ALEXANDRIA REAL ESTATE EQUITIES, INC. - Annual Report: 2019 (Form 10-K)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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•	Proximity to centers of innovation and technological advances;

•	Location of the property and our strategy in the relevant market;

•	Quality of existing and prospective tenants;

•	Condition and capacity of the building infrastructure;

•	Physical condition of the structure and common area improvements;

•	Quality and generic characteristics of the improvements;

•	Opportunities available for leasing vacant space and for re-tenanting or renewing occupied space;

•	Availability of and/or ability to add appropriate tenant amenities;

•	Availability of land for future ground-up development of new space;

•	Opportunities to generate higher rent through redevelopment of existing space;

•	The property’s unlevered yields; and

•	Our ability to increase the property’s long-term financial returns.

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•	Maintaining access to diverse sources of capital, including operating cash flows after dividends, incremental debt, asset sales, and other capital such as the sale of equity or joint venture capital;

•	Maintaining significant liquidity through borrowing capacity under our unsecured senior line of credit, available commitments under secured construction loans, marketable securities, and cash and cash equivalents;

•	Continuing to improve our credit profile;

•	Minimizing the amount of near-term debt maturities in a single year;

•	Maintaining commitment to long-term capital to fund growth;

•	Maintaining low to modest leverage;

•	Minimizing variable interest rate risk;

•	Generating high-quality, strong, and increasing operating cash flows;

•	Selectively selling real estate assets, including land parcels and non-core/“core-like” operating assets, and reinvesting the proceeds into our highly leased value-creation development projects;

•	Allocating capital to Class A properties located in collaborative life science, technology, and agtech campuses in AAA urban innovation clusters;

•	Maintaining geographic diversity in urban intellectual centers of innovation;

•	Selectively acquiring high-quality office/laboratory and tech office space in our target urban innovation cluster submarkets at prices that enable us to realize attractive returns;

•	Selectively developing properties in our target urban innovation cluster submarkets;

•	Selectively redeveloping existing office, warehouse, or shell space, or newly acquired properties, into high-quality, generic, and reusable office/laboratory space that can be leased at higher rental rates in our target urban innovation cluster submarkets;

•	Renewing existing tenant space at higher rental rates to the extent possible;

•	Minimizing tenant improvement costs;

•	Improving investment returns through the leasing of vacant space and the replacing of existing tenants with new tenants at higher rental rates;

•	Executing leases with high-quality tenants and proactively monitoring tenant health;

•	Maintaining solid occupancy while attaining high rental rates;

•	Realizing contractual rental rate escalations; and

•	Implementing effective cost control measures, including negotiating pass-through provisions in tenant leases for operating expenses and certain capital expenditures.

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•	We may be unable to acquire a desired property because of competition from other real estate investors with significant capital, including both publicly traded REITs and institutional funds.

•	Even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price or result in other less favorable terms.

•	Even if we enter into agreements for the acquisition of properties, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction.

•	We may be unable to complete an acquisition because we cannot obtain debt and/or equity financing on favorable terms or at all.

•	We may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;

•	We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of operating properties or portfolios of properties, into our existing operations.

•	Acquired properties may be subject to reassessment, which may result in higher-than-expected property tax payments;

•	Market conditions may result in higher-than-expected vacancy rates and lower-than-expected rental rates.

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We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for the cleanup of undisclosed environmental contamination; claims by tenants, vendors, or other persons dealing with the former owners of the properties; and claims for indemnification by general partners, directors, officers, and others indemnified by the former owners of the properties.

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•	We may not complete development or redevelopment projects on schedule or within budgeted amounts;

•	We may be unable to lease development or redevelopment projects on schedule or within budgeted amounts;

•	We may encounter project delays or cancellations due to unavailability of necessary labor and construction materials;

•	We may expend funds on, and devote management’s time to, development and redevelopment projects that we may not complete;

•	We may abandon development or redevelopment projects after we begin to explore them, and as a result, we may lose deposits or fail to recover costs already incurred;

•	Market and economic conditions may deteriorate, which can result in lower-than-expected rental rates;

•	We may face higher operating costs than we anticipated for development or redevelopment projects, including insurance premiums, utilities, real estate taxes, and costs of complying with changes in government regulations or increases in tariffs;

•	We may face higher requirements for capital improvements than we anticipated for development or redevelopment projects, particularly in older structures;

•	We may be unable to proceed with development or redevelopment projects because we cannot obtain debt and/or equity financing on favorable terms or at all;

•	We may fail to retain tenants that have pre-leased our development or redevelopment projects if we do not complete the construction of these properties in a timely manner or to the tenants’ specifications;

•	Tenants that have pre-leased our development or redevelopment projects may file for bankruptcy or become insolvent, which may adversely affect the income produced by, and the value of, our properties or require us to change the scope of the project, which may potentially result in higher construction costs and lower financial returns;

•	We may encounter delays, refusals, unforeseen cost increases, and other impairments resulting from third-party litigation, natural disasters, or severe weather conditions;

•	We may encounter delays or refusals in obtaining all necessary zoning, land use, building, occupancy, and other required government permits and authorizations; and

•	Development or redevelopment projects may have defects we do not discover through our inspection processes, including latent defects that may not reveal themselves until many years after we put a property in service.

•	Our properties may not perform as we expect;

•	We may have to lease space at rates below our expectations;

•	We may not be able to obtain financing on acceptable terms; and

•	We may underestimate the cost of improvements required to maintain or improve space to meet standards established for the market position intended for that property.

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•	Restrict our ability to incur additional indebtedness;

•	Restrict our ability to make certain investments;

•	Restrict our ability to merge with another company;

•	Restrict our ability to make distributions to our stockholders;

•	Require us to maintain financial coverage ratios; and

•	Require us to maintain a pool of qualified unencumbered assets.

•	Our cash flows from operations may not be sufficient to meet required payments of principal and interest;

•	We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt;

•	If we default on our debt obligations, the lenders or mortgagees may foreclose on our properties that secure those loans;

•	A foreclosure on one of our properties could create taxable income without any accompanying cash proceeds to pay the tax;

•	A default under a loan that has cross-default provisions may cause us to automatically default on another loan;

•	We may not be able to refinance or extend our existing debt;

•	The terms of any refinancing or extension may not be as favorable as the terms of our existing debt;

•	We may be subject to a significant increase in the variable interest rates on our unsecured senior line of credit, which could adversely impact our cash flows and operations; and

•	The terms of our debt obligations may require a reduction in our distributions to stockholders.

•	National, local, and worldwide economic and political conditions;

•	Competition from other properties;

•	Changes in the life science, technology, and agtech industries;

•	Real estate conditions in our target markets;

•	Our ability to collect rent payments;

•	The availability of financing;

•	Changes to the financial and banking industries;

•	Changes in interest rate levels;

•	Vacancies at our properties and our ability to re-lease space;

•	Changes in tax or other regulatory laws;

•	The costs of compliance with government regulation;

•	The lack of liquidity of real estate investments; and

•	Increases in operating costs.

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•	The status of the economy;

•	The status of capital markets, including availability and cost of capital;

•	Changes in financing terms available to us;

•	Negative developments in the operating results or financial condition of tenants, including, but not limited to, their ability to pay rent;

•	Our ability to re-lease space at similar rates as vacancies occur;

•	Our ability to reinvest sale proceeds in a timely manner at rates similar to the rate at which assets are sold;

•	Regulatory approval and market acceptance of the products and technologies of tenants;

•	Liability or contract claims by or against tenants;

•	Unanticipated difficulties and/or expenditures relating to future acquisitions;

•	Environmental laws affecting our properties;

•	Changes in rules or practices governing our financial reporting; and

•	Other legal and operational matters, including REIT qualification and key management personnel recruitment and retention.

•	The availability and cost of debt and/or equity capital;

•	The condition of our balance sheet;

•	Actual or anticipated capital requirements;

•	The condition of the financial and banking industries;

•	Actual or anticipated variations in our quarterly operating results or dividends;

•	The amount and timing of debt maturities and other contractual obligations;

•	Changes in our net income, funds from operations, or guidance;

•	The publication of research reports and articles about us, our tenants, the real estate industry, or the life science, technology, and agtech industries;

•	The general reputation of REITs and the attractiveness of their equity securities in comparison to other debt or equity securities (including securities issued by other real estate-based companies);

•	General stock and bond market conditions, including changes in interest rates on fixed-income securities, that may lead prospective stockholders to demand a higher annual yield from future dividends;

•	Fluctuations from general market volatility;

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•	Changes in our analyst ratings;

•	Changes in our corporate credit rating or credit ratings of our debt or other securities;

•	Changes in market valuations of similar companies;

•	Adverse market reaction to any additional debt we incur in the future;

•	Additions, departures, or other announcements regarding our key management personnel;

•	Actions by institutional stockholders;

•	Speculation in the press or investment community;

•	Terrorist activity adversely affecting the markets in which our securities trade, possibly increasing market volatility and causing the further erosion of business and consumer confidence and spending;

•	Government regulatory action and changes in tax laws;

•	Fiscal policies or inaction at the U.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy;

•	Global market factors adversely affecting the U.S. economic and political environment;

•	The realization of any of the other risk factors included in this annual report on Form 10-K; and

•	General market and economic conditions.

