Image Source: PexelsAlexandria Real Estate Equities (ARE) is the largest and longest-tenured owner/developer of specialized AAA commercial space focused exclusively on meeting the unique needs of the life sciences sector. For investors, this translates into a compelling combination of high cash flow, stable dividend income, and consistent earnings growth, advises Adam Johnson, editor of Bullseye Brief.From fully-wired, high-tech workspaces to customized laboratories housing billions of cutting-edge equipment across corporate campuses, Alexandria owns 74 million square feet in North America and has 6 million additional square feet under development. Future commitments already in planning total another 17 million square feet and provide significant runway for growth.The company’s uniquely focused business model ensures a high-quality tenant base, resulting in higher occupancy, longer leases, stronger cash flow, and industry-leading capital appreciation. Notably, as of late 2023, occupancy was 96% and lease renewals were being signed at 6% increases, both of which provided ample support for the 4.5% dividend yield.Ironically, shares recently traded at a 25% discount to long-term valuation on the assumption all commercial real estate is doomed by higher rates and work-from-home demographics. I disagree, and I think the recent valuation anomaly will correct as stability returns to the market.Buying Alexandria now could provide a rare opportunity to acquire an investment-grade company at a near-distressed valuation.
About the Author
Adam Johnson is the founder and author of BullseyeBrief, a weekly investment letter that explores American Ingenuity through actionable stock picks. He also runs the American Ingenuity portfolio at Kensington Investment Counsel.Previously he anchored several daily programs at Bloomberg Television, interviewing CEOs, heads of state, and prominent investors. During his three-decade career on Wall Street, he has traded stocks, options, and oil for ING Asset Management, Louis Dreyfus, and Merrill Lynch. He graduated from Princeton with a degree in economics. He resides in New York City.More By This Author:Top Picks 2024: DuolingoWhy Investors Shouldn’t Give Up on AI, “Big Tech” In 2024 (Plus: The Path To S&P 5,100+)Top Picks 2024: Baxter International
