Equibles

8-K

BXP, Inc. (BXP)

8-K 2020-10-27 For: 2020-10-27
View Original
Added on April 08, 2026

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 27, 2020

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<br>of Incorporation) (Commission File Number) (IRS Employer<br>Identification No.)
Boston Properties Limited Partnership Delaware 0-50209 04-3372948
(State or Other Jurisdiction<br>of Incorporation) (Commission File Number) (IRS Employer<br>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 Name of each exchange on which registered
Boston Properties, Inc. Common Stock, par value 0.01 per share New York Stock Exchange
Boston Properties, Inc. Depository Shares Each Representing 1/100th of a share New York Stock Exchange

All values are in US Dollars.

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 27, 2020, 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 2020. 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 endedq32020supplemental.htmSeptember30,q32020supplemental.htm2020.
*99.2 Press release datedOctober27, 2020.
*101.SCH Inline XBRL Taxonomy Extension Schema Document.
*101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase 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 27, 2020

Document

Exhibit 99.2

bxplogohorizontalcolorrgba.jpg

BOSTON PROPERTIES ANNOUNCES THIRD QUARTER 2020 RESULTS; REPORTS EPS OF $0.58 AND FFO PER SHARE OF $1.57

Signs 811,000 Square Feet of Leasing in Q3 With a Weighted Average Lease Term of Seven Years

BOSTON, MA, October 27, 2020 - Boston Properties, Inc. (NYSE: BXP), the largest publicly-traded developer, owner and manager of Class A office properties in the United States, reported results today for the third quarter ended September 30, 2020.

Financial highlights for the third quarter include:

•Net income attributable to common shareholders of $89.9 million, or $0.58 per diluted share (EPS), compared to $107.8 million, or $0.70 per diluted share, for the quarter ended September 30, 2019. The third quarter of 2020 included a $0.06 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail, fitness and entertainment sectors.

•Funds from Operations (FFO) of $244.0 million, or $1.57 per diluted share, compared to FFO of $253.6 million, or $1.64 per diluted share, for the quarter ended September 30, 2019. The third quarter of 2020 included a $0.06 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail, fitness and entertainment sectors.

Third quarter and recent business highlights include:

•Completed 811,000 square feet of leases and renewals in the third quarter with a weighted average lease term of approximately seven years. Notable leases signed in the quarter include a 13-year expansion and a long-term extension with Microsoft Corporation in Reston, Virginia totaling 186,000 square feet and a new, 14-year, 82,000 square foot lease with Columbia Threadneedle Investments at Atlantic Wharf in Boston, Massachusetts.

•In addition, the Company recently signed a 196,000 square foot, 20-year lease with the Volkswagen Group of America at BXP’s 1.1 million square foot development in the new phase of Reston Town Center in Reston, Virginia. With this new lease, the development is 85% pre-leased. Further details can be found in the press release issued today.

•Collected 99% of its total rent payments from office tenants in the third quarter. Rent collections from all commercial tenants, including base rent from retail tenants, were 97% in total in Q3.

•Completed and fully placed in-service two developments in the third quarter including Hub50House, a 320,000 square foot residential property in Boston, Massachusetts which the Company has a 50% ownership and The Skylyne, a 331,000 square foot residential property in Oakland, California.

•Entered into an agreement with an existing joint venture partner for the future development of a 1.2 million square foot site in Waltham, Massachusetts, a popular submarket of Boston for leading and emerging companies in the life sciences, biotechnology and technology sectors. The agreement allows for the phased development of office and lab properties across 41-

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acres. Boston Properties will serve as the development manager and expects to be a majority owner of the properties. This agreement builds on Boston Properties’ current footprint of 4.3 million square feet of Class A Office and lab properties in this submarket.

•Completed the acquisition of a 50% interest in Beach Cities Media Center, a 6.4-acre land site on the Rosecrans Corridor of the El Segundo submarket of Los Angeles, California for a purchase price of approximately $21.2 million. Located in close proximity to the desirable beach cities of Manhattan, Hermosa and Redondo as well as the Palos Verdes peninsula, El Segundo is one of the most in-demand locations for Fortune 500 and emerging office tenants in the South Bay of Los Angeles. The site is fully entitled to support the future development of approximately 275,000 square feet of Class A creative office space.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended September 30, 2020. In the opinion of management, the Company has made all adjustments considered necessary for a fair statement of these reported results.

Boston Properties will host a conference call on Wednesday, October 28, 2020 at 10:00 AM Eastern Time, open to the general public, to discuss the third quarter 2020 results, provide a business update pertaining to the current COVID-19 pandemic and discuss other business matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 796-3880 (Domestic) or (443) 961-9013 (International) and entering the passcode 5198453. A replay of the conference call will be available by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 51984533. There will also be a live audio webcast of the call, which may be accessed in the Investor Relations section of the Company’s website at investors.bxp.com. Shortly after the call, a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

Additionally, a copy of Boston Properties’ third quarter 2020 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at investors.bxp.com.

Boston Properties (NYSE: BXP) is the largest publicly-held developer and owner of Class A office properties in the United States, concentrated in five markets -  Boston, Los Angeles, New York, San Francisco 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. The Company’s portfolio totals 51.2 million square feet and 196 properties, including seven properties under construction/redevelopment. For more information about Boston Properties, please visit our website at www.bxp.com or follow us on LinkedIn or Instagram.

This press release 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 “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. These statements are based on our current expectations of 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 or restrictive measures

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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; whether new or existing actions/or measures result in increasing unemployment that impacts the ability of our residential tenants to generate sufficient income to pay, or makes 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 governmental 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. 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.

Financial tables follow.

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BOSTON PROPERTIES, INC.<br><br>CONSOLIDATED BALANCE SHEETS<br><br>(Unaudited)
September 30, 2020 December 31, 2019
(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost $ 21,554,453 $ 21,458,412
Construction in progress 769,846 789,736
Land held for future development 446,392 254,828
Right of use assets - finance leases 237,382 237,394
Right of use assets - operating leases 146,973 148,640
Less: accumulated depreciation (5,413,709) (5,266,798)
Total real estate 17,741,337 17,622,212
Cash and cash equivalents 1,714,783 644,950
Cash held in escrows 50,006 46,936
Investments in securities 34,934 36,747
Tenant and other receivables, net 76,330 112,807
Related party note receivable, net 77,592 80,000
Note receivables, net 25,304 15,920
Accrued rental income, net 1,111,078 1,038,788
Deferred charges, net 644,036 689,213
Prepaid expenses and other assets 106,524 41,685
Investments in unconsolidated joint ventures 1,377,291 955,647
Total assets $ 22,959,215 $ 21,284,905
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net $ 2,912,494 $ 2,922,408
Unsecured senior notes, net 9,636,397 8,390,459
Unsecured line of credit — —
Unsecured term loan, net 499,270 498,939
Lease liabilities - finance leases 233,288 224,042
Lease liabilities - operating leases 201,337 200,180
Accounts payable and accrued expenses 345,959 377,553
Dividends and distributions payable 171,070 170,713
Accrued interest payable 88,826 90,016
Other liabilities 369,932 387,994
Total liabilities 14,458,573 13,262,304
Commitments and contingencies — —
Redeemable deferred stock units 5,604 8,365
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 at September 30, 2020 and December 31, 2019 200,000 200,000
BOSTON PROPERTIES, INC.<br><br>CONSOLIDATED BALANCE SHEETS<br><br>(Unaudited)
--- --- --- --- ---
September 30, 2020 December 31, 2019
(in thousands, except for share and par value amounts)
Common stock, $0.01 par value, 250,000,000 shares authorized, 155,715,200 and 154,869,198 issued and 155,636,300 and 154,790,298 outstanding at September 30, 2020 and December 31, 2019, respectively 1,556 1,548
Additional paid-in capital 6,348,076 6,294,719
Dividends in excess of earnings (364,720) (760,523)
Treasury common stock at cost, 78,900 shares at September 30, 2020 and December 31, 2019 (2,722) (2,722)
Accumulated other comprehensive loss (52,622) (48,335)
Total stockholders’ equity attributable to Boston Properties, Inc. 6,129,568 5,684,687
Noncontrolling interests:
Common units of the Operating Partnership 634,796 600,860
Property partnerships 1,730,674 1,728,689
Total equity 8,495,038 8,014,236
Total liabilities and equity $ 22,959,215 $ 21,284,905

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended September 30, Nine months ended September 30,
2020 2019 2020 2019
(in thousands, except for per share amounts)
Revenue
Lease $ 666,674 $ 692,225 $ 2,006,904 $ 2,051,665
Parking and other 16,327 25,582 54,777 76,807
Hotel revenue 90 13,014 7,014 36,796
Development and management services 7,281 10,303 23,285 29,566
Direct reimbursements of payroll and related costs from management services contracts 2,896 2,429 8,617 8,227
Total revenue 693,268 743,553 2,100,597 2,203,061
Expenses
Operating
Rental 258,261 265,603 761,014 781,091
Hotel 3,164 8,743 11,958 25,686
General and administrative 27,862 31,147 102,059 107,980
Payroll and related costs from management services contracts 2,896 2,429 8,617 8,227
Transaction costs 307 538 1,254 1,415
Depreciation and amortization 166,456 165,862 515,738 507,867
Total expenses 458,946 474,322 1,400,640 1,432,266
Other income (expense)
(Loss) income from unconsolidated joint ventures (6,873) (649) (5,410) 47,528
(Losses) gains on sales of real estate (209) (15) 613,723 766
Interest and other income (loss) (45) 7,178 4,277 14,546
Gains from investments in securities 1,858 106 965 4,240
Loss from early extinguishment of debt — (28,010) — (28,010)
Impairment loss — — — (24,038)
Interest expense (110,993) (106,471) (319,726) (309,837)
Net income 118,060 141,370 993,786 475,990
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships (15,561) (18,470) (34,280) (54,782)
Noncontrolling interest—common units of the Operating Partnership (10,020) (12,504) (97,090) (43,133)
Net income attributable to Boston Properties, Inc. 92,479 110,396 862,416 378,075
Preferred dividends (2,625) (2,625) (7,875) (7,875)
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 107,771 $ 854,541 $ 370,200
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income $ 0.58 $ 0.70 $ 5.49 $ 2.40
Weighted average number of common shares outstanding 155,645 154,577 155,349 154,553
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income $ 0.58 $ 0.70 $ 5.49 $ 2.39
Weighted average number of common and common equivalent shares outstanding 155,670 154,820 155,447 154,847

BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

(Unaudited)

Three months ended September 30, Nine months ended September 30,
2020 2019 2020 2019
(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 107,771 $ 854,541 $ 370,200
Add:
Preferred dividends 2,625 2,625 7,875 7,875
Noncontrolling interest - common units of the Operating Partnership 10,020 12,504 97,090 43,133
Noncontrolling interests in property partnerships 15,561 18,470 34,280 54,782
Net income 118,060 141,370 993,786 475,990
Add:
Depreciation and amortization expense 166,456 165,862 515,738 507,867
Noncontrolling interests in property partnerships’ share of depreciation and amortization (15,833) (17,402) (55,940) (53,273)
Company’s share of depreciation and amortization from unconsolidated joint ventures 20,413 13,745 59,757 43,993
Corporate-related depreciation and amortization (444) (411) (1,399) (1,218)
Impairment loss — — — 24,038
Less:
Gains on sales of real estate included within (loss) income from unconsolidated joint ventures — (487) 5,946 47,270
(Losses) gains on sales of real estate (209) (15) 613,723 766
Noncontrolling interests in property partnerships 15,561 18,470 34,280 54,782
Preferred dividends 2,625 2,625 7,875 7,875
Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) 270,675 282,571 850,118 886,704
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations 26,697 28,940 85,095 90,792
Funds from operations attributable to Boston Properties, Inc. common shareholders $ 243,978 $ 253,631 $ 765,023 $ 795,912
Boston Properties, Inc.’s percentage share of funds from operations - basic 90.14 % 89.76 % 89.99 % 89.76 %
Weighted average shares outstanding - basic 155,645 154,577 155,349 154,553
FFO per share basic $ 1.57 $ 1.64 $ 4.92 $ 5.15
Weighted average shares outstanding - diluted 155,670 154,820 155,447 154,847
FFO per share diluted $ 1.57 $ 1.64 $ 4.92 $ 5.14

(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. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and real estate-related depreciation and amortization. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results 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 differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other 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.

In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES

% Leased by Location
September 30, 2020 December 31, 2019
Boston 94.6 % 95.9 %
Los Angeles 96.7 % 96.7 %
New York 90.5 % 92.9 %
San Francisco 91.6 % 93.7 %
Washington, DC 84.3 % 87.6 %
Total Portfolio 91.1 % 93.0 %

AT THE COMPANY

Michael LaBelle

Executive Vice President,

Chief Financial Officer and Treasurer

(617) 236-3352

Sara Buda

Vice President, Investor Relations

(617) 236-3429

sbuda@bxp.com

#

Document

Exhibit 99.1

image1a.jpg

image122.jpg

Supplemental Operating and Financial Data

for the Quarter Ended September 30, 2020

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 five markets -  Boston, Los Angeles, New York, San Francisco 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. The Company’s complete portfolio totals 51.2 million square feet and 196 properties, including seven properties under construction/redevelopment, and consists of 177 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 eight consecutive Global Real Estate Sustainability Benchmark (GRESB) Green Stars 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 “believes,” “budgeted,” “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 expectations of 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; whether new or existing actions/or measures continue to result in increasing unemployment that 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; 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; and the extent of construction delays on our development/redevelopment projects due to work-stoppage orders or disruptions in the supply of materials which could result in our failure to meet the development milestones set forth in any applicable lease agreement, delay the commencement or completion of construction and our anticipated lease-up plans for a development/redevelopment project or our overall development pipeline that may cause returns on investment to be less than projected, and/or increase the costs of construction of new or existing projects. In addition to the risks specific to COVID-19, other 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 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.

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 55.

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 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 59.

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 Sara Buda
Boston, MA 02199 Stock Exchange Listing Boston, MA 02199 Vice President, Investor Relations
www.bxp.com New York Stock Exchange investors.bxp.com at 617.236.3429 or
(t) 617.236.3300 investorrelations@bxp.com sbuda@bxp.com
(f) 617.236.3311 (t) 617.236.3429
Michael E. LaBelle
Executive Vice President, Chief Financial Officer
at 617.236.3352 or
mlabelle@bxp.com

(Cover photo: Rendering of Hub50House, Boston, MA which was placed in-service in Q3 2020.)

Q3 2020
Table of contents Page
--- ---
OVERVIEW
Company Profile 1
FINANCIAL INFORMATION
COVID-19 Impact 2
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 11
Capital Expenditures, Tenant Improvement Costs and Leasing Commissions 13
Acquisitions and Dispositions 14
DEVELOPMENT ACTIVITY
Construction in Progress 15
Land Parcels and Purchase Options 17
LEASING ACTIVITY
Leasing Activity 18
PROPERTY STATISTICS
Portfolio Overview 19
Residential and Hotel Performance 20
In-Service Property Listing 22
Top 20 Tenants Listing and Portfolio Tenant Diversification 26
Occupancy by Location 27
DEBT AND CAPITALIZATION
Capital Structure 28
Debt Analysis 29
Senior Unsecured Debt Covenant Compliance Ratios 30
Net Debt to EBITDAre 31
Debt Ratios 32
JOINT VENTURES
Consolidated Joint Ventures 33
Unconsolidated Joint Ventures 35
LEASE EXPIRATION ROLL-OUT
Total In-Service Properties 39
Boston 40
Los Angeles 42
New York 44
San Francisco 46
Washington, DC 48
CBD 50
Suburban 52
RESEARCH COVERAGE, DEFINITIONS AND RECONCILIATIONS
Research Coverage 54
Definitions 55
Reconciliations 59
Consolidated Income Statement - Prior Year 65
Funds From Operations (FFO) - Prior Year 66
Funds Available for Distribution (FAD) - Prior Year 67
Q3 2020
--- ---
Company profile

SNAPSHOT

(as of September 30, 2020)

Fiscal Year-End December 31
Total Properties (includes unconsolidated joint ventures) 196
Total Square Feet (includes unconsolidated joint ventures) 51.2 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^ 173.1 million
Closing Price, at the end of the quarter $80.30 per share
Dividend - Quarter/Annualized $0.98/$3.92 per share
Dividend Yield 4.9%
Consolidated Market Capitalization ^1^ $27.1 billion
BXP’s Share of Market Capitalization ^1, 2^ $27.1 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 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 resultant ability to make new investments at opportune points in time; 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 the Compensation Committee Michael E. LaBelle Executive Vice President, Chief Financial Officer and Treasurer
Bruce W. Duncan
Karen E. Dykstra Peter D. Johnston Executive Vice President, Washington, DC Region
Carol B. Einiger Bryan J. Koop Executive Vice President, Boston Region
Diane J. Hoskins Robert E. Pester Executive Vice President, San Francisco Region
Matthew J. Lustig Chair of Nominating & Corporate Governance Committee John F. Powers Executive Vice President, New York Region
Frank D. Burt Senior Vice President and Chief Legal Officer
David A. Twardock Chair of Audit Committee Donna D. Garesche Senior Vice President and Chief Human Resources Officer
William H. Walton, III
Michael R. Walsh Senior Vice President and Chief Accounting Officer
James J. Whalen Senior Vice President and Chief Information & Technology Officer

____________________

^1^For additional detail, see page 28.

^2^For the Company’s definitions and related disclosures, see the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

Q3 2020
COVID-19 Impact

Commencing in March 2020, the COVID-19 pandemic began to negatively impact the United States economy and the Company, and it continues to do so. Set forth below are the details related to the effects of the COVID-19 pandemic to the Company’s operations for the three months ended September 30, 2020.

(unaudited and dollars in thousands)

For the third quarter of 2020, Revenue was $693,268 and Net income attributable to Boston Properties, Inc. common shareholders was $89,854. For the third quarter of 2019, Revenue was $743,553 and Net income attributable to Boston Properties, Inc. common shareholders was $107,771.

BXP’s Share of Revenue^1^ for the third quarter of 2020 was $664,711, marking a decrease of $39,460 from $704,171 for Q3 2019. Included in BXP’s Share for Q3 2020 is an aggregate of $33,223 of primarily COVID-19 related decreases consisting of:

•$5,931 of write-offs associated with accrued rent (all of which was included within straight-line rent)^2,^

•$3,790 of write-offs associated with accounts receivable^2,^,

•$10,578 decrease in parking and other revenue^2,^, and

•$12,924 decrease due to the closure of our only hotel (which re-opened on October 2, 2020).

Funds from Operations (“FFO”) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO)^1^, ^3^ for Q3 2020 was $270,675, marking a decrease of $11,896 from $282,571 for Q3 2019. Included in Q3 2020 is an aggregate of $27,644 of BXP’s Share of primarily COVID-19 related decreases consisting of:

•$5,931 of write-offs associated with accrued rent (all of which was included within straight-line rent)^2,^,

•$3,790 of write-offs associated with accounts receivable^2,^,

•$10,578 decrease in parking and other revenue^2,^, and

•$7,345 decrease in NOI due to the closure of our only hotel (which re-opened on October 2, 2020.)

BXP’s Share of Same Property NOI (excluding termination income)^1, 4^was $377,504, marking a decrease of $37,030 from Q3 2019. Included in Q3 2020 is an aggregate of $27,472 of BXP’s Share of primarily COVID-19 related decreases consisting of:

•$5,931 of write-offs associated with accrued rent (all of which was included within straight-line rent)^2,^,

•$3,790 of write-offs associated with accounts receivable^2,^,

•$10,406 decrease in parking and other revenue^2,^, and

•$7,345 decrease in NOI due to the closure of our only hotel (which re-opened on October 2, 2020).

BXP’s Share of Same Property NOI (excluding termination income) - cash^1, 4^ was $343,757, marking a decrease of $48,916 from Q3 2019. Included in Q3 2020 is an aggregate of $38,369 of BXP’s Share of primarily COVID-19 related decreases consisting of:

•$16,828 decrease in lease revenue related to COVID-19 cash rent abatements and deferrals^2,^

•$3,790 of write-offs associated with accounts receivable^2,^,

•$10,406 decrease in parking and other revenue^2,^, and

•$7,345 decrease in NOI due to the closure of our only hotel (which re-opened on October 2, 2020).

Funds Available for Distribution (“FAD”)^1, 5^ was $153,481 for Q3 2020, a decrease of $38,439 from $191,920 for Q3 2019. The distributions to common shareholders and unitholders (excluding any special distributions) were $169,701 for Q3 2020. Included in Q3 2020 is an aggregate of $39,927 of BXP’s Share of primarily COVID-19 related decreases consisting of:

•$18,214 decrease in lease revenue related to COVID-19 cash rent abatements and deferrals^2,^

•$3,790 of write-offs associated with accounts receivable^2,^,

•$10,578 decrease in parking and other revenue^2,^, and

•$7,345 decrease in NOI due to the closure of our only hotel (which re-opened on October 2, 2020).

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^For additional information, see page 59.

^3^For quantitative reconciliations of FFO for the three months ended September 30, 2020 and September 30, 2019, see pages 6 and 66, respectively.

