BXP Gears Up to Report Q1 Earnings: Key Factors to Consider

BXP, Inc. BXP is slated to report first-quarter 2025 results on April 29, after market close. While the company’s quarterly results are likely to display a year-over-year rise in revenues, funds from operations (FFO) per share are expected to decline.

In the last reported quarter, this office real-estate investment trust (REIT) met the Zacks Consensus Estimate in terms of FFO per share. The quarterly results reflected better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth.

Over the preceding four quarters, BXP’s FFO per share surpassed the Zacks Consensus Estimate once and met in the remaining periods, the average beat being 0.73%. This is depicted in the graph below:

BXP, Inc. Price and EPS Surprise

BXP, Inc. price-eps-surprise | BXP, Inc. Quote

US Office Market in Q1

Per a Cushman & Wakefield report, the U.S. office demand showed resilience amid macroeconomic uncertainties in the first quarter of 2025. The shift in economic policies under the Trump administration could not majorly impact it as of the end of the first quarter.

During the first quarter, though net absorption turned out to be negative, the four-quarter rolling absorption was the strongest in the past two years. The four-quarter rolling net absorption for the broader office space was positive for a third of the U.S. markets. The metric at negative 35 million square feet (MSF) improved 30% quarter over quarter and 48% year over year.

Demand for quality offices was on the upswing, as evident in the four-quarter rolling absorption in Class A buildings, which surpassed the broader office market, improving 36% quarter over quarter and 55% year over year. As such, the vacancy turned out to be uneven. Nearly half of the office buildings have single-digit vacancies or no vacancies at all. In the first quarter of 2025, office demand was positive for one-third of the U.S. market.

Moreover, supply pressures are continuously receding due to decreasing sublease activities and dwindling new construction activity. National sublease availabilities fell 9.5% year over year, with the trend being broad-based, prevalent in two-thirds of the U.S. market. The under-construction pipeline stood at 26.2 MSF, nearly half down from Q1’24 and just one-fifth of the Q1’20 pipeline, representing only 0.5% of the current inventory. At the same time, new deliveries in the first quarter were the lowest quarterly total in the past 12 years at just 4.1 MSF. The current pipeline is 80% less than that at the beginning of 2020.

BXP’s Projections for Q1

BXP owns a portfolio of class-A office buildings concentrated in a few select high-rent, high-barrier-to-entry geographic markets of Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. Given the rise in demand for top-quality offices, the company’s properties are likely to have witnessed healthy leasing activity in the first quarter.

We expect BXP’s rental revenues to increase 2.9% year over year in the to-be-reported quarter.

BXP’s strategic portfolio repositioning efforts through acquisitions and the development of properties in core markets and shedding properties in non-core markets are likely to have contributed to stable revenue generation in the reported quarter.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $790.9 million, suggesting an increase of 0.29% from the prior-year quarter’s reported number.

However, high competition and high interest expenses are expected to have been a spoilsport for BXP during the to-be-reported quarter. We estimate a 0.6% year-over-year increase in interest expenses for the first quarter. Moreover, owing to several large expirations due in the first half of the current year, occupancy is likely to have declined, affecting its performance.

BXP’s activities in the to-be-reported quarter were inadequate in garnering analysts’ confidence. The Zacks Consensus Estimate for first-quarter FFO per share has been revised southward by 4.6% to $1.65 in the past two months. Also, it suggests a 4.6% decrease from the year-ago quarter’s tally. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

What Our Quantitative Model Predicts for BXP

Our proven model doesn’t conclusively predict a surprise in terms of FFO per share for BXP this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

BXP has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Host Hotels & Resorts HST and Ventas VTR — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Host Hotels & Resorts, scheduled to report quarterly numbers on April 30, has an Earnings ESP of +2.26% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ventas, slated to release quarterly numbers on April 30, has an Earnings ESP of +0.18% and carries a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research