121 Broadway/Image courtesy of Stantec
BXP executives outlined plans to sell 23 properties and concentrate investments in “premier workplace assets” in coastal urban markets during the company’s third-quarter earnings call Wednesday morning.
The nation’s largest office REIT plans to divest non-core properties that could net $1.9 billion in proceeds by the end of 2027, CEO Owen Thomas said during a conference call to discuss BXP’s third-quarter financial statement.
The office investment sales climate is improving as equity investors return to the market and availability of debt increases, particularly in the CMBS sector, Thomas said.
“Debt and equity investors are becoming more constructive in the office sector, driving availability of capital and better pricing,” Thomas said.
Up to $700 million in transactions could be completed by the end of 2025.
BXP reported overall revenues increased 1.4 percent to $871.5 million for the quarter ending Sept. 30, compared with the same period in 2024. The company posted a net loss of $121.7 million.
Funds from operations, a key indicator of a REIT’s performance, totaled $276.7 million, down from $286.9 million during the third quarter of 2024.
The office REIT executed 79 leases totaling more than 1.5 million square feet in the third quarter, up 38 percent from the third quarter of 2024. Thomas tied leasing growth to increases in office space utilization driven by return-to-office mandates.
BXP’s central business district properties are 92 percent leased, and account for 89 percent of BXP’s rental income. Overall, the portfolio is 86.6 percent leased.
In Waltham, the 1050 Winter St. repositioning project was completed fully leased. Military equipment and weapons firm Anduril Industries leased 163,000 square feet at the property, according to brokerage reports, halting plans for a lab conversion.
At the same time, BXP is looking at residential redevelopment potential in its Boston suburban market.
In Lexington, BXP completed the $21.8 million sale of the 17 Hartwell Ave. office building, which has been demolished to make way for construction of a 312-unit apartment building. The project is a joint venture with Northwestern Mutual, but BXP will act as development manager.
BXP now is considering a residential conversion for 1000 Winter St. in Waltham, President Doug Linde said. The 282,000 square-foot office building was completed in 1987.
BXP also has presented plans to redevelop its Weston Corporate Center at 133 Boston Post Road with 480 homes.
BXP has two other active development projects in Greater Boston.
The 290 Binney St. office-lab building in Cambridge’s Kendall Square is preleased to AstraZeneca. Construction continues on the adjacent 121 Broadway residential tower, which contains 439 apartments and is scheduled for completion in the third quarter of 2027. The project, with an estimated cost of $597.8 million, will become Cambridge’s tallest building.
