Alexandria Real Estate Equities, Inc. Reports 4Q25 and 2025 Net Loss per Share - Diluted of $6.35 and $8.44, respectively; and 4Q25 and 2025 FFO per Share - Diluted, as Adjusted, of $2.16 and $9.01, respectively
PASADENA, Calif., Jan. 26, 2026 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE:ARE) announced financial and operating results for the fourth quarter and year ended December 31, 2025.
Key highlights
YTD
Operating results
4Q25
4Q24
2025
2024
Net (loss) income attributable to Alexandria's common stockholders, diluted:
In millions
$ (1,081.8)
$ (64.9)
$ (1,438.0)
$ 309.6
Per share
$ (6.35)
$ (0.38)
$ (8.44)
$ 1.80
Funds from operations attributable to Alexandria's common stockholders, diluted, as adjusted:
In millions
$ 368.5
$ 411.8
$ 1,534.7
$ 1,629.1
Per share
$ 2.16
$ 2.39
$ 9.01
$ 9.47
A best-in-class REIT with a high-quality, diverse tenant base, strong margins, and long lease terms
(As of December 31, 2025, unless stated otherwise)
Occupancy of operating properties in North America
90.9 %
Percentage of annual rental revenue in effect from Megacampus™ platform
78 %
Percentage of annual rental revenue in effect from investment-grade or publicly
traded large cap tenants
53 %
Operating margin
69 %
Adjusted EBITDA margin
70 %
Percentage of leases containing annual rent escalations
97 %
Weighted-average remaining lease term:
Top 20 tenants
9.7
years
All tenants
7.5
years
Strong 4Q25 tenant collections:
4Q25 tenant rents and receivables collected as of January 26, 2026
99.9 %
Strong and flexible balance sheet with significant liquidity; top 15% credit rating ranking among all publicly traded U.S. REITs
$20.75 billion in total market capitalization.
$8.35 billion in total equity capitalization.
Net debt and preferred stock to Adjusted EBITDA of 5.7x and fixed-charge coverage ratio of 3.7x for 4Q25 annualized.
As of December 31, 2025
Significant liquidity of $5.30 billion, or 3.7x of our debt maturities through 2028.
Only 11% of our total debt matures through 2028.
12.1 years weighted-average remaining term of debt, longest among S&P 500 REITs.
Our fixed-rate debt represents 97.2% of our total debt, which provides predictability in debt servicing costs. Since 2021, our quarter-end fixed-rate debt has averaged 96.7%.
Total debt and preferred stock to gross assets of 31%.
Solid leasing volume
Leasing volume of 1.2 million RSF during 4Q25.
Leasing of previously vacant space aggregating 393,376 RSF, up 98%, over the quarterly average over the last five quarters.
Rental rates on renewals and re-leasing of space decreased by 9.9% and 5.2% (cash basis) for 4Q25 and increased by 7.0% and 3.5% (cash basis) for 2025.
82% of our leasing activity during the last twelve months was generated from our existing tenant base.
4Q25
2025
Lease renewals and re-leasing of space:
Rental rate changes
(9.9) %
7.0 %
Rental rate changes (cash basis)
(5.2) %
3.5 %
RSF
821,289
2,543,473
Leasing of previously vacant space, RSF
393,376
944,362
Leasing of development and redevelopment space, RSF
6,279
704,821
Total leasing activity, RSF
1,220,944
4,192,656
Dividend strategy to share net cash flows from operating activities with stockholders while retaining a significant portion for reinvestment
Common stock dividend declared of $0.72 per share for 4Q25, representing a 45% reduction from the quarterly dividend declared of $1.32 for 3Q25.
The decision to reduce the declared dividend per common share reflects our commitment to maintaining the strength of our balance sheet, enhancing financial flexibility, and preserving liquidity of approximately $410 million on an annual basis, which will be used to support our 2026 capital plan.
Significant net cash flows provided by operating activities after dividends retained for reinvestment aggregating $2.36 billion for the years ended December 31, 2021 through 2025.
