UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 29, 2014
BOSTON PROPERTIES, INC.
(Exact Name of Registrant As Specified in Charter)
Delaware | 1-13087 | 04-2473675 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
800 Boylston Street, Suite 1900, Boston, Massachusetts 02199
(Address of Principal Executive Offices) (Zip Code)
(617) 236-3300
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
The information in this Item 2.02 - Results of Operations and Financial Condition is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed filed for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
On April 29, 2014, Boston Properties, Inc. (the Company) issued a press release announcing its financial results for the first quarter of 2014. That press release referred to certain supplemental information that is available on the Companys website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description | |
*99.1 | Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended March 31, 2014. | |
*99.2 | Press release dated April 29, 2014. |
* | Filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BOSTON PROPERTIES, INC. | ||||
Date: April 29, 2014 | By: | /s/ Michael E. LaBelle | ||
Michael E. LaBelle | ||||
Senior Vice President, Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
*99.1 | Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended March 31, 2014. | |
*99.2 | Press release dated April 29, 2014. |
* | Filed herewith. |
Exhibit 99.1
Supplemental Operating and Financial Data
for the Quarter Ended March 31, 2014
Boston Properties, Inc.
First Quarter 2014
Table of Contents
Page | ||||
Company Profile |
3 | |||
Investor Information |
4 | |||
Research Coverage |
5 | |||
Financial Highlights |
6 | |||
Consolidated Balance Sheets |
7 | |||
Consolidated Income Statements |
8 | |||
Funds From Operations |
9 | |||
Reconciliation to Diluted Funds From Operations |
10 | |||
Funds Available for Distribution and Interest Coverage Ratios |
11 | |||
Capital Structure |
12 | |||
Debt Analysis |
13-15 | |||
Unconsolidated Joint Ventures |
16-17 | |||
Consolidated Joint Ventures |
18 | |||
Portfolio Overview-Square Footage |
19 | |||
In-Service Property Listing |
20-22 | |||
Top 20 Tenants and Tenant Diversification |
23 | |||
Office Properties-Lease Expiration Roll Out |
24 | |||
Office/Technical Properties-Lease Expiration Roll Out |
25 | |||
Retail Properties - Lease Expiration Roll Out |
26 | |||
Grand Total - Office, Office/Technical and Retail Properties |
27 | |||
Boston Lease Expiration Roll Out |
28-29 | |||
New York Lease Expiration Roll Out |
30-31 | |||
San Francisco Lease Expiration Roll Out |
32-33 | |||
Washington, DC Lease Expiration Roll Out |
34-35 | |||
CBD/Suburban Lease Expiration Roll Out |
36-37 | |||
Hotel and Residential Performance |
38 | |||
Same Property Occupancy Analysis |
39 | |||
Same Property Performance |
40 | |||
Reconciliation to Same Property Performance and Net Income |
41-42 | |||
Leasing Activity |
43 | |||
Capital Expenditures, Tenant Improvements and Leasing Commissions |
44 | |||
Acquisitions/Dispositions |
45 | |||
Value Creation Pipeline - Construction in Progress |
46 | |||
Value Creation Pipeline - Land Parcels and Purchase Options |
47 | |||
Definitions |
48-50 |
This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words assumes, believes, estimates, expects, guidance, intends, may, might, plans, projects, should, will and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effectiveness of our interest rate hedging programs, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Companys accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Companys filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
(Cover photo: Seventeen Cambridge Center, Cambridge, MA)
2
Boston Properties, Inc.
First Quarter 2014
COMPANY PROFILE
The Company
Boston Properties, Inc. (the Company), a self-administered and self-managed real estate investment trust (REIT), is one of the largest owners, managers, and developers of first-class office properties in the United States, with a significant presence in four markets: Boston, New York, San Francisco, and Washington, DC. The Company was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston, where it maintains its headquarters. Boston Properties became a public company in June 1997. The Company acquires, develops and manages its properties through full-service regional offices. Its property portfolio is comprised primarily of first-class office space, one hotel, three residential properties and four retail properties. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants needs. The Company holds a superior track record in developing premium Central Business District (CBD) office buildings, successful mixed use complexes, suburban office centers and build-to-suit projects for the U.S. government and a diverse array of creditworthy tenants.
Management
Boston Properties senior management team is among the most respected and accomplished in the REIT industry. Our deep and talented team of thirty-three individuals averages thirty years of real estate experience and eighteen years with Boston Properties. We believe that our size, management depth, financial strength, reputation, and relationships of key personnel provide a competitive advantage to realize growth through property development and acquisitions. Boston Properties benefits from the reputation and relationships of key personnel, including Mortimer B. Zuckerman, Executive Chairman; Owen D. Thomas, Chief Executive Officer; Douglas T. Linde, President; Raymond A. Ritchey, Executive Vice President, National Director of Acquisitions and Development; and Michael E. LaBelle, Senior Vice President, Chief Financial Officer. Our senior management teams national reputation helps us attract business and investment opportunities. In addition, our other senior officers that serve as Regional Managers have strong reputations that assist in identifying and closing on new opportunities, having opportunities brought to us, and in negotiating with tenants and build-to-suit prospects. Additionally, Boston Properties Board of Directors consists of eleven distinguished members, the majority of whom serve as Independent Directors.
Strategy
Boston Properties primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the Company maintains consistent strategies that include the following:
| concentrating on carefully targeted markets characterized by high barriers to the creation of new supply and strong real estate fundamentals where tenants have demonstrated a preference for high-quality office buildings and other facilities; |
| selectively acquiring assets which increase its penetration in these targeted markets; |
| taking on complex, technically-challenging development projects that leverage the skills of its management team to successfully develop, acquire, and reposition properties; |
| exploring joint-venture opportunities with partners who seek to benefit from the Companys depth of development and management expertise; |
| pursuing on a selective basis the sale of properties or interests therein to either take advantage of the demand for its premier properties and realize the value created and/or pare from the portfolio of properties that have slower future growth potential; and |
| continuing to enhance the Companys balanced capital structure through its access to a variety of capital sources. |
Snapshot
(as of March 31, 2014)
Corporate Headquarters |
Boston, Massachusetts | |
Markets |
Boston, New York, San Francisco and Washington, DC | |
Fiscal Year-End |
December 31 | |
Total Properties (includes unconsolidated joint ventures) |
175 | |
Total Square Feet (includes unconsolidated joint ventures and structured parking) |
61.5 million | |
Closing common shares outstanding, plus common, preferred and LTIP units on an as-converted basis (but excluding Outperformance Plan and Multi-Year Long-Term Incentive Program Units) |
171.0 million | |
Dividend - Quarter/Annualized |
$0.65/$2.60 | |
Dividend Yield |
2.27% | |
Total Adjusted Market Capitalization |
$29.8 billion | |
Senior Debt Ratings |
Baa2 (Moodys); BBB (Fitch); A- (S&P) |
3
Boston Properties, Inc.
First Quarter 2014
INVESTOR INFORMATION
Board of Directors |
Management | |||||
Mortimer B. Zuckerman Executive Chairman
Owen D. Thomas Chief Executive Officer and Director
Douglas T. Linde President and Director
Zoë Baird Budinger Director
Carol B. Einiger Director
Dr. Jacob A. Frenkel Director, Chair of Nominating & Corporate Governance Committee |
Joel I. Klein Director
Matthew J. Lustig Director
Alan J. Patricof Director, Chair of Audit Committee
Martin Turchin Director
David A. Twardock Director, Chair of Compensation Committee |
Raymond A. Ritchey Executive Vice President, National Director of Acquisitions & Development
Michael E. LaBelle Senior Vice President, Chief Financial Officer
Peter D. Johnston Senior Vice President and Regional Manager of Washington, DC
Bryan J. Koop Senior Vice President and Regional Manager of Boston |
Robert E. Pester Senior Vice President and Regional Manager of San Francisco
John F. Powers Senior Vice President and Regional Manager of New York
Frank D. Burt Senior Vice President, General Counsel
Michael R. Walsh Senior Vice President, Finance | |||
Company Information | ||||||
Corporate Headquarters |
Trading Symbol | Investor Relations | Inquires | |||
800 Boylston Street Suite 1900 Boston, MA 02199 (t) 617.236.3300 (f) 617.236.3311 |
BXP
Stock Exchange Listing New York Stock Exchange |
Boston Properties, Inc. 800 Boylston Street, Suite 1900 Boston, MA 02199 (t) 617.236.3322 (f) 617.236.3311 www.bostonproperties.com |
Inquiries should be directed to Michael Walsh, Senior Vice President, Finance at 617.236.3410 or mwalsh@bostonproperties.com
Arista Joyner, Investor Relations Manager at 617.236.3343 or ajoyner@bostonproperties.com |
Common Stock Data (NYSE: BXP) |
||||||||||||||||||||
Boston Properties common stock has the following characteristics (based on information reported by the New York Stock Exchange): | ||||||||||||||||||||
Q1 2014 | Q4 2013 | Q3 2013 | Q2 2013 | Q1 2013 | ||||||||||||||||
High Closing Price |
$ | 114.53 | $ | 109.64 | $ | 111.35 | $ | 114.59 | $ | 109.46 | ||||||||||
Low Closing Price |
$ | 100.39 | $ | 98.46 | $ | 98.27 | $ | 100.50 | $ | 100.33 | ||||||||||
Average Closing Price |
$ | 109.07 | $ | 103.44 | $ | 105.81 | $ | 108.58 | $ | 105.48 | ||||||||||
Closing Price, at the end of the quarter |
$ | 114.53 | $ | 100.37 | $ | 106.90 | $ | 105.47 | $ | 101.06 | ||||||||||
Dividends per share - annualized (1) |
$ | 2.60 | $ | 2.60 | $ | 2.60 | $ | 2.60 | $ | 2.60 | ||||||||||
Closing dividend yield - annualized (1) |
2.27 | % | 2.59 | % | 2.43 | % | 2.47 | % | 2.57 | % | ||||||||||
Closing common shares outstanding, plus preferred shares and common, preferred and LTIP units on an as-converted basis (but excluding Outperformance Plan and Multi-Year Long-Term Incentive Program Units) (thousands) (2) |
171,029 | 170,896 | 170,897 | 170,896 | 170,448 | |||||||||||||||
Closing market value of outstanding shares and units (thousands) |
$ | 19,805,957 | $ | 17,370,837 | $ | 18,486,904 | $ | 18,285,486 | $ | 17,486,559 |
(1) | Excludes the special dividend of $2.25 per share paid on January 29, 2014. |
(2) | For additional detail, see page 12. |
Timing | ||
Quarterly results for the next three quarters will be announced according to the following schedule:
| ||
Second Quarter, 2014 | Tentatively July 29, 2014 | |
Third Quarter, 2014 |
Tentatively October 28, 2014 | |
Fourth Quarter, 2014 |
Tentatively January 27, 2015 |
4
Boston Properties, Inc.
First Quarter 2014
RESEARCH COVERAGE
Equity Research Coverage |
Debt Research Coverage |
Rating Agencies | ||||
Lucy Moore | Steve Sakwa / George Auerbach | Scott Frost | Stephen Boyd | |||
Argus Research Company | ISI Group | Bank of America Merrill Lynch | Fitch Ratings | |||
646.747.5456 | 212.446.9462 / 212.446.9459 | 646.855.8078 | 212.908.9153 | |||
Jeffrey Spector / Jamie Feldman | Omotayo Okusanya /David Shamis | Thomas Cook | Chris Wimmer | |||
Bank of America Merrill Lynch | Jefferies & Co. | Citi Investment Research | Moodys Investors Service | |||
212.449.6329 / 212.449.6339 | 212.336.7076 / 212.284.1796 | 212.723.1112 | 212.553.2947 | |||
Ross Smotrich / Michael Lewis | Anthony Paolone / Joseph Dazio | John Giordano | Lisa Sarajian | |||
Barclays Capital | J.P. Morgan Securities | Credit Suisse Securities | Standard & Poors | |||
212.526.2306 / 212.526.3098 | 212.622.6682 / 212.622.6416 | 212.538.4935 | 212.438.2597 | |||
David Toti / Evan Smith | Jordan Sadler / Craig Mailman | Mark Streeter | ||||
Cantor Fitzgerald | KeyBanc Capital Markets | J.P. Morgan Securities | ||||
212.829.5224 / 215.915.1220 | 917.368.2280 / 917.368.2316 | 212.834.5086 | ||||
Michael Bilerman / Joshua Attie | Vance Edelson | Thierry Perrein / Jason Jones | ||||
Citigroup Global Markets | Morgan Stanley | Wells Fargo | ||||
212.816.1383 / 212.816.1685 | 212.761.4000 | 704.715.8455 / 704.715.7932 | ||||
James Sullivan /Tom Catherwood | Rich Moore / Mike Carroll | |||||
Cowen and Company | RBC Capital Markets | |||||
646.562.1380 / 646.562.1382 | 440.715.2646 / 440.715.2649 | |||||
Vin Chao / Jeremy Metz | David Rodgers /Matthew Spencer | |||||
Deutsche Bank Securities | RW Baird | |||||
212.250.6799 / 212.250.4667 | 216.737.7341 / 414.298.5053 | |||||
Sheila McGrath /Nathan Crossett | Alexander Goldfarb /Andrew Schaffer | |||||
Evercore Partners | Sandler ONeill & Partners | |||||
212.497.0882 / 212.497.0870 | 212.466.7937 / 212.466.8062 | |||||
Brad Burke | John Guinee / Erin Aslakson | |||||
Goldman Sachs | Stifel, Nicolaus & Company | |||||
917.343.2082 | 443.224.1307 / 443.224.1350 | |||||
Michael Knott / Jed Reagan | Ross Nussbaum /Gabriel Hilmoe | |||||
Green Street Advisors | UBS Securities | |||||
949.640.8780 / 949.640.8780 | 212.713.2484 / 212.713.3876 | |||||
David Harris | ||||||
Imperial Capital | ||||||
212.351.9429 |
With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding Boston Properties performance made by the analysts listed above do not represent the opinions, estimates or forecasts of Boston Properties or its management. Boston Properties does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.
5
Boston Properties, Inc.
First Quarter 2014
FINANCIAL HIGHLIGHTS
(unaudited and in thousands, except per share amounts)
This section includes non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 9-11. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the Companys financial condition and results of operations can be found on pages 48-50.
Three Months Ended | ||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Selected Items: |
||||||||||||||||||||
Revenue |
$ | 574,694 | $ | 576,199 | $ | 571,481 | $ | 510,033 | $ | 477,826 | ||||||||||
Straight-line rent (1) |
$ | 8,140 | $ | 15,936 | $ | 14,837 | $ | 16,142 | $ | 17,807 | ||||||||||
Fair value lease revenue (1) (2) |
$ | 7,501 | $ | 7,202 | $ | 7,073 | $ | 13,286 | $ | 16,037 | ||||||||||
Revenue from residential properties |
$ | 5,682 | $ | 5,606 | $ | 5,493 | $ | 5,484 | $ | 5,578 | ||||||||||
Company share of funds from operations from unconsolidated joint ventures |
$ | 7,400 | $ | 7,467 | $ | 7,951 | $ | 20,991 | $ | 30,378 | ||||||||||
Lease termination fees (included in revenue) (1) |
$ | 1,119 | $ | 664 | $ | 1,380 | $ | 288 | $ | 476 | ||||||||||
Ground rent expense (3) |
$ | 4,986 | $ | 5,004 | $ | 5,016 | $ | 5,006 | $ | 5,008 | ||||||||||
ASC 470-20 (formerly known as FSP APB 14-1) interest expense adjustment |
$ | 2,438 | $ | 4,971 | $ | 4,888 | $ | 6,035 | $ | 7,158 | ||||||||||
Fair value interest adjustment (1) |
$ | 7,583 | $ | 7,512 | $ | 7,491 | $ | 1,918 | $ | (558 | ) | |||||||||
Capitalized interest |
$ | 17,709 | $ | 17,900 | $ | 17,398 | $ | 18,436 | $ | 14,418 | ||||||||||
Capitalized wages |
$ | 3,547 | $ | 4,113 | $ | 3,147 | $ | 2,784 | $ | 2,750 | ||||||||||
Operating Margins [(rental revenue - rental expense)/rental revenue] (4) |
65.1 | % | 66.3 | % | 66.2 | % | 66.3 | % | 65.2 | % | ||||||||||
Gains (losses) from early extinguishments of debt |
$ | | $ | | $ | (30 | ) | $ | 152 | $ | | |||||||||
Net income attributable to Boston Properties, Inc. common shareholders |
$ | 54,034 | $ | 88,719 | $ | 152,677 | $ | 452,417 | $ | 47,854 | ||||||||||
Funds from operations (FFO) attributable to Boston Properties, Inc. |
$ | 183,844 | $ | 197,605 | $ | 197,859 | $ | 195,415 | $ | 160,624 | ||||||||||
FFO per share - diluted |
$ | 1.20 | $ | 1.29 | $ | 1.29 | $ | 1.28 | $ | 1.06 | ||||||||||
Net income attributable to Boston Properties, Inc. per share - basic |
$ | 0.35 | $ | 0.58 | $ | 1.00 | $ | 2.95 | $ | 0.32 | ||||||||||
Net income attributable to Boston Properties, Inc. per share - diluted |
$ | 0.35 | $ | 0.58 | $ | 1.00 | $ | 2.94 | $ | 0.31 | ||||||||||
Dividends per common share (5) |
$ | 0.65 | $ | 2.90 | $ | 0.65 | $ | 0.65 | $ | 0.65 | ||||||||||
Funds available for distribution to common shareholders and common unitholders (FAD) (6) |
$ | 163,933 | $ | 154,562 | $ | 150,285 | $ | 167,699 | $ | 145,867 | ||||||||||
Ratios: |
||||||||||||||||||||
Interest Coverage Ratio (excluding capitalized interest) - cash basis (7) |
3.30 | 3.23 | 3.18 | 3.32 | 3.15 | |||||||||||||||
Interest Coverage Ratio (including capitalized interest) - cash basis (7) |
2.81 | 2.77 | 2.74 | 2.77 | 2.72 | |||||||||||||||
FFO Payout Ratio (8) |
54.17 | % | 50.39 | % | 50.39 | % | 50.78 | % | 61.32 | % | ||||||||||
FAD Payout Ratio (9) |
67.51 | % | 71.55 | % | 73.40 | % | 65.78 | % | 75.42 | % | ||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Capitalization: |
||||||||||||||||||||
Common Stock Price @ Quarter End |
$ | 114.53 | $ | 100.37 | $ | 106.90 | $ | 105.47 | $ | 101.06 | ||||||||||
Equity Value @ Quarter End |
$ | 19,805,957 | $ | 17,370,837 | $ | 18,486,904 | $ | 18,285,486 | $ | 17,486,559 | ||||||||||
Total Consolidated Debt |
$ | 10,577,135 | $ | 11,341,508 | $ | 11,354,369 | $ | 11,365,545 | $ | 8,871,518 | ||||||||||
Total Consolidated Market Capitalization |
$ | 30,383,092 | $ | 28,712,345 | $ | 29,841,273 | $ | 29,651,031 | $ | 26,358,077 | ||||||||||
Total Consolidated Debt/Total Consolidated Market Capitalization (10) |
34.81 | % | 39.50 | % | 38.05 | % | 38.33 | % | 33.66 | % | ||||||||||
BXPs Share of Unconsolidated Joint Venture Debt |
$ | 328,869 | $ | 329,188 | $ | 328,373 | $ | 326,714 | $ | 1,445,565 | ||||||||||
Less: |
||||||||||||||||||||
Partners Share of Consolidated Debt |
$ | 878,265 | $ | 883,655 | $ | 889,008 | $ | 894,341 | $ | 177,228 | ||||||||||
Total Adjusted Debt |
$ | 10,027,739 | $ | 10,787,041 | $ | 10,793,734 | $ | 10,797,918 | $ | 10,139,855 | ||||||||||
Total Adjusted Market Capitalization (11) |
$ | 29,833,696 | $ | 28,157,878 | $ | 29,280,638 | $ | 29,083,404 | $ | 27,626,414 | ||||||||||
Total Adjusted Debt/Total Adjusted Market Capitalization (11) (12) |
33.61 | % | 38.31 | % | 36.86 | % | 37.13 | % | 36.70 | % |
(1) | Includes the Companys share of consolidated and unconsolidated joint venture amounts. |
(2) | Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates. |
(3) | Includes non-cash straight-line adjustments to ground rent. See page 11 for the straight-line adjustments to the ground rent expense. |
(4) | Rental expense consists of operating expenses, real estate taxes and ground rent expense. Amounts are exclusive of the gross up of reimbursable electricity and other amounts totaling $15,996, $15,473, $17,524, $14,916 and $13,324 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
(5) | For the three months ended December 31, 2013, dividends per share includes the $2.25 per common share special dividend paid on January 29, 2014. |
(6) | For a quantitative reconciliation of the differences between FAD and FFO, see page 11. |
(7) | For additional detail, see page 11. |
(8) | FFO Payout Ratio is defined as dividends per share to common shareholders divided by FFO per share. For the three months ended December 31, 2013, excludes the $2.25 per share special dividend paid on January 29, 2014. |
(9) | FAD Payout Ratio is defined as distributions to common shareholders and unitholders divided by FAD. For the three months ended December 31, 2013, excludes the $2.25 per share special distribution paid on January 29, 2014. For additional information, see page 11. |
(10) | For disclosures related to our definition of Total Consolidated Debt to Total Consolidated Market Capitalization Ratio, see page 48. |
(11) | For additional detail, see page 12. |
(12) | For disclosures related to our definition of Total Adjusted Debt to Total Adjusted Market Capitalization Ratio, see page 48. |
6
Boston Properties, Inc.
First Quarter 2014
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Real estate |
$ | 17,258,665 | $ | 17,158,210 | $ | 17,105,492 | $ | 17,059,235 | $ | 13,550,889 | ||||||||||
Construction in progress (1) |
1,564,821 | 1,523,179 | 1,502,017 | 1,483,114 | 1,145,517 | |||||||||||||||
Land held for future development |
300,498 | 297,376 | 295,370 | 290,085 | 503,684 | |||||||||||||||
Less accumulated depreciation |
(3,263,208 | ) | (3,161,571 | ) | (3,076,280 | ) | (2,996,520 | ) | (2,929,385 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate |
15,860,776 | 15,817,194 | 15,826,599 | 15,835,914 | 12,270,705 | |||||||||||||||
Cash and cash equivalents |
1,179,573 | 2,365,137 | 1,641,275 | 1,608,731 | 909,376 | |||||||||||||||
Cash held in escrows |
54,240 | 57,201 | 53,499 | 54,829 | 55,410 | |||||||||||||||
Marketable securities |
18,026 | 16,641 | 15,377 | 14,226 | 13,825 | |||||||||||||||
Tenant and other receivables, net |
37,812 | 59,464 | 55,393 | 66,039 | 75,849 | |||||||||||||||
Related party notes receivable |
| | | | 282,307 | |||||||||||||||
Interest receivable from related party notes receivable |
| | | | 106,313 | |||||||||||||||
Accrued rental income, net |
661,730 | 651,603 | 641,041 | 625,654 | 612,041 | |||||||||||||||
Deferred charges, net |
861,567 | 884,450 | 918,798 | 939,675 | 572,890 | |||||||||||||||
Prepaid expenses and other assets |
178,488 | 184,477 | 238,688 | 179,741 | 71,756 | |||||||||||||||
Investments in unconsolidated joint ventures |
127,356 | 126,084 | 129,038 | 137,975 | 652,807 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 18,979,568 | $ | 20,162,251 | $ | 19,519,708 | $ | 19,462,784 | $ | 15,623,279 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Mortgage notes payable |
$ | 4,430,110 | $ | 4,449,734 | $ | 4,468,069 | $ | 4,484,657 | $ | 3,053,798 | ||||||||||
Unsecured senior notes, net of discount |
5,836,290 | 5,835,854 | 5,835,424 | 5,834,973 | 4,639,843 | |||||||||||||||
Unsecured exchangeable senior notes, net of discount |
| 744,880 | 739,536 | 734,278 | 1,177,877 | |||||||||||||||
Unsecured line of credit |
| | | | | |||||||||||||||
Mezzanine notes payable |
310,735 | 311,040 | 311,340 | 311,637 | | |||||||||||||||
Related party notes payable |
180,000 | 180,000 | 180,000 | 180,000 | | |||||||||||||||
Accounts payable and accrued expenses |
218,028 | 202,470 | 215,778 | 212,998 | 210,359 | |||||||||||||||
Dividends and distributions payable |
114,799 | 497,242 | 112,470 | 112,425 | 110,886 | |||||||||||||||
Accrued interest payable |
178,651 | 167,523 | 181,310 | 141,676 | 99,491 | |||||||||||||||
Other liabilities |
556,772 | 578,969 | 567,464 | 556,730 | 316,683 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
11,825,385 | 12,967,712 | 12,611,391 | 12,569,374 | 9,608,937 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commitments and contingencies |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Noncontrolling interests: |
||||||||||||||||||||
Redeemable preferred units of the Operating Partnership |
51,312 | 51,312 | 67,806 | 110,876 | 110,876 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Redeemable interest in property partnership |
100,327 | 99,609 | 98,649 | 98,162 | 98,216 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity: |
||||||||||||||||||||
Stockholders equity attributable to Boston Properties, Inc.: |
||||||||||||||||||||
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding |
| | | | | |||||||||||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; |
||||||||||||||||||||
5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding |
200,000 | 200,000 | 200,000 | 200,000 | 200,000 | |||||||||||||||
Common stock, $0.01 par value, 250,000,000 shares authorized, |
||||||||||||||||||||
153,017,311, 152,983,101, 152,390,595, 152,384,740 and |
||||||||||||||||||||
151,601,209 outstanding, respectively |
1,530 | 1,530 | 1,524 | 1,524 | 1,516 | |||||||||||||||
Additional paid-in capital |
5,668,230 | 5,662,453 | 5,250,174 | 5,246,243 | 5,232,030 | |||||||||||||||
Earnings (dividends) in excess of dividends (earnings) |
(153,979 | ) | (108,552 | ) | 246,206 | 192,492 | (160,697 | ) | ||||||||||||
Treasury common stock, at cost |
(2,722 | ) | (2,722 | ) | (2,722 | ) | (2,722 | ) | (2,722 | ) | ||||||||||
Accumulated other comprehensive loss |
(10,989 | ) | (11,556 | ) | (12,122 | ) | (12,689 | ) | (13,253 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total stockholders equity attributable to Boston Properties, Inc. |
5,702,070 | 5,741,153 | 5,683,060 | 5,624,848 | 5,256,874 | |||||||||||||||
Noncontrolling interests: |
||||||||||||||||||||
Common units of the Operating Partnership |
575,381 | 576,333 | 577,173 | 570,135 | 540,103 | |||||||||||||||
Property partnerships |
725,093 | 726,132 | 481,629 | 489,389 | 8,273 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity |
7,002,544 | 7,043,618 | 6,741,862 | 6,684,372 | 5,805,250 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 18,979,568 | $ | 20,162,251 | $ | 19,519,708 | $ | 19,462,784 | $ | 15,623,279 | ||||||||||
|
|
|
|
|
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|
|
|
On May 31, 2013, the Companys two joint venture partners in 767 Venture, LLC (the entity that owns 767 Fifth Avenue in New York City) transferred all of their interests in the joint venture to third parties. In connection with the transfer, the Company and its new joint venture partners modified the Companys relative decision making authority and consent rights with respect to the joint ventures assets and operations. These changes resulted in the Company having sufficient financial and operating control over 767 Venture, LLC such that the Company now accounts for the assets, liabilities and operations of 767 Venture, LLC on a consolidated basis in its financial statements instead of under the equity method of accounting. Upon consolidation, the Company recognized a non-cash gain on its investment of approximately $359.5 million.
(1) | Represents the portion of the Companys consolidated development projects that qualifies for interest capitalization. Such portion generally excludes intangible assets. |
7
Boston Properties, Inc.
