Jim Cramer on Alexandria Real Estate: “It’s Been Suffering From Muted Tenant Demand for a While”

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is one of the S&P 500 and Nasdaq-100 stocks Jim Cramer commented on. Cramer noted what the company’s high dividend yield could mean, as he said:

“The third worst performer, very interesting, it’s a REIT, Alexandria Real Estate Equities, down almost 50%. This real estate investment trust focuses on office space for the life sciences industry, including laboratories, and it’s been suffering from muted tenant demand for a while. That’s somewhat the result of a weaker IPO market in the past few years, which made it harder for small biotechs to raise money and therefore take down real estate. Last month, after a couple of years of bleeding, Alexandria Real Estate, they bit the bullet and slashed the dividend by 45%, becoming another cautionary tale about the illusory high yield so many people seek. And before the cut, the dividend yield was sitting just under 10%. It’s still pretty high at almost 6%. Let’s hope they can get their act together. Remember, a high yield is often a sign of real problems, not just a juicy opportunity.”

Photo by Adam Nowakowski on Unsplash

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is a life science REIT that builds and manages collaborative innovation campuses to support research and biotech growth.

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Disclosure: None. This article is originally published at Insider Monkey.