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bxp-20211026

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): October 26, 2021

BOSTON PROPERTIES, INC.

BOSTON PROPERTIES LIMITED PARTNERSHIP

(Exact Name of Registrants As Specified in its Charter)


Boston Properties, Inc.	Delaware	1-13087	04-2473675
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
Boston Properties Limited Partnership	Delaware	0-50209	04-3372948
	(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 registrants 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))

Securities registered pursuant to Section 12(b) of the Act:

Registrant

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Boston Properties, Inc.

Common Stock, par value $0.01 per share

BXP

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Boston Properties, Inc.:

Emerging growth company ☐

Boston Properties Limited Partnership:

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Boston Properties, Inc. ☐ Boston Properties Limited Partnership ☐

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 October 26, 2021, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the third quarter of 2021. That press release referred to certain supplemental information that is available on the Company’s 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 September 30, 2021.
*99.2						Press release dated October 26 , 2021.
*101.SCH						Inline XBRL Taxonomy Extension Schema Document.
*101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
*101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
*104						Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).

______________

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


BOSTON PROPERTIES, INC.

By:			/s/ MICHAEL E. LABELLE
			Michael E. LaBelle
			Executive Vice President, Chief Financial Officer
			and Treasurer



BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc., its General Partner

By:			/s/ MICHAEL E. LABELLE
			Michael E. LaBelle
			Executive Vice President, Chief Financial Officer
			and Treasurer

Date: October 26, 2021

Document

Exhibit 99.1

https://cdn.kscope.io/db55bdbc78fb583577d39549c1ec8aef-safecoplazab.jpg

https://cdn.kscope.io/db55bdbc78fb583577d39549c1ec8aef-image16.jpg

Supplemental Operating and Financial Data

for the Quarter Ended September 30, 2021

THE COMPANY

Boston Properties, Inc. (NYSE: BXP) (“Boston Properties,” “BXP” or the “Company”) is the largest publicly traded developer, owner, and manager of Class A office properties in the United States, concentrated in six markets - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. Including properties owned by joint ventures, the Company’s complete portfolio totals 52.5 million square feet and 202 properties, including nine properties under construction/redevelopment. The Company’s properties include 183 office properties, 12 retail properties, six residential properties and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy tenants. Boston Properties actively works to promote its growth and operations in a sustainable and responsible manner. The Company has earned a tenth consecutive Global Real Estate Sustainability Benchmark (GRESB) “Green Star” recognition and the highest GRESB 5-star Rating. Boston Properties, an S&P 500 Company, was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde and became a public company in 1997.

FORWARD-LOOKING STATEMENTS

This Supplemental package contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “anticipates,” “believes,” “budgeted,” “could,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. These statements are based on our current plans, expectations, projections and assumptions about future events. 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. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, uncertainties and risks related to the impact of the COVID-19 global pandemic, including the duration, scope and severity of the pandemic domestically and internationally; federal, state and local government actions and restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures on our and our tenants' businesses, financial condition, results of operation, cash flows, liquidity and performance, and the U.S. and international economy and economic activity generally; the speed, effectiveness and distribution of vaccines, whether new or existing actions or measures continue to impact the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay, rent in full or at all in a timely manner; the health, continued service and availability of our personnel, including our key personnel and property management teams; and the effectiveness or lack of effectiveness of government relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19. In addition to the risks specific to COVID-19, other factors include, without limitation, the Company’s 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, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s 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 Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of issuance of this report and are not guarantees of future results, performance or achievements. 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, except as may be required by law.

NON-GAAP FINANCIAL MEASURES

This Supplemental package includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are provided within this Supplemental package. Definitions of these non-GAAP financial measures and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations, and, if applicable, the other purposes for which management uses the measures, can be found in the Definitions section of this Supplemental starting on page 52.

The Company also presents “BXP’s Share” of certain of these measures, which are non-GAAP financial measures that are calculated as the consolidated amount calculated in accordance with GAAP, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest and, in some cases, after priority allocations), minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ percentage ownership interests and, in some cases, after income allocation to private REIT shareholders and their share of fees due to the Company). Management believes that presenting “BXP’s Share” of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because the Company has several significant joint ventures and, in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a significant percentage interest. As a result, management believes that presenting BXP’s Share of various financial measures in this manner can help investors better understand the Company’s financial condition and/or results of operations after taking into account its true economic interest in these joint ventures. The Company cautions investors that the ownership percentages used in calculating “BXP’s Share” of these measures may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, financings and guarantees, liquidations and other matters. As a result, presentations of “BXP’s Share” of a financial measure should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Unless noted otherwise, reconciliations of “BXP’s Share” of these financial measures can be found in the Reconciliations section of this Supplemental package starting on page 56.

GENERAL INFORMATION


Corporate Headquarters	Trading Symbol	Investor Relations	Inquiries
800 Boylston Street	BXP	Boston Properties, Inc.	Inquiries should be directed to
Suite 1900		800 Boylston Street, Suite 1900	Michael E. LaBelle
Boston, MA 02199	Stock Exchange Listing	Boston, MA 02199	Executive Vice President, Chief Financial Officer
www.bxp.com	New York Stock Exchange	investors.bxp.com	at 617.236.3352 or
(t) 617.236.3300		investorrelations@bxp.com	mlabelle@bxp.com
		(t) 617.236.3429

(Cover photo: Safeco Plaza, Seattle, WA)


			Q3 2021
			Table of contents


			Page
OVERVIEW
Company Profile			1
Guidance and assumptions			2

FINANCIAL INFORMATION
Financial Highlights			3
Consolidated Balance Sheets			4
Consolidated Income Statements			5
Funds From Operations (FFO)			6
Funds Available for Distribution (FAD)			7
Net Operating Income (NOI)			8
Same Property Net Operating Income (NOI) by Reportable Segment			10
Capital Expenditures, Tenant Improvement Costs and Leasing Commissions			12
Acquisitions and Dispositions			13

DEVELOPMENT ACTIVITY
Construction in Progress			14
Land Parcels and Purchase Options			15

LEASING ACTIVITY
Leasing Activity			16

PROPERTY STATISTICS
Portfolio Overview			17
Residential and Hotel Performance			18
In-Service Property Listing			20
Top 20 Tenants Listing and Portfolio Tenant Diversification			24
Occupancy by Location			25

DEBT AND CAPITALIZATION
Capital Structure			26
Debt Analysis			27
Senior Unsecured Debt Covenant Compliance Ratios			28
Net Debt to EBITDAre			29
Debt Ratios			30

JOINT VENTURES
Consolidated Joint Ventures			31
Unconsolidated Joint Ventures			33

LEASE EXPIRATION ROLL-OUT
Total In-Service Properties			36
Boston			37
Los Angeles			39
New York			41
San Francisco			43
Washington, DC			45
CBD			47
Suburban			49

RESEARCH COVERAGE, DEFINITIONS AND RECONCILIATIONS
Research Coverage			51
Definitions			52
Reconciliations			56
Consolidated Income Statement - Prior Year			64


			Q3 2021
			Company profile

SNAPSHOT

(as of September 30, 2021)