First Quarter 2014
CONSOLIDATED INCOME STATEMENTS
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended | ||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Revenue |
||||||||||||||||||||
Rental |
||||||||||||||||||||
Base Rent |
$ | 455,018 | $ | 453,538 | $ | 449,636 | $ | 399,192 | $ | 373,046 | ||||||||||
Recoveries from tenants |
81,934 | 79,586 | 80,718 | 68,321 | 64,319 | |||||||||||||||
Parking and other |
24,333 | 25,174 | 25,000 | 23,547 | 23,437 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total rental revenue |
561,285 | 558,298 | 555,354 | 491,060 | 460,802 | |||||||||||||||
Hotel revenue |
8,193 | 10,269 | 10,652 | 11,118 | 8,291 | |||||||||||||||
Development and management services |
5,216 | 7,632 | 5,475 | 7,855 | 8,733 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenue |
574,694 | 576,199 | 571,481 | 510,033 | 477,826 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses |
||||||||||||||||||||
Operating (1) |
114,455 | 108,147 | 108,668 | 97,914 | 94,677 | |||||||||||||||
Real estate taxes |
91,933 | 90,441 | 90,620 | 78,104 | 74,385 | |||||||||||||||
Hotel operating |
6,797 | 7,488 | 6,580 | 7,335 | 7,044 | |||||||||||||||
General and administrative (1) (2) (3) |
29,905 | 20,656 | 24,841 | 24,316 | 45,516 | |||||||||||||||
Transaction costs |
437 | | 766 | 535 | 443 | |||||||||||||||
Impairment loss |
| | | | 8,306 | |||||||||||||||
Depreciation and amortization |
154,270 | 154,475 | 153,253 | 133,456 | 119,453 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
397,797 | 381,207 | 384,728 | 341,660 | 349,824 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income |
176,897 | 194,992 | 186,753 | 168,373 | 128,002 | |||||||||||||||
Other income (expense) |
||||||||||||||||||||
Income from unconsolidated joint ventures (4) |
2,816 | 2,834 | 14,736 | 48,783 | 8,721 | |||||||||||||||
Gains on consolidation of joint ventures (5) |
| | (1,810 | ) | 387,801 | | ||||||||||||||
Interest and other income |
1,311 | 1,664 | 3,879 | 1,296 | 1,471 | |||||||||||||||
Gains from investments in securities (2) |
286 | 1,039 | 956 | 181 | 735 | |||||||||||||||
Interest expense (6) |
(113,554 | ) | (121,134 | ) | (122,173 | ) | (103,140 | ) | (100,433 | ) | ||||||||||
Gains (losses) from early extinguishments of debt |
| | (30 | ) | 152 | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income from continuing operations |
67,756 | 79,395 | 82,311 | 503,446 | 38,496 | |||||||||||||||
Discontinued operations |
||||||||||||||||||||
Income from discontinued operations |
| 536 | 1,677 | 3,315 | 2,494 | |||||||||||||||
Gains on sales of real estate from discontinued operations |
| 26,381 | 86,448 | | | |||||||||||||||
Gain on forgiveness of debt from discontinued operations |
| | | | 20,182 | |||||||||||||||
Impairment loss from discontinued operations |
| | | | (3,241 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
67,756 | 106,312 | 170,436 | 506,761 | 57,931 | |||||||||||||||
Net income attributable to noncontrolling interests |
||||||||||||||||||||
Noncontrolling interest in property partnerships |
(4,354 | ) | (2,271 | ) | 3,279 | 219 | (2,574 | ) | ||||||||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
(619 | ) | (2,661 | ) | (1,082 | ) | (1,123 | ) | (1,180 | ) | ||||||||||
Noncontrolling interest - common units of the Operating Partnership (7) |
(6,160 | ) | (7,302 | ) | (8,339 | ) | (50,489 | ) | (4,111 | ) | ||||||||||
Noncontrolling interest in discontinued operations - common units of the Operating Partnership (7) |
| (2,713 | ) | (8,970 | ) | (333 | ) | (2,066 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income attributable to Boston Properties, Inc. |
56,623 | 91,365 | 155,324 | 455,035 | 48,000 | |||||||||||||||
Preferred dividends |
(2,589 | ) | (2,646 | ) | (2,647 | ) | (2,618 | ) | (146 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income attributable to Boston Properties, Inc. common shareholders |
$ | 54,034 | $ | 88,719 | $ | 152,677 | $ | 452,417 | $ | 47,854 | ||||||||||
|
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|
|
|
|
|
|
|
|||||||||||
INCOME PER SHARE OF COMMON STOCK (EPS) |
||||||||||||||||||||
Net income attributable to Boston Properties, Inc. per share-basic |
$ | 0.35 | $ | 0.58 | $ | 1.00 | $ | 2.95 | $ | 0.32 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income attributable to Boston Properties, Inc. per share-diluted |
$ | 0.35 | $ | 0.58 | $ | 1.00 | $ | 2.94 | $ | 0.31 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Beginning in the third quarter of 2013, the Company revised the presentation of costs to operate its San Francisco and Princeton regional offices. These expenses, which totaled approximately $1.8 million, $2.1 million, $2.0 million, $2.1 million and $1.9 million for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively, were previously included in Operating Expenses and are now included in General and Administrative Expenses for all periods presented. |
(2) | Gains from investments in securities includes $286, $1,039, $956, $181 and $735 and general and administrative expense includes $(306), $(1,055), $(941), $(176) and $(752) for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively, related to the Companys deferred compensation plan. |
(3) | For the three months ended March 31, 2013, general and administrative expense includes an aggregate of approximately $19.5 million consisting of (i) the acceleration of the remaining approximately $12.9 million of stock-based compensation expense associated with the Companys Executive Chairmans unvested long-term equity awards and (ii) approximately $6.6 million of compensation expense associated with the Companys Executive Chairmans transition benefits agreement related to the Companys succession planning. |
(4) | For the three months ended September 30, 2013, includes the gain on sale of Eighth Avenue and 46th Street totaling approximately $11.3 million and an adjustment to the gain on sale of 125 West 55th Street totaling approximately $(0.1) million. For the three months ended June 30, 2013, includes the gain on sale of 125 West 55th Street totaling approximately $43.3 million. |
(5) | For the three months ended September 30, 2013, the gains on consolidation of joint ventures consisted of adjustments to the gains from (1) 767 Fifth Avenue (The GM Building) totaling approximately $(3.9) million and (2) the Companys Value-Added Funds Mountain View properties totaling approximately $2.1 million. For the three months ended June 30, 2013, the gains on consolidation of joint ventures consisted of (1) 767 Fifth Avenue totaling approximately $363.4 million and (2) the Companys Value-Added Funds Mountain View properties totaling approximately $24.4 million. |
(6) | For the three months ended March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, interest expense includes $6,940, $6,906, $6,873 and $2,265, respectively, consisting of the interest expense on the partner loans for the 767 Fifth Avenue consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships. The Companys share of the interest expense on its loan to the joint venture eliminates in consolidation. |
(7) | Equals noncontrolling interestcommon units of the Operating Partnerships share of 9.90%, 9.89%, 9.94%, 10.06% and 10.14% of income before net income attributable to noncontrolling interests in Operating Partnership after deduction for preferred distributions for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
8
Boston Properties, Inc.
First Quarter 2014
FUNDS FROM OPERATIONS (FFO)
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended | ||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Net income attributable to Boston Properties, Inc. common shareholders |
$ | 54,034 | $ | 88,719 | $ | 152,677 | $ | 452,417 | $ | 47,854 | ||||||||||
Add: |
||||||||||||||||||||
Preferred dividends |
2,589 | 2,646 | 2,647 | 2,618 | 146 | |||||||||||||||
Noncontrolling interest in discontinued operations - common units of the |
||||||||||||||||||||
Operating Partnership |
| 2,713 | 8,970 | 333 | 2,066 | |||||||||||||||
Noncontrolling interest - common units of the Operating Partnership |
6,160 | 7,302 | 8,339 | 50,489 | 4,111 | |||||||||||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
619 | 2,661 | 1,082 | 1,123 | 1,180 | |||||||||||||||
Noncontrolling interests in property partnerships |
4,354 | 2,271 | (3,279 | ) | (219 | ) | 2,574 | |||||||||||||
Impairment loss from discontinued operations |
| | | | 3,241 | |||||||||||||||
Less: |
||||||||||||||||||||
Income from discontinued operations |
| 536 | 1,677 | 3,315 | 2,494 | |||||||||||||||
Gains on sales of real estate from discontinued operations |
| 26,381 | 86,448 | | | |||||||||||||||
Gain on forgiveness of debt from discontinued operations |
| | | | 20,182 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income from continuing operations |
67,756 | 79,395 | 82,311 | 503,446 | 38,496 | |||||||||||||||
Add: |
||||||||||||||||||||
Real estate depreciation and amortization (1) |
158,514 | 159,706 | 158,274 | 149,817 | 142,555 | |||||||||||||||
Income from discontinued operations |
| 536 | 1,677 | 3,315 | 2,494 | |||||||||||||||
Less: |
||||||||||||||||||||
Gains on sales of real estate included within income from unconsolidated joint ventures (2) |
| | 11,174 | 43,327 | | |||||||||||||||
Gains on consolidation of joint ventures (3) |
| | (1,810 | ) | 387,801 | | ||||||||||||||
Noncontrolling interests in property partnerships share of funds from operations |
19,023 | 16,994 | 9,462 | 4,436 | 3,038 | |||||||||||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership (4) |
619 | 694 | 1,082 | 1,123 | 1,180 | |||||||||||||||
Preferred dividends |
2,589 | 2,646 | 2,647 | 2,618 | 146 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Funds from operations (FFO) attributable to the Operating Partnership |
204,039 | 219,303 | 219,707 | 217,273 | 179,181 | |||||||||||||||
Less: |
||||||||||||||||||||
Noncontrolling interest - common units of the Operating Partnerships share of funds from operations |
20,195 | 21,698 | 21,848 | 21,858 | 18,557 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
FFO attributable to Boston Properties, Inc. (5) |
$ | 183,844 | $ | 197,605 | $ | 197,859 | $ | 195,415 | $ | 160,624 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
FFO per share - basic |
$ | 1.20 | $ | 1.29 | $ | 1.30 | $ | 1.29 | $ | 1.06 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted average shares outstanding - basic |
153,030 | 152,798 | 152,407 | 151,938 | 151,646 | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||
FFO per share - diluted |
$ | 1.20 | $ | 1.29 | $ | 1.29 | $ | 1.28 | $ | 1.06 | ||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||
Weighted average shares outstanding - diluted |
154,043 | 153,900 | 153,999 | 153,797 | 153,259 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Real estate depreciation and amortization consists of depreciation and amortization from the consolidated statements of operations of $154,270, $154,475, $153,253, $133,456 and $119,453, our share of unconsolidated joint venture real estate depreciation and amortization of $4,584, $4,633, $4,389, $15,535 and $21,657, and depreciation and amortization from discontinued operations of $0, $934, $940, $1,148 and $1,738, less corporate related depreciation of $340, $336, $308, $322 and $293 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
(2) | For the three months ended September 30, 2013, consists of the portion of income from unconsolidated joint ventures related to the gain on sale of Eighth Avenue and 46th Street totaling approximately $11.3 million and an adjustment to the gain on sale of 125 West 55th Street totaling approximately $(0.1) million. For the three months ended June 30, 2013, consists of the portion of income from unconsolidated joint ventures related to the gain on sale of 125 West 55th Street totaling approximately $43.3 million. |
(3) | For the three months ended September 30, 2013, the gains on consolidation of joint ventures consisted of adjustments to the gains from (1) 767 Fifth Avenue totaling approximately $(3.9) million and (2) the Companys Value-Added Funds Mountain View properties totaling approximately $2.1 million. For the three months ended June 30, 2013, the gains on consolidation of joint ventures consisted of (1) 767 Fifth Avenue totaling approximately $363.4 million and (2) the Companys Value-Added Funds Mountain View properties totaling approximately $24.4 million. |
(4) | Excludes approximately $2.0 million for the three months ended December 31, 2013 of income allocated to the holders of Series Two Preferred Units to account for their right to participate on an as-converted basis in the special dividend that was primarily the result of the sale of a 45% interest in the Companys Times Square Tower property. |
(5) | Based on weighted average basic shares for the quarter. The Companys share for the quarter ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013 was 90.10%, 90.11%, 90.06%, 89.94% and 89.86%, respectively. |
9
Boston Properties, Inc.
First Quarter 2014
RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS
(in thousands, except for per share amounts)
(unaudited)
March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2013 | March 31, 2013 | ||||||||||||||||||||||||||||||||||||
Income (Numerator) |
Shares/Units (Denominator) |
Income (Numerator) |
Shares/Units (Denominator) |
Income (Numerator) |
Shares/Units (Denominator) |
Income (Numerator) |
Shares/Units (Denominator) |
Income (Numerator) |
Shares/Units (Denominator) |
|||||||||||||||||||||||||||||||
Basic FFO |
$ | 204,039 | 169,841 | $ | 219,303 | 169,576 | $ | 219,707 | 169,236 | $ | 217,273 | 168,933 | $ | 179,181 | 168,750 | |||||||||||||||||||||||||
Effect of Dilutive Securities |
||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Units (1) |
530 | 874 | 603 | 968 | 850 | 1,307 | 818 | 1,307 | 879 | 1,307 | ||||||||||||||||||||||||||||||
Stock based compensation and exchangeable senior notes |
| 139 | | 134 | | 285 | | 552 | | 306 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Diluted FFO |
$ | 204,569 | 170,854 | $ | 219,906 | 170,678 | $ | 220,557 | 170,828 | $ | 218,091 | 170,792 | $ | 180,060 | 170,363 | |||||||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||||||||||||||
Noncontrolling interestcommon units of the Operating Partnerships share of diluted funds from operations |
20,128 | 16,811 | 21,617 | 16,778 | 21,728 | 16,829 | 21,702 | 16,995 | 18,077 | 17,104 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Companys share of diluted FFO (2) |
$ | 184,441 | 154,043 | $ | 198,289 | 153,900 | $ | 198,829 | 153,999 | $ | 196,389 | 153,797 | $ | 161,983 | 153,259 | |||||||||||||||||||||||||
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|
|||||||||||||||||||||
FFO per share - basic |
$ | 1.20 | $ | 1.29 | $ | 1.30 | $ | 1.29 | $ | 1.06 | ||||||||||||||||||||||||||||||
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|
|
|||||||||||||||||||||||||||||||
FFO per share - diluted |
$ | 1.20 | $ | 1.29 | $ | 1.29 | $ | 1.28 | $ | 1.06 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Excludes approximately $2.0 million for the three months ended December 31, 2013 of income allocated to the holders of Series Two Preferred Units to account for their right to participate on an as-converted basis in the special dividend that was primarily the result of the sale of a 45% interest in the Companys Times Square Tower property. |
(2) | Based on weighted average diluted shares for the quarter. The Companys share for the quarter ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013 was 90.16%, 90.17%, 90.15%, 90.05% and 89.96%, respectively. |
10
Boston Properties, Inc.
First Quarter 2014
Funds Available for Distribution (FAD)
(in thousands)
Three Months Ended | ||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Basic FFO (see page 9) |
$ | 204,039 | $ | 219,303 | $ | 219,707 | $ | 217,273 | $ | 179,181 | ||||||||||
2nd generation tenant improvements and leasing commissions |
(25,336 | ) | (28,132 | ) | (46,722 | ) | (20,311 | ) | (38,380 | ) | ||||||||||
Straight-line rent (1) |
(8,140 | ) | (15,936 | ) | (14,837 | ) | (16,142 | ) | (17,807 | ) | ||||||||||
Recurring capital expenditures |
(7,694 | ) | (19,913 | ) | (11,839 | ) | (12,856 | ) | (6,418 | ) | ||||||||||
Fair value interest adjustment (1) |
(7,583 | ) | (7,512 | ) | (7,491 | ) | (1,918 | ) | 558 | |||||||||||
ASC 470-20 (formerly known as FSP APB 14-1) interest expense adjustment |
2,438 | 4,971 | 4,888 | 6,035 | 7,158 | |||||||||||||||
Fair value lease revenue (1) (2) |
(7,501 | ) | (7,202 | ) | (7,073 | ) | (13,286 | ) | (16,037 | ) | ||||||||||
Hotel improvements, equipment upgrades and replacements |
(1,557 | ) | (715 | ) | (206 | ) | (1,006 | ) | (143 | ) | ||||||||||
Straight-line ground rent expense adjustment (3) |
1,747 | 1,785 | 1,785 | 1,785 | 1,801 | |||||||||||||||
Non real estate depreciation |
340 | 336 | 308 | 322 | 293 | |||||||||||||||
Stock-based compensation (4) |
10,380 | 6,154 | 6,537 | 6,681 | 25,783 | |||||||||||||||
Impairment loss |
| | | | 8,306 | |||||||||||||||
Non-cash losses (gains) from early extinguishments of debt |
| | | (264 | ) | | ||||||||||||||
Non-cash termination adjustment (including fair value lease amounts) |
| | 999 | (3 | ) | 1,106 | ||||||||||||||
Partners share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions |
2,800 | 1,423 | 4,229 | 1,389 | 466 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
Funds available for distribution to common shareholders and common unitholders (FAD) |
$ | 163,933 | $ | 154,562 | $ | 150,285 | $ | 167,699 | $ | 145,867 | ||||||||||
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|
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|
|
|
|||||||||||
Interest Coverage Ratios | ||||||||||||||||||||
(in thousands, except for ratio amounts) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
31-Mar-14 | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||
Income from continuing operations |
$ | 67,756 | $ | 79,395 | $ | 82,311 | $ | 503,446 | $ | 38,496 | ||||||||||
Interest expense |
113,554 | 121,134 | 122,173 | 103,140 | 100,433 | |||||||||||||||
Depreciation and amortization expense |
154,270 | 154,475 | 153,253 | 133,456 | 119,453 | |||||||||||||||
Depreciation and amortization expense from unconsolidated joint ventures |
4,584 | 4,633 | 4,389 | 15,535 | 21,657 | |||||||||||||||
Gains on sales of real estate included within income from unconsolidated joint ventures |
| | (11,174 | ) | (43,327 | ) | | |||||||||||||
Gains on consolidation of joint ventures |
| | 1,810 | (387,801 | ) | | ||||||||||||||
Depreciation and amortization expense - discontinued operations |
| 934 | 940 | 1,148 | 1,738 | |||||||||||||||
Interest expense - discontinued operations |
| | | | 360 | |||||||||||||||
Income from discontinued operations |
| 536 | 1,677 | 3,315 | 2,494 | |||||||||||||||
Impairment loss |
| | | | 8,306 | |||||||||||||||
Non-cash losses (gains) from early extinguishments of debt |
| | | (264 | ) | | ||||||||||||||
Non-cash termination adjustment (including fair value lease amounts) |
| | 999 | (3 | ) | 1,106 | ||||||||||||||
Stock-based compensation |
10,380 | 6,154 | 6,537 | 6,681 | 25,783 | |||||||||||||||
Straight-line ground rent expense adjustment (3) |
1,747 | 1,785 | 1,785 | 1,785 | 1,801 | |||||||||||||||
Straight-line rent (1) |
(8,140 | ) | (15,936 | ) | (14,837 | ) | (16,142 | ) | (17,807 | ) | ||||||||||
Fair value lease revenue (1) (2) |
(7,501 | ) | (7,202 | ) | (7,073 | ) | (13,286 | ) | (16,037 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
336,650 | 345,908 | 342,790 | 307,683 | 287,783 | |||||||||||||||
Excluding Capitalized Interest | ||||||||||||||||||||
Divided by: |
||||||||||||||||||||
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|
|
|||||||||||
Adjusted interest expense (5) (6) (7) (8) |
102,150 | 106,998 | 107,633 | 92,600 | 91,462 | |||||||||||||||
Interest Coverage Ratio |
3.30 | 3.23 | 3.18 | 3.32 | 3.15 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
Including Capitalized Interest | ||||||||||||||||||||
Divided by: |
||||||||||||||||||||
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|
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|
|
|
|
|
|
|
|||||||||||
Adjusted interest expense (5) (6) (7) (8) (9) |
119,859 | 124,898 | 125,031 | 111,036 | 105,880 | |||||||||||||||
Interest Coverage Ratio |
2.81 | 2.77 | 2.74 | 2.77 | 2.72 | |||||||||||||||
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|
|
(1) | Includes the Companys share of consolidated and unconsolidated joint venture amounts. |
(2) | Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates. |
(3) | For additional information, see page 6. |
(4) | For the three months ended March 31, 2013, stock-based compensation expense includes an aggregate of approximately $16.9 million consisting of (i) the acceleration of the remaining approximately $12.9 million of stock-based compensation expense associated with the Companys Executive Chairmans unvested long-term equity awards and (ii) approximately $4.0 million of stock-based compensation awards associated with the Companys Executive Chairmans transition benefits agreement related to the Companys succession planning. |
(5) | Excludes the impact of the ASC 470-20 (formerly known as FSP APB 14-1) interest expense adjustment of $2,438, $4,971, $4,888, $6,035 and $7,158 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
(6) | Excludes amortization of financing costs of $2,026, $2,259, $2,779, $2,240 and $2,173 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
(7) | Includes interest expense from discontinued operations of $360 for the three months ended March 31, 2013. |
(8) | Excludes interest expense of $6,940, $6,906, $6,873 and $2,265 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively, consisting of the interest expense on the partner loans for the 767 Fifth Avenue (the GM Building) consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships. The Companys share of the interest expense on its loan to the joint venture eliminates in consolidation. |
(9) | Includes capitalized interest of $17,709, $17,900, $17,398, $18,436 and $14,418 for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, respectively. |
11
Boston Properties, Inc.
First Quarter 2014
CAPITAL STRUCTURE
Consolidated Debt
(in thousands)
Aggregate Principal | ||||
March 31, 2014 | ||||
Mortgage Notes Payable |
$ | 4,251,900 | ||
Mezzanine Notes Payable |
306,000 | |||
Unsecured Line of Credit |
| |||
Unsecured Senior Notes, at face value |
5,850,000 | |||
|
|
|||
Total Debt |
10,407,900 | |||
Fair Value Adjustment on Mortgage Notes Payable |
178,210 | |||
Fair Value Adjustment on Mezzanine Notes Payable |
4,735 | |||
Discount on Unsecured Senior Notes |
(13,710 | ) | ||
|
|
|||
Total Consolidated Debt |
$ | 10,577,135 | ||
|
|
Boston Properties Limited Partnership Unsecured Senior Notes |
| |||||||||||||||||||||||||||||||||||||||
Settlement Date | 6/27/2013 | 4/11/2013 | 6/11/2012 | 11/10/2011 | 11/18/2010 | 4/19/2010 | 10/9/2009 | 5/22/2003 | 3/18/2003 | Total/Average | ||||||||||||||||||||||||||||||
Original Principal Amount |
$ | 700,000 | $ | 500,000 | $ | 1,000,000 | $ | 850,000 | $ | 850,000 | $ | 700,000 | $ | 700,000 | $ | 250,000 | $ | 300,000 | $ | 5,850,000 | ||||||||||||||||||||
Principal Amount at Quarter End |
$ | 700,000 | $ | 500,000 | $ | 1,000,000 | $ | 850,000 | $ | 850,000 | $ | 700,000 | $ | 700,000 | $ | 250,000 | $ | 300,000 | $ | 5,850,000 | ||||||||||||||||||||
Yield (on issue date) |
3.916 | % | 3.279 | % | 3.954 | % | 3.853 | % | 4.289 | % | 5.708 | % | 5.967 | % | 5.194 | % | 5.693 | % | 4.52 | % | ||||||||||||||||||||
Coupon |
3.800 | % | 3.125 | % | 3.850 | % | 3.700 | % | 4.125 | % | 5.625 | % | 5.875 | % | 5.000 | % | 5.625 | % | 4.40 | % | ||||||||||||||||||||
Public Offering Price |
99.694 | % | 99.379 | % | 99.779 | % | 99.767 | % | 99.260 | % | 99.891 | % | 99.931 | % | 99.329 | % | 99.898 | % | 99.68 | % | ||||||||||||||||||||
Ratings: |
||||||||||||||||||||||||||||||||||||||||
Moodys |
Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | Baa2 (stable) | |||||||||||||||||||||||||||||||
S&P |
A-(stable) | A-(stable) | A-(stable) | A-(stable) | A-(stable) | A-(stable) | A-(stable) | A-(stable) | A-(stable) | |||||||||||||||||||||||||||||||
Fitch |
BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | BBB (stable) | |||||||||||||||||||||||||||||||
Maturity Date |
2/1/2024 | 9/1/2023 | 2/1/2023 | 11/15/2018 | 5/15/2021 | 11/15/2020 | 10/15/2019 | 6/1/2015 | 4/15/2015 | |||||||||||||||||||||||||||||||
Discount |
$ | 1,991 | $ | 2,854 | $ | 1,880 | $ | 1,360 | $ | 4,554 | $ | 523 | $ | 303 | $ | 189 | $ | 56 | $ | 13,710 | ||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unsecured Senior Notes, net of discount |
$ | 698,009 | $ | 497,146 | $ | 998,120 | $ | 848,640 | $ | 845,446 | $ | 699,477 | $ | 699,697 | $ | 249,811 | $ | 299,944 | $ | 5,836,290 | ||||||||||||||||||||
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Equity
(in thousands)
Shares/Units | Common | |||||||||||
Outstanding | Stock | Equivalent | ||||||||||
as of 03/31/2014 | Equivalents | Value (1) | ||||||||||
Common Stock |
153,017 | 153,017 | (2) | $ | 17,525,037 | |||||||
Common Operating Partnership Units |
17,138 | 17,138 | (3) | 1,962,815 | ||||||||
Series Two Preferred Operating Partnership Units |
666 | 874 | 100,099 | |||||||||
Series Four Preferred Operating Partnership Units |
360 | | 18,006 | (4) | ||||||||
5.25% Series B Cumulative Redeemable Preferred Stock |
80 | | 200,000 | (5) | ||||||||
|
|
|
|
|||||||||
Total Equity |
171,029 | $ | 19,805,957 | |||||||||
|
|
|
|
|||||||||
Total Consolidated Debt |
$ | 10,577,135 | ||||||||||
|
|
|||||||||||
Total Consolidated Market Capitalization |
$ | 30,383,092 | ||||||||||
|
|
|||||||||||
BXPs share of Unconsolidated Joint Venture Debt |
$ | 328,869 | ||||||||||
Less: |
||||||||||||
Partners Share of Consolidated Debt |
$ | 878,265 | ||||||||||
Total Adjusted Debt (6) |
$ | 10,027,739 | ||||||||||
|
|
|||||||||||
Total Adjusted Market Capitalization (6) |
$ | 29,833,696 | ||||||||||
|
|
(1) | Values based on March 31, 2014 closing price of $114.53 per share of common stock, except for the Series Four Preferred Operating Partnership Units which have been valued at the liquidation preference of $50.00 per unit (see Note 4 below) and the shares of Series B Cumulative Redeemable Preferred Stock which have been valued at the liquidation preference of $2,500.00 per share (see Note 5 below). |
(2) | Includes 59 shares of restricted stock. |
(3) | Includes 1,554 long-term incentive plan units, but excludes an aggregate of 1,193 Outperformance Plan Units and Multi-Year Long-Term Incentive Program Units. |
(4) | In connection with the acquisition of 680 Folsom Street in San Francisco on August 29, 2012, the Companys Operating Partnership issued 1,588 Series Four Preferred Units to the sellers as a portion of the consideration paid. The Series Four Preferred Units are not convertible into or exchangeable for any common equity of the Company or Operating Partnership, have a per unit liquidation preference of $50.00 and are entitled to receive quarterly distributions of $0.25 per unit (or an annual rate of 2%). On August 31, 2012, a holder redeemed 366 Series Four Preferred Units for cash totaling approximately $18.3 million. On August 29, 2013, the Companys Operating Partnership redeemed 861 Series Four Preferred Units for cash totaling approximately $43.1 million. |
(5) | On March 27, 2013, the Company completed an underwritten public offering of 80,000 shares (8,000,000 depositary shares, each representing 1/100th of a share) of its newly designated 5.25% Series B Cumulative Redeemable Preferred Stock, at a price of $2,500.00 per share ($25.00 per depositary share). The net proceeds from this offering were approximately $194 million, after deducting the underwriting discount and transaction expenses. The Company will pay cumulative cash dividends on the Series B Preferred Stock at a rate of 5.25% per annum of the $2,500.00 liquidation preference per share. The Company may not redeem the Series B Preferred Stock prior to March 27, 2018. On or after March 27, 2018, the Company, at its option, may redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per depositary share), plus all accrued and unpaid dividends. The Series B Preferred Stock is not redeemable by the holders, has no maturity date and is not convertible into any other security of the Company or its affiliates. |
(6) | For disclosures relating to our definition of Total Adjusted Debt and Total Adjusted Market Capitalization, see page 48. |
12
Boston Properties, Inc.
