Analyst Note| Kevin Brown |
No-moat-rated Boston Properties delivered good third-quarter results, reporting funds from operations of $1.73 per share, 10.2% higher than the $1.57 in FFO during the third quarter of 2020. The FFO in the third quarter was slightly higher than the midpoint of the company's guidance primarily due to better-than-projected results from the company’s in-service portfolio and improved parking revenue. The company also provided encouraging guidance for full-year 2022, with projected FFO of $7.25-$7.45 per diluted share, which is 13% higher at the midpoint than the midpoint of 2021 guidance. Management anticipates incremental growth of $0.43 coming from development and acquisitions, $0.25 from the same property portfolio, and $0.32 from lower interest expense. This is offset by $0.06 of dilution from 2021 disposition activity, $0.06 of lower termination income, and $0.04 of higher general and administrative expenses. After incorporating the third-quarter results, we are maintaining our $118 fair value estimate for Boston Properties.