Alexandria Real Estate Equities, Inc.: Form 10-Q for the period ended Sep 30, 2026

Forward-looking statements

Certain information and statements included in this quarterly report on Form 10-Q, including, without limitation, statements

containing the words “forecast,” “guidance,” “goals,” “projects,” “estimates,” “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,”

“seeks,” “should,” “targets,” or “will,” or the negative of those words or similar words, constitute “forward-looking statements” within the

meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as

amended. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions, and financial trends that

may affect our future plans of operations, business and financial strategy, results of operations, and financial position. A number of

important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking

statements, including, but not limited to, the following:

• Operating factors, such as a failure to operate our business successfully in comparison to market expectations or in

comparison to our competitors, our inability to obtain capital when desired or refinance debt maturities when desired, and/

or a failure to maintain our status as a REIT for federal tax purposes;

• Market and industry factors, such as adverse developments concerning the life science industry and/or our tenants;
• Government factors, such as any unfavorable effects resulting from federal, state, local, and/or foreign government

policies, laws, and/or funding levels;

• Global factors, such as negative economic, social, political, financial, credit market, banking conditions, and/or regional

armed hostilities; and

• Other factors, such as climate change, cyber intrusions, and/or changes in laws, regulations, and financial accounting

standards.

This list of risks and uncertainties is not exhaustive. Additional information regarding risk factors that may affect us is included

under Part I, “Item 1A. Risk factors”; and Part II, “Item 7. Management’s discussion and analysis of financial condition and results of

operations” in our annual report on Form 10-K for the year ended December 31, 2025, and under respective sections in this quarterly

report on Form 10-Q. Readers of this quarterly report on Form 10-Q should also read our other documents filed publicly with the SEC

for further discussion regarding such factors.

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Overview

We are a Maryland corporation formed in October 1994 that has elected to be taxed as a REIT for federal income tax

purposes. 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 and advanced technology innovation cluster locations, including Greater Boston, San Diego, the San Francisco Bay

Area, Seattle, Maryland, Research Triangle, and New York City. As of September 30, 2026, Alexandria has a total market capitalization

of $21.01 billion and an asset base that includes 36.5 million RSF of operating properties and 1.9 million RSF of Class A/A+ properties

undergoing construction.

We develop dynamic Megacampus ecosystems that enable and inspire some of the world’s most brilliant minds and innovative

companies to create life-changing scientific and technological innovations. We believe in the utmost professionalism, humility, and

teamwork. Our tenants include multinational pharmaceutical companies; life science product, service, and device companies; public

and private biotechnology companies; advanced technologies companies; biomedical institutions; U.S. government institutions; and

others. 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.

As of September 30, 2026:

• Investment-grade or publicly traded large cap tenants represented 57% of our annual rental revenue;
• Approximately 97% of our leases (on an annual rental revenue basis) contained effective annual rent escalations

approximating 3% that were either fixed or indexed based on a consumer price index or other index;

• Approximately 91% of our leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay

substantially all real estate taxes, insurance, utilities, repairs and maintenance, common area expenses, and other

operating expenses (including increases thereto) in addition to base rent;

• Approximately 91% of our leases (on an annual rental revenue basis) provided for the recapture of capital expenditures

(such as HVAC maintenance and/or replacement, roof replacement, and parking lot resurfacing) that we believe would

typically be borne by the landlord in traditional office leases; and

• 74% of our leasing activity during the last twelve months was generated from our existing tenant base.

A key element of our business and financial strategy is our unique focus on Class A/A+ properties primarily located in

collaborative Megacampus ecosystems in AAA life science and advanced technology innovation clusters. Our Megacampus

ecosystems are designed for optionality and scalability, offering our tenants a clear path to address their growth requirements, including

through our future developments and redevelopments. Strategically located near top academic and medical research institutions and

equipped with curated amenities and services and convenient access to transit, our Megacampus ecosystems are designed to support

our tenants in attracting and retaining top talent and in meeting our tenants’ growth needs, which we believe is a key driver of tenant

demand for our properties. Our strategy also includes drawing upon our deep, broad, and long-standing real estate and life science

industry relationships in order to retain tenants, identify and attract new and leading tenants, and source additional real estate.

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Executive summary

Operating results

(1) Includes $637.9 million of real estate impairment charges related to assets held for sale for the three months ended September 30, 2026. Refer to Note 3 – “Investments

in real estate” to our unaudited consolidated financial statements in Item 1 for additional details.

For additional information, refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria

Real Estate Equities, Inc.’s common stockholders” under “Definitions and reconciliations.”

A best-in-class REIT with a high-quality and diverse tenant base, strong margins, and long lease terms

Strong and flexible balance sheet with significant liquidity; top 20% credit rating ranking among all publicly traded U.S. REITs; long-

duration remaining debt term (as of September 30, 2026)

• $21.01 billion in total market capitalization.
• $8.11 billion in total equity capitalization.
• Net debt and preferred stock to Adjusted EBITDA:
• Target for the three months ending December 31, 2026, annualized: 5.6x–6.2x.
• For the three months ended September 30, 2026 annualized: 6.9x; 6.6x on a pro forma basis reflecting the October 2026

closing of the sale of our partial interest in the Campus Point by Alexandria joint venture.

• Significant liquidity of $4.56 billion and closed extension of our $5.0 billion unsecured senior line of credit to 2032.
• Only 6% of our total debt matures through 2028.
• 11.6-year weighted-average remaining debt term, the longest among S&P 500 REITs.
• Total debt and preferred stock, as adjusted, to gross assets of 30%.
• Intermediate-term goal for leverage: mid-5x range.

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Solid 3Q26 total leasing volume exceeding 1.2 million RSF; highest total quarterly volume since 4Q24

• Total leasing volume surpassed 1.2 million RSF during the three months ended September 30, 2026, exceeding the average

quarterly leasing volume of 979,822 RSF for the period from the first quarter of 2025 through the second quarter of 2026 by

approximately 256,000 RSF, and representing the highest quarterly volume since the fourth quarter of 2024.

• Includes 450,961 RSF of leasing of previously vacant space, the second-highest quarterly amount in company history.
• 74% of our leasing activity during the last twelve months was generated from our existing tenant base.

Ongoing execution of Alexandria’s capital recycling strategy

We plan to continue funding a significant portion of our capital requirements for the year ending December 31, 2026 through

dispositions of land, non-core dispositions, and sales of partial interests. In October 2026, we completed the sale of an approximately

29% noncontrolling interest in Campus Point by Alexandria Megacampus for $475.0 million to a new joint venture partner.

(dollars in millions)

Occupancy of operating properties and leasing progress on temporary vacancy

(1) Refer to “Resolution of certain construction projects under evaluation and reduction of capital spend and funding needs” within this section for additional details.

(2) Represents executed leases aggregating 1.3 million RSF within our operating portfolio, with occupancy expected upon completion of building and/or tenant

improvements. The weighted-average expected occupancy date is approximately June 2027, with expected annual rental revenue of approximately $52 million. We

expect 32% of the total 1.3 million RSF to be occupied by December 31, 2026. The RSF presented excludes 686 thousand RSF of pre-leased space related to

development and redevelopment projects under construction with future delivery. Refer to “New Class A/A+ development and redevelopment properties: under

construction” in Item 2 for additional details.

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Key operating metrics

• Same property net operating income changes
• Decreased by 6.7% and 2.8% (cash basis) for the three months ended September 30, 2026, compared to the three

months ended September 30, 2025.

• Decreased by 9.2% and 8.4% (cash basis) for the nine months ended September 30, 2026, compared to the nine months

ended September 30, 2025.

• The decline was due to a decrease in same property occupancy, primarily driven by previously disclosed key lease

expirations with expected downtime aggregating 282,878 RSF and 1.2 million RSF in the three and nine months ended

September 30, 2026, respectively, with weighted-average lease expiration dates of August 2026 and April 2026,

respectively.

• Same properties average occupancy:
• 88.1% for the three months ended September 30, 2026, compared to 91.7% same properties average occupancy for the

three months ended September 30, 2025.

• 88.6% for the nine months ended September 30, 2026, compared to 92.8% same properties average occupancy for the

nine months ended September 30, 2025.

Resolution of certain construction projects under evaluation and reduction of capital spend and funding needs

• We entered into a purchase and sale agreement with an institutional user for the sale of 421 Park Drive on the Alexandria

Center® for Life Science – Fenway Megacampus, aggregating 339,668 RSF, which represents substantially all of our

development project at this location. The disposition is expected to generate significant sales proceeds and to reduce future

potential construction spend by approximately $136 million, with closing anticipated in the fourth quarter of 2026.

• We have executed leases of 66,859 RSF and have additional leases under negotiation of 100,684 RSF for advanced

technology use at our project at 311 Arsenal Street in The Arsenal on the Charles Megacampus. This activity enables us to

pivot the redevelopment project to a lower-cost advanced technology use, reducing future potential construction spend by

approximately $220 million. As a result of this leasing progress, the entire project aggregating 339,020 RSF was reclassified

from redevelopment to operating as of September 30, 2026.

• We continue to evaluate the business and financial strategy for three remaining projects aggregating 667,002 RSF, including

options that could further reduce future construction funding requirements.

• Non-income-producing assets as of September 30, 2026 are 12% of gross assets, a reduction of 800 bps since December 31,

Alexandria’s development and redevelopment pipeline delivered incremental annual net operating income of $40 million during 3Q26,

with an additional $85 million expected from projects to be delivered by 4Q28

• During the three months ended September 30, 2026, we placed into service 529,061 RSF of development and redevelopment

projects across multiple submarkets. The projects were 84% occupied at delivery and generated incremental annual net

operating income aggregating $40 million. Key deliveries for the three months ended September 30, 2026 included:

• 198,992 RSF to Novo Nordisk for its R&D Center at 60 Sylvan Road on the Alexandria Center® for Life Science –

Waltham Megacampus.

• 174,662 RSF at 99 Coolidge Avenue located on a Megacampus in Watertown.
• Annual net operating income (cash basis) from recently delivered projects is expected to increase by $67 million upon the

burn-off of initial free rent, which has a weighted-average remaining period of approximately four months.

• 80% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.

(dollars in millions)

(1) Excludes future incremental annual net operating income from spaces placed into service that were vacant and/or unleased at delivery.

(2) Excludes 667,002 RSF of redevelopment projects currently under evaluation.

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Continued successful management of general and administrative expenses

• For the trailing twelve months ended September 30, 2026, general and administrative expenses represented 7.5% of net

operating income, nearly half the average of other S&P 500 REITs for 2023–2025.

• Compared to 2024, we continue to expect approximately $76 million of cumulative general and administrative expense savings

for the two-year period 2025 and 2026 (based on the midpoint of our 2026 guidance range). Some of the cost savings in 2025

were temporary, and approximately half of the cost reductions achieved in 2025 are expected to continue in 2026 (based on

the midpoint of our 2026 guidance range).

Key capital events

• In August 2026, we completed a public offering of $1.00 billion aggregate principal amount of 7.250% Series A fixed-to-fixed

reset rate junior subordinated notes due 2057. The notes will initially bear interest at 7.250% per year through, but excluding,

February 15, 2032. Thereafter, the interest rate will reset every five years to the five-year U.S. Treasury rate plus 2.889%,

subject to a minimum interest rate of 7.250%. We may elect to defer interest payments for up to five consecutive years, subject

to the terms of the notes, including certain restrictions on paying dividends and repurchasing equity. We may also redeem at

100% of principal plus accrued and unpaid interest during the period beginning November 17, 2031 and ending on

February 15, 2032, and thereafter on any interest payment date. This issuance supports our liquidity, capital structure and

deleveraging objectives while receiving 50% equity treatment from key rating agencies for purposes of the computations of

leverage, fixed charges, and other credit metrics.

• In September 2026, we closed our amended and restated $5.0 billion unsecured senior line of credit, which, among other

changes, extended the maturity date from January 22, 2030 to January 22, 2032, including extension options that we control.

The amendment also reduced the applicable borrowing rate to SOFR plus 0.725% from SOFR plus 0.835%. In connection with

the amendment, we recognized a loss on early extinguishment of debt of approximately $3.3 million related to the partial write-

off of unamortized loan fees.

• Under our common stock repurchase program authorized in December 2025, we may repurchase up to $500.0 million of our

common stock through December 31, 2026. As of the date of this report, no shares have been repurchased under this

program and $500.0 million remains available for future share repurchases.

Dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment

• Common stock dividend declared of $0.72 per share for the three months ended September 30, 2026, consistent with the

preceding quarter. The declared dividend per common share reflects our commitment to maintaining the strength of our

balance sheet, enhancing financial flexibility, supporting liquidity, and sharing cash flows with our stockholders.

• Significant net cash provided by operating activities, as adjusted, retained for reinvestment aggregating $2.55 billion for the

years ended December 31, 2022 through 2025 and the midpoint of our 2026 guidance range.

