted cash within our consolidated balance sheets. We include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. We provide a reconciliation between the balance sheets and statements of cash flows, as required when the balance includes more than one line item for cash, cash equivalents, and restricted cash. We also provide a disclosure of the nature of the restrictions related to material restricted cash balances. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenues subject to new revenue recognition and lease ASUs | The table below provides details of our consolidated total revenues for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals 656,853 546,527 1,910,366 1,533,593 Other income 2,999 1,232 8,315 3,634 Total revenues $ 659,852 $ 547,759 $ 1,918,681 $ 1,537,227 |
Investments in real estate (Tab
Investments in real estate (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Our consolidated investments in real estate, including real estate assets held for sale as described in Note 15 – “Assets classified as held for sale” to our unaudited consolidated financial statements, consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Rental properties: Land (related to rental properties) $ 4,156,888 $ 3,782,182 Buildings and building improvements 17,857,504 16,312,402 Other improvements 2,537,926 2,109,884 Rental properties 24,552,318 22,204,468 Development and redevelopment projects 8,352,598 6,528,640 Gross investments in real estate – North America 32,904,916 28,733,108 Less: accumulated depreciation – North America (4,144,019) (3,766,758) Net investments in real estate – North America 28,760,897 24,966,350 Net investments in real estate – Asia 10,848 14,319 Investments in real estate $ 28,771,745 $ 24,980,669 |
Real estate assets acquisitions | Our real estate asset acquisitions during the nine months ended September 30, 2022 consisted of the following (dollars in thousands): Square Footage Market Number of Properties Future Development Operating With Future Development/Redevelopment Operating Purchase Price Greater Boston 2 202,997 440,130 — $ 205,792 San Francisco Bay Area 5 610,000 723,953 70,000 564,000 San Diego 2 537,000 8,730 — 125,000 Seattle — 869,000 — — 87,608 Research Triangle 4 1,925,000 69,485 — 179,428 Texas 9 — 998,099 — 400,400 Other 7 473,994 428,097 381,760 278,489 Three months ended March 31, 2022 29 4,617,991 2,668,494 451,760 1,840,717 Greater Boston 1 — 88,591 — 140,000 Other 2 869,000 109,557 — 140,146 Three months ended June 30, 2022 3 869,000 198,148 — 280,146 Greater Boston 1 — 104,500 — 170,000 San Diego 3 750,000 226,144 — 106,380 Other 3 302,000 108,478 — 40,349 Three months ended September 30, 2022 7 1,052,000 439,122 — 316,729 Nine months ended September 30, 2022 39 6,538,991 3,305,764 451,760 $ 2,437,592 (1) (1) Represents the aggregate contractual purchase price of our acquisitions, which differs from purchases of real estate in our unaudited consolidated statements of cash flows due to the timing of payment, closing costs, and other acquisition adjustments such as prorations of rents and expenses. |
Real estate assets dispositions | Our completed dispositions of and sales of partial interests in real estate assets during the nine months ended September 30, 2022 consisted of the following (dollars in thousands): Gain on Sale of Real Estate Consideration in Excess of Book Value Property Submarket/Market Date of Sale Interest Sold RSF Sales Price Three months ended March 31, 2022: 100 Binney Street Cambridge/Inner Suburbs/Greater Boston 3/30/22 70 % 432,931 $ 713,228 N/A $ 413,615 Three months ended June 30, 2022: 300 Third Street Cambridge/Inner Suburbs/Greater Boston 6/27/22 70 % 131,963 166,485 N/A 113,020 Alexandria Park at 128, 285 Bear Hill Road, 111 and 130 Forbes Boulevard, and 20 Walkup Drive Route 128 and Route 495/Greater Boston 6/8/22 100 % 617,043 334,397 $ 202,325 N/A Other 47,800 11,894 N/A 548,682 214,219 113,020 Three months ended September 30, 2022: 1450 Owens Street Mission Bay/San Francisco Bay Area 7/1/22 20 % 191,000 25,039 N/A 10,083 341 and 343 Oyster Point Boulevard, 7000 Shoreline Court, and Shoreway Science Center South San Francisco and Greater Stanford/San Francisco Bay Area 9/15/22 100 % 330,379 383,635 223,127 N/A 3215 Merryfield Row Torrey Pines/San Diego 9/1/22 70 % 170,523 149,940 N/A 42,214 Summers Ridge Science Park Sorrento Mesa/San Diego 9/15/22 70 % 316,531 159,600 N/A 65,097 7330 and 7360 Carroll Road Sorrento Mesa/San Diego 9/15/22 100 % 84,442 59,476 35,463 N/A 13112 Evening Creek Drive Other/San Diego 9/26/22 100 % 109,780 55,500 31,001 N/A Other Various 127,196 34,108 N/A 960,386 323,699 117,394 Nine months ended September 30, 2022 $ 2,222,296 (1) $ 537,918 $ 644,029 (1) Represents the aggregate contractual sales price of our sales, which differs from proceeds from sales of real estate and contributions from and sales of noncontrolling interests within Investing and Financing sections of our consolidated statements of cash flows primarily due to the timing of payment, closing costs, and other sales adjustments such as prorations of rents and expenses. |
Consolidated and unconsolidat_2
Consolidated and unconsolidated real estate joint ventures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Consolidated and unconsolidated real estate joint venture properties | From time to time, we enter into joint venture agreements through which we own a partial interest in real estate entities that own, develop, and operate real estate properties. As of September 30, 2022, our real estate joint ventures held the following properties: Property Market Submarket Our Ownership Interest (1) Consolidated joint ventures (2) : 50 and 60 Binney Street Greater Boston Cambridge/Inner Suburbs 34.0 % 75/125 Binney Street Greater Boston Cambridge/Inner Suburbs 40.0 % 100 and 225 Binney Street and 300 Third Street Greater Boston Cambridge/Inner Suburbs 30.0 % (3) 99 Coolidge Avenue Greater Boston Cambridge/Inner Suburbs 75.0 % Alexandria Center ® for Science and Technology – Mission Bay (4) San Francisco Bay Area Mission Bay 25.0 % 1450 Owens Street San Francisco Bay Area Mission Bay 65.5 % (5) 601, 611, 651, 681, 685, and 701 Gateway Boulevard San Francisco Bay Area South San Francisco 50.0 % 751 Gateway Boulevard San Francisco Bay Area South San Francisco 51.0 % 213 East Grand Avenue San Francisco Bay Area South San Francisco 30.0 % 500 Forbes Boulevard San Francisco Bay Area South San Francisco 10.0 % Alexandria Center ® for Life Science – Millbrae San Francisco Bay Area South San Francisco 44.3 % 3215 Merryfield Row San Diego Torrey Pines 30.0 % Alexandria Point (6) San Diego University Town Center 55.0 % 5200 Illumina Way San Diego University Town Center 51.0 % 9625 Towne Centre Drive San Diego University Town Center 50.1 % SD Tech by Alexandria (7) San Diego Sorrento Mesa 50.0 % Pacific Technology Park San Diego Sorrento Mesa 50.0 % Summers Ridge Science Park (8) San Diego Sorrento Mesa 30.0 % 1201 and 1208 Eastlake Avenue East and 199 East Blaine Street Seattle Lake Union 30.0 % 400 Dexter Avenue North Seattle Lake Union 30.0 % 800 Mercer Street Seattle Lake Union 60.0 % Unconsolidated joint ventures (2) : 1655 and 1725 Third Street San Francisco Bay Area Mission Bay 10.0 % 1401/1413 Research Boulevard Maryland Rockville 65.0 % (9) 1450 Research Boulevard Maryland Rockville 73.2 % (10) 101 West Dickman Street Maryland Beltsville 57.9 % (10) (1) Refer to the table on the next page that shows the categorization of our joint ventures under the consolidation framework. (2) In addition to the real estate joint ventures listed, various partners hold insignificant noncontrolling interests in three other consolidated joint ventures in North America and we hold an interest in one other insignificant unconsolidated real estate joint venture in North America. (3) 225 Binney Street is owned through a tenancy in common arrangement. We directly own 26.316% of the tenancy in common and a real estate joint venture owns the remaining 73.684% of the tenancy in common. We own 5% of this real estate joint venture, resulting in an aggregate ownership of 30% of this property. We determined that we are the primary beneficiary of the real estate joint venture and as such, we consolidate this joint venture under the variable interest model. (4) Includes 409 and 499 Illinois Street, 1500 and 1700 Owens Street, and 455 Mission Bay Boulevard South. (5) The noncontrolling interest share of our joint venture partner is anticipated to increase to 75% as our partner contributes capital for construction over time. (6) Includes 10210, 10260, 10290, and 10300 Campus Point Drive and 4110, 4150, 4161, 4224, and 4242 Campus Point Court. (7) Includes 9605, 9645, 9675, 9685, 9725, 9735, 9808, 9855, and 9868 Scranton Road and 10055 and 10065 Barnes Canyon Road. (8) Includes 9965, 9975, 9985 and 9995 Summers Ridge Road. (9) Represents our ownership interest; our voting interest is limited to 50%. (10) Represents a joint venture with a local real estate operator in which our partner manages the day-to-day activities that significantly affect the economic performance of the joint venture. |
Consolidated VIE's balance sheet information | The table below aggregates the balance sheet information of our consolidated VIEs as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Investments in real estate $ 6,581,901 $ 5,014,842 Cash and cash equivalents 253,426 181,074 Other assets 678,889 509,281 Total assets $ 7,514,216 $ 5,705,197 Secured notes payable $ 39,945 $ 7,991 Other liabilities 453,619 269,605 Total liabilities 493,564 277,596 Alexandria Real Estate Equities, Inc.’s share of equity 3,391,220 2,593,505 Noncontrolling interests’ share of equity 3,629,432 2,834,096 Total liabilities and equity $ 7,514,216 $ 5,705,197 |
Investment in unconsolidated real estate joint ventures | Our investments in unconsolidated real estate joint ventures, accounted for under the equity method of accounting presented in our consolidated balance sheets as of September 30, 2022 and December 31, 2021, consisted of the following (in thousands): Property September 30, 2022 December 31, 2021 1655 and 1725 Third Street $ 12,990 $ 14,034 1450 Research Boulevard 5,532 4,455 101 West Dickman Street 8,537 8,481 Other 11,226 11,513 $ 38,285 $ 38,483 |
Summary of unconsolidated real estate joint ventures loans | The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of September 30, 2022 (dollars in thousands): Interest Rate (1) At 100% Our Share Unconsolidated Joint Venture Maturity Date Stated Rate Aggregate Commitment Debt Balance (2) 1401/1413 Research Boulevard 12/23/24 2.70% 3.32% $ 28,500 $ 28,079 65.0% 1655 and 1725 Third Street 3/10/25 4.50% 4.57% 600,000 598,974 10.0% 101 West Dickman Street 11/10/26 SOFR+1.95% (3) 4.33% 26,750 10,439 57.9% 1450 Research Boulevard 12/10/26 SOFR+1.95% (3) N/A 13,000 — 73.2% $ 668,250 $ 637,492 (1) Includes interest expense and amortization of loan fees. (2) Represents outstanding principal, net of unamortized deferred financing costs, as of September 30, 2022. (3) This loan is subject to a fixed SOFR floor rate of 0.75%. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Lessor | |
Operating Lease - Schedule of Future Minimum Lease Receivable | Future lease payments to be received under the terms of our operating lease agreements, excluding expense reimbursements, in effect as of September 30, 2022 are outlined in the table below (in thousands): Year Amount 2022 $ 413,509 2023 1,743,452 2024 1,831,621 2025 1,816,651 2026 1,771,008 Thereafter 13,261,005 Total $ 20,837,246 |