Fiscal Year-End			December 31
Total Properties (includes unconsolidated joint ventures and properties under development/redevelopment)			202
Total Square Feet (includes unconsolidated joint ventures and properties under development/redevelopment)			52.5 million
Common shares outstanding, plus common units and LTIP units (other than unearned Multi-Year Long-Term Incentive Program (MYLTIP) Units) on an as-converted basis 1, 2			173.7 million
Closing Price, at the end of the quarter			$108.35 per share
Dividend - Quarter/Annualized			$0.98/$3.92 per share
Dividend Yield			3.6%
Consolidated Market Capitalization 2			$32.2 billion
BXP’s Share of Market Capitalization 2, 3			$32.3 billion
Senior Debt Ratings			BBB+ (S&P); Baa1 (Moody’s)

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 key tenets of our business strategy are to:

•maintain a keen focus on select markets that exhibit the strongest economic growth and investment characteristics over time - currently Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC;

•invest in the highest quality buildings (primarily office) with unique amenities and desirable locations that are able to maintain high occupancy rates and achieve premium rental rates through economic cycles;

•maintain scale and a full-service real estate capability (leasing, development, construction and property management) in our markets to ensure we (1) see all relevant investment deal flow, (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle, (3) provide superior service to our tenants and (4) develop and manage our assets in the most sustainable manner possible;

•be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing new properties in times of growth and selling assets at attractive prices, resulting in continuous portfolio refreshment;

•ensure a strong balance sheet to maintain consistent access to capital and the ability to make new investments at opportune times; and

•foster a culture and reputation of integrity, excellence and purposefulness, making us the employer of choice for talented real estate professionals, the landlord and developer of choice for our customers, as well as the counterparty of choice for real estate industry participants.

MANAGEMENT

Board of Directors

Management

Joel I. Klein

Chairman of the Board

Owen D. Thomas

Chief Executive Officer

Owen D. Thomas

Chief Executive Officer

Douglas T. Linde

President

Douglas T. Linde

President

Raymond A. Ritchey

Senior Executive Vice President

Kelly A. Ayotte

Chair of Compensation Committee

Michael E. LaBelle

Executive Vice President, Chief Financial Officer and Treasurer

Bruce W. Duncan

Bryan J. Koop

Executive Vice President, Boston Region

Karen E. Dykstra

John F. Powers

Executive Vice President, New York Region

Carol B. Einiger

Robert E. Pester

Executive Vice President, San Francisco Region

Diane J. Hoskins

Chair of Sustainability Committee

Jonathan D. Lange

Senior Vice President, Los Angeles Region

Matthew J. Lustig

Chair of Nominating & Corporate Governance Committee

Peter V. Otteni

Senior Vice President, Co-Head of the Washington, DC Region

John J. Stroman

Senior Vice President, Co-Head of the Washington, DC Region

David A. Twardock

Chair of Audit Committee

Frank D. Burt

Senior Vice President, Chief Legal Officer

William H. Walton, III

Donna D. Garesche

Senior Vice President, Chief Human Resources Officer

Michael R. Walsh

Senior Vice President, Chief Accounting Officer

James J. Whalen

Senior Vice President, Chief Information & Technology Officer

____________________

1Common units and LTIP units are units of limited partnership interest in Boston Properties Limited Partnership, the entity through which the Company conducts substantially all of its business.

2For additional detail, see page 26.

3For the Company’s definitions and related disclosures, see the Definitions and Reconciliations sections of this Supplemental package starting on page 52.


			Q3 2021
			Guidance and assumptions

GUIDANCE

The Company’s guidance for the full year 2021 and full year 2022 for diluted earnings per common share attributable to Boston Properties, Inc. (EPS) and diluted funds from operations (FFO) per common share attributable to Boston Properties, Inc. is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, the timing of the lease-up of available space and the earnings impact of the events referenced in the Company’s earnings release issued on October 26, 2021 and those referenced during the Company’s conference call scheduled for October 27, 2021. Except as otherwise publicly disclosed, the estimates do not include any material (1) possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, (2) possible gains or losses from capital markets activity (including, without limitation, due to the early extinguishment of debt and resulting from hedging activity and derivatives), (3) possible future write-offs or reinstatement of accounts receivable and accrued rent balances or (4) 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, impairment losses on depreciable real estate 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 on depreciable real estate, or gains and losses associated with disposition activities. For a complete definition of FFO and statements of the reasons why management believes it provides useful information to investors, see page 54. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.


			Full Year 2021				Full Year 2022
			Low		High		Low		High
Projected EPS (diluted)			$	3.11	$	3.13	$	2.97	$	3.17
	Add:
		Projected Company share of real estate depreciation and amortization	4.14		4.14		4.28		4.28
		Projected Company share of (gains)/losses on sales of real estate	(0.75)		(0.75)		—		—
Projected FFO per share (diluted)			$	6.50	$	6.52	$	7.25	$	7.45

ASSUMPTIONS

(dollars in thousands)


		Full Year 2021						Full Year 2022
		Low			High			Low			High
Operating property activity:
	Average In-service portfolio occupancy	88.00		%	89.00		%	88.00		%	90.00		%
	Increase in BXP’s Share of Same Property net operating income (excluding termination income)	5.00		%	6.00		%	2.00		%	3.50		%
	Increase in BXP’s Share of Same Property net operating income - cash (excluding termination income)	4.00		%	5.00		%	5.50		%	6.50		%
	BXP’s Share of Non Same Properties’ incremental contribution to net operating income over prior year (excluding asset sales)	$	26,000		$	28,000		$	72,000		$	80,000
	BXP’s Share of incremental net operating income related to asset sales over prior year	$	(15,000)		$	(13,000)		$	(11,000)		$	(9,000)
	BXP’s Share of straight-line rent and fair value lease revenue (non-cash revenue)	$	115,000		$	120,000		$	90,000		$	115,000
	Termination income	$	12,000		$	13,000		$	—		$	4,000

Other revenue (expense):
	Development and management services revenue	$	25,000		$	26,000		$	22,000		$	28,000
	General and administrative expense 1	$	(148,000)		$	(147,000)		$	(157,000)		$	(151,000)
	Net interest expense 2	$	(469,000)		$	(466,000)		$	(415,000)		$	(405,000)

Noncontrolling interest:
	Noncontrolling interest in property partnerships’ share of FFO	$	(141,000)		$	(139,000)		$	(147,000)		$	(143,000)

________________

1 Excludes estimated changes in the market value of the Company’s deferred compensation plan and Gains (losses) from investments in securities.

2 2021 Net interest expense assumption includes the charge of approximately $43 million related to the early extinguishment of debt in connection with the early redemption on October 15, 2021 of the Company’s $1.0 billion aggregate principal amount of 3.85% unsecured senior notes that was scheduled to mature in February 2023.


