This article first appeared on GuruFocus .
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FFO Per Share (Diluted, Adjusted):$1.54 for Q3 2026; 2026 guidance midpoint reaffirmed at $6.40, range tightened to $0.02.
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Leasing Volume:1,236,000 sq ft in Q3 2026, the highest in the last seven quarters; Q4 2026 estimate of ~1.25 million sq ft.
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Leasing of Previously Vacant Space:451,000 sq ft, the second-largest quarterly total in company history.
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Weighted Average Lease Term:~11 years on Q3 2026 leasing.
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Occupancy:87.1% at end of Q3 2026, up 20 bps from prior quarter; year-end 2026 guidance unchanged.
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Same-Property NOI:Down 6.7% (and 2.8% on a cash basis) for Q3 2026, an improvement from prior quarter's 3.9% and 5.8% declines.
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Adjusted EBITDA Margin:65% for the quarter.
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G&A Expenses:2026 guidance range of $134 million to $154 million; trailing 12-month G&A at 7.5% of NOI, nearly half the S&P 500 REIT average of 14.3%.
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Realized Investment Gains:$16 million in Q3 2026 and $44.5 million for the first three quarters; 2026 guidance lowered by $10 million to a $65 million midpoint.
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Capitalized Interest:$62.9 million in Q3 2026, down $11 million from the prior quarter; further decline expected in Q4.
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Development/Redevelopment Deliveries:529,000 sq ft delivered in Q3 2026 (84% occupied), generating $40 million of incremental annual NOI.
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Development Pipeline:Shrunk more than 50% from 3.6 million sq ft to 1.6 million sq ft between Q4 2025 and Q3 2026; 906,000 sq ft under construction, 77% leased or negotiating.
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Capital Raising:$1.7 billion completed since June 30, including $1 billion of 7.25% junior subordinated notes (50% equity credit) and a $475 million Campus Point joint venture.
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Dispositions and Partial-Interest Sales:$717 million completed; $2.6 billion aggregate completed and pending, exceeding the $1.9 billion midpoint target by ~$720 million.
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Impairments:$638 million of real estate impairments recognized in Q3 2026, substantially all related to development, land, or lab conversion opportunities.
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Liquidity:$4.6 billion as of Q3 2026; $5 billion unsecured credit line extended to 2032.
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Leverage:Year-end 2026 net debt to annualized adjusted EBITDA guidance of 5.6x6.2x; intermediate-term target around mid-5x.
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Debt Maturity:Average remaining term of 11.6 years, the longest among S&P 500 REITs; only $350 million of maturities in 2027.
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Tenant Base:57% of annual rental revenue from investment-grade or publicly traded large-cap tenants; average remaining lease term of 7.7 years; ~3% average rent steps on 97% of leases.
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Free Rent Concessions:Two months per year of term for trailing 12 months ended Q3 2026 (1.1 months excluding one large non-life science lease).
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Tenant Improvements and Leasing Commissions:7.4% of total rent, the lowest in the last 10 quarters.
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Non-Income-Producing Assets:Reduced to 12% of gross assets as of Q3 2026 from 20% at year-end 2024.
Release Date: October 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Solid leasing volume of 1.2 million square feet in Q3 2026, the highest in seven quarters, with 451,000 square feet of previously vacant space leasedthe second-largest quarterly total in company history.
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Strong balance sheet with $4.6 billion liquidity, longest average debt maturity among S&P 500 REITs at 11.6 years, and only $350 million of debt maturities in 2027.
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Successful capital raising of $1.7 billion since June 30, including $1 billion of junior subordinated notes with 50% equity credit, and a $475 million joint venture at Campus Point.
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High-quality tenant base with 57% of annual rental revenue from investment-grade or publicly traded large-cap tenants, long remaining lease terms of 7.7 years, and average rent steps approaching 3%.
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Significant progress in reducing non-income-producing assets from 20% of gross assets at year-end 2024 to 12% as of Q3 2026, and capitalized interest is expected to decline further.
Negative Points
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Same-property net operating income declined 6.7% (GAAP) and 2.8% (cash) in Q3 2026, primarily due to lower occupancy.
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Occupancy at 87.1% remains below historical levels, with temporary pressure expected in the first half of 2027 due to 1.4 million square feet of lease expirations with downtime of 9 to 24 months.
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Public biotech leasing remains muted, representing only 1.1% of total leasing volume in Q3 2026, and tenant wind-downs are expected to continue, posing a headwind.
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Recognized $638 million of impairments in Q3 2026, primarily related to development projects and land, with potential for further impairments in upcoming quarters.
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Free rent concessions remain elevated at two months per year of term for the trailing 12 months, driven by a large non-life science lease, and tenant improvements and leasing commissions, though low this quarter, could rise.
Q & A Highlights
Q: On the Campus Point joint venture, is there a fixed cadence to the waterfall shift over time, and how does the put mechanism work? A: Marc Binda (CFO): A 5.5% distribution is in place for at least the first several years, with steps up over time. There is a put mechanism intended to allow the investor to achieve a targeted IRR if exercised. The JV is treated as permanent equity, and Alexandria holds a call option that preserves long-term control of the campus.
Q: What are the GAAP and cash cap rates on the $1.9 billion of pending dispositions? A: Marc Binda (CFO): The $355 million under contract is a mix of noncore and land, including 421 Park, which will have essentially no cap rate. A big chunk of the $1.5 billion in late-stage negotiations is a joint venture, and economics can't be disclosed yet given advanced discussions.
Q: How should we think about 2027 development spending versus the prior $1.15 billion to $1.65 billion estimate, and the leverage impact? A: Marc Binda (CFO): The number will be refined over the next five weeks ahead of Investor Day in early December. A big chunk will target the operating portfolio, much of it leased or under negotiation. He declined to signal whether the final figure would be higher or lower.
Q: Are the 2027 tenant wind-down assumptions based on known move-outs or a conservative estimate? A: Marc Binda (CFO): It is an estimate; these situations are hard to predict and many tenants have upcoming milestones that dictate their ability to raise capital. The 2026 run rate included a similar $30 million to $35 million, so it shouldn't create incremental dilution. Joel Marcus (Executive Chairman) added that funders are increasingly pushing company mergers, and underwriting is being kept conservative.
Q: What is the progress on the 2027 key expirations, now 22% under negotiation versus essentially zero last quarter? A: Joel Marcus (Executive Chairman): Of the 1.37 million square feet rolling with downtime, over 60% is in active discussions with specific tenants, some late-stage and some early-stage. That is a strong position at this stage, with examples including Bristol-Myers vacating San Diego space for its new building.
Q: How do you expect same-property NOI to improve by 2028 given known move-outs and tenant wind-downs? A: Marc Binda (CFO): Occupancy growth in 2028 requires continuing a healthy pace of leasing, particularly of vacant space. The third quarter's 451,000 square feet of previously vacant space leased was the second-highest in company history, and the team is focused on sustaining that.
Q: Where do core life science assets price today, and how does that inform the disposition strategy? A: Peter Moglia (CEO and CIO): Tier 1 core assets had been trading at a 5-handle cap rate, but that is getting pressured by rates. Better assets would trade around a 6-cap, and good workhorse assets between 7.5% and 8.5%. The big three markets and Seattle command lower cap rates, while suburban markets typically carry a 100 to 150 basis point spread.
Q: How do the JVs factor into the mid-5x leverage target given consolidation? A: Marc Binda (CFO): The Campus Point JV will continue to be consolidated, so its EBITDA stays on the income statement and is included in the leverage computation, while the cash proceeds benefit the funding plan.
Q: How do you view advanced technology tenants as a leasing opportunity given lower rents but lower CapEx? A: Joel Marcus (Executive Chairman): Advanced technology tenants, like early tenants Google, Stripe and Pinterest, are attracted to the campuses for talent recruitment and infrastructure. Peter Moglia (CEO and CIO) added that these tenants can absorb lab supply that shouldn't have been built as lab, though Joel noted some poorly located "zombie buildings" will need other adaptive reuse.
Q: Is the 5% decline in tenants in the market a onetime shift, and where does activity asymptote in 2027? A: Peter Moglia (CEO and CIO): The 30% quarter-over-quarter jump from 4Q to 1Q was an anomaly never seen before, followed by another 10% gain. A 5% decline is normal, with typical moves of flat to plus or minus 7%. Activity appears stable now, with some pent-up demand having worked through the pipeline.
Q: What is the appetite for partial interest sales of core assets versus noncore and land dispositions in 2027? A: Marc Binda (CFO): Partial interest sales will be on the menu. The other 2026 JV in progress will likely involve multiple assets, both core and noncore, rather than a Megacampus. Future JVs, land and noncore assets will all feature in 2027 as the company seeks the most cost-efficient capital.
Q: Could Megacampuses eventually reach 100% of the portfolio? A: Joel Marcus (Executive Chairman): There will always be a need for some core non-Megacampus assets, such as the Lilly building in the Seaport. The mix could rise to 85%, maybe 90% at the high end, but not 95% or 100%.
Q: Why the cautious macro tone alongside improving leasing trends in 3Q and 4Q? A: Joel Marcus (Executive Chairman): Life science is a niche of many subsectors with differing health. The pinch point is clinical-stage public biotech without near-term data milestones, while private, institutional, tools and pharma remain steady or strong. Fourth quarter should see an upswing in public biotech leasing for the first time in many quarters.
Q: What drives the 718,000 square feet of expected downtime on 2028 expirations, and could that grow? A: Joel Marcus (Executive Chairman): It is largely one big pharma move-out in Tech Square that consolidated elsewhere years ago, plus
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