Dividend yield of 5.9% as of December 31, 2025 and dividend payout ratio of 33% for the three months ended December 31, 2025.
Successful execution of Alexandria's capital recycling strategy
We exceeded the midpoint of our 2025 guidance for dispositions and sales of partial interests by completing $1.81 billion of funding, primarily from sales of non-core assets and land, as well as sales to owner/users. During 4Q25, we completed $1.47 billion of dispositions.
(dollars in millions)
Sales Price
YTD 3Q25
$ 341
4Q25
1,471
Total 2025 dispositions and sales of partial interests(1)
$ 1,812
Types of dispositions in 2025(1)
% of Sales Price
Land
21 %
Non-stabilized properties
59
Stabilized properties
20
Total 2025 dispositions
100 %
(1) Excludes the exchange of partial interests in two consolidated real estate joint ventures, Pacific Technology Park
and 199 East Blaine Street, during the three months ended September 30, 2025. Refer to "2025 dispositions
and sales of partial interests" in this Earnings Press Release for additional details.
As of December 31, 2025, the book value of our real estate assets designated as held for sale aggregated $581.7 million. We expect to sell these assets in 2026.
Increased occupancy and leasing progress on temporary vacancy
Operating occupancy as of September 30, 2025
90.6 %
Assets with vacancy designated as held for sale or sold during 4Q25
0.5
Early termination of one lease aggregating 170,618 RSF at 259 East Grand
Avenue in South San Francisco, originally set to expire in early 2027, which is already
fully re-leased to a new tenant with occupancy expected to commence in 2H26
(0.5)
(1)
Reclassification of 401 Park Avenue from redevelopment to operating upon our
decision to pursue leasing as office space rather than convert to laboratory space
(0.3)
Other changes in occupancy, primarily due to the commencement of leases during 4Q25
0.6
Operating occupancy as of December 31, 2025
90.9
Key vacant space leased with future delivery
2.5
(2)
Operating occupancy as of December 31, 2025, including leased but not yet
delivered space
93.4 %
(1)
Refer to "Guidance" in the Earnings Press Release for key considerations on 1Q26 guidance.
(2)
Represents temporary vacancies as of December 31, 2025 aggregating 899,259 RSF, primarily in the Greater Boston, San Francisco Bay Area, and Seattle markets, that are leased and expected to be occupied upon completion of building and/or tenant improvements. The weighted-average expected delivery date is approximately August 2026 and the expected annual rental revenue is approximately $52 million.
Key operating metrics
Operating metrics
4Q25
2025
(dollars in millions)
Net operating income (cash basis)
$ 1,985
(1)
$ 1,978
(Decrease) Increase compared to 4Q24 and 2024
(3.4) %
(2)
0.1 %
(2)
Same property performance:
Net operating income changes
(6.0) %
(3.5) %
Net operating income changes (cash basis)
(1.7) %
0.9 %
Occupancy, current-period average
91.0 %
92.5 %
Occupancy, same-period prior-year average
95.5 %
95.2 %
(1)
Quarter annualized.
(2)
Change in net operating income (cash basis) includes the impact of operating properties disposed of after January 1, 2024. Excluding these dispositions, net operating income (cash basis) annualized for the three months ended December 31, 2025 and for the year ended December 31, 2025 would have increased by 1.4% and 6.2%, respectively, compared to the corresponding periods in 2024.
Continued successful management and reduction of general and administrative expenses
General and administrative expenses as a percentage of net operating income for the year ended December 31, 2025 were 5.6%, the lowest level in the past ten years for the Company and approximately half the average of other S&P 500 REITs. In 2025, we realized cost reductions of $51.3 million, or 30%, compared to 2024, primarily from cost-control and efficiency initiatives. Some of these cost savings are temporary in nature, and we anticipate that approximately half of the cost reduction achieved in 2025 will continue in 2026.
Compared to the general and administrative expenses for the year ended December 31, 2024, we expect to achieve a savings of $76 million of cumulative general and administrative expense in 2025 and 2026 based upon the midpoint of our guidance range for 2026 general and administrative expenses.
