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BXP has increased its 2026 funds from operations (FFO) forecast, supported by strong leasing demand from artificial intelligence companies and a gradual return-to-office trend. The revised guidance is slightly above market expectations, reflecting improved confidence in office space absorption, particularly in key US markets like the Bay Area and New York City. However, the company expects softer performance in the near term, with second-quarter projections coming in below estimates. Despite a modest year-on-year dip in quarterly FFO, revenue growth remained stable, indicating steady operational performance.
BXP, earlier known as Boston Properties, has raised its financial outlook for 2026, supported by increasing demand for office space from artificial intelligence-driven companies and a continued push toward in-office work culture. Advertisement
The company revised its funds from operations (FFO) guidance for 2026, projecting it in the range of USD 6.9 to USD 7.04 per share. This revision lifts the lower end of its earlier forecast and places the midpoint slightly above analysts’ expectations of USD 6.95 per share, based on market data.
During its earnings discussions in the past quarter, the company had indicated that leasing demand from AI-focused firms was growing steadily, especially in major office markets such as the Bay Area and New York City. This segment has emerged as a key demand driver at a time when traditional office leasing has seen mixed recovery trends following the pandemic.
Despite the improved full-year outlook, BXP expects some short-term pressure. The company projected second-quarter FFO in the range of USD 1.69 to USD 1.71 per share, which is slightly below analysts’ estimate of USD 1.72 per share.
For the quarter ending March 31, BXP reported an FFO of USD 1.59 per share, compared to USD 1.64 per share in the same period last year. However, this figure was marginally higher than market expectations of USD 1.58 per share.
Revenue for the quarter stood at USD 872.1 million, showing a modest increase from USD 865.2 million reported a year earlier. The steady rise in revenue indicates stable leasing activity despite broader uncertainties in the office real estate sector.
Following the announcement, the company’s shares recorded a slight increase of 0.7% in after-hours trading, reflecting a balanced market response to the updated outlook and near-term projections.
In recent years, BXP has been focusing on premium office assets in key urban markets, where demand from technology and AI firms has remained relatively resilient compared to traditional sectors.
Source Reuters
5th Jun, 2025
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