What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-02 compared with 2021-11-05 · 429 added, 915 removed, 586 unchanged (70% of the section changed)

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Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

T he most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include the ongoing impact of the global COVID-19 pandemic on the U.S.

and global economies, which has impacted, and is likely to continue to impact, us, the risks described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 including those described under the caption “Risk Factors,” (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Form 10-Q in Part II, Item 1A, and the following:

• the risks and uncertainties 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 implemented in response to COVID-19, the effectiveness of such measures, as well as the effect of any relaxation of current restrictions, and the direct and indirect impact of such measures on our and our tenants’ businesses, financial condition, results of operations, cash flows, liquidity, performance and demand for office space, and the U.S.

and international economy and economic activity generally;

the emergence and characteristics of new variants, the speed, effectiveness and distribution of vaccines (including effectiveness against COVID-19 variant strains), whether new or existing actions and measures continue to impact the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay rent in a timely manner, in full or at all;

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;

• volatile or adverse global economic and political conditions, health crises and dislocations in the credit markets could adversely affect our access to cost-effective capital and have a resulting material adverse effect on our business opportunities, results of operations and financial condition;

The most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include the impact on global and U.S.

economic conditions due to the ongoing COVID-19 pandemic, the ongoing war in Ukraine, rising inflation, increasing interest rates, supply-chain disruptions, as well as the risks described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 including those described under the caption “Risk Factors,” (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Form 10-Q in Part II, Item 1A, if any.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

• the risks and uncertainties related to the impact of (1) the COVID-19 global pandemic, including the emergence of additional variants, the effectiveness, availability and distribution of vaccines, including their efficacy against new variant strains and the willingness of individuals to be vaccinated, (2) the impact of geopolitical conflicts, including the war in Ukraine, and (3) the severity and duration of the indirect economic impacts of the foregoing, such as recession, supply chain disruptions, labor market disruptions, rising inflation, increasing interest rates, dislocation and volatility in capital markets, job losses, potential longer-term changes in consumer and tenant behavior, as well as possible future governmental responses;

• volatile or adverse global economic and geopolitical conditions, health crises and dislocations in the credit markets could adversely affect our access to cost-effective capital and have a resulting material adverse effect on our business opportunities, results of operations and financial condition;

• risks associated with downturns in the national and local economies, increasing interest rates, and volatility in the securities markets;

• general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, tenant space utilization, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate);

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• the ability of our joint venture partners to satisfy their obligations;

• risks and uncertainties affecting property development and construction (including, without limitation, construction delays, increased construction costs, cost overruns, inability to obtain necessary permits, tenant accounting considerations that may result in negotiated lease provisions that limit a tenant’s liability during construction, and public opposition to such activities);

• risks and uncertainties affecting property development and construction (including, without limitation, rising inflation, supply chain disruptions, labor shortages, construction delays, increased

construction costs, cost overruns, inability to obtain necessary permits, tenant accounting considerations that may result in negotiated lease provisions that limit a tenant’s liability during construction, and public opposition to such activities);

• risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments or refinance existing indebtedness, including the impact of higher interest rates on the cost and/or availability of financing;

• risks associated with forward interest rate contracts and the effectiveness of such arrangements;

• risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets;

• risks associated with actual or threatened terrorist attacks;

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• risks associated with our dependence on key personnel whose continued service is not guaranteed.

• the other risk factors identified in our most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2020 or described herein, including those under the caption “Risk Factors.”

The risks set forth above are not exhaustive.

Other sections of this report may include additional factors that could adversely affect our business and financial performance.

Moreover, we operate in a very competitive and rapidly changing environment, particularly in light of the circumstances relating to COVID-19.

Moreover, we operate in a very competitive and rapidly changing environment, particularly in light of the circumstances relating to COVID-19 and the war in Ukraine.

New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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We expressly disclaim any responsibility to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or otherwise, and you should not rely upon these forward-looking statements after the date of this report.

BXP is one of the largest publicly traded office real estate investment trusts (REITs) (based on total market capitalization as of September 30, 2021) in the United States that develops, owns and manages primarily Class A office properties.

BXP is one of the largest publicly traded office real estate investment trusts (REITs) (based on total market capitalization as of March 31, 2022) in the United States that develops, owns, and manages primarily Class A office properties.

Our properties are concentrated in six markets in the United States - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC.

BPLP is the entity through which BXP conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets.

We generate revenue and cash primarily by leasing Class A office space to our tenants.

When making leasing decisions, we consider, among other things, the creditworthiness of the tenant and the industry in which it conducts business, the length of

the lease, the rental rate to be paid at inception and throughout the lease term, the costs of tenant improvements, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, current and anticipated vacancy in our properties and the market overall (including sublease space), current and expected future demand for the space, the impact of any expansion rights and general economic factors.

Our core strategy has always been to develop, acquire and manage high-quality properties in supply-constrained markets with high barriers-to-entry and attractive demand drivers, and to focus on executing long-term leases with financially strong tenants.

We generate revenue and cash primarily by leasing Class A office space to our clients.

When making leasing decisions, we consider, among other things, the creditworthiness of the client and the industry in which it conducts business, the length of the lease, the rental rate to be paid at inception and throughout the lease term, the costs of tenant improvements, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, current and anticipated vacancy in our properties and the market overall (including sublease space), current and expected future demand for the space, the impact of other client’s expansion rights and general economic factors.

Historically, these factors have minimized our exposure in weaker economic cycles and enhanced revenues as market conditions improve.

Our tenant base is diverse across market sectors and the weighted-average lease term for our in-place leases, excluding residential units, was approximately 7.5 years, as of September 30, 2021, including leases signed by our unconsolidated joint ventures.

The weighted-average lease term for our 20 largest office tenants was approximately 10.5 years as of September 30, 2021.

To be successful in any leasing environment, we believe we must consider all aspects of the tenant-landlord relationship.

Our client base is diverse across market sectors and

the weighted-average lease term for our in-place leases, excluding residential units, was approximately 7.9 years, as of March 31, 2022, including leases signed by our unconsolidated joint ventures.

The weighted-average lease term for our 20 largest clients, based on leased square footage, was approximately 11.2 years as of March 31, 2022.

To be successful in any leasing environment, we believe we must consider all aspects of the client-landlord relationship.

In this regard, we believe that our competitive leasing advantage is based on the following attributes:

• our understanding of tenants’ short- and long-term space utilization and amenity needs in the local markets;

• our understanding of our client’s short- and long-term space utilization and amenity needs in the local markets;

• our track record of developing and operating Class A office properties in a sustainable and responsible manner;

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• our relationships with local brokers.

The United States economy continues to recover from the COVID-19 pandemic, although quarter-over-quarter GDP growth slowed to an annual rate of 2.0% in the third quarter of 2021 compared to 6.7% in the second quarter of 2021.

This slowdown reflects the impacts of the Delta variant and moderation in government stimulus spending.

Since the end of the third quarter, however, daily COVID infection levels have decreased by more than 50% from the recent highs in September 2021.

We believe the positive trend in infection rates, combined with relatively low unemployment rates, bodes well for continuing economic growth in our markets.

The overall economic recovery is having a positive impact on our leasing activity.

Although additional COVID variants and supply-chain issues may emerge, we believe as the number of vaccinations increases and employees return to their offices in greater numbers, our strategically located, high-quality office properties will remain a vital component of the strategies of today’s forward-thinking organizations that prioritize fostering collaboration, innovation, productivity and culture, and we expect tenants will take advantage of the availability of Class A space and upgrade.

Annual inflation increased to 5.4% in September 2021, driven largely by energy prices, which increased approximately 25% compared to one year ago.

Energy is a component of our operating expenses our largest energy cost is electricity.

We have limited most of our exposure to additional potential increases through 2022, and we have been increasing our procurement from green power.

We remain exposed to the marginal cost of electrical generation in the Boston region where we expect increases in 2022 of greater than 10% compared to last year.

Costs for security, cleaning and engineering labor continues to increase due to labor shortages across all trades.

However, we are able to mitigate the risks from these increased costs to our results due to the nature of our lease contracts, which generally take one of two forms:

(1) net leases, under which all of the operating expense and real estate taxes are paid by the tenant, and (2) gross leases with a base year that is set upon the lease commencement with increases in expenses over that base year added to the rental obligation of the tenant.

Our near-term exposure to increases in operating expenses is primarily on our vacant space and for new or renewal leases where we are setting a base year.

Our vacancy was approximately 11.6% at September 30, 2021, and our 2021 and 2022 lease expirations total approximately 7.6% of our portfolio.

We do not expect an increase in operating expenses to have a material adverse effect on our results of operations for the remainder of 2021 or 2022.

BXP Priorities

Despite the concerns surrounding COVID-19 and the lingering impact on economic conditions in our markets, we remain optimistic for our industry generally and our company in particular, given low interest rates, the demand

for workers across sectors, the high quality of our properties, the supply and demand characteristics of our markets and the success of our development efforts.

We remain focused on the following priorities:

• ensuring tenant health, safety and satisfaction;

Just as the Omicron variant’s impact on the economy began to slowly dissipate, geopolitical tensions in Eastern Europe increased uncertainty during the first quarter of 2022.