• Dividend yield of 6.1% as of September 30, 2026 and dividend payout ratio of 47% for the three months ended September 30,

Investments

• As of September 30, 2026:
• Our non-real estate investments aggregated $1.74 billion.
• Unrealized gains presented in our consolidated balance sheet were $243.9 million, comprising gross unrealized gains and

losses aggregating $322.4 million and $78.5 million, respectively.

• Investment income of $24.0 million for the three months ended September 30, 2026, presented in our consolidated statement

of operations, consisted of $16.0 million of realized gains, $21.6 million of unrealized gains, and $13.6 million of impairment

charges.

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Trends that may affect our future results

Currently identified key market trends and uncertainties that had or may have a negative effect on our business are discussed

below. Although we seek to minimize the risks posed by these trends and uncertainties as discussed in the mitigating factors section

below, there can be no assurance that these measures will be successful in preventing or mitigating material impacts on our future

results of operations, financial position, and cash flows. Refer to “Item 1A. Risk factors” in Part I of our annual report on Form 10-K for

the year ended December 31, 2025 for discussion of additional risks we face.

New and existing supply and reduced demand for life science space may continue to negatively affect our rental rates,

occupancy, and operating results.

• Influx of supply. During and after the COVID-19 pandemic, the shift toward hybrid and remote work arrangements as well as

exceptionally strong demand for life science space, driven by public health urgency and supported by historically low interest

rates, prompted certain office and other real estate investors to repurpose underutilized office spaces into laboratory facilities,

initiating a wave of new development activity across the sector. Our success and the success of other laboratory operators

prompted new and existing developers to commence speculative redevelopment and/or development laboratory projects in

anticipation of demand for such facilities. These conversion and speculative development projects have contributed to a

significant influx of new laboratory properties in our top three markets—Greater Boston, San Diego, and San Francisco Bay

Area. Life science real estate availability in these top markets—measured as the percentage of life science RSF available

relative to total life science RSF—rose to approximately 29% during 2025, from approximately 4% in 2021. This surge created

supply that materially exceeded current demand. As pandemic-driven urgency faded, the amount of available space became

the dominant factor influencing tenant activity, with absorption unable to match the influx of supply.

• Decrease in demand. Adding to these challenges, life science tenant demand—after reaching historically high levels in 2021—

has moderated significantly. The average tenant demand, measured by life science tenants’ RSF requirements, declined by

more than 60% in 2025 compared to 2021 across our top three markets: Greater Boston, San Diego, and San Francisco Bay

Area. This reflected a shift from extraordinary tenant demand driven by pandemic-related urgency to levels more consistent

with historical pre-pandemic norms, particularly those observed during 2016-2018. Importantly, this shift occurred amid

substantially higher available supply, as discussed above, further negatively impacting occupancy and rental rates in top life

science markets.

Exacerbating the recent demand trend, the life science industry faced an unusual convergence of macroeconomic, regulatory,

policy, and political challenges in 2025 that continued to affect the sector during 2026. These included consequential shifts in

leadership at the U.S. Department of Health and Human Services (“HHS”), tariff-related measures, operational, leadership,

and staff disruptions at the NIH and the FDA, threatened reductions in NIH funding of biomedical research and proposals to

limit NIH funding of indirect grant costs, heightened scrutiny of pharmaceutical pricing, and increased global competition from

China, discussed below. Collectively, these factors, including those described below, increased uncertainty, leading tenants to

defer leasing commitments and expansion decisions pending greater clarity. As a result, absorption of available space has

been notably slower.

• Prolonged biotech bear market and capital constraints. The life science sector experienced the fifth consecutive year

of a broad-based biotech bear market in 2025. Life science venture capital fundraising declined to its lowest level since

2016, reducing overall levels of venture capital funds available to deploy in the future. Life science venture funds also

continued to be highly risk averse, focusing investments on clinical-stage and asset-based opportunities that may not

drive significant laboratory space needs. The initial public offering market for biotech companies remained largely closed

in 2025, eliminating a key source of liquidity and growth capital, but began to reopen in 2026. Elevated financing costs and

broader economic and regulatory uncertainty continued to constrain access to debt and equity financing. These factors

slowed company formation, reduced headcount growth, and delayed laboratory expansion decisions, directly impacting

leasing demand for specialized life science space. Although capital markets and leasing activity showed early signs of

improvement in 2026, the recovery remained uneven, and laboratory demand continued to be constrained by disciplined

capital allocation and significant excess supply.

• Regulatory and policy factors affecting absorption. At the same time, the regulatory environment experienced

significant disruption. The FDA saw more than 50% turnover in senior leadership during the first half of 2025,

accompanied by employee layoffs and delays in regulatory review decisions. Leadership turnover continued in 2026,

including the departure of the FDA Commissioner in May 2026. Changing expectations related to clinical trial requirements

and flexibility for rare diseases with large unmet needs created additional uncertainty around development timelines for

certain regulated products. These conditions have reduced some tenants’ near-term confidence in expansion and capital

investment decisions.

Biomedical research institutions faced increased uncertainty around federal funding policies throughout 2025. The

proposed 15% cap on NIH institutional indirect grant spending, subsequently ruled unlawful by an appellate court, raised

concerns for biomedical research institutions about the ability to recover infrastructure and operating costs, which

materially constrained incremental real estate demand among certain federally supported entities.

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In April 2026, the Trump administration discontinued its legal effort to implement the proposed 15% cap on NIH indirect

cost reimbursements, allowing the federal court ruling blocking the policy to become final. Existing negotiated

reimbursement rates remain in effect. Accordingly, NIH-funded research institutions continue to operate under the current

reimbursement framework.

Further, government actions aimed at reducing U.S. prescription drug prices have heightened uncertainty regarding future

returns on pharmaceutical and biotechnology investments. This has weighed on risk appetite across the sector and

constrained investment into some areas of research and development. As a result, some tenants have delayed or scaled

back expansion plans, reducing leasing activity and occupancy levels.

At the same time, global competition for life science research has intensified, with certain foreign markets, especially

China, rapidly gaining ground as biotechnology leaders through centralized funding and faster regulatory approval

timelines. Coupled with immigration-related restrictions implemented in the U.S. during 2025 that limit access to

international research talent, these policy actions not only affect current activities but also pose a significant threat to the

long-term viability of the U.S. biomedical industry. The cumulative effect of these developments may significantly reduce

tenant demand for U.S. life science real estate. Refer to “Item 1A. Risk factors” in our annual report on Form 10-K for

additional details.

• Impact on our business. The surge in supply and decrease in demand for life science space have led to industry-wide elevated

vacancy rates, slower leasing activity, pressure on rental rates, higher lease concessions, and increased competition for

tenants. Our operating occupancy declined from 90.9% as of December 31, 2025 to 87.1% as of September 30, 2026, and we

project our operating occupancy to be approximately 87.0% as of December 31, 2026, representing the midpoint of our

guidance range for occupancy percentage in North America as of December 31, 2026.

To remain competitive, we have realized lower rental rate changes on renewed and re-leased spaces and have offered more

tenant improvement allowances or additional tenant concessions, including free rent, to retain existing tenants or attract new

tenants. We project our rental rate on renewed and re-leased spaces to decrease by approximately 5.0% for the year ending

December 31, 2026, representing the midpoint of our guidance range. Furthermore, to maintain long-term tenant relationships

and sustain occupancy levels within our core assets, our existing operating properties may require additional revenue- and

non-revenue-enhancing capital expenditures earlier than typically expected.

The table below reflects a trend of increasing revenue- and non-revenue-enhancing capital expenditures, including tenant

improvement expenditures. The table also presents the trend, on a per RSF basis, of increasing tenant improvement

allowance, leasing commissions, and free rent concessions, and of less favorable changes in rental rates related to our

renewed/re-leased spaces, as well as decreases in our operating occupancy (dollars in thousands, except per RSF amounts):

Additionally, we have key lease expirations with expected downtime in 2027 aggregating 1.4 million RSF as of September 30,

2026 with a weighted-average lease expiration date of March 2027. These spaces are expected to become vacant at lease

expiration and re-leased to new tenants. We expect downtime on the 1.4 million RSF to be approximately 9 to 24 months on a

weighted-average basis. In addition, we have identified 717,546 RSF of key lease expirations in 2028 that are expected to

have downtime of approximately 9 to 24 months on a weighted-average basis. Considering elevated laboratory supply, there

can be no assurance that we will be able to re-lease some or all of this space on acceptable terms, without significant capital

expenditures, or within anticipated time frames, even at reduced rates.

As of September 30, 2026, we anticipate that 905,582 RSF of our projects undergoing construction will be placed into service

from October 1, 2026 through 2028 and will generate $85 million in future incremental annual net operating income. These

projects are 77% leased or under lease negotiations as of September 30, 2026. Furthermore, we have an additional 667,002

RSF of projects under evaluation which are 8% leased or under lease negotiations. For these projects, we are evaluating the

business and financial strategy, including continuing construction, repositioning for advanced technology or other non-

laboratory use, selling, or pausing development or redevelopment. If we decide to sell or pause, such actions could negatively

impact our FFO and operating metrics. Alternatively, if we decide to invest limited capital, we may place some or all of these

projects into operation, which could temporarily reduce our operating occupancy until the projects are leased and occupied.

Landlord-funded tenant improvement allowances have increased significantly for first-generation space, including development

and redevelopment projects, with most space in shell condition requiring landlords to fund the full build-out cost. This trend

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places additional pressure on projected returns and overall economics, and further challenges our ability to attract and secure

tenants for the remaining unleased RSF related to these projects at the expected rates, or at all, which could result in a

shortfall or delay in the commencement of the projected incremental annual net operating income.

Unfavorable macroeconomic and capital market conditions may continue to adversely affect the value of our real estate and

non-real estate portfolios, which could result in additional significant impairments and may impact our ability to raise capital

efficiently to further our business objectives.

The effective execution of our development and redevelopment activities is contingent on access to the capital required to fund

these projects. We expect construction spending in 2026 to aggregate $1.75 billion at the midpoint of our 2026 guidance

range. This includes significant remaining construction costs to complete our active pipeline and anticipated increases in both

revenue- and non-revenue-enhancing capital expenditures in our operating portfolio. As a result, our capital plan and leverage

management strategy have increased our reliance on real estate dispositions and sales of partial interests to generate capital.

However, current real estate market conditions, including lower property valuations, increased capitalization rates, and higher

short-term and long-term interest rates, will likely adversely affect the timing and pricing of such transactions.

For 2027, we are continuing to apply a disciplined approach to reduce construction spending and expect construction spending

in 2027 will be primarily comprised of (i) revenue- and non-revenue-enhancing capital expenditures primarily to support the

leasing of vacant space and renewals and re-leasing of space at our operating properties and (ii) amounts required to

complete our development and redevelopment projects that are expected to stabilize through 2028 and are 77% leased/

negotiating.

• Lower property valuations and increased capitalization rates. A portion of our projected construction spending and other uses

of capital is expected to be funded through dispositions, sales of partial interests, and other capital sources (including junior

subordinated notes). Real estate investments are generally less liquid than many other investment types, which can present

challenges in selling our properties in a timely manner or at desirable prices, especially in an environment of oversupply and

high interest rates.

In addition to the factors discussed above specifically affecting demand for life science space, broader real estate demand has

also been impacted by macroeconomic conditions, particularly elevated interest rates. Following the onset of the COVID-19

pandemic, the U.S. Federal Reserve reduced the federal funds target range to 0%–0.25% in March 2020 and maintained that

near-zero range until March 2022. To address inflation concerns, the U.S. Federal Reserve then increased the target range

rapidly, reaching 5.25%–5.50% in July 2023, where it remained for an extended period. Although the U.S. Federal Reserve

reduced the federal funds target range to 4.25%–4.50% during 2024 and further to 3.50%–3.75% during 2025, interest rates

remain elevated. In September 2026, the U.S. Federal Reserve increased the target range to 3.75%–4.00%. Due to a variety

of factors, the yield on the 10-year U.S. Treasury note increased significantly in October 2026, exceeding 5% and reaching its

highest level since 2002. This continues to limit access to debt and/or equity financing for prospective buyers of real estate

assets. All other aspects being equal, such challenges for buyers contribute to an excess of properties available for sale, which

exerts downward pressure on property valuations and elevates capitalization rates, adversely impacting the sales proceeds we

can generate from our real estate asset sales.

The oversupply of life science real estate assets, discussed above, combined with high interest rates and reduced market

liquidity, has contributed to a prolonged period of lower property valuations and higher capitalization rates, resulting in

significant real estate impairments and making it more challenging to execute asset sales within the expected timelines and at

favorable pricing. In 2026, we expect to complete dispositions and sales of partial interests of approximately $1.90 billion at the

midpoint of our 2026 guidance range. However, we may not be able to achieve this and/or other targets disclosed in our 2026

guidance as a result of the uncertainties discussed in this section as well as in “Item 1A. Risk factors” in Part I of our annual

report on Form 10-K for the year ended December 31, 2025.

