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1. Company Snapshot

1.a. Company Description

Boston Properties (NYSE:BXP) is the largest publicly-held developer and owner of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC.The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space.The Company's portfolio totals 51.2 million square feet and 196 properties, including six properties under construction/redevelopment.

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1.b. Last Insights on BXP

Boston Properties' recent performance was driven by strong leasing momentum, with over 1.5 million square feet of leases signed in Q3 2025, representing a 38% increase year-over-year. The company's focus on high-quality and life science office conversions lifted leasing activity. Despite debt and higher interest costs being a concern, BXP's Q3 FFO and revenues beat estimates. The company raised its 2025 FFO guidance, citing solid leasing gains. BXP's strategic portfolio moves, including asset sales and partnerships, aim to fuel long-term growth. A 28.6% dividend cut allowed for $50M quarterly allocation to developments.

1.c. Company Highlights

2. BXP's Strong 2025 Earnings: Leasing and Dispositions Drive Growth

Boston Properties (BXP) reported total consolidated revenues of $3.5 billion and full-year FFO of $1.2 billion or $6.85 per share in 2025, with the fourth-quarter FFO coming in at $1.76 per share, slightly below estimates of $1.8. For 2026, the company introduced FFO guidance with a range of $6.88 to $7.04 per share, representing an increase of $0.11 per share from 2025. The guidance assumes internal growth in NOI from higher occupancy in the same-property portfolio, external growth in NOI generated by development deliveries, and lower interest expense from utilizing asset sale proceeds to reduce debt.

Publication Date: Feb -08

📋 Highlights
  • Leasing Momentum:: Exceeded 2025 leasing goals with 5.5M sq ft annually and 1.8M sq ft in Q4, driven by 11.6% direct vacancy in premier workplaces (vs. 17.2% market average).
  • Asset Sales Progress:: Sold 12 assets for $1B net proceeds, with 8 more under contract ($230M), on track to sell $1.9B in assets by 2028.
  • Development Pipeline:: 8 active projects totaling 3.5M sq ft ($3.7B investment), including 290 Binney Street (573K sq ft, 100% leased to AstraZeneca) expected to deliver in June 2026.
  • FFO Guidance:: 2026 FFO/share guidance of $6.88–$7.04 (midpoint $6.96), up $0.11/share from 2025, driven by higher occupancy, development deliveries, and lower interest expense.
  • Occupancy Growth Outlook:: 86.7% in-service occupancy in 2025, targeting 89% by 2026 (160 bps increase) via 750K sq ft of lease negotiations and 4M sq ft of 2026 leasing.

Leasing and Occupancy Gains

BXP has made significant progress in leasing, with over 1.8 million square feet of leasing completed in Q4 and 5.5 million square feet for the full year, exceeding its goals. The company's forecast occupancy gains have commenced, driven by a positive environment for leasing, with corporate users returning to offices and a strong demand for premier workplaces. BXP expects to complete 4 million square feet of leasing in 2026, with 1.243 million square feet of executed leases on vacant space yet to commence.

Dispositions and Development Pipeline

The company has made significant progress on its business plan, including selling 12 assets for $1 billion in net proceeds and having 8 additional assets under contract or agreed to terms for $230 million. BXP aims to sell 27 assets for $1.9 billion by 2028. The company has also advanced its development pipeline, with 8 projects underway, comprising 3.5 million square feet and $3.7 billion of investment. The delivery of 290 Binney Street, a 573,000 square foot life science project in Cambridge, is expected by the end of June, with a total investment of approximately $500 million.

Valuation and Outlook

With a P/E Ratio of 37.23 and a Dividend Yield of 5.19%, BXP's valuation appears to be factoring in a certain level of growth. The company's focus on leasing, occupancy gains, and efficient management of its portfolio and development pipeline is expected to drive growth. Analysts estimate next year's revenue growth at 2.9%. The company's quarterly FFO run rate is expected to consistently improve through 2026, leading to a strong base for 2027. BXP's portfolio is well-positioned for additional occupancy growth, with improving trends in leasing markets and low rollover exposure.

Market Conditions and Leasing Activity

BXP's office visits have increased, and data from Placer.ai supports further improvement. The forecast for US corporations' earnings growth is higher in 2026, which could drive more leasing activity. The company's portfolio demand comes from growing industries such as financial services, asset management, and law firms. Leasing capital expenditures were $128 per square foot in the quarter, an outlier compared to the usual $85-$100 per square foot. BXP assumes $100 per square foot in their AFFO projections going forward.

