Boston Properties Inc.’s BXP fourth-quarter 2024 funds from operations (FFO) per share of $1.79 was in line with the Zacks Consensus Estimate. However, the reported figure fell 1.6% year over year.

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BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP also issued its guidance for 2025 FFO per share.

Quarterly lease revenues were $798.2 million, up 3.8% year over year. The Zacks Consensus Estimate was pegged at $795.3 million. Total revenues increased 3.6% from the prior-year quarter to $858.6 million.

For 2024, Boston Properties reported an FFO per share of $7.10, which met the Zacks Consensus Estimate. The figure compared unfavorably with the prior year’s $7.28. Lease revenues of $3.18 billion increased 4% year over year.

BXP’s Fourth Quarter in Detail

Boston Properties’ rental revenues (excluding termination income) for the office portfolio came in at $777.4 million, which rose 0.9% year over year. For the hotel & residential segment, the metric aggregated $25.6 million, indicating a jump of 8.5% year over year. On a consolidated basis, BXP’s rental revenues (excluding termination income) came in at $803 million, up 1.2% year over year.

BXP’s share of the same property net operating income (NOI) on a cash basis (excluding termination income) totaled $447.2 million, which increased 0.9% from the prior-year quarter.

Its share of EBITDAre (on a cash basis), as of Dec. 31, 2024, was $476.4 million, up 1.4% from $469.8 million as of Sept. 30, 2024.

BXP’s in-service properties occupancy increased 50 basis points sequentially to 87.5%. We estimated the metric to be 87.3%.

BXP’s quarterly interest expenses were up 9.9% year over year to $170.4 million.

BXP’s Portfolio Activity

As of Dec. 31, 2024, Boston Properties’ portfolio comprised 185 properties encompassing 53.3 million square feet of space. This included seven properties under construction/redevelopment.

During the fourth quarter, the company executed 83 leases spanning more than 2.3 million square feet, with a weighted average lease term of 10.3 years.

In December, BXP acquired 725 12th Street property encompassing 300,000 square feet of space in Washington, DC, for a gross purchase price of $34 million. The company plans to undertake the demolition and redevelopment of the property, transforming it into a premier workplace of approximately 320,000 square feet.

Balance Sheet Position of BXP

Boston Properties exited the fourth quarter of 2024 with cash and cash equivalents of $1.25 billion, down from $1.42 billion as of Sept. 30, 2024.

BXP’s share of net debt to EBITDAre annualized was 7.65 as of Dec. 31, 2024, up from 7.59 times as of Sept. 30, 2024.

2025 Guidance by BXP

Boston Properties projects FFO per share for the first quarter of 2025 to be in the range of $1.63-$1.65.

For 2025, FFO per share is expected in the band of $6.77-$6.95. The Zacks Consensus Estimate for the same is currently pegged at $7.11, which exceeds the guided range.

BXP estimates the change in its share of the same-property NOI on a cash basis (excluding termination income) to be within 1.50% for 2025. The average in-service portfolio occupancy is expected in the band of 86.5-88%.

BXP’s Zacks Rank

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

BXP, Inc. Price, Consensus and EPS Surprise

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

Performance of Other REITs

SL Green Realty Corp. SLG reported a fourth-quarter 2024 FFO per share of $1.45, which missed the Zacks Consensus Estimate of $1.53. The company had reported an FFO of 72 cents per share in the previous year.

Results reflected lower-than-anticipated revenues despite decent leasing activity in its Manhattan portfolio. Also, higher interest expenses and lower same-store NOI acted as dampeners.

Alexandria Real Estate Equities, Inc. ARE reported a fourth-quarter 2024 AFFO per share of $2.39, meeting the Zacks Consensus Estimate. The reported figure outpaced the year-ago quarter’s AFFO per share by 4.8%.

Results reflected a rise in revenues, aided by decent leasing activity and rental rate growth. However, higher interest expenses year over year undermined the results to some extent. Alexandria provided its 2025 outlook.

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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