# How Alexandria Real Estate Equities makes money

CXProWealth Business Lens · Alexandria Real Estate Equities (ARE) · Q3 FY2026

Read from the 10-Q for the period 2026-07-01 to 2026-09-30, filed 2026-10-26 with the SEC (accession 0001035443-26-000076): https://www.sec.gov/Archives/edgar/data/1035443/000103544326000076/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $671.2M (-10.7% on the year)
- Operating income: — (operating margin —)
- Net income: -$637.7M (net margin -95.0%)
- Gross margin: not reported (the company reports expenses by nature: no cost of revenue or gross profit line exists)
- Free cash flow: —
- Cash conversion (operating cash flow / net income): -0.54x
- Capital expenditure: — of revenue

## Where the money goes (Q3 FY2026)

- Income from rentals → Total revenues: $653.6M
- Other income → Total revenues: $17.6M
- Total revenues → Total expenses: $669.5M
- Total expenses → Rental operations: $227.9M
- Total expenses → General and administrative: $40.9M
- Total expenses → Interest: $79.7M
- Total expenses → Depreciation and amortization: $304.4M
- Total expenses → Impairment of real estate: $637.9M
- Total revenues → (Loss) gain on early extinguishment of debt: $1.7M
- Net loss → Total expenses: $621.4M
- Net loss → (Loss) gain on early extinguishment of debt: $1.6M
- Net loss → Net income attributable to noncontrolling interests: $38.8M

## Where the revenue comes from

### Products and services (Consolidated Statements of Operations)

| Member | Value | Share |
|---|---:|---:|
| Income from rentals | $653.6M | 97.4% |
| Other income | $17.6M | 2.6% |

The members sum to total revenue.

### Segments (Segment Information (Details))

| Member | Value | Share |
|---|---:|---:|
| Reportable Segment, Aggregation before Other Operating Segment | $668.9M | 99.7% |
| Other Operating Segment | $2.3M | 0.3% |

The members sum to total revenue.

## Key insights

### The write-downs equal the whole quarterly loss

Impairment on buildings held for sale matched the stockholders' loss almost dollar for dollar: the loss is about asset prices.

Impairment of real estate was $637.9M this quarter against $323.9M a year earlier, and equalled 95.0% of total revenues of $671.2M. The net loss attributable to stockholders was $637.7M, so the write-down alone matches the loss. The filing ties the quarter's charge to assets held for sale. _(from the filing)_
Total expenses reached $1.29B, 192.3% of revenue. The loss per share widened to $3.74 from $1.38 a year earlier. Gain on sales of real estate was zero, against $9.4M in the same quarter last year. _(from the filing)_
An impairment records the gap between the value on the books and what a buyer will pay. It costs no cash in the quarter, but it says part of the asset base is worth less than it cost. Charges of this size on buildings marked for sale suggest the sale program is clearing at prices below carrying value. _(analysis)_

### Deep accounting loss, yet the buildings still produce cash

Operating cash flow equalled 50.9% of revenue, so the buildings fund the business while their book values are cut.

Operating cash flow was $341.8M in the quarter, 50.9% of revenue, against $433.5M a year earlier. Depreciation and amortization of $304.4M, 45.4% of revenue, and the impairment charge are both non-cash, which is why the accounting loss and the cash flow point in opposite directions. _(from the filing)_
The pattern is not new. In FY2025 the company reported a net loss of $1.43B and operating cash flow of $1.41B. _(from the filing)_
Cash flow is what gives the company time to sell assets on its own schedule rather than a forced one. It is also lower than a year ago, as sold buildings and vacant space take rent away, so the cushion is thinner even while it holds. _(analysis)_

### Finished projects move interest onto the income statement

Interest rose 45.3% as less was capitalized into construction, so a smaller pipeline lifts reported costs even with steady debt.

Interest expense was $79.7M, up 45.3% from $54.9M, and rose to 11.9% of revenue from 7.3% a year earlier. The filing shows gross interest almost unchanged: the increase came from capitalizing less interest into construction as projects were delivered, paused or sold. _(from the filing)_
General and administrative costs rose 40.0% to $40.9M from $29.2M, which the filing attributes to the timing of a compensation restructuring in the prior-year quarter, so part of that jump is a comparison effect. _(from the filing)_
While a building is under construction, interest on the money funding it is added to the building's cost. Once it is delivered or paused, that interest becomes an expense. A smaller pipeline therefore raises reported interest without new borrowing, and rent from delivered buildings has to carry it. _(analysis)_

## For members

Signed-in members read, on the page: the investor's and the founder's views of Alexandria Real Estate Equities (its fundamentals against its peers, where the profit is made, how the model works, where every $100 of revenue goes against the industry, the path to scale), its performance over time with every line as filed, and the edge and the risks. Membership is free.

## Member research

Signed-in members read, on the page: what Alexandria Real Estate Equities's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Alexandria Real Estate Equities 10-Q for the period to 2026-09-30: https://www.sec.gov/Archives/edgar/data/1035443/000103544326000076/ (2026-10-26)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-03 · as of 2026-11-03