Inflation, at generational highs, has caused food and energy prices to spike, thereby reducing consumer’s purchasing power and elevating the risks of an economic slowdown.

At the same time, the labor market remains historically tight and companies continue to look to add employees, pushing unemployment lower.

As business conditions become more competitive due to rising interest rates, slowing economic growth, and changes in the labor markets, business leaders will likely feel the need to bring their employees together on a much more consistent basis and modify their return to office policies.

We believe as employees return to their offices in greater numbers, our strategically located, high-quality office and well-amenitized properties will remain a vital component of the strategies of today’s forward-thinking organizations that prioritize fostering collaboration, innovation, productivity and culture.

We expect companies will look to take advantage of the availability of Class A space and upgrade.

Despite the concerns surrounding COVID-19 variants, geopolitical tensions, and the potential impact on economic conditions, we remain optimistic for our industry generally and BXP in particular, given the demand for workers across sectors, the high quality of our properties, and the success of our development efforts.

We remain focused on the following priorities, which we believe are key to increasing future revenue and asset values over the long-term:

• ensuring client health, safety and satisfaction;

• leasing available space in our in-service and development properties, as well as proactively focusing on future lease expirations;

• completing the construction of our development properties;

• continuing and completing the redevelopment and repositioning of several key properties to increase future revenue and asset values over the long-term;

• completing the construction and leasing of our development properties;

• continuing and completing the redevelopment, repositioning, and repurposing for growing life sciences use of several key properties;

• identifying new investment opportunities that meet our criteria while maintaining discipline in our underwriting;

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• actively managing our operations in a sustainable and responsible manner.

The following is an overview of portfolio activity, leasing activity and capital markets activity in the third quarter of 2021.

The following is an overview of leasing and investment activity in the first quarter of 2022.

Leasing Activity and Occupancy

In the third quarter of 2021, we signed approximately 1.4 million square feet of new leases and renewals with a weighted-average lease term of approximately 9.2 years, indicating that many new and existing tenants continue to commit to the long-term use of space and view our properties as their preferred choice for a premium Class A office environment.

The volume of leasing in the third quarter of 2021 (measured by square feet) was more than double the volume achieved in the first quarter of 2021 and approximately 90% of our pre-pandemic historical third quarter average.

The overall occupancy of our in-service office and retail properties was 88.4% at September 30, 2021, a decrease of 0.2% compared to 88.6% at June 30, 2021.

We anticipate occupancy for the remainder of 2021 will be relatively flat with occupancy for the third quarter of 2021, but will begin to improve as we head into 2022, as our remaining 2021 and 2022 lease expirations are backfilled by signed leases that have not yet commenced and new leases.

Our parking and other revenue was approximately $23.5 million in the third quarter of 2021, an increase of approximately $5.2 million from the second quarter of 2021.

The increase was primarily due to improved transient parking and greater insurance proceeds from a water main break at a New York property.

The third quarter 2021 parking and other revenue was 92% of pre-pandemic parking and other revenue from the third quarter of 2019.

We expect to return to pre-pandemic levels of parking revenue as workers increasingly return to work in their offices.

Our hotel property, the Boston Marriott Cambridge, generated approximately $1.2 million of net operating income during the third quarter of 2021.

This was the first quarter since the start of the pandemic in which the hotel made a positive contribution to our results.

Given the hotel’s location in the heart of Cambridge, Massachusetts and adjacent to MIT, we expect hotel occupancy and REVPAR to improve to pre-pandemic levels over time as business and leisure travel return to historical levels.

In the first quarter of 2022, we signed approximately 1.2 million square feet of new leases and renewals, which is in line with our 10-year, pre-pandemic average for leasing for the first quarter.

These leases have a weighted-average lease term of approximately 7.3 years, indicating that many new and existing clients continue to commit to

the long-term use of space and view our properties as their preferred choice for a premium Class A office environment.

The overall occupancy of our in-service office and retail properties was 89.1% at March 31, 2022, an increase of 30 basis points from December 31, 2021.

Given our moderate near-term rollover, the amount of leases signed, but for which occupancy has not commenced, and the number of leases in negotiation for space in the in-service portfolio, we expect our occupancy to continue to increase.

Our parking and other revenue was approximately $21.7 million in the first quarter of 2022, a decrease of approximately $1.4 million, or 6%, from the fourth quarter of 2021.

Our hotel property, the Boston Marriott Cambridge, also experienced a decrease in revenue of approximately $1.7 million, or 27%, from the fourth quarter of 2021.

We believe both decreases are correlated to the spike in the Omicron variant throughout the U.S.

in the first part of the quarter that delayed return to office openings and slowed down travel.

Investment Activity

We remain committed to developing and acquiring assets to enhance our long-term growth and to meet tenant demand for high-quality office and lab space.

We remain committed to developing and acquiring assets to enhance our long-term growth and to meet client demand for high-quality office, residential, and life sciences space.

We continually evaluate current and prospective markets for possible acquisitions of “value-add” assets that require lease-up or repositioning, and acquisitions that are otherwise consistent with our long-term strategy of owning, managing, developing, and improving, premier Class A properties in each of our chosen markets.

During the third quarter of 2021, we continued to execute on our strategy and completed two acquisitions.

We believe these investments align with several elements of our growth strategy, including entering new markets or submarkets that exhibit strong demand and limitations on supply, uncovering opportunities that utilize our leasing and redevelopment skills to increase value, broadening our portfolio to meet the current and anticipated future

demand of tenants in the life sciences sector and employing our Strategic Capital Program (“SCP”) (Refer to the heading “ Liquidity and Capital Resources” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations ” for a description of the SCP.) to utilize private equity to increase our returns and enhance our investment capacity.

These acquisitions included:

• Safeco Plaza, an approximately 765,000 net rentable square-foot Class A office building in Seattle, Washington.

The property was approximately 91% leased at September 30, 2021.

This acquisition marked our initial entry into the Seattle market, one of the most vibrant markets in the United States for companies in the technology, life sciences, manufacturing and financial services sectors.

The acquisition was completed through a newly formed joint venture with two institutional partners that are part of our SCP.

• Shady Grove Bio+Tech Campus, consisting of seven buildings totaling approximately 435,000 square-feet in the Shady Grove area of Rockville, Maryland, a region that is home to more than 400 companies in the biotechnology and life sciences sector.

We plan to convert the office buildings on the campus to lab space to meet current and growing demand in the region from biotechnology companies for new, Class A lab space.

In the third quarter of 2021, we continued the construction of the developments and redevelopment projects in our pipeline, which consists of nine properties that, when completed, we expect will total approximately 4.3 million net rentable square feet.

As of September 30, 2021, our share of the estimated total cost for these projects is approximately $2.7 billion, of which approximately $1.1 billion of equity remained to be invested.

The total development pipeline, inclusive of both office and lab/life sciences developments, but excluding the View Boston Observatory at The Prudential Center, is 72% pre-leased as of November 2, 2021.

The office development projects in our current pipeline, which total approximately 3.3 million square feet, are approximately 87% pre-leased, as of November 2, 2021, to predominately credit-strong tenants with long-lease terms.

In addition, during September and October of 2021, we completed and delivered approximately 1.5 million square feet of space to tenants from our development pipeline.

In early 2021 we added several new development and redevelopment projects to our development pipeline focused on the specific needs of tenants in the life sciences sector.

Our lab/life sciences developments in our pipeline total approximately 920,000 square feet and include properties in Waltham, Massachusetts and South San Francisco, California.

Although Shady Grove Bio+Tech Campus is not currently included in our development pipeline, we anticipate converting the office buildings on the campus to lab space.

Our lab/life sciences developments are located in some of the largest life sciences clusters in the United States, with strong demand from tenants because of the close proximity to universities, research institutions and related businesses and concentrations of labor with specialized skills and knowledge.

Supply-chain concerns impact our business both in time to completion and increased costs.

Our construction schedule is one of the criteria we use when we evaluate bids for development projects and capital improvements.

Consistent with this strategy, on April 14, 2022, we entered into an agreement to acquire Madison Centre, a Class A office property in the Seattle, Washington central business district (“CBD”), for a gross purchase price of $730 million.

This addition to our portfolio furthers our goal to establish a strong platform for continued growth in the Seattle market.

Built in 2017, Madison Centre is approximately 760,000 square feet, 37 floors, 93% leased and LEED Platinum certified.

The acquisition is expected to close in the second quarter of this year and will be initially funded with a one-year, $730 million term loan.

We anticipate ultimately funding the acquisition through incremental asset sales, which we anticipate would be structured as like-kind exchanges or joint venture equity.

In the first quarter of 2022, we commenced two new development projects:

• the redevelopment of 651 Gateway in South San Francisco, California, an office building that will be converted to approximately 327,000 net rentable square feet of life sciences space and that is owned by a joint venture in which we have a 50% interest;

• the development of the first phase of Platform 16 in San Jose, California, a Class A office project that is owned by a joint venture in which we have a 55% interest.

