Here's Why Alexandria (ARE) Is an Apt Portfolio Pick for Now

Core Viewpoint - Alexandria Real Estate Equities, Inc. (ARE) is well-positioned for growth due to its high-quality portfolio of life science, technology, and agtech properties in strategic markets, benefiting from strong demand and favorable market dynamics [1] Group 1: Portfolio and Performance - Alexandria focuses on Class A/A+ properties in AAA innovation cluster regions, characterized by high barriers to entry and limited supply, allowing the company to command high rents and maintain elevated occupancy levels [2] - In 2023, Alexandria's total leasing activity reached 4.3 million RSF, with lease renewals and re-leasing accounting for nearly 3.05 million RSF [2] Group 2: Demand for Life-Science Assets - The life science sector is experiencing booming demand driven by the need for drug research and innovation, presenting a multiyear growth opportunity [3] - The implementation of AI and ML tools in life sciences is increasing the demand for lab space, which is expected to drive further demand for Alexandria's assets [3] Group 3: Occupancy and Rental Growth - Alexandria's occupancy rate for its North American properties was 94.6% as of December 31, 2023, with rental rate growth of 29.4% during 2023 [4] - For 2024, same-store occupancy is projected to be 95.1%, with rental income expected to increase by 8.5% year-over-year [4] Group 4: Tenant Base - Alexandria has a diversified tenant base, including multinational pharmaceutical companies and biotechnology firms, with mega campuses contributing 75% of annual rental revenues [5] - The weighted average remaining lease term for all tenants is 7.4 years, ensuring steady rental revenues [5] Group 5: Acquisitions and Development - In 2023, Alexandria completed acquisitions and development projects worth $258.9 million, with a total of 2.5 million RSF placed into service, generating$265 million in incremental annual NOI [6] - The project pipeline is expected to yield an annual incremental NOI of $495 million through Q4 2027, with 60$5.8 billion in liquidity, with a net debt to adjusted EBITDA ratio of 5.1X, improving from 5.4X [7] - The company has no debt maturities before 2025 and enjoys favorable credit ratings, positioning it well for growth opportunities [7] Group 7: Dividend Policy - Alexandria has a history of consistently raising its dividend rates, with a 2.4% increase announced in December 2023, bringing the payout to $1.27 per share [8] - The company has increased its dividend 10 times in the last five years, with a five-year annualized growth rate of 5.41% [8]