The same is true for the 2024-2025 numbers on an estimated basis. So, the problem that we see is certainly not in any near-term earnings drop. Since the company started declining, the company's FFO actually went up 15% in 2022, and although it is estimated to drop around 6% in 2023, FFO is still higher than 2020-2021 numbers. To explain this sort of development, we'd usually expect to see an earnings decline or a funds from operations ('FFO') decline of around 20% - or at least double digits. Since early 2022, the company has gone from trading at $130/share to now below $55/share. You'd be excused for thinking that something must be seriously wrong with the company's earnings this year or on a forward basis, given that the company has lost more than 50% of its market cap and share price in less than about a year. If you already have plenty of Simon stock, though, or similar safety and yield, then this company could be a worthy addition to a good dividend yield.īXP is actually the largest publicly traded owner/developer and manager of workplaces in the US. One of the only safer alternatives out there, with an equal or similar yield, is Simon Properties Group. The reason is that Boston Properties actually is BBB+ rated, despite that massive yield. Though, calling BXP 'risky' is a bit of a stretch. Something like this, however, offers you a better yield, but also a bit more risk. I've recently written about other companies such as Simon Property Group ( SPG) and Realty Income Corporation ( O), which offer relative safety as well as appealing yield. Investing in office REITs is riskier than investing in other types of properties. Boston Properties Group - Plenty to like at this price However, no matter how you slice it, what you have here is quality at a cheap price. It could go lower if circumstances worsen in the real estate sector, and specifically office, due to interest rates. I view it as likely that we've finally found the bottom, after a 6-month decline of 25%. My own position is actually not far in the negative at this time, despite that office sector's significant decline.īXP's price has been flat for the past month. This is a high-quality name that still has plenty of upside despite its recent climb. One of the higher-quality names in this segment, and one that I particularly like, is Boston Properties, Inc. I've been a vocal proponent of investing in office real estate investment trusts ('REITs') at low valuation. This article was coproduced with Wolf Report. This article was published at iREIT™ on Alpha on Monday June 5, 2023.

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