Boston Properties Sees Qtr, '08 FFO Below Street
NEW YORK (Reuters) - Boston Properties Inc (BXP.N), which owns and develops office buildings, on Tuesday forecast first-quarter and 2008 funds from operations below Wall Street estimates after posting a 4 percent rise in quarterly FFO.
Fourth-quarter funds from operations (FFO), a measure of real estate investment trust performance, were $147.5 million, or $1.22 a diluted share, up from $141.9 million, or $1.18, a year earlier.
The results exceeded the company's FFO forecast of $1.18 to $1.19 a share and were in line with the average analyst estimate of $1.20 according to Reuters Estimates.
FFO removes the profit-reducing effect depreciation, a noncash accounting item, has on earnings.
The company, one of the most successful office developers and owners, posted net income of $123.8 million, or $1.02 per share, compared with $71.7 million, or 60 cents per share.
At the end of the quarter, Boston Properties had 139 properties comprising 43.8 million square feet, including 13 under construction totaling 3.9 million square feet and one hotel.
At the end of the quarter, the 124 properties in service were 94.9 percent leased.
The U.S. credit crisis has taken its toll on commercial real estate as buyers find it harder and more expensive to borrow money and many sellers refuse to lower prices. In the fourth quarter, sales of office properties over $5 million fell 42 percent in the fourth quarter to $26.5 billion, according to Real Capital Analytics.
For the first quarter, Boston Properties forecast FFO of $1.09 to $1.10 per share. Analysts, on average, had expecting FFO per share of $1.16, according to Reuters Estimates.
The company forecast FFO per share of $4.55 to $4.65 for the full year. Analysts were expecting FFO of $4.72, on average, according to Reuters Estimates.
Prices for central business district office buildings fell to $325 per square foot in the fourth quarter, down from a peak of $360 in the first quarter 2007.
Boston Properties shares closed down 18 cents at $93.15 on Tuesday.
(See www.reutersrealestate.com for the new global service for real estate professionals from Reuters)
(Reporting by Nichola Groom; Additional reporting by Ilaina Jonas and Joe Giannone)
