Alexandria Real Estate Equities on Jan. 5 raised its public stock offering from 5 million to 6 million shares, which will be offered for sale at a price of $164 per share. Shares closed at $170.59 on Tuesday.
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Alexandria Real Estate Equities (ARE) also granted the underwriters a 30-day option to purchase up to 0.9 million additional shares. The offering is expected to close by Jan. 8, 2021, subject to closing conditions.
The real estate investment trust said that the net proceeds from the offering will be used to finance pending acquisitions, including 401 Park Drive, 201 Brookline Avenue and a related future development opportunity in the heart of the company’s Greater Boston life science cluster market. The remaining proceeds will be used for general working capital and other corporate purposes, including the reduction of the outstanding balance on the company’s unsecured senior line of credit and commercial paper program.
UBS analyst Brent Dilts recently initiated coverage on the stock with a Hold rating and a price target of $166 (2.7% downside potential).
According to Dilts, the company’s accelerating fundamentals in its core lab/tech markets are offset by slowing demand from the tech and other traditional office tenants that make up 19% of ARE’s tenant base. (See ARE stock analysis on TipRanks)
Meanwhile, the stock scores a cautiously optimistic outlook from the rest of the Street. The analyst consensus of a Moderate Buy is based on 1 Buy and 1 Hold. The average price target of $175 implies 2.6% upside potential at current levels.
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