Washington Analyst Says Boston Properties' Land Bank is Dangerously Large

WASHINGTON, DC-Analysts at the Service Employees International Union’s information service says Boston Properties’ stock of undeveloped properties has grown at an unusually rapid pace. The REIT’s “land bank” is unlikely to decrease due to ramifications of the sagging economy and lawsuits in Massachusetts and Maryland.

Boston Properties’ undeveloped land increased by 45% over the last 18 months, but its developed and under construction properties increased by only 23% during the same period. “Their land bank is starting to grow at a faster rate than the rest of their assets,” explains SEIU Researcher Martin Thomas. “A [land bank] buildup typically causes a drag on a REIT’s resources – they make an investment acquiring land and pay property taxes, but they’re getting little or no income.” The company’s core markets are Boston, Washington, DC, Midtown Manhattan and San Francisco.