Net investment in direct financing and sales-type leases | The components of our aggregate net investment in our direct financing and sales-type leases as of September 30, 2022 and December 31, 2021 are summarized in the table below (in thousands): September 30, 2022 December 31, 2021 Gross investment in direct financing and sales-type leases $ 255,641 $ 403,388 Add: estimated unguaranteed residual value of the underlying assets — 31,839 Less: unearned income on direct financing lease (213,640) (215,557) Less: effect of discounting on sales-type leases — (146,175) Less: allowance for credit losses (2,839) (2,839) Net investment in direct financing and sales-type leases $ 39,162 $ 70,656 |
Direct Financing and Sales-Type Leases - Schedule of Future Minimum Payment Receivable | Future lease payments to be received under the terms of our direct financing lease as of September 30, 2022 are outlined in the table below (in thousands): Year Total 2022 $ 454 2023 1,863 2024 1,919 2025 1,976 2026 2,036 Thereafter 247,393 Total $ 255,641 |
Income from rentals | Our total income from rentals includes revenue related to agreements for the rental of our real estate, which primarily includes revenues subject to the lease accounting standard and the revenue recognition accounting standard as shown below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Income from rentals: Revenues subject to the lease accounting standard: Operating leases $ 646,662 $ 538,880 $ 1,879,534 $ 1,515,396 Direct financing and sales-type leases 642 1,012 2,449 2,473 Revenues subject to the lease accounting standard 647,304 539,892 1,881,983 1,517,869 Revenues subject to the revenue recognition accounting standard 9,549 6,635 28,383 15,724 Income from rentals $ 656,853 $ 546,527 $ 1,910,366 $ 1,533,593 |
Lessee | |
Operating Lease - Schedule of Future Minimum Lease Payable | The reconciliation of future lease payments, under noncancelable operating ground and office leases in which we are the lessee, to the operating lease liability reflected in our unaudited consolidated balance sheet as of September 30, 2022 is presented in the table below (in thousands): Year Total 2022 $ 6,586 2023 24,073 2024 24,389 2025 24,475 2026 24,543 Thereafter 806,749 Total future payments under our operating leases in which we are the lessee 910,815 Effect of discounting (501,785) Operating lease liability $ 409,030 |
Lessee Operating Costs | For the three and nine months ended September 30, 2022 and 2021, our costs for operating leases in which we are the lessee were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross operating lease costs $ 9,349 $ 7,055 $ 26,843 $ 20,580 Capitalized lease costs (847) (827) (2,699) (2,273) Expenses for operating leases in which we are the lessee $ 8,502 $ 6,228 $ 24,144 $ 18,307 |
Cash, cash equivalents, and r_2
Cash, cash equivalents, and restricted cash (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash, cash equivalents, and restricted cash [Abstract] | |
Cash, cash equivalents, and restricted cash summary | Cash, cash equivalents, and restricted cash consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Cash and cash equivalents $ 533,824 $ 361,348 Restricted cash: Funds held in trust under the terms of certain secured notes payable — 17,264 Funds held in escrow for real estate acquisitions 329,448 30,000 Other 2,896 6,615 332,344 53,879 Total $ 866,168 $ 415,227 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Summary of investments | The following tables summarize our investments as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 Cost Unrealized Gains Unrealized Carrying Amount Publicly traded companies $ 220,787 $ 102,196 $ (99,441) $ 223,542 Entities that report NAV 438,087 331,477 (6,297) 763,267 Entities that do not report NAV: Entities with observable price changes 104,337 95,289 (2,166) 197,460 Entities without observable price changes 384,278 — — 384,278 Investments accounted for under the equity method N/A N/A N/A 56,374 Total investments $ 1,147,489 $ 528,962 $ (107,904) $ 1,624,921 December 31, 2021 Cost Unrealized Gains Unrealized Carrying Amount Publicly traded companies $ 203,290 $ 309,998 $ (29,471) $ 483,817 Entities that report NAV 385,692 446,586 (2,414) 829,864 Entities that do not report NAV: Entities with observable price changes 56,257 74,279 (1,305) 129,231 Entities without observable price changes 362,064 — — 362,064 Investments accounted for under the equity method N/A N/A N/A 71,588 Total investments $ 1,007,303 $ 830,863 $ (33,190) $ 1,876,564 |
Schedule of net investment income | Our investment (loss) income for the three and nine months ended September 30, 2022 and 2021 consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Realized gains $ 24,210 $ 81,516 $ 75,971 $ 189,013 Unrealized (losses) gains (56,515) (14,432) (388,076) 183,348 Investment (loss) income $ (32,305) $ 67,084 $ (312,105) $ 372,361 |
Other assets (Tables)
Other assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | The following table summarizes the components of other assets as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Acquired in-place leases $ 638,024 $ 609,872 Deferred compensation plan 31,957 38,937 Deferred financing costs – unsecured senior line of credit 33,692 19,294 Deposits 30,007 176,077 Furniture, fixtures, and equipment 23,493 26,429 Net investment in direct financing and sales-type leases (1) 39,162 70,656 Notes receivable 18,029 13,088 Operating lease right-of-use asset 561,866 474,299 Other assets 78,330 53,985 Prepaid expenses 30,007 24,806 Property, plant, and equipment 149,310 151,375 Total $ 1,633,877 $ 1,658,818 (1) We completed the sale of our real estate assets subject to sales-type leases in May 2022. As of September 30, 2022, we had no remaining sales-type leases. Refer to Note 5 – “Leases” to these unaudited consolidated financial statements for additional detail. |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table sets forth the assets that we measure at fair value on a recurring basis by level in the fair value hierarchy (in thousands). There were no liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021. In addition, there were no transfers of assets measured at fair value on a recurring basis to or from Level 3 in the fair value hierarchy during the nine months ended September 30, 2022. Fair Value Measurement Using Description Total Quoted Prices in Significant Significant Investments in publicly traded companies: As of September 30, 2022 $ 223,542 $ 223,542 $ — $ — As of December 31, 2021 $ 483,817 $ 483,817 $ — $ — |
Schedule of assets and liabilities measure at fair value on a nonrecurring basis | The following table sets forth the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands). These investments were measured at various times during the period from January 1, 2018 to September 30, 2022. Fair Value Measurement Using Description Total Quoted Prices in Significant Significant Investments in privately held entities that do not report NAV As of September 30, 2022 $ 212,413 $ — $ 197,460 (1) $ 14,953 (2) As of December 31, 2021 $ 138,011 $ — $ 129,231 $ 8,780 (1) This balance represents the total carrying amount of our equity investments in privately held entities with observable price changes, included in our total investments balance of $1.6 billion in our unaudited consolidated balance sheet as of September 30, 2022. For more information, refer to Note 7 – “Investments” to our unaudited consolidated financial statements. (2) This amount is included in the $384.3 million balance of investments in privately held entities without observable price changes disclosed in Note 7 – “Investments” to our unaudited consolidated financial statements and represents the carrying amount of investments in privately held entities that do not report NAV for which impairments have been recognized in accordance with the measurement alternative guidance described within the “Investments” section in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated financial statements. As of September 30, 2022 and December 31, 2021, the book and estimated fair values of our secured notes payable, unsecured senior notes payable, and amounts outstanding under our unsecured senior line of credit and commercial paper program, including the level within the fair value hierarchy for which the estimates were derived, were as follows (in thousands): September 30, 2022 Book Value Fair Value Hierarchy Estimated Fair Value Quoted Prices in Significant Significant Liabilities: Secured notes payable $ 40,594 $ — $ 42,611 $ — $ 42,611 Unsecured senior notes payable $ 10,098,588 $ — $ 8,226,370 $ — $ 8,226,370 Unsecured senior line of credit $ — $ — $ — $ — $ — Commercial paper program $ 386,666 $ — $ 385,838 $ — $ 385,838 December 31, 2021 Book Value Fair Value Hierarchy Estimated Fair Value Quoted Prices in Significant Significant Liabilities: Secured notes payable $ 205,198 $ — $ 214,097 $ — $ 214,097 Unsecured senior notes payable $ 8,316,678 $ — $ 8,995,913 $ — $ 8,995,913 Unsecured senior line of credit $ — $ — $ — $ — $ — Commercial paper program $ 269,990 $ — $ 269,994 $ — $ 269,994 |
Secured and unsecured senior _2
Secured and unsecured senior debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of secured and unsecured debt | The following table summarizes our outstanding indebtedness and respective principal payments remaining as of September 30, 2022 (dollars in thousands): Stated Interest Rate (1) Maturity Date (2) Principal Payments Remaining for the Periods Ending December 31, Unamortized (Deferred Financing Cost), (Discount)/ Premium Debt 2022 2023 2024 2025 2026 Thereafter Principal Total Secured notes payable Greater Boston (3) SOFR+2.70 % 5.34 % 11/19/26 $ — $ — $ — $ — $ 41,438 $ — $ 41,438 $ (1,494) $ 39,944 San Francisco Bay Area 6.50 % 6.50 7/1/36 — 30 32 34 36 518 650 — 650 Secured debt weighted-average interest rate/subtotal 5.36 — 30 32 34 41,474 518 42,088 (1,494) 40,594 Unsecured senior line of credit and commercial paper program (4) (4) 3.48 (4) 1/22/28 (4) (4) — — — — 386,815 (4) 386,815 (149) 386,666 Unsecured senior notes payable 3.45 % 3.62 4/30/25 — — — 600,000 — — 600,000 (2,280) 597,720 Unsecured senior notes payable 4.30 % 4.50 1/15/26 — — — — 300,000 — 300,000 (1,628) 298,372 Unsecured senior notes payable – green bond 3.80 % 3.96 4/15/26 — — — — 350,000 — 350,000 (1,752) 348,248 Unsecured senior notes payable 3.95 % 4.13 1/15/27 — — — — — 350,000 350,000 (2,199) 347,801 Unsecured senior notes payable 3.95 % 4.07 1/15/28 — — — — — 425,000 425,000 (2,257) 422,743 Unsecured senior notes payable 4.50 % 4.60 7/30/29 — — — — — 300,000 300,000 (1,524) 298,476 Unsecured senior notes payable 2.75 % 2.87 12/15/29 — — — — — 400,000 400,000 (2,981) 397,019 Unsecured senior notes payable 4.70 % 4.81 7/1/30 — — — — — 450,000 450,000 (2,889) 447,111 Unsecured senior notes payable 4.90 % 5.05 12/15/30 — — — — — 700,000 700,000 (6,485) 693,515 Unsecured senior notes payable 3.375 % 3.48 8/15/31 — — — — — 750,000 750,000 (5,787) 744,213 Unsecured senior notes payable – green bond 2.00 % 2.12 5/18/32 — — — — — 900,000 900,000 (9,029) 890,971 Unsecured senior notes payable 1.875 % 1.97 2/1/33 — — — — — 1,000,000 1,000,000 (9,055) 990,945 Unsecured senior notes payable – green bond 2.95 % 3.07 3/15/34 — — — — — 800,000 800,000 (8,923) 791,077 Unsecured senior notes payable 4.85 % 4.93 4/15/49 — — — — — 300,000 300,000 (3,131) 296,869 Unsecured senior notes payable 4.00 % 3.91 2/1/50 — — — — — 700,000 700,000 10,248 710,248 Unsecured senior notes payable 3.00 % 3.08 5/18/51 — — — — — 850,000 850,000 (12,082) 837,918 Unsecured senior notes payable 3.55 % 3.63 3/15/52 — — — — — 1,000,000 1,000,000 (14,658) 985,342 Unsecured debt weighted-average interest rate/subtotal 3.51 — — — 600,000 650,000 9,311,815 10,561,815 (76,561) 10,485,254 Weighted-average interest rate/total 3.52 % $ — $ 30 $ 32 $ 600,034 $ 691,474 $ 9,312,333 $ 10,603,903 $ (78,055) $ 10,525,848 (1) Represents the weighted-average interest rate as of the end of the applicable period, including amortization of loan fees, amortization of debt premiums (discounts), and other bank fees. (2) Reflects any extension options that we control. (3) Represents a secured construction loan held by our consolidated real estate joint venture at 99 Coolidge Avenue, of which we own a 75.0% interest. As of September 30, 2022, this joint venture has $153.9 million available under the existing lender commitments. The interest rate shall be reduced from SOFR+2.70% to SOFR+2.10% over time upon the completion of certain leasing, construction, and financial covenant milestones. (4) Refer to “Amendment of our unsecured senior line of credit” and “$2.0 billion commercial paper program” on the next page. |
