Boston Properties Announces First Quarter 2021 Results; Reports EPS of $0.59 and FFO Per Share Of $1.56
Sees Recent Uptick in Leasing Activity and Signs Long-Term Leases with Media, Technology and Consulting Companies; Commences New Life Sciences Development Projects in
Financial highlights for the first quarter include:
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Net income attributable to common shareholders of
$91.6 million , or$0.59 per diluted share (EPS), compared to$497.5 million , or$3.20 per diluted share, for the quarter endedMarch 31, 2020 . The decrease in EPS in the first quarter of 2021 was primarily due to a$2.37 per diluted share gain on asset sales in the first quarter of 2020 that did not reoccur in the first quarter of 2021. EPS in the first quarter of 2021 also included a$0.04 per diluted share write-off related to the redemption of the 5.25% Series B Cumulative Redeemable Preferred Stock (Series B Preferred Stock). -
Funds from Operations (FFO) of
$243.8 million , or$1.56 per diluted share, compared to FFO of$284.1 million , or$1.83 per diluted share, for the quarter endedMarch 31, 2020 .-
FFO of
$1.56 per diluted share was$0.01 greater than the mid-point of the Company's first quarter guidance provided onJanuary 26, 2021 , due to$0.04 per diluted share better-than-projected portfolio performance and$0.01 per diluted share of higher fee income, partially offset by a$0.04 per diluted share non-cash write-off related to the redemption of the Series B Preferred Stock.
-
FFO of
The Company provided guidance for the second quarter 2021 with projected EPS of
First quarter and recent business highlights include:
-
Signed approximately 592,000 square feet of leases in the quarter with a weighted-average lease term of 7.6 years. This reflects leasing volume of 84% of the total square feet of leases executed in First Quarter 2020. Notable leases signed this quarter include:
-
a 72,000 square foot, 10-year lease with Roku, a new tenant at Colorado Center in
Los Angeles, California . Please see separate press release issued today. -
a 63,500 square foot, 16-year new lease with a healthcare company at
195 West Street inWaltham, Massachusetts . -
a 60,000 square foot lease extension with a technology manufacturing company at
200 West Street inWaltham, Massachusetts . -
a 25,000 square foot, 14-year expansion with a multinational asset management company at
399 Park Avenue inNew York, New York , bringing the total space leased by the tenant to 100,000 square feet.
-
a 72,000 square foot, 10-year lease with Roku, a new tenant at Colorado Center in
-
In addition, in April the Company signed a 98,000 square foot lease with a new tenant at
Metropolitan Square inWashington, DC , and a 72,000 square foot expansion with an existing tenant inReston, Virginia . -
Completed and fully placed in-service One Five Nine
East 53rd Street inNew York City . The property includes 195,000 square feet of office space that is 100% leased toNYU for a 30-year term. -
Commenced development and redevelopment of three properties focused on meeting the ongoing demand from tenants in the life sciences sector:
-
180 CityPoint, a 329,000 square foot lab development in
Waltham, Massachusetts . -
880 Winter Street , a 224,000 square foot office property inWaltham, Massachusetts that will be redeveloped and converted into lab space. -
751
Gateway , a 229,000 square foot lab development inSouth San Francisco, California . 751Gateway is the first phase of a multi-phase life sciences campus development. The Company will own 49% of 751Gateway and future development projects atGateway Commons upon completion.