•	The amount of net cash provided by operating activities available for distribution;

•	Our financial condition and capital requirements;

•	Any decision to reinvest funds rather than to distribute such funds;

•	Our capital expenditures;

•	The annual distribution requirements under the REIT provisions of the Internal Revenue Code;

•	Restrictions under Maryland law; and

•	Other factors our Board of Directors deems relevant.

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•	Adverse effects of changes in exchange rates for foreign currencies;

•	Challenges and/or taxation with respect to the repatriation of foreign earnings or repatriation of proceeds from the sale of one or more of our foreign investments;

•	Changes in foreign political, regulatory, and economic conditions, including nationally, regionally, and locally;

•	Challenges in managing international operations;

•	Challenges in hiring or retaining key management personnel;

•	Challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment, and legal proceedings;

•	Differences in lending practices;

•	Differences in languages, cultures, and time zones;

•	Changes in applicable laws and regulations in the U.S. that affect foreign operations;

•	Challenges in managing foreign relations and trade disputes that adversely affect U.S. and foreign operations;

•	Future partial or complete U.S. federal government shutdowns, trade disagreements with other countries, or uncertainties that could affect business transactions within the U.S. and with foreign entities;

•	Changes in tax and local regulations with potentially adverse tax consequences and penalties; and

•	Foreign ownership and transfer restrictions.

•	Upon bankruptcy of non-wholly owned partnerships, limited liability companies, or joint venture entities, we may become liable for the liabilities of the partnership, limited liability company, or joint venture;

•	We may share certain approval rights over major decisions with third parties;

•	We may be required to contribute additional capital if our partners fail to fund their share of any required capital contributions;

•	Our partners, co-members, or joint venture partners might have economic or other business interests or goals that are inconsistent with our business interests or goals and that could affect our ability to lease or re-lease the property, operate the property, or maintain our qualification as a REIT;

•	Our ability to sell the interest on advantageous terms when we so desire may be limited or restricted under the terms of our agreements with our partners; and

•	We may not continue to own or operate the interests or assets underlying such relationships or may need to purchase such interests or assets at an above-market price to continue ownership.

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•	We would be subject to federal and state income taxes on our taxable income at regular corporate rates;

•	We would not be allowed a deduction for distributions to our stockholders in computing taxable income;

•	We would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification, unless we were entitled to relief under the Internal Revenue Code; and

•	We would no longer be required by the Internal Revenue Code to make distributions to our stockholders.

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•	Status as a REIT;

•	Incurrence of debt and debt management activities;

•	Selective acquisition, disposition, development, and redevelopment activities;

•	Stockholder distributions; and

•	Other policies, as appropriate.

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•	Other REITs;

•	Insurance companies;

•	Pension and investment funds;

•	Private equity entities;

•	Partnerships;

•	Developers;

•	Investment companies;

•	Owners/occupants; and

•	Foreign investors, including sovereign wealth funds.

•	Greater Boston;

•	San Francisco;

•	New York City;

•	San Diego;

•	Seattle;

•	Maryland; and

•	Research Triangle.

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•	Reinforced concrete floors;

•	Upgraded roof loading capacity;

•	Increased floor-to-ceiling heights;

•	Heavy-duty HVAC systems;

•	Enhanced environmental control technology;

•	Significantly upgraded electrical, gas, and plumbing infrastructure; and

•	Laboratory benches.

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Some of our tenants develop and manufacture drugs that require regulatory approval, including approval from the FDA, prior to being made, marketed, sold, and used. The regulatory approval process to manufacture and market drugs is costly, typically takes several years, requires validation through clinical trials and the use of substantial resources, and is often unpredictable. A tenant may fail to obtain or may experience significant delays in obtaining these approvals. Even if the tenant obtains regulatory approvals, marketed products will be subject to ongoing regulatory review and potential loss of approvals.

•	The ability of some of our tenants to commercialize any future products successfully will depend in part on the coverage and reimbursement levels set by government authorities, private health insurers, and other third-party payers. Additionally, reimbursements may decrease in the future.

•	Some of our tenants developing potential products may find that their products are not effective, or even are harmful, when tested in humans.

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Some of our tenants depend upon the commercial success of certain products. Even if a product made by a tenant is successfully developed and proven safe and effective in human clinical trials, and the requisite regulatory approvals are obtained, subsequent discovery of safety issues with these products could cause product liability events, additional regulatory scrutiny and requirements for additional labeling, loss of approval, withdrawal of products from the market, and the imposition of fines or criminal penalties.

•	A drug made by a tenant may not be well accepted by doctors and patients, or may be less effective or accepted than a competitor’s drug, even if it is successfully developed.

•	The negative results of safety signals arising from the clinical trials of the competitors of our tenants may prompt regulatory agencies to take actions that may adversely affect the clinical trials or products of our tenants.

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Some of our tenants require significant funding to develop and commercialize their products and technologies, which funding must be obtained from venture capital firms; private investors; the public markets; companies in the life science industry; or federal, state, and local governments. Such funding may become unavailable or difficult to obtain. The ability of each tenant to raise capital will depend on its financial and operating condition, viability of their products, and the overall condition of the financial, banking, and economic environment, as well as government budget policies.

•	Even with sufficient funding, some of our tenants may not be able to discover or identify potential drug targets in humans, or potential drugs for use in humans, or to create tools or technologies that are commercially useful in the discovery or identification of potential drug targets or drugs.

•	Some of our tenants may not be able to successfully manufacture their drugs economically, even if such drugs are proven through human clinical trials to be safe and effective in humans.

•	Marketed products also face commercialization risk, and tenants may never realize projected levels of product utilization or revenues.

•	Negative news regarding the products, the clinical trials, or other business developments of our tenants may cause their stock price or credit profile to deteriorate.

•	Our tenants sell products and services in an industry that is characterized by rapid and significant technological changes, frequent new product and service introductions and enhancements, evolving industry standards, and uncertainty over the implementation of new healthcare reform legislation, which may cause them to lose competitive positions and adversely affect their operations.

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Some of our tenants and their licensors require patent, copyright, or trade secret protection to develop, make, market, and sell their products and technologies. A tenant may be unable to commercialize its products or technologies if patents covering such products or technologies are not issued or are successfully challenged, narrowed, invalidated, or circumvented by third parties, or if the tenant fails to obtain licenses to the discoveries of third parties necessary to commercialize its products or technologies.

•	Many of our tenants depend upon patents to provide exclusive marketing rights for their products. As their product patents expire, competitors of these tenants may be able to legally produce and market products similar to those products of our tenants, which could have a material adverse effect on their sales and results of operations.

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Laws and regulations governing the Internet, e-commerce, electronic devices, and other services are evolving. Existing and future laws and regulations and the halting of operations at certain agencies resulting from partial or complete U.S. federal government shutdowns may impede the growth of our technology industry tenants. These laws and regulations may cover, among other areas, taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, business licensing, and consumer protection.

•	The technology industry is characterized by rapid changes in customer requirements and preferences, frequent new product and service introductions, and the emergence of new industry standards and practices. A failure to respond in a timely manner to these market conditions could materially impair the operations of our technology industry tenants.

•	Some of our tenants depend on continued and unimpeded access to the Internet by users of their products and services, as well as access to mobile networks. Internet service providers and mobile network operators may be able to block, degrade, or charge additional fees to these tenants or users.

•	The Internet has experienced, and is likely to continue to experience, outages and other delays. These outages and delays, as well as problems caused by cyber attacks and computer malware, viruses, worms, and similar programs, may materially affect the ability of our technology industry tenants to conduct business.

•	Security breaches or network attacks may delay or interrupt the services provided by our tenants and could harm their reputations or subject them to significant liability.

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Some of our tenants require significant funding to develop and commercialize their products and technologies, which funding must be obtained from venture capital firms; private investors; the public markets; companies in the technology industry; or federal, state, and local governments. Such funding may become unavailable or difficult to obtain. The ability of each tenant to raise capital will depend on its financial and operating condition, viability of their products, and the overall condition of the financial, banking, governmental budget policies, and economic environment.

•	Even with sufficient funding, some of our tenants may not be able to discover or identify potential customers or may not be able to create tools or technologies that are commercially useful.

•	Some of our tenants may not be able to successfully manufacture their products economically.

•	Marketed products also face commercialization risk, and some of our tenants may never realize projected levels of product utilization or revenues.

•	Unfavorable news regarding the products or other business developments of our tenants may cause their stock price or credit profile to deteriorate.

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•	The products and services provided by some of our tenants are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and other inadequate protections could prevent them from enforcing or defending their proprietary technologies. These tenants may also face legal risks arising out of user-generated content.

•	Trademark, copyright, patent, domain name, trade dress, and trade secret protection is very expensive to maintain and may require our technology industry tenants to incur significant costs to protect their intellectual property rights.

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Laws and regulations governing the Internet, e-commerce, electronic devices, and other services and products developed by the agtech industry are evolving. Existing and future laws and regulations and the halting of operations at certain agencies resulting from partial or complete U.S. federal government shutdowns may impede the growth of our agtech industry tenants. These laws and regulations may cover, among other areas, taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, business licensing, and consumer protection.

