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Boston Properties(BXP - Get Report) owns some hugely attractive commercial assets spread across major metropolitan areas in the U.S. The firm's portfolio includes 40 million leasable square feet spread across 125 office buildings, as well as a smattering of one-off assets that includes a hotel, two apartment buildings and a few retail properties.
Boston Properties didn't get defensive during the Great Recession. Instead, it took depressed real estate prices as an opportunity to build out properties at lower prices. The firm's stellar geographic positioning in Boston, New York, San Francisco and Washington D.C. greatly mitigated the firm's downside as property valued dropped; as a result, it's maintained high levels of profitability in 2008 and beyond.
In many ways, REITs are more like income investment vehicles than a play on the real estate market. Because commercial REITs such as BXP rent properties through long-term "triple-net" leases, they're able to collect reliable surprise-free revenues as long as tenants don't go bust. And since REITs have to pay out the vast majority of their incomes to shareholders in the firm of dividends, they offer some true benefits in an environment in which interest rates are scraping the floor. Right now, BXP pays out a 2.37% yield.
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