Core Insights - BXP has secured a significant long-term lease with Starr at 343 Madison Avenue, enhancing its Midtown Manhattan portfolio and demonstrating ongoing tenant interest in modern office spaces [1][2][8] Company Developments - The lease agreement with Starr covers approximately 275,000 square feet, representing about 30% of the building, under a 20-year contract, which improves BXP's future cash flow visibility and reduces leasing risk [2][8] - 343 Madison Avenue is designed as a next-generation office building with a focus on sustainability, wellness, and amenities, aligning with BXP's strategy to upgrade its portfolio [3][6] Market Trends - The office real estate market is selective, with tenants favoring high-quality, well-located offices, particularly in Midtown Manhattan, which benefits landlords like BXP [5][6] - BXP reported strong leasing activity in Q3 2025, signing over 1.5 million square feet with a weighted-average lease term of 7.9 years, marking its best third quarter since 2019 [4] Financial Outlook - The lease with Starr reinforces BXP's positioning in a changing office market, improving income visibility and validating its focus on prime locations and modern design [6] - Analysts have slightly raised BXP's 2025 FFO per share estimates to $6.89, despite a 4.2% decline in shares over the past six months [7]

REIT Sector Performance - The REIT sector rebounded in November with a +1.02% return, narrowing the year-to-date negative total return to -2.55% for the average REIT [1] - REITs outperformed the broader market in November, exceeding the returns of the Dow Jones Industrial Average (+0.5%), S&P 500 (+0.2%), and NASDAQ (-1.4%) [1] - The Vanguard Real Estate ETF (VNQ) achieved a return of +2.42% in November, significantly outperforming the average REIT [1] - The spread between the 2026 FFO multiples of large cap REITs (16.2x) and small cap REITs (12.8x) widened, with investors paying 26.6% more for large cap REITs [1] Property Type Performance - In November, 9 out of 18 property types averaged positive returns, with a 33.18% total return spread between the best (Advertising +22.32%) and worst (Data Centers -10.86%) performing property types [5][6] - Year-to-date, Health Care (+30.53%) and Advertising (+24.67%) are the only property types with double-digit positive returns, while Office (-18.35%) and Data Centers (-13.93%) have seen significant declines [7][10] Market Capitalization Insights - Mid cap REITs averaged gains of +3.53%, while small cap REITs gained +3.38%, contrasting with large cap REITs which only gained +0.32% [3] - The average P/FFO for the REIT sector increased from 13.5x to 13.7x during November, with 50% of property types experiencing multiple expansion [7] Individual Security Highlights - OUTFRONT Media (OUT) led the sector with a +33.01% return in November after strong Q3 earnings and raised guidance [9] - Office Properties Income Trust (OPI) faced a significant decline of -54.53% in November, following its Chapter 11 bankruptcy filing, bringing its year-to-date total return to -98.25% [10] Dividend Yield Insights - High dividend yields are a key attraction for investors in the REIT sector, with many REITs trading below their NAV, resulting in attractive yields [14][15]

REIT Performance Overview - The REIT sector experienced a total return of -4.92% in March, underperforming the Dow Jones Industrial Average (-4.1%) but faring better than the S&P 500 (-5.6%) and NASDAQ (-8.1%) [1] - The Vanguard Real Estate ETF (VNQ) outperformed the average REIT with a return of -2.58% in March and a year-to-date return of +2.69% compared to -3.36% for the average REIT [1] - The spread between the 2025 FFO multiples of large cap REITs (18.1x) and small cap REITs (12.9x) increased, indicating that investors are paying 40.3% more for each dollar of FFO from large cap REITs [1] Performance by Market Capitalization - Micro cap REITs underperformed significantly with a return of -16.19%, while large cap REITs returned -2.04%, mid caps -2.63%, and small caps -4.16% [3] - Year-to-date, large cap REITs have outperformed small caps by 568 basis points [3] Property Type Performance - Only 33.33% of REIT property types had a positive total return in March, with a 14% spread between the best (Casino +2.40%, Single Family Housing +2.00%) and worst performing property types (Office -11.60%, Hotel -11.11%) [5] - In the first quarter of 2025, Data Centers (-16.35%), Office (-15.95%), and Hotels (-15.74%) were the worst performers, while Health Care (+10.87%), Casino (+10.24%), and Timber (+9.56%) led the sector [6] Average Returns by Property Type - The average returns for various property types in March were as follows: - Office: -11.60% - Hotel: -11.11% - Casino: +2.40% - Single Family Housing: +2.00% - REIT Average: -4.92% [6] Price/FFO Multiples - The average P/FFO for the REIT sector decreased from 14.3x to 13.9x in March, with 27.8% of property types experiencing multiple expansion and 66.7% seeing contraction [8] - Data Centers (25.2x), Land (23.8x), and Multifamily (20.5x) have the highest average multiples, while Hotels (6.2x) and Offices (8.4x) are the only types with single-digit FFO multiples [8] Individual Security Performance - Peakstone Realty Trust (PKST) was the best performing REIT in March with a return of +13.10%, followed by Crown Castle (CCI) at +12.44% and CareTrust REIT (CTRE) at +11.77% [10] - Wheeler REIT (WHLR) continued its decline with a staggering -75.88% return in March, marking a -95.31% drop in the first three months of 2025 [11] Dividend Yield Insights - High dividend yields are a significant attraction for investors in the REIT sector, especially as many REITs are trading below their NAV, leading to opportunities for attractive yields [15]