First Quarter 2014
DEBT ANALYSIS (1)
Debt Maturities and Principal Payments
as of March 31, 2014
(in thousands)
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | ||||||||||||||||||||||
Floating Rate Debt |
||||||||||||||||||||||||||||
Mortgage Notes Payable |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Unsecured Line of Credit |
| | | | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Floating Debt |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Fixed Rate Debt |
||||||||||||||||||||||||||||
Mortgage Notes Payable |
$ | 81,129 | $ | 26,182 | $ | 608,879 | $ | 2,821,750 | $ | 18,633 | $ | 695,327 | $ | 4,251,900 | ||||||||||||||
Fair Value Adjustment |
39,498 | 53,888 | 50,632 | 34,192 | | | 178,210 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mortgage Notes Payable |
120,627 | 80,070 | 659,511 | 2,855,942 | 18,633 | 695,327 | 4,430,110 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mezzanine Notes Payable |
| | | 306,000 | | | 306,000 | |||||||||||||||||||||
Fair Value Adjustment |
939 | 1,314 | 1,389 | 1,093 | | | 4,735 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
939 | 1,314 | 1,389 | 307,093 | | | 310,735 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Unsecured Senior Notes, Face Amount |
| 550,000 | | | 850,000 | 4,450,000 | 5,850,000 | |||||||||||||||||||||
Discount Amortization |
(1,372 | ) | (1,686 | ) | (1,681 | ) | (1,749 | ) | (1,774 | ) | (5,448 | ) | (13,710 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Unsecured Senior Notes, Face Amount |
(1,372 | ) | 548,314 | (1,681 | ) | (1,749 | ) | 848,226 | 4,444,552 | 5,836,290 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Fixed Debt |
$ | 120,194 | $ | 629,698 | $ | 659,219 | $ | 3,161,286 | $ | 866,859 | $ | 5,139,879 | $ | 10,577,135 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Consolidated Debt |
$ | 120,194 | $ | 629,698 | $ | 659,219 | $ | 3,161,286 | $ | 866,859 | $ | 5,139,879 | $ | 10,577,135 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
GAAP Weighted Average Floating Rate Debt |
| | | | | | | |||||||||||||||||||||
GAAP Weighted Average Fixed Rate Debt |
5.63 | % | 5.48 | % | 5.29 | % | 4.05 | % | 3.89 | % | 4.59 | % | 4.46 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total GAAP Weighted Average Rate |
5.63 | % | 5.48 | % | 5.29 | % | 4.05 | % | 3.89 | % | 4.59 | % | 4.46 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stated Weighted Average Rate |
5.60 | % | 5.40 | % | 6.43 | % | 5.76 | % | 3.77 | % | 4.51 | % | 5.01 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Debt
Unsecured Line of Credit - Matures July 26, 2018
(in thousands)
Remaining | ||||||||||||||
Outstanding | Letters of | Capacity | ||||||||||||
Facility | at 03/31/2014 | Credit | at 03/31/2014 | |||||||||||
$ | 1,000,000 | $ | | $ | 9,901 | $ | 990,099 |
Unsecured and Secured Debt Analysis
Stated Weighted | GAAP Weighted | Weighted Average | ||||||||||||||
% of Total Debt | Average Rate | Average Rate | Maturity | |||||||||||||
Unsecured Debt |
58.02 | % | 4.44 | % | 4.52 | % | 6.8 years | |||||||||
Secured Debt |
41.98 | % | 5.72 | % | 4.39 | % | 3.9 years | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Consolidated Debt |
100.00 | % | 5.01 | % | 4.46 | % | 5.5 years | |||||||||
|
|
|
|
|
|
|
|
Floating and Fixed Rate Debt Analysis
Stated Weighted | GAAP Weighted | Weighted Average | ||||||||||||||
% of Total Debt | Average Rate | Average Rate | Maturity | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Floating Rate Debt |
| | | years | ||||||||||||
Fixed Rate Debt |
100.00 | % | 5.01 | % | 4.46 | % | 5.5 years | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Consolidated Debt |
100.00 | % | 5.01 | % | 4.46 | % | 5.5 years | |||||||||
|
|
|
|
|
|
|
|
(1) | Excludes unconsolidated joint ventures. The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, effects of hedging transactions and adjustments required to reflect loans at their fair values upon acquisition. |
13
Boston Properties, Inc.
First Quarter 2014
DEBT MATURITIES AND PRINCIPAL PAYMENTS (1)
as of March 31, 2014
(in thousands)
Property |
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||
767 Fifth Avenue (The General Motors Building) (60% ownership) |
$ | | $ | | $ | | $ | 1,300,000 | $ | | $ | | $ | 1,300,000 | (2)(3) | |||||||||||||
599 Lexington Avenue |
| | | 750,000 | | | 750,000 | |||||||||||||||||||||
601 Lexington Avenue |
8,541 | 11,870 | 12,447 | 13,051 | 13,684 | 659,880 | 719,473 | |||||||||||||||||||||
John Hancock Tower and Garage |
| | | 640,500 | | | 640,500 | (2) | ||||||||||||||||||||
Embarcadero Center Four |
4,120 | 5,794 | 348,886 | | | | 358,800 | |||||||||||||||||||||
Fountain Square (50% ownership) |
| | 211,250 | | | | 211,250 | (2) | ||||||||||||||||||||
505 9th Street (50% ownership) |
1,844 | 2,585 | 2,737 | 113,596 | | | 120,762 | |||||||||||||||||||||
New Dominion Technology Park, Building Two |
63,000 | | | | | | 63,000 | |||||||||||||||||||||
New Dominion Technology Park, Building One |
1,173 | 2,481 | 2,672 | 2,878 | 3,100 | 29,843 | 42,147 | |||||||||||||||||||||
Kingstowne Two and Retail |
1,391 | 1,950 | 29,277 | | | | 32,618 | (2) | ||||||||||||||||||||
University Place |
1,060 | 1,502 | 1,610 | 1,725 | 1,849 | 5,604 | 13,350 | |||||||||||||||||||||
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81,129 | 26,182 | 608,879 | 2,821,750 | 18,633 | 695,327 | 4,251,900 | ||||||||||||||||||||||
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|||||||||||||||
Aggregate Fair Value Adjustments |
39,498 | 53,888 | 50,632 | 34,192 | | | 178,210 | |||||||||||||||||||||
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120,627 | 80,070 | 659,511 | 2,855,942 | 18,633 | 695,327 | 4,430,110 | ||||||||||||||||||||||
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Mezzanine Notes Payable (associated with 767 Fifth Avenue (The General Motors Building))(60% ownership) |
| | | 306,000 | | | 306,000 | |||||||||||||||||||||
Fair Value Adjustment |
939 | 1,314 | 1,389 | 1,093 | | | 4,735 | |||||||||||||||||||||
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939 | 1,314 | 1,389 | 307,093 | | | 310,735 | ||||||||||||||||||||||
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Unsecured Senior Notes, Face Amount |
| 550,000 | | | 850,000 | 4,450,000 | 5,850,000 | |||||||||||||||||||||
Aggregate Discount Amortization |
(1,372 | ) | (1,686 | ) | (1,681 | ) | (1,749 | ) | (1,774 | ) | (5,448 | ) | (13,710 | ) | ||||||||||||||
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|||||||||||||||
(1,372 | ) | 548,314 | (1,681 | ) | (1,749 | ) | 848,226 | 4,444,552 | 5,836,290 | |||||||||||||||||||
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Unsecured Line of Credit |
| | | | | | | |||||||||||||||||||||
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|||||||||||||||
$ | 120,194 | $ | 629,698 | $ | 659,219 | $ | 3,161,286 | $ | 866,859 | $ | 5,139,879 | $ | 10,577,135 | |||||||||||||||
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% of Total Consolidated Debt |
1.14 | % | 5.95 | % | 6.23 | % | 29.89 | % | 8.20 | % | 48.59 | % | 100.00 | % | ||||||||||||||
Balloon Payments |
$ | 63,000 | $ | 550,000 | $ | 583,782 | $ | 3,107,619 | 850,000 | $ | 5,083,554 | $ | 10,237,955 | |||||||||||||||
Scheduled Principal Amortization |
$ | 18,129 | $ | 26,182 | $ | 25,097 | $ | 20,131 | $ | 18,633 | $ | 61,773 | $ | 169,945 |
(1) | Excludes unconsolidated joint ventures. For information on our unconsolidated joint venture debt, see page 16. |
(2) | This property has a fair value adjustment which is aggregated below. |
(3) | In connection with the capitalization of the joint venture, loans totaling $450.0 million were funded by the ventures partners on a pro-rata basis. Our partners share of the partner loans totaling $180.0 million has been reflected in Related Party Notes Payable on our Consolidated Balance Sheets and has not been included in the above balance. |
14
Boston Properties, Inc.
First Quarter 2014
Senior Unsecured Debt Covenant Compliance Ratios
(in thousands)
In the fourth quarter of 2002, the Companys operating partnership (Boston Properties Limited Partnership) received investment grade ratings on its senior unsecured debt securities and thereafter issued unsecured notes. The notes were issued under an indenture, dated as of December 13, 2002, by and between Boston Properties Limited Partnership and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented, which, among other things, requires us to comply with the following limitations on incurrence of debt: Limitation on Outstanding Debt; Limitation on Secured Debt; Ratio of Annualized Consolidated EBITDA to Annualized Interest Expense; and Maintenance of Unencumbered Assets. Compliance with these restrictive covenants requires us to apply specialized terms the meanings of which are described in detail in our filings with the SEC, and to calculate ratios in the manner prescribed by the indenture.
This section presents such ratios as of March 31, 2014 to show that the Companys Operating Partnership was in compliance with the terms of the indenture, as amended, which has been filed with the SEC. This section also presents certain other indenture-related data which we believe assists investors in the Companys unsecured debt securities. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Companys financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the indenture.
Senior Notes | Senior Notes | |||||||||
Issued Prior to | Issued On or After | |||||||||
October 9, 2009 | October 9, 2009 | |||||||||
March 31, 2014 | ||||||||||
Total Assets: |
||||||||||
Capitalized Property Value (1) |
$ | 20,619,961 | $ | 21,060,704 | ||||||
Cash and Cash Equivalents |
1,179,573 | 1,179,573 | ||||||||
Investments in Marketable Securities |
18,026 | 18,026 | ||||||||
Undeveloped Land, at Cost (including Joint Venture %) |
305,748 | 305,748 | ||||||||
Development in Process, at Cost (including Joint Venture %) |
1,733,111 | 1,733,111 | ||||||||
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|
|||||||
Total Assets |
$ | 23,856,419 | $ | 24,297,162 | ||||||
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|
|||||||
Unencumbered Assets |
$ | 15,409,572 | $ | 15,688,628 | ||||||
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|
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|
|||||||
Secured Debt (Fixed and Variable)(2) |
$ | 4,251,900 | $ | 4,251,900 | ||||||
Mezzanine Notes Payable(3) |
306,000 | 306,000 | ||||||||
Joint Venture Debt |
328,869 | 328,869 | ||||||||
Related Party Notes Payable |
180,000 | 180,000 | ||||||||
Contingent Liabilities & Letters of Credit |
13,208 | 13,208 | ||||||||
Unsecured Debt (4) |
5,850,000 | 5,850,000 | ||||||||
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|
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Total Outstanding Debt |
$ | 10,929,977 | $ | 10,929,977 | ||||||
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|
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Consolidated EBITDA: |
||||||||||
Income from Continuing Operations (per Consolidated Income Statement) |
$ | 67,756 | $ | 67,756 | ||||||
Subtract: Income from Unconsolidated Joint Ventures (per Consolidated Income Statement) |
(2,816 | ) | (2,816 | ) | ||||||
Subtract: Gains from Investments in Securities (per Consolidated Income Statement) |
(286 | ) | (286 | ) | ||||||
Add: Interest Expense (per Consolidated Income Statement) |
113,554 | 113,554 | ||||||||
Add: Depreciation and Amortization (per Consolidated Income Statement) |
154,270 | 154,270 | ||||||||
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|
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|
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EBITDA |
332,478 | 332,478 | ||||||||
Add: Company share of unconsolidated joint venture EBITDA |
9,729 | 9,729 | ||||||||
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|
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Consolidated EBITDA |
$ | 342,207 | $ | 342,207 | ||||||
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|
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Adjusted Interest Expense: |
||||||||||
Interest Expense (per Consolidated Income Statement) |
$ | 113,554 | $ | 113,554 | ||||||
Add: Company share of unconsolidated joint venture interest expense |
3,362 | 3,362 | ||||||||
Less: Amortization of financing costs |
(2,026 | ) | (2,026 | ) | ||||||
Less: Interest expense funded by construction loan draws |
| | ||||||||
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|
|||||||
Adjusted Interest Expense |
$ | 114,890 | $ | 114,890 | ||||||
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|
|||||||
Covenant Ratios and Related Data | Test | Actual | Actual | |||||||
Total Outstanding Debt/Total Assets |
Less than 60% | 45.8 | % | 45.0 | % | |||||
Secured Debt/Total Assets |
Less than 50% | 20.5 | % | 20.1 | % | |||||
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense) |
Greater than 1.50x | 2.98 | 2.98 | |||||||
Unencumbered Assets/ Unsecured Debt |
Greater than 150% | 263.4 | % | 268.2 | % | |||||
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Unencumbered Consolidated EBITDA |
$ | 229,865 | $ | 229,865 | ||||||
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Unencumbered Interest Coverage (Unencumbered Consolidated EBITDA to Unsecured Interest Expense) |
3.24 | 3.24 | ||||||||
|
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|
|||||||
% of Unencumbered Consolidated EBITDA to Consolidated EBITDA |
67.2 | % | 67.2 | % | ||||||
|
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|
|||||||
# of unencumbered properties |
146 | 146 | ||||||||
|
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|
|
(1) | For senior notes issued prior to October 9, 2009, Capitalized Property Value is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.5% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. Capitalized Property Value for senior notes issued on or after October 9, 2009 is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.0% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. |
(2) | Excludes aggregate fair value adjustment of $178,210. |
(3) | Excludes aggregate fair value adjustment of $4,735. |
(4) | Excludes aggregate debt discount of $13,710. |
15
Boston Properties, Inc.
First Quarter 2014
UNCONSOLIDATED JOINT VENTURE DEBT ANALYSIS (*)
Debt Maturities and Principal Payments by Property
(in thousands)
Property |
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||
Metropolitan Square (51%) |
$ | 897 | $ | 1,257 | $ | 1,332 | $ | 1,410 | $ | 1,493 | $ | 81,909 | $ | 88,298 | ||||||||||||||
540 Madison Avenue (60%) |
| | | | 72,000 | | 72,000 | |||||||||||||||||||||
Market Square North (50%) |
749 | 1,043 | 1,094 | 1,148 | 1,205 | 59,356 | 64,595 | |||||||||||||||||||||
901 New York Avenue (25%) |
621 | 37,590 | | | | | 38,211 | |||||||||||||||||||||
500 North Capitol Street, N.W. (30%) |
| | | | | 31,500 | 31,500 | |||||||||||||||||||||
Annapolis Junction Building One (50%) |
210 | 279 | 279 | 279 | 19,519 | | 20,566 | (1) | ||||||||||||||||||||
Annapolis Junction Building Six (50%) |
6,991 | | | | | | 6,991 | (2) | ||||||||||||||||||||
Annapolis Junction Building Seven (50%) |
| | 6,708 | | | | 6,708 | (3) | ||||||||||||||||||||
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$ | 9,468 | $ | 40,169 | $ | 9,413 | $ | 2,837 | $ | 94,217 | $ | 172,765 | $ | 328,869 | |||||||||||||||
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GAAP Weighted Average Rate |
2.80 | % | 5.25 | % | 3.15 | % | 5.08 | % | 1.98 | % | 5.20 | % | 4.16 | % | ||||||||||||||
% of Total Debt |
2.88 | % | 12.21 | % | 2.85 | % | 0.86 | % | 28.65 | % | 52.55 | % | 100.00 | % | ||||||||||||||
Balloon Payments |
$ | 6,991 | $ | 37,590 | $ | 6,708 | $ | | $ | 91,519 | $ | 169,918 | $ | 312,726 | ||||||||||||||
Scheduled Amortization |
$ | 2,477 | $ | 2,579 | $ | 2,705 | $ | 2,837 | $ | 2,698 | $ | 2,847 | $ | 16,143 |
Floating and Fixed Rate Debt Analysis
Stated | GAAP | |||||||||||||||
Weighted | Weighted | Weighted Average | ||||||||||||||
% of Total Debt | Average Rate | Average Rate | Maturity | |||||||||||||
Floating Rate Debt |
32.31 | % | 1.73 | % | 1.92 | % | 3.8 years | |||||||||
Fixed Rate Debt |
67.69 | % | 5.17 | % | 5.23 | % | 5.7 years | |||||||||
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Total Debt |
100.00 | % | 4.06 | % | 4.16 | % | 5.1 years | |||||||||
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(*) | All amounts represent the Companys share. |
(1) | Loan has one, three-year extension option, subject to certain conditions. |
(2) | Loan has one, one-year extension option, subject to certain conditions. |
(3) | Loan has two, one-year extension options, subject to certain conditions. |
16
Boston Properties, Inc.
First Quarter 2014
UNCONSOLIDATED JOINT VENTURES
Balance Sheet Information
(unaudited and in thousands)
as of March 31, 2014
Total | ||||||||||||||||||||||||||||||||||||
540 Madison | Market Square | Metropolitan | 901 New York | Wisconsin | Annapolis | 500 North Capitol | Other | Unconsolidated | ||||||||||||||||||||||||||||
Avenue | North | Square | Avenue | Place (1) | Junction (2) | Street, N.W. | Joint Ventures (3) | Joint Ventures | ||||||||||||||||||||||||||||
Net Equity (4) |
$ | 69,002 | $ | (9,758 | ) | $ | 6,236 | $ | (2,509 | ) | $ | 46,944 | $ | 17,528 | $ | (909 | ) | $ | 822 | $ | 127,356 | |||||||||||||||
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Mortgage/Construction loans payable (4) |
$ | 72,000 | $ | 64,595 | $ | 88,298 | $ | 38,211 | $ | | $ | 34,265 | $ | 31,500 | $ | | $ | 328,869 | ||||||||||||||||||
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BXPs nominal ownership percentage |
60.00 | % | 50.00 | % | 51.00 | % | 25.00 | % | 33.33 | % | 50.00 | % | 30.00 | % | ||||||||||||||||||||||
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|||||||||||||||||||||||
Results of Operations (unaudited and in thousands) for the three months ended March 31, 2014
|
||||||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||||||
540 Madison | Market Square | Metropolitan | 901 New York | Wisconsin | Annapolis | 500 North Capitol | Other | Unconsolidated | ||||||||||||||||||||||||||||
Avenue | North | Square | Avenue | Place (1) | Junction (2) | Street, N.W. | Joint Ventures | Joint Ventures | ||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||
Rental |
$ | 5,591 | $ | 5,683 | $ | 8,271 | $ | 9,038 | $ | 1,329 | $ | 4,103 | $ | 3,373 | $ | | $ | 37,388 | ||||||||||||||||||
Straight-line rent |
777 | 26 | (129 | ) | (410 | ) | | (6 | ) | 302 | | 560 | ||||||||||||||||||||||||
Fair value lease revenue |
71 | | | | | | | | 71 | |||||||||||||||||||||||||||
Termination Income |
15 | | | | | | | | 15 | |||||||||||||||||||||||||||
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|
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Total revenue |
6,454 | 5,709 | 8,142 | 8,628 | 1,329 | 4,097 | 3,675 | | 38,034 | |||||||||||||||||||||||||||
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|||||||||||||||||||
EXPENSES |
||||||||||||||||||||||||||||||||||||
Operating |
3,075 | 2,392 | 3,283 | 3,073 | 749 | 1,569 | 1,323 | | 15,464 | |||||||||||||||||||||||||||
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|||||||||||||||||||
NET OPERATING INCOME |
3,379 | 3,317 | 4,859 | 5,555 | 580 | 2,528 | 2,352 | | 22,570 | |||||||||||||||||||||||||||
Interest |
549 | 1,589 | 2,516 | 2,013 | | 241 | 1,104 | | 8,012 | |||||||||||||||||||||||||||
Depreciation and amortization |
1,853 | 959 | 1,914 | 1,417 | 1,383 | 727 | 839 | | 9,092 | |||||||||||||||||||||||||||
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|||||||||||||||||||
SUBTOTAL |
2,402 | 2,548 | 4,430 | 3,430 | 1,383 | 968 | 1,943 | | 17,104 | |||||||||||||||||||||||||||
Gain on sale of real estate |
| | | | | | | | | |||||||||||||||||||||||||||
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|||||||||||||||||||
NET INCOME/(LOSS) |
$ | 977 | $ | 769 | $ | 429 | $ | 2,125 | $ | (803 | ) | $ | 1,560 | $ | 409 | $ | | $ | 5,466 | |||||||||||||||||
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BXPs share of net income/(loss) |
$ | 586 | $ | 385 | $ | 219 | $ | 784 | (5) | $ | (267 | ) | $ | 780 | $ | 122 | $ | | 2,609 | |||||||||||||||||
Basis differential (6) |
182 | 1 | 39 | (16 | ) | (7 | ) | (1 | ) | 9 | | 207 | ||||||||||||||||||||||||
Gain on investment |
| | | | | | | | | |||||||||||||||||||||||||||
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Subtotal |
768 | 386 | 258 | 768 | (274 | ) | 779 | 131 | | 2,816 | ||||||||||||||||||||||||||
Gain upon consolidation in income statement |
| | | | | | | | | |||||||||||||||||||||||||||
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Income/(loss) from unconsolidated joint ventures |
$ | 768 | $ | 386 | $ | 258 | $ | 768 | $ | (274 | ) | $ | 779 | $ | 131 | $ | | $ | 2,816 | |||||||||||||||||
Gain on investment |
| | | | | | | | | |||||||||||||||||||||||||||
BXPs share of depreciation & amortization |
976 | 483 | 978 | 1,058 | (5) | 468 | 368 | 253 | | 4,584 | ||||||||||||||||||||||||||
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BXPs share of Funds from Operations (FFO) |
$ | 1,744 | $ | 869 | $ | 1,236 | $ | 1,826 | $ | 194 | $ | 1,147 | $ | 384 | $ | | $ | 7,400 | ||||||||||||||||||
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BXPs share of net operating income/(loss) |
$ | 2,040 | $ | 1,659 | $ | 2,478 | $ | 1,389 | $ | 193 | $ | 1,264 | $ | 706 | $ | | $ | 9,729 | ||||||||||||||||||
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(1) | Represents the Companys interest in the joint venture entity that owns the land, parking garage and infrastructure. The Companys entity that owns 100% of the office component of the project is consolidated within the accounts of the Company. |
(2) | Annapolis Junction includes two properties in service, one property in development and two undeveloped land parcels. |
(3) | Includes Two Grand Central Tower, Value-Added Fund and 125 West 55th Street properties, which were sold on October 25, 2011, April 10, 2013 and May 30, 2013, respectively. |
(4) | Represents the Companys share. |
(5) | Reflects the changes in the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement. |
(6) | Represents adjustments related to the carrying values and depreciation of certain of the Companys investment in unconsolidated joint ventures. |
17
Boston Properties, Inc.
First Quarter 2014
CONSOLIDATED JOINT VENTURES
Balance Sheets
(unaudited and in thousands)
as of March 31, 2014
Total | ||||||||||||||||||||||||
BXPs nominal ownership percentage | 60.00% | 55.00% | 95.00% | 50.00% | 50.00% | |||||||||||||||||||
767 Fifth Avenue | Times Square | Salesforce | Fountain | 505 9th | Consolidated | |||||||||||||||||||
(The GM Building) | Tower | Tower (1) | Square | Street | Joint Ventures | |||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Real estate, net |
$ | 3,607,090 | $ | 475,069 | $ | 277,617 | $ | 379,120 | $ | 110,527 | $ | 4,849,423 | ||||||||||||
Cash and cash held in escrows |
93,609 | 26,488 | 4,425 | 24,704 | 4,131 | 153,357 | ||||||||||||||||||
Other assets |
111,911 | 64,261 | | 8,110 | 8,987 | 193,269 | ||||||||||||||||||
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|
|
|||||||||||||
Total assets |
$ | 3,812,610 | $ | 565,818 | $ | 282,042 | $ | 411,934 | $ | 123,645 | $ | 5,196,049 | ||||||||||||
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|||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Mortgage notes payable |
$ | 1,452,722 | $ | | $ | | $ | 225,002 | $ | 120,763 | $ | 1,798,487 | ||||||||||||
Mezzanine notes payable |
310,736 | | | | | 310,736 | ||||||||||||||||||
Related party notes payable |
180,000 | | | | | 180,000 | ||||||||||||||||||
Accrued interest on related party notes |
77,304 | | | | | 77,304 | ||||||||||||||||||
Other liabilities |
249,032 | 6,141 | 12,807 | 10,929 | 5,375 | 284,284 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
2,269,794 | 6,141 | 12,807 | 235,931 | 126,138 | 2,650,811 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity: |
||||||||||||||||||||||||
BXP |
1,080,130 | (2) | 307,370 | 256,405 | 75,676 | 333 | 1,719,914 | |||||||||||||||||
Redeemable interest in property partnership |
| | | 100,327 | | 100,327 | ||||||||||||||||||
Noncontrolling interests |
462,686 | 252,307 | 12,830 | | (2,826 | ) | 724,997 | (3) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total equity |
1,542,816 | 559,677 | 269,235 | 176,003 | (2,493 | ) | 2,545,238 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities and equity |
$ | 3,812,610 | $ | 565,818 | $ | 282,042 | $ | 411,934 | $ | 123,645 | $ | 5,196,049 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income Statements (unaudited and in thousands) for the three months ended March 31, 2014 |
| |||||||||||||||||||||||
BXPs nominal ownership percentage | 60.00% | 55.00% | 95.00% | 50.00% | 50.00% | |||||||||||||||||||
Total | ||||||||||||||||||||||||
767 Fifth Avenue | Times Square | Salesforce | Fountain | 505 9th | Consolidated | |||||||||||||||||||
(The GM Building) | Tower | Tower (1) | Square | Street | Joint Ventures | |||||||||||||||||||
REVENUE |
||||||||||||||||||||||||
Rental income |
$ | 62,913 | $ | 22,874 | $ | | $ | 8,966 | $ | 5,561 | $ | 100,314 | ||||||||||||
Straight-line rent |
4,002 | 263 | | 621 | 62 | 4,948 | ||||||||||||||||||
Fair value lease revenue |
5,480 | | | (84 | ) | | 5,396 | |||||||||||||||||
Parking and Other |
1,218 | 237 | | 43 | 526 | 2,024 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
73,613 | 23,374 | | 9,546 | 6,149 | 112,682 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EXPENSES |
||||||||||||||||||||||||
Operating |
22,116 | 4,100 | | 3,093 | 2,187 | 31,496 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OPERATING INCOME |
51,497 | 19,274 | | 6,453 | 3,962 | 81,186 | ||||||||||||||||||
Interest |
23,535 | | | 3,053 | 1,780 | 28,368 | ||||||||||||||||||
Interest other - partner notes |
6,940 | | | | | 6,940 | ||||||||||||||||||
Fair value interest expense |
(10,724 | ) | | | (1,603 | ) | | (12,327 | ) | |||||||||||||||
Depreciation and amortization |
30,995 | 4,111 | | 4,998 | 877 | 40,981 | ||||||||||||||||||
Other |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
SUBTOTAL |
50,746 | 4,111 | | 6,448 | 2,657 | 63,962 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME/(LOSS) |
$ | 751 | $ | 15,163 | $ | | $ | 5 | $ | 1,305 | $ | 17,224 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Reconciliation of partners noncontrolling interest (NCI) |
||||||||||||||||||||||||
Add back depreciation & amortization - BXP basis difference |
$ | 1 | $ | 2 | $ | | $ | 3 | $ | 31 | $ | 37 | ||||||||||||
Add back partners share of partner loan interest |
6,940 | | | | | 6,940 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Partners net income/(loss) before interest allocation |
7,692 | 15,165 | | 8 | 1,336 | 24,201 | ||||||||||||||||||
Partners NCI share of net income |
3,077 | 6,824 | | 4 | 668 | 10,574 | ||||||||||||||||||
Partners share of partner loan interest |
(6,940 | ) | | | | | (6,940 | ) | ||||||||||||||||
Allocation of management and other fees to non-controlling partner |
(781 | ) | (167 | ) | | (113 | ) | (93 | ) | (1,154 | ) | |||||||||||||
Accretion and adjustments |
| | | 1,874 | (3) | | 1,874 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Partners NCI |
$ | (4,644 | ) | $ | 6,657 | $ | | $ | 1,765 | $ | 575 | $ | 4,354 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Reconciliation of partners share of FFO |
||||||||||||||||||||||||
Net income/(loss) |
$ | 751 | $ | 15,163 | $ | | $ | 5 | $ | 1,305 | $ | 17,224 | ||||||||||||
Add back depreciation & amortization |
30,995 | 4,111 | | 4,998 | 877 | 40,981 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Entity FFO |
31,746 | 19,274 | | 5,003 | 2,182 | 58,205 | ||||||||||||||||||
Partners share of entity FFO |
12,698 | 8,673 | | 2,502 | 1,091 | 24,964 | ||||||||||||||||||
Partners share of partner loan interest not in Partners share of entity FFO |
(4,164 | ) | | | | | (4,164 | ) | ||||||||||||||||
Allocation of management and other fees to non-controlling partner |
(781 | ) | (167 | ) | | (113 | ) | (93 | ) | (1,154 | ) | |||||||||||||
Accretion and adjustments |
| | | (623 | ) | | (623 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Partners share FFO |
$ | 7,753 | $ | 8,506 | $ | | $ | 1,766 | $ | 998 | $ | 19,023 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Reconciliation of BXP share of FFO |
||||||||||||||||||||||||
BXP Share of net income (loss) adjusted for Partners NCI |
5,395 | 8,506 | | (1,760 | )(4) | 730 | 12,871 | |||||||||||||||||
Depreciation & amortization - BXP basis difference |
1 | 2 | | 3 | 31 | 37 | ||||||||||||||||||
Other adjustment (5) |
33 | 4 | | 3 | | 40 | ||||||||||||||||||
BXP share of depreciation & amortization |
18,596 | 2,260 | | 4,995 | (4) | 423 | 26,274 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
BXP share of FFO |
$ | 24,025 | $ | 10,772 | $ | | $ | 3,241 | $ | 1,184 | $ | 39,222 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unearned portion of capitalized fees (5) |
$ | 826 | $ | 121 | $ | | $ | 23 | $ | | $ | 970 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Formerly Transbay Tower. |
(2) | BXP equity adjusted for related party notes and accrued interest that are allocated to our partners through NCI. |
(3) | Amount excludes preferred shareholders capital of $0.1 million. |
(4) | The allocation of net income and FFO to the NCI partner reflects the accretion to their redemption value, which is expected to occur in Q1 2016. |
(5) | Capitalized fees are eliminated in consolidation and recognized in FFO over the life of the asset as depreciation and amortization are added back to the Companys net income. |
18
Boston Properties, Inc.