The first phase is an approximately 390,000 net rentable square foot Class A creative office building.

When all phases are complete, Platform 16 is expected to include approximately 1.1 million net rentable square feet.

As of March 31, 2022, our development/redevelopment pipeline consists of 11 properties that, when completed, we expect will total approximately 4.1 million net rentable square feet.

Our share of the estimated total cost for these projects is approximately $2.9 billion, of which approximately $1.2 billion remained to be invested.

The total development pipeline, inclusive of both office and lab/life sciences developments, but excluding the View Boston Observatory at The Prudential Center, is 54% pre-leased as of April 29, 2022.

The office development projects, which total approximately 2.8 million square feet, are approximately 57% pre-leased as of April 29, 2022, to predominately credit-strong clients with long-lease terms.

Supply-chain concerns and inflationary pressures continue to negatively impact our business and have been exacerbated by the war in Ukraine and the ongoing Omicron outbreak in China.

Impacts on our business include increased time to complete construction projects and increased costs.

Our construction schedule is one of the elements we consider when we evaluate bids for development projects and capital improvements.

We have been successful in awarding bids and maintaining schedules through the pandemic.

However, there are fewer choices for materials, and we are working closely with our consultants and contractors to ensure there are not items used in the development or redevelopment process that could impact schedules.

We are intentionally minimizing the amount of materials we acquire from overseas, releasing material packages as early as possible and stock-piling materials off-site.

In addition, when budgeting new development projects, we are including projected cost increases of approximately 5-6%.

We currently expect to deliver all active developments and redevelopments on time and budget, but we cannot assure you that we will not experience greater cost increases or that the materials we need will continue to be available so that we are able to complete the project.

A failure to deliver a project on time could expose us to additional costs under the signed pre-leases for those projects.

As we continue to focus on new investments to drive future growth, we also continually review our portfolio to identify properties as potential sales candidates because they may either no longer fit within our portfolio strategy or they could attract premium pricing in the current market environment.

On October 25, 2021, we completed the sale of 181,191 and 201 Spring Street, a three-building complex aggregating approximately 333,000 net rentable square feet in Lexington, Massachusetts, for an aggregate gross sales price of $191.5 million.

The three buildings are 100% leased.

We will continue to evaluate the sale of similar properties.

Excluding Seattle, which we entered on September 1, 2021, a brief overview of each of our markets follows.

The Boston region is home to the largest cluster of life sciences companies in the world, and these companies are growing and increasing demand and rents in the region.

During the third quarter of 2021, we signed approximately 769,000 square feet of leases and approximately 782,000 square feet of leases commenced.

However, there are fewer choices for materials, and we continue to work closely with our consultants and contractors to ensure there are not items used in the development or redevelopment process that are not available or could, directly or indirectly, cause delays.

We are intentionally minimizing the amount of materials we acquire from foreign suppliers, releasing material packages as early as possible and, when appropriate, purchasing materials in advance and storing them off-site.

We currently expect to deliver all active developments and redevelopments on time and budget.

However, we may experience greater costs and/or necessary materials may not be available, which could delay the completion of our development projects.

A failure to deliver a project on time could expose us to additional costs, in time or penalties (including lease termination rights), under leases signed for the project.

As we continue to focus on new investments to drive future growth, we continually review our portfolio to identify properties as potential sales candidates that either no longer fit within our portfolio strategy or could attract premium pricing in the current market.

On March 31, 2022, we completed the sale of 195 West Street, an approximately 63,500 square foot office building in Waltham, Massachusetts, for a gross sales price of $37.7 million and net cash proceeds of approximately $35.4 million.

We expect to sell an aggregate of $700 million to $900 million of assets in 2022.

A brief overview of each of our markets follows.

During the first quarter of 2022, we signed approximately 351,000 square feet of leases and approximately 369,000 square feet of leases commenced in the Boston region.

Approximately 191,000 square feet of the leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 8% over the prior leases.

Our Boston central business district (“CBD”) in-service portfolio was approximately 94% leased as of September 30, 2021.

During the third quarter of 2021, we executed an approximately 524,000 square foot, 10-year lease extension with Wellington Management at Atlantic Wharf, approximately four years prior to the lease expiration, supporting our belief in the commitment of employers to office space and the attractiveness of our asset.

In addition, we completed and delivered 440,000 square feet of space leased to an affiliate of Verizon Communications at our 100 Causeway Street development project in Boston, Massachusetts.

100 Causeway Street is an approximately 632,000 square foot office building in which we have a 50% ownership interest.

Our approximately 2.0 million square foot in-service office portfolio in Cambridge was approximately 99% leased as of September 30, 2021.

During the third quarter of 2021, we continued our development of 325 Main Street at Kendall Center in Cambridge, Massachusetts, which is 90% pre-leased to an office tenant for a term of 15 years and we expect to deliver the building into service in 2022.

In early 2021, we received approximately one million square feet of new entitlements at Kendall Center for potential future development.

Waltham and the area surrounding the Route 128-Mass Turnpike interchange continue to comprise a popular submarket of Boston for leading and emerging companies in the life sciences, biotechnology and technology sectors.

Since the third quarter of 2021, we signed leases for approximately 52,000 square feet at 880 Winter Street, an approximately 224,000 square foot office property in Waltham, Massachusetts that is being converted into lab space.

We expect to deliver this project in early 2023.

We also continued the conversion of 200 West Street in Waltham, Massachusetts into life sciences/lab space and we continued the development of 180 CityPoint, an approximately 329,000 square foot lab development in Waltham, Massachusetts, which is expected to be delivered in 2024.

We own or control a significant amount of land in the Boston region that we expect will enable us to aggressively compete for and meet the demand from the emerging and growing tenants in these industries.

Our Boston CBD in-service portfolio was approximately 94% leased as of March 31, 2022.

Our approximately 2.0 million square foot in-service office portfolio in Cambridge was approximately 99% leased as of March 31, 2022.

In April of 2022, we signed an approximately 570,000 square foot lease with AstraZeneca to lease the entirety of the first phase of the future life sciences development at 290 Binney Street.

This future development site is located in the heart of Kendall Square and, when all phases are complete, will be comprised of approximately 1.1 million square feet of life sciences space and a 400,000 square foot residential building.

This lease is subject to various conditions, some of which are not within our control.

If the conditions are not satisfied for a reason other than BXP’s non-performance, then BXP may terminate the lease.

There can be no assurance the conditions will be satisfied or that we will commence the development on the terms and schedule currently contemplated or at all.

Waltham and the area surrounding the Route 128-Mass Turnpike interchange continue to be a popular submarket of Boston for leading and emerging companies in the life sciences, biotechnology and technology sectors.

Our Route 128-Mass Turnpike portfolio is comprised of approximately 4.8 million square feet and was approximately 85% leased as of March 31, 2022.

Our Los Angeles (“LA”) in-service portfolio of approximately 2.3 million square feet is currently focused in West LA and includes Colorado Center, a 1.1 million square foot property of which we own 50%, and Santa Monica Business Park, a 21-building, approximately 1.2 million square foot property of which we own 55%.

As of September 30, 2021, our LA in-service properties were approximately 83% leased.

We expect our occupancy to increase later this year upon commencement of an approximately 140,000 square foot lease expansion that was signed in the second quarter of 2021 with a technology company at Santa Monica Business Park in Santa Monica, California.

As of September 30, 2021, our New York CBD in-service portfolio was approximately 90% leased.

During the third quarter of 2021, (1) we signed leases covering approximately 169,000 square feet, including an approximately 39,000 square foot expansion with a financial services company at 399 Park Avenue, increasing their total square footage to approximately 373,000 square feet, and (2) approximately 259,000 square feet of leases commenced.

Approximately 200,000 square feet of the leases that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 27% over the prior leases.

Excluding approximately 55,000 square feet of short term leases that commenced, the net rental obligations decreased approximately 13% over the prior leases.

In the third quarter of 2021, sublease space continued to be removed from the market and high-quality buildings experienced increased leasing activity.

We are actively negotiating approximately 340,000 square feet of leases, of which approximately 200,000 square feet is at Dock 72, our joint venture property in Brooklyn, New York.

In October 2021, we signed a 42,000 square foot lease at Dock 72.

As of March 31, 2022, our LA in-service properties were approximately 88% leased.

During the first quarter of 2022, we executed approximately 434,000 square feet of leases in the New York region and approximately 267,000 square feet of leases commenced.

Approximately 214,000 square feet of the 267,000 square feet of leases that commenced in the first quarter had been vacant for less than one year and they represent a decrease in net rental obligations of approximately 20% over the prior leases.

The decrease is primarily driven by a short-term lease extension completed in 2021, which allowed our client time to consider its long-term plans.

In April 2022, we were successful in retaining this client with a lease extension to 2040.

The most significant transaction completed in the first quarter of 2022 was an approximately 330,000 square foot extension and expansion at 601 Lexington Avenue in New York City.

This lease involved the client expanding into a vacant floor as well as floors that are expiring in the second half of 2022.

As of March 31, 2022, our New York CBD in-service portfolio was approximately 90% leased.

