Alexandria Real Estate Equities

Alexandria Real Estate Equities is a specialised property trust that develops and owns laboratory and office campuses for the life-sciences industry, clustered in hubs such as Boston, San Francisco and San Diego. Its tenants are biotech and pharmaceutical firms on long leases, which historically gave it dependable rent, though a glut of new lab space and softer demand have pressured the shares. As a real estate investment trust, Alexandria is required to distribute most of its taxable income, and it offers an above-average yield that has grown for many years. The concern is that rising vacancies and heavy development spending have strained cash flow and cast doubt on future growth. Investors get a meaningful payout, but one carrying more risk than its long record might suggest.