^4^For a quantitative reconciliation for the three months ended September 30, 2020, see page 11.

^5^For quantitative reconciliations of FAD for the three months ended September 30, 2020 and September 30, 2019, see pages 7 and 67, respectively.

Q3 2020
Financial highlights

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

Three Months Ended
30-Sep-20 30-Jun-20
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 266,525
Net income attributable to Boston Properties, Inc. per share - diluted $ 0.58 $ 1.71
FFO attributable to Boston Properties, Inc. common shareholders ^1^ $ 243,978 $ 236,908
Diluted FFO per share ^1^ $ 1.57 $ 1.52
Dividends per common share $ 0.98 $ 0.98
Funds available for distribution to common shareholders and common unitholders (FAD) ^2^ $ 153,481 $ 153,660
Selected items:
Revenue $ 693,268 $ 654,773
Recoveries from tenants $ 105,682 $ 98,393
Service income from tenants $ 967 $ 1,115
BXP’s Share of revenue ^3^ $ 664,711 $ 638,485
BXP’s Share of straight-line rent ^3^ $ 40,478 $ 22,747
BXP’s Share of write-offs associated with accrued rent (all of which was included within straight-line rent) ^3^ $ (5,931) $ (26,325)
BXP’s Share of write-offs associated with accounts receivable (all of which was included within lease revenue) ^3^ $ (3,790) $ (14,707)
BXP’s Share of fair value lease revenue ^3, 4^ $ 979 $ 2,548
BXP’s Share of termination income ^3^ $ 2,850 $ 2,988
Ground rent expense $ 3,455 $ 3,468
Capitalized interest $ 13,463 $ 13,717
Capitalized wages $ 3,409 $ 3,401
(Loss) income from unconsolidated joint ventures $ (6,873) $ 1,832
BXP’s share of FFO from unconsolidated joint ventures ^5^ $ 13,540 $ 16,898
Net income (loss) attributable to noncontrolling interests in property partnerships $ 15,561 $ (767)
FFO attributable to noncontrolling interests in property partnerships ^6^ $ 31,394 $ 21,713
Balance Sheet items:
Above-market rents (included within Prepaid Expenses and Other Assets) $ 5,640 $ 6,927
Below-market rents (included within Other Liabilities) $ 29,272 $ 31,277
Accrued rental income liability (included within Other Liabilities) $ 125,442 $ 125,887
Ratios:
Interest Coverage Ratio (excluding capitalized interest) ^7^ 3.34 3.53
Interest Coverage Ratio (including capitalized interest) ^7^ 2.97 3.11
Fixed Charge Coverage Ratio ^7^ 2.47 2.68
BXP’s Share of Net Debt to BXP’s Share of EBITDAre ^8^ 7.32 7.38
Change in BXP’s Share of Same Store Net Operating Income (NOI) (excluding termination income) ^9^ (8.9) % (10.8) %
Change in BXP’s Share of Same Store NOI (excluding termination income) - cash ^9^ (12.5) % (10.1) %
FAD Payout Ratio ^2^ 110.57 % 110.44 %
Operating Margins [(rental revenue - rental expense)/rental revenue] 62.2 % 62.8 %
Occupancy of In-Service Properties 91.1 % 92.0 %
Capitalization:
Consolidated Debt $ 13,048,161 $ 13,048,579
BXP’s Share of Debt ^10^ $ 12,966,235 $ 12,918,703
Consolidated Market Capitalization $ 27,147,609 $ 28,892,634
Consolidated Debt/Consolidated Market Capitalization 48.06 % 45.16 %
BXP’s Share of Market Capitalization ^10^ $ 27,065,683 $ 28,762,758
BXP’s Share of Debt/BXP’s Share of Market Capitalization ^10^ 47.91 % 44.91 %

_____________

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

^2^For 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.

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^4^Represents 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.^^

^5^For a quantitative reconciliation for the three months ended September 30, 2020, see page 37.

^6^For a quantitative reconciliation for the three months ended September 30, 2020, see page 34.

^7^For a quantitative reconciliation for the three months ended September 30, 2020 and June 30, 2020, see page 32.

^8^For a quantitative reconciliation for the three months ended September 30, 2020 and June 30, 2020, see page 31.

^9^For a quantitative reconciliation for the three months ended September 30, 2020, see page 11.

^10^For a quantitative reconciliation for September 30, 2020, see page 28.

Q3 2020
Consolidated Balance Sheets

(unaudited and in thousands)

30-Sep-20 30-Jun-20
ASSETS
Real estate 21,554,453 $ 21,267,915
Construction in progress 769,846 893,935
Land held for future development 446,392 414,053
Right of use assets - finance leases 237,382 237,394
Right of use assets - operating leases 146,973 147,512
Less accumulated depreciation (5,413,709) (5,292,389)
Total real estate 17,741,337 17,668,420
Cash and cash equivalents 1,714,783 1,691,047
Cash held in escrows 50,006 300,608
Investments in securities 34,934 32,848
Tenant and other receivables, net 76,330 82,545
Related party note receivable, net 77,592 78,520
Notes receivable, net 25,304 25,480
Accrued rental income, net 1,111,078 1,069,004
Deferred charges, net 644,036 655,813
Prepaid expenses and other assets 106,524 56,768
Investments in unconsolidated joint ventures 1,377,291 1,339,724
Total assets $ 22,959,215 $ 23,000,777
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net $ 2,912,494 $ 2,915,852
Unsecured senior notes, net 9,636,397 9,633,577
Unsecured line of credit — —
Unsecured term loan, net 499,270 499,150
Lease liabilities- finance leases 233,288 230,146
Lease liabilities - operating leases 201,337 200,979
Accounts payable and accrued expenses 345,959 328,292
Dividends and distributions payable 171,070 171,077
Accrued interest payable 88,826 95,274
Other liabilities 369,932 373,281
Total liabilities 14,458,573 14,447,628
Commitments and contingencies — —
Redeemable deferred stock units 5,604 6,003
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 at September 30, 2020 and June 30, 2020 200,000 200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 155,715,200 and 155,701,186 issued and 155,636,300 and 155,622,286 outstanding at September 30, 2020 and June 30, 2020, respectively 1,556 1,556
Additional paid-in capital 6,348,076 6,340,665
Dividends in excess of earnings (364,720) (302,511)
Treasury common stock at cost, 78,900 shares at September 30, 2020 and June 30, 2020 (2,722) (2,722)
Accumulated other comprehensive loss (52,622) (54,921)
Total stockholders’ equity attributable to Boston Properties, Inc. 6,129,568 6,182,067
Noncontrolling interests:
Common units of the Operating Partnership 634,796 640,491
Property partnerships 1,730,674 1,724,588
Total equity 8,495,038 8,547,146
Total liabilities and equity $ 22,959,215 $ 23,000,777
Q3 2020
--- ---
Consolidated Income Statements^1^

(unaudited and in thousands, except per share amounts)

Three Months Ended
30-Sep-20 30-Jun-20
Revenue
Lease $ 666,674 $ 630,119
Parking and other 16,327 13,946
Hotel revenue 90 99
Development and management services 7,281 8,125
Direct reimbursements of payroll and related costs from management services contracts 2,896 2,484
Total revenue 693,268 654,773
Expenses
Operating 120,833 109,448
Real estate taxes 137,222 130,415
Demolition costs 206 (76)
Hotel operating 3,164 1,973
General and administrative ^2^ 27,862 37,743
Payroll and related costs from management services contracts 2,896 2,484
Transaction costs 307 332
Depreciation and amortization 166,456 178,188
Total expenses 458,946 460,507
Other income (expense)
(Loss) income from unconsolidated joint ventures (6,873) 1,832
(Losses) gains on sales of real estate (209) 203,767
Gains from investments in securities^2^ 1,858 4,552
Interest and other income (loss) (45) 1,305
Interest expense (110,993) (107,142)
Net income 118,060 298,580
Net income (loss) attributable to noncontrolling interests
Noncontrolling interest in property partnerships (15,561) 767
Noncontrolling interest - common units of the Operating Partnership ^3^ (10,020) (30,197)
Net income attributable to Boston Properties, Inc. 92,479 269,150
Preferred dividends (2,625) (2,625)
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 266,525
INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic $ 0.58 $ 1.71
Net income attributable to Boston Properties, Inc. per share - diluted $ 0.58 $ 1.71

_____________

^1^Commencing in March 2020, the COVID-19 pandemic began to negatively impact the United States economy and the Company, and it continues to do so. For additional detail, see page 59.

^2^General and administrative expense includes $1.9 million and $4.6 million and Gains from investments in securities include $1.9 million and $4.6 million for the three months ended September 30, 2020 and June 30, 2020, respectively, related to the Company’s deferred compensation plan.

^3^For additional detail, see page 6.

Q3 2020
Funds from operations (FFO) ^1^

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

Three Months Ended
30-Sep-20 30-Jun-20
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 266,525
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 10,020 30,197
Noncontrolling interests in property partnerships 15,561 (767)
Net income 118,060 298,580
Add:
Depreciation and amortization expense 166,456 178,188
Noncontrolling interests in property partnerships' share of depreciation and amortization ^2^ (15,833) (22,480)
BXP's share of depreciation and amortization from unconsolidated joint ventures ^3^ 20,413 21,012
Corporate-related depreciation and amortization (444) (486)
Less:
Gain on sale of real estate included within (loss) income from unconsolidated joint ventures — 5,946
(Losses) gains on sales of real estate (209) 203,767
Noncontrolling interests in property partnerships 15,561 (767)
Preferred dividends 2,625 2,625
FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO) ^4^ 270,675 263,243
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO 26,697 26,335
FFO attributable to Boston Properties, Inc. common shareholders $ 243,978 $ 236,908
Boston Properties, Inc.’s percentage share of Basic FFO 90.14 % 90.00 %
Noncontrolling interest’s - common unitholders percentage share of Basic FFO 9.86 % 10.00 %
Basic FFO per share $ 1.57 $ 1.52
Weighted average shares outstanding - basic 155,645 155,386
Diluted FFO per share $ 1.57 $ 1.52
Weighted average shares outstanding - diluted 155,670 155,407

RECONCILIATION TO DILUTED FFO

Three Months Ended
30-Sep-20 30-Jun-20
Basic FFO $ 270,675 $ 263,243
Add:
Effect of dilutive securities - stock-based compensation — —
Diluted FFO 270,675 263,243
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO 26,693 26,331
Boston Properties, Inc.’s share of Diluted FFO $ 243,982 $ 236,912

RECONCILIATION OF SHARES/UNITS FOR DILUTED FFO

Three Months Ended
30-Sep-20 30-Jun-20
Shares/units for Basic FFO 172,677 172,659
Add:
Effect of dilutive securities - stock-based compensation (shares/units) 25 21
Shares/units for Diluted FFO 172,702 172,680
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units) 17,032 17,273
Boston Properties, Inc.’s share of shares/units for Diluted FFO 155,670 155,407
Boston Properties, Inc.’s percentage share of Diluted FFO 90.14 % 90.00 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^For a quantitative reconciliation for the three months ended September 30, 2020, see page 34.

^3^For a quantitative reconciliation for the three months ended September 30, 2020, see page 37.

^4^Basic FFO for Q3 2020 decreased by $11,896 from $282,571 for Q3 2019. For a reconciliation of Basic FFO to Net income attributable to Boston Properties, Inc. common shareholders for Q3 2019, see page 66. Included in the Q3 2020 amounts are BXP’s Share of: $5,931 of write-offs associated with accrued rent (all of which was included within straight-line rent), $3,790 of write-offs associated with accounts receivable, a $10,578 decrease in parking and other revenue and a $7,345 decrease in NOI due to the closure of our only hotel. These items decreased Q3 2020 Basic FFO by $27,644. For additional information, see page 59.

Q3 2020
Funds available for distributions (FAD) ^1^

(dollars in thousands)

Three Months Ended
30-Sep-20 30-Jun-20
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 266,525
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 10,020 30,197
Noncontrolling interests in property partnerships 15,561 (767)
Net income 118,060 298,580
Add:
Depreciation and amortization expense 166,456 178,188
Noncontrolling interests in property partnerships’ share of depreciation and amortization ^2^ (15,833) (22,480)
BXP’s share of depreciation and amortization from unconsolidated joint ventures ^3^ 20,413 21,012
Corporate-related depreciation and amortization (444) (486)
Less:
Gain on sale of real estate included within (loss) income from unconsolidated joint ventures — 5,946
(Losses) gains on sales of real estate (209) 203,767
Noncontrolling interests in property partnerships 15,561 (767)
Preferred dividends 2,625 2,625
Basic FFO 270,675 263,243
Add:
BXP’s Share of lease transaction costs that qualify as rent inducements ^1,^ ^4^ 2,965 1,309
BXP’s Share of hedge amortization ^1^ 1,446 1,446
BXP’s Share of straight-line ground rent expense adjustment ^1, 5^ 940 992
Stock-based compensation 8,253 10,374
Non-real estate depreciation 444 486
Unearned portion of capitalized fees from consolidated joint ventures ^6^ 660 411
Less:
BXP’s Share of straight-line rent ^1^ 40,478 22,747
BXP’s Share of fair value lease revenue ^1, 7^ 979 2,548
BXP’s Share of non-cash termination income adjustment (fair value lease amounts) ^1^ 828 —
BXP’s Share of 2nd generation tenant improvements and leasing commissions ^1^ 67,826 83,024
BXP’s Share of maintenance capital expenditures ^1, 8^ 21,722 16,246
Hotel improvements, equipment upgrades and replacements 69 36
Funds available for distribution to common shareholders and common unitholders (FAD) ^9^ (A) $ 153,481 $ 153,660
Distributions to common shareholders and unitholders (excluding any special distributions) (B) $ 169,701 $ 169,701
FAD Payout Ratio^1^(B÷A) 110.57 % 110.44 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^For a quantitative reconciliation for the three months ended September 30, 2020, see page 34.

^3^For a quantitative reconciliation for the three months ended September 30, 2020, see page 37.

^4^Consists 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.

^5^Includes 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.

^6^See page 61 for additional information.

^7^Represents 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.^^

^8^Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

^9^FAD for Q3 2020 decreased by $38,439 from $191,920 for Q3 2019. For a reconciliation of FAD to Net income attributable to Boston Properties, Inc. common shareholders for Q3 2019, see page 67. Included in the Q3 2020 amounts are BXP’s Share of: $3,790 of write-offs associated with accounts receivable, a $18,214 decrease in lease revenue related to COVID-19 cash rent abatements and deferrals, a $10,578 decrease in parking and other revenue and a $7,345 decrease in NOI due to the closure of our only hotel. These items decreased Q3 2020 FAD by $39,927. For additional information, see page 59.

Q3 2020
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-20 30-Sep-19
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 107,771
Preferred dividends 2,625 2,625
Net income attributable to Boston Properties, Inc. 92,479 110,396
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership 10,020 12,504
Noncontrolling interest in property partnerships 15,561 18,470
Net income 118,060 141,370
Add:
Interest expense 110,993 106,471
Loss from early extinguishments of debt — 28,010
Depreciation and amortization expense 166,456 165,862
Transaction costs 307 538
Payroll and related costs from management services contracts 2,896 2,429
General and administrative expense 27,862 31,147
Less:
Interest and other income (loss) (45) 7,178
Gains from investments in securities 1,858 106
Losses on sales of real estate (209) (15)
Loss from unconsolidated joint ventures (6,873) (649)
Direct reimbursements of payroll and related costs from management services contracts 2,896 2,429
Development and management services revenue 7,281 10,303
Net Operating Income (NOI) 421,666 456,475
Add:
BXP’s share of NOI from unconsolidated joint ventures ^1^ 24,938 23,065
Less:
Partners’ share of NOI from consolidated joint ventures (after income allocation to private REIT shareholders) ^2^ 42,160 46,249
BXP’s Share of NOI 404,444 433,291
Less:
Termination income 3,406 1,960
BXP’s share of termination income from unconsolidated joint ventures ^1^ — —
Add:
Partners’ share of termination income from consolidated joint ventures ^2^ 556 —
BXP’s Share of NOI (excluding termination income) $ 401,594 $ 431,331
Net Operating Income (NOI) $ 421,666 $ 456,475
Less:
Termination income 3,406 1,960
NOI from non Same Properties (excluding termination income) ^3^ 17,288 16,155
Same Property NOI (excluding termination income) 400,972 438,360
Less:
Partners’ share of NOI from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) ^2^ 41,604 46,249
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^ (70) 191
BXP’s share of NOI from unconsolidated joint ventures (excluding termination income) ^1^ 24,938 23,065
Less:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) ^3^ 6,732 833
BXP’s Share of Same Property NOI (excluding termination income) $ 377,504 $ 414,534

_____________

^1^For a quantitative reconciliation for the three months ended September 30, 2020, see page 64.

^2^For a quantitative reconciliation for the three months ended September 30, 2020, see pages 61-62.

^3^Pages 22-25 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, 2020 and therefore are no longer a part of the Company’s property portfolio.

Q3 2020
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-20 30-Sep-19
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 107,771
Preferred dividends 2,625 2,625
Net income attributable to Boston Properties, Inc. 92,479 110,396
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership 10,020 12,504
Noncontrolling interest in property partnerships 15,561 18,470
Net income 118,060 141,370
Add:
Interest expense 110,993 106,471
Loss from early extinguishments of debt — 28,010
Depreciation and amortization expense 166,456 165,862
Transaction costs 307 538
Payroll and related costs from management services contracts 2,896 2,429
General and administrative expense 27,862 31,147
Less:
Interest and other income (loss) (45) 7,178
Gains from investments in securities 1,858 106
Losses on sales of real estate (209) (15)
Loss from unconsolidated joint ventures (6,873) (649)
Direct reimbursements of payroll and related costs from management services contracts 2,896 2,429
Development and management services revenue 7,281 10,303
Net Operating Income (NOI) 421,666 456,475
Less:
Straight-line rent 46,713 (16,803)
Straight-line rent from deferred revenue ^1^ — 36,926
Fair value lease revenue (662) 4,961
Termination income 3,406 1,960
Add:
Straight-line ground rent expense adjustment ^2^ 799 843
Lease transaction costs that qualify as rent inducements ^3^ 3,966 2,140
NOI - cash (excluding termination income) 376,974 432,414
Less:
NOI - cash from non Same Properties (excluding termination income) ^4^ 15,709 16,576
Same Property NOI - cash (excluding termination income) 361,265 415,838
Less:
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income and after income allocation to private REIT shareholders) ^5^ 35,318 42,930
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) ^4^ (64) 263
BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income) ^6^ 22,288 20,012
Less:
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) ^4^ 4,414 510
BXP’s Share of Same Property NOI - cash (excluding termination income) $ 343,757 $ 392,673

_____________

^1^Represents the straight-line impact related to deferred revenue from a tenant. The tenant paid for improvements to a long-lived asset of the Company resulting in deferred revenue for the period until the asset was substantially complete, which occurred in the third quarter 2019.

^2^In 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 $98 and $176 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, the Company has remaining lease payments aggregating approximately $25.9 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.

^3^Consists 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.

^4^Pages 22-25 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, 2020 and therefore are no longer a part of the Company’s property portfolio.^^

Q3 2020
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI) - cash (continued)

^5^For a quantitative reconciliation for the three months ended September 30, 2020, see page 62.

^6^For a quantitative reconciliation for the three months ended September 30, 2020, see page 64.