San Francisco

The recovery in San Francisco continues to lag our other markets as fewer businesses have commenced their return to work, street-level retail remains closed or slow and the streets are quiet.

As restrictions are lifted, we believe the pace of new leasing activity will begin to increase.

Our San Francisco CBD in-service properties were approximately 92% leased as of September 30, 2021.

During the third quarter of 2021, we executed approximately 185,000 square feet of leases, including over 100,000 square feet at Embarcadero Center.

We executed four full floor leases at Embarcadero Center at average rental rates of over $100 per square foot.

In addition, we commenced approximately 91,000 square feet of leases in the San Francisco region.

Of these leases, approximately 57,000 square feet had been vacant for less than one year and represent an increase in net rental obligations of approximately 9% over the prior leases.

Life sciences activity at our Gateway Commons joint venture in which we own an approximately 52% interest continues to be productive.

The joint venture has signed a letter of intent to lease the entirety of 751 Gateway Commons, a 229,000 square foot project in our development pipeline.

During the third quarter of 2021, we completed two full-building leases aggregating approximately 58,000 square feet in the Mountain View submarket.

We are experiencing greater tour activity, including large technology tenant requirements for existing and new products.

Due to the limited supply of new, high-quality office space in this submarket, we are evaluating when to restart the first phase of our Platform 16 development project, an approximately 1.1 million aggregate square foot future development next to Diridon Station in San Jose.

During the first quarter of 2022, we executed approximately 199,000 square feet of leases and approximately 182,000 square feet of leases commenced in the San Francisco region.

Approximately 139,000 square feet of the 182,000 square feet of leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 8% over the prior leases.

Our San Francisco CBD in-service properties were approximately 91% leased as of March 31, 2022.

In South San Francisco, our Gateway Commons joint venture continues to be productive.

We executed approximately 45,000 square feet of leasing at 601 and 611 Gateway and commenced the redevelopment of 651 Gateway.

Safeco Plaza, our initial entry into the Seattle market, was 87.7% leased as of March 31, 2022.

The strength of the Seattle market, as evidenced by our experience with lease proposals at Safeco Plaza, affirmed our reasons for entering the market and gave us confidence to move forward with our plan to grow this region.

As a result, we signed an agreement to acquire Madison Centre, one of the highest quality office buildings in the Seattle CBD, for a gross purchase price of $730 million.

This addition to our portfolio will create a strong platform for continued growth in the Seattle market.

Built in 2017, Madison Centre is approximately 760,000 square feet, 37 floors, 93% leased and LEED Platinum certified.

Washington, DC

During the third quarter of 2021, we executed approximately 300,000 square feet of leases and we commenced approximately 163,000 square feet of leases in the Washington, DC region.

Of these leases, approximately 96,000 square feet had been vacant for less than one year and represent a decrease in net rental obligations of approximately 22% over the prior leases.

Our Washington, DC CBD in-service properties were approximately 84% leased, as of September 30, 2021, with modest near-term rollover exposure, and we have reduced our exposure in the Washington, DC CBD market significantly over the past few years through the dispositions of assets.

Our Washington, DC suburban properties include our significant presence in Reston, Virginia, where demand from technology and cybersecurity tenants remains strong.

Our Washington, DC suburban properties were approximately 86% leased as of September 30, 2021.

During the third quarter of 2021, we completed approximately 70,000 square feet of office leases in Reston and are in negotiations for another 125,000 square feet.

In October, we completed and delivered approximately 285,000 square feet at Reston Next, a Class A office project with approximately 1.1 million net rentable square feet located in Reston, Virginia.

This project is 85% pre-leased as of November 2, 2021.

In addition, on October 29, 2021, a joint venture in which we own a 50% interest, fully placed in-service 7750 Wisconsin Avenue, a Class A office project with approximately 734,000 net rentable square feet located in Bethesda, Maryland.

During the first quarter of 2022, we executed approximately 183,000 square feet of leases and approximately 709,000 square feet of leases commenced in the Washington, DC region, including approximately 411,000 square feet at Reston Next.

Leases for approximately 110,000 square feet of the 709,000 square feet of leases that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 2% over the prior leases.

Our Washington, DC CBD in-service properties were approximately 85% leased as of March 31, 2022.

Our Reston, Virginia properties were approximately 94% leased as of March 31, 2022.

During the first quarter of 2022, activity in Reston was concentrated on partial floor deals.

Large client activity has been slow in early 2022.

Leasing Statistics

The table below details the leasing activity, including 100% of the unconsolidated joint ventures, that commenced during the three and nine months ended September 30, 2021:

Three months ended September 30, 2021 Nine months ended September 30, 2021

The table below details the leasing activity, including 100% of the unconsolidated joint ventures, that commenced during the three months ended March 31, 2022:

Three months ended March 31, 2022

(Square Feet)

1 unchanged sentence

Property dispositions/properties taken out of service (1) (95,180)

Vacant space in properties acquired (2) 143,848 143,848

Properties placed (and partially placed) in-service (2) 410,690

2 unchanged sentences

1 st generation leases

585,933 789,489

2 nd generation leases with new tenants

407,240 1,824,259

2 nd generation lease renewals

311,332 1,344,812

Total space leased (3) 1,609,804

3 unchanged sentences

Leases commencing during the period, in square feet 1,057,074

Weighted Average Lease Term 58 Months 81 Months

Weighted Average Free Rent Period 124 Days 158 Days

Weighted Average Lease Term 71 Months

Weighted Average Free Rent Period 135 Days

Total Transaction Costs Per Square Foot (6) $54.99

2 unchanged sentences

__________________

(1) Total square feet of property dispositions during the nine months ended September 30, 2021 consists of 29,595 square feet due to the sale of Annapolis Junction Building Six.

Total square feet of properties taken out of service during the nine months ended September 30, 2021 consists of 34,290 square feet at 880 Winter Street and 40,728 square feet at 800 Boylston Street - The Prudential Center , both due to redevelopment.

(2) Total square feet of vacant space in properties acquired during the three and nine months ended September 30, 2021 consists of 69,581 square feet at Safeco Plaza and 74,267 square feet at Shady Grove Bio+Tech Campus.

(3) Total square feet of properties placed (and partially placed) in-service during the three months ended September 30, 2021 consists of 6,709 square feet at 685 Gateway and 496,315 square feet at 100 Causeway Street.

Total square feet of properties placed (and partially placed) in-service during the nine months ended September 30, 2021 consists of 195,326 square feet of office and 31,950 square feet of retail at One Five Nine East 53rd Street, 6,709 square feet at 685 Gateway and 498,469 square feet at 100 Causeway Street.

(4) Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three and nine months ended September 30, 2021 .

(5) Represents leases executed during the three and nine months ended September 30, 2021 for which we either (1) commenced lease revenue recognition in such period or (2) will commence lease revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development.

The total square feet of leases e xecuted and recognized in the three and nine months ended September 30, 2021 is 320,719 and 734,797, respectively.

(1) Total square feet of property dispositions during the three months ended March 31, 2022 consists of 95,180 square feet at 651 Gateway.

(2) Total square feet of properties placed (and partially placed) in-service during the three months ended March 31, 2022 consists of 410,690 square feet at Reston Next.

(3) Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three months ended March 31, 2022 .

(4) Represents leases executed during the three months ended March 31, 2022 for which we either (1) commenced lease revenue recognition in such period or (2) will commence lease revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development.

The total square feet of leases e xecuted and recognized during the three months ended March 31, 2022 is 321,917.

(5) Second generation leases are defined as leases for space that had previously been leased by us.

Of the 718,572 and 3,169,071 square feet of second generation leases that commenced during the three and nine months ended September 30, 2021, respectively, leases for 397,853 and 2,439,402 square feet, respectively, were signed in prior periods.

Of the 1,057,074 square feet of second generation leases that commenced during the three months ended March 31, 2022, leases for 735,157 square feet were signed in prior periods.

(6) Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.

(8) Represents the decrease in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 507,899 and 2,219,080 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2021, respectively;

(7) Represents the decrease in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 734,025 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2022;

excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis.

(9) Represents the decrease in net rent (gross rent less operating expenses) on the new versus expired leases on the 507,899 and 2,219,080 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2021, respectively.

Transactions during the three months ended September 30, 2021 included the following:

Acquisition/disposition activities

• On August 2, 2021, we acquired Shady Grove Bio+Tech Campus in Rockville, Maryland, for a purchase price, including transaction costs, of approximately $118.5 million in cash.

Shady Grove Bio+Tech Campus is an approximately 435,000 net rentable square foot, seven-building office park situated on an approximately 31-acre site.

We intend to reposition three of the buildings, which are currently vacant, to support lab or life sciences uses.

As a result, the three vacant buildings are not part of our in-service portfolio.

We anticipate that we will redevelop or convert the remaining four buildings to lab or life sciences-related uses as each becomes vacant.

• On July 13, 2021, we entered into an agreement to sell our 181,191 and 201 Spring Street properties located in Lexington, Massachusetts for an aggregate gross sales price of $191.5 million.

181,191 and 201 Spring Street are three Class A office properties aggregating approximately 333,000 net rentable square feet and are 100% leased.

