BXP, Inc. (BXP) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 was solid: revenue rose 2.1% YoY to $868.5M and diluted EPS hit $0.56, with FFO/share of $1.71; EPS and FFO both exceeded company guidance midpoints, driven by a $18.4M gain on sale at 17 Hartwell and stronger portfolio operations .
Full-year 2025 guidance was raised: EPS to $1.74–$1.82 (midpoint +$0.12) and FFO/share to $6.84–$6.92 (midpoint +$0.02), while Q3 guidance was set at EPS $0.41–$0.43 and FFO/share $1.69–$1.71 .
Leasing momentum continued: 91 leases totaling >1.1M SF; CBD portfolio 89.9% occupied and 92.5% leased; total portfolio 86.4% occupied and 89.1% leased, with 1.3M SF signed but not yet commenced expected to start in 2025–2026 .
Strategic catalyst: BXP launched vertical construction of 343 Madison Avenue (930k SF, targeted delivery late 2029) and executed an LOI with an investment-grade anchor for ~~30% of the tower; BXP will buy out its partner’s 45% interest (~~$43.5M) in Q3 2025 .
The company highlighted improving demand in premier workplace markets (NY, Back Bay Boston, Reston) and a clear path to occupancy and FFO growth through 2026, balanced against interest-rate sensitivities and life-science leasing headwinds .

What Went Well and What Went Wrong

What Went Well

EPS and FFO beats with guidance raise: “FFO per share was $0.05 above our forecast and $0.04 above market consensus... we’re also raising the midpoint of our earnings guidance” .
Development milestone: “We’re proceeding with full vertical construction of 343 Madison… we have executed a letter of intent with an anchor client for ~30% of the building” .
Leasing execution and pipeline: 1.1M SF executed in Q2; in-service leased vs. occupied spread widened to 270 bps (1.3M SF signed not yet commenced), enabling visible revenue ramp in H2 2025–2026 .

What Went Wrong

Occupancy dipped 50 bps QoQ to 86.4% due to known Boston lease expiration (360k SF) and early terminations to enable higher-rent backfills; headline occupancy will be temporarily pressured as developments are added in Q3 .
West Coast softness: Life-science demand for wet lab space remains thin; San Francisco traditional office users continue to rationalize even as AI demand grows, resulting in mixed mark-to-market across regions .
Interest expense outlook: fewer expected Fed cuts vs prior assumptions; BXP added ~$3M to 2025 interest expense in updated guidance (partly offset by lower G&A) .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025	Consensus Q2 2025
Revenue ($USD Millions)	$850.5	$865.2	$868.5	$858.1*
Diluted EPS ($)	$0.51	$0.39	$0.56	$0.4191*
FFO per Share - Diluted ($)	$1.77	$1.64	$1.71	$1.6724*
Net Income Attrib. to BXP ($USD Millions)	$79.6	$61.2	$89.0	—

Values with * retrieved from S&P Global.

Segment NOI and Rental Revenue

Segment	Rental Revenue ex-Termination ($USD Millions)	NOI ex-Termination ($USD Millions)	Change YoY
Office (Consolidated)	$806.7	$488.6	NOI -0.1% YoY
Hotel & Residential (Consolidated)	$27.3	$11.4	NOI -0.9% YoY
Consolidated Total	$834.0	$500.0	NOI -0.1% YoY
BXP’s Share (ex JV Partner)	$802.7	$484.2	NOI -0.2% YoY

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
CBD Occupancy (%)	90.9	89.8	89.9
Total Portfolio Occupancy (%)	87.5	86.9	86.4
Total Portfolio Leased (%)	89.4	89.4	89.1
BXP’s Share Net Debt / EBITDAre (Annualized) (x)	—	8.33	8.18
Interest Coverage (ex cap. int.) (x)	—	2.83	2.85
FAD ($USD Thousands)	—	$213,885	$203,592
FAD Payout Ratio (%)	—	81.03%	85.15%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Diluted)	Q3 2025	—	$0.41–$0.43	New
FFO/Share (Diluted)	Q3 2025	—	$1.69–$1.71	New
EPS (Diluted)	FY 2025	$1.60–$1.72	$1.74–$1.82	Raised (midpoint +$0.12)
FFO/Share (Diluted)	FY 2025	$6.80–$6.92	$6.84–$6.92	Raised (midpoint +$0.02)
Avg In-service Occupancy (Assumption)	FY 2025	86.5%–88.0%	86.5%–88.0% (unchanged)	Maintained
Same-Property NOI YoY (ex term. income)	FY 2025	-0.5% to +0.5%	0.0% to +0.5% (midpoint +25 bps)	Raised
Same-Property NOI Cash YoY (ex term.)	FY 2025	+0.5% to +1.5%	+1.0% to +1.5%	Raised
Consolidated Net Interest Expense	FY 2025	$(625)M to $(615)M	$(625)M to $(620)M	Slightly higher at low end
Dividend ($/share)	FY 2025	$3.92 annualized	$3.92 annualized	Maintained

Other guidance notes: Q2 beats driven by ~$0.10 EPS from the 17 Hartwell gain and ~$0.05 FFO/share outperformance; updated rate-cut assumptions reduced potential Fed cuts to two in Q4, adding ~$3M interest expense to 2025 .

