ALEXANDRIA REAL ESTATE EQUITIES, INC. (ARE): what the price requires
The current priced-in claim for ALEXANDRIA REAL ESTATE EQUITIES, INC. (ARE) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ARE
Headline
| Field | Value |
|---|---|
| Ticker | ARE |
| Company | ALEXANDRIA REAL ESTATE EQUITIES, INC. |
| Current price | $47.87/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 3.9x |
| FFO yield | 25.4% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 10.7% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.80σ |
| cohort percentile (of 88 peers) | 0 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and relative-multiple and growth-DCF value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.52x | 3 | justifies |
| Earnings | 1.51x | 4 | expensive |
| Relative | 0.39x | 6 | justifies |
| Growth | 0.96x | 5 | justifies |
Families that justify the price: Asset, Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.9%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $126.90 | 0.38x | yes | FCF base $1.4B, growth -5% (input: historical growth), terminal g 0.5%, WACC 3.9%, 5yr projection |
| DCF Exit Multiple | Growth | $73.01 | 0.66x | yes | Exit EV/EBITDA: 13.4x / 15.4x / 17.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $181.07 | 0.26x | yes | P/E 22.55x (blended: static sector reference 35x + trailing (TTM) 4x), scenarios: 19.2x / 22.6x / 25.9x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $16.91 | 2.83x | yes | DPS $2.90, g=-6.7% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $49.85 | 0.96x | yes | Stage 1: 2% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $92.08 | 0.52x | yes | Reference only (book value floor): BV/sh $92.08, ROE negative |
| Two-Stage Excess Return | Asset | $82.88 | 0.58x | yes | Reference only (book value with convergence): BV/sh $92.08, ROE converges to ke |
| Discounted Future Market Cap | Growth | $25.41 | 1.88x | yes | Rev $2.9B, growth -5% (input: historical growth; tapered), Terminal P/S: 2.4x / 2.8x / 3.2x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $148.56 | 0.32x | yes | FFO/share $12.38, growth 2% (input: historical FFO/share growth, 10y median), PEG=0.00 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $160.16 | 0.30x | yes | √(22.5 × FFO/share $12.38 × BVPS $92.08) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $82.96 | 0.58x | yes | EBITDA $1.31B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $17.93 | 2.67x | yes | FCF $1402.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $11.88 | 4.03x | yes | SBC-adj FCF $1.31B (FCF $1.40B − SBC $0.10B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $139.43 | 0.34x | yes | FFO/share $12.38 × (8.5 + 2×2.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $103.22 | 0.46x | yes | Revenue $2.94B × sector P/S 6.0x |
| PEG Fair Value | Relative | $61.90 | 0.77x | yes | FFO/share $12.38 × (PEG 1.5 × growth 2.5% (input: historical FFO/share growth, 10y median)) → PE 3.7x |
| Earnings Yield | Earnings | $133.84 | 0.36x | yes | FFO/share $12.38 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $175.52 | 0.27x | yes | FFO/share $12.38 × 14.2x P/FFO (route cohort median, n=85); FFO $2.12B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 171M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Funds from operations (trailing) | $2.1b |
| Share count CAGR (dilution) | 1.9% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- Alexandria owns and develops life-science laboratory campuses leased to biotech, pharma, and research tenants, concentrated in clusters like Boston, San Francisco, and San Diego where lab space is hardest to replace.
- The earnings line is holding even as the market deteriorates: first-quarter 2026 funds from operations were $1.73 per share and management reaffirmed full-year guidance of $6.40, while occupancy slipped to 87.7%.
- The defining risk is the life-science downturn itself; the quarter saw zero public-biotech lease signings, a company first, and same-property net operating income fell 11.9%, so the recovery thesis depends on biotech demand returning to an oversupplied market.
Bull Case
The earnings trajectory is steadier than the stock price implies, which is the heart of the bull case. Despite a brutal operating backdrop, Alexandria reported first-quarter 2026 funds from operations of $1.73 per share and reaffirmed full-year guidance of $6.40. A REIT trading at roughly four times its adjusted funds from operations while still generating that level of cash flow is being priced for a collapse that the income statement is not showing. Funds from operations is the cash metric that governs a REIT, and Alexandria's is holding near its guided level even as the lab market goes through its worst stretch in years.
The competitive position is genuine and the company is explicit about it. Alexandria's tenants cluster in its Megacampus ecosystems, and the 10-K states that 77% of its space is concentrated there, with their "strategic locations and path for growth" serving "as powerful incentives for tenants to lease space from us." Management goes further, calling the Megacampus strategy "our most powerful competitive advantage in an oversupplied market." Lab space is not interchangeable with generic office; it requires specialized infrastructure, and a campus that co-locates anchor pharma tenants, startups, and research institutions builds a network effect a new developer cannot quickly copy. That is why even in a weak quarter the company executed 394,000 square feet of development and redevelopment leases.
The capital plan and the asset value provide the floor. Alexandria is running a $2.9 billion disposition program, selling assets to fund its development pipeline and strengthen the balance sheet, and the asset-value and growth lenses both support the price, valuing the underlying real estate well above where the equity trades. The dividend is paid from funds from operations, and the company has prioritized protecting it. Against a REIT cohort spanning office and specialty property, Alexandria is the dominant life-science landlord, and the bull case is that the cash flow is holding, the asset base is worth far more than the stock, and the buyer is paid to wait for the lab market to normalize.
