Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have spent our lives distinguishing between a wonderful business having a bad year and an average business that had a wonderful decade. Alexandria Real Estate Equities, we have concluded, is the latter. From 1994 through 2021, this company looked like it owned a toll bridge: irreplaceable lab campuses in Cambridge and South San Francisco, 95% occupancy, rising rents, a tenant roster of the world's great pharmaceutical companies. Then the tide went out. What was revealed was not fraud or folly — management here is honest and capable — but something more fundamental: lab space can be built by anybody with capital, and between 2020 and 2023, everybody with capital built it. National lab vacancy now sits near 23%, and above 30% across Alexandria's three largest markets. Occupancy has slid from the mid-90s to 86.9%. Same-property NOI fell 10.6% last quarter.
Recent filings analysed: 8-K (2026-08-03), 10-Q (2026-08-03), 8-K (2026-07-09), 8-K (2026-05-14).
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