NewsGlobalAlexandria Real Estate Equities Lowers Annual Forecast Amid Weakening Leasing ActivityAlexandria Real Estate Equities Lowers Annual Forecast Amid Weakening Leasing Activity
Alexandria Real Estate Equities has revised its annual adjusted funds from operations (FFO) forecast to $8.98-$9.04 per share, down from $9.16-$9.36. Q3 2023 results fell short of expectations with adjusted FFO per share at $2.22 and total revenue declining 5% year-over-year to $751.94 million. The company reported a net loss of $1.38 per share, citing macroeconomic uncertainty, high interest rates, and pressured leasing activity as key challenges. The occupancy rate slightly decreased to 90.6%. Following the announcement, shares declined over 2% in after-hours trading.
*this image is generated using AI for illustrative purposes only.
Alexandria Real Estate Equities, a prominent real estate investment trust specializing in life science laboratories and technology campuses, has revised its annual financial outlook downward, reflecting challenges in the current market environment.
Revised Annual Forecast
The company has adjusted its annual adjusted funds from operations (FFO) forecast to a range of $8.98-$9.04 per share, down from the previous projection of $9.16-$9.36 per share. This revision falls short of analyst expectations, which had anticipated $9.23 per share.
Quarterly Performance
Alexandria's quarterly results also missed market expectations:
| Metric | Q3 2023 | Year-over-Year Change | Analyst Estimate |
|---|---|---|---|
| Adjusted FFO per share | 2.22 | N/A | 2.30 |
| Total Revenue | 751.94 | -5.0% | N/A |
| Net Income per share | -1.38 | N/A | N/A |
| Occupancy Rate | 90.6% | -0.2% (vs. Q2) | N/A |
The company reported a net loss of $1.38 per share for the quarter, a significant shift from the income of 96 cents per share recorded in the same period last year.
Market Challenges
Alexandria cited several factors contributing to its performance:
- Macroeconomic uncertainty
- Continued challenges from high interest rates
- Pressured leasing activity
- Negative net absorption during the quarter
Market Reaction
Following the announcement, Alexandria's shares experienced a decline of more than 2% in after-hours trading, reflecting investor concerns about the company's near-term prospects.
Outlook
The lowered forecast and missed estimates suggest that Alexandria Real Estate Equities is navigating a challenging market environment. The company's performance in the coming quarters will likely depend on broader economic conditions, interest rate trends, and the recovery of leasing activity in the life science and technology sectors.
Investors and analysts will be closely monitoring Alexandria's strategies to address these challenges and maintain its position in the specialized real estate market.
15