•	Our agtech tenants businesses may fluctuate from time to time due to seasonal weather conditions and other factors out of their control, affecting products and services our agtech tenants’ offer.

•	Some of our agtech tenants’ businesses depend on transportation services to deliver their products or to deliver raw materials to their clients. If transportation providers are unavailable or fail to deliver our agtech tenant’s products in a timely manner, they may be able to manufacture and deliver their services and products on a timely basis.

•	Similarly, if fuel or other energy prices increase, it may increase transportation costs, which could affect our agtech tenants’ businesses.

•	Our agtech tenants may face labor strikes, work slowdowns, labor contract negotiations or other job actions from their employees or third party contractors. In the event of a strike, work slowdown or other similar labor unrest, our tenants may not have the ability to adequately staff their businesses, which could have an adverse effect on their operations and revenue.

•	The agtech industry is characterized by frequent new product and service introductions, and the emergence of new industry standards and practices. A failure to respond in a timely manner to these market conditions could materially impair the operations of our agtech industry tenants.

•	Technological advances in agriculture could decrease the demand for crop nutrients, energy and other crop input products and services our tenants provide. Genetically engineered crops that resist disease and insects could affect the demand for certain of our tenant’s products. Demand for fuel could decline as technology allows for more efficient usage of equipment.

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•	Restricted the deductibility of interest expense by businesses (generally, to 30% of the business’ adjusted taxable income) except, among others, real property businesses electing out of such restriction; generally, we expect our business to qualify as a real property business, but businesses conducted by our taxable REIT subsidiaries may not qualify;

•	Required real property businesses to use the less favorable alternative depreciation system to depreciate real property in the event businesses elect to avoid the interest deduction restriction above;

•	Restricted the benefits of like-kind exchanges that defer capital gains for tax purposes to exchanges of real property;

•	Required accrual method taxpayers to take certain amounts in income no later than the taxable year in which such income is taken into account as revenue in an applicable financial statement prepared under GAAP, which, with respect to certain leases, could accelerate the inclusion of rental income; and

•	Generally allowed a deduction for individuals equal to 20% of certain income from pass-through entities, including ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income).

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•	“Hardwired Approach,” which clearly specifies the SOFR-based successor rate and spread adjustment to be used when LIBOR ceases to exist.

•	“Amendment Approach,” which, unlike the Hardwired Approach, does not reference specific rates or spread adjustments but provides a streamlined amendment approach for negotiating a benchmark replacement and introduces clarity with respect to the fallback trigger events and an adjustment to be applied to the successor rate.

•	We have proactively reduced outstanding LIBOR-based borrowings under our unsecured senior bank term loans and secured construction loans through repayments. From January 2017 to December 2018, we retired approximately $942.0 million of such debt.

•	During the year ended December 31, 2019, we further reduced our exposure to LIBOR as follows:

•	Repaid the $350.0 million balance and extinguished our unsecured senior bank term loan.

•	Terminated our LIBOR-based interest rate hedge agreements aggregating $350.0 million in conjunction with the extinguishment of our unsecured senior bank term loan. As a result, we had no outstanding interest rate hedge agreements as of December 31, 2019.

•	Fully repaid outstanding balances aggregating $193.1 million under our LIBOR-based construction loans.

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During the three months ended September 30, 2019, we established a commercial paper program, under which we have the ability to issue up to $750.0 million of commercial notes, bearing interest at short term fixed rates, with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is not subjected to LIBOR and will be used for funding short-term working capital needs. As of December 31, 2019, we had no borrowings outstanding under our commercial paper program.

•	We continue to prudently manage outstanding borrowings under our unsecured senior line of credit, which represented less than 6% of our total debt balance outstanding as of December 31, 2019. Excluding LIBOR-based debt held by our unconsolidated joint ventures, borrowings under our unsecured senior line of credit represented our only LIBOR-based debt outstanding as of December 31, 2019.

•	Our unsecured senior line of credit contains fallback language generally consistent with the ARRC’s Amendment Approach, which provides a streamlined amendment approach for negotiating a benchmark replacement and introduces clarity with respect to the fallback trigger events and an adjustment to be applied to the successor rate.

•	We continue to monitor developments by the ARRC and other governing bodies involved in LIBOR transition.

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•	The discharge of stormwater, wastewater, and any water pollutants;

•	The emission of air pollutants;

•	The generation, management, and disposal of hazardous or toxic chemicals, substances, or wastes; and

•	Workplace health and safety.

•	Asbestos surveys;

•	Radon surveys;

•	Lead-based paint surveys;

•	Mold surveys;

•	Additional public records review;

•	Subsurface sampling; and

•	Other testing.

•	Change in market conditions may affect our ability to deploy capital for projects that reduce energy consumption, greenhouse gas pollution and potable water consumption, and provide waste savings.

•	Our tenants might be unwilling or unable to accept potential incremental expenses associated with our sustainability programs, including expenses to comply with requirements stipulated under building certification standards such as LEED, WELL, and Fitwel.

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•	New class A development properties that have received or are expected to receive Gold or Platinum LEED certification;

•	Existing class A redevelopment properties that have received or are expected to receive Gold or Platinum LEED certification; and

•	Tenant improvements that have received or are expected to receive Gold or Platinum LEED certification.

•	Significant changes to our balance sheet relating to the recognition of operating leases as assets or liabilities based on existing lease terms and whether we are the lessor or lessee;

•	Significant changes in the timing of revenue recognition (related to lease arrangements in which we are the lessor) or expense recognition (related to the lease arrangements in which we are the lessee) stemming from the potential classification of financing or sales-type leases under the new ASU, for leases that are classified as operating leases under the current accounting standards;

•	Significant fluctuations in our reported results of operations, including an increase in our expenses related to amortization of new lease-related assets and/or liabilities and assumed interest costs with leases;

•	Significant fluctuations in our reported results of operations, including an increase in our general and administrative expenses related to payroll costs, legal costs, and other out-of-pocket costs incurred as part of the leasing process prior to the execution of a lease that no longer qualifies for capitalization as initial direct costs and instead are expensed as incurred; and

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Significant fluctuations in our reported results of operations that may result from the classification of future ground leases as finance leases rather than operating leases. Prior to January 1, 2019, the effective date of the new lease ASUs, all ground leases were accounted for as operating leases, with ground lease payments straight-lined over the term of the ground lease. Under the new lease accounting, ground leases can qualify for classification as finance leases, which are recognized in operating results using an effective interest method. The classification of ground leases as operating leases or finance leases may result in different timing of expense recognition over the term of the ground leases.

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•	Theft of our cash, cash equivalents, or other liquid assets, including publicly traded securities;

•	Interruption in the operation of our systems, which may result in operational inefficiencies and a loss of profits;

•	Unauthorized access to, and destruction, loss, theft, misappropriation, or release of, proprietary, confidential, sensitive, or otherwise valuable information of ours or our tenants, and other business partners, which could be used to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;

•	Inability to produce financial and operational data necessary to comply with rules and regulations from the SEC, the IRS, or other state and federal regulatory agencies;

•	Our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;

•	Significant management attention and resources required to remedy any damages that result;

•	Significant exposure to litigation and regulatory fines, penalties or other sanctions;

•	Violation of our lease agreements or other agreements;

•	Damage to our reputation among our tenants, business partners, and investors;

•	Loss of business opportunities; and

•	Difficulties in employee retention and recruitment.

•	The breadth of our operations and the high volume of transactions that our systems process;

•	The large number of our business partners; and

•	The proliferation and increasing sophistication of cyber attacks.

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•	Reinforced concrete floors;

•	Upgraded roof loading capacity;

•	Increased floor-to-ceiling heights;

•	Heavy-duty HVAC systems;

•	Enhanced environmental control technology;

•	Significantly upgraded electrical, gas, and plumbing infrastructure; and

•	Laboratory benches.

•	Investment-grade or publicly traded large cap tenants represented 50% of our total annual rental revenue;

•	Approximately 95% of our leases (on an RSF basis) contained effective annual rent escalations that were either fixed (generally ranging from approximately 3.0% to 3.5%) or indexed based on a consumer price index or other index;

•	Approximately 97% of our leases (on an RSF 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; and

•	Approximately 96% of our leases (on an RSF 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.

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(1)	Decline from December 31, 2018 primarily related to vacancy at the recently acquired SD Tech by Alexandria, partially offset by lease commencements at our Campus Pointe by Alexandria and University District campuses.

(2)

Includes 259,616 RSF, or 1.0%, of vacancy representing lease-up opportunities at properties recently acquired during the second half of 2019, primarily related to our SD Tech by Alexandria campus. Excluding these vacancies, occupancy of operating properties in North America would have been 97.8% as of December 31, 2019. Expected occupancy for the first quarter of 2020 includes 689,103 RSF, or 2.4%, of vacancy primarily from three buildings contributed by our partner in a recently formed consolidated real estate joint venture and our acquisition of SD Tech by Alexandria campus. Refer to the “Acquisitions” section under this Item 2 in this annual report on Form 10-K for additional information.

