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# BXP Passes On Buyback At $61: 'Better Use Of Capital Is To Do The Development'
- URL: https://www.bullished.co/bxp-passes-on-buyback-at-61-better-use-of-capital-is-to-do-the-development-707ccbc5/
- Published: 2026-10-28T15:31:47.000Z
- Updated: 2026-10-28T15:31:47.000Z
- Description: BXP's CEO says pre-leased projects yielding about 9% beat repurchasing shares priced at a high-sevens cap rate, though a buyback stays possible.
- Author: Matteo Parrino
- Tags: Earnings, BXP, Industry: Real Estate

BXP Chairman and CEO Owen Thomas said on the company's [third-quarter earnings call](https://www.businesswire.com/news/home/20261027724245/en/BXP-Announces-Third-Quarter-2026-Results?ref=bullished.co) that building pre-leased developments is a better use of capital than buying back its own stock, even with the shares near $61\. President Doug Linde added that a buyback is still "on the table."

## Nine percent versus a high-sevens cap rate

A Wells Fargo analyst asked whether the board had weighed a repurchase plan with the stock around $61\. Thomas answered: "if we can do new developments that are pre-leased at a nine and our stock is trading at a high sevens cap rate, it feels like a better use of capital is to do the development."

Linde said the board spends "hundreds of hours" on valuation work, including net asset value and discounted cash flow. If BXP has incremental capital, he said, it can consider a buyback on a leverage-neutral basis, so "it's certainly on the table."

BXP, a real estate investment trust that develops, owns and manages office buildings in Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC, traded at $61.46 in Wednesday trading, up about 1%.

## Why acquisitions rank last

Thomas said the lack of equity capital and thinner competition make it an interesting time to look for new investments. He expects most of the money to go to development, though. He put the yield on [343 Madison](https://www.businesswire.com/news/home/20261027724245/en/BXP-Announces-Third-Quarter-2026-Results?ref=bullished.co) in New York at about 8%, and on new Washington, D.C. projects at a 9%-plus cash development yield.

Acquisitions look worse, he said: "hard to find acquisitions of properties of the quality that we would be interested in trading at those kinds of cap rates." BXP is pursuing another pre-leased Washington development that would likely start in 2028.

## Asset sales fund the pipeline

Thomas said BXP has raised over $520 million in net sale proceeds this year and $1.37 billion since its investor conference, against a goal of $1.9 billion by 2028\. Counting four assets under contract, dispositions could reach about $1.45 billion.

BXP has also agreed terms and is negotiating a contract to sell Times Square Tower, where it holds a 55% unleveraged interest. The buyer must secure debt and equity financing, and a completed sale would occur in the first quarter of 2027.

The development pipeline stands at three office and four residential projects, totaling $2.9 billion of BXP investment, with about $750 million of equity still to be funded. The three office projects are 70% pre-leased.

CFO Mike LaBelle said the Times Square Tower sale would add about six cents per share of dilution if it closes at the end of the first quarter of 2027.

### Sources

- [Boston Properties (BXP) Surpasses Q3 FFO and Revenue Estimates](https://finance.yahoo.com/real-estate/articles/boston-properties-bxp-surpasses-q3-202502785.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance
- [Here's What Key Metrics Tell Us About Boston Properties (BXP) Q3 Earnings](https://finance.yahoo.com/markets/stocks/articles/heres-key-metrics-tell-us-210002061.html?ref=bullished.co) — Yahoo Finance
- [BXP to Post Q3 Earnings: Is the Stock a Portfolio Must-Have?](https://finance.yahoo.com/markets/stocks/articles/bxp-post-q3-earnings-stock-160700182.html?ref=bullished.co) — Yahoo Finance
- [BXP Q3 2026 Earnings Preview (BXP:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4657276-bxp-q3-2026-earnings-preview?ref=bullished.co) — seekingalpha.com
- [BXP Announces Third Quarter 2026 Results](https://www.businesswire.com/news/home/20261027724245/en/BXP-Announces-Third-Quarter-2026-Results?ref=bullished.co) — businesswire.com