The table below presents trends in total dispositions and impairments of real estate and capitalization rates associated with

dispositions and sales of partial interests in our real estate assets over the last several years (dollars in thousands), partly

attributable to the quality of core and non-core assets sold during each period.

(1) Capitalization rates are calculated only for stabilized operating assets sold. Refer to “Capitalization rates” under “Definitions and reconciliations” for additional

information.

(2) Represents the weighted-average capitalization rate for stabilized operating assets sold in 2025, which accounted for only 20% of the aggregate sales price

of dispositions and sales of partial interests in 2025.

(3) We are not able to forecast impairments or capitalization rates for future periods without unreasonable effort due to the inherent difficulty of forecasting the

timing and amount of transactions that depend on market conditions outside of our control.

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For additional information about our dispositions and real estate impairments recognized during the three and nine months

ended September 30, 2026, refer to “Sales of real estate assets and impairment of real estate” in Note 3 – “Investments in real

estate” to our unaudited consolidated financial statements in Item 1.

For 2026, we have established a disposition and joint venture program aggregating approximately $1.90 billion at the midpoint

of our 2026 guidance range for dispositions and sales of partial interests. We may utilize multiple sources of capital, including

land and non-core dispositions, sales of partial interests, and the issuance of $1.00 billion junior subordinated notes offering

completed during the three months ended September 30, 2026, to fund (i) construction focused on highly leased

developments and lease-up of vacant space, and (ii) repayment of senior unsecured debt sufficient to achieve our net debt

and preferred stock to Adjusted EBITDA – fourth quarter of 2026 annualized target of 5.6x to 6.2x. We continue to evaluate

available alternatives and expect to execute on cost-efficient sources of capital under prevailing market conditions. We do not

anticipate the issuance of any common equity during the year ending December 31, 2026.

In 2026, we are committed to dispose of certain assets classified as held for sale with an aggregate book value of

$702.8 million as of September 30, 2026. To achieve the midpoint of our 2026 guidance range of $1.90 billion for dispositions

and sales of partial interests, we continue to evaluate a broad range of opportunities, including non-core operating properties,

both stabilized and unstabilized, and land parcels.

Under GAAP, real estate assets are evaluated for impairment upon an indication of potential impairment:

• For real estate assets held and used, impairments are recognized if the sum of expected future undiscounted cash

flows, including estimated proceeds from eventual disposition, is less than the carrying amount. In such cases, the

carrying amount is reduced to estimated fair value.

• For real estate assets held for sale, impairments are recognized if fair value less costs to sell is less than the carrying

amount.

• In evaluating potential disposition targets that do not meet the criteria for held for sale classification, we apply a

probability-weighted approach, and in each case, no impairment charge is currently required.

If circumstances change, including changes in expected cash flows, capitalization rates, or market conditions, we may incur

additional material real estate impairments in 2026. For additional information on accounting for real estate impairments, refer

to “Impairment of long-lived assets” in Note 2 – “Summary of significant accounting policies” to our unaudited consolidated

financial statements in Item 1.

We are focused on our large-scale non-core disposition program in 2026, although some of these dispositions could close in

2027. As of September 30, 2026, 80% of our annual rental revenue is from our Megacampus platform, and we expect this

percentage to continue to grow over time, in part through our disposition program.

• Increased cost and limited availability of capital. Our 2026 guidance assumes a reduction of our outstanding unsecured debt

by approximately $675.0 million, at the midpoint of our 2026 guidance range.

• In August 2026, we completed a public offering of $1.0 billion aggregate principal amount of 7.250% junior

subordinated notes due 2057. The notes will initially bear interest at 7.250% per year through, but excluding,

February 15, 2032. Thereafter, the interest rate will reset every five years to the five-year U.S. Treasury rate plus

2.889%, subject to a minimum interest rate of 7.250%. We may elect to defer interest payments for up to five

consecutive years, subject to the terms of the notes, including certain restrictions on paying dividends and

repurchasing equity. We may also redeem at 100% of principal plus accrued and unpaid interest during the period

beginning November 17, 2031 and ending on February 15, 2032, and thereafter on any interest payment date. This

issuance supports our capital structure and deleveraging objectives while receiving 50% equity treatment from key

rating agencies.

• In February 2026, we completed tender offers to repurchase an aggregate debt principal amount of $1.33 billion

across a portion of our outstanding 4.00% Senior Notes due 2050, 3.00% Senior Notes due 2051, and 3.55% Senior

Notes due 2052. The tender offers were completed at an average discount of approximately 28%, for a total cash

payment of $952.2 million, resulting in the extinguishment of approximately $380 million of debt. We funded the

$952.2 million payment through the issuance of $750.0 million of 5.25% unsecured senior notes due 2036 and

approximately $200 million of short-term borrowings under our commercial paper program.

• In January 2026 and April 2026, we repaid, upon maturity, $300.0 million of 4.30% unsecured senior notes and

$350.0 million of 3.80% unsecured senior notes, respectively. These repayments, aggregating $650 million, were

temporarily funded through borrowings under our commercial paper program.

Achievement of our targeted $675.0 million net unsecured debt reduction remains dependent on our ability to generate

proceeds during 2026 from planned real estate dispositions and sales of partial interests.

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These expectations assume our ability to execute these transactions on acceptable terms. If we are unable to sell real estate

assets at our targeted prices or within our expected timeframes, we may need to reduce the projected amount of debt

repayment, delay the timing of such repayment, and/or increase our reliance on additional debt financing to fund the

approximately $1.75 billion of construction spending, based on the midpoint of our 2026 guidance range. Elevated interest

rates may result in debt financing options that are costlier, less accessible, or even unavailable, potentially limiting our ability to

complete our development and redevelopment projects on schedule and thereby delaying our expected incremental annual

net operating income generation.

The table below reflects interest rates related to unsecured senior notes payable and junior subordinated notes payable that

we have issued over the last several years and in 2026 (dollars in thousands). There is no assurance that high debt costs will

not continue into the future.

(1) Includes amortization of loan fees, amortization of debt premiums (discounts), and other bank fees.

• Capitalized Interest.

The table below presents gross interest expense, capitalized interest, and interest expense (in thousands):

For 2026, we expect capitalized interest of approximately $240 million at the midpoint of our guidance range. The decrease

compared to 2025 reflects our actions taken in response to the market conditions, including re-evaluating certain projects,

ceasing or pausing certain pre-construction activities on land and uncommitted projects to conserve capital, and disposing of

certain assets. As a result, we expect our interest expense to increase to approximately $280 million (at the midpoint of our

2026 guidance range) in 2026 from $226.7 million in 2025. Continued macroeconomic and capital market pressures may

necessitate further reevaluation of our plans, including temporary suspension of our construction projects, delay of future

projects, or the sale of non-income-producing assets, which could further reduce our capitalized interest and increase interest

expense.

• Volatility in the valuation of non-real estate investments. We hold strategic investments in publicly traded companies and

privately held entities primarily involved in the life science industry. These investments are subject to market- and sector-

specific risks that can substantially affect their valuation. Like many other industries, the life science industry is susceptible to

macroeconomic challenges, such as ongoing economic and geopolitical uncertainty and a tighter capital environment. These

factors may lead to increased volatility in the valuation of our non-real estate investments.

In such an environment, distributions from our investments—which we may receive as dividends, as liquidation distributions

from our investments in limited partnerships, or as a result of mergers and acquisitions involving our privately held investees—

may be limited and could result in lower realized gains. Gross unrealized gains related to our non-real estate investments held

as of September 30, 2026, December 31, 2025, and December 31, 2024 aggregated to $322.4 million, $184.4 million, and

$228.1 million, respectively. These unrealized amounts are subject to market fluctuations and may not ultimately be realized.

We may not receive distributions from our investments or may face difficulties in monetizing our non-real estate investments at

optimal prices. There can be no assurance that we will be able to realize gains in the future. In periods with limited or no

realized gains, our FFO per share, as adjusted, may be adversely affected.

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For the nine months ended September 30, 2026, we recognized $44.5 million in realized gains on non-real estate investments

and are projecting realized gains of $65 million in 2026 at the midpoint of our guidance range. During the nine months ended

September 30, 2026, we also recognized impairment charges and unrealized gains that reflect continued valuation pressures.

The table below presents components of investment income (losses) on our non-real estate investments (in thousands):

(1) We are not able to forecast investment income (losses) of future periods without unreasonable effort and therefore do not provide the information on a

forward-looking basis. This is due to the inherent difficulty of forecasting the timing and/or amount of items that depend on market conditions outside of our

control.

Unfavorable market conditions could also lead to additional impairments of our investments in privately held entities that do not

report NAV per share, as well as other‑than‑temporary impairments of our non‑real estate investments accounted for under the

equity method.

The realization of any of the foregoing risks could continue to have material adverse impacts on our revenues and operating

performance, including, but not limited to, our income from rentals, net operating income, results of operations, funds from operations,

operating margins, initial stabilized yields (unlevered) on new or existing construction projects, occupancy, rental rates, EPS, FFO per

share, FFO per share, as adjusted, and net cash provided by operating activities, as adjusted. These impacts have adversely affected,

and could continue to adversely affect, our Adjusted EBITDA, which in turn may continue to negatively impact our key metrics such as

Adjusted EBITDA margin, net debt and preferred stock to Adjusted EBITDA, and fixed-charge coverage ratios. This may also impact

our credit ratings and credit rating outlooks. To preserve liquidity and mitigate an increase to our net debt and preferred stock to

Adjusted EBITDA ratio resulting from declines in Adjusted EBITDA, we may seek additional capital by pursuing additional sales of real

estate and non-real estate investments, or through equity offerings, which could be dilutive to existing stockholders. A reduction in

earnings and/or net cash provided by operating activities, as adjusted, could potentially necessitate or make advisable a reduction in

our dividends per share, as determined by our board of directors. Any of the foregoing could further negatively affect our business and

the market value of our common stock.

• Mitigating factors:
• Reinforcing the Megacampus platform as our core growth engine. We believe our Megacampus strategy represents

our most powerful competitive advantage in an oversupplied life science real estate market. Our Megacampus

ecosystems are large-scale environments designed to meet the evolving needs of the world’s leading scientific and

technological organizations, located in life science innovation hubs in close proximity to top academic and medical

research institutions. This proximity is a key driver of tenant demand. These campuses are used in two distinct ways: (i) to

house the research operations of our tenants, and (ii) to recruit and retain the best talent available from a limited pool,

which underscores why their scale, strategic design, and location are critical. With our Megacampus ecosystems, we aim

to provide a superior set of amenities, services, and access to transit. With inspiring design and people-centric amenities,

we believe these campuses enhance our tenants’ confidence in using these spaces as effective recruiting tools. In

contrast, we believe that a significant amount of the competitive supply in the market today consists of isolated facilities

that provide operational space but lack the scale and strategic design that our Megacampus ecosystems deliver.

Our Megacampus ecosystems, which offer both high visibility and a clear path for growth, are designed for scalability to

accommodate our tenants’ growth. Our future development and redevelopment projects aggregate 19.5 million RSF as of

September 30, 2026, of which 80% is concentrated within our Megacampus ecosystems. Their strategic locations and

path for growth serve as powerful incentives for tenants to lease space from us.

We believe our Megacampus strategy has enabled us to capture a greater share of available leasing demand relative to

competitors in our core life science markets, even as overall supply has increased. The strength of this strategy is

reflected in the 2026 performance metrics below, achieved despite challenging macroeconomic, regulatory, policy, and

geopolitical environments:

• Our occupancy of 87.1% as of September 30, 2026:
• Additional 3.7% occupancy is expected from 1.3 million RSF (3.7% of total operating RSF) of leased space that

was temporarily vacant as of September 30, 2026. These spaces are expected to become occupied upon

completion of building and/or tenant improvements, with a weighted‑average expected occupancy date of June

2027, and are expected to generate annual rental revenue of approximately $52 million upon lease

commencement. We expect 32% of the total 1.3 million RSF to be occupied by December 31, 2026.

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• During the nine months ended September 30, 2026, we placed into service development and redevelopment projects

aggregating 1.1 million RSF that are 87% occupied in various submarkets and delivered incremental annual net

operating income of $98 million.

• Expected incremental annual net operating income from projects anticipated to be placed into service by the end of

2028:

• $24 million from 2027 deliveries.
• $61 million from 2028 deliveries.
• Strength of our brand. As a recognized leader in the life science and real estate sectors, Alexandria has successfully

built a diverse and high-quality tenant base. Over the past three decades, we have fostered long-standing relationships

and strategic partnerships with our tenants, which have enabled us to maintain strong occupancy levels and leasing

volume, generate growth in net operating income and cash flows, and effectively navigate various economic cycles. Key

indicators of our brand strength include the following:

• As of September 30, 2026, 74% of our leasing activity during the last twelve months was from our existing tenant

base.

• As of September 30, 2026, 84% of our top 20 tenant annual rental revenue was derived from investment-grade or

publicly traded large cap companies.

