Alexandria Real Estate Equities (ARE) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 13.0% YoY to $757.2M; adjusted FFO per diluted share increased to $2.28 from $2.14. 2023 revenue rose 11.5% to $2.886B and adjusted FFO per diluted share reached $8.97.

• Record value-creation deliveries generated $145M of incremental annual NOI in Q4 and $265M in 2023; the pipeline is expected to add $495M when placed into service.

• Q4 net loss per diluted share was $0.54, while FY net income per diluted share was $0.54; real estate impairments and other notable items materially affected reported results.

Financial highlights

• Q4 total revenue was $757.2M versus $670.3M YoY; FY revenue was $2.886B versus $2.589B.

• Q4 net loss attributable to common stockholders was $91.9M, or $0.54 per diluted share; FY net income was $92.4M, or $0.54 per diluted share.

• Adjusted FFO was $389.8M, or $2.28 per diluted share, in Q4; FY adjusted FFO was $1.532B, or $8.97 per diluted share.

• FY reported results included $461.1M of real estate impairment charges and $277.0M of gains on real estate sales; adjusted FFO excludes specified items.

Outlook and guidance

• 2024 diluted EPS guidance is $3.49–$3.69; adjusted FFO per diluted share guidance is $9.37–$9.57, with a midpoint of $9.47.

• 2024 North America occupancy guidance is 94.6%–95.6%; lease renewal and re-leasing rental rate increases are projected at 11%–19%, or 5%–13% cash basis.

• 2024 same-property NOI growth guidance is 0.5%–2.5%, or 3%–5% cash basis; straight-line rent revenue is guided at $169M–$184M.

• 2024 capital plan midpoint includes $2.2B of construction uses, $900M of incremental debt, and $900M of dispositions and partial-interest sales.