-
180 CityPoint, a 329,000 square foot lab development in
-
Commenced redevelopment of the top floors of the
Prudential Tower inBoston, Massachusetts into a 59,000 square foot, world-class observatory attraction. This will be Boston’s only observatory and will feature a dramatic, 360-degree outdoor viewing deck, 11,000 square feet of outdoor space and two floors of exhibits and public spaces, marking a transformative addition to theCity of Boston . -
Fully redeemed
$850.0 million of 4.125% unsecured senior notes scheduled to mature inMay 2021 and recognized a loss from early extinguishment of debt related to unamortized origination costs of approximately$0.4 million during the first quarter of 2021. -
Completed a green bond offering of
$850.0 million 2.550% unsecured senior notes maturing in 2032. The offering marked the Company’s third green bond offering. -
The Company redeemed all
$200 million of outstanding shares of its Series B Preferred Stock and the corresponding depositary shares onApril 1, 2021 . In connection with the redemption, the Company recognized a first quarter$6.4 million ,$0.04 per diluted share non-cash write-off related to original issuance costs associated with the Series B Preferred Stock. -
Repaid the Company’s
$500 million unsecured term loan. The Company recognized a loss from early extinguishment of debt totaling approximately$0.5 million related to unamortized financing costs. -
Completed the sale of Annapolis Junction Buildings Six and Seven, two Class A office properties in
Annapolis, Maryland totaling approximately 247,000 square feet, for a gross sales price of approximately$65.9 million . The Company had a 50% ownership interest in the joint venture that owned the properties. Net cash proceeds to the Company totaled approximately$17.6 million after repayment of the Company's share of debt totaling approximately$15.1 million .
The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended
EPS and FFO per Share Guidance:
The Company’s guidance for the second quarter 2021 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, the timing of the lease-up of available space and the earnings impact of the events referenced in this release and those referenced during the conference call and in the Company’s Supplemental Operating and Financial Data for the quarter ended
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Second Quarter 2021 |
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Low |
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High |
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Projected EPS (diluted) |
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$ |
0.54 |
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$ |
0.56 |
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Add: |
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1.05 |
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1.05 |
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Projected FFO per share (diluted) |
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$ |
1.59 |
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$ |
1.61 |
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Additionally, a copy of Boston Properties’ first quarter 2021 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at investors.bxp.com.
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “anticipates,” “believes,” “budgeted,” “could,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. These statements are based on our current plans and expectations, projections and assumptions about future events. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond Boston Properties’ control. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, uncertainties and risks related to the impact of the COVID-19 global pandemic, including the duration, scope and severity of the pandemic domestically and internationally; federal, state and local government actions or restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures on our and our tenants' businesses, financial condition, results of operation, cash flows, liquidity and performance, and the
Financial tables follow.
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(in thousands, except for share and par value amounts) |
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ASSETS |
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Real estate, at cost |
$ |
21,955,916 |
|
|
$ |
21,649,383 |
|
Construction in progress |
794,039 |
|
|
868,773 |
|
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Land held for future development |
421,349 |
|
|
450,954 |
|
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Right of use assets - finance leases |
237,017 |
|
|
237,393 |
|
||
Right of use assets - operating leases |
144,143 |
|
|
146,406 |
|
||
Less: accumulated depreciation |
(5,679,441) |
|
|
(5,534,102) |
|
||
Total real estate |
17,873,023 |
|
|
17,818,807 |
|
||
Cash and cash equivalents |
697,369 |
|
|
1,668,742 |
|
||
Cash held in escrows |
251,814 |
|
|
50,587 |
|
||
Investments in securities |
39,002 |
|
|
39,457 |
|
||
Tenant and other receivables, net |
51,271 |
|
|
77,411 |
|
||
Related party note receivable, net |
77,640 |
|
|
77,552 |
|
||
Note receivables, net |