Reduction of capital spend and funding needs
During 4Q25, we reduced future construction funding requirements across our active pipeline by: i) selling or designating as held for sale three projects and ii) pivoting one project to a lower investment strategy; enabling us to redeploy future construction savings and sale proceeds into opportunities aligned with our long‑term Megacampus™ strategy.
We reduced the overall size of our future construction funding needs on current development and redevelopment projects by more than $300 million over the next few years.
3% reduction in non-income-producing assets to 17% as a percentage of gross assets.
We are evaluating business strategy for four additional projects.
Alexandria's development and redevelopment pipeline delivered incremental annual net operating income of $10 million commencing during 4Q25, with an additional $97 million of incremental annual net operating income anticipated to deliver by 4Q26 primarily from projects that are 86% leased/negotiating
During 4Q25, we placed into service one development project aggregating 139,979 RSF that is 100% occupied at 10075 Barnes Canyon Road in our Sorrento Mesa submarket and delivered incremental annual net operating income of $10 million.
Annual net operating income (cash basis) from recently delivered projects is expected to increase by $26 million upon the burn-off of initial free rent, which has a weighted-average remaining period of approximately six months.
77% of the RSF in our total development and redevelopment pipeline is within our Megacampus ecosystems.
Development and Redevelopment
Projects
Incremental
Annual Net
Operating Income
RSF
Leased/
Negotiating
Percentage
(dollars in millions)
Expected to be placed into service:
2026
$ 97
(1)
699,933
(2)
86 %
(3)
2027- 2028
123
1,614,994
51 %
$ 220
Projects under business strategy evaluation:
2026-2028
$ 113
1,248,227
8 %
(1)
Includes expected partial deliveries through 2026 from projects expected to stabilize in 2027-2028, including speculative future leasing that is not yet fully committed. Refer to the initial and stabilized occupancy years under "New Class A/A+ development and redevelopment properties: current projects" in the Supplemental Information for additional details.
(2)
Represents the RSF of projects expected to stabilize in 2026. Does not include RSF for partial deliveries through 2026 from projects expected to stabilize in 2027-2028.
(3)
Represents the current leased/negotiating percentage of development and redevelopment projects that are expected to stabilize through 2026.
Key capital events
On December 8, 2025, we announced that our board of directors authorized a common stock repurchase program under which we may repurchase up to $500.0 million of our common stock through December 31, 2026. The new program replaces the prior repurchase authorization for up to $500.0 million that was set to expire on December 31, 2025. During 4Q25, no shares were repurchased.
In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity. No gain or loss was incurred in connection with this repayment.
Investments
As of December 31, 2025:
Our non-real estate investments aggregated $1.50 billion.
Unrealized gains presented in our consolidated balance sheet were $133.4 million, comprising gross unrealized gains and losses aggregating $184.4 million and $51.1 million, respectively.
Investment loss of $3.9 million for 4Q25 presented in our consolidated statement of operations consisted of $21.1 million of realized gains, $103.3 million from a significant realized loss on one transaction, $98.5 million of unrealized gains, and $20.2 million of impairment charges.
GuidanceDecember 31, 2025(Dollars in millions, except per share amounts)
Based on our current view of existing market conditions and assumptions for the year ending December 31, 2026, our guidance for 2026 that was initially provided on December 3, 2025 has been reiterated as of January 26, 2026. Actual results may be materially higher or lower than these expectations. Our guidance for 2026 is subject to a number of variables and uncertainties, including, but not limited to, leasing velocity and overall tenant demand, actions and changes in policy by the current U.S. administration related to the regulatory environment, life science funding, the U.S. Food and Drug Administration and National Institutes of Health, trade, and other areas. For additional discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated, refer to our discussion of "forward-looking statements" on page 7 of the Earnings Press Release as well as our SEC filings, including our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.
