News

BXP, Inc. BXP reported second-quarter 2024 funds from operations (FFO) per share of $1.77, beating the Zacks Consensus Estimate of $1.72. However, the reported figure declined 4.8% year over year.

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

Quarterly revenues from lease came in at $790.6 million, up 3.8% year over year. The Zacks Consensus Estimate was pegged at $781.3 million. Total revenues increased 4.1% from the prior-year quarter to $850.5 million.

Quarter in Detail

BXP’s rental revenues (excluding termination income) for the office portfolio came in at $767.4 million, which fell marginally year over year. For the hotel & residential segment, the metric aggregated $27 million, indicating a jump of 3.1% year over year. On a consolidated basis, BXP’s rental revenues (excluding termination income) came in at $794.5 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 $446.2 million, which declined 3.2% from the prior-year quarter.

Its share of EBITDAre (on a cash basis), as of Jun 30, 2024, was $466.2 million, up 3% from $452.5 million as of Mar 31, 2024.

BXP’s in-service properties occupancy fell 110 basis points sequentially to 87.1%.

BXP’s quarterly interest expenses were up 5% year over year to $149.6 million. We estimated the metric to be $149 million.

Portfolio Activity

As of Jun 30, 2024, BXP’s portfolio comprised 186 properties encompassing 53.5 million square feet of space. This included 10 properties under
construction/redevelopment.

During the second quarter, the company executed 73 leases aggregating 1.3 million square feet with a weighted average lease term of nine years.

BXP completed and fully placed in service 760 Boylston Street in Boston, MA. This 118,000 net rentable square feet retail redevelopment is fully leased to DICK’S Sporting Goods’ Boston House of Sport.

Moreover, in July 2024, 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.

Balance Sheet Position

BXP exited the second quarter of 2024 with cash and cash equivalents of $685.4 million, down from $701.7 million as of Mar 31, 2024.

BXP’s share of net debt to EBITDAre annualized was 7.91 as of Jun 30, 2024, up from 7.81 times as of Mar 31, 2024.

2024 Outlook

BXP projects FFO per share for third-quarter 2024 to be in the range of $1.80-$1.82.

For 2024, FFO per share is expected to be in the band of $7.09-$7.15, up from $6.98-$7.10 projected earlier. The range is higher than the Zacks Consensus Estimate of $7.04.

BXP updated its outlook for its share of the same property NOI on a cash basis (excluding termination income) between a decrease of 3% and 1.5%. The average in-service portfolio occupancy is lowered and is expected to be in the band of 87.00-88.20% for the current year from the previous guided range of 87.20-88.60%.

BXP currently carries a Zacks Rank #4 (Sell).

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

Alexandria Real Estate Equities, Inc. ARE reported second-quarter 2024 adjusted funds from operations (AFFO) per share of $2.36, which beat the Zacks Consensus Estimate of $2.34. The reported figure also climbed 5.4% from the year-ago quarter.

Results reflected a rise in revenues, aided by decent leasing activity and rental rate growth. Alexandria maintained its 2024 AFFO per share outlook.

SL Green Realty Corp. SLG reported second-quarter 2024 FFO per share of $2.05, which outpaced the Zacks Consensus Estimate of $1.62. The company had reported an FFO of $1.43 per share a year ago.

Results reflected decent leasing activity in its Manhattan portfolio. The company reported gains of 69 cents per share on discounted debt extinguishments at 280 Park Avenue and 719 Seventh Avenue and 2 cents per share of positive non-cash fair value adjustments on mark-to-market derivatives. SLG also raised its guidance for 2024 FFO per share.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.