Q3 2020
Same property net operating income (NOI) by reportable segment

(dollars in thousands)

Office ^1^ Hotel & Residential ^2^
Three Months Ended % Three Months Ended $ %
30-Sep-20 30-Sep-19 Change Change 30-Sep-20 30-Sep-19 Change Change
Rental Revenue ^3^ $ 647,318 $ 680,356 $ 9,784 $ 23,010
Less: Termination income 2,715 1,698 691 —
Rental revenue (excluding termination income) ^3^ 644,603 678,658 $ (34,055) (5.0) 9,093 23,010 $ (13,917) (60.5) %
Less: Operating expenses and real estate taxes 245,346 250,554 (5,208) (2.1) 7,378 12,754 (5,376) (42.2) %
NOI (excluding termination income) ^3,^ ^4^ $ 399,257 $ 428,104 $ (28,847) (6.7) $ 1,715 $ 10,256 $ (8,541) (83.3) %
Rental revenue (excluding termination income) ^3^ $ 644,603 $ 678,658 $ (34,055) (5.0) $ 9,093 $ 23,010 $ (13,917) (60.5) %
Less: Straight-line rent and fair value lease revenue ^5^ 44,312 25,182 19,130 76.0 153 59 94 159.3 %
Add: Lease transaction costs that qualify as rent inducements ^6^ 3,959 1,876 2,083 111.0 — — — — %
Subtotal 604,250 655,352 (51,102) (7.8) 8,940 22,951 (14,011) (61.0) %
Less: Operating expenses and real estate taxes 245,346 250,554 (5,208) (2.1) 7,378 12,754 (5,376) (42.2) %
Add: Straight-line ground rent expense ^7^ 799 843 (44) (5.2) — — — — %
NOI - cash (excluding termination income) ^3,^ ^4, 5^ $ 359,703 $ 405,641 $ (45,938) (11.3) $ 1,562 $ 10,197 $ (8,635) (84.7) %
Consolidated Total ^1, 8^(A) BXP’s share of Unconsolidated Joint Ventures ^8^ (B)
Three Months Ended % Three Months Ended $ %
30-Sep-20 30-Sep-19 Change Change 30-Sep-20 30-Sep-19 Change Change
Rental Revenue ^3^ $ 657,102 $ 703,366 $ 30,566 $ 35,126
Less: Termination income 3,406 1,698 — —
Rental revenue (excluding termination income) ^3^ 653,696 701,668 $ (47,972) (6.8) 30,566 35,126 $ (4,560) (13.0) %
Less: Operating expenses and real estate taxes 252,724 263,308 (10,584) (4.0) 12,360 12,894 (534) (4.1) %
NOI (excluding termination income) ^3,^ ^4^ $ 400,972 $ 438,360 $ (37,388) (8.5) $ 18,206 $ 22,232 $ (4,026) (18.1) %
Rental revenue (excluding termination income) ^3^ $ 653,696 $ 701,668 $ (47,972) (6.8) $ 30,566 $ 35,126 $ (4,560) (13.0) %
Less: Straight-line rent and fair value lease revenue ^5^ 44,465 25,241 19,224 76.2 542 2,906 (2,364) (81.3) %
Add: Lease transaction costs that qualify as rent inducements ^6^ 3,959 1,876 2,083 111.0 210 176 34 19.3 %
Subtotal $ 613,190 $ 678,303 (65,113) (9.6) 30,234 32,396 (2,162) (6.7) %
Less: Operating expenses and real estate taxes 252,724 263,308 (10,584) (4.0) 12,360 12,894 (534) (4.1) %
Add: Straight-line ground rent expense ^7^ 799 843 (44) (5.2) — — — — %
NOI - cash (excluding termination income) ^3,^ ^4, 5^ $ 361,265 $ 415,838 $ (54,573) (13.1) $ 17,874 $ 19,502 $ (1,628) (8.3) %
Partners’ share of Consolidated Joint Ventures ^8^(C) BXP’s Share ^3, 8, 9, 10, 11^
Three Months Ended % Three Months Ended $ %
30-Sep-20 30-Sep-19 Change Change 30-Sep-20 30-Sep-19 Change Change
Rental Revenue ^3^ $ 71,395 $ 75,286 $ 616,273 $ 663,206
Less: Termination income 556 — 2,850 1,698
Rental revenue (excluding termination income) ^3^ 70,839 75,286 $ (4,447) (5.9) 613,423 661,508 $ (48,085) (7.3) %
Less: Operating expenses and real estate taxes 29,165 29,228 (63) (0.2) 235,919 246,974 (11,055) (4.5) %
NOI (excluding termination income) ^3,^ ^4^ $ 41,674 $ 46,058 $ (4,384) (9.5) $ 377,504 $ 414,534 $ (37,030) (8.9) %
Rental revenue (excluding termination income) ^3^ $ 70,839 $ 75,286 $ (4,447) (5.9) $ 613,423 $ 661,508 $ (48,085) (7.3) %
Less: Straight-line rent and fair value lease revenue ^5^ 7,165 3,672 3,493 95.1 37,842 24,475 13,367 54.6 %
Add: Lease transaction costs that qualify as rent inducements ^6^ 873 281 592 210.7 3,296 1,771 1,525 86.1 %
Subtotal 64,547 71,895 (7,348) (10.2) 578,877 638,804 (59,927) (9.4) %
Less: Operating expenses and real estate taxes 29,165 29,228 (63) (0.2) 235,919 246,974 (11,055) (4.5) %
Add: Straight-line ground rent expense ^7^ — — — — 799 843 (44) (5.2) %
NOI - cash (excluding termination income) ^3,^ ^4, 5^ $ 35,382 $ 42,667 $ (7,285) (17.1) $ 343,757 $ 392,673 $ (48,916) (12.5) %

All values are in US Dollars.

___________________

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

^2^As a result of COVID-19, the Boston Marriott Cambridge closed in March 2020 and did not re-open until October 2, 2020.^^

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^4^For 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.

^5^For the three months ended September 30, 2019, excludes the straight-line impact of approximately $(36.9) million for Office and Consolidated Total, $(14.7) million for Partners’ share of Consolidated Joint Ventures and $(22.2) million for BXP’s Share in connection with the deferred revenue received from a tenant. For additional information, see page 9.

Q3 2020
Same property net operating income (NOI) by reportable segment (continued)

^6^Consists 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.

^7^Excludes the straight-line impact of approximately $98 and $176 for the three months ended September 30, 2020 and 2019, respectively, in connection with the Company’s 99-year ground and air rights lease at 100 Clarendon Street garage and Back Bay Transit Station. For additional information, see page 9.

^8^For the three months ended September 30, 2020, includes write-offs associated with accounts receivable of approximately $3,373 for Consolidated Total, $120 for Partners’ share of Consolidated Joint Ventures, $537 for BXP’s share of Unconsolidated Joint Ventures and $3,790 for BXP’s Share, primarily related to COVID-19. For the three months ended September 30, 2020, includes write-offs associated with straight-line rent of approximately $4,098 for Consolidated Total, $86 for Partners’ share of Consolidated Joint Ventures, $1,919 for BXP’s share of Unconsolidated Joint Ventures and $5,931 for BXP’s Share, primarily related to COVID-19. For additional information, see page 59.

^9^BXP’s Share equals (A) + (B) - (C).

^10^BXP’s Share of Same Store NOI (excluding termination income) was $37,030 less, compared to Q3 2019. Included in the Q3 2020 comparison are BXP’s Share of $5,931 of write-offs associated with accrued rent (all of which was included within straight-line rent), $3,790 of write-offs associated with accounts receivable, $10,406 decrease in parking and other revenue and a $7,345 decrease in NOI due to the closure of our only hotel. These items decreased BXP’s Share of Same Store NOI (excluding termination income) by $27,472. For additional information, see page 59.

^11^BXP’s Share of Same Store NOI-cash (excluding termination income) was $48,916 less, compared to Q3 2019. Included in the Q3 2020 comparison are BXP’s Share of $3,790 of write-offs associated with accounts receivable, $16,828 decrease in lease revenue related to COVID-19 cash rent abatements and deferrals, $10,406 decrease in parking and other revenue and a $7,345 decrease in NOI due to the closure of our only hotel. These items decreased BXP’s Share of Same Store NOI-cash (excluding termination income) by $38,369. For additional information, see page 59.

Q3 2020
Capital expenditures, tenant improvement costs and leasing commissions

(dollars in thousands, except PSF amounts)

CAPITAL EXPENDITURES

Three Months Ended
30-Sep-20 30-Jun-20
Maintenance capital expenditures $ 22,003 $ 15,461
Planned capital expenditures associated with acquisition properties — —
Repositioning capital expenditures (121) 98
Hotel improvements, equipment upgrades and replacements 69 36
Subtotal 21,951 15,595
Add:
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (JVs) 178 876
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated JVs 1,793 3,034
BXP’s share of repositioning capital expenditures from unconsolidated JVs (203) 655
Less:
Partners’ share of maintenance capital expenditures from consolidated JVs 459 91
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated JVs — —
Partners’ share of repositioning capital expenditures from consolidated JVs (77) 30
BXP’s Share of Capital Expenditures ^1^ $ 23,337 $ 20,039

2nd GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS ^2^

Three Months Ended
30-Sep-20 30-Jun-20
Square feet 1,188,471 1,278,458
Tenant improvements and lease commissions PSF $ 66.57 $ 102.33

___________________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^Includes 100% of unconsolidated joint ventures.

Q3 2020
Acquisitions and dispositions

For the period from January 1, 2020 through September 30, 2020

(dollars in thousands)

ACQUISITIONS

Investment
Property Location Date Acquired Square Feet Initial Anticipated Future Total In-service Leased (%)
681, 685 and 701 Gateway (50% nominal ownership interest) ^1^ South San Francisco, CA January 28, 2020 312,828 $ 280,751 $ — $ 280,751 100.0 %
Platform 16 (55% ownership interest) ^2^ San Jose, CA February 20, 2020 N/A 74,113 — 74,113 N/A
Fourth + Harrison San Francisco, CA June 26, 2020 N/A 140,147 — 140,147 N/A
Beach Cities Media Center (50% ownership interest) El Segundo, CA July 23, 2020 N/A 21,226 — 21,226 N/A
759 Harrison Street (undivided 50% ownership interest) San Francisco, CA July 31, 2020 N/A 2,250 — 2,250 N/A
Total Acquisitions 312,828 $ 518,487 $ — $ 518,487 100.0 %

DISPOSITIONS

Property Location Date Disposed Square Feet Gross Sales Price Net Cash Proceeds Book Gain ^5^
601, 611 and 651 Gateway (50% ownership interest) ^1^ South San Francisco, CA January 28, 2020 768,236 $ 350,000 $ — $ 217,744
New Dominion Technology Park Herndon, VA February 20, 2020 492,601 256,000 253,971 192,297
Annapolis Junction Building Eight and two land parcels (50% ownership interest) ^3^ Annapolis, MD June 25, 2020 125,685 47,000 22,899 5,833
Capital Gallery ^4^ Washington, DC June 25, 2020 455,000 253,675 246,615 203,557
Total Dispositions 1,841,522 $ 906,675 $ 523,485 $ 619,431

________________

^1^On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California. The Company contributed its 601, 611 and 651 Gateway properties and development rights with an agreed upon value aggregating approximately $350.0 million for its 50% interest in the joint venture. The partner contributed three properties and development rights with an agreed upon value aggregating approximately $280.8 million at closing and will contribute cash totaling approximately $69.2 million in the future for its 50% ownership interest in the joint venture. As a result of the partner’s deferred contribution, the Company has an initial approximately 55% interest in the joint venture. The Company recognized a gain on the retained and sold interest in the real estate contributed to the joint venture totaling approximately $217.7 million during the three months ended March 31, 2020, as the fair value of the real estate exceeded its carrying value.

^2^On February 20, 2020, a joint venture in which the Company has a 55% interest acquired the land underlying the ground lease at its Platform 16 project located in San Jose, California for a purchase price totaling approximately $134.8 million. The joint venture had previously made a deposit totaling $15.0 million, which deposit was credited against the purchase price. Platform 16 consists of a parcel of land totaling approximately 5.6 acres that is expected to support the development of approximately 1.1 million square feet of commercial office space.

^3^Net cash proceeds totaled approximately $45.8 million, of which the Company’s share was approximately $22.9 million. The joint venture distributed approximately $36.8 million, of which the Company’s share totaled approximately $18.4 million, of available cash and the net proceeds from the sale after the pay down of the mortgage loan. The Company’s share of the gain on sale of real estate totaling approximately $5.8 million is included in Income from Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations.

^4^On June 25, 2020, the Company sold a portion of its Capital Gallery property located in Washington, DC for a gross sale price of approximately $253.7 million. The portion sold was comprised of approximately 455,000 net rentable square feet of commercial office space. The Company continues to own the land, underground parking garage and remaining commercial office and retail space containing approximately 176,000 net rentable square feet at the property.

^5^Excludes approximately $0.2 million of gains on sales of real estate recognized during the nine months ended September 30, 2020 related to gain amounts from sales of real estate occurring in the prior year.

Q3 2020
Construction in progress

as of September 30, 2020

(dollars in thousands)

CONSTRUCTION IN PROGRESS ^1^

Actual/Estimated BXP’s share
Estimated Total Investment ^2^ Amount Drawn at 9/30/2020 Estimated Future Equity Requirement ^2^ Percentage placed in-service ^4^ Net Operating Income (Loss) ^5^(BXP’s share)
Initial Occupancy Stabilization Date Square Feet Investment to Date ^2^ Total Financing Percentage Leased ^3^
Construction Properties Location
Office and Retail
Dock 72 (50% ownership) Q4 2019 Q2 2022 Brooklyn, NY 670,000 $ 209,795 $ 243,150 $ 125,000 $ 98,206 $ 6,561 33 % 34 % $ 635
325 Main Street Q3 2022 Q3 2022 Cambridge, MA 420,000 148,585 418,400 — 269,815 90 % — % N/A
100 Causeway Street (50% ownership) Q2 2021 Q3 2022 Boston, MA 632,000 167,620 267,300 200,000 — 90,274 — 94 % — % N/A
7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership) Q3 2022 Q3 2022 Bethesda, MD 734,000 134,843 198,900 127,500 66,361 2,918 100 % — % N/A
Reston Next (formerly Reston Gateway) Q4 2022 Q4 2023 Reston, VA 1,062,000 323,537 715,300 — — 391,763 85 % — % N/A
2100 Pennsylvania Avenue Q3 2022 Q3 2024 Washington, DC 480,000 109,153 356,100 — — 246,947 62 % — % N/A
Total Office Properties under Construction 3,998,000 1,093,533 2,199,150 452,500 254,841 918,004 78 % 6 % 635
Redevelopment Properties
One Five Nine East 53rd (55% ownership) Q1 2021 Q1 2021 New York, NY 220,000 137,155 150,000 — — 12,845 96 % — % N/A
200 West Street ^6^ Q4 2021 Q4 2021 Waltham, MA 126,000 13,663 47,800 — — 34,137 — % — % N/A
Total Redevelopment Properties under Construction 346,000 150,818 197,800 — — 46,982 61 % — % N/A
Total Properties Under Construction and Redevelopment 4,344,000 $ 1,244,351 $ 2,396,950 $ 452,500 $ 254,841 $ 964,986 77 % 6 % 635

PROJECTS FULLY PLACED IN-SERVICE DURING 2020

Actual/Estimated BXP’s share
Estimated Total Investment ^2^ Amount Drawn at 9/30/2020 Estimated Future Equity Requirement ^2^ Net Operating Income (Loss) ^5^(BXP’s share)
Initial Occupancy Stabilization Date Square feet Investment to Date ^2^ Total Financing Percentage Leased ^3^
Location
17Fifty Presidents Street Q1 2020 Q1 2020 Reston, VA 275,809 $ 130,989 $ 142,900 $ — $ — $ 11,911 100 % $ 3,635
20 CityPoint Q3 2019 Q3 2021 Waltham, MA 211,476 76,951 97,000 — — 20,049 62 % 1,130
Hub50House (440 units) (50% ownership) Q4 2019 Q1 2022 Boston, MA 320,444 146,296 153,500 90,000 84,517 1,721 55 % 233
The Skylyne (402 units) ^7^ Q3 2020 Q1 2022 Oakland, CA 318,171 242,166 263,600 — — 21,434 8 % (717)
Skylyne Retail 12,825 N/A N/A — — — — % —
Total Projects Fully Placed In-Service 1,138,725 $ 596,402 $ 657,000 $ 90,000 $ 84,517 $ 55,115 81 % ^8^ $ 4,281
Q3 2020
--- ---
Construction in progress (continued)

_____________

^1^A 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.

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

^3^Represents percentage leased as of October 27, 2020, including leases with future commencement dates.

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

^5^Amounts represent Net Operating Income (Loss) for the three months ended September 30, 2020. See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^6^Represents a portion of the property under redevelopment for conversion to laboratory space.

^7^This property is subject to a 99-year ground lease (including extension options) with an option to purchase in the future.

^8^Excludes residential units.

Q3 2020
Land parcels and purchase options

as of September 30, 2020

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 820,000
South San Francisco, CA (50% ownership) 640,000
Waltham, MA 605,000
Washington, DC (50% ownership) 520,000
Springfield, VA 422,000
Santa Clara, CA ^3^ 414,000
Marlborough, MA 400,000
Dulles, VA 310,000
El Segundo, CA (50% ownership) ^4^ 275,000
Total 14,271,000

VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS

Location Approximate Developable Square Feet ^1^
Boston, MA 1,300,000
Waltham, MA^5^ 1,200,000
Cambridge, MA 330,000
Total 2,830,000

__________________

^1^Represents 100%.

^2^During the third quarter of 2020, a ground lease was executed with a hotel developer for approximately 200,000 square feet, contingent on their ability to obtain construction financing.

^3^Excludes the existing square footage at in-service properties being held for future re-development as listed and noted on page 24.

^4^Completed the acquisition of a 50% interest in Beach Cities Media Center, a 6.4-acre land site.

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

Q3 2020
Leasing activity

for the three months ended September 30, 2020

ALL IN-SERVICE PROPERTIES

Net (increase)/decrease in available space (SF) Total
Vacant space available at the beginning of the period 3,570,356
Add:
Properties placed (and partially placed) in-service ^1^ 12,825
Leases expiring or terminated during the period 1,597,697
Total space available for lease 5,180,878
1st generation leases —
2nd generation leases with new tenants 613,534
2nd generation lease renewals 574,937
Total space leased 1,188,471
Vacant space available for lease at the end of the period 3,992,407
Net (increase)/decrease in available space (422,051)
Second generation leasing information: ^2^
Leases commencing during the period (SF) 1,188,471
Weighted average lease term (months) 89
Weighted average free rent period (days) 144
Total transaction costs per square foot ^3^ 66.57
Increase (decrease) in gross rents ^4^ 13.65
Increase (decrease) in net rents ^5^ 20.14

All values are in US Dollars.

All leases (SF) Incr (decr) in 2nd generation cash rents ^6^ Total square feet of leases executed in the quarter ^7, 8^
1st generation 2nd generation total ^6^ gross 4 net ^5^
Boston — 262,154 262,154 10.14 % 15.32 % 96,491
Los Angeles — 56,415 56,415 13.52 % 19.59 % 68,854
New York — 210,455 210,455 7.85 % 14.00 % 249,461
San Francisco — 386,729 386,729 21.24 % 29.48 % 37,674
Washington, DC — 272,718 272,718 0.76 % 1.06 % 358,492
Total / Weighted Average — 1,188,471 1,188,471 13.65 % 20.14 % 810,972

_____________

^1^Total square feet of properties placed (and partially placed) in-service in Q3 2020 consists of 12,825 square feet of retail at The Skylyne.

^2^Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,188,471 square feet of second generation leases that commenced in Q3 2020, leases for 1,014,284 square feet were signed in prior periods.

^3^Total transaction costs include tenant improvements and leasing commissions, but 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 894,966 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”).

^5^Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 894,966 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”).

^6^Represents leases for which rental revenue recognition commenced in accordance with GAAP during the quarter.

^7^Amounts shown in this column exclude COVID-19 related lease modifications covering an aggregate of approximately 667,000 square feet that were executed in the third quarter of 2020 to provide cash rent deferral and/or abatement in the aggregate amount of approximately $11.3 million in the third quarter representing BXP’s Share. Of these lease modifications, the lease terms associated with 176,787 square feet were extended for a period of 12 or more months. In addition, COVID-19 related lease modifications from the second quarter of 2020 provide cash rent and/or abatement in the aggregate amount of approximately $6.9 million in the third quarter representing BXP’s Share. For additional information, see page 59.

^8^Represents 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 174,187.

Q3 2020
Portfolio overview

for the three months ended September 30, 2020

(dollars in thousands)

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

Office Retail Residential Hotel Total
Boston 13,789,140 1,106,270 550,114 330,000 15,775,524
Los Angeles 2,181,921 124,932 — — 2,306,853
New York 10,482,351 395,923 — — 10,878,274
San Francisco 7,497,789 334,643 318,171 — 8,150,603
Washington, DC 8,299,959 664,327 822,436 — 9,786,722
Total 42,251,160 2,626,095 1,690,721 330,000 46,897,976
% of Total 90.09 % 5.60 % 3.61 % 0.70 % 100.00 %

Rental revenue of in-service properties by unit type ^1^

Office ^3^ Retail ^4^ Residential Hotel ^5^ Total
Consolidated $ 627,740 $ 46,486 $ 8,863 $ 2 $ 683,091
Less:
Partners’ share from consolidated joint ventures ^6^ 62,406 9,061 — — 71,467
Add:
BXP’s share from unconsolidated joint ventures ^7^ 39,243 2,639 996 — 42,878
BXP’s Share of Rental revenue ^1^ $ 604,577 $ 40,064 $ 9,859 $ 2 $ 654,502
% of Total 92.37 % 6.12 % 1.51 % — % 100.00 %

Percentage of BXP’s Share of net operating income (NOI) (excluding termination income) by location ^1,^ ^8^

CBD Suburban Total
Boston 25.83 % 7.77 % 33.60 %
Los Angeles 2.98 % — % 2.98 %
New York 24.50 % 2.66 % 27.16 %
San Francisco 19.06 % 3.34 % 22.40 %
Washington, DC 5.09 % 8.77 % 13.86 %
Total 77.46 % 22.54 % 100.00 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^Includes 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 22-25.

^3^Includes the impact of write-offs associated with accounts receivable of approximately $493, $0, $537 and $1,030 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively. Includes the impact of write-offs associated with accrued rent of approximately $1,036, $0, $1,919 and $2,955 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively.

^4^Includes the impact of write-offs associated with accounts receivable of approximately $2,880, $120, $0 and $2,760 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively. Includes the impact of write-offs associated with accrued rent of approximately $3,062, $86, $0 and $2,976 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively.