First Quarter 2014
PORTFOLIO OVERVIEW
Rentable Square Footage and Percentage of Combined Net Operating Income of In-Service Properties by Location and Type of Property for the Quarter Ended March 31, 2014 (1) (2)
Square Feet | % of NOI | |||||||||||||||||||||||||||||||||||
Square Feet | % of NOI | Office/ | Office/ | Square Feet | Square Feet | % of NOI | % of NOI | % of NOI | ||||||||||||||||||||||||||||
Geographic Area |
Office (3) | Office (4) | Technical | Technical (4) | Total (3) | % of Total | Residential (4) | Hotel (4) | Total (4) | |||||||||||||||||||||||||||
Boston |
13,247,343 | 27.1 | % | 392,530 | 1.1 | % | 13,639,873 | 33.4 | % | 0.2 | % | 0.4 | % | 28.8 | % | |||||||||||||||||||||
New York (5) |
10,554,691 | (6) | 39.6 | % | | | 10,554,691 | (6) | 25.9 | % | | | 39.6 | % | ||||||||||||||||||||||
San Francisco |
4,961,191 | 9.7 | % | 768,463 | 1.4 | % | 5,729,654 | 14.1 | % | | | 11.1 | % | |||||||||||||||||||||||
Washington, DC |
10,093,372 | (7) | 19.5 | % | 728,551 | 0.7 | % | 10,821,923 | (7) | 26.6 | % | 0.3 | % | | 20.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
38,856,597 | 95.9 | % | 1,889,544 | 3.2 | % | 40,746,141 | 100.0 | % | 0.5 | % | 0.4 | % | 100.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
% of Total |
95.4 | % | 4.6 | % | 100.0 | % |
(1) | For disclosures relating to our definition of In-Service Properties, see page 49. |
(2) | Combined Net Operating Income is a non-GAAP financial measure. For a quantitative reconciliation of Combined NOI to net income available to common shareholders, see page 41. For disclosures relating to our use of Combined NOI see page 49. |
(3) | Includes approximately 2,100,000 square feet of retail space. |
(4) | The calculation for percentage of Combined Net Operating Income excludes termination income. |
(5) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
(6) | Includes 1,245,823 square feet at Times Square Tower which is 55% owned by the Company, 1,808,893 square feet at 767 Fifth Avenue (The GM Building) which is 60% owned by the Company and 286,711 square feet at 540 Madison Avenue which is 60% owned by the Company. |
(7) | Includes 589,288 square feet at Metropolitan Square which is 51% owned by the Company, 407,607 square feet at Market Square North which is 50% owned by the Company, 539,679 square feet at 901 New York Avenue which is 25% owned by the Company, 231,411 square feet at 500 North Capitol which is 30% owned by the Company, 321,943 square feet at 505 9th Street, N.W. which is 50% owned by the Company, 117,599 square feet at Annapolis Junction which is 50% owned by the Company, 119,339 square feet at Annapolis Junction Building Six which is 50% owned by the Company and 756,035 square feet at Fountain Square which is 50% owned by the Company. |
(8) | Includes 4,260 square feet of retail space which is 100% occupied. |
(9) | Includes 26,179 square feet of retail space which is 0% occupied but is 100% leased. |
(10) | Includes 49,528 square feet of retail space which is 100% occupied. |
(11) | Includes 9,617 square feet of retail space which is 100% occupied. |
19
Boston Properties, Inc.
First Quarter 2014
In-Service Property Listing
as of March 31, 2014
Annualized | Encumbered | Central | ||||||||||||||||||
Revenue | with secured | Business | ||||||||||||||||||
Number of | Per | debt | District (CBD) or | |||||||||||||||||
Sub Market |
Buildings | Square Feet | Leased % | Leased SF (1) | (Y/N) | Suburban (S) | ||||||||||||||
Boston |
||||||||||||||||||||
Office |
||||||||||||||||||||
John Hancock Tower |
CBD Boston MA | 1 | 1,722,164 | 96.1 | % | $ | 53.23 | Y | CBD | |||||||||||
100 Federal Street |
CBD Boston MA | 1 | 1,265,411 | 90.9 | % | 49.07 | N | CBD | ||||||||||||
800 Boylston Street - The Prudential Center |
CBD Boston MA | 1 | 1,228,651 | 98.7 | % | 52.35 | N | CBD | ||||||||||||
111 Huntington Avenue - The Prudential Center |
CBD Boston MA | 1 | 858,326 | 98.2 | % | 59.66 | N | CBD | ||||||||||||
Atlantic Wharf Office |
CBD Boston MA | 1 | 793,827 | 100.0 | % | 61.20 | N | CBD | ||||||||||||
101 Huntington Avenue - The Prudential Center |
CBD Boston MA | 1 | 505,389 | 64.7 | % | 39.26 | N | CBD | ||||||||||||
The Shops at the Prudential Center |
CBD Boston MA | 1 | 501,315 | 98.8 | % | 78.44 | N | CBD | ||||||||||||
Shaws Supermarket at the Prudential Center |
CBD Boston MA | 1 | 57,235 | 100.0 | % | 51.38 | N | CBD | ||||||||||||
One Cambridge Center |
East Cambridge MA | 1 | 215,629 | 100.0 | % | 51.54 | N | CBD | ||||||||||||
Three Cambridge Center |
East Cambridge MA | 1 | 115,061 | 100.0 | % | 41.95 | N | CBD | ||||||||||||
Four Cambridge Center |
East Cambridge MA | 1 | 216,156 | 100.0 | % | 45.04 | N | CBD | ||||||||||||
Five Cambridge Center |
East Cambridge MA | 1 | 264,708 | 99.0 | % | 55.00 | N | CBD | ||||||||||||
Eight Cambridge Center |
East Cambridge MA | 1 | 177,226 | 100.0 | % | 42.04 | N | CBD | ||||||||||||
Ten Cambridge Center |
East Cambridge MA | 1 | 152,664 | 100.0 | % | 44.86 | N | CBD | ||||||||||||
Eleven Cambridge Center |
East Cambridge MA | 1 | 79,616 | 100.0 | % | 55.52 | N | CBD | ||||||||||||
(2) Seventeen Cambridge Center |
East Cambridge MA | 1 | 195,191 | 100.0 | % | 52.66 | N | CBD | ||||||||||||
University Place |
Mid-Cambridge MA | 1 | 195,282 | 100.0 | % | 41.36 | Y | CBD | ||||||||||||
Bay Colony Corporate Center |
Route 128 Mass Turnpike MA | 4 | 992,877 | 76.4 | % | 33.41 | N | S | ||||||||||||
Reservoir Place |
Route 128 Mass Turnpike MA | 1 | 527,860 | 85.6 | % | 34.88 | N | S | ||||||||||||
Reservoir Place North |
Route 128 Mass Turnpike MA | 1 | 73,258 | 100.0 | % | 30.58 | N | S | ||||||||||||
140 Kendrick Street |
Route 128 Mass Turnpike MA | 3 | 380,987 | 99.5 | % | 36.19 | N | S | ||||||||||||
230 CityPoint |
Route 128 Mass Turnpike MA | 1 | 301,373 | 84.1 | % | 32.35 | N | S | ||||||||||||
77 CityPoint |
Route 128 Mass Turnpike MA | 1 | 209,707 | 82.8 | % | 46.40 | N | S | ||||||||||||
195 West Street |
Route 128 Mass Turnpike MA | 1 | 63,500 | 100.0 | % | 38.51 | N | S | ||||||||||||
200 West Street |
Route 128 Mass Turnpike MA | 1 | 256,245 | 91.0 | % | 31.48 | N | S | ||||||||||||
Weston Corporate Center |
Route 128 Mass Turnpike MA | 1 | 356,995 | 100.0 | % | 48.12 | N | S | ||||||||||||
Waltham Weston Corporate Center |
Route 128 Mass Turnpike MA | 1 | 306,687 | 86.0 | % | 32.13 | N | S | ||||||||||||
32 Hartwell Avenue |
Route 128 Northwest MA | 1 | 69,154 | 100.0 | % | 23.87 | N | S | ||||||||||||
91 Hartwell Avenue |
Route 128 Northwest MA | 1 | 120,458 | 63.0 | % | 24.69 | N | S | ||||||||||||
92 Hayden Avenue |
Route 128 Northwest MA | 1 | 31,100 | 100.0 | % | 39.21 | N | S | ||||||||||||
100 Hayden Avenue |
Route 128 Northwest MA | 1 | 55,924 | 100.0 | % | 39.32 | N | S | ||||||||||||
33 Hayden Avenue |
Route 128 Northwest MA | 1 | 80,872 | 63.8 | % | 41.05 | N | S | ||||||||||||
Lexington Office Park |
Route 128 Northwest MA | 2 | 166,759 | 95.4 | % | 26.62 | N | S | ||||||||||||
191 Spring Street |
Route 128 Northwest MA | 1 | 158,900 | 100.0 | % | 31.24 | N | S | ||||||||||||
181 Spring Street |
Route 128 Northwest MA | 1 | 55,793 | 100.0 | % | 30.21 | N | S | ||||||||||||
201 Spring Street |
Route 128 Northwest MA | 1 | 106,300 | 100.0 | % | 35.37 | N | S | ||||||||||||
40 Shattuck Road |
Route 128 Northwest MA | 1 | 121,216 | 87.7 | % | 19.64 | N | S | ||||||||||||
Quorum Office Park |
Route 128 Northwest MA | 2 | 267,527 | 90.0 | % | 16.50 | N | S | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
45 | 13,247,343 | 92.6 | % | $ | 47.05 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Office/Technical |
||||||||||||||||||||
Seven Cambridge Center |
East Cambridge MA | 1 | 231,028 | 100.0 | % | $ | 88.73 | N | CBD | |||||||||||
Fourteen Cambridge Center |
East Cambridge MA | 1 | 67,362 | 100.0 | % | 24.69 | N | CBD | ||||||||||||
17 Hartwell Avenue |
Route 128 Northwest MA | 1 | 30,000 | 0.0 | % | | N | S | ||||||||||||
164 Lexington Road |
Route 128 Northwest MA | 1 | 64,140 | 0.0 | % | | N | S | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
4 | 392,530 | 76.0 | % | $ | 74.27 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total Boston: | 49 | 13,639,873 | 92.1 | % | $ | 47.70 | ||||||||||||||
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Not included in Same Property analysis. |
20
Boston Properties, Inc.
First Quarter 2014
In-Service Property Listing (continued)
as of March 31, 2014
Central | ||||||||||||||||||||
Annualized | Encumbered | Business | ||||||||||||||||||
Number of | Revenue Per | with secured | District (CBD) or | |||||||||||||||||
Sub Market |
Buildings | Square Feet | Leased % | Leased SF (1) | debt (Y/N) | Suburban (S) | ||||||||||||||
New York (2) |
||||||||||||||||||||
Office |
||||||||||||||||||||
599 Lexington Avenue |
Park Avenue NY | 1 | 1,045,128 | 98.7 | % | $ | 89.85 | Y | CBD | |||||||||||
601 Lexington Avenue |
Park Avenue NY | 1 | 1,631,300 | 99.8 | % | 88.32 | Y | CBD | ||||||||||||
399 Park Avenue |
Park Avenue NY | 1 | 1,710,383 | 99.0 | % | 86.54 | N | CBD | ||||||||||||
Times Square Tower (55% ownership) |
Times Square NY | 1 | 1,245,823 | 99.7 | % | 70.94 | N | CBD | ||||||||||||
(3) 767 Fifth Avenue (The GM Building) (60% ownership) |
Plaza District NY | 1 | 1,808,893 | 98.7 | % | 140.12 | Y | CBD | ||||||||||||
510 Madison Avenue |
Fifth/Madison Avenue NY | 1 | 355,598 | 74.1 | % | 108.73 | N | CBD | ||||||||||||
540 Madison Avenue (60% ownership) |
Fifth/Madison Avenue NY | 1 | 286,711 | 82.3 | % | 105.30 | Y | CBD | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
7 | 8,083,836 | 97.5 | % | $ | 98.33 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
101 Carnegie Center |
Princeton NJ | 1 | 125,269 | 84.0 | % | $ | 30.34 | N | S | |||||||||||
104 Carnegie Center |
Princeton NJ | 1 | 102,830 | 86.0 | % | 32.76 | N | S | ||||||||||||
105 Carnegie Center |
Princeton NJ | 1 | 69,955 | 62.7 | % | 30.48 | N | S | ||||||||||||
201 Carnegie Center |
Princeton NJ | | 6,500 | 100.0 | % | 31.23 | N | S | ||||||||||||
202 Carnegie Center |
Princeton NJ | 1 | 130,582 | 91.7 | % | 35.27 | N | S | ||||||||||||
206 Carnegie Center |
Princeton NJ | 1 | 161,763 | 100.0 | % | 29.22 | N | S | ||||||||||||
210 Carnegie Center |
Princeton NJ | 1 | 162,372 | 79.3 | % | 35.31 | N | S | ||||||||||||
211 Carnegie Center |
Princeton NJ | 1 | 47,025 | 100.0 | % | 33.29 | N | S | ||||||||||||
212 Carnegie Center |
Princeton NJ | 1 | 152,576 | 79.5 | % | 29.39 | N | S | ||||||||||||
214 Carnegie Center |
Princeton NJ | 1 | 150,774 | 72.7 | % | 32.33 | N | S | ||||||||||||
302 Carnegie Center |
Princeton NJ | 1 | 64,926 | 100.0 | % | 34.58 | N | S | ||||||||||||
502 Carnegie Center |
Princeton NJ | 1 | 122,460 | 95.5 | % | 35.39 | N | S | ||||||||||||
504 Carnegie Center |
Princeton NJ | 1 | 121,990 | 100.0 | % | 32.46 | N | S | ||||||||||||
506 Carnegie Center |
Princeton NJ | 1 | 149,110 | 100.0 | % | 32.80 | N | S | ||||||||||||
508 Carnegie Center |
Princeton NJ | 1 | 133,915 | 69.4 | % | 32.83 | N | S | ||||||||||||
510 Carnegie Center |
Princeton NJ | 1 | 234,160 | 100.0 | % | 30.51 | N | S | ||||||||||||
701 Carnegie Center |
Princeton NJ | 1 | 120,000 | 100.0 | % | 36.57 | N | S | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
16 | 2,056,207 | 89.1 | % | $ | 32.53 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
One Tower Center |
East Brunswick NJ | 1 | 414,648 | 33.6 | % | $ | 30.51 | N | S | |||||||||||
|
|
|
|
|
|
|
||||||||||||||
1 | 414,648 | 33.6 | % | $ | 30.51 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total New York: | 24 | 10,554,691 | 93.3 | % | $ | 85.13 | ||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
San Francisco |
||||||||||||||||||||
Office |
||||||||||||||||||||
Embarcadero Center One |
CBD San Francisco CA | 1 | 833,438 | 95.8 | % | $ | 48.66 | N | CBD | |||||||||||
Embarcadero Center Two |
CBD San Francisco CA | 1 | 779,768 | 97.6 | % | 52.25 | N | CBD | ||||||||||||
Embarcadero Center Three |
CBD San Francisco CA | 1 | 775,086 | 94.7 | % | 45.73 | N | CBD | ||||||||||||
Embarcadero Center Four |
CBD San Francisco CA | 1 | 934,377 | 90.0 | % | 56.14 | Y | CBD | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
4 | 3,322,669 | 94.4 | % | $ | 50.81 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
611 Gateway |
South San Francisco CA | 1 | 257,664 | 81.0 | % | $ | 36.04 | N | S | |||||||||||
601 and 651 Gateway |
South San Francisco CA | 2 | 506,280 | 95.2 | % | 36.58 | N | S | ||||||||||||
(4) North First Business Park |
San Jose CA | 5 | 190,636 | 100.0 | % | 14.85 | N | S | ||||||||||||
3100-3130 Zanker Road (formerly 3200 Zanker Road) |
San Jose CA | 4 | 543,900 | 19.5 | % | 20.40 | N | S | ||||||||||||
2440 West El Camino Real |
Mountain View CA | 1 | 140,042 | 100.0 | % | 50.61 | N | S | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
13 | 1,638,522 | 68.8 | % | $ | 33.01 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Office/Technical |
||||||||||||||||||||
(3) Mountain View Research Park |
Mountain View CA | 16 | 603,564 | 83.5 | % | $ | 34.62 | N | S | |||||||||||
(3) Mountain View Technology Park |
Mountain View CA | 7 | 135,279 | 100.0 | % | 29.37 | N | S | ||||||||||||
453 Ravendale Drive |
Mountain View CA | 1 | 29,620 | 100.0 | % | 20.72 | N | S | ||||||||||||
|
|
|
|
|
|
|
||||||||||||||
24 | 768,463 | 87.1 | % | $ | 33.01 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total San Francisco: | 41 | 5,729,654 | 86.1 | % | $ | 44.30 | ||||||||||||||
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
(3) | Not included in Same Property analysis. |
(4) | Property held for redevelopment. |
21
Boston Properties, Inc.
First Quarter 2014
In-Service Property Listing (continued)
as of March 31, 2014
Sub Market |
Number of Buildings |
Square Feet | Leased % | Annualized Revenue Per Leased SF (1) |
Encumbered with secured debt (Y/N) |
Central Business District (CBD) or Suburban (S) | ||||||||||||||||
Washington, DC |
||||||||||||||||||||||
Office |
||||||||||||||||||||||
Capital Gallery |
Southwest Washington DC |
1 | 631,165 | 91.7 | % | $ | 54.58 | N | CBD | |||||||||||||
500 E Street, S. W. |
Southwest Washington DC |
1 | 251,994 | 100.0 | % | 45.41 | N | CBD | ||||||||||||||
Metropolitan Square (51% ownership) |
East End Washington DC |
1 | 589,288 | 90.4 | % | 56.79 | Y | CBD | ||||||||||||||
Market Square North (50% ownership) |
East End Washington DC |
1 | 407,607 | 88.8 | % | 60.68 | Y | CBD | ||||||||||||||
505 9th Street, N.W. (50% ownership) |
East End Washington DC |
1 | 321,943 | 100.0 | % | 69.83 | Y | CBD | ||||||||||||||
901 New York Avenue (25% ownership) |
East End Washington DC |
1 | 539,679 | 100.0 | % | 63.85 | Y | CBD | ||||||||||||||
2200 Pennsylvania Avenue |
CBD Washington DC |
1 | 458,831 | 98.1 | % | 81.32 | N | CBD | ||||||||||||||
1333 New Hampshire Avenue |
CBD Washington DC |
1 | 315,371 | 94.0 | % | 52.21 | N | CBD | ||||||||||||||
1330 Connecticut Avenue |
CBD Washington DC |
1 | 252,136 | 100.0 | % | 58.34 | N | CBD | ||||||||||||||
(2) 500 North Capitol (30% ownership) |
CBD Washington DC |
1 | 231,411 | 86.7 | % | 63.91 | Y | CBD | ||||||||||||||
Sumner Square |
CBD Washington DC |
1 | 208,892 | 95.6 | % | 48.56 | N | CBD | ||||||||||||||
Annapolis Junction (50% ownership) |
Anne Arundel County MD |
1 | 117,599 | 77.1 | % | 143.77 | Y | S | ||||||||||||||
(2) Annapolis Junction Building Six (50% ownership) |
Anne Arundel County MD |
1 | 119,339 | 48.9 | % | 27.69 | Y | S | ||||||||||||||
2600 Tower Oaks Boulevard |
Montgomery County MD |
1 | 179,369 | 76.5 | % | 35.85 | N | S | ||||||||||||||
Wisconsin Place Office |
Montgomery County MD |
1 | 299,186 | 100.0 | % | 50.78 | N | S | ||||||||||||||
Fountain Square (50% ownership) |
Fairfax County VA |
2 | 521,696 | 98.3 | % | 43.34 | Y | S | ||||||||||||||
Fountain Square Retail (50% ownership) |
Fairfax County VA |
1 | 234,339 | 100.0 | % | 52.91 | Y | S | ||||||||||||||
Democracy Tower |
Fairfax County VA |
1 | 259,441 | 100.0 | % | 55.22 | N | S | ||||||||||||||
Kingstowne One |
Fairfax County VA |
1 | 151,483 | 88.6 | % | 39.80 | N | S | ||||||||||||||
Kingstowne Two |
Fairfax County VA |
1 | 156,251 | 70.1 | % | 42.41 | Y | S | ||||||||||||||
Kingstowne Retail |
Fairfax County VA |
1 | 88,288 | 100.0 | % | 33.63 | Y | S | ||||||||||||||
One Freedom Square |
Fairfax County VA |
1 | 432,581 | 100.0 | % | 44.55 | N | S | ||||||||||||||
Two Freedom Square |
Fairfax County VA |
1 | 421,142 | 99.6 | % | 40.83 | N | S | ||||||||||||||
One Reston Overlook |
Fairfax County VA |
1 | 319,519 | 100.0 | % | 35.56 | N | S | ||||||||||||||
Two Reston Overlook |
Fairfax County VA |
1 | 134,615 | 100.0 | % | 34.98 | N | S | ||||||||||||||
One and Two Discovery Square |
Fairfax County VA |
2 | 366,990 | 93.8 | % | 41.22 | N | S | ||||||||||||||
New Dominion Technology Park - Building One |
Fairfax County VA |
1 | 235,201 | 100.0 | % | 33.58 | Y | S | ||||||||||||||
New Dominion Technology Park - Building Two |
Fairfax County VA |
1 | 257,400 | 100.0 | % | 39.23 | Y | S | ||||||||||||||
Reston Corporate Center |
Fairfax County VA |
2 | 261,046 | 100.0 | % | 38.48 | N | S | ||||||||||||||
South of Market |
Fairfax County VA |
3 | 623,665 | 100.0 | % | 51.33 | N | S | ||||||||||||||
(2) One and Two Patriots Park |
Fairfax County VA |
2 | 523,482 | 100.0 | % | 33.50 | N | S | ||||||||||||||
Three Patriots Park |
Fairfax County VA |
1 | 182,423 | 100.0 | % | 35.55 | N | S | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
38 | 10,093,372 | 95.5 | % | $ | 50.63 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Office/Technical |
||||||||||||||||||||||
7435 Boston Boulevard |
Fairfax County VA |
1 | 103,557 | 92.8 | % | $ | 22.29 | N | S | |||||||||||||
7451 Boston Boulevard |
Fairfax County VA |
1 | 45,615 | 67.4 | % | 21.37 | N | S | ||||||||||||||
7450 Boston Boulevard |
Fairfax County VA |
1 | 62,402 | 100.0 | % | 20.86 | N | S | ||||||||||||||
7374 Boston Boulevard |
Fairfax County VA |
1 | 57,321 | 100.0 | % | 17.51 | N | S | ||||||||||||||
8000 Grainger Court |
Fairfax County VA |
1 | 88,775 | 100.0 | % | 21.45 | N | S | ||||||||||||||
7500 Boston Boulevard |
Fairfax County VA |
1 | 79,971 | 100.0 | % | 16.08 | N | S | ||||||||||||||
7501 Boston Boulevard |
Fairfax County VA |
1 | 75,756 | 100.0 | % | 25.64 | N | S | ||||||||||||||
7601 Boston Boulevard |
Fairfax County VA |
1 | 103,750 | 100.0 | % | 14.46 | N | S | ||||||||||||||
7375 Boston Boulevard |
Fairfax County VA |
1 | 26,865 | 100.0 | % | 23.49 | N | S | ||||||||||||||
8000 Corporate Court |
Fairfax County VA |
1 | 52,539 | 0.0 | % | | N | S | ||||||||||||||
7300 Boston Boulevard |
Fairfax County VA |
1 | 32,000 | 100.0 | % | 20.00 | N | S | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
11 | 728,551 | 89.7 | % | $ | 19.88 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Total Washington, DC: |
49 | 10,821,923 | 95.2 | % | $ | 48.67 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Total In-Service Properties: |
163 | 40,746,141 | 92.4 | % | $ | 57.32 | ||||||||||||||||
|
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Not included in Same Property analysis. |
22
Boston Properties, Inc.
