Office REIT SL Green (NYSE:SLG) impressed investors earlier this week, and now Boston Properties (NYSE:BXP) has done the same by beating expectations for its first quarter, even in the face of what could have been some challenging situations.

Funds from operations for this real estate investment trust increased 12% to $133 million, compared with $119.2 million from the same period a year ago. Net income rose to $6.99 per share, up $0.59 per share from a year ago, with the current figure including gains from real estate sales of $6.39 per share and $0.05 from discontinued operations. The overall percentage of leased space for properties in services was 93.8%.

The company's strategy focuses on obtaining high-quality assets in select key geographic areas with high barriers to entry. Its 135 properties total 42.9 million square feet, including six under construction, and are concentrated in New York, Boston, San Francisco, and Washington, D.C., with a smaller percentage in Princeton, N.J. Not surprisingly, the company benefited from heightened demand for office space and rising rents in key markets such as Manhattan and San Francisco. It's the other locations, however, such as the greater Boston and Princeton locales, that currently have smaller occupancy rates and less upward rental pressure. That situation presents the risk of restraining net income operating growth.

The good news is that by not relying on only one geographic market to support its operations, the company sees its risks being somewhat lessened. Nevertheless, the company still relies on strong macroeconomic trends to support high office-space demand and high rent. Management believes that current conditions will continue and sees no evidence of a slowdown. One hopes the company execs are right, since their REIT is unable to take full advantage of escalating rents in key markets now, since so few of its leases are expiring in the near future.

It's also encouraging that the company actively tries to sell non-core properties while acquiring assets in which it sees opportunities for value creation, through actions such as capital improvements and marketing shifts. Separate transactions occurring in the last quarter highlight the company's discipline in this area. In Boston, the company sold the Long Wharf Marriott hotel for $231 million and acquired Russia Wharf, a land parcel slated for mixed-use development, for $105.5 million.  

So, despite the potential for pitfalls, Boston Properties is likely to continue to benefit from its experienced leadership, which should keep steadily guiding the company toward steady returns.

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Fool contributor S.J. Caplan does not own shares of the companies discussed in this article.