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MarketScreener Homepage  >  Equities  >  Nyse  >  Boston Properties, Inc.    BXP

BOSTON PROPERTIES, INC.

(BXP)
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Boston Properties : Announces Third Quarter 2020 Results; Reports EPS of $0.58 and FFO Per Share Of $1.57

10/27/2020 | 03:53pm EST

Signs 811,000 Square Feet of Leasing in Q3 With a Weighted Average Lease Term of Seven Years

Boston Properties, Inc. (NYSE: BXP), the largest publicly-traded developer, owner and manager of Class A office properties in the United States, reported results today for the third quarter ended September 30, 2020.

Financial highlights for the third quarter include:

  • Net income attributable to common shareholders of $89.9 million, or $0.58 per diluted share (EPS), compared to $107.8 million, or $0.70 per diluted share, for the quarter ended September 30, 2019. The third quarter of 2020 included a $0.06 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail, fitness and entertainment sectors.
  • Funds from Operations (FFO) of $244.0 million, or $1.57 per diluted share, compared to FFO of $253.6 million, or $1.64 per diluted share, for the quarter ended September 30, 2019. The third quarter of 2020 included a $0.06 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail, fitness and entertainment sectors.

Third quarter and recent business highlights include:

  • Completed 811,000 square feet of leases and renewals in the third quarter with a weighted average lease term of approximately seven years. Notable leases signed in the quarter include a 13-year expansion and a long-term extension with Microsoft Corporation in Reston, Virginia totaling 186,000 square feet and a new, 14-year, 82,000 square foot lease with Columbia Threadneedle Investments at Atlantic Wharf in Boston, Massachusetts.
  • In addition, the Company recently signed a 196,000 square foot, 20-year lease with the Volkswagen Group of America at BXP’s 1.1 million square foot development in the new phase of Reston Town Center in Reston, Virginia. With this new lease, the development is 85% pre-leased. Further details can be found in the press release issued today.
  • Collected 99% of its total rent payments from office tenants in the third quarter. Rent collections from all commercial tenants, including base rent from retail tenants, were 97% in total in Q3.
  • Completed and fully placed in-service two developments in the third quarter including Hub50House, a 320,000 square foot residential property in Boston, Massachusetts which the Company has a 50% ownership and The Skylyne, a 331,000 square foot residential property in Oakland, California.
  • Entered into an agreement with an existing joint venture partner for the future development of a 1.2 million square foot site in Waltham, Massachusetts, a popular submarket of Boston for leading and emerging companies in the life sciences, biotechnology and technology sectors. The agreement allows for the phased development of office and lab properties across 41-acres. Boston Properties will serve as the development manager and expects to be a majority owner of the properties. This agreement builds on Boston Properties’ current footprint of 4.3 million square feet of Class A Office and lab properties in this submarket.
  • Completed the acquisition of a 50% interest in Beach Cities Media Center, a 6.4-acre land site on the Rosecrans Corridor of the El Segundo submarket of Los Angeles, California for a purchase price of approximately $21.2 million. Located in close proximity to the desirable beach cities of Manhattan, Hermosa and Redondo as well as the Palos Verdes peninsula, El Segundo is one of the most in-demand locations for Fortune 500 and emerging office tenants in the South Bay of Los Angeles. The site is fully entitled to support the future development of approximately 275,000 square feet of Class A creative office space.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended September 30, 2020. In the opinion of management, the Company has made all adjustments considered necessary for a fair statement of these reported results.

Boston Properties will host a conference call on Wednesday, October 28, 2020 at 10:00 AM Eastern Time, open to the general public, to discuss the third quarter 2020 results, provide a business update pertaining to the current COVID-19 pandemic and discuss other business matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 796-3880 (Domestic) or (443) 961-9013 (International) and entering the passcode 5198453. A replay of the conference call will be available by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 51984533. There will also be a live audio webcast of the call, which may be accessed in the Investor Relations section of the Company’s website at investors.bxp.com. Shortly after the call, a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

Additionally, a copy of Boston Properties’ third quarter 2020 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at investors.bxp.com.

