Question · Q3 2025
Alexander David Goldfarb asked how BXP's investment criteria have tightened since Investor Day, specifically regarding development yield thresholds, and how many deals were rejected due to these new, higher thresholds.
Answer
CEO Owen Thomas stated that BXP's development yield threshold is now 8% or higher, an increase of 100-200 basis points from pre-interest rate hike levels (6-7%), requiring significantly higher rents due to increased construction costs. This makes BXP a more selective office developer. President Douglas Linde added that BXP is executing on $2.6 billion in developments (343 Madison, 725 12th Street, and a potential new build-to-suit), which represents significant external growth, and acquisitions at a 6% NOI yield are less appealing compared to these development opportunities.