Alexandria Real Estate Equities Inc (NYSE:ARE) Operating Income Rose 21.2% in Q3

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Alexandria Real Estate Equities Inc (NYSE:ARE) stock rose 0.28% (As on Oct 26, 11:36:13 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 21. Net operating income (cash basis) was of $1.3 billion for 3Q21 annualized, up 21.2%, compared to 3Q20 annualized, excluding the effect of income recognized during 3Q20 aggregating $86.2 million, which comprised a termination fee of $89.5 million and related expenses of $3.3 million. The company’s 95% of the leases contain contractual annual rent escalations approximating 3%. Same property net operating income growth was of 3.0% and 7.1% (cash basis) for 3Q21 over 3Q20 and 4.1% and 7.3% (cash basis) for YTD 3Q21 over YTD 3Q20. During YTD 3Q21, historic demand for the high-quality office/laboratory space translated into 5.4 million RSF of leasing activity in only nine months, representing the highest leasing activity in Company history, surpassing the record annual leasing of 5.1 million RSF in 2019.

Meanwhile, in September 2021, the company had signed a 15-year full-building lease with Moderna, Inc. to develop, construct, and operate its new headquarters and core R&D facility at 325 Binney Street, a leading-edge 462,100 RSF property designed to be the most sustainable laboratory building in Cambridge, representing the largest life science lease in Company history. Further, during 3Q21, the company had placed into service development and redevelopment projects aggregating 238,163 RSF that are 100% leased across four submarkets. The company started three value-creation projects aggregating 1.1 million RSF during 3Q21, including a 462,100 RSF development project at 325 Binney Street in the Cambridge submarket and a 229,000 RSF development project at 751 Gateway Boulevard in the South San Francisco submarket, which are 100% leased and 100% negotiating, respectively

ARE in the third quarter of FY 21 has reported the adjusted funds from operations per share of $1.95, beating the analysts’ estimates for the adjusted funds from operations per share of $1.93. The company had reported the adjusted revenue growth of 0.5 percent to $547.8 million in the third quarter of FY 21, beating the analysts’ estimates for revenue of $533.5 billion.

Additionally, the company has declared the dividend for 3Q21 of $1.12 per common share, aggregating $4.42 per common share for the twelve months ended September 30, 2021, up 24 cents, or 6%, over the twelve months ended September 30, 2020.

Alexandria Real Estate Equities expects full-year funds from operations to be in the range of $7.74 to $7.76 per share compared to the Thomson Reuters consensus EPS estimate of $7.77.

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