Dean A. Shigenaga
President and Chief Financial Officer at Alexandria Real Estate Equities
Thanks, Peter. Dean Shigenaga here. Good afternoon, everyone.
Year-to-date 2021 really has been an exceptional year financial and operating performance for Alexandria, our brand partnerships with some of the most innovative life science entities combined with operational excellence has allowed our team to generate strong results. Our internal growth has been very strong, statistics from our pipeline of development and redevelopment projects are record-breaking and provide visibility for growth into the future.
Total revenues, net operating income, and adjusted EBITDA for the third quarter were very strong and were up 20%, 21%, and 22% respectively over the third quarter of 2020 all really amazing and impactful results and I should point out that these stats exclude the impact of the termination fee that was recognized in the third quarter of 2020.
Now, internal growth and operating results continue to reflect the strength of our unique and differentiated business model and strength of our brand. Our Same Property performance represents one of the highest quality growth engines within the REIT industry of which we are immensely proud.
We have one of the highest quality tenant rosters in the REIT industry with 53% of our annual rental revenue from investment grade or large cap publicly-traded companies and an important statistic that should be noticed and occupancy has been very strong and improving this year to 98.5%, up 80 basis points from the beginning of the year, excluding the impact from vacancy in recently acquired properties.
Now importantly, 1.4 million rentable square feet of vacancy from recent acquisitions represents about 4.1% of our operating rentable square footage and is a significant opportunity to increase cash flows. Additionally, 40% of this 1.4 million rentable square feet of vacancy is leased or under lease negotiations. And as Joel stated earlier, we are seeing increasing leasing demand in a number of our key -- Key Life Science close to markets.
Now, Same Property, NOI growth was strong at 4.1% and 7.3% on a cash basis and headed toward the upper end of our ranges for 2021 guidance. Same property NOI growth projected for the full year of 2021 is very solid and is up 100 basis points and 70 basis points on a GAAP and cash basis respectively from our initial guidance for 2021, really highlighting the improvement in our outlook. Since the beginning of the year. And once again very proud of the strong internal growth engine we have.
Leases executed in the nine months ended September 30th at over 5.4 million rentable square feet. Another company record and this leasing volume was completed with exceptional rental rate growth, up 39% and 22.3% on the cash basis.
Now, let me take a moment to highlight the seasonality of operating expenses related to higher utility expenses with warm summer weather, we had higher repairs and maintenance in the summer months versus what might occur during the winter months and higher property insurance premiums with our policy renewal, which took effect June 1.
Now, with 92% of our leases being triple-net, these increases are generally recoverable from our tenants and therefore have minimal impact on net operating income. However, the increase in operating expenses as a slight and only temporary negative 1% to 2% impact on operating and EBITDA margins for the quarter.
Additionally, vacancy from recent acquisitions. Also slightly reduced margins, but it's important to recognize that our adjusted EBITDA margins remain one of the top within the REIT industry and we expect to favorably resolve vacancy from recently acquired properties over the next number of quarters.
Now, turning to real estate, our trusted partnership with key life science and disease are brand in operational excellence among many other items is really standing out today is highlighted by strong demand for our pipeline of development and redevelopment projects.
We have 7.7 million rentable square feet either under construction or construction commencing over the next 6 quarters with projects approximately 80% leased or under negotiation highlighting continuing historic demand 93% of which represents transactions with existing relationships, including a number of deals coming from our tenant base of over 750 entities.
Now, the 7.7 million rentable square foot pipeline is up 731,000 rentable square feet over June 30th and some of the key highlights in the quarter included that we commenced construction on 1.2 million rentable square feet. That is on average 60% leased or under negotiation, including 3.25 Binney Street, which is 100% leased in 751 Gateway in South San Francisco, which is a 100% under negotiation. These are pretty amazing leasing statistics. And we just commenced construction and in both cases stellar existing relationships resulted in full building users. Now, we added approximately 480,000 rentable square feet of space targeted to commence construction over the next six quarters, it's about 20% of this space is under LOI negotiations today. And importantly, our team executed 1 million rentable square feet of leasing in the third quarter related to the development and redevelopment space including the 462,000 rentable square foot lease for with Moderna for 100% of 325 Binney Street.
And we expect demand from our development sites and projects will provide us the opportunity to commence construction of other development and redevelopment projects.
Now, turning to our venture investments. Just want to shout out a huge thank you to our science and technology team for the leadership in underwriting life science industry trends and high quality investment opportunities. Now, our venture investment cost basis only represents about 3.2% of gross assets and unrealized gains were $930 million on a cost basis of about $1 billion.
In the third quarter, we realized individually significant gains from three separate transactions aggregating $52.4 million and year-to-date through September 30th, we realized individually significant gains from six separate transactions aggregating $110.1 million.
Now, this represents over $100 million of capital that we did not anticipate at the beginning of the year that we were able to reinvest into our business and our team is very pleased for recognition of the overall improvement in our corporate credit profile, S&P just upgraded our rating to BBB plus with a positive outlook. Highlighting our unique and differentiated business model, strong brand and execution, high-quality cash flows, and strong credit profile among many other items. So thank you to our entire team for continued solid execution across all areas of our business, we remain on track for net debt to adjusted EBITDA at 5.2 times and fixed charges greater than 5 times by the end of the year.
As we close in on the end of 2021, we are focused on ramping up several key partial interest sales in high-value, low-cap rate transactions and other dispositions. Each transaction is moving along as expected and we are targeting completion of the sales later this year, which will generate about $1.7 billion in capital. The timing of a couple of the key dispositions were subject to the lease negotiations before we were able to put the deals in front of potential investors and therefore are targeted to close in the fourth quarter.
As our team continues to focus on making a positive and lasting impact on the world, they're very pleased for continued recognition of leadership in ESG. Now, MSCI just released results highlight an A rating for Alexandria representing one of the top ratings within the REIT industry. GRESB also recently released results of the 2021 assessment highlighting Alexandria is a global sector leader in a 5-star rating in the diversified sector for buildings in development and one of the top 2 in the science and technology sector for buildings and operation.
And our team commence construction to 325 Binney Street, which is the ground-up development fully leased to Moderna and is designed to be the most sustainable laboratory building in Cambridge. The key items of the design include use of geothermal energy for heating and cooling and innovative building envelope and building management system and other sustainable attributes that is designed to eliminate 95% or more fossil fuels and achieved leads or energy.
Now, this building has also been designed to mitigate risk associated with flood precipitation under a business as usual scenario. And we are extremely excited to be an important strategic partner to Moderna for about a decade now and super pleased that they select 13 to assist them with their strategic priorities including development of their next super innovative and sustainable lab building.
Now turning to guidance, we updated our conservative guidance for 2021 including narrowing the range for EPS and FFO per share from a range of $0.08 to a range of $0.02 per share or 2021 guidance for EPS diluted is a range from $3.91 to $3.93 in FFO per share as adjusted diluted to a range of $0.04 -- excuse me $7.74 to $7.76 with no change in the midpoint of $7.75.
Now, we continued strong demand for space in our asset base has increased our outlook for rental rate growth on lease renewals and releasing the space by 2% and 1% on a GAAP and cash basis respectively. And we also updated or 2021 guidance for dispositions and have four transactions in process that will generate $1.7 billion as highlighted a moment ago.
We updated construction spend for an increase of about $200 million at the midpoint, primarily due to acceleration of leasing and tenant space requirements related to our development and redevelopment projects. And as a reminder, we are about five weeks away from issuance of our detailed guidance for 2022 and therefore we are unable to comment on 2022 guidance related matters.
Let me end there and turn it back to Joel.