Alexandria Real Estate Equities Inc. ARE is scheduled to release its first-quarter 2026 results on April 27, 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 in terms of adjusted FFO per share by just 0.47%. ARE’s performance in the quarter reflected lower occupancy, negative rental rates and higher interest expenses.
Alexandria has a decent surprise history. Over the preceding four quarters, its adjusted FFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, with the average miss of 0.20%. 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 and 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 and elevated lease-up vacancy in its operating portfolio are likely to have pressured occupancy level in the quarter under consideration, affecting its revenue growth. Management expects occupancy to dip in the first quarter of 2026. The projected decline in occupancy for the first quarter is primarily driven by the 1.2 million square feet of key lease expirations with expected downtime. We align with this outlook, estimating occupancy to decline to 89.4% from 90.9% in the prior quarter.
Moreover, Alexandria’s same-property revenues are likely to have been adversely impacted owing to pressure on occupancy. Management expects weaker same-property net operating income (NOI) in the first half of 2026 due to lower occupancy. For the first quarter of 2026, our estimate indicates a 10.4% decrease in same-store revenues and a 8.9% decline in same-store NOI.
The Zacks Consensus Estimate for Alexandria’s quarterly revenues currently stands at $666.8 million, suggesting a decrease of 12.1% 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 increased a cent to $1.74 over the past two months. However, the figure suggests a 24.4% decrease from the year-ago quarter’s tally.
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 has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT industry — Ventas VTR and BXP, Inc. BXP — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.
Ventas is slated to report quarterly numbers on April 27. VTR has an Earnings ESP of +0.36% and carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
BXP, scheduled to report quarterly numbers on April 28, has an Earnings ESP of +0.17% and a Zacks Rank of 3.
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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Ventas, Inc. (VTR): Free Stock Analysis Report
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Alexandria Real Estate Equities, Inc. (ARE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).