			Q3 2021
			Financial highlights

(unaudited and in thousands, except ratios and per share amounts)


	Three Months Ended
	30-Sep-21			30-Jun-21
Net income attributable to Boston Properties, Inc.	$	108,297		$	111,703
Net income attributable to Boston Properties, Inc. per share - diluted	$	0.69		$	0.71
FFO attributable to Boston Properties, Inc. 1	$	270,477		$	268,642
Diluted FFO per share 1	$	1.73		$	1.72
Dividends per common share	$	0.98		$	0.98
Funds available for distribution to common shareholders and common unitholders (FAD) 2	$	236,608		$	178,341

Selected items:
Revenue	$	730,056		$	713,807
Recoveries from tenants	$	107,766		$	100,433
Service income from tenants	$	1,874		$	1,516
BXP’s Share of revenue 3	$	696,313		$	683,273
BXP’s Share of straight-line rent 3	$	35,811		$	30,855
BXP’s Share of fair value lease revenue 3, 4	$	1,793		$	1,193
BXP’s Share of termination income 3	$	1,847		$	6,067
Ground rent expense	$	3,249		$	3,261
Capitalized interest	$	11,586		$	13,014
Capitalized wages	$	3,366		$	3,459
Loss from unconsolidated joint ventures	$	(5,597)		$	(1,373)
BXP’s share of FFO from unconsolidated joint ventures 5	$	12,206		$	13,977
Net income attributable to noncontrolling interests in property partnerships	$	18,971		$	17,164
FFO attributable to noncontrolling interests in property partnerships 6	$	35,744		$	34,277

Balance Sheet items:
Above-market rents (included within Prepaid Expenses and Other Assets)	$	1,906		$	2,207
Below-market rents (included within Other Liabilities)	$	24,823		$	26,271
Accrued rental income liability (included within Other Liabilities)	$	132,580		$	136,085

Ratios:
Interest Coverage Ratio (excluding capitalized interest) 7	3.79			3.84
Interest Coverage Ratio (including capitalized interest) 7	3.37			3.37
Fixed Charge Coverage Ratio 7	2.94			2.83
BXP’s Share of Net Debt to BXP’s Share of EBITDAre (Annualized) 8	7.70			7.44
Change in BXP’s Share of Same Store Net Operating Income (NOI) (excluding termination income) 9	7.4		%	8.9		%
Change in BXP’s Share of Same Store NOI (excluding termination income) - cash 9	9.2		%	7.5		%
FAD Payout Ratio 2	71.97		%	95.47		%
Operating Margins [(rental revenue - rental expense)/rental revenue]	63.9		%	64.6		%
Occupancy of In-Service Properties	88.4		%	88.6		%

Capitalization:
Consolidated Debt	$	13,378,350		$	12,536,065
BXP’s Share of Debt 10	$	13,477,453		$	12,534,659
Consolidated Market Capitalization	$	32,196,903		$	32,436,223
Consolidated Debt/Consolidated Market Capitalization	41.55		%	38.65		%
BXP’s Share of Market Capitalization 10	$	32,296,006		$	32,434,817
BXP’s Share of Debt/BXP’s Share of Market Capitalization 10	41.73		%	38.65		%

_____________

1For a quantitative reconciliation of FFO attributable to Boston Properties, Inc. and Diluted FFO per share, see page 6.

2For a quantitative reconciliation of FAD, see page 7. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.

3See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

4Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.

5For a quantitative reconciliation for the three months ended September 30, 2021, see page 35.

6For a quantitative reconciliation for the three months ended September 30, 2021, see page 32.

7For a quantitative reconciliation for the three months ended September 30, 2021 and June 30, 2021, see page 30.

8For a quantitative reconciliation for the three months ended September 30, 2021 and June 30, 2021, see page 29.

9For a quantitative reconciliation for the three months ended September 30, 2021 and June 30, 2021, see pages 10, 62 and 63.

10For a quantitative reconciliation for September 30, 2021, see page 26.


			Q3 2021
			Consolidated Balance Sheets

(unaudited and in thousands)


	30-Sep-21		30-Jun-21
ASSETS
Real estate	$	22,088,835	$	22,012,095
Construction in progress	1,054,531		908,061
Land held for future development	568,034		497,019
Right of use assets - finance leases	237,845		237,765
Right of use assets - operating leases	170,085		170,331
Less accumulated depreciation	(5,850,397)		(5,752,818)
Total real estate	18,268,933		18,072,453
Cash and cash equivalents	1,002,728		557,307
Cash held in escrows	79,193		79,973
Investments in securities	41,517		41,476
Tenant and other receivables, net	61,269		58,624
Related party note receivable, net	78,144		77,872
Notes receivable, net	19,297		19,087
Accrued rental income, net	1,203,840		1,172,411
Deferred charges, net	622,807		627,338
Prepaid expenses and other assets	97,560		46,946
Investments in unconsolidated joint ventures	1,373,522		1,305,589
Total assets	$	22,848,810	$	22,059,076

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,898,699	$	2,901,709
Unsecured senior notes, net	10,479,651		9,634,356
Unsecured line of credit	—		—
Lease liabilities - finance leases	243,562		243,381
Lease liabilities - operating leases	204,137		226,594
Accounts payable and accrued expenses	331,687		305,969
Dividends and distributions payable	169,739		169,718
Accrued interest payable	87,408		107,386
Other liabilities	370,403		370,990
Total liabilities	14,785,286		13,960,103

Commitments and contingencies	—		—
Redeemable deferred stock units	8,775		8,980

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding	—		—
Common stock, $0.01 par value, 250,000,000 shares authorized, 156,285,391 and 156,214,859 issued and 156,206,491 and 156,135,959 outstanding at September 30, 2021 and June 30, 2021, respectively	1,562		1,561
Additional paid-in capital	6,415,802		6,405,916
Dividends in excess of earnings	(657,021)		(612,247)
Treasury common stock at cost, 78,900 shares at September 30, 2021 and June 30, 2021	(2,722)		(2,722)
Accumulated other comprehensive loss	(40,803)		(43,166)
Total stockholders’ equity attributable to Boston Properties, Inc.	5,716,818		5,749,342

Noncontrolling interests:
Common units of the Operating Partnership	609,830		615,308
Property partnerships	1,728,101		1,725,343
Total equity	8,054,749		8,089,993

Total liabilities and equity	$	22,848,810	$	22,059,076


			Q3 2021
			Consolidated Income Statements

(unaudited and in thousands, except per share amounts)


	Three Months Ended
	30-Sep-21		30-Jun-21
Revenue
Lease	$	692,260	$	684,025
Parking and other	21,266		17,864
Insurance proceeds 1	2,241		418
Hotel revenue	5,189		1,561
Development and management services	6,094		7,284
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,655
Total revenue	730,056		713,807
Expenses
Operating	124,153		117,769
Real estate taxes	131,718		130,440
Demolition costs	169		92
Restoration expenses related to insurance claim 1	2,241		402
Hotel operating	3,946		1,996
General and administrative 2	34,560		38,405
Payroll and related costs from management services contracts	3,006		2,655
Transaction costs	1,888		751
Depreciation and amortization	179,412		183,838
Total expenses	481,093		476,348
Other income (expense)
Loss from unconsolidated joint ventures	(5,597)		(1,373)
Gains on sales of real estate	348		7,756
Gains (losses) from investments in securities 2	(190)		2,275
Interest and other income (loss)	1,520		1,452

Interest expense	(105,794)		(106,319)
Net income	139,250		141,250
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships	(18,971)		(17,164)
Noncontrolling interest - common units of the Operating Partnership 3	(11,982)		(12,383)
Net income attributable to Boston Properties, Inc.	$	108,297	$	111,703


INCOME PER SHARE OF COMMON STOCK (EPS)

Net income attributable to Boston Properties, Inc. per share - basic	$	0.69	$	0.72
Net income attributable to Boston Properties, Inc. per share - diluted	$	0.69	$	0.71

_____________

1Amounts relate to damage at one of the Company’s properties in New York City due to a water main break.

