3Q26
Filed Oct 26, 2026Alexandria Real Estate Equities, Inc. Reports 3Q26 and YTD 3Q26 Net Loss per Share – Diluted of $3.74 and $2.06, respectively, and 3Q26 and YTD 3Q26 FFO per Share – Diluted, as Adjusted, of $1.54 and $5.00, respectively
Leasing volume and occupancy improved sequentially, but rental revenue, same-property NOI, adjusted FFO, and reported earnings declined from the prior-year period. The quarter included $637.9 million of real estate impairment charges, while management narrowed adjusted FFO guidance and retained negative same-property NOI guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| 3Q26 income from rentalsGAAP | $653,618 | – | – |
| 3Q26 other incomeGAAP | $17,564 | – | – |
| 3Q26 total revenuesGAAP | $671,182 | – | (10.7)% |
| YTD 3Q26 total revenuesGAAP | $2,004,988 | – | (11.8)% |
| 3Q26 rental revenuesGAAP | $481,348 | – | (11.0)% |
| 3Q26 tenant recoveriesother | $172,270 | – | (11.6)% |
| 3Q26 rental operationsGAAP | $227,931 | – | (4.7)% |
| 3Q26 general and administrative expensesGAAP | $40,915 | – | – |
| 3Q26 interest expenseGAAP | $79,687 | – | – |
| 3Q26 depreciation and amortizationGAAP | $304,419 | – | – |
| 3Q26 impairment of real estateGAAP | $637.9M | – | – |
| 3Q26 total expensesGAAP | $1,290,856 | – | – |
| 3Q26 investment incomeGAAP | $23.99M | – | – |
| 3Q26 loss on early extinguishment of debtGAAP | $(3,323) | – | – |
| 3Q26 net loss attributable to Alexandria Real Estate Equities, Inc.'s common stockholdersGAAP | $(638,452) | – | – |
| 3Q26 net loss per share attributable to Alexandria Real Estate Equities, Inc.'s common stockholders – dilutedGAAP | $(3.74) | – | – |
| YTD 3Q26 net loss per share attributable to Alexandria Real Estate Equities, Inc.'s common stockholders – dilutedGAAP | $(2.06) | – | – |
| 3Q26 funds from operations attributable to Alexandria's common stockholders – dilutednon-GAAP | $269,050 | – | – |
| 3Q26 funds from operations per share attributable to Alexandria's common stockholders – dilutednon-GAAP | $1.57 | – | – |
| 3Q26 funds from operations attributable to Alexandria's common stockholders – diluted, as adjustednon-GAAP | $264,423 | – | – |
| 3Q26 funds from operations per share attributable to Alexandria's common stockholders – diluted, as adjustednon-GAAP | $1.54 | – | – |
| YTD 3Q26 funds from operations attributable to Alexandria's common stockholders – diluted, as adjustednon-GAAP | $856,461 | – | – |
| YTD 3Q26 funds from operations per share attributable to Alexandria's common stockholders – diluted, as adjustednon-GAAP | $5.00 | – | – |
| 3Q26 operating marginother | 66% | – | – |
| 3Q26 Adjusted EBITDA marginnon-GAAP | 65% | – | – |
| 3Q26 Adjusted EBITDA – quarter annualizednon-GAAP | $1,731,920 | – | – |
| 3Q26 same property net operating incomenon-GAAP | $394,488 | – | (6.7)% |
| YTD 3Q26 same property net operating incomenon-GAAP | $1,146,078 | – | (9.2)% |
| 3Q26 same property net operating income – cash basisnon-GAAP | $381,030 | – | (2.8)% |
| YTD 3Q26 same property net operating income – cash basisnon-GAAP | $1,092,238 | – | (8.4)% |
| 3Q26 occupancy of operating propertiesother | 87.1% | – | – |
| 3Q26 occupancy of operating properties, including executed leases with future occupancyother | 90.8% | – | – |
| 3Q26 total leasing volumeother | 1,236,030 RSF | – | – |
| 3Q26 leasing of previously vacant spaceother | 450,961 RSF | – | – |
| 3Q26 lease renewals and re-leasing of spaceother | 785,069 RSF | – | – |
| 3Q26 lease renewals and re-leasing rental rate changesother | (2.4)% | – | – |
| 3Q26 lease renewals and re-leasing rental rate changes (cash basis)other | (3.3)% | – | – |
2026 outlook
- Operating expenses$134 million to $154 million general and administrative expenses; $260 million to $300 million interest expense
- NoteFunds from operations per share, as adjusted: $6.38 to $6.42
- NoteNet debt and preferred stock to Adjusted EBITDA – 4Q26 annualized: 5.6x to 6.2x
- NoteFixed-charge coverage ratio – 4Q26 annualized: 3.4x to 3.9x
- NoteNet cash provided by operating activities, as adjusted: $475 million to $575 million
- NoteDispositions and sales of partial interests: $1,100 million to $2,700 million
- NoteConstruction: $1,500 million to $2,000 million
- NoteReduction in unsecured debt: $75 million to $1,275 million
- NoteOccupancy of operating properties as of December 31, 2026: 86.2% to 87.8%
- NoteSame property net operating income changes: (10.5)% to (8.5)%
- NoteSame property net operating income changes (cash basis): (10.5)% to (8.5)%
- NoteLease renewals and re-leasing of space rental rate changes: (9.0)% to (1.0)%
- NoteLease renewals and re-leasing of space rental rate changes (cash basis): (15.0)% to (7.0)%
- NoteStraight-line rent revenue: $40 million to $70 million
- NoteCapitalization of interest: $220 million to $260 million
- NoteRealized gains on non-real estate investments: $50 million to $80 million
Capital returns
- Common stock dividend declared of $0.72 per share for 3Q26, consistent with the preceding quarter.
