BXP, Inc. and Boston Properties Limited Partnership Report Quarterly Results for the Period Ended March 31, 2025

BXP Maintains Strong Performance Amid Economic Uncertainty

Overview BXP is one of the largest publicly traded office real estate investment trusts (REITs) in the United States. The company develops, owns, and manages premier workplaces, with properties concentrated in six major U.S. markets - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC.

BXP’s core strategy is to focus on high-quality office properties in markets with strong demand drivers and barriers to entry. The company believes its commitment to the office sector, financial strength, and premier portfolio give it a competitive edge. Clients are increasingly seeking out buildings with modern amenities, professional management, and owners committed to long-term success.

BXP’s premier workplaces in central business districts have consistently outperformed the broader office market, with higher occupancy, rental rates, and absorption. As of March 31, 2025, the company’s CBD assets were 89.8% occupied and 92.3% leased, with a weighted-average remaining lease term of 7.9 years.

Outlook Amid Economic Uncertainty The market is experiencing increased volatility, with concerns over inflation, interest rates, and a potential recession. However, BXP has not seen significant delays or cancellations in its leasing pipeline so far. The company remains focused on ensuring ample liquidity, managing leverage, and selectively investing in premier workplace opportunities.

In the life sciences sector, proposed federal funding cuts and regulatory uncertainties are creating headwinds, which may impact leasing velocity. A potential recession could also soften overall leasing demand, but could also lead to lower interest rates and reduced remote work.

BXP is positioning itself for success by embracing its leadership in premier workplaces, proactively managing its portfolio, and prioritizing risk management. The company is committed to leasing available space, completing development projects, pursuing adjacent opportunities like residential, and actively recycling capital through strategic asset sales.

Leasing Activity and Occupancy In the first quarter of 2025, BXP executed 91 leases totaling over 1.1 million square feet, a 25% increase over the prior year. Notable deals included a 244,000 square foot lease at 200 Fifth Avenue in New York and a 162,000 square foot lease in Waltham, Massachusetts.

Overall occupancy of BXP’s in-service office and retail properties was 86.9% at March 31, 2025, down slightly from 87.5% at the end of 2024. Including signed but not yet commenced leases, the portfolio was 89.4% leased. The company’s leasing pipeline remains active and robust, with limited impact seen on its 2025 leasing plan of 4 million square feet.

Investment Activity BXP continues to pursue acquisition opportunities, focusing on lenders to highly leveraged assets and institutional owners seeking to divest from office. The company also formed a joint venture to develop a 670-unit residential project in Jersey City, New Jersey.

As of March 31, 2025, BXP’s development pipeline consisted of 9 properties totaling 3 million square feet, with an estimated $2.4 billion in total investment, of which $1.2 billion remains to be funded. The commercial space in the pipeline was 62% pre-leased as of April 28, 2025.

BXP is also actively reviewing its portfolio for potential asset sales, particularly suburban land holdings and office buildings that may be better suited for alternative uses. The company is in negotiations for the disposition of 8 land sites, which could generate approximately $250 million in net proceeds over the next 24 months.

Regional Performance Boston: BXP’s Boston CBD portfolio was 96.1% occupied and 97.9% leased as of March 31, 2025. The company’s Cambridge CBD portfolio was 97.2% occupied and 98.1% leased.

Los Angeles: BXP’s LA in-service portfolio was 83.9% occupied and 86.6% leased.

New York: BXP executed 420,000 square feet of leases in New York during Q1 2025, with the CBD portfolio 88.1% occupied and 92.3% leased.

San Francisco: BXP executed 263,000 square feet of leases in San Francisco, with the CBD portfolio 81.7% occupied and 83.7% leased.

Seattle: BXP’s Seattle in-service portfolio, including Safeco Plaza and Madison Centre, was 81.9% occupied and 84.4% leased.

Washington, DC: BXP’s DC CBD portfolio was 89.3% occupied and 90.8% leased. The company’s Reston Town Center portfolio was 94.9% occupied and 97.2% leased.

Financial Performance BXP’s net income attributable to the company decreased by $18.7 million in Q1 2025 compared to the prior year. This was primarily due to a $21.3 million decrease in income from unconsolidated joint ventures, as the prior year included a $21.8 million gain from acquiring a partner’s interest in 901 New York Avenue.

Net operating income (NOI), a key performance metric, increased slightly by 0.59% to $511.8 million. The same property portfolio saw a 1.07% decrease in NOI, offset by contributions from acquired, placed in-service, and development properties.

Residential and hotel NOI decreased by 7.82% and 6.40% respectively. Leasing statistics showed a 1.52% increase in gross rents and a 2.17% increase in net rents on second-generation leases.

Liquidity and Capital Resources As of March 31, 2025, BXP had $15.7 billion in consolidated debt, representing 56.89% of its $27.5 billion consolidated market capitalization. The company’s share of debt was $15.7 billion, or 56.93% of its $27.6 billion share of market capitalization.

Notable debt activity in Q1 2025 included:

• Repaying $850 million in 3.2% senior notes due 2025
• Amending the $2.95 billion revolving credit facility, increasing the revolver to $2.25 billion and adding a $700 million term loan
• Increasing the commercial paper program capacity from $500 million to $750 million

BXP has $386.7 million in available cash as of April 28, 2025, and $1.4 billion in available capacity under its credit facility. The company expects net interest expense to be higher in 2025 due to lower cash balances and higher interest rates on refinanced debt.

BXP’s development pipeline requires an estimated $1.2 billion in remaining investment through 2030. The company may seek to enhance liquidity through additional capital raises to fund this activity and pursue new opportunities.

Conclusion Despite economic uncertainties, BXP has maintained strong operational performance, with robust leasing activity and high occupancy in its premier office portfolio. The company is proactively managing its balance sheet, selectively investing in growth, and positioning itself to navigate potential market challenges. BXP’s focus on high-quality assets, financial discipline, and strategic capital allocation should continue to serve the company well in the years ahead.