Summary of secured and unsecured debt | The following table summarizes our secured and unsecured senior debt and amounts outstanding under our unsecured senior line of credit and commercial paper program as of September 30, 2022 (dollars in thousands): Fixed-Rate Debt Variable-Rate Debt Weighted-Average Interest Remaining Term Total Percentage Rate (1) Secured notes payable $ 650 $ 39,944 $ 40,594 0.4 % 5.36 % 4.3 Unsecured senior notes payable 10,098,588 — 10,098,588 95.9 3.51 13.5 Unsecured senior line of credit and commercial paper program — 386,666 386,666 (2) 3.7 3.48 (2) 5.3 (3) Total/weighted average $ 10,099,238 $ 426,610 $ 10,525,848 100.0 % 3.52 % 13.2 (3) Percentage of total debt 95.9 % 4.1 % 100.0 % (1) Represents the weighted-average interest rate as of the end of the applicable period, including expense/income related to the amortization of loan fees, amortization of debt premiums (discounts), and other bank fees. (2) As of September 30, 2022, we had no outstanding balance on our unsecured senior line of credit. Our unsecured senior line of credit has aggregate commitments of $4.0 billion and bears an interest rate of SOFR plus 0.875%. In addition, the rate is subject to a sustainability adjustment of +/- four basis points based upon our ability to achieve certain annual sustainability targets. As of September 30, 2022, we had $386.7 million of commercial paper notes outstanding with a weighted-average interest rate of 3.48%. (3) We calculate the weighted-average remaining term of our commercial paper notes by using the maturity date of our unsecured senior line of credit. Using the maturity date of our outstanding commercial paper, the consolidated weighted-average maturity of our debt is 13.0 years. The commercial paper notes sold during the three months ended September 30, 2022 were issued at a weighted-average yield to maturity of 2.69% and had a weighted-average maturity term of 13 days. |
Schedule of Interest Incurred | The following table summarizes interest expense for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Interest incurred $ 96,173 $ 78,863 $ 275,835 $ 233,866 Capitalized interest (73,189) (43,185) (199,154) (126,563) Interest expense $ 22,984 $ 35,678 $ 76,681 $ 107,303 |
Accounts payable, accrued exp_2
Accounts payable, accrued expenses, and other liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of accounts payable and accrued liabilities | The following table summarizes the components of accounts payable, accrued expenses, and other liabilities as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Accounts payable and accrued expenses $ 458,760 $ 513,416 Accrued construction 606,413 438,866 Acquired below-market leases 378,790 341,585 Conditional asset retirement obligations 54,354 59,797 Deferred rent liabilities 18,468 12,384 Operating lease liability 409,030 434,745 Unearned rent and tenant security deposits 373,937 326,924 Other liabilities 94,012 82,693 Total $ 2,393,764 $ 2,210,410 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of the numerators and denominators of the basic and diluted earnings per share computations | The table reconciles the numerators and denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 383,443 $ 124,433 $ 575,433 $ 554,486 Net income attributable to noncontrolling interests (38,747) (21,286) (108,092) (58,134) Net income attributable to unvested restricted stock awards (3,257) (1,883) (5,866) (5,750) Numerator for basic and diluted EPS – net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders $ 341,439 $ 101,264 $ 461,475 $ 490,602 Denominator for basic EPS – weighted-average shares of common stock outstanding 161,554 150,854 160,400 144,716 Dilutive effect of forward equity sales agreements — 707 — 437 Denominator for diluted EPS – weighted-average shares of common stock outstanding 161,554 151,561 160,400 145,153 Net income per share attributable to Alexandria Real Estate Equities, Inc.’s common stockholders: Basic $ 2.11 $ 0.67 $ 2.88 $ 3.39 Diluted $ 2.11 $ 0.67 $ 2.88 $ 3.38 |
Assets classified as held for_2
Assets classified as held for sale (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of net assets of discontinued operations and (loss) income from discontinued operations, net | The following is a summary of net assets as of September 30, 2022 and December 31, 2021 for our real estate investments that were classified as held for sale as of each respective date (in thousands): September 30, 2022 December 31, 2021 Total assets $ 14,169 $ 17,749 Total liabilities (1,179) (1,083) Total accumulated other comprehensive income (loss) 1,839 (1,750) Net assets classified as held for sale $ 14,829 $ 14,916 |
Organization and basis of pre_2
Organization and basis of presentation (Details) ft² in Millions, $ in Billions | Sep. 30, 2022 USD ($) ft² |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Market capitalization | $ | $ 33.3 |
Area of real estate property | ft² | 74.5 |
Summary of significant accoun_4
Summary of significant accounting policies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | |
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Maximum expected period of sale of property (in years) | 1 year | |||
Cost method investment ownership percentage | 10% | 10% | ||
Percentage of total revenues | 98.10% | 98.10% | ||
Revenue with customer, asset, adjustment to allowance for credit loss | $ 6,000 | $ 6,900 | ||
Contract with customer, asset, adjustment for allowance for credit loss | 4,000 | 9,500 | ||
Contract with customer, asset, allowance for credit loss | 16,300 | $ 16,300 | ||
Minimum percentage of taxable income to be distributed | 90% | |||
Percent of taxable income, generally distributed as dividend | 100% | |||
Income from rentals | ||||
Operating leases | 646,662 | $ 538,880 | $ 1,879,534 | $ 1,515,396 |
Revenues subject to the new lease accounting standard | 647,304 | 539,892 | 1,881,983 | 1,517,869 |
Revenue | $ 659,852 | 547,759 | $ 1,918,681 | 1,537,227 |
Land improvements | Maximum | ||||
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Estimated useful life | 20 years | |||
Buildings and building improvements | Maximum | ||||
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Estimated useful life | 40 years | |||
Canada | ||||
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Number of real estate properties | property | 8 | 8 | ||
China | ||||
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Number of real estate properties | property | 1 | 1 | ||
Income from rentals | ||||
Income from rentals | ||||
Revenue | $ 656,853 | 546,527 | $ 1,910,366 | 1,533,593 |
Income from rentals | Accounting Standards Update 2014-09 - Revenue from Contract with Customers | ||||
Income from rentals | ||||
Revenues subject to the revenue recognition accounting standard | 9,549 | 6,635 | 28,383 | 15,724 |
Other income | ||||
Income from rentals | ||||
Revenue | $ 2,999 | $ 1,232 | $ 8,315 | $ 3,634 |
Revenues subject to other accounting guidance | ||||
Property, plant and equipment depreciated on a straight-line basis using an estimated life | ||||
Percentage of total revenues | 1.90% | 1.90% | ||
Income from rentals | ||||
Revenue | $ 12,500 | $ 36,700 |
Investments in real estate - Sc
Investments in real estate - Schedule of investment in real estates (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate | ||
Investments in real estate | $ 28,771,745 | $ 24,980,669 |
North America | ||
Real Estate | ||
Land (related to rental properties) | 4,156,888 | 3,782,182 |
Buildings and building improvements | 17,857,504 | 16,312,402 |
Other improvements | 2,537,926 | 2,109,884 |
Rental properties | 24,552,318 | 22,204,468 |
Development and redevelopment projects | 8,352,598 | 6,528,640 |
Gross investments in real estate | 32,904,916 | 28,733,108 |
Less: accumulated depreciation | (4,144,019) | (3,766,758) |
Investments in real estate | 28,760,897 | 24,966,350 |
Asia | ||
Real Estate | ||
Investments in real estate | $ 10,848 | $ 14,319 |
Investments in real estate - Ac
Investments in real estate - Acquisition (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) ft² property | Jun. 30, 2022 USD ($) ft² property | Mar. 31, 2022 USD ($) ft² property | Sep. 30, 2022 USD ($) ft² property | Sep. 30, 2021 USD ($) | Oct. 24, 2022 ft² property | |
Real Estate | ||||||
Number of real estate properties acquired | property | 7 | 3 | 29 | 7 | ||
Area of real estate property | 74,500,000 | 74,500,000 | ||||
Payments to acquire real estate | $ | $ 2,499,772 | $ 3,758,704 | ||||
Subsequent Event | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 2 | |||||
Acquired in-place leases | ||||||
Real Estate | ||||||
Acquired in-place leases | $ | $ 164,200 | 164,200 | ||||
Below-market leases | ||||||
Real Estate | ||||||
Below-market leases | $ | $ 96,300 | $ 96,300 | ||||
Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 1,052,000 | 869,000 | 4,617,991 | 1,052,000 | ||
Future Development | Subsequent Event | ||||||
Real Estate | ||||||
Area of real estate property | 123,976 | |||||
Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 439,122 | 198,148 | 2,668,494 | 439,122 | ||
Operating With Future Development/Redevelopment | Subsequent Event | ||||||
Real Estate | ||||||
Area of real estate property | 198,972 | |||||
Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | 0 | 451,760 | 0 | ||
Weighted average remaining amortization period, acquired in-place and below-market leases | 11 years 6 months | |||||
Operating | Acquired in-place leases | ||||||
Real Estate | ||||||
Weighted average remaining amortization period, acquired in-place and below-market leases | 8 years 1 month 6 days | |||||
Operating | Below-market leases | ||||||
Real Estate | ||||||
Weighted average remaining amortization period, acquired in-place and below-market leases | 17 years 1 month 6 days | |||||
Greater Boston | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 1 | 1 | 2 | 1 | ||
Payments to acquire real estate | $ | $ 170,000 | $ 140,000 | $ 205,792 | |||
Greater Boston | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 0 | 0 | 202,997 | 0 | ||
Greater Boston | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 104,500 | 88,591 | 440,130 | 104,500 | ||
Greater Boston | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | 0 | 0 | 0 | ||
San Francisco Bay Area | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 5 | |||||
Area of real estate property | 600,000 | 600,000 | ||||
Payments to acquire real estate | $ | $ 564,000 | |||||
San Francisco Bay Area | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 610,000 | |||||
San Francisco Bay Area | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 723,953 | |||||
San Francisco Bay Area | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 70,000 | |||||
San Diego | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 3 | 2 | 3 | |||
Payments to acquire real estate | $ | $ 106,380 | $ 125,000 | ||||
San Diego | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 750,000 | 537,000 | 750,000 | |||
San Diego | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 226,144 | 8,730 | 226,144 | |||
San Diego | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | 0 | 0 | |||
Seattle | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 0 | |||||
Payments to acquire real estate | $ | $ 87,608 | |||||
Seattle | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 869,000 | |||||
