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Boston Properties (BXP) Q1 FFO Beats, Leasing Momentum Strong

·4 min read

Boston Properties Inc.’s BXP first-quarter 2022 funds from operations (FFO) per share of $1.82 beat the Zacks Consensus Estimate of $1.74. The figure also compared favorably with the year-ago quarter’s $1.56.

BXP’s quarterly results reflect decent growth in lease revenues. Also, it experienced strong leasing activity during the quarter.

Quarterly revenues from lease came in at $718.1 million, up 4.7% from $685.8 million in the year-ago quarter. Moreover, the figure surpassed the consensus mark of $700.6 million.

Quarter in detail

Boston Properties’ rental revenues (excluding termination income) for the office portfolio came in at $706.2 million, growing 4.1 % year over year. The same for the hotel & residential segment aggregated $17.5 million, up 78.7%.

BXP’s share of same property net operating income (NOI) on a cash basis (excluding termination income) totaled $411.9 million, up 4.8% year over year.

Its share of EBITDAre, on a cash basis, grew 1.9% to $404.4 million sequentially.

BXP’s in-service properties occupancy grew sequentially from 88.8% to 89.1%.

Portfolio Activity

As of Mar 31, 2022, Boston Properties’ portfolio comprised 201 properties, encompassing 53.1 million square feet of space. This included 11 properties under construction/redevelopment.

The leasing volume achieved in the quarter doubled year over year. It was in line with BXP’s 10-year first-quarter leasing average.

During the first quarter, Boston Properties executed 1.2 million square feet of leases with a weighted-average lease term of 7.3 years. This included renewal and expansion of 330,000 square feet of space with a financial services firm at 601 Lexington Avenue in New York City, NY.

On Mar 31, 2022, BXP disposed of 195 West Street, a 63,500 square feet office building, at Waltham, MA, for a gross sale price of $37.7 million.

Liquidity

Boston Properties exited first-quarter 2022 with $436.3 million of cash and cash equivalents, down from $452.7 million as of Dec 31, 2021.

Net debt totaled $12.6 billion at the first quarter-end, up from $12.4 billion reported at the end of December 2021.

BXP’s share of net debt to EBITDAre annualized was 7.50 times as of Mar 31, 2022, up from 7.46 times as of Dec 31, 2021.

Outlook

For the second quarter, Boston Properties projected FFO per share of $1.84-$1.86. The Zacks Consensus Estimate for the same is currently pegged at $1.83.

For 2022, BXP projects FFO per share in the range of $7.40-$7.50. The Zacks Consensus Estimate is currently pegged at $7.40.

The company estimates average in-service portfolio occupancy to range between 88% and 90%. The increase in BXP’s share of same property NOI cash basis (excluding termination income) is expected to be 5-6%.

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.

Boston Properties, Inc. Price, Consensus and EPS Surprise

Boston Properties, Inc. Price, Consensus and EPS Surprise
Boston Properties, Inc. Price, Consensus and EPS Surprise

Boston Properties, Inc. price-consensus-eps-surprise-chart | Boston Properties, Inc. Quote

Performance of Other REITs

Cousins Properties Incorporated’s CUZ first-quarter 2022 FFO per share of 67 cents came in line with the Zacks Consensus Estimate.

Total revenues aggregated $186.9 million, exceeding the Zacks Consensus Estimate of $184.7 million.

On a year-over-year basis, CUZ’s FFO per share and total revenues declined 2.9% and 1.4%, respectively.

The slight growth in revenue was offset by a rise in operating expenses during the first-quarter. Leasing activity fell year-over-year.

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2022 core FFO per share of $1.97, surpassing the Zacks Consensus Estimate of $1.92. The reported number increased 20.1% year over year.

MAA’s quarterly results were driven by an increase in the average effective rent per unit for the same-store portfolio. The average physical occupancy for the same-store portfolio also increased year over year.

The rental and other property revenues came in at $476.1 million, outpacing the Zacks Consensus Estimate of $474.20 million. The reported figure was 12% higher than the previous-year quarter’s $425 million.

AvalonBay Communities, Inc.’s AVB first-quarter 2022 core FFO per share of $2.26 matched the Zacks Consensus Estimate.

However, total revenues of $613.9 million lagged the consensus estimate of $615.4 million.

On a year-over-year basis, AVB’s core FFO per share increased 15.9% and total revenues grew 11.4%.

The first-quarter results reflected a year-over-year increase in same-store residential revenues, partially offset by rising operating expenses.

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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