BXP BXP Inc

   By Maria Armental 
 

Boston Properties Inc.'s (BXP) third-quarter profit rose on gains from real-estate sales even as more of its properties went vacant.

Citing market conditions, such as rental rates and occupancy levels, the Boston-based real-estate investment trust raised its projection for funds from operations, a key metric for REITs, to $5.46 to $5.48 a share, compared with its earlier view of $5.37 to $5.45 a share. In 2014, it made $5.26 a share.

For 2016, it projects FFO of $5.50 to $5.70 a share, compared with analysts' projected $5.78 a share, according to Thomson Reuters.

Meanwhile for the current quarter, it projects FFO of $1.39 to $1.41 a share, compared with analysts' forecasts of $1.39 a share, according to Thomson Reuters.

Boston Properties defines funds from operations as net income less real-estate-related depreciation and amortization along with impairment losses or gains or losses associated with disposition activities.

The REIT, which focuses on office space, has said it expects results to benefit from the expansion of the life sciences and technology industry in the Boston area, which accounts for nearly a third of its square footage.

It gave its John Hancock Tower, on Boston's Back Bay, a facelift that it has said it expects to attract new tenants at a 40% premium. But company officials have said they expected much of that space to remain vacant until at least the second half of 2016.

Overall, Boston Properties reported a profit of $186.7 million, or $1.20 a share, compared with $130.4 million, or 83 cents a share, a year earlier. FFO were $1.41 a share, compared with $1.46 a share a year earlier, above its projected $1.34 to $1.36 a share.

Revenue rose to $629.9 million from $618.8 million, compared with analysts' projected $610.8 million.

The percentage of leased properties in its portfolio fell to 91.3%, from 91.7% as of Dec. 31, the company said.

The percentage of leased property in San Francisco, where a tech boom is fueling demand and adding pressure to the city's cap on office-space development under Proposition M, improved to 88.6% from 88.3% as of Dec. 31.

Shares, inactive in late trading, closed at $122.78 on Thursday, down 5% for the year.

Write to Maria Armental at maria.armental@wsj.com

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(END) Dow Jones Newswires

October 29, 2015 18:15 ET (22:15 GMT)

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