2General and administrative expense includes $(0.2) million and $2.3 million and Gains (losses) from investments in securities include $(0.2) million and $2.3 million for the three months ended September 30, 2021 and June 30, 2021, respectively, related to the Company’s deferred compensation plan.

3For additional detail, see page 6.


			Q3 2021
			Funds from operations (FFO) 1

(unaudited and dollars in thousands, except per share amounts)


	Three Months Ended
	30-Sep-21			30-Jun-21
Net income attributable to Boston Properties, Inc.	$	108,297		$	111,703
Add:
Noncontrolling interest - common units of the Operating Partnership	11,982			12,383
Noncontrolling interests in property partnerships	18,971			17,164
Net income	139,250			141,250
Add:
Depreciation and amortization expense	179,412			183,838
Noncontrolling interests in property partnerships' share of depreciation and amortization 2	(16,773)			(17,113)
BXP's share of depreciation and amortization from unconsolidated joint ventures 3	17,803			15,350
Corporate-related depreciation and amortization	(443)			(444)
Less:
Gains on sales of real estate	348			7,756
Noncontrolling interests in property partnerships	18,971			17,164
FFO attributable to the Operating Partnership (including Boston Properties, Inc.) (Basic FFO)	299,930			297,961
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO	29,453			29,319
FFO attributable to Boston Properties, Inc.	$	270,477		$	268,642

Boston Properties, Inc.’s percentage share of Basic FFO	90.18		%	90.16		%
Noncontrolling interest’s - common unitholders percentage share of Basic FFO	9.82		%	9.84		%
Basic FFO per share	$	1.73		$	1.72
Weighted average shares outstanding - basic	156,183			156,107
Diluted FFO per share	$	1.73		$	1.72
Weighted average shares outstanding - diluted	156,598			156,519

RECONCILIATION TO DILUTED FFO


	Three Months Ended
	30-Sep-21		30-Jun-21
Basic FFO	$	299,930	$	297,961
Add:
Effect of dilutive securities - stock-based compensation	—		—
Diluted FFO	299,930		297,961
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO	29,393		29,259
Boston Properties, Inc.’s share of Diluted FFO	$	270,537	$	268,702

RECONCILIATION OF SHARES/UNITS FOR DILUTED FFO


	Three Months Ended
	30-Sep-21		30-Jun-21
Shares/units for Basic FFO	173,194		173,150
Add:
Effect of dilutive securities - stock-based compensation (shares/units)	415		412
Shares/units for Diluted FFO	173,609		173,562
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units)	17,011		17,043
Boston Properties, Inc.’s share of shares/units for Diluted FFO	156,598		156,519

Boston Properties, Inc.’s percentage share of Diluted FFO	90.20	%	90.18	%

_____________

1See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

2For a quantitative reconciliation for the three months ended September 30, 2021, see page 32.

3For a quantitative reconciliation for the three months ended September 30, 2021, see page 35.


			Q3 2021
			Funds available for distributions (FAD) 1

(dollars in thousands)


	Three Months Ended
	30-Sep-21			30-Jun-21
Net income attributable to Boston Properties, Inc.	$	108,297		$	111,703
Add:
Noncontrolling interest - common units of the Operating Partnership	11,982			12,383
Noncontrolling interests in property partnerships	18,971			17,164
Net income	139,250			141,250
Add:
Depreciation and amortization expense	179,412			183,838
Noncontrolling interests in property partnerships’ share of depreciation and amortization 2	(16,773)			(17,113)
BXP’s share of depreciation and amortization from unconsolidated joint ventures 3	17,803			15,350
Corporate-related depreciation and amortization	(443)			(444)
Less:
Gains on sales of real estate	348			7,756
Noncontrolling interests in property partnerships	18,971			17,164
Basic FFO	299,930			297,961
Add:
BXP’s Share of lease transaction costs that qualify as rent inducements 1, 4	3,379			(132)
BXP’s Share of hedge amortization 1	1,446			1,446
BXP’s Share of straight-line ground rent expense adjustment 1, 5	996			698
Stock-based compensation	8,440			13,993
Non-real estate depreciation	443			444
Unearned portion of capitalized fees from consolidated joint ventures 6	2,207			603

Less:
BXP’s Share of straight-line rent 1	35,811			30,855
BXP’s Share of fair value lease revenue 1, 7	1,793			1,193

BXP’s Share of 2nd generation tenant improvements and leasing commissions 1	25,826			82,476
BXP’s Share of maintenance capital expenditures 1, 8	16,800			22,145
Hotel improvements, equipment upgrades and replacements	3			3
Funds available for distribution to common shareholders and common unitholders (FAD) (A)	$	236,608		$	178,341

Distributions to common shareholders and unitholders (excluding any special distributions) (B)	$	170,286		$	170,266

FAD Payout Ratio1 (B÷A)	71.97		%	95.47		%

_____________

1See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

2For a quantitative reconciliation for the three months ended September 30, 2021, see page 32.

3For a quantitative reconciliation for the three months ended September 30, 2021, see page 35.

4Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the period the lease commences.

5Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur by the end of 2023 with no payments thereafter. The Company is recognizing this expense on a straight-line basis over the 99-year term of the ground and air rights lease, see page 3.

6See page 58 for additional information.

7Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.

8Maintenance capital expenditures do not include capital expenditures that are planned at the time of acquisition or capital expenditures incurred in connection with repositioning activities.


			Q3 2021
			Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI)

(in thousands)


	Three Months Ended
	30-Sep-21		30-Sep-20
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	$	89,854

Preferred dividends	—		2,625
Net income attributable to Boston Properties, Inc.	108,297		92,479
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership	11,982		10,020
Noncontrolling interest in property partnerships	18,971		15,561
Net income	139,250		118,060
Add:
Interest expense	105,794		110,993


Depreciation and amortization expense	179,412		166,456
Transaction costs	1,888		307
Payroll and related costs from management services contracts	3,006		2,896
General and administrative expense	34,560		27,862
Less:
Interest and other income (loss)	1,520		(45)
Gains (losses) from investments in securities	(190)		1,858
Gains (losses) on sales of real estate	348		(209)
Loss from unconsolidated joint ventures	(5,597)		(6,873)
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896
Development and management services revenue	6,094		7,281
Net Operating Income (NOI)	458,729		421,666
Add:
BXP’s share of NOI from unconsolidated joint ventures 1	24,266		24,938
Less:
Partners’ share of NOI from consolidated joint ventures (after income allocation to private REIT shareholders) 2	47,800		42,160
BXP’s Share of NOI	435,195		404,444
Less:
Termination income	1,874		3,406
BXP’s share of termination income from unconsolidated joint ventures 1	(17)		—
Add:
Partners’ share of termination income (loss) from consolidated joint ventures 2	10		556
BXP’s Share of NOI (excluding termination income)	$	433,348	$	401,594

Net Operating Income (NOI)	$	458,729	$	421,666
Less:
Termination income	1,874		3,406
NOI from non Same Properties (excluding termination income) 3	5,227		1,842
Same Property NOI (excluding termination income)	451,628		416,418
Less:
Partners’ share of NOI from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) 2	47,790		41,604
Add:
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) 3	1,502		(70)
BXP’s share of NOI from unconsolidated joint ventures (excluding termination income) 1	24,283		24,938
Less:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) 3	1,827		1,394
BXP’s Share of Same Property NOI (excluding termination income)	$	427,796	$	398,288

_____________

1For a quantitative reconciliation for the three months ended September 30, 2021, see page 61.

