Alexandria Real Estate Equities, Inc. Announces $500 Million Common Stock Repurchase Program

Rhea-AI Summary

Alexandria Real Estate Equities (NYSE: ARE) has announced a $500 million common stock repurchase program authorized by its Board of Directors. The program, running until December 31, 2025, allows the company to purchase its outstanding common stock through various methods including open market transactions, accelerated share repurchase, and negotiated transactions.

The timing, price, and size of purchases will be determined by market conditions and other factors. The program is not mandatory and can be suspended at any time. Any stock repurchases are expected to be funded on a leverage neutral basis through operating activities cash flow after dividends and asset sale proceeds.

Positive

• Authorization of $500 million stock repurchase program indicates strong financial position
• Leverage neutral funding approach maintains financial stability
• Flexible implementation timeline until December 2025 allows strategic execution
• Program can enhance shareholder value through reduced share count

Negative

• Repurchase program may reduce cash available for other investments
• No guarantee of complete program execution as it's discretionary
• Asset sales might be needed to fund the program

Insights

Financial Analyst

The $500 million stock buyback program represents approximately 2.7% of ARE's market cap, signaling management's confidence in the company's valuation and future prospects. The program's leverage-neutral funding approach through operating cash flows and asset sales is particularly noteworthy, as it maintains financial discipline while returning capital to shareholders. This conservative funding strategy helps preserve ARE's balance sheet strength, important for a REIT in the current high-interest-rate environment.

The flexible nature of the program, running through December 2025, provides management with strategic optionality to capitalize on market volatility and potential stock price dislocations. While the buyback authorization doesn't guarantee actual repurchases, it creates a price support mechanism and demonstrates management's commitment to shareholder value, especially important given the recent pressure on office REIT valuations.

Real Estate Market Analyst

This buyback initiative comes at a strategic time for Alexandria, as life science real estate fundamentals remain relatively resilient compared to traditional office spaces. The company's focus on life science properties has historically commanded premium valuations, yet the broader REIT market pressures have created potential value opportunities. The decision to implement a buyback program suggests management views current stock prices as attractive relative to the underlying real estate value.

The program's structure through December 2025 aligns with typical real estate market cycles, providing ample time to execute opportunistically. The focus on leverage-neutral funding through operating cash flows and strategic asset sales indicates a balanced approach to capital allocation, maintaining flexibility for core business investments while opportunistically returning capital to shareholders.

PASADENA, Calif., Dec. 9, 2024 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. ("Alexandria" or the "Company") (NYSE: ARE) today announced that the Company's Board of Directors authorized a common stock repurchase program. Under the program, the Company may purchase up to $500,000,000 of its outstanding shares of common stock, par value $0.01 per share ("Common Stock"), until December 31, 2025 from time to time in the open market or otherwise (including in negotiated transactions, in open market transactions, through accelerated share repurchase, through indirect purchases of Common Stock such as by using derivatives or in other transactions). The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions and other considerations. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of Common Stock and may be suspended or discontinued at any time. Stock repurchases through December 31, 2025, if any, are expected to be funded on a leverage neutral basis with net cash provided by operating activities after dividends and proceeds from asset sales.

About Alexandria Real Estate Equities, Inc.
Alexandria, an S&P 500^® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since its founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative Megacampus^™ ecosystems in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle and New York City. For more information on Alexandria, please visit www.are.com.

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding the Company's stock repurchase program. These forward-looking statements are based on the Company's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by the Company's forward-looking statements as a result of a variety of factors, including, without limitation, the risks and uncertainties detailed in its filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update this information. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in the Company's forward-looking statements, and risks and uncertainties to the Company's business in general, please refer to the Company's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.

CONTACT: Sara Kabakoff, Senior Vice President – Chief Content Officer, (626) 788-5578, skabakoff@are.com

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SOURCE Alexandria Real Estate Equities, Inc.

FAQ

What is the size of Alexandria Real Estate's (ARE) stock buyback program announced in December 2024?

Alexandria Real Estate Equities announced a $500 million common stock repurchase program.

When does Alexandria Real Estate's (ARE) 2024 stock buyback program expire?

The stock buyback program runs until December 31, 2025.

How will Alexandria Real Estate (ARE) fund its 2024 stock repurchase program?

The program will be funded on a leverage neutral basis using net cash from operating activities after dividends and proceeds from asset sales.

Is Alexandria Real Estate (ARE) required to complete the full $500 million stock repurchase?

No, the program does not obligate the company to repurchase any specific dollar amount or number of shares and can be suspended or discontinued at any time.