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Boston Properties Buys 880, 890 Winter Street, Expands in Waltham

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Office REIT Boston Properties, Inc. (BXP - Free Report) recently announced acquisition of 880 and 890 Winter Street, a two-building, class A office campus in Waltham, MA. The company shelled out $106 million in cash for this acquisition, which will boost its footprint in Boston’s thriving suburb that is witnessing rising demand for class A space.

The company’s latest acquisition in Waltham seems a strategic fit for Boston Properties as it continues to be one of the preferred locations in the region for organizations intending to lure highly-educated staff.

The premium two-building office campus, aggregating 392,600 square feet of space, is presently 82% leased to approximately 24 companies. These companies range from healthcare and technology to services and energy infrastructure sectors. With an advantageous location and solid set of amenities, the property is likely to lure more tenants.

In fact, Boston Properties has already emerged as the largest owner and manager of Class A office space in Waltham, having holdings exceeding 4 million square feet. The latest acquisition is also adjacent to the company’s one million-square-foot, 58-acre Bay Colony property in Waltham. The company has also been a top developer in this region for five decades.

Moreover, along the Route 128/Interstate 95 corridor in the Boston suburbs, Boston Properties owns and actively manages approximately 5 million square feet of area. The region is a preferred choice of several biotechnology, life sciences and technology companies.

A portfolio of high-quality properties in select high-rent, high barrier-to-entry geographic markets enables Boston Properties to enjoy high leasing volumes amid healthy job-market environment. Furthermore, the company is focused on opportunistic acquisitions and development projects which are expected to contribute to its cash flow over the long term. Nevertheless, high level of supply of office space is a concern as it limits landlords’ pricing power.

In the year-to-date period, shares of this Zacks Rank #3 (Hold) company have gained 15.8%, underperforming the industry’s rally of 25%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Stocks to Consider

Investors can also consider some better-ranked stocks from the same space like Alexandria Real Estate Equities, Inc. (ARE - Free Report) , Equity Residential (EQR - Free Report) and Mid-America Apartment Communities, Inc. (MAA - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present.

Alexandria Real Estate’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share has moved marginally north to $6.98 in the past three months.

Equity Residential’s FFO per share estimate for the current year moved up 1.2% to $3.45 over the past month.

Mid-America’s Zacks Consensus Estimate for the ongoing year’s FFO per share climbed marginally to $6.28 in a month’s time.

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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