Real estate sell-off: Is ARE hiding the best dividend in the sector?
At the start of last year, it bought back 2.2 million of its own shares at an average of $96.71. Today the stock is at 48, the company has a half-billion buyback authorization, and it is buying nothing. The reason isn't in how cheap the stock is, but in what expires for the company in 2027.
Key points
The stock is roughly 78% below its late-2021 high and trades at 53% of the company's book value.
It last repurchased its own shares at an average of $96.71. Today it trades at 48 and buys nothing.
It cut the dividend by 45% and in August borrowed a billion at 7.25% in subordinated debt.
In 2027, leases totaling $100.5 million in annual rent expire, and the company itself expects 12 to 24 months of vacancy.
The market values its buildings at roughly $570 per square foot. Building a lab cost at least $975 already in 2021.
At the end of 2021, Alexandria Real Estate Equities $ARE had a market value of $35.2 billion. It was the largest publicly traded owner of laboratories in America, the stock was at $223, and investors paid just under 29 times annual operating cash flow for it. The argument was simple and bulletproof at the time: biotech needs labs, labs can't be built overnight, and Alexandria owns more of them than anyone else.
On Thursday, August 13, 2026, the stock closed at $48.47. The company's market value is roughly $8.3 billion, down more than three-quarters. The drop per share is about 78% because the company has issued more shares in the meantime. The year 2025 alone cost shareholders half of the value, and this year the stock is roughly flat with New Year's Eve.
Yet in biotech, the exact opposite of what you'd expect from such a chart is happening. Venture capital sent the most money into biotechnology companies in the first half of 2026 since 2022, IPOs returned to the exchange, and R&D employment is growing at the fastest pace since mid-2023. The CEO of rival Healthpeak Properties $DOC Scott Brinker said at an August analyst conference that public offering volume was the highest since the second quarter of 2021.
So the money came back. The tenants did not. Vacancy in U.S. lab and research space reached 23.8% in the second quarter, according to CBRE, a new record, and average asking rents fell 8.1% year over year. Net absorption, the difference between newly occupied and vacated space, was negative for the second straight quarter.
Both are true at the same time. So the question for anyone considering the stock at $48 today is not whether biotech has recovered. It already has. The question is different: when will it start showing up in leases — and will Alexandria survive in its current form long enough?