Is Alexandria Real Estate a Buy After Q2 2025 Earnings?

Alexandria Real Estate Equities (ARE) posted strong Q2 2025 earnings. Adjusted funds from operations (AFFO) came in above estimates, and revenue exceeded expectations. Despite these gains, net income declined due to impairment charges. However, the company reduced costs and maintained strong leasing activity. This article presents a financial and technical analysis of Alexandria Real Estate to assess long-term investment opportunities. The stock is showing strength at key long-term support levels, signalling a potential buying opportunity for investors.

Alexandria Real Estate Q2 2025 Earnings Show Strength and Growth Momentum

Alexandria Real Estate released its Q2 2025 results on July 21, 2025. AFFO were $2.33 per share, exceeding expectations. Moreover, the revenue also exceeded expectations, reaching $762 million. This strong growth highlights the robust performance of the Alexandria portfolio.

Despite the strong revenue, the company reported a net loss of ($0.64) per share, due to asset impairment charges. These non-cash charges overshadowed robust cost controls and stable cash flows.

Operating margin was 71% while operating expenses dropped to $600 million as compared to $642 million in Q1 2025. On the other hand, the selling and administrative expenses declined to $29.1 million in Q2 2025.

The net income dropped due to $129.6 million in real estate impairment charges. These charges were much higher than the $30.8 million recorded last year. The impairments stemmed from changes in the valuations of non-core land holdings and properties outside core clusters. Additional investment losses also added pressure. This reflects broader valuation headwinds in the life sciences real estate sector.

Moreover, portfolio occupancy in North America declined to 90.8%, down from 94.6% the previous year. The leasing market remains competitive, with tenants taking longer to sign new agreements. Despite this, Alexandria’s leasing success underscores the strength of its clusters.

Development Pipeline and Dividend Growth Support Long-Term Buy

Alexandria secured its largest lease to date in the life sciences sector, covering 466,598 square feet over a 16-year term at University Town Centre. Nearly 97% of leases include built-in annual rent increases, supporting long-term revenue growth.

Moreover, the tenant payments remained strong, with rent collection reaching 99.9% for Q2 2025. Over half of Alexandria’s rental income comes from large-cap or investment-grade tenants, helping ensure income stability and lower credit exposure.

On the other hand, the development remained a strong driver of growth for Alexandria. The company completed 217,774 square feet of projects during Q2 2025, with 90% of the space already leased. The pipeline through 2026 remains healthy, with 84% of upcoming projects either leased or under negotiation.

The company completed or lined up $785 million in asset sales by July and expects $1.95 billion for the year. This asset recycling strategy allows Alexandria to reinvest in its core mega campuses.

On the dividend front, the quarterly payout increased to $1.32 per share from $1.30 last year. The payout ratio stands at 57%, striking a balance between cash returns and reinvestment needs. At quarter-end, the dividend yield was 7.3%.

The company did not repurchase shares in Q2; however, $241.8 million remains authorised for future buybacks. The chart below shows Alexandria’s dividend growth and total dividends paid. Alexandria has consistently increased its dividend payments over the years. The drop in total payouts reflects higher distributions to shareholders as the company scales its operations. This trend signals a strong commitment to returning capital while supporting long-term growth.

Alexandria 2025 Outlook Shows Resilience Despite Market Challenges

The company projects AFFO for full-year 2025 in the range of $9.16 to $9.36 per share, with a midpoint of $9.26. The company revised its GAAP net income guidance downward to $0.40 to $0.60 per share, reflecting the impact of recent impairment charges. On the other hand, year-end occupancy is expected to fall between 90.9% and 92.5%, while rental rate growth on new and renewed leases is projected to reach as high as 17%.

Despite a challenging and uncertain operating environment, Alexandria remains focused on asset recycling, disciplined development execution, and maintaining a high-quality tenant base. These key factors continue to support its long-term financial stability.

Alexandria Real Estate Technical Analysis

Monthly Chart: Strong Support and Rebound Potential

The technical analysis for Alexandria indicates strongly bullish price action despite the sharp correction since 2021. The stock bottomed at $17.93 in May 2009 and then surged to an all-time high of $193.20 in December 2021, as shown in the chart below. After reaching this high, the price declined by over 50% and formed a new bottom at $66.16 in May 2025.