Boston Properties (NYSE: BXP) is the largest publicly-held developer and owner of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The Company’s portfolio totals 51.2 million square feet and 196 properties, including seven properties under construction/redevelopment. For more information about Boston Properties, please visit our website at www.bxp.com or follow us on LinkedIn or Instagram.

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. These statements are based on our current expectations of future events. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond Boston Properties’ control. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, uncertainties and risks related to the impact of the COVID-19 global pandemic, including the duration, scope and severity of the pandemic domestically and internationally; federal, state and local government actions or restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures on our and our tenants' businesses, financial condition, results of operation, cash flows, liquidity and performance, and the U.S. and international economy and economic activity generally; whether new or existing actions/or measures result in increasing unemployment that impacts the ability of our residential tenants to generate sufficient income to pay, or makes them unwilling to pay, rent in full or at all in a timely manner; the health, continued service and availability of our personnel, including our key personnel and property management teams; and the effectiveness or lack of effectiveness of governmental relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19. In addition to the risks specific to COVID-19, other factors include, without limitation, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement whether as a result of new information, future events or otherwise, except as may be required by law.

Financial tables follow.

BOSTON PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited) 

 

September 30, 2020

 

December 31, 2019

 

(in thousands, except for share and par value amounts)

ASSETS

 

 

 

Real estate, at cost

$

21,554,453

 

 

$

21,458,412

 

Construction in progress

769,846

 

 

789,736

 

Land held for future development

446,392

 

 

254,828

 

Right of use assets - finance leases

237,382

 

 

237,394

 

Right of use assets - operating leases

146,973

 

 

148,640

 

Less: accumulated depreciation

(5,413,709)

 

 

(5,266,798)

 

Total real estate

17,741,337

 

 

17,622,212

 

Cash and cash equivalents

1,714,783

 

 

644,950

 

Cash held in escrows

50,006

 

 

46,936

 

Investments in securities

34,934

 

 

36,747

 

Tenant and other receivables, net

76,330

 

 

112,807

 

Related party note receivable, net

77,592

 

 

80,000

 

Note receivables, net

25,304

 

 

15,920

 

Accrued rental income, net

1,111,078

 

 

1,038,788

 

Deferred charges, net

644,036

 

 

689,213

 

Prepaid expenses and other assets

106,524

 

 

41,685

 

Investments in unconsolidated joint ventures

1,377,291

 

 

955,647

 

Total assets

$

22,959,215

 

 

$

21,284,905

 

LIABILITIES AND EQUITY

 

 

 

Liabilities:

 

 

 

Mortgage notes payable, net

$

2,912,494

 

 

$

2,922,408

 

Unsecured senior notes, net

9,636,397

 

 

8,390,459

 

Unsecured line of credit

 

 

 

Unsecured term loan, net

499,270

 

 

498,939

 

Lease liabilities - finance leases

233,288

 

 

224,042

 

Lease liabilities - operating leases

201,337

 

 

200,180

 

Accounts payable and accrued expenses

345,959

 

 

377,553

 

Dividends and distributions payable

171,070

 

 

170,713

 

Accrued interest payable

88,826

 

 

90,016

 

Other liabilities

369,932

 

 

387,994

 

Total liabilities

14,458,573

 

 

13,262,304

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Redeemable deferred stock units

5,604

 

 

8,365

 

 

 

 

 

Equity:

 

 

 

Stockholders’ equity attributable to Boston Properties, Inc.:

 

 

 

Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding

 

 

 

Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at September 30, 2020 and December 31, 2019

200,000

 

 

200,000

 

Common stock, $0.01 par value, 250,000,000 shares authorized, 155,715,200 and 154,869,198 issued and 155,636,300 and 154,790,298 outstanding at September 30, 2020 and December 31, 2019, respectively

1,556

 

 

1,548

 

Additional paid-in capital

6,348,076

 

 

6,294,719

 

Dividends in excess of earnings

(364,720)

 

 

(760,523)

 

Treasury common stock at cost, 78,900 shares at September 30, 2020 and December 31, 2019

(2,722)

 

 

(2,722)

 

Accumulated other comprehensive loss

(52,622)

 

 

(48,335)

 

Total stockholders’ equity attributable to Boston Properties, Inc.

