A month has gone by since the last earnings report for Alexandria Real Estate Equities (ARE Quick QuoteARE - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.

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

Alexandria’s Q2 AFFO Beats Estimates, Occupancy Declines

Alexandria reported second-quarter 2025 adjusted FFO (AFFO) per share of $2.33, beating the Zacks Consensus Estimate of $2.29. This compared unfavorably to the AFFO per share of $2.36 reported in the prior year.

Results reflected 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.

Behind the Headlines

Alexandria’s total leasing activity aggregated 769,815 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 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, Alexandria 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.

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.

2025 Guidance

Alexandria has maintained its 2025 outlook. The company expects its 2025 AFFO per share to be between $9.16-$9.36. The FFO midpoint stands at $9.26.

The company expects occupancy of operating properties in North America to be between 90.9% and 92.5%. Same-property NOI growth on a cash basis is projected in the range of negative 1.2%-0.8%.

Dispositions and sales of partial interests are estimated between $1.45 and 2.45 billion. Acquisitions and other opportunistic uses of capital are estimated at $208 million at the midpoint.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Alexandria Real Estate Equities has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Alexandria Real Estate Equities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Alexandria Real Estate Equities is part of the Zacks REIT and Equity Trust - Other industry. Over the past month, Prologis (PLD Quick QuotePLD - Free Report) , a stock from the same industry, has gained 1.4%. The company reported its results for the quarter ended June 2025 more than a month ago.

Prologis reported revenues of $2.03 billion in the last reported quarter, representing a year-over-year change of +9.3%. EPS of $0.61 for the same period compares with $1.34 a year ago.

Prologis is expected to post earnings of $1.43 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.

Prologis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.