^5^Excludes approximately $88 of revenue from retail tenants that is included in Retail.

^6^See page 62 for additional information.

^7^See page 64 for additional information.

^8^BXP’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. common shareholders to BXP’s Share of NOI (excluding termination income), see page 8.

Q3 2020
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-20 30-Jun-20 30-Sep-20 30-Jun-20
Rental Revenue ^3^ $ 9,718 $ 9,402 $ 90 $ 99
Less: Operating expenses and real estate taxes 4,955 3,965 3,164 1,973
Net Operating Income (Loss) (NOI) ^3^ 4,763 5,437 (3,074) (1,874)
Add: BXP’s share of NOI from unconsolidated joint ventures 233 41 N/A N/A
BXP’s Share of NOI ^3^ $ 4,996 $ 5,478 $ (3,074) $ (1,874)
Rental Revenue ^3^ $ 9,718 $ 9,402 $ 90 $ 99
Less: Straight line rent and fair value lease revenue 159 (69) (6) (6)
Subtotal 9,559 9,471 96 105
Less: Operating expenses and real estate taxes 4,955 3,965 3,164 1,973
NOI - cash basis ^3^ 4,604 5,506 (3,068) (1,868)
Add: BXP’s share of NOI-cash from unconsolidated joint ventures 233 41 N/A N/A
BXP’s Share of NOI - cash basis ^3^ $ 4,837 $ 5,547 $ (3,068) $ (1,868)

RENTAL RATES AND OCCUPANCY - Year-over-Year

Residential Units Three Months Ended Percent Change
30-Sep-20 30-Sep-19
BOSTON
Hub50House (50% ownership), Boston, MA ^3, 4^ 440
Average Monthly Rental Rate $ 3,571 N/A N/A
Average Rental Rate Per Occupied Square Foot $ 5.32 N/A N/A
Average Physical Occupancy 45.08 % N/A N/A
Average Economic Occupancy 39.31 % N/A N/A
Proto Kendall Square, Cambridge, MA ^3, 5^ 280
Average Monthly Rental Rate $ 2,676 $ 2,972 (9.96) %
Average Rental Rate Per Occupied Square Foot $ 4.91 $ 5.49 (10.56) %
Average Physical Occupancy 85.71 % 95.95 % (10.67) %
Average Economic Occupancy 83.13 % 96.14 % (13.53) %
The Lofts at Atlantic Wharf, Boston, MA ^3, 5^ 86
Average Monthly Rental Rate $ 4,231 $ 4,498 (5.94) %
Average Rental Rate Per Occupied Square Foot $ 4.62 $ 4.99 (7.41) %
Average Physical Occupancy 80.23 % 95.35 % (15.86) %
Average Economic Occupancy 80.74 % 95.22 % (15.21) %
Boston Marriott Cambridge (437 rooms), Cambridge, MA^2, 5^ N/A
Average Occupancy — % 90.70 % (100.00) %
Average Daily Rate $ — $ 293.45 (100.00) %
Revenue Per Available Room $ — $ 266.31 (100.00) %
SAN FRANCISCO
The Skylyne, Oakland, CA ^3, 6^ 402
Average Monthly Rental Rate $ 3,887 N/A N/A
Average Rental Rate Per Occupied Square Foot $ 4.97 N/A N/A
Average Physical Occupancy 2.27 % N/A N/A
Average Economic Occupancy 1.70 % N/A N/A
Q3 2020
--- ---
Residential and hotel performance (continued)

RENTAL RATES AND OCCUPANCY - Year-over-Year

Residential Units Three Months Ended Percent Change
30-Sep-20 30-Sep-19
WASHINGTON, DC
Signature at Reston, Reston, VA ^3, 5, 7^ 508
Average Monthly Rental Rate $ 2,319 $ 2,379 (2.52) %
Average Rental Rate Per Occupied Square Foot $ 2.42 $ 2.56 (5.47) %
Average Physical Occupancy 82.22 % 74.48 % 10.39 %
Average Economic Occupancy 78.20 % 68.90 % 13.50 %
The Avant at Reston Town Center, Reston, VA ^3, 5^ 359
Average Monthly Rental Rate $ 2,352 $ 2,447 (3.88) %
Average Rental Rate Per Occupied Square Foot $ 2.57 $ 2.66 (3.38) %
Average Physical Occupancy 89.69 % 92.94 % (3.50) %
Average Economic Occupancy 88.90 % 93.04 % (4.45) %
Total In-Service Residential Units 2,075

_____________

^1^Includes retail space.

^2^As a result of COVID-19, the Boston Marriott Cambridge closed in March 2020 and did not re-open until October 2, 2020.

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^4^This property was completed and fully placed in-service on July 24, 2020 and is in its initial lease-up period with expected stabilization in the first quarter of 2022.

^5^Excludes retail space.

^6^This property was completed and fully placed in-service on August 15, 2020 and is in its initial lease-up period with expected stabilization in the first quarter of 2022.

^7^This property was completed and fully placed in-service on June 7, 2018 and is in its initial lease-up period with expected stabilization in the second quarter of 2021.

Q3 2020
In-service property listing

as of September 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
BOSTON
Office
200 Clarendon Street CBD Boston MA 1 1,768,286 98.1 % $ 70.13
100 Federal Street (55% ownership) CBD Boston MA 1 1,238,461 99.5 % 64.81
800 Boylston Street - The Prudential Center CBD Boston MA 1 1,235,538 93.9 % 64.53
111 Huntington Avenue - The Prudential Center CBD Boston MA 1 860,455 100.0 % 69.15
Atlantic Wharf Office (55% ownership) CBD Boston MA 1 793,823 100.0 % 73.40
Prudential Center (retail shops) ^3, 4^ CBD Boston MA 1 594,771 97.2 % 88.13
101 Huntington Avenue - The Prudential Center CBD Boston MA 1 506,476 100.0 % 55.06
The Hub on Causeway - Podium (50% ownership) ^4, 5, 6^ CBD Boston MA 1 382,497 97.7 % 62.39
888 Boylston Street - The Prudential Center CBD Boston MA 1 364,079 99.8 % 77.16
Star Market at the Prudential Center ^3^ CBD Boston MA 1 57,236 100.0 % 60.95
Subtotal 10 7,801,622 98.2 % $ 68.96
145 Broadway ^6^ East Cambridge MA 1 490,086 98.5 % $ 84.64
355 Main Street East Cambridge MA 1 259,640 99.0 % 76.60
90 Broadway East Cambridge MA 1 223,771 100.0 % 72.44
255 Main Street East Cambridge MA 1 215,394 92.9 % 85.10
300 Binney Street East Cambridge MA 1 195,191 100.0 % 59.02
150 Broadway East Cambridge MA 1 177,226 100.0 % 81.09
105 Broadway East Cambridge MA 1 152,664 100.0 % 69.92
250 Binney Street East Cambridge MA 1 67,362 100.0 % 46.44
University Place Mid-Cambridge MA 1 195,282 100.0 % 53.15
Subtotal 9 1,976,616 98.7 % $ 73.72
Bay Colony Corporate Center Route 128 Mass Turnpike MA 4 1,001,136 86.5 % $ 44.89
Reservoir Place Route 128 Mass Turnpike MA 1 526,985 90.1 % 38.16
880 & 890 Winter Street ^6^ Route 128 Mass Turnpike MA 2 392,576 78.5 % 41.64
140 Kendrick Street Route 128 Mass Turnpike MA 3 380,991 67.8 % 53.59
Weston Corporate Center Route 128 Mass Turnpike MA 1 356,995 100.0 % 57.10
Waltham Weston Corporate Center Route 128 Mass Turnpike MA 1 301,611 92.7 % 40.38
230 CityPoint Route 128 Mass Turnpike MA 1 296,212 96.6 % 41.40
10 CityPoint Route 128 Mass Turnpike MA 1 241,203 98.1 % 51.73
20 CityPoint ^6^ Route 128 Mass Turnpike MA 1 211,476 62.4 % 51.60
77 CityPoint Route 128 Mass Turnpike MA 1 209,712 95.4 % 50.16
200 West Street ^6, 7^ Route 128 Mass Turnpike MA 1 134,921 100.0 % 39.57
1265 Main Street (50% ownership) ^5^ Route 128 Mass Turnpike MA 1 114,969 100.0 % 44.87
Reservoir Place North Route 128 Mass Turnpike MA 1 73,258 100.0 % 45.05
195 West Street Route 128 Mass Turnpike MA 1 63,500 — % —
The Point ^3^ Route 128 Mass Turnpike MA 1 16,300 84.7 % 56.18
191 Spring Street Route 128 Northwest MA 1 170,997 100.0 % 45.46
Lexington Office Park Route 128 Northwest MA 2 166,779 67.4 % 31.44
201 Spring Street Route 128 Northwest MA 1 106,300 100.0 % 45.06
33 Hayden Avenue Route 128 Northwest MA 1 80,876 100.0 % 62.35
32 Hartwell Avenue Route 128 Northwest MA 1 69,154 100.0 % 28.71
100 Hayden Avenue Route 128 Northwest MA 1 55,924 100.0 % 45.81
181 Spring Street Route 128 Northwest MA 1 55,793 100.0 % 44.01
92 Hayden Avenue Route 128 Northwest MA 1 31,100 100.0 % 43.99
17 Hartwell Avenue Route 128 Northwest MA 1 30,000 100.0 % 48.17
Subtotal 31 5,088,768 87.4 % $ 45.38
Boston Office Total: 50 14,867,006 94.6 % $ 62.12
Residential
Hub50House (440 units) (50% ownership) ^5, 6^ CBD Boston MA 1 320,444
The Lofts at Atlantic Wharf (86 units) CBD Boston MA 1 87,097
Proto Kendall Square (280 units) East Cambridge MA 1 166,717
Boston Residential Total: 3 574,258
Q3 2020
--- ---
In-service property listing (continued)

as of September 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
BOSTON (continued)
Hotel
Boston Marriott Cambridge (437 rooms) East Cambridge MA 1 334,260
Boston Hotel Total: 1 334,260
Boston Total: 54 15,775,524
LOS ANGELES
Office
Colorado Center (50% ownership) ^5^ West Los Angeles CA 6 1,128,600 100.0 % $ 70.81
Santa Monica Business Park (55% ownership) ^5^ West Los Angeles CA 14 1,103,849 93.8 % 60.04
Santa Monica Business Park Retail (55% ownership) ^3, 5^ West Los Angeles CA 7 74,404 90.1 % 65.18
Subtotal 27 2,306,853 96.7 % $ 65.67
Los Angeles Total: 27 2,306,853 96.7 % $ 65.67
NEW YORK
Office
767 Fifth Avenue (The GM Building) (60% ownership) ^4^ Plaza District NY 1 1,957,768 89.3 % $ 161.75
399 Park Avenue Park Avenue NY 1 1,576,437 88.9 % 102.14
601 Lexington Avenue (55% ownership) Park Avenue NY 1 1,445,155 97.6 % 101.99
599 Lexington Avenue Park Avenue NY 1 1,062,708 99.3 % 92.77
Times Square Tower (55% ownership) ^4^ Times Square NY 1 1,250,578 94.7 % 80.87
250 West 55th Street Times Square / West Side NY 1 966,965 99.7 % 96.67
510 Madison Avenue Fifth/Madison Avenue NY 1 355,083 98.4 % 141.87
Subtotal 7 8,614,694 94.2 % $ 111.71
510 Carnegie Center Princeton NJ 1 234,160 — % $ —
206 Carnegie Center Princeton NJ 1 161,763 100.0 % 35.17
210 Carnegie Center Princeton NJ 1 159,468 79.2 % 37.31
212 Carnegie Center Princeton NJ 1 151,355 76.6 % 36.35
214 Carnegie Center Princeton NJ 1 146,979 43.2 % 46.25
506 Carnegie Center Princeton NJ 1 138,616 80.5 % 36.81
508 Carnegie Center Princeton NJ 1 134,433 100.0 % 41.37
202 Carnegie Center Princeton NJ 1 134,068 91.2 % 40.59
804 Carnegie Center Princeton NJ 1 130,000 100.0 % 39.63
504 Carnegie Center Princeton NJ 1 121,990 100.0 % 33.52
101 Carnegie Center Princeton NJ 1 121,620 100.0 % 38.10
502 Carnegie Center Princeton NJ 1 121,460 100.0 % 37.53
701 Carnegie Center Princeton NJ 1 120,000 100.0 % 42.81
104 Carnegie Center Princeton NJ 1 102,930 63.6 % 38.56
103 Carnegie Center Princeton NJ 1 96,332 68.0 % 33.05
105 Carnegie Center Princeton NJ 1 69,955 56.3 % 35.52
302 Carnegie Center Princeton NJ 1 64,926 89.3 % 37.00
211 Carnegie Center Princeton NJ 1 47,025 100.0 % 38.06
201 Carnegie Center Princeton NJ — 6,500 100.0 % 38.84
Subtotal 18 2,263,580 76.5 % $ 38.11
New York Total: 25 10,878,274 90.5 % $ 98.75
SAN FRANCISCO
Office
Salesforce Tower CBD San Francisco CA 1 1,420,682 100.0 % $ 102.31
Embarcadero Center Four CBD San Francisco CA 1 941,138 96.2 % 80.66
Embarcadero Center One CBD San Francisco CA 1 822,102 91.9 % 76.58
Embarcadero Center Two CBD San Francisco CA 1 799,208 91.2 % 78.39
Embarcadero Center Three CBD San Francisco CA 1 785,698 93.6 % 75.00
Q3 2020
--- ---
In-service property listing (continued)

as of September 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
SAN FRANCISCO (continued)
680 Folsom Street CBD San Francisco CA 2 524,793 100.0 % 69.00
535 Mission Street CBD San Francisco CA 1 307,235 95.7 % 84.59
690 Folsom Street CBD San Francisco CA 1 26,080 100.0 % 63.63
Subtotal 9 5,626,936 95.8 % $ 83.73
Gateway Commons (55% ownership) ^5, 6, 8^ South San Francisco CA 6 1,070,393 81.5 % $ 53.31
Mountain View Research Park Mountain View CA 15 542,264 76.3 % 67.87
2440 West El Camino Real Mountain View CA 1 141,392 87.2 % 84.58
453 Ravendale Drive Mountain View CA 1 29,620 85.8 % 48.54
3625-3635 Peterson Way ^9^ Santa Clara CA 1 218,366 100.0 % 24.17
North First Business Park ^9^ San Jose CA 5 190,636 61.9 % 26.71
Subtotal 29 2,192,671 80.8 % $ 53.47
San Francisco Office Total: 38 7,819,607 91.6 % $ 76.22
Residential
The Skylyne (402 units) ^6^ CBD Oakland CA 1 330,996
San Francisco Residential Total: 1 330,996
San Francisco Total: 39 8,150,603
WASHINGTON, DC
Office
Metropolitan Square (20% ownership) ^5^ East End Washington DC 1 654,145 62.6 % $ 67.82
901 New York Avenue (25% ownership) ^5^ East End Washington DC 1 541,739 74.9 % 66.06
601 Massachusetts Avenue East End Washington DC 1 478,818 98.4 % 84.10
Market Square North (50% ownership) ^5^ East End Washington DC 1 417,979 79.3 % 69.63
2200 Pennsylvania Avenue CBD Washington DC 1 458,831 100.0 % 98.64
1330 Connecticut Avenue CBD Washington DC 1 253,941 89.4 % 71.52
Sumner Square CBD Washington DC 1 209,556 97.0 % 54.82
500 North Capitol Street, N.W. (30% ownership) ^5^ Capitol Hill Washington DC 1 230,900 98.5 % 79.23
Capital Gallery ^6, 8^ Southwest Washington DC 1 176,078 91.2 % 56.57
Subtotal 9 3,421,987 84.6 % $ 74.78
South of Market Reston VA 3 623,250 71.9 % $ 55.74
Fountain Square Reston VA 2 505,492 76.1 % 53.77
One Freedom Square Reston VA 1 432,289 66.9 % 51.87
Two Freedom Square Reston VA 1 422,349 100.0 % 49.53
One and Two Discovery Square Reston VA 2 366,989 100.0 % 50.79
One Reston Overlook Reston VA 1 319,519 100.0 % 44.91
17Fifty Presidents Street ^6^ Reston VA 1 275,809 100.0 % 59.13
Reston Corporate Center Reston VA 2 261,046 100.0 % 44.17
Democracy Tower Reston VA 1 259,441 98.4 % 58.78
Fountain Square Retail ^3^ Reston VA 1 216,591 87.1 % 44.60
Two Reston Overlook Reston VA 1 134,615 — % —
Subtotal 16 3,817,390 84.1 % $ 51.62
Wisconsin Place Office Montgomery County MD 1 299,217 82.3 % $ 58.88
Kingstowne Two Springfield VA 1 156,071 67.6 % 37.84
Kingstowne One Springfield VA 1 150,957 93.0 % 38.92
7601 Boston Boulevard Springfield VA 1 108,286 100.0 % 32.77
7435 Boston Boulevard Springfield VA 1 103,557 83.4 % 24.39
8000 Grainger Court Springfield VA 1 88,775 — % —
Kingstowne Retail ^3^ Springfield VA 1 88,288 94.3 % 37.37
7500 Boston Boulevard Springfield VA 1 79,971 100.0 % 19.30
7501 Boston Boulevard Springfield VA 1 75,756 100.0 % 29.64
7450 Boston Boulevard Springfield VA 1 62,402 100.0 % 17.64
Q3 2020
--- ---
In-service property listing (continued)

as of September 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
WASHINGTON, DC (continued)
7374 Boston Boulevard Springfield VA 1 57,321 100.0 % 18.37
8000 Corporate Court Springfield VA 1 52,539 100.0 % 16.15
7451 Boston Boulevard Springfield VA 1 45,615 67.4 % 27.78
7300 Boston Boulevard Springfield VA 1 32,000 100.0 % 23.18
7375 Boston Boulevard Springfield VA 1 26,865 100.0 % 28.25
Annapolis Junction Building Seven (50% ownership) ^5^ Anne Arundel County MD 1 127,229 100.0 % 35.84
Annapolis Junction Building Six (50% ownership) ^5^ Anne Arundel County MD 1 119,339 75.2 % 32.09
Subtotal 17 1,674,188 83.9 % $ 35.12
Washington, DC Office Total: 42 8,913,565 84.3 % $ 57.42
Residential
Signature at Reston (508 units) Reston VA 1 517,783
The Avant at Reston Town Center (359 units) Reston VA 1 355,374
Washington, DC Residential Total: 2 873,157
Washington, DC Total: 44 9,786,722
Total In-Service Properties: 189 46,897,976 91.1 % ^10^ $ 72.77 ^10^

_____________

^1^Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^3^This is a retail property.

^4^Includes 275,868 square feet at Prudential Center (retail shops), 66,806 square feet at The Hub on Causeway - Podium, 343,572 square feet at Times Square Tower and 30,094 square feet at 767 Fifth Avenue (The GM building) of leases terminated by the Company where the tenant is still occupying the space.

^5^This is an unconsolidated joint venture property.

^6^Not included in the Same Property analysis.

^7^A portion of this property is under redevelopment. For additional detail, see page 15.

^8^For additional detail, see page 14.

^9^Property held for redevelopment.

^10^Excludes Hotel and Residential properties. For additional detail, see pages 20-21.

Q3 2020
Top 20 tenants listing and portfolio tenant diversification

as of September 30, 2020

TOP 20 TENANTS

No. Tenant BXP’s Share of Annualized Rental Obligations ^1^ Weighted Average Remaining Lease Term (years) ^2^
1 salesforce.com 3.49 % 11.7
2 Arnold & Porter Kaye Scholer 2.81 % 13.1
3 Akamai Technologies 2.21 % 14.1
4 Biogen 1.82 % 6.1
5 Kirkland & Ellis 1.56 % 16.6
6 Shearman & Sterling 1.56 % 13.6
7 Google 1.49 % 15.7
8 Ropes & Gray 1.40 % 9.3
9 WeWork 1.31 % 12.8
10 Weil Gotshal & Manges 1.22 % 13.6
11 US Government 1.14 % 4.8
12 Wellington Management 1.09 % 6.8
13 Microsoft 1.01 % 10.0
14 Aramis (Estee Lauder) 0.97 % 17.0
15 Morrison & Foerster 0.89 % 9.7
16 O’Melveny & Myers 0.88 % 4.2
17 Millennium Management 0.87 % 10.3
18 Bank of America 0.85 % 15.2
19 Mass Financial Services 0.85 % 7.7
20 Under Armour 0.81 % 13.6
BXP’s Share of Annualized Rental Obligations 28.23 %
BXP’s Share of Square Feet ^1^ 22.91 %
Weighted Average Remaining Lease Term (years) 11.6

NOTABLE SIGNED DEALS ^3^

Tenant Property Square Feet
Marriott International 7750 Wisconsin Avenue 734,000
Fannie Mae ^4^ Reston Next (formerly Reston Gateway) 703,000
Verizon 100 Causeway Street 440,000
Google 325 Main Street 379,000
Wilmer Cutler Pickering Hale 2100 Pennsylvania Avenue 287,000
Microsoft Two Freedom Square 222,500
Volkswagen Group of America ^4^ Reston Next (formerly Reston Gateway) 196,000

TENANT DIVERSIFICATION ^1^

chart-b8610267fafb40dd8c31.jpg

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^Based on BXP’s Share of Annualized Rental Obligations.

