We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Results reflect decent leasing activity and rental rate growth. However, lower occupancy and higher interest expenses year over year undermined the results to some extent.
Total revenues of $762 million surpassed the consensus estimate of $750.7 million. However, the figure decreased marginally year over year.
ARE: Behind the Headlines
Alexandria’s total leasing activity aggregated 769,815 rentable square feet (RSF) of space in the second quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing of space amounted to 483,409 RSF, while leasing of development and redevelopment space totaled 131,768 RSF.
The company registered rental rate growth of 5.5% during the quarter. On a cash basis, the rental rate increased 6.1%. The occupancy of operating properties in North America was 90.8% as of June 30, 2025, down 0.9% from the prior quarter and 3.8% from the year-ago quarter. Our estimate for the same was 91%.
On a year-over-year basis, same-property net operating income (NOI) decreased 5.4%. It improved 2% on a cash basis. The change in same-property NOI was due to lease expirations totaling 768,080 RSF at six properties across four submarkets. Same-property NOI changes, excluding the impact of these lease expirations, were a 2.1% decrease and a 6.5% increase on a cash basis.
In the reported quarter, investment-grade or publicly traded large-cap tenants accounted for 53% of the annual rental revenues in effect. The weighted average remaining lease term of all tenants is 7.4 years. For Alexandria’s top 20 tenants, it is 9.4 years. As of June 30, 2025, the tenant receivable balance was $6.3 million.
As of June 30, 2025, Alexandria’s share of completed and pending dispositions and sales of partial interests totaled $785.4 million. During the second quarter, ARE placed into service development and redevelopment projects aggregating 217,774 RSF, which are 90% occupied across three submarkets, delivering $15 million of incremental annual NOI.
However, interest expenses jumped 20.8% year over year to $55.3 million.
In July, ARE secured the largest life science lease in its 31 years of history by signing a 16-year expansion lease agreement with a longtime multi-national pharmaceutical tenant. The lease for this build-to-suit research hub spans more than 466,598 RSF of space located at Campus Point by Alexandria Megacampus in the University Town Center submarket of San Diego.
ARE’s Liquidity
The company exited the second quarter with cash and cash equivalents of $520.5 million, up from $476.4 million as of March 31, 2025. It had $4.6 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.9X, and the fixed-charge coverage was 4.1X on an annualized basis. Its weighted average remaining term of debt was 12 years.
ARE’s Zacks Rank
Alexandria currently carries a Zacks Rank #5 (Strong Sell).
We now look forward to the earnings releases of other REITs like Welltower (WELL - Free Report) and Highwoods Properties (HIW - Free Report) , slated to report on July 28 and July 29, respectively.
The Zacks Consensus Estimate for Welltower’s second-quarter 2025 FFO per share stands at $1.22, which indicates 16.2% growth year over year. WELL currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Highwoods Properties’ second-quarter 2025 FFO per share is pegged at 85 cents, which implies a 13.3% year-over-year decrease. HIW currently carries a Zacks Rank #3.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Alexandria's Q2 AFFO Beats Estimates, Occupancy Declines
Key Takeaways
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2025 adjusted funds from operations (AFFO) per share of $2.33, beating the Zacks Consensus Estimate of $2.29. This compares unfavorably to the AFFO of $2.36 reported in the prior year.
Results reflect decent leasing activity and rental rate growth. However, lower occupancy and higher interest expenses year over year undermined the results to some extent.
Total revenues of $762 million surpassed the consensus estimate of $750.7 million. However, the figure decreased marginally year over year.
ARE: Behind the Headlines
Alexandria’s total leasing activity aggregated 769,815 rentable square feet (RSF) of space in the second quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing of space amounted to 483,409 RSF, while leasing of development and redevelopment space totaled 131,768 RSF.
The company registered rental rate growth of 5.5% during the quarter. On a cash basis, the rental rate increased 6.1%. The occupancy of operating properties in North America was 90.8% as of June 30, 2025, down 0.9% from the prior quarter and 3.8% from the year-ago quarter. Our estimate for the same was 91%.
On a year-over-year basis, same-property net operating income (NOI) decreased 5.4%. It improved 2% on a cash basis. The change in same-property NOI was due to lease expirations totaling 768,080 RSF at six properties across four submarkets. Same-property NOI changes, excluding the impact of these lease expirations, were a 2.1% decrease and a 6.5% increase on a cash basis.
In the reported quarter, investment-grade or publicly traded large-cap tenants accounted for 53% of the annual rental revenues in effect. The weighted average remaining lease term of all tenants is 7.4 years. For Alexandria’s top 20 tenants, it is 9.4 years. As of June 30, 2025, the tenant receivable balance was $6.3 million.
As of June 30, 2025, Alexandria’s share of completed and pending dispositions and sales of partial interests totaled $785.4 million. During the second quarter, ARE placed into service development and redevelopment projects aggregating 217,774 RSF, which are 90% occupied across three submarkets, delivering $15 million of incremental annual NOI.
However, interest expenses jumped 20.8% year over year to $55.3 million.
In July, ARE secured the largest life science lease in its 31 years of history by signing a 16-year expansion lease agreement with a longtime multi-national pharmaceutical tenant. The lease for this build-to-suit research hub spans more than 466,598 RSF of space located at Campus Point by Alexandria Megacampus in the University Town Center submarket of San Diego.
ARE’s Liquidity
The company exited the second quarter with cash and cash equivalents of $520.5 million, up from $476.4 million as of March 31, 2025. It had $4.6 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.9X, and the fixed-charge coverage was 4.1X on an annualized basis. Its weighted average remaining term of debt was 12 years.
ARE’s Zacks Rank
Alexandria currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alexandria Real Estate Equities, Inc. Price, Consensus and EPS Surprise
Alexandria Real Estate Equities, Inc. price-consensus-eps-surprise-chart | Alexandria Real Estate Equities, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like Welltower (WELL - Free Report) and Highwoods Properties (HIW - Free Report) , slated to report on July 28 and July 29, respectively.
The Zacks Consensus Estimate for Welltower’s second-quarter 2025 FFO per share stands at $1.22, which indicates 16.2% growth year over year. WELL currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Highwoods Properties’ second-quarter 2025 FFO per share is pegged at 85 cents, which implies a 13.3% year-over-year decrease. HIW currently carries a Zacks Rank #3.
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.