• Our tenant collections have remained consistently high, averaging 99.9% from the beginning of 2021 to

September 30, 2026.

• Prudent financial management. Our strong and flexible balance sheet and prudent balance sheet management are key

factors in our ability to navigate macroeconomic uncertainties and capitalize on new opportunities. The strength of our

financial position is highlighted by several key indicators:

• Our significant liquidity of $4.56 billion as of September 30, 2026 provides us the flexibility to address our operational

needs and to pursue strategic opportunities.

• We expect to fund a large portion of our capital requirements through the following sources in 2026:
• $525 million in net cash provided by operating activities, as adjusted, at the midpoint of our 2026 guidance range.
• $105.0 million in capital contributions to fund construction expected from our existing consolidated real estate

joint venture partners from October 1, 2026 through 2027 and beyond.

• $1.90 billion from real estate dispositions and sales of partial interests at the midpoint of our 2026 guidance

range.

• Issuance of $1.00 billion of 7.250% Series A fixed-to-fixed reset rate junior subordinated notes due 2057, which

was completed in August 2026.

• As of September 30, 2026, our credit ratings from S&P Global Ratings and Moody’s Ratings were BBB+ and Baa2,

respectively, which rank in the top 20% among all publicly traded U.S. REITs.

• Net debt and preferred stock to Adjusted EBITDA ratio target: 5.6x to 6.2x for the fourth quarter of 2026, annualized.
• As of September 30, 2026, our fixed-rate debt represents 91.5% of our total debt, which provides predictability in debt

servicing costs. Since 2022, our quarter-end fixed-rate debt has averaged 95.5%.

• Our debt maturity schedule is well laddered, which provides us with financial flexibility and reduces short-term

refinancing risks. As of September 30, 2026, only 6% of our debt matures through 2028.

• As of September 30, 2026, the weighted-average remaining term of our debt is 11.6 years, which is the longest

among S&P 500 REITs, and demonstrates our strategic approach to debt management and our focus on maintaining

manageable annual debt maturities.

• Operational excellence of our team. Alexandria focuses on operational excellence in the direct asset management and

operations of our Labspace® asset base. Our asset management and operations team is composed of highly experienced,

educated, and professionally credentialed facilities specialists. This expertise, essential in ensuring a secure and efficient

environment for groundbreaking scientific research, has been cultivated and maintained over many years.

The demanding nature of laboratory-based scientific research requires strict adherence to safety standards set by local,

state, and federal regulatory bodies. Key compliance aspects include good manufacturing practices (“GMP”) and Clinical

Laboratory Improvement Amendments (“CLIA”) certifications, adherence to national biosafety level guidelines, proper

permitting and handling of hazardous waste generation and chemical storage, maintenance of safety stations, effective

management of ultra-low temperature freezers, and careful licensing and management of radioactive materials.

• Other mitigating factors
• Improvement in office market. The increase in demand for premium office space since 2024, primarily driven by the

technology sector, particularly companies focused on AI, absorbed some of the market’s supply that was previously

anticipated for life science use and is now being repositioned back into office space. High ceilings, improved

ventilation systems, and abundant natural light, which are all features of life science real estate, have become highly

desirable, appealing to office and advanced technology tenants. We expect this trend may lead to the exit from the

life science sector of inexperienced life science real estate developers and expedite the resolution of the oversupply

impacting the sector.

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• Proactive reduction in capital spending and funding needs. To address higher capital costs and slower market

absorption, we implemented a disciplined reduction in construction spending. Based on the midpoint of our 2026

guidance range, our average annual construction spending is expected to decrease to approximately $1.74 billion for

2024–2026, representing a reduction of approximately $1.02 billion, or 37%, compared to the 2021–2023 average.

Our 2026 construction spending is primarily focused on:

• Leasing vacant space at operating properties
• Completing active committed construction projects
• Limiting future pipeline pre-construction activity

This strategy supports a more cost-efficient capital plan while preserving flexibility for future growth opportunities.

• Decrease in general and administrative expenses. Over the past several years, we have implemented comprehensive

measures to reduce our expenditures across our organization, including our general and administrative expenses,

through a variety of cost-control and efficiency initiatives, including, but not limited to:

• Personnel-related matters, including:
• Reduction in headcount over the last two years.
• Restructuring of various compensation plans.
• Streamlining of business processes:
• Implementation of systems upgrades, process improvements, and smarter technology.
• Renegotiation of contracts related to legal, technology, and operational support services, and

elimination of redundancies through better alignment and consolidation of roles.

As a result, we have achieved the following outcomes:

• We expect $76 million of cumulative savings in 2025 and 2026 (based upon the midpoint of our guidance

range for 2026 general and administrative expenses), compared to 2024.

• For the trailing twelve months ended September 30, 2026, our general and administrative expenses were

7.5% of net operating income, approximately half the 2023–2025 average of other S&P 500 REITs.

We believe the mitigating factors discussed above will help us manage prolonged market volatility while maintaining the

flexibility to act on strategic opportunities. Through disciplined execution of non-core asset recycling, targeted capital

allocation, continued focus on our Megacampus platform, moderated construction spending, and preservation of balance sheet

strength, we are building a resilient platform designed to deliver sustainable future growth and value creation across multiple

cycles. We believe these actions position us to emerge from the current cycle in a position of strength.

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Operating summary

Same Property Performance: Net Operating Income Changes

Occupancy of Operating Properties

(1)

(1)

Refer to “Same properties” and “Definitions and reconciliations” in Item 2 for additional details. “Definitions and reconciliations” contains the definitions of “Adjusted EBITDA,”

“Fixed-charge coverage ratio,” “Net debt and preferred stock to Adjusted EBITDA,” and “Net operating income” and their respective reconciliations from the most directly

comparable financial measures presented in accordance with GAAP.

(1) Refer to footnote 1 under “Same properties” in Item 2 for additional details.

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(1) Percentages calculated based on our annual rental revenue in effect as of September 30, 2026.

(2) For the three months ended September 30, 2026.

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Stable Cash Flows From Our High-Quality and Diverse Tenants

(1)

(2)

(3)

Percentage of ARE’s Annual Rental Revenue

As of September 30, 2026. Annual rental revenue represents amounts in effect as of September 30, 2026. Refer to “Definitions and reconciliations” in Item 2 for additional

information.

(1) Represents the percentage of our annual rental revenue generated by professional services, finance, construction/real estate companies, and retail-related tenants.

(2) 89% of our annual rental revenue from advanced technologies tenants is from investment-grade or publicly traded large cap tenants.

(3) 80% of our annual rental revenue from biomedical institutions is from investment-grade or publicly traded large cap tenants.

(4) Represents the weighted-average remaining term based on annual rental revenue in effect as of September 30, 2026.

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Leasing activity

The following table summarizes our leasing activity at our properties:

Leasing activity includes 100% of results for properties in which we have an investment.

(1) Excludes month-to-month leases aggregating 272,378 RSF and 58,516 RSF as of September 30, 2026 and December 31, 2025, respectively. During the trailing twelve

months ended September 30, 2026, we granted free rent concessions averaging 2.0 months per annum. This includes a lease concession for a 20-year lease with a non-

life science tenant in the Research Triangle market executed during the three months ended September 30, 2026. Excluding this lease, free rent concessions were 1.1

months per annum.

(2) Includes the largest life science lease in company history, executed in July 2025 with Novartis AG. The 16-year expansion build-to-suit lease aggregates 466,598

RSF and is located at the Campus Point by Alexandria Megacampus in our University Town Center submarket. Excluding this lease, previously vacant/developed/

redeveloped rental rates would have been $58.31 and $58.70 (cash basis) and development/redevelopment leasing volume would have been 238,223 RSF, for the

year ended December 31, 2025.

(3) During the three months ended September 30, 2026, we executed leases of 66,859 RSF and have additional leases under negotiation of 100,684 RSF for advanced

technology use at our project at 311 Arsenal Street in our Greater Boston market, all of which will be reflected as leasing of previously vacant space. This activity

enabled us to pivot the redevelopment project to a lower-cost advanced technology use, reducing future potential construction spend by approximately $220 million.

As a result of this leasing progress, the entire project aggregating 339,020 RSF was reclassified from redevelopment to operating as of September 30, 2026.

(4) Refer to “New Class A/A+ development and redevelopment properties: summary of pipeline” in Item 2 for additional information, including total project costs.

(5) Includes previously disclosed key lease expirations aggregating 282,878 RSF that became vacant during the three months ended September 30, 2026, with a

weighted-average lease expiration date of August 2026.

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Contractual lease expirations

The following tables summarize the contractual lease expirations as of September 30, 2026:

Contractual lease expirations for properties classified as held for sale as of September 30, 2026 are excluded from the information on this page.

(1) Amounts in effect as of September 30, 2026.

(2) Excludes month-to-month leases aggregating 272,378 RSF as of September 30, 2026. Refer to “Leasing activity” in Item 2 for additional details.

(3) See tables below for additional details.

(4) Includes 317,385 RSF of key lease expirations from Bristol Myers Squibb across four properties, generating $24.0 million of annual rental revenue with a weighted-average expiration date of April 2027. Upon lease expiration, Bristol Myers

Squibb is expected to relocate to 4135 Campus Point Court, a 426,927 RSF R&D facility delivered in June 2026. We expect the vacated space to experience a period of downtime and are currently under negotiation for 190,085 RSF.

(5) Refer to the footnote for Novartis AG under "Top 20 tenants" in Item 2 for additional details.

Reason for Expected Downtime (Based on RSF) Reason for Expected Downtime (Based on RSF)

Relocation to Other ARE Properties(4) Leases at Assets Originally Acquired for Redevelopment Other

Relocation to Other ARE Properties Leases at Assets Originally Acquired for Redevelopment 100 Technology Square(5) Other

Current Leasing Status (Based on RSF) Current Leasing Status (Based on RSF)

Negotiating Early Tenant Discussions Marketing/Remaining

Early Tenant Discussions Marketing/Remaining

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Contractual lease expirations (continued)

The following table summarizes our key contractual lease expirations in 2027 as of September 30, 2026 (dollars in thousands):

(1) Relocation to other ARE properties.

(2) Leases at assets originally acquired for redevelopment or repositioning.

(3) Represents the weighted-average expiration date based on annual rental revenue as of September 30, 2026.

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Top 20 tenants

84% of Top 20 Tenant Annual Rental Revenue Is From Investment-Grade

or Publicly Traded Large Cap Tenants(1)

Our properties are leased to a high-quality and diverse group of tenants, with no individual tenant accounting for greater than

8.6% of our annual rental revenue in effect as of September 30, 2026. The following table sets forth information regarding leases with our

20 largest tenants in North America based upon annual rental revenue in effect as of September 30, 2026 (dollars in thousands, except

average market cap amounts):

Annual rental revenue and RSF include 100% of each property managed by us. Refer to “Annual rental revenue” and “Investment-grade or publicly traded large cap tenants”

under “Definitions and reconciliations” in Item 2 for additional details, including our methodology of calculating annual rental revenue from unconsolidated real estate joint

ventures and average market capitalization, respectively.

(1) Based on annual rental revenue in effect as of September 30, 2026.

(2) Of the $56.7 million of annual rental revenue generated by this tenant, $27.0 million relates to a 232,902 RSF lease at our Alexandria Center® for Life Science – Waltham

Megacampus, which expires in the first quarter of 2027. This lease is included in the 1.4 million RSF of 2027 key lease expirations with expected downtime disclosed under

“Contractual lease expirations” in Item 2. We do not expect the tenant to renew its lease and are actively marketing the space.

(3) Eikon Therapeutics, Inc. is a public biotechnology company led by Roger Perlmutter, a biopharmaceutical executive who previously served as an executive vice president

of Merck & Co., Inc. As of June 30, 2026, the company held $531 million in cash and marketable securities.

(4) Intellia Therapeutics, Inc. is an established, publicly traded clinical-stage biotechnology company focused on CRISPR-based gene-editing therapies. The company reported

positive Phase 3 clinical results in 2026 and reported cash, cash equivalents and marketable securities of $628.4 million as of June 30, 2026. Additionally, on September 4,

2026, the company announced it secured a non-dilutive senior secured term loan facility for up to $400 million.

(5) Includes leases, which are not subject to annual appropriations, with governmental entities such as the NIH and the General Services Administration. Approximately 2% of

the annual rental revenue derived from our leases with the United States Government is cancelable prior to the lease expiration date.

(6) Includes (i) ground leases for land at 1455 and 1515 Third Street (two buildings aggregating 422,980 RSF) and (ii) leases at 1655 and 1725 Third Street (two buildings

aggregating 586,208 RSF) in our Mission Bay submarket owned by our unconsolidated real estate joint venture in which we have an ownership interest of 10%. Annual

rental revenue is presented using 100% of the annual rental revenue from our consolidated properties and our share of annual rental revenue from our unconsolidated real

estate joint ventures. Excluding these ground leases, the weighted-average remaining lease term for our top 20 tenants was 8.4 years as of September 30, 2026.

