BOSTON - BXP (NYSE: BXP), a major developer and manager of workplace properties in the U.S., has finalized the sale of a 45% interest in the 290 Binney Street development to Norges Bank Investment Management (NBIM). This life sciences property, located in the Kendall Square (NYSE:SQ) area of Cambridge, Massachusetts, is currently under construction and is fully pre-leased to AstraZeneca (NASDAQ:AZN), with occupancy expected to begin in April 2026.
The joint venture agreement, which sees NBIM investing in the 16-story, 570,000 square foot laboratory and life sciences building, will relieve BXP of approximately $533.5 million in estimated development costs over time. BXP retains a 55% stake in the joint ventures, alongside providing development, property management, and leasing services.
This transaction marks the completion of NBIM's two-building investment in Cambridge, with a combined gross valuation of about $1.66 billion or $2,050 per square foot. The properties, 290 Binney Street and 300 Binney Street, encompass a total of 810,000 square feet and are each fully pre-leased.
BXP Life Sciences, a subset of BXP, currently has a portfolio of roughly 3.9 million square feet tailored to the life sciences industry, primarily in key innovation markets across Massachusetts, Maryland, and California. Additionally, BXP is developing approximately 5.8 million square feet of life sciences-focused projects and has about 1.6 million square feet of current lab developments and redevelopments underway, expected to be completed within the next three years.
As a real estate investment trust (REIT), BXP's portfolio as of December 31, 2023, included 53.3 million square feet and 188 properties, with 10 under construction or redevelopment. The company has been a significant presence in the real estate market for over 50 years, focusing on dynamic gateway markets such as Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC.
This news is based on a press release statement.
InvestingPro Insights
BXP (NYSE: BXP), known for its strategic focus on premium workplace properties, has recently made a significant move by partnering with Norges Bank Investment Management (NBIM) on a life sciences development. This partnership not only diversifies BXP's portfolio but also reinforces its position in the life sciences real estate sector, a niche that has shown resilience and growth potential.
InvestingPro data highlights BXP's robust financial standing with a market capitalization of $11.15 billion, indicating its substantial presence in the industry. The company's revenue growth over the last twelve months as of Q4 2023 stood at 4.71%, with a notable quarterly revenue growth of 34.85% in Q4 2023, reflecting its ability to expand its income streams effectively. Moreover, the company's gross profit margin of 62.29% over the same period underscores its efficiency in managing operational costs and maximizing profitability.
InvestingPro Tips suggest that BXP is expected to see net income growth this year, which could be a positive sign for investors looking for companies with an upward trajectory in earnings. Additionally, BXP has been a consistent performer when it comes to dividend payments, maintaining them for 28 consecutive years, which may appeal to income-focused investors. For those interested in a deeper analysis, there are six additional InvestingPro Tips available for BXP at https://www.investing.com/pro/BXP, including insights on the company's valuation and profitability. Prospective subscribers can use the coupon code PRONEWS24 to receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more valuable investment insights.
With a P/E ratio of 52.47 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 29.75, BXP is trading at a high earnings multiple, which may indicate investors' confidence in its future growth prospects or reflect a premium for its stable dividend payments and position as a prominent player in the Office REITs industry. The company's strategy of investing in life sciences properties, as seen with the recent NBIM deal, aligns with the InvestingPro Tip highlighting BXP as a profitable entity over the last twelve months.
As BXP continues to expand its life sciences portfolio and leverage its expertise in property management and development, the company's financial health and strategic moves could offer interesting opportunities for investors. Those considering BXP as a potential investment can benefit from the detailed analysis and additional tips provided by InvestingPro.
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