Boston Properties Inc. BXP, the Massachusetts-based real estate investment trust (“REIT”), announced the defeasance of mortgage loan collateralized by 100 & 200 Clarendon Street in Boston, MA. Previously, the REIT had revealed its plans to seek repayment or refinancing options for its 2016 and 2017 debt maturities, carrying interest rate higher than the market rate, in order to save future interests. The recent defeasance is in sync with its current strategies.
The defeased mortgage loan, slated to mature on Jan 6, 2017, had an outstanding principal balance of $640.5 million, and a fixed annual rate of interest of 5.68%. On the basis of the U.S. government securities purchase price, Boston Properties had to make a payment of $667.4 for the defeasance. On the other hand, the associated mortgage, collaterals and the liens were extinguished or released.
Notably, Boston Properties owns and develops Class A office real estates in the U.S. The company also operates retail properties, residential properties and a hotel. Due to the defeasance, the REIT is anticipated to recognize a loss of around $23.5 million, or a loss of 14 cents per common share, in fourth-quarter 2015.
Boston Properties currently has a Zacks Rank #3 (Hold).
Investors interested in the REIT space may consider stocks like Hersha Hospitality Trust HT, Getty Realty Corp. GTY and Mack-Cali Realty Corp. CLI. All these stocks sport a Zacks Rank #1 (Strong Buy).
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