BXP's Q2 2026 FFO rose to $1.78 a share from $1.71 as occupancy climbed to 88.4% and same-property NOI grew 4.1%, while GAAP net income fell 22.9% to $68.6M on an $18.0M impairment and smaller property-sale gains.
Revenue
$896M
+3.1% YoY
Net income
$69M
-22.9% YoY
Diluted EPS
$0.43
-23.2% YoY
Overview
BXP, which describes itself as the largest publicly traded owner and developer of premier office buildings in the US, concentrated in Boston, New York, San Francisco, Seattle, Los Angeles and Washington, DC, had better rental income in Q2 2026 but lower accounting profit. Total revenue rose 3.1% to $895.7 million. Net income attributable to BXP, Inc. fell 22.9% to $68.6 million ($0.43 per diluted share, down from $0.56). Funds from operations (FFO), the earnings measure REIT investors actually track, rose to $1.78 per diluted share from $1.71.
The two measures moved in opposite directions because of accounting items, not because the buildings earned less. The quarter included an $18.0 million non-cash impairment (a write-down of a building's book value to what BXP expects to sell it for) on Sumner Square in Washington, DC. It also booked $11.4 million less in property-sale gains than a year ago. Neither item counts in FFO.
Why FFO matters more than net income for a REIT
A REIT (real estate investment trust) owns income-producing property and must pay out most of its taxable income as dividends. Under standard (GAAP) accounting, BXP has to deduct depreciation, a yearly charge that assumes its buildings slowly lose value. That charge was $237.0 million this quarter, more than three times net income. Well-kept office buildings in major cities often don't lose value on that schedule, and the charge is not cash leaving the business. GAAP profit also rises and falls with one-off gains when a property is sold and with write-downs when one is marked down.
FFO, as defined by the industry body Nareit, starts from net income. It adds back real-estate depreciation and impairments and removes gains or losses on property sales. What is left is closer to the recurring cash earnings of the portfolio, and it is the figure BXP gives guidance on and that dividend decisions are weighed against. FFO is still not a cash-flow statement: it doesn't subtract the large sums spent on tenant improvements and leasing commissions (see below).
Key metrics
Metric
Q2 2026
Q2 2025
Read 0 community reports on BXP, Inc., or write your own.Write a report
NOI (net operating income) is rent and other property revenue minus property-level operating costs, before interest, depreciation and corporate overhead. "Same-property" limits the comparison to 138 buildings BXP owned and operated throughout both periods, so purchases, sales and newly opened buildings don't distort the trend. FFO per share figures are from BXP's Q2 earnings release; all other figures are from the 10-Q.
First half of 2026: revenue was $1,767.8M (+2.0%), net income attributable to BXP, Inc. was $170.2M (+13.3%), and diluted EPS was $1.07 versus $0.95. Six-month FFO was $3.36 per diluted share versus $3.35. First-half GAAP profit is up even though Q2 was down, mainly because of about $42.4 million of gains on sales inside BXP's joint ventures, almost all booked in Q1. That is exactly the kind of gain FFO strips out, which is why FFO barely moved.
Takeaway: The 22.9% drop in GAAP profit is almost entirely a non-cash write-down plus smaller property-sale gains. The part of the business that pays the dividend improved. Same-property NOI rose 4.1%, occupancy climbed a full percentage point in one quarter, and FFO per share of $1.78 beat the middle of BXP's own guidance range by $0.08. The next pressure point is refinancing, not leasing: the $1.0 billion of 2.75% notes due in October is being replaced partly with new debt at 6.05%.
What drove the quarter
Rent growth from both price and occupancy. Same-property lease revenue (excluding lease-termination fees) rose $24.3 million. About $13.2 million came from higher average rent per square foot, up about $1.47. The other $11.1 million came from average occupancy rising from 88.0% to 89.2%. Same-property operating expenses rose 3.1%, a bit slower than same-property rental revenue (+3.6%), so NOI grew 4.1%. Termination income (fees tenants pay to exit a lease early) was $2.8 million versus $0.6 million, which adds about half a point of the growth and won't necessarily repeat.
