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Boston Properties: Looks Overvalued But There Is A Serious Value Below The Surface

Daniel P. Varga profile picture
Daniel P. Varga


  • Boston Properties is a stable and reliable office REIT with a 3.4% dividend yield.
  • It looks overvalued but there is serious value beyond the price and a great management team is in place.
  • The company will have several challenges in 2022 such as the work from home trend, rising cost of capital but the management is actively working on solving these issues.
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Investment thesis

Boston Properties, Inc. (NYSE:BXP) could look overvalued at first glance but there is a serious value below the surface. The company will face challenges in 2022 with the rising interest rates causing the rise of the cost of

This article was written by

Daniel P. Varga profile picture
Started investing more than 10 years ago. Mainly focusing on Large-Caps and occasional story stock. In addition, I am a regular buyer and analyzer of REITs, mREITS, and asset managers. I also have a dividend-focused portfolio with an investment horizon of 15 to 25 years. Follow me for comparison articles such as AAL vs. LUV or USB vs. C.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

Manhattan has not been the market that suffered the most due to the pandemic. BXP should have solid FFO growth over the next several years due to their development pipeline which is mostly leased. They also received 1.4 million sq ft of entitlements in Cambridge which is the best office/life science market in the country. That development should produce great NOI in 3-5 years.
lowRisklucy profile picture
Based on the title and summary bullets I expected a sophisticated analysis of BXP and the office/life science markets. There was no discussion of leasing trends, comparable transactions, implied cap rates or P/Sq Ft.

Instead the author gave a time series chart of P/Tangible Book (completely irrelevant for REITs due to Depreciation) and P/FFO and Dividend Yield.

This piece was disappointing. Anyway, some office REITs like KRC and HPP are very interesting at today’s prices trading at large discounts to NAV and having accretive niche growth strategies. Good discussion of the opportunity here www.privateeyecapital.com/...
SallyV6 profile picture
@lowRisklucy KRC will eventually be rewarded for its meaningful life science exposure - look at how richly ARE trades. Agree with the blog that KRC will reach $95++ per share. As their life science portfolio continues to grow, I think they will spin it off (2023-24) which will be a catalyst for revaluation.
Chachi9337 profile picture
@lowRisklucy For KRC, I'm coming up with a NAV of $49.14/share. Assets of $10.6B- Liabilities of $4.9B/ 116M shares outstanding. Current share price of about $67. So that's a 35%+ premium to NAV. Is my math wrong?

For HPP, I'm coming up with $25.58/share and current price of about $24. So that one's basically at NAV.

I can't find any discounts to NAVs here.
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