(7) Includes one direct lease at 100 Technology Square at Alexandria Technology Square® Megacampus in our Cambridge submarket aggregating 255,441 RSF, which

generates annualized rental revenue of $21.0 million and expires in March 2028. The tenant has leased the building since 2002 and has subsequently expanded and

consolidated its operations in Cambridge into a larger footprint. As a result, we do not expect the tenant to renew its lease upon expiration. We are actively marketing the

space for re-leasing and expect significant downtime following lease expiration to upgrade and re-lease the space.

(8) Altos Labs, Inc. is a private biotechnology company led by Hal Barron, M.D., former GlaxoSmithKline Chief Scientific Officer and President, R&D. Altos Labs launched with

$3.0 billion in private funding in 2022, and is backed by a group of prominent investors.

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Locations of properties

Our properties are strategically located in AAA life science and advanced technology innovation cluster markets. The following

table sets forth the total RSF, number of properties, and annual rental revenue in effect as of September 30, 2026 in each of our

markets in North America (dollars in thousands, except per RSF amounts):

Summary of occupancy percentages in North America

The following table sets forth the occupancy percentages for our operating properties and our operating and redevelopment

properties in each of our North America markets, excluding properties held for sale, as of the following dates:

(1) Includes 779,842 RSF and $14.9 million of annual rental revenue located in Canada.

(2) Decline in occupancy was primarily due to 339,020 RSF at our 311 Arsenal Street redevelopment project in our Greater Boston market being placed back into operation

following the execution of leases aggregating 66,859 RSF, with additional leases aggregating 100,684 RSF under negotiation for advanced technology use as of

September 30, 2026. This activity enables us to pivot the redevelopment project to a lower-cost advanced technology use, reducing future construction spend by

approximately $220 million.

(3) Excludes leases aggregating 1.3 million RSF, or 3.7% of total operating RSF, executed as of September 30, 2026 and expected to be occupied upon completion of

building and/or tenant improvements. The weighted-average expected occupancy date is approximately June 2027, with expected annual rental revenue of

approximately $52 million. We expect 32% of the total RSF to be occupied by December 31, 2026.

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Investments in real estate

A key component of our business model is our disciplined allocation of capital to the development and redevelopment of new

Class A/A+ properties, and property enhancements identified during the underwriting of certain acquired properties, primarily located in

collaborative Megacampus ecosystems in AAA life science and advanced technology innovation clusters. These projects are focused

on providing high-quality, generic, and reusable spaces that meet the real estate requirements of a wide range of tenants. Upon

completion, each development or redevelopment project is expected to generate increases in rental income, net operating income, and

cash flows. Our development and redevelopment projects are generally in locations that are highly desirable to high-quality entities,

which we believe may result in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term

asset value. Our pre-construction activities are undertaken in order to prepare the property for its intended use and include entitlements,

permitting, design, site work, and other activities preceding commencement of construction of aboveground building improvements.

Our investments in real estate consisted of the following as of September 30, 2026 (dollars in thousands):

20%

17%

Development/ Redevelopment Under Construction

Land/Future Development

11% to 16%

12%

Non-Income-Producing Assets(4) as a Percentage of Gross Assets

(1) Refer to “Investments in real estate” under “Definitions and reconciliations” in Item 2 for additional details, including future development and redevelopment square feet

currently included in rental properties.

(2) Balances exclude accumulated depreciation and our share of the cost basis associated with our properties held by our unconsolidated real estate joint ventures, which is

classified as investments in unconsolidated real estate joint ventures in our consolidated balance sheet.

(3) Our share of investment in our development and redevelopment pipeline as of September 30, 2026 is $4.63 billion.

(4) Excludes land and development parcels classified as held for sale which represented approximately 1% of total non-income-producing assets as of September 30, 2026,

compared with approximately 1% as of December 31, 2025 and 2024.

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Dispositions and sales of partial interests

The following table summarizes our 2026 sources of capital activity during the nine months ended September 30, 2026 and through the date of this report, and projections for the

remainder of 2026 (dollars in thousands):

(1) Represents one future development project aggregating 250,000 SF at 3825 Fabian Way and one fully leased operating building aggregating 228,000 RSF at 3875 Fabian Way in our Palo Alto submarket. These assets were acquired in

2019 with the intent to develop them for life science use. However, due to the project’s macroeconomic outlook, the assets no longer aligned with our strategy and were sold to a residential developer.

(2) Represents one vacant office property that was originally acquired with the intent to redevelop for life science use and expand our Megacampus ecosystem. The asset was sold due to the macroeconomic outlook for the project and the

significant capital required to redevelop and lease the property.

(3) Represents five operating properties, primarily comprising non-laboratory space, and one land parcel. As of June 30, 2026, these operating properties were 30% occupied with a weighted-average lease term of 2.4 years and were sold due

to the significant capital that would have been required to convert these properties through redevelopment for laboratory use and their misalignment with our Megacampus strategy.

(4) Our share of dispositions completed during the three months ended September 30, 2026 had annual net operating income of $4.4 million (based on the three months ended June 30, 2026, annualized) with a weighted-average disposition

date of July 29, 2026.

(5) Refer to Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements in Item 1 for additional details.

(6) Refer to “Key sources and uses of capital” under “Projected results” in Item 2 for additional details.

(7) Including the impact of the $1.0 billion junior subordinated notes issued during the three months ended September 30, 2026, the weighted-average projected completion date of these sources of capital is expected to be October 2026.

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New Class A/A+ development and redevelopment properties: recent deliveries

(1) Image represents 60 Sylvan Road on the Alexandria Center® for Life Science – Waltham Megacampus.

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New Class A/A+ development and redevelopment properties: recent deliveries (continued)

Incremental Annual Net Operating Income Generated From YTD 3Q26 Deliveries

Aggregated $98 million(1), Including $40 million in 3Q26

The following table presents development and redevelopment of new Class A/A+ projects placed into service during the nine months ended September 30, 2026 (dollars in

thousands):

(1) Excludes future incremental annual net operating income from recently delivered spaces aggregating 134,767 RSF that were vacant and/or unleased at delivery.

(2) The delivered leases contain effective annual rent escalations of 3%, which are expected to contribute to growth in net operating income (cash basis) over the respective lease term.

(3) Represents the average delivery date for deliveries that occurred during the three months ended September 30, 2026, weighted by annual rental revenue.

(4) Occupancy reflects total operating RSF placed in service as of each respective delivery date when the space was placed into service. Subsequent occupancy changes are not reflected.

(5) The lease with Novo Nordisk, an investment-grade tenant, was executed in a highly competitive leasing environment and provides strong long-term value through a 15-year term and 3% annual rent escalations. The lower cash yield

relative to the original underwriting is primarily driven by higher development costs and lower rental assumptions than initially forecasted due to market changes.

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New Class A/A+ development and redevelopment properties: under construction

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New Class A/A+ development and redevelopment properties: under construction

The following tables set forth a summary of our new Class A/A+ development and redevelopment properties under construction as of September 30, 2026 (dollars in thousands):

Refer to “Initial stabilized yield (unlevered)” under “Definitions and reconciliations” in Item 2 for additional information.

(1) Initial occupancy dates are subject to leasing and/or market conditions. Stabilized occupancy may vary depending on single tenancy versus multi-tenancy. Multi-tenant projects may increase in occupancy over time.

(2) Represents a single-tenant project that expands the existing Campus Point by Alexandria Megacampus, where we have a 59.3% ownership interest as of September 30, 2026. The project is fully leased to Novartis AG with 3% annual rent

escalations. The tenant currently occupies a building within the Megacampus aggregating 52,853 RSF that generated annual rental revenue of $4.1 million as of September 30, 2026. The tenant is expected to vacate this building during

2028. We expect to fund the majority of future construction costs at the Megacampus. Refer to “Dispositions and sales of partial interests” in Item 2 for additional information.

(3) We are evaluating multiple options, including whether to continue construction of laboratory improvements, pause construction, pursue lower-investment construction alternatives (including a pivot to advanced technology use), or pursue a

disposition, based upon future leasing interest. Under a lower-investment scenario, we would expect lower rent and tenant improvement requirements, and we would evaluate whether all or a portion of the property would be placed back

into operation. We would also expect stabilized yields under such alternatives to be lower than our initial underwriting assumptions. If we elect to continue to pursue construction of laboratory improvements for these projects, the earliest

deliveries of these projects are in 2028.

(4) As of June 30, 2026, 311 Arsenal Street and 421 Park Drive in our Greater Boston market were included in projects for which we were evaluating our business and financial strategy. During the three months ended September 30, 2026, we

reclassified the 339,020 RSF redevelopment project at 311 Arsenal Street to operating following the execution of leases aggregating 66,859 RSF, with additional leases aggregating 100,684 RSF under negotiation for advanced technology

use, which is expected to reduce future potential construction spending by approximately $220 million. We also entered into a purchase and sale agreement with an institutional user for the sale of 339,668 RSF at 421 Park Drive,

representing substantially all of our development project at this location. This portion of the project was classified as held for sale as of September 30, 2026. The transaction is anticipated to close in the fourth quarter of 2026 and is

expected to reduce future potential construction spending by approximately $136 million.

(5) We expect to provide total estimated costs and related yields for each project over the next several quarters.

(6) Represents dollar amount rounded to the nearest $10 million and includes preliminary estimated amounts for projects listed as TBD.

(7) Represents our share of investment based on our current ownership percentage upon completion of development or redevelopment projects, and will be adjusted as our ownership percentage increases at the Campus Point project.

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New Class A/A+ development and redevelopment properties: summary of pipeline

80% of Our Total Development and Redevelopment Pipeline RSF

Is Within Our Megacampus Ecosystems

The following table summarizes the key information for all our development and redevelopment projects in North America as of September 30, 2026 (dollars in thousands):

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New Class A/A+ development and redevelopment properties: summary of pipeline (continued)

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New Class A/A+ development and redevelopment properties: summary of pipeline (continued)

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New Class A/A+ development and redevelopment properties: summary of pipeline (continued)

Refer to “Megacampus” under “Definitions and reconciliations” in Item 2 for additional information.

(1) Total square footage includes 935,031 RSF of buildings currently in operation that we expect to demolish or redevelop and commence future construction subject to market conditions and leasing. Refer to “Investments in real estate” under

“Definitions and reconciliations” in Item 2 for additional details, including development and redevelopment square feet currently included in rental properties.

(2) Includes $1.04 billion of projects that are currently under construction.

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Results of operations

Same properties

We supplement an evaluation of our results of operations with an evaluation of operating performance of certain of our

properties, referred to as “Same Properties.” For additional information on the determination of our Same Properties portfolio, refer to

“Same property comparisons” under “Definitions and reconciliations” in Item 2. The following table presents information regarding our

Same Properties for the three and nine months ended September 30, 2026:

(1) The decline was due to a decrease in same property occupancy, primarily driven by previously disclosed key lease expirations with expected downtime aggregating

282,878 RSF and 1.2 million RSF in the three and nine months ended September 30, 2026, respectively, with weighted-average lease expiration dates of August 2026

and April 2026, respectively.

The following table reconciles the number of Same Properties to total properties for the nine months ended

September 30, 2026:

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Comparison of results for the three months ended September 30, 2026 to the three months ended September 30, 2025

The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same

Properties for the three months ended September 30, 2026, compared to the three months ended September 30, 2025 (dollars in

thousands). Refer to “Definitions and reconciliations” in Item 2 for definitions of “Tenant recoveries” and “Net operating income” and

their reconciliations from the most directly comparable financial measures presented in accordance with GAAP, income from rentals and

net income, respectively.

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Income from rentals

Total income from rentals for the three months ended September 30, 2026 decreased by $82.2 million, or 11.2%, to

$653.6 million, compared to $735.8 million for the three months ended September 30, 2025. The components of this change are

discussed below.

Rental revenues

Total rental revenues for the three months ended September 30, 2026 decreased by $59.7 million, or 11.0%, to $481.3 million,

compared to $541.1 million for the three months ended September 30, 2025. The decrease was primarily attributable to the factors

discussed below.

Same Properties’ rental revenues for the three months ended September 30, 2026 decreased by $22.0 million, or 4.8%, to

$432.6 million, compared to $454.6 million for the three months ended September 30, 2025. This decrease is primarily attributable to a

decrease in Same Properties’ average occupancy to 88.1% for the three months ended September 30, 2026 from 91.7% for the three

months ended September 30, 2025, and reflects the impact of previously disclosed key lease expirations aggregating 282,878 RSF and

1.2 million RSF in the three and nine months ended September 30, 2026, respectively, with weighted-average lease expiration dates of

August 2026 and April 2026, respectively.

Non-Same Properties’ rental revenues for the three months ended September 30, 2026 decreased by $37.7 million, or 43.6%,

to $48.8 million, compared to $86.4 million for the three months ended September 30, 2025, primarily due to the real estate dispositions

completed after July 1, 2025.

