Alexandria Real Estate Equities, Inc. (ARE Quick QuoteARE - Free Report) recently inked a long-term full-building lease with Novo Nordisk (NVO Quick QuoteNVO - Free Report) , a leading global healthcare company. Shares of the ARE witnessed a marginal loss on the Dec 19 normal trading session on the NYSE.

The lease was signed for 165,940 rentable square feet (RSF) for the building situated at 60 Sylvan Road, which is ARE’s active redevelopment project. This anchors the 1.5 million RSF Alexandria Center for Life Science – Waltham mega campus in Greater Boston – which includes 40, 50 and 60 Sylvan Road, 35 Gatehouse Drive and 840 Winter Street. The property is expected to be delivered to Novo Nordisk in 2025.

The campus is highly differentiated in the Route 128 submarket with inspiring design, curated placemaking and unmatched scale. It is conveniently located in proximity to world-renowned academic medical centers and Cambridge, downtown Boston and Logan International Airport.

With an exceptional suite of amenities, including flexible conference and meeting space, an expansive central lawn and collaboration pods, the campus has been strategically designed to attract and retain top talent and enhance innovation and efficiency. Other attractive features include a casual café, a fitness and wellness center, outdoor biking and walking paths and a vertical farm.

Additionally, this December, Alexandria signed a long-term lease for 99,557 RSF with CARGO Therapeutics (CRGX Quick QuoteCRGX - Free Report) at 835 Industrial Road on the Alexandria Center for Life Science – San Carlos mega campus in the San Francisco Bay Area. CARGO is expected to take occupancy in the mission-critical life science space in early 2024.

Strategically located between Highway 101 and the San Carlos Caltrain station, the mega campus provides convenient access to downtown San Carlos and public transit. At present, the site, which can accommodate roughly 1.4 million RSF of future development opportunities, has around 737,000 RSF in operation.  

The San Carlos campus operates in a vibrant ecosystem with state-of-the-art laboratory space and a highly curated array of amenities, including sophisticated conference and meeting spaces, an expansive courtyard, a contemporary eatery, an artisanal coffee bar and a fully equipped fitness and wellness center.

Both these leases showcase the high demand for Alexandria Class A/A+ properties in North America's AAA innovation cluster locations and highlight the essential, reusable and re-leasable nature of its best-in-class Labspace infrastructure. The advantageous locations of its properties are driving demand, resulting in high occupancy levels.

ARE is also focused on the acquisition, development and redevelopment of new Class A/A+ properties in AAA locations to boost its operating performance over the long term.

Notably, from the beginning of 2023 through Oct 23, the company completed acquisitions with development/redevelopment opportunities worth $258.9 million. Its pipeline of current and near-term projects is expected to generate annual incremental net operating income of $580 million through the third quarter of 2026, which is encouraging.

ARE’s solid balance sheet position and ample financial flexibility are likely to support its growth endeavors.

Nonetheless, persistent macroeconomic uncertainty and high interest rates pose near-term concerns.

Shares of this Zacks Rank #3 (Hold) company have gained 15% in the past three months compared with the industry’s growth of 10.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Image Source: Zacks Investment Research

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.