Financial Data and Key Metrics - FFO per share for Q2 2024 was $0.06 above the forecast and $0.05 above market consensus, with the midpoint of 2024 FFO per share guidance raised by $0.08 [5] - The company completed 1.3 million square feet of leasing in Q2 2024, a 41% increase compared to Q2 2023, close to the 10-year average leasing volume for the second quarter [5] - Weighted average lease term for leases signed in Q2 2024 remained long at nine years [5] - Portfolio NOI for Q2 2024 was $0.01 ahead of the midpoint of guidance, primarily due to lower operating expenses [31] - Full-year 2024 FFO guidance increased to $7.09 to $7.15 per share, an $0.08 increase from the prior guidance midpoint [33] Business Line Data and Key Metrics - Leasing activity in Q2 2024 included 73 transactions: 37 lease renewals for 830,000 square feet and 36 new leases for 500,000 square feet [15] - 45% of absorption came from growth in the existing client pool [15] - East Coast markets dominated leasing activity, with 445,000 square feet in New York, 343,000 square feet in Boston, and 351,000 square feet in Northern Virginia, accounting for 86% of total activity [16] - West Coast activity was primarily in San Francisco, with 146,000 square feet leased [16] - Starting rents on leases signed in Q2 2024 increased by 8% in Boston, remained flat in New York, decreased by 6% in D.C., and decreased by 7% on the West Coast [17] Market Data and Key Metrics - Premier workplaces, representing the highest quality 6.5% of buildings, continue to outperform the broader market, with direct vacancy at 13% compared to 18.5% for the broader market [8] - Net absorption for premier workplaces was positive 6.9 million square feet over the last three years, compared to negative 22.8 million square feet for the broader market [8] - Asking rents for premier workplaces are 51% higher than the broader market [8] - Office sales volume in Q2 2024 remained muted at $6.9 billion, well below pre-2022 levels [9] Company Strategy and Industry Competition - The company is focused on premier workplaces, leveraging its strong balance sheet and high-quality portfolio to gain market share during a period of market dislocation in the office sector [11] - BXP is actively pursuing acquisitions but has seen limited opportunities in the premier workplace segment [10] - The company is advancing a significant development pipeline, including 10 office, lab, retail, and residential projects totaling 3.1 million square feet and $2.3 billion of investment [11] Management Commentary on Operating Environment and Future Outlook - Management highlighted the positive impact of lower interest rates and stronger corporate earnings growth on BXP's performance [7] - The company expects occupancy to increase over time as leasing volumes continue to exceed current lease expirations [5] - Management noted that corporate earnings growth is driving leasing activity, with S&P 500 earnings growth expected to be around 9% for Q2 2024 [7] Other Important Information - The company released its 2023 Sustainability & Impact Report and was recognized by Time Magazine as one of the world's most sustainable companies, ranking number one in the U.S. among property owners [6] - BXP is in active negotiations for the disposition of four land positions, which could generate approximately $150 million in proceeds, with half potentially realized in 2024 [10] Q&A Session Summary Question: Impact of leasing pace on occupancy growth in 2025 [40] - Management expects occupancy to increase, with potential growth to 88% in 2025, driven by signed leases that have not yet commenced [41][42] Question: Yields and funding for new apartment developments [43] - The company is targeting mid-6% yields for new residential projects and plans to bring in JV partners, similar to the Skymark project in Reston [44][45] Question: Correlation between corporate earnings growth and leasing demand [47] - Management emphasized the strong correlation between S&P 500 earnings growth and BXP's leasing activity, with tech and life science sectors still lagging behind pre-pandemic levels [47][48] Question: Stabilization dates and capitalization interest policy for development projects [50] - Stabilization dates assume 85% occupancy, with leasing expected 12-18 months prior. Capitalization of interest stops 12 months after base building completion [51][52] Question: Potential impact of the upcoming election on the business [55] - Management believes state and local elections have a larger impact on day-to-day operations than federal elections, particularly regarding real estate taxes, entitlements, and local infrastructure [55] Question: CapEx spend and expectations for higher lease commencement [57] - Maintenance CapEx is expected to be $80-100 million for 2024, with repositioning CapEx focused on tenant retention and higher rents, particularly at 200 Clarendon Street [57][58] Question: Timing for tech and life science leasing to return to normal [67] - Management noted that tech companies are no longer downsizing but are cautious about high-value real estate investments. Life science demand is expected to grow, but the timing remains uncertain [67][68][69] Question: Divergence between premium and general market leasing [72] - Premium buildings continue to outperform, with asking rents 51% higher than the broader market. Renewals account for around 60% of leasing activity, with the majority focused on 2025 and 2026 expirations [73][74] Question: Transaction activity in the office market and bid-ask spread [75] - Limited foreclosure activity in premier assets, but increased market testing is occurring. The second half of 2024 will be critical for potential deals as owners seek to transact [75][76] Question: Prospects for net effective rent growth in premier assets [78] - Net effective rents have increased in strong submarkets like Park Avenue in Manhattan and Back Bay in Boston, driven by low vacancy rates and stable concessions [78][79][80] Question: Operating expense growth in the same-store portfolio [82] - Operating expenses were lower than expected, with seasonal increases in utilities and repair/maintenance costs in Q2 and Q3 [82] Question: Leverage trajectory and credit rating concerns [84] - Leverage is temporarily elevated due to development pipeline funding but is expected to moderate as projects stabilize, bringing leverage back to the 6.5x-7.5x range [84][85] Question: Details on lease terminations and timing [87] - Terminations involve tenants downsizing or relocating, with new tenants expected to take over the space in 2025. These transactions are expected to improve long-term occupancy and rents [88][89][90] Question: Same-store NOI headwinds and tailwinds for 2025 [93] - Same-store NOI is expected to improve in 2025 as occupancy growth offsets the impact of lease expirations and rollovers [94]

