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Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2023 funds from operations (FFO) per share of $1.82 outpaced the Zacks Consensus Estimate by a penny. However, the reported figure fell 2.2% year over year.
BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP also issued its guidance for 2024 FFO per share.
Quarterly revenues from lease came in at $768.9 million, up 4% year over year. The Zacks Consensus Estimate was pegged at $762.3 million. Total revenues increased 5% from the prior-year quarter to $828.9 million.
In 2023, Boston Properties reported an FFO per share of $7.28, which beat the Zacks Consensus Estimate of $7.27. The figure compared unfavorably with the prior year’s $7.53. Lease revenues of $3.05 billion were in line with the Zacks Consensus Estimate and increased 4.7% year over year.
Quarter in Detail
Boston Properties’ rental revenues (excluding termination income) for the office portfolio came in at $743.5 million, which rose 1.1% year over year. For the hotel & residential segment, the metric aggregated $23.6 million, indicating a jump of 4.7% year over year. On a consolidated basis, BXP’s rental revenues (excluding termination income) came in at $767.1 million, up 1.2% year over year.
BXP’s share of same property net operating income (NOI) on a cash basis (excluding termination income) totaled $430.2 million, which declined marginally from the prior-year quarter.
Its share of EBITDAre (on a cash basis), as of Dec 31, 2023, was $457.1 million, down 2.1% from $466.8 million as of Sep 30, 2023.
BXP’s in-service properties occupancy fell 40 basis points sequentially to 88.4%. We estimated the metric to be 88.6%.
BXP’s quarterly interest expenses were up 29.3% year over year to $155.1 million.
Portfolio Activity
As of Dec 31, 2023, Boston Properties’ portfolio comprised 188 properties encompassing 53.3 million square feet of space. This included ten properties under construction/redevelopment.
During the fourth quarter, the company executed more than 1.5 million square feet of leases with a weighted average lease term of 8.4 years.
Boston Properties entered into agreements with Norges Bank Investment Management to divest 45% of its interest in two life sciences development properties — 290 Binney Street and 300 Binney Street — in Kendall Square in Cambridge, MA, to the bank.
Balance Sheet Position
Boston Properties exited fourth-quarter 2023 with cash and cash equivalents of $1.53 billion, up from $882.6 million as of Sep 30, 2023.
BXP’s share of net debt to EBITDAre annualized was 7.37 as of Dec 31, 2023, up from 7.28 times as of Sep 30, 2023.
2024 Outlook
Boston Properties projects FFO per share for first-quarter 2024 to be in the range of $1.72-$1.74.
For 2024, FFO per share is expected to be in the band of $7.00-$7.20. The Zacks Consensus Estimate for the same is currently pegged at $7.14, which lies in the guided range.
BXP estimates the decrease in its share of the same property NOI on a cash basis (excluding termination income) to be between 3% and 1% for 2024. The average in-service portfolio occupancy is expected to be in the band of 87.20-88.60%.
SL Green Realty Corp. (SLG - Free Report) reported fourth-quarter 2023 FFO per share of 72 cents, lagging the Zacks Consensus Estimate of 88 cents per share. The figure fell 50.7% from the year-ago quarter’s $1.46.
The results reflect lower-than-anticipated revenues despite decent leasing activity in its Manhattan portfolio. However, lower interest expenses and a rise in same-store cash NOI during the quarter were commendable. SLG raised its guidance for 2024 FFO per share.
Crown Castle Inc. (CCI - Free Report) reported fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.82, outpacing the Zacks Consensus Estimate of $1.79. However, the reported figure declined 1.6% from the year-ago quarter.
Results reflect better-than-anticipated revenues aided by healthy site-rental revenue growth. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2023 AFFO per share of $2.28, missing the Zacks Consensus Estimate by a penny. However, the reported figure climbed 6.5% from the year-ago quarter.
Results reflect lower-than-anticipated AFFO per share. However, a rise in revenues, aided by decent leasing activity and rental rate growth, supports the results to some extent. ARE also issued its 2024 outlook.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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Boston Properties (BXP) Q4 FFO & Revenues Top, '24 View Issued
Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2023 funds from operations (FFO) per share of $1.82 outpaced the Zacks Consensus Estimate by a penny. However, the reported figure fell 2.2% year over year.
BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP also issued its guidance for 2024 FFO per share.
Quarterly revenues from lease came in at $768.9 million, up 4% year over year. The Zacks Consensus Estimate was pegged at $762.3 million. Total revenues increased 5% from the prior-year quarter to $828.9 million.
In 2023, Boston Properties reported an FFO per share of $7.28, which beat the Zacks Consensus Estimate of $7.27. The figure compared unfavorably with the prior year’s $7.53. Lease revenues of $3.05 billion were in line with the Zacks Consensus Estimate and increased 4.7% year over year.
Quarter in Detail
Boston Properties’ rental revenues (excluding termination income) for the office portfolio came in at $743.5 million, which rose 1.1% year over year. For the hotel & residential segment, the metric aggregated $23.6 million, indicating a jump of 4.7% year over year. On a consolidated basis, BXP’s rental revenues (excluding termination income) came in at $767.1 million, up 1.2% year over year.
BXP’s share of same property net operating income (NOI) on a cash basis (excluding termination income) totaled $430.2 million, which declined marginally from the prior-year quarter.
Its share of EBITDAre (on a cash basis), as of Dec 31, 2023, was $457.1 million, down 2.1% from $466.8 million as of Sep 30, 2023.
BXP’s in-service properties occupancy fell 40 basis points sequentially to 88.4%. We estimated the metric to be 88.6%.
BXP’s quarterly interest expenses were up 29.3% year over year to $155.1 million.
Portfolio Activity
As of Dec 31, 2023, Boston Properties’ portfolio comprised 188 properties encompassing 53.3 million square feet of space. This included ten properties under construction/redevelopment.
During the fourth quarter, the company executed more than 1.5 million square feet of leases with a weighted average lease term of 8.4 years.
Boston Properties entered into agreements with Norges Bank Investment Management to divest 45% of its interest in two life sciences development properties — 290 Binney Street and 300 Binney Street — in Kendall Square in Cambridge, MA, to the bank.
Balance Sheet Position
Boston Properties exited fourth-quarter 2023 with cash and cash equivalents of $1.53 billion, up from $882.6 million as of Sep 30, 2023.
BXP’s share of net debt to EBITDAre annualized was 7.37 as of Dec 31, 2023, up from 7.28 times as of Sep 30, 2023.
2024 Outlook
Boston Properties projects FFO per share for first-quarter 2024 to be in the range of $1.72-$1.74.
For 2024, FFO per share is expected to be in the band of $7.00-$7.20. The Zacks Consensus Estimate for the same is currently pegged at $7.14, which lies in the guided range.
BXP estimates the decrease in its share of the same property NOI on a cash basis (excluding termination income) to be between 3% and 1% for 2024. The average in-service portfolio occupancy is expected to be in the band of 87.20-88.60%.
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-eps-surprise-chart | Boston Properties, Inc. Quote
Performance of Other REITs
SL Green Realty Corp. (SLG - Free Report) reported fourth-quarter 2023 FFO per share of 72 cents, lagging the Zacks Consensus Estimate of 88 cents per share. The figure fell 50.7% from the year-ago quarter’s $1.46.
The results reflect lower-than-anticipated revenues despite decent leasing activity in its Manhattan portfolio. However, lower interest expenses and a rise in same-store cash NOI during the quarter were commendable. SLG raised its guidance for 2024 FFO per share.
Crown Castle Inc. (CCI - Free Report) reported fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.82, outpacing the Zacks Consensus Estimate of $1.79. However, the reported figure declined 1.6% from the year-ago quarter.
Results reflect better-than-anticipated revenues aided by healthy site-rental revenue growth. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2023 AFFO per share of $2.28, missing the Zacks Consensus Estimate by a penny. However, the reported figure climbed 6.5% from the year-ago quarter.
Results reflect lower-than-anticipated AFFO per share. However, a rise in revenues, aided by decent leasing activity and rental rate growth, supports the results to some extent. ARE also issued its 2024 outlook.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.