Alexandria's Q4 AFFO & Revenues Beat Estimates, Occupancy Decline Y/Y

Core Insights - Alexandria Real Estate Equities, Inc. (ARE) reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $2.16, slightly above the Zacks Consensus Estimate of $2.15, but down from $2.39 in the prior year [1][2] - Total revenues for the quarter were $754.4 million, exceeding the consensus estimate of $738.3 million, but reflecting a 4.4% decline year over year [2] - The company’s total leasing activity reached 1.2 million rentable square feet (RSF) in the fourth quarter, indicating strong demand for its office/laboratory space [3] Financial Performance - For the full year 2025, AFFO per share was reported at $9.01, a decrease of 4.9% from the previous year, and slightly missing the Zacks Consensus Estimate of $9.00 [2] - Total revenues for 2025 were $3.03 billion, down 2.9% from the previous year [2] - The company experienced a negative rental rate of 9.9% during the quarter, with a cash basis rental rate decrease of 5.2% [4] Occupancy and Leasing - As of December 31, 2025, occupancy of operating properties in North America was 90.9%, a 0.3% increase from the prior quarter but a 3.7% decrease from the year-ago quarter [4] - The weighted average remaining lease term for all tenants was 7.5 years, with the top 20 tenants having a longer term of 9.7 years [5] Interest Expenses and Dispositions - Interest expenses rose 18% year over year to $65.7 million [6] - The company completed dispositions and sales of partial interests worth $1.47 billion in the fourth quarter [6][9] Liquidity Position - Alexandria ended the fourth quarter with cash and cash equivalents of $549.1 million, down from $579.5 million at the end of the previous quarter [7] - The company had $5.3 billion of liquidity at the end of the reported quarter, with a net debt and preferred stock to adjusted EBITDA ratio of 5.7X [7] 2026 Outlook - For 2026, the company provided AFFO per share guidance in the range of $6.25 to $6.55, with the Zacks Consensus Estimate at $6.42 [10] - Expected occupancy for operating properties in North America is projected to be between 87.7% and 89.3% [10] - Rental rate changes for lease renewals and re-leasing are anticipated to range from a negative 2% to a growth of 6% [10]