Boston Properties Announces Rent Collections and New Leases
Despite the coronavirus outbreak-led market mayhem that severely impacted the office real estate space, Boston Properties, Inc. BXP has been witnessing a decent demand from new and existing customers alike.
During April and May, the company signed around 870,000 square feet of new leases and renewals. This includes a new lease with Microsoft Corporation for roughly 400,000 square feet of space at Reston Town Center in Reston, VA. The lease is for 12 years and allows the tenant to expand in Reston, where it already has a footprint of nearly 165,000 square feet.
Notably, the company’s Reston Town Center has an impressive tenant roster, with companies like Facebook, Leidos, Bechtel and CACI. The strategic location of the property has likely driven its tenants to ink leases with the aim of attracting talent and expanding the workforce in the region.
Additionally, the company announced collecting more than 97% of its total rental payments from office tenants for May. Moreover, rent collections from all tenants, including retail, totaled 93%. Earlier, the company disclosed that rent collections for April from office tenants were 95%, and the same from retail and office tenants totaled 90%.
The ongoing strength in rent collections indicates the company’s high-quality tenants and will support its revenues in the April-June quarter.
It also has a strong balance sheet and ample liquidity. This will help Boston properties to navigate through the ongoing uncertainty. Specifically, it has total liquidity of $3.3 billion, consisting of $1.7 billion in cash, $151 million of cash held in 1031 exchange escrow and $1.5 billion available balance under its unsecured revolving credit facility as of May 5, 2020. This is inclusive of net cash proceeds from the company’s most-recent unsecured senior notes issuances of $1.25 billion.
While all of its office properties remained open for tenants, Boston properties witnessed lower physical occupancy due to shelter-in-place orders.
Moreover, shares of the Zacks Rank #3 (Hold) company have lost 33.2% over the past year compared with the industry’s decline of 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s ALEX Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved upward to 83 cents over the past month. The company currently flaunts a Zacks Rank of 1.
One Liberty Properties, Inc.’s OLP FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s LAND FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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