^3^Represents leases signed with occupancy commencing in the future. The number of square feet is an estimate.

^4^As of October 27, 2020.

Q3 2020
Occupancy by location

as of September 30, 2020

TOTAL IN-SERVICE OFFICE PROPERTIES ^1^- Quarter-over-Quarter

CBD Suburban Total
Location 30-Sep-20 30-Jun-20 30-Sep-20 30-Jun-20 30-Sep-20 30-Jun-20
Boston 98.3 % 98.7 % 87.4 % 87.3 % 94.6 % 94.8 %
Los Angeles 96.7 % 95.9 % — % — % 96.7 % 95.9 %
New York 94.2 % 94.2 % 76.5 % 86.2 % 90.5 % 92.6 %
San Francisco 95.8 % 97.4 % 80.8 % 82.3 % 91.6 % 93.2 %
Washington, DC 84.6 % 83.3 % 84.1 % 85.7 % 84.3 % 84.8 %
Total Portfolio 94.9 % 95.2 % 83.6 % 85.8 % 91.1 % 92.0 %

chart-08f12d590660448888b1.jpg

SAME PROPERTY OFFICE PROPERTIES ^1, 2^- Year-over-Year

CBD Suburban Total
Location 30-Sep-20 30-Sep-19 30-Sep-20 30-Sep-19 30-Sep-20 30-Sep-19
Boston 98.3 % 99.0 % 89.4 % 89.5 % 95.3 % 95.8 %
Los Angeles 96.7 % 96.8 % — % — % 96.7 % 96.8 %
New York 94.2 % 92.8 % 76.5 % 85.2 % 90.5 % 91.2 %
San Francisco 95.8 % 96.8 % 80.1 % 90.0 % 93.2 % 95.7 %
Washington, DC 84.3 % 86.5 % 83.2 % 89.5 % 83.6 % 88.3 %
Total Portfolio 94.9 % 95.1 % 83.9 % 88.8 % 91.4 % 93.1 %

chart-603b977655b74a7b8af1.jpg

_____________

^1^Represents signed leases for which revenue recognition has commenced in accordance with GAAP. Includes 100% of joint venture properties. Does not include residential units and hotel.

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

Q3 2020
Capital structure

(in thousands, except percentages)

CONSOLIDATED DEBT

Aggregate Principal
Mortgage Notes Payable $ 2,936,359
Unsecured Line of Credit —
Unsecured Term Loan 500,000
Unsecured Senior Notes, at face value 9,700,000
Outstanding Principal 13,136,359
Discount on Unsecured Senior Notes (16,880)
Deferred Financing Costs, Net (71,318)
Consolidated Debt $ 13,048,161

MORTGAGE NOTES PAYABLE

Interest Rate
Property Maturity Date GAAP Stated Outstanding Principal
University Place August 1, 2021 6.99% 6.94% $ 2,045
601 Lexington Avenue (55% ownership) April 10, 2022 4.79% 4.75% 634,314
767 Fifth Avenue (The GM Building) (60% ownership) June 9, 2027 3.64% 3.43% 2,300,000
Total $ 2,936,359

BOSTON PROPERTIES LIMITED PARTNERSHIP UNSECURED SENIOR NOTES ^1^

Maturity Date Effective Yield (on issue date) Coupon Outstanding Principal
10 Year Unsecured Senior Notes May 15, 2021 4.29% 4.13% $ 850,000
11 Year Unsecured Senior Notes February 1, 2023 3.95% 3.85% 1,000,000
10.5 Year Unsecured Senior Notes September 1, 2023 3.28% 3.13% 500,000
10.5 Year Unsecured Senior Notes February 1, 2024 3.92% 3.80% 700,000
7 Year Unsecured Senior Notes January 15, 2025 3.35% 3.20% 850,000
10 Year Unsecured Senior Notes February 1, 2026 3.77% 3.65% 1,000,000
10 Year Unsecured Senior Notes October 1, 2026 3.50% 2.75% 1,000,000
10 Year Unsecured Senior Notes (“green bonds”) December 1, 2028 4.63% 4.50% 1,000,000
10 Year Unsecured Senior Notes (“green bonds”) June 21, 2029 3.51% 3.40% 850,000
10.5 Year Unsecured Senior Notes March 15, 2030 2.98% 2.90% 700,000
10.75 Year Unsecured Senior Notes January 30, 2031 3.34% 3.25% 1,250,000
$ 9,700,000

CAPITALIZATION

Shares/Units Common Stock Equivalent
Outstanding Equivalents Value ^2^
Common Stock 155,636 155,636 $ 12,497,571
Common Operating Partnership Units 17,458 17,458 1,401,877
5.25% Series B Cumulative Redeemable Preferred Stock (callable on or after March 27, 2018) 80 — 200,000
Total Equity 173,094 $ 14,099,448
Consolidated Debt (A) $ 13,048,161
Add: BXP’s share of unconsolidated joint venture debt ^3^ 1,114,031
Less: Partners’ share of consolidated debt ^4^ 1,195,957
BXP’s Share of Debt ^5^ (B) $ 12,966,235
Consolidated Market Capitalization (C) $ 27,147,609
BXP’s Share of Market Capitalization ^5^(D) $ 27,065,683
Consolidated Debt/Consolidated Market Capitalization (A÷C) 48.06 %
BXP’s Share of Debt/BXP’s Share of Market Capitalization ^5^(B÷D) 47.91 %

_____________

^1^All unsecured senior notes are rated BBB+ (stable), and Baa1 (stable) by S&P and Moody’s, respectively.

^2^Values based on September 30, 2020 closing price of $80.30 per share of common stock, except the Series B Preferred Stock is valued at its fixed liquidation preference.

^3^Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 35.

^4^Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 33.

^5^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

Q3 2020
Debt analysis ^1^

as of September 30, 2020

(dollars in thousands)

chart-2f7c0cbd9587457f98d1.jpg

UNSECURED CREDIT FACILITY - MATURES APRIL 24, 2022

Facility Outstanding at September 30, 2020 Letters of Credit Remaining Capacity at September 30, 2020
Unsecured Line of Credit $ 1,500,000 $ — $ 2,457 $ 1,497,543
Unsecured Term Loan $ 500,000 $ 500,000 N/A $ —

UNSECURED AND SECURED DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rates GAAP Rates ^2^ Maturity (years)
Unsecured Debt 77.68 % 3.50 % 3.58 % 5.6
Secured Debt 22.32 % 3.72 % 3.89 % 5.6
Consolidated Debt 100.00 % 3.55 % 3.65 % 5.6

FLOATING AND FIXED RATE DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rates GAAP Rates ^2^ Maturity (years)
Floating Rate Debt 3.83 % 1.09 % 1.18 % 1.6
Fixed Rate Debt 96.17 % 3.65 % 3.75 % 5.8
Consolidated Debt 100.00 % 3.55 % 3.65 % 5.6

_____________

^1^Excludes unconsolidated joint ventures. For information on BXP’s share of unconsolidated joint venture debt, see page 35.

^2^The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions.

Q3 2020
Senior unsecured debt covenant compliance ratios

In the fourth quarter of 2002, the Company’s 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 from time to time (the “Indenture”), 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 September 30, 2020 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, which has been filed with the SEC. Management is not presenting these ratios for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the Indenture.

COVENANT RATIOS AND RELATED DATA

Senior Notes Issued Prior to December 4, 2017 Senior Notes Issued On or After December 4, 2017
Test Actual
Total Outstanding Debt/Total Assets ^1^ Less than 60% 46.7 % 43.6 %
Secured Debt/Total Assets Less than 50% 13.9 % 13.0 %
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense) Greater than 1.50x 3.65 3.65
Unencumbered Assets/ Unsecured Debt Greater than 150% 229.3 % 252.1 %

_____________

^1^Capitalized Property Value for senior notes issued prior to December 4, 2017 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. Capitalized property value for senior notes issued on or after December 4, 2017 is determined for each property and is the greater of (x) annualized EBITDA capitalized at 7.0% and (y) the undepreciated book value as determined under GAAP.

Q3 2020
Net Debt to EBITDAre

(dollars in thousands)

Reconciliation of BXP’s Share of EBITDAre and BXP’s Share of EBITDAre – cash ^1^

Three Months Ended
30-Sep-20 30-Jun-20
Net income attributable to Boston Properties, Inc. common shareholders $ 89,854 $ 266,525
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 10,020 30,197
Noncontrolling interest in property partnerships 15,561 (767)
Net income 118,060 298,580
Add:
Interest expense 110,993 107,142
Depreciation and amortization expense 166,456 178,188
Less:
(Losses) gains on sales of real estate (209) 203,767
(Loss) income from unconsolidated joint ventures (6,873) 1,832
Add:
BXP’s share of EBITDAre from unconsolidated joint ventures ^2^ 24,851 27,807
EBITDAre ^1^ 427,442 406,118
Less:
Partners’ share of EBITDAre from consolidated joint ventures ^3^ 42,154 32,451
BXP’s Share of EBITDAre ^1^ (A) 385,288 373,667
Add:
Stock-based compensation expense 8,253 10,374
BXP’s Share of straight-line ground rent expense adjustment ^1^ 940 992
BXP’s Share of lease transaction costs that qualify as rent inducements ^1^ 2,965 1,309
Less:
BXP’s Share of non-cash termination income adjustment (fair value lease amounts) ^1^ 828 —
BXP’s Share of straight-line rent ^1^ 40,478 22,747
BXP’s Share of fair value lease revenue ^1^ 979 2,548
BXP’s Share of EBITDAre – cash ^1^ $ 355,161 $ 361,047
BXP’s Share of EBITDAre (Annualized) ^4^ (A x 4) $ 1,541,152 $ 1,494,668

Reconciliation of BXP’s Share of Net Debt^1^

30-Sep-20 30-Jun-20
Consolidated debt $ 13,048,161 $ 13,048,579
Add:
Special dividend payable — —
Less:
Cash and cash equivalents 1,714,783 1,691,047
Cash held in escrow for 1031 exchange — 250,607
Net debt ^1^ 11,333,378 11,106,925
Add:
BXP’s share of unconsolidated joint venture debt ^2^ 1,114,031 1,067,400
Partners’ share of cash and cash equivalents from consolidated joint ventures 116,295 129,709
Less:
BXP’s share of cash and cash equivalents from unconsolidated joint ventures 87,628 78,768
Partners’ share of consolidated joint venture debt ^3^ 1,195,957 1,197,276
BXP’s Share of Net Debt ^1^ (B) $ 11,280,119 $ 11,027,990
BXP’s Share of Net Debt to BXP’s Share of EBITDAre (Annualized) [B ÷ (A x 4)] 7.32 7.38

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures for the three months ended September 30, 2020, see pages 35 and 63.

^3^For disclosures related to the calculation of Partners’ share from consolidated joint ventures for the three months ended September 30, 2020, see pages 33 and 61.

^4^BXP’s Share of EBITDAre is annualized and calculated as the product of such amount for the quarter multiplied by four (4).

Q3 2020
Debt ratios

(in thousands, except for ratio amounts)

INTEREST COVERAGE RATIO ^1^

Three Months Ended
30-Sep-20 30-Jun-20
BXP’s Share of interest expense ^1^ $ 111,544 $ 107,313
Less:
BXP’s Share of hedge amortization ^1^ 1,446 1,446
BXP’s Share of amortization of financing costs ^1^ 3,823 3,584
Adjusted interest expense excluding capitalized interest (A) 106,275 102,283
Add:
BXP’s Share of capitalized interest ^1^ 13,255 13,705
Adjusted interest expense including capitalized interest (B) $ 119,530 $ 115,988
BXP’s Share of EBITDAre – cash ^1, 2^(C) $ 355,161 $ 361,047
Interest Coverage Ratio (excluding capitalized interest) (C÷A) 3.34 3.53
Interest Coverage Ratio (including capitalized interest) (C÷B) 2.97 3.11

FIXED CHARGE COVERAGE RATIO ^1^

Three Months Ended
30-Sep-20 30-Jun-20
BXP’s Share of interest expense ^1^ $ 111,544 $ 107,313
Less:
BXP’s Share of hedge amortization ^1^ 1,446 1,446
BXP’s Share of amortization of financing costs ^1^ 3,823 3,584
Add:
BXP’s Share of capitalized interest ^1^ 13,255 13,705
BXP’s Share of maintenance capital expenditures ^1^ 21,722 16,246
Hotel improvements, equipment upgrades and replacements 69 36
Preferred dividends/distributions 2,625 2,625
Total Fixed Charges (A) $ 143,946 $ 134,895
BXP’s Share of EBITDAre – cash ^1, 2^ (B) $ 355,161 $ 361,047
Fixed Charge Coverage Ratio (B÷A) 2.47 2.68

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^For a qualitative reconciliation of BXP’s Share of EBITDAre – cash, see page 31.

d

Q3 2020
Consolidated joint ventures

as of September 30, 2020

(unaudited and dollars in thousands)

BALANCE SHEET INFORMATION

Norges Joint Ventures ^1^
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
ASSETS (The GM Building) ^1^ Atlantic Wharf Office Joint Ventures
Real estate, net $ 3,211,250 $ 2,289,547 $ 5,500,797
Cash and cash equivalents 79,155 188,074 267,229
Other assets 308,083 342,755 650,838
Total assets $ 3,598,488 $ 2,820,376 $ 6,418,864
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net $ 2,276,610 $ 633,812 $ 2,910,422
Other liabilities 93,005 91,269 184,274
Total liabilities 2,369,615 725,081 3,094,696
Equity:
Boston Properties, Inc. 738,863 854,520 1,593,383
Noncontrolling interests 490,010 1,240,775 1,730,785 ^2^
Total equity 1,228,873 2,095,295 3,324,168
Total liabilities and equity $ 3,598,488 $ 2,820,376 $ 6,418,864
BXP’s nominal ownership percentage 60% 55%
Partners’ share of cash and cash equivalents ^3^ $ 31,662 $ 84,633 $ 116,295
Partners’ share of consolidated debt ^3, 4^ $ 910,742 $ 285,215 $ 1,195,957

_____________

^1^Certain balances contain amounts that eliminate in consolidation.

^2^Amount excludes preferred shareholders’ capital of approximately $0.1 million.

^3^Amounts represent the partners’ share based on their respective ownership percentages.

^4^Amounts adjusted for basis differentials.

Q3 2020
Consolidated joint ventures (continued)

for the three months ended September 30, 2020

(unaudited and dollars in thousands)

RESULTS OF OPERATIONS^1^

Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
(The GM Building) Atlantic Wharf Office Joint Ventures
Revenue
Lease ^2^ $ 60,868 $ 86,916 $ 147,784
Write-offs associated with accounts receivable — (267) (267)
Straight-line rent 14,346 5,177 19,523
Write-offs associated with straight-line rent — (191) (191)
Fair value lease revenue (2,180) 109 (2,071)
Termination income 1,389 — 1,389
Total lease revenue 74,423 91,744 166,167
Parking and other — 919 919
Total rental revenue ^3^ 74,423 92,663 167,086
Expenses
Operating 30,104 34,993 65,097
Net Operating Income (NOI) 44,319 57,670 101,989
Other income (expense)
Interest and other income 6 99 105
Interest expense (21,394) (4,899) (26,293)
Depreciation and amortization expense (15,349) (20,721) (36,070)
General and administrative expense (5) (35) (40)
Total other income (expense) (36,742) (25,556) (62,298)
Net income $ 7,577 $ 32,114 $ 39,691

FUNDS FROM OPERATIONS (FFO)

BXP’s nominal ownership percentage 60% 55%
Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
Reconciliation of Partners’ share of FFO (The GM Building) Atlantic Wharf Office Joint Ventures
Net income $ 7,577 $ 32,114 $ 39,691
Add: Depreciation and amortization expense 15,349 20,721 36,070
Entity FFO $ 22,926 $ 52,835 $ 75,761
Partners’ NCI ^4^ $ 2,104 $ 13,457 $ 15,561
Partners’ share of depreciation and amortization expense after BXP’s basis differential ^4^ 6,397 9,436 15,833
Partners’ share FFO ^4^ $ 8,501 $ 22,893 $ 31,394
Reconciliation of BXP’s share of FFO
BXP’s share of net income adjusted for partners’ NCI $ 5,473 $ 18,657 $ 24,130
Depreciation and amortization expense - BXP’s basis difference 46 408 454
BXP’s share of depreciation and amortization expense 8,906 10,877 19,783
BXP’s share of FFO $ 14,425 $ 29,942 $ 44,367

_____________

^1^Commencing in March 2020, the COVID-19 pandemic began to negatively impact the United States economy and the Company, and it continues to do so. For additional, detail, see page 59.

^2^Lease revenue includes recoveries from tenants and service income from tenants.

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^4^Amounts represent the partners’ share based on their respective ownership percentage and is adjusted for basis differentials and the allocations of management and other fees and depreciation and amortization related to capitalized fees.^^

Q3 2020
Unconsolidated joint ventures ^1^

as of September 30, 2020

(unaudited and dollars in thousands)

BALANCE SHEET INFORMATION

BXP’s Nominal Ownership Mortgage/Construction Loans Payable, Net Interest Rate
Property Net Equity Maturity Date Stated GAAP ^2^
540 Madison Avenue ^3^ 60.00 % $ 105 $ — — — % — %
Santa Monica Business Park 55.00 % 147,015 163,611 July 19, 2025 4.06 % 4.24 %
Platform 16 55.00 % 104,422 — — — % — %
Gateway Commons 50.00 % 339,383 — — — % — %
Colorado Center 50.00 % 232,065 274,648 August 9, 2027 3.56 % 3.58 %
Dock 72 ^4^ 50.00 % 99,080 97,784 December 18, 2020 2.41 % 3.55 %
The Hub on Causeway 50.00 % — — — — % — %
Podium 50.00 % 49,092 86,692 September 6, 2021 2.41 % 2.90 %
Hub50House 50.00 % 52,055 84,113 April 19, 2022 2.17 % 2.45 %
100 Causeway Street 50.00 % 56,572 89,038 September 5, 2023 1.66 % 1.87 %
Hotel Air Rights 50.00 % 10,469 — — — % — %
1001 6th Street 50.00 % 42,640 — — — % — %
7750 Wisconsin Avenue (Marriott International Headquarters) 50.00 % 57,720 64,563 April 26, 2023 1.41 % 1.95 %
Beach Cities Media Center 50.00 % 27,180 — — — % — %
Annapolis Junction 50.00 % 13,238 — — — % — %
Annapolis Junction Building Six 50.00 % — 6,064 November 17, 2020 2.15 % 2.30 %
Annapolis Junction Building Seven 50.00 % — 9,195 March 25, 2021 2.58 % 2.92 %
1265 Main Street 50.00 % 4,027 18,615 January 1, 2032 3.77 % 3.84 %
Market Square North 50.00 % (3,864) 57,068 November 1, 2020 4.85 % 4.85 %
Wisconsin Place Parking Facility 33.33 % 35,682 — — — % — %
500 North Capitol Street, N.W. 30.00 % (6,239) 31,453 June 6, 2023 4.15 % 4.20 %
3 Hudson Boulevard ^5^ 25.00 % 106,546 19,956 July 13, 2023 3.66 % 3.74 %
901 New York Avenue 25.00 % (12,187) 55,358 January 5, 2025 3.61 % 3.69 %
Metropolitan Square 20.00 % (7,166) 55,873 July 7, 2022 5.40 % 6.90 %
1,347,835
Investments with deficit balances reflected within Other Liabilities 29,456
Investment in Joint Ventures $ 1,377,291
Mortgage/Construction Loans Payable, Net $ 1,114,031

chart-dd8bfc41e61640b79881.jpg

FLOATING AND FIXED RATE DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rate GAAP Rate ^2^ Maturity (years)
Floating Rate Debt 46.07 % 2.49 % 3.11 % 1.6
Fixed Rate Debt 53.93 % 3.86 % 3.93 % 5.3
Total Debt 100.00 % 3.23 % 3.55 % 3.6
Q3 2020
--- ---
Unconsolidated joint ventures (continued) ^1^

_____________

^1^Amounts represent BXP’s share based on its ownership percentage.

^2^The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, which includes mortgage recording fees.

^3^The property was sold on June 27, 2019.

^4^ The property includes net equity balances from the amenity joint venture.

^5^The Company has provided $80.0 million of mortgage financing to the joint venture. The loan has been reflected as Related Party Note Receivable, Net on the Company’s Consolidated Balance Sheets.

