ALEXANDRIA REAL ESTATE EQUITIES, INC. (ARE) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that ALEXANDRIA REAL ESTATE EQUITIES, INC. surfaced in its latest filing.

• The Inflation Reduction Act of 2022 (IRA) was signed into law on August 22, 2022, allowing HHS to negotiate Medicare drug prices, imposing excise taxes for noncompliance, and introducing penalties for price increases over inflation, which may adversely impact the company, its tenants, and venture investment portfolio.August 22, 2022
• The One Big Beautiful Bill Act was signed into law on July 4, 2025, changing the business interest expense limitation from 30% of EBIT to 30% of EBITDA, restoring and making permanent 100% bonus depreciation, creating Section 174A for 100% expensing of domestic research expenditures, making permanent a 20% deduction for certain pass-through income, and including an estimated $1 trillion in cuts to Medicaid spending.July 4, 2025
• The Federal Reserve raised its benchmark rate from near zero in March 2022 to 3.50%–3.75% as of December 31, 2025, exposing the company's variable-rate unsecured senior line of credit and commercial paper program to rising interest rates.December 31, 2025
• On December 3, 2025, the Board declared a quarterly cash dividend of $0.72 per common share for Q4 2025, a $0.60 or 45% reduction from Q3 2025.December 3, 2025
• Silicon Valley Bank was closed by regulators on March 10, 2023; Signature Bank was closed on March 12, 2023; and First Republic Bank was seized and sold on May 1, 2023, affecting tenants and venture investments in the life science, technology, and healthcare industries.May 1, 2023
• PG&E initiated Chapter 11 bankruptcy proceedings in January 2019 due to wildfire liabilities and emerged in July 2020, with the company's San Francisco Bay Area properties depending on PG&E for electrical and gas service, and PG&E having preemptively shut off power during high fire danger periods.July 2020
• As of December 31, 2025, approximately 92% of leases (on an annual rental revenue basis) are triple net leases requiring tenants to pay substantially all real estate and other rent-related taxes, insurance, utilities, security, common area expenses, and other operating expenses.December 31, 2025
• As of December 31, 2025, the aggregate noncontrolling interest balance in the consolidated balance sheet is $3.63 billion, with partners in six consolidated real estate joint ventures (approximately $1.17 billion) currently able to exercise contractual rights to sell interests, initiate a buy/sell process, or force a sale, and partners in 16 other joint ventures (approximately $1.91 billion) gaining such rights upon expiration of lockout provisions during 2026 through 2031.December 31, 2025
• All-risk property insurance currently provides a $2.0 billion per-occurrence limit for the operating portfolio; earthquake insurance in California is $335 million per occurrence with an annual aggregate limit subject to a 5% deductible, and in the Seattle region is $200 million per occurrence subject to a 2% deductible.
• In September 2025, Congress failed to enact a budget for the upcoming fiscal year, resulting in a partial government shutdown that lasted 43 days, during which the FDA may be unable to accept or process new drug applications and the NIH and CDC may experience staffing furloughs, suspended operations, and delayed grant reviews.September 2025
• In 2025, the FDA laid off approximately 3,500 employees (about 19% of its workforce), the CDC underwent significant restructuring and workforce reduction, and the NIH laid off approximately 5,000 employees and contractors, while a January 27, 2025 memorandum froze much of the NIH's nearly $48 billion budget for 2025.2025
• On January 5, 2026, the U.S. Court of Appeals for the First Circuit affirmed a nationwide injunction blocking a 15% cap on indirect cost reimbursements for NIH grants; on February 7, 2025, NIH introduced a policy limiting indirect cost reimbursements to 15%; and on April 7, 2025, a federal court issued a permanent injunction blocking the 15% indirect cost cap.
• On January 27, 2025, a memorandum froze much of the NIH's nearly $48 billion budget for 2025, and in May 2025, the White House proposed reducing the NIH budget by approximately 40% to $27.5 billion for fiscal year 2026.May 2025
• On January 20, 2025, an executive order directed agencies to terminate all grants relating to diversity, equity, and inclusion, and on January 29, 2025, an executive order was issued to combat anti-Semitism, resulting in the NIH withholding funding from certain U.S. research institutions.January 2025
• On May 12, 2025, President Trump issued an executive order directing HHS to set U.S. drug price benchmarks at the lowest prices paid in comparable developed countries, projecting price reductions of 30%–80%; in July 2025, the White House sent letters to 17 major drug manufacturers demanding compliance within 60 days with MFN pricing.July 2025
• The Trump administration reached public agreements with AstraZeneca and Pfizer to offer many drugs at MFN pricing through Medicaid and a new direct-to-consumer platform in return for a three-year tariff reprieve.2025
• On February 1, 2025, executive orders imposed a 25% tariff on certain imports from Mexico and Canada and a 10% tariff on all products from China; on March 3, 2025, tariffs on all products from China were increased to 20% and new 25% tariffs were imposed on certain imports from Mexico and Canada.March 3, 2025
• On April 2, 2025, a national emergency was declared and a 10% universal import tariff was imposed with higher rates for 57 trading partners, causing the S&P 500, Dow Jones, and Nasdaq to drop approximately 6.0%, 5.5%, and 5.8% respectively; on April 9, 2025, a 90-day pause on tariffs for most countries was announced but the tariff on Chinese imports was raised to 125%.April 9, 2025
• On June 12, 2025, the 125% tariff on Chinese goods was replaced with a 55% tariff on select Chinese goods.June 12, 2025
• On April 14, 2025, the U.S. government launched an investigation into pharmaceuticals to justify tariffs; in 2024 over $200 billion in pharmaceutical products were imported, and tariffs could add $46 billion in costs.April 14, 2025
• On August 21, 2025, the U.S. and EU reached a trade agreement establishing a 15% ceiling on tariffs on pharmaceutical products traded between them.August 21, 2025
• On September 25, 2025, President Trump announced effective October 1, 2025, a 100% tariff on all branded and patented drugs imported into the U.S., with exceptions for generic drugs and companies that have broken ground or are under construction on U.S.-based production operations.September 25, 2025
• In January 2025, the U.S. submitted notice of withdrawal from the Paris Agreement.January 2025
• S&P Global Ratings lowered its long-term sovereign credit rating of the U.S. from “AAA” to “AA+” in 2011 and affirmed it in August 2025; Fitch Ratings downgraded the sovereign credit rating of the U.S. from “AAA” to “AA+” in 2023 and affirmed the “AA+” rating in August 2025.August 2025
• Basel III final regulations were tentatively set to take effect by mid-2025, with a revised, more industry-friendly version expected by early 2026; supplementary leverage ratio standards were fully effective as of 2019; and the Volcker Rule was amended in 2020 to simplify compliance and reduce restrictions.
• In June 2023, a short seller published reports containing negative and false allegations about the company's business, prompting potential regulatory inquiries including from the SEC.June 2023