BXP reported Q2 2026 results with revenue of $895.7 million up 3.1 percent year over year, FFO of $283.4 million or $1.78 per share up 4.3 percent, and net income of $68.6 million or $0.43 per share impacted by a $0.10 per share non-cash impairment charge on the anticipated disposition of Sumner Square. The company executed 1.8 million square feet of leasing at a 9.9-year weighted average term, increasing total portfolio occupancy by 100 basis points to 88.4 percent. The CBD portfolio reached 90.7 percent occupied and 93.6 percent leased. The 290 Binney Street life sciences property (572,578 square feet, 100 percent leased to AstraZeneca) was placed in service. Full-year FFO guidance was raised to $6.99-7.05 per share while EPS guidance was lowered to $2.14-2.24 due to the impairment charge.
The investment thesis rests on three variables. The leasing execution and the occupancy recovery trajectory is the load-bearing revenue variable, with 1.8 million square feet leased at 9.9-year terms, CBD portfolio at 90.7 percent occupied, total portfolio occupancy up 100 basis points to 88.4 percent, and the strategic intent is to lease the remaining 1.3 million square feet of signed-but-not-commenced space while maintaining rent growth, and the market will track quarterly leasing volume, occupancy progression, rental rate growth, and lease commencement schedule as real-time indicators. The development pipeline delivery and the pre-leasing success is the load-bearing growth variable, with 290 Binney Street (572,578 square feet, 100 percent leased to AstraZeneca) placed in service, Reservoir Place (363,000 square feet, 89 percent pre-leased to Boston Dynamics) under redevelopment, 343 Madison Avenue ($1.2 billion construction loan closed) advancing, and the strategic intent is to deliver the development pipeline on schedule with high pre-leasing, and the market will track quarterly development spend, pre-leasing percentages, construction milestones, and yield-on-cost as real-time indicators. The balance sheet management and the capital allocation discipline is the load-bearing financial flexibility variable, with the $1.2 billion construction loan for 343 Madison Avenue at SOFR+250bps, the Herndon Virginia residential joint venture with 20 percent BXP interest, and the strategic intent is to fund development through construction financing and joint ventures while maintaining investment-grade metrics, and the market will track quarterly debt maturity schedule, construction loan draws, joint venture economics, and liquidity position as real-time indicators.