BXP is expensive: FFO is decreasing and occupancy is 89%, while $15 billion of debt amid high rates and weak office demand adds risk. Valuation is attractive but not enough, and a recession is not priced in, so the 5% return is extremely risky. Compare BXP with other REITs, not the S&P 500.
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BXP is a company specializing in workplace real estate investment trusts . For me, it's expensive. You can see an 89% occupancy rate in Wiltshire. The dividend yield is heading towards 5%.
However, it is not as busy as some of the good real estate investment trusts that we will discuss later.
So, when I look at this real estate fund, well, they are all priced similarly in the same group , but some are a little riskier than others . There are 15 billion in debt, and 15 billion with high interest rates and low demand for your offices is not a place I would want to go.
The funds generated from operations are decreasing, and this is a negative trend. Yes, the valuation is attractive, but I would say it is not attractive enough, and you cannot compare this to the S &P 500 index.
You should compare it to other real estate investment trusts , but they're comparing it to the S& P 500, which is crazy.
I believe here that there are risks of constant stress in the workplace environment. Think of the recession; it's not included in the price at all. Therefore, it is extremely risky for the 5% return you receive for taking on that risk.