Seattle | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 0 | |||||
Seattle | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | |||||
Research Triangle | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 4 | |||||
Payments to acquire real estate | $ | $ 179,428 | |||||
Research Triangle | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 1,925,000 | |||||
Research Triangle | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 69,485 | |||||
Research Triangle | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | |||||
Texas | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 9 | |||||
Payments to acquire real estate | $ | $ 400,400 | |||||
Texas | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 0 | |||||
Texas | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 998,099 | |||||
Texas | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | |||||
Other | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 3 | 2 | 7 | 3 | ||
Payments to acquire real estate | $ | $ 40,349 | $ 140,146 | $ 278,489 | |||
Other | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 302,000 | 869,000 | 473,994 | 302,000 | ||
Other | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 108,478 | 109,557 | 428,097 | 108,478 | ||
Other | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 0 | 0 | 381,760 | 0 | ||
North America | ||||||
Real Estate | ||||||
Number of real estate properties acquired | property | 39 | 39 | ||||
Area of real estate property | 41,100,000 | 41,100,000 | ||||
Payments to acquire real estate | $ | $ 316,729 | $ 280,146 | $ 1,840,717 | $ 2,437,592 | ||
North America | Future Development | ||||||
Real Estate | ||||||
Area of real estate property | 6,538,991 | 6,538,991 | ||||
North America | Operating With Future Development/Redevelopment | ||||||
Real Estate | ||||||
Area of real estate property | 3,305,764 | 3,305,764 | ||||
North America | Operating | ||||||
Real Estate | ||||||
Area of real estate property | 451,760 | 451,760 |
Investments in real estate - Re
Investments in real estate - Real estate asset sales (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Oct. 24, 2022 USD ($) ft² property | Sep. 30, 2022 USD ($) ft² property | Jun. 30, 2022 USD ($) ft² property | Mar. 31, 2022 USD ($) ft² property | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) ft² property | Sep. 30, 2021 USD ($) | Jul. 01, 2022 | Jun. 30, 2021 | |
Real Estate | |||||||||
Number of real estate properties acquired | property | 7 | 3 | 29 | 7 | |||||
Area of real estate property | ft² | 74,500,000 | 74,500,000 | |||||||
Proceeds from sale of real estate assets and partial interest | $ 960,386 | $ 548,682 | $ 2,200,000 | ||||||
Proceeds from noncontrolling interests | 1,463,454 | $ 629,138 | |||||||
Gain on sales of real estate | 323,699 | $ 214,219 | $ (435) | 537,918 | 2,344 | ||||
Contributions from and sales of noncontrolling interests | 450,913 | 360,551 | 1,479,520 | 753,971 | |||||
Impairment of real estate | $ 38,783 | 42,620 | $ 38,783 | 52,675 | |||||
Subsequent Event | |||||||||
Real Estate | |||||||||
Number of real estate properties acquired | property | 2 | ||||||||
Proceeds from sale of real estate | $ 108,000 | ||||||||
Future Development | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 1,052,000 | 869,000 | 4,617,991 | 1,052,000 | |||||
Future Development | Subsequent Event | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 123,976 | ||||||||
Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 324,957 | 264,822 | $ 826,929 | 554,327 | |||||
Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 125,956 | $ 95,729 | $ 652,591 | $ 199,644 | |||||
San Francisco Bay Area | |||||||||
Real Estate | |||||||||
Number of real estate properties acquired | property | 5 | ||||||||
Area of real estate property | ft² | 600,000 | 600,000 | |||||||
Impairment of real estate | $ 38,300 | ||||||||
San Francisco Bay Area | Future Development | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 610,000 | ||||||||
North America | |||||||||
Real Estate | |||||||||
Number of real estate properties acquired | property | 39 | 39 | |||||||
Area of real estate property | ft² | 41,100,000 | 41,100,000 | |||||||
Proceeds from sale of real estate assets and partial interest | $ 2,222,296 | ||||||||
Proceeds from sale of real estate | $ 625,800 | 1,000,000 | |||||||
Proceeds from noncontrolling interests | $ 334,600 | $ 1,200,000 | |||||||
North America | Future Development | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 6,538,991 | 6,538,991 | |||||||
North America | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 117,394 | $ 113,020 | $ 644,029 | ||||||
100 Binney Street | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 432,931 | ||||||||
Proceeds from noncontrolling interests | $ 713,228 | ||||||||
100 Binney Street | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 413,615 | ||||||||
100 Binney Street | Alexandria | Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Ownership percentage by noncontrolling owners | 70% | ||||||||
300 Third Street | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 131,963 | ||||||||
Proceeds from noncontrolling interests | $ 166,485 | ||||||||
300 Third Street | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 113,020 | ||||||||
300 Third Street | Alexandria | Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Ownership percentage by noncontrolling owners | 70% | ||||||||
Alexandria Park at 128, 285 Bear Hill Road, 111 and 130 Forbes Blvd, and 20 Walkup Drive | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 617,043 | ||||||||
Real Estate Property, Ownership Interest Sold | 100% | ||||||||
Proceeds from sale of real estate | $ 334,397 | ||||||||
Gain on sales of real estate | 202,325 | ||||||||
9609, 9613, 9615 Medical Center Drive | |||||||||
Real Estate | |||||||||
Proceeds from sale of real estate | 47,800 | ||||||||
Gain on sales of real estate | $ 11,894 | ||||||||
1450 Owens Street | |||||||||
Real Estate | |||||||||
Proceeds from noncontrolling interests | $ 25,039 | ||||||||
1450 Owens Street | Future Development | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 191,000 | 191,000 | |||||||
1450 Owens Street | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 10,083 | ||||||||
1450 Owens Street | Alexandria | Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Ownership percentage by noncontrolling owners | 75% | 75% | |||||||
Real Estate Property, Ownership Interest Sold | 20% | ||||||||
341 and 343 Oyster Point Boulevard, 7000 Shoreline Court, and 75 and 125 Shoreway Road | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 330,379 | 330,379 | |||||||
Real Estate Property, Ownership Interest Sold | 100% | 100% | |||||||
Proceeds from sale of real estate | $ 383,635 | ||||||||
Gain on sales of real estate | $ 223,127 | ||||||||
3215 Merryfield Row | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 170,523 | 170,523 | |||||||
Proceeds from noncontrolling interests | $ 149,940 | ||||||||
3215 Merryfield Row | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 42,214 | ||||||||
3215 Merryfield Row | Alexandria | Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Ownership percentage by noncontrolling owners | 70% | 70% | |||||||
Summers Ridge Science Park | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 316,531 | 316,531 | |||||||
Proceeds from noncontrolling interests | $ 159,600 | ||||||||
Summers Ridge Science Park | Additional Paid-In Capital | |||||||||
Real Estate | |||||||||
Contributions from and sales of noncontrolling interests | $ 65,097 | ||||||||
Summers Ridge Science Park | Alexandria | Noncontrolling Interests | |||||||||
Real Estate | |||||||||
Ownership percentage by noncontrolling owners | 70% | 70% | |||||||
7330 and 7360 Carroll Road | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 84,442 | 84,442 | |||||||
Real Estate Property, Ownership Interest Sold | 100% | 100% | |||||||
Proceeds from sale of real estate | $ 59,476 | ||||||||
Gain on sales of real estate | $ 35,463 | ||||||||
13112 Evening Creek Drive | |||||||||
Real Estate | |||||||||
Area of real estate property | ft² | 109,780 | 109,780 | |||||||
Real Estate Property, Ownership Interest Sold | 100% | 100% | |||||||
Proceeds from sale of real estate | $ 55,500 | ||||||||
Gain on sales of real estate | 31,001 | ||||||||
Other | |||||||||
Real Estate | |||||||||
Proceeds from sale of real estate | 127,196 | ||||||||
Gain on sales of real estate | $ 34,108 |
Consolidated and unconsolidat_3
Consolidated and unconsolidated real estate joint ventures (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 USD ($) ft² | Jun. 30, 2022 USD ($) ft² | Mar. 31, 2022 USD ($) ft² | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) ft² | Sep. 30, 2021 USD ($) | Jul. 01, 2022 | |
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 74,500,000 | 74,500,000 | |||||
Payments to noncontrolling interests | $ 139,685,000 | $ 81,926,000 | |||||
Proceeds from noncontrolling interests | 1,463,454,000 | 629,138,000 | |||||
Contributions from and sales of noncontrolling interests | $ 450,913,000 | $ 360,551,000 | 1,479,520,000 | 753,971,000 | |||
Contribution of assets from real estate joint venture partner | $ 19,146,000 | 118,750,000 | |||||
Future Development | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 1,052,000 | 869,000 | 4,617,991 | 1,052,000 | |||
Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Payments to noncontrolling interests | $ 139,500,000 | 81,900,000 | |||||
Contributions from and sales of noncontrolling interests | $ 324,957,000 | 264,822,000 | 826,929,000 | 554,327,000 | |||
Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 125,956,000 | $ 95,729,000 | $ 652,591,000 | $ 199,644,000 | |||
1655 and 1725 Third Street | |||||||
Schedule of Equity Method Investments | |||||||
Equity Method Investment, Ownership Percentage | 10% | 10% | |||||
1401/1413 Research Boulevard | |||||||
Schedule of Equity Method Investments | |||||||
Equity Method Investment, Ownership Percentage | 65% | 65% | |||||
1450 Research Boulevard | |||||||
Schedule of Equity Method Investments | |||||||
Equity Method Investment, Ownership Percentage | 73.20% | 73.20% | |||||
101 West Dickman Street | |||||||
Schedule of Equity Method Investments | |||||||
Equity Method Investment, Ownership Percentage | 57.90% | 57.90% | |||||
50 and 60 Binney Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 34% | 34% | |||||
75/125 Binney Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 40% | 40% | |||||
100 and 225 Binney Street and 300 Third Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
99 Coolidge Avenue | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 75% | 75% | |||||
Alexandria Center for Science and Technology - Mission Bay | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 25% | 25% | |||||
1450 Owens Street | |||||||
Schedule of Equity Method Investments | |||||||
Proceeds from noncontrolling interests | $ 25,039,000 | ||||||
Contribution of assets from real estate joint venture partner | $ 125,200,000 | ||||||
1450 Owens Street | Future Development | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 191,000 | 191,000 | |||||
1450 Owens Street | Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 10,083,000 | ||||||
1450 Owens Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 65.50% | 65.50% | |||||
1450 Owens Street | Alexandria | Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 75% | 75% | |||||
Real Estate Property, Ownership Interest Sold | 20% | ||||||
1450 Owens Street | Alexandria | Noncontrolling Interests | Partially Owned Properties | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 34.50% | 34.50% | |||||
601, 611, 651, 681, 685, and 701 Gateway Boulevard | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50% | 50% | |||||
751 Gateway Boulevard | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 51% | 51% | |||||
