By Debbie Cai
Boston Properties Inc.'s (BXP) first-quarter profit fell 0.9% as
the office landlord posted significantly higher expenses, offset in
part by higher revenue and a debt-forgiveness gain.
For the current quarter, the company expects funds from
operations--a key measure of performance for the real-estate
sector-of $1.25 to $1.27 a share. Analysts surveyed by Thomson
Reuters had forecast $1.21 a share.
Boston Properties lowered its full-year FFO to $4.97 to $5.07 a
share, from its downbeat January forecast of $5.06 to $5.18 a
share.
The real-estate investment trust, which also manages and
develops hotel and industrial properties, has recorded sustained
revenue growth for more than three years, though earnings have been
impacted by charges and expenses. Its properties are concentrated
in the Boston, midtown Manhattan and Washington markets, where
rents remained high through the recession, and as the housing
market recovers.
Owen Thomas, former chairman of Lehman Brothers Holdings Inc.,
earlier this month succeeded Boston Properties's co-founder Mort
Zuckerman as chief executive.
Boston Properties posted a profit of $48 million, or 31 cents a
share, down from $48.5 million, or 33 cents a share, a year
earlier. FFO fell to $1.06 a share from $1.12 a share, missing its
January guidance of FFO between $1.19 and $1.21 a share.
The latest quarter included 12 cents per share in expenses
related to the CEO succession and a five cents-a-share impairment
charge. It also included a $20.2 million debt-forgiveness gain from
discontinued operations.
Total revenue grew 8.9% to $483 million, beating the $470
million consensus estimate.
Leasing rates rose to 91.7% as of March 31, from 91.4% at the
end of 2012.
Base rent improved 6.5%.
Total expenses climbed 17%, as operating expenses associated
with rentals rose 11%.
Shares closed at $109.43 on Tuesday and were unchanged after
hours. The stock is up 2.7% over the past six months.
Write to Debbie Cai at debbie.cai@dowjones.com
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