The sale was completed on October 25, 2021 (See below).

(8) Represents the decrease in net rent (gross rent less operating expenses) on the new versus expired leases on the 734,025 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2022.

Transactions during the three months ended March 31, 2022 included the following:

• On March 31, 2022, we completed the sale of 195 West Street located in Waltham, Massachusetts for a gross sale price of $37.7 million.

Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP.

195 West Street is an approximately 63,500 net rentable square foot Class A office property.

Unconsolidated joint venture activities

• On August 31, 2021, a joint venture in which we have a 50% interest extended the construction loan collateralized by its The Hub on Causeway – Podium property.

At the time of the extension, the outstanding balance of the loan totaled approximately $174.3 million, bore interest at a variable rate equal to LIBOR plus 2.25% per annum and was scheduled to mature on September 6, 2021, with two, one-year extension options, subject to certain conditions.

The extended loan continues to bear interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2023.

The Hub on Causeway - Podium is a retail and office property with approximately 382,000 net rentable square feet located in Boston, Massachusetts.

• On September 1, 2021, we entered into a joint venture to acquire Safeco Plaza, a Class A office property located in Seattle, Washington, for a gross purchase price of approximately $465.0 million.

Safeco Plaza is a 50-story, approximately 765,000 net rentable square-foot, Class A office property.

The acquisition was completed through a newly formed joint venture with two institutional partners.

Each of the institutional partners invested approximately $71.9 million of cash for its 33.165% ownership interest in the joint venture.

We invested approximately $72.6 million for our 33.67% interest in the joint venture and are providing customary operating, property management and leasing services to the joint venture.

Our ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two entities (each, a “Safeco Partner Entity”) through which each partner owns its interest in the joint venture.

Subject to the occurrence of certain events and the joint venture achieving certain return thresholds, we are entitled to earn promote distributions.

Some of the promote distributions may be payable in cash or, at our election, equity interest(s) in the Safeco Partner Entity(ies).

The purchase price was funded with cash and proceeds from a new mortgage loan secured by the property.

The mortgage loan has a principal amount of $250.0 million, bears interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum and matures on September 1, 2026.

Debt Transaction

• On September 29, 2021, BPLP completed a public offering of $850.0 million in aggregate principal amount of its 2.450% unsecured senior notes due 2033.

The notes were priced at 99.959% of the principal amount to yield an effective rate (including financing fees) of approximately 2.524% per annum to maturity.

The notes will mature on October 1, 2033, unless earlier redeemed.

The aggregate net

proceeds from the offering were approximately $842.5 million after deducting underwriting discounts and transaction expenses.

Transactions completed subsequent to September 30, 2021 included the following:

• On October 15, 2021, BPLP used available cash and funds under its unsecured revolving credit agreement (the “2021 Credit Facility”) to complete the redemption of $1.0 billion in aggregate principal amount of its 3.85% senior notes due February 1, 2023.

The redemption price was approximately $1.05 billion, which included approximately $7.9 million of accrued and unpaid interest to, but not including, the redemption date and an early redemption premium and unamortized financing costs totaling approximately $43.9 million.

• On O cto ber 19, 2021, we partially placed in-service Reston Next, a Class A office project with approximately 1.1 million net rentable square feet located in Reston, Virginia.

• On October 25, 2021, we completed the sale of our 181,191 and 201 Spring Street properties located in Lexington, Massachusetts for an aggregate gross sales price of $191.5 million, as described above under “- Acquisition/disposition activities”.

• On October 29, 2021, a joint venture in which we have a 50% interest fully placed in-service 7750 Wisconsin Avenue, a Class A office project with approximately 734,000 net rentable square feet located in Bethesda, Maryland.

Critical Accounting Policies

• On January 18, 2022, a joint venture in which we have a 50% interest commenced the redevelopment of 651 Gateway located in South San Francisco, California.

651 Gateway is an office building that will be converted to approximately 327,000 net rentable square feet of life sciences space.

• On February 2, 2022, a joint venture in which we have a 55% interest commenced the development of the first phase of Platform 16, a Class A office project located in San Jose, California, that is expected to contain approximately 1.1 million net rentable square feet upon completion.

The first phase of the development project will include the construction of an approximately 390,000 net rentable square foot Class A creative office building and a below-grade parking garage.

• On March 28, 2022, a joint venture in which we have a 20% interest refinanced with a new lender the secured debt collateralized by its Metropolitan Square property located in Washington, DC.

At the time of the refinancing, the loan had an outstanding balance of approximately $294.1 million, bore interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.65%, plus (2) 4.75% per annum and was scheduled to mature on July 7, 2022, with two, one-year extension options, subject to certain conditions.

In conjunction with the refinancing, the joint venture settled its interest rate cap agreement, entered into in 2020, to limit its exposure to increases in the LIBOR rate.

There was no prepayment penalty associated with the prepayment of the previous mortgage loan.

The joint venture recognized a loss from early extinguishment of debt totaling approximately $1.3 million due to the write-off of unamortized deferred financing costs.

The new mortgage and mezzanine loans have an aggregate principal balance of $420.0 million, bear interest at a weighted average variable rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.75% per annum and mature on April 9, 2024, with three, one-year extension options, subject to certain conditions.

The joint venture distributed excess loan proceeds from the new mortgage and mezzanine loans totaling approximately $100.5 million, of which our share totaled approximately $20.1 million.

Metropolitan Square is an office property with approximately 657,000 net rentable square feet located in Washington, DC.

Transactions completed subsequent to March 31, 2022 included the following:

• On April 7, 2022, we executed an agreement to assign our right to acquire 11251 Roger Bacon Drive in Reston, Virginia to a third party for an assignment fee of approximately $6.9 million.

11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres (See Note 3).

• On April 14, 2022, we entered into an agreement to acquire Madison Centre in Seattle, Washington for a gross purchase price of $730.0 million.

Pursuant to the agreement, we made a $50.0 million non-refundable deposit that will be credited towards the purchase price at closing.

Madison Centre is an approximately 760,000 square foot, 37-story Class A office building.

The acquisition is subject to customary closing conditions, and there can be no assurance that this acquisition will occur on the terms currently contemplated or at all.

• On April 18, 2022, a joint venture in which we have a 50% ownership interest extended the construction loan collateralized by its Hub50House property.

At the time of the extension, the outstanding balance of the loan totaled approximately $176.5 million and the loan bore interest at a variable rate equal to LIBOR plus 2.00% per annum and was scheduled to mature on April 19, 2022.

The extended loan matures on June 19, 2022.

Hub50House is a residential property that consists of approximately 320,000 net rentable square feet and 440 residential units located in Boston, Massachusetts.

• On April 27, 2022, we entered into a lease agreement with AstraZeneca to lease approximately 570,000 square feet at our 290 Binney Street future development project.

290 Binney Street is part of the initial phase of a future life sciences development project located in the heart of Kendall Square in Cambridge, Massachusetts.

The full project will consist of two buildings aggregating approximately 1.1 million rentable square feet of life sciences space and an approximately 400,000 square foot residential building.

The lease and commencement of construction are subject to various conditions, some of which are not within our control.

There can be no assurance that the conditions will be satisfied or that we will commence the development on the terms and schedule currently contemplated or at all.

Critical Accounting Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”).

The preparation of these financial -statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Certain accounting policies are considered to be critical accounting policies, as they require management to make assumptions about matters that are highly uncertain at the time the estimate is made and changes in accounting estimate are reasonably likely to occur from period to period.

Management bases its estimates and assumptions on historical experience and current economic conditions.

On an on-going basis, management evaluates its estimates and assumptions including those related to revenue, impairment of long-lived assets and the allowance for doubtful accounts.

Actual results may differ from those estimates and assumptions.

Our Annual Report on Form 10-K for the year ended December 31, 2020 contains a discussion of our critical accounting policies.

Management discusses and reviews our critical accounting policies and management’s judgments and estimates with BXP’s Audit Committee.

Results of Operations for the Nine Months Ended September 30, 2021 and 2020

Our Annual Report on Form 10-K for the year ended December 31, 2021 contains a discussion of our critical accounting estimates.

There have been no significant changes in our critical accounting estimates since the year ended December 31, 2021.

Results of Operations for the Three Months Ended March 31, 2022 and 2021

Net income attributable to Boston Properties, Inc.

common shareho lders and net income attributable to Boston Properties Limited Partnership common unitholders decreased approximately $542.9 million and $616.3 million for the nine months ended September 30, 2021 compared to 2020, respectively, as set forth in the following tables and for the reasons discussed below under the heading “ Comparison of the nine months ended September 30, 2021 to the nine months ended September 30, 2020” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders increased approximately $51.4 million and $56.1 million for the three months ended March 31, 2022 compared to 2021, respectively, as detailed in the following tables and for the reasons discussed below under the heading “ Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following are reconciliations of Net Income Attributable to Boston Properties, Inc.

Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the nine months ended September 30, 2021 and 2020 (in thousands):

Boston Properties, Inc.

Nine months ended September 30,

Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the three months ended March 31, 2022 and 2021.