213 East Grand Avenue | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
500 Forbes Boulevard | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 10% | 10% | |||||
Alexandria Center® for Life Science – Millbrae | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 44.30% | 44.30% | |||||
3215 Merryfield Row | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 170,523 | 170,523 | |||||
Proceeds from noncontrolling interests | $ 149,940,000 | ||||||
Proceeds from sale of real estate (in dollars per RSF) | 1,256 | ||||||
3215 Merryfield Row | Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 42,214,000 | ||||||
3215 Merryfield Row | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
3215 Merryfield Row | Alexandria | Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 70% | 70% | |||||
Alexandria Point | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 55% | 55% | |||||
5200 Illumina Way | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 51% | 51% | |||||
9625 Towne Centre Drive | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50.10% | 50.10% | |||||
SD Tech by Alexandria | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50% | 50% | |||||
Pacific Technology Park | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50% | 50% | |||||
Summers Ridge Science Park | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 316,531 | 316,531 | |||||
Proceeds from noncontrolling interests | $ 159,600,000 | ||||||
Proceeds from sale of real estate (in dollars per RSF) | 720 | ||||||
Summers Ridge Science Park | Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 65,097,000 | ||||||
Summers Ridge Science Park | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
Summers Ridge Science Park | Alexandria | Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 70% | 70% | |||||
1201 and 1208 Eastlake Avenue East and 199 East Blaine Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
400 Dexter Avenue North | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
800 Mercer Street | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 869,000 | ||||||
Payments to noncontrolling interests | $ 87,600,000 | ||||||
800 Mercer Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 60% | 60% | 60% | ||||
225 Binney Street | Alexandria | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 30% | 30% | |||||
225 Binney Street | Tenancy in Common | |||||||
Schedule of Equity Method Investments | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 26.316% | 26.316% | |||||
Ownership percentage by noncontrolling owners | 73.684% | 73.684% | |||||
100 Binney Street | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 432,931 | ||||||
Proceeds from noncontrolling interests | $ 713,228,000 | ||||||
Proceeds from sale of real estate (in dollars per RSF) | 2,353 | ||||||
100 Binney Street | Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 413,615,000 | ||||||
100 Binney Street | Alexandria | Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 70% | ||||||
300 Third Street | |||||||
Schedule of Equity Method Investments | |||||||
Area of real estate property | ft² | 131,963 | ||||||
Proceeds from noncontrolling interests | $ 166,485,000 | ||||||
Proceeds from sale of real estate (in dollars per RSF) | 1,802 | ||||||
300 Third Street | Additional Paid-In Capital | |||||||
Schedule of Equity Method Investments | |||||||
Contributions from and sales of noncontrolling interests | $ 113,020,000 | ||||||
300 Third Street | Alexandria | Noncontrolling Interests | |||||||
Schedule of Equity Method Investments | |||||||
Ownership percentage by noncontrolling owners | 70% |
Consolidated and unconsolidat_4
Consolidated and unconsolidated real estate joint ventures - Consolidated VIE's balance sheet information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity | ||
Investments in real estate | $ 28,771,745 | $ 24,980,669 |
Cash and cash equivalents | 533,824 | 361,348 |
Other assets | 1,633,877 | 1,658,818 |
Total assets | 34,368,614 | 30,219,373 |
Secured notes payable | 40,594 | 205,198 |
Total liabilities | 13,113,235 | 11,186,123 |
Alexandria Real Estate Equities, Inc.’s share of equity | 17,616,335 | 16,189,542 |
Noncontrolling interests’ share of equity | 3,629,432 | 2,834,096 |
Total liabilities, noncontrolling interests, and equity | 34,368,614 | 30,219,373 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity | ||
Investments in real estate | 6,581,901 | 5,014,842 |
Cash and cash equivalents | 253,426 | 181,074 |
Other assets | 678,889 | 509,281 |
Total assets | 7,514,216 | 5,705,197 |
Secured notes payable | 39,945 | 7,991 |
Other liabilities | 453,619 | 269,605 |
Total liabilities | 493,564 | 277,596 |
Alexandria Real Estate Equities, Inc.’s share of equity | 3,391,220 | 2,593,505 |
Noncontrolling interests’ share of equity | 3,629,432 | 2,834,096 |
Total liabilities, noncontrolling interests, and equity | $ 7,514,216 | $ 5,705,197 |
Consolidated and unconsolidat_5
Consolidated and unconsolidated real estate joint ventures - Unconsolidated real estate joint ventures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Equity Method Investments | ||
Investments in unconsolidated real estate joint ventures | $ 38,285 | $ 38,483 |
Unconsolidated Real Estate Joint Ventures Debt | ||
Interest Rate | 3.52% | |
Debt Balance at 100% | $ 10,525,848 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Debt instrument, borrowing capacity | 668,250 | |
Debt Balance at 100% | $ 637,492 | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Fixed SOFR floor rate | 0.75% | |
1655 and 1725 Third Street | ||
Schedule of Equity Method Investments | ||
Investments in unconsolidated real estate joint ventures | $ 12,990 | 14,034 |
Equity Method Investment, Ownership Percentage | 10% | |
1450 Research Boulevard | ||
Schedule of Equity Method Investments | ||
Investments in unconsolidated real estate joint ventures | $ 5,532 | 4,455 |
Equity Method Investment, Ownership Percentage | 73.20% | |
101 West Dickman Street | ||
Schedule of Equity Method Investments | ||
Investments in unconsolidated real estate joint ventures | $ 8,537 | 8,481 |
Equity Method Investment, Ownership Percentage | 57.90% | |
Other unconsolidated real estate joint ventures | ||
Schedule of Equity Method Investments | ||
Investments in unconsolidated real estate joint ventures | $ 11,226 | $ 11,513 |
1401/1413 Research Boulevard | ||
Schedule of Equity Method Investments | ||
Equity Method Investment, Ownership Percentage | 65% | |
Secured debt maturing on 12/23/24 | 1401/1413 Research Boulevard | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Maturity Date | Dec. 23, 2024 | |
Stated interest rate (as a percent) | 2.70% | |
Interest Rate | 3.32% | |
Debt instrument, borrowing capacity | $ 28,500 | |
Debt Balance at 100% | $ 28,079 | |
Secured debt maturing on 3/10/25 | 1655 and 1725 Third Street | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Maturity Date | Mar. 10, 2025 | |
Stated interest rate (as a percent) | 4.50% | |
Interest Rate | 4.57% | |
Debt instrument, borrowing capacity | $ 600,000 | |
Debt Balance at 100% | $ 598,974 | |
Secured debt maturing on 11/10/26 | 101 West Dickman Street | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Maturity Date | Nov. 10, 2026 | |
Interest Rate | 4.33% | |
Debt instrument, borrowing capacity | $ 26,750 | |
Debt Balance at 100% | $ 10,439 | |
Secured debt maturing on 11/10/26 | 101 West Dickman Street | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Stated interest rate (as a percent) | 1.95% | |
Secured debt maturing on 12/10/26 | 1450 Research Boulevard | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Maturity Date | Dec. 10, 2026 | |
Debt instrument, borrowing capacity | $ 13,000 | |
Debt Balance at 100% | $ 0 | |
Secured debt maturing on 12/10/26 | 1450 Research Boulevard | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||
Unconsolidated Real Estate Joint Ventures Debt | ||
Stated interest rate (as a percent) | 1.95% |
Leases - Lessor (Details)
Leases - Lessor (Details) $ in Thousands, ft² in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) ft² directFinancingLease landParcel property | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) ft² directFinancingLease landParcel property | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lessor, Lease, Description [Line Items] | ||||||
Area of real estate property | ft² | 74.5 | 74.5 | ||||
Operating Lease | ||||||
Land parcel subject to lease agreement that contains a purchase option | landParcel | 2 | 2 | ||||
Rent commence date | Oct. 01, 2017 | |||||
Operating Leases, Future Minimum Payments Receivable | ||||||
2022 | $ 413,509 | $ 413,509 | ||||
2023 | 1,743,452 | 1,743,452 | ||||
2024 | 1,831,621 | 1,831,621 | ||||
2025 | 1,816,651 | 1,816,651 | ||||
2026 | 1,771,008 | 1,771,008 | ||||
Thereafter | 13,261,005 | 13,261,005 | ||||
Total | $ 20,837,246 | $ 20,837,246 | ||||
Direct Financing and Sales-Type Lease | ||||||
Number of direct financing leases | directFinancingLease | 1 | 1 | ||||
Direct financing lease, net investment in lease, before allowance for credit loss | $ 39,200 | $ 39,200 | ||||
Lessee option to purchase underlying asset, option exercise period | 30 days | |||||
Direct financing lease, remaining lease term | 70 years 2 months 12 days | |||||
Gain on sales of real estate | 323,699 | $ 214,219 | $ (435) | $ 537,918 | $ 2,344 | |
Direct financing lease, allowance for credit loss | 2,800 | 2,800 | ||||
Direct Financing Lease, Net Investment in Leases | ||||||
Gross investment in direct financing and sales-type leases | 255,641 | 255,641 | $ 403,388 | |||
Add: estimated unguaranteed residual value of the underlying assets | 0 | 0 | 31,839 | |||
Less: unearned income on direct financing lease | (213,640) | (213,640) | (215,557) | |||
Less: effect of discounting on sales-type leases | 0 | 0 | (146,175) | |||
Less: allowance for credit losses | (2,839) | (2,839) | (2,839) | |||
Net investment in direct financing and sales-type leases(1) | 39,162 | 39,162 | 70,656 | |||
Direct Financing and Sales-Type Leases, Future Minimum Payments Receivable | ||||||
2022 | 454 | 454 | ||||
2023 | 1,863 | 1,863 | ||||
2024 | 1,919 | 1,919 | ||||
2025 | 1,976 | 1,976 | ||||
2026 | 2,036 | 2,036 | ||||
Thereafter | 247,393 | 247,393 | ||||
Total | 255,641 | 255,641 | $ 403,388 | |||
Income from rentals | ||||||
Operating leases | 646,662 | 538,880 | 1,879,534 | 1,515,396 | ||
Direct financing and sales-type leases | 642 | 1,012 | 2,449 | 2,473 | ||
Revenues subject to the lease accounting standard | 647,304 | 539,892 | 1,881,983 | 1,517,869 | ||
Income from rentals | $ 659,852 | 547,759 | $ 1,918,681 | 1,537,227 | ||
Purchase Option Term One | ||||||
Operating Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 15 years | |||||
Direct Financing and Sales-Type Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 15 years | |||||
Purchase Option Term Two | ||||||
Operating Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 30 years | |||||
Direct Financing and Sales-Type Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 30 years | |||||
Purchase Option Term Three | ||||||
Operating Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 74 years 6 months | |||||
Direct Financing and Sales-Type Lease | ||||||
Lessee option to purchase underlying asset, period after rent commencement | 74 years 6 months | |||||
Land parcels subject to lease agreement that contains a purchase option | ||||||
Operating Lease | ||||||
Remaining lease term | 70 years 2 months 12 days | |||||
9609, 9613, 9615 Medical Center Drive | ||||||
Direct Financing and Sales-Type Lease | ||||||
Proceeds from sale of real estate | 47,800 | |||||
Gain on sales of real estate | $ 11,894 | |||||
North America | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Number of real estate properties | property | 431 | 431 | ||||
Area of real estate property | ft² | 41.1 | 41.1 | ||||