6,129,568

 

 

5,684,687

 

Noncontrolling interests:

 

 

 

Common units of the Operating Partnership

634,796

 

 

600,860

 

Property partnerships

1,730,674

 

 

1,728,689

 

Total equity

8,495,038

 

 

8,014,236

 

Total liabilities and equity

$

22,959,215

 

 

$

21,284,905

 

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

(in thousands, except for per share amounts)

Revenue

 

 

 

 

 

 

 

 

Lease

 

$

666,674

 

 

$

692,225

 

 

$

2,006,904

 

 

$

2,051,665

 

Parking and other

 

16,327

 

 

25,582

 

 

54,777

 

 

76,807

 

Hotel revenue

 

90

 

 

13,014

 

 

7,014

 

 

36,796

 

Development and management services

 

7,281

 

 

10,303

 

 

23,285

 

 

29,566

 

Direct reimbursements of payroll and related costs from management services contracts

 

2,896

 

 

2,429

 

 

8,617

 

 

8,227

 

Total revenue

 

693,268

 

 

743,553

 

 

2,100,597

 

 

2,203,061

 

Expenses

 

 

 

 

 

 

 

 

Operating

 

 

 

 

 

 

 

 

Rental

 

258,261

 

 

265,603

 

 

761,014

 

 

781,091

 

Hotel

 

3,164

 

 

8,743

 

 

11,958

 

 

25,686

 

General and administrative

 

27,862

 

 

31,147

 

 

102,059

 

 

107,980

 

Payroll and related costs from management services contracts

 

2,896

 

 

2,429

 

 

8,617

 

 

8,227

 

Transaction costs

 

307

 

 

538

 

 

1,254

 

 

1,415

 

Depreciation and amortization

 

166,456

 

 

165,862

 

 

515,738

 

 

507,867

 

Total expenses

 

458,946

 

 

474,322

 

 

1,400,640

 

 

1,432,266

 

Other income (expense)

 

 

 

 

 

 

 

 

(Loss) income from unconsolidated joint ventures

 

(6,873)

 

 

(649)

 

 

(5,410)

 

 

47,528

 

(Losses) gains on sales of real estate

 

(209)

 

 

(15)

 

 

613,723

 

 

766

 

Interest and other income (loss)

 

(45)

 

 

7,178

 

 

4,277

 

 

14,546

 

Gains from investments in securities

 

1,858

 

 

106

 

 

965

 

 

4,240

 

Loss from early extinguishment of debt

 

 

 

(28,010)

 

 

 

 

(28,010)

 

Impairment loss

 

 

 

 

 

 

 

(24,038)

 

Interest expense

 

(110,993)

 

 

(106,471)

 

 

(319,726)

 

 

(309,837)

 

Net income

 

118,060

 

 

141,370

 

 

993,786

 

 

475,990

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

Noncontrolling interests in property partnerships

 

(15,561)

 

 

(18,470)

 

 

(34,280)

 

 

(54,782)

 

Noncontrolling interest—common units of the Operating Partnership

 

(10,020)

 

 

(12,504)

 

 

(97,090)

 

 

(43,133)

 

Net income attributable to Boston Properties, Inc.

 

92,479

 

 

110,396

 

 

862,416

 

 

378,075

 

Preferred dividends

 

(2,625)

 

 

(2,625)

 

 

(7,875)

 

 

(7,875)

 

Net income attributable to Boston Properties, Inc. common shareholders

 

$

89,854

 

 

$

107,771

 

 

$

854,541

 

 

$

370,200

 

Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:

 

 

 

 

 

 

 

 

Net income

 

$

0.58

 

 

$

0.70

 

 

$

5.49

 

 

$

2.40

 

Weighted average number of common shares outstanding

 

155,645

 

 

154,577

 

 

155,349

 

 

154,553

 

Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:

 

 

 

 

 

 

 

 

Net income

 

$

0.58

 

 

$

0.70

 

 

$

5.49

 

 

$

2.39

 

Weighted average number of common and common equivalent shares outstanding

 

155,670

 

 

154,820

 

 

155,447

 

 

154,847

 

 

BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

(Unaudited)

 

Three months ended September 30,

 

Nine months ended September 30,

 

2020

 

2019

 

2020

 

2019

 

(in thousands, except for per share amounts)

