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Alexandria (ARE) Q4 FFO Beats on Solid Rental Rate Growth

Alexandria Real Estate Equities, Inc. ARE reported adjusted funds from operations (FFO) of $1.97 per share for fourth-quarter 2021, up 7.1% from the year-ago quarter’s $1.84. The figure also surpassed the Zacks Consensus Estimate of $1.96.

This year-over-year improvement resulted from 24.4% year-over-year top-line growth to $576.9 million. Results reflect decent internal growth.

Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.

For the full year, adjusted FFO per share came in at $7.76, higher than the prior-year tally of $7.30 and in line with the Zacks Consensus Estimate. This was backed by 12.1% growth in total revenues to $2.11 billion.

Alexandria also issued its 2022 outlook, expecting FFO per share in the range of $8.26-$8.46, with the mid-point at $8.36. In addition, as of Dec 31, 2021, the tenant receivables balance was $7.4 million.

Behind the Headlines

Reflecting robust demand for its high-quality office/laboratory space, Alexandria’s total leasing activity aggregated to 4.1 million rentable square feet (RSF) of space during the December quarter. Lease renewals and re-leasing of space amounted to 1.95 million RSF. Leasing of development and redevelopment space was 1,795,633 RSF.

Alexandria registered rental rate growth of 35.9% during the reported quarter. On a cash basis, rental rate increased 22.9%.

On a year-over-year basis, same-property NOI was up 5%. It climbed 7.5% on a cash basis. Occupancy of operating properties in North America remained high at 94%.

As of fourth-quarter 2021, investment-grade or publicly-traded large-cap tenants accounted for 51% of the annual rental revenues in effect. Weighted-average remaining lease term of all tenants is 7.5 years. For Alexandria’s top 20 tenants, it is 10.9 years.

During the fourth quarter, Alexandria completed acquisitions in its key life-science cluster submarkets totaling 4.1 million SF, comprising 3.9 million RSF of future development opportunities and 191,879 RSF of operating space for a total price of $1.5 billion, including the previously announced acquisition of One Rogers Street in Cambridge submarket for a purchase price of $849.4 million.

During the reported quarter, Alexandria placed into service development and redevelopment projects totaling 600,768 RSF, which are 100% leased across multiple submarkets.


Alexandria exited fourth-quarter 2021 with cash and cash equivalents of $361.3 million, up from $325.9 million seen at the end of third-quarter 2021. ARE had $5.4 billion of liquidity as of the end of the reported quarter. The net debt and preferred stock to adjusted EBITDA was 5.2Xand the fixed-charge coverage ratio was 5.3X for fourth-quarter 2021 annualized. ARE has no debt maturities before 2024 and its weighted-average remaining term of debt as of Dec 31, 2021, is 12.1 years.


Alexandria also issued 2022 guidance, projecting the adjusted FFO per share in the range of $8.26-$8.46, with the mid-point being$8.36. The Zacks Consensus Estimate for the same is currently pinned at $8.36.

Alexandria’s current-year expectations are backed by anticipations for occupancy in North America (as of Dec 31, 2022) in the band of 95.2-95.8%, rental rate increases for lease renewals, re-leasing of space of 30-35% and same-property NOI growth of 5.5-7.5%.

Alexandria currently carries a Zacks Rank #2 (Buy). 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 and EPS Surprise
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

We now look forward to the earnings releases of other REITs like AvalonBay Communities AVB, Mid-America Apartment Communities MAA and Essex Property ESS scheduled for this week.

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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