Alexandria Real Estate Equities, Inc. Reports: 2Q25 and 1H25 Net Loss per Share - Diluted of $(0.64) and $(0.71), respectively; and 2Q25 and 1H25 FFO per Share - Diluted, as Adjusted, of $2.33 and $4.63, respectively
PASADENA, Calif., July 21, 2025 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the second quarter ended June 30, 2025.
Key highlights
Operating results
2Q25
2Q24
1H25
1H24
Total revenues:
In millions
$ 762.0
$ 766.7
$ 1,520.2
$ 1,535.8
Net (loss) income attributable to Alexandria's common stockholders, diluted:
In millions
$ (109.6)
$ 42.9
$ (121.2)
$ 209.8
Per share
$ (0.64)
$ 0.25
$ (0.71)
$ 1.22
Funds from operations attributable to Alexandria's common stockholders, diluted, as adjusted:
In millions
$ 396.4
$ 405.5
$ 788.4
$ 809.4
Per share
$ 2.33
$ 2.36
$ 4.63
$ 4.71
A sector-leading REIT with a high-quality, diverse tenant base and strong margins
(As of June 30, 2025, unless stated otherwise)
Occupancy of operating properties in North America
90.8 %
(1)
Percentage of annual rental revenue in effect from Megacampus™ platform
75 %
Percentage of annual rental revenue in effect from investment-grade or publicly
traded large cap tenants
53 %
Operating margin
71 %
Adjusted EBITDA margin
71 %
Percentage of leases containing annual rent escalations
97 %
Weighted-average remaining lease term:
Top 20 tenants
9.4
years
All tenants
7.4
years
Sustained strength in tenant collections:
July 2025 tenant rents and receivables collected as of July 21, 2025
99.4 %
2Q25 tenant rents and receivables collected as of July 21, 2025
99.9 %
(1)
Reflects temporary vacancies aggregating 668,795 RSF, or 1.7%, which are now leased and expected to be occupied upon completion of building and/or tenant improvements. The weighted-average expected delivery date is January 2, 2026.
Strong and flexible balance sheet with significant liquidity; top 10% credit rating ranking among all publicly traded U.S. REITs
Net debt and preferred stock to Adjusted EBITDA of 5.9x and fixed-charge coverage ratio of 4.1x for 2Q25 annualized, with 4Q25 annualized targets of ≤5.2x and 4.0x to 4.5x, respectively.
Significant liquidity of $4.6 billion.
Only 9% of our total debt matures through 2027.
12.0 years weighted-average remaining term of debt, longest among S&P 500 REITs.
Since 2021, our quarter-end fixed-rate debt averaged 97.2%.
Total debt and preferred stock to gross assets of 30%.
$297.3 million of capital contribution commitments from existing real estate joint venture partners to fund construction from 3Q25 through 2027 and beyond, including $116.7 million from 3Q25 to 4Q25.
Leasing volume and rental rate increases
Leasing volume of 769,815 RSF during 2Q25.
In July 2025, we executed the largest life science lease in company history with a long-standing multinational pharmaceutical tenant for a 16-year expansion build-to-suit lease, aggregating 466,598 RSF, located on the Campus Point by Alexandria Megacampus in our University Town Center submarket. If this were included in the leasing volume for 2Q25, the total leased RSF would have increased to 1.2 million RSF for 2Q25 from 769,815 RSF. Refer to "Subsequent events" in the Earnings Press Release for additional details.
Rental rate increases on lease renewals and re-leasing of space of 5.5% and 6.1% (cash basis) for 2Q25 and 13.2% and 6.9% (cash basis) for 1H25.
84% of our leasing activity during the last twelve months was generated from our existing tenant base.
2Q25
1H25
Total leasing activity, RSF
769,815
1,800,368
Lease renewals and re-leasing of space:
RSF (included in total leasing activity above)
483,409
1,367,817
Rental rate increase
5.5 %
13.2 %
Rental rate increase (cash basis)
6.1 %
6.9 %
Leasing of development and redevelopment space, RSF
131,768
138,198
Dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment
Common stock dividend declared for 2Q25 of $1.32 per share aggregating $5.26 per common share for the twelve months ended June 30, 2025, up 18 cents, or 3.5%, over the twelve months ended June 30, 2024.
By maintaining our recent dividend at $1.32 per share, over $40 million of additional liquidity and equity capital can be reinvested annually.
