Boston Properties Inc. (BXP), one of the leading real estate investment trusts, reported first quarter 2010 FFO (funds from operations) of $149.6 million or $1.07 per share, compared to $134.8 million or $1.11 per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
The first quarter 2010 FFO per share included a non-recurring income of 5 cents related to the termination of a lease resulting from the suspension of construction on a development project in New York City. Excluding the one-time items, FFO for first quarter 2010 was $1.02 per share, which marginally missed the Zacks Consensus Estimate by 2 cents.
During the quarter, the overall portfolio was 92.9% leased. Boston Properties reclassified three in-service properties spanning 131,000 square feet of space as redevelopments during the quarter. Also during the quarter, the company refinanced a $207 million mortgage loan collateralized by a joint-venture property in which it had a 60% ownership.
During the quarter, Boston Properties paid $12.8 million for the termination of lease for its 1 million square feet office project in New York City. The company has currently suspended all construction work on the project, and recognized $7.2 million of ‘other income’ during the first quarter of fiscal 2010. Boston Properties ended the quarter with cash and cash equivalents of over $1.2 billion.
Subsequent to the quarter end, Boston Properties acquired a 30% stake in a joint-venture property spanning approximately 180,000 square feet of net rentable office space in Washington DC. The company also refinanced two separate mortgage loans collateralized by joint-venture properties in New York City and Washington DC.
In April 2010, Boston Properties announced an offering of $700 million aggregate principal amount of 5.625% senior unsecured notes due November 15, 2020. The company expects to raise net proceeds of approximately $693.5 million from the offering. The net proceeds from the offering would be primarily used to reduce debt and for general corporate purposes. Boston Properties had priced the notes at 99.89% of the face amount to yield 5.6% to maturity.
Boston Properties anticipates FFO for full year 2010 in the range of $4.06 to $4.16 per share, while FFO for the second quarter is expected to be in the range of 97 cents to 99 cents per share.
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