Boston Properties Beats FFO Guidance in Second Quarter

BOSTON—Second quarter 2014 Funds from Operations posted by Boston Properties totaled $207 million or $1.35 per share. The results beat first quarter FFO of $195.4 million or $1.28 per share.

The second quarter 2014 FFO of $1.35 bested the company's own guidance of between $1.32-$1.34 per share primarily because of property-related expense savings and greater than projected development and management services income. The company's rental revenue was in line with management's expectations, Boston Properties states.

As of June 30, the company's portfolio consisted of 180 properties, comprised primarily of Class A office space, one hotel, three residential properties and five retail properties, totaling approximately 46.6 million square feet, including 13 properties under construction totaling 4.8 million square feet. In addition, Boston Properties has structured parking for vehicles containing approximately 15.8 million square feet. The overall percentage of leased space for the 163 properties in service (excluding the three in-service residential properties and the hotel) was 93.0% at the end of the second quarter.

Boston Properties has adjusted its guidance for FFO per share (diluted) for the full year 2014 to $5.24-$5.29 per share from $5.25-$5.33 per share. The updated guidance reflects, among other items, a projected increase in same property GAAP net operating income of between 2% to 2.50% for the full year 2014, which is greater than its previous projected increase of 1.75% to 2.50%.

The updated guidance also reflects an expected increase in development and management service income of $0.02 per share, a $0.01 per share decrease in net interest expense and a $0.05 per share decrease in FFO due to the completed and expected sales of its Mountain View Technology Park and Mountain View Research Park Building Sixteen, Patriots Park and Broad Run Business Park Land. In addition, the company's projected share of gains on sales of real estate includes approximately $34.2 million from the expected conveyance to the Broad Institute of a condominium interest in 75 Ames St. in Cambridge, Massachusetts in the third quarter of 2014.