ARE · Q2 2026 Earnings

Cautious

Alexandria Real Estate Equities

Reported August 3, 2026

30-second summary

30-second take: Q2 FY2026 revenue of $663M (-13% YoY, -1.2% QoQ) beat consensus of $656M by 1.1% and adjusted FFO of $1.73 landed against a $0.12 GAAP EPS estimate that materially understated the FFO-driven print. The guidance table tells the real story: FY2026 FFO/share range tightened to $6.35–$6.45 (midpoint unchanged at $6.40), Q2 leasing volume of 1.04M RSF materially beat the ~900K guide, interest expense guide raised $20M to $260M–$300M (driven by a six-week slip in the weighted-average disposition completion date from August to September), capitalization of interest lowered $5M, and straight-line rent lowered $10M. Occupancy slipped to 86.9% (-80bps QoQ), sitting mid-band of the 86.2%–87.8% year-end guide but conceding another leg down from Q1's 87.7%. The $6.40 midpoint holds because the later disposition timing offsets higher interest expense and lower capitalized interest.

Headline numbers

EPS

Q2 FY2026

$1.73

Revenue

Q2 FY2026

$0.66B

-13.0% YoY

+1.1% vs est.

Operating margin

Q2 FY2026

69.0%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$0.66B	$0.76B	-13.0%	$0.67B	-1.2%
EPS	$1.73	$2.33	-25.8%	$1.73	+0.0%
Operating margin	69.0%	71.0%	-200bps	67.0%	+200bps

Guidance

FY2026 FFO guidance reaffirmed at midpoint with tighter range; several quarterly and component-level metrics withdrawn from disclosure; Q2 leasing volume beat guidance meaningfully at 1.04M RSF vs. 900K RSF expected.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Total Leasing Volume	Q2 FY2026	approximately 900,000 RSF	1,038,917 RSF	+138,917 RSF (+15.4%) above guide	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
FFO per share, as adjusted	FY2026	$6.30 to $6.50	$6.35 to $6.45	midpoint lowered $0.05 (from $6.40 to $6.40, range tightened by $0.10 at low end, flat at high end)	Lowered
Straight-line rent revenue	FY2026	$55 to $85 million	Withdrawn — no replacement	—	Withdrawn
Capitalization of interest	FY2026	$225 to $265 million	Withdrawn — no replacement	—	Withdrawn
Interest expense	FY2026	$240 to $280 million	Withdrawn — no replacement	—	Withdrawn
Realized gains on non-real estate investments	FY2026	$60 to $90 million	Withdrawn — no replacement	—	Withdrawn
FFO per share, diluted, as adjusted	FY2026	$1.40 to $1.50	Withdrawn — no replacement	—	Withdrawn
Construction spending	FY2026	$1.5 to $2.0 billion (midpoint $1.75 billion)	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026
Megacampus Platform % of Annual Rental Revenue	80%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Occupancy of Operating Properties	86.9%	—	—
Occupancy Including Executed Leases with Future Occupancy	90.9%	—	—
Investment-Grade or Publicly Traded Tenants % of Revenue	57%	—	—
Adjusted EBITDA Margin	67%	71%	—
Weighted-Average Remaining Lease Term (All Tenants)	7.7 years	—	—
Leases with Annual Rent Escalations	97%	97%	—
2Q26 Total Leasing Volume	1,038,917 RSF	—	—

Management tone

No earnings call transcript was available for this brief; tone analysis is drawn from the press release and guidance table changes only.

Narrative arc: Q2 FY2025 cautious operating quarter → Q3 FY2025 broad capitulation → Q4 FY2025 multi-year reset with $1.45B impairment and 45% dividend cut → Q1 FY2026 structural biotech demand admission → Q2 FY2026 midpoint held on tighter range with component moves that mostly offset.

The most consequential shift this quarter is what the FFO bridge components are doing under the reaffirmed midpoint. Interest expense guidance was raised $20M — roughly $15M of that is the six-week slip in the weighted-average disposition completion date (from August to September) and $5M reflects the lower 4Q26 capitalization of interest. Capitalized interest itself came down $5M as project milestone dates were hit and some paused/under-evaluation projects saw their capitalizable basis reduced. Straight-line rent revenue was cut $10M, driven by write-offs and reserves tied to tenant wind-downs — the 2026 guide continues to assume $25M–$30M of FFO drag from wind-downs, with ~$14M realized in 1H26. That management holds the $6.40 midpoint despite all three of those component moves running against FFO tells you the later disposition timing is expected to contribute enough offsetting benefit to 3Q26 FFO to close the gap.

Leverage language upgraded from "we expect improvement" (Q1) to "on track for annualized 4Q26 leverage guidance of 5.6x to 6.2x." The specifics behind that framing did fill in this quarter: $170M completed dispositions, $1.16B under LOI/PSA/deposits, and $1.10B in-process — cumulatively $2.43B against the $2.9B midpoint, or 84% of the target identified as of August 3.

