Alexandria Real Estate Equities (ARE) Q1 2026 earnings summary

Executive summary

• Net income per share (diluted) was $2.10 for 1Q26, rebounding from a loss in 1Q25, driven by a $366.4M gain on early extinguishment of debt and strong leasing activity, though FFO per share (as adjusted) fell to $1.73 due to lower occupancy and rental rates.

• Leasing volume reached 647,356 RSF in 1Q26, with 72% from existing tenants and significant activity in development/redevelopment spaces, though public biotech demand was weak.

• Operating occupancy declined to 87.7% at quarter-end, with a future benefit from 1.1M RSF of leased space not yet delivered, and occupancy including this space at 90.9%.

• Asset quality and tenant base remain strong, with 80–87% of top tenants investment grade or large cap, and a weighted-average remaining lease term of 9.9 years.

• Ongoing capital recycling strategy with $2.9B in dispositions and partial interest sales targeted for 2026.

Financial highlights

• Total revenues for 1Q26 were $671M, down from $758M in 1Q25, primarily due to property dispositions and lower occupancy.

• Same property NOI (cash basis) declined 11.7–11.9% year-over-year, mainly due to lower occupancy.

• Adjusted EBITDA margin was 66% for 1Q26; operating margin was 67%.

• $366.4M gain from $1.33B unsecured bond repurchase at a discount, reducing overall debt.

• Dividend declared at $0.72 per share for 1Q26, with a 6.2% yield and a payout ratio of 42%.

Outlook and guidance

• 2026 FFO per share (diluted, as adjusted) guidance midpoint is $6.40, with a narrowed range of $6.30–$6.50.

• 4Q26 FFO per share (diluted, as adjusted) projected at $1.40–$1.50, reflecting asset sales and higher interest expense.

• Operating occupancy for year-end 2026 expected between 86.2% and 87.8%, with same property NOI (cash basis) projected to decline 8.5–10.5%.

• Dispositions and sales of partial interests for 2026 expected to reach $2.9B.

• Construction spending for 2026 projected at $1.5B–$2.0B.