For a detailed discussion of Net Operating Income ("NOI”), including the reasons management believes NOI is useful to investors, see page 45.

Three months ended March 31,

2022 2021 Increase/

(in thousands)

Net Income Attributable to Boston Properties, Inc.

14 unchanged sentences

Interest expense 101,228 107,902 (6,674) (6.19) %

320,015 319,726 289 0.09 %

Losses from early extinguishment of debt — 898 (898) (100.00) %

Loss from unconsolidated joint ventures 1,745 5,410 (3,665) (67.74) %

Other Income:

Gains from investments in securities 3,744 965 2,779 287.98 %

Gains (losses) from investments in securities (2,262) 1,659 (3,921) (236.35) %

Interest and other income (loss)

Gains on sales of real estate

1,228 1,168 60 5.14 %

Gains on sales of real estate 22,701 — 22,701 100.00 %

Income from unconsolidated joint ventures 2,189 5,225 (3,036) (58.11) %

Other Expenses:

12 unchanged sentences

Net Operating Income $ 469,316 $ 443,947 $ 25,369 5.71 %

Boston Properties Limited Partnership

Nine months ended September 30,

Three months ended March 31,

2022 2021 Increase/

(in thousands)

Net Income Attributable to Boston Properties Limited Partnership Common Unitholders

12 unchanged sentences

Losses from early extinguishment of debt — 898 (898) (100.00) %

Loss from unconsolidated joint ventures 1,745 5,410 (3,665) (67.74) %

Other Income:

Gains from investments in securities 3,744 965 2,779 287.98 %

Gains (losses) from investments in securities (2,262) 1,659 (3,921) (236.35) %

Interest and other income (loss)

Gains on sales of real estate

1,228 1,168 60 5.14 %

Gains on sales of real estate 23,384 — 23,384 100.00 %

Income from unconsolidated joint ventures 2,189 5,225 (3,036) (58.11) %

Other Expenses:

12 unchanged sentences

Net Operating Income $ 469,316 $ 443,947 $ 25,369 5.71 %

At September 30, 2021 and 2020, we owned or had joint venture interests in a portfolio of 202 and 196 commercial real estate properties, respectively (in each case, the “Total Property Portfolio”).

At March 31, 2022 and 2021, we owned or had joint venture interests in a portfolio of 201 and 196 commercial real estate properties, respectively (in each case, the “Total Property Portfolio”).

As a result of changes within our Total Property Portfolio, the financial data presented below shows significant changes in revenue and expenses from period-to-period.

Accordingly, we do not believe that our period-to-period financial data with respect to the Total Property Portfolio provides a complete understanding of our operating results.

Therefore, the comparison of operating results for the three and nine months ended September 30, 2021 and 2020 show separately the changes attributable to the properties that were owned by us and in-service throughout each period compared (the “Same Property Portfolio”) and the changes attributable to the properties included in the Acquired, Placed In-Service, Development or Redevelopment or Sold Portfolios.

In our analysis of operating results, particularly to make comparisons of net operating income between periods more meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented.

Accordingly, we do not believe that our period-to-period financial data with respect to the Total Property Portfolio is meaningful.

Therefore, the comparison of operating results for the three months ended March 31, 2022 and 2021 show separately the changes attributable to the properties that were owned by us and in-service throughout each period compared (the “Same Property Portfolio”) and the changes attributable to the properties included in the Acquired, Placed In-Service, Development or Redevelopment or Sold Portfolios.

In our analysis of operating results, particularly to make comparisons of net operating income between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented.

We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us and in-service through the end of the latest period presented as our Same Property Portfolio.

The Same Property Portfolio therefore excludes properties acquired, placed in-service 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.

Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc.

common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred stock/unit redemption charge, preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, losses from early extinguishment of debt, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains (losses) from investments in securities, interest and other income (loss), gains (losses) on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue.

NOI is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc.

common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred stock/unit redemption charge, preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, losses from early extinguishment of debt, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains (losses) from investments in securities, interest and other income (loss), gains on sales of real estate, income from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue.

We use NOI internally as a performance measure and believe it provides useful information to investors regarding our results of operations and financial condition because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc.

12 unchanged sentences

For additional information see the Explanatory Note that follows the cover page of this Quarterly Report on Form 10-Q.

Comparison of the nine months ended September 30, 2021 to the nine months ended September 30, 2020

Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021

The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio.

The Same Property Portfolio consists of 140 properties totaling approximately 39.6 million net rentable square feet, excluding unconsolidated joint ventures.

The Same Property Portfolio includes properties acquired or placed in-service on or prior to January 1, 2020 and owned and in service through September 30, 2021.

The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in development or redevelopment after January 1, 2020 or disposed of on or prior to September 30, 2021.

This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the nine months ended September 30, 2021 and 2020 with respect to the properties that were acquired, placed in-service, in development or redevelopment or sold.

Same Property Portfolio Properties Acquired Portfolio Properties

The Same Property Portfolio includes properties acquired or placed in-service on or prior to January 1, 2021 and owned and in-service through March 31, 2022.

The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in development or redevelopment after January 1, 2021 or disposed of on or prior to March 31, 2022.

This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the three months ended March 31, 2022 and 2021 with respect to the properties that were acquired, placed in-service, in development or redevelopment or sold.

Same Property Portfolio Properties

Acquired Portfolio Properties

Placed In-Service

Portfolio Properties in Development or Redevelopment Portfolio Properties Sold Portfolio Total Property Portfolio

Portfolio Properties in

Development or

Redevelopment

Portfolio Properties Sold Portfolio Total Property Portfolio

2022 2021 Increase/

12 unchanged sentences

Real Estate Operating Expenses 258,619 247,844 10,775 4.35 % 717 — 4,245 1,089 — 1,126 242 1,203 263,823 251,262 12,561 5.00 %

Net Operating Income (Loss), Excluding Residential and Hotel 1,309,169 1,252,831 56,338 4.50 % 2,811 (143) 22,628 7,353 4,715 8,547 5,401 15,987 1,344,724 1,284,575 60,149 4.68 %

Residential Net Operating Income (Loss) (2) 14,833 16,809 (1,976) (11.76) % — — (3,101) (717) — — — — 11,732 16,092 (4,360) (27.09) %

Net Operating Income, Excluding Residential and Hotel 449,669 435,045 14,624 3.36 % 2,574 — 10,315 3,088 — 1,645 507 2,540 463,065 442,318 20,747 4.69 %

Residential Net Operating Income (2) 6,534 3,048 3,486 114.37 % — — — — — — — — 6,534 3,048 3,486 114.37 %

Hotel Net Operating Loss (2) (283) (1,419) 1,136 80.06 % — — — — — — — — (283) (1,419) 1,136 80.06 %

Net Operating Income (Loss) $ 1,323,391 $ 1,264,696 $ 58,695 4.64 % $ 2,811 $ (143) $ 19,527 $ 6,636 $ 4,715 $ 8,547 $ 5,401 $ 15,987 $ 1,355,845 $ 1,295,723 $ 60,122 4.64 %

Net Operating Income $ 455,920 $ 436,674 $ 19,246 4.41 % $ 2,574 $ — $ 10,315 $ 3,088 $ — $ 1,645 $ 507 $ 2,540 $ 469,316 $ 443,947 $ 25,369 5.71 %

_______________

2 unchanged sentences

(2) For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 45.

Residential Net Operating Income for the nine months ended September 30, 2021 and 2020 is comprised of Residential Revenue of $29,832 and $29,076 less Residential Expenses of $18,100 and $12,984, respectively.

Hotel Net Operating Loss for the nine months ended September 30, 2021 and 2020 is comprised of Hotel Revenue of $7,382 and $7,014 less Hotel Expenses of $7,993 and $11,958, respectively, per the Consolidated Statements of Operations.

Residential Net Operating Income for the three months ended March 31, 2022 and 2021 is comprised of Residential Revenue of $12,966 and $9,175 less Residential Expenses of $6,432 and $6,127, respectively.

Hotel Net Operating Loss for the three months ended March 31, 2022 and 2021 is comprised of Hotel Revenue of $4,557 and $632 less Hotel Expenses of $4,840 and $2,051, respectively, per the Consolidated Statements of Operations.

Same Property Portfolio

Lease Revenue (Excluding Termination Income)

Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $51.8 million for the nine months ended September 30, 2021 compared to 2020.

Approximately $59.6 million of the increase was related to write-offs of accrued rent and accounts receivable balances that occurred during the nine months ended September 30, 2020 and did not recur in 2021, for primarily retail tenants that either terminated their leases or we determined that the accrued rent and/or accounts receivable balances were no longer probable of collection.

Excluding the write-offs, the Same Property Portfolio decreased by approximately $7.8 million due to average occupancy decreasing from 93.4% to 91.7%, resulting in a decrease of approximately $62.9 million, partially offset by an increase in average revenue per square foot by approximately $1.08, contributing approximately $55.1 million.

We continue to evaluate the collectability of our accrued rent and accounts receivable balances related to lease revenue.

