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BXP has forecast its 2026 funds from operations below analyst estimates as weak office leasing continues across the US commercial property market. The REIT cited uncertainty around economic and trade policies as a key factor delaying tenant decisions on expansion and investment. While quarterly leasing revenue showed modest growth and overall revenue exceeded expectations, funds from operations declined year-on-year. BXP also returned to profitability in the latest quarter after reporting a loss last year, highlighting stable financial performance amid challenging market conditions.
Office-focused real estate investment trust BXP, formerly known as Boston Properties, has projected its funds from operations for 2026 below market expectations, reflecting continued pressure on office leasing activity across the sector. The outlook comes at a time when companies are holding back on long-term decisions due to wider economic uncertainty. Advertisement
Management indicated that frequent shifts in trade and economic policies by the US administration have made corporate tenants cautious. This uncertainty has slowed decisions on capital spending, office expansion, and workforce growth, directly affecting leasing momentum in major commercial markets where BXP operates.
The Boston-based REIT now expects its 2026 funds from operations, a key indicator of operating performance for real estate investment trusts, to range between USD 6.88 and USD 7.04 per share. The midpoint of this guidance falls short of the USD 7.00 per share estimated by analysts tracked by LSEG. For the first quarter of the year, the company expects FFO in the range of USD 1.56 to USD 1.58 per share.
BXP also reported its latest quarterly performance, showing a decline in funds from operations to USD 1.76 per share for the quarter ended December 31, compared with USD 1.79 per share recorded in the same period a year earlier. Despite weaker leasing sentiment, revenue from leasing activities edged up by 1.4 percent year-on-year to USD 809.15 million during the quarter.
On the profitability front, the company posted a net income of USD 248.49 million, or USD 1.56 per share, reversing a loss of USD 230.02 million, or USD 1.45 per share, reported in the corresponding quarter of the previous year. Total fourth-quarter revenue increased by 1.37 percent to USD 877.10 million, exceeding the LSEG consensus estimate of USD 864.66 million.
The latest numbers underline a mixed picture for large US office landlords, where steady rent collections and selective leasing gains are being offset by subdued demand for new office space.
Source Reuters
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