BXP (BXP) Q2 2024 earnings summary

Executive summary

• FFO and EPS per share for Q2 2024 exceeded guidance midpoints, with the midpoint of 2024 FFO guidance raised by $0.08.

• Leasing activity surged, with over 1.3 million sq ft leased in Q2, a 41% year-over-year increase and near the 10-year average, with a weighted-average lease term of 9 years.

• Premier workplace assets continue to outperform, with 90.4% occupancy and 92.2% leased in CBDs as of Q2 2024.

• BXP is actively managing liquidity, capital allocation, and development, with a $2.5 billion development pipeline and $1.3 billion remaining to be invested.

• Sustainability efforts recognized, including top U.S. ranking by Time Magazine and release of the 2023 Sustainability and Impact Report.

Financial highlights

• Q2 2024 FFO was $1.77 per share, $0.06 above guidance midpoint, driven by lower operating expenses and a $0.05 non-recurring reduction in non-cash interest expense.

• Q2 2024 net income attributable to BXP, Inc. was $79.6 million ($0.51 per share), down from $104.3 million ($0.66 per share) in Q2 2023.

• Q2 2024 total revenue was $850.5 million, up 4.1% year-over-year.

• 2024 FFO guidance increased to $7.09–$7.15 per share, up $0.08 at midpoint.

• Termination income guidance for 2024 raised to $14–$16 million, offsetting a 25 bps reduction in same-property NOI growth guidance.

Outlook and guidance

• Full-year 2024 FFO per share guidance: $7.09–$7.15; EPS guidance: $2.08–$2.14.

• Expectation for occupancy to rise as leasing outpaces expirations; projected year-end occupied space between 87% and 87.5%.

• 2024 same-property NOI growth now guided to -1.5% to -3% year-over-year.

• Interest expense guidance updated to $578–$588 million for 2024.

• Management expects market tailwinds from lower inflation and anticipated interest rate cuts.