We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain BXP Stock in Your Portfolio Now
Read MoreHide Full Article
BXP, Inc.’s (BXP - Free Report) assets in a few select markets, well-diversified tenant base, strategic expansions, prudent capital-management practices and solid balance sheet position bode well for long-term growth.
However, larger expirations and the elevated supply of office properties in some markets are likely to fuel competition and weigh on its pricing power. Elevated interest expenses add to its woes.
Last month, BXP announced that it has continued to witness strong leasing activity from the beginning of the year 2025 through April 29. This emphasizes the sustained demand and long-term commitment by corporates for quality office spaces with premier amenities as their key business strategy.
BXP signed more than 1.1 million square feet of leases in the first quarter of 2025, 25% higher year over year, with a weighted-average lease term of 10.9 years. Around 270,000 square feet of leases were signed subsequent to the quarter’s end through April 29, making it a total of nearly 1.4 million square feet, which is highly encouraging.
What is Aiding BXP?
BXP's portfolio of premier office assets, concentrated in a few select high-rent, high-barrier-to-entry geographic markets, and a solid tenant base enables it to generate stable rental revenues, even during periods of economic downturn. The rise in demand for top-quality office spaces continues to be driven by technology and life science businesses, positioning the company well for long-term growth. As of March 31, 2025, the weighted average remaining lease term for its 20 largest clients, based on leased square footage, was 9.3 years. Its long-term leases with tenants having a solid credit profile assure stable cash flows.
The return-to-office policies implemented by many companies, coupled with a relatively low unemployment rate and consistent job growth, are likely to drive the demand for BXP's strategically located, high-quality office properties. Given the strong leasing momentum, management expects its 2025 occupancy to stabilize between 86.5% and 88%. We estimate an occupancy rate of 86.9% in 2025.
Moreover, amid strong demand from life-science tenants, the company is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio. As of the end of the first quarter of 2025, BXP had nine office, lab/life science, retail and residential projects underway, with its share of the estimated total investment aggregating around $2.26 billion.
The company projects the properties under development and redevelopment to add around $158 million to its share of NOI-cash upon stabilization. Given its solid financial position and prudent capital management, BXP seems well-poised to navigate any economic uncertainty and industry choppiness and capitalize on future growth opportunities.
What is Hurting BXP?
In a volatile and still elevated interest rate environment, with policy changes, geopolitical concerns and inflationary pressures, companies remain focused on cost controls and are delaying their decision-making for leasing office assets. Moreover, there is competition from developers, owners and operators of office properties and other commercial real estate, affecting BXP’s ability to retain tenants at relatively higher rents and curbing its pricing power.
Given this backdrop, it will be challenging for the company to backfill tenant move-outs and vacancies in the near term. Owing to several larger expirations due in the first half of 2025, management expects its occupancy to decline slightly during the first half of 2025.
Despite the Federal Reserve announcing rate cuts late in 2024, the interest rate is still high and is a concern for BXP. Elevated rates imply high borrowing costs for the company, affecting its ability to purchase or develop real estate. BXP has a substantial debt burden, and its share of debt as of March 31, 2025, was approximately $15.67 billion. We estimate a 2.9% year-over-year increase in its 2025 interest expenses.
So far in the quarter, shares of this office REIT, carrying a Zacks Rank #3 (Hold), have lost 3.8%, slightly narrower than its industry's 3.9% decline. Analysts seem slightly bearish on it, with the Zacks Consensus Estimate for 2025 FFO per share having been revised marginally southward over the past week to $6.89.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share is pinned at $2.34, suggesting year-over-year growth of 3.5%.
The Zacks Consensus Estimate for WPC’s 2025 FFO per share stands at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Retain BXP Stock in Your Portfolio Now
BXP, Inc.’s (BXP - Free Report) assets in a few select markets, well-diversified tenant base, strategic expansions, prudent capital-management practices and solid balance sheet position bode well for long-term growth.
However, larger expirations and the elevated supply of office properties in some markets are likely to fuel competition and weigh on its pricing power. Elevated interest expenses add to its woes.
Last month, BXP announced that it has continued to witness strong leasing activity from the beginning of the year 2025 through April 29. This emphasizes the sustained demand and long-term commitment by corporates for quality office spaces with premier amenities as their key business strategy.
BXP signed more than 1.1 million square feet of leases in the first quarter of 2025, 25% higher year over year, with a weighted-average lease term of 10.9 years. Around 270,000 square feet of leases were signed subsequent to the quarter’s end through April 29, making it a total of nearly 1.4 million square feet, which is highly encouraging.
What is Aiding BXP?
BXP's portfolio of premier office assets, concentrated in a few select high-rent, high-barrier-to-entry geographic markets, and a solid tenant base enables it to generate stable rental revenues, even during periods of economic downturn. The rise in demand for top-quality office spaces continues to be driven by technology and life science businesses, positioning the company well for long-term growth. As of March 31, 2025, the weighted average remaining lease term for its 20 largest clients, based on leased square footage, was 9.3 years. Its long-term leases with tenants having a solid credit profile assure stable cash flows.
The return-to-office policies implemented by many companies, coupled with a relatively low unemployment rate and consistent job growth, are likely to drive the demand for BXP's strategically located, high-quality office properties. Given the strong leasing momentum, management expects its 2025 occupancy to stabilize between 86.5% and 88%. We estimate an occupancy rate of 86.9% in 2025.
Moreover, amid strong demand from life-science tenants, the company is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio. As of the end of the first quarter of 2025, BXP had nine office, lab/life science, retail and residential projects underway, with its share of the estimated total investment aggregating around $2.26 billion.
The company projects the properties under development and redevelopment to add around $158 million to its share of NOI-cash upon stabilization. Given its solid financial position and prudent capital management, BXP seems well-poised to navigate any economic uncertainty and industry choppiness and capitalize on future growth opportunities.
What is Hurting BXP?
In a volatile and still elevated interest rate environment, with policy changes, geopolitical concerns and inflationary pressures, companies remain focused on cost controls and are delaying their decision-making for leasing office assets. Moreover, there is competition from developers, owners and operators of office properties and other commercial real estate, affecting BXP’s ability to retain tenants at relatively higher rents and curbing its pricing power.
Given this backdrop, it will be challenging for the company to backfill tenant move-outs and vacancies in the near term. Owing to several larger expirations due in the first half of 2025, management expects its occupancy to decline slightly during the first half of 2025.
Despite the Federal Reserve announcing rate cuts late in 2024, the interest rate is still high and is a concern for BXP. Elevated rates imply high borrowing costs for the company, affecting its ability to purchase or develop real estate. BXP has a substantial debt burden, and its share of debt as of March 31, 2025, was approximately $15.67 billion. We estimate a 2.9% year-over-year increase in its 2025 interest expenses.
So far in the quarter, shares of this office REIT, carrying a Zacks Rank #3 (Hold), have lost 3.8%, slightly narrower than its industry's 3.9% decline. Analysts seem slightly bearish on it, with the Zacks Consensus Estimate for 2025 FFO per share having been revised marginally southward over the past week to $6.89.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - 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 VICI’s 2025 FFO per share is pinned at $2.34, suggesting year-over-year growth of 3.5%.
The Zacks Consensus Estimate for WPC’s 2025 FFO per share stands at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
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.