Q3 2020
Unconsolidated joint ventures (continued)

for the three months ended September 30, 2020

(unaudited and dollars in thousands)

RESULTS OF OPERATIONS ^1^

Market Square North Metropolitan<br> Square 901 New York Avenue Annapolis Junction 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons Other Joint Ventures ^2^ Total Unconsolidated Joint Ventures
Revenue
Lease ^3^ $ 5,211 $ 4,939 $ 5,828 $ 1,912 $ 4,362 $ 20,189 $ 16,269 $ 7,267 $ 12,685 $ 1,663 $ 80,325
Write-offs associated with accounts receivable — — — — — (1,075) — — — — (1,075)
Straight-line rent 171 2,005 587 38 (82) (199) 226 1,526 254 3,079 7,605
Write-offs associated with straight-line rent — — — — — (3,837) — — — — (3,837)
Fair value lease revenue 9 1,069 — 52 — 1,130
Termination income — — — — — — — — — — —
Total lease revenue 5,382 6,944 6,415 1,950 4,280 15,087 17,564 8,793 12,991 4,742 84,148
Parking and other 209 206 218 — 18 1,166 1,345 (92) 5 380 3,455
Total rental revenue ^4^ 5,591 7,150 6,633 1,950 4,298 16,253 18,909 8,701 12,996 5,122 87,603
Expenses
Operating 2,369 3,141 2,994 645 1,680 6,174 7,834 4,170 4,911 3,413 37,331
Net operating income 3,222 4,009 3,639 1,305 2,618 10,079 11,075 4,531 8,085 1,709 50,272
Other income/(expense)
Development and management services revenue 15 88 — — — — — — 11 — 114
Interest and other income 1 — — — — 1 — 1 — 4 7
Interest expense (1,409) (5,183) (2,054) (209) (1,128) (5,033) (6,999) (2,381) — (1,085) (25,481)
Depreciation and amortization expense (1,217) (3,195) (1,588) (546) (862) (5,366) (8,884) (4,276) (7,104) (2,772) (35,810)
General and administrative expense — (34) (9) — (1) (11) (99) (20) (67) — (241)
Gain on sale of real estate — — — — — — — — — — —
Total other income/(expense) (2,610) (8,324) (3,651) (755) (1,991) (10,409) (15,982) (6,676) (7,160) (3,853) (61,411)
Net income/(loss) $ 612 $ (4,315) $ (12) $ 550 $ 627 $ (330) $ (4,907) $ (2,145) $ 925 $ (2,144) $ (11,139)
BXP’s economic ownership percentage 50 % 20 % 50 % 50 % 30 % 50 % 55 % 50 % 55 %
Reconciliation of BXP’s share of Funds from Operations (FFO)
BXP’s share of net income/(loss) $ 306 $ (863) $ (3) ^5^ $ 275 $ 188 $ (165) $ (2,699) $ (1,073) $ 509 $ (896) $ (4,421)
Basis differential
Straight-line rent $ — $ — $ — $ — $ — $ 416 ^6^ $ — $ — $ 8 $ — $ 424
Fair value lease revenue — — — — — 437 ^6^ — — (241) — 196
Depreciation and amortization expense (47) (9) (26) (4) 3 (1,901) 7 (33) (1,043) (19) (3,072)
Gain on sale of real estate — — — — — — — — — — —
Total basis differential ^7^ (47) (9) (26) (4) 3 (1,048) ^6^ 7 (33) (1,276) (19) (2,452)
Income/(loss) from unconsolidated joint ventures 259 (872) (29) ^5^ 271 191 (1,213) (2,692) (1,106) (767) (915) (6,873)
Add:
BXP’s share of depreciation and amortization expense 655 648 817 ^5^ 277 256 4,584 4,879 2,171 4,950 1,176 20,413
Less:
BXP’s share of gain on sale of real estate — — — — — — — — — — —
BXP’s share of FFO $ 914 $ (224) $ 788 $ 548 $ 447 $ 3,371 $ 2,187 $ 1,065 $ 4,183 $ 261 $ 13,540
Q3 2020
--- ---
Unconsolidated joint ventures (continued)

_____________

^1^Commencing in March 2020, the COVID-19 pandemic began to negatively impact the United States economy and the Company, and it continues to do so. For additional detail, see page 59.

^2^Includes 1001 6th Street, Dock 72, 7750 Wisconsin Avenue, 1265 Main Street, Wisconsin Place Parking Facility, 3 Hudson Boulevard, 540 Madison Avenue, Platform 16, and Beach Cities Media Center.

^3^Lease revenue includes recoveries from tenants and service income from tenants.

^4^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^5^Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

^6^The Company’s purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

^7^Represents adjustments related to the carrying values and depreciation of certain of the Company’s investment in unconsolidated joint ventures.

Q3 2020
Lease expirations^^- All in-service properties^1, 2, 3, 5^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 1,206,999 877,529 46,643,197 % ^4, 5^
2021 2,823,709 2,478,449 139,399,519 %
2022 2,584,131 2,221,621 141,315,026 %
2023 2,087,472 1,799,459 129,297,222 %
2024 3,476,665 3,133,599 197,025,977 %
2025 2,686,538 2,424,731 154,597,145 %
2026 3,441,195 2,658,193 197,311,067 %
2027 2,069,535 1,830,642 121,525,043 %
2028 2,320,597 2,102,600 150,494,413 %
2029 2,225,400 2,078,083 143,556,548 %
Thereafter 13,524,379 11,468,330 891,392,341 %

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 398,019 354,758 16,110,742 % ^5^
2021 67,033 63,243 4,894,486 %
2022 204,493 174,209 12,815,424 %
2023 178,384 174,561 11,408,587 %
2024 134,027 127,539 13,371,790 %
2025 180,120 167,909 9,981,648 %
2026 105,006 96,194 18,973,465 %
2027 94,659 89,392 12,300,260 %
2028 140,750 126,566 9,702,317 %
2029 110,373 88,111 8,732,806 %
Thereafter 594,047 451,537 61,412,856 %

All values are in US Dollars.

IN-SERVICE PROPERTIES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 1,605,018 1,232,287 62,753,939 % ^4, 5^
2021 2,890,742 2,541,692 144,294,005 %
2022 2,788,624 2,395,830 154,130,450 %
2023 2,265,856 1,974,020 140,705,809 %
2024 3,610,692 3,261,138 210,397,767 %
2025 2,866,658 2,592,640 164,578,793 %
2026 3,546,201 2,754,387 216,284,532 %
2027 2,164,194 1,920,034 133,825,303 %
2028 2,461,347 2,229,166 160,196,730 %
2029 2,335,773 2,166,194 152,289,354 %
Thereafter 14,118,426 11,919,867 952,805,197 %

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter. ^^

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 190,649 SF, and (B) 332,585 SF of retail space, of which BXP’s Share is 290,739 SF. BXP’s Share of current and future annualized rental obligations is (A) $12,220,460 for office space and (B) $11,986,210 for retail space for which the Company is not currently recognizing revenue.

Q3 2020
Lease expirations - Boston region in-service properties ^1, 2, 3, 5^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 205,597 198,106 11,042,675
2021 814,522 793,305 36,342,992
2022 888,821 827,116 42,647,502
2023 697,192 637,791 37,631,101
2024 853,222 824,019 44,560,139
2025 1,079,226 1,062,711 60,824,527
2026 1,281,168 1,042,109 69,832,484
2027 662,035 662,035 37,265,392
2028 1,079,209 1,079,209 67,083,320
2029 681,361 604,026 30,119,980
Thereafter 4,691,022 4,169,077 282,579,628

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 353,767 321,829 10,685,343
2021 4,506 4,504 762,711
2022 52,526 45,897 3,486,026
2023 55,252 55,252 4,949,029
2024 80,177 80,177 5,808,491
2025 47,432 47,432 4,245,390
2026 21,841 20,976 4,598,507
2027 54,619 54,619 9,989,416
2028 48,918 48,918 7,188,389
2029 77,491 60,301 6,786,733
Thereafter 201,449 142,784 10,642,166

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 559,364 519,935 21,728,018
2021 819,028 797,809 37,105,703
2022 941,347 873,013 46,133,528
2023 752,444 693,043 42,580,130
2024 933,399 904,196 50,368,630
2025 1,126,658 1,110,143 65,069,917
2026 1,303,009 1,063,085 74,430,991
2027 716,654 716,654 47,254,808
2028 1,128,127 1,128,127 74,271,709
2029 758,852 664,327 36,906,713
Thereafter 4,892,471 4,311,861 293,221,794

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of 310,363 SF, of which BXP’s Share is 278,425 SF. BXP’s Share of current and future annualized rental obligations is $8,064,337 for which the Company is not currently recognizing revenue.

Q3 2020
Quarterly lease expirations - Boston region in-service properties ^1, 2, 3, 5^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 17,549 10,058 937,800
Q4 2020 188,048 188,048 10,104,875
Total 2020 205,597 198,106 11,042,675
Q1 2021 224,140 219,810 9,048,104
Q2 2021 319,241 319,241 14,145,317
Q3 2021 110,739 110,739 4,985,600
Q4 2021 160,402 143,515 8,163,971
Total 2021 814,522 793,305 36,342,992

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 353,767 321,829 10,685,343
Total 2020 353,767 321,829 10,685,343
Q1 2021 — — —
Q2 2021 1,725 1,725 239,557
Q3 2021 1,540 1,540 366,168
Q4 2021 1,241 1,239 156,986
Total 2021 4,506 4,504 762,711

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 17,549 10,058 937,800
Q4 2020 541,815 509,877 20,790,218
Total 2020 559,364 519,935 21,728,018
Q1 2021 224,140 219,810 9,048,104
Q2 2021 320,966 320,966 14,384,874
Q3 2021 112,279 112,279 5,351,768
Q4 2021 161,643 144,754 8,320,957
Total 2021 819,028 797,809 37,105,703

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of 310,363 SF, of which BXP’s Share is 278,425 SF. BXP’s Share of current and future annualized rental obligations is $8,064,337 for which the Company is not currently recognizing revenue.

Q3 2020
Lease expirations - Los Angeles region in-service properties ^1, 2, 3^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 214,746 117,900 5,739,624
2021 445,260 223,744 17,179,801
2022 66,798 34,856 2,281,609
2023 163,555 86,354 5,558,283
2024 128,688 70,778 4,406,891
2025 6,475 3,561 243,590
2026 451,148 248,131 16,146,603
2027 — — —
2028 280,704 144,608 10,086,546
2029 — — —
Thereafter 346,204 173,102 11,533,167

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 — — —
2021 7,576 3,788 112,965
2022 39,888 21,850 1,231,831
2023 1,405 703 46,269
2024 4,333 2,283 116,040
2025 15,448 8,496 491,930
2026 5,827 3,205 295,269
2027 — — —
2028 — — —
2029 — — —
Thereafter 23,276 11,902 783,667

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 214,746 117,900 5,739,624
2021 452,836 227,532 17,292,766
2022 106,686 56,706 3,513,440
2023 164,960 87,057 5,604,552
2024 133,021 73,061 4,522,931
2025 21,923 12,057 735,520
2026 456,975 251,336 16,441,872
2027 — — —
2028 280,704 144,608 10,086,546
2029 — — —
Thereafter 369,480 185,004 12,316,834

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. The Company owns 50% of Colorado Center and 55% of Santa Monica Business Park.

^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.

Q3 2020
Quarterly lease expirations - Los Angeles region in-service properties ^1, 2, 3^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 214,746 117,900 5,739,624
Total 2020 214,746 117,900 5,739,624
Q1 2021 168,072 84,382 7,342,952
Q2 2021 4,964 2,730 112,306
Q3 2021 5,581 3,070 194,281
Q4 2021 266,643 133,563 9,530,262
Total 2021 445,260 223,744 17,179,801

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 — — —
Total 2020 — — —
Q1 2021 — — —
Q2 2021 — — —
Q3 2021 7,576 3,788 112,965
Q4 2021 — — —
Total 2021 7,576 3,788 112,965

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 214,746 117,900 5,739,624
Total 2020 214,746 117,900 5,739,624
Q1 2021 168,072 84,382 7,342,952
Q2 2021 4,964 2,730 112,306
Q3 2021 13,157 6,858 307,246
Q4 2021 266,643 133,563 9,530,262
Total 2021 452,836 227,532 17,292,766

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. The Company owns 50% of Colorado Center and 55% of Santa Monica Business Park.

^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.

Q3 2020
Lease expirations - New York region in-service properties ^1, 2, 3, 5^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 387,994 230,425 15,095,499
2021 359,291 295,172 26,057,790
2022 614,808 513,755 43,578,343
2023 400,955 315,538 32,816,769
2024 1,135,835 959,206 67,303,763
2025 605,304 541,408 43,750,266
2026 700,647 507,120 43,524,947
2027 474,687 391,134 27,748,806
2028 271,207 249,161 22,491,157
2029 630,080 603,713 62,048,306
Thereafter 4,088,477 3,168,506 292,832,131

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 22,222 12,314 3,921,873
2021 715 715 141,517
2022 27,093 27,022 4,086,369
2023 — — —
2024 8,327 5,706 5,330,177
2025 — — —
2026 23,438 19,320 11,049,307
2027 243 146 21,600
2028 — — —
2029 3,135 3,135 678,475
Thereafter 239,614 176,049 42,540,254

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 410,216 242,739 19,017,372
2021 360,006 295,887 26,199,307
2022 641,901 540,777 47,664,712
2023 400,955 315,538 32,816,769
2024 1,144,162 964,912 72,633,940
2025 605,304 541,408 43,750,266
2026 724,085 526,440 54,574,254
2027 474,930 391,280 27,770,406
2028 271,207 249,161 22,491,157
2029 633,215 606,848 62,726,781
Thereafter 4,328,091 3,344,555 335,372,385

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space.

^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 square feet expiring on the last day of the current quarter.

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020 the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 190,649 SF, and (B) 22,222 SF of retail space, of which BXP’s Share is 12,314 SF. BXP’s Share of current and future annualized rental obligations (A) $12,220,460 for office space and (B) $3,921,873 for retail space for which the Company is not currently recognizing revenue.

Q3 2020
Quarterly lease expirations - New York region in-service properties ^1, 2, 3, 5^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 11,593 11,593 1,131,239
Q4 2020 376,401 218,832 13,964,260
Total 2020 387,994 230,425 15,095,499
Q1 2021 49,139 42,178 2,245,492
Q2 2021 67,441 50,524 3,665,676
Q3 2021 181,142 140,901 14,502,056
Q4 2021 61,569 61,569 5,644,566
Total 2021 359,291 295,172 26,057,790

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 22,222 12,314 3,921,873
Total 2020 22,222 12,314 3,921,873
Q1 2021 715 715 141,517
Q2 2021 — — —
Q3 2021 — — —
Q4 2021 — — —
Total 2021 715 715 141,517

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 11,593 11,593 1,131,239
Q4 2020 398,623 231,146 17,886,133
Total 2020 410,216 242,739 19,017,372
Q1 2021 49,854 42,893 2,387,009
Q2 2021 67,441 50,524 3,665,676
Q3 2021 181,142 140,901 14,502,056
Q4 2021 61,569 61,569 5,644,566
Total 2021 360,006 295,887 26,199,307

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space.

^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 square feet expiring on the last day of the current quarter.

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020 the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 190,649 SF, and (B) 22,222 SF of retail space, of which BXP’s Share is 12,314 SF. BXP’s Share of current and future annualized rental obligations (A) $12,220,460 for office space and (B) $3,921,873 for retail space for which the Company is not currently recognizing revenue.

Q3 2020
Lease expirations - San Francisco region in-service properties ^1, 2, 3^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 159,219 109,626 6,083,490
2021 857,259 826,989 44,318,148
2022 698,186 574,066 39,770,534
2023 605,150 549,461 41,701,323
2024 646,344 612,594 43,173,571
2025 457,801 449,469 35,704,844
2026 503,249 420,216 34,644,099
2027 379,957 376,634 33,402,668
2028 499,479 487,223 41,163,714
2029 259,888 241,604 22,195,831
Thereafter 1,774,113 1,757,747 164,852,602

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 1,216 1,216 51,356
2021 18,294 18,294 1,257,634
2022 29,010 29,010 1,476,661
2023 47,910 47,910 2,304,039
2024 9,700 9,700 431,889
2025 32,585 32,585 2,077,656
2026 12,247 12,247 933,276
2027 10,560 10,560 470,367
2028 14,208 14,208 906,607
2029 9,944 9,944 584,965
Thereafter 41,285 39,887 2,893,783

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 160,435 110,842 6,134,846 55.35
2021 875,553 845,283 45,575,782
2022 727,196 603,076 41,247,195
2023 653,060 597,371 44,005,362
2024 656,044 622,294 43,605,460
2025 490,386 482,054 37,782,500
2026 515,496 432,463 35,577,375
2027 390,517 387,194 33,873,035
2028 513,687 501,431 42,070,321
2029 269,832 251,548 22,780,796
Thereafter 1,815,398 1,797,634 167,746,385

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space.

^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 square feet expiring on the last day of the current quarter.

Q3 2020
Lease expirations - San Francisco region in-service properties ^1, 2, 3^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 4,281 4,281 340,910
Q4 2020 154,938 105,345 5,742,581
Total 2020 159,219 109,626 6,083,490
Q1 2021 344,353 338,497 15,042,834
Q2 2021 166,032 158,177 9,475,078
Q3 2021 160,764 152,466 9,630,779
Q4 2021 186,110 177,851 10,169,456
Total 2021 857,259 826,989 44,318,148

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 1,216 1,216 51,356
Total 2020 1,216 1,216 51,356
Q1 2021 1,964 1,964 183,819
Q2 2021 12,999 12,999 853,912
Q3 2021 821 821 84,253
Q4 2021 2,510 2,510 135,651
Total 2021 18,294 18,294 1,257,634

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 4,281 4,281 340,910
Q4 2020 156,154 106,561 5,793,937
Total 2020 160,435 110,842 6,134,846
Q1 2021 346,317 340,461 15,226,653
Q2 2021 179,031 171,176 10,328,990
Q3 2021 161,585 153,287 9,715,032
Q4 2021 188,620 180,361 10,305,107
Total 2021 875,553 845,283 45,575,782

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space.

^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 square feet expiring on the last day of the current quarter.

Q3 2020
Lease expirations - Washington, DC region in-service properties ^1, 2, 3^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 239,443 221,472 8,681,909
2021 347,377 339,239 15,500,788
2022 315,518 271,828 13,037,038
2023 220,620 210,315 11,589,746
2024 712,576 667,002 37,581,613
2025 537,732 367,582 14,073,918
2026 504,983 440,617 33,162,934
2027 552,856 400,839 23,108,177
2028 189,998 142,399 9,669,676
2029 654,071 628,740 29,192,431
Thereafter 2,624,563 2,199,898 139,594,813

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 20,814 19,399 1,452,170
2021 35,942 35,942 2,619,659
2022 55,976 50,430 2,534,537
2023 73,817 70,696 4,109,250
2024 31,490 29,673 1,685,193
2025 84,655 79,396 3,166,672
2026 41,653 40,446 2,097,106
2027 29,237 24,067 1,818,877
2028 77,624 63,440 1,607,321
2029 19,803 14,731 682,633
Thereafter 88,423 80,915 4,552,986

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 260,257 240,871 10,134,079
2021 383,319 375,181 18,120,447
2022 371,494 322,258 15,571,575
2023 294,437 281,011 15,698,996
2024 744,066 696,675 39,266,806
2025 622,387 446,978 17,240,590
2026 546,636 481,063 35,260,040
2027 582,093 424,906 24,927,054
2028 267,622 205,839 11,276,997
2029 673,874 643,471 29,875,064
Thereafter 2,712,986 2,280,813 144,147,799

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

Q3 2020
Quarterly lease expirations - Washington, DC region in-service properties ^1, 2, 3^

^^

as of September 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 — — —
Q4 2020 239,443 221,472 8,681,909
Total 2020 239,443 221,472 8,681,909
Q1 2021 80,580 80,580 3,309,939
Q2 2021 98,145 93,256 3,935,445
Q3 2021 101,410 98,162 6,529,673
Q4 2021 67,242 67,242 1,725,731
Total 2021 347,377 339,239 15,500,788

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 3,962 3,962 441,528
Q4 2020 16,852 15,437 1,010,642
Total 2020 20,814 19,399 1,452,170
Q1 2021 14,559 14,559 1,226,274
Q2 2021 11,930 11,930 822,173
Q3 2021 4,491 4,491 285,192
Q4 2021 4,962 4,962 286,019
Total 2021 35,942 35,942 2,619,659

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 3,962 3,962 441,528
Q4 2020 256,295 236,909 9,692,551
Total 2020 260,257 240,871 10,134,079
Q1 2021 95,139 95,139 4,536,213
Q2 2021 110,075 105,186 4,757,618
Q3 2021 105,901 102,653 6,814,865
Q4 2021 72,204 72,204 2,011,750
Total 2021 383,319 375,181 18,120,447

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

Q3 2020
Lease expirations - CBD properties ^1, 2, 3, 5^

^^

as of September 30, 2020

Boston

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 465,496 426,066 17,479,111
2021 219,896 198,678 12,959,613
2022 305,413 237,078 16,459,753
2023 475,595 416,194 30,723,633
2024 464,912 435,709 29,330,812
2025 350,895 334,380 26,182,763
2026 1,074,870 834,946 62,946,308
2027 377,127 377,127 32,675,648
2028 924,309 924,309 65,146,509
2029 468,280 373,755 26,109,687
Thereafter 4,370,629 3,847,503 270,672,665

All values are in US Dollars.

