Boston Properties Inc. said Thursday it may cut its dividend to about 50 cents per quarter to retain cash and strengthen its balance sheet.

The owner of several signature office buildings nationwide currently pays a dividend of 68 cents per share. A reduction would allow the company to retain an extra $100 million annually, Boston Properties President Douglas Linde said in a conference call with analysts.

The cut to roughly 50 cents a share would represent the minimum amount Boston Properties would have to pay out as a real estate investment trust. Under rules set by the Internal Revenue Service, a REIT is exempt from corporate-level taxes when it distributes at least 90 percent of its taxable income in the form of dividends.

The board of directors would have to approve a payout cut.

Because of downturn in the U.S. economy and the soft commercial real estate market, Boston Properties said it expects to have lower taxable income and therefore could cut its dividend to the minimum.

Late Wednesday, the Boston Properties reported first-quarter funds from operations, a key performance measure of a REIT, that rose 3 percent.

Shares of Boston Properties were up 3.6 percent, or $1.76 at $50.25 on the New York Stock Exchange in late afternoon trading. (Reuters)