Boston Properties Earnings: Office Demand Remains Muted, but Shares Reflect Excessive Pessimism

No-moat-rated Boston Properties reported a decent set of numbers in the first quarter as the demand for office real estate remains muted because of macroeconomic factors and a slower recovery in physical office utilization rates. The firm reported funds from operations, or FFO, of $1.73 per share in the first quarter, which was around 5% lower than the $1.82 per share FFO reported in the first quarter of the previous year. The decrease in FFO compared with the previous year was primarily due to higher interest expense that was partially offset by higher contributions from portfolio operations. The company also updated its 2023 FFO full-year guidance to $7.14-$7.20 per diluted share, which is about $0.04 per share higher than the previous full-year guidance.