Los Angeles

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 214,746 117,900 5,739,624
2021 452,836 227,532 17,292,765
2022 106,686 56,706 3,513,439
2023 164,960 87,057 5,604,552
2024 133,021 73,062 4,522,931
2025 21,923 12,058 735,519
2026 456,975 251,336 16,441,872
2027 — — —
2028 280,704 144,608 10,086,546
2029 — — —
Thereafter 369,480 185,004 12,316,834

All values are in US Dollars.

New York

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 392,022 224,545 18,299,789
2021 284,827 220,708 23,588,904
2022 530,442 429,317 43,485,767
2023 353,288 267,871 31,083,715
2024 660,103 480,854 54,348,596
2025 381,877 317,981 35,140,683
2026 509,161 311,516 45,759,005
2027 255,424 171,774 19,862,601
2028 216,656 194,610 20,437,403
2029 586,449 560,082 61,078,279
Thereafter 4,100,574 3,117,038 326,684,018

All values are in US Dollars.

Q3 2020
Lease expirations - CBD properties (continued) ^1, 2, 3, 5^

^^

as of September 30, 2020

San Francisco

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 43,568 43,568 3,293,324
2021 392,776 392,776 29,484,288
2022 420,047 420,047 31,473,696
2023 400,003 400,003 31,087,659
2024 536,016 536,016 38,485,470
2025 303,418 303,418 24,579,957
2026 349,430 349,430 28,932,860
2027 351,610 351,610 31,409,853
2028 489,175 489,175 41,464,132
2029 233,264 233,264 21,957,599
Thereafter 1,779,868 1,779,868 166,946,580

All values are in US Dollars.

Washington, DC

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 52,681 33,294 1,882,181
2021 54,846 46,708 4,030,305
2022 119,398 70,162 4,848,503
2023 51,216 37,790 2,814,100
2024 183,007 164,786 12,928,082
2025 172,610 60,816 3,463,547
2026 343,562 277,990 26,483,768
2027 216,998 75,514 5,973,131
2028 196,742 134,959 9,571,631
2029 59,730 29,327 2,130,516
Thereafter 1,404,272 972,098 74,159,783

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of (A) 310,363 square feet of space in Boston, of which BXP’s Share is 278,425 SF and (B) 366,467 SF of space in New York of which BXP’s Share is 190,649 SF. BXP’s Share of current and future annualized rental obligations is (A) $8,064,337 for Boston and (B) $16,142,333 for New York for which the Company is not currently recognizing revenue..

Q3 2020
Lease expirations - Suburban properties ^1, 2, 3^

^^

as of September 30, 2020

Boston

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 93,868 93,868 4,248,907
2021 599,132 599,132 24,146,090
2022 635,934 635,934 29,673,775
2023 276,849 276,849 11,856,497
2024 468,487 468,487 21,037,819
2025 775,763 775,763 38,887,153
2026 228,139 228,139 11,484,683
2027 339,527 339,527 14,579,160
2028 203,818 203,818 9,125,200
2029 290,572 290,572 10,797,026
Thereafter 521,842 464,358 22,549,129

All values are in US Dollars.

New York

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 18,194 18,194 717,582
2021 75,179 75,179 2,610,403
2022 111,459 111,459 4,178,945
2023 47,667 47,667 1,733,055
2024 484,059 484,059 18,285,343
2025 223,427 223,427 8,609,584
2026 214,924 214,924 8,815,250
2027 219,506 219,506 7,907,805
2028 54,551 54,551 2,053,754
2029 46,766 46,766 1,648,501
Thereafter 227,517 227,517 8,688,366

All values are in US Dollars.

San Francisco

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 116,867 67,274 2,841,522
2021 482,777 452,507 16,091,494
2022 307,149 183,029 9,773,499
2023 253,057 197,368 12,917,704
2024 120,028 86,278 5,119,991
2025 186,968 178,636 13,202,543
2026 166,066 83,033 6,644,514
2027 38,907 35,584 2,463,182
2028 24,512 12,256 606,188
2029 36,568 18,284 823,196
Thereafter 35,530 17,765 799,805

All values are in US Dollars.

Q3 2020
Lease expirations - Suburban properties (continued) ^1, 2, 3^

^^

as of September 30, 2020

Washington, DC

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 207,576 207,576 8,251,898
2021 328,473 328,473 14,090,142
2022 252,096 252,096 10,723,072
2023 243,221 243,221 12,884,896
2024 561,059 531,889 26,338,723
2025 449,777 386,163 13,777,043
2026 203,074 203,074 8,776,271
2027 365,095 349,393 18,953,923
2028 70,880 70,880 1,705,366
2029 614,144 614,144 27,744,548
Thereafter 1,308,714 1,308,714 69,988,016

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 55.

^2^Includes partially placed in-service leased space. 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 square feet expiring on the last day of the current quarter.

Q3 2020
Research coverage

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to Thomson Reuters Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by the analysts listed above do not represent the opinions, estimates or forecasts of the Company or its management. The Company does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.

Equity Research Coverage
Argus Research Company Jacob Kilstein 646.747.5447
Bank of America Merrill Lynch Jeffrey Spector / Jamie Feldman 646.855.1363 / 646.855.5808
BMO Capital John Kim 212.885.4115
BTIG Tom Catherwood 212.738.6140
Citi Michael Bilerman / Emmanuel Korchman 212.816.1383 / 212.816.1382
Deutsche Bank Securities Derek Johnston 212.250.5683
Evercore ISI Steve Sakwa 212.446.9462
Goldman Sachs & Company, Inc. Richard Skidmore 801.741.5459
Green Street Advisors Daniel Ismail 949.640.8780
Jefferies & Co. Jonathan Petersen 212.284.1705 / 212.336.7076
J.P. Morgan Securities Anthony Paolone 212.622.6682
KeyBanc Capital Markets Craig Mailman / Jordan Sadler 917.368.2316 / 917.368.2280
Mizuho Securities Omotayo Okusanya 212.205.7855
Morgan Stanley Vikram Malhotra 212.761.7064
Morningstar Michael Wong 312.384.5404
Piper Sandler Companies Alexander Goldfarb / Daniel Santos 212.466.7937 / 212.466.7927
RW Baird David Rodgers 216.737.7341
Scotiabank GBM Nicholas Yulico 212.225.6904
SMBC Nikko Securities Inc. Richard Anderson 646.521.2351
Truist Securities Michael Lewis 212.319.5659
Wells Fargo Securities Blaine Heck 443.263.6529 Debt Research Coverage
--- --- ---
Bank of America Merrill Lynch Andrew Molloy 646.855.6435
Barclays Peter Troisi 212.412.3695
J.P. Morgan Securities Mark Streeter 212.834.5086
US Bank Bill Stafford 877.558.2605
Wells Fargo Thierry Perrein / Kevin McClure 704.715.8455 / 704.410.3252 Rating Agencies
--- --- ---
Moody’s Investors Service Ranjini Venkatesan 212.553.3828
Standard & Poor’s Michael Souers 212.438.2508
Q3 2020
--- ---
Definitions

This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this supplemental report and, if applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. Additional detail can be found in the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents the Company files or furnishes to the SEC from time to time.

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 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 59.

Annualized Rental Obligations

Annualized Rental Obligations is defined as monthly Rental Obligations, as of the last day of the reporting period, multiplied by twelve (12).

Average Economic Occupancy

Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. 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 property’s total possible gross revenue.

Average Monthly Rental Rates

Average Monthly Rental Rates are calculated by the Company as the average of the quotients obtained by dividing (A) rental revenue as determined in accordance with GAAP by (B) the number of occupied units for each month within the applicable fiscal period.

Average Physical Occupancy

Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.

Debt to Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT sector that equals the quotient of (A) the Company’s Consolidated Debt divided by (B) the Company’s Consolidated Market Capitalization, presented as a percentage. Consolidated Market Capitalization is the sum of (x) the Company’s Consolidated Debt plus (y) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company, as reported by the New York Stock Exchange, 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 LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) on and after February 6, 2015, which was the end of the performance period for 2012 OPP Units and thus the date earned, common units issuable upon conversion of 2012 OPP Units that were issued in the form of LTIP Units, (5) on and after February 4, 2016, which was the end of the performance period for 2013 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2013 MYLTIP Units that were issued in the form of LTIP Units, (6) on and after February 3, 2017, which was the end of the performance period for 2014 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2014 MYLTIP Units that were issued in the form of LTIP Units, (7) on and after February 4, 2018, which was the end of the performance period for 2015 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2015 MYLTIP Units that were issued in the form of LTIP Units, (8) on and after February 9, 2019, which was the end of the performance period for 2016 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2016 MYLTIP Units that were issued in the form of LTIP Units and (9) on and after February 6, 2020, which was the end of the performance period for 2017 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2017 MYLTIP Units that were issued in the form of LTIP Units plus (z) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by their fixed liquidation preference of $2,500 per share. The calculation of Consolidated Market Capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2018, 2019 and 2020 MYLTIP Units are not included.

The Company also presents BXP’s Share of Market Capitalization, which is calculated in a similar manner, except that BXP’s Share of Debt is utilized instead of the Company’s Consolidated Debt in both the numerator and the denominator. The Company presents these ratios because its degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, 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 do not necessarily reflect the Company’s capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. However, for a company like Boston Properties, Inc., whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long as they are 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 the Company’s outstanding indebtedness.

Q3 2020
Definitions (continued)

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)

Pursuant to the definition of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), the Company calculates EBITDAre as net income (loss) attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus net income attributable to noncontrolling interests, interest expense, losses (gains) from early extinguishments of debt, depreciation and amortization expense, impairment loss and adjustments to reflect the Company’s share of EBITDAre from unconsolidated joint ventures less gains (losses) on sales of real estate. EBITDAre is a non-GAAP financial measure. The Company uses EBITDAre internally as a performance measure and believes EBITDAre provides useful information to investors regarding its financial condition and results of operations at the corporate level because, when compared across periods, EBITDAre reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and acquisition and development activities on an unleveraged basis, providing perspective not immediately apparent from net (loss) income attributable to Boston Properties, Inc. common shareholders.

In some cases the Company also presents (A) BXP’s Share of EBITDAre – cash, which is BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements, and (B) Annualized EBITDAre, which is EBITDAre for the applicable fiscal quarter ended multiplied by four (4). Presenting BXP’s Share of EBITDAre – cash allows investors to compare EBITDAre across periods without taking into account the effect of certain non-cash rental revenues, ground rent expense and stock based compensation expense. Similar to depreciation and amortization, because of historical cost accounting, fair value lease revenue may distort operating performance measures at the property level. Additionally, presenting EBITDAre excluding the impact of straight-line rent provides investors with an alternative view of operating performance at the property level that more closely reflects rental revenue generated at the property level without regard to future contractual increases in rental rates. In addition, the Company’s management believes that the presentation of Annualized EBITDAre provides useful information to investors regarding the Company’s results of operations because it enables investors to more easily compare quarterly EBITDAre to EBITDAre from full fiscal years.

The Company’s computation of EBITDAre may not be comparable to EBITDAre 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.  The Company believes that in order to facilitate a clear understanding of its operating results, EBITDAre should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. EBITDAre should not be considered a substitute to net income attributable to Boston Properties, Inc. common shareholders in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

Fixed Charge Coverage Ratio

Fixed Charge Coverage Ratio equals BXP’s Share of EBITDAre – cash divided by Total Fixed Charges. BXP’s Share of EBITDAre – cash is a non-GAAP financial measure equal to BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements. Total Fixed Charges is also a non-GAAP financial measure equal to the sum of BXP’s Share of interest expense, capitalized interest, maintenance capital expenditures, hotel improvements, equipment upgrades and replacements and preferred dividends/distributions less hedge amortization and amortization of financing costs. The Company believes that the presentation of its Fixed Charge Coverage Ratio provides investors with useful information about the Company’s financial performance as it relates to overall financial flexibility and balance sheet management. Furthermore, the Company believes that the Fixed Charge Coverage Ratio is frequently used by analysts, rating agencies and other interested parties in the evaluation of the Company’s performance as a REIT and, as a result, by presenting the Fixed Charge Coverage Ratio the Company assists these parties in their evaluations.  The Company’s calculation of its Fixed Charge Coverage Ratio may not be comparable to the ratios reported by other REITs or real estate companies that define the term differently and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP. For clarification purposes, this ratio does not include gains (losses) from early extinguishments of debt.

Funds Available for Distribution (FAD) and FAD Payout Ratio

In addition to FFO, which is defined on the following page, the Company presents Funds Available for Distribution to common shareholders and common unitholders (FAD), which is a non-GAAP financial measure that is calculated by (1) adding to FFO lease transaction costs that qualify as rent inducements, non-real estate depreciation, non-cash losses (gains) from early extinguishments of debt, stock-based compensation expense, partners’ share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences) and unearned portion of capitalized fees, (2) eliminating the effects of straight-line rent, straight-line ground rent expense adjustment, hedge amortization and fair value lease revenue, and (3) subtracting maintenance capital expenditures, hotel improvements, equipment upgrades and replacements, 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences), non-cash termination income adjustment (fair value lease amounts) and impairments of non-depreciable real estate. The Company believes that the presentation of FAD provides useful information to investors regarding the Company’s results of operations because FAD provides supplemental information regarding the Company’s operating performance that would not otherwise be available and may be useful to investors in assessing the Company’s operating performance. Additionally, although the Company does not consider FAD to be a liquidity measure, as it does not make adjustments to reflect changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, the Company believes that FAD may provide investors with useful supplemental information regarding the Company’s ability to generate cash from its operating performance and the impact of the Company’s operating performance on its ability to make distributions to its shareholders. Furthermore, the Company believes that FAD is frequently used by analysts, investors and other interested parties in the evaluation of its performance as a REIT and, as a result, by presenting FAD the Company is assisting these parties in their evaluation. FAD should not be considered as a substitute for net income (loss) attributable to Boston Properties, Inc.’s common shareholders determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

FAD Payout Ratio is defined as distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.

Q3 2020
Definitions (continued)

Funds from Operations (FFO)

Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of Nareit, the Company calculates Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on the Company’s balance sheet, impairment losses on its investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and real estate-related depreciation and amortization. FFO is a non-GAAP financial measure, but the Company believes the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing the Company’s operating results 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 differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

The Company’s 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.  In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

In-Service Properties

The Company treats a property as being “in-service” upon the earlier of (1) lease-up and completion of tenant improvements or (2) one year after cessation of major construction activity as determined under GAAP. The determination as to when an entire 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, the Company specifies a single date for treating a property as “in-service,” which is generally later than the date the property is partially placed in-service under 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 addition, under GAAP, when a portion of a property has been substantially completed and either occupied or held available for occupancy, the Company ceases capitalizing costs on that portion, even though it may not treat the property as being “in-service,” and continues to capitalize only those costs associated with the portion still under construction. In-service properties include properties held by the Company’s unconsolidated joint ventures.

Interest Coverage Ratio

Interest Coverage Ratio, calculated including and excluding capitalized interest, is a non-GAAP financial measure equal to BXP’s Share of EBITDAre – cash divided by Adjusted interest expense. BXP’s Share of EBITDAre – cash is a non-GAAP financial measure equal to BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements. Adjusted interest expense excluding capitalized interest is equal to BXP’s Share of interest expense less (1) BXP’s Share of hedge amortization and (2) BXP’s Share of amortization of financing costs. Adjusted interest expense including capitalized interest is calculated in the same manner but adds back BXP’s Share of capitalized interest. The Company believes that the presentation of its Interest Coverage Ratio provides useful information about the Company’s financial condition because it provides investors additional information on the Company’s ability to meet its debt obligations and incur additional indebtedness. In addition, by analyzing interest coverage ratios over a period of time, trends may emerge that provide investors a better sense of whether a company’s financial condition is improving or declining. The ratios may also be used to compare the financial condition of different companies, which can help when making an investment decision. The Company presents its Interest Coverage Ratio in two ways - including capitalized interest and excluding capitalized interest. GAAP requires the capitalization of interest expense during development. Therefore, for a company like Boston Properties, Inc. that is an active developer of real estate, presenting the Interest Coverage Ratio (excluding capitalized interest) provides an alternative measure of financial condition that may be more indicative of the Company’s ability to meet its interest expense obligations and therefore its overall financial condition. For clarification purposes, this ratio does not include gains (losses) from early extinguishments of debt.

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 Company’s residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could therefore vary materially. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Net Debt

Net Debt is equal to (A) the Company’s consolidated debt plus special dividends payable (if any) less (B) cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s). The Company believes that the presentation of Net Debt provides useful information to investors because the Company reviews Net Debt as part of the management of its overall financial flexibility, capital structure and leverage. In particular, Net Debt is an important component of the Company’s ratio of BXP’s Share of Net Debt to BXP’s Share of EBITDAre.  BXP’s Share of Net Debt is calculated in a similar manner to Net Debt, except that BXP’s Share of Debt and BXP’s Share of cash are utilized instead of the Company’s consolidated debt and cash in the calculation. The Company believes BXP’s Share of Net Debt to BXP’s Share of EBITDAre is useful to investors because it provides an alternative measure of the Company’s financial flexibility, capital structure and leverage based on its percentage ownership interest in all of its assets. Furthermore, certain debt rating agencies, creditors and credit analysts monitor the Company’s Net Debt as part of their assessments of its business. The Company may utilize a considerable portion of its cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s) may not be solely controlled by the Company. The deduction of these items from consolidated debt in the calculation of Net Debt therefore should not be understood to mean that these items are available exclusively for debt reduction at any given time.

Q3 2020
Definitions (continued)

Net Operating Income/(Loss) (NOI)

Net operating income/(loss) (NOI) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus (1) preferred dividends, net income attributable to noncontrolling interests, corporate general and administrative expense, payroll and related costs from management services contracts, transaction costs, impairment losses, depreciation and amortization expense, losses from early extinguishments of debt and interest expense, less (2) development and management services revenue, direct reimbursements of payroll and related costs from management services contracts, income (loss) from unconsolidated joint ventures, gains (losses) on sales of real estate, gains (losses) from investments in securities and interest and other income (loss). In some cases, the Company also presents (1) NOI – cash, which is NOI after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue, straight-line ground rent expense adjustment and lease transaction costs that qualify as rent inducements in accordance with GAAP, and (2) NOI and NOI – cash, in each case excluding termination income.

The Company uses these measures internally as performance measures and believes they provide useful information to investors regarding the Company’s results of operations and financial condition because, when compared across periods, they reflect 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. 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. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. Presenting NOI – cash allows investors to compare NOI performance across periods without taking into account the effect of certain non-cash rental revenues and ground rent expenses. Similar to depreciation and amortization expense, fair value lease revenues, because of historical cost accounting, may distort operating performance measures at the property level. Additionally, presenting NOI excluding the impact of the straight-lining of rent provides investors with an alternative view of operating performance at the property level that more closely reflects net cash generated at the property level on an unleveraged basis. Presenting NOI measures that exclude termination income provides investors with additional information regarding operating performance at a property level that allows them to compare operating performance between periods without taking into account termination income, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s properties.

Rental Obligations

Rental Obligations is defined as the contractual base rents (but excluding percentage rent) and budgeted reimbursements from tenants under existing leases. These amounts exclude rent abatements.

Rental Revenue

Rental Revenue is equal to Total revenue, the most directly comparable GAAP financial measure, less development and management services revenue and direct reimbursements of payroll and related costs from management services contracts. The Company uses Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods. The Company also presents Rental Revenue (excluding termination income) because termination income can distort the results for any given period because it generally represents multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and does not reflect the core ongoing operating performance of the Company’s properties.

Same Properties

In the Company’s 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 the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company 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 22 - 25 indicate by footnote the “In-Service Properties” that are not included in “Same Properties.”

