Home Business Thinking Of Buying Alexandria Real Estate Equities? Here Are The Properties And Tenants You’d Add To Your Portfolio – Alphabet (NASDAQ:GOOGL), Alexandria Real Estate (NYSE:ARE), Eli Lilly (NYSE:LLY), Boston Props (NYSE:BXP)

Thinking Of Buying Alexandria Real Estate Equities? Here Are The Properties And Tenants You’d Add To Your Portfolio – Alphabet (NASDAQ:GOOGL), Alexandria Real Estate (NYSE:ARE), Eli Lilly (NYSE:LLY), Boston Props (NYSE:BXP)

by Kianna Warburton

The Best Report Benzinga Has Ever Produced: Massive Returns Are Possible Within This Market

Investing in real estate investment trusts (REITs) can be a lucrative venture, but it’s important to consider the stability and solvency of the tenant base before making any purchases. In this article, we’ll take a closer look at one office REIT that has been undervalued in the market, offering investors an opportunity for massive returns.

Alexandria Real Estate Equities Inc. (NYSE:ARE) is a Pasadena, California-based REIT that specializes in life science, agtech, and advanced technology companies. With a portfolio of 850 tenants in 430 properties across innovation clusters like Boston, New York, Seattle, and San Francisco, Alexandria Real Estate offers a unique investment opportunity.

Despite concerns over tech workers leaving California and other office REITs experiencing higher delinquencies and lower occupancy rates, Alexandria Real Estate has maintained high occupancy rates. Its total occupancy rate is over 95%, with the San Francisco area boasting a 95.5% occupancy rate.

One key factor that sets Alexandria Real Estate apart from other office REITs is the quality of its tenant base. Many of its tenants are publicly traded on Wall Street and have higher investment-grade credit ratings. For example, Bristol-Myers Squibb Co. (NYSE:BMY), a global biopharmaceutical company, is Alexandria Real Estate’s largest tenant, comprising 3.5% of its aggregate annual rental revenue.

Another notable tenant is Moderna Inc. (NASDAQ:MRNA), a biotechnology company that uses mRNA science to create new medicines and vaccines. Moderna has a market capitalization of $39.31 billion and comprises 2.6% of Alexandria Real Estate’s aggregate annual rental revenue.

In terms of dividends, Alexandria Real Estate recently declared a $1.24 per share quarterly dividend, payable on October 13. The company’s dividend growth has been solid, with nine dividend increases in the past five years, amounting to a 27.8% increase. The current yield on the dividend is 4.95%, making it an attractive investment for income-seeking investors.

While the market has undervalued Alexandria Real Estate in recent years, its business model and tenant base differentiate it from other office REITs. With a recent price/funds from operations (P/FFO) ratio of 11.7, compared to the typical 20-22x P/FFO ratio for the company, Alexandria Real Estate is clearly undervalued.

The company’s most recent operating results showed positive growth, with FFO of $2.24 in the second quarter of 2023, beating estimates by $0.04. Revenue was also up by 10.9% compared to the same period in 2022.

Analyst ratings for Alexandria Real Estate have been positive, with Wedbush initiating coverage with an Outperform rating and a price target of $120. Evercore ISI Group analyst Steve Sakwa also maintained an Outperform rating and lowered the price target to $135.

In summary, Alexandria Real Estate Equities Inc. is a REIT that offers investors a unique opportunity in the office space sector. With a strong tenant base in the life science and technology industries, high occupancy rates, and solid dividend growth, the company is poised for significant returns. Despite being undervalued in the market, Alexandria Real Estate’s business model and tenant base set it apart from other office REITs and make it an attractive investment option for those seeking future wealth.

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