A new building started paying. 290 Binney Street in Cambridge, a 572,578 sq ft lab building fully leased to AstraZeneca, was fully placed in service on April 30. It contributed $17.9 million of rental revenue this quarter. That is most of the difference between total-portfolio NOI growth (+4.8%) and same-property growth.
What pulled GAAP profit down:
$18.0 million impairment on Sumner Square (about 211,000 sq ft in Washington, DC). The sale agreement signed on May 27 required the asset to be written down to its expected sale value. The sale closed on August 5 for $63.0 million gross. BXP's earnings release puts the hit at $0.10 per diluted share.
Gains on property sales of $7.0 million (Kingstowne Retail) versus $18.4 million a year earlier (land at 17 Hartwell Avenue).
Depreciation up $13.2 million, partly because 290 Binney is now in service.
General and administrative expense up $7.9 million (+18.7%), mostly compensation. That includes about $2.9 million of non-cash expense tied to a December 2025 executive incentive award and about $1.8 million from a higher deferred-compensation liability. The deferred-compensation piece is mostly offset by a $4.4 million investment gain lower down the income statement.
Partners' share of profit in jointly owned buildings rose $6.0 million, so less of the consolidated income belonged to BXP.
Interest expense fell $9.4 million (-5.7%). Repaying $1.0 billion of 3.65% notes in February saved $9.2 million. Lower term-loan, credit-line and commercial-paper costs saved another $4.7 million. The $1.0 billion of 2.0% exchangeable notes issued in September 2025 added $5.0 million back. The weighted-average stated rate on consolidated debt fell to 3.90% from 4.08% a year earlier.
Leasing and occupancy
BXP signed 106 leases totaling about 1.8 million sq ft in Q2, with an average term of 9.9 years. By the company's measure that is 129% of its 10-year average for a second quarter. Two large signings were at projects still being built or redeveloped:
McDermott Will & Schulte, about 148,000 sq ft at 343 Madison Avenue in New York. That takes the tower to 50% pre-leased.
Boston Dynamics, about 322,000 sq ft at Reservoir Place in Waltham, MA.
In-service occupancy reached 88.4%, up 100 basis points (1.0 percentage point) from Q1. The portfolio was 91.3% leased. The gap is about 1.3 million sq ft of signed leases where the tenant hasn't moved in or started paying rent yet. BXP expects about 85% of that space to start before year-end. That gives visible rent growth over the next two quarters without any new signings.
The markets are diverging. On second-generation space (space that had a previous tenant) that had been occupied within the prior two years, net rents on new leases compared with the expiring ones as follows:
Region
Sq ft leased in Q2
Change in net cash rent vs. expiring lease
Occupancy
Boston
512,847
+23.7%
92.9%
New York
498,936
+19.9%
86.7%
San Francisco
375,987
-17.8%
79.7%
Washington, DC
219,069
-10.2%
90.5%
Seattle
103,440
-20.1%
81.9%
Los Angeles
44,882
0.0%
88.2%
Total
1,755,161
+1.6%
88.4%
Across the portfolio, rents on renewed and re-let space are basically flat (+1.6%). Strong Boston and New York re-leasing is offsetting rents 10-20% below expiring levels in San Francisco, Seattle and DC. Deals are also expensive to win. On second-generation leases in Q2, BXP gave an average of 172 days of free rent and spent $99.12 per sq ft on tenant improvements and leasing commissions, about $14.32 per sq ft for each year of lease term. Those costs don't appear in FFO. That's why occupancy gains take a while to show up in free cash flow. Management notes that life-science leasing demand "remains below historical levels, particularly among earlier-stage companies."
Development pipeline
BXP has six projects under development or redevelopment. Its share of total investment is about $3.3 billion. The commercial space in these projects was 65% pre-leased as of July 31.
