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lexandria Real Estate Equities (ARE) is trading at $63.43, down 18.55% as of 3 p.m. ET, after a Q3 report that fell short of expectations. Revenue slipped 5% and adjusted funds from operations (FFO) fell 7%, prompting the sell‑off. The company also trimmed its 2025 adjusted‑FFO guidance to $9.01 from the previously projected $9.26.
Occupancy in the third quarter dropped to 91.4% from 94.8% a year earlier, and the REIT recorded real‑estate impairments that pushed earnings into negative territory as it sold non‑core assets. Despite these setbacks, shares have fallen 71% from their all‑time peak, suggesting a potential buying opportunity.
Key upside drivers remain: the REIT’s portfolio is heavily weighted toward biotech tenants, a sector projected to grow roughly 14% annually through 2034. Over the past year, Alexandria generated $1.5 billion in FFO, comfortably covering the $912 million paid out in dividends and supporting a 6.8% yield. Management cites a credit rating in the top decile of U.S. REITs, indicating a solid balance sheet.
Valuation metrics are attractive, with price‑to‑sales and enterprise‑value‑to‑FFO ratios near decade lows. For investors seeking high yield, Alexandria presents an intriguing option. The Motley Fool recommends the stock.
