Real estate investment trust Boston Properties Inc. (BXP) on Tuesday reported positive Funds from Operations for the fourth quarter compared to negative funds from operations last year. The company also reported a profit for the quarter compared to loss in the year-ago period despite a decline in revenues. However, the results were below the company's own projections. Looking ahead, the company forecast FFO per share in line with analysts' estimates, and raised its earnings as well as FFO outlook for fiscal year 2010. The Boston, Massachusetts-based company's Funds from Operations or FFO, a key profitability metric among REITs, were $146.06 million or $1.04 per share for the fourth quarter, compared to negative funds from operations of $0.64 million or $0.01 per share in the prior-year quarter. In the preceding third quarter, the company's FFO was $158.5 million or $1.13 per share. On average, fifteen analysts polled by Thomson Reuters expected the company to report FFO of $1.06 per share for the third quarter. Analysts' estimates typically exclude special items.
Result for the latest quarter included non-cash impairment charges of $0.04 per share on the company's investment in its Value-Added Fund.
The year-ago quarter's results non-cash impairment charges of $1.33 per share related to certain of the company's investments in unconsolidated joint ventures, $0.05 per share related to termination income associated with the company's termination of its lease with the law firm of Heller Ehrman LLP, and a charge of $0.05 per share related to the ineffectiveness of certain of the company's interest rate hedging contracts.
The company's net income available to common shareholders for the fourth quarter was $53.32 million or $0.38 per share, compared to net loss of $98.06 million or $0.81 per share in the previous-year quarter. In the previous quarter, the company's net income available to common shareholders was $65.8 million or $0.47 per share. While announcing its financial results for the third quarter in October, Boston Properties had projected FFO for the fourth quarter in a range of $1.04-$1.06 per share, and earnings of $0.40-$0.42 per share.
Revenue for the latest quarter declined 3.17% to $377.91 million from $390.30 million in the same period last year, but increased from $377.30 million in the preceding quarter. Analysts had a consensus revenue estimate of $358.55 million for the latest quarter.
Among Boston Properties' peers, Vornado Realty Trust (VNO) is slated to report its financial results for the fourth quarter on February 23. Analysts expect the company to report FFO of $0.90 per share for the quarter on revenues of $675.45 million.
Boston Properties' total rental revenue for the quarter declined 2.9% to $357.57 million, revenue from development and management services declined 8.2% to $8.28 million and hotel revenue dropped 15.4% to $10.28 million. However, interest and other revenue more than doubled to to $1.78 million.
Total expenses for the third quarter increased to $318.21 million from $317.31 million in the prior-year quarter. The company recorded gains from investments in securities of $0.51 million compared to losses from investments in securities of $2.63 million a year ago.
Income from unconsolidated joint ventures for the quarter were $0.96 million compared to loss from unconsolidated joint ventures of $187.56 million in the same period last year. Gains on sales of real estate for the latest quarter increased to $2.08 million from $1.95 million last year.
As of December 31, 2009, the company's portfolio consisted of 146 properties comprising approximately 50.5 million square feet, including five properties under construction totaling 2.0 million square feet and one hotel. The overall percentage of leased space for the 140 properties in service as of December 31, 2009 was 92.4%, up from 92.1% in the prior quarter and down from 94.5% a year ago.
For fiscal year 2009, Boston Properties posted FFO of $606.27 million or $4.59 per share, up from $403.79 million or $3.33 per share in the previous year.
Net income available to common shareholders rose to $231.01 million or $1.76 per share from $105.27 million or $0.87 per share a year ago.
Total revenue for the year rose to $1.52 billion from $1.48 billion in the prior year.
For the first quarter, Boston Properties forecasts FFO in a range of $1.02-$1.04 per share and earnings in a range of $0.36-$0.38 per share. Analysts expect the company to report FFO of $1.03 per share for the quarter.
For fiscal year 2010, the company raised its projection for FFO to a range of $4.10-$4.25 per share from the prior range of $4.00-$4.20 per share, and earnings to a range of $1.36-$1.51 per share from the prior range of $1.26-$1.46 per share. Analysts expect the company to report FFO of $4.10 per share.
BXP closed Tuesday's regular trading session at $64.72, down $0.38 or 0.58% on a volume of 1.44 million shares. In the after-hours, the shares gained $0.49 or 0.76% to $62.21. In the past 52 weeks, the stock has been trading in a range of $29.30-$72.23.
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