Q3 2020
Reconciliations

(unaudited and in thousands)

BXP’s Share of select items

Three Months Ended
30-Sep-20 30-Jun-20
Revenue $ 693,268 $ 654,773
Partners’ share of revenue from consolidated joint ventures (JVs) (71,467) (60,168)
BXP’s share of revenue from unconsolidated JVs 42,910 43,880
BXP’s Share of revenue $ 664,711 $ 638,485
Straight-line rent $ 46,713 $ 17,024
Partners’ share of straight-line rent from consolidated JVs (7,982) 1,592
BXP’s share of straight-line rent from unconsolidated JVs 1,747 4,131
BXP’s Share of straight-line rent $ 40,478 $ 22,747
Write-offs associated with accrued rent (all of which was included within straight-line rent) $ (4,098) $ (35,944)
Partners’ share of write-offs associated with accrued rent from consolidated JVs (all of which was included within straight-line rent) 86 10,283
BXP’s share of write-offs associated with accrued rent from unconsolidated JVs (all of which was included within straight-line rent) (1,919) (664)
BXP’s Share of write-offs associated with accrued rent (all of which was included within straight-line rent) $ (5,931) $ (26,325)
Write-offs associated with accounts receivable (all of which was included within lease revenue) $ (3,373) $ (18,024)
Partners’ share of write-offs associated with accounts receivable (all of which was included within lease revenue) from consolidated JVs 120 4,288
BXP’s share of write-offs associated with accounts receivable (all of which was included within lease revenue) from unconsolidated JVs (537) (971)
BXP’s Share of write-offs associated with accounts receivable (all of which was included within lease revenue) $ (3,790) $ (14,707)
Fair value lease revenue ^1^ $ (662) $ 2,159
Partners’ share of fair value lease revenue from consolidated JVs ^1^ 823 (296)
BXP’s share of fair value lease revenue from unconsolidated JVs ^1^ 818 685
BXP’s Share of fair value lease revenue ^2^ $ 979 $ 2,548
Lease termination income $ 3,406 $ 3,309
Partners’ share of termination income from consolidated JVs (556) (321)
BXP’s share of termination income from unconsolidated JVs — —
BXP’s Share of termination income $ 2,850 $ 2,988
Non-cash termination income adjustment (fair value lease amounts) $ 1,381 $ —
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated JVs (553) —
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated JVs $ — $ —
BXP’s Share of non-cash termination income adjustment (fair value lease amounts) $ 828 $ —
Parking and other revenue $ 16,327 $ 13,946
Partners’ share of parking and other revenue from consolidated JVs (414) (406)
BXP’s share of parking and other revenue from unconsolidated JVs $ 1,678 $ 2,084
BXP’s Share of parking and other revenue $ 17,591 $ 15,624
Cash rent abatements and deferrals related to COVID-19 $ 17,127 $ 14,159
Partners’ share of cash rent abatements and deferrals related to COVID-19 from consolidated JVs (808) (83)
BXP’s share of cash rent abatements and deferrals from unconsolidated JVs related to COVID-19 1,895 2,475
BXP’s Share of cash rent abatements and deferrals related to COVID-19 $ 18,214 $ 16,551
Q3 2020
--- ---
Reconciliations (continued)

BXP’s Share of select items (continued)

Three Months Ended
30-Sep-20 30-Jun-20
Hedge amortization $ 1,590 $ 1,590
Partners’ share of hedge amortization from consolidated JVs (144) (144)
BXP’s share of hedge amortization from unconsolidated JVs — —
BXP’s Share of hedge amortization $ 1,446 $ 1,446
Straight-line ground rent expense adjustment $ 897 $ 951
Partners’ share of straight-line ground rent expense adjustment from consolidated JVs — —
BXP’s share of straight-line ground rent expense adjustment from unconsolidated JVs 43 41
BXP’s Share of straight-line ground rent expense adjustment $ 940 $ 992
Depreciation and amortization $ 166,456 $ 178,188
Noncontrolling interests in property partnerships’ share of depreciation and amortization (15,833) (22,480)
BXP’s share of depreciation and amortization from unconsolidated JVs 20,413 21,012
BXP’s Share of depreciation and amortization $ 171,036 $ 176,720
Lease transaction costs that qualify as rent inducements ^2^ $ 3,966 $ 1,616
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated JVs ^2^ (873) (120)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated JVs ^2^ (128) (187)
BXP’s Share of lease transaction costs that qualify as rent inducements ^2^ $ 2,965 $ 1,309
2nd generation tenant improvements and leasing commissions $ 67,075 $ 124,588
Partners’ share of 2nd generation tenant improvements and leasing commissions from consolidated JVs (3,438) (43,777)
BXP’s share of 2nd generation tenant improvements and leasing commissions from unconsolidated JVs 4,189 2,213
BXP’s Share of 2nd generation tenant improvements and leasing commissions $ 67,826 $ 83,024
Maintenance capital expenditures ^3^ $ 22,003 $ 15,461
Partners’ share of maintenance capital expenditures from consolidated JVs ^3^ (459) (91)
BXP’s share of maintenance capital expenditures from unconsolidated JVs ^3^ 178 876
BXP’s Share of maintenance capital expenditures ^3^ $ 21,722 $ 16,246
Interest expense $ 110,993 $ 107,142
Partners’ share of interest expense from consolidated JVs (10,760) (10,738)
BXP’s share of interest expense from unconsolidated JVs 11,311 10,909
BXP’s Share of interest expense $ 111,544 $ 107,313
Capitalized interest $ 13,463 $ 13,717
Partners’ share of capitalized interest from consolidated JVs (1,348) (1,296)
BXP’s share of capitalized interest from unconsolidated JVs 1,140 1,284
BXP’s Share of capitalized interest $ 13,255 $ 13,705
Amortization of financing costs $ 3,485 $ 3,428
Partners’ share of amortization of financing costs from consolidated JVs (382) (382)
BXP’s share of amortization of financing costs from unconsolidated JVs 720 538
BXP’s Share of amortization of financing costs $ 3,823 $ 3,584
Three Months Ended
30-Sep-19
Revenue $ 743,553
Partners’ share of revenue from consolidated joint ventures (JVs) (75,714)
BXP’s share of revenue from unconsolidated JVs 36,332
BXP’s Share of revenue $ 704,171

_____________

^1^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.

^2^Consists 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.

^3^Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

Q3 2020
Reconciliations (continued)

for the three months ended September 30, 2020

(unaudited and dollars in thousands)

Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
CONSOLIDATED JOINT VENTURES 767 Fifth Avenue 100 Federal Street Total Consolidated
(The GM Building) Atlantic Wharf Office Joint Ventures
Revenue
Lease^1^ $ 60,868 $ 86,916 $ 147,784
Write-offs associated with accounts receivable — (267) (267)
Straight-line rent 14,346 5,177 19,523
Write-offs associated with straight-line rent — (191) (191)
Fair value lease revenue (2,180) 109 (2,071)
Termination income 1,389 — 1,389
Total lease revenue 74,423 91,744 166,167
Parking and other — 919 919
Total rental revenue ^2^ 74,423 92,663 167,086
Expenses
Operating 30,104 34,993 65,097
Net Operating Income (NOI) 44,319 57,670 101,989
Other income (expense)
Interest and other income 6 99 105
Interest expense (21,394) (4,899) (26,293)
Depreciation and amortization expense (15,349) (20,721) (36,070)
General and administrative expense (5) (35) (40)
Total other income (expense) (36,742) (25,556) (62,298)
Net income $ 7,577 $ 32,114 $ 39,691
BXP’s nominal ownership percentage 60.00% 55.00%
Partners’ share of NOI (after income allocation to private REIT shareholders) ^3^ $ 17,054 $ 25,106 $ 42,160
BXP’s share of NOI (after income allocation to private REIT shareholders) $ 27,265 $ 32,564 $ 59,829
Unearned portion of capitalized fees ^4^ $ 292 $ 368 $ 660
Partners’ share of select items ^3^
Partners’ share of write-offs associated with accounts receivable $ — $ 120 $ 120
Partners’ share of write-offs associated with straight-line rent $ — $ 86 $ 86
Partners’ share of parking and other revenue $ — $ 414 $ 414
Partners’ share hedge amortization $ 144 $ — $ 144
Partners’ share of amortization of financing costs $ 346 $ 36 $ 382
Partners’ share of depreciation and amortization related to capitalized fees $ 275 $ 296 $ 571
Partners’ share of capitalized interest $ — $ 1,348 $ 1,348
Partners’ share of non-cash termination income adjustment (fair value lease amounts) $ 553 $ — $ 553
Partners’ share of lease transaction costs that qualify as rent inducements $ 174 $ 699 $ 873
Partners’ share of management and other fees $ 673 $ 845 $ 1,518
Partners’ share of basis differential and other adjustments $ (18) $ (146) $ (164)
Reconciliation of Partners’ share of EBITDAre ^3^
Partners’ NCI $ 2,104 $ 13,457 $ 15,561
Add:
Partners’ share of interest expense after BXP’s basis differential 8,555 2,205 10,760
Partners’ share of depreciation and amortization expense after BXP’s basis differential 6,397 9,436 15,833
Partners’ share of EBITDAre $ 17,056 $ 25,098 $ 42,154
Q3 2020
--- ---
Reconciliations (continued)

for the three months ended September 30, 2020

(unaudited and dollars in thousands)

CONSOLIDATED JOINT VENTURES
Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
Reconciliation of Partners’ share of Net Operating Income (Loss) (NOI) ^3^ (The GM Building) Atlantic Wharf Office Joint Ventures
Rental revenue ^2^ $ 29,769 $ 41,698 $ 71,467
Less: Termination income 556 — 556
Rental revenue (excluding termination income) ^2^ 29,213 41,698 70,911
Less: Operating expenses (including partners’ share of management and other fees) 12,715 16,592 29,307
Income allocation to private REIT shareholders — — —
NOI (excluding termination income and after income allocation to private REIT shareholders) $ 16,498 $ 25,106 $ 41,604
Rental revenue (excluding termination income) ^2^ $ 29,213 $ 41,698 $ 70,911
Less: Straight-line rent 5,738 2,244 7,982
Fair value lease revenue (872) 49 (823)
Add: Lease transaction costs that qualify as rent inducements 174 699 873
Subtotal 24,521 40,104 64,625
Less: Operating expenses (including partners’ share of management and other fees) 12,715 16,592 29,307
Income allocation to private REIT shareholders — — —
NOI - cash (excluding termination income and after income allocation to private REIT shareholders) $ 11,806 $ 23,512 $ 35,318
Reconciliation of Partners’ share of Revenue ^3^
Rental revenue ^2^ $ 29,769 $ 41,698 $ 71,467
Add: Development and management services revenue — — —
Revenue $ 29,769 $ 41,698 $ 71,467

_________

^1^Lease revenue includes recoveries from tenants and service income from tenants.^^

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^3^ Amounts represent the partners’ share based on their respective ownership percentage.

^4^Capitalized fees are eliminated in consolidation and recognized over the life of the asset as depreciation and amortization are added back to the Company’s net income.

Q3 2020
Reconciliations (continued)

for the three months ended September 30, 2020

(unaudited and dollars in thousands)

UNCONSOLIDATED JOINT VENTURES^1^

Market Square North Metropolitan Square 901 New York Avenue Annapolis Junction 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons Other Joint Ventures ^2^ Total Unconsolidated Joint Ventures
Revenue
Lease ^3^ $ 5,211 $ 4,939 $ 5,828 $ 1,912 $ 4,362 $ 20,189 $ 16,269 $ 7,267 $ 12,685 $ 1,663 $ 80,325
Write-offs associated with accounts receivable — — — — — (1,075) — — — — (1,075)
Straight-line rent 171 2,005 587 38 (82) (199) 226 1,526 254 3,079 7,605
Write-offs associated with straight-line rent — — — — — (3,837) — — — — (3,837)
Fair value lease revenue 9 1,069 — 52 — 1,130
Termination income — — — — — — — — — — —
Total lease revenue 5,382 6,944 6,415 1,950 4,280 15,087 17,564 8,793 12,991 4,742 84,148
Parking and other 209 206 218 — 18 1,166 1,345 (92) 5 380 3,455
Total rental revenue ^4^ 5,591 7,150 6,633 1,950 4,298 16,253 18,909 8,701 12,996 5,122 87,603
Expenses
Operating 2,369 3,141 2,994 645 1,680 6,174 7,834 4,170 4,911 3,413 ^5^ 37,331
Net operating income 3,222 4,009 3,639 1,305 2,618 10,079 11,075 4,531 8,085 1,709 50,272
Other income/(expense)
Development and management services revenue 15 88 — — — — — — 11 — 114
Interest and other income 1 — — — — 1 — 1 — 4 7
Interest expense (1,409) (5,183) (2,054) (209) (1,128) (5,033) (6,999) (2,381) — (1,085) (25,481)
Depreciation and amortization expense (1,217) (3,195) (1,588) (546) (862) (5,366) (8,884) (4,276) (7,104) (2,772) (35,810)
General and administrative expense — (34) (9) — (1) (11) (99) (20) (67) — (241)
Gain on sale of real estate — — — — — — — — — — —
Total other income/(expense) (2,610) (8,324) (3,651) (755) (1,991) (10,409) (15,982) (6,676) (7,160) (3,853) (61,411)
Net income/(loss) $ 612 $ (4,315) $ (12) $ 550 $ 627 $ (330) $ (4,907) $ (2,145) $ 925 $ (2,144) $ (11,139)
BXP’s economic ownership percentage 50 % 20 % 50 % 50 % 30 % 50 % 55 % 50 % 55 %
BXP’s share of write-offs associated with accounts receivable $ — $ — $ — $ — $ — $ 538 $ — $ — $ — $ — $ 538
BXP’s share of write-offs associated with straight-line rent $ — $ — $ — $ — $ — $ 1,919 $ — $ — $ — $ — $ 1,919
BXP’s share of parking and other revenue $ 105 $ 41 $ 109 $ — $ 5 $ 583 $ 740 $ (46) $ 3 $ 138 $ 1,678
BXP’s share of amortization of financing costs $ 11 $ 244 $ 22 ^6^ $ 11 $ 4 $ 13 $ 72 $ 189 $ — $ 154 $ 720
BXP’s share of capitalized interest $ — $ — $ — ^6^ $ — $ — $ — $ — $ 333 $ — $ 807 $ 1,140
BXP’s share of non-cash termination income adjustment (fair value lease amounts) $ — $ — $ — ^6^ $ — $ — $ — $ — $ — $ — $ — $ —
Income/(loss) from unconsolidated joint ventures $ 259 $ (872) $ (29) ^6^ $ 271 $ 191 $ (1,213) $ (2,692) $ (1,106) $ (767) $ (915) $ (6,873)
Add:
BXP’s share of interest expense 705 1,037 1,027 ^6^ 105 338 2,517 3,849 1,191 — 542 11,311
BXP’s share of depreciation and amortization expense 655 648 817 ^6^ 277 256 4,584 ^7^ 4,879 2,171 4,950 1,176 20,413
Less:
BXP’s share of gain on sale of real estate — — — — — — — — — — —
BXP’s share of EBITDAre $ 1,619 $ 813 $ 1,815 ^6^ $ 653 $ 785 $ 5,888 $ 6,036 $ 2,256 $ 4,183 $ 803 $ 24,851
Q3 2020
--- ---
Reconciliations (continued) UNCONSOLIDATED JOINT VENTURES
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Reconciliation of BXP’s share of Net Operating Income/(Loss) Market Square North Metropolitan Square 901 New York Avenue Annapolis Junction 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons Other Joint Ventures ^2^ Total Unconsolidated Joint Ventures
BXP’s share of rental revenue ^4^ $ 2,796 $ 1,430 $ 3,317 ^6^ $ 975 $ 1,289 $ 8,980 ^7^ $ 10,400 $ 4,351 $ 6,915 $ 2,425 $ 42,878
BXP’s share of operating expenses 1,185 628 1,497 ^6^ 323 504 3,087 4,309 2,085 2,701 1,621 17,940
BXP’s share of net operating income/(loss) 1,611 802 1,820 ^6^ 652 785 5,893 6,091 2,266 4,214 804 24,938
Less:
BXP’s share of termination income — — — ^6^ — — — — — — — —
BXP’s share of net operating income/(loss) (excluding termination income) 1,611 802 1,820 ^6^ 652 785 5,893 6,091 2,266 4,214 804 24,938
Less:
BXP’s share of straight-line rent 86 401 294 ^6^ 19 (25) (1,602) ^7^ 124 763 148 1,539 1,747
BXP’s share of fair value lease revenue — — — ^6^ — — 442 ^7^ 588 — (212) — 818
Add:
BXP’s share of straight-line ground rent expense adjustment — — — ^6^ — — — — — — 43 43
BXP’s share of lease transaction costs that qualify as rent inducements 23 187 — ^6^ — — — — — (338) — (128)
BXP’s share of net operating income/(loss) - cash (excluding termination income) $ 1,548 $ 588 $ 1,526 ^6^ $ 633 $ 810 $ 7,053 ^7^ $ 5,379 $ 1,503 $ 3,940 $ (692) $ 22,288
Reconciliation of BXP’s share of Revenue
BXP’s share of rental revenue ^5^ $ 2,796 $ 1,430 $ 3,317 ^6^ $ 975 $ 1,289 $ 8,980 ^7^ $ 10,400 $ 4,351 $ 6,915 $ 2,425 $ 42,878
Add:
BXP’s share of development and management services revenue 8 18 — ^6^ — — — — — 6 — 32
BXP’s share of revenue $ 2,804 $ 1,448 $ 3,317 ^6^ $ 975 $ 1,289 $ 8,980 ^7^ $ 10,400 $ 4,351 $ 6,921 $ 2,425 $ 42,910

_____________

^1^Commencing in March 2020, the COVID-19 pandemic began to negatively impact the United States economy and the Company, and it continues to do so. For additional detail, see page 59.

^2^Includes 1001 6th Street, Dock 72, 7750 Wisconsin Avenue, 1265 Main Street, Wisconsin Place Parking Facility, 3 Hudson Boulevard, 540 Madison Avenue, Platform 16, and Beach Cities Media Center.

^3^Lease revenue includes recoveries from tenants and service income from tenants.^^

^4^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^5^ Includes approximately $80 of straight-line ground rent expense.

^6^Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

^7^ The Company’s purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

Q3 2020
Consolidated Income Statement - prior year

(unaudited and in thousands, except per share amounts)

Three Months Ended
30-Sep-19
Revenue
Lease $ 692,225
Parking and other 25,582
Hotel revenue 13,014
Development and management services 10,303
Direct reimbursements of payroll and related costs from management services contracts 2,429
Total revenue 743,553
Expenses
Operating 129,852
Real estate taxes 135,419
Demolition costs 332
Hotel 8,743
General and administrative 31,147
Payroll and related costs from management services contracts 2,429
Transaction costs 538
Depreciation and amortization 165,862
Total expenses 474,322
Other income (expense)
Loss from unconsolidated joint ventures (649)
Losses on sales of real estate (15)
Gains from investments in securities 106
Interest and other income 7,178
Losses from early extinguishments of debt (28,010)
Interest expense (106,471)
Net income 141,370
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships (18,470)
Noncontrolling interest - common units of the Operating Partnership (12,504)
Net income attributable to Boston Properties, Inc. 110,396
Preferred dividends (2,625)
Net income attributable to Boston Properties, Inc. common shareholders $ 107,771
INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic $ 0.70
Net income attributable to Boston Properties, Inc. per share - diluted $ 0.70
Q3 2020
--- ---
Funds from operations (FFO) ^1^- prior year

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

Three Months Ended
30-Sep-19
Net income attributable to Boston Properties, Inc. common shareholders $ 107,771
Add:
Preferred dividends 2,625
Noncontrolling interest - common units of the Operating Partnership 12,504
Noncontrolling interests in property partnerships 18,470
Net income 141,370
Add:
Depreciation and amortization expense 165,862
Noncontrolling interests in property partnerships' share of depreciation and amortization (17,402)
BXP's share of depreciation and amortization from unconsolidated joint ventures 13,745
Corporate-related depreciation and amortization (411)
Less:
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures (487)
Gains (losses) on sales of real estate (15)
Noncontrolling interests in property partnerships 18,470
Preferred dividends 2,625
FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO) 282,571
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO 28,940
FFO attributable to Boston Properties, Inc. common shareholders $ 253,631
Boston Properties, Inc.’s percentage share of Basic FFO 89.76 %
Noncontrolling interest’s - common unitholders percentage share of Basic FFO 10.24 %
Basic FFO per share $ 1.64
Weighted average shares outstanding - basic 154,577
Diluted FFO per share $ 1.64
Weighted average shares outstanding - diluted 154,820

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

Q3 2020
Funds available for distributions (FAD) ^1^ - prior year

(unaudited and in thousands)

Three Months Ended
30-Sep-19
Net income attributable to Boston Properties, Inc. common shareholders $ 107,771
Add:
Preferred dividends 2,625
Noncontrolling interest - common units of the Operating Partnership 12,504
Noncontrolling interests in property partnerships 18,470
Net income 141,370
Add:
Depreciation and amortization expense 165,862
Noncontrolling interests in property partnerships’ share of depreciation and amortization (17,402)
BXP’s share of depreciation and amortization from unconsolidated joint ventures 13,745
Corporate-related depreciation and amortization (411)
Less:
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures (487)
Gains (losses) on sales of real estate (15)
Noncontrolling interests in property partnerships 18,470
Preferred dividends 2,625
Basic FFO 282,571
Add:
BXP’s Share of lease transaction costs that qualify as rent inducements ^1, 2^ 2,041
BXP’s Share of hedge amortization ^1^ 1,435
Straight-line ground rent expense adjustment ^3^ 1,019
Stock-based compensation 7,809
Non-real estate depreciation 411
Unearned portion of capitalized fees from consolidated joint ventures 836
Less:
BXP’s Share of straight-line rent ^1^ (1,904)
BXP’s Share of fair value lease revenue ^1, 4^ 4,467
BXP’s Share of 2nd generation tenant improvements and leasing commissions ^1^ 70,199
BXP’s Share of maintenance capital expenditures ^1, 5^ 31,263
Hotel improvements, equipment upgrades and replacements 177
Funds available for distribution to common shareholders and common unitholders (FAD) (A) 191,920
Distributions to common shareholders and unitholders (excluding any special distributions) (B) 164,043
FAD Payout Ratio1 (B÷A) 85.47 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

^2^Consists 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.

^3^Includes 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.

^4^Represents 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.^^

^5^Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

67

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