LOS ANGELES—Alexandria Real Estate Equities' 2Q earnings outperformed estimates from analysts. ARE reported a 2Q14 FFO of $1.19, surpassing estimates, both from RBC Capital Markets and consensus by $0.01. Lower-than-expected interest expenses, according to a report from RBC Capital, drove the modest bump. In addition to surpassing FFO estimates, ARE also issued $700 million of unsecured bank notes, $150 million more than expected.

ARE's portfolio delivered strong results with a year-over-year NOI growth of 5.7%, a 1.4% increase from 1Q14, and revenue growth of 5.3%. Occupancy increased in the portfolio as well by 320 basis points throughout the quarter with a total occupancy of 95.3%. The REIT signed only 750,000 square feet of leases; about 150,000 square feet lower than the trailing five-quarter average.

Due to the strong leasing quarter, management increased the FFO guidance range to $4.74-4.80 per share. RBC Capital's FFO estimate, however, is at the lower end of this range, at $4.74 per share. ARE expects year-end occupancy to range between 96.7-97.2%, which will increase its cash-lease spread to 4% to 6%.

During the quarter, the REIT began construction on 3013/3033 Science Park, and has pre-leased 25% of the building to a publicly traded life science company. ARE is also in negotiations for an additional 38% of the space. During the quarter, an affiliate of the REIT purchased 500 Townsend Street in San Francisco, a AAA location at the intersection of Alexandria's Mission Bay science and technology campus.