Long-term support levels are identified at $35.13, $51.28, and $66.16. These levels align with the rising trendline drawn from the 2009 low. The stock touched this trendline again in 2025 and rebounded strongly in June and July.

Immediate resistance lies near the $86.00 area, defined by a blue trendline. A confirmed breakout above this level would confirm a new long-term uptrend.

On the monthly chart, the RSI has entered a deeply oversold zone. The last time this occurred was in 2009, when the stock marked its major bottom at $17.93 and surged by 977.5% to hit its record high in 2021 at $193.20. The current RSI level suggests strong long-term support and a potential for sustained recovery.

Weekly Chart – Strong Base and Oversold Conditions

The weekly chart for Alexandria also confirms a strong support region. A long-term base has formed near the $50 area. Historical support levels at $51.28 in 2016 and $50.35 in 2014 reinforce this zone as a critical floor. The current long-term correction will likely hold above the $50 region, making it a potential bottom for the next upward cycle.

Another key support appears near $65, where the stock bottomed at $66.16 in May 2025 before rebounding toward the $86 region. This area marks a pivotal turning point. The $86 level also aligns with a descending blue trendline, which has acted as a key reference for past support and resistance.

The weekly RSI shows a highly oversold condition. This is the most severe oversold reading in Alexandria’s entire price history. Such an extreme setup suggests a high probability of a strong rebound. As a result, the stock is likely to continue rallying in the coming months and years.

Daily Chart – Reversal Pattern Indicates a Buy

The short-term outlook is observed using the daily chart, which shows a confirmed bottom at the $66.16 area. At this level, the stock formed an inverted head-and-shoulders pattern. A breakout above $78.61 triggered a strong rally, pushing the price toward the $100 region.

This move suggests continued bullish momentum. The stock may continue to rise from its current levels. Investors can consider buying on pullbacks to target higher levels. Given the strong long-term support, this may be an attractive entry point for long-term investment in Alexandria.

Risk Factors: Valuation Headwinds and Leasing Pressures

Alexandria faces ongoing pressure from falling property valuations. The company recorded $129.6 million in impairment charges during Q2 2025, a sharp increase from $30.8 million in the same period last year. These non-cash losses reflect weakness in non-core assets and rising uncertainty across the life sciences real estate market.

Moreover, the occupancy levels continue to decline. The North American portfolio dropped to 90.8%, down from 94.6% a year ago. Tenants are delaying leasing decisions due to slower biotech funding and tighter capital markets. This trend may further weaken near-term revenue and limit rent growth despite built-in escalators.

On the other hand, broader macro risks remain elevated. Interest rates, public market volatility, and lower valuations may impact asset sales and delay development plans. The risk of impairment could increase if market conditions deteriorate. These factors may pressure net income, reduce tenant demand, and create headwinds for Alexandria’s long-term growth outlook.

Despite these risks, the stock price reached a strong support zone in 2025, signalling a potential bottom. A recovery above $86 would reduce the risk of further declines and increase the probability of a sustained rally. However, a break below $66.16 will indicate further downside towards the long-term support region of $50.

Key Takeaways for Long-Term Investors

Alexandria delivered strong operational results in Q2 2025 despite a challenging environment. AFFO exceeded expectations, and leasing remained solid with high rent collections. The company completed major development projects and secured its largest lease to date. Dividends have increased, and the payout remains sustainable. Asset sales continued to fund new growth, reinforcing Alexandria’s focus on core clusters and capital discipline.

The stock has reached a historically strong support zone. Technical charts point to a possible long-term bottom within the $66 to $50 region. A breakout above $86 may confirm a new uptrend. Given the stable cash flows, strong tenant base, and disciplined strategy, Alexandria offers long-term value.

A rebound from the long-term support region of $66 indicates that a bottom may have formed. However, a break below $66 would signal a further decline toward the $50 support level. Investors can consider buying the stock at current levels and accumulate more positions if the price dips toward $50.