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(1)

Based on aggregate annual rental revenue in effect as of December 31, 2019. Refer to the definitions of “Annual Rental Revenue” and “Investment-Grade or Publicly Traded Large Cap Tenants” in the “Non-GAAP Measures and Definitions” section under Item 7 of this annual report on Form 10-K for additional information on our methodology on annual rental revenue from unconsolidated real estate joint ventures and average daily market capitalization.

(2)	Annual rental revenue from investment-grade or publicly traded large cap tenants includes two tenants, Maxar Technologies and athenahealth, Inc., located in properties acquired during the three months ended December 31, 2019. Excluding these two tenants, our annual rental revenue from investment-grade or publicly traded large cap tenants within our top 20 tenants was 87%.

(3)

Includes a ground lease for land at 1455 and 1515 Third Street (two buildings aggregating 422,980 RSF) and a lease at 1655 and 1725 Third Street (two buildings aggregating 593,765 RSF) owned by our unconsolidated joint venture in which we have an ownership interest of 10%. Annual rental revenue is presented using 100% of the annual rental revenue of our consolidated properties and our share of annual rental revenue of our unconsolidated real estate joint ventures. Refer to footnote 1 for additional information. Excluding the ground lease, the weighted-average remaining lease term for our top 20 tenants was 8.9 years as of December 31, 2019.

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(1)	Represents annual rental revenue in effect as of December 31, 2019. Refer to the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for additional information.

(2)	Based on aggregate annual rental revenue in effect as of December 31, 2019. Refer to definition of “Annual Rental Revenue” in the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for our methodology on annual rental revenue for unconsolidated real estate joint ventures.

(3)	67% of our annual rental revenue for technology tenants is from investment-grade or publicly traded large cap tenants.

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(1)	Represents annual rental revenue in effect as of December 31, 2019. Refer to the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for additional information.

(2)	Represents average occupancy of operating properties in North America as of each December 31 for the last 10 years.

(3)	As of December 31, 2019.

(4)

Includes 259,616 RSF, or 1.0%, of vacancy representing lease-up opportunities at properties recently acquired during the second half of 2019, primarily related to our SD Tech by Alexandria campus. Excluding these vacancies, occupancy of operating properties in North America would have been 97.8% as of December 31, 2019. Refer to the “Summary of Occupancy Percentages in North America” section under this Item 2 in this annual report on Form 10-K for additional information.

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•	Executed a total of 241 leases, with a weighted-average lease term of 7.8 years, for 5.1 million RSF, including 1.4 million RSF related to our development and redevelopment projects, during the year ended December 31, 2019; leasing activity of 5.1 million RSF represents the highest annual leasing activity in Alexandria’s history; and

•	Strong rental rate increases of 32.2% and 17.6% (cash basis), representing our highest annual increase during the past 10 years.

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(1)	Excludes month-to-month leases aggregating 41,809 RSF and 50,548 RSF as of December 31, 2019 and 2018, respectively.

(2)	During the year ended December 31, 2019, we granted tenant concessions/free rent averaging 2.4 months with respect to the 5,062,722 RSF leased. Approximately 59% of the leases executed during the year ended December 31, 2019, did not include concessions for free rent.

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(1)	Represents amounts in effect as of December 31, 2019.

(2)	Excludes month-to-month leases aggregating 41,809 RSF as of December 31, 2019.

(1)	The largest remaining contractual lease expiration in 2020 is 60,759 RSF in our Greater Boston market.

(2)	Excludes month-to-month leases aggregating 41,809 RSF as of December 31, 2019.

(3)	Represents amounts in effect as of December 31, 2019.

(4)	Represents office space aggregating 154,855 RSF at The Arsenal on the Charles, a campus acquired on December 17, 2019, in our Cambridge/Inner Suburbs submarket, that is targeted for redevelopment into office/laboratory space upon expiration of existing leases during the third quarter of 2020 and first quarter of 2021.

(5)	Includes two leases aggregating 100,560 RSF at 630 and 650 Gateway Boulevard in our South San Francisco submarket that expire during the fourth quarter of 2020. We are considering options to renovate these buildings into Class A office/laboratory properties, which will not be classified as a redevelopment. As such, we expect these properties to remain in our pool of same properties.

(6)	Includes 140,398 RSF at 9363, 9373, and 9393 Towne Centre Drive in our University Town Center submarket, a site that is under evaluation to be developed, subject to future market conditions.

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(1)	Balances exclude our share of the cost basis associated with our unconsolidated properties, which is classified as investments in unconsolidated real estate joint ventures in our consolidated balance sheets.

(2)	Refer to the definition of “Investment in Real Estate” in the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for additional detail on value-creation square feet currently included in rental properties.

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(1)	Represents leased square footage with contractual lease expirations in the third quarter of 2020 and first quarter of 2021. Upon expiration of the existing leases, we anticipate this RSF will be redeveloped to office/laboratory space.

(2)	We expect to provide total estimated costs and related yields in the future, subsequent to the commencement of development or redevelopment.

(3)	Represents the initial stabilized yields related to the fully occupied operating properties upon closing.

(4)	The campus includes 10 operating buildings, of which we expect to renovate several vacant suites aggregating 182,056 RSF. We expect to achieve unlevered initial stabilized yields of 6.6% and 6.5% (cash basis) for the operating buildings, and yields for future development will be disclosed subsequent to the commencement of development.

(5)	Refer to the “New Class A Development and Redevelopment Properties: Summary of Pipeline” subsection of this “Investments in Real Estate” section under this Item 2 for additional information.

(6)	In December 2018, we acquired two buildings adjacent to our Campus Pointe by Alexandria campus. The total purchase price of $80.0 million was paid in two installments, $15.0 million in December 2018 and $65.0 million in January 2019.

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(1)	Capitalization rates are calculated based upon net operating income and net operating income (cash basis), annualized for the quarter preceding the date on which the property is sold.

(2)	We retained control over each of these newly formed joint ventures (except as noted in footnote 5) and therefore consolidate these properties. For consolidated joint ventures, we account for the difference between the consideration received and the book value of the interest sold as an equity transaction, with no gain or loss recognized in earnings.

(3)

In December 2018, we acquired two buildings adjacent to our Campus Pointe by Alexandria campus aggregating 269,048 RSF, comprising 109,164 RSF at 10260 Campus Point Drive and 159,884 RSF at 4161 Campus Point Court, for a total purchase price of $80.0 million. In July 2019, as had been contemplated at the time of the original acquisition, we completed the formation of a joint venture through the sale of a 45% noncontrolling interest to an institutional investor.

(4)	This transaction values 100% of the campus at $585.2 million and represents a value in excess of book basis aggregating $269.1 million.

(5)	Upon completion of the sale of 6138/6150 Nancy Ridge Drive, we recognized in earnings a gain on sale of real estate of $474 thousand.

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(1)	Upon completion of 26 projects in process targeting either WELL or Fitwel certification.

(2)	Relative to a 2015 baseline. Carbon pollution, energy consumption, and water consumption values are for our directly managed buildings.

(3)	Waste values are for our total portfolio, which includes both indirectly and directly managed buildings.

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(1)	Relates to total operating RSF placed in service as of the most recent delivery.

(2)	This property is an unconsolidated real estate joint venture. RSF represents 100% and cost and yields amounts represent our share.

(3)	Improvements in initial stabilized yields of 60 bps and 50 bps (cash basis), are due to reduction in costs of $6 million primarily from core and shell cost savings.

(4)	Excludes 685 Gateway Boulevard, a 15,437 RSF amenity building.

(5)	Project costs represent aggregate development costs for 9880 Campus Point Drive and 4150 Campus Point Court. Yields represent expected aggregate returns for Campus Pointe by Alexandria, including 9880, 10290, and 10300 Campus Point Drive and 4150 Campus Point Court.

(6)	Yields represent aggregate returns for Alexandria Center® for AgTech – Research Triangle which consists of Phase I at 5 Laboratory Drive and Phase II at 9 Laboratory Drive.

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(1)	Initial occupancy dates are subject to leasing and/or market conditions. Multi-tenant projects may have occupancy by tenants over a period of time. Stabilized occupancy may vary depending on single tenancy versus multi-tenancy.

(2)	We expect to redevelop 154,855 RSF of occupied space into office/laboratory space upon expiration of the existing leases in the third quarter of 2020 and first quarter of 2021.

(3)	Refer to footnote 2 on the next page.

(4)	704 Quince Orchard is an unconsolidated real estate joint venture. RSF represent 100%.

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(1)	Refer to the “Consolidated and Unconsolidated Real Estate Joint Ventures” section under this Item 2 for additional information.

(2)	Represents a two-phase development project as follows:

•

Initial phase represents 9880 Campus Point Drive, a 98,000 RSF project to develop Alexandria GradLabs™, a highly flexible, first-of-its-kind life science platform designed to provide post-seed-stage life science companies with turnkey, fully furnished office/laboratory suites and an accelerated, scalable path for growth. The R&D building located at 9880 Campus Point Drive was demolished and as of December 31, 2019, continues to be included in our same property performance results. Refer to the “Same Properties” subsection of the “Results of Operations” section under this Item 2 for additional information.

•	Subsequent phase represents 4150 Campus Point Court, a 171,102 RSF, 100% leased project with occupancy expected in 2022.

