BXP, Inc. earnings calls

Colorado Center leasing and mortgage plans

Q (Jana Galan · BofA): They asked outlook for Los Angeles market and the large lease expiration at Colorado Center, and asked about plans for the mortgage debt there.

A: Management said West LA demand has not recovered and Colorado Center is slow because media consolidation and AI are reducing demand. They do not rely on occupancy improvements at Colorado Center in the short-to-medium term and are actively marketing built space while much vacant space is still shell and harder to lease.

"The 1 market in our portfolio that has not seen the demand recovery has been West LA." — Douglas T. Linde (PRESIDENT)

Rents and activity for GM Building space

Q (Steve Sakwa · Evercore): He asked about one top-10 tenant in the news and, if space returned, where rents sit relative to market and current activity for premier space.

A: Management said the General Motors Building is effectively fully leased and noted a large gap between in-place rents there and where market rents are for comparable premier buildings. They compared in-place rents under $150 per square foot to expected rents above $190 and even over $300 per square foot at other nearby assets.

"The General Motors building is 99.9% leased." — Douglas T. Linde (PRESIDENT)

Capital appetite for 343 Madison

Q (Seth Bergey · Citi): He asked how appetite from different capital sources for 343 Madison has changed after the 10-year yield moved.

A: Management said 343 Madison is a trophy asset and few comparable assets are trading now. They noted the project is more a total-return investment with no current cap rate and the sale happens after delivery in 2029.

"there is very few, if any, assets like that are trading in the market." — Owen David Thomas (CEO·CHAIR)

How fast lease spreads will grow

Q (John Kim · BMO): He asked how much cash lease spreads will accelerate next year given leasing visibility and mark-to-market potential.

A: Management said same-store growth this year is about 2.5% and they expect that number to accelerate materially next year. They also said many markets are seeing double-digit increases within 12 months and that occupancy growth will be the primary driver over the next couple of years.

"You know, I think that number is gonna accelerate next year in a material way." — Michael E. LaBelle (CFO)

Buybacks vs development and acquisitions

Q (Blaine Heck · Wells Fargo): He asked if BXP might go on the offensive with acquisitions in 2027/2028 and whether the board has considered stock repurchases versus development spending.

A: Management said the scarcity of capital makes development a more attractive place for new investment and they expect to focus more on development than acquisitions. They also said the board continually reviews buybacks and would consider a stock buyback on a leverage-neutral basis if incremental capital is available, though development that is pre-leased at higher yields can be a better use of capital.

"To the extent that we have incremental available capital absolutely, 1 of the things that we think about is can we consider doing a stock buyback on a leverage neutral basis if we have incremental capital versus where we sort of set out our quote, unquote, strategic objectives." — Michael E. LaBelle (CFO)

2027 FFO growth meaning

Q (Nicholas Yulico · Scotiabank): He asked whether the factors mentioned mean 2027 would be slower growth than 2026 or just that without those factors growth would be higher.

A: Management said, without giving formal guidance, they expect to grow in 2027. They acknowledged several headwinds (higher interest, refinancing, asset sales) but said other parts of the business are doing very well and same-property NOI should be higher next year.

"I think what I am trying to communicate is without giving guidance for 2027, by the way, is that we expect that we are going to grow next year." — Michael E. LaBelle (CFO)

Tech leasing demand and AI impact

Q (Alexander Goldfarb · Piper Sandler): He asked whether recent headlines about hyperscalers and CapEx are spilling over into office leasing demand or VC behavior.

A: Management said tech demand is very strong and that much of the current market growth is net new companies or growing organizations. They pointed to strong activity at Salesforce Tower and high demand from large AI companies, and said many unnamed groups are also actively looking for space.

"I mean, the tech demand is, as you said, Douglas, it is actually a little bit I guess it is about 62% roughly of the total demand, which is about 8.6 million square feet." — Rodney Diehl

NYC large tenant demand vs available space

Q (Hilary Spann): He asked whether big tenants are taking more space than needed and about the imbalance of large-user demand versus available better blocks.