18,891 |
|
|
18,729 |
|
||
Accrued rental income, net |
1,145,066 |
|
|
1,122,502 |
|
||
Deferred charges, net |
622,649 |
|
|
640,085 |
|
||
Prepaid expenses and other assets |
129,102 |
|
|
33,840 |
|
||
Investments in unconsolidated joint ventures |
1,307,725 |
|
|
1,310,478 |
|
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Total assets |
$ |
22,213,552 |
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|
$ |
22,858,190 |
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LIABILITIES AND EQUITY |
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Liabilities: |
|
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Mortgage notes payable, net |
$ |
2,904,672 |
|
|
$ |
2,909,081 |
|
Unsecured senior notes, net |
9,631,592 |
|
|
9,639,287 |
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Unsecured line of credit |
— |
|
|
— |
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Unsecured term loan, net |
— |
|
|
499,390 |
|
||
Lease liabilities - finance leases |
239,361 |
|
|
236,492 |
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Lease liabilities - operating leases |
200,383 |
|
|
201,713 |
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Accounts payable and accrued expenses |
260,875 |
|
|
336,264 |
|
||
Dividends and distributions payable |
171,003 |
|
|
171,082 |
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||
Accrued interest payable |
76,675 |
|
|
106,288 |
|
||
Preferred stock redemption liability |
200,000 |
|
|
— |
|
||
Other liabilities |
399,965 |
|
|
412,084 |
|
||
Total liabilities |
14,084,526 |
|
|
14,511,681 |
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||
|
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|
|
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Commitments and contingencies |
— |
|
|
— |
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||
|
|
|
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Redeemable deferred stock units |
7,679 |
|
|
6,897 |
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|
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Equity: |
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Stockholders’ equity attributable to |
|
|
|
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Excess stock, |
— |
|
|
— |
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||
Preferred stock, |
— |
|
|
200,000 |
|
||
Common stock, |
1,561 |
|
|
1,557 |
|
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Additional paid-in capital |
6,392,923 |
|
|
6,356,791 |
|
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Dividends in excess of earnings |
(570,982) |
|
|
(509,653) |
|
||
|
(2,722) |
|
|
(2,722) |
|
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Accumulated other comprehensive loss |
(45,139) |
|
|
(49,890) |
|
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Total stockholders’ equity attributable to |
5,775,641 |
|
|
5,996,083 |
|
||
Noncontrolling interests: |
|
|
|
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Common units of the |
620,106 |
|
|
616,596 |
|
||
Property partnerships |
1,725,600 |
|
|
1,726,933 |
|
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Total equity |
8,121,347 |
|
|
8,339,612 |
|
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Total liabilities and equity |
$ |
22,213,552 |
|
|
$ |
22,858,190 |
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Three months ended |
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2021 |
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2020 |
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(in thousands, except for per share amounts) |
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Revenue |
|
|
|
|
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Lease |
|
$ |
685,817 |
|
|
$ |
710,111 |
|
Parking and other |
|
16,938 |
|
|
24,504 |
|
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Hotel revenue |
|
632 |
|
|
6,825 |
|
||
Development and management services |
|
6,803 |
|
|
7,879 |
|
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Direct reimbursements of payroll and related costs from management services contracts |
|
3,505 |
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|
3,237 |
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Total revenue |
|
713,695 |
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|
752,556 |
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Expenses |
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Operating |
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Rental |
|
257,389 |
|
|
262,966 |
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Hotel |
|
2,051 |
|
|
6,821 |
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General and administrative |
|
44,959 |
|
|
36,454 |
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Payroll and related costs from management services contracts |
|
3,505 |
|
|
3,237 |
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Transaction costs |
|
331 |
|
|
615 |
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Depreciation and amortization |
|
176,565 |
|
|
171,094 |
|
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Total expenses |
|
484,800 |
|
|
481,187 |
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Other income (expense) |