First Quarter 2014
TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION
23
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE OFFICE PROPERTIES
Lease Expirations (1) (2) (3)
Year of Lease Expiration |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Current Annualized Revenues Under Expiring Leases p.s.f. |
Annualized Revenues Under Expiring Leases with future step-ups |
Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. |
Percentage of Total Square Feet |
||||||||||||||||||
2014 |
1,291,657 | $ | 59,824,022 | $ | 46.32 | $ | 60,078,536 | $ | 46.51 | 3.51 | % | |||||||||||||
2015 |
2,384,461 | 122,924,095 | 51.55 | 122,645,500 | 51.44 | 6.48 | % | |||||||||||||||||
2016 |
2,727,333 | 130,170,225 | 47.73 | 133,490,079 | 48.95 | 7.42 | % | |||||||||||||||||
2017 |
3,944,767 | 259,835,155 | 65.87 | 266,305,316 | 67.51 | 10.73 | % | |||||||||||||||||
2018 |
1,886,648 | 105,995,884 | 56.18 | 109,723,515 | 58.16 | 5.13 | % | |||||||||||||||||
2019 |
3,785,968 | 214,684,442 | 56.71 | 227,105,497 | 59.99 | 10.29 | % | |||||||||||||||||
2020 |
3,582,879 | 217,020,313 | 60.57 | 234,867,526 | 65.55 | 9.74 | % | |||||||||||||||||
2021 |
2,203,863 | 119,663,078 | 54.30 | 135,280,062 | 61.38 | 5.99 | % | |||||||||||||||||
2022 |
3,824,217 | 206,409,839 | 53.97 | 230,737,293 | 60.34 | 10.40 | % | |||||||||||||||||
2023 |
847,448 | 44,234,949 | 52.20 | 52,343,815 | 61.77 | 2.30 | % | |||||||||||||||||
Thereafter |
7,309,286 | 425,729,903 | 58.25 | 518,008,759 | 70.87 | 19.87 | % |
Occupancy By Location (4)
CBD | Suburban | Total | ||||||||||||||||||||||
Location |
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||||||
Boston |
95.3 | % | 97.5 | % | 87.6 | % | 79.9 | % | 92.6 | % | 91.0 | % | ||||||||||||
New York (5) |
97.5 | % | 94.5 | % | 79.8 | % | 78.3 | % | 93.3 | % | 90.9 | % | ||||||||||||
San Francisco |
94.4 | % | 94.0 | % | 68.8 | % | 78.7 | % | 85.9 | % | 89.1 | % | ||||||||||||
Washington, DC |
94.7 | % | 95.0 | % | 96.1 | % | 94.6 | % | 95.5 | % | 94.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Portfolio |
95.8 | % | 95.5 | % | 87.6 | % | 85.5 | % | 92.7 | % | 91.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Includes approximately 2,100,000 square feet of retail space. |
(5) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. Prior period occupancy have been updated to conform to current period presentation. |
24
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE OFFICE/TECHNICAL PROPERTIES
Lease Expirations (1) (2) (3)
Year of Lease Expiration |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Current Annualized Revenues Under Expiring Leases p.s.f. |
Annualized Revenues Under Expiring Leases with future step-ups |
Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. |
Percentage of Total Square Feet |
||||||||||||||||||
2014 |
284,619 | $ | 5,507,047 | $ | 19.35 | $ | 5,499,720 | $ | 19.32 | 15.06 | % | |||||||||||||
2015 |
239,286 | 6,550,578 | 27.38 | 6,640,298 | 27.75 | 12.66 | % | |||||||||||||||||
2016 |
393,591 | 24,917,601 | 63.31 | 25,382,945 | 64.49 | 20.83 | % | |||||||||||||||||
2017 |
180,830 | 6,257,392 | 34.60 | 6,665,690 | 36.86 | 9.57 | % | |||||||||||||||||
2018 |
| | | | | 0.00 | % | |||||||||||||||||
2019 |
293,509 | 9,353,944 | 31.87 | 10,986,169 | 37.43 | 15.53 | % | |||||||||||||||||
2020 |
79,971 | 1,285,735 | 16.08 | 1,285,735 | 16.08 | 4.23 | % | |||||||||||||||||
2021 |
57,321 | 1,003,977 | 17.51 | 1,003,977 | 17.51 | 3.03 | % | |||||||||||||||||
2022 |
| | | | | 0.00 | % | |||||||||||||||||
2023 |
| | | | | 0.00 | % | |||||||||||||||||
Thereafter |
67,362 | 1,663,167 | 24.69 | 3,374,162 | 50.09 | 3.56 | % |
Occupancy By Location
CBD | Suburban | Total | ||||||||||||||||||||||
Location |
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||||||
Boston |
100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 76.0 | % | 76.0 | % | ||||||||||||
New York |
n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||
San Francisco |
n/a | n/a | 87.1 | % | 100.0 | % | 87.1 | % | 100.0 | % | ||||||||||||||
Washington, DC |
n/a | n/a | 89.7 | % | 97.8 | % | 89.7 | % | 97.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Portfolio |
100.0 | % | 100.0 | % | 83.1 | % | 87.4 | % | 85.8 | % | 90.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
25
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE RETAIL PROPERTIES
Lease Expirations (1) (2) (3)
Year of Lease Expiration |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Current Annualized Revenues Under Expiring Leases p.s.f. |
Annualized Revenues Under Expiring Leases with future step-ups |
Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. |
Percentage of Total Square Feet |
||||||||||||||||||
2014 |
44,248 | $ | 5,346,504 | $ | 120.83 | $ | 5,522,809 | $ | 124.81 | 2.13 | % | |||||||||||||
2015 |
129,038 | 14,711,717 | 114.01 | 14,741,578 | 114.24 | 6.21 | % | |||||||||||||||||
2016 |
236,681 | 21,410,578 | 90.46 | 22,048,882 | 93.16 | 11.40 | % | |||||||||||||||||
2017 |
213,250 | 27,386,501 | 128.42 | 27,741,695 | 130.09 | 10.27 | % | |||||||||||||||||
2018 |
244,569 | 20,207,192 | 82.62 | 21,849,445 | 89.34 | 11.78 | % | |||||||||||||||||
2019 |
71,331 | 5,312,662 | 74.48 | 5,666,701 | 79.44 | 3.43 | % | |||||||||||||||||
2020 |
141,843 | 6,629,716 | 46.74 | 9,071,557 | 63.95 | 6.83 | % | |||||||||||||||||
2021 |
122,800 | 7,801,503 | 63.53 | 8,804,572 | 71.70 | 5.91 | % | |||||||||||||||||
2022 |
236,803 | 17,744,507 | 74.93 | 20,273,590 | 85.61 | 11.40 | % | |||||||||||||||||
2023 |
193,251 | 17,161,023 | 88.80 | 19,723,434 | 102.06 | 9.31 | % | |||||||||||||||||
Thereafter |
442,986 | 24,142,040 | 54.50 | 30,646,182 | 69.18 | 21.33 | % |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
26
Boston Properties, Inc.
First Quarter 2014
GRAND TOTAL OF ALL
IN-SERVICE PROPERTIES
Lease Expirations (1) (2) (3)
Year of Lease Expiration |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Current Annualized Revenues Under Expiring Leases p.s.f. |
Annualized Revenues Under Expiring Leases with future step-ups |
Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. |
Percentage of Total Square Feet |
||||||||||||||||||
2014 |
1,620,524 | $ | 70,677,572 | $ | 43.61 | $ | 71,101,065 | $ | 43.88 | 3.98 | % | |||||||||||||
2015 |
2,752,785 | 144,186,390 | 52.38 | 144,027,376 | 52.32 | 6.76 | % | |||||||||||||||||
2016 |
3,357,605 | 176,498,404 | 52.57 | 180,921,906 | 53.88 | 8.24 | % | |||||||||||||||||
2017 |
4,338,847 | 293,479,048 | 67.64 | 300,712,701 | 69.31 | 10.65 | % | |||||||||||||||||
2018 |
2,131,217 | 126,203,075 | 59.22 | 131,572,960 | 61.74 | 5.23 | % | |||||||||||||||||
2019 |
4,150,808 | 229,351,048 | 55.25 | 243,758,368 | 58.73 | 10.19 | % | |||||||||||||||||
2020 |
3,804,693 | 224,935,764 | 59.12 | 245,224,817 | 64.45 | 9.34 | % | |||||||||||||||||
2021 |
2,383,984 | 128,468,558 | 53.89 | 145,088,611 | 60.86 | 5.85 | % | |||||||||||||||||
2022 |
4,061,020 | 224,154,346 | 55.20 | 251,010,884 | 61.81 | 9.97 | % | |||||||||||||||||
2023 |
1,040,699 | 61,395,972 | 58.99 | 72,067,249 | 69.25 | 2.55 | % | |||||||||||||||||
Thereafter |
7,819,634 | 451,535,110 | 57.74 | 552,029,103 | 70.60 | 19.19 | % |
Occupancy By Location (4)
CBD | Suburban | Total | ||||||||||||||||||||||
Location |
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||||||
Boston |
95.5 | % | 97.6 | % | 85.8 | % | 78.4 | % | 92.1 | % | 90.6 | % | ||||||||||||
New York (5) |
97.5 | % | 94.5 | % | 79.8 | % | 78.3 | % | 93.3 | % | 90.9 | % | ||||||||||||
San Francisco |
94.4 | % | 94.0 | % | 74.6 | % | 79.1 | % | 86.1 | % | 89.1 | % | ||||||||||||
Washington, DC |
94.7 | % | 95.0 | % | 95.4 | % | 95.0 | % | 95.2 | % | 95.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Portfolio |
95.9 | % | 95.6 | % | 87.2 | % | 85.6 | % | 92.4 | % | 91.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Includes approximately 2,100,000 square feet of retail space, excluding our residential and hotel properties. |
(5) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. Prior period occupancy have been updated to conform to current period presentation. |
27
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE BOSTON REGION PROPERTIES
Lease Expirations - Boston Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
630,438 | $ | 23,992,848 | $ | 38.06 | $ | 24,016,626 | $ | 38.10 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
2015 |
1,050,157 | 44,065,496 | 41.96 | 43,391,743 | 41.32 | | | | | | ||||||||||||||||||||||||||||||
2016 |
689,599 | 25,413,896 | 36.85 | 25,932,186 | 37.60 | 225,532 | 20,092,752 | 89.09 | 20,092,752 | 89.09 | ||||||||||||||||||||||||||||||
2017 |
830,544 | 36,840,918 | 44.36 | 38,798,705 | 46.71 | | | | | | ||||||||||||||||||||||||||||||
2018 |
488,441 | 18,378,964 | 37.63 | 19,364,853 | 39.65 | | | | | | ||||||||||||||||||||||||||||||
2019 |
1,261,602 | 57,011,962 | 45.19 | 60,315,251 | 47.81 | | | | | | ||||||||||||||||||||||||||||||
2020 |
372,189 | 17,179,272 | 46.16 | 18,585,084 | 49.93 | | | | | | ||||||||||||||||||||||||||||||
2021 |
671,752 | 24,177,623 | 35.99 | 25,480,105 | 37.93 | | | | | | ||||||||||||||||||||||||||||||
2022 |
1,646,144 | 78,585,290 | 47.74 | 86,154,982 | 52.34 | | | | | | ||||||||||||||||||||||||||||||
2023 |
281,154 | 16,076,023 | 57.18 | 17,850,041 | 63.49 | | | | | | ||||||||||||||||||||||||||||||
Thereafter |
3,395,746 | 175,555,546 | 51.70 | 215,679,495 | 63.51 | 67,362 | 1,663,167 | 24.69 | 3,374,162 | 50.09 | ||||||||||||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
10,960 | $ | 3,081,330 | $ | 281.14 | $ | 3,257,730 | $ | 297.24 | 641,398 | $ | 27,074,179 | $ | 42.21 | $ | 27,274,356 | $ | 42.52 | ||||||||||||||||||||||
2015 |
48,611 | 7,433,943 | 152.93 | 7,415,943 | 152.56 | 1,098,768 | 51,499,439 | 46.87 | 50,807,686 | 46.24 | ||||||||||||||||||||||||||||||
2016 |
19,300 | 2,710,094 | 140.42 | 2,726,283 | 141.26 | 934,431 | 48,216,742 | 51.60 | 48,751,220 | 52.17 | (4) | |||||||||||||||||||||||||||||
2017 |
47,147 | 3,417,860 | 72.49 | 3,440,655 | 72.98 | 877,691 | 40,258,779 | 45.87 | 42,239,360 | 48.13 | ||||||||||||||||||||||||||||||
2018 |
137,622 | 6,092,603 | 44.27 | 6,195,158 | 45.02 | 626,063 | 24,471,568 | 39.09 | 25,560,012 | 40.83 | ||||||||||||||||||||||||||||||
2019 |
17,092 | 2,491,617 | 145.78 | 2,676,718 | 156.61 | 1,278,694 | 59,503,578 | 46.53 | 62,991,969 | 49.26 | ||||||||||||||||||||||||||||||
2020 |
92,818 | 3,900,629 | 42.02 | 6,075,116 | 65.45 | 465,007 | 21,079,901 | 45.33 | 24,660,200 | 53.03 | ||||||||||||||||||||||||||||||
2021 |
38,642 | 2,454,175 | 63.51 | 2,678,209 | 69.31 | 710,394 | 26,631,797 | 37.49 | 28,158,314 | 39.64 | ||||||||||||||||||||||||||||||
2022 |
126,196 | 5,722,013 | 45.34 | 6,356,702 | 50.37 | 1,772,340 | 84,307,303 | 47.57 | 92,511,683 | 52.20 | ||||||||||||||||||||||||||||||
2023 |
76,325 | 6,912,523 | 90.57 | 7,623,983 | 99.89 | 357,479 | 22,988,546 | 64.31 | 25,474,024 | 71.26 | ||||||||||||||||||||||||||||||
Thereafter |
187,984 | 7,385,621 | 39.29 | 8,120,889 | 43.20 | 3,651,092 | 184,604,334 | 50.56 | 227,174,547 | 62.22 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Includes 225,532 square feet of research/laboratory space. Excluding the research/laboratory space, current and future expiring rents would be $39.41 per square foot and $40.17 per square foot, respectively, in 2016. |
28
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE BOSTON REGION PROPERTIES
Quarterly Lease Expirations - Boston Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
29,354 | $ | 1,421,795 | $ | 48.44 | $ | 1,421,795 | $ | 48.44 | (4) | | $ | | $ | | $ | | $ | | |||||||||||||||||||||
Q2 2014 |
164,258 | 5,726,044 | 34.86 | 5,725,727 | 34.86 | | | | | | ||||||||||||||||||||||||||||||
Q3 2014 |
80,672 | 2,901,085 | 35.96 | 2,925,179 | 36.26 | | | | | | ||||||||||||||||||||||||||||||
Q4 2014 |
356,154 | 13,943,924 | 39.15 | 13,943,924 | 39.15 | | | | | | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
630,438 | $ | 23,992,848 | $ | 38.06 | $ | 24,016,626 | $ | 38.10 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
|
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|
|
|||||||||||||||||||||
Q1 2015 |
264,900 | $ | 12,851,346 | $ | 48.51 | $ | 12,813,196 | $ | 48.37 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2015 |
216,904 | 8,011,386 | 36.94 | 8,340,982 | 38.45 | | | | | | ||||||||||||||||||||||||||||||
Q3 2015 |
305,282 | 15,305,573 | 50.14 | 14,127,294 | 46.28 | | | | | | ||||||||||||||||||||||||||||||
Q4 2015 |
263,071 | 7,897,192 | 30.02 | 8,110,272 | 30.83 | | | | | | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
1,050,157 | $ | 44,065,496 | $ | 41.96 | $ | 43,391,743 | $ | 41.32 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
2 | $ | 104,000 | $ | 51,999.96 | $ | 104,000 | $ | 51,999.96 | (4) | 29,356 | $ | 1,525,795 | $ | 51.98 | $ | 1,525,795 | $ | 51.98 | (4) | ||||||||||||||||||||
Q2 2014 |
929 | 568,237 | 611.67 | 574,237 | 618.12 | 165,187 | 6,294,281 | 38.10 | 6,299,964 | 38.14 | ||||||||||||||||||||||||||||||
Q3 2014 |
2,048 | 1,233,718 | 602.40 | 1,330,918 | 649.86 | 82,720 | 4,134,804 | 49.99 | 4,256,098 | 51.45 | ||||||||||||||||||||||||||||||
Q4 2014 |
7,981 | 1,175,375 | 147.27 | 1,248,575 | 156.44 | 364,135 | 15,119,300 | 41.52 | 15,192,500 | 41.72 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
10,960 | $ | 3,081,330 | $ | 281.14 | $ | 3,257,730 | $ | 297.24 | 641,398 | $ | 27,074,179 | $ | 42.21 | $ | 27,274,356 | $ | 42.52 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Q1 2015 |
45,575 | $ | 6,553,164 | $ | 143.79 | $ | 6,535,164 | $ | 143.39 | 310,475 | $ | 19,404,510 | $ | 62.50 | $ | 19,348,360 | $ | 62.32 | ||||||||||||||||||||||
Q2 2015 |
2,005 | 771,070 | 384.57 | 771,070 | 384.57 | 218,909 | 8,782,456 | 40.12 | 9,112,052 | 41.62 | ||||||||||||||||||||||||||||||
Q3 2015 |
25 | 57,160 | 2,286.40 | 57,160 | 2,286.40 | 305,307 | 15,362,733 | 50.32 | 14,184,454 | 46.46 | ||||||||||||||||||||||||||||||
Q4 2015 |
1,006 | 52,549 | 52.24 | 52,549 | 52.24 | 264,077 | 7,949,741 | 30.10 | 8,162,821 | 30.91 | ||||||||||||||||||||||||||||||
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
48,611 | $ | 7,433,943 | $ | 152.93 | $ | 7,415,943 | $ | 152.56 | 1,098,768 | $ | 51,499,439 | $ | 46.87 | $ | 50,807,686 | $ | 46.24 | ||||||||||||||||||||||
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|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Represents leases that were occupied as of and expired on March 31, 2014. |
29
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE NEW YORK REGION PROPERTIES
Lease Expirations - New York Region (1) (2) (3) (4)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
270,651 | $ | 14,128,725 | $ | 52.20 | $ | 14,128,726 | $ | 52.20 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
2015 |
392,056 | 27,269,394 | 69.55 | 27,389,476 | 69.86 | | | | | | ||||||||||||||||||||||||||||||
2016 |
562,802 | 41,738,195 | 74.16 | 43,167,916 | 76.70 | | | | | | ||||||||||||||||||||||||||||||
2017 |
1,588,145 | 146,266,804 | 92.10 | 147,583,853 | 92.93 | | | | | | ||||||||||||||||||||||||||||||
2018 |
534,417 | 45,865,493 | 85.82 | 45,604,902 | 85.34 | | | | | | ||||||||||||||||||||||||||||||
2019 |
1,255,721 | 98,202,930 | 78.20 | 101,586,199 | 80.90 | | | | | | ||||||||||||||||||||||||||||||
2020 |
1,601,362 | 119,566,612 | 74.67 | 127,952,118 | 79.90 | | | | | | ||||||||||||||||||||||||||||||
2021 |
309,051 | 31,780,967 | 102.83 | 35,398,909 | 114.54 | | | | | | ||||||||||||||||||||||||||||||
2022 |
879,889 | 67,305,076 | 76.49 | 73,027,163 | 83.00 | | | | | | ||||||||||||||||||||||||||||||
2023 |
81,115 | 6,934,944 | 85.50 | 7,594,457 | 93.63 | | | | | | ||||||||||||||||||||||||||||||
Thereafter |
2,050,752 | 155,929,169 | 76.04 | 190,234,101 | 92.76 | | | | | | ||||||||||||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
6,185 | $ | 723,739 | $ | 117.02 | $ | 720,739 | $ | 116.53 | 276,836 | $ | 14,852,464 | $ | 53.65 | $ | 14,849,465 | $ | 53.64 | ||||||||||||||||||||||
2015 |
3,000 | 2,368,386 | 789.46 | 2,368,386 | 789.46 | 395,056 | 29,637,780 | 75.02 | 29,757,862 | 75.33 | ||||||||||||||||||||||||||||||
2016 |
111,262 | 12,788,572 | 114.94 | 13,327,663 | 119.79 | 674,064 | 54,526,767 | 80.89 | 56,495,579 | 83.81 | ||||||||||||||||||||||||||||||
2017 |
78,027 | 18,220,695 | 233.52 | 18,232,903 | 233.67 | 1,666,172 | 164,487,499 | 98.72 | 165,816,755 | 99.52 | ||||||||||||||||||||||||||||||
2018 |
6,514 | 7,900,000 | 1,212.77 | 9,158,265 | 1,405.94 | 540,931 | 53,765,493 | 99.39 | 54,763,167 | 101.24 | ||||||||||||||||||||||||||||||
2019 |
877 | 69,575 | 79.33 | 77,929 | 88.86 | 1,256,598 | 98,272,505 | 78.21 | 101,664,128 | 80.90 | ||||||||||||||||||||||||||||||
2020 |
4,195 | 260,818 | 62.17 | 267,179 | 63.69 | 1,605,557 | 119,827,429 | 74.63 | 128,219,297 | 79.86 | ||||||||||||||||||||||||||||||
2021 |
2,056 | 233,179 | 113.41 | 279,925 | 136.15 | 311,107 | 32,014,146 | 102.90 | 35,678,834 | 114.68 | ||||||||||||||||||||||||||||||
2022 |
59,437 | 9,498,289 | 159.80 | 11,066,836 | 186.19 | 939,326 | 76,803,365 | 81.76 | 84,093,999 | 89.53 | ||||||||||||||||||||||||||||||
2023 |
33,292 | 6,385,914 | 191.82 | 7,749,177 | 232.76 | 114,407 | 13,320,858 | 116.43 | 15,343,633 | 134.11 | ||||||||||||||||||||||||||||||
Thereafter |
38,267 | 9,663,696 | 252.53 | 13,510,255 | 353.05 | 2,089,019 | 165,592,865 | 79.27 | 203,744,356 | 97.53 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
30
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE NEW YORK REGION PROPERTIES
Quarterly Lease Expirations - New York Region (1) (2) (3)(4)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
5,770 | $ | 519,300 | $ | 90.00 | $ | 519,300 | $ | 90.00 | (5) | | $ | | $ | | $ | | $ | | |||||||||||||||||||||
Q2 2014 |
107,292 | 4,744,957 | 44.22 | 4,744,957 | 44.22 | | | | | | ||||||||||||||||||||||||||||||
Q3 2014 |
85,625 | 6,384,994 | 74.57 | 6,384,994 | 74.57 | | | | | | ||||||||||||||||||||||||||||||
Q4 2014 |
71,964 | 2,479,475 | 34.45 | 2,479,475 | 34.45 | | | | | | ||||||||||||||||||||||||||||||
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|
|
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|
|
|
|
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|
|
|||||||||||||||||||||
Total 2014 |
270,651 | $ | 14,128,725 | $ | 52.20 | $ | 14,128,726 | $ | 52.20 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Q1 2015 |
83,085 | $ | 4,224,322 | $ | 50.84 | $ | 4,222,574 | $ | 50.82 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2015 |
124,128 | 6,340,917 | 51.08 | 6,457,737 | 52.02 | | | | | | ||||||||||||||||||||||||||||||
Q3 2015 |
71,798 | 6,756,020 | 94.10 | 6,758,369 | 94.13 | | | | | | ||||||||||||||||||||||||||||||
Q4 2015 |
113,045 | 9,948,136 | 88.00 | 9,950,795 | 88.03 | | | | | | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
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|
|
|||||||||||||||||||||
Total 2015 |
392,056 | $ | 27,269,394 | $ | 69.55 | $ | 27,389,476 | $ | 69.86 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
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|||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
| $ | | $ | | $ | | $ | | 5,770 | $ | 519,300 | $ | 90.00 | $ | 519,300 | $ | 90.00 | (5) | |||||||||||||||||||||
Q2 2014 |
| | | | | 107,292 | 4,744,957 | 44.22 | 4,744,957 | 44.22 | ||||||||||||||||||||||||||||||
Q3 2014 |
| | | | | 85,625 | 6,384,994 | 74.57 | 6,384,994 | 74.57 | ||||||||||||||||||||||||||||||
Q4 2014 |
6,185 | 723,739 | 117.02 | 720,739 | 116.53 | 78,149 | 3,203,214 | 40.99 | 3,200,214 | 40.95 | ||||||||||||||||||||||||||||||
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|
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|
|
|
|
|
|
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|
|
|
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|
|
|||||||||||||||||||||
Total 2014 |
6,185 | $ | 723,739 | $ | 117.02 | $ | 720,739 | $ | 116.53 | 276,836 | $ | 14,852,464 | $ | 53.65 | $ | 14,849,465 | $ | 53.64 | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Q1 2015 |
| $ | | $ | | $ | | $ | | 83,085 | $ | 4,224,322 | $ | 50.84 | $ | 4,222,574 | $ | 50.82 | ||||||||||||||||||||||
Q2 2015 |
3,000 | 2,368,386 | 789.46 | 2,368,386 | 789.46 | 127,128 | 8,709,303 | 68.51 | 8,826,123 | 69.43 | ||||||||||||||||||||||||||||||
Q3 2015 |
| | | | | 71,798 | 6,756,020 | 94.10 | 6,758,369 | 94.13 | ||||||||||||||||||||||||||||||
Q4 2015 |
| | | | | 113,045 | 9,948,136 | 88.00 | 9,950,795 | 88.03 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total 2015 |
3,000 | $ | 2,368,386 | $ | 789.46 | $ | 2,368,386 | $ | 789.46 | 395,056 | $ | 29,637,780 | $ | 75.02 | $ | 29,757,862 | $ | 75.33 | ||||||||||||||||||||||
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|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
(5) | Represents leases that were occupied as of and expired on March 31, 2014. |
31
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE SAN FRANCISCO REGION PROPERTIES
Lease Expirations - San Francisco Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
132,185 | $ | 5,710,941 | $ | 43.20 | $ | 5,788,154 | $ | 43.79 | 29,070 | $ | 823,122 | $ | 28.32 | $ | 823,122 | $ | 28.32 | ||||||||||||||||||||||
2015 |
319,433 | 14,061,078 | 44.02 | 14,049,470 | 43.98 | 73,062 | 2,442,292 | 33.43 | 2,512,264 | 34.39 | ||||||||||||||||||||||||||||||
2016 |
1,094,477 | 46,169,397 | 42.18 | 46,703,970 | 42.67 | 134,659 | 4,065,964 | 30.19 | 4,494,083 | 33.37 | ||||||||||||||||||||||||||||||
2017 |
507,839 | 21,205,375 | 41.76 | 22,846,140 | 44.99 | 167,422 | 5,979,259 | 35.71 | 6,373,914 | 38.07 | ||||||||||||||||||||||||||||||
2018 |
148,142 | 8,425,040 | 56.87 | 9,028,516 | 60.95 | | | | | | ||||||||||||||||||||||||||||||
2019 |
375,774 | 15,902,428 | 42.32 | 18,289,583 | 48.67 | 261,509 | 8,713,944 | 33.32 | 10,265,849 | 39.26 | ||||||||||||||||||||||||||||||
2020 |
500,268 | 29,032,671 | 58.03 | 31,388,219 | 62.74 | | | | | | ||||||||||||||||||||||||||||||
2021 |
176,517 | 8,264,153 | 46.82 | 9,527,122 | 53.97 | | | | | | ||||||||||||||||||||||||||||||
2022 |
452,576 | 18,312,374 | 40.46 | 21,394,298 | 47.27 | | | | | | ||||||||||||||||||||||||||||||
2023 |
111,517 | 5,293,088 | 47.46 | 6,733,431 | 60.38 | | | | | | ||||||||||||||||||||||||||||||
Thereafter |
170,730 | 8,919,075 | 52.24 | 10,152,344 | 59.46 | | | | | | ||||||||||||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
7,381 | $ | 395,193 | $ | 53.54 | $ | 395,193 | $ | 53.54 | 168,636 | $ | 6,929,256 | $ | 41.09 | $ | 7,006,469 | $ | 41.55 | ||||||||||||||||||||||
2015 |
18,371 | 1,278,346 | 69.58 | 1,289,102 | 70.17 | 410,866 | 17,781,716 | 43.28 | 17,850,837 | 43.45 | ||||||||||||||||||||||||||||||
2016 |
39,764 | 2,029,023 | 51.03 | 2,051,148 | 51.58 | 1,268,900 | 52,264,384 | 41.19 | 53,249,201 | 41.96 | ||||||||||||||||||||||||||||||
2017 |
16,079 | 1,097,928 | 68.28 | 1,115,094 | 69.35 | 691,340 | 28,282,562 | 40.91 | 30,335,148 | 43.88 | ||||||||||||||||||||||||||||||
2018 |
34,410 | 2,055,476 | 59.73 | 2,091,957 | 60.80 | 182,552 | 10,480,516 | 57.41 | 11,120,473 | 60.92 | ||||||||||||||||||||||||||||||
2019 |
10,305 | 559,557 | 54.30 | 591,789 | 57.43 | 647,588 | 25,175,930 | 38.88 | 29,147,222 | 45.01 | ||||||||||||||||||||||||||||||
2020 |
22,265 | 1,188,597 | 53.38 | 1,310,617 | 58.86 | 522,533 | 30,221,268 | 57.84 | 32,698,836 | 62.58 | ||||||||||||||||||||||||||||||
2021 |
15,458 | 921,937 | 59.64 | 1,000,681 | 64.74 | 191,975 | 9,186,091 | 47.85 | 10,527,804 | 54.84 | ||||||||||||||||||||||||||||||
2022 |
27,445 | 1,050,440 | 38.27 | 1,137,744 | 41.46 | 480,021 | 19,362,813 | 40.34 | 22,532,042 | 46.94 | ||||||||||||||||||||||||||||||
2023 |
27,788 | 1,483,522 | 53.39 | 1,600,164 | 57.58 | 139,305 | 6,776,609 | 48.65 | 8,333,595 | 59.82 | ||||||||||||||||||||||||||||||
Thereafter |
17,888 | 524,892 | 29.34 | 681,010 | 38.07 | 188,618 | 9,443,967 | 50.07 | 10,833,354 | 57.44 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
32
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE SAN FRANCISCO REGION PROPERTIES
Quarterly Lease Expirations - San Francisco Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
| $ | | $ | | $ | | $ | | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2014 |
21,337 | 1,196,576 | 56.08 | 1,273,789 | 59.70 | | | | | | ||||||||||||||||||||||||||||||
Q3 2014 |
19,226 | 1,061,990 | 55.24 | 1,061,990 | 55.24 | 29,070 | 823,122 | 28.32 | 823,122 | 28.32 | ||||||||||||||||||||||||||||||
Q4 2014 |
91,622 | 3,452,375 | 37.68 | 3,452,375 | 37.68 | | | | | | ||||||||||||||||||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
132,185 | $ | 5,710,941 | $ | 43.20 | $ | 5,788,154 | $ | 43.79 | 29,070 | $ | 823,122 | $ | 28.32 | $ | 823,122 | $ | 28.32 | ||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Q1 2015 |
47,733 | $ | 1,880,810 | $ | 39.40 | $ | 1,888,970 | $ | 39.57 | 17,720 | $ | 504,504 | $ | 28.47 | $ | 510,567 | $ | 28.81 | ||||||||||||||||||||||
Q2 2015 |
112,666 | 4,418,187 | 39.21 | 4,344,119 | 38.56 | 8,152 | 227,947 | 27.96 | 238,708 | 29.28 | ||||||||||||||||||||||||||||||
Q3 2015 |
111,325 | 5,887,343 | 52.88 | 5,890,381 | 52.91 | 26,914 | 1,031,751 | 38.34 | 1,054,132 | 39.17 | ||||||||||||||||||||||||||||||
Q4 2015 |
47,709 | 1,874,738 | 39.30 | 1,926,001 | 40.37 | 20,276 | 678,090 | 33.44 | 708,857 | 34.96 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
319,433 | $ | 14,061,078 | $ | 44.02 | $ | 14,049,470 | $ | 43.98 | 73,062 | $ | 2,442,292 | $ | 33.43 | $ | 2,512,264 | $ | 34.39 | ||||||||||||||||||||||
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|
|
|
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|
|
|
|
|
|
|
|||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
Q1 2014 |
| $ | | $ | | $ | | $ | | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2014 |
732 | 55,877 | 76.33 | 55,877 | 76.33 | 22,069 | 1,252,453 | 56.75 | 1,329,665 | 60.25 | ||||||||||||||||||||||||||||||
Q3 2014 |
4,049 | 214,671 | 53.02 | 214,671 | 53.02 | 52,345 | 2,099,783 | 40.11 | 2,099,783 | 40.11 | ||||||||||||||||||||||||||||||
Q4 2014 |
2,600 | 124,646 | 47.94 | 124,646 | 47.94 | 94,222 | 3,577,021 | 37.96 | 3,577,021 | 37.96 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
7,381 | $ | 395,193 | $ | 53.54 | $ | 395,193 | $ | 53.54 | 168,636 | $ | 6,929,256 | $ | 41.09 | $ | 7,006,469 | $ | 41.55 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Q1 2015 |
8,044 | $ | 563,617 | $ | 70.07 | $ | 565,546 | $ | 70.31 | 73,497 | $ | 2,948,931 | $ | 40.12 | $ | 2,965,083 | $ | 40.34 | ||||||||||||||||||||||
Q2 2015 |
5,879 | 390,637 | 66.45 | 394,805 | 67.16 | 126,697 | 5,036,771 | 39.75 | 4,977,631 | 39.29 | ||||||||||||||||||||||||||||||
Q3 2015 |
1,624 | 108,982 | 67.11 | 108,982 | 67.11 | 139,863 | 7,028,076 | 50.25 | 7,053,495 | 50.43 | ||||||||||||||||||||||||||||||
Q4 2015 |
2,824 | 215,109 | 76.17 | 219,769 | 77.82 | 70,809 | 2,767,938 | 39.09 | 2,854,627 | 40.31 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
18,371 | $ | 1,278,346 | $ | 69.58 | $ | 1,289,102 | $ | 70.17 | 410,866 | $ | 17,781,716 | $ | 43.28 | $ | 17,850,837 | $ | 43.45 | ||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
33
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE WASHINGTON, DC REGION PROPERTIES
Lease Expirations - Washington, DC Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Year of Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
258,383 | $ |
15,991,507 |
|
$ | 61.89 | $ | 16,145,031 | $ | 62.48 | (4) | 255,549 | $ | 4,683,925 | $ | 18.33 | $ | 4,676,598 | $ | 18.30 | ||||||||||||||||||||
2015 |
622,815 | 37,528,127 | 60.26 | 37,814,811 | 60.72 | (4) | 166,224 | 4,108,286 | 24.72 | 4,128,034 | 24.83 | |||||||||||||||||||||||||||||
2016 |
380,455 | 16,848,737 | 44.29 | 17,686,006 | 46.49 | 33,400 | 758,886 | 22.72 | 796,110 | 23.84 | ||||||||||||||||||||||||||||||
2017 |
1,018,239 | 55,522,058 | 54.53 | 57,076,618 | 56.05 | 13,408 | 278,133 | 20.74 | 291,776 | 21.76 | ||||||||||||||||||||||||||||||
2018 |
715,648 | 33,326,386 | 46.57 | 35,725,243 | 49.92 | | | | | | ||||||||||||||||||||||||||||||
2019 |
892,871 | 43,567,122 | 48.79 | 46,914,465 | 52.54 | 32,000 | 640,000 | 20.00 | 720,320 | 22.51 | ||||||||||||||||||||||||||||||
2020 |
1,109,060 | 51,241,758 | 46.20 | 56,942,105 | 51.34 | 79,971 | 1,285,735 | 16.08 | 1,285,735 | 16.08 | ||||||||||||||||||||||||||||||
2021 |
1,046,543 | 55,440,335 | 52.97 | 64,873,926 | 61.99 | 57,321 | 1,003,977 | 17.51 | 1,003,977 | 17.51 | ||||||||||||||||||||||||||||||
2022 |
845,608 | 42,207,099 | 49.91 | 50,160,851 | 59.32 | | | | | | ||||||||||||||||||||||||||||||
2023 |
373,662 | 15,930,894 | 42.63 | 20,165,886 | 53.97 | | | | | | ||||||||||||||||||||||||||||||
Thereafter |
1,692,058 | 85,326,113 | 50.43 | 101,942,819 | 60.25 | | | | | | ||||||||||||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Year of Lease |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
19,722 | $ | 1,146,241 | $ | 58.12 | $ | 1,149,146 | $ | 58.27 | 533,654 | $ | 21,821,672 | $ | 40.89 | $ | 21,970,775 | $ | 41.17 | ||||||||||||||||||||||
2015 |
59,056 | 3,631,042 | 61.48 | 3,668,147 | 62.11 | 848,095 | 45,267,455 | 53.38 | 45,610,991 | 53.78 | ||||||||||||||||||||||||||||||
2016 |
66,355 | 3,882,889 | 58.52 | 3,943,789 | 59.43 | 480,210 | 21,490,511 | 44.75 | 22,425,905 | 46.70 | ||||||||||||||||||||||||||||||
2017 |
71,997 | 4,650,018 | 64.59 | 4,953,043 | 68.80 | 1,103,644 | 60,450,208 | 54.77 | 62,321,437 | 56.47 | ||||||||||||||||||||||||||||||
2018 |
66,023 | 4,159,112 | 62.99 | 4,404,064 | 66.71 | 781,671 | 37,485,498 | 47.96 | 40,129,307 | 51.34 | ||||||||||||||||||||||||||||||
2019 |
43,057 | 2,191,912 | 50.91 | 2,320,265 | 53.89 | 967,928 | 46,399,035 | 47.94 | 49,955,050 | 51.61 | ||||||||||||||||||||||||||||||
2020 |
22,565 | 1,279,673 | 56.71 | 1,418,645 | 62.87 | 1,211,596 | 53,807,166 | 44.41 | 59,646,484 | 49.23 | ||||||||||||||||||||||||||||||
2021 |
66,644 | 4,192,212 | 62.90 | 4,845,756 | 72.71 | 1,170,508 | 60,636,524 | 51.80 | 70,723,660 | 60.42 | ||||||||||||||||||||||||||||||
2022 |
23,725 | 1,473,765 | 62.12 | 1,712,308 | 72.17 | 869,333 | 43,680,864 | 50.25 | 51,873,159 | 59.67 | ||||||||||||||||||||||||||||||
2023 |
55,846 | 2,379,065 | 42.60 | 2,750,111 | 49.24 | 429,508 | 18,309,959 | 42.63 | 22,915,996 | 53.35 | ||||||||||||||||||||||||||||||
Thereafter |
198,847 | 6,567,831 | 33.03 | 8,334,028 | 41.91 | 1,890,905 | 91,893,944 | 48.60 | 110,276,847 | 58.32 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Includes 90,654 square feet of Sensitive Compartmented Information Facility (SCIF) space. Excluding the SCIF space from 2014 and 2015, the current and future expiring rental rate would be (i) $45.21 per square foot and $45.93 per square foot, respectively, for 2014, (ii) $53.41 per square foot and $53.91 per square foot. |
34
Boston Properties, Inc.
