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Alexandria Real Estate Equities has forecast its 2026 adjusted funds from operations below analyst expectations, citing weak leasing demand and broader economic uncertainty. The REIT guided adjusted FFO at USD 6.25-USD 6.55 per share, with the midpoint trailing estimates. However, fourth-quarter adjusted FFO slightly exceeded expectations, while occupancy edged up to 90.9%. Quarterly revenue declined year-on-year but beat forecasts. The company continues to focus on life science and technology-focused real estate across North America.
Alexandria Real Estate Equities earlier this week projected its adjusted funds from operations for 2026 below market expectations, pointing to subdued leasing activity and continued macroeconomic uncertainty affecting demand across its portfolio. The US-based real estate investment trust said it expects adjusted FFO to be in the range of USD 6.25 to USD 6.55 per share. The midpoint of this guidance remains lower than the average analyst estimate of USD 6.44 per share, as per LSEG data. Advertisement
Despite the cautious full-year outlook, the company delivered a slightly better-than-expected performance in the fourth quarter. Adjusted FFO for the quarter stood at USD 2.16 per share, marginally ahead of market expectations of USD 2.14 per share. This indicates some near-term stability even as longer-term concerns persist.
Occupancy levels showed a modest improvement. As of the end of December, portfolio occupancy was reported at 90.9%, up from 90.6% in the previous quarter. While the increase was limited, it reflected steady tenant retention in a challenging leasing environment, particularly for office-linked real estate.
Revenue for the fourth quarter declined 4.4% on a year-on-year basis to USD 754.41 million. However, the figure exceeded analyst estimates of USD 742.7 million, suggesting better-than-anticipated income resilience despite lower leasing momentum. Following the earnings announcement, the company's shares rose by nearly 1% in aftermarket trading, reflecting a measured investor response.
Alexandria Real Estate focuses on owning, operating and developing life science laboratories, office properties and technology campuses across North America. Its tenant base includes pharmaceutical and biotechnology firms, life science companies, research institutions and various US government agencies. The company has historically benefited from long-term demand linked to research and innovation-driven sectors, though recent economic uncertainty has weighed on expansion and leasing decisions.
Source Reuters
5th Jun, 2025
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