Nov. 5, 2009 (PR Newswire) -- PASADENA, Calif., Nov. 5 /PRNewswire-FirstCall/ --
Highlights
Third Quarter 2009:
-- Third Quarter 2009 Funds from Operations Per Share (Diluted)
Attributable to Alexandria Real Estate Equities, Inc.'s Common
Stockholders of $1.13
-- Third Quarter 2009 Earnings Per Share (Diluted) Attributable to
Alexandria Real Estate Equities, Inc.'s Common Stockholders of $0.47
-- Third Quarter 2009 GAAP Same Property Revenues Less Operating Expenses
Up 1%; Nine Months Ended September 30, 2009 GAAP Same Property Revenues
Less Operating Expenses Up 4%
-- Executed 29 Leases for 450,000 Rentable Square Feet; Nine Months Ended
September 30, 2009 Executed 108 Leases for 1,349,000 Rentable Square
Feet
-- Third Quarter 2009 GAAP Rental Rate Increase of 5.6% on Renewed/Released
Space
-- Third Quarter Occupancy Remains Relatively Steady at 94.4%
-- Operating Margins at 73%
-- Reduced $104 Million of Secured Debt Obligations
-- Entered into 15-Year Lease with Eli Lilly and Company as Anchor Tenant
at Alexandria Center for Life Science at East River Science Park -
NYC(TM)
-- Closed Follow-on Common Stock Offering with Net Proceeds of $233 Million
-- Completed Ground-Up Development of One Property at Mission Bay, San
Francisco Aggregating 102,000 Rentable Square Feet Pursuant to a 15-Year
Lease with Pfizer Inc.
-- As of September 30, 2009, Four Properties Aggregating 269,196 Rentable
Square Feet Were Under Contract, LOI or Under Negotiation and Were
Classified as "Held for Sale"
October 2009:
-- Closed 10-Year Secured Loan for $120 Million
-- Sold One Property Previously Classified as "Held For Sale" to a Life
Science User
Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the third quarter ended September 30, 2009.
For the third quarter of 2009, we reported funds from operations ("FFO") attributable to Alexandria Real Estate Equities, Inc.'s common stockholders of $50,609,000, or $1.13 per share (diluted), compared to FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders of $46,273,000, or $1.45 per share (diluted), for the third quarter of 2008. Comparing the third quarter of 2009 to the third quarter of 2008, FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders increased 9% and FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders decreased 22%. The weighted average number of basic and diluted common stock outstanding for calculating FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders totaled 39,094,018 and 44,903,051, respectively, for the third quarter of 2009 and 31,694,711 and 31,807,455, respectively, for the third quarter of 2008. For the nine months ended September 30, 2009, we reported FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders of $180,427,000, or $4.49 per share (diluted), compared to FFO attributable to
Alexandria Real Estate Equities, Inc.'s common stockholders of $130,317,000, or $4.11 per share (diluted), for nine months ended September 30, 2008. Comparing the nine months ended September 30, 2009 to the nine months ended September 30, 2008, FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders and FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders increased 38% and 9%, respectively.
FFO is a non-GAAP measure widely used by publicly traded real estate investment trusts. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in its April 2002 White Paper and related implementation guidance. A reconciliation of net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders in accordance with United States generally accepted accounting principles ("GAAP") to FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders is included in the financial information accompanying this press release. The primary reconciling item between GAAP net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders and FFO attributable to Alexandria Real Estate Equities, Inc.'s common stockholders is depreciation and amortization expense. Depreciation and amortization expense for the three months ended September 30, 2009 and 2008 was $28,336,000 and $27,447,000, respectively. Depreciation and amortization expense for the nine months ended September 30, 2009 and 2008 was $89,504,000 and $80,260,000, respectively. Net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders for the third quarter of 2009 was $18,203,000, or $0.47 per share (diluted), compared to net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders of $19,319,000, or $0.61 per share (diluted), for the third quarter of 2008. The weighted average number of basic and diluted common stock outstanding for calculating earnings per share attributable to Alexandria Real Estate Equities, Inc.'s common stockholders totaled 39,094,018 and 39,105,950, respectively, for the third quarter of 2009 and 31,694,711 and 31,807,455, respectively, for the third quarter of 2008. Net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders for the nine months ended September 30, 2009 was $83,314,000, or $2.26 per share (diluted), compared to net income attributable to Alexandria Real Estate Equities, Inc.'s common stockholders of $71,521,000, or $2.25 per share (diluted), for the nine months ended September 30, 2008.