Project
Type
BXP's est. total investment
% leased
Est. stabilization
343 Madison Avenue, New York
Office, 930,000 sq ft
$1,971M
50%
Q2 2031
725 12th Street, Washington, DC
Office redevelopment
$350M
87%
Q4 2030
Reservoir Place, Waltham, MA
Office redevelopment
$87M
89%
Q2 2027
121 Broadway Street, Cambridge
Residential, 439 units
$598M
—
Q2 2029
290 Coles Street, Jersey City (19.46%)
Residential, 670 units
$89M
—
Q3 2029
17 Hartwell Ave, Lexington (20%)
Residential, 312 units
$36M
—
Q2 2028
In June BXP also formed a 20%-owned joint venture to build 359 apartments on Worldgate Drive in Herndon, VA ($26.4 million BXP share). On July 28 it closed a $1.2 billion construction loan on 343 Madison at Term SOFR + 2.50%. According to the 10-Q, that cut BXP's remaining equity needed to finish the whole pipeline from about $2.1 billion to about $900 million. It removes the biggest funding question hanging over the stock, and replaces it with floating-rate construction debt.
Asset sales
Selling non-core assets to cut debt is a central part of BXP's plan. So far in 2026 it has raised about $432 million of net sale proceeds, and about $1.3 billion since its September 2025 investor day. Five more assets are under contract for about $180 million, about $120 million of which is expected to close in 2026. Including properties being marketed, management estimates up to an additional $440 million of net proceeds by year-end. Sales shrink the portfolio (164 properties versus 186 a year ago), which will weigh on future NOI growth even as it lowers debt.
Debt and interest costs
Consolidated debt was $15.6 billion at June 30. BXP's share of debt, after adding its share of joint-venture debt and subtracting partners' share, was $15.4 billion. That equals 56.6% of BXP's share of total market capitalization (debt plus equity at the $66.31 share price). Weighted-average maturity shortened to 3.5 years from 4.1. Near-term maturities are large:
$1.0 billion of 2.75% notes due October 1, 2026. On August 31, after the quarter ended, BXP sold $700 million of 6.05% notes due 2036 (8-K filed August 31, 2026) to fund most of that repayment. The rest will come from cash and the credit line. Replacing 2.75% debt with 6.05% debt adds roughly $23 million a year of interest on the $700 million refinanced (our estimate from the two coupons). This is the main headwind to FFO growth from here.
$2.3 billion mortgage on 767 Fifth Avenue (the GM Building, 60% owned), due June 9, 2027. BXP says it has received several lender quotes to refinance it.
$100 million term loan due September 26, 2026, with two one-year extension options.
Liquidity was about $345.7 million of cash at July 31, plus about $1.3 billion available on the revolving credit line after reserving capacity to back the $750 million commercial-paper program. BXP has not sold any shares under its $1.0 billion at-the-market stock program.
Dividend
BXP paid $0.70 per share for the quarter, versus $0.98 a year earlier. The dividend was reset at the $0.70 level starting with the payment made in January 2026. Against Q2 FFO of $1.78 per share, the dividend uses about 39% of FFO. That leaves room for leasing costs, development spending and debt reduction. At the June 30 share price of $66.31, the annualized $2.80 works out to about a 4.2% yield (our calculation).
Guidance and outlook
In its July 28 earnings release, management guided Q3 2026 FFO to $1.80–$1.82 per diluted share and full-year 2026 FFO to $6.99–$7.05. It raised the full-year midpoint by $0.05 on better-than-planned portfolio performance. Full-year EPS guidance is $2.14–$2.24, with the midpoint lowered $0.03 because of the Sumner Square impairment. The guidance excludes future property sales not yet under contract and future impairments.
Our read: The operating picture has clearly turned. Occupancy is rising, 1.3 million sq ft of signed leases have yet to start paying, and only about 300,000 sq ft of leases expire for the rest of 2026. Those point to further NOI gains through year-end, and the Q3 guidance midpoint of $1.81 implies a sequential rise. Growth is capped by higher interest costs, though. Cheap debt from the low-rate era is being refinanced at roughly double the coupon, the 343 Madison loan is floating-rate, and sales are removing income-producing buildings. The GM Building refinancing in 2027 is the next large test. If occupancy keeps climbing faster than interest costs rise, FFO per share can grow modestly from the roughly $7.00 level. If San Francisco and Seattle rents keep resetting 10-20% lower, the Boston and New York gains will be needed just to stay even.