Dividend yield of 7.3% as of June 30, 2025.
Dividend payout ratio of 57% for the three months ended June 30, 2025.
Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating $2.3 billion for the years ended December 31, 2021 through 2024 and the midpoint of our 2025 guidance range.
Ongoing execution of Alexandria's 2025 capital recycling strategy
We expect to fund a significant portion of our capital requirements for the year ending December 31, 2025 through dispositions of non-core assets, land, partial interest sales, and sales to owner/users. We expect dispositions of land to represent 20%–30% of our total dispositions and sales of partial interests for 2025.
(in millions)
Completed dispositions
$ 261
Our share of pending transactions subject to non-refundable deposits,
signed letters of intent, and/or purchase and sale agreement
negotiations
525
Our share of completed and pending 2025 dispositions
786
40 %
Additional targeted dispositions
1,164
60
2025 guidance midpoint for dispositions and sales of partial interests
$ 1,950
100 %
Alexandria's development and redevelopment pipeline delivered incremental annual net operating income of $15 million commencing during 2Q25, with an additional $139 million of incremental annual net operating income anticipated to deliver by 4Q26 primarily from projects 84% leased/negotiating
During 2Q25, we placed into service development and redevelopment projects aggregating 217,774 RSF that are 90% occupied across three submarkets and delivered incremental annual net operating income of $15 million.
A significant 2Q25 delivery was 119,202 RSF at 10935, 10945, and 10955 Alexandria Way located in this asset at the One Alexandria Square Megacampus in our Torrey Pines submarket.
Improvements of 100 bps and 110 bps in initial stabilized yield and initial stabilized yield (cash basis), respectively, were primarily driven by leasing space at higher rental rates than previously underwritten and a $23 million reduction in total investment due to construction cost savings from overall project efficiencies.
Annual net operating income (cash basis) from recently delivered projects is expected to increase by $57 million upon the burn-off of initial free rent, which has a weighted-average burn-off period of approximately three months.
During 1Q25-4Q26, we expect to deliver annual net operating income representing nearly 9% of the total net operating income for 2024.
74% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.
Development and Redevelopment Projects
Incremental
Annual Net
Operating Income
RSF
Occupied/
Leased/
Negotiating
Percentage
(dollars in millions)
Placed into service:
1Q25
$ 37
309,494
100 %
2Q25
15
(1)
217,774
90
Placed into service in 1H25
$ 52
(1)
527,268
96 %
Expected to be placed into service:
3Q25 through 4Q26
$ 139
(2)
1,155,041
(3)
84 %
(4)
2027 through 2028(5)
261
3,270,238
28 %
$ 400
(1)
Excludes incremental annual net operating income from recently delivered spaces aggregating 22,005 RSF that are vacant and/or unleased as of June 30, 2025.
(2)
Includes expected partial deliveries through 4Q26 from projects expected to stabilize in 2027 and beyond, including speculative future leasing that is not yet fully committed. Refer to the initial and stabilized occupancy years under "New Class A/A+ development and redevelopment properties: current projects" in the Supplemental Information for additional details.
(3)
Represents the RSF related to projects expected to stabilize by 4Q26. Does not include RSF for partial deliveries through 4Q26 from projects expected to stabilize in 2027 and beyond.
(4)
Represents the leased/negotiating percentage of development and redevelopment projects that are expected to stabilize during 2H25 and 2026.
(5)
Includes one 100% pre-leased committed near-term project expected to commence construction in the next year.
Significant leasing progress on temporary vacancy
Occupancy as of June 30, 2025
90.8 %
(1)
Temporary vacancies now leased with future delivery
1.7
(2)
Occupancy as of June 30, 2025, including leased, but not yet delivered space
92.5 %
(1)
Refer to "Summary of properties and occupancy" in the Supplemental Information for additional details.
(2)
Represents temporary vacancy as of June 30, 2025 aggregating 668,795 RSF, primarily in the Greater Boston, San Francisco Bay Area, and San Diego markets, which is leased and expected to be occupied upon completion of building and/or tenant improvements. The weighted-average expected delivery date is January 2, 2026.
Key operating metrics
Net operating income (cash basis) of $2.0 billion for 2Q25 annualized, up $111.4 million, or 5.8%, compared to 2Q24 annualized.