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|
|
|
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Income (loss) from unconsolidated joint ventures |
|
5,225 |
|
|
(369) |
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Gains on sales of real estate |
|
— |
|
|
410,165 |
|
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Interest and other income (loss) |
|
1,168 |
|
|
3,017 |
|
||
Gains (losses) from investments in securities |
|
1,659 |
|
|
(5,445) |
|
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Losses from early extinguishment of debt |
|
(898) |
|
|
— |
|
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Interest expense |
|
(107,902) |
|
|
(101,591) |
|
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Net income |
|
128,147 |
|
|
577,146 |
|
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Net income attributable to noncontrolling interests |
|
|
|
|
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Noncontrolling interests in property partnerships |
|
(16,467) |
|
|
(19,486) |
|
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Noncontrolling interest—common units of the |
|
(11,084) |
|
|
(57,539) |
|
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Net income attributable to |
|
100,596 |
|
|
500,121 |
|
||
Preferred dividends |
|
(2,560) |
|
|
(2,625) |
|
||
Preferred stock redemption charge |
|
(6,412) |
|
|
— |
|
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Net income attributable to |
|
$ |
91,624 |
|
|
$ |
497,496 |
|
Basic earnings per common share attributable to |
|
|
|
|
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Net income |
|
$ |
0.59 |
|
|
$ |
3.20 |
|
Weighted average number of common shares outstanding |
|
155,928 |
|
|
155,011 |
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Diluted earnings per common share attributable to |
|
|
|
|
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Net income |
|
$ |
0.59 |
|
|
$ |
3.20 |
|
Weighted average number of common and common equivalent shares outstanding |
|
156,099 |
|
|
155,258 |
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Three months ended |
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|
2021 |
|
2020 |
||||
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(in thousands, except for per share amounts) |
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Net income attributable to |
$ |
91,624 |
|
|
$ |
497,496 |
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Add: |
|
|
|
||||
Preferred stock redemption charge |
6,412 |
|
|
— |
|
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Preferred dividends |
2,560 |
|
|
2,625 |
|
||
Noncontrolling interest - common units of the |
11,084 |
|
|
57,539 |
|
||
Noncontrolling interests in property partnerships |
16,467 |
|
|
19,486 |
|
||
Net income |
128,147 |
|
|
577,146 |
|
||
Add: |
|
|
|
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Depreciation and amortization expense |
176,565 |
|
|
171,094 |
|
||
Noncontrolling interests in property partnerships’ share of depreciation and amortization |
(16,457) |
|
|
(17,627) |
|
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Company’s share of depreciation and amortization from unconsolidated joint ventures |
18,412 |
|
|
18,332 |
|
||
Corporate-related depreciation and amortization |
(440) |
|
|
(469) |
|
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Less: |
|
|
|
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Gains on sale of investment included within income (loss) from unconsolidated joint ventures |
10,257 |
|
|
— |
|
||
Gains on sales of real estate |
— |
|
|
410,165 |
|
||
Noncontrolling interests in property partnerships |
16,467 |
|
|
19,486 |
|
||
Preferred dividends |
2,560 |
|
|
2,625 |
|
||
Preferred stock redemption charge |
6,412 |
|
|
— |
|
||
Funds from operations (FFO) attributable to the |
270,531 |
|
|
316,200 |
|
||
Less: |
|
|
|
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Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations |
26,728 |
|
|
32,138 |
|
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Funds from operations attributable to |
$ |
243,803 |
|
|
$ |
284,062 |
|
|
90.12 |
% |
|
89.84 |
% |
||
Weighted average shares outstanding - basic |
155,928 |
|
|
155,011 |
|
||
FFO per share basic |
$ |
1.56 |
|
|
$ |
1.83 |
|
Weighted average shares outstanding - diluted |
156,099 |
|
|
155,258 |
|
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FFO per share diluted |
$ |
1.56 |
|
|
$ |
1.83 |
|
(1) |
Pursuant to the revised definition of Funds from Operations adopted by the |
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently. |
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In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to |
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% Leased by Location |
||
|
|
|
|
|
93.1% |
|
94.8% |
|
82.2% |
|
93.5% |
|
86.8% |
|
87.4% |
|
88.7% |
|
91.0% |
|
85.7% |
|
84.4% |
Total Portfolio |
88.7% |
|
90.1% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210427006149/en/
AT THE COMPANY
Executive Vice President,
Chief Financial Officer and Treasurer
(617) 236-3352
Vice President, Investor Relations
(617) 236-3429
sbuda@bxp.com
Source: