How Alexandria's Watertown Mall Sale at a Loss Has Changed Its Investment Story at ARE

• Earlier this week, Alexandria Real Estate Equities sold the Watertown Mall property to National Development for US$100.25 million, below the US$130 million purchase price paid four years ago, exiting plans to redevelop it as a life science campus.
• This decision highlights Alexandria's ongoing adjustments to its portfolio and its increased focus on reshaping assets to respond to shifting demand, such as rising interest from AI-related office tenants in San Francisco.
• We'll examine how Alexandria's decision to sell the Watertown Mall at a loss and rotate into technology-driven leasing may influence its investment outlook.

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Alexandria Real Estate Equities Investment Narrative Recap

To be a shareholder in Alexandria Real Estate Equities, you need confidence in the long-term demand for life science and technology-focused campus properties in high-barrier markets like Boston and San Francisco. The recent sale of the Watertown Mall at a loss is not expected to materially impact the most important near-term catalyst, the company's ability to attract high-value technology tenants, but does highlight one of the biggest near-term risks, which is valuation pressure from asset sales.

Among Alexandria’s recent announcements, the effort to convert more lab buildings to office space in San Francisco is closely relevant, as it underscores the company's adaptation to growing AI tenant demand. How effectively Alexandria matches its properties to the needs of technology sectors could influence leasing rates and occupancy, which remain vital short-term drivers.

But in contrast to longer-term growth prospects, investors should be aware of ongoing asset dispositions at lower-than-expected prices and what this signals about...

Read the full narrative on Alexandria Real Estate Equities (it's free!)

Alexandria Real Estate Equities is projected to reach $3.2 billion in revenue and $288.1 million in earnings by 2028. This outlook assumes a -0.7% annual revenue decline and an earnings increase of about $310 million from current earnings of -$21.5 million.

Uncover how Alexandria Real Estate Equities' forecasts yield a $97.50 fair value, a 27% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community range broadly from US$71 to US$136.20 per share. Some see strong upside, while the risk of difficult real estate market conditions continues to weigh on short-term outlooks.

Explore 8 other fair value estimates on Alexandria Real Estate Equities - why the stock might be worth 8% less than the current price!

Build Your Own Alexandria Real Estate Equities Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Alexandria Real Estate Equities research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Alexandria Real Estate Equities research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alexandria Real Estate Equities' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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