Net income attributable to Boston Properties, Inc. common shareholders

$

89,854

 

 

$

107,771

 

 

$

854,541

 

 

$

370,200

 

Add:

 

 

 

 

 

 

 

Preferred dividends

2,625

 

 

2,625

 

 

7,875

 

 

7,875

 

Noncontrolling interest - common units of the Operating Partnership

10,020

 

 

12,504

 

 

97,090

 

 

43,133

 

Noncontrolling interests in property partnerships

15,561

 

 

18,470

 

 

34,280

 

 

54,782

 

Net income

118,060

 

 

141,370

 

 

993,786

 

 

475,990

 

Add:

 

 

 

 

 

 

 

Depreciation and amortization expense

166,456

 

 

165,862

 

 

515,738

 

 

507,867

 

Noncontrolling interests in property partnerships’ share of depreciation and amortization

(15,833)

 

 

(17,402)

 

 

(55,940)

 

 

(53,273)

 

Company’s share of depreciation and amortization from unconsolidated joint ventures

20,413

 

 

13,745

 

 

59,757

 

 

43,993

 

Corporate-related depreciation and amortization

(444)

 

 

(411)

 

 

(1,399)

 

 

(1,218)

 

Impairment loss

 

 

 

 

 

 

24,038

 

Less:

 

 

 

 

 

 

 

Gains on sales of real estate included within (loss) income from unconsolidated joint ventures

 

 

(487)

 

 

5,946

 

 

47,270

 

(Losses) gains on sales of real estate

(209)

 

 

(15)

 

 

613,723

 

 

766

 

Noncontrolling interests in property partnerships

15,561

 

 

18,470

 

 

34,280

 

 

54,782

 

Preferred dividends

2,625

 

 

2,625

 

 

7,875

 

 

7,875

 

Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)

270,675

 

 

282,571

 

 

850,118

 

 

886,704

 

Less:

 

 

 

 

 

 

 

Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations

26,697

 

 

28,940

 

 

85,095

 

 

90,792

 

Funds from operations attributable to Boston Properties, Inc. common shareholders

$

243,978

 

 

$

253,631

 

 

$

765,023

 

 

$

795,912

 

Boston Properties, Inc.’s percentage share of funds from operations - basic

90.14

%

 

89.76

%

 

89.99

%

 

89.76

%

Weighted average shares outstanding - basic

155,645

 

 

154,577

 

 

155,349

 

 

154,553

 

FFO per share basic

$

1.57

 

 

$

1.64

 

 

$

4.92

 

 

$

5.15

 

Weighted average shares outstanding - diluted

155,670

 

 

154,820

 

 

155,447

 

 

154,847

 

FFO per share diluted

$

1.57

 

 

$

1.64

 

 

$

4.92

 

 

$

5.14

 

  1. Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), we calculate Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and real estate-related depreciation and amortization. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

    Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently.

    In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

 

BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES

 

% Leased by Location

 

September 30, 2020

 

December 31, 2019

Boston

94.6

%

 

95.9

%

Los Angeles

96.7

%

 

96.7

%

New York

90.5

%

 

92.9

%

San Francisco

91.6

%

 

93.7

%

Washington, DC

84.3

%

 

87.6

%

Total Portfolio

91.1

%

 

93.0

%

 


© Business Wire 2020
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Financials (USD)
Sales 2020 2 821 M - -
Net income 2020 945 M - -
Net Debt 2020 11 570 M - -
P/E ratio 2020 15,4x
Yield 2020 4,29%
Capitalization 14 212 M 14 212 M -
EV / Sales 2020 9,14x
EV / Sales 2021 9,10x
Nbr of Employees 760
Free-Float 99,8%
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Technical analysis trends BOSTON PROPERTIES, INC.
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 101,80 $
Last Close Price 91,30 $
Spread / Highest target 58,8%
Spread / Average Target 11,5%
Spread / Lowest Target -5,81%
EPS Revisions
Managers and Directors
NameTitle
Owen D. Thomas Chief Executive Officer & Director
Douglas T. Linde President & Director
Joel Irwin Klein Independent Non-Executive Chairman
Michael E. LaBelle Chief Financial Officer, Treasurer & Executive VP
James J. Whalen Chief Information Officer & Senior Vice President
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