•	Project costs represent development costs for 9880 Campus Point Drive and 4150 Campus Point Court. Unlevered yields represent expected aggregate returns for Campus Pointe by Alexandria, including 9880, 10290, and 10300 Campus Point Drive and 4150 Campus Point Court.

(3)	Unlevered yields represent anticipated aggregate returns for 1165 Eastlake Avenue, an amenity-rich research headquarter for Adaptive Biotechnologies Corporation, and 1208 Eastlake Avenue, an adjacent multi-tenant office/laboratory building.

(4)	704 Quince Orchard is an unconsolidated real estate joint venture. Cost and yields amounts represent our share.

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(1)	This property is held by an unconsolidated real estate joint venture. Refer to the “Consolidated and Unconsolidated Real Estate Joint Ventures” section under Item 7 in this annual report on Form 10-K for additional information on our ownership interest.

(2)

Total rentable square footage includes 1,525,116 RSF of buildings currently in operation that will be redeveloped or replaced with new development RSF upon commencement of future construction. Refer to the definition of “Investments in Real Estate – Value-Creation Square Footage Currently in Rental Properties” in the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for additional information.

(3)	Refer to the “Acquisitions” subsection of this “Investments in Real Estate” section under this Item 2 for additional information.

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(1)	Includes revenue-enhancing projects and non-revenue-enhancing capital expenditures.

(1)	Excludes amounts that are recoverable from tenants, related to revenue-enhancing capital expenditures, or related to properties that have undergone redevelopment.

(2)	Represents the average for a five-year period from 2015 to 2019.

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(1)	Refer to Note 2 – “Summary of Significant Accounting Policies” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information on discontinued operations.

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(1)	Classified in equity in earnings of unconsolidated real estate joint ventures in our consolidated statements of operations under Item 15 in this annual report on Form 10-K.

(2)	Refer to “Weighted-Average Share of Common Stock Outstanding – Diluted” in the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K for additional information.

(3)	Refer to “Funds From Operations and Funds From Operations, as Adjusted, Attributable to Alexandria Real Estate Equities, Inc.’s Common Stockholders” in the “Non-GAAP Measures and Definitions” section under Item 7 in this annual report on Form 10-K.

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•	50% of annual rental revenue from investment-grade or publicly traded large cap tenants.

•	Weighted-average remaining lease term of 8.1 years.

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•	Total revenues of $1.5 billion, up 15.4%, for the year ended December 31, 2019, compared to $1.3 billion for the year ended December 31, 2018.

•	Continued strong internal growth; acquired vacancy from recent acquisitions provide opportunity to increase income from rentals and net operating income.

•	Net operating income (cash basis) of $951.8 million for the year ended December 31, 2019, increased by $121.2 million, or 14.6%, compared to the year ended December 31, 2018.

•	Same property net operating income growth of 3.1% and 7.1% (cash basis) for the year ended December 31, 2019, compared to the year ended December 31, 2018.

•	Continued strong leasing activity during 2019, representing the highest leasing activity in our history and rental rate growth over expiring rates on renewed and re-leased space during 2019, representing our highest annual rental rate increases during the past 10 years:

•	Since the beginning of 2019, we have placed into service 2.1 million RSF of development and redevelopment projects, with weighted-average initial stabilized yields of 7.4% and 6.9% (cash basis).

•	Significant near-term growth of annual net operating income (cash basis), including our share of unconsolidated real estate joint ventures, of $55 million upon the burn-off of initial free rent on recently delivered projects.

•	We commenced development and redevelopment projects aggregating 1.9 million RSF during the year ended December 31, 2019.

•	During the year ended December 31, 2019, we leased 1.4 million RSF of development and redevelopment space.

(1)

Includes 259,616 RSF, or 1.0%, of vacancy representing lease-up opportunities at properties recently acquired during the second half of 2019, primarily related to our SD Tech by Alexandria campus. Excluding these vacancies, occupancy of operating properties in North America would have been 97.8% as of December 31, 2019. Refer to the “Summary of Occupancy Percentages in North America” section under Item 2 in this annual report on Form 10-K for additional information.

(2)	Fourth quarter of 2019, annualized.

(3)	Represents an increase of 400 bps since the beginning of 2013.

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•

In February 2019, it was announced that we are working with Verily Life Sciences, LLC, Alphabet’s life science division, to build a tech-focused rehabilitation campus in Dayton, Ohio, for the full and sustained recovery of people living with opioid addiction. The campus will provide a comprehensive model of care that will include a behavioral health treatment center, rehabilitation housing, and wrap-around services, and will act as a state of the art model for opioid addiction treatment nationwide.

•

In February 2019, we were recognized by the Center for Active Design, which operates Fitwel®, as the inaugural Industry Leading Company in Fitwel’s 2018 Best in Building Health. We were selected based on our 3-Star Fitwel certification (the highest rating possible); our leadership in promoting and educating the real estate industry on the opportunities for and benefits of building design, construction, and operational practices that support high levels of occupant health and wellness; and our #1 global ranking in the 2018 GRESB Health & Well-Being Module.

•	In March 2019, Alexandria LaunchLabs® – Cambridge, located at the Alexandria Center® at One Kendall Square in Greater Boston, achieved LEED gold certification and a Fitwel 3-Star certification.

•

In April 2019, we announced the launch of a new strategic agricultural technology (agtech) business initiative and the opening of Phase I of the Alexandria Center® for AgTech – Research Triangle, the first and only fully integrated, amenity-rich, multi-tenant agtech R&D and greenhouse campus, in the heart of Research Triangle, the most important, dense, and diverse agtech cluster in the U.S. The campus opened with a 97% leased, 180,400 RSF first phase redevelopment at 5 Laboratory Drive.

•

In June 2019, we announced our partnership with Columbia University to open our second Alexandria LaunchLabs® in New York City in the spring of 2020. The full-service platform will offer member companies 13,298 RSF of highly flexible, turnkey office/laboratory space and feature a high-tech event center to host workshops, networking events, and educational opportunities for the entrepreneurial life science community.

•	In June 2019, we celebrated the opening of the first facilities within the tech-focused opioid rehabilitation campus in Dayton, Ohio. In partnership with Verily Life Sciences, LLC, we are leading the design and development of this 59,000 RSF state-of-the-art campus to provide a comprehensive model of care dedicated to the recovery of people suffering from opioid addiction.

•	In September 2019, we achieved the following in the 2019 GRESB Real Estate Assessment: (i) GRESB 5 Star Rating (out of 5 stars), (ii) our third consecutive “Green Star” designation, and (iii) our second consecutive “A” disclosure score.

•

In October 2019, we accepted the 2019 Developer of the Year Award from NAIOP, the Commercial Real Estate Development Association. This award annually honors the development company that best exemplifies leadership and innovation as demonstrated by the outstanding quality of projects and services, financial consistency and stability, ability to adapt to market conditions, and support for the local community.

•

In November 2019, Alexandria, in collaboration with academic institutions, research hospitals, and life science industry partners, including Harvard University, the Massachusetts Institute of Technology, FUJIFILM Diosynth Biotechnologies, and GE Healthcare Life Sciences, announced the launch of a first-of-its-kind consortium to catalyze advanced biological innovation and manufacturing in Greater Boston with an aim to treat, prevent, and cure diseases.

•	In January 2020, we announced our first national $100,000 AgTech Innovation Prize competition to recognize startup and early-stage agtech and foodtech companies that demonstrate novel approaches to addressing agriculture-, food-, and nutrition-related challenges.

•

In January 2020, Alexandria Venture Investments, the company’s venture capital arm, was recognized for a third consecutive year as the most active biopharma investor by new deal volume by Silicon Valley Bank in its “2020 Annual Report: Healthcare Investments and Exits.” Alexandria’s venture activity provides us with, among other things, mission-critical data and knowledge on innovations and trends.

•	Our philanthropy and volunteerism efforts provide mission-critical support to non-profit organizations doing meaningful work in areas of medical research, STEM education, military support services, and serving local communities. During 2019, our team members volunteered more than 4,500 hours to support over 250 non-profit organizations across the country.

•	We value both the health and wellness of our team members as well as supporting organizations on the leading edge of medical innovation. In November 2019, we were honored to support 59 of our team members who completed the 2019 New York City Marathon on behalf of Fred’s Team and raised approximately $360 thousand to support the mission-critical research at Memorial Sloan Kettering Cancer Center.

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•	As of the date of this report, we completed acquisitions of four properties in 2020 for an aggregate purchase price of $341.2 million, comprising 800,346 RSF of operating and redevelopment opportunities strategically located across multiple markets.

•

In January 2020, we formed a real estate joint venture with Boston Properties, Inc., in which we are targeting a 51% ownership interest over time. We are the managing member with the power to direct the activities that most significantly affect the economic performance of the joint venture, and will consolidate this joint venture pursuant to the applicable accounting standards. Our partner contributed three office buildings and land supporting 260,000 square feet of future development, and we contributed one office building, one office/laboratory building, one amenity building, at 701, 681, and 685 Gateway Boulevard, respectively, and land supporting 377,000 square feet of future development. This future mega campus in our South San Francisco submarket will aggregate 1.7 million RSF, approximately 50% of which represents future development and redevelopment opportunities.

