Alexandria Real Estate Equities Inc (NYSE:ARE) stock fell 4.38% (As on January 28, 11:24:54 AM UTC-4, Source: Google Finance) after the company posted a rise in its fourth-quarter funds from operations, as the real estate investment trust benefited from steady leasing demand from biotech clients and technology-focused firms. During 4Q24, the company have placed into service Megacampus development and redevelopment projects aggregating 602,593 RSF that are 98% occupied across multiple submarkets and delivered incremental annual net operating income of $55 million. Annual net operating income (cash basis) is expected to increase by $70 million upon the burn-off of initial free rent, with a weighted-average burn-off period of approximately three months, from recently delivered projects. 68% of the RSF in the total development and redevelopment pipeline is within the Megacampus ecosystems.
Moreover, Rental rate increases on lease renewals and re-leasing of space were 18.1% and 3.3% (cash basis) for 4Q24 and 16.9% and 7.2% (cash basis) for 2024. Significant liquidity of $5.7 billion. 32% of the total debt matures in 2049 and beyond. $684.1 million of capital contribution commitments from existing real estate joint venture partners to fund construction from 1Q25 through 2028.
ARE in the fourth quarter of FY 24 has reported the adjusted funds from operations per share of $2.39, which is inline with the analysts’ estimates for the adjusted earnings per share of $2.39, according to analysts polled by FactSet. The company had reported the adjusted revenue of $788.9 million in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $774.8 million.
Additionally, the company has authorized a common stock repurchase program under which the company may repurchase up to $500.0 million of the common stock through December 31, 2025. As of January 27, 2025, the approximate value of shares authorized and remaining under this program was $299.9 million.
For 2025, the property manager said it expects adjusted funds from operations of $9.23 to $9.43. Analysts surveyed by FactSet are looking for $9.28.
The company expects general and administrative cost savings of approximately $32 million in 2025, based on the midpoint of the guidance, compared to 2024, from a variety of cost-control and efficiency initiatives, including Personnel-related matters: reduction in headcount over the last two years and restructuring of compensation plans and streamlining of business processes: systems upgrades, process improvements, and cost reduction in legal, technology, and operational support services.