2For a quantitative reconciliation for the three months ended September 30, 2021, see pages 58-59.

3Pages 20-23 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, Same Properties exclude properties that were sold prior to September 30, 2021 and therefore are no longer a part of the Company’s property portfolio.


			Q3 2021
			Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI) - cash

(in thousands)


	Three Months Ended
	30-Sep-21		30-Sep-20
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	$	89,854

Preferred dividends	—		2,625
Net income attributable to Boston Properties, Inc.	108,297		92,479
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership	11,982		10,020
Noncontrolling interest in property partnerships	18,971		15,561
Net income	139,250		118,060
Add:
Interest expense	105,794		110,993


Depreciation and amortization expense	179,412		166,456
Transaction costs	1,888		307
Payroll and related costs from management services contracts	3,006		2,896
General and administrative expense	34,560		27,862
Less:
Interest and other income (loss)	1,520		(45)
Gains (losses) from investments in securities	(190)		1,858
Gains (losses) on sales of real estate	348		(209)
Loss from unconsolidated joint ventures	(5,597)		(6,873)
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896
Development and management services revenue	6,094		7,281
Net Operating Income (NOI)	458,729		421,666
Less:
Straight-line rent	36,675		46,713
Fair value lease revenue	1,408		(662)
Termination income	1,874		3,406
Add:
Straight-line ground rent expense adjustment 1	748		799
Lease transaction costs that qualify as rent inducements 2	4,090		3,966
NOI - cash (excluding termination income)	423,610		376,974
Less:
NOI - cash from non Same Properties (excluding termination income) 3	3,732		1,542
Same Property NOI - cash (excluding termination income)	419,878		375,432
Less:
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) 4	45,150		35,318
Add:
Partners’ share of NOI - cash from non Same Properties from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) 3	1,075		(64)
BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income) 5	21,619		22,288
Less:
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) 3	1,634		(124)
BXP’s Share of Same Property NOI - cash (excluding termination income)	$	395,788	$	362,462

_____________

1In light of the front-ended, uneven rental payments required by the Company’s 99-year ground and air rights lease for the 100 Clarendon Street garage and Back Bay Transit Station in Boston, MA, and to make period-to-period comparisons more meaningful to investors, the adjustment does not include the straight-line impact of approximately $40 and $98 for the three months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, the Company has remaining lease payments aggregating approximately $25.4 million, all of which it expects to incur by the end of 2023 with no payments thereafter. Under GAAP, the Company recognizes expense of $(87) per quarter on a straight-line basis over the term of the lease. However, unlike more traditional ground and air rights leases, the timing and amounts of the rental payments by the Company correlate to the uneven timing and funding by the Company of capital expenditures related to improvements at Back Bay Transit Station. As a result, the amounts excluded from the adjustment each quarter through 2023 may vary significantly.

2Consist of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 7.

4For a quantitative reconciliation for the three months ended September 30, 2021, see page 59.

5For a quantitative reconciliation for the three months ended September 30, 2021, see page 61.


			Q3 2021
			Same property net operating income (NOI) by reportable segment

(dollars in thousands)


	Office 1								Hotel & Residential
	Three Months Ended				$		%		Three Months Ended				$		%
	30-Sep-21		30-Sep-20		Change		Change		30-Sep-21		30-Sep-20		Change		Change
Rental Revenue 2	$	696,372	$	668,369					$	15,276	$	9,784
Less: Termination income	1,874		2,715						—		691
Rental revenue (excluding termination income) 2	694,498		665,654		$	28,844	4.3	%	15,276		9,093		$	6,183	68.0	%
Less: Operating expenses and real estate taxes	249,844		250,951		(1,107)		(0.4)	%	8,302		7,378		924		12.5	%
NOI (excluding termination income) 2, 3	$	444,654	$	414,703	$	29,951	7.2	%	$	6,974	$	1,715	$	5,259	306.6	%

Rental revenue (excluding termination income) 2	$	694,498	$	665,654	$	28,844	4.3	%	$	15,276	$	9,093	$	6,183	68.0	%
Less: Straight-line rent and fair value lease revenue	36,596		45,598		(9,002)		(19.7)	%	(8)		153		(161)		(105.2)	%
Add: Lease transaction costs that qualify as rent inducements 4	4,042		3,966		76		1.9	%	48		—		48		100.0	%
Subtotal	661,944		624,022		37,922		6.1	%	15,332		8,940		6,392		71.5	%
Less: Operating expenses and real estate taxes	249,844		250,951		(1,107)		(0.4)	%	8,302		7,378		924		12.5	%
Add: Straight-line ground rent expense 5	748		799		(51)		(6.4)	%	—		—		—		—	%
NOI - cash (excluding termination income) 2, 3	$	412,848	$	373,870	$	38,978	10.4	%	$	7,030	$	1,562	$	5,468	350.1	%

	Consolidated Total 1 (A)								BXP’s share of Unconsolidated Joint Ventures (B)
	Three Months Ended				$		%		Three Months Ended				$		%
	30-Sep-21		30-Sep-20		Change		Change		30-Sep-21		30-Sep-20		Change		Change
Rental Revenue 2	$	711,648	$	678,153					$	37,933	$	39,390
Less: Termination income	1,874		3,406						(17)		—
Rental revenue (excluding termination income) 2	709,774		674,747		$	35,027	5.2	%	37,950		39,390		$	(1,440)	(3.7)	%
Less: Operating expenses and real estate taxes	258,146		258,329		(183)		(0.1)	%	15,494		15,846		(352)		(2.2)	%
NOI (excluding termination income) 2, 3	$	451,628	$	416,418	$	35,210	8.5	%	$	22,456	$	23,544	$	(1,088)	(4.6)	%

Rental revenue (excluding termination income) 2	$	709,774	$	674,747	$	35,027	5.2	%	$	37,950	$	39,390	$	(1,440)	(3.7)	%
Less: Straight-line rent and fair value lease revenue	36,588		45,751		(9,163)		(20.0)	%	2,838		1,004		1,834		182.7	%
Add: Lease transaction costs that qualify as rent inducements 4	4,090		3,966		124		3.1	%	367		(128)		495		386.7	%
Subtotal	$	677,276	$	632,962	44,314		7.0	%	35,479		38,258		(2,779)		(7.3)	%
Less: Operating expenses and real estate taxes	258,146		258,329		(183)		(0.1)	%	15,494		15,846		(352)		(2.2)	%
Add: Straight-line ground rent expense 5	748		799		(51)		(6.4)	%	—		—		—		—	%
NOI - cash (excluding termination income) 2, 3	$	419,878	$	375,432	$	44,446	11.8	%	$	19,985	$	22,412	$	(2,427)	(10.8)	%