•

In January 2020, we entered into forward equity sales agreements to sell an aggregate of 6.9 million shares of our common stock (including the exercise of an underwriters’ option) at a public offering price of $155.00 per share, before underwriting discounts. We expect to settle these forward equity sales agreements in 2020, and receive proceeds of approximately $1.0 billion, to be further adjusted as provided in the sales agreements, which will fund pending and recently completed acquisitions and the construction of our highly leased development projects.

•	We expect to file a new ATM program in the first quarter of 2020.

(1)	Percentages calculated based on RSF as of December 31, 2019.

(2)	Represents percentages for the three months ended December 31, 2019.

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•	$26.3 billion of total market capitalization

•	$19.5 billion of total equity capitalization

•	$2.4 billion of liquidity(1)

(1)	In January 2020, we entered into $1.0 billion of forward equity sales agreements. Including the outstanding forward equity agreements, we had proforma liquidity of $3.4 billion.

(1)	Due to the timing of two acquisitions that closed in December 2019, we had a temporary 0.4x increase above our projected net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2019, annualized, for December 31, 2019. We remain committed to our guidance of net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2020, annualized, of less than or equal to 5.2x.

(1)	Includes projects that have existing buildings which are generating or can generate operating cash flows. Also includes development rights associated with existing operating campuses.

•	We had the following dispositions and sales of partial interests in core Class A properties (dollars in millions, except per RSF):

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•	Our issuances and repayments of debt included the following (dollars in millions):

(1)	The remaining proceeds received from our debt issuances, after repayments of debt, were used to fund the construction of our value-creation pipeline and acquisitions completed during 2019. Refer to Note 3 – “Investments in Real Estate” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information.

•

In conjunction with the $350.0 million repayment of our unsecured senior bank term loan, during the three months ended September 30, 2019, we also terminated all of our interest rate hedge agreements aggregating $350.0 million with a weighted-average interest pay rate of 2.57% and reclassified the entire loss on our interest rate hedge agreements aggregating $1.7 million from accumulated other comprehensive loss into interest expense in our consolidated statements of operations.

•

In September 2019, we established a commercial paper program with the ability to issue up to $750.0 million of commercial paper notes with a maximum maturity of 397 days from the date of issue. Our commercial paper program is backed by our $2.2 billion unsecured senior line of credit, and at all times we expect to retain a minimum undrawn amount of borrowing capacity under our unsecured senior line of credit equal to any outstanding balance on our commercial paper program. We use borrowings under the program to fund short-term capital needs. As of December 31, 2019, we had no borrowings outstanding under our commercial paper program.

•	During the year ended December 31, 2019, we issued 8.7 million shares of common stock and received net proceeds of $1.2 billion, as follows:

•	Issued an aggregate of 8.1 million shares of common stock, at a weighted-average price of $139.32 per share, for aggregate proceeds (net of underwriters’ discounts) of approximately $1.1 billion. During the year ended December 31, 2019, we incurred initial issuance costs aggregating $700 thousand in connection with these forward equity sales agreements.

•	Issued 602,484 shares of common stock under our ATM program, at a weighted-average price of $145.58 per share, for net proceeds of $86.1 million, during the three months ended June 30, 2019. As of December 31, 2019, we had approximately $22.5 million of gross proceeds available to be issued under our ATM program.

•	The proceeds were used to fund construction projects and 2019 acquisitions completed prior to December 2019.

•	During the year ended December 31, 2019, we repurchased, in privately negotiated transactions, 275,000 outstanding shares of our Series D Convertible Preferred Stock at an aggregate price of $9.2 million, or $33.60 per share, and recognized a preferred stock redemption charge of $2.6 million.

•

In September 2019, we elected to convert the remaining 2.3 million outstanding shares of our Series D Convertible Preferred Stock into shares of our common stock. The Series D Convertible Preferred Stock became eligible for mandatory conversion at our discretion, at a set conversion rate of 0.2513 shares of common stock to one share of preferred stock, upon our common stock price exceeding $149.46 per share for the specified period of time required to cause the mandatory conversion. In October 2019, we converted the Series D Convertible Preferred Stock into 578 thousand shares of common stock. This conversion was accounted for as an equity transaction, and we did not recognize a gain or loss. As of December 31, 2019, we had no outstanding shares of Series D Convertible Preferred Stock.

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•	Allocate capital to Class A properties located in collaborative life science, technology, and agtech campuses in AAA urban innovation clusters;

•	Continue to improve our credit profile;

•	Maintain prudent access to diverse sources of capital, which include cash flows from operating activities after dividends, incremental debt supported by our growth in EBITDA, real estate asset sales, non-real estate investment sales, joint venture capital, and other capital such as sales of equity;

•	Maintain commitment to long-term capital to fund growth;

•	Prudently ladder debt maturities;

•	Reduce short-term variable-rate debt;

•	Prudently manage equity investments to support corporate-level investment strategies;

•	Maintain significant balance sheet liquidity; and

•	Maintain a stable and flexible balance sheet.

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(1)	Refer to Note 7 – “Investments” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for more information.

(2)	Refer to Note 3 – “Investments in Real Estate” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for more information.

(3)	Refer to Note 10 – “Secured and Unsecured Senior Debt” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for more information.

(4)	Refer to Note 16 – “Stockholders’ Equity” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for more information.

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(1)	Includes 9880 Campus Point Drive and 3545 Cray Court. The 9880 Campus Point Drive building was occupied through January 2018 and is currently in active development, and 3545 Cray Court is currently undergoing renovations.

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

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

(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.

(2)	During the year ended December 31, 2019, we terminated all of our interest rate hedge agreements aggregating $350.0 million and reclassified a loss of $1.7 million from accumulated other comprehensive loss into interest expense. Refer to Note 11 – “Interest Rate Hedge Agreements” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information.

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(1)	The 0.3% reduction in occupancy guidance is attributable to vacancy aggregating 71,016 RSF representing lease-up opportunities at one acquisition completed in January 2020. Refer to the “Summary of Occupancy Percentages in North America” section under Item 2 in this annual report on Form 10-K for additional information.

(2)	Excludes unrealized gains or losses after December 31, 2019, that are required to be recognized in earnings and are excluded from funds from operations per share, as adjusted.

(3)

Calculated in accordance with standards established by the Advisory Board of Governors of Nareit (the “Nareit Board of Governors”). Refer to the definition of “Funds From Operations and Funds From Operations, As Adjusted, Attributable to Alexandria’s Common Stockholders” in the “Non-GAAP Measures and Definitions” section under this Item 7 in this annual report on Form 10-K for additional information.

(1)

The completion of our development and redevelopment projects will result in an increase in interest expense and other project costs, because these project costs will no longer qualify for capitalization and will therefore be expensed as incurred. Our key assumptions, included in the tables above, and are subject to a number of variables and uncertainties, including those discussed under Item 1A and this Item 7 in this annual report on Form 10-K. 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.

(2)	The 0.3% reduction in occupancy guidance is attributable to vacancy aggregating 71,016 RSF representing lease-up opportunities at one acquisition completed in January 2020. Refer to the “Summary of Occupancy Percentages in North America” section under Item 2 in this annual report on Form 10-K for additional information.

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(1)	In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in six other joint ventures in North America.

(2)	Excludes 9880 Campus Point Drive in our University Town Center submarket.

(3)	In addition to the unconsolidated real estate joint ventures listed, we hold an interest in one other insignificant unconsolidated real estate joint venture in North America.

(4)	Represents our ownership interest; our voting interest is limited to 50%.

(1)	Includes interest expense and amortization of loan fees.

(2)	Represents outstanding principal, net of unamortized deferred financing costs, as of December 31, 2019.

(3)	This unconsolidated joint venture is in the process of refinancing this loan to, among other changes, extend the maturity date and fix the interest rate. We expect to complete the refinancing next quarter.

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(1)	Represents an allocation of joint venture earnings to redeemable noncontrolling interests primarily in one property in our South San Francisco submarket. These redeemable noncontrolling interests earn a fixed return on their investment rather than participate in the operating results of the property.

(2)	Refer to the definition of “Funds From Operations and Funds From Operations, As Adjusted, Attributable to Alexandria’s Common Stockholders” in the “Non-GAAP Measures and Definitions” section under this Item 7 for the definition and the reconciliation from the most directly comparable GAAP measure.

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(1)	Quarter annualized.

(2)	Due to the timing of two acquisitions that closed in December 2019, we had a temporary 0.4x increase above our target for December 31, 2019 in our net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2019, annualized. We remain committed to our guidance for net debt and preferred stock to Adjusted EBITDA – fourth quarter of 2020, annualized, of less than or equal to 5.2x.

(3)	As of December 31, 2019.

(4)	In January 2020, we entered into $1.0 billion of forward equity sales agreements. Including the outstanding forward equity agreements, we had proforma liquidity of $3.4 billion.

