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Alexandria's Q3 Earnings Preview: Is ARE Stock a Portfolio Must-Have?
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Key Takeaways
ARE is expected to report a 14.3% revenue decline and a 31.5% drop in adjusted FFO per share.
Slow re-leasing, lease-up delays and high leasing concessions pressure occupancy and same-store performance.
ARE's estimated Q3 occupancy is 85.9%, while higher interest expenses may further weigh on quarterly results.
Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to release its third-quarter 2026 results on Oct. 26, after the closing bell. Its quarterly results are likely to reflect a decline in revenues and funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based life science real estate investment trust (REIT), focusing on collaborative life science, agtech and technology campuses in AAA innovation cluster locations, beat the Zacks Consensus Estimate for adjusted FFO per share by 4.85%. The results benefited from strong leasing volume, steady tenant collections and continued development deliveries.
Alexandria has a decent surprise history. Over the preceding four quarters, its adjusted FFO per share surpassed the Zacks Consensus Estimate on two occasions, missed once and met in the remaining quarter, with an average beat of 0.36%. This is depicted in the graph below:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
ARE owns a premium portfolio of Class A/A+ properties in the high-barrier-to-entry markets of the United States. This strategically located property base supports stable long-term demand from high-growth tenants. However, the company’s vast development pipeline exposes it to the risk of lease-up concerns.
The slow re-leasing of expiring spaces in its operating portfolio is likely to have pressured occupancy levels in the quarter under consideration, affecting its revenue growth. Per the second-quarter 2026 earnings call transcript, management indicated that approximately 450,000 square feet of identified lease expirations were expected to experience downtime in the second half of 2026. Although Alexandria had 1.4 million square feet of leased space awaiting commencement, with approximately 64% expected to commence by year-end, the average commencement was projected for November 2026. The benefits from these leases are unlikely to have fully materialized in the third quarter. For the third quarter of 2026, we estimate occupancy at 85.9%.
Alexandria's same-property revenues and net operating income (NOI) are likely to have been adversely impacted by lower occupancy and elevated leasing concessions. For the third quarter of 2026, our estimate indicates a 10.2% decrease in same-store revenues and a 19.3% decline in same-store NOI.
Higher interest expenses are also likely to have weighed on Alexandria's third-quarter 2026 performance owing to the substantial debt burden.
The Zacks Consensus Estimate for Alexandria’s quarterly revenues currently stands at $644.2 million, suggesting a decrease of 14.3% from the prior-year period’s reported figure.
Alexandria’s activities in the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly adjusted FFO per share has remained unchanged at $1.52 over the past three months. The figure suggests a 31.5% decrease from the year-ago quarter’s tally.
Here Is What Our Quantitative Model Predicts for ARE:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Alexandria this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Alexandria currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector, Host Hotels & Resorts (HST - Free Report) and SBA Communications (SBAC - Free Report) , which you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.
SBA Communications is slated to report quarterly numbers on Nov. 2. SBAC has an Earnings ESP of +1.54% and carries a Zacks Rank of 3 at present.
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.
View the Zacks #1 Rank List
Image: Bigstock
Alexandria's Q3 Earnings Preview: Is ARE Stock a Portfolio Must-Have?
Key Takeaways
Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to release its third-quarter 2026 results on Oct. 26, after the closing bell. Its quarterly results are likely to reflect a decline in revenues and funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based life science real estate investment trust (REIT), focusing on collaborative life science, agtech and technology campuses in AAA innovation cluster locations, beat the Zacks Consensus Estimate for adjusted FFO per share by 4.85%. The results benefited from strong leasing volume, steady tenant collections and continued development deliveries.
Alexandria has a decent surprise history. Over the preceding four quarters, its adjusted FFO per share surpassed the Zacks Consensus Estimate on two occasions, missed once and met in the remaining quarter, with an average beat of 0.36%. This is depicted in the graph below:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Alexandria Real Estate Equities, Inc. price-eps-surprise | Alexandria Real Estate Equities, Inc. Quote
Factors at Play & Projections for ARE
ARE owns a premium portfolio of Class A/A+ properties in the high-barrier-to-entry markets of the United States. This strategically located property base supports stable long-term demand from high-growth tenants. However, the company’s vast development pipeline exposes it to the risk of lease-up concerns.
The slow re-leasing of expiring spaces in its operating portfolio is likely to have pressured occupancy levels in the quarter under consideration, affecting its revenue growth. Per the second-quarter 2026 earnings call transcript, management indicated that approximately 450,000 square feet of identified lease expirations were expected to experience downtime in the second half of 2026. Although Alexandria had 1.4 million square feet of leased space awaiting commencement, with approximately 64% expected to commence by year-end, the average commencement was projected for November 2026. The benefits from these leases are unlikely to have fully materialized in the third quarter. For the third quarter of 2026, we estimate occupancy at 85.9%.
Alexandria's same-property revenues and net operating income (NOI) are likely to have been adversely impacted by lower occupancy and elevated leasing concessions. For the third quarter of 2026, our estimate indicates a 10.2% decrease in same-store revenues and a 19.3% decline in same-store NOI.
Higher interest expenses are also likely to have weighed on Alexandria's third-quarter 2026 performance owing to the substantial debt burden.
The Zacks Consensus Estimate for Alexandria’s quarterly revenues currently stands at $644.2 million, suggesting a decrease of 14.3% from the prior-year period’s reported figure.
Alexandria’s activities in the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly adjusted FFO per share has remained unchanged at $1.52 over the past three months. The figure suggests a 31.5% decrease from the year-ago quarter’s tally.
Here Is What Our Quantitative Model Predicts for ARE:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Alexandria this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Alexandria currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector, Host Hotels & Resorts (HST - Free Report) and SBA Communications (SBAC - Free Report) , which you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.
Host Hotels & Resorts is slated to report quarterly numbers on Nov. 4. HST has an Earnings ESP of +0.22% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
SBA Communications is slated to report quarterly numbers on Nov. 2. SBAC has an Earnings ESP of +1.54% and carries a Zacks Rank of 3 at present.
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.