If after a write-off has been recorded, (1) we subsequently determine that we are probable we will collect substantially all the remaining lessee’s lease payments under the lease term and (2) the lease has not been modified since the write-off, we will then reinstate the accrued rent and accounts receivable write-offs, adjusting for the amount related to the period when the lease payments were considered not probable of collection.

If our estimate of collectability differs from the cash received, then the timing and amount of our reported revenue could be impacted.

Each quarter since the second quarter of 2020, the number of executed COVID-19 lease modifications has decreased and as of the third quarter of 2021, we are executing COVID-19 modifications on a limited basis.

Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $22.9 million for the three months ended March 31, 2022 compared to 2021.

The increase was a result of our average revenue per square foot increasing by approximately $2.96, contributing approximately $25.7 million, partially offset by an approximately $2.8 million decrease due to our average occupancy decreasing from 91.5% to 91.1%.

Termination Income

Termination income increased by approximately $3.1 million for the nine months ended September 30, 2021 compared to 2020.

Termination income for the nine months ended September 30, 2021 related to 23 tenants across the Same Property Portfolio and totaled approximately $11.5 million, which was primarily related to tenants that terminated leases early in New York City and the Boston region.

Termination income for the nine months ended September 30, 2020 related to 34 tenants across the Same Property Portfolio and totaled approximately $8.4 million, which was primarily related to tenants that terminated leases early in New York City.

Termination income decreased by approximately $2.2 million for the three months ended March 31, 2022 compared to 2021.

Termination income for the three months ended March 31, 2022 related to ten tenants across the Same Property Portfolio and totaled approximately $1.5 million, which was primarily related to tenants that terminated leases early in San Francisco.

In addition, we received a distribution from our unsecured credit claim against Lehman Brothers, Inc.

of approximately $0.6 million.

Termination income for the three months ended March 31, 2021 related to 11 tenants across the Same Property Portfolio and totaled approximately $4.3 million, of which $3.7 million was related to a retail tenant in the Boston region that closed all of its retail stores.

Parking and Other Revenue

Parking and other revenue increased by approximately $3.3 million for the nine months ended September 30, 2021 compared to 2020.

Parking revenue and other revenue increased by approximately $0.8 million and $2.5 million, respectively.

The increase in parking revenue was primarily due to an increase in transient parking.

The increase in other revenue was primarily due to approximately $5.1 million in insurance proceeds related to damage at one of our properties in the New York region due to a water main break, partially offset by a decrease in other revenue of approximately $2.6 million related to tenant restoration obligation payments in 2020 that did not recur in 2021.

Expenses of $5.1 million related to the insurance claim are included within real estate operating expenses.

We expect to see an increase in parking revenue as the return to office work grows.

For the nine months ended September 30, 2021, monthly parking decreased by approximately $4.3 million, offset by an increase in transient parking of approximately $5.6 million, compared to the nine months ended September 30, 2020.

Some of our monthly parking revenues are contractual agreements embedded in our leases, and some are at will individual agreements.

Parking and other revenue increased by approximately $4.7 million for the three months ended March 31, 2022 compared to 2021.

Parking revenue increased by approximately $6.2 million and was partially offset by a decrease in other revenue of approximately $1.5 million.

The increase in parking revenue was primarily due to an increase in transient and monthly parking.

The decrease in other revenue was due to a decrease in insurance proceeds received during the three months ended March 31, 2022 compared to 2021.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio increased by approximately $1.8 million, or 0.3%, for the nine months ended September 30, 2021 compared to 2020, due primarily to an increase in utility expense and expenses related to the insurance claim mentioned above, partially offset by a decrease in real estate taxes and cleaning expenses.

The increase in utility expense was experienced across the portfolio and was primarily driven by an increase in physical tenant occupancy, which led to higher demand for electricity and HVAC.

Real estate operating expenses from the Same Property Portfolio increased by approximately $10.8 million, or 4.3%, for the three months ended March 31, 2022 compared to 2021, due primarily to an increase of approximately $15.1 million, or 16.2%, in operating expenses, including cleaning, utilities, repairs and maintenance, and roads/grounds/security, and other real estate operating expenses of $1.7 million, or 7.9%, partially offset by a decrease in real estate taxes of approximately $6.0 million, or 4.5%.

The increase in operating expenses is driven by an increase in physical tenant occupancy.

The decrease in real estate taxes was primarily in New York City.

Properties Acquired Portfolio

The table below lists the properties acquired between January 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses increased by approximately $4.8 million and $1.9 million, respectively, for the nine months ended September 30, 2021 compared to 2020, as detailed below.

The table below lists the properties acquired between January 1, 2021 and March 31, 2022.

Rental revenue and real estate operating expenses increased by approximately $3.3 million and $0.7 million, respectively, for the three months ended March 31, 2022 compared to 2021, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

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(dollars in thousands)

777 Harrison Street (1) June 26, 2020 N/A $ 1,509 $ 300 $ 1,209 $ 1,641 $ 443 $ 1,198

153 & 211 Second Avenue June 2, 2021 136,882 $ 2,555 $ — $ 2,555 $ 297 $ — $ 297

Shady Grove Bio+Tech Campus August 2, 2021 233,452 495 — 495 334 — 334

370,334 $ 5,105 $ 300 $ 4,805 $ 2,294 $ 443 $ 1,851

Shady Grove Innovation District August 2, 2021 232,278 736 — 736 420 — 420

369,160 $ 3,291 $ — $ 3,291 $ 717 $ — $ 717

(1) Formerly known as Fourth + Harrison and 425 Fourth Street and includes operating results for 759 Harrison Street, which was fully acquired on December 16, 2020 .

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $19.9 million and $7.0 million, respectively, for the nine months ended September 30, 2021 compared to 2020, as detailed below.

The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2021 and March 31, 2022.

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $10.4 million and $3.2 million, respectively, for the three months ended March 31, 2022 compared to 2021, as detailed below.

Quarter Initially Placed In-Service Quarter Fully Placed In-Service Rental Revenue Real Estate Operating Expenses

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(dollars in thousands)

20 CityPoint Second Quarter, 2019 Second Quarter, 2020 211,476 $ 5,781 $ 5,485 $ 296 $ 2,248 $ 2,053 $ 195

17Fifty Presidents Street

First Quarter, 2020 First Quarter, 2020 275,809 14,833 8,878 5,955 4,292 2,576 1,716

One Five Nine East 53rd Street (1)

First Quarter, 2021 First Quarter, 2021 220,000 10,600 (1,232) 11,832 2,046 1,149 897

Total Office 707,285 31,214 13,131 18,083 8,586 5,778 2,808

The Skylyne Third Quarter, 2020 Third Quarter, 2020 330,996 1,817 23 1,794 4,918 740 4,178

Total Residential 330,996 1,817 23 1,794 4,918 740 4,178

One Five Nine East 53rd Street (1) First Quarter, 2021 First Quarter, 2021 220,000 $ 4,487 $ 2,676 $ 1,811 $ 945 $ 719 $ 226

200 West Street (2) Fourth Quarter, 2020 Fourth Quarter, 2021 273,365 3,183 1,501 1,682 1,186 370 816

Reston Next Fourth Quarter, 2021 N/A 1,062,000 6,890 — 6,890 2,114 — 2,114

1,555,365 $ 14,560 $ 4,177 $ 10,383 $ 4,245 $ 1,089 $ 3,156

_______________

(1) This is the low-rise portion of 601 Lexington Avenue, which was in development for the nine months ended September 30, 2020.

Rental revenue for the nine months ended September 30, 2020 includes an approximately $2.9 million write-off of accrued rent and accounts receivable balances for a terminated tenant.

(1) This is the low-rise portion of 601 Lexington Avenue.

(2) Includes 138,444 square feet of redevelopment that was fully placed in-service in December 2021.

Properties in Development or Redevelopment Portfolio

The table below lists the properties that were in development or redevelopment between January 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $5.6 million and $1.8 million, respectively, for the nine months ended September 30, 2021 compared to 2020, as detailed below.

The table below lists the properties that were in development or redevelopment between January 1, 2021 and March 31, 2022.

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $2.8 million and $1.1 million, respectively, for the three months ended March 31, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

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325 Main Street (1) May 9, 2019 115,000 $ — $ — $ — $ — $ 17 $ (17)

200 West Street (2) September 30, 2019 261,000 4,900 3,826 1,074 2,168 2,565 (397)

880 Winter Street (2) February 25, 2021 224,000 — 1,335 (1,335) — 758 (758)

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_______________

(1) Real estate operating expenses for the nine months ended September 30, 2021 and 2020 were related to demolition costs.

(2) Conversion of a 126,000 square foot portion of the property to life sciences space from office space.

(1) Real estate operating expenses for the three months ended March 31, 2021 were related to demolition costs.

(2) On February 25, 2021, we commenced the redevelopment and conversion of 880 Winter Street, a 224,000 square foot office property located in Waltham, Massachusetts, to laboratory space.

(3) On April 16, 2021, we removed 3625-3635 Peterson Way, located in Santa Clara, California, from our in-service portfolio.

We are demolishing the building and expect to redevelop the site at a future date.

We demolished the building and expect to redevelop the site at a future date.