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•	Retain positive cash flows from operating activities after payment of dividends and distributions to noncontrolling interests for investment in development and redevelopment projects and/or acquisitions;

•	Improve credit profile and relative long-term cost of capital;

•	Maintain diverse sources of capital, including sources from net cash provided by operating activities, unsecured debt, secured debt, selective real estate asset sales, partial interest sales, non-real estate investment sales, preferred stock, and common stock;

•	Maintain commitment to long-term capital to fund growth;

•	Maintain prudent laddering of debt maturities;

•	Maintain solid credit metrics;

•	Maintain significant balance sheet liquidity;

•	Mitigate variable-rate debt exposure through the reduction of short-term and medium-term variable-rate bank debt;

•	Maintain a large unencumbered asset pool to provide financial flexibility;

•	Fund common stock dividends and distributions to noncontrolling interests from net cash provided by operating activities;

•	Manage a disciplined level of value-creation projects as a percentage of our gross investments in real estate; and

•	Maintain high levels of pre-leasing and percentage leased in value-creation projects.

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(1)	Excludes the formation of a consolidated joint venture with Boston Properties, Inc. through non-cash contributions of real estate. Refer to “Subsequent Events” under the “Executive Summary” section of this Item 7 in this annual report on Form 10-K for additional information.

(2)

In January 2020, we entered into forward equity sales agreements to sell an aggregate of 6.9 million shares of our common stock (including the exercise of underwriters’ option) at a public offering price of $155.00 per share, before underwriting discounts. We expect to settle these forward equity sales agreements in 2020 and receive proceeds of approximately $1.0 billion, to be further adjusted as provided in the sales agreements.

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(1)	Excludes loan fees as of December 31, 2019.

(2)	Includes two six-month extension options that we control.

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(1)	The remaining proceeds received from our debt issuances, after repayments of debt, were used to fund the construction of our value-creation pipeline and acquisitions completed during 2019. Refer to Note 3 – “Investments in Real Estate” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information.

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•	We have proactively reduced outstanding LIBOR-based borrowings under our unsecured senior bank term loans and secured construction loans through repayments. From January 2017 to December 2018, we retired approximately $942.0 million of such debt.

•	During the year ended December 31, 2019, we further reduced our exposure to LIBOR as follows:

•	Repaid the $350.0 million balance and extinguished our unsecured senior bank term loan.

•	Terminated our LIBOR-based interest rate hedge agreements aggregating $350.0 million in conjunction with the extinguishment of our unsecured senior bank term loan. As a result, we had no outstanding interest rate hedge agreements as of December 31, 2019.

•	Fully repaid outstanding balances aggregating $193.1 million under our LIBOR-based construction loans.

•

During the three months ended September 30, 2019, we established a commercial paper program, under which we have the ability to issue up to $750.0 million of commercial paper notes, which bear interest at short-term fixed rates, with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is not subjected to LIBOR and is used for funding short-term working capital needs. As of December 31, 2019, we had no borrowings outstanding under our commercial paper program.

•	We continue to prudently manage outstanding borrowings under our unsecured senior line of credit, which represented less than 6% of our total debt balance outstanding as of December 31, 2019. Excluding LIBOR-based debt held by our unconsolidated joint ventures, borrowings under our unsecured senior line of credit represented our only LIBOR-based debt outstanding as of December 31, 2019.

•	Our unsecured senior line of credit contains fallback language generally consistent with the ARRC’s Amendment Approach, which provides a streamlined amendment approach for negotiating a benchmark replacement and introduces clarity with respect to the fallback trigger events and an adjustment to be applied to the successor rate.

•	We continue to monitor developments by the ARRC and other governing bodies involved in LIBOR transition.

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•	Issued an aggregate of 8.1 million shares of common stock, at a weighted-average price of $139.32 per share, for aggregate proceeds (net of underwriters’ discounts) of approximately $1.1 billion. During the year ended December 31, 2019, we incurred initial issuance costs aggregating $700 thousand in connection with these forward equity sales agreements.

•	Issued 602,484 shares of common stock under our ATM program, at a weighted-average price of $145.58 per share, for net proceeds of $86.1 million, during the three months ended June 30, 2019. As of December 31, 2019, we had approximately $22.5 million of gross proceeds available to be issued under our ATM program. We expect to file a new ATM program in the first quarter of 2020.

•	The proceeds were used to fund construction projects and to fund 2019 acquisitions.

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(1)	Amounts represent principal amounts due and exclude unamortized premiums (discounts) and deferred financing costs reflected on the consolidated balance sheets under Item 15 in this annual report on Form 10-K.

(2)	Payment dates reflect any extension options that we control.

(3)	Amounts are based upon contractual interest rates, including interest payment dates and scheduled maturity dates.

(1)	All covenant ratio titles utilize terms as defined in the respective debt agreements.

(2)	The calculation of consolidated EBITDA is based on the definitions contained in our loan agreements and is not directly comparable to the computation of EBITDA as described in Exchange Act Release No. 47226.

(1)	All covenant ratio titles utilize terms as defined in the respective debt agreements.

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(1)	Calculated in accordance with standards established by the Nareit Board of Governors.

(2)	Relates to non-real estate investments in privately held entities.

(3)	Relates to the repayment of our unsecured senior notes payable due 2020 and 2022, unsecured senior bank term loan, and one secured note payable.

(4)	Represents loss on early termination of our interest rate hedge agreements. The loss is included within interest expense in our consolidated statements of operations. Refer to Note 11 – “Interest Rate Hedge Agreements” to our consolidated financial statements under Item 15 in this annual report on Form 10-K for additional information.

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(1)	Calculated in accordance with standards established by the Nareit Board of Governors.

(2)	Refer to footnotes 2, 3, and 4, respectively, on the previous page for additional information.

(3)	Refer to the definition of “Weighted-Average Shares of Common Stock Outstanding – Diluted” within this section of this Item 7 for additional information.

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•	Initial stabilized yield reflects rental income, including contractual rent escalations and any rent concessions over the term(s) of the lease(s), calculated on a straight-line basis.

•	Initial stabilized yield (cash basis) reflects cash rents at the stabilization date after initial rental concessions, if any, have elapsed and our total cash investment in the property.

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(1)	In October 2019, we completed the conversion of all 2.3 million outstanding shares of our Series D Convertible Preferred Stock into shares of our common stock. Refer to the “7.00% Series D Convertible Preferred Stock Repurchases and Conversion” section in Note 16 – “Stockholders’ Equity” to our consolidated financial statements under Item 15 in this annual report for additional information.

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1.	Organization and basis of presentation

2.	Summary of significant accounting policies

•	The entity has a legal structure that has been established to conduct business activities and to hold assets; such entity can be in the form of a partnership, limited liability company, or corporation, among others; and

•	We have a variable interest in the legal entity – i.e., variable interests that are contractual, such as equity ownership, or other financial interests that change with changes in the fair value of the entity’s net assets.

1)	The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2)	The entity is established with non-substantive voting rights (i.e., the entity deprives the majority economic interest holder(s) of voting rights); or

3)	The equity holders, as a group, lack the characteristics of a controlling financial interest. Equity holders meet this criterion if they lack any of the following:

•	The power, through voting rights or similar rights, to direct the activities of the entity that most significantly influence the entity’s economic performance, as evidenced by:

•	Substantive participating rights in day-to-day management of the entity’s activities; or

•	Substantive kick-out rights over the party responsible for significant decisions;

•	The obligation to absorb the entity’s expected losses; or

•	The right to receive the entity’s expected residual returns.

•	Participating rights provide the noncontrolling equity holders the ability to direct significant financial and operating decisions made in the ordinary course of business that most significantly influence the entity’s economic performance.

•	Kick-out rights allow the noncontrolling equity holders to remove the general partner or managing member without cause.

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•	Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or

•	The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction).

•	The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable, and experienced in performing the process;

•	The process cannot be replaced without significant cost, effort, or delay; or

•	The process is considered unique or scarce.

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•	Investments in publicly traded companies are classified as investments with readily determinable fair values. These investments are carried at fair value, with changes in fair value recognized in net income. The fair values for our investments in publicly traded companies are determined based on sales prices/quotes available on securities exchanges.

•	Investments in privately held entities without readily determinable fair values fall into two categories:

•

Investments in privately held entities that report NAV per share, such as our privately held investments in limited partnerships, are carried at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV per share reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date. We disclose the timing of liquidation of an investee’s assets and the date when redemption restrictions will lapse (or indicate if this timing is unknown) if the investee has communicated this information to us or has announced it publicly.

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•	Investments in privately held entities that do not report NAV per share are accounted for using a measurement alternative under which these investments are measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income.

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•	Package of practical expedients – requires us not to reevaluate our existing or expired leases as of January 1, 2019, under the new lease accounting standard.

•	Optional transition method practical expedient – requires us to apply the new lease accounting standard prospectively from the adoption date of January 1, 2019.

•	Single component accounting policy – requires us to account for lease and nonlease components within a lease under the new lease accounting standard if certain criteria are met.

•	Land easements practical expedient – requires us to continue to account for land easements existing as of January 1, 2019, under the accounting standards applied to them prior to January 1, 2019.

•	Short-term lease accounting policy – requires us not to record the related lease liabilities and right-of-use assets for operating leases in which we are the lessee with a term of 12 months or less.

•	Whether any contracts effective prior to January 1, 2019, are leases or contain leases. This practical expedient is primarily applicable to entities that have contracts containing embedded leases. As of December 31, 2018, we had no such contracts; therefore, this practical expedient had no effect on us.