Direct Financing and Sales-Type Lease | ||||||
Proceeds from sale of real estate | $ 625,800 | $ 1,000,000 | ||||
Income from rentals | ||||||
Income from rentals | ||||||
Income from rentals | 656,853 | 546,527 | 1,910,366 | 1,533,593 | ||
Income from rentals | Cumulative Effect, Period of Adoption, Adjustment | ||||||
Income from rentals | ||||||
Revenues subject to the revenue recognition accounting standard | $ 9,549 | $ 6,635 | $ 28,383 | $ 15,724 |
Leases - Lessee (Details)
Leases - Lessee (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) property | Mar. 31, 2022 USD ($) property | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Ground and operating lease obligation due | $ 910,800 | $ 910,800 | ||||
Operating lease liability | 409,030 | 409,030 | $ 434,745 | |||
Operating lease right-of-use asset | $ 561,866 | $ 561,866 | 474,299 | |||
Operating lease discount rate | 4.60% | 4.60% | ||||
Number of properties subject to ground leases | property | 40 | 40 | ||||
Percentage of properties subject to ground leases | 9% | 9% | ||||
Remaining lease term for operating lease obligations | 13 years | |||||
Operating lease costs - cash rents | $ 46,800 | $ 18,000 | ||||
Operating Lease Liabilities, Payments Due | ||||||
2022 | $ 6,586 | 6,586 | ||||
2023 | 24,073 | 24,073 | ||||
2024 | 24,389 | 24,389 | ||||
2025 | 24,475 | 24,475 | ||||
2026 | 24,543 | 24,543 | ||||
Thereafter | 806,749 | 806,749 | ||||
Total future payments under our operating leases in which we are the lessee | 910,815 | 910,815 | ||||
Effect of discounting | (501,785) | (501,785) | ||||
Operating lease liability | 409,030 | 409,030 | $ 434,745 | |||
Leasee operating costs | ||||||
Gross operating lease costs | 9,349 | $ 7,055 | 26,843 | 20,580 | ||
Capitalized lease costs | (847) | (827) | (2,699) | (2,273) | ||
Expenses for operating leases in which we are the lessee | $ 8,502 | $ 6,228 | $ 24,144 | $ 18,307 | ||
San Francisco Bay Area | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease costs - cash rents | $ 26,300 | |||||
Number of properties associated with lease extensions executed | property | 2 | |||||
Minimum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease term for ground lease obligation | 31 years | |||||
Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease term for ground lease obligation | 99 years | |||||
Ground and operating leases | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Weighted average remaining lease term | 42 years | 42 years | ||||
Operating Property with Ground Lease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of properties subject to ground leases | property | 1 | 1 | ||||
Net book value for the exclusion of one ground lease related to one operating property | $ 6,400 | $ 6,400 |
Cash, cash equivalents, and r_3
Cash, cash equivalents, and restricted cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 533,824 | $ 361,348 | ||
Restricted cash | 332,344 | 53,879 | ||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Total | 866,168 | 415,227 | $ 368,054 | $ 597,705 |
Funds held in trust under the terms of certain secured notes payable | ||||
Cash and Cash Equivalents | ||||
Restricted cash | 0 | 17,264 | ||
Funds held in escrow for real estate acquisitions | ||||
Cash and Cash Equivalents | ||||
Restricted cash | 329,448 | 30,000 | ||
Other | ||||
Cash and Cash Equivalents | ||||
Restricted cash | $ 2,896 | $ 6,615 |
Investments - Summary of Invest
Investments - Summary of Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) investment | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) investment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule of Investments | |||||
Cost method investment ownership percentage | 10% | 10% | |||
Number of equity method investments | investment | 6 | 6 | |||
Investments accounted for under the equity method | $ 56,374 | $ 56,374 | $ 71,588 | ||
Investment commitments | 384,100 | $ 384,100 | |||
Limited partnership maximum expiration terms | 12 years | ||||
Weighted-average remaining liquidation term (in years) | 5 years 7 months 6 days | ||||
Limited partnership liquidation, expected initial term (in years) | 10 years | ||||
Investments in privately held entities that do not report NAV, cumulative downward price adjustment | (2,200) | $ (2,200) | |||
Investments in privately held entities that do not report NAV, cumulative impairment loss | (54,200) | (54,200) | |||
Unrealized (losses) gains | (56,515) | $ (14,432) | (388,076) | $ 183,348 | |
Income from equity method investments | 40 | $ 3,091 | 473 | 9,237 | |
Summary of Investment [Abstract] | |||||
Investment at fair value, cost | 1,147,489 | 1,147,489 | 1,007,303 | ||
Cumulative unrealized gains on investments | 528,962 | 528,962 | 830,863 | ||
Cumulative unrealized losses on investments | (107,904) | (107,904) | (33,190) | ||
Total investments held at adjusted carrying value or fair value | 1,624,921 | 1,624,921 | 1,876,564 | ||
Equity Method Investments | |||||
Schedule of Investments | |||||
Income from equity method investments | 2,800 | ||||
Investments in publicly traded companies | |||||
Summary of Investment [Abstract] | |||||
Investment at fair value, cost | 220,787 | 220,787 | 203,290 | ||
Cumulative unrealized gains on investments | 102,196 | 102,196 | 309,998 | ||
Cumulative unrealized losses on investments | (99,441) | (99,441) | (29,471) | ||
Investments at fair value, book value | 223,542 | $ 223,542 | 483,817 | ||
Investments in privately held entities that report NAV | |||||
Schedule of Investments | |||||
Weighted-average remaining liquidation term (in years) | 8 years 9 months 18 days | ||||
Summary of Investment [Abstract] | |||||
Investment at fair value, cost | 438,087 | $ 438,087 | 385,692 | ||
Cumulative unrealized gains on investments | 331,477 | 331,477 | 446,586 | ||
Cumulative unrealized losses on investments | (6,297) | (6,297) | (2,414) | ||
Investments at fair value, book value | 763,267 | 763,267 | 829,864 | ||
Investments in privately held entities that do not report NAV | Entities with observable price change | |||||
Schedule of Investments | |||||
Investment in privately held entities that do not report NAV, cumulative price adjustments | 39,000 | 39,000 | |||
Investments in privately held entities that do not report NAV, cumulative upward price adjustment | 95,300 | 95,300 | |||
Annual adjustments recognized on investments in privately held entities that do not report NAV | 1,800 | 28,000 | |||
Investments in privately held entities that do not report NAV, annual downward price adjustment | 23,400 | 57,900 | |||
Investments in privately held entities that do not report NAV, annual upward price adjustment | 25,200 | 29,900 | |||
Summary of Investment [Abstract] | |||||
Investment at fair value, cost | 104,337 | 104,337 | 56,257 | ||
Cumulative unrealized gains on investments | 95,289 | 95,289 | 74,279 | ||
Cumulative unrealized losses on investments | (2,166) | (2,166) | (1,305) | ||
Investments in privately held entities that do not report fair value, book value | 197,460 | 197,460 | 129,231 | ||
Investments in privately held entities that do not report NAV | Entities without observable price changes | |||||
Summary of Investment [Abstract] | |||||
Investment at fair value, cost | 384,278 | 384,278 | 362,064 | ||
Cumulative unrealized gains on investments | 0 | 0 | 0 | ||
Cumulative unrealized losses on investments | 0 | 0 | 0 | ||
Investments in privately held entities that do not report fair value, book value | $ 384,278 | 384,278 | $ 362,064 | ||
Total investments held | |||||
Schedule of Investments | |||||
Unrealized (losses) gains | $ (301,800) | $ 231,500 |
Investments - Investment Income
Investments - Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Investments [Abstract] | ||||
Realized gains | $ 24,210 | $ 81,516 | $ 75,971 | $ 189,013 |
Unrealized (losses) gains | (56,515) | (14,432) | (388,076) | 183,348 |
Investment (loss) income | $ (32,305) | $ 67,084 | $ (312,105) | $ 372,361 |
Other assets (Detail)
Other assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Acquired in-place leases | $ 638,024 | $ 609,872 |
Deferred compensation plan | 31,957 | 38,937 |
Deferred financing costs – unsecured senior line of credit | 33,692 | 19,294 |
Deposits | 30,007 | 176,077 |
Furniture, fixtures, and equipment | 23,493 | 26,429 |
Net investment in direct financing and sales-type leases(1) | 39,162 | 70,656 |
Notes receivable | 18,029 | 13,088 |
Operating lease right-of-use asset | 561,866 | 474,299 |
Other assets | 78,330 | 53,985 |
Prepaid expenses | 30,007 | 24,806 |
Property, plant, and equipment | 149,310 | 151,375 |
Total | $ 1,633,877 | $ 1,658,818 |
Fair value measurements - Asset
Fair value measurements - Assets and Liabilities on Recurring and Nonrecurring Basis (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) transfer | Dec. 31, 2021 USD ($) | |
Assets and liabilities measured at fair value | ||
Transfers in Fair Value Hierarchy | transfer | 0 | |
Investments | $ 1,624,921 | $ 1,876,564 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Secured notes payable | 40,594 | 205,198 |
Unsecured senior notes payable | 10,098,588 | 8,316,678 |
Unsecured senior lines of credit | 386,666 | 269,990 |
Book value | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Secured notes payable | 40,594 | 205,198 |
Unsecured senior notes payable | 10,098,588 | 8,316,678 |
Book value | Commercial Paper | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Commercial paper program | 386,666 | 269,990 |
Book value | Unsecured senior line of credit | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Unsecured senior lines of credit | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Secured notes payable, fair value | 42,611 | 214,097 |
Unsecured senior notes payable, fair value | 8,226,370 | 8,995,913 |
Fair Value | Fair value measured on nonrecurring basis | Commercial Paper | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Commercial paper, fair value disclosure | 385,838 | 269,994 |
Fair Value | Fair value measured on nonrecurring basis | Unsecured senior line of credit | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Unsecured senior lines of credit, fair value | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | Quoted prices in active markets for identical assets (Level 1) | Commercial Paper | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Commercial paper, fair value disclosure | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | Quoted prices in active markets for identical assets (Level 1) | Unsecured senior line of credit | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Unsecured senior lines of credit, fair value | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | Significant other observable inputs (Level 2) | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Secured notes payable, fair value | 42,611 | 214,097 |
Unsecured senior notes payable, fair value | 8,226,370 | 8,995,913 |
Fair Value | Fair value measured on nonrecurring basis | Significant other observable inputs (Level 2) | Commercial Paper | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Commercial paper, fair value disclosure | 385,838 | 269,994 |
Fair Value | Fair value measured on nonrecurring basis | Significant other observable inputs (Level 2) | Unsecured senior line of credit | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Unsecured senior lines of credit, fair value | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | Significant unobservable input (Level 3) | Commercial Paper | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Commercial paper, fair value disclosure | 0 | 0 |
Fair Value | Fair value measured on nonrecurring basis | Significant unobservable input (Level 3) | Unsecured senior line of credit | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Unsecured senior lines of credit, fair value | 0 | 0 |