	Partners’ share of Consolidated Joint Ventures (C)								BXP’s Share 3, 6, 7, 8
	Three Months Ended				$		%		Three Months Ended				$		%
	30-Sep-21		30-Sep-20		Change		Change		30-Sep-21		30-Sep-20		Change		Change
Rental Revenue 2	$	75,191	$	71,395					$	674,390	$	646,148
Less: Termination income	10		556						1,847		2,850
Rental revenue (excluding termination income) 2	75,181		70,839		$	4,342	6.1	%	672,543		643,298		$	29,245	4.5	%
Less: Operating expenses and real estate taxes	28,893		29,165		(272)		(0.9)	%	244,747		245,010		(263)		(0.1)	%
NOI (excluding termination income) 2, 3	$	46,288	$	41,674	$	4,614	11.1	%	$	427,796	$	398,288	$	29,508	7.4	%

Rental revenue (excluding termination income) 2	$	75,181	$	70,839	$	4,342	6.1	%	$	672,543	$	643,298	$	29,245	4.5	%
Less: Straight-line rent and fair value lease revenue	3,291		7,165		(3,874)		(54.1)	%	36,135		39,590		(3,455)		(8.7)	%
Add: Lease transaction costs that qualify as rent inducements 4	1,078		873		205		23.5	%	3,379		2,965		414		14.0	%
Subtotal	72,968		64,547		8,421		13.0	%	639,787		606,673		33,114		5.5	%
Less: Operating expenses and real estate taxes	28,893		29,165		(272)		(0.9)	%	244,747		245,010		(263)		(0.1)	%
Add: Straight-line ground rent expense 5	—		—		—		—	%	748		799		(51)		(6.4)	%
NOI - cash (excluding termination income) 2, 3	$	44,075	$	35,382	$	8,693	24.6	%	$	395,788	$	362,462	$	33,326	9.2	%

___________________

1Includes 100% share of consolidated joint ventures that are a Same Property.

2See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

3For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding termination income) and NOI - cash (excluding termination income), see pages 8-9.

4Consist of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 7.

5Excludes the straight-line impact of approximately $40 and $98 for the three months ended September 30, 2021 and 2020, respectively, in connection with the Company’s 99-year ground and air rights lease at 100 Clarendon Street garage and Back Bay Transit Station.


			Q3 2021
			Same property net operating income (NOI) by reportable segment (continued)

6BXP’s Share equals (A) + (B) - (C).

7BXP’s Share of Same Store NOI (excluding termination income) increased $29,508 compared to Q3 2020. Included in the Q3 2020 comparison are BXP’s Share of $5,931 in write-offs associated with accrued rent, net and $3,790 in write-offs associated with accounts receivable, net. These items increased BXP’s Share of Same Store NOI (excluding termination income) by $9,721.

8BXP’s Share of Same Store NOI-cash (excluding termination income) increased $33,326 compared to Q3 2020. Included in the Q3 2020 comparison is BXP’s Share of $3,790 in write-offs associated with accounts receivable, net. Cash rent abatements and deferrals primarily related to COVID-19 decreased approximately $8,812 in Q3 2021 compared to Q3 2020. These items increased BXP’s Share of Same Store NOI-cash (excluding termination income) by $12,602. For additional information, see page 56.


			Q3 2021
			Capital expenditures, tenant improvement costs and leasing commissions

(dollars in thousands, except PSF amounts)

CAPITAL EXPENDITURES


	Three Months Ended
	30-Sep-21		30-Jun-21
Maintenance capital expenditures	$	17,779	$	23,851
Planned capital expenditures associated with acquisition properties	—		—
Repositioning capital expenditures	—		(10)
Hotel improvements, equipment upgrades and replacements	3		3
Subtotal	17,782		23,844
Add:
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (JVs)	192		380
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated JVs	786		1,156
BXP’s share of repositioning capital expenditures from unconsolidated JVs	—		—
Less:
Partners’ share of maintenance capital expenditures from consolidated JVs	1,171		2,086
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated JVs	—		—
Partners’ share of repositioning capital expenditures from consolidated JVs	—		—
BXP’s Share of Capital Expenditures 1	$	17,589	$	23,294

2nd GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS 2


	Three Months Ended
	30-Sep-21		30-Jun-21
Square feet	718,572		1,354,986
Tenant improvements and lease commissions PSF	$	43.95	$	74.26

___________________

1See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

2Includes 100% of unconsolidated joint ventures.


			Q3 2021
			Acquisitions and dispositions

For the period from January 1, 2021 through September 30, 2021

(dollars in thousands)

ACQUISITIONS


				Investment
Property	Location	Date Acquired	Square Feet	Initial		Anticipated Future		Total		In-service Leased (%)
153 & 211 Second Avenue	Waltham, MA	June 2, 2021	136,882	$	100,176	$	5,000	$	105,176	100.0	%
Shady Grove Bio+Tech Campus 1	Rockville, MD	August 2, 2021	233,452	116,500		—		116,500		64.4	%
Safeco Plaza 2	Seattle, WA	September 1, 2021	765,139	465,000		40,000		505,000		90.9	%
Total Acquisitions			1,135,473	$	681,676	$	45,000	$	726,676	86.6	%

DISPOSITIONS


Property	Location	Date Disposed	Square Feet	Gross Sales Price		Net Cash Proceeds		Book Gain
Annapolis Junction Buildings Six and Seven 3	Annapolis, MD	March 30, 2021	246,568	$	65,948	$	17,600	$	10,257
6595 Springfield Center Drive 4	Springfield, VA	December 13, 2018	N/A	N/A		N/A		8,104
Total Dispositions			246,568	$	65,948	$	17,600	$	18,361

________________

1Shady Grove Bio+Tech Campus is an approximately 435,000 net rentable square foot, seven-building office park situated on an approximately 31-acre site. The Company intends to reposition three of the buildings, which are currently vacant, to support life sciences uses. These three buildings are not part of the Company’s in-service portfolio and are included within Land Held for Future Development on the Company’s Consolidated Balance Sheet. The Company anticipates it will redevelop or convert the remaining four buildings to lab or life sciences-related uses as each becomes vacant.

2The acquisition was completed through a newly formed joint venture with two institutional partners. Each partner owns approximately one-third of the joint venture. Each of the institutional partners invested approximately $71.9 million of cash for its ownership interest in the joint venture. The Company invested approximately $72.6 million in the joint venture and is providing customary operating, property management and leasing services to the venture. The purchase price was funded with cash and proceeds from a new mortgage loan secured by the property.

3Completed the sale of Annapolis Junction Buildings Six and Seven, two Class A office properties in Annapolis, Maryland totaling approximately 247,000 square feet, for a gross sales price of approximately $65.9 million. The Company had a 50% ownership interest in the joint venture that owned the properties. Net cash proceeds to the Company totaled approximately $17.6 million after repayment of the Company's share of debt totaling approximately $15.1 million. With the sale of Annapolis Junction Buildings Six and Seven, the Company no longer has any assets in Annapolis, Maryland.

4The Company sold its 6595 Springfield Center Drive development project located in Springfield, Virginia. Concurrently with the sale, the Company agreed to act as development manager and guaranteed the completion of the project. The Company earned a development fee of approximately $7.9 million during the development of this building. Upon completion of the project, the total cost of development was determined to be below the estimated total investment at the time of sale. As a result, the Company recognized a gain on sale of real estate of approximately $8.1 million during the nine months ended September 30, 2021, of which approximately $0.3 million occurred during the three months ended September 30, 2021.