•

The lease classification for any leases that commenced prior to January 1, 2019. Our election of the package of practical expedients requires us not to revisit the classification of our leases that commenced prior to January 1, 2019. For example, all of our leases that were classified as operating leases in accordance with the lease accounting standards in effect prior to January 1, 2019, continue to be classified as operating leases after adoption of the new lease accounting standard.

•

Previously capitalized initial direct costs for any leases that commenced prior to January 1, 2019. Our election of the package of practical expedients and the optional transition method requires us not to reassess whether initial direct leasing costs capitalized prior to the adoption of the new lease accounting standard in connection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the new lease accounting standard.

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(i)	One party (lessor) must hold an identified asset;

(ii)	The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract; and

(iii)	The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.

(i)	Ownership is transferred from lessor to lessee by the end of the lease term;

(ii)	An option to purchase is reasonably certain to be exercised;

(iii)	The lease term is for the major part of the underlying asset’s remaining economic life;

(iv)	The present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset; or

(v)	The underlying asset is specialized and is expected to have no alternative use at the end of the lease term.

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(i)	The timing and pattern of transfer of the lease component and the nonlease component(s) are the same; and

(ii)	The lease component would be classified as an operating lease if it were accounted for separately.

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3.	Investments in real estate

(1)

Includes $65.0 million paid in January 2019 for two properties at 10260 Campus Point Drive and 4161 Campus Point Court that we acquired in December 2018. The total purchase price was $80.0 million, of which $15.0 million was paid in December 2018. Also includes $114.8 million related to our partner’s noncontrolling interest in the consolidated real estate joint venture at 4224/4242 Campus Point Court and 10210 Campus Point Drive to reflect the full contractual purchase price.

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4.	Consolidated and unconsolidated real estate joint ventures

(1)	Refer to the table on the next page that shows our categorization of our existing significant joint ventures under the consolidation framework.

(2)	In addition to the consolidated real estate joint ventures listed, various partners hold insignificant noncontrolling interests in six other joint ventures in North America and we hold an interest in one other insignificant unconsolidated real estate joint venture in North America.

(3)	Excludes 9880 Campus Point Drive in our University Town Center submarket.

(4)	Represents our ownership interest; our voting interest is limited to 50%.

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(1)	Includes interest expense and amortization of loan fees.

(2)	Represents outstanding principal, net of unamortized deferred financing costs, as of December 31, 2019.

•	A description of the nature of leases, including terms for any variable payments, options to extend or terminate, and options to purchase the underlying asset;

•	Tabular presentation of undiscounted cash flows to be received over the next five years and thereafter separately for operating leases and direct financing leases;

•	The amount of lease income and its location on the statements of operations;

•	Income classified separately for operating leases and direct financing leases; and

•	Our risk management strategy to mitigate declines in residual value of the leased assets.

•	A description of the nature of leases, including terms for any variable payments, options to extend or terminate, and options to purchase the underlying asset;

•	The amounts of lease liabilities and corresponding right-of-use assets and their respective locations in the balance sheet;

•	The weighted-average remaining lease term and weighted-average discount rate of leases;

•	Tabular presentation of undiscounted cash flows of our remaining lease payment obligations over the next five years and thereafter; and

•	Total lease costs, including cash paid, amounts expensed, and amounts capitalized.

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6.	Cash, cash equivalents, and restricted cash

7.	Investments

•	Investments in publicly traded companies are presented at fair value in our consolidated balance sheet, with changes in fair value recognized in net income.

•	Investments in privately held entities without readily determinable fair values previously accounted for under the cost method are accounted for as follows:

•

Investments in privately held entities that report NAV are presented at fair value using NAV as a practical expedient, with changes in fair value recognized in net income. We use NAV reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date.

•

Investments in privately held entities that do not report NAV are carried at cost, adjusted for observable price changes and impairments, with changes recognized in net income. These investments continue to be evaluated on the basis of a qualitative assessment for indicators of impairment by utilizing the same monitoring criteria described in the “Investments” section in Note 2 – “Summary of Significant Accounting Policies” to our consolidated financial statements, and by monitoring the presence of the following impairment indicators: (i) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse change in the regulatory, economic, or technological environment of the investee, (iii) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates, (iv) significant concerns about the investee’s ability to continue as a going concern. If such indicators are present, we are required to estimate the investment’s fair value and immediately recognize an impairment loss, without consideration as to whether the impairment is other-than-temporary, in an amount equal to the investment’s carrying value in excess of its estimated fair value.

•

Investments in privately held entities continue to require accounting under the equity method unless our interest in the entity is deemed to be so minor that we have virtually no influence over the entity’s operating and financial policies. Under the equity method of accounting, we initially recognize our investment at cost and adjust the carrying amount of the investment to recognize our share of the earnings or losses of the investee subsequent to the date of our investment. We had no investments accounted for under the equity method as of December 31, 2019.

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8.	Other assets

(1)	Upon the adoption of new lease accounting standards on January 1, 2019, the balance related to the acquired below-market leases in which we are the lessee was included in the calculation of our operating lease right-of-use asset. Refer to Note 2 – “Summary of Significant Accounting Policies” and Note 5 – “Leases” to our consolidated financial statements for additional information.

9.	Fair value measurements

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10.	Secured and unsecured senior debt

(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.

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(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.

(2)	Reflects any extension options that we control.

(3)

In September 2019, we established a commercial paper program that has the ability to issue up to $750.0 million of commercial paper notes with a maximum maturity of 397 days from the date of issuance. Borrowings under the program will be used to fund short-term capital needs and are backed by our $2.2 billion unsecured senior line of credit. In the event we are unable to refinance outstanding borrowings under terms equal to or more favorable than those under the unsecured senior line of credit, we expect to borrow under the unsecured senior line of credit at L+0.825%. The commercial paper notes sold during the year ended December 31, 2019, were issued at a yield to maturity of between 1.83% and 2.29%.

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(1)	The remaining proceeds received from our debt issuances, after repayments of debt, were used to fund the construction of our value-creation pipeline and acquisitions completed during 2019. Refer to Note 3 – “Investments in Real Estate” to our consolidated financial statements for additional information.

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11.	Interest rate hedge agreements

•	We have proactively reduced outstanding LIBOR-based borrowings under our unsecured senior bank term loans and secured construction loans through repayments. From January 2017 to December 2018, we retired approximately $942.0 million of such debt.

•	During the year ended December 31, 2019, we further reduced our exposure to LIBOR as follows:

•	Repaid the $350.0 million balance and extinguished our unsecured senior bank term loan.

•	Fully repaid outstanding balances aggregating $193.1 million under our LIBOR-based construction loans.

•

During the three months ended September 30, 2019, we established a commercial paper program, under which we have the ability to issue up to $750.0 million of commercial paper notes, bearing interest at short-term fixed rates, with a maximum maturity of 397 days from the date of issuance. Our commercial paper program is not subject to LIBOR and is used for funding short-term working capital needs. As of December 31, 2019, we had no outstanding borrowings under our commercial paper program.

•	We continue to prudently manage outstanding borrowings under our unsecured senior line of credit, which represented less than 6% of our total debt balance outstanding as of December 31, 2019. Excluding LIBOR-based debt held by our unconsolidated joint ventures, borrowings under our unsecured senior line of credit represented our only LIBOR-based debt outstanding as of December 31, 2019.

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12.	Accounts payable, accrued expenses, and other liabilities

(1)	Refer to Note 2 – “Summary of Significant Accounting Policies” and Note 5 – “Leases” to our consolidated financial statements for additional information.

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13.	Earnings per share

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14.	Income taxes

(1)	Refer to Note 16 - “Stockholders’ Equity” to our consolidated financial statements for information regarding the conversion of our Series D Preferred Stock and redemption of our Series E Preferred Stock.

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(1)	Total common stock and preferred stock dividend distributions paid were approximately $385.8 million and $321.8 million during the years ended December 31, 2018 and 2017, respectively.

15.	Commitments and contingencies

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16.	Stockholders’ equity

•	Issued an aggregate of 8.1 million shares of common stock, at a weighted-average price of $139.32 per share, for aggregate proceeds (net of underwriters’ discounts) of approximately $1.1 billion. During the year ended December 31, 2019, we incurred initial issuance costs aggregating $700 thousand in connection with these forward equity sales agreements.

•	Issued 602,484 shares of common stock under our ATM program, at a weighted-average price of $145.58 per share, for net proceeds of $86.1 million, during the three months ended June 30, 2019. As of December 31, 2019, we had approximately $22.5 million of gross proceeds available to be issued under our ATM program.

•	The proceeds were used to fund construction projects and to fund 2019 acquisitions completed prior to December 2019.

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17.	Share-based compensation

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18.	Noncontrolling interests

19.	Assets classified as held for sale

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20.	Quarterly financial data (unaudited)

(1)	Quarterly earnings per common share amounts may not total to the annual amounts due to rounding and due to the increase in the weighted-average shares of common stock outstanding.

21.	Subsequent events

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22.	Condensed consolidating financial information

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(1)	The aggregate cost of real estate for federal income tax purposes is not materially different from the cost basis under GAAP (unaudited).

(2)	The depreciable life ranges up to 40 years for buildings and improvements, up to 20 years for land improvements, and the term of the respective lease for tenant improvements.

(3)	Represents the later of the date of original construction or the date of the latest renovation.

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