Investments in publicly traded companies | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 223,542 | 483,817 |
Investments in publicly traded companies | Fair Value | Fair value measured on recurring basis | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 223,542 | 483,817 |
Investments in publicly traded companies | Fair Value | Fair value measured on recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 223,542 | 483,817 |
Investments in publicly traded companies | Fair Value | Fair value measured on recurring basis | Significant other observable inputs (Level 2) | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 0 | 0 |
Investments in publicly traded companies | Fair Value | Fair value measured on recurring basis | Significant unobservable input (Level 3) | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 0 | 0 |
Investments in privately held entities that report NAV | ||
Assets and liabilities measured at fair value | ||
Investments at fair value | 763,267 | 829,864 |
Entities without observable price changes | Investments in privately held entities that do not report NAV | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Investments in privately held entities that do not report fair value, book value | 384,278 | 362,064 |
Entities without observable price changes | Investments in privately held entities that do not report NAV | Fair Value | Fair value measured on nonrecurring basis | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Investments in privately held entities that do not report fair value, book value | 212,413 | 138,011 |
Entities without observable price changes | Investments in privately held entities that do not report NAV | Fair Value | Fair value measured on nonrecurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Investments in privately held entities that do not report fair value, book value | 0 | 0 |
Entities without observable price changes | Investments in privately held entities that do not report NAV | Fair Value | Fair value measured on nonrecurring basis | Significant other observable inputs (Level 2) | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Investments in privately held entities that do not report fair value, book value | 197,460 | 129,231 |
Entities without observable price changes | Investments in privately held entities that do not report NAV | Fair Value | Fair value measured on nonrecurring basis | Significant unobservable input (Level 3) | ||
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Investments in privately held entities that do not report fair value, book value | $ 14,953 | $ 8,780 |
Detail of secured and unsecured
Detail of secured and unsecured debt (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument | ||
Effective rate (as a percent) | 3.52% | 3.52% |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 30 | 30 |
2024 | 32 | 32 |
2025 | 600,034 | 600,034 |
2026 | 691,474 | 691,474 |
Thereafter | 9,312,333 | 9,312,333 |
Principal | 10,603,903 | 10,603,903 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (78,055) | (78,055) |
Total Consolidated | $ 10,525,848 | $ 10,525,848 |
99 Coolidge Avenue | Alexandria | ||
Debt Instrument | ||
Noncontrolling Interest, Ownership Percentage by Parent | 75% | 75% |
Secured notes payable | ||
Debt Instrument | ||
Effective rate (as a percent) | 5.36% | 5.36% |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 30 | 30 |
2024 | 32 | 32 |
2025 | 34 | 34 |
2026 | 41,474 | 41,474 |
Thereafter | 518 | 518 |
Principal | 42,088 | 42,088 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (1,494) | (1,494) |
Total Consolidated | $ 40,594 | $ 40,594 |
Secured notes payable maturing on 11/19/26 | ||
Debt Instrument | ||
Effective rate (as a percent) | 5.34% | 5.34% |
Maturity Date | Nov. 19, 2026 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 41,438 | 41,438 |
Thereafter | 0 | 0 |
Principal | 41,438 | 41,438 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (1,494) | (1,494) |
Total Consolidated | 39,944 | 39,944 |
Secured notes payable maturing on 11/19/26 | 99 Coolidge Avenue | ||
Debt Instrument | ||
Debt instrument, borrowing capacity | $ 153,900 | $ 153,900 |
Secured Notes Payable Maturing on 7/1/36 | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 6.50% | 6.50% |
Effective rate (as a percent) | 6.50% | 6.50% |
Maturity Date | Jul. 01, 2036 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 30 | 30 |
2024 | 32 | 32 |
2025 | 34 | 34 |
2026 | 36 | 36 |
Thereafter | 518 | 518 |
Principal | 650 | 650 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | 0 | 0 |
Total Consolidated | $ 650 | $ 650 |
Unsecured Debt | ||
Debt Instrument | ||
Effective rate (as a percent) | 3.51% | 3.51% |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 600,000 | 600,000 |
2026 | 650,000 | 650,000 |
Thereafter | 9,311,815 | 9,311,815 |
Principal | 10,561,815 | 10,561,815 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (76,561) | (76,561) |
Total Consolidated | $ 10,485,254 | 10,485,254 |
Unsecured senior line of credit | ||
Debt Instrument | ||
Maturity Date | Jan. 22, 2028 | |
Future principal payments due on secured and unsecured debt | ||
Total Consolidated | $ 0 | $ 0 |
3.45% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.45% | 3.45% |
Effective rate (as a percent) | 3.62% | 3.62% |
Maturity Date | Apr. 30, 2025 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 600,000 | 600,000 |
2026 | 0 | 0 |
Thereafter | 0 | 0 |
Principal | 600,000 | 600,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (2,280) | (2,280) |
Total Consolidated | $ 597,720 | $ 597,720 |
4.30% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4.30% | 4.30% |
Effective rate (as a percent) | 4.50% | 4.50% |
Maturity Date | Jan. 15, 2026 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 300,000 | 300,000 |
Thereafter | 0 | 0 |
Principal | 300,000 | 300,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (1,628) | (1,628) |
Total Consolidated | $ 298,372 | $ 298,372 |
3.80% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.80% | 3.80% |
Effective rate (as a percent) | 3.96% | 3.96% |
Maturity Date | Apr. 15, 2026 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 350,000 | 350,000 |
Thereafter | 0 | 0 |
Principal | 350,000 | 350,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (1,752) | (1,752) |
Total Consolidated | $ 348,248 | $ 348,248 |
3.95% Unsecured Senior Notes Payable Due in 2027 | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.95% | 3.95% |
Effective rate (as a percent) | 4.13% | 4.13% |
Maturity Date | Jan. 15, 2027 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 350,000 | 350,000 |
Principal | 350,000 | 350,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (2,199) | (2,199) |
Total Consolidated | $ 347,801 | $ 347,801 |
3.95% Unsecured Senior Notes Payable Due in 2028 | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.95% | 3.95% |
Effective rate (as a percent) | 4.07% | 4.07% |
Maturity Date | Jan. 15, 2028 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 425,000 | 425,000 |
Principal | 425,000 | 425,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (2,257) | (2,257) |
Total Consolidated | $ 422,743 | $ 422,743 |
4.50% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4.50% | 4.50% |
Effective rate (as a percent) | 4.60% | 4.60% |
Maturity Date | Jul. 30, 2029 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 300,000 | 300,000 |
Principal | 300,000 | 300,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (1,524) | (1,524) |
Total Consolidated | $ 298,476 | $ 298,476 |
2.75% Unsecured Senior Notes Payable Due 2029 | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 2.75% | 2.75% |
Effective rate (as a percent) | 2.87% | 2.87% |
Maturity Date | Dec. 15, 2029 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 400,000 | 400,000 |
Principal | 400,000 | 400,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (2,981) | (2,981) |
Total Consolidated | $ 397,019 | $ 397,019 |
4.70% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4.70% | 4.70% |
Effective rate (as a percent) | 4.81% | 4.81% |
Maturity Date | Jul. 01, 2030 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 450,000 | 450,000 |
Principal | 450,000 | 450,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (2,889) | (2,889) |
Total Consolidated | $ 447,111 | $ 447,111 |
4.90% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4.90% | 4.90% |
Effective rate (as a percent) | 5.05% | 5.05% |
Maturity Date | Dec. 15, 2030 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 700,000 | 700,000 |
Principal | 700,000 | 700,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (6,485) | (6,485) |
Total Consolidated | $ 693,515 | $ 693,515 |
3.375% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.375% | 3.375% |
Effective rate (as a percent) | 3.48% | 3.48% |
Maturity Date | Aug. 15, 2031 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 750,000 | 750,000 |
Principal | 750,000 | 750,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (5,787) | (5,787) |
Total Consolidated | $ 744,213 | $ 744,213 |
2.00% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 2% | 2% |
Effective rate (as a percent) | 2.12% | 2.12% |
Maturity Date | May 18, 2032 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 900,000 | 900,000 |
Principal | 900,000 | 900,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (9,029) | (9,029) |
Total Consolidated | $ 890,971 | $ 890,971 |
1.875% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 1.875% | 1.875% |
Effective rate (as a percent) | 1.97% | 1.97% |
Maturity Date | Feb. 01, 2033 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 1,000,000 | 1,000,000 |
Principal | 1,000,000 | 1,000,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (9,055) | (9,055) |
Total Consolidated | $ 990,945 | $ 990,945 |
2.95% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 2.95% | 2.95% |
Effective rate (as a percent) | 3.07% | 3.07% |
Maturity Date | Mar. 15, 2034 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 800,000 | 800,000 |
Principal | 800,000 | 800,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (8,923) | (8,923) |
Total Consolidated | $ 791,077 | $ 791,077 |
4.85% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4.85% | 4.85% |
Effective rate (as a percent) | 4.93% | 4.93% |
Maturity Date | Apr. 15, 2049 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 300,000 | 300,000 |
Principal | 300,000 | 300,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (3,131) | (3,131) |
Total Consolidated | $ 296,869 | $ 296,869 |
4.00% Unsecured Senior Notes Payables Due 2050 | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 4% | 4% |
Effective rate (as a percent) | 3.91% | 3.91% |
Maturity Date | Feb. 01, 2050 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 700,000 | 700,000 |
Principal | 700,000 | 700,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | 10,248 | 10,248 |
Total Consolidated | $ 710,248 | $ 710,248 |
3.00% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3% | 3% |
Effective rate (as a percent) | 3.08% | 3.08% |
Maturity Date | May 18, 2051 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 850,000 | 850,000 |
Principal | 850,000 | 850,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (12,082) | (12,082) |
Total Consolidated | $ 837,918 | $ 837,918 |
3.55% Unsecured Senior Notes Payable | ||
Debt Instrument | ||
Stated interest rate (as a percent) | 3.55% | 3.55% |
Effective rate (as a percent) | 3.63% | 3.63% |
Maturity Date | Mar. 15, 2052 | |
Future principal payments due on secured and unsecured debt | ||
2022 | $ 0 | $ 0 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 1,000,000 | 1,000,000 |
Principal | 1,000,000 | 1,000,000 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (14,658) | (14,658) |
Total Consolidated | $ 985,342 | $ 985,342 |
Commercial Paper | ||
Debt Instrument | ||
Effective rate (as a percent) | 3.48% | 3.48% |
