Alexandria Q1 2025 Update

Alexandria Real Estate (ARE) reported Q1 2025 results after the market closed. We have a small position in ARE. Shares look cheap, but headwinds will likely persist for years. Consequently, we've been building our position very gradually.

Wall Street’s Definitions for FFO (Repeated for ARE)

Words are bad. They are imprecise. I used to explain the differences in words. I hated it.

I built a chart to explain the concept.

There are only 3 types of values, but there are 5 terms. I’m counting “FFO” as two terms because it has a different meaning depending on who wrote it. Ugly. 

Value 2 is much more useful than value 1, so we join Wall Street in throwing value 1 in the trash.

Results for FFO As Adjusted / Wall Street FFO (Value 2)

• Consensus FFO estimate: $2.28
• FFO Result: $2.30
• Slight beat on FFO as Adjusted.

Results for AFFO (Value 3)

• Consensus AFFO estimate: $1.91
• Result: ARE does not report AFFO.

Guidance for FFO as Adjusted (Value 2)

• Old Guidance for 2025 FFO: $9.23 to $9.43 (midpoint $9.33)
• New Guidance for 2025 FFO: $9.16 to $9.36 (midpoint $9.26)
• Change: -$.07 (about -0.75%)
• Consensus Estimate for 2025: $9.28 (up $.01 from the prior earnings release date)
• Guidance is $.02 below the consensus.

Changing Capital Allocation

I like the changes here.