Timing note: August 3, 2026 is today, not tomorrow. ARE is scheduled to report 2Q26 results after the U.S. market close today, followed by its earnings call.
ARE enters 2Q earnings in the middle of a multi-quarter reset. The company’s central task is to stabilize occupancy and cash flow while reducing its development/capital burden and executing a large capital-recycling program. A headline FFO result will matter, but investors are likely to focus more on four operational questions:
The stock closed at $51.47 on July 31—up roughly 27% from the post-1Q-results close of $40.41, but about 7% below its late-June high. That recovery suggests investors have already credited ARE for some balance-sheet and capital-recycling progress, leaving little room for another vague update on occupancy or asset-sale timing.
In 1Q26, ARE reported:
The cause was not a surprise: approximately 657,000 RSF of previously identified key expirations became vacant in 1Q. Management also indicated that another 747,000 RSF of key lease expirations were expected to go vacant during 2026, with roughly 45% anticipated in 2Q.
Read-through for 2Q: occupancy and same-property NOI could remain under meaningful pressure. A sequential decline in occupancy would not necessarily invalidate the thesis, but it will need to be consistent with the company’s stated expiration schedule and accompanied by evidence that leasing demand is improving.
On the 1Q call, management indicated it expected approximately 900,000 RSF of 2Q leasing activity, versus 647,000 RSF in 1Q. The quality and composition of leasing will be at least as important as the total:
A key positive embedded in the 1Q update was 1.1 million RSF of already leased but not-yet-delivered space, expected to commence occupancy around September 2026 and generate approximately $68 million of annual rental revenue. The 2Q report should confirm whether that delivery timetable is unchanged. This is the clearest bridge to better second-half occupancy and NOI.
ARE’s 2026 plan depends heavily on capital recycling. At the end of 1Q, management’s midpoint assumed $2.9 billion of dispositions and sales of partial interests for the year, with a weighted-average projected completion date of August 2026. It had identified or put in process approximately $2.33 billion of transactions, including only about $151 million that was completed or pending as of the April earnings release.
This makes the upcoming call especially consequential:
There is an important trade-off: later sales support near-term FFO, because ARE keeps the income from the assets longer, but earlier sales improve leverage and reduce short-term funding needs. Investors should prioritize balance-sheet progress and the credibility of transaction execution over a modest quarter-to-quarter FFO benefit.
At 1Q, ARE retained its 2026 adjusted FFO/share guidance of $6.30–$6.50, midpoint $6.40, while narrowing the range. It also projected 4Q adjusted FFO/share of $1.40–$1.50, reflecting lower capitalized interest, expected dispositions, and continuing occupancy pressure.
Management’s full-year framework implies that 2Q and 3Q combined must generate about $3.22/share at the midpoint after 1Q’s $1.73 and the projected 4Q midpoint of $1.45.
The report’s central question is therefore not simply whether 2Q FFO beats or misses by a few cents; it is whether management can reaffirm the $6.40 midpoint without relying on more favorable sale timing, investment gains, or other non-core offsets.
Specific guidance items to watch:
| Metric | 1Q26 Framework | What investors should look for in 2Q |
|---|---|---|
| 2026 adjusted FFO/share | $6.30–$6.50 | Reaffirmation, range changes, and underlying assumptions |
| Year-end operating occupancy | 86.2%–87.8% | Whether 2Q expirations or leasing alter the outlook |
| Same-property NOI | (10.5%) to (8.5%) | Evidence of a second-half inflection |
| 2026 dispositions / partial interests | $2.1B–$3.7B | Closed volume, binding pipeline, pricing, and timing |
| Construction spending | $1.5B–$2.0B | Further cuts, pauses, or alternative-use conversions |
| 4Q26 net debt / adjusted EBITDA | 5.6x–6.2x | Progress toward deleveraging and commercial-paper reduction |
The balance sheet remains a relative strength. At 1Q-end, ARE had approximately $4.2 billion of liquidity, a 10-year weighted-average debt term, and about 96% fixed-rate debt. However, net debt and preferred stock to annualized adjusted EBITDA had risen to 6.8x, versus a targeted 4Q26 range of 5.6x–6.2x.
The company also announced in July that it had locked in terms for a replacement $5 billion unsecured revolving credit facility, with an option to expand commitments by another $1 billion. The facility is expected to become effective by October 1, 2026, subject to closing conditions. This is a meaningful liquidity and refinancing positive, but it does not remove the need to execute asset sales and reduce commercial-paper borrowings.
This is primarily a credibility-and-execution quarter. The near-term operating print is likely to remain challenged because of known lease expirations and still-soft life-science leasing conditions. A favorable reaction would most likely require some combination of:
Conversely, a guidance cut, delayed or less-certain dispositions, additional tenant distress, or slippage in the September occupancy bridge would reinforce the concern that ARE’s occupancy trough and FFO reset extend beyond 2026.