* Company interested in raising more capital
* Company recaptures naming rights to 767 Fifth Ave
* Stock down 4.2 percent
By Ilaina Jonas
NEW YORK, Oct 28 (Reuters) - Mortimer Zuckerman, chairman
of Boston Properties Inc (BXP.N), said on Wednesday his company
may be open to raising more debt capital as acquisition
opportunities arise.
The real estate investment trust, which owns high-quality
buildings in key U.S. cities, raised $860 million of equity in
June and an additional $700 million in the bond market three
weeks ago.
"We're not closed to looking at this again and not in too
long a time," Zuckerman said during a conference call with
analysts.
But Boston Properties does not expect high-quality office
buildings in the cities in which it operates -- New York,
Washington, San Francisco and Boston -- to hit the market as
long as banks and other lenders keep delaying foreclosing on
loans.
"I think the fundamental belief we have is that there are
many assets who have deficient capital structures; there are
many assets where the leasing fundamentals have gone down
significantly," Boston Properties President Doug Linde said.
"Therefore, there should be a recognition that the value of the
property is not what it was."
"The question will be what the friction point will be for
those particular assets and the constituents in the capital
structure in terms of resolving that issue."
Boston Properties anticipates an acquisition may come in at
a first-year yield of less than 7 percent. But the pricing will
also factor in rents now and how they will increase over time.
Doug Linde also said that the company may make mezzanine
loans that eventually will allow the Boston Properties to
become the owner of the building.
During the call, the company also said that rents have come
down about 20 percent on a gross basis and 30 percent on a net
basis, from their peak level in the second quarter 2008.
Boston Properties also said it recaptured the naming rights
of the General Motors Building at 767 Fifth Ave, as the
automaker agreed to continue to rent 114,000 square feet for
another 10 years in one of Manhattan's most valuable buildings,
while giving its landlord the naming rights.
Shares of Boston Properties were off 4.2 percent at $58.38
in afternoon trading on the New York Stock Exchange, while the
benchmark MSCI U.S. REIT Index .RMZ was off 2.5 percent.
(Reporting by Ilaina Jonas, editing by Matthew Lewis)
