“We just completed another strong quarter capping off one of the most productive and successful years in Boston Properties’ history.” So says Owen Thomas, CEO of Boston Properties on the firm’s Q4 earnings call. Specifically, in 2018, he said, the company completed 7.2 million square feet of leasing, its second highest level of annual leasing ever.
“We delivered and placed in service 2.3 million square feet of new developments, the commercial component of which is a 100% lease. We commenced 2 million square feet of new developments, which are 80% preleased in the aggregate with strong customers such as Verizon, Fannie Mae and Leidos as anchor tenants,” he explained.
He noted that the REIT completed important new acquisition joint venture including Santa Monica Business Park, doubling our Los Angeles presence, and a site at 3 Hudson Boulevard in New York that can accommodate 2 million square feet of new development. “We completed approximately 720 million of non-core asset sales. We increased in-service portfolio occupancy, 70 basis points over the years to 91.4%. And lastly, we increased our regular quarterly dividend 19%. In fact Boston Properties has increased its regular quarterly dividend by more than 46% over the past three years,” he added.
More recently, he said, in the fourth quarter of 2018, the company generated FFO per share in line with prior guidance, and up 7% year-over-year. “We leased 1.8 million square feet including of 300,000 square-foot leased with Millennium Management at 399 Park, bringing this focus asset to 93% leased. We raised $1 billion as the green bond in the unsecured debt market on favorable terms, and we increased the midpoint of our FFO per share guidance for 2019 by $0.11, raising our projected 2019 growth to over 10% at the midpoint.”
He explained that “Our performance in 2018 highlights the key characteristics that make Boston Properties unique and its ability to generate growth and shareholder returns in the office sector. Our high quality Class A assets allow us to attract premium rents from long-term creditworthy tenants. Our scale and diverse yet concentrated market selection allows us to benefit from growth within the strongest markets in the U.S., while minimizing risk of single market sector or customer weakness.”
The REIT’s development expertise and portfolio of sites “gives us the opportunity to win important mandates with customers and ensure our growth is driven by a strong pipeline of preleased development, driving higher return. And our modest leverage and growing portfolio NOI provides capacity for new investment without issuing public equity, also driving FFO growth. I’m very proud of our team at Boston Properties and what we are able to accomplish in 2018 through our experience, relationships, teamwork and commitment to success.”