BXP, Inc. (BXP) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 revenue rose 3.6% year over year to $858.6M; funds from operations (FFO) per share were $1.79, essentially flat vs Q4 2023 ($1.82) and slightly below Q3 2024 ($1.81). GAAP diluted EPS was $(1.45) due to ~$341.3M non-cash JV impairments on Colorado Center, Gateway Commons, and Safeco Plaza .
Management said Q4 FFO was in line with both company forecast and market consensus; however, S&P Global consensus estimates could not be retrieved for independent comparison due to data access limits .
Guidance introduced: Q1 2025 EPS $0.33–$0.35 and FFO $1.63–$1.65; FY2025 EPS $1.57–$1.75 and FFO $6.77–$6.95. EPS is higher than 2024 due to nonrecurring 2024 impairments; FFO lower primarily on higher net interest expense from reduced average cash balances after debt repayment and funding development .
Leasing momentum: strongest quarter since Q2 2019 with 2.3M SF signed in Q4 (weighted-average term 10.3 years), and 5.6M SF for 2024, supporting improving leased percentage (89.4%) and CBD occupancy/leasing outperformance (90.9%/92.8%) .

What Went Well and What Went Wrong

What Went Well
- Record leasing momentum: 2.3M SF in Q4 and 5.6M SF in 2024; “momentum is clearly building” in premier workplaces with long lease terms .
- Premier workplace outperformance: CBD assets 90.9% occupied and 92.8% leased; management emphasized demand concentration and higher asking rents vs broader market .
- Accretive DC redevelopment: acquired 725 12th Street for $34M with 152k SF pre-lease; projected >8% initial cash development yield and potential majority pre-leasing of remaining space .
What Went Wrong
- GAAP loss from JV impairments: $(1.45) diluted EPS driven by ~$341.3M non-cash JV impairment charges on West Coast assets; life science and West Coast office remain headwinds .
- Slight sequential FFO downtick and FAD softness: FFO per share $1.79 vs $1.81 in Q3; FAD fell to $209.5M vs $219.1M, with payout ratio rising to 82.5% .
- 2025 FFO guidance below 2024: primarily due to higher net interest expense from lower average cash balances after repaying $850M notes and funding ~$700M development spend .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$828.9	$859.2	$858.6
Diluted EPS ($)	$0.76	$0.53	$(1.45)
FFO per share (Diluted) ($)	$1.82	$1.81	$1.79

Year-over-year: revenue +3.6%; EPS impacted by impairments; FFO per share modestly lower .
Quarter-over-quarter: revenue flat; EPS swing due to impairments; FFO per share −$0.02 .

Segment/Rental Revenue Breakdown (BXP’s Share, Q4 2024)

Unit Type	Rental Revenue ($USD Thousands)
Office	$735,196
Retail	$54,248
Residential	$14,856
Hotel	$13,048
Total	$817,348

Key KPIs

KPI	Q3 2024	Q4 2024
Total Portfolio Occupancy (%)	87.0	87.5
Total Portfolio Leased (%)	89.1	89.4
CBD Occupied/Leased (%)	90.1 / 92.1	90.9 / 92.8
Q4 Leasing Volume (SF)	—	2,323,553
Weighted-Average Lease Term (Years)	—	10.3
FAD ($USD Thousands)	$219,130	$209,499
FAD Payout Ratio (%)	78.86	82.48
Interest Coverage (ex-capitalized)	2.95	2.88
Net Debt / EBITDAre (Annualized)	7.59	7.65

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Diluted)	Q1 2025	N/A	$0.33 – $0.35	New
FFO per Share (Diluted)	Q1 2025	N/A	$1.63 – $1.65	New
EPS (Diluted)	FY 2025	N/A	$1.57 – $1.75	New
FFO per Share (Diluted)	FY 2025	N/A	$6.77 – $6.95	New