3. NewsRoom

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BXP: Valuation Should Re-Rate Upwards When FFO Growth Inflects Positively

Feb -04

Source: seekingalpha.com

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Property Type Round-Up From REITWorld 2025

Feb -03

Source: seekingalpha.com

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Reviewing BXP (NYSE:BXP) & NETSTREIT (NYSE:NTST)

Feb -02

Source: defenseworld.net

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BXP, Inc. (BXP) Q4 2025 Earnings Call Transcript

Jan -28

Source: seekingalpha.com

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BXP Inc (BXP) Q4 2025 Earnings Call Highlights: Strong Leasing Activity and Strategic Asset Sales Amid Challenges

Jan -28

Source: gurufocus.com

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Boston Properties' Q4 Revenues and FFO Miss Estimates

Jan -28

Source: zacks.com

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Boston Properties (BXP) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Jan -28

Source: zacks.com

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Boston Properties (BXP) Q4 FFO and Revenues Lag Estimates

Jan -28

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.47%)

6. Segments

Premier Workplace

Expected Growth: 2.5%

Premier Workplace from Boston Properties, Inc. achieves 2.5% growth driven by increasing demand for Class A office spaces, strategic location in Boston's thriving business hub, and high-quality amenities. Additionally, the company's focus on sustainability, energy efficiency, and tenant experience enhancements contribute to its growth momentum.

Residential

Expected Growth: 1.8%

Boston Properties' 1.8% residential growth is driven by increasing demand for luxury apartments in urban areas, fueled by a strong job market and limited housing supply. Additionally, the company's focus on amenity-rich, Class-A properties in high-growth markets such as Boston and Washington D.C. contributes to its growth.

Hotel

Expected Growth: 1.2%

Boston Properties' hotel segment growth of 1.2% is driven by increasing business travel demand, particularly in urban areas, and a strong leisure travel market. Additionally, the company's strategic focus on premium properties in high-barrier-to-entry markets, such as Boston and Washington D.C., contributes to its growth.

7. Detailed Products

Class A Office Space

High-quality office spaces in prime locations, offering modern amenities and flexible lease terms

Mixed-Use Developments

Integrated projects combining office, retail, and residential spaces, enhancing urban livability and community engagement

Retail and Restaurant Space

Prime retail and restaurant locations in high-traffic areas, offering flexible lease terms and customized build-outs

Industrial and Logistics Facilities

Modern industrial and logistics facilities, offering flexible space and strategic locations for efficient supply chain management

Life Science and Laboratory Space

Specialized facilities designed for life science and laboratory uses, featuring advanced infrastructure and flexible lease terms

Residential and Multifamily Housing

Luxury residential properties and multifamily housing developments, offering high-end amenities and convenient locations

8. Boston Properties, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Boston Properties, Inc. operates in a highly competitive industry, and there are many substitutes available for office space, such as coworking spaces and virtual offices. However, the company's high-quality properties and prime locations help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Boston Properties, Inc. has a diverse tenant base, which reduces the bargaining power of individual customers. Additionally, the company's high-quality properties and strong relationships with tenants help to maintain a stable and loyal customer base.

Bargaining Power Of Suppliers

Boston Properties, Inc. has a strong negotiating position with its suppliers, given its large scale and diversified portfolio of properties. This allows the company to negotiate favorable terms and prices with its suppliers.

Threat Of New Entrants

The commercial real estate industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established players like Boston Properties, Inc.

Intensity Of Rivalry

The commercial real estate industry is highly competitive, with many established players competing for tenants and market share. Boston Properties, Inc. faces intense competition from other REITs and private developers, which can lead to downward pressure on rents and occupancy rates.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.02%
Debt Cost 5.28%
Equity Weight 26.98%
Equity Cost 9.75%
WACC 6.49%
Leverage 270.63%

11. Quality Control: Boston Properties, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
COPT Defense

A-Score: 6.3/10

Value: 4.5

Growth: 4.7

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Boston Properties

A-Score: 5.4/10

Value: 5.7

Growth: 3.2

Quality: 4.1

Yield: 8.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Alexandria Real Estate Equities

A-Score: 5.3/10

Value: 7.3

Growth: 4.6

Quality: 4.7

Yield: 9.0

Momentum: 0.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Vornado Realty

A-Score: 5.2/10

Value: 7.4

Growth: 2.2

Quality: 6.6

Yield: 6.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Douglas Emmett

A-Score: 4.9/10

Value: 4.7

Growth: 4.6

Quality: 3.3

Yield: 9.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
SL Green Realty

A-Score: 3.9/10

Value: 2.5

Growth: 0.9

Quality: 3.8

Yield: 9.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.72$

Current Price

64.72$

Potential

-0.00%

Expected Cash-Flows