Alexandria Real Estate Equities (ARE)

The sleeper story is the $79M capitalized interest cliff hitting 2026 FFO as they pause/sell development projects, creating a mechanical earnings headwind independent of leasing recovery. Management is calling the occupancy bottom with H2 2026 recovery, but Q1 gets ugly first with 1.2M sqft of known move-outs. Joel's warning that 'measles and polio may be back to some extent' captures the regulatory uncertainty still weighing on biotech demand. The binding constraint isn't capital or balance sheet strength, it's the government shutdown freezing FDA submissions and biotech decision-making. My view changes if Q1 2026 occupancy decline is smaller than the 300+ bps implied by known move-outs, suggesting their pipeline conversion is better than historical averages.