			Q3 2021
			Construction in progress

as of September 30, 2021

(dollars in thousands)

CONSTRUCTION IN PROGRESS 1


		Actual/Estimated				BXP’s share
		Initial Occupancy	Stabilization Date		Square Feet	Investment to Date 2		Estimated Total Investment 2		Total Financing		Amount Drawn at 9/30/2021		Estimated Future Equity Requirement 2		Percentage Leased 3			Percentage placed in-service 4		Net Operating Income (Loss) 5 (BXP’s share)
Construction Properties				Location
Office
	325 Main Street	Q3 2022	Q3 2022	Cambridge, MA	420,000	$	283,920	$	418,400	$	—	$	—	$	134,480	90	%		—	%	N/A
	100 Causeway Street (50% ownership)	Q3 2021	Q3 2022	Boston, MA	632,000	229,627		267,300		200,000		148,603		—		95	%		79	%	$	47
	7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership)	Q1 2022	Q1 2022	Bethesda, MD	734,000	168,945		198,900		127,500		104,036		6,491		100	%		—	%	N/A
	Reston Next 6	Q4 2021	Q4 2023	Reston, VA	1,062,000	507,726		715,300		—		—		207,574		85	%		—	%	N/A
	2100 Pennsylvania Avenue	Q3 2022	Q3 2024	Washington, DC	480,000	209,193		356,100		—		—		146,907		56	%		—	%	N/A
	Total Office Properties under Construction				3,328,000	1,399,411		1,956,000		327,500		252,639		495,452		87	%		15	%	47

Lab/Life Sciences
	200 West Street (Redevelopment) 7	Q4 2021	Q4 2021	Waltham, MA	138,000	29,340		47,800		—		—		$	18,460	100	%		—	%	N/A
	880 Winter Street (Redevelopment)	Q1 2023	Q2 2024	Waltham, MA	224,000	6,964		108,000		—		—		101,036		17	%		—	%	N/A
	751 Gateway (49% ownership)	Q1 2023	Q3 2024	South San Francisco, CA	229,000	28,723		127,600		—		—		98,877		—	%		—	%	N/A
	180 CityPoint	Q1 2024	Q4 2024	Waltham, MA	329,000	41,442		274,700		—		—		233,258		—	%		—	%	N/A
	Total Lab/Life Sciences Properties under Construction				920,000	106,469		558,100		—		—		451,631		19	%		—	%	—

Other
	View Boston Observatory at The Prudential Center (Redevelopment)	Q2 2023	N/A	Boston, MA	59,000	45,158		182,300		—		—		137,142		N/A			—	%	N/A

Total Properties Under Construction					4,307,000	$	1,551,038	$	2,696,400	$	327,500	$	252,639	$	1,084,225	72	%	8	12	%	$	47

PROJECTS FULLY PLACED IN-SERVICE DURING 2021


	Actual/Estimated				BXP’s share
							Estimated Total Investment 2				Amount Drawn at 9/30/2021		Estimated Future Equity Requirement 2				Net Operating Income (Loss) 5
	Initial Occupancy	Stabilization Date		Square feet	Investment to Date 2				Total Financing						Percentage Leased 3
			Location
One Five Nine East 53rd (55% Ownership)	Q1 2021	Q1 2021	New York, NY	220,000	$	144,402	$	150,000	$	—	$	—	$	5,598	96	%	$	3,261
Total Projects Fully Placed In-Service				220,000	$	144,402	$	150,000	$	—	$	—	$	5,598	96	%	$	3,261

_____________

1A project is classified as Construction in Progress when (1) construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed and (2) capitalized interest has commenced.

2Includes income (loss) and interest carry on debt and equity investment.

3Represents percentage leased as of October 22, 2021, including leases with future commencement dates.

4Represents the portion of the project that no longer qualifies for capitalization of interest in accordance with GAAP.

5Amounts represent Net Operating Income (Loss) for the three months ended September 30, 2021. See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

6On October 19, 2021, approximately 285,000 square feet of the project was placed in-service.

7Represents a portion of the property under redevelopment for conversion to laboratory space.

8Total percentage leased excludes Other.


			Q3 2021
			Land parcels and purchase options

as of September 30, 2021

OWNED LAND PARCELS



Location	Approximate Developable Square Feet 1
Reston, VA 2		2,938,000
San Jose, CA 3		2,199,000
New York, NY (25% Ownership)		2,000,000
Princeton, NJ		1,650,000
San Jose, CA (55% Ownership)		1,078,000
San Francisco, CA		850,000
Santa Clara, CA		632,000
Washington, DC (50% ownership)		520,000
Springfield, VA		422,000
South San Francisco, CA (50% Ownership)		411,000
Waltham, MA		396,000
Dulles, VA		310,000
El Segundo, CA (50% Ownership)		275,000
Rockville, MD 3, 4		202,000
Total		13,883,000

VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS



Location	Approximate Developable Square Feet 1
Cambridge, MA		1,400,000
Boston, MA		1,300,000
Waltham, MA 5		1,200,000
Total		3,900,000

__________________

1Represents 100% of consolidated and unconsolidated projects.

2During the fourth quarter of 2020, a ground lease commenced with a hotel developer to lease approximately 200,000 square feet from the Company. Construction is contingent on the developer’s ability to obtain construction financing.

3Excludes the existing square footage at in-service properties being held for future re-development as listed and noted on page 22.

4On August 2, 2021, the Company acquired the Shady Grove Bio+Tech Campus in Rockville, Maryland, which includes three buildings that are currently vacant, totaling 202,000 square feet. The Company intends to reposition these three vacant buildings to support life sciences uses. These three buildings are not included in the Company’s in-service portfolio.

5The Company expects to be a 50% partner in the future development of these sites.


			Q3 2021
			Leasing activity

for the three months ended September 30, 2021

ALL IN-SERVICE PROPERTIES


Net (increase)/decrease in available space (SF)	Total
Vacant space available at the beginning of the period	5,186,818


Add:
Properties acquired vacant space 1	143,848
Properties placed (and partially placed) in-service 2	503,024
Leases expiring or terminated during the period	862,505
Total space available for lease	6,696,195

1st generation leases	585,933
2nd generation leases with new tenants	407,240
2nd generation lease renewals	311,332
Total space leased	1,304,505

Vacant space available for lease at the end of the period	5,391,690
Net (increase)/decrease in available space	(204,872)


Second generation leasing information: 3
Leases commencing during the period (SF)	718,572
Weighted average lease term (months)	58
Weighted average free rent period (days)	124
Total transaction costs per square foot 4	$43.95
Increase (decrease) in gross rents 5	(9.42)	%
Increase (decrease) in net rents 6	(14.23)	%


	All leases (SF)			Incr (decr) in 2nd generation cash rents				Total square feet of leases executed in the quarter 8
	1st generation	2nd generation	total 7	gross 5		net 6
Boston	571,766	209,872	781,638	11.09	%	16.59	%	769,093
Los Angeles	—	8,973	8,973	(8.00)	%	(11.16)	%	7,180
New York	14,167	245,097	259,264	(17.65)	%	(27.06)	%	168,990
San Francisco	—	91,359	91,359	7.19	%	9.44	%	185,253
Seattle	—	—	—	—		—		—
Washington, DC	—	163,271	163,271	(14.64)	%	(21.87)	%	301,301
Total / Weighted Average	585,933	718,572	1,304,505	(9.42)	%	(14.23)	%	1,431,817

_____________

1Total square feet of properties acquired vacant space in Q3 2021 consists of 69,581 square feet at Safeco Plaza and 74,267 square feet at Shady Grove Bio+Tech Campus, which excludes three vacant properties included within Owned Land Parcels on page 15.

