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Alexandria (ARE) Q2 AFFO Beats Estimates, Revenues Miss
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Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2024 adjusted funds from operations (AFFO) per share of $2.36, which beat the Zacks Consensus Estimate of $2.34. The reported figure also climbed 5.4% from the year-ago quarter.
Results reflected a rise in revenues, aided by decent leasing activity and rental rate growth.Alexandria maintained its 2024 AFFO per share outlook.
Total revenues of $ 766.7 million increased 7.4% on a year-over-year basis. However, revenues missed the consensus estimate of $776.3 million.
Behind the Headlines
Alexandria’s total leasing activity aggregated 1.1 million rentable square feet (RSF) of space in the second quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing of space amounted to 589,650 RSF, while leasing of development and redevelopment space totaled 340,989 RSF.
The company registered rental rate growth of 7.4% during the quarter. On a cash basis, the rental rate increased 3.7%.
On a year-over-year basis, same-property net operating income (NOI) increased 1.5%. It improved 3.9% on a cash basis. The occupancy of operating properties in North America was 94.6% as of Jun 30, 2024, the same as in the prior quarter and up from 93.6% in the year-ago quarter. We estimated the metric to be 95%.
In the reported quarter, investment-grade or publicly traded large-cap tenants accounted for 53% of the annual rental revenues in effect. The weighted average remaining lease term of all tenants is 7.4 years. For Alexandria’s top 20 tenants, it is 9.4 years.
As of Jun 30, 2024, the tenant receivable balance was $6.8 million.
During the second quarter, Alexandria completed acquisitions worth $7 million. Moreover, acquisitions made since the beginning of the year through June, as well as its pending acquisitions subject to signed letters of intent or purchase and sale agreements, in total reached $249.4 million.
During the quarter, ARE placed into service development and redevelopment projects aggregating 284,982 RSF, which are fully leased across multiple submarkets, delivering $16 million of incremental annual NOI.
Liquidity
The company exited the second quarter with cash and cash equivalents of $561.0 million, down from $722.2 million as of Mar 31, 2024. It had $5.6 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.4X, and the fixed-charge coverage was 4.5X on an annualized basis. Its weighted average remaining term of debt was 13 years.
2024 Guidance
Alexandria maintained its 2024 guidance, projecting the AFFO per share in the range of $9.41-$9.53, with the midpoint remaining unchanged at $9.47. The Zacks Consensus Estimate is currently pegged at $9.49.
Alexandria’s current-year expectations are backed by anticipations for occupancy in North America (as of Dec 31, 2024) in the band of 94.6-95.6%, rental rate increases for lease renewals, re-leasing of space of 11-19% (5-13% cash basis) and same-property NOI growth of 0.5-2.5% (3-5% cash basis).
However, the company reduced its 2024 FFO guidance range to $8.89-$9.01 from the previously guided range of $9.49-$9.61
Alexandria currently carries a Zacks Rank #4 (Sell).
Alexandria Real Estate Equities, Inc. Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like SBA Communications (SBAC - Free Report) and Ventas (VTR - Free Report) ,slated to report on Jul 29 and Aug 1, respectively.
The Zacks Consensus Estimate for Ventas’ second-quarter 2024 FFO per share is pegged at 79 cents, which implies a 5.3% year-over-year increase. VTR currently carries a Zacks Rank #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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Alexandria (ARE) Q2 AFFO Beats Estimates, Revenues Miss
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2024 adjusted funds from operations (AFFO) per share of $2.36, which beat the Zacks Consensus Estimate of $2.34. The reported figure also climbed 5.4% from the year-ago quarter.
Results reflected a rise in revenues, aided by decent leasing activity and rental rate growth.Alexandria maintained its 2024 AFFO per share outlook.
Total revenues of $ 766.7 million increased 7.4% on a year-over-year basis. However, revenues missed the consensus estimate of $776.3 million.
Behind the Headlines
Alexandria’s total leasing activity aggregated 1.1 million rentable square feet (RSF) of space in the second quarter, reflecting healthy demand for its high-quality office/laboratory space. Of this, lease renewals and re-leasing of space amounted to 589,650 RSF, while leasing of development and redevelopment space totaled 340,989 RSF.
The company registered rental rate growth of 7.4% during the quarter. On a cash basis, the rental rate increased 3.7%.
On a year-over-year basis, same-property net operating income (NOI) increased 1.5%. It improved 3.9% on a cash basis. The occupancy of operating properties in North America was 94.6% as of Jun 30, 2024, the same as in the prior quarter and up from 93.6% in the year-ago quarter. We estimated the metric to be 95%.
In the reported quarter, investment-grade or publicly traded large-cap tenants accounted for 53% of the annual rental revenues in effect. The weighted average remaining lease term of all tenants is 7.4 years. For Alexandria’s top 20 tenants, it is 9.4 years.
As of Jun 30, 2024, the tenant receivable balance was $6.8 million.
During the second quarter, Alexandria completed acquisitions worth $7 million. Moreover, acquisitions made since the beginning of the year through June, as well as its pending acquisitions subject to signed letters of intent or purchase and sale agreements, in total reached $249.4 million.
During the quarter, ARE placed into service development and redevelopment projects aggregating 284,982 RSF, which are fully leased across multiple submarkets, delivering $16 million of incremental annual NOI.
Liquidity
The company exited the second quarter with cash and cash equivalents of $561.0 million, down from $722.2 million as of Mar 31, 2024. It had $5.6 billion of liquidity at the end of the reported quarter.
The net debt and preferred stock to adjusted EBITDA was 5.4X, and the fixed-charge coverage was 4.5X on an annualized basis. Its weighted average remaining term of debt was 13 years.
2024 Guidance
Alexandria maintained its 2024 guidance, projecting the AFFO per share in the range of $9.41-$9.53, with the midpoint remaining unchanged at $9.47. The Zacks Consensus Estimate is currently pegged at $9.49.
Alexandria’s current-year expectations are backed by anticipations for occupancy in North America (as of Dec 31, 2024) in the band of 94.6-95.6%, rental rate increases for lease renewals, re-leasing of space of 11-19% (5-13% cash basis) and same-property NOI growth of 0.5-2.5% (3-5% cash basis).
However, the company reduced its 2024 FFO guidance range to $8.89-$9.01 from the previously guided range of $9.49-$9.61
Alexandria currently carries a Zacks Rank #4 (Sell).
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
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like SBA Communications (SBAC - Free Report) and Ventas (VTR - Free Report) ,slated to report on Jul 29 and Aug 1, respectively.
The Zacks Consensus Estimate for SBA Communications’ second-quarter 2024 FFO per share stands at $3.28, which indicates a 1.2% rise year over year. SBAC currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ventas’ second-quarter 2024 FFO per share is pegged at 79 cents, which implies a 5.3% year-over-year increase. VTR currently carries a Zacks Rank #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.