Projected 2026 Funds From Operations per Share Attributable to Alexandria's Common
Stockholders, Diluted
Funds from operations per share, as adjusted(1)
$6.25 to $6.55
Midpoint
$6.40
Key Credit Metric Targets
Net debt and preferred stock to Adjusted EBITDA, 4Q26 annualized
5.6x to 6.2x
Fixed-charge coverage ratio, 4Q26 annualized
3.6x to 4.1x
Key Assumptions
Low
High
Occupancy percentage in North America as of December 31, 2026(2)
87.7 %
89.3 %
Lease renewals and re-leasing of space:
Rental rate changes
(2.0) %
6.0 %
Rental rate changes (cash basis)
(12.0) %
(4.0) %
Same property performance:
Net operating income
(9.5) %
(7.5) %
Net operating income (cash basis)
(9.5) %
(7.5) %
Straight-line rent revenue
$ 65
$ 95
General and administrative expenses
$ 134
$ 154
Capitalization of interest(3)
$ 225
$ 275
Interest expense
$ 230
$ 280
Realized gains on non-real estate investments(4)
$ 60
$ 90
Key Sources and Uses of Capital
Range
Midpoint
Sources of capital:
Reduction in debt(5)
$ (1,075)
$ (2,275)
$ (1,675)
Net cash provided by operating activities after dividends
475
575
525
Dispositions and sales of partial interests(6)
2,100
3,700
2,900
Total sources of capital
$ 1,500
$ 2,000
$ 1,750
Uses of capital:
Construction
$ 1,500
$ 2,000
$ 1,750
Total uses of capital
$ 1,500
$ 2,000
$ 1,750
Reduction in debt (included above):
Repayment of unsecured notes payable with 2026 maturities(7)
$ (650)
$ (650)
$ (650)
Unsecured senior line of credit, commercial paper, and other
(425)
(1,625)
(1,025)
Reduction in debt
$ (1,075)
$ (2,275)
$ (1,675)
Refer to "Definitions and reconciliations" in the Supplemental Information for additional details on key credit metrics.
(1)
Refer to "Funds from operations and funds from operations, as adjusted, attributable to Alexandria's common stockholders" under "Definitions and reconciliations" in the Supplemental Information for additional details.
(2)
Our guidance for operating occupancy percentage in North America as of December 31, 2026 assumes an approximate 2% benefit related to a range of assets with vacancy that could potentially be sold during 2026 and/or qualify for designation as held for sale by December 31, 2026 but that have not yet qualified for such designation as of December 31, 2025.
(3)
Refer to "Capitalization of interest" in the Supplemental Informational for additional details.
(4)
Represents realized gains and losses included in funds from operations per share, diluted, as adjusted. Excludes unrealized gains and losses and significant impairments realized on non-real estate investments, if any. Refer to "Investments" in the Supplemental Information for additional details.
(5)
Our debt repayment goals include repaying existing short-term borrowings, including amounts outstanding on our commercial paper program, repaying our 2026 unsecured senior note payable maturities aggregating $650 million, and potentially repaying other unsecured senior notes payable, including our 2027 maturity.
(6)
We expect to achieve a weighted-average capitalization rate on our projected 2026 non-core operating dispositions (includes stabilized and non-stabilized properties and excludes land) in the 8.5%–9.5% range. We expect dispositions of land to represent 25%–35% of our total dispositions and sales of partial interests for the year ending December 31, 2026. We expect the remaining balance to comprise of approximately 25%–35% in core assets and 35%–45% in non-core assets. As of January 26, 2026, our share of pending transactions subject to non-refundable deposits, signed letters of intent, or purchase and sale agreement negotiations aggregated $180.7 million.
(7)
In January 2026, we repaid $300.0 million of 4.30% unsecured senior notes payable upon maturity, funded temporarily with borrowings under our commercial paper program. We expect to repay these temporary borrowings with proceeds from future dispositions and sales of partial interests. No gain or loss was incurred in connection with this repayment.