The addition of "five projects aggregating 1.4 million RSF" under evaluation is a new disclosure that extends the Q1 curtailment framework. In Q4 FY2025 four under-construction projects were flagged; in Q1 FY2026 311 Arsenal and 3000 Minuteman were named as potential advanced-technology conversions; in Q2 FY2026 the 3000 Minuteman conversion executed (159,947 RSF lease, $80M construction-budget reduction) and 311 Arsenal LOIs of 108,800 RSF for advanced tech use progressed. The review has expanded to a new set of five projects with 1.4M RSF. The pipeline is still being actively re-cut a year into the reset.

Answers to last quarter's watch list

Q2 FY2026 leasing volume against the ~900K RSF management guide. Q2 printed 1.04M RSF — a 15.4% beat versus the ~900K guide and a 60% sequential rebound from Q1's 647K. This is the clearest positive operating data point of the quarter and the only forward number where management put a stake in the ground last quarter and cleared it decisively.

Resolved positively

Whether any public biotech lease prints in Q2 FY2026. The press release does not break out public biotech leasing volume as a discrete disclosure, so the specific answer to the "first quarter in company history with zero public biotech leases" question isn't directly confirmed or refuted by the print. Absent a transcript, the binding constraint management itself identified in Q1 remains unresolved on the record.

Continue monitoring

Cash renewal spreads on early-FY2026 renewals against the (15)% to (7)% guide. The FY2026 GAAP (-9.0% to -1.0%) and cash (-15.0% to -7.0%) renewal spread guides were reaffirmed unchanged. Actual Q2 renewals cleared at -0.7% GAAP and -4.3% cash — running notably better than both guide midpoints for the quarter, though 1H26 blended is -7.4% GAAP and -9.6% cash, still within the annual band. Status: Resolved positively for Q2; watch full-year against the reaffirmed guide.

Disposition program milestones. Management disclosed $170M completed, $1.16B under LOI/PSA/deposits, and $1.10B in-process as of August 3 — cumulatively $2.43B against the $2.9B midpoint (84%). The $2.1B–$3.7B FY guide was reaffirmed. This is a meaningful specificity upgrade from Q1. Status: Resolved partially; watch for closings and cap rates.

Operating-pool placement of 311 Arsenal and 3000 Minuteman. 3000 Minuteman moved: the 159,947 RSF advanced-tech lease was executed and the space reclassified from redevelopment to operating in Q2, with expected occupancy in 2Q27. 311 Arsenal has LOIs of 108,800 RSF signed but has not yet been reclassified. Status: 3000 Minuteman resolved; 311 Arsenal continue monitoring.

2027 expiration backfilling. Q2 disclosure sizes the 2027 expiration cohort at 1.38M RSF / $100.5M annual rental revenue with expected 12–24 month downtime and a weighted-average March 2027 expiration. No specific tenant-level backfill data. The Q2 leasing beat is a favorable signal for backfilling capacity generally.

Continue monitoring

What to watch into next quarter

Q3 FFO/share step-up from the disposition timing benefit. Management explicitly guides that 3Q26 FFO will be higher than previously assumed because of the six-week disposition timing shift. If Q3 does not print notably above the $1.73 Q2 run rate, the $6.40 full-year midpoint gets harder to defend into Q4.

Q3 operating occupancy versus the 86.2%–87.8% year-end band. Q1 printed 87.7%, Q2 printed 86.9%. A Q3 print below 86.2% breaches the year-end low end at the third-quarter mark, forcing another guide cut before the year is done.

Disposition closings against the $2.43B already-identified pipeline. With 84% of the midpoint identified (completed + LOI + in-process), watch how much of the $1.16B LOI/PSA bucket actually closes, at what cap rates, and against a weighted-average September projected completion date.

Q3 leasing volume as follow-through. The 1.04M RSF Q2 beat needs at least one more quarter of confirmation to establish that leasing momentum is real rather than a lumpy build-to-suit or renewal timing effect. Management's own 3Q26 projected total-leasing bar shown in the supplemental is the reference point.

Full renewal spread trajectory against the reaffirmed (9.0)%–(1.0)% GAAP and (15.0)%–(7.0)% cash bands. Q2 cleared well inside both bands, but 1H26 blended (-7.4% GAAP / -9.6% cash) is closer to the middle. Watch 2H26 clearing rates as the 2026 and early-2027 expiration cohorts renew.

Whether the five 1.4M RSF projects under evaluation get individually named. Each named project is a potential future impairment or capital-reallocation disclosure. Watch for specifics and any incremental non-cash charges beyond the $1.45B already booked.

Full-year FFO/share outcome relative to the tightened $6.35–$6.45 range. With 1H26 FFO/share of $3.46, achieving the $6.40 midpoint requires $2.94 across Q3+Q4 — an implied step-up from the $1.73 Q2 run rate. Management's own disposition-timing narrative implies Q3 should carry more of that step-up than Q4, which is guided to the lower end of $1.40–$1.50.

Sources

Alexandria Real Estate Equities Q2 FY2026 Earnings Supplemental — https://www.sec.gov/Archives/edgar/data/1035443/000103544326000067/a2q26ex991supp.htm

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.