Boston Properties Earnings: Higher Interest Rates and a Challenging Office Market Weigh on Results

Higher interest rates and a challenging office market environment weighed on Boston Properties’ second-quarter results. The no-moat-rated firm reported funds from operations, or FFO, of $1.86 per share in the second quarter, which was about 4% lower than the $1.94 reported in the second quarter of the previous year. The decrease in FFO from the previous year was primarily due to higher interest expenses, which were partially offset by higher contributions from portfolio operations. The company also updated its full-year 2023 FFO guidance to $7.24-$7.29 per diluted share, which is about $0.10 per share higher than the previous full-year guidance. We are reducing our fair value estimate for Boston Properties to $95 per share from $98 after incorporating the second-quarter results.