Investment Thesis
Boston Properties (BXP) is a real estate investment trust (“REIT”) that owns and develops Class A office properties in the United States. Its properties attract top tenants from different industry sectors. The company has a good track record of increasing its dividend and same property net operating income (“NOI”) in the past few years. BXP also has an active development pipeline that will contribute to its NOI in the next few years. However, the current rising interest rate environment may weigh on its shares.
Source: Company Website
The Positives of Boston Properties
Geographically Diversified
BXP’s properties are geographically diversified in five key markets: Boston, New York, Washington, D.C., San Francisco, and Los Angeles. BXP is not heavily dependent on one single market since no one single market represents more than one-third of its total net operating income (“NOI”). This diversification is important as any unexpected event (e.g., natural disaster) or regional economic weakness will not severely impact its funds from operations ("FFO").
