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Alexandria Closes Public Offering Linked to Forward Sale Deal

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Alexandria Real Estate Equities, Inc. (ARE - Free Report) has announced the closing of its upsized public offering of 6 million shares of common stock at $160.50 per share related to forward sale agreements. Moreover, underwriters have bought 0.9 million additional shares under a 30-day option granted.

The move comes as part of Alexandria’s effort to boost its financial flexibility and bank on opportunistic investment options. A forward sale of common shares entails an offering agreed upon now and settled at a future date.

Alexandria will not receive any proceeds initially from this move. However, with any net proceeds it receives upon the future settlement of forward sale agreements, the company plans to finance the pending and the recently-closed acquisitions as well as the construction of highly-leased development projects.

Apart from these, the company plans to use it for general working capital and other corporate needs, including reduction of outstanding balance, if any, on its $2.2-billion unsecured senior line of credit, new $750-million unsecured senior line of credit, and commercial paper program.

Alexandria focuses on Class A properties concentrated in urban campuses, primarily for the life-science and technology entities. The dynamic setting adds to the productivity and efficiency of the tenants, which, in turn, ensures steady rental revenues. Moreover, the coronavirus pandemic is opening up scope for life-science companies, in turn, benefiting landlords who provide spaces for such activities.

As of first-quarter 2020, investment-grade or publicly-traded large-cap tenants accounted for 51% of annual rental revenues in effect. Weighted-average remaining lease term of all tenants is 7.8 years.

Shares of this Zacks Rank #2 (Buy) company have appreciated 11.7% over the past year, while its industry has declined 7.4%.

 

Stocks to Consider

Gaming and Leisure Properties, Inc.’s (GLPI - Free Report) funds from operations (FFO) per share estimate for the ongoing year have been revised marginally upward over the past 30 days. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Four Corners Property Trust, Inc.’s (FCPT - Free Report) FFO per share estimate for 2020 has moved 8.9% upward to $1.34 over the past month. It currently carries a Zacks Rank of 2.

Cousins Properties Incorporated’s (CUZ - Free Report) Zacks Consensus Estimate for the ongoing year FFO per share has been revised marginally upward to $2.74 over the past month. The company currently carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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