January 27, 2010 / 3:25 AM / 9 years ago

UPDATE 2-Boston Properties FFO beats Street; ups outlook

* Q4 adj-FFO $1.15/shr vs Street view $1.06/shr

* Q4 total revenue $377.9 mln vs year-ago $390.3 mln

* Sees 2010 FFO/share $4.10-$4.25; prior view $4-$4.20 (Adds analyst estimates, background, details of results)

NEW YORK, Jan 26 (Reuters) - Boston Properties Inc (BXP.N) beat analysts’ expectations for adjusted quarterly funds from operations and raised its full-year outlook, after having leased a large office space in New Jersey and raising $700 million in a debt offering.

The company, which owns office buildings in New York, San Francisco, Boston and the Washington, D.C., area, said FFO was $146.1 million, or $1.04 per share, compared with a loss of $642 million, or 1 cent per share, a year earlier, when results were weighed down by large impairment charges.

Excluding non-cash impairment charges and non-cash interest expenses, quarterly FFO was $1.15 per share, ahead of the $1.06 per share expected by analysts polled by Thomson Reuters I/B/E/S and the company’s forecast of $1.04 to $1.06 per share.

FFO, a measure of performance, removes the profit-reducing effect of depreciation, a noncash accounting item.

Quarterly revenue fell 3.2 percent to $377.9 million.

During the quarter, total occupancy fell to 92.4 percent from 94.5 percent a year ago. Occupancy in Boston Properties’ Midtown Manhattan buildings, which command the highest rents, fell to 95.4 percent from 98.4 percent.

The credit crisis and ensuing U.S. recession have dealt U.S. commercial real estate a double punch. Financing for new buildings and to replace maturing mortgages has dried up, while rent and occupancy levels have tumbled.

The number of sales remains a fraction of what it was in 2008, leaving valuations sketchy due to a lack of comparable trades.

In October Boston Properties raised $700 million in a public debt offering and rented 120,000-square foot office space in Princeton, New Jersey. The company also said it will see $7.2 million in additional income in the first quarter due to ending a lease on an office property in New York City.

Boston Properties, whose chairman is publisher Mortimer Zuckerman, owns or has interest in 146 properties totaling 50.5 million square feet. Earlier this month, its co-founder and chief executive Edward Linde died, and Zuckerman was named chief executive.

For the current first quarter, the company forecast FFO in a range between $1.02 to $1.04 per share. For the full year, it said it expects FFO of $4.10 to $4.25 per share, up from its earlier forecast of FFO in the range of $4.00 to $4.20 per share.

Analysts on average were expecting FFO of $1.02 per share for the first quarter and $4.10 per share for the full year, according to Thomson Reuters I/B/E/S.

Before the results were released, Boston Properties shares closed at $64.72, down 0.58 percent, or 38 cents, on the New York Stock Exchange. (Reporting Clare Baldwin, Martinne Geller and Ilaina Jonas; editing by Andre Grenon and Muralikumar Anantharaman)

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