REIT stock trading in green: Alexandria Real Estate Equities Inc (NYSE: ARE)

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Alexandria Real Estate Equities Inc (NYSE: ARE) stock rose over 2.4% on 28th July, 2020 (as of 11:48 am GMT-4; Source: Google finance) on better than expected second quarter of 2020 coupled with better 2020 forecasts. As per the recent guidance, the firm rose midpoint of their 2020 construction spending guidance range from $960.0 million to $1.35 billion. They further expect a $900 million to $1.3 billion of real estate acquisitions in the second half of 2020, including acquisitions completed in July 2020. The firm also rose midpoint of their real estate dispositions and partial interest sales from $50.0 million to $1.25 billion, which is expected to fund a portion of the increase in construction spending and acquisitions in addition to providing significant capital for growth over the next two to three quarters.

The group’s total revenue rose 16.9% yoy to $437 million during the second quarter of 2020 while funds from operations rose to $ 225 million from $192.7 million in pcp. The Net operating income rose 17.6% yoy to $1.1 billion during the quarter with 94% of the leases containing contractual annual rent escalations of over 3.0%. The Same property net operating income rose 1.6% and 4.5% during the first half of 2020 against pcp. The Current projects reached 3.3 million RSF, including COVID-19-focused R&D spaces, with highly leased at 61% and will generate significant revenues and cash flows. The firm’s Annual net operating income comprising share of unconsolidated real estate joint ventures, is forecasted to rise $29 million upon the burn-off of initial free rent on recently delivered projects. The Common stock dividend declared during the quarter was $1.06 per common share, totaling to $4.12 per common share for the twelve months ended June 30, 2020, while the FFO payout ratio was 59%. The firm derives 51% of annual rental revenue from investment-grade or publicly traded large cap tenants with a Weighted-average remaining lease term of 7.8 years. The firm collected 99% of July 2020 rents and tenant recoveries.

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