First Quarter 2014
IN-SERVICE WASHINGTON, DC REGION PROPERTIES
Quarterly Lease Expirations - Washington, DC Region (1) (2) (3)
OFFICE | OFFICE/TECHNICAL | |||||||||||||||||||||||||||||||||||||||
Lease Expiration by Quarter |
Rentable |
Current |
Per |
Annualized step-ups |
Per |
Rentable |
Current |
Per |
Annualized step-ups |
Per |
||||||||||||||||||||||||||||||
Q1 2014 |
| $ | | $ | | $ | | $ | | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2014 |
30,826 | 4,472,474 | 145.09 | 4,472,474 | 145.09 | (5) | 114,904 | 2,309,365 | 20.10 | 2,302,038 | 20.03 | |||||||||||||||||||||||||||||
Q3 2014 |
86,601 | 5,223,602 | 60.32 | 5,231,299 | 60.41 | 103,750 | 1,500,736 | 14.46 | 1,500,736 | 14.46 | ||||||||||||||||||||||||||||||
Q4 2014 |
140,956 | 6,295,431 | 44.66 | 6,441,259 | 45.70 | 36,895 | 873,824 | 23.68 | 873,824 | 23.68 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
258,383 | $ | 15,991,507 | $ | 61.89 | $ | 16,145,031 | $ | 62.48 | 255,549 | $ | 4,683,925 | $ | 18.33 | $ | 4,676,598 | $ | 18.30 | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Q1 2015 |
223,966 | $ | 11,343,263 | $ | 50.65 | $ | 11,463,241 | $ | 51.18 | | $ | | $ | | $ | | $ | | ||||||||||||||||||||||
Q2 2015 |
186,589 | 14,652,155 | 78.53 | 14,816,918 | 79.41 | (6) | 23,439 | 500,283 | 21.34 | 512,511 | 21.87 | |||||||||||||||||||||||||||||
Q3 2015 |
43,753 | 2,084,232 | 47.64 | 1,871,303 | 42.77 | 14,338 | 308,532 | 21.52 | 316,053 | 22.04 | ||||||||||||||||||||||||||||||
Q4 2015 |
168,507 | 9,448,478 | 56.07 | 9,663,348 | 57.35 | 128,447 | 3,299,470 | 25.69 | 3,299,470 | 25.69 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
622,815 | $ | 37,528,127 | $ | 60.26 | $ | 37,814,811 | $ | 60.72 | 166,224 | $ | 4,108,286 | $ | 24.72 | $ | 4,128,034 | $ | 24.83 | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Retail | Total Property Types | |||||||||||||||||||||||||||||||||||||||
Lease Expiration by Quarter |
Rentable |
Current |
Per |
Annualized step-ups |
Per |
Rentable |
Current |
Per |
Annualized step-ups |
Per |
||||||||||||||||||||||||||||||
Q1 2014 |
1,519 | $ | 67,177 | $ | 44.22 | $ | 69,891 | $ | 46.01 | (4) | 1,519 | $ | 67,177 | $ | 44.22 | $ | 69,891 | $ | 46.01 | (4) | ||||||||||||||||||||
Q2 2014 |
2,207 | 170,282 | 77.16 | 170,473 | 77.24 | 147,937 | 6,952,120 | 46.99 | 6,944,985 | 46.95 | ||||||||||||||||||||||||||||||
Q3 2014 |
| | | | | 190,351 | 6,724,338 | 35.33 | 6,732,035 | 35.37 | ||||||||||||||||||||||||||||||
Q4 2014 |
15,996 | 908,782 | 56.81 | 908,782 | 56.81 | 193,847 | 8,078,037 | 41.67 | 8,223,865 | 42.42 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2014 |
19,722 | $ | 1,146,241 | $ | 58.12 | $ | 1,149,146 | $ | 58.27 | 533,654 | $ | 21,821,672 | $ | 40.89 | $ | 21,970,776 | $ | 41.17 | ||||||||||||||||||||||
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|
|||||||||||||||||||||
Q1 2015 |
14,351 | $ | 959,996 | $ | 66.89 | $ | 961,807 | $ | 67.02 | 238,317 | $ | 12,303,258 | $ | 51.63 | $ | 12,425,048 | $ | 52.14 | ||||||||||||||||||||||
Q2 2015 |
3,856 | 293,541 | 76.13 | 300,433 | 77.91 | 213,884 | 15,445,980 | 72.22 | 15,629,862 | 73.08 | ||||||||||||||||||||||||||||||
Q3 2015 |
24,218 | 1,404,617 | 58.00 | 1,414,749 | 58.42 | 82,309 | 3,797,382 | 46.14 | 3,602,105 | 43.76 | ||||||||||||||||||||||||||||||
Q4 2015 |
16,631 | 972,887 | 58.50 | 991,158 | 59.60 | 313,585 | 13,720,836 | 43.75 | 13,953,976 | 44.50 | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total 2015 |
59,056 | $ | 3,631,042 | $ | 61.48 | $ | 3,668,147 | $ | 62.11 | 848,095 | $ | 45,267,455 | $ | 53.38 | $ | 45,610,991 | $ | 53.78 | ||||||||||||||||||||||
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|
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Represents leases that were occupied as of and expired on March 31, 2014. |
(5) | Includes 30,826 square feet of Sensitive Compartmented Information Facility (SCIF) space. |
(6) | Includes 59,828 square feet of Sensitive Compartmented Information Facility (SCIF) space. Excluding the SCIF space from Q2 2015, the current and future expiring rental rate would be $56.45 per square foot and $57.63 per square foot, respectively. |
35
Boston Properties, Inc.
First Quarter 2014
CBD PROPERTIES
Lease Expirations (1) (2) (3)
Boston | San Francisco | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
432,484 | $ | 20,911,166 | $ | 48.35 | $ | 21,111,660 | $ | 48.81 | 115,176 | $ | 5,857,356 | $ | 50.86 | $ | 5,934,569 | $ | 51.53 | ||||||||||||||||||||||
2015 |
614,776 | 36,480,886 | 59.34 | 35,265,289 | 57.36 | 231,855 | 11,706,452 | 50.49 | 11,760,536 | 50.72 | ||||||||||||||||||||||||||||||
2016 |
375,857 | 28,964,380 | 77.06 | 29,062,379 | 77.32 | (4) | 911,533 | 43,939,996 | 48.20 | 44,238,414 | 48.53 | |||||||||||||||||||||||||||||
2017 |
377,436 | 24,410,275 | 64.67 | 25,934,477 | 68.71 | 296,376 | 14,938,899 | 50.41 | 15,989,514 | 53.95 | ||||||||||||||||||||||||||||||
2018 |
264,748 | 13,346,795 | 50.41 | 13,736,640 | 51.89 | 171,940 | 10,123,141 | 58.88 | 10,720,060 | 62.35 | ||||||||||||||||||||||||||||||
2019 |
848,663 | 42,779,465 | 50.41 | 45,539,120 | 53.66 | 198,139 | 9,997,969 | 50.46 | 11,014,338 | 55.59 | ||||||||||||||||||||||||||||||
2020 |
387,344 | 19,070,357 | 49.23 | 22,439,577 | 57.93 | 508,373 | 29,551,401 | 58.13 | 31,942,495 | 62.83 | ||||||||||||||||||||||||||||||
2021 |
386,106 | 19,614,711 | 50.80 | 20,927,820 | 54.20 | 191,975 | 9,186,091 | 47.85 | 10,527,804 | 54.84 | ||||||||||||||||||||||||||||||
2022 |
1,237,604 | 64,766,473 | 52.33 | 72,703,662 | 58.75 | 189,573 | 8,615,115 | 45.44 | 9,735,288 | 51.35 | ||||||||||||||||||||||||||||||
2023 |
334,282 | 22,314,522 | 66.75 | 24,702,769 | 73.90 | 98,648 | 4,760,981 | 48.26 | 5,518,204 | 55.94 | ||||||||||||||||||||||||||||||
Thereafter |
3,089,832 | 160,540,016 | 51.96 | 199,821,127 | 64.67 | 188,618 | 9,443,967 | 50.07 | 10,833,354 | 57.44 | ||||||||||||||||||||||||||||||
New York | Washington, DC | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
78,059 | $ | 8,596,698 | $ | 110.13 | $ | 8,593,698 | $ | 110.09 | 140,721 | $ | 6,760,111 | $ | 48.04 | $ | 6,762,825 | $ | 48.06 | ||||||||||||||||||||||
2015 |
203,483 | 23,167,542 | 113.85 | 23,247,727 | 114.25 | 394,480 | 23,549,891 | 59.70 | 23,686,914 | 60.05 | ||||||||||||||||||||||||||||||
2016 |
480,997 | 48,037,659 | 99.87 | 49,831,298 | 103.60 | 54,964 | 2,971,504 | 54.06 | 3,095,146 | 56.31 | ||||||||||||||||||||||||||||||
2017 |
1,505,098 | 158,770,444 | 105.49 | 160,030,150 | 106.33 | 823,766 | 46,772,457 | 56.78 | 47,522,516 | 57.69 | ||||||||||||||||||||||||||||||
2018 |
337,714 | 47,243,662 | 139.89 | 47,914,889 | 141.88 | 128,212 | 8,093,297 | 63.12 | 8,737,547 | 68.15 | ||||||||||||||||||||||||||||||
2019 |
997,707 | 89,756,724 | 89.96 | 92,619,410 | 92.83 | 416,573 | 24,733,387 | 59.37 | 27,028,622 | 64.88 | ||||||||||||||||||||||||||||||
2020 |
1,371,397 | 112,974,573 | 82.38 | 119,984,897 | 87.49 | 449,263 | 23,397,857 | 52.08 | 26,328,065 | 58.60 | ||||||||||||||||||||||||||||||
2021 |
236,114 | 29,684,773 | 125.72 | 33,114,862 | 140.25 | 546,807 | 33,386,157 | 61.06 | 39,167,167 | 71.63 | ||||||||||||||||||||||||||||||
2022 |
909,589 | 75,896,868 | 83.44 | 83,128,028 | 91.39 | 309,272 | 20,818,035 | 67.31 | 24,071,006 | 77.83 | ||||||||||||||||||||||||||||||
2023 |
106,108 | 13,059,865 | 123.08 | 15,066,042 | 141.99 | 57,290 | 3,574,736 | 62.40 | 4,462,320 | 77.89 | ||||||||||||||||||||||||||||||
Thereafter |
1,655,660 | 151,266,618 | 91.36 | 187,852,426 | 113.46 | 675,329 | 47,437,877 | 70.24 | 59,897,326 | 88.69 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Includes 225,532 square feet of research/laboratory space. Excluding the research/laboratory space, current and future expiring rents would be $58.45 per square foot and $59.13 per square foot, respectively, in 2016. |
36
Boston Properties, Inc.
First Quarter 2014
SUBURBAN PROPERTIES
Lease Expirations (1) (2) (3)
Boston | San Francisco | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
208,914 | $ | 6,163,013 | $ | 29.50 | $ | 6,162,697 | $ | 29.50 | 53,460 | $ | 1,071,900 | $ | 20.05 | $ | 1,071,900 | $ | 20.05 | ||||||||||||||||||||||
2015 |
483,992 | 15,018,553 | 31.03 | 15,542,397 | 32.11 | 179,011 | 6,075,264 | 33.94 | 6,090,301 | 34.02 | ||||||||||||||||||||||||||||||
2016 |
558,574 | 19,252,362 | 34.47 | 19,688,841 | 35.25 | 357,367 | 8,324,388 | 23.29 | 9,010,787 | 25.21 | ||||||||||||||||||||||||||||||
2017 |
500,255 | 15,848,504 | 31.68 | 16,304,883 | 32.59 | 394,964 | 13,343,663 | 33.78 | 14,345,635 | 36.32 | ||||||||||||||||||||||||||||||
2018 |
361,315 | 11,124,773 | 30.79 | 11,823,372 | 32.72 | 10,612 | 357,376 | 33.68 | 400,413 | 37.73 | ||||||||||||||||||||||||||||||
2019 |
430,031 | 16,724,113 | 38.89 | 17,452,849 | 40.59 | 449,449 | 15,177,960 | 33.77 | 18,132,884 | 40.34 | ||||||||||||||||||||||||||||||
2020 |
77,663 | 2,009,544 | 25.88 | 2,220,623 | 28.59 | 14,160 | 669,867 | 47.31 | 756,341 | 53.41 | ||||||||||||||||||||||||||||||
2021 |
324,288 | 7,017,086 | 21.64 | 7,230,494 | 22.30 | | | | | | ||||||||||||||||||||||||||||||
2022 |
534,736 | 19,540,831 | 36.54 | 19,808,022 | 37.04 | 290,448 | 10,747,698 | 37.00 | 12,796,754 | 44.06 | ||||||||||||||||||||||||||||||
2023 |
23,197 | 674,024 | 29.06 | 771,255 | 33.25 | 40,657 | 2,015,628 | 49.58 | 2,815,391 | 69.25 | ||||||||||||||||||||||||||||||
Thereafter |
561,260 | 24,064,318 | 42.88 | 27,353,420 | 48.74 | | | | | | ||||||||||||||||||||||||||||||
New York(4) | Washington, DC | |||||||||||||||||||||||||||||||||||||||
Year of |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
Rentable Square Footage Subject to Expiring Leases |
Current Annualized Revenues Under Expiring Leases |
Per Square Foot |
Annualized Revenues Under Expiring Leases with future step-ups |
Per Square Foot |
||||||||||||||||||||||||||||||
2014 |
198,777 | $ | 6,255,766 | $ | 31.47 | $ | 6,255,766 | $ | 31.47 | 392,933 | $ | 15,061,561 | $ | 38.33 | $ | 15,207,951 | $ | 38.70 | (5) | |||||||||||||||||||||
2015 |
191,573 | 6,470,238 | 33.77 | 6,510,135 | 33.98 | 453,615 | 21,717,564 | 47.88 | 21,924,078 | 48.33 | (5) | |||||||||||||||||||||||||||||
2016 |
193,067 | 6,489,107 | 33.61 | 6,664,281 | 34.52 | 425,246 | 18,519,007 | 43.55 | 19,330,759 | 45.46 | ||||||||||||||||||||||||||||||
2017 |
161,074 | 5,717,055 | 35.49 | 5,786,606 | 35.93 | 279,878 | 13,677,751 | 48.87 | 14,798,922 | 52.88 | ||||||||||||||||||||||||||||||
2018 |
203,217 | 6,521,831 | 32.09 | 6,848,279 | 33.70 | 653,459 | 29,392,201 | 44.98 | 31,391,761 | 48.04 | ||||||||||||||||||||||||||||||
2019 |
258,891 | 8,515,781 | 32.89 | 9,044,718 | 34.94 | 551,355 | 21,665,648 | 39.30 | 22,926,428 | 41.58 | ||||||||||||||||||||||||||||||
2020 |
234,160 | 6,852,856 | 29.27 | 8,234,400 | 35.17 | 762,333 | 30,409,309 | 39.89 | 33,318,419 | 43.71 | ||||||||||||||||||||||||||||||
2021 |
74,993 | 2,329,372 | 31.06 | 2,563,971 | 34.19 | 623,701 | 27,250,366 | 43.69 | 31,556,493 | 50.60 | ||||||||||||||||||||||||||||||
2022 |
29,737 | 906,498 | 30.48 | 965,971 | 32.48 | 560,061 | 22,862,829 | 40.82 | 27,802,154 | 49.64 | ||||||||||||||||||||||||||||||
2023 |
8,299 | 260,993 | 31.45 | 277,591 | 33.45 | 372,218 | 14,735,223 | 39.59 | 18,453,677 | 49.58 | ||||||||||||||||||||||||||||||
Thereafter |
433,359 | 14,326,247 | 33.06 | 15,891,930 | 36.67 | 1,215,576 | 44,456,068 | 36.57 | 50,379,521 | 41.44 |
(1) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(2) | Includes 100% of joint venture properties. Does not include residential units and hotel. |
(3) | Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires. |
(4) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
(5) | Includes 90,654 square feet of Sensitive Compartmented Information Facility (SCIF) space. Excluding the SCIF space from 2014 and 2015, the current and future expiring rental rate would be (i) $25.14 per square foot and $25.56 per square foot, respectively, for 2014, (ii) $30.84 per square foot and $31.36 per square foot, respectively, for 2015. |
37
Boston Properties, Inc.
First Quarter 2014
RESIDENTIAL and HOTEL PERFORMANCE
Rental Rates and Occupancy | First Quarter 2014 |
First Quarter 2013 |
Percent Change |
|||||||||
The Avant at Reston Town Center (359 units) (1) Reston, VA |
||||||||||||
Average Monthly Rental Rate (2) |
$ | 1,875 | N/A | N/A | ||||||||
Average Rental Rate Per Occupied Square Foot (2) |
$ | 2.04 | N/A | N/A | ||||||||
Average Physical Occupancy (2) (3) |
10.5 | % | N/A | N/A | ||||||||
Average Economic Occupancy (3) |
7.5 | % | N/A | N/A | ||||||||
Residences on The Avenue (335 units) located at 2221 I Street, NW, Washington, DC |
||||||||||||
Average Monthly Rental Rate (4) |
$ | 3,182 | $ | 3,360 | (5.3 | %) | ||||||
Average Rental Rate Per Occupied Square Foot (4) |
$ | 3.90 | $ | 4.12 | (5.3 | %) | ||||||
Average Physical Occupancy (3) (4) |
92.5 | % | 92.7 | % | (0.2 | %) | ||||||
Average Economic Occupancy (3) |
91.8 | % | 92.5 | % | (0.8 | %) | ||||||
The Lofts at Atlantic Wharf (86 units) |
||||||||||||
Boston, MA |
||||||||||||
Average Monthly Rental Rate (5) |
$ | 3,927 | $ | 3,781 | 3.9 | % | ||||||
Average Rental Rate Per Occupied Square Foot (5) |
$ | 4.37 | $ | 4.19 | 4.3 | % | ||||||
Average Physical Occupancy (3) (5) |
96.9 | % | 99.6 | % | (2.7 | %) | ||||||
Average Economic Occupancy (3) |
97.7 | % | 99.8 | % | (2.1 | %) | ||||||
Cambridge Center Marriott (433 rooms) |
||||||||||||
Cambridge, MA |
||||||||||||
Average Occupancy |
77.7 | % | 73.5 | % | 5.7 | % | ||||||
Average Daily Rate |
$ | 199.88 | $ | 194.79 | 2.6 | % | ||||||
Revenue per available room |
$ | 155.78 | $ | 143.17 | 8.8 | % |
Net Operating Income (in thousands) | Residential | Hotel | ||||||||||||||||||||||
First Quarter 2014 |
First Quarter 2013 |
Percent Change |
First Quarter 2014 |
First Quarter 2013 |
Percent Change |
|||||||||||||||||||
Rental Revenue |
$ | 5,682 | (6) | $ | 5,578 | (6) | 1.9 | % | $ | 8,193 | $ | 8,291 | (1.2 | %) | ||||||||||
Operating expenses and real estate taxes |
3,762 | 2,733 | 37.7 | % | 6,797 | 7,044 | (3.5 | %) | ||||||||||||||||
|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||
Net Operating Income |
$ | 1,920 | (6) | $ | 2,845 | (6) | (32.5 | %) | $ | 1,396 | $ | 1,247 | 11.9 | % | ||||||||||
|
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|
|
|
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|
|
|
|
|
|||||||||||||
Less: Straight line rent and fair value lease revenue |
86 | 114 | (24.6 | %) | 1 | 1 | | |||||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|||||||||||||
Rental Revenue - cash basis |
5,596 | 5,464 | 2.4 | % | 8,192 | 8,290 | (1.2 | %) | ||||||||||||||||
Less: Operating expenses and real estate taxes |
3,762 | 2,733 | 37.7 | % | 6,797 | 7,044 | (3.5 | %) | ||||||||||||||||
Add: Straight line ground rent expense |
527 | 542 | (2.8 | %) | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Operating Income - cash basis |
$ | 2,361 | $ | 3,273 | (27.9 | %) | $ | 1,395 | $ | 1,246 | 12.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Not included in Same Property analysis. |
(2) | Excludes 26,179 square feet of retail space which is 0% occupied but is 100% leased. |
(3) | For disclosures related to our definition of Average Physical and Average Economic Occupancy, see page 50. |
(4) | Excludes 49,528 square feet of retail space which is 100% occupied. |
(5) | Excludes 9,617 square feet of retail space which is 100% occupied. |
(6) | Includes 85,324 square feet of retail space which had revenue of approximately $981,000 for the quarter ended March 31, 2014 and 59,145 square feet of retail space which had revenue of approximately $955,000 for the quarter ended March 31, 2013. |
38
Boston Properties, Inc.
