BXP, Inc. (BXP) Q3 2025 Earnings Summary

Executive Summary

Q3 results were mixed: revenue beat estimates while GAAP EPS missed materially on non-cash impairment; FFO/share exceeded guidance on stronger portfolio NOI. Revenue was $871.5M vs $851.9M consensus (beat), EPS was $(0.77) vs $0.43 consensus (miss), and FFO/share was $1.74 (+$0.04 vs guidance midpoint) . EPS miss was driven by $212M of impairments tied to the strategic asset sales program; management emphasized this was non-cash and contrasted with FFO strength .
Management nudged FY2025 FFO guidance midpoint up by ~$0.03 to $6.89–$6.92, while lowering EPS to $0.99–$1.02 due to impairments; Q3 leasing of >1.5M sf was the strongest Q3 since 2019, supporting 2026 occupancy uplift plans .
Balance sheet actions were constructive: $1.0B 2.00% exchangeable notes due 2030 (GAAP 2.5%) and a $465M 5.73% green CMBS at The Hub on Causeway; interest coverage remained ~2.6x–2.8x, and net debt/EBITDAre was 8.21x .
Near-term stock catalysts: continued leasing progress at 360 Park Avenue South and 343 Madison (LOI for 30% of space), asset sale closings from a ~$1.25B pipeline, and confirmation of 2026 occupancy uplift (most commencements in 2H26) .

What Went Well and What Went Wrong

What Went Well
- Strong leasing momentum and NOI outperformance: 79 leases, >1.5M sf (best Q3 since 2019); FFO beat guidance midpoint by $0.04, driven by better same-property NOI and lower expenses. “FFO per share was $0.04 above our forecast and $0.02 above market consensus” (Owen Thomas) .
- Capital markets access improved: issued $1.0B 2.00% exchangeables (GAAP 2.5%) and refinanced Hub on Causeway with $465M green CMBS at ~5.73%; management noted five-times oversubscription and tightening CMBS spreads .
- Development progress: full vertical construction commenced at 343 Madison (LOI for ~274k sf/30%); three projects placed in-service (1050 Winter 100% leased; Reston Next Phase II 92% leased; 360 PAS 38% leased) .
What Went Wrong
- GAAP EPS miss from non-cash impairments tied to asset sales plan: $(0.77) vs $0.43 consensus; impairments totaled $212M for the quarter (including JV-related) .
- Portfolio occupancy dipped 40 bps to 86.0% after placing three developments in service (occupied vs leased gap widened to ~1.4M sf), though excluding deliveries occupancy rose 20 bps .
- Dividend reset to $0.70 (from $0.98) reduced distributions; however, FAD payout fell to 61.4%, increasing internal funding flexibility .

Financial Results

Quarterly results (actuals)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$865.2	$868.5	$871.5
Diluted EPS ($)	$0.39	$0.56	$(0.77)
FFO per Share – Diluted ($)	$1.64	$1.71	$1.74
Operating Margin (%)	N/A	60.5%	60.8%

Q3 2025 vs S&P Global consensus

Metric	Estimate	Actual	Beat/Miss
EPS ($)	$0.43*	$(0.77)	— bold — Miss
Revenue ($USD Millions)	$851.9*	$871.5	— bold — Beat
EBITDA ($USD Millions)	$486.7*	$482.1*	Miss

Values marked with * retrieved from S&P Global.

Segment mix (BXP’s Share of rental revenue, Q3 2025)

Segment	Q3 2025 ($USD Millions)
Office	$739.9
Retail	$57.2
Residential	$15.8
Hotel	$13.1
Total	$826.0

KPIs and portfolio metrics

KPI	Q2 2025	Q3 2025
Portfolio Occupancy (%)	86.4%	86.0%
Portfolio Leased (%)	89.1%	88.8%
Change in Same-Property NOI (ex-term income) YoY (%)	(0.2%)	1.7%
Change in Same-Property NOI – Cash (ex-term income) YoY (%)	1.7%	2.6%
Leases Executed (sf, quarter)	>1.1M	>1.5M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Diluted)	FY 2025	$1.74–$1.82	$0.99–$1.02	— bold — Lowered (impairments)
FFO/Share (Diluted)	FY 2025	$6.84–$6.92	$6.89–$6.92	— bold — Raised midpoint (~+$0.03)
Avg In‑Service Occupancy	FY 2025	N/A	86.5%–87.5%	N/A
Same-Property NOI (ex-term income) YoY	FY 2025	N/A	0.0%–0.5%	N/A
Same-Property NOI – Cash (ex-term income) YoY	FY 2025	N/A	1.0%–1.5%	N/A
G&A Expense ($M)	FY 2025	N/A	$(161)–$(158)	N/A
Consolidated Net Interest ($M)	FY 2025	N/A	$(621)–$(617)	N/A
Unconsolidated JV Interest ($M)	FY 2025	N/A	$(75)–$(73)	N/A
Dividend/Share (Quarter)	Q3 2025	$0.98 (prior)	$0.70	— bold — Lowered

