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- **Megacampus Focus**: 77% of ARR from megacampuses, with plans to reduce non-income-producing assets to 10-15% of portfolio.
- **Financial Performance**: Q3 FFO per share of $2.22, down 6% YoY, driven by 110 bps occupancy decline.
- **Leasing Strength**: 1.2 million sq. ft. leased in Q3, 82% from existing tenants, with 15.2% rental rate growth on renewals.
- **Risk Management**: $685 million potential impairments on non-core assets, with 2026 expiring leases totaling $46 million in annual rent.

**【CEO Summary Section】**
- Emphasized the company's mission to enable life science innovation, despite challenges like government shutdowns and a slow biotech recovery.
- Highlighted the strategic focus on megacampuses, with 77% of ARR from these assets, aiming to reduce non-income-producing assets to 10-15% of the portfolio.
- Noted the importance of regulatory clarity and cost control in the biotech industry.

**【CFO Financial Commentary】**
- Reported Q3 FFO per share as adjusted of $2.22, down 6% year-over-year due to lower occupancy and venture gains.
- Occupancy declined to 90.6%, with 110 basis points of apples-to-apples decline, driven by oversupply in certain submarkets.
- Leasing volume of 1.2 million sq. ft. remained solid, with 82% from existing tenants and 15.2% rental rate growth on renewals.
- G&A expenses reduced by $49 million annually, with a 5.7% G&A/NOI ratio, outperforming peers.
- Capitalized interest expected to decline in 2026 as development pipeline is curtailed.

**【Q&A Highlights】**
- 2026 outlook includes $1.2 billion in expiring leases, with 1.2 million sq. ft. of known move-outs, and potential impairments of $685 million on non-core assets.
- Dividend policy under review for 2026, with focus on reducing leverage and retaining cash for construction commitments.
- Strategy to pivot non-core assets to alternative uses (e.g., residential) to capitalize on resi demand.
- Regulatory delays (FDA shutdown) and capital market challenges (high interest rates) cited as key risks to demand recovery.

Alexandria Real Estate Equities (ARE)-28 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ARE

ARE fundamentals

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