For the third quarter of 2009, we executed a total of 29 leases for approximately 450,000 rentable square feet of space at 21 different properties (excluding month-to-month leases). Of this total, approximately 207,000 rentable square feet related to new or renewal leases of previously leased space and approximately 243,000 rentable square feet related to developed, redeveloped or previously vacant space. Of the 243,000 rentable square feet, approximately 144,000 rentable square feet were delivered from our development or redevelopment programs, with the remaining approximately 99,000 rentable square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 5.6% higher (on a GAAP basis) than rental rates for expiring leases.
For the nine months ended September 30, 2009, we executed a total of 108 leases for approximately 1,349,000 rentable square feet of space at 49 different properties (excluding month-to-month leases). Of this total, approximately 788,000 rentable square feet related to new or renewal leases of previously leased space and approximately 561,000 rentable square feet related to developed, redeveloped or previously vacant space. Of the 561,000 rentable square feet, approximately 252,000 rentable square feet were delivered from our development or redevelopment programs, with the remaining approximately 309,000 rentable square feet related to previously vacant space. Rental rates for these new or renewal leases were on average approximately 4.9% higher (on a GAAP basis) than rental rates for expiring leases.
During the nine months ended September 30, 2009, we sold three properties aggregating 64,218 rentable square feet to a life science user. These properties were located in the San Diego market and were sold for approximately $14.5 million at a gain of approximately $2.2 million. As of September 30, 2009, four properties with approximately 269,196 rentable square feet were classified as "held for sale." In October 2009, we sold one property located in the Suburban Washington, D.C. market aggregating 47,558 rentable square feet to a life science user for approximately $6.4 million.
In July 2009, we announced that we entered into a 15-year lease with Eli Lilly and Company ("Lilly") as the anchor tenant at the Alexandria Center for Life Science at East River Science Park - NYC(TM) ("the Alexandria Center"), a highly advanced state-of-the-art urban science park in New York City. Lilly has leased approximately 91,000 rentable square feet, as well as an additional approximately 9,000 rentable square feet of core services space, at the Alexandria Center, which will become the new research headquarters for ImClone Systems, a wholly-owned subsidiary of Lilly, and New York City's life science collaboration and translational research epicenter.
Also in July 2009, we completed the ground-up development of one property located in the San Francisco Mission Bay submarket aggregating 102,000 rentable square feet pursuant to a 15-year lease with Pfizer Inc.
In October 2009, we closed on a 10-year secured loan with an insurance company approximating $120 million. The loan is secured by several of our operating properties.
As of September 30, 2009, approximately 88% of our leases (on a rentable square footage basis) were triple net leases, requiring tenants to pay substantially all real estate taxes and insurance, common area and other operating expenses, including increases thereto. In addition, approximately 7% of our leases (on a rentable square footage basis) required the tenants to pay a majority of operating expenses. Additionally, approximately 92% of our leases (on a rentable square footage basis) provided for the recapture of certain capital expenditures, and approximately 93% of our leases (on a rentable square footage basis) contained effective annual rent escalations that were either fixed or indexed based on the consumer price index or another index.
Based on our current view of existing market conditions and certain current assumptions, our updated guidance for FFO per share (diluted) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders and earnings per share (diluted) attributable to Alexandria Real Estate Equities, Inc.'s common stockholders is as follows:
2009
----
FFO per share (diluted) (1) $5.52 (1)
Earnings per share (diluted) (1) $2.69 (1)
(1) Our guidance for 2009 includes a $7.2 million gain for a cash payment
related to real estate acquired in November 2007 and a $11.3 million
gain on early extinguishment of debt recognized during the nine
months ended September 30, 2009.
