Life sciences-focused REIT Alexandria Real Estate Equities will execute a $500M stock buyback program, according to a Monday press release, and may purchase outstanding common stock through Dec. 31.
The decision comes during a challenging moment for the life sciences real estate industry, with nearly a third of the nation’s lab space available. The supply imbalance is predicted to get worse before it gets better.
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The REIT’s stock price dipped Friday to $102.89, near its 52-week low. The stock rose slightly Monday after the buyback announcement. Alexandria didn't immediately respond to a request for comment.
During the REIT’s fourth-quarter earnings call, Chairman Joel Marcus referred to a “stubborn economic and operating environment,” and executives said the company was set to sell $1.2B in property by year’s end.
The planned dispositions are part of a push to get rid of ancillary and underperforming assets and focus strictly on the company's megacampus strategy. Quarterly results were mixed.
ARE missed Q4 earnings estimates by a penny, and while revenue improved, leasing forecasts for the three major life sciences markets suggested a bumpy road over the next few quarters trying to fill space amid an industrywide supply glut.
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