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Boston Properties (BXP) Upsizes Credit Facility, Boosts Liquidity
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Boston Properties, Inc.’s (BXP - Free Report) operating partnership, Boston Properties Limited Partnership (“BPLP”), recently upsized its revolving credit facility by an aggregate amount of $315 million by exercising a portion of the accordion feature.
With a maximum borrowing capacity of $1.815 billion, the move boosts the company’s liquidity position and financial flexibility. At present, the facility has no outstanding balances.
Per Mike LaBelle, EVP, CFO & Treasurer of the company, “We are pleased to expand our borrowing capacity and increase the number of participants in our credit facility. This upsizing, especially in current market conditions, is a further testament to BXP’s strong financial position and the strength and support of our banking relationships.”
The utilization of the accordion feature added three new lenders — M&T Bank, Sumitomo Mitsui Banking Corporation and Banco Bilbao Vizcaya Argentaria, S.A. — to the facility. BPLP can now increase its total commitments under the facility by up to an additional $185 million, subject to certain conditions.
In January 2023, BPLP closed a new $1.2 billion unsecured term loan facility that matures in May 2024. The facility can be prolonged by exercising one 12-month extension subject to the satisfaction of customary conditions.
Boston Properties is making concerted efforts to enhance its portfolio quality through repositioning initiatives via acquisitions, the development of properties in core markets and shedding properties in non-core markets.
Also, amid strong demand from life-science tenants, it is converting numerous straight office buildings to office labs in its suburban portfolio, especially its Kendall Center project, which is one of the leading preferred locations for life-science clients in the world.
Notably, as of the end of the second quarter of 2023, BXP had 13 office, lab, retail and residential projects underway, with its share of the estimated total investment aggregating around $2.6 billion, which seems encouraging.
With added balance sheet strength and ample financial flexibility, the company is well-positioned to capitalize on long-term growth opportunities. As of Jun 30, 2023, it had $3.1 billion of liquidity.
Shares of this Zacks Rank #3 (Hold) company have gained 8.8% over the past six months against the industry’s decline of 11.5%.
Image Source: Zacks Investment Research
Nonetheless, given a choppy office market environment, demand for office properties is likely to remain subdued in the near term, hurting leasing volume.
Also, elevated supply in certain markets is likely to intensify competition, limiting its ability to attract and retain tenants at relatively higher rents. High interest rates raise concerns for the company.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.55.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised marginally over the past month to $1.26.
The Zacks Consensus Estimate for EastGroup Properties’ current-year FFO per share has moved 1.1% northward over the past two months to $7.62.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Boston Properties (BXP) Upsizes Credit Facility, Boosts Liquidity
Boston Properties, Inc.’s (BXP - Free Report) operating partnership, Boston Properties Limited Partnership (“BPLP”), recently upsized its revolving credit facility by an aggregate amount of $315 million by exercising a portion of the accordion feature.
With a maximum borrowing capacity of $1.815 billion, the move boosts the company’s liquidity position and financial flexibility. At present, the facility has no outstanding balances.
Per Mike LaBelle, EVP, CFO & Treasurer of the company, “We are pleased to expand our borrowing capacity and increase the number of participants in our credit facility. This upsizing, especially in current market conditions, is a further testament to BXP’s strong financial position and the strength and support of our banking relationships.”
The utilization of the accordion feature added three new lenders — M&T Bank, Sumitomo Mitsui Banking Corporation and Banco Bilbao Vizcaya Argentaria, S.A. — to the facility. BPLP can now increase its total commitments under the facility by up to an additional $185 million, subject to certain conditions.
In January 2023, BPLP closed a new $1.2 billion unsecured term loan facility that matures in May 2024. The facility can be prolonged by exercising one 12-month extension subject to the satisfaction of customary conditions.
Boston Properties is making concerted efforts to enhance its portfolio quality through repositioning initiatives via acquisitions, the development of properties in core markets and shedding properties in non-core markets.
Also, amid strong demand from life-science tenants, it is converting numerous straight office buildings to office labs in its suburban portfolio, especially its Kendall Center project, which is one of the leading preferred locations for life-science clients in the world.
Notably, as of the end of the second quarter of 2023, BXP had 13 office, lab, retail and residential projects underway, with its share of the estimated total investment aggregating around $2.6 billion, which seems encouraging.
With added balance sheet strength and ample financial flexibility, the company is well-positioned to capitalize on long-term growth opportunities. As of Jun 30, 2023, it had $3.1 billion of liquidity.
Shares of this Zacks Rank #3 (Hold) company have gained 8.8% over the past six months against the industry’s decline of 11.5%.
Image Source: Zacks Investment Research
Nonetheless, given a choppy office market environment, demand for office properties is likely to remain subdued in the near term, hurting leasing volume.
Also, elevated supply in certain markets is likely to intensify competition, limiting its ability to attract and retain tenants at relatively higher rents. High interest rates raise concerns for the company.
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , Americold Realty Trust (COLD - Free Report) and EastGroup Properties (EGP - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.55.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised marginally over the past month to $1.26.
The Zacks Consensus Estimate for EastGroup Properties’ current-year FFO per share has moved 1.1% northward over the past two months to $7.62.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.