A Modest Investment in Concrete & Contingency

by

Boston Properties

One gathers that H/2 Credit Manager, a Connecticut-based fund with a penchant for the reasonably sensible, has seen fit to allocate some $18.09 million to shares in Boston Properties. A perfectly respectable sum, of course, though one does wonder if they’ve consulted a reliable astrologer before committing. February 17th, 2026, it was, a date that will undoubtedly be etched in the annals of… well, something or other.

A Curious Diversification

The aforementioned H/2, it seems, acquired 268,110 shares during the last quarter. A rather substantial gesture, wouldn’t you agree? One suspects they’ve been looking at the skyline, rather than the spreadsheets. Their portfolio, as we shall see, is already something of a menagerie.

The Lay of the Land

Let’s have a peek at the holdings, shall we? A rather busy collection, if I may say so.

  • NYSE:VRE: $81.44 million (17.8% of AUM) – Perfectly adequate.
  • NASDAQ:DHC: $72.35 million (15.8% of AUM) – One assumes it’s all going swimmingly.
  • NYSE:RLJ: $71.39 million (15.6% of AUM) – One hopes they know what they’re doing.
  • NYSE:INN: $44.45 million (9.7% of AUM) – A trifle pedestrian, perhaps?
  • NASDAQ:DRH: $36.51 million (8.0% of AUM) – Harmless enough, I suppose.

And Boston Properties, priced at a mere $60.66 as of the 17th, is down a discouraging 10.5% over the past year. Underperforming the S&P 500 by a rather dramatic 22.09 percentage points. One shudders to think what the shareholders are saying.

A Brief Corporate Profile

Metric Value
Price (as of market close February 17, 2026) $60.66
Market capitalization $10 billion
Revenue (TTM) $3.48 billion
Dividend yield 5%

Boston Properties, for those who require reminding, develops, owns, and manages rather impressive office buildings in all the usual places: Boston, Los Angeles, New York, San Francisco, Washington DC. A fully integrated REIT, naturally. They’re the largest publicly held developer of Class A office space in the United States, which is either a triumph or a terrible burden, depending on one’s outlook.

The Meaning of It All (If Any)

Office real estate, as everyone is wearily aware, is currently something of a battlefield. This investment, therefore, is… interesting. Boston Properties reported a fourth-quarter revenue of $877 million – a modest increase of 2.2% – and full-year funds from operations of $1.1 billion, or $6.85 per share. Roughly in line with the previous year. One gathers they’re not exactly setting the world on fire.

Their guidance for 2026 suggests a similarly uninspired trajectory, despite some asset sales and redevelopment. At roughly $61 per share, they’re trading at under 9 times trailing FFO. A multiple that reflects a profound skepticism about long-term office demand, particularly in San Francisco and New York, where occupancy rates remain… shall we say, optimistic.

Adding a “gateway office landlord” to a portfolio already brimming with lodging and other REITs suggests a conviction in asset quality, rather than a grand macroeconomic pronouncement. If premier workplaces in top markets regain some pricing power, today’s valuation might prove unduly pessimistic. But if remote work becomes structurally permanent, this multiple compression could linger. A distinctly tiresome prospect, wouldn’t you agree?

Read More

2026-02-20 02:02