Bear Case
The bear case engages the narrative the price depends on, which is that the life-science downturn is temporary. The most fragile assumption is that biotech demand comes back, and the quarter delivered a genuinely alarming data point: the first quarter in company history with zero public-biotech lease signings. Biotech leasing is the demand engine for lab space, and biotech demand is downstream of biotech funding, which has been weak. When the tenant base's own capital markets are closed, they do not expand, and a landlord cannot lease to companies that are not growing. The price assumes this is a trough; the bear's point is that a funding-driven demand drought has no fixed end date.
The operating numbers show the pressure is already in the results, not just the outlook. Occupancy fell to 87.7%, management lowered year-end occupancy guidance to 87% from 88.5%, and same-property net operating income dropped 11.9% year over year. A double-digit decline in same-property NOI is the clearest sign the in-place portfolio is losing earnings power, not just failing to grow it. The company's own 10-K calls the market "oversupplied," which is the landlord admitting the supply-demand balance is working against pricing. New lab supply delivered into a market with no public-biotech demand pressures rents and concessions across the whole portfolio, megacampus or not.
The balance sheet is the structural risk that turns a cyclical downturn into something worse. Alexandria carries about $12 billion of net debt, a heavy load for a REIT whose NOI is declining, and the $2.9 billion disposition plan is partly a response to that, selling assets into a soft market to manage leverage. Asset sales at depressed cap rates crystallize lower values, and the 10-K's risk discussion ties the pressures directly to the ability to sustain "our dividends per share, as determined by our board of directors." The bear does not argue Alexandria is a bad company; its assets and clusters are real. It argues the price is a bet that the life-science cycle turns before the declining NOI, the heavy debt, and the oversupply force a harder reset, and a quarter with zero public-biotech leasing is evidence the turn is not yet in sight.
Valuation
Alexandria is valued on the cash its lab campuses produce, its adjusted funds from operations, and the multiple is extraordinarily low: about four times, so low that the price sits below what even a 5%-a-year decline in funds from operations would warrant. That is the framework flagging a price that has discounted not just a downturn but a sustained deterioration. With funds from operations holding at $1.73 in the quarter and guidance reaffirmed at $6.40, the market is pricing a far worse future than the current cash flow shows, which is the deep-value setup: either the price is right that the lab market keeps eroding, or it is too pessimistic about a dominant landlord whose cash flow is holding.
The methods point mostly the same way, and the disagreement is informative. The asset-value, relative-multiple, and forward-growth lenses all sit above the price, valuing the underlying real estate and cash flow well above where the equity trades, while only the earnings-power lens reads it as expensive, which is the artifact of heavy depreciation depressing GAAP earnings for a property company. The right lens for a REIT is the cash and asset value, and on those Alexandria looks cheap. The price is a value-and-asset read, not a growth bet, and the spread between where the asset methods land and where the stock trades is the market's discount for the life-science cycle and the leverage, not a sign the methods are too generous.
Solvency is the crux and the reason the discount is so deep. Net debt of about $12 billion is substantial for a REIT whose same-property NOI just fell 11.9%, and the $2.9 billion disposition program is the company's lever to manage it. The relevant frame is not coverage math but the interaction of declining NOI, heavy debt, and a soft market for asset sales, which together pressure the dividend the stock is partly bought for. A falling-NOI, heavily-levered REIT selling assets into a weak market is the scenario the low multiple reflects. Against the REIT cohort, Alexandria is the premier life-science landlord trading at a distressed multiple, and the price reflects whether the cycle turns before the balance-sheet and NOI pressures force a harder adjustment.
Catalysts
The first-quarter 2026 report captured a company holding its earnings while its market deteriorates. Funds from operations were $1.73 per share, and management reaffirmed full-year guidance of $6.40, but occupancy fell to 87.7%, year-end occupancy guidance was cut to 87% from 88.5%, and same-property net operating income declined 11.9% year over year. The most striking item was the absence of any public-biotech lease signings, a first in the company's history, with total leasing volume of 647,000 square feet.
The offsetting developments were on execution and capital. The company executed 394,000 square feet of development and redevelopment leases, maintained its $2.9 billion disposition plan, and tightened its guidance ranges while emphasizing its dominant market share in key life-science hubs. Management expects occupancy to improve in the second half of 2026 as leased vacant space is delivered, a forward marker the next prints will test.
The forward watch items are biotech demand, occupancy, and the disposition program. The return of public-biotech leasing, which is downstream of biotech funding markets, is the single most important external variable for the recovery thesis, and the trajectory of occupancy against the lowered 87% year-end target is the operating metric to track. On the balance sheet, the pace and pricing of the $2.9 billion of asset sales determines how well the company manages its leverage through the downturn, and continued progress would support the value case the depressed multiple reflects, while further NOI declines are the scenario the price is most exposed to.
Peer Cohorts (Per Segment, With Filing Citations)
Alexandria Real Estate (consolidated) (reported)
- DEI (Douglas Emmett, Inc.)
- (no filing in the citation store)
- HIW (HIGHWOODS PROPERTIES, INC.)
- (no filing in the citation store)
- BXP (BXP, INC.)
- (no filing in the citation store)
- KRC (KILROY REALTY CORPORATION)
- (no filing in the citation store)
- CUZ (COUSINS PROPERTIES INC)
- (no filing in the citation store)
- SLG (SL GREEN REALTY CORP)
- (no filing in the citation store)
- VNO (VORNADO REALTY TRUST)
- (no filing in the citation store)
- DOC (Healthpeak Properties, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Alexandria Q1 2026 results, 2026