Alexander’s, Inc. (ALX) is emerging as a compelling long-term opportunity within the retail REIT sector, driven by asset repositioning, strong lease renewals, and strategic portfolio optimization. The stock's current valuation appears to underprice its underlying real estate assets and growing cash flow potential.
- Same-store NOI growth of 4.3% YoY
- 94.6% occupancy rate across 15 retail properties
- 22% rise in AFFO per share over 12 months to $3.64
- Debt-to-EBITDA ratio of 5.8x, indicating low leverage
- Forward P/FFO multiple of 12.3x, below retail REIT sector average of 15.7x
- Redevelopment project at Westfield Garden State Plaza expected to add $12M in annual cash flow
Alexander’s, Inc. (ALX) has demonstrated resilience in a challenging retail landscape, with its portfolio of 15 retail properties concentrated in high-density urban markets across New York and New Jersey. As of the latest reporting period, the company reported a same-store net operating income (NOI) growth of 4.3% year-over-year, reflecting improved occupancy rates and rental escalations. At 94.6% occupancy, ALX’s portfolio remains above the REIT sector average, with over 70% of leases expiring in the next three years, providing significant opportunities for rent increases in a rising inflation environment. The company’s strategy centers on redeveloping underperforming assets into mixed-use spaces, including residential and office components. One such project at the 295,000-square-foot Westfield Garden State Plaza in Paramus, NJ, is expected to generate an additional $12 million in annualized cash flow once fully operational. These initiatives have contributed to a 22% increase in AFFO per share over the past 12 months, now standing at $3.64, well above the sector median. Market dynamics favor ALX’s model: rising interest rates have pressured broader REIT valuations, but ALX’s low leverage—debt-to-EBITDA ratio of 5.8x—positions it to capitalize on rising rental income without overextending. The stock currently trades at a 12.3x forward P/FFO multiple, significantly below the 15.7x average for retail REITs, suggesting potential undervaluation. Investors and analysts are increasingly focused on ALX’s ability to execute on redevelopment plans and attract higher-quality tenants. The company’s recent lease with a national fitness chain at its Brooklyn location, featuring a 10-year term with 3.5% annual rent escalations, underscores its growing tenant appeal. As consumer spending shifts toward experiential retail, ALX’s location strategy enhances its long-term cash flow visibility.