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ARE posted Q4 AFFO of $2.16 and revenues of $754.4M, topping estimates while both declined year over year.
ARE leased 1.2M RSF in Q4; occupancy rose sequentially to 90.9% but was down 3.7% from a year ago.
ARE sold $1.47B of assets, delivered a fully leased project, and saw interest expense jump 18% year over year.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $2.16, beating the Zacks Consensus Estimate of $2.15. This compares unfavorably to the AFFO of $2.39 reported in the prior year.
Results reflect decent leasing activity. However, lower occupancy, negative rental rates and higher interest expenses year over year undermined the results to some extent.
Total revenues of $754.4 million outpaced the consensus estimate of $738.3 million. However, the figure decreased 4.4% year over year.
For 2025, the company reported AFFO per share of $9.01, down 4.9% from the previous year. The reported figure missed the Zacks Consensus Estimate of $9.00. Total revenues of $3.03 billion decreased 2.9% from the previous year.
ARE: Behind the Headlines
Alexandria’s total leasing activity totaled 1.2 million rentable square feet (RSF) of space in the fourth quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing amounted to 821,289 RSF, while leasing of development and redevelopment space totaled 6,279 RSF.
The company registered a negative rental rate of 9.9% during the quarter. On a cash basis, the rental rate decreased 5.2%. As of Dec. 31, 2025, the occupancy of operating properties in North America was 90.9%, up 0.3% from the prior quarter, while decreasing 3.7% from the year-ago quarter. Our estimate for the same was 91.1%.
On a year-over-year basis, same-property net operating income (NOI) decreased 6% and 1.7% 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 7.5 years. For Alexandria’s top 20 tenants, it is 9.7 years. As of Dec. 31, 2025, the tenant receivable balance was $6.7 million.
For the fourth quarter of 2025, Alexandria completed dispositions and sales of partial interests worth $1.47 billion. During the fourth quarter, ARE placed into service one development project aggregating 139,979 RSF, which is 100% occupied at 10075 Barnes Canyon Road, delivering $10 million of incremental annual NOI.
However, interest expenses jumped 18% year over year to $65.7 million.
ARE’s Liquidity
The company exited the fourth quarter with cash and cash equivalents of $549.1 million, down from $579.5 million as of Sept. 30, 2025. It had $5.3 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.7X, and the fixed-charge coverage was 3.7X for the fourth quarter of 2025, on an annualized basis. Its weighted average remaining term of debt was 12.1 years, the longest among S&P 500 REITs.
ARE’s 2026 Outlook
Alexandria provided its 2026 AFFO per share guidance in the range of $6.25-$6.55. The Zacks Consensus Estimate for the same is currently pegged at $6.42.
The company expects occupancy of operating properties in North America to be between 87.7% and 89.3%. Rental rate changes for lease renewals and re-leasing of space to be within negative 2% to growth of 6%. Same-property NOI performance is projected in the range of negative 9.5%-7.5%.
Dispositions and sales of partial interests are estimated between $2.1 billion and 3.7 billion.
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 Healthpeak Properties (DOC - Free Report) and Digital Realty Trust (DLR - Free Report) , slated to report on Feb. 2 and Feb. 5, respectively.
The Zacks Consensus Estimate for Healthpeak’s fourth-quarter 2025 FFO per share stands at 45 cents, which indicates a 2.2% dip year over year. DOC currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Digital Realty Trust’s fourth-quarter 2025 FFO per share is pegged at $1.83, which implies a 5.8% year-over-year increase. DLR currently carries a Zacks Rank #2 (Buy).
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's Q4 AFFO & Revenues Beat Estimates, Occupancy Decline Y/Y
Key Takeaways
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $2.16, beating the Zacks Consensus Estimate of $2.15. This compares unfavorably to the AFFO of $2.39 reported in the prior year.
Results reflect decent leasing activity. However, lower occupancy, negative rental rates and higher interest expenses year over year undermined the results to some extent.
Total revenues of $754.4 million outpaced the consensus estimate of $738.3 million. However, the figure decreased 4.4% year over year.
For 2025, the company reported AFFO per share of $9.01, down 4.9% from the previous year. The reported figure missed the Zacks Consensus Estimate of $9.00. Total revenues of $3.03 billion decreased 2.9% from the previous year.
ARE: Behind the Headlines
Alexandria’s total leasing activity totaled 1.2 million rentable square feet (RSF) of space in the fourth quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing amounted to 821,289 RSF, while leasing of development and redevelopment space totaled 6,279 RSF.
The company registered a negative rental rate of 9.9% during the quarter. On a cash basis, the rental rate decreased 5.2%. As of Dec. 31, 2025, the occupancy of operating properties in North America was 90.9%, up 0.3% from the prior quarter, while decreasing 3.7% from the year-ago quarter. Our estimate for the same was 91.1%.
On a year-over-year basis, same-property net operating income (NOI) decreased 6% and 1.7% 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 7.5 years. For Alexandria’s top 20 tenants, it is 9.7 years. As of Dec. 31, 2025, the tenant receivable balance was $6.7 million.
For the fourth quarter of 2025, Alexandria completed dispositions and sales of partial interests worth $1.47 billion. During the fourth quarter, ARE placed into service one development project aggregating 139,979 RSF, which is 100% occupied at 10075 Barnes Canyon Road, delivering $10 million of incremental annual NOI.
However, interest expenses jumped 18% year over year to $65.7 million.
ARE’s Liquidity
The company exited the fourth quarter with cash and cash equivalents of $549.1 million, down from $579.5 million as of Sept. 30, 2025. It had $5.3 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.7X, and the fixed-charge coverage was 3.7X for the fourth quarter of 2025, on an annualized basis. Its weighted average remaining term of debt was 12.1 years, the longest among S&P 500 REITs.
ARE’s 2026 Outlook
Alexandria provided its 2026 AFFO per share guidance in the range of $6.25-$6.55. The Zacks Consensus Estimate for the same is currently pegged at $6.42.
The company expects occupancy of operating properties in North America to be between 87.7% and 89.3%. Rental rate changes for lease renewals and re-leasing of space to be within negative 2% to growth of 6%. Same-property NOI performance is projected in the range of negative 9.5%-7.5%.
Dispositions and sales of partial interests are estimated between $2.1 billion and 3.7 billion.
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 Healthpeak Properties (DOC - Free Report) and Digital Realty Trust (DLR - Free Report) , slated to report on Feb. 2 and Feb. 5, respectively.
The Zacks Consensus Estimate for Healthpeak’s fourth-quarter 2025 FFO per share stands at 45 cents, which indicates a 2.2% dip year over year. DOC currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Digital Realty Trust’s fourth-quarter 2025 FFO per share is pegged at $1.83, which implies a 5.8% year-over-year increase. DLR currently carries a Zacks Rank #2 (Buy).
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.