Boston Properties(BXP) - 2024 Q2 - Quarterly Results

Property and Occupancy - Total in-service properties amount to 176, covering 50,407,904 square feet with an occupancy rate of 87.1% and a leased percentage of 89.1%[1] - As of June 30, 2024, the total square footage of properties is 10,399,609 with an overall occupancy rate of 90.8%[39] - The total number of buildings across all listed properties is 19[39] - The company has a 50% ownership in Dock 72, which has an occupancy rate of 33.4%[39] - The overall occupancy rate for the San Francisco office properties is 84.0%[39] - The company has a total of 29 buildings in the Washington, DC CBD, with an average occupied percentage of 90.9%[48] - The total square footage for the Boston suburban area is 4,677,825, with an average occupied percentage of 76.8%[48] Financial Performance - BXP's share of EBITDA re – cash for Q2 2024 was $466,203, an increase from $452,490 in Q1 2024, representing a growth of approximately 3.9%[13] - Revenue for Q2 2024 was $850,482, an increase from $839,439 in Q1 2024, representing a growth of approximately 1.24%[158] - Total rental revenue for the three months ended June 30, 2024, was $189,389,000, a decrease from the previous period[164] - Net Operating Income (NOI) for the same period was $114,157,000, reflecting a decline compared to prior results[164] - BXP's share of net debt increased slightly to $14,735,679 as of June 30, 2024, compared to $14,689,415 at the end of Q1 2024[13] - The company reported a net income of $46,012,000, with BXP's share of Funds From Operations (FFO) amounting to $52,018,000[26] Debt and Financing - The company has an unsecured credit facility of $2 billion, with a remaining capacity of $1,493,373 as of June 30, 2024[3] - The total outstanding debt to total assets ratio is 47.3%, well below the 60% limit[9] - Interest coverage ratio, calculated as annualized consolidated EBITDA to annualized interest expense, is 3.15, exceeding the 1.50x requirement[9] - The weighted average remaining lease term for top clients is 7.7 years for Salesforce and 12.8 years for Google[2] - The company’s fixed rate debt constitutes 92.20% of total debt, with a weighted average GAAP rate of 4.01%[5] - The unsecured term loan outstanding as of June 30, 2024, is $700,000, representing 71.55% of total debt[4] Rental Obligations and Lease Expirations - The annualized rental obligations per occupied square foot stand at $80.70[1] - The annualized rental obligations per occupied square foot for the total portfolio is $109.85[39] - In 2024, 1,425,834 square feet are subject to expiring leases, with current annualized rental obligations of $86,146,800, averaging $66.79 per square foot[52] - For 2025, 2,739,994 square feet are subject to expiring leases, with annualized rental obligations of $170,192,086, averaging $72.90 per square foot[52] - The company has a total of 13,759,116 square feet subject to expiring leases thereafter, with obligations of $890,223,601, averaging $80.71 per square foot[52] - The total annualized rental obligations for the "Thereafter" period (beyond 2033) is estimated at $347,331,376, covering 5,139,666 square feet[58] Operational Efficiency and Sustainability - The company has achieved a twelfth consecutive GRESB "Green Star" recognition and the highest GRESB 5-star Rating, highlighting its commitment to sustainability[130] - BXP has been recognized as one of the world's most sustainable companies by TIME Magazine, reflecting its focus on responsible growth[130] - The company is actively pursuing new product and technology developments to enhance operational efficiency and market competitiveness[26] - BXP's average economic occupancy is calculated by measuring total possible revenue less vacancy loss, expressed as a percentage[123] - The company emphasizes the importance of NOI – cash, which excludes non-cash rental revenues, to provide a clearer picture of cash generated at the property level[152] Market Position and Future Outlook - The company operates in six dynamic gateway markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC[130] - The company anticipates continued growth in rental revenue driven by strategic market expansions and new developments[26] - BXP aims to maintain a strong balance sheet to ensure consistent access to capital for new investments[184] - The company is actively monitoring lease expirations and rental obligations to optimize its portfolio and financial performance[69] - The company plans to continue focusing on market expansion and new product development to enhance future revenue streams[36]