3 REITs That Beat Analysts' Earnings Estimates This Week

During earnings season, some investors must decide whether to await earnings reports before purchasing shares of stocks they've been monitoring, while others contemplate whether it's better to hold or sell the stocks they already own before the reports are released.

One ironic thing about Wall Street's reaction to earnings is that sometimes whether a company beats or misses estimates holds more significance than whether the actual earnings — or funds from operations (FFO) for most real estate investment trusts (REITs) — and revenue are better or worse than the same quarter year over year. There are also instances when revenue and forward guidance mean more than earnings in determining how Wall Street will react.

Take a look at some of the REITs that have surpassed the analysts' estimates:

Alexandria Real Estate Equities Inc. ARE is a Pasadena, California-based REIT with a portfolio of 850 tenants in 430 properties devoted to life science, agtech and technology companies in what its website calls "top innovation clusters." These areas include cities like Boston, New York City, Seattle and San Francisco.

On July 24, Alexandria Real Estate released its second-quarter operating results. FFO of $2.24 was higher than FFO of $2.10 in the second quarter of 2022 and beat the estimates by $0.04.  Revenue of $713.9 million beat the estimates of $694.54 million and was 10.9% ahead of revenue of $713.9 million in the second quarter of 2022. Alexandria Real Estate also announced its full-year 2023 guidance for FFO of $2.72-$2.78. Street estimates were for $3.09.

Shares are up about 5% this week.

Brandywine Realty Trust BDN is a Philadelphia-based REIT that as of March 31 owns, develops, leases and manages 163 diverse mixed-use commercial properties from the Northeast to Texas. It has a total of 23 million square feet of rentable space.

On July 25, Brandywine Realty Trust released second-quarter operating results. FFO of $0.29 per share beat the estimates by $0.02 but was down 17.14% from FFO of $0.35 in the second quarter of 2022.  Revenue of $125.88 million missed the estimate of $127.63 million but was a 1.48% increase over revenue of $124.04 million in the second quarter of 2022. Shares have risen over 10% since the report was released.

Empire State Realty Trust Inc. ESRT is a New York City-based diversified REIT that owns and operates a portfolio of office, retail and multifamily properties in the greater New York metro area. Empire State Realty is the owner of the Empire State Building, one of the world's most famous buildings. As of March 31, Empire's portfolio included 8.9 million square feet of office space, 718,000 square feet of retail space, and 721 residential units in three multifamily properties.

On July 26, Empire State Realty Trust released its second-quarter operating results. FFO of $0.26 beat the estimates of $0.22 but was 10.34% below FFO of $0.29 in the second quarter of 2022. Revenue of $154.6 million missed the estimates by $9.6 million but was 3.52% above revenue of $149.34 million in the second quarter of 2022.

Empire State Realty is a REIT that has not performed well for a long time, but it rose over 5% following the release of earnings. Empire State Investors can take hope that perhaps this is the beginning of an improvement in price performance.

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