Tenant recoveries

Tenant recoveries for the three months ended September 30, 2026 decreased by $22.5 million, or 11.6%, to $172.3 million,

compared to $194.8 million for the three months ended September 30, 2025.

Same Properties’ tenant recoveries for the three months ended September 30, 2026 decreased by $7.3 million, or 4.2%, to

$167.8 million compared to $175.1 million for the three months ended September 30, 2025, primarily due to the decrease in Same

Property occupancy to 88.1% for the three months ended September 30, 2026, from 91.7% for the three months ended September 30,

2025, which reduced the proportion of expenses recoverable from tenants. As of September 30, 2026, 91% of our leases (on an annual

rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes, insurance, utilities, repairs

and maintenance, common area expenses, and other operating expenses (including increases thereto) in addition to base rent.

Non-Same Properties’ tenant recoveries for the three months ended September 30, 2026 decreased by $15.2 million, or

77.4%, to $4.4 million compared to $19.6 million for the three months ended September 30, 2025, primarily due to the dispositions of

real estate since July 1, 2025.

Rental operations

Total rental operating expenses for the three months ended September 30, 2026 decreased by $11.3 million, or 4.7%, to

$227.9 million, compared to $239.2 million for the three months ended September 30, 2025.

Same Properties’ rental operating expenses decreased by $1.2 million, or 0.6%, to $205.9 million during the three months

ended September 30, 2026, compared to $207.1 million for the three months ended September 30, 2025, primarily driven by a

decrease of $3.6 million in repairs and maintenance costs due to lower Same Properties’ average occupancy, partially offset by an

increase in property tax expense primarily resulting from the property tax rate increases in Boston and Cambridge in our Greater Boston

market.

Non-Same Properties’ rental operating expenses decreased by $10.1 million primarily due to real estate dispositions

completed since July 1, 2025.

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General and administrative expenses

General and administrative expenses for the three months ended September 30, 2026 increased by $11.7 million, or 40.0%, to

$40.9 million, compared to $29.2 million for the three months ended September 30, 2025. The increase primarily reflects the timing of

the restructuring of compensation plans and other cost-control and efficiency initiatives during the three months ended September 30,

Notwithstanding this increase compared to the three months ended September 30, 2025, general and administrative expenses

for the three months ended September 30, 2026 decreased by $3.0 million, or 6.9%, compared to $43.9 million for the three months

ended September 30, 2024. The decrease relative to 2024 reflects the continued benefit from cost-efficiency initiatives implemented in

prior years. The increase relative to 2025 primarily reflects the expected return of a portion of the cost reductions achieved in 2025 that

were temporary in nature, while approximately half of the cost reductions achieved in 2025 have continued into 2026 and are expected

to continue through the remainder of 2026. We continue to expect approximately $76 million of cumulative general and administrative

expense savings in 2025 and 2026 compared to 2024 based on the midpoint of our 2026 guidance range.

As a percentage of net operating income, our general and administrative expenses for the trailing twelve months ended

September 30, 2026 and 2025 were 7.5% and 5.7%, respectively.

Depreciation and amortization

Depreciation and amortization expense for the three months ended September 30, 2026 decreased by $35.8 million, or 10.5%,

to $304.4 million, compared to $340.2 million for the three months ended September 30, 2025. The decrease was primarily a result of

real estate dispositions since July 1, 2025.

Impairment of real estate

During the three months ended September 30, 2026, we recognized impairment charges aggregating $637.9 million, classified

in impairment of real estate in our consolidated statement of operations. For additional information, refer to “Sales of real estate assets

and impairment of real estate” in Note 3 – “Investments in real estate” to our unaudited consolidated financial statements in Item 1.

During the three months ended September 30, 2025, we recognized real estate impairment charges aggregating

$323.9 million, primarily related to three operating properties in our Greater Boston, Research Triangle, and New York City markets and

land parcels in our San Diego market that met the criteria for classification as held for sale.

Interest expense

Interest expense for the three months ended September 30, 2026 and 2025 consisted of the following (dollars in thousands):

(1) Represents the average debt balance outstanding during the respective periods.

(2) Represents annualized total interest incurred divided by the average debt balance outstanding during the respective periods.

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The net change in interest expense during the three months ended September 30, 2026, compared to the three months ended

September 30, 2025, resulted from the following (dollars in thousands):

(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.

Investment income

During the three months ended September 30, 2026, we recognized investment income aggregating $24.0 million, which

consisted of $16.0 million of realized gains, $21.6 million of unrealized gains, and $13.6 million of impairment charges.

During the three months ended September 30, 2025, we recognized investment income aggregating $28.2 million, which

consisted of $34.8 million of realized gains, $18.5 million of unrealized gains, and $25.1 million of impairment charges.

For more information about our investments, refer to Note 7 – “Investments” and “Investments” in Note 2 – “Summary of

significant accounting policies” to our unaudited consolidated financial statements in Item 1.

Loss on early extinguishment of debt

During the three months ended September 30, 2026, we recognized a loss on early extinguishment of debt aggregating $3.3

million related to the partial write-off of unamortized loan fees in connection with the amendment and restatement of our unsecured

senior line of credit.

Gain on sales of real estate

During the three months ended September 30, 2026, no gain on sales of real estate was recognized. During the three months

ended September 30, 2025, we recognized a $9.4 million gain related to the disposition of our controlling interest in a consolidated joint

venture that owns Pacific Technology Park in our Sorrento Mesa submarket. The gain was classified in gain on sales of real estate

within our consolidated statement of operations for the three months ended September 30, 2025.

Other comprehensive loss

Total other comprehensive loss for the three months ended September 30, 2026 aggregating $664 thousand primarily related

to foreign currency translation losses related to our operations in Canada, resulting from the weakening of the Canadian dollar relative

to the U.S. dollar during this period. Refer to Note 11 – “Hedge Agreements” to our unaudited consolidated financial statements in Item

1 for additional information.

Total other comprehensive loss of $4.8 million for the three months ended September 30, 2025 was primarily due to unrealized

foreign currency translation loss of $7.8 million related to our operations in Canada, partially offset by $3.0 million of unrealized gains

related to the change in the fair value of our cross-currency swap agreements, resulting from the CAD’s weakening since the execution

of these agreements on July 29, 2025 through September 30, 2025.

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Comparison of results for the nine months ended September 30, 2026 to the nine months ended September 30, 2025

The following table presents a comparison of the components of net operating income for our Same Properties and Non-Same

Properties for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 (dollars in

thousands). Refer to “Definitions and reconciliations” in Item 2 for definitions of “Tenant recoveries” and “Net operating income” and

their reconciliations from the most directly comparable financial measures presented in accordance with GAAP, income from rentals and

net income, respectively.

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Income from rentals

Total income from rentals for the nine months ended September 30, 2026 decreased by $266.5 million, or 12.0%, to

$1.95 billion, compared to $2.22 billion for the nine months ended September 30, 2025, due to a decrease in rental revenues, as

discussed below.

Rental revenues

Total rental revenues for the nine months ended September 30, 2026 decreased by $203.8 million, or 12.4%, to $1.44 billion,

compared to $1.65 billion for the nine months ended September 30, 2025. The decrease was primarily attributable to the factors

discussed below.

Same Properties’ rental revenues for the nine months ended September 30, 2026 decreased by $92.7 million, or 6.8%, to

$1.27 billion, compared to $1.36 billion for the nine months ended September 30, 2025. This decrease primarily reflects a decrease in

Same Properties’ average occupancy to 88.6% for the nine months ended September 30, 2026 from 92.8% for the nine months ended

September 30, 2025, primarily driven by previously disclosed key lease expirations aggregating 282,878 RSF and 1.2 million RSF in the

three and nine months ended September 30, 2026, respectively, with weighted-average lease expiration dates of August 2026 and April

2026, respectively.

Non-Same Properties’ rental revenues for the nine months ended September 30, 2026 decreased by $111.1 million, or 38.9%,

to $174.5 million, compared to $285.5 million for the nine months ended September 30, 2025, primarily due to the dispositions of real

estate since January 1, 2025.

Tenant recoveries

Tenant recoveries for the nine months ended September 30, 2026 decreased by $62.6 million, or 11.0%, to $507.1 million,

compared to $569.7 million for the nine months ended September 30, 2025.

Same Properties’ tenant recoveries for the nine months ended September 30, 2026 decreased by $20.0 million, or 4.0%, to

$478.4 million, compared to $498.5 million for the nine months ended September 30, 2025. The decrease described above in Same

Properties’ tenant recoveries resulted from a decrease in Same Properties’ average occupancy. As of September 30, 2026, 91% of our

leases (on an annual rental revenue basis) were triple net leases, which require tenants to pay substantially all real estate taxes,

insurance, utilities, repairs and maintenance, common area expenses, and other operating expenses (including increases thereto) in

addition to base rent.

Non-Same Properties’ tenant recoveries for the nine months ended September 30, 2026 decreased by $42.6 million, or 59.8%,

to $28.7 million, compared to $71.3 million for the nine months ended September 30, 2025, primarily due to the dispositions of real

estate since January 1, 2025.

Rental operations

Total rental operating expenses for the nine months ended September 30, 2026 decreased by $30.7 million, or 4.4%, to

$659.4 million, compared to $690.1 million for the nine months ended September 30, 2025. Non-Same Properties’ rental operating

expenses decreased by $33.3 million primarily as a result of dispositions of real estate assets since January 1, 2025.

Same Properties’ rental operating expenses increased by $2.7 million, or 0.4%, to $600.6 million during the nine months ended

September 30, 2026, compared to $597.9 million for the nine months ended September 30, 2025, primarily attributable to an increase

of $9.8 million in property tax expense resulting from the property tax rate increases in Boston and Cambridge in our Greater Boston

market. The increase was offset primarily by a decrease of $7.3 million in repairs and maintenance costs resulting from the lower Same

Properties’ average occupancy.

General and administrative expenses

General and administrative expenses for the nine months ended September 30, 2026 increased by $23.4 million, or 26.3%, to

$112.5 million, compared to $89.0 million for the nine months ended September 30, 2025. The increase primarily reflects the timing of

the restructuring of compensation plans and other cost-control and efficiency initiatives during the nine months ended September 30,

Notwithstanding this increase compared to the nine months ended September 30, 2025, general and administrative expenses

for the nine months ended September 30, 2026 decreased by $23.2 million, or 17%, compared to $135.6 million for the nine months

ended September 30, 2024. The decrease relative to 2024 reflects the continued benefit from cost-efficiency initiatives implemented in

prior years. The increase relative to 2025 primarily reflects the expected return of a portion of the cost reductions achieved in 2025 that

were temporary in nature, while approximately half of the cost reductions achieved in 2025 have continued into 2026 and are expected

to continue through the remainder of 2026. We continue to expect approximately $76 million of cumulative general and administrative

expense savings in 2025 and 2026 compared to 2024 based on the midpoint of our 2026 guidance range.

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As a percentage of net operating income, our general and administrative expenses for the trailing twelve months ended

September 30, 2026 and 2025 were 7.5% and 5.7%, respectively.

Depreciation and amortization

Depreciation and amortization expense for the nine months ended September 30, 2026 decreased by $114.2 million, or 11.1%,

to $914.2 million, compared to $1.03 billion for the nine months ended September 30, 2025. The decrease was primarily a result of real

estate dispositions since January 1, 2025.

Impairment of real estate

During the nine months ended September 30, 2026, we recognized impairment charges aggregating $865.9 million, classified

in impairment of real estate in our consolidated statement of operations. For additional information, refer to “Sales of real estate assets

and impairment of real estate” in Note 3 – “Investments in real estate” to our unaudited consolidated financial statements in Item 1.

During the nine months ended September 30, 2025, we recognized real estate impairment charges aggregating $485.6 million,

which primarily related to (i) a ground lease entered into in 2021 for a future development site in our San Francisco Bay Area market, (ii)

three operating properties in our San Diego market and land parcels in our non-cluster market that met the criteria for classification as

held for sale, and (iii) three operating properties in our Greater Boston, Research Triangle, and New York City markets and land parcels

in our San Diego market that met the criteria for classification as held for sale.

Interest expense

Interest expense for the nine months ended September 30, 2026 and 2025 consisted of the following (dollars in thousands):

(1) Represents the average debt balance outstanding during the respective periods.

(2) Represents annualized total interest incurred divided by the average debt balance outstanding during the respective periods.

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The net change in interest expense during the nine months ended September 30, 2026, compared to the nine months ended

September 30, 2025, resulted from the following (dollars in thousands):

(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.

Investment income (losses)

During the nine months ended September 30, 2026, we recognized investment income aggregating $152.6 million, which

consisted of $44.5 million of realized gains, $143.2 million of unrealized gains, and $35.0 million of impairment charges.

During the nine months ended September 30, 2025, we recognized investment losses aggregating $52.5 million, which

consisted of $94.7 million of realized gains, $71.6 million of unrealized losses, and $75.5 million of impairment charges.

