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Alexandria Stock Gains 19.3% in 3 Months: Will the Trend Continue?
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Key Takeaways
Alexandria stock rose 19.3% in three months, outpacing the industry's 3.9% gain.
Class A/A+ properties in AAA clusters drive demand, aiding occupancy and rental growth.
ARE boasts $4.6B liquidity, a disciplined debt profile and steady dividend growth.
Alexandria Real Estate Equities (ARE - Free Report) shares have gained 19.3% in the past three months compared with the industry's growth of 3.9%.
The company’s premium portfolio of Class A/A+ properties in strategic markets is well-poised to benefit from solid demand for life science assets, driven by the increasing need for drug research and innovation. Its acquisition, developments and robust balance sheet augur well for long-term growth.
Analysts seem bullish on this Zacks Rank #3 (Hold) stock. The Zacks Consensus Estimate for 2025 funds from operations (FFO) per share has been revised a cent upward to $9.21 over the past month.
Image Source: Shutterstock
Let us decipher the possible factors behind the rise in the stock price.
Alexandria's portfolio of Class A/A+ properties is strategically located within the AAA innovation cluster regions. These locations are highly appealing to life science, tech and technology companies seeking tenancy. Also, with artificial intelligence (AI) and machine learning (ML) tools being implemented in this industry, AI-focused life science companies require significant lab footprints to generate the immense biological and chemical datasets needed to train AI-ML models effectively. This is likely to emerge as a key demand driver for Alexandria’s life science assets in the upcoming period.
Alexandria’s Class A/A+ properties in AAA locations are experiencing high demand, aiding occupancy levels and rent growth. As of June 30, 2025, the occupancy of its operating properties in North America remained high at 90.8%.
The acquisition, development and redevelopment of the new Class A/A+ properties in AAA locations are likely to boost the company’s operating performance over the long term. In the second quarter of 2025, it placed into service development and redevelopment projects totaling 217,774 RSF, 90% occupied across three submarkets, which resulted in $15 million of incremental annual net operating income. It is actively disposing of non-core assets to utilize the receipts for funding long-term accretive investments. In the first half of 2025, Alexandria completed dispositions worth $260.6 million.
Alexandria has adequate financial flexibility to cushion and enhance its market position. The company had $4.6 billion of liquidity as of the end of the second quarter of 2025. The net debt and preferred stock to adjusted EBITDA was 5.9X, and the fixed-charge coverage ratio was 4.1 in the second quarter of 2025 on an annualized basis. Its debt maturities are well-laddered, with a weighted average remaining term of 12 years as of the end of the second quarter of 2025.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Alexandria remains committed to that. The company has increased its dividend nine times in the last five years, and the five-year annualized dividend growth rate is 4.88%. Given the company’s solid operating platform and decent financial position, this dividend rate is likely to be sustainable over the long run.
With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
Risks Likely to Affect ARE’s Positive Trend
Alexandria has a vast development pipeline. This exposes the company to the risk of rising construction costs and lease-up concerns. High interest expenses also add to the company’s woes.
The Zacks Consensus Estimate for PLYM’s 2025 FFO per share has moved 2 cents northward to $1.88 over the past week.
The Zacks Consensus Estimate for WELL’s 2025 FFO per share has moved 4 cents northward to $5.06 over the past month.
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.
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Alexandria Stock Gains 19.3% in 3 Months: Will the Trend Continue?
Key Takeaways
Alexandria Real Estate Equities (ARE - Free Report) shares have gained 19.3% in the past three months compared with the industry's growth of 3.9%.
The company’s premium portfolio of Class A/A+ properties in strategic markets is well-poised to benefit from solid demand for life science assets, driven by the increasing need for drug research and innovation. Its acquisition, developments and robust balance sheet augur well for long-term growth.
Analysts seem bullish on this Zacks Rank #3 (Hold) stock. The Zacks Consensus Estimate for 2025 funds from operations (FFO) per share has been revised a cent upward to $9.21 over the past month.
Image Source: Shutterstock
Let us decipher the possible factors behind the rise in the stock price.
Alexandria's portfolio of Class A/A+ properties is strategically located within the AAA innovation cluster regions. These locations are highly appealing to life science, tech and technology companies seeking tenancy. Also, with artificial intelligence (AI) and machine learning (ML) tools being implemented in this industry, AI-focused life science companies require significant lab footprints to generate the immense biological and chemical datasets needed to train AI-ML models effectively. This is likely to emerge as a key demand driver for Alexandria’s life science assets in the upcoming period.
Alexandria’s Class A/A+ properties in AAA locations are experiencing high demand, aiding occupancy levels and rent growth. As of June 30, 2025, the occupancy of its operating properties in North America remained high at 90.8%.
The acquisition, development and redevelopment of the new Class A/A+ properties in AAA locations are likely to boost the company’s operating performance over the long term. In the second quarter of 2025, it placed into service development and redevelopment projects totaling 217,774 RSF, 90% occupied across three submarkets, which resulted in $15 million of incremental annual net operating income. It is actively disposing of non-core assets to utilize the receipts for funding long-term accretive investments. In the first half of 2025, Alexandria completed dispositions worth $260.6 million.
Alexandria has adequate financial flexibility to cushion and enhance its market position. The company had $4.6 billion of liquidity as of the end of the second quarter of 2025. The net debt and preferred stock to adjusted EBITDA was 5.9X, and the fixed-charge coverage ratio was 4.1 in the second quarter of 2025 on an annualized basis. Its debt maturities are well-laddered, with a weighted average remaining term of 12 years as of the end of the second quarter of 2025.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Alexandria remains committed to that. The company has increased its dividend nine times in the last five years, and the five-year annualized dividend growth rate is 4.88%. Given the company’s solid operating platform and decent financial position, this dividend rate is likely to be sustainable over the long run.
With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
Risks Likely to Affect ARE’s Positive Trend
Alexandria has a vast development pipeline. This exposes the company to the risk of rising construction costs and lease-up concerns. High interest expenses also add to the company’s woes.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Plymouth Industrial REIT (PLYM - Free Report) and Welltower (WELL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for PLYM’s 2025 FFO per share has moved 2 cents northward to $1.88 over the past week.
The Zacks Consensus Estimate for WELL’s 2025 FFO per share has moved 4 cents northward to $5.06 over the past month.
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.