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Boston Properties (BXP) Closes Stake Sale in Kendall Square Asset
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Boston Properties, Inc. (BXP - Free Report) has completed the sale of the 45% interest in a Kendall Square life sciences development to Norges Bank Investment Management (“NBIM”). As a result of this NBIM investment, BXP’s share of the project’s estimated development spend over time will reduce by around $533.5 million.
This 16-story, 570,000-square-foot laboratory/life sciences property in Cambridge, MA - 290 Binney Street is presently under construction and fully pre-leased to AstraZeneca. The initial occupancy is expected to take place in April 2026.
With the consummation of this joint venture, NBIM’s two-building investment — 290 Binney Street and 300 Binney Street — in Kendall Square in Cambridge, with a gross valuation of around $1.66 billion or $2,050 per square foot, is finally accomplished. The properties encompass 810,000 square feet and are each 100% pre-leased. In late 2023, NBIM funded around $212.9 million at closing for its investment in 300 Binney Street.
Boston Properties now retains a 55% stake in the joint ventures and provides development, property management and leasing services for the ventures.
The 300 Binney Street is a six-story building undergoing redevelopment into 240,000 square feet of laboratory/life sciences space. The property is 100% pre-leased to the Broad Institute, which is expected to take occupancy in January 2025.
The move marks a strategic fit for Boston Properties as it is able to capitalize on the value that investors are placing on well-positioned, well-managed and well-leased premier workplaces. It helps boost financial strength and leverage other growing opportunities.
The life science industry is booming due to the increasing need for drug research and innovation. Against this backdrop, Boston Properties is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio, especially its Kendall Center project, which is one of the leading preferred locations for life science clients in the world.
Boston Properties has been focusing on the successful execution of its capital reallocation strategy. In particular, it is boosting its portfolio quality through repositioning initiatives through acquisitions and the development of properties in core markets and shedding properties in non-core markets.
From the beginning of 2010 through the end of the fourth quarter of 2023, Boston Properties carried out acquisitions worth $7.5 billion. It also disposed of properties for an aggregate amount of $7.6 billion during this period. Such moves highlight the company’s prudent capital management practices and relieve pressure on its balance sheet.
Shares of this Zacks Rank #3 (Hold) company have rallied 24.9% over the past year, outperforming the industry’s increase of 5.5%.
The Zacks Consensus Estimate for HST’s 2024 funds from operations (FFO) per share is pegged at $1.97, which suggests year-over-year growth of 2.6%.
The Zacks Consensus Estimate for IRM’s 2024 FFO per share stands at $4.42, which indicates an increase of 7.3% from the year-ago quarter.
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) Closes Stake Sale in Kendall Square Asset
Boston Properties, Inc. (BXP - Free Report) has completed the sale of the 45% interest in a Kendall Square life sciences development to Norges Bank Investment Management (“NBIM”). As a result of this NBIM investment, BXP’s share of the project’s estimated development spend over time will reduce by around $533.5 million.
This 16-story, 570,000-square-foot laboratory/life sciences property in Cambridge, MA - 290 Binney Street is presently under construction and fully pre-leased to AstraZeneca. The initial occupancy is expected to take place in April 2026.
With the consummation of this joint venture, NBIM’s two-building investment — 290 Binney Street and 300 Binney Street — in Kendall Square in Cambridge, with a gross valuation of around $1.66 billion or $2,050 per square foot, is finally accomplished. The properties encompass 810,000 square feet and are each 100% pre-leased. In late 2023, NBIM funded around $212.9 million at closing for its investment in 300 Binney Street.
Boston Properties now retains a 55% stake in the joint ventures and provides development, property management and leasing services for the ventures.
The 300 Binney Street is a six-story building undergoing redevelopment into 240,000 square feet of laboratory/life sciences space. The property is 100% pre-leased to the Broad Institute, which is expected to take occupancy in January 2025.
The move marks a strategic fit for Boston Properties as it is able to capitalize on the value that investors are placing on well-positioned, well-managed and well-leased premier workplaces. It helps boost financial strength and leverage other growing opportunities.
The life science industry is booming due to the increasing need for drug research and innovation. Against this backdrop, Boston Properties is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio, especially its Kendall Center project, which is one of the leading preferred locations for life science clients in the world.
Boston Properties has been focusing on the successful execution of its capital reallocation strategy. In particular, it is boosting its portfolio quality through repositioning initiatives through acquisitions and the development of properties in core markets and shedding properties in non-core markets.
From the beginning of 2010 through the end of the fourth quarter of 2023, Boston Properties carried out acquisitions worth $7.5 billion. It also disposed of properties for an aggregate amount of $7.6 billion during this period. Such moves highlight the company’s prudent capital management practices and relieve pressure on its balance sheet.
Shares of this Zacks Rank #3 (Hold) company have rallied 24.9% over the past year, outperforming the industry’s increase of 5.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Host Hotels & Resorts (HST - Free Report) and Iron Mountain (IRM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HST’s 2024 funds from operations (FFO) per share is pegged at $1.97, which suggests year-over-year growth of 2.6%.
The Zacks Consensus Estimate for IRM’s 2024 FFO per share stands at $4.42, which indicates an increase of 7.3% from the year-ago quarter.
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.