A: No management answer was provided in this exchange; the analyst stated that in NYC there were 59 tenants seeking 100,000+ square feet and only 26 available blocks in better buildings, implying a tight market and mismatch between large-user demand and supply.

Tenant retention and renewals

Q (Caitlin Burrows · Goldman Sachs): She asked about historical retention, whether it will improve, and whether older leases will limit renewals and retention.

A: Management said short-term expirations tend to have higher move-out risk, and near-term retention is around 45% to 50% this quarter. They said they are already working on renewals for two of the three largest 2027 expirations and expect those expiration numbers to come down materially.

"As this quarter is a good example, we are sort of in that 45% to 50% range." — Douglas T. Linde (PRESIDENT)

Occupancy vs rent growth importance

Q (Ronald Kamdem · UBS): He asked whether the inflection is nearing where pricing becomes more important than occupancy for NOI growth.

A: Management said occupancy gains are currently the dominant driver because only a small percent of the portfolio rolls each year, so occupancy increases dwarf mark-to-market gains today. They expect as occupancy approaches a stabilized 93%–94% range, future same-store growth will shift to improvements in underlying fundamentals like rents.

"As we get closer to that, all of the growth in the portfolio same store is going to come from the improvements in the fundamentals of our underlying business." — Douglas T. Linde (PRESIDENT)

Net rent impact and market leasing costs

Q (Floris Van Dijkum · Ladenburg Thalmann): He asked about the net effect of rising rents and differences in transaction costs (TI, free rent, commissions) across New York, San Francisco, DC, and Boston.

A: Management said concessions are shrinking in every market, so improvements to gross or net rents flow to the bottom line. They gave a market ranking: TI costs highest in San Francisco, free rent highest in DC, and leasing commissions higher in DC and New York than in Boston or San Francisco.

"The TI cost is higher in San Francisco than it is in New York and than it is in Boston or than it is in Washington DC on a, quote, unquote, new transaction on a high quality premier building." — Douglas T. Linde (PRESIDENT)

Cash flow from signed-but-not-started leases

Q (Upal Rana · KeyBanc): He asked how the signed-but-not-commenced pipeline will contribute cash flow in 2027, including free rent burn-off timing.

A: Management declined to give 2027 guidance but said same-property NOI should accelerate in 2027 and that significant free rent from 2026 leasing will be burning off. They said AFFO and the cash portion of FFO will be improved in 2027 versus 2026.

"The cash portion of our FFO will be improved in 2027 over 2026." — Michael E. LaBelle (CFO)

343 Madison yield expectations

Q (Dylan Burzinski · Green Street): He asked if stronger rents for remaining 343 Madison space mean yield on cost will be above the prior 7.5%–8% target.

A: Management said it is fair to expect results at the higher end of the original range and they do not expect to be above 8%. They also noted that selling down interest above basis would raise yields and they have completed one sell-down and are pursuing more.

"I think that is fair. I do not think we are saying above 8%, but I think we are in the higher end of the range." — Owen David Thomas (CEO·CHAIR)

CapEx run-rate and normalization

Q (Ronald Kamdem · Morgan Stanley): He asked for an annualized CapEx number for this year and how elevated it is versus a normalized year given higher leasing activity.

A: Management said this year was unusually high because many renewals commenced this year, and that will not repeat. They said transaction costs this year are near $450 million so they expect to finish around $550 million for the year and do not see that level recurring next year.

"so we will probably be somewhere around $550 million, plus or minus." — Michael E. LaBelle (CFO)

Times Square Tower dilution impact

Q (Alexander Goldfarb · Piper Sandler): He asked whether the expected FFO growth for 2027 includes the $0.06 dilution from Times Square Tower.

A: Management said the 2027 outlook includes all items they discussed on the call, including that dilution. They confirmed their commentary was comprehensive.

"It includes everything we talked about." — Michael E. LaBelle (CFO)