Same property net operating income changes of (5.4)% and 2.0% (cash basis) for 2Q25 over 2Q24 and (4.3)% and 3.4% (cash basis) for 1H25 over 1H24, which include lease expirations that became vacant during 1Q25 aggregating 768,080 RSF across six properties and four submarkets with a weighted-average lease expiration date of January 21, 2025. Excluding the impact of these lease expirations, same property net operating income changes for 2Q25 would have been (2.1)% and 6.5% (cash basis). As of June 30, 2025, 153,658 RSF was leased with a weighted-average lease commencement date of April 30, 2026, and we expect to favorably resolve the remaining 614,422 RSF over the next several quarters.
General and administrative expenses of $59.8 million for 1H25, representing cost savings of $31.9 million or 35%, compared to 1H24, primarily the result of cost-control and efficiency initiatives on reducing personnel-related costs and streamlining business processes.
As a percentage of net operating income, our general and administrative expenses for the trailing twelve months ended June 30, 2025 were 6.3%, representing the lowest level in the past ten years, compared to 9.2% for the trailing twelve months ended June 30, 2024.
Strong and flexible balance sheet
Key metrics as of or for the three months ended June 30, 2025
$25.7 billion in total market capitalization.
$12.4 billion in total equity capitalization.
2Q25
Target
Quarter
Annualized
Trailing
12 Months
4Q25
Annualized
Net debt and preferred stock to
Adjusted EBITDA
5.9x
5.8x
Less than or equal to 5.2x
Fixed-charge coverage ratio
4.1x
4.3x
4.0x to 4.5x
Key capital events
Upon maturity on April 30, 2025, we repaid $600.0 million of our 3.45% unsecured senior notes payable with proceeds from our February 2025 unsecured senior notes payable offering.
Under our common stock repurchase program authorized in December 2024, we may repurchase up to $500.0 million of our common stock through December 31, 2025. During 2Q25, we did not repurchase any shares. As of July 21, 2025, the approximate value of shares authorized and remaining under this program was $241.8 million.
In August 2025, we expect to repay a secured construction loan held by our consolidated real estate joint venture for 99 Coolidge Avenue, a development project where we have a 76.9% interest. The project is currently 76% leased/negotiating and is expected to deliver in 2026. We expect to repay the loan aggregating $153.5 million which matures in 2026 and bears an interest rate of 7.16% as of June 30, 2025. As a result, we expect to recognize a loss on early extinguishment of debt of $99 thousand for the write-off of unamortized deferred financing costs in 3Q25.
Investments
As of June 30, 2025:
Our non-real estate investments aggregated $1.5 billion.
Unrealized gains presented in our consolidated balance sheet were $7.7 million, comprising gross unrealized gains and losses aggregating $180.2 million and $172.5 million, respectively.
Investment loss of $30.6 million for 2Q25 presented in our consolidated statement of operations consisted of $30.5 million of realized gains, $21.9 million of unrealized losses, and $39.2 million of impairment charges.
Other key highlights
Key items included in net income attributable to Alexandria's common stockholders:
2Q25
2Q24
2Q25
2Q24
1H25
1H24
1H25
1H24
(in millions, except per share
amounts)
Amount
Per Share,
Diluted
Amount
Per Share,
Diluted
Unrealized losses on non-
real estate investments
$ (21.9)
$ (64.2)
$ (0.13)
$ (0.37)
$ (90.1)
$ (35.1)
$ (0.53)
$ (0.20)
Gain on sales of real estate
—
—
—
—
13.2
0.4
0.08
—
Impairment of non-real
estate investments
(39.2)
(12.8)
(0.23)
(0.08)
(50.4)
(27.5)
(0.30)
(0.16)
Impairment of real estate(1)
(129.6)
(30.8)
(0.76)
(0.18)
(161.8)
(30.8)
(0.95)
(0.18)
Increase in provision for
expected credit losses on
financial instruments
—
—
—
—
(0.3)
—
—
—
Total
$ (190.7)
$ (107.8)
$ (1.12)
$ (0.63)
$ (289.4)
$ (93.0)
$ (1.70)
$ (0.54)
(1)
Refer to "Funds from operations and funds from operations per share" in the Earnings Press Release for additional details.
