BXP Gears Up to Report Q4 Earnings: Key Factors to Consider

Core Viewpoint - BXP, Inc. is expected to report a year-over-year increase in revenues for the fourth quarter of 2024, but a decline in funds from operations (FFO) per share is anticipated [1][10]. Company Performance - In the last reported quarter, BXP met the Zacks Consensus Estimate for FFO per share, driven by better-than-expected revenues due to healthy leasing activity, although higher interest expenses negatively impacted results [2][11]. - Over the past four quarters, BXP's FFO per share exceeded the Zacks Consensus Estimate twice, with an average beat of 0.87% [3]. Market Conditions - The U.S. office market experienced negative net absorption of 5.8 million square feet in Q4 2024, an improvement from the previous quarter's negative 13.2 million square feet, marking the most stable quarter for office demand in two years [4]. - Despite national trends showing weaker performance, 44 out of 93 U.S. markets reported positive net absorption in Q4, with a full-year positive absorption in 29 markets, driven by demand for high-quality office buildings [5][6]. Vacancy and Rent Trends - The national vacancy rate for U.S. offices reached 20.9% in Q4, increasing by 20 basis points sequentially and 160 basis points year-over-year, although nearly half of U.S. markets saw flat or declining vacancy rates [7]. - The national asking rent slightly decreased to $38.20 in Q4 from$38.22 in the previous quarter [7]. BXP's Projections - BXP's portfolio consists of class-A office buildings in high-demand markets, and occupancy for in-service properties is expected to increase by 30 basis points to 87.3% in the upcoming quarter [8]. - Demand for BXP's life-science assets is anticipated to have performed well, supported by a healthy balance sheet [9]. Financial Estimates - The Zacks Consensus Estimate for BXP's Q4 revenues is $795.3 million, reflecting a 3.4$1.79, indicating a 1.7% decrease from the previous year [11].