Key considerations for funds from operations and adjusted EBITDA for 1Q26
The following key considerations are expected to impact our quarterly funds from operations per share results in 1Q26. These items will also affect our Adjusted EBITDA beginning in 1Q26. As a result, we expect our net debt and preferred stock to Adjusted EBITDA ratio to temporarily increase in 1Q26 (on a quarter annualized basis) by approximately 1.0x to 1.5x higher than our 4Q25 annualized ratio of 5.7x. We expect this ratio to trend downward through the remainder of 2026 as we make progress on our disposition and sales of partial interests program, with a target net debt and preferred stock to Adjusted EBITDA ratio of 5.6x to 6.2x for 4Q26 annualized, which is unchanged from our initial 2026 guidance provided on December 3, 2025.
4Q25 Dispositions
We completed $1.47 billion of dispositions during 4Q25. These dispositions had annual net operating income of $118 million (based on consolidated 3Q25 annualized results) with a weighted-average disposition date of December 9, 2025. Refer to "2025 Dispositions and sales of partial interests" in the Earnings Press Release for additional details.
2026 key lease expirations with expected downtime
There are key lease expirations primarily in our Greater Boston, San Francisco Bay Area, and San Diego markets, aggregating 1.2 million RSF, with a weighted‑average lease expiration date in April 2026 and annual rental revenue of $71 million. These leases are expected to become vacant upon expiration, and we anticipate downtime on these spaces to range from 6 to 24 months on a weighted‑average basis. 150,822 RSF has been leased or is under negotiations and we have identified prospective tenants or have early negotiations for another 468,470 RSF. We expect a decline in net operating income of approximately $14 million for the three months ending March 31, 2026, compared to the three months ended December 31, 2025, related to the portion of these leases that are scheduled to expire in 1Q26, which includes operating expenses that will not be recoverable once the spaces become vacant. Refer to "Contractual lease expirations" in the Supplemental Information for additional details.
Certain items included in 4Q25 results not expected to reoccur in 1Q26
During 4Q25, we terminated a lease at one property in our South San Francisco submarket aggregating 170,618 RSF , which had generated annual rental revenue of $11.4 million, ahead of its contractual lease expiration in early 2027. The termination allowed us to re-lease 100% of the space to a new tenant, with occupancy expected to commence in 2H26 following the completion of tenant improvements. As a result of the termination, we recognized incremental rental revenue of $8.4 million during 4Q25, primarily from a termination fee, net of the deferred rent balances written off.
We recognized an asset management fee paid by our joint venture partner aggregating $7.0 million in connection with the disposition of 409 and 499 Illinois Street in 4Q25, which is included in other income. Other income in 4Q25 was $25.5 million, or 3.4% of total revenues, compared to an average of $19.5 million, or 2.5% of total revenues, for the preceding five quarters.
Potential tenant wind-downs
Our 2026 guidance assumes reduction of rent in 2026 aggregating $20–$25 million (or approximately $6 million per quarter at the midpoint of the range) related to potential tenant wind-downs and downtime without immediate backfill.
General and administrative expenses
General and administrative expenses for the year ended December 31, 2025 was $117.0 million and $28.0 million for the fourth quarter of 2025. Our guidance range for 2026 general and administrative expenses is $134 million to $154 million, with a midpoint of $144 million, or a quarterly average of approximately $36 million. Despite the anticipated increase in general and administrative expenses in 2026 compared to 2025, the midpoint of our guidance range for 2026 of $144 million, represents a 14% reduction compared to 2024, and cumulative anticipated savings aggregating $76 million for 2025 and 2026.
Realized gains on non-real estate investments
Realized gains included in funds from operations per share, diluted, as adjusted, for the year ended December 31, 2025 were $115.7 million and $21.1 million for the fourth quarter of 2025. Our guidance range for 2026 realized gains on non-real estate investments is $60 million to $90 million, with a midpoint of $75 million (or a quarterly average of approximately $18.8 million). Refer to "Investments" in the Supplemental Information for additional details.
2025 Dispositions and Sales of Partial Interests
December 31, 2025
(Dollars in thousands)
Interest
Sold
Square Footage
Capitalization Rate
Capitalization Rate
(Cash Basis)
Price
(Our Share)
Gain on
Sales of Real Estate
Property
Submarket/Market
Date of Transaction
Operating
