BOSTON-The bludgeoning that tech stocks have taken in the past few months raises questions about how owners in tech-destination cities maintain a positive balance sheet. Boston Properties (NYSE: BXP) is currently trading at 39 ¾. Not it’s highest this year, but certainly respectable. Bryan Koop, senior VP and locally based regional manager, explains that cautious leasing and an emphasis on diversity are the two keys to immunity from the deviations of tech.

“We underwrite our leases at execution,” he tells “We have a team within our capital markets group that scrutinizes the business plans of all the companies we deal with.”

When asked if this is not industry practice, Koop states that while the REIT has always focused on a tenant’s creditworthiness, it’s “a relatively new phenomenon for real estate. The dot-coms have brought a new awareness to the industry. They have minimal revenues and earnings. It’s all about the future.”

The other key is diversification. In fact, says Koop, “the dot-coms are only a small fraction of our portfolio. We have properties in Boston, New York, New Jersey, Washington, DC and San Francisco. Each of them has a heavy tech concentration. But they also have high barriers to entry and very low vacancies. Also, tech and dot-coms are two different types, and the dot-coms represent less than 1% of or total. Our portfolio is well-diversified in terms of financial services, law, the US government and such tenants as universities. MIT is one of our significant tenants here.”

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