Company Reports

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns 164 properties consisting of approximately 51.1 million rentable square feet of space, which includes six properties currently under construction.

BXP reported funds from operations of $1.78 per share and cash same-store net operating income increased 0.8% in the second quarter.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns 164 properties consisting of approximately 50.4 million rentable square feet of space. The firm has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

BXP reported funds from operations of $1.59 per share and a same-store net operating income decline of 0.4% in the first quarter.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns 179 properties consisting of approximately 52.6 million rentable square feet of space. The firm has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

BXP reported funds from operations of $1.76 per share and cash same-store net operating income growth of 1.7% in the fourth quarter.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns over 180 properties consisting of approximately 53 million rentable square feet of space. The firm has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

BXP reported $1.74 per share in funds from operations during the third quarter, down 3.9% on a year-over-year basis. The third-quarter FFO exceeded the midpoint due to portfolio outperformance, as leasing momentum remains solid, especially in higher-quality buildings in central business districts.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns over 180 properties consisting of approximately 53 million rentable square feet of space. The firm has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

BXP reported $1.71 per share in funds from operations during the second quarter, down 3.4% on a year-over-year basis. Shares have rallied about 20% from mid-April lows as tariff and macroeconomic uncertainty eased, but the volatility reflects inherent risks in the outlook.

BXP reported $1.64 per share in funds from operations, or FFO, during the first quarter, down 5.2% on a year-over-year basis. The stock has sold off considerably in recent months anticipating macroeconomic weakness that will dent employment creation thereby impacting office leasing volumes.

Performance of the REIT sector remains negatively correlated with interest rate movements with performance over the past three years demonstrating strong statistical relationship with 10-year US Treasury movements.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns over 180 properties consisting of approximately 53 million rentable square feet of space. The company has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

BXP reported $1.79 per share in funds from operations for the fourth quarter, down 1.6% year over year. Leasing momentum remained extremely strong for the company, but we were slightly disappointed by management's 2025 guidance.

Over the past few years, we have observed an inverse relationship between share prices in the REIT sector and interest-rate movements. We believe a major reason is that all commercial real estate valuations are connected to interest rates. Capitalization rates directly indicate the return expectations for a real estate investment and expectations for risk and growth. Historically, we have observed that commercial real trades at cap rates consistently spread above the 10-year US Treasury. If interest rates rise, investors will require a higher return, and thus a higher cap rate, to accept the risk associated with an investment in a real estate asset. Since return expectations have held relatively steady for most real estate sectors over the past few years, higher cap rates translate to falling prices for real estate.

No-moat-rated BXP posted a decent set of numbers in the third quarter as the firm reported funds from operations of $287 million or $1.81 per share down 3% compared with the $293 million or $1.86 per share in the third quarter of the previous year. The company slightly updated its 2024 full-year FFO guidance to $7.09-$7.11 per diluted share, a decrease of approximately $0.02 per share at the midpoint. We are maintaining our $91 per share fair value estimate for BXP after incorporating the third-quarter results.

Despite a rally over the past two months, we still view the US REIT sector as being undervalued. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors led combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years, with many reaching historical levels of net operating income growth, the REIT sector has underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that the cause has been due to the sector's negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. We believe that US REITs will continue to see share price movements that are inverse of interest rate movements.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns over 180 properties consisting of approximately 53 million rentable square feet of space. The company has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.3 million square feet of life sciences space and has significant potential for future development here.

No-moat-rated BXP posted a middling set of numbers in the second quarter as the firm reported funds from operations, or FFO, of $278 million or $1.77 per share, down 5% compared with the $293 million or $1.86 per share in the second quarter of the previous year. The company slightly updated its 2024 full-year FFO guidance to $7.09-$7.15 per diluted share, an increase of approximately $0.08 per share at the midpoint. The higher FFO guidance was mainly due to $0.05 per share of lower-than-projected noncash interest expense on the reassessment of the finance lease with the rest related to better performance of the company's operating portfolio. We are maintaining our $91 per share fair value estimate for BXP after incorporating the second-quarter results.

The US REIT sector remains significantly undervalued, in our perspective. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past two years, with many REITs reaching historical levels of net operating income growth, the sector has underperformed the broader equity markets over the past two years. We believe that the cause has been the sector’s negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, we don’t believe that higher rates significantly change our fair value estimates for the sector. Additionally, interest rates are down from the October 2023 highs, and REIT share prices have generally inversely followed the movements of the US 10-year Treasury.