BXP (BXP) Q2 2025 Earnings Call July 30, 2025 10:00 AM ET Company ParticipantsHelen Han - VP - IROwen Thomas - Chairman & CEODouglas Linde - President & DirectorMichael LaBelle - EVP, CFO & TreasurerJamie Feldman - MD & Head - REIT ResearchJohn Kim - MD - U.S. Real EstateNicholas Yulico - Managing DirectorJana Galan - DirectorHilary Spann - Executive Vice President of New York RegionCaitlin Szczupak - Vice PresidentVikram Malhotra - Managing DirectorOmotayo Okusanya - Managing Director - Head of US REIT Res ...

BXP (BXP) Q2 2025 Earnings Call July 30, 2025 10:00 AM ET Speaker0Day, and thank you for standing by. Welcome to Q2 twenty twenty five BXP Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please b ...

Key Takeaways BXP's Q2 FFO per share of $1.71 beat estimates but fell 3.4% from the prior-year quarter.Quarterly revenues rose 2.1% to $868.5M, driven by solid leasing activity and higher rental income.BXP revised 2025 FFO per share guidance upward to a range of $6.84-$6.92 from $6.80-$6.92.Boston Properties Inc.’s (BXP)  second-quarter 2025 funds from operations (FFO) per share of $1.71 surpassed the Zacks Consensus Estimate of $1.67. However, the reported figure fell 3.4% year over year.BXP’s quarterly re ...

Group 1 - Boston Properties reported revenue of $805.94 million for the quarter ended June 2025, a year-over-year increase of 2% [1] - The EPS for the same period was $1.71, compared to $0.51 a year ago, indicating significant growth [1] - The reported revenue exceeded the Zacks Consensus Estimate of $800.88 million, resulting in a surprise of +0.63% [1] Group 2 - The company delivered an EPS surprise of +2.4%, with the consensus EPS estimate being $1.67 [1] - Occupancy rate of in-service properties was 86.4%, slightly below the estimated 86.7% [4] - Revenue from parking and other sources was $34.8 million, exceeding the estimated $34.08 million, representing a +0.5% change year-over-year [4] Group 3 - Hotel revenue was reported at $14.77 million, below the estimated $15.56 million, reflecting a -0.3% change compared to the previous year [4] - Revenue from development and management services was $8.85 million, surpassing the estimated $8.23 million, showing a +39.3% change year-over-year [4] - The net earnings per share (diluted) was $0.56, exceeding the average estimate of $0.45 from six analysts [4] Group 4 - Shares of Boston Properties returned +3.2% over the past month, compared to the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Boston Properties (BXP) reported quarterly funds from operations (FFO) of $1.71 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, but down from $1.77 per share a year ago, representing an FFO surprise of +2.40% [1] - The company posted revenues of $805.94 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.63%, compared to year-ago revenues of $790.55 million, and has topped consensus revenue estimates three times over the last four quarters [2] - The current consensus FFO estimate for the coming quarter is $1.75 on revenues of $808.95 million, and for the current fiscal year, it is $6.86 on revenues of $3.23 billion [7] Group 2 - Boston Properties shares have underperformed the market, losing about 6.4% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The Zacks Industry Rank for REIT and Equity Trust - Other is currently in the top 34% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8] - The estimate revisions trend for Boston Properties was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]

Supplemental Operating and Financial Data for the Quarter Ended June 30, 2025 Exhibit 99.1 THE COMPANY BXP, Inc. (NYSE: BXP) (formerly known as Boston Properties, Inc.) ("BXP" or the "Company") is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP has delivered places that power progress for our clients and communities for more than 5 ...

Core Insights - BXP, Inc. is expected to report second-quarter 2025 results on July 29, with anticipated year-over-year revenue growth but a decline in funds from operations (FFO) per share [1][10] Company Performance - In the last reported quarter, BXP met the Zacks Consensus Estimate for FFO per share, driven by strong leasing activity, although higher interest expenses negatively impacted year-over-year FFO growth [2] - Over the past four quarters, BXP's FFO per share has surpassed the Zacks Consensus Estimate once, missed once, and met in the remaining periods, with an average beat of 0.58% [3] Market Environment - The U.S. office market is showing signs of stabilization despite economic uncertainty, with net absorption being negative in the second quarter but improving on a four-quarter rolling basis [4] - Demand for high-quality office spaces is increasing, with Class A absorption positive in 48 out of 92 U.S. markets, while new construction activity is declining significantly [5] Vacancy and Leasing Trends - Overall U.S. office vacancy increased slightly to 20.8%, up 20 basis points quarterly and 90 basis points year-over-year, with sublease activities also rising slightly [6] BXP's Projections for Q2 - BXP is expected to benefit from the growing demand for quality office spaces, with rental revenues projected to increase by 4.3% year-over-year [7] - The Zacks Consensus Estimate for second-quarter revenues is $801 million, reflecting a 1.31% increase from the prior year [8] Challenges Faced - Occupancy rates are expected to decline by 40 basis points to 86.5% due to high competition and significant lease expirations [9] - High interest expenses are projected to increase by 9.4% year-over-year, which may negatively impact BXP's FFO per share [9][10] Analyst Sentiment - Analysts have slightly revised the Zacks Consensus Estimate for second-quarter FFO per share down to $1.67, indicating a 5.65% decrease from the previous year [11] - The current Earnings ESP for BXP is -0.50%, and it holds a Zacks Rank of 4 (Sell), suggesting limited potential for a positive surprise in FFO this quarter [12]