Future principal payments due on secured and unsecured debt | ||
Principal | $ 386,700 | $ 386,700 |
Commercial Paper | Unsecured senior line of credit | ||
Debt Instrument | ||
Effective rate (as a percent) | 3.48% | 3.48% |
Maturity Date | Jan. 22, 2028 | |
Future principal payments due on secured and unsecured debt | ||
2023 | $ 0 | $ 0 |
2024 | 0 | 0 |
2025 | 0 | 0 |
2026 | 0 | 0 |
Thereafter | 386,815 | 386,815 |
Principal | 386,815 | 386,815 |
Unamortized (Deferred Financing Cost), (Discount)/ Premium | (149) | (149) |
Total Consolidated | $ 386,666 | $ 386,666 |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Secured notes payable maturing on 11/19/26 | ||
Debt Instrument | ||
Applicable margin (as a percent) | 2.70% | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Unsecured senior line of credit | ||
Debt Instrument | ||
Applicable margin (as a percent) | 0.875% | 0.875% |
Summary of secured and unsecure
Summary of secured and unsecured debt (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument | ||
Long-term debt | $ 10,099,238 | $ 10,099,238 |
Long-term debt, percentage bearing variable interest, amount, net | 426,610 | 426,610 |
Total Consolidated | $ 10,525,848 | $ 10,525,848 |
Percentage of Total | 100% | 100% |
Interest Rate | 3.52% | 3.52% |
Weighted Average Remaining Terms (in years) | 13 years 2 months 12 days | |
Percentage of fixed rate/hedged total debt | 95.90% | 95.90% |
Percentage of unhedged floating rate total debt | 4.10% | 4.10% |
Commercial Paper | ||
Debt Instrument | ||
Interest Rate | 3.48% | 3.48% |
Weighted Average Remaining Terms (in years) | 13 years | |
Weighted-average yield to maturity, commercial paper | 2.69% | |
Weighted-average remaining maturity term, commercial paper | 13 days | |
Secured notes payable | ||
Debt Instrument | ||
Long-term debt | $ 650 | $ 650 |
Long-term debt, percentage bearing variable interest, amount, net | 39,944 | 39,944 |
Total Consolidated | $ 40,594 | $ 40,594 |
Percentage of Total | 0.40% | 0.40% |
Interest Rate | 5.36% | 5.36% |
Weighted Average Remaining Terms (in years) | 4 years 3 months 18 days | |
Unsecured senior notes payable | ||
Debt Instrument | ||
Long-term debt | $ 10,098,588 | $ 10,098,588 |
Long-term debt, percentage bearing variable interest, amount, net | 0 | 0 |
Total Consolidated | $ 10,098,588 | $ 10,098,588 |
Percentage of Total | 95.90% | 95.90% |
Interest Rate | 3.51% | 3.51% |
Weighted Average Remaining Terms (in years) | 13 years 6 months | |
Unsecured senior line of credit | ||
Debt Instrument | ||
Total Consolidated | $ 0 | $ 0 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 | $ 4,000,000 |
Unsecured senior line of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||
Debt Instrument | ||
Applicable margin (as a percent) | 0.875% | 0.875% |
Unsecured senior line of credit | Commercial Paper | ||
Debt Instrument | ||
Long-term debt | $ 0 | $ 0 |
Long-term debt, percentage bearing variable interest, amount, net | 386,666 | 386,666 |
Total Consolidated | $ 386,666 | $ 386,666 |
Percentage of Total | 3.70% | 3.70% |
Interest Rate | 3.48% | 3.48% |
Weighted Average Remaining Terms (in years) | 5 years 3 months 18 days |
Unsecured senior notes payable
Unsecured senior notes payable and commercial paper (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) d loan | Sep. 30, 2021 USD ($) | Sep. 22, 2022 | Jun. 30, 2022 USD ($) | |
Debt Instrument | |||||||
Principal | $ 10,603,903 | $ 10,603,903 | |||||
Debt Balance at 100% | $ 10,525,848 | $ 10,525,848 | |||||
Number of Loan Repayments | loan | 2 | ||||||
Repayments of secured debt | $ 934 | $ 17,108 | |||||
Effective rate (as a percent) | 3.52% | 3.52% | |||||
Loss on early extinguishment of debt | $ 0 | $ 0 | $ (3,317) | $ (67,253) | |||
Commercial Paper | |||||||
Debt Instrument | |||||||
Principal | 386,700 | 386,700 | |||||
Commercial paper, maximum issuance | $ 2,000,000 | $ 2,000,000 | $ 1,500,000 | ||||
Effective rate (as a percent) | 3.48% | 3.48% | |||||
Commercial Paper | Maximum | |||||||
Debt Instrument | |||||||
Number of maturity days from date of issuance | d | 397 | ||||||
Total issuance of unsecured senior notes in Feb 2022 | |||||||
Debt Instrument | |||||||
Total issuance of unsecured senior notes | $ 1,800,000 | ||||||
Weighted Average Interest Rate | 3.28% | ||||||
Weighted average maturity years | 22 years | ||||||
2.95% Unsecured Senior Notes Payable | |||||||
Debt Instrument | |||||||
Principal | $ 800,000 | $ 800,000 | |||||
Stated interest rate (as a percent) | 2.95% | 2.95% | |||||
Maturity Date | Mar. 15, 2034 | ||||||
Debt Balance at 100% | $ 791,077 | $ 791,077 | |||||
Effective rate (as a percent) | 3.07% | 3.07% | |||||
3.55% Unsecured Senior Notes Payable | |||||||
Debt Instrument | |||||||
Principal | $ 1,000,000 | $ 1,000,000 | |||||
Stated interest rate (as a percent) | 3.55% | 3.55% | |||||
Maturity Date | Mar. 15, 2052 | ||||||
Debt Balance at 100% | $ 985,342 | $ 985,342 | |||||
Effective rate (as a percent) | 3.63% | 3.63% | |||||
Secured Notes Payable Maturing on 2/6/24 | |||||||
Debt Instrument | |||||||
Repayments of secured debt | $ 195,000 | ||||||
Effective rate (as a percent) | 3.40% | 3.40% | |||||
Loss on early extinguishment of debt | $ 3,300 | ||||||
Unsecured senior line of credit | |||||||
Debt Instrument | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 | $ 4,000,000 | |||||
Maturity Date | Jan. 22, 2028 | ||||||
Interest rate adjustment amount, maximum | 0.04% | ||||||
Debt Balance at 100% | $ 0 | $ 0 | |||||
Unsecured senior line of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||
Debt Instrument | |||||||
Applicable margin (as a percent) | 0.875% | 0.875% | |||||
Unsecured senior line of credit | Commercial Paper | |||||||
Debt Instrument | |||||||
Principal | $ 386,815 | $ 386,815 | |||||
Maturity Date | Jan. 22, 2028 | ||||||
Debt Balance at 100% | $ 386,666 | $ 386,666 | |||||
Effective rate (as a percent) | 3.48% | 3.48% |
Schedule of interest expense in
Schedule of interest expense incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest expense incurred | ||||
Interest incurred | $ 96,173 | $ 78,863 | $ 275,835 | $ 233,866 |
Capitalized interest | (73,189) | (43,185) | (199,154) | (126,563) |
Interest | $ 22,984 | $ 35,678 | $ 76,681 | $ 107,303 |
Accounts payable, accrued exp_3
Accounts payable, accrued expenses, and other liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable and accrued expenses | $ 458,760 | $ 513,416 |
Accrued construction | 606,413 | 438,866 |
Acquired below-market leases | 378,790 | 341,585 |
Conditional asset retirement obligations | 54,354 | 59,797 |
Deferred rent liabilities | 18,468 | 12,384 |
Operating lease liability | 409,030 | 434,745 |
Unearned rent and tenant security deposits | 373,937 | 326,924 |
Other liabilities | 94,012 | 82,693 |
Total | $ 2,393,764 | $ 2,210,410 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share Reconciliation | ||||
Net income | $ 383,443 | $ 124,433 | $ 575,433 | $ 554,486 |
Net income attributable to noncontrolling interests | (38,747) | (21,286) | (108,092) | (58,134) |
Net income attributable to unvested restricted stock awards | (3,257) | (1,883) | (5,866) | (5,750) |
Numerator for basic and diluted EPS – net income attributable to Alexandria Real Estate Equities, Inc.’s common stockholders | $ 341,439 | $ 101,264 | $ 461,475 | $ 490,602 |
Denominator for basic EPS – weighted-average shares of common stock outstanding | 161,554 | 150,854 | 160,400 | 144,716 |
Dilutive effect of forward equity sales agreements | 0 | 707 | 0 | 437 |
Denominator for diluted EPS – weighted-average shares of common stock outstanding | 161,554 | 151,561 | 160,400 | 145,153 |
Earnings per share attributable to Alexandria Real Estate Equities, Inc.'s common stockholders - basic and diluted: | ||||
Earnings (loss) per share – basic (USD per share) | $ 2.11 | $ 0.67 | $ 2.88 | $ 3.39 |
Earnings (loss) per share - diluted (USD per share) | $ 2.11 | $ 0.67 | $ 2.88 | $ 3.38 |
Stockholders' equity - ATM comm
Stockholders' equity - ATM common stock offering program and Forward Equity Sales Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jan. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | May 01, 2022 | Apr. 30, 2022 | Dec. 31, 2021 | |
Class of Stock | ||||||||
Net proceeds from issuance of common stock | $ 845,746 | $ 2,758,545 | ||||||
Shares of common stock authorized | 400 | 200 | ||||||
Forward Equity Sales Agreement Entered in January 2022 | ||||||||
Class of Stock | ||||||||
Net proceeds from issuance of common stock | $ 1,700,000 | $ 199,700 | $ 648,200 | |||||
Shares of common stock authorized | 8.1 | |||||||
Average issue price per share | $ 210 | |||||||
Issuances of common stock (in shares) | 1 | 3.2 | ||||||
Forward Equity Sales Agreements Entered Under ATM Program | ||||||||
Class of Stock | ||||||||
Net proceeds from issuance of common stock | $ 753,400 | |||||||
Shares of common stock authorized | 4.2 | 4.2 | ||||||
Average issue price per share | $ 179.36 | $ 179.36 | ||||||
All Forward Equity Sales Agreements Outstanding | ||||||||
Class of Stock | ||||||||
Average issue price per share | $ 186.03 | $ 186.03 | ||||||
Common stock available for future issuance (in shares) | 8 | 8 | ||||||
Expected net proceeds from issuance of common stock | $ 1,500,000 | |||||||
ATM Common Stock Offering Program, Established December 2021 | ||||||||
Class of Stock | ||||||||
Common stock available for future issuance (in dollars) | $ 246,600 | $ 246,600 | $ 1,000,000 |
Stockholders' equity (Details)
Stockholders' equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 01, 2022 | Apr. 30, 2022 | |
Stockholders' Equity Note [Abstract] | ||||||||
Dividends declared on common stock | $ 193,623 | $ 192,600 | $ 187,700 | $ 173,561 | $ 573,894 | $ 504,986 | ||
Dividends declared on common stock (per share) | $ 1.18 | $ 1.18 | $ 1.15 | $ 1.12 | $ 3.51 | $ 3.33 | ||
Unrealized foreign currency translation (losses) gains arising during the period | $ (12,874) | $ (1,521) | $ (17,431) | $ 596 | ||||
Shares of common stock authorized | 400,000,000 | 200,000,000 | ||||||
Shares of common stock issued and outstanding | 162,600,000 | 162,600,000 | ||||||
Shares of preferred stock authorized | 100,000,000 | 100,000,000 | ||||||
Shares of preferred stock issued and outstanding | 0 | 0 | ||||||
Number of "excess stock" authorized (in shares) | 200,000,000 | |||||||
Number of excess stock authorized issued and outstanding (in shares) | 0 | 0 |
Noncontrolling interests (Detai
Noncontrolling interests (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | |
Noncontrolling interests | ||
Payments to noncontrolling interests | $ 139,685 | $ 81,926 |
Noncontrolling Interests | ||
Noncontrolling interests | ||
Number of real estate properties subject to ownership from noncontrolling interest | property | 63 | |
Payments to noncontrolling interests | $ 139,500 | $ 81,900 |
Assets classified as held for_3
Assets classified as held for sale (Details) $ in Thousands | Sep. 30, 2022 USD ($) ft² property | Dec. 31, 2021 USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | ||
Number of properties held for sale | property | 1 | |
Assets held for sale - area of real estate | ft² | 334,144 | |
Net assets held for sale [Abstract] | ||
Total assets | $ 14,169 | $ 17,749 |
Total liabilities | (1,179) | (1,083) |
Total accumulated other comprehensive income (loss) | 1,839 | (1,750) |
Net assets classified as held for sale | $ 14,829 | $ 14,916 |
Subsequent events (Details)
Subsequent events (Details) $ in Millions | Oct. 24, 2022 USD ($) property | Sep. 30, 2022 property | Jun. 30, 2022 property | Mar. 31, 2022 property |
Subsequent Event [Line Items] | ||||
Number of real estate properties acquired | 7 | 3 | 29 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Number of real estate properties acquired | 2 | |||
Proceeds from sale of real estate | $ | $ 108 |