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.
BXP Gains 10.3% in a Month: Time to Buy, Hold or Sell the Stock?
Read MoreHide Full Article
Key Takeaways
BXP stock surged 10.3% in a month, outpacing its industry and the broader market.
Leasing volume reached 1.4M sq ft through April, with major tenants committing to long-term leases.
BXP is advancing $2.26B in developments, including 71%-pre-leased life-science projects under construction.
BXP, Inc. (BXP - Free Report) , the largest publicly traded developer, owner and manager of premier workplaces in the United States, recently experienced a significant upturn in its stock price, gaining 10.3% over the past month. It outperformed the Zacks REIT and Equity Trust - Other industry’s growth of 2% and the S&P 500 composite’s rise of 2.4% over the same time frame.
BXP's portfolio of premier office assets, concentrated in a few select high-rent, high-barrier-to-entry geographic markets, and solid tenant base enable 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.
Investors might be pondering whether they have missed the investment opportunity or still have time to take a position. Let us delve deeper to understand whether it is prudent to consider retaining the stock in the portfolio or increasing positions.
One-Month Price Performance
Image Source: Zacks Investment Research
What’s Aiding BXP’s Growth?
The return-to-office policies implemented by many companies, coupled with a decent job market, are likely to drive the demand for BXP's strategically located, high-quality office properties. In the first quarter of 2025, the company executed 91 leases totaling around 1.1 million square feet with a weighted average lease term of 10.9 years, an increment of 25% year over year. Around 270,000 square feet of leases were signed subsequent to the quarter end through April 29, bringing the total to nearly 1.4 million square feet.
This emphasizes the sustained demand and long-term commitment of corporates to quality office spaces with premier amenities as their key business strategy. 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.
This office REIT’s tenant roster includes several industry bellwethers. 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. 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 March 31, 2025, BXP had two life-science projects under development, encompassing 0.9 million RSF with an estimated total investment of $675.1 million (BXP’s share) and 71% pre-leased.
BXP 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 first quarter of 2025, BXP carried out acquisitions worth $7.6 billion at its share. It also disposed of properties for an aggregate amount of $8.2 billion at its share during this period. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.
Moreover, the company has an encouraging development and redevelopment pipeline, which bodes well for its long-term growth. 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 the company’s share of NOI cash upon stabilization.
Headwinds for 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.
BXP’s Estimate Revisions and Valuation
Analysts seem to be slightly bearish about BXP’s prospects, as indicated by the Zacks Consensus Estimate for funds from operations (FFO) per share’s downward revision for both 2025 and 2026 over the past month.
BXP: Estimate Revisions
Image Source: Zacks Investment Research
Currently, BXP is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing office REITs, of 10.26X, which is at a discount to the industry average of 15.59X. The stock is also trading at a discount to its industry peer SL Green Realty Corp.’s (SLG - Free Report) current forward 12-month P/FFO of 12.08X and Vornado Realty Trust’s (VNO - Free Report) P/FFO of 17.53X.
Although BXP stock is currently trading at a discount compared to its industry peers like SL Green and Vornado Realty Trust, this valuation disparity might not be as favorable as it seems.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
Final Thoughts on BXP
BXP owns a high-quality portfolio of Class A office properties concentrated in select U.S. markets. Strong demand for top-tier office space, coupled with BXP’s capability to deliver such offerings, is expected to support leasing momentum and rental rate increases. Its broad tenant mix also contributes to revenue stability. However, in the face of macroeconomic uncertainty and shifting policy dynamics, many businesses are postponing leasing decisions. As a result, BXP may face near-term challenges in re-leasing vacated spaces and mitigating the impact of tenant departures.
That said, while the stock currently trades at a relative discount to peers like SL Green and Vornado Realty Trust, prospective investors may choose to remain cautious until there’s greater clarity on macroeconomic trends and potential policy shifts. However, existing shareholders may choose to remain invested, given the superior portfolio quality of BXP and the return-to-office policies implemented by several companies.