First Quarter 2014
OCCUPANCY ANALYSIS
Same Property Occupancy(1) - By Location | ||||||||||||||||||||||||
CBD | Suburban | Total | ||||||||||||||||||||||
Location |
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | ||||||||||||||||||
Boston |
95.4 | % | 97.6 | % | 85.8 | % | 78.4 | % | 92.0 | % | 90.8 | % | ||||||||||||
New York (2) |
97.1 | % | 94.5 | % | 79.8 | % | 78.3 | % | 92.2 | % | 89.9 | % | ||||||||||||
San Francisco |
94.4 | % | 94.0 | % | 69.4 | % | 79.1 | % | 86.0 | % | 89.1 | % | ||||||||||||
Washington, DC |
95.2 | % | 95.3 | % | 96.0 | % | 95.8 | % | 95.6 | % | 95.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Portfolio |
95.7 | % | 95.8 | % | 87.0 | % | 85.5 | % | 92.2 | % | 91.6 | % | ||||||||||||
|
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|
|
|
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|
|||||||||||||
Same Property Occupancy(1) - By Type of Property | ||||||||||||||||||||||||
CBD | Suburban | Total | ||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | |||||||||||||||||||
Total Office Portfolio |
95.6 | % | 95.7 | % | 87.5 | % | 85.3 | % | 92.4 | % | 91.6 | % | ||||||||||||
Total Office/Technical Portfolio |
100.0 | % | 100.0 | % | 80.2 | % | 89.0 | % | 85.3 | % | 91.8 | % | ||||||||||||
|
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|
|
|
|
|
|
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|
|
|
|||||||||||||
Total Portfolio |
95.7 | % | 95.8 | % | 87.0 | % | 85.5 | % | 92.2 | % | 91.6 | % | ||||||||||||
|
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|
|
(1) | For disclosures related to our definition of Same Property, see page 49. |
(2) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
39
Boston Properties, Inc.
First Quarter 2014
SAME PROPERTY PERFORMANCE
Office, Office/Technical and Hotel Properties
Office | Office/Technical | Hotel & Residential (1) | Total | |||||||||||||
Number of Properties |
118 | 16 | 3 | 137 | ||||||||||||
Square feet |
35,978,281 | 1,150,701 | 1,099,734 | 38,228,716 | ||||||||||||
Percent of properties in-service |
92.6 | % | 60.9 | % | 100.0 | % | 92.9 | % | ||||||||
Occupancy @ 03/31/2013 |
91.6 | % | 91.8 | % | N/A | 91.6 | % | |||||||||
Occupancy @ 03/31/2014 |
92.4 | % | 85.3 | % | N/A | 92.2 | % | |||||||||
Percent change from 1st quarter 2014 over 1st quarter 2013 (2): |
||||||||||||||||
Rental revenue |
3.9 | % | (2.2 | %) | (1.6 | %) | ||||||||||
Operating expenses and real estate taxes |
6.3 | % | 3.7 | % | (0.0 | %) | ||||||||||
Consolidated Net Operating Income (3) - excluding hotel & residential |
2.3 | %(2) | ||||||||||||||
Consolidated Net Operating Income (3) - Hotel & residential |
(5.5 | %)(2) | ||||||||||||||
Net Operating Income - BXPs share of unconsolidated joint ventures (3) (4) |
(1.0 | %)(2) | ||||||||||||||
Combined Net Operating Income (3) |
2.1 | % | ||||||||||||||
Rental revenue - cash basis |
6.1 | % | (5.7 | %) | (1.4 | %) | ||||||||||
Consolidated Net Operating Income (3) - cash basis (5) excluding hotel & residential |
6.0 | % | (9.5 | %) | 5.6 | %(2) | ||||||||||
Consolidated Net Operating Income (3) - cash basis (5) - Hotel & residential |
(4.7 | %)(2) | ||||||||||||||
Net Operating Income - cash basis (5) - BXPs share of unconsolidated joint ventures |
(4.8 | %)(2) | ||||||||||||||
Combined Net Operating Income (3) - cash basis (5) |
5.1 | % |
Same Property Lease Analysis - quarter ended March 31, 2014
Office | Office/Technical | Total | ||||||||||
Vacant space available @ 1/01/2014 (sf) |
2,371,857 | 93,814 | 2,465,671 | |||||||||
Square footage of leases expiring or terminated 1/1/2014-3/31/2014 |
1,298,815 | 7,479 | 1,306,294 | |||||||||
|
|
|
|
|
|
|||||||
Total space for lease (sf) |
3,670,672 | 101,293 | 3,771,965 | |||||||||
|
|
|
|
|
|
|||||||
New tenants (sf) |
458,485 | 14,826 | 473,311 | |||||||||
Renewals (sf) |
408,002 | | 408,002 | |||||||||
|
|
|
|
|
|
|||||||
Total space leased (sf) |
866,487 | 14,826 | 881,313 | |||||||||
|
|
|
|
|
|
|||||||
Space available @ 3/31/2014 (sf) |
2,804,185 | 86,467 | 2,890,652 | |||||||||
|
|
|
|
|
|
|||||||
Net (increase)/decrease in available space (sf) |
(432,328 | ) | 7,347 | (424,981 | ) | |||||||
Second generation leasing information: (6) |
||||||||||||
Leases commencing during the period (sf) |
848,189 | 14,826 | 863,015 | |||||||||
Average lease term (months) |
70 | 125 | 71 | |||||||||
Average free rent period (days) |
60 | 284 | 64 | |||||||||
Total transaction costs per square foot (7) |
$ | 26.98 | $ | 39.37 | $ | 27.19 | ||||||
Increase (decrease) in gross rents (8) |
3.87 | % | -8.59 | % | 3.73 | % | ||||||
Increase (decrease) in net rents (9) |
5.07 | % | -9.46 | % | 4.87 | % |
(1) | Includes revenue and expenses from retail tenants at the hotel and residential properties. |
(2) | See page 42 for a quantitative reconciliation of Same Property Net Operating Income (NOI) by reportable segment. |
(3) | For a quantitative reconciliation of NOI to Net income attributable to Boston Properties, Inc., see page 41. For disclosures relating to our use of Combined NOI and Consolidated NOI, see page 49. |
(4) | For disclosures related to the calculation of NOI from unconsolidated joint ventures, see page 17. |
(5) | For a quantitative reconciliation of NOI to NOI on a cash basis, see page 41. |
(6) | Second generation leases are defined as leases for space that had previously been under lease by the Company. Of the 863,015 square feet of second generation leases that commenced in Q1 2014, leases for 618,169 square feet were signed in prior periods. |
(7) | Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions. |
(8) | Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 689,816 square feet of second generation leases (1) that had been occupied within the prior 12 months and (2) for which the new lease term is greater than six months. |
(9) | Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 689,816 square feet of second generation leases (1) that had been occupied within the prior 12 months and (2) for which the new lease term is greater than six months. |
40
Boston Properties, Inc.
First Quarter 2014
Reconciliation of Net Operating Income to Net Income
For the three months ended | ||||||||
March 31, 2014 | March 31, 2013 | |||||||
(in thousands) | ||||||||
Net income attributable to Boston Properties, Inc. |
$ | 56,623 | $ | 48,000 | ||||
Net income attributable to noncontrolling interests: |
||||||||
Noncontrolling interest in discontinued operations - common units of the Operating |
||||||||
Partnership |
| 2,066 | ||||||
Noncontrolling interest - common units of the Operating Partnership |
6,160 | 4,111 | ||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
619 | 1,180 | ||||||
Noncontrolling interests in property partnerships (1) |
4,354 | 2,574 | ||||||
Discontinued operations: |
||||||||
Impairment loss from discontinued operations |
| 3,241 | ||||||
Gain on forgiveness of debt from discontinued operations |
| (20,182 | ) | |||||
Income from discontinued operations |
| (2,494 | ) | |||||
|
|
|
|
|||||
Income from continuing operations |
67,756 | 38,496 | ||||||
|
|
|
|
|||||
Add: |
||||||||
Interest expense |
113,554 | 100,433 | ||||||
Depreciation and amortization |
154,270 | 119,453 | ||||||
Impairment loss |
8,306 | |||||||
Transaction costs |
437 | 443 | ||||||
General and administrative expense |
29,905 | 45,516 | ||||||
Subtract: |
||||||||
Gains from investments in securities |
(286 | ) | (735 | ) | ||||
Interest and other income |
(1,311 | ) | (1,471 | ) | ||||
Income from unconsolidated joint ventures |
(2,816 | ) | (8,721 | ) | ||||
Development and management services income |
(5,216 | ) | (8,733 | ) | ||||
|
|
|
|
|||||
Consolidated Net Operating Income |
356,293 | 292,987 | ||||||
Net Operating Income from unconsolidated joint ventures (BXPs share) (2) |
9,729 | 51,338 | ||||||
|
|
|
|
|||||
Combined Net Operating Income |
$ | 366,022 | $ | 344,325 | ||||
|
|
|
|
|||||
Same Property Net Operating Income |
304,653 | 298,429 | ||||||
Net Operating Income from non Same Properties (3) |
60,250 | 45,420 | ||||||
Termination income |
1,119 | 476 | ||||||
|
|
|
|
|||||
Combined Net Operating Income |
$ | 366,022 | $ | 344,325 | ||||
|
|
|
|
|||||
Same Property Net Operating Income |
304,653 | 298,429 | ||||||
Less straight-line rent and fair value lease revenue |
(8,886 | ) | (17,127 | ) | ||||
Add straight-line ground rent expense |
1,747 | 1,801 | ||||||
|
|
|
|
|||||
Same Property Net Operating Income - cash basis |
$ | 297,514 | $ | 283,103 | ||||
|
|
|
|
(1) | These partnerships include 505 9th Street in Washington, D.C., Fountain Square in Reston, VA, 767 Fifth Avenue (The General Motors Building) in New York City and Times Square Tower in New York City. |
(2) | For disclosures related to the calculation of Net Operating Income from unconsolidated joint ventures, see page 17. |
(3) | Pages 20-22 & 38 indicate by footnote the properties which are not included as part of Same Property Net Operating Income. |
41
Boston Properties, Inc.
First Quarter 2014
Same Property Net Operating Income by Reportable Segment
(in thousands)
Office | Office/Technical | |||||||||||||||||||||||||||||||
For the three months ended |
$ Change |
% Change |
For the three months ended |
$ Change |
% Change |
|||||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | |||||||||||||||||||||||||||||
Rental Revenue |
$ | 459,027 | $ | 441,258 | $ | 9,627 | $ | 9,847 | ||||||||||||||||||||||||
Less Termination Income |
1,110 | 476 | | | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Rental revenue - subtotal |
457,917 | 440,782 | $ | 17,135 | 3.9 | % | 9,627 | 9,847 | $ | (220 | ) | (2.2 | %) | |||||||||||||||||||
Operating expenses and real estate taxes |
172,678 | 162,406 | 10,272 | 6.3 | % | 2,930 | 2,826 | 104 | 3.7 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (1) |
$ | 285,239 | $ | 278,376 | $ | 6,863 | 2.5 | % | $ | 6,697 | $ | 7,021 | $ | (324 | ) | (4.6 | %) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - subtotal |
$ | 457,917 | $ | 440,782 | $ | 9,627 | $ | 9,847 | ||||||||||||||||||||||||
Less straight-line rent and fair value lease revenue |
8,174 | 17,079 | (8,905 | ) | (52.1 | %) | 264 | (86 | ) | 350 | 407.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - cash basis |
449,743 | 423,703 | 26,040 | 6.1 | % | 9,363 | 9,933 | (570 | ) | (5.7 | %) | |||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||||||
Operating expenses and real estate taxes |
172,678 | 162,406 | 10,272 | 6.3 | % | 2,930 | 2,826 | 104 | 3.7 | % | ||||||||||||||||||||||
Add: |
||||||||||||||||||||||||||||||||
Straight-line ground rent expense (2) |
1,220 | 1,259 | (39 | ) | (3.1 | %) | | | | | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (3) - cash basis |
$ | 278,285 | $ | 262,556 | $ | 15,729 | 6.0 | % | $ | 6,433 | $ | 7,107 | $ | (674 | ) | (9.5 | %) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Sub-Total | Hotel & Residential | |||||||||||||||||||||||||||||||
For the three months ended |
$ Change |
% Change |
For the three months ended |
$ Change |
% Change |
|||||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | |||||||||||||||||||||||||||||
Rental Revenue |
$ | 468,654 | $ | 451,105 | $ | 13,644 | $ | 13,869 | ||||||||||||||||||||||||
Less Termination Income |
1,110 | 476 | | | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Rental revenue - subtotal |
467,544 | 450,629 | $ | 16,915 | 3.8 | % | 13,644 | 13,869 | $ | (225 | ) | (1.6 | %) | |||||||||||||||||||
Operating expenses and real estate taxes |
175,608 | 165,232 | 10,376 | 6.3 | % | 9,777 | 9,777 | | 0.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (1) |
$ | 291,936 | $ | 285,397 | $ | 6,539 | 2.3 | % | $ | 3,867 | $ | 4,092 | $ | (225 | ) | (5.5 | %) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - subtotal |
$ | 467,544 | $ | 450,629 | $ | 13,644 | $ | 13,869 | ||||||||||||||||||||||||
Less straight-line rent and fair value lease revenue |
8,438 | 16,993 | (8,555 | ) | (50.3 | %) | 86 | 114 | (28 | ) | (24.6 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - cash basis |
459,106 | 433,636 | 25,470 | 5.9 | % | 13,558 | 13,755 | (197 | ) | (1.4 | %) | |||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||||||
Operating expenses and real estate taxes |
175,608 | 165,232 | 10,376 | 6.3 | % | 9,777 | 9,777 | | 0.0 | % | ||||||||||||||||||||||
Add: |
||||||||||||||||||||||||||||||||
Straight-line ground rent expense (2) |
1,220 | 1,259 | (39 | ) | (3.1 | %) | 527 | 542 | (15 | ) | (2.8 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (3) - cash basis |
$ | 284,718 | $ | 269,663 | $ | 15,055 | 5.6 | % | $ | 4,308 | $ | 4,520 | $ | (212 | ) | (4.7 | %) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Unconsolidated Joint Ventures | Total | |||||||||||||||||||||||||||||||
For the three months ended |
$ Change |
% Change |
For the three months ended |
$ Change |
% Change |
|||||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | 31-Mar-14 | 31-Mar-13 | |||||||||||||||||||||||||||||
Rental Revenue |
$ | 15,285 | $ | 15,084 | $ | 497,583 | $ | 480,058 | ||||||||||||||||||||||||
Less Termination Income |
9 | | 1,119 | 476 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Rental revenue - subtotal |
15,276 | 15,084 | $ | 192 | 1.3 | % | 496,464 | 479,582 | $ | 16,882 | 3.5 | % | ||||||||||||||||||||
Operating expenses and real estate taxes |
6,426 | 6,144 | 282 | 4.6 | % | 191,811 | 181,153 | 10,658 | 5.9 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (1) |
$ | 8,850 | $ | 8,940 | $ | (90 | ) | (1.0 | %) | $ | 304,653 | $ | 298,429 | $ | 6,224 | 2.1 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - subtotal |
$ | 15,276 | $ | 15,084 | $ | 496,464 | $ | 479,582 | ||||||||||||||||||||||||
Less straight-line rent and fair value lease revenue |
362 | 20 | 342 | 1,710.0 | % | 8,886 | 17,127 | (8,241 | ) | (48.1 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Rental revenue - cash basis |
14,914 | 15,064 | (150 | ) | (1.0 | %) | 487,578 | 462,455 | 25,123 | 5.4 | % | |||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||||||
Operating expenses and real estate taxes |
6,426 | 6,144 | 282 | 4.6 | % | 191,811 | 181,153 | 10,658 | 5.9 | % | ||||||||||||||||||||||
Add: |
||||||||||||||||||||||||||||||||
Straight-line ground rent expense (2) |
| | | | 1,747 | 1,801 | (54 | ) | (3.0 | %) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Operating Income (3) - cash basis |
$ | 8,488 | $ | 8,920 | $ | (432 | ) | (4.8 | %) | $ | 297,514 | $ | 283,103 | $ | 14,411 | 5.1 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For a quantitative reconciliation of net operating income (NOI) to net income available to common shareholders, see page 41. For disclosures relating to our use of NOI see page 49. |
(2) | For additional information, see page 6. |
(3) | For a quantitative reconciliation of NOI to NOI on a cash basis see page 41. For disclosures relating to our use of NOI see page 49. |
42
Boston Properties, Inc.
First Quarter 2014
LEASING ACTIVITY
All In-Service Properties - quarter ended March 31, 2014
Office | Office/Technical | Total | ||||||||||
Vacant space available @ 1/1/2014 (sf) |
2,490,492 | 193,155 | 2,683,647 | |||||||||
Property dispositions/ properties taken out of service (sf) |
| | | |||||||||
Properties acquired vacant space (sf) |
| | | |||||||||
Properties placed in-service (sf) |
| | | |||||||||
Leases expiring or terminated 1/1/2014-3/31/2014 (sf) |
1,321,035 | 40,802 | 1,361,837 | |||||||||
|
|
|
|
|
|
|||||||
Total space available for lease (sf) |
3,811,527 | 233,957 | 4,045,484 | |||||||||
|
|
|
|
|
|
|||||||
1st generation leases (sf) |
22,248 | | 22,248 | |||||||||
2nd generation leases with new tenants (sf) |
462,407 | 24,226 | 486,633 | |||||||||
2nd generation lease renewals (sf) |
408,002 | 23,923 | 431,925 | |||||||||
|
|
|
|
|
|
|||||||
Total space leased (sf) |
892,657 | 48,149 | 940,806 | (1) | ||||||||
|
|
|
|
|
|
|||||||
Vacant space available for lease @ 3/31/2014 (sf) |
2,918,870 | 185,808 | 3,104,678 | |||||||||
|
|
|
|
|
|
|||||||
Net (increase)/decrease in available space (sf) |
(428,378 | ) | 7,347 | (421,031 | ) | |||||||
Second generation leasing information: (2) |
||||||||||||
Leases commencing during the period (sf) |
870,409 | 48,149 | 918,558 | |||||||||
Average lease term (months) |
72 | 70 | 71 | |||||||||
Average free rent period (days) |
58 | 121 | 62 | |||||||||
Total transaction costs per square foot (3) |
$ | 27.80 | $ | 23.65 | $ | 27.59 | ||||||
Increase (decrease) in gross rents (4) |
1.59 | % | -0.62 | % | 1.50 | % | ||||||
Increase (decrease) in net rents (5) |
1.38 | % | -0.56 | % | 1.29 | % |
All leases 1st Generation |
All leases 2nd Generation |
Incr (decr) in 2nd gen. gross cash rents (4) |
Incr (decr) in 2nd gen. net cash rents (5) |
Total Leased (6) |
Total square feet of leases executed in the quarter (7) |
|||||||||||||||||||
Boston |
| 303,712 | -7.93 | % | -12.78 | % | 303,712 | 560,979 | ||||||||||||||||
New York (8) |
18,298 | 163,233 | 9.78 | % | 11.20 | % | 181,531 | 537,004 | ||||||||||||||||
San Francisco |
| 186,890 | 13.48 | % | 18.20 | % | 186,890 | 308,530 | ||||||||||||||||
Washington, DC |
3,950 | 264,723 | -1.51 | % | -3.10 | % | 268,673 | 156,012 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
22,248 | 918,558 | 1.50 | % | 1.29 | % | 940,806 | 1,562,525 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Details of 1st and 2nd generation space is located in chart below. |
(2) | Second generation leases are defined as leases for space that had previously been under lease by the Company. Of the 918,558 square feet of second generation leases that commenced in Q1 2014, leases for 673,712 square feet were signed in prior periods. |
(3) | Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions. |
(4) | Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 745,359 square feet of second generation leases (1) that had been occupied within the prior 12 months and (2) for which the new lease term is greater than six months. |
(5) | Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 745,359 square feet of second generation leases (1) that had been occupied within the prior 12 months and (2) for which the new lease term is greater than six months. |
(6) | Represents leases for which rental revenue has commenced in accordance with GAAP during the quarter. |
(7) | Represents leases executed in the quarter for which the GAAP impact may be recognized in the current or future quarters, including properties currently under development. The total square feet of leases executed in the current quarter and recognized in the current quarter is 255,594. |
(8) | Beginning on January 1, 2014, Princeton is reflected as the suburban component of the New York region. |
43
Boston Properties, Inc.
First Quarter 2014
HISTORICALLY GENERATED CAPITAL EXPENDITURES,
TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
Historical Capital Expenditures
(in thousands)
Q1 2014 | 2013 | 2012 | 2011 | |||||||||||||
Recurring capital expenditures |
$ | 7,694 | $ | 51,026 | $ | 23,774 | $ | 29,334 | ||||||||
Planned non-recurring capital expenditures associated with acquisition properties |
3,339 | 20,506 | 22,287 | 4,358 | ||||||||||||
Hotel improvements, equipment upgrades and replacements |
1,557 | 2,070 | 896 | 4,010 | (1) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 12,590 | $ | 73,602 | $ | 46,957 | $ | 37,702 | |||||||||
|
|
|
|
|
|
|
|
2nd Generation Tenant Improvements and Leasing Commissions
Q1 2014 | 2013 | 2012 | 2011 | |||||||||||||
Office |
||||||||||||||||
Square feet |
870,409 | 3,554,632 | 3,572,825 | 4,116,436 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Tenant improvements and lease commissions PSF |
$ | 27.80 | $ | 37.54 | $ | 45.31 | $ | 30.32 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Office/Technical |
||||||||||||||||
Square feet |
48,149 | 55,456 | 59,788 | 184,849 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Tenant improvements and lease commissions PSF |
$ | 23.65 | $ | 2.02 | $ | 3.94 | $ | 23.97 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average tenant improvements and lease commissions PSF |
$ | 27.59 | $ | 36.99 | $ | 44.63 | $ | 30.05 | ||||||||
|
|
|
|
|
|
|
|
(1) | Includes approximately $1,845 of retail tenant improvements. |
44
Boston Properties, Inc.
First Quarter 2014
ACQUISITIONS/DISPOSITIONS
as of March 31, 2014
ACQUISITIONS
For the period from January 1, 2014 through March 31, 2014
Property |
Date Acquired | Square Feet | Initial Investment |
Anticipated Future Investment |
Total Investment |
Percentage Leased | ||||||||||||||
Not Applicable |
||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||
Total Acquisitions |
| $ | | $ | | $ | | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||
DISPOSITIONS | ||||||||||||||||||||
For the period from January 1, 2014 through March 31, 2014
| ||||||||||||||||||||
Property |
Date Disposed | Square Feet | Gross Sales Price |
Book Gain | ||||||||||||||||
Not Applicable |
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Total Dispositions |
| $ | | $ | | |||||||||||||||
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45
Boston Properties, Inc.
First Quarter 2014
VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS (1)
as of March 31, 2014 |
Construction |
Initial Occupancy |
Estimated Stabilization Date |
Location | # of Buildings |
Square feet |
Investment to Date (2) |
Estimated Total Investment (2) |
Total Construction Loan (2) |
Amount Drawn at 3/31/2014 (2) |
Estimated Future Equity Requirement (2) |
Percentage Leased (3) |
Percentage Placed in Service (4) |
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Office |
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680 Folsom Street |
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Q2 2014 |
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Q4 2014 |
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San Francisco, CA |
2 | 524,509 | $ | 305,313,210 | $ | 340,000,000 | $ | | $ | | $ | 34,686,790 | 96 | % | 1 | % | |||||||||||||||||||||||
Annapolis Junction Building Seven (50% ownership) |
|
Q1 2015 |
|
|
Q1 2015 |
|
Annapolis, MD |
1 | 125,000 | 11,795,702 | 17,500,000 | 11,000,000 | 6,707,658 | 1,411,956 | 100 | % | | |||||||||||||||||||||||||||||
250 West 55th Street (5) |
|
Q4 2013 |
|
|
Q4 2015 |
|
New York, NY |
1 | 989,000 | 868,268,112 | 1,050,000,000 | | | 181,731,888 | 73 | % | 6 | % | ||||||||||||||||||||||||||||
804 Carnegie Center |
|
Q1 2016 |
|
|
Q1 2016 |
|
Princeton, NJ | 1 | 130,000 | 2,234,159 | 40,410,000 | 38,175,841 | 100 | % | | |||||||||||||||||||||||||||||||
535 Mission Street |
|
Q4 2014 |
|
|
Q3 2016 |
|
San Francisco, CA |
1 | 307,000 | 135,348,383 | 215,000,000 | | | 79,651,617 | 26 | % | | |||||||||||||||||||||||||||||
601 |
|
Q4 2015 |
|
|
Q4 2017 |
|
Washington, DC |
1 | 478,000 | 171,232,373 | 360,760,000 | | | 189,527,627 | 79 | % | | |||||||||||||||||||||||||||||
Salesforce Tower (95% ownership) (6) |
|
Q2 2017 |
|
|
Q1 2019 |
|
San Francisco, CA |
1 | 1,400,000 | 264,787,401 | 1,130,000,000 | | | 865,212,599 | 51 | % | N/A | |||||||||||||||||||||||||||||
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Total |
8 | 3,953,509 | $ | 1,758,979,340 | $ | 3,153,670,000 | $ | 11,000,000 | $ | 6,707,658 | $ | 1,390,398,318 | 67 | % | 3 | % | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||||
PROJECTS PLACED IN-SERVICE DURING 2014 |
| |||||||||||||||||||||||||||||||||||||||||||||
Initial In Service Date |
Estimated Stabilization Date |
Location | # of Buildings |
Square feet |
Investment to Date (2) |
Estimated Total Investment (2) |
Debt (2) | Amount Drawn at 3/31/2014 (2) |
Estimated Future Equity Requirement (2) |
Percentage Leased (3) |
Percentage Placed in Service (4) |
|||||||||||||||||||||||||||||||||||
The Avant at Reston Town Center (359 units) |
|
Q4 2013 |
|
|
Q4 2015 |
|
Reston, VA | 1 | 329,168 | $ | 112,627,959 | $ | 137,250,000 | $ | | $ | | $ | 24,622,041 | 29 | % | 100 | % | |||||||||||||||||||||||
The Avant at Reston Town Center - Retail |
| 26,179 | | | | | | 100 | % | 100 | % | |||||||||||||||||||||||||||||||||||
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|
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Total Projects placed in Service |
1 | 355,347 | $ | 112,627,959 | $ | 137,250,000 | $ | | $ | | $ | 24,622,041 | 34 | % | 100 | % | ||||||||||||||||||||||||||||||
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IN-SERVICE PROPERTIES HELD FOR RE-DEVELOPMENT
Sub Market | # of Buildings |
Existing Square Feet |
Leased % | Annualized Revenue Per Leased SF (7) |
Encumbered with secured debt (Y/N) |
Central Business District (CBD) or Suburban (S) |
Estimated Future Square Feet (8) |
|||||||||||||||||||||||||
North First Business Park |
San Jose, CA | 5 | 190,636 | 100.0 | % | $ | 14.85 | N | S | 683,000 | ||||||||||||||||||||||
|
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|
|
|
|
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|
|
|
|||||||||||||||||||||||
Total Properties held for Re-Development |
5 | 190,636 | 100.0 | % | $ | 14.85 | 683,000 | |||||||||||||||||||||||||
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(1) | A project is classified as Construction in Progress when construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed. |
(2) | Represents the Companys share. Includes net revenue and interest carry during lease up period and acquisition expenses. |
(3) | Represents percentage leased as of April 25, 2014, including leases with future commencement dates and including residential space. |
(4) | Represents the portion of the project which no longer qualifies for capitalization of interest in accordance with GAAP. |
(5) | Investment to Date excludes approximately $24.8 million of cost that were expensed in prior periods in connection with the suspension of development activities. Estimated Total Investment includes approximately $230 million of interest capitalization. |
(6) | On April 11, 2014, the joint venture executed a lease for approximately 714,000 square feet for the 60-story, 1.4 million square foot office tower known as Salesforce Tower (formerly Transbay Tower). The Total Estimated Investment has been updated to represents the total cost to complete the project. |
(7) | For disclosures relating to our definition of Annualized Revenue, see page 49. |
(8) | The incremental square footage increase in Estimated Future Square Feet is Included in Approximate Developable Square Feet of Value Creation Pipeline - Owned Land Parcels on page 47. |
46
Boston Properties, Inc.