Subsequent event
In July 2025, we executed the largest life science lease in company history with a long-standing multinational pharmaceutical tenant for a 16-year expansion build-to-suit lease, aggregating 466,598 RSF, located on the Campus Point by Alexandria Megacampus in our University Town Center submarket.
The tenant currently occupies two buildings within the Megacampus, one building aggregating 52,620 RSF and another building aggregating 52,853 RSF. At the end of 2025, the tenant will vacate the 52,620 RSF building to allow for the demolition and development of the new purpose-built life science building at this site. Upon delivery of the new build-to-suit property anticipated to occur in 2028, the tenant will vacate the 52,853 RSF building to allow for the construction of an amenity which will service the entire Megacampus.
Industry and corporate responsibility leadership: catalyzing and leading the way for positive change to benefit human health and society
8 Davis Drive on the Alexandria Center® for Advanced Technologies, Research Triangle Megacampus won the prestigious 2025 BOMA (Building Owners and Managers Association) International TOBY (The Outstanding Building of the Year) Award in the Life Science category. The TOBY Awards are the commercial real estate industry's highest recognition honoring excellence in building management and operations. The award represents the company's first win in the International TOBY Awards. Of the four regional winners in the Life Science category that progressed as international TOBY nominees, three were Alexandria-owned, -operated, and -developed facilities. The two additional Alexandria facilities were:
201 Haskins Way on the Alexandria Center® for Life Science, South San Francisco campus in the San Francisco Bay Area and
188 East Blaine Street on the Alexandria Center® for Life Science, Eastlake Megacampus in Seattle.
We released our 2024 Corporate Responsibility Report, which underscores our groundbreaking sustainability approach and the continued execution of our impactful corporate responsibility platform. Notable highlights in the report include:
The continued advancement of our innovative strategy to reduce operational greenhouse gas (GHG) emissions in our asset base through energy efficiency, electrification and alternative energy, and renewable electricity. We reduced operational GHG emissions intensity by 18% from 2022 to 2024, representing ongoing progress toward our 30% reduction target by 2030 relative to a 2022 baseline.
Our steadfast work to catalyze the health and vitality of our local communities and make a tangible positive impact through action-oriented solutions addressing some of the nation's most pressing issues, including mental health and education.
15 Necco Street, a state-of-the-art R&D facility totaling 345,996 RSF in our Seaport Innovation District submarket in Greater Boston, earned LEED Platinum certification, the highest certification level under the U.S. Green Building Council's Core and Shell rating system. Home to the Lilly Seaport Innovation Center, the facility serves as the central hub for Lilly's genetic medicines efforts.
We deepened our commitment to driving educational opportunities for students and supporting STEM education with the opening of the Alexandria Real Estate Equities, Inc. Learning Lab at the Fred Hutch Cancer Center in Seattle. Designed and built by Alexandria in close collaboration with Fred Hutch's Science Education and Facilities teams, the innovative laboratory environment is dedicated to inspiring and training future scientists.
Alexandria was named a recipient of the 2025 Charles A. Sanders, MD, Partnership Award by the Foundation for the National Institutes of Health (FNIH) in recognition of our key role in catalyzing a public-private partnership focused on the development of biomarkers for major depressive disorder to address the urgent need for new medicines for neuropsychology.
Lawrence J. Diamond, co-chief operating officer and regional market director of Maryland, was honored with the Beacon of Service Award at the Maryland Tech Council's 2025 ICON Awards. The award recognizes Mr. Diamond's leadership, service, and profound impact on Maryland's innovation ecosystem and broader community.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. With our founding in 1994, Alexandria pioneered the life science real estate niche. Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. As of June 30, 2025, Alexandria has a total market capitalization of $25.7 billion and an asset base in North America that includes 39.7 million RSF of operating properties and 4.4 million RSF of Class A/A+ properties undergoing construction and one 100% pre-leased committed near-term project expected to commence construction in the next year. Alexandria has a long-standing and proven track record of developing Class A/A+ properties clustered in highly dynamic and collaborative Megacampus environments that enhance our tenants' ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. For more information on Alexandria, please visit www.are.com.
Guidance
June 30, 2025
(Dollars in millions, except per share amounts)
Guidance for 2025 has been updated to reflect our current view of existing market conditions and assumptions for the year ending December 31, 2025. There can be no assurance that actual amounts will
not be materially higher or lower than these expectations. Our guidance for 2025 is subject to a number ...
