Boston Properties is performing admirably, despite the commercial real estate market's woes and above-average vacancy rates. Hence, I'm Reiterating my Buy rating for Boston Properties (NYSE: BXP), first recommended on June 11, 2009 at a price of $48.89. If you bought BXP then, you're up about 28%.
Only about 9% of BXP's space is subject to FY2010 lease revision, which limits the exposure to leases renewed at lower rates during this 'very soft' period for real estate. A rebound in rental rates is not expected in F2010, but given cost cutting, the suspension of an office tower project on Manhattan's West Side, BXP's liquidity will improve. The First Call FY2009/FY2010 EPS estimates for BXP are $4.61 to $4.32.
Technically, BXP's stock chart is strong, in an uptrend, and the recent pull-back from $72 to $62 represents a Buy opportunity.
Stock Analysis: Boston Properties is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in BXP now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your BXP position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $37.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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