Alexandria Stock Rises 19.2% in 3 Months: Will the Trend Continue?

Alexandria Real Estate Equities ARE shares have gained 19.2% in the past three months compared with the industry's growth of 7.2%.

The company’s premium portfolio of Class A/A+ properties in strategic markets is well-poised to benefit from solid demand for life science assets, driven by the increasing need for drug research and innovation. Its acquisition, developments and robust balance sheet augur well for long-term growth.

 

Image Source: Zacks Investment Research

 

Let us decipher the possible factors behind the rise in the stock price.

Alexandria’s portfolio of Class A/A+ properties is strategically located within the AAA innovation cluster regions. These locations are highly appealing to life science and technology companies seeking tenancy. Also, with artificial intelligence (AI) and machine learning (ML) tools being implemented in this industry, AI-focused life science companies require significant lab footprints to generate the immense biological and chemical datasets needed to train AI-ML models effectively. This is likely to emerge as a key demand driver for Alexandria’s life science assets in the upcoming period.

This Zacks Rank #3 (Hold) company’s weighted average remaining lease term of all tenants is 7.5 years. For Alexandria’s top 20 tenants, it is 9.7 years. This ensures steady rental revenues over the long term. In the fourth quarter of 2025, the company executed leases spanning 1.2 million RSF, including the lease renewals and re-leasing of space amounting to 821,289 RSF. Over the past 12 months, the existing tenant base contributed 82% of the company’s leasing activity. As a result of the above favorable trends, the company is experiencing a strong leasing volume.

The acquisition, development and redevelopment of the new Class A/A+ properties in AAA locations are likely to boost the company’s operating performance over the long term. In the fourth quarter of 2025, it placed into service one development project totaling 139,979 RSF. Further, Alexandria’s pipeline of projects as of Dec. 31, 2025, consists of around 3.5 million RSF. It is actively disposing of non-core assets to utilize the receipts for funding long-term accretive investments. In 2025, the company completed dispositions and sales of partial interests worth $1.81 billion.

Alexandria has adequate financial flexibility to cushion and enhance its market position. The company had $5.3 billion of liquidity as of the end of the fourth quarter of 2025. The net debt and preferred stock to adjusted EBITDA was 5.7X, and the fixed-charge coverage ratio was 3.7 in the fourth quarter of 2025 on an annualized basis. The company expects its net debt and preferred stock to Adjusted EBITDA ratio to temporarily increase in the first quarter of 2026 by approximately 1.0x to 1.5x higher than its fourth quarter 2025 annualized ratio. Its debt maturities are well-laddered, with a weighted average remaining term of 12.1 years as of the end of the fourth quarter of 2025.

With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.

Risks Likely to Affect ARE’s Positive Trend

Alexandria has a vast development pipeline. This exposes the company to the risk of rising construction costs and lease-up concerns. High interest expenses also add to the company’s woes.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Cousins Properties CUZ and W.P. Carey WPC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CUZ’s 2026 FFO per share has moved a cent northward to $2.93 over the past month.

The Zacks Consensus Estimate for WPC’s 2026 FFO per share has moved 4 cents northward to $5.16 over the past month.

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.