Alexandria Real Estate (ARE) reported Q3 2024 results after the market closed. Alexandria Real Estate is a popular REIT. When I poll readers asking which REITs they want me to prioritize for updates, Alexandria performs quite well. If you're reading my content, you should know that I'm better known as Colorado Wealth Management Fund on Seeking Alpha. I'm posting here under my given name. 

Results for FFO

• Consensus FFO estimate: $2.37
• FFO Result: $2.37
• Result in line with estimate.

Results for AFFO

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

Guidance for FFO

• Old Guidance for FFO: $8.89 to $9.01 (midpoint $8.95)
• New Guidance for FFO: $8.88 to $8.92 (midpoint $8.90)
• Change: Down $.05.
• Note: This is not particularly important. The headline metric should be FFO as Adjusted.

Guidance for FFO as Adjusted

• Old Guidance for FFO as Adjusted: $9.41 to $9.53 (midpoint $9.47)
• New Guidance for FFO as Adjusted: $9.45 to $9.49 (midpoint $9.47)
• Change: Tightened. No change at midpoint.
• Consensus Estimate for 2024: $9.47
• Guidance in line with consensus estimate.

Wall Street’s Definitions for FFO

The wording can be a bit strange here because Wall Street is sloppy. Consensus analyst estimates are labeled as “FFO” and “AFFO”. Someone might assume that FFO would represent FFO and AFFO would represent FFO as Adjusted. However, that would be wrong.

The Wall Street estimate for “FFO” goes with what Alexandria is calling “FFO as Adjusted”.

The Wall Street estimate for “AFFO” is a metric Alexandria Real Estate does not (directly) report. Instead, it has to be calculated by making other adjustments. That generally isn’t too bad, except for the fact that analysts disagree on which “other adjustments” need to be made.

The Takeaway

Alexandria Real Estate tightened guidance for FFO as Adjusted, which is the most relevant number they report for FFO. The tightened guidance continues to match the consensus analyst estimate.

Leasing Spreads

Spreads for leasing were unusually weak.

• GAAP spreads: 5.1%
• Cash spreads: 1.5%

Guidance for 2024 full-year leasing spreads was unchanged:

• GAAP spreads: 11% to 19%
• Cash spreads: 5% to 13%

Year to date leasing spreads:

• GAAP spreads: 16.4%
• Cash spreads: 8.9%

Total leasing activity was elevated for the quarter, leading me to think ARE prioritized occupancy over spreads. Occupancy came in at 94.7%, which is only a higher than 94.6% from each of the prior 3 quarters. However, it is up nicely from 93.7% one year ago.

Conclusion

Looks like a reasonable quarter. I added some extra images for analysis in my Alexandria Q3 2024 update.

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Disclosure: Long ARE