First Quarter 2014
VALUE CREATION PIPELINE - OWNED LAND PARCELS
as of March 31, 2014
Location |
Acreage | Approximate Developable Square Feet |
||||||
San Jose, CA (1) (2) |
44.0 | 2,409,364 | ||||||
Reston, VA |
38.3 | 1,160,000 | ||||||
Waltham, MA |
25.4 | 1,150,000 | ||||||
Gaithersburg, MD |
27.0 | 850,000 | ||||||
Springfield, VA |
17.8 | 800,000 | ||||||
Dulles, VA |
76.6 | 760,000 | ||||||
Rockville, MD |
58.1 | 759,000 | ||||||
Boston, MA |
1.0 | 450,000 | ||||||
Marlborough, MA |
50.0 | 400,000 | ||||||
Annapolis, MD (50% ownership) |
20.0 | 300,000 | ||||||
Andover, MA |
10.0 | 110,000 | ||||||
San Francisco, CA |
0.2 | 22,000 | ||||||
|
|
|
|
|||||
368.4 | 9,170,364 | |||||||
|
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VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS
as of March 31, 2014
Location |
Acreage | Approximate Developable Square Feet |
||||||
Princeton, NJ (3) |
134.1 | 1,650,000 | ||||||
Cambridge, MA (4) |
| 207,500 | ||||||
|
|
|
|
|||||
134.1 | 1,857,500 | |||||||
|
|
|
|
(1) | Excludes the existing square footage related to in-service properties being held for future re-development included on page 46. |
(2) | Includes an additional 460,000 of developable square footage at our Zanker Road project. |
(3) | Option to purchase at a fixed price of $30.50 per square foot plus annual non-refundable option payments of $125,000. The option expires on January 1, 2018. |
(4) | Includes 7,500 square feet of development rights for office / lab space and the option to purchase 200,000 square feet of residential rights. |
47
Boston Properties, Inc.
First Quarter 2014
Definitions
This section contains an explanation of certain non-GAAP financial measures we provide in other sections of this document, as well as the reasons why management believes these measures provide useful information to investors about the Companys financial condition or results of operations. Additional detail can be found in the Companys most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.
Funds from Operations
Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), we calculate Funds from Operations, or FFO, by adjusting net income (loss) attributable to Boston Properties, Inc. (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, impairment losses on depreciable real estate of consolidated entities, impairment losses on investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate related depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing our comparative operating and financial performance because, by excluding gains and losses related to asset sales (land and property), impairment losses and real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a companys real estate between periods or as compared to different companies. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.
FFO should not be considered as an alternative to net income attributable to Boston Properties, Inc. (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income attributable to Boston Properties, Inc. and considered in addition to cash flows determined in accordance with GAAP, as presented in our consolidated financial statements.
Funds Available for Distribution (FAD)
In addition to FFO, we present Funds Available for Distribution (FAD) by (1) adding to FFO non-real estate depreciation, fair value interest adjustment, losses from early extinguishments of debt, ASC 470-20 (formerly known as FSP APB 14-1) interest expense adjustment, non-cash stock-based compensation expense, and partners share of joint venture 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences), (2) eliminating the effects of straight-line rent and fair value lease revenue, (3) subtracting: recurring capital expenditures; hotel improvements, equipment upgrades and replacements; and 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences); and (4) subtracting from FFO non-cash termination adjustment. Although our FAD may not be comparable to that of other REITs and real estate companies, we believe it provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. In addition, we believe that to further understand our liquidity, FAD should be compared with our cash flows determined in accordance with GAAP, as presented in our consolidated financial statements. FAD does not represent cash generated from operating activities determined in accordance with GAAP, and FAD should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity.
Total Consolidated Debt to Total Consolidated Market Capitalization Ratio
Total consolidated debt to total consolidated market capitalization ratio, defined as total consolidated debt as a percentage of the market value of our outstanding equity securities plus our total consolidated debt, is a measure of leverage commonly used by analysts in the REIT sector. Total consolidated market capitalization is the sum of (A) our total consolidated indebtedness outstanding plus (B) the market value of our outstanding equity securities calculated using the closing price per share of common stock of the Company multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding Series Two Preferred Units of partnership interest in Boston Properties Limited Partnership and (4) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units plus (C) outstanding Series Four Preferred Units of partnership interest in Boston Properties Limited Partnership multiplied by the fixed liquidation preference of $50 per unit plus (D) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by the fixed liquidation preference of $2,500 per share. The calculation of total consolidated market capitalization does not include LTIP Units issued in the form of performance-based awards (OPP Awards and MYLTIP Awards) because, unlike other LTIP Units, they are not earned until certain performance thresholds are achieved. We are presenting this ratio because our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Investors should understand that our total consolidated debt to total consolidated market capitalization ratio is in part a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. However, for a company like ours, whose assets are primarily income-producing real estate, the total consolidated debt to total consolidated market capitalization ratio may provide investors with an alternate indication of leverage, so long as it is evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.
Total Adjusted Debt to Total Adjusted Market Capitalization Ratio
Total adjusted debt to total adjusted market capitalization ratio, defined as total adjusted debt (which equals our total consolidated debt, plus our share of unconsolidated joint venture debt, minus our joint venture partners share of consolidated debt) as a percentage of the market value of our outstanding equity securities plus our total adjusted debt, is an alternative measure of leverage used by some analysts in the REIT sector. Total adjusted market capitalization is the sum of (A) our total adjusted debt plus (B) the market value of our outstanding equity securities calculated using the closing price per share of common stock of the Company multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding Series Two Preferred Units of partnership interest in Boston Properties Limited Partnership and (4) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units plus (C) outstanding Series Four Preferred Units of partnership interest in Boston Properties Limited Partnership multiplied by the fixed liquidation preference of $50 per unit plus (D) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by the fixed liquidation preference of $2,500 per share. The calculation of total adjusted market capitalization does not include performance-based awards because, unlike other LTIP Units, they are not earned until certain performance thresholds are achieved.
We present this ratio because, following the consolidation of 767 Venture, LLC (the entity that owns 767 Fifth Avenue (The GM Building)) effective June 1, 2013, our consolidated debt increased significantly compared to prior periods even though our economic interest in 767 Venture, LLC remained substantially unchanged. We believe the presentation of total adjusted debt may provide investors with a more complete picture of our share of consolidated and unconsolidated debt. In addition, in light of the difference between our total consolidated debt and our total adjusted debt, we believe that also presenting our total adjusted debt to total adjusted market capitalization may provide investors with a more complete picture of our leverage in relation to the overall size of our company. Investors should understand that our total adjusted debt to total adjusted market capitalization ratio is in part a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. The total adjusted debt to total adjusted market capitalization ratio should be evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.
48
Boston Properties, Inc.
First Quarter 2014
Definitions
Consolidated Net Operating Income (NOI)
Consolidated NOI is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc., the most directly comparable GAAP financial measure, plus net income attributable to noncontrolling interests, less discontinued operations, plus corporate general and administrative expense, transaction costs, impairment loss, depreciation and amortization and interest expense, less development and management services income, income from unconsolidated joint ventures, interest and other income and gains from investments in securities. In some cases we also present Consolidated NOI on a cash basis, which is Consolidated NOI after eliminating the effects of straight-lining of rent and fair value lease revenue. We use Consolidated NOI internally as a performance measure and believe Consolidated NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe Consolidated NOI is a useful measure for evaluating the operating performance of our real estate assets. Our management also uses Consolidated NOI to evaluate regional property level performance and to make decisions about resource allocations. Further, we believe Consolidated NOI is useful to investors as a performance measure because, when compared across periods, Consolidated NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. Consolidated NOI excludes certain components from net income in order to provide results that are more closely related to a propertys results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Consolidated NOI presented by us may not be comparable to Consolidated NOI reported by other REITs that define Consolidated NOI differently. We believe that in order to facilitate a clear understanding of our operating results, Consolidated NOI should be examined in conjunction with net income as presented in our consolidated financial statements. Consolidated NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
Combined Net Operating Income (NOI)
Combined NOI is a non-GAAP financial measure equal to Consolidated NOI plus our share of net operating income from unconsolidated joint ventures. In some cases we also present Combined NOI on a cash basis, which is Combined NOI after eliminating the effects of straight-lining of rent and fair value lease revenue. In addition to Consolidated NOI, we use Combined NOI internally as a performance measure and believe Combined NOI provides useful information to investors regarding our financial condition and results of operations because it includes the impact of our unconsolidated joint ventures, which have become significant. Therefore, we believe Combined NOI is a useful measure for evaluating the operating performance of all of our real estate assets, including those held by our unconsolidated joint ventures. Our management also uses Combined NOI to evaluate regional property level performance and to make decisions about resource allocations. Further, like Consolidated NOI, we believe Combined NOI is useful to investors as a performance measure because, when compared across periods, Combined NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. Combined NOI presented by us may not be comparable to Combined NOI reported by other REITs that define Combined NOI differently. We believe that in order to facilitate a clear understanding of our operating results, Combined NOI should be examined in conjunction with net income as presented in our consolidated financial statements. Combined NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
In-Service Properties
We treat a property as being in-service upon the earlier of (i) lease-up and completion of tenant improvements or (ii) one year after cessation of major construction activity under GAAP. The determination as to when a property should be treated as in-service involves a degree of judgment and is made by management based on the relevant facts and circumstances of the particular property. For portfolio operating and occupancy statistics we specify a single date for treating a property as in-service which is generally later than the date the property is partially placed in-service for GAAP. Under GAAP a property may be placed in service in stages as construction is completed and the property is held available for occupancy. In accordance with GAAP, when a portion of a property has been substantially completed and occupied or held available for occupancy, we cease capitalization on that portion, though we may not treat the property as being in-service, and continue to capitalize only those costs associated with the portion still under construction. In-service properties include properties held by our unconsolidated joint ventures. In-service Office and Office/Technical properties exclude hotel and residential properties.
Same Properties
In our analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us through the end of the latest period presented as Same Properties. Same Properties therefore exclude properties placed in-service, acquired, repositioned, or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as in-service for that property to be included in Same Properties. Pages 20-22 & 38 indicate by footnote the In-Service Properties which are not included in Same Properties. Same Properties NOI includes our share of net operating income from unconsolidated joint ventures.
Annualized Revenue
Rental obligations at the end of the reporting period, including contractual base rents, percentage rent and reimbursements from tenants under existing leases, multiplied by twelve. These annualized amounts exclude rent abatements and non-recurring items.
Future Annualized Revenue
Rental obligations including the sum of (i) contractual base rents at lease expiration and (ii) percentage rent and reimbursements from tenants at the end of the current reporting period, multiplied by twelve. These annualized amounts exclude rent abatements and non-recurring items.
49
Boston Properties, Inc.
First Quarter 2014
Definitions
Average Monthly Rental Rates
Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.
Average Economic Occupancy
Average Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential propertys total possible gross revenue.
Market Rents
Market Rents used by the Company in calculating Average Economic Occupancy are based on the current market rates set by the managers of the Companys residential properties based on their experience in renting their residential propertys units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
Average Physical Occupancy
Average Physical Occupancy is defined as the number of average occupied units divided by the total number of units, expressed as a percentage.
50
Exhibit 99.2
800 Boylston Street
Boston, MA 02199
AT THE COMPANY
Michael Walsh
Senior Vice President, Finance
(617) 236-3410
Arista Joyner
Investor Relations Manager
(617) 236-3343
BOSTON PROPERTIES ANNOUNCES
FIRST QUARTER 2014 RESULTS
Reports diluted FFO per share of $1.20 Reports diluted EPS of $0.35
BOSTON, MA, April 29, 2014 Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the first quarter ended March 31, 2014.
Funds from Operations (FFO) for the quarter ended March 31, 2014 were $183.8 million, or $1.20 per share basic and $1.20 per share diluted. This compares to FFO for the quarter ended March 31, 2013 of $160.6 million, or $1.06 per share basic and $1.06 per share diluted. The weighted average number of basic and diluted shares outstanding totaled 153,030,424 and 154,043,413, respectively, for the quarter ended March 31, 2014 and 151,645,578 and 153,259,143, respectively, for the quarter ended March 31, 2013.
The Companys reported FFO of $1.20 per share diluted was less than the guidance previously provided of $1.21-$1.23 per share primarily due to increased utilities and snow removal expenses related to the cold winter for its assets located in the Northeast and a timing variance in its G&A expense. The Companys revenue was in line with managements expectations used in establishing the guidance range.
Net income available to common shareholders was $54.0 million for the quarter ended March 31, 2014, compared to $47.9 million for the quarter ended March 31, 2013. Net income available to common shareholders per share (EPS) for the quarter ended March 31, 2014 was $0.35 basic and $0.35 on a diluted basis. This compares to EPS for the first quarter of 2013 of $0.32 basic and $0.31 on a diluted basis.
The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the quarter ended March 31, 2014. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.
1
As of March 31, 2014, the Companys portfolio consisted of 175 properties, comprised primarily of Class A office space, one hotel, three residential properties and four retail properties, aggregating approximately 45.8 million square feet, including eight properties under construction totaling 4.0 million square feet. In addition, the Company has structured parking for vehicles containing approximately 15.7 million square feet. The overall percentage of leased space for the 163 properties in service (excluding the three in-service residential properties and the hotel) as of March 31, 2014 was 92.4%.
Significant events during the first quarter included:
| On January 27, 2014, the Companys Compensation Committee approved the 2014 Multi-Year Long-Term Incentive Program (the 2014 MYLTIP) as a performance-based component of the Companys overall compensation program. Under the Financial Accounting Standards Boards Accounting Standards Codification (ASC) 718 Compensation Stock Compensation, the 2014 MYLTIP has an aggregate value of approximately $13.1 million, which amount will generally be amortized into earnings over the four-year plan period under the graded vesting method and has been reflected in the 2014 guidance below. As detailed in the Companys proxy statement for its 2014 annual meeting of stockholders, this reflects the Compensation Committees decision to shift a significant portion of our incentive compensation from time-based to performance-based awards to build stronger pay-for-performance alignment with our stockholders. |
| On January 31, 2014, the measurement period for the Companys 2011 OPP Awards expired and the Companys total stockholder return was not sufficient for employees to earn and therefore become eligible to vest in any of the 2011 OPP Awards. As a result, the Company accelerated the then remaining unrecognized compensation expense totaling approximately $1.2 million. Accordingly, all 2011 OPP Awards were automatically forfeited. |
| On February 10, 2014, the Company completed and fully placed in-service The Avant at Reston Town Center development project comprised of 359 apartment units and retail space aggregating approximately 355,000 square feet located in Reston, Virginia. The retail space totaling approximately 26,000 net rentable square feet is 100% leased and the residential units are currently 29% leased. |
| On February 18, 2014, the Companys Operating Partnership repaid at maturity the $747.5 million aggregate principal amount of its 3.625% exchangeable senior notes due 2014 plus accrued and unpaid interest thereon. |
Transactions completed subsequent to March 31, 2014:
| On April 10, 2014, a consolidated joint venture in which the Company has a 95% interest signed a lease with salesforce.com for 714,000 square feet at the new Salesforce Tower (formerly Transbay Tower), the 1.4 million square foot, 61-story Class A office development project currently under construction at 415 Mission Street in the South Financial District of San Francisco, California. In conjunction with the lease signing, the Company has committed to construct the building and expects to complete the building in early 2017 for a projected total cost of approximately $1.1 billion, which includes capitalized interest in accordance with GAAP. |
2
| On April 10, 2014, the Company entered into a joint venture with an unrelated third party to acquire a parcel of land located at 501 K Street in Washington, DC. The Company anticipates the land parcel will accommodate an approximate 520,000 square foot Class A office property to be developed in the future. The joint venture partner contributed the land for a 50% interest in the joint venture and the Company contributed cash of approximately $39.0 million for its 50% interest. |
EPS and FFO per Share Guidance:
The Companys guidance for the second quarter and full year 2014 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect managements view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses or gains or losses associated with disposition activities. There can be no assurance that the Companys actual results will not differ materially from the estimates set forth below.
As shown below, the Company has adjusted its guidance for FFO per share (diluted) for Full Year 2014 to $5.25 - $5.33 per share from $5.20 - $5.33 per share. The updated guidance reflects, among other items, a projected increase in same property GAAP net operating income of 1.75% - 2.50% for the full year 2014, which is greater than our previous projection of 1.25% to 2.50%. In addition, the Companys projected share of gains on sales of real estate includes approximately $34.2 million from the expected conveyance to the Broad Institute of a condominium interest in 75 Ames Street in Cambridge, Massachusetts in the second quarter of 2014 (this transaction was previously described in the Companys Form 10-K for the fiscal year ended 2011).
Second Quarter 2014 | Full Year 2014 | |||||||||||||||||||
Low | - | High | Low | - | High | |||||||||||||||
Projected EPS (diluted) |
$ | 0.71 | - | $ | 0.73 | $ | 1.95 | - | $ | 2.03 | ||||||||||
Add: |
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Projected Company Share of Real Estate Depreciation and Amortization |
0.81 | - | 0.81 | 3.50 | - | 3.50 | ||||||||||||||
Less: |
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Projected Company Share of Gains on Sales of Real Estate |
0.20 | - | 0.20 | 0.20 | - | 0.20 | ||||||||||||||
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Projected FFO per Share (diluted) |
$ | 1.32 | - | $ | 1.34 | $ | 5.25 | - | $ | 5.33 | ||||||||||
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Boston Properties will host a conference call on Wednesday, April 30, 2014 at 10:00 AM Eastern Time, open to the general public, to discuss the first quarter 2014 results, the 2014 projections and related assumptions, and other related matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731 (International) and entering the passcode 31243111. A replay of the conference call will be available through May 14, 2014, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 31243111. There will also be a live audio webcast of the call which may be accessed on the Companys website at www.bostonproperties.com in the Investor Relations section. Shortly after the call a replay of the webcast will be available in the Investor Relations section of the Companys website and archived for up to twelve months following the call.
3
Additionally, a copy of Boston Properties first quarter 2014 Supplemental Operating and Financial Data and this press release are available in the Investor Relations section of the Companys website at www.bostonproperties.com.
Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of Class A office space, one hotel, three residential properties and four retail properties. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in four markets Boston, New York, San Francisco and Washington, DC.
This press release contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words assumes, believes, estimates, expects, guidance, intends, plans, projects and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties control and could materially affect actual results, performance or achievements. These factors include, without limitation, the Companys ability to satisfy the closing conditions to the pending transactions described above, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions (including the impact of the European sovereign debt issues), the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Companys accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Companys filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the second quarter and full fiscal year 2014, whether as a result of new information, future events or otherwise.
Financial tables follow.
4
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands, except for share amounts) | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Real estate |
$ | 17,258,665 | $ | 17,158,210 | ||||
Construction in progress |
1,564,821 | 1,523,179 | ||||||
Land held for future development |
300,498 | 297,376 | ||||||
Less: accumulated depreciation |
(3,263,208 | ) | (3,161,571 | ) | ||||
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Total real estate |
15,860,776 | 15,817,194 | ||||||
Cash and cash equivalents |
1,179,573 | 2,365,137 | ||||||
Cash held in escrows |
54,240 | 57,201 | ||||||
Investments in securities |
18,026 | 16,641 | ||||||
Tenant and other receivables, net of allowance for doubtful accounts of $1,625 and $1,636, respectively |
37,812 | 59,464 | ||||||
Accrued rental income, net of allowance of $3,448 and $3,636, respectively |
661,730 | 651,603 | ||||||
Deferred charges, net |
861,567 | 884,450 | ||||||
Prepaid expenses and other assets |
178,488 | 184,477 | ||||||
Investments in unconsolidated joint ventures |
127,356 | 126,084 | ||||||
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Total assets |
$ | 18,979,568 | $ | 20,162,251 | ||||
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LIABILITIES AND EQUITY | ||||||||
Liabilities: |
||||||||
Mortgage notes payable |
$ | 4,430,110 | $ | 4,449,734 | ||||
Unsecured senior notes, net of discount |
5,836,290 | 5,835,854 | ||||||
Unsecured exchangeable senior notes, net of discount |
| 744,880 | ||||||
Unsecured line of credit |
| | ||||||
Mezzanine notes payable |
310,735 | 311,040 | ||||||
Related party notes payable |
180,000 | 180,000 | ||||||
Accounts payable and accrued expenses |
218,028 | 202,470 | ||||||
Dividends and distributions payable |
114,799 | 497,242 | ||||||
Accrued interest payable |
178,651 | 167,523 | ||||||
Other liabilities |
556,772 | 578,969 | ||||||
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Total liabilities |
11,825,385 | 12,967,712 | ||||||
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Commitments and contingencies |
| | ||||||
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Noncontrolling interest: |
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Redeemable preferred units of the Operating Partnership |
51,312 | 51,312 | ||||||
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Redeemable interest in property partnership |
100,327 | 99,609 | ||||||
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Equity: |
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Stockholders equity attributable to Boston Properties, Inc. |
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Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding |
| | ||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 and no shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively |
200,000 | 200,000 | ||||||
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,096,211 and 153,062,001 shares issued and 153,017,311 and 152,983,101 shares outstanding at March 31, 2014 and December 31, 2013, respectively |
1,530 | 1,530 | ||||||
Additional paid-in capital |
5,668,230 | 5,662,453 | ||||||
Dividends in excess of earnings |
(153,979 | ) | (108,552 | ) | ||||
Treasury common stock, at cost |
(2,722 | ) | (2,722 | ) | ||||
Accumulated other comprehensive loss |
(10,989 | ) | (11,556 | ) | ||||
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Total stockholders equity attributable to Boston Properties, Inc. |
5,702,070 | 5,741,153 | ||||||
Noncontrolling interests: |
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Common units of the Operating Partnership |
575,381 | 576,333 | ||||||
Property partnerships |
725,093 | 726,132 | ||||||
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Total equity |
7,002,544 | 7,043,618 | ||||||
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Total liabilities and equity |
$ | 18,979,568 | $ | 20,162,251 | ||||
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BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands, except for per share | ||||||||
amounts) | ||||||||
Revenue |
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Rental |
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Base rent |
$ | 455,018 | $ | 373,046 | ||||
Recoveries from tenants |
81,934 | 64,319 | ||||||
Parking and other |
24,333 | 23,437 | ||||||
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Total rental revenue |
561,285 | 460,802 | ||||||
Hotel revenue |
8,193 | 8,291 | ||||||
Development and management services |
5,216 | 8,733 | ||||||
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Total revenue |
574,694 | 477,826 | ||||||
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Expenses |
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Operating |
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Rental |
206,388 | 169,062 | ||||||
Hotel |
6,797 | 7,044 | ||||||
General and administrative |
29,905 | 45,516 | ||||||
Transaction costs |
437 | 443 | ||||||
Impairment loss |
| 8,306 | ||||||
Depreciation and amortization |
154,270 | 119,453 | ||||||
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Total expenses |
397,797 | 349,824 | ||||||
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Operating income |
176,897 | 128,002 | ||||||
Other income (expense) |
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Income from unconsolidated joint ventures |
2,816 | 8,721 | ||||||
Interest and other income |
1,311 | 1,471 | ||||||
Gains from investments in securities |
286 | 735 | ||||||
Interest expense |
(113,554 | ) | (100,433 | ) | ||||
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Income from continuing operations |
67,756 | 38,496 | ||||||
Discontinued operations |
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Income from discontinued operations |
| 2,494 | ||||||
Gain on forgiveness of debt from discontinued operations |
| 20,182 | ||||||
Impairment loss from discontinued operations |
| (3,241 | ) | |||||
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Net income |
67,756 | 57,931 | ||||||
Net income attributable to noncontrolling interests |
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Noncontrolling interests in property partnerships |
(4,354 | ) | (2,574 | ) | ||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
(619 | ) | (1,180 | ) | ||||
Noncontrolling interest - common units of the Operating Partnership |
(6,160 | ) | (4,111 | ) | ||||
Noncontrolling interest in discontinued operations - common units of the Operating Partnership |
| (2,066 | ) | |||||
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Net income attributable to Boston Properties, Inc. |
56,623 | 48,000 | ||||||
Preferred dividends |
(2,589 | ) | (146 | ) | ||||
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Net income attributable to Boston Properties, Inc. common shareholders |
$ | 54,034 | $ | 47,854 | ||||
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Basic earnings per common share attributable to Boston Properties, Inc. common shareholders: |
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Income from continuing operations |
$ | 0.35 | $ | 0.20 | ||||
Discontinued operations |
| 0.12 | ||||||
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Net income |
$ | 0.35 | $ | 0.32 | ||||
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Weighted average number of common shares outstanding |
153,030 | 151,646 | ||||||
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Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders: |
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Income from continuing operations |
$ | 0.35 | $ | 0.20 | ||||
Discontinued operations |
| 0.11 | ||||||
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Net income |
$ | 0.35 | $ | 0.31 | ||||
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Weighted average number of common and common equivalent shares outstanding |
153,169 | 151,952 | ||||||
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BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS (1)
(Unaudited)
Three months ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands, except for per share amounts) |
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Net income attributable to Boston Properties, Inc. common shareholders |
$ | 54,034 | $ | 47,854 | ||||
Add: |
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Preferred dividends |
2,589 | 146 | ||||||
Noncontrolling interest in discontinued operations - common units of the Operating Partnership |
| 2,066 | ||||||
Noncontrolling interest - common units of the Operating Partnership |
6,160 | 4,111 | ||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
619 | 1,180 | ||||||
Noncontrolling interests in property partnerships |
4,354 | 2,574 | ||||||
Impairment loss from discontinued operations |
| 3,241 | ||||||
Less: |
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Income from discontinued operations |
| 2,494 | ||||||
Gain on forgiveness of debt from discontinued operations |
| 20,182 | ||||||
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Income from continuing operations |
67,756 | 38,496 | ||||||
Add: |
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Real estate depreciation and amortization (2) |
158,514 | 142,555 | ||||||
Income from discontinued operations |
| 2,494 | ||||||
Less: |
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Noncontrolling interests in property partnerships share of funds from operations |
19,023 | 3,038 | ||||||
Noncontrolling interest - redeemable preferred units of the Operating Partnership |
619 | 1,180 | ||||||
Preferred dividends |
2,589 | 146 | ||||||
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Funds from operations (FFO) attributable to the Operating Partnership |
204,039 | 179,181 | ||||||
Less: |
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Noncontrolling interest - common units of the Operating Partnerships share of funds from operations |
20,195 | 18,557 | ||||||
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Funds from operations attributable to Boston Properties, Inc. |
$ | 183,844 | $ | 160,624 | ||||
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Boston Properties, Inc.s percentage share of funds from operations - basic |
90.10 | % | 89.86 | % | ||||
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Weighted average shares outstanding - basic |
153,030 | 151,646 | ||||||
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FFO per share basic |
$ | 1.20 | $ | 1.06 | ||||
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Weighted average shares outstanding - diluted |
154,043 | 153,259 | ||||||
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FFO per share diluted |
$ | 1.20 | $ | 1.06 | ||||
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(1) | Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), we calculate Funds from Operations, or FFO, by adjusting net income (loss) attributable to Boston Properties, Inc. (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, impairment losses on depreciable real estate of consolidated real estate, impairment losses on investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate related depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing our comparative operating and financial performance because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a companys real estate between periods or as compared to different companies. |
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.
FFO should not be considered as an alternative to net income attributable to Boston Properties, Inc. (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income attributable to Boston Properties, Inc. and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.
(2) | Real estate depreciation and amortization consists of depreciation and amortization from the Consolidated Statements of Operations of $154,270 and $119,453, our share of unconsolidated joint venture real estate depreciation and amortization of $4,584 and $21,657 and depreciation and amortization from discontinued operations of $0 and $1,738, less corporate-related depreciation and amortization of $340 and $293 for the three months ended March 31, 2014 and 2013, respectively. |
BOSTON PROPERTIES, INC.
PORTFOLIO LEASING PERCENTAGES
% Leased by Location | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Boston |
92.1 | % | 93.9 | % | ||||
New York (1) |
93.3 | % | 93.0 | % | ||||
San Francisco |
86.1 | % | 89.9 | % | ||||
Washington, DC |
95.2 | % | 95.0 | % | ||||
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Total Portfolio |
92.4 | % | 93.4 | % | ||||
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% Leased by Type | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Class A Office Portfolio |
92.7 | % | 93.8 | % | ||||
Office/Technical Portfolio |
85.8 | % | 85.4 | % | ||||
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Total Portfolio |
92.4 | % | 93.4 | % | ||||
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(1) | Beginning in 2014, the Company has reflected its Princeton portfolio as the suburban component of its New York region. |