Boston Properties, Inc. (BXP) does not make an appealing value proposition for income investors based on valuation and risks affecting the investment thesis. The real estate investment trust does, however, have a strong real estate portfolio consisting largely of class A office properties, but U.S. recession risks are growing considerably. The REIT covers its dividend payout with FAD, but downside risks outweigh the potential for upside, in my opinion. An investment in Boston Properties currently yields 3.1 percent.
Boston Properties - Portfolio Overview
Boston Properties is structured as a real estate investment trust, meaning the company is required to distribute the majority of its earnings/taxable income to shareholders. Hence, BXP is a preferred income vehicle for dividend investors.
Boston Properties' real estate portfolio is comprised of 200 commercial properties (including joint venture real estate) representing 52.7 million square feet. The REIT also has 7.5 million of square feet under current re/development. The REIT's occupancy rate in the most recent quarter was 91.1 percent.
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