Earnings Call Themes & Trends

Topic	Q4 2024 (Prev-2)	Q1 2025 (Prev-1)	Q2 2025 (Current)	Trend
Premier workplace outperformance	Emphasized lower vacancy and higher rents vs broader market	Continued outperformance metrics; limited new office supply	Confirmed; demand strongest in NY/Back Bay/Reston	Improving
AI-driven demand (SF/NY)	Building momentum; SF amenity upgrades	AI footprint >5M SF; granular absorption; spec suites	SF AI demand remains a bright spot; micro-trend emerging in Midtown South	Positive, granular
Tariffs & construction costs	Flagged potential inflation impact	Early bids showed manageable impact; labor/materials competition offset	Subcontractor interest yielding savings vs prior estimates (343 Madison GMP)	Manageable
Interest rates & funding	Rates volatile; opportunistic hedging; CP cheapest	Bank/CMBS access; extended facilities; swapped debt	Reduced expected Fed cuts; ~$3M higher 2025 interest expense	Mixed headwind
343 Madison Avenue	Expected 2025 launch; strong anchor interest	LOIs to multiple anchors; 8% targeted yield	Vertical construction launched; 30% LOI; unlevered 7.5–8% cash yield	Major catalyst
Residential entitlements & monetization	Active re-entitlement pipeline	290 Coles JV launched; preferred equity 13% IRR	17 Hartwell residential JV formed; $18.4M gain; construction loan at 6.75%	Accretive
Return-to-office (RTO)	Gaining; CBD occupancy rising	DOAS helping DC; in-person behavior improving	Fortune 100: fully in-office rose to 54%; hybrid fell to 41%	Tailwind
Life sciences	Weak wet-lab demand; office-only LS needs emerging	Office-oriented LS demand (Waltham/SSF)	Wet-lab thin; pivot examples (1050 Winter to office)	Mixed

Management Commentary

“Our FFO per share was $0.05 above our forecast and $0.04 above market consensus… we’re also raising the midpoint of our earnings guidance” — Owen Thomas .
“We’re proceeding with full vertical construction of 343 Madison… we have executed a letter of intent with an anchor client for approximately 30% of the building” — Owen Thomas .
“Unlevered cash yield upon delivery is roughly 7.5% to 8%; levered IRR likely mid to high teens depending on cap and financing” — Owen Thomas .
“We increased our guidance range to $6.84 to $6.92 per share… increase at midpoint from $0.03 better same property NOI and $0.01 lower G&A, partially offset by $0.02 higher interest expense” — Mike LaBelle .
“Total portfolio percentage leased was 89.1%; difference between leased and occupied grew to 270 bps (~1.3M SF), expected to commence 2025–2026” — Doug Linde .

Q&A Highlights

343 Madison economics and funding: BXP targets unlevered 7.5–8% yield; will buy out partner’s 45% and weigh private/public equity, asset sales (~$600M potential net proceeds), construction or corporate debt; dividend reset is a lever but not decided .
Occupancy trajectory: In-service portfolio to ~87% by year-end (excluding development adds); headline occupancy will be temporarily impacted (~70 bps) when 360 PAS/1050 Winter/Reston Next Block D enter service; leased square footage expected to continue rising .
Regional demand: Strength in Park Avenue/Back Bay/Reston; San Francisco traditional users rationalize while AI tenants drive granular absorption; amenity investments (Embarcadero Mosaic, 680 Folsom roof deck) supporting leasing .
Leverage: Net debt/EBITDAre expected to moderate in 2026 with delivery of fully leased 290 Binney and occupancy gains; ongoing monetization of non-income assets assists funding .
Mark-to-market: NY/Boston cash rents up double digits; concessions sticky outside tight submarkets; select Q2 spreads reflect specific lease mix and TI dynamics .

Estimates Context

Q2 2025 actuals vs S&P Global consensus:
- Revenue: $868.5M actual vs $858.1M consensus* — beat.
- Diluted EPS: $0.56 actual vs $0.4191 consensus* — beat (helped by ~$0.10/share gain on sale).
- FFO/share (REIT): $1.71 actual vs $1.6724 consensus* — modest beat.
  Values retrieved from S&P Global.
Company-reported beats versus internal guidance midpoints: EPS beat by $0.17/share; FFO/share beat by $0.05/share .

Key Takeaways for Investors

Premier workplace exposure is paying off: tightening in NY/Back Bay/Reston supports rent growth and occupancy gains into 2026; watch the leased vs occupied spread (~1.3M SF signed not yet commenced) as a leading indicator .
343 Madison is a high-conviction, multi-year value-creation project with an anchor LOI and attractive unlevered yields; funding flexibility spans asset monetization, JV equity, debt, and potential dividend reset .
Near-term optics: headline occupancy may dip when developments enter service in Q3, but cash/NOI trajectory should improve as commencements flow through in H2 2025 and 2026 .
Rate sensitivity remains the key macro variable; management reduced assumed Fed cuts, lifting 2025 interest expense by ~$3M; hedge actions and fixed-rate mix help but monitor refinancing cadence .
West Coast remains mixed: AI supports SF demand; life-science wet-lab is soft; BXP’s pivot to office in select lab assets (e.g., 1050 Winter) exemplifies capital discipline .
Pipeline monetization and residential entitlements (e.g., 17 Hartwell gain) provide non-dilutive funding sources and optionality to support development and deleveraging .
Trading implication: the combination of guidance raise, 343 Madison greenlight, and visible occupancy lifts is a constructive narrative; near-term headline occupancy noise is likely transient against improving leased backlog .

Notes & Citations

Financials and performance:
Guidance and assumptions:
Segment metrics:
KPIs and ratios:
343 Madison press and call:
Leasing and occupancy commentary:
Estimates values: S&P Global.