Boston Properties BXP reported third-quarter 2024 funds from operations (FFO) per share of $1.81, in line with the Zacks Consensus Estimate. However, the reported figure declined 2.7% year over year.

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BXP’s quarterly results reflect better-than-anticipated revenues due to healthy leasing activity. However, higher interest expenses during the quarter acted as a dampener. The company revised its guidance for 2024 FFO per share.

Quarterly revenues from lease came in at $799.5 million, up 4.2% year over year. The Zacks Consensus Estimate was pegged at $790.5 million. Total revenues increased 4.2% from the prior-year quarter to $859.2 million.

BXP, Inc. Price, Consensus and EPS Surprise

BXP, Inc. price-consensus-eps-surprise-chart | BXP, Inc. Quote

BXP’s Q3 in Detail

BXP’s rental revenues (excluding termination income) for the office portfolio were $773 million, which fell marginally year over year. For the hotel & residential segment, the metric aggregated $27.2 million, reflecting a jump of 7.6% year over year. On a consolidated basis, BXP’s rental revenues (excluding termination income) came in at $800.2 million, down marginally year over year.

BXP’s share of the same-property net operating income (NOI) on a cash basis (excluding termination income) totaled $444.7 million, which declined 2% from the prior-year quarter.

Its share of EBITDAre (on a cash basis), as of Sept. 30, 2024, was $469.8 million, up marginally from $466.2 million as of June 30, 2024.

BXP’s in-service properties occupancy fell 10 basis points sequentially to 87%.

BXP’s quarterly interest expenses were up 10.4% year over year to $163.2 million.

BXP’s Portfolio Activity

As of Sept. 30, 2024, BXP’s portfolio comprised 184 properties, encompassing 53 million square feet of space. This included nine properties under construction/redevelopment.

The company executed 74 leases aggregating 1.1 million square feet with a weighted average lease term of 7.2 years.

BXP fully placed in service a laboratory/life sciences project, 180 CityPoint, encompassing approximately 329,000 square feet in Waltham, MA.

BXP partially placed in service Skymark in Reston, VA. The residential property consists of 508 units across a five-story low-rise building and an iconic 39-story tower. The property is owned by a joint venture in which BXP has a 20% interest.

BXP’s Balance Sheet Position

BXP exited the third quarter of 2024 with cash and cash equivalents of $1.42 billion, up from $685.4 million as of June 30, 2024.

BXP’s share of net debt to EBITDAre annualized was 7.59 as of Sept. 30, 2024, down from 7.91 times as of June 30, 2024.

BXP’s 2024 Outlook

BXP expects its 2024 FFO per share in the band of $7.09-$7.11, revising it from the range of $7.07-$7.13 projected earlier and keeping the midpoint unchanged. The Zacks Consensus Estimate for 2024 FFO per share, pegged at $7.10, is within the guided range.

BXP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Alexandria Real Estate Equities, Inc. ARE reported third-quarter 2024 adjusted funds from operations (AFFO) per share of $2.37, missing the Zacks Consensus Estimate by a penny. However, the reported figure outpaced the year-ago quarter’s AFFO per share of $2.26 by 4.9%.

Results reflected a rise in revenues, aided by decent leasing activity and rental rate growth.  ARE narrowed its 2024 outlook.

SL Green Realty Corp. SLG reported a third-quarter 2024 FFO per share of $1.13, which missed the Zacks Consensus Estimate of $1.21. The company had reported an FFO of $1.27 per share in the previous year.

SLG’s results reflected decent leasing activity in its Manhattan portfolio and higher rental revenues, though higher interest expenses acted as a dampener.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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