Market value: $12.8 billion
When stocks as a whole start to struggle, investors are often quick to seek out other kinds of assets … commodities, bonds, and real estate. That’s why Jonathan Pappas, communications consultant for real estate PR firm Solomon McCown, thinks real estate investment trust (REIT) Alexandria Real Estate Equities (ARE, $126.98) could be a compelling alternative in the midst of this market turbulence.
Pappas explains, “After last week’s Q1-2018 Alexandria earnings call, investors and analysts for the first time in Alexandria’s 24-year history heard Joel and leadership give increased visibility into their development/redevelopment pipeline for 2018-2019-2020. This news sent Alexandria’s stock up 4% on May 1.”
He adds, “Another reason why the Street was excited about Alexandria’s long-term growth was because these Class A lab/office buildings currently under construction or pre-construction are already more than 80% pre-leased, on average – guaranteed cash flow over the next several years.”
That impending cash flow makes ARE a lower-risk bet than many other equities, and REITs, when the overall market is being shaken and stirred.
The kicker: Alexandria’s first-quarter top and bottom lines were both better than analysts were expecting. Revenues were up a healthy 18%, year-over-year, adding to the bullish response to the company’s new forward-looking transparency.