Boston Properties Sees Higher Revenue Despite Leasing Slowdown in First Quarter


Boston Properties’ revenue was up 6.5 percent in the first quarter of 2023 compared to the same period last year “despite significant economic headwinds” and slow leasing, the real estate investment trust (REIT) said in its quarterly earnings call Wednesday. 

Overall revenue was $803.2 million in the first quarter, up from $754.3 million in the first quarter of last year, even as leasing sank from 1.2 million square feet to 600,000 square feet during that time.

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Boston Properties’ funds from operations slipped to $272 million, or $1.73 per share, a drop from the $286.1 million in the same time last year but slightly beating economists expectations of $1.70 per share. Boston Properties stock rose 2 percent to $51.23 per share in early trading Wednesday following the announcement. 

Despite the fewer deals signed and a struggling office market, Boston Properties CEO Owen Thomas said he was confident it would improve into 2023.

“We believe the current leasing slowdown is cyclical and will recover along with economic conditions,” Thomas said during the earnings call. “With more challenging economic conditions, the return-to-office trend continues to improve [as] major tech companies have announced return-to-work expectations.”

Boston Properties President Douglas Linde said he expected to close out the year with 3 million square feet of leases across its portfolio. Linde said the REIT has 900,000 square feet of deals currently under negotiation.

New deals the REIT inked at the start of this year include 30,000 square feet at 200 Clarendon Street in Boston and a full floor at 399 Park Avenue in New York City to a firm expanding within the building, said Linde, who did not disclose the names of the tenants or the size of the floor. 

Linde expected the REIT’s leasing to grow, despite high availability rates in the U.S. office market, because Boston Properties rents out higher-end office space — which makes up about 94 percent of its portfolio — to tenants that can afford to pay for it.

While tech firms in particular have made plans to cut office space, Boston Properties said that leasing from them represents just 17 percent of its revenue, while 80 percent comes from large, publicly traded companies.

The REIT’s expenses also increased from $500 million in the first quarter of 2022 to $568.7 million in the first quarter of this year, in part thanks to the firm’s purchase of two Northern Virginia office buildings. Boston Properties spent $17.4 million on a 50 percent stake of the properties at 13100 and 13150 Worldgate Drive and plans to turn the site into a 349-unit residential development with Artemis Real Estate Partners, Thomas said. 

Boston Properties plans to capitalize on the tough real estate market to buy more discounted properties, Thomas added. 

“Additional new acquisition opportunities will undoubtedly grow in this environment and we will remain highly opportunistic and solely focused on premier workplaces, life science and residential development,” Thomas said. 

Celia Young can be reached at