BXP, Inc. (BXP) reported second-quarter 2024 funds from operations (FFO) per share of $1.77, beating the Zacks Consensus Estimate of $1.72. However, the reported figure declined 4.8% year over year. BXP's quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter acted as a dampener. The company also raised its guidance for 2024 FFO per share. Quarterly revenues from lease came in at $790.6 million, up 3.8% year over year. The ...

For the quarter ended June 2024, Boston Properties (BXP) reported revenue of $790.56 million, up 3.8% over the same period last year. EPS came in at $1.77, compared to $0.66 in the year-ago quarter. The reported revenue represents a surprise of +1.18% over the Zacks Consensus Estimate of $781.32 million. With the consensus EPS estimate being $1.72, the EPS surprise was +2.91%. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and wh ...

Over the last four quarters, the company has surpassed consensus FFO estimates three times. Boston Properties (BXP) came out with quarterly funds from operations (FFO) of $1.77 per share, beating the Zacks Consensus Estimate of $1.72 per share. This compares to FFO of $1.86 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of 2.91%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1.73 per share ...

| --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------|-------------------------------|-----------------------|-------------|---------------|------------|-------|---------------------------------------------------| | as of June 30, 2024 | Sub Market | Number of Buildings | Square Feet | Occupied % | Leased % | | Annualized Rental Obligations Per Occupied SF | | 103 Carnegie Center | Princeton NJ | 1 | 96,331 | 72.0 % | 72.0 % | | 37.42 | | 302 Carnegie Cen ...

BXP, Inc. (BXP) is slated to report second-quarter 2024 results on Jul 30, after market close. While its quarterly results are likely to reflect year-over-year growth in revenues, funds from operations (FFO) per share may decline. Per a Cushman & Wakefield (CWK) report, although the U.S. economy is now slowing, job growth remains healthy. CWK expects office-using job growth to be moderate for the remainder of the year before picking up in 2025. Nonetheless, the second-quarter national vacancy rate reached a ...

Real estate investment trusts (REITs) represent one of the best ways to get exposure to investing in real estate without having to take on the risks and capital expenditures of purchasing your own property. When buying into a REIT, investors are essentially giving their money as a loan to a capital management firm, which then invests that money into further property as the value of that property grows so two does the dividend yield of the REIT lowering it to provide comfortable returns on the original inves ...

BXP, Inc. (NYSE:BXP), which just changed its name last month from Boston Properties, covers its robust 6% dividend yield with funds from operations and has a well-leased office real estate portfolio. Supatman/iStock via Getty Images Though the trust has a high asset concentration and is not as diversified as one would wish, BXP easily earns its dividend with funds from operations. With a low payout ratio in the 50-percent range and a low valuation based on FFO, I think BXP offers passive income investors a ...

Furthremore, a great deal of money is going to be made by those buying the " middle 50% of office assets." Meanwhile, the outlook of industrial properties and data centers is positive. Banks will resume lending to commercial real estate companies again when the Federal Reserve starts cutting rates, he stated. Similarly, investment manager Invesco predicted that lower interest rates would spark a recovery in commercial real estate later this year. Here are three commercial real estate stocks to buy. "Leasing ...

One of the key advantages of investing in REIT stocks is the potential for high dividend yields. Which are often higher than those of other equities. REITs are legally required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends. This makes them highly attractive for dividend income. They also offer the liquidity of stocks, allowing investors to buy and sell shares easily on major exchanges. To initiate, SL Green Realty Corp. (SLG) is a real estate investment ...