2Total square feet of properties partially placed in-service in Q3 2021 consists of 6,709 square feet at 685 Gateway and 496,315 square feet at 100 Causeway Street.

3Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 718,572 square feet of second generation leases that commenced in Q3 2021, leases for 397,853 square feet were signed in prior periods.

4Total transaction costs include tenant improvements and leasing commissions, but exclude free rent concessions.

5Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 507,899 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

6Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 507,899 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

7Represents leases for which rental revenue recognition commenced in accordance with GAAP during the quarter.

8Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter for which the Company recognized rental revenue in the current quarter is 320,719.


			Q3 2021
			Portfolio overview

for the three months ended September 30, 2021

(dollars in thousands)

Rentable square footage of in-service properties by location and unit type 1, 2


	Office		Retail		Residential		Hotel		Total
Boston	13,720,696		1,058,690		550,114		330,000		15,659,500
Los Angeles	2,181,670		124,932		—		—		2,306,602
New York	11,328,824		417,849		—		—		11,746,673
San Francisco	7,291,388		351,186		318,171		—		7,960,745
Seattle	749,110		16,029		—		—		765,139
Washington, DC	8,274,757		682,131		822,436		—		9,779,324
Total	43,546,445		2,650,817		1,690,721		330,000		48,217,983
% of Total	90.31	%	5.50	%	3.51	%	0.68	%	100.00	%

Rental revenue of in-service properties by unit type 1


	Office			Retail			Residential			Hotel 3			Total
Consolidated	$	655,238		$	50,402		$	10,227		$	5,089		$	720,956
Less:
Partners’ share from consolidated joint ventures 4	68,008			8,943			—			—			76,951
Add:
BXP’s share from unconsolidated joint ventures 5	38,933			2,185			1,923			—			43,041
BXP’s Share of Rental revenue 1	$	626,163		$	43,644		$	12,150		$	5,089		$	687,046
% of Total	91.14		%	6.35		%	1.77		%	0.74		%	100.00		%

Percentage of BXP’s Share of net operating income (NOI) (excluding termination income) by location 1, 6


	CBD		Suburban		Total
Boston	26.66	%	7.78	%	34.44	%
Los Angeles	2.79	%	—	%	2.79	%
New York	26.71	%	2.05	%	28.76	%
San Francisco	16.65	%	2.83	%	19.48	%
Seattle	0.15	%	—	%	0.15	%
Washington, DC	4.89	%	9.49	%	14.38	%
Total	77.85	%	22.15	%	100.00	%

_____________

1See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

2Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 20-23.

3Excludes approximately $100 of revenue from retail tenants that is included in Retail.

4See page 59 for additional information.

5See page 61 for additional information.

6BXP’s Share of NOI (excluding termination income) is a non-GAAP financial measure. For a quantitative reconciliation of net income attributable to Boston Properties, Inc. to BXP’s Share of NOI (excluding termination income), see page 8.


			Q3 2021
			Residential and hotel performance

(dollars in thousands, except rental rates)

RESULTS OF OPERATIONS


	Residential 1				Hotel 2
	Three Months Ended				Three Months Ended
	30-Sep-21		30-Jun-21		30-Sep-21		30-Jun-21
Rental Revenue 3	$	10,894	$	9,763	$	5,189	$	1,561
Less: Operating expenses and real estate taxes	6,045		5,928		3,946		1,996
Net Operating Income (Loss) (NOI) 3	4,849		3,835		1,243		(435)
Add: BXP’s share of NOI from unconsolidated joint ventures	882		449		N/A		N/A
BXP’s Share of NOI 3	$	5,731	$	4,284	$	1,243	$	(435)

Rental Revenue 3	$	10,894	$	9,763	$	5,189	$	1,561
Less: Straight line rent and fair value lease revenue	(13)		21		5		(5)
Add: Lease transaction costs that qualify as rent inducements	48		—		—		—
Subtotal	10,955		9,742		5,184		1,566
Less: Operating expenses and real estate taxes	6,045		5,928		3,946		1,996
NOI - cash basis 3	4,910		3,814		1,238		(430)
Add: BXP’s share of NOI-cash from unconsolidated joint ventures	882		449		N/A		N/A
BXP’s Share of NOI - cash basis 3	$	5,792	$	4,263	$	1,238	$	(430)

RENTAL RATES AND OCCUPANCY - Year-over-Year


	Residential Units	Three Months Ended						Percent Change
		30-Sep-21			30-Sep-20
BOSTON

Hub50House (50% ownership), Boston, MA 3	440
Average Monthly Rental Rate		$	3,360		$	3,571		(5.91)	%
Average Rental Rate Per Occupied Square Foot		$	4.69		$	5.32		(11.84)	%
Average Physical Occupancy		87.50		%	45.08		%	94.10	%
Average Economic Occupancy		82.92		%	39.31		%	110.94	%

Proto Kendall Square, Cambridge, MA 3, 4	280
Average Monthly Rental Rate		$	2,642		$	2,676		(1.27)	%
Average Rental Rate Per Occupied Square Foot		$	4.82		$	4.91		(1.83)	%
Average Physical Occupancy		94.52		%	85.71		%	10.28	%
Average Economic Occupancy		93.90		%	83.13		%	12.96	%

The Lofts at Atlantic Wharf, Boston, MA 3, 4	86
Average Monthly Rental Rate		$	3,747		$	4,231		(11.44)	%
Average Rental Rate Per Occupied Square Foot		$	4.17		$	4.62		(9.74)	%
Average Physical Occupancy		96.51		%	80.23		%	20.29	%
Average Economic Occupancy		95.38		%	80.74		%	18.13	%

Boston Marriott Cambridge (437 rooms), Cambridge, MA 2, 4	N/A
Average Occupancy		49.40		%	—		%	100.00	%
Average Daily Rate		$	222.31		$	—		100.00	%
Revenue Per Available Room		$	109.86		$	—		100.00	%

SAN FRANCISCO

The Skylyne, Oakland, CA 3, 5	402
Average Monthly Rental Rate		$	3,307		$	3,887		(14.92)	%
Average Rental Rate Per Occupied Square Foot		$	3.92		$	4.97		(21.13)	%
Average Physical Occupancy		48.34		%	2.27		%	2,029.52	%
Average Economic Occupancy		41.03		%	1.70		%	2,313.53	%


			Q3 2021
			Residential and hotel performance (continued)

RENTAL RATES AND OCCUPANCY - Year-over-Year


	Residential Units	Three Months Ended				Percent Change
		30-Sep-21		30-Sep-20
WASHINGTON, DC

Signature at Reston, Reston, VA 3, 4	508
Average Monthly Rental Rate		$	2,429	$	2,319	4.74	%
Average Rental Rate Per Occupied Square Foot		$	2.51	$