It has been about a month since the last earnings report for Alexandria Real Estate Equities (ARE Quick QuoteARE - Free Report) . Shares have lost about 3.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Alexandria Real Estate Equities due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Alexandria Q4 FFO Beats on Solid Rental Rate Growth

Alexandria Real Estate reported adjusted FFO of $1.97 per share for fourth-quarter 2021, up 7.1% from the year-ago quarter’s $1.84. The figure also surpassed the Zacks Consensus Estimate of $1.96.

This year-over-year improvement resulted from 24.4% year-over-year growth in top-line to $576.9 million. Results reflect decent internal growth.

Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.

Behind the Headlines

Reflecting robust demand for its high-quality office/laboratory space, Alexandria’s total leasing activity aggregated to 4.1 million RSF of space during the December-end quarter. Lease renewals and re-leasing of space amounted to 1.95 million RSF. Leasing of development and redevelopment space was 1,795,633 RSF.

Alexandria registered rental rate growth of 35.9% during the reported quarter. On a cash basis, rental rate increased 22.9%.

On a year-over-year basis, same-property NOI was up 5%. It climbed 7.5% on a cash basis. Occupancy of operating properties in North America remained high at 94%.

As of fourth-quarter 2021, investment-grade or publicly-traded large-cap tenants accounted for 51% of the annual rental revenues in effect. Weighted-average remaining lease term of all tenants is 7.5 years. For Alexandria’s top 20 tenants, it is 10.9 years.

During the fourth quarter, Alexandria completed acquisitions in its key life-science cluster submarkets totaling 4.1 million SF, comprising 3.9 million RSF of future development opportunities and 191,879 RSF of operating space for a total price of $1.5 billion, including the previously announced acquisition of One Rogers Street in Cambridge submarket for a purchase price of $849.4 million.

During the reported quarter, Alexandria placed into service development and redevelopment projects totaling 600,768 RSF, which are 100% leased across multiple submarkets.

Liquidity

Alexandria exited fourth-quarter 2021 with cash and cash equivalents of $361.3 million, up from $325.9 million reported at the end of third-quarter 2021. ARE had $5.4 billion of liquidity as of the end of the reported quarter. The net debt and preferred stock to adjusted EBITDA was 5.2Xand the fixed-charge coverage ratio was 5.3X for fourth-quarter 2021 annualized. The company has no debt maturities before 2024 and its weighted-average remaining term of debt as of Dec 31, 2021, is 12.1 years.

Outlook

Alexandria issued its 2022 outlook, expecting FFO per share in the range of $8.26-$8.46, with the mid-point at $8.36. In addition, as of Dec 31, 2021, the tenant receivables balance was $7.4 million.

Alexandria also projected the 2022 adjusted FFO per share in the range of $8.26-$8.46, with the mid-point being $8.36.

Alexandria’s current-year expectations are backed by anticipations for occupancy in North America (as of Dec 31, 2022) in the band of 95.2-95.8%, rental rate increases for lease renewals, re-leasing of space of 30-35% and same-property NOI growth of 5.5-7.5%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.