For additional information about our investments, refer to Note 7 – “Investments” to our unaudited consolidated financial

statements in Item 1. For our impairment accounting policy, refer to “Investments” in Note 2 – “Summary of significant accounting

policies” to our unaudited consolidated financial statements in Item 1.

Gain on early extinguishment of debt

During the nine months ended September 30, 2026, we recognized a gain on early extinguishment of debt aggregating $363.1

million, net of the write-off of unamortized debt issuance costs and other transaction-related costs, primarily related to the completion of

the February 2026 tender offers to repurchase $1.33 billion of debt principal across a portion of our outstanding 4.00% Senior Notes

due 2050, 3.00% Senior Notes due 2051, and 3.55% Senior Notes due 2052 for $952.2 million. The gain was partially offset by a loss

on early extinguishment of debt aggregating $3.3 million related to the partial write-off of unamortized loan fees in connection with the

amendment and restatement of our unsecured senior line of credit during the three months ended September 30, 2026.

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Gain on sales of real estate

During the nine months ended September 30, 2026, no gain on sales of real estate was recognized. During the nine months

ended September 30, 2025, we recognized $22.5 million of gains classified in gain on sales of real estate within our consolidated

statement of operations. These gains included $12.7 million recognized during the three months ended March 31, 2025, in connection

with one sales-type lease for an operating property in our Seattle market, and $9.3 million recognized upon the disposition of our

controlling interest in a consolidated joint venture that owns Pacific Technology Park in our Sorrento Mesa submarket. The gains were

classified in gain on sales of real estate within our consolidated statement of operations for the nine months ended September 30,

Other comprehensive loss

Other comprehensive loss for the nine months ended September 30, 2026 aggregating $4.3 million includes $12.3 million of

foreign currency translation losses related to our operations in Canada, resulting from the weakening of the Canadian dollar relative to

the U.S. dollar during this period, partially offset by $8.0 million of unrealized gains related to the change in the fair value of our cross-

currency swap agreements. Refer to Note 11 – “Hedge Agreements” to our unaudited consolidated financial statements in Item 1 for

additional information.

Total other comprehensive income of $14.0 million for the nine months ended September 30, 2025 was primarily due to

unrealized foreign currency translation income of $11.1 million related to our operations in Canada and $3.0 million of unrealized gains

related to the change in the fair value of our cross-currency swap agreements, resulting from the CAD’s weakening since the execution

of these agreements on July 29, 2025 through September 30, 2025.

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Construction spending

Our construction spending for the nine months ended September 30, 2026 and projected spending for the year ending

December 31, 2026 consisted of the following (in thousands):

(1) Includes smaller conversions to laboratory space through redevelopment.

(2) Approximately 74% represents capitalized costs.

(3) Represents revenue- and non-revenue-enhancing capital expenditures before contributions from noncontrolling interests and tenant-funded and tenant-built landlord

improvements.

(4) The top two revenue- and non-revenue-enhancing capital expenditure projects in 2026 represent approximately 53% of the total spending within this category. The first

project relates to a property located at the Alexandria Center® for Advanced Technologies – South San Francisco Megacampus in our South San Francisco submarket,

which is leased to a new tenant and is undergoing its first major renovation in 12 years. The second project relates to two properties at the Alexandria Technology

Square® Megacampus in our Cambridge submarket, which are undergoing their first major renovation in 16 years.

(5) Represents contractual capital commitments from existing real estate joint venture partners to fund construction.

Projected capital contributions from partners in consolidated real estate joint ventures to fund construction

The following table summarizes projected capital contributions from partners in our existing consolidated joint ventures to fund

construction through 2027 and beyond (in thousands):

(1) Amounts represent reductions to our consolidated construction spending.

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Capitalization of interest

Our construction spending includes capitalized interest. The table below provides key categories of interest capitalized during

the three months ended September 30, 2026 (in thousands):

(1) In addition to capitalized interest, we incur other capitalized project costs, including property taxes, insurance, and other costs directly related and essential to the

construction of Class A/A+ properties. If we cease activities necessary to prepare a project for its intended use, related costs are expensed as incurred. Annualized

capitalized operating expenses represent approximately 2% of the total average real estate basis subject to capitalization for the three months ended September 30,

(2) Primarily includes projects at 421 Park Drive on the Alexandria Center® for Life Science – Fenway Megacampus and Alexandria Stanford Life Science District, both of

which were classified as held for sale as of September 30, 2026, as well as a delivered project at Alexandria Center® for Life Science – Waltham Megacampus during the

three months ended September 30, 2026.

(3) Primarily consists of projects related to our operating assets that generally have shorter periods for which capitalization of interest is required, including executed leases

aggregating 1.3 million RSF as of September 30, 2026, with future occupancy expected after completion of building and/or tenant improvements by June 2027 on a

weighted-average basis. The balance also includes redevelopment projects for which we are evaluating business and financial strategy.

(4) Includes future pipeline projects expected to reach pre-construction milestones, including various phases of entitlement, design, site work, and other activities necessary

to begin aboveground vertical construction, with a weighted-average key construction milestone by 1H28. As projects progress, we will evaluate whether to proceed with

additional pre-construction and/or construction activities based on leasing demand and/or market conditions, pause future investments, or consider potential disposition.

These projects include, among others, future Megacampus development projects at (i) Alexandria Center® for Advanced Technologies – Tanforan, (ii) Alexandria Center®

for Life Science – San Carlos, where we have a letter of intent for approximately 235,600 RSF related to existing industrial buildings that were originally expected to be

demolished to allow for future development, (iii) Alexandria Center® for Life Science – New York City, and (iv) Campus Point by Alexandria, which represent

approximately 52% of the total real estate basis that continues to qualify for capitalization in this category as of September 30, 2026.

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Projected results

Our 2026 guidance includes forward-looking non-GAAP financial measures, such as funds from operations as adjusted, net debt and preferred stock to Adjusted EBITDA –

fourth quarter 2026 annualized, fixed-charge coverage ratio – fourth quarter 2026 annualized, and net cash provided by operating activities, as adjusted, that differ from measures

calculated in accordance with GAAP. These non-GAAP measures are in addition to, and not a substitute for or superior to, financial measures prepared in accordance with GAAP

and should be considered in conjunction with our GAAP financial measures. We are unable to provide corresponding forward-looking GAAP measures or reconciliations to these

non-GAAP measures without unreasonable effort. This is due to the inherent difficulty of forecasting items that depend on market conditions outside of our control, including the

timing of dispositions, capital events, and financing decisions, as well as quarterly and annual components such as gain on sales of real estate, impairments of real estate and non-

real estate investments, and unrealized gains or losses on non-real estate investments. Our attempt to predict these amounts may produce significant but inaccurate estimates,

which would be potentially misleading for our investors. Refer to “Definitions and reconciliations” in Item 2 for additional details about these non-GAAP measures.

We expect that our principal liquidity needs for the year ending December 31, 2026 will be satisfied by the following multiple sources of capital, as shown in the table below.

There can be no assurance that our sources and uses of capital will not be materially higher or lower than these expectations.

(1) Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” under “Definitions and reconciliations” in Item 2 for additional details.

(2) Reduction primarily reflects the $1.00 billion issuance of 7.250% Series A fixed-to-fixed reset rate junior subordinated notes due 2057, as further discussed in footnote 3 below.

(3) In August 2026, we issued $1.00 billion of 7.250% Series A fixed-to-fixed reset rate junior subordinated notes due 2057, allowing us to reduce the midpoint of our 2026 dispositions and sales of partial interests guidance by $1.0

billion. The proceeds from this issuance support our capital structure and deleveraging objectives, and the notes receive 50% equity treatment from key rating agencies for the computation of key credit metrics. We do not

anticipate the issuance of any common equity during 2026. As of October 26, 2026, completed dispositions and sales of partial interests aggregated $716.8 million, our share of pending dispositions and sales of partial interests

subject to non-refundable deposits aggregated $355.4 million and signed letters of intent and/or purchase and sale agreement late-stage negotiations aggregated $1.55 billion. These transactions aggregate approximately $2.62

billion, exceeding the $1.90 billion midpoint of our 2026 guidance and potentially providing advanced funding of our 2027 capital needs, whereby certain dispositions and sales of partial interests may be completed in 2026 with

proceeds deferred or available to be drawn in 2027, subject to timing and market conditions.

(4) We continue to apply a disciplined approach to reduce construction spending for 2027 and seek to prioritize leased projects with high incremental returns. We expect 2027 construction spending to primarily focus on: (i) revenue-

and non-revenue-enhancing capital expenditures, which are expected to represent the majority of spend, approximately half of which is associated with space that is already leased or under lease negotiations, in order to

support the leasing of vacant space and renewals and re-leasing of space at our operating properties and (ii) construction spending required to complete our development and redevelopment projects that are expected to

stabilize through 2028 and are 77% leased/negotiating.

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The key assumptions behind the sources and uses of capital in the table on the previous page include favorable real estate transaction and capital market environments,

performance of our core operating properties, lease-up and delivery of current and future development and redevelopment projects, and leasing activity. Our expected sources and

uses of capital are subject to a number of variables and uncertainties, including those discussed as “Forward-looking statements” under Part I, “Item 1A. Risk factors”; and Part II,

“Item 7. Management’s discussion and analysis of financial condition and results of operations” in our annual report on Form 10-K for the year ended December 31, 2025; as well as

under “Trends that may affect our future results” in Part I, “Item 2. Management’s discussion and analysis of financial condition and results of operations” of this quarterly report on

Form 10-Q. To the extent our full-year earnings guidance is updated during the year, we will provide additional disclosure supporting reasons for any significant changes to such

guidance.

(1) Reduction driven primarily by write-offs and reserves of deferred rent related to tenant wind-downs. Our 2026 guidance assumes a $30 million to $35 million reduction in funds from operations related to potential tenant wind-

downs, of which approximately $30 million was recognized during the nine months ended September 30, 2026, including approximately $16 million recognized during the three months ended September 30, 2026.

(2) We expect 2026 interest expense to be near the high-end of the range, reflecting, in part, interest expense associated with the $1.0 billion issuance of junior subordinated notes in August 2026.

(3) Represents realized gains and losses included in funds from operations per share – diluted, as adjusted. Excludes unrealized gains and losses and significant gains and impairments realized on non-real estate investments, if

any. The midpoint of our revised guidance range for 2026 realized gains on non-real estate investments was reduced by $10 million, primarily due to certain transactions previously expected to close in 2026 that are now

expected to close in 2027. Refer to “Investments” in Item 2 for additional details.

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Summary of key items that may impact 2026 and 2027 results

1) Potential tenant wind-downs

• Our 2026 guidance includes a $30 million to $35 million reduction in funds from operations for potential tenant wind-downs, of which approximately $30 million was recognized

during the nine months ended September 30, 2026, including approximately $16 million recognized during the three months ended September 30, 2026.

• Based upon current market conditions, we preliminarily estimate at least a similar level of reduction in funds from operations may be necessary in 2027.
• Depending on the timing and magnitude of the specific tenant wind-downs, we anticipate that 2027 occupancy may also be negatively impacted.

2) Development-related other income

• During the nine months ended September 30, 2026, we recognized development fees and other related revenues of approximately $8.0 million, or $11 million annualized, most

of which are expected to cease by the end of 2026 as we complete the respective projects.

3) Development and redevelopment projects under business and financial strategy evaluation

• We have three redevelopment projects for which the business and financial strategies continue to be evaluated, including whether to continue construction of laboratory

improvements, pause construction, pursue lower-investment construction alternatives (including a pivot to advanced technology use), or pursue a disposition. Refer to “New

Class A/A+ development and redevelopment properties: under construction” in Item 2 for additional details.

• If we elect to continue to pursue construction of laboratory improvements for these projects, the earliest deliveries of these projects are in 2028.
• If we elect to pursue lower-investment construction alternatives (including a pivot to advanced technology use), we expect these projects would have lower rental rates and

stabilized yields compared to our initial underwriting. The incremental capital required for alternative-use construction and corresponding rental rates earned are generally

lower than those associated with laboratory improvements.

• During the three months ended September 30, 2026, we have executed leases for 66,859 RSF and have additional leases under negotiation for 100,684 RSF for advanced

technology use at our project at 311 Arsenal Street in The Arsenal on the Charles Megacampus. This activity enables us to pivot the redevelopment project to a lower-cost

alternative use at lower rental rates and stabilized yields than our initial underwriting. Therefore, we placed this project, aggregating 339,020 RSF, into operation during the

three months ended September 30, 2026 and included it in our operating occupancy as of September 30, 2026. Refer to “Leasing activity” in Item 2 for additional details.

• In addition, we entered into a purchase and sale agreement with an institutional user for the sale of our development project at 421 Park Drive on the Alexandria Center® for

Life Science – Fenway Megacampus aggregating 339,668 RSF. The disposition is expected to close during the three months ended December 31, 2026, resulting in

significant sales proceeds and reducing future construction spending by approximately $136 million.

