Longleaf Partners Q2 2026 Report: Alexander’s Inc. Shines as Portfolio Star

Longleaf Partners’ Q2 2026 report highlights Alexander’s Inc. (NYSE:ALX) shares delivering the strongest contribution to the portfolio with an unexpected surge.

Portfolio Performance Overview

■-2.47% return, lagging behind Russell 2000’s +21.49% and Russell 2000 Value’s +17.19%.

■Unexpected moves in IT and industrial sectors drove a tilt toward speculative equities.

■The fund stresses that holdings appear attractive on P/V and P/FCF metrics, yet market winners have raced far beyond fair value.

Alexander’s Quarterly Dynamics

■Closing price on July 13, 2026: $276.21, market cap $1.44 billion.

■One‑month return +7.14%, 52‑week gain +16.68%.

■Finalized sale of a non‑core asset and a full‑lease agreement with Target for its flagship Queens shopping center boosted cash flow.

■Steady FCF generation and a robust balance sheet are narrowing the price‑to‑value gap.

Competitive REIT Landscape & Strategic Moves

■Mirrors Empire State Realty Trust's offensive stance, yet Alexander’s delivers a larger impact via asset divestiture and leasing.

■Hedge funds hold ALX in 12 portfolios at both Q1 and Q2 ends, indicating cautious interest.

■Compared to AI‑centric stocks, ALX offers lower volatility and sustainable growth prospects.

Key Takeaways for Investors

■FCF growth and asset sales are pivotal for closing the short‑term valuation disparity.

■The Target lease signals a broader revival of rental income in retail REITs.

■Sector volatility (IT and industrial) may pressure overall fund performance; ALX provides a stabilizing counterweight.

■Long‑term investors should monitor ALX’s price‑to‑earnings and price‑to‑free‑cash‑flow ratios, as current levels may be approaching fair value.

Markets view Alexander’s Inc.’s strategic asset divestiture and marquee tenant deal as a recovery cue for the REIT sector. Nevertheless, the fund’s overall underperformance underscores lingering sector‑wide risks. In this context, FCF‑focused valuations and a narrowing price‑earnings gap render the stock attractive for medium‑term buying. – Defne Aydın, Director of Geopolitical Risk & European Markets