Management noted FFO midpoint raised by $0.03, with drivers including higher same-property NOI and lower interest expense, partly offset by Q4 asset sale dilution .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Leasing momentum & occupancy	>1.1M sf in Q1 and >1.1M sf in Q2; occupancy 86.9%→86.4% with known rollovers	>1.5M sf; excluding deliveries occupancy +20 bps; gap between leased and occupied now ~1.4M sf; expecting ~210 bps occupancy improvement by YE 2026 (mostly 2H26)	— bold — Strengthening
Capital markets access	Revolver upsized/extended; $252M CMBS at 7750 Wisconsin	$1.0B 2.00% exchangeables (GAAP 2.5%); $465M green CMBS at 5.73%; improving CMBS liquidity/spreads	— bold — Improving
Asset sales program	N/A (prior)	Plan to sell ~27 assets for ~$1.9B by 2027; ~$1.25B closed/underway; 2025 dispositions $500–$700M targeted	Ramping
AI/tech demand & SF dynamics	Not highlighted in PRs	AI demand concentrated south of Mission; activity rising at 680 Folsom; towers remain more pro services-led	Mixed: targeted strength
Development pipeline	Q2: proceed with 343 Madison; acquire partner’s 45%	343 Madison full vertical started; LOI ~30%; three new in-service projects	Advancing
Tariffs/supply chain	General risk noted in PRs	Tariffs considered in bids; budgets in line; potential savings amid slower construction	Manageable

Management Commentary

“FFO per share was $0.04 above our forecast and $0.02 above market consensus, and we raised the midpoint of our earnings guidance for the full year 2025 by $0.03” — Owen Thomas, CEO .
“We project the current in-service portfolio…to end 2026 at 88.3% occupied, a 210 basis point increase, with most of the improvement in the second half of 2026” — Douglas Linde, President .
“All of the outperformance came from better-than-projected same-property portfolio NOI… and lower net operating expenses” — Michael LaBelle, CFO .
“We commenced full vertical construction of 343 Madison Avenue… signed a letter of intent… approximately 274,000 square feet, or 30% of the building” — Company release .
“Dispositions completed for 2025 could aggregate approximately $500 to $700 million in net proceeds” — Owen Thomas .

Q&A Highlights

Asset sales timing and dilution: Management reiterated the $1.9B multi-year plan, with Q4 sales slightly dilutive (~$0.01/share including interest effects); timing could shift dilution within a prior $0.04–$0.09 range discussed at Investor Day .
343 Madison capital partner: Intent to introduce a 30–50% equity partner in 2026 as leasing/market conditions improve; being patient to capture appreciation .
Market footprint (LA/Seattle): Smaller West Coast markets remain challenged; no near-term development; selective on acquisitions while focusing on core CBDs .
San Francisco & AI: Demand concentrated in mid-rise south of Mission; rising tours/LOIs at 680 Folsom; towers remain more services-led .
CBD mix strategy: CBD exposure ~89% of rents; plan to increase CBD concentration via urban investments and suburban dispositions (not to 100%) .

Estimates Context

Q3 vs S&P Global consensus: Revenue $871.5M vs $851.9M (beat); EPS $(0.77) vs $0.43 (miss); EBITDA $482.1M vs $486.7M (miss). Management noted FFO/share was ~$0.02 above market consensus and $0.04 above guidance midpoint . Values for consensus marked with * retrieved from S&P Global.
Implications: GAAP EPS estimates likely revised down for 2025 on impairments, while FFO estimates should drift modestly higher on NOI and lower interest expense; 2026 estimates hinge on commencement timing and asset sale cadence .

Metric	Q3 2025 Consensus	Q3 2025 Actual
EPS ($)	0.426*	(0.77)
Revenue ($M)	851.9*	871.5
EBITDA ($M)	486.7*	482.1*