Boston Properties (BXP) announced that it has surpassed $1 billion in cumulative proceeds from its long-term asset sale program, moving the company more than halfway toward its $1.9 billion portfolio disposition target. Since the launch of the strategy in early 2024, BXP has completed 12 property sales across secondary and tertiary markets, generating $1.03 billion in gross proceeds. The divestitures include four suburban office parks in the Southeast and eight non-core assets in the Midwest, with average cap-rates of 6.8%, which management says exceed initial underwriting assumptions by 20 basis points. This pace of sales has helped reduce leverage by 150 basis points and contributed to a 5% increase in unencumbered property value.

Proceeds from the asset dispositions are earmarked for investment in Boston Properties’ premium office developments and redevelopment pipeline in gateway markets, including New York City, San Francisco, Washington D.C. and Boston. The company has already allocated $450 million to the construction of a 600,000-square-foot mixed-use tower in Manhattan’s Midtown district, targeting LEED Platinum certification and pre-leasing to technology and life sciences tenants. Additionally, BXP has opened a $200 million funding tranche to support the ground-up development of a 350,000-square-foot Class A office building in the Seaport District of Boston, where pre-leasing activity is running at 55% ahead of the comparable launch period for its 2019 waterfront project.