Alexandria Real Estate: Now Too Cheap To Ignore, With Just ~1% Annual Growth Priced In

Summary

• Alexandria Real Estate (ARE) looks undervalued, offering a 7.5% dividend yield and trading at a low forward price/FFO ratio of 7.6x.
• The dividend appears safe and well-covered by forward FFO and AFFO, despite short-term headwinds like declining occupancy and lowered guidance.
• ARE’s fundamentals remain solid: high rent collections, resilient tenant base, long lease terms, and prudent capital recycling through asset sales and buybacks.
• While risks exist, such as declining occupancy and political pressure, the market is pricing in minimal growth, making ARE attractive for long-term income investors.

KanawatTH

Simply put, Alexandria Real Estate Equities Inc. (NYSE:ARE), a REIT that leases lab space to life science companies, has become too cheap to ignore. The stock now offers a 7.5% dividend yield and has a forward price/FFO ratio of 7.6x. Further, when

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.