BXP Reports 1.1M SF of Leasing in Q1 Amid AI Surge

It was a good 2025 for the biggest Class A office owner in the country, and the first quarter of 2026 was no different.

BXP, which boasts a current portfolio of 50.4 million square feet across 164 properties, completed 68 leases during the first quarter of 2026 totaling more than 1.1 million square feet, including approximately 140,000 square feet of leases signed at 360 Park Avenue South in New York City and roughly 104,000 square feet of deals signed at 680 Folsom Street in San Francisco. Plus, as of March 31, BXP is in negotiations for another 1.7 million square feet of leases.

On a Wednesday morning earnings call, BXP executives attributed much of the firm’s leasing success to high demand from artificial intelligence and technology tenants in its office portfolio, largely focused in San Francisco and in Manhattan’s Midtown South neighborhood. Hilary Spann, executive vice president of the New York region for the real estate investment trust, said that in Midtown South, the first quarter of 2026 captured as much AI demand as the entire first half of 2025, with demand accelerating quickly year-over-year.

Douglas Linde, president of BXP, also emphasized the firm’s focus on AI tenants during Wednesday’s call. “There is a clear acceleration of technology as these new AI-oriented companies absorb the majority of the incremental space in the market,” he said. “These companies are, relatively speaking, aggressively hiring people, and they’ve made a decision that in-place work is critically important to their business strategies. So those are all great indicators, from our perspective.”

Besides leasing updates, BXP reported first-quarter earnings on Wednesday surpassing estimates, with funds from operations (FFO) for the period hitting $1.59 per diluted share, edging right past analysts’ predictions of $1.58 per share. It was a slight decrease from the REIT’s FFO of $1.64 per share in the first quarter of 2025 and $1.76 per share in the fourth quarter of 2025.

Meanwhile, the REIT’s net income reached $101.6 million in the first quarter, or 64 cents per diluted share, compared to $61.2 million, or 39 cents per share, during the same period last year. While net income certainly decreased from the firm’s reported $248.5 million in the fourth quarter of 2025, BXP’s earnings per share in the first quarter exceeded the firm’s own expectations by 31 cents per share, primarily due to “gains on sales recognized in connection with the disposition activity completed in the first quarter,” the earnings report said.

BXP’s total revenues also hit $872.1 million during the first quarter, compared to $865.2 million during the same period in 2025, according to the earnings report. Revenue was slightly down from the firm’s $877.1 million total in the fourth quarter of 2025.

2025 was a successful year for BXP, as it officially launched vertical construction of its $2 billion, 930,000-square-foot office tower development at 343 Madison Avenue. With completion scheduled in 2029, 343 Madison will stand 46 stories tall and feature offices, dining spaces, terraces and lots and lots of amenities.

BXP signed a deal with insurance and investment giant C.V. Starr in October to anchor the office development by taking 275,000 square feet, or roughly 30 percent, of the property. BXP execs said Wednesday that their firm is currently negotiating leases with several tenants to cover another 27 percent of the building, which would bring the tower to roughly 57 percent committed.

One of those tenants in negotiations is law firm McDermott Will & Schulte, which is in talks for an approximately 150,000-square-foot lease at 343 Madison, Commercial Observer first reported earlier this month.

In addition to securing anchor tenants for the property, BXP is negotiating a letter of intent with a bank for construction financing for 343 Madison, and it is considering several private equity firms as partners in the development.

Isabelle Durso can be reached at idurso@commercialobserver.com.