- Dividend payout ratio of 47% for the three months ended September 30, 2026.
- Dividend yield of 6.1% as of September 30, 2026.
- Under the common stock repurchase program authorized in December 2025, the company may repurchase up to $500.0 million of common stock through December 31, 2026.
- As of September 30, 2026, no shares had been repurchased under the program and $500.0 million remained available for future share repurchases.
What drove it
- 3Q26 total leasing volume was 1,236,030 RSF, including 450,961 RSF of previously vacant leasing, described as the second-highest quarterly amount in company history.
- 74% of leasing activity during the last twelve months was generated from the existing tenant base.
- Occupancy of operating properties increased to 87.1% from 86.9% as of June 30, 2026, primarily due to lease commencements during 3Q26.
- Executed leases aggregating 1.3 million RSF within the operating portfolio had a weighted-average expected occupancy date of approximately June 2027 and expected annual rental revenue of approximately $52 million.
- During 3Q26, 529,061 RSF of development and redevelopment projects were placed into service, were 84% occupied at delivery, and generated incremental annual net operating income aggregating $40 million.
- The company entered into a purchase and sale agreement for 421 Park Drive, expected to reduce future potential construction spend by approximately $136 million.
- The pivot of 311 Arsenal Street to lower-cost advanced technology use is expected to reduce future potential construction spend by approximately $220 million.
Concerns
- Same-property net operating income declined (6.7)% in 3Q26 and (9.2)% in YTD 3Q26, driven by lower same-property occupancy and previously disclosed key lease expirations with expected downtime.
- Rental revenues declined (11.0)% in 3Q26 and total revenues declined (10.7)% in 3Q26.
- 3Q26 included $637.9 million of real estate impairment charges related to assets held for sale.
- Lease renewals and re-leasing rental rate changes were (2.4)% in 3Q26 and (3.3)% on a cash basis.
- The company expects a $30 million to $35 million reduction in 2026 FFO related to potential tenant wind-downs, with approximately $30 million recognized through YTD 3Q26, including approximately $16 million in 3Q26.
- The company preliminarily estimates at least a similar level of FFO reduction may be necessary in 2027, and stated that 2027 occupancy may be negatively affected depending on tenant wind-down timing and magnitude.
- The company estimates that 1.4 million RSF of leases expiring in 2027, with approximately $100.5 million of annual rental revenue, will have downtime after lease expiration.
What to watch
- Completion of the expected 4Q26 sale of 421 Park Drive and the associated significant sales proceeds and approximately $136 million reduction in future potential construction spending.
- Completion timing and proceeds for pending dispositions and sales of partial interests, which aggregated approximately $2.62 billion as of October 26, 2026.
- Leasing and occupancy conversion from the 1.3 million RSF of executed operating-portfolio leases with future occupancy.
- Progress in evaluating the business and financial strategy for three remaining projects aggregating 667,002 RSF.
- Operating occupancy as of December 31, 2026 against guidance of 86.2% to 87.8%.
- Same-property NOI performance against 2026 guidance of (10.5)% to (8.5)%.
- The effect of 2027 key lease expirations, anticipated tenant wind-downs, and expected negative same-property NOI performance in 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $508,855 as of September 30, 2026.
