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 16.4% in that time frame, underperforming 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 latest earnings report in order to get a better handle on the important drivers.

Alexandria’s Q3 AFFO & Revenues Miss Estimates, ‘25 View Narrowed

Alexandria reported third-quarter 2025 adjusted FFO (AFFO) per share of $2.22, lagging the Zacks Consensus Estimate of $2.31. This compares unfavorably to the AFFO per share of $2.37 reported in the prior year.

Results reflected lower occupancy and higher interest expenses, undermining the performance. However, leasing activity and an improved rental rate supported the same to some extent. The company has lowered its 2025 FFO guidance range.

Total revenues of $751.9 million lagged the consensus estimate of $756.2 million. Moreover, the figure decreased 5% year over year.

Behind the Headlines

Alexandria’s total leasing activity totaled 1.2 million rentable square feet (RSF) of space in the third quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing amounted to 354,367 RSF, while leasing of development and redevelopment space totaled 560,344 RSF.

The company registered rental rate growth of 15.2% during the quarter. On a cash basis, the rental rate increased 6.1%. As of Sept. 30, 2025, the occupancy of operating properties in North America was 90.6%, down 0.2% from the prior quarter and 4.1% from the year-ago quarter. Our estimate for the same was 90.8%.

On a year-over-year basis, same-property NOI decreased 6% and 3.1% on a cash basis. The decline in same-property NOI (cash basis) was due to the disposition of properties after Jan. 1, 2024. Same-property NOI (cash basis) changes, annualized for the three months ended Sept. 30, 2025, excluding the impact of these dispositions, were a 1.2% decrease.

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 7.5 years. For Alexandria’s top 20 tenants, it is 9.4 years. As of Sept. 30, 2025, the tenant receivable balance was $6.4 million.

As of Sept. 30, 2025, Alexandria’s share of completed and pending dispositions and sales of partial interests totaled $1.54 billion. During the third quarter, Alexandria placed into service development projects aggregating 185,517 RSF, which are 89% occupied across multiple submarkets, delivering $16 million of incremental annual NOI.

However, interest expenses jumped 26% year over year to $54.9 million.

Liquidity

The company exited the third quarter with cash and cash equivalents of $579.5 million, up from $520.5 million as of June 30, 2025. It had $4.2 billion of liquidity at the end of the reported quarter.

The net debt and preferred stock to adjusted EBITDA was 6.1X, and the fixed-charge coverage was 3.9X on an annualized basis. Its weighted average remaining term of debt was 11.6 years.

2025 Guidance

Alexandria has lowered its 2025 FFO per share guidance range. The same is now expected to lie between $8.98 and $9.04 from the earlier guided range of $9.16-$9.36, reducing the midpoint by 25 cents to $9.01.

The rationale for revision has been attributed to a 1% reduction in projected 2025 same-property NOI and a 0.9% reduction in projected operating occupancy in North America as of Dec. 31, 2025.

The company pointed out that it is witnessing slower-than-anticipated re-leasing of expiring space and lease-up of vacancy in its operating portfolio owing to the lower demand across the life science industry.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Alexandria Real Estate Equities has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock has a grade 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 D. 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 these revisions indicates a downward shift. It's no surprise Alexandria Real Estate Equities has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Alexandria Real Estate Equities belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Healthpeak (DOC Quick QuoteDOC - Free Report) , has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.

Healthpeak reported revenues of $705.87 million in the last reported quarter, representing a year-over-year change of +0.8%. EPS of -$0.17 for the same period compares with $0.45 a year ago.

Healthpeak is expected to post earnings of $0.45 per share for the current quarter, representing a year-over-year change of -2.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.

Healthpeak has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.