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Boston Properties (BXP) Declares Net-Zero Lease for Needham Asset

Zacks Equity Research
·4-min read

Boston Properties, Inc. BXP recently announced a long-term, net zero lease commitment with Wellington Management for a 106,000-square feet space at 140 Kendrick Street in Needham, MA. With this commitment, BXP will reposition the premises as Net Zero, Carbon Neutral per LEED Zero Carbon Certification.

Notably, 140 Kendrick Street is a 440,000-square-foot multi-building complex, consisting of three interconnected office buildings. Wellington Management will lease the entire Building A. The multi-building complex provides the Exchange amenity center, shared conference facilities, a full-service cafe, boutique fitness studio and structured parking.

The property is also conveniently located and easily accessible through Route 128/I-95, Route 2, and I-90. This is likely to lure a large number of tenants at this property.

The move will mark the first Net Zero, Carbon Neutral office repositioning on a large scale in Massachusetts. The repositioning will comprise a deep energy retrofit, full electrification of gas-fired systems, HVAC modernization consisting advanced heat recovery, and onsite renewable energy generation from a solar photovoltaic system to exceed annual consumption.

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The latest lease will boost occupancy level at Boston Properties’ property and fuel revenue growth from rental income.

In September, Boston Properties signed a 10-year lease renewal and expansion agreement with Wellington Management at Atlantic Wharf. The long-term agreement for 524,000 square foot will commence in 2026. It also includes a 66,000-square-foot expansion within the building, which will commence in 2022.

Per management, “Wellington Management’s commitment at 140 Kendrick Street is a continuation of the success we built at Atlantic Wharf through the development of Boston’s First Green Skyscraper. We look forward to continuing our longstanding partnership through this extraordinary net zero project.”

However, the overall choppy environment for the office real-estate market remains a concern for Boston Properties, which has a concentration of office assets in six markets, namely Boston, Los Angeles, New York, San Francisco, Seattle and Washington, D.C.

Boston Properties currently carries a Zacks Rank #3 (Hold). In the past three months, BXP’s shares have gained 2%, underperforming the industry’s increase of 5.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the REIT sector are OUTFRONT Media OUT, Cedar Realty Trust CDR and Condor Hospitality Trust CDOR.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 fund from operations (FFO) per share has been raised 13.8% over the past two months. OUT’s 2021 FFO per share is expected to increase 45.71% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media flaunts a Zacks Rank 1 (Strong Buy) at present. Shares of OUT have gained 4.6% in the past six months.

The Zacks Consensus Estimate for Cedar Realty’s current-year FFO per share has been raised 2.6% to $2.36 in the past two months. Over the last four quarters, CDR’s FFO per share surpassed the consensus mark twice and missed the same on the other two occasions, the average surprise being 6.4%.

Currently, CDR sports a Zacks Rank of 1. Shares of Cedar Realty have appreciated 39.4% in the past six months.

The Zacks Consensus Estimate for Condor Hospitality Trust’s 2021 FFO per share has been raised 25.8% over the past two months. CDOR’s 2021 FFO per share is expected to increase significantly from the year-ago quarter’s reported figure.

Condor Hospitality sports a Zacks Rank of 1 at present. Shares of CDOR have soared 49.3% in the past six months.

Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.


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Boston Properties, Inc. (BXP) : Free Stock Analysis Report

Cedar Realty Trust, Inc. (CDR) : Free Stock Analysis Report

OUTFRONT Media Inc. (OUT) : Free Stock Analysis Report

Condor Hospitality Trust, Inc. (CDOR) : Free Stock Analysis Report

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Zacks Investment Research