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
BXP Gains 10.3% in a Month: Time to Buy, Hold or Sell the Stock?
Key Takeaways
BXP, Inc. (BXP - Free Report) , the largest publicly traded developer, owner and manager of premier workplaces in the United States, recently experienced a significant upturn in its stock price, gaining 10.3% over the past month. It outperformed the Zacks REIT and Equity Trust - Other industry’s growth of 2% and the S&P 500 composite’s rise of 2.4% over the same time frame.
BXP's portfolio of premier office assets, concentrated in a few select high-rent, high-barrier-to-entry geographic markets, and solid tenant base enable 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.
Investors might be pondering whether they have missed the investment opportunity or still have time to take a position. Let us delve deeper to understand whether it is prudent to consider retaining the stock in the portfolio or increasing positions.
One-Month Price Performance
Image Source: Zacks Investment Research
What’s Aiding BXP’s Growth?
The return-to-office policies implemented by many companies, coupled with a decent job market, are likely to drive the demand for BXP's strategically located, high-quality office properties. In the first quarter of 2025, the company executed 91 leases totaling around 1.1 million square feet with a weighted average lease term of 10.9 years, an increment of 25% year over year. Around 270,000 square feet of leases were signed subsequent to the quarter end through April 29, bringing the total to nearly 1.4 million square feet.
This emphasizes the sustained demand and long-term commitment of corporates to quality office spaces with premier amenities as their key business strategy. 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.
This office REIT’s tenant roster includes several industry bellwethers. 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. 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 March 31, 2025, BXP had two life-science projects under development, encompassing 0.9 million RSF with an estimated total investment of $675.1 million (BXP’s share) and 71% pre-leased.
BXP 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 first quarter of 2025, BXP carried out acquisitions worth $7.6 billion at its share. It also disposed of properties for an aggregate amount of $8.2 billion at its share during this period. Such moves highlight the company’s prudent capital management practices and relieve the pressure on its balance sheet.
Moreover, the company has an encouraging development and redevelopment pipeline, which bodes well for its long-term growth. 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 the company’s share of NOI cash upon stabilization.
Headwinds for 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.
BXP’s Estimate Revisions and Valuation
Analysts seem to be slightly bearish about BXP’s prospects, as indicated by the Zacks Consensus Estimate for funds from operations (FFO) per share’s downward revision for both 2025 and 2026 over the past month.
BXP: Estimate Revisions
Image Source: Zacks Investment Research
Currently, BXP is trading at a forward 12-month price-to-FFO, which is a commonly used multiple for valuing office REITs, of 10.26X, which is at a discount to the industry average of 15.59X. The stock is also trading at a discount to its industry peer SL Green Realty Corp.’s (SLG - Free Report) current forward 12-month P/FFO of 12.08X and Vornado Realty Trust’s (VNO - Free Report) P/FFO of 17.53X.
Although BXP stock is currently trading at a discount compared to its industry peers like SL Green and Vornado Realty Trust, this valuation disparity might not be as favorable as it seems.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
Final Thoughts on BXP
BXP owns a high-quality portfolio of Class A office properties concentrated in select U.S. markets. Strong demand for top-tier office space, coupled with BXP’s capability to deliver such offerings, is expected to support leasing momentum and rental rate increases. Its broad tenant mix also contributes to revenue stability. However, in the face of macroeconomic uncertainty and shifting policy dynamics, many businesses are postponing leasing decisions. As a result, BXP may face near-term challenges in re-leasing vacated spaces and mitigating the impact of tenant departures.
That said, while the stock currently trades at a relative discount to peers like SL Green and Vornado Realty Trust, prospective investors may choose to remain cautious until there’s greater clarity on macroeconomic trends and potential policy shifts. However, existing shareholders may choose to remain invested, given the superior portfolio quality of BXP and the return-to-office policies implemented by several companies.
At present, BXP Properties carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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.