Rationale: EPS midpoint higher vs 2024 due to nonrecurring 2024 JV impairments; FFO midpoint lower driven mainly by higher net interest expense as cash balances decline after debt repayment and development funding. Assumptions include average occupancy 86.5–88.0%, stable same-property NOI (cash up to +1.5%), and fee income uplift ($32–$38M) .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior-2)	Q3 2024 (Prior-1)	Q4 2024 (Current)	Trend
Premier workplace outperformance	Emphasized 50% rent premium, CBD 90.4% occupied/92.2% leased	Continued outperformance; CBD 90.1% occupied/92.1% leased	Gap vs broader market persists; direct vacancy lower; absorption positive in premium	Improving/consistent
Return-to-office (RTO)	Salesforce 3–5 days, attendance rising	Further pickup, East Coast stronger	RTO accelerating; sector/region differences; collaboration days matter	Improving
Leasing momentum	1.3M SF in Q2; raised 2024 guidance	1.1M SF in Q3; pipeline building; 4.5M+ FY target	2.3M SF in Q4; 5.6M FY; avg term ~10 years	Accelerating
San Francisco/West Coast	Demand improving but sublease overhang; tech cautious	Positive tours; small deals; AI interest emerging	Law firm/legacy downsizes offset growth; AI tenants and amenities strategy; positive Q4 absorption noted	Gradual improvement with headwinds
Development pipeline	Deliveries (Skymark, Dick’s, 300 Binney); capitalized interest timing	More deliveries; stabilization delayed in some lab assets	725 12th St (>8% yield); 343 Madison targeted 2025 launch; 651 Gateway/360 Park in-service 2025	Active; selective
Capital markets/debt	Unsecured bond August; CMBS improving	Continued flexibility; data on CMBS spreads	Repaid $850M 3.2% notes Jan 2025; higher net interest expected	Neutral to cautious (interest headwinds)

Management Commentary

“We completed over 2.3 million square feet of leasing in the quarter, which was…130% of our long-term average…our fifth largest quarter of leasing ever.” (Owen Thomas) .
“Premier workplaces…continue to materially outperform the broader office market…asking rents…more than 50% higher than the broader market.” (Owen Thomas) .
“We acquired 725 12th Street…secured a long-term prelease…projected initial cash development yield…over 8%.” (Owen Thomas) .
“Our initial guidance range for 2025 FFO is $6.77 to $6.95…decline…primarily due to lower interest income from lower cash balances as we fund our development pipeline.” (Michael LaBelle) .
“Our in-service properties finished the year at 87.5% occupancy…we were 89.4% leased.” (Douglas Linde) .

Q&A Highlights

Occupancy trajectory: With ~3.1M SF 2025 expirations and ~2.3M SF targeted leasing of vacant/expiring space, net leased pickup ~40 bps expected; 2026–2027 seen as low rollover years enabling occupancy gains with continued leasing pace .
Concessions and net effective rents: Park Avenue and Back Bay seeing rising face rents and firming TI; concessions sticky outside tight submarkets; net effectives improving in strongest areas .
San Francisco demand and AI: Positive Q4 absorption; amenities strategy at Embarcadero/680 Folsom; AI and broader tech showing incremental activity but legacy downsizes persist .
Guidance clarifications: Developments entering service could temporarily drag reported occupancy (~70 bps if no additional leasing); removal of certain suburban buildings from service may offset .
Capital allocation: Accretive redevelopments like 725 12th; 343 Madison targeted for 2025; opportunistic acquisitions in premier segment as financing improves .

Estimates Context

Management stated Q4 FFO per share was in line with market consensus, but S&P Global consensus estimates could not be retrieved independently due to a daily rate-limit error; as a result, we cannot quantify beats/misses versus Wall Street consensus for revenue, EPS, or FFO this quarter .
We will reassess when S&P Global (Capital IQ) access is available to validate consensus and compare actuals.

Key Takeaways for Investors

Leasing momentum and premier workplace positioning are driving share gains; 2.3M SF in Q4 and 5.6M SF in 2024 with long terms support stable cash flows despite macro headwinds .
2025 FFO guide modestly lower vs 2024 is primarily a financing/cash balance story (repayment of $850M notes and ~$700M development spend), not an operating weakness; watch rate path and fee income contributions .
CBD portfolio remains the earnings anchor (90.9%/92.8% occupied/leased), highlighting asset quality, location, and amenity advantages; regional bifurcation persists (East Coast stronger than West Coast) .
West Coast exposure is improving but still mixed: San Francisco’s amenity investments and AI demand can help, while legacy downsizing and sublease overhang temper absorption; life science leasing is slower to materialize .
Development pipeline offers embedded growth: 725 12th Street in DC (>8% yield) and 343 Madison (target 2025 launch) position BXP for medium-term NOI uplift; deliveries at 651 Gateway and 360 Park expected to contribute beyond 2025 as leasing commences .
Balance sheet actions de-risk near-term maturities (notes repaid) but elevate near-term net interest expense; maintain focus on interest coverage (2.66–2.88x) and Net Debt/EBITDAre (7.65x) .
Tactical angle: near-term prints likely emphasize stable occupancy/leasing and financing headwinds; catalysts include additional leasing at developments, potential accretive acquisitions as premier asset bid-ask narrows, and sector-wide RTO momentum supporting occupancy and rent growth in tight submarkets .

Notes: All quantitative and qualitative data are sourced from BXP’s Q4 2024 press release, Form 8-K exhibits, and earnings call transcripts. S&P Global consensus estimates were unavailable at this time due to access limits.