- Total assets were $34,051,722 as of September 30, 2026.
- Unsecured senior notes payable were $10,820,687 as of September 30, 2026.
- Junior subordinated notes payable were $985,143 as of September 30, 2026.
- Unsecured senior line of credit and commercial paper were $1,091,166 as of September 30, 2026.
- Total liabilities were $15,633,413 as of September 30, 2026.
- Total equity was $18,409,190 as of September 30, 2026.
- Significant liquidity was $4.56 billion as of September 30, 2026.
- Net debt was $11,963,187 as of September 30, 2026.
- Net debt and preferred stock to Adjusted EBITDA – quarter annualized was 6.9x, or 6.6x on a pro forma basis reflecting the October 2026 closing of the Campus Point by Alexandria joint venture partial-interest sale.
- Total debt and preferred stock, as adjusted, to gross assets was 30% as of September 30, 2026.
- In August 2026, the company completed a public offering of $1.00 billion aggregate principal amount of 7.250% Series A fixed-to-fixed reset rate junior subordinated notes due 2057.
- In September 2026, the company closed its amended and restated $5.0 billion unsecured senior line of credit, extending the maturity date from January 22, 2030 to January 22, 2032, including extension options controlled by the company.
- The amendment reduced the applicable borrowing rate to SOFR plus 0.725% from SOFR plus 0.835%.
Analysis
Alexandria reported a 3Q26 GAAP net loss attributable to common stockholders of $(638,452) and diluted net loss per share of $(3.74), compared with $(234,937) and $(1.38) in 3Q25. The reported loss was heavily affected by $637,904 of real estate impairment in the quarter, including $637.9 million of charges related to assets held for sale. Adjusted FFO was $264,423, or $1.54 per diluted share, down from $377,825, or $2.22 per diluted share, in 3Q25 and from $296,077, or $1.73 per diluted share, in 2Q26.
Top-line and property operating trends remained under pressure. Total revenues were $671,182 in 3Q26 versus $751,944 in 3Q25, while rental revenues were $481,348 versus $541,070. Same-property NOI declined (6.7)% and same-property cash NOI declined (2.8)%, with the company citing lower same-property occupancy associated with previously disclosed lease expirations and expected downtime. Lease renewals and re-leasing generated rental rate changes of (2.4)% and cash-basis changes of (3.3)%.
Leasing activity and sequential occupancy were constructive. Total leasing volume reached 1,236,030 RSF, the highest quarterly volume since 4Q24, and included 450,961 RSF of previously vacant space. Occupancy of operating properties rose to 87.1% from 86.9% at June 30, 2026, though it remained below 90.6% at September 30, 2025. Executed leases with future occupancy added 3.7 percentage points, bringing occupancy including those leases to 90.8%. The company expects the 1.3 million RSF of executed but unoccupied leases to generate approximately $52 million of annual rental revenue.
Management continued to reposition the asset base and pursue capital recycling. The company expects the 421 Park Drive sale to reduce future potential construction spending by approximately $136 million and expects the Arsenal Street conversion to lower-cost advanced technology use to reduce future potential construction spending by approximately $220 million. Completed dispositions and partial-interest sales totaled $716.8 million as of October 26, 2026, and pending or late-stage transactions brought the aggregate to approximately $2.62 billion. The company also issued $1.00 billion of junior subordinated notes and completed an extension of its $5.0 billion unsecured senior line of credit to 2032.
2026 adjusted FFO per share guidance was narrowed to $6.38 to $6.42, with the $6.40 midpoint unchanged. Guidance retains an expectation for negative same-property NOI growth of (10.5)% to (8.5)% and operating occupancy of 86.2% to 87.8% at year end. Management identified tenant wind-downs, 2027 lease expirations covering 1.4 million RSF with approximately $100.5 million of annual rental revenue, and decisions on three remaining redevelopment projects as central variables for future results. The targeted 4Q26 annualized net debt and preferred stock to Adjusted EBITDA range is 5.6x to 6.2x, compared with 6.9x reported for 3Q26 annualized leverage.
Not in the filing
stated, not guessed- Gross margin was not reported.
- GAAP operating income was not reported as a line item.
- GAAP income tax expense or benefit and tax rate were not reported.
- A consolidated statement of cash flows, including actual operating cash flow and free cash flow for 3Q26, was not provided in the filing text.
- Revenue guidance was not reported.
- Previous-release outlook was not provided for formal actual-versus-prior-guidance comparison.
- Reportable operating segment revenue was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.