4) Capitalization of interest

• Our average real estate basis capitalized during the three months ended September 30, 2026 was $5.87 billion. As of September 30, 2026, real estate basis that continued to

qualify for capitalization declined to $4.46 billion, primarily driven by the cessation of capitalization on our projects at 421 Park Drive on the Alexandria Center® for Life Science –

Fenway Megacampus and Alexandria Stanford Life Science District, both of which were classified as held for sale as of September 30, 2026, as well as a delivered project at

Alexandria Center® for Life Science – Waltham Megacampus during the three months ended September 30, 2026. During the three months ended December 31, 2026, we

expect average real estate basis capitalized to range from $3.4 billion to $4.9 billion . Refer to “Capitalization of interest” in Item 2 for additional details.

• At each milestone date, we evaluate, on an asset-by-asset basis, whether to (i) proceed with additional pre-construction and/or construction activities based on leasing demand

and/or market conditions, (ii) pause future investments, or (iii) consider potential dispositions or sales of partial interests of these real estate assets. If we cease the activities

necessary to prepare a project for its intended use, costs related to such project, including interest, payroll, property taxes, insurance, and other costs directly related and

essential to the construction of Class A/A+ properties, are expensed as incurred. During the three months ended September 30, 2026, annualized capitalized operating

expenses represented approximately 2% of the total average real estate basis subject to capitalization.

5) 2027 Key lease expirations

2027 Key Lease Expirations

• We estimate 1.4 million RSF of leases expiring in 2027, with approximately $100.5 million of annual

rental revenue, will have downtime after lease expiration. These 2027 expirations have a weighted-

average contractual lease expiration date in March 2027 and an expected weighted-average downtime

ranging from 9 to 24 months. Refer to “Contractual lease expirations” in Item 2 for additional details.

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Summary of key items that may impact 2027 and 2028 results

The following key considerations for 2027 and 2028 reflect our preliminary expectations based on current market conditions. These expectations could change materially and

are subject to a variety of factors, including industry, governmental, geopolitical, and macroeconomic conditions, including changes in interest rates, as well as other factors described in

our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

1) Operating occupancy

• For the year ending December 31, 2027, we expect average operating occupancy to temporarily decline relative to our projected operating occupancy as of December 31, 2026,

primarily due to expected downtime associated with the 1.4 million RSF 2027 key lease expirations disclosed in “Contractual lease expirations” in Item 2, as well as the potential

for tenant wind-downs.

• For the year ending December 31, 2028, we expect average operating occupancy to improve relative to projected average operating occupancy for the year ending December

31, 2027, driven by the lease-up of temporary vacancy partially offset by approximately 718 thousand RSF of 2028 key lease expirations with expected downtime as disclosed in

“Contractual lease expirations” in Item 2.

2) Same property performance

• For the year ending December 31, 2027, we expect same property net operating income performance to improve compared with the midpoint of our guidance range for 2026 but

remain negative, primarily due to the expected temporary year-over-year decline in average operating occupancy, including the impact of expected downtime associated with 1.4

million RSF of 2027 key lease expirations.

• For the year ending December 31, 2028, we expect same property net operating income performance to improve compared with 2027, primarily driven by operating occupancy

growth and the lease-up of vacant space, subject to leasing and market conditions.

3) Construction Spending

• For 2027, we continue to apply a disciplined approach to reduce construction spending and we seek to prioritize leased projects with high incremental returns. We expect 2027

construction spending to primarily focus on (i) revenue- and non-revenue-enhancing capital expenditures, which are expected to represent the majority of spend, approximately

half of which is associated with space that is leased or under lease negotiations, in order to support the leasing of vacant space and renewals and re-leasing of space at our

operating properties and (ii) construction spending required to complete our development and redevelopment projects that are expected to stabilize through 2028 and are 77%

leased/negotiating as of October 26, 2026.

• For 2028, we expect a further decline in construction spending relative to 2027, primarily driven by lower development and redevelopment spending. Construction spending on

revenue- and non-revenue-enhancing capital expenditures related to our operating portfolio is expected to continue to support the lease-up of temporary vacancy, subject to

leasing and market conditions.

4) Transactional and other capital sources

• For 2027, capital will be required to fund construction spending as we continue to prudently manage our key credit metrics, including net debt and preferred stock to Adjusted

EBITDA ratio. In general, we expect to rely on asset recycling transactions and other sources of cost-effective capital to support the achievement of our 2027 key credit metric

ratios targets, including net debt and preferred stock to Adjusted EBITDA.

• For 2028, if we have growth in Adjusted EBITDA, we may use incremental long-term debt to fund a portion of our capital needs on a leverage neutral basis. In addition, we may

use asset recycling and other sources of cost-effective capital to support the achievement of our 2028 key credit metric ratio targets, including net debt and preferred stock to

Adjusted EBITDA.

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Consolidated and unconsolidated real estate joint ventures

We present components of balance sheet and operating results information for the noncontrolling interest share of our

consolidated real estate joint ventures and for our share of investments in unconsolidated real estate joint ventures to help investors

estimate balance sheet and operating results information related to our partially owned entities. These amounts are estimated by

computing, for each joint venture that we consolidate in our financial statements, the noncontrolling interest percentage of each financial

item to arrive at the cumulative noncontrolling interest share of each component presented. In addition, for our real estate joint ventures

that we do not control and do not consolidate, we apply our economic ownership percentage to the unconsolidated real estate joint

ventures to arrive at our proportionate share of each component presented. Refer to Note 4 – “Consolidated and unconsolidated real

estate joint ventures” to our unaudited consolidated financial statements in Item 1 for further discussion.

Refer to “Joint venture financial information” under “Definitions and reconciliations” in Item 2 for additional information.

(1) Includes properties currently under construction or in our future development and redevelopment pipeline. Refer to “New Class A/A+ development and redevelopment

properties” in Item 2 for additional details.

(2) Includes 10200, 10290, and 10300 Campus Point Drive and 4135, 4155, 4165, 4224, and 4242 Campus Point Court.

(3) In October 2026, we completed a partial sale of our interest in this joint venture for $475.0 million which reduced our interest to approximately 30%. We expect to fund

the majority of future construction costs at the Megacampus, which is expected to reduce the ownership interests of our new joint venture partner and existing joint

venture partner over time to below 20.0% and 30.0%, respectively, and increase our ownership interest to over 50.0%. Refer to Note 4 – “Consolidated and

unconsolidated real estate joint ventures” to our unaudited consolidated financial statements in Item 1 for additional details.

(4) Includes 9605, 9645, 9675, 9725, 9735, 9805, 9808, 9855, and 9868 Scranton Road and 10055, 10065, and 10075 Barnes Canyon Road.

(5) Includes 9965, 9975, 9985, and 9995 Summers Ridge Road.

(6) Includes 1450, 1500, and 1700 Owens Street and 455 Mission Bay Boulevard South.

(7) Represents a joint venture with a local real estate operator in which our joint venture partner manages the day-to-day activities that significantly affect the economic

performance of the joint venture.

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The following table presents key terms related to our unconsolidated real estate joint ventures’ secured loans as of

September 30, 2026 (dollars in thousands):

(1) Includes interest expense and amortization of loan fees.

(2) Represents outstanding principal, net of unamortized deferred financing costs, as of September 30, 2026.

(3) In October 2026, the unconsolidated real estate joint venture refinanced this debt with a new $22.5 million secured note payable bearing interest at SOFR+1.85% and

maturing in October 2030. As of September 30, 2026, our investment in this unconsolidated real estate joint venture was $9.9 million.

(4) This loan is subject to a SOFR floor of 0.75%.

The following tables present information related to the operating results and financial positions of our consolidated and

unconsolidated real estate joint ventures as of and for the three and nine months ended September 30, 2026 (in thousands):

Refer to “Joint venture financial information” under “Definitions and reconciliations” in Item 2 for additional details.

(1) Represents an allocation of joint venture earnings to redeemable noncontrolling interest for a property in the San Francisco Bay Area market. This redeemable

noncontrolling interest earns a fixed return on its investment rather than participating in the operating results of the property.

(2) Refer to “Funds from operations and funds from operations, as adjusted, attributable to Alexandria Real Estate Equities, Inc.’s common stockholders” under “Definitions

and reconciliations” in Item 2 for the definition and its reconciliation from the most directly comparable financial measure presented in accordance with GAAP.

During the nine months ended September 30, 2026 and 2025, our consolidated real estate joint ventures distributed an

aggregate of $171.2 million and $186.8 million, respectively, to our joint venture partners. Refer to our consolidated statements of cash

flows and Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our unaudited consolidated financial statements in

Interest rate risk

The primary market risk to which we believe we may be exposed is interest rate risk, which may result from many factors,

including government monetary and tax policies, domestic and international economic and political considerations, and other factors

that are beyond our control.

In order to modify and manage the interest rate characteristics of our outstanding debt and to limit the effects of interest rate

risks on our operations, we may utilize a variety of financial instruments, including interest rate hedge agreements, caps, floors, and

other interest rate exchange contracts. The use of these types of instruments to hedge a portion of our exposure to changes in interest

rates may carry additional risks, such as counterparty credit risk and the legal enforceability of hedge agreements. As of September 30,

2026, we did not have any outstanding interest rate hedge agreements.

Our future earnings and fair values relating to our outstanding debt are primarily dependent upon prevailing market interest

rates. The following tables illustrate the effect of a 1% change in interest rates, assuming a zero percent interest rate floor, on our fixed-

and variable-rate debt as of September 30, 2026 (in thousands):

These amounts are determined by considering the effect of the hypothetical interest rates on our borrowings as of

September 30, 2026 and December 31, 2025. These analyses do not consider the effects of the reduced level of overall economic

activity that could exist in such an environment. Furthermore, in the event of a change of such magnitude, we would consider taking

actions to further mitigate our exposure to the change. Because of the uncertainty of the specific actions that would be taken and their

possible effects, the sensitivity analyses assume no changes in our capital structure.

Equity price risk

We have exposure to equity price market risk because we hold equity investments in publicly traded companies and privately

held entities. All of our investments in actively traded public companies are reflected in our consolidated balance sheets at fair value.

Our investments in privately held entities that report NAV per share are measured at fair value using NAV as a practical expedient to fair

value. Our equity investments in privately held entities that do not report NAV per share are measured at cost less impairments,

adjusted for observable price changes during the period. Changes in fair value of public investments, changes in NAV per share

reported by privately held entities, and observable price changes of privately held entities that do not report NAV per share are

classified as investment income (losses) in our consolidated statements of operations. There is no assurance that future declines in

value will not have a material adverse effect on our future results of operations. The following table illustrates the effect that a 10%

change in the value of our equity investments would have on earnings as of September 30, 2026 and December 31, 2025 (in

thousands):

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Foreign currency exchange rate risk

We have exposure to foreign currency exchange rate risk related to our operations in Canada. The functional currency of our

Canadian subsidiaries is the Canadian dollar. Gains or losses resulting from the translation of these subsidiaries’ balance sheets and

statements of operations are classified in accumulated other comprehensive income (loss) as a separate component of total equity and

are excluded from net income (loss). Gains or losses will be reflected in our consolidated statements of operations when there is a sale

of our investment in these operations or upon a complete or substantially complete liquidation of the investment. The following tables

illustrate the effect that a 10% change in Canadian dollar exchange rates relative to the USD would have on our potential future

earnings and on the fair value of our net investment in Canadian subsidiaries, based on our current operating assets outside the U.S.

as of September 30, 2026 and December 31, 2025 (in thousands):

(1) Refer to Note 11 – “Hedge agreements” to our unaudited consolidated financial statements for additional information.

Our exposure to market risk elements for the nine months ended September 30, 2026 was consistent with the risk elements

presented above, including the effects of changes in interest rates, equity prices, and foreign currency exchange rates.

Evaluation of disclosure controls and procedures

As of September 30, 2026, we had performed an evaluation, under the supervision of our principal executive officers and

principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and

procedures have been designed to ensure that information required for disclosure is recorded, processed, summarized, and reported

within the requisite time periods. Based on our evaluation, the principal executive officers and principal financial officer concluded that

our disclosure controls and procedures were effective as of September 30, 2026.

Changes in internal control over financial reporting

There has not been any change in our internal control over financial reporting during the three months ended September 30,

2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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In addition to the information set forth in this quarterly report on Form 10-Q, one should also carefully review and consider the

information contained in the other reports and periodic filings that we make with the SEC, including, without limitation, the information

contained under the caption “Item 1A. Risk factors” in our annual report on Form 10-K for the year ended December 31, 2025. Those

risk factors could materially affect our business, financial condition, and results of operations. The risks that we describe in our public

filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be

immaterial, also may materially adversely affect our business, financial condition, and results of operations.

There have been no material changes in our risk factors from those disclosed under the caption “Item 1A. Risk factors” in our

annual report on Form 10-K for the year ended December 31, 2025.