Core Viewpoint - BXP, Inc. has seen a significant stock price increase of 10.3% over the past month, outperforming both the Zacks REIT and Equity Trust - Other industry and the S&P 500 composite [1][9] Group 1: Company Performance - BXP's portfolio consists of premier office assets in high-rent, high-barrier-to-entry markets, allowing for stable rental revenues even during economic downturns [2] - The company executed 91 leases totaling approximately 1.1 million square feet in Q1 2025, a 25% increase year over year, with total leasing volume reaching nearly 1.4 million square feet by April 29, 2025 [6][9] - Management anticipates occupancy rates to stabilize between 86.5% and 88% in 2025, with an estimated occupancy rate of 86.9% [7] Group 2: Tenant and Market Dynamics - BXP's tenant roster includes industry leaders, with a weighted average remaining lease term of 9.3 years for its 20 largest clients, ensuring stable cash flows [8] - The company is converting office buildings to laboratory/life science spaces in response to strong demand from life-science tenants, with two projects under development totaling 0.9 million RSF and an estimated investment of $675.1 million [8] Group 3: Capital Management and Development - BXP has executed a capital reallocation strategy, acquiring properties worth $7.6 billion and disposing of $8.2 billion in non-core assets since 2010, reflecting prudent capital management [11] - The company has a development pipeline of nine projects with an estimated total investment of around $2.26 billion, expected to add approximately $158 million to its share of NOI cash upon stabilization [12] Group 4: Market Challenges - The current economic environment, characterized by elevated interest rates and geopolitical concerns, is causing companies to delay leasing decisions, which may impact BXP's ability to retain tenants at higher rents [13][20] - Management expects a slight decline in occupancy during the first half of 2025 due to larger lease expirations [14] Group 5: Valuation Metrics - BXP is currently trading at a forward 12-month price-to-FFO of 10.26X, which is below the industry average of 15.59X and lower than peers like SL Green Realty Corp. and Vornado Realty Trust [18][19] - Despite trading at a discount compared to industry peers, the valuation disparity may not be as favorable as it appears [19] Group 6: Future Outlook - Strong demand for top-tier office space and BXP's ability to deliver quality offerings are expected to support leasing momentum and rental rate increases [20] - However, macroeconomic uncertainties may lead to cautious leasing decisions from businesses, impacting BXP's near-term performance [21]

Company Overview - Welch's is a leading fruit-based food, beverage, and agricultural cooperative founded over 150 years ago, headquartered in Massachusetts, and owned by 650 family farms across the United States [4] - The company's mission focuses on nourishing consumers through the goodness of fruit, offering products such as real fruit juices, sparkling juices, and fruit spreads [4] New Headquarters - Welch's officially opened its new headquarters in Waltham, Massachusetts, on June 17, featuring a 60,000 square-foot facility designed for modern lab space and collaboration [2][3] - The new headquarters aims to enhance operational efficiency, support current employees, attract top talent, and create new opportunities for the company [2] - The facility was developed in partnership with SGA and project managed by A/E/C solutions, emphasizing strategic visibility and accessibility off I-95 [2] Corporate Growth - The new headquarters will accommodate 200 corporate employees, marking a significant step in Welch's growth and commitment to its legacy [3] - The move to Waltham is seen as a pivotal moment for the brand, aligning with its ambitious goals for future development [1][2] Community Engagement - The grand opening included remarks from local officials and showcased Welch's latest product innovations, fostering community engagement [1] - The event featured local food vendors, highlighting the company's connection to the local business community [1] Real Estate Context - BXP, the developer of the new headquarters, is the largest publicly traded developer and manager of premier workplaces in the U.S., with a portfolio totaling 53.4 million square feet as of March 31, 2025 [5] - BXP's focus on creating dynamic business environments aligns with Welch's vision for its new headquarters [2][5] Design and Sustainability - SGA, the architectural firm involved, specializes in innovative design solutions across various sectors, emphasizing sustainability and community enrichment [6] - The design of the new headquarters reflects a balance between progressive concepts and practical business needs, supporting Welch's operational goals [2][6]

Core Insights - BXP Inc. (BXP) shares have increased by 11.3% over the past month, significantly outperforming the industry growth of 0.7% [1] - The company has a strong portfolio of Class A office assets in select U.S. markets, driven by healthy tenant demand and rental growth [1] Leasing Activity - In Q1 2025, BXP signed over 1.1 million square feet of leases, a 25% increase year over year, with an additional 270,000 square feet signed post-quarter, totaling nearly 1.4 million square feet [2][7] Growth Drivers - BXP is positioned to benefit from rising demand for high-quality office spaces, particularly from technology and life science sectors, with ongoing conversions of office buildings to lab spaces [3] - The company has two life-science projects under development, covering 0.9 million RSF with an estimated investment of $675.1 million, and is 71% pre-leased [3] Market Conditions - The return-to-office policies and low unemployment rates are expected to boost demand for BXP's high-quality office properties, which include tenants like Salesforce, Google, and Microsoft [4] - Long-term leases with financially stable tenants ensure consistent cash flows for the company [4] Capital Management - BXP has executed a capital reallocation strategy, acquiring properties worth $7.6 billion and disposing of assets for $8.2 billion since 2010, reflecting prudent capital management [5] - The company has a robust development pipeline with nine projects underway, estimated to require around $2.26 billion in total investment, projected to add approximately $158 million to net operating income upon stabilization [8] Financial Position - As of Q1 2025, BXP had cash and cash equivalents of $398.1 million, with a net debt to EBITDAre ratio of 8.33X and a fixed charge coverage ratio of 2.38 [9] - The company's solid financial position and capital management practices position it well to navigate economic uncertainties [9]