Properties Sold Portfolio

The table below lists the properties we sold between January 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $17.0 million and $6.4 million, respectively, for the nine months ended September 30, 2021 compared to 2020, as detailed below.

The table below lists the properties we sold between January 1, 2021 and March 31, 2022.

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $3.0 million and $1.0 million, respectively, for the three months ended March 31, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

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(dollars in thousands)

601, 611 and 651 Gateway January 28, 2020 Office 768,000 $ — $ 1,946 $ (1,946) $ — $ 881 $ (881)

New Dominion Technology Park

February 20, 2020 Office 493,000 — 2,551 (2,551) — 772 (772)

Capital Gallery (1) June 25, 2020 Office 631,000 8,261 20,779 (12,518) 2,860 7,636 (4,776)

1,892,000 $ 8,261 $ 25,276 $ (17,015) $ 2,860 $ 9,289 $ (6,429)

181, 191 and 201 Spring Street October 25, 2021 Office 333,000 $ — $ 3,743 $ (3,743) $ — $ 1,074 $ (1,074)

195 West Street March 31, 2022 Office 63,500 749 — 749 242 129 113

396,500 $ 749 $ 3,743 $ (2,994) $ 242 $ 1,203 $ (961)

(1) We completed the sale of a portion of our Capital Gallery property located in Washington, DC.

Capital Gallery is an approximately 631,000 net rentable square foot Class A office property.

The portion sold was comprised of approximately 455,000 net rentable square feet of commercial office space.

We continue to own the land, underground parking garage and remaining commercial office and retail space.

The amounts shown represent the entire property and not just the portion sold .

For additional information on the sales of the above properties refer to “Results of Operations—Other Income and Expense Items—Gains on Sales of Real Estate” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Residential Net Operating Income

Net operating income for our residential same properties decreased by approximately $2.0 million for the nine months ended September 30, 2021 compared to 2020.

Net operating income for the nine months ended September 30, 2020 includes approximately $0.7 million of termination income from a retail tenant.

The following reflects our occupancy and rate information for The Lofts at Atlantic Wharf, The Avant at Reston Town Center, Signature at Reston and Proto Kendall Square for the nine months ended September 30, 2021 and 2020.

The Lofts at Atlantic Wharf The Avant at Reston Town Center Signature at Reston Proto Kendall Square

2021 2020 Change (%) 2021 2020 Change (%) 2021 2020 Change (%) 2021 2020 Change (%)

Average Monthly Rental Rate (1)

$ 3,459 $ 4,424 (21.8) % $ 2,255 $ 2,381 (5.3) % $ 2,279 $ 2,327 (2.1) % $ 2,577 $ 2,865 (10.1) %

Average Rental Rate Per Occupied Square Foot

$ 3.89 $ 4.89 (20.4) % $ 2.46 $ 2.61 (5.7) % $ 2.36 $ 2.46 (4.1) % $ 4.73 $ 5.26 (10.1) %

Average Physical Occupancy (2)

93.4 % 89.0 % 4.9 % 94.2 % 90.2 % 4.4 % 86.8 % 82.0 % 5.9 % 92.2 % 91.2 % 1.1 %

Average Economic Occupancy (3)

91.0 % 88.9 % 2.4 % 93.6 % 89.2 % 4.9 % 83.6 % 77.3 % 8.2 % 91.0 % 90.0 % 1.1 %

Net operating income for our residential same properties increased by approximately $3.5 million for the three months ended March 31, 2022 compared to 2021.

The following reflects our occupancy and rate information for our residential same properties for the three months ended March 31, 2022 and 2021.

Average Monthly Rental Rate (1) Average Rental Rate Per Occupied Square Foot Average Physical Occupancy (2) Average Economic Occupancy (3)

Name 2022 2021 Change (%) 2022 2021 Change (%) 2022 2021 Change (%) 2022 2021 Change (%)

Proto Kendall Square $ 2,743 $ 2,585 6.1 % $ 5.04 $ 4.78 5.4 % 93.6 % 90.4 % 3.5 % 93.1 % 88.8 % 4.8 %

The Lofts at Atlantic Wharf $ 3,933 $ 3,474 13.2 % $ 4.36 $ 3.99 9.3 % 96.1 % 87.6 % 9.7 % 95.6 % 84.0 % 13.8 %

The Avant at Reston Town Center $ 2,340 $ 2,287 2.3 % $ 2.55 $ 2.51 1.6 % 94.2 % 91.4 % 3.1 % 94.0 % 90.2 % 4.2 %

Signature at Reston $ 2,580 $ 2,265 13.9 % $ 2.66 $ 2.36 12.7 % 94.2 % 80.1 % 17.6 % 93.5 % 75.6 % 23.7 %

The Skylyne $ 3,342 $ 2,953 13.2 % $ 4.03 $ 3.55 13.5 % 71.5 % 15.8 % 352.5 % 68.6 % 9.1 % 653.8 %

_______________

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Hotel Net Operating Loss

The Boston Marriott Cambridge hotel property operated at a loss of approximately $0.6 million for the nine months ended September 30, 2021.

This is approximately $4.3 million less than the nine months ended September 30, 2020.

The Boston Marriott Cambridge closed in March 2020 due to COVID-19.

The hotel re-opened on October 2, 2020 and has operated at lower occupancy levels due to the continued impact of COVID-19 on business and leisure travel.

The closing of the hotel for more than two fiscal quarters, and the lower demand and low occupancy since its re-opening, have had, and are expected to continue to have, a material adverse effect on the hotel’s operations.

The Boston Marriott Cambridge hotel property continues to operate at a loss, however, the net operating loss decreased by approximately $1.1 million for the three months ended March 31, 2022 compared to 2021.

The decreased demand for and occupancy of the Boston Marriott Cambridge hotel have had, and are expected to continue to have, a material adverse effect on its operations.

We expect hotel occupancy to remain low until the demand for business and leisure travel returns to historical levels .

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the nine months ended September 30, 2021 and 2020.

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the three months ended March 31, 2022 and 2021.

Occupancy 40.4 % 10.9 % 270.6 %

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Development and Management Services Revenue

Development and management services revenue decreased by approximately $3.1 million for the nine months ended September 30, 2021 compared to 2020.

Development services revenue decreased by approximately $3.8 million while management services revenue increased by approximately $0.7 million.

The decrease in development

services revenue was primarily related to a decrease in development fees earned from a building owned by a third-party in the Washington, DC region and an unconsolidated joint venture in New York City and fees associated with tenant improvement projects earned from a third-party owned building in the Washington, DC region.

The increase in management services revenue was primarily related to an increase in leasing commissions earned from a third-party owned building in the Washington, DC region.

Development and management services revenue decreased by approximately $1.0 million for the three months ended March 31, 2022 compared to 2021.

Development services revenue and management services revenue decreased by approximately $0.9 million and $0.1 million, respectively.

The decrease in development services revenue was primarily related to a decrease in development fees.

The decrease in management services revenue was primarily related to a decrease in leasing commissions earned from a third-party owned building in the Washington, DC region, partially offset by an increase in asset management fees earned from an unconsolidated joint venture in Seattle.

General and Administrative Expense

General and administrative expense increased by approximately $15.9 million for the nine months ended September 30, 2021 compared to 2020 primarily due to an increase in compensation and health care expenses of approximately $17.5 million, partially offset by an approximately $1.6 million decrease in other general and administrative expenses.

The increase in compensation expense was related to (1) an approximately $2.7 million increase in the value of our deferred compensation plan, (2) an approximately $13.4 million increase in other compensation expenses, primarily due to age-based vesting and (3) an approximately $1.4 million increase in health care costs.

The decrease in other general and administrative expenses was primarily related to a decrease in professional fees.

General and administrative expense decreased by approximately $1.8 million for the three months ended March 31, 2022 compared to 2021 primarily due to a decrease in compensation expense of approximately $3.6

million, partially offset by an increase of approximately $1.8 million in other general and administrative expenses.

The decrease in compensation expense primarily related to an approximately $4.0 million decrease in the value of our deferred compensation plan.

The increase in other general and administrative expenses primarily related to an increase in professional fees.

Wages directly related to the development of rental properties are capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the applicable asset or lease term.

Capitalized wages for the nine months ended September 30, 2021 and 2020 were approximately $10.1 million and $9.6 million, respectively.

Capitalized wages for the three months ended March 31, 2022 and 2021 were approximately $4.0 million and $3.3 million, respectively.

These costs are not included in the general and administrative expenses discussed above.

Transaction Costs

Transaction costs increased by approximately $1.7 million for the nine months ended September 30, 2021 compared to 2020 due primarily to costs incurred in connection with the pursuit and formation of new joint ventures.

Transaction costs decreased by approximately $0.3 million for the three months ended March 31, 2022 compared to 2021 due primarily to joint venture formation costs that occurred during the three months ended March 31, 2021.

In general, transaction costs relating to the formation of new and pending joint ventures and the pursuit of other transactions are expensed as incurred.

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For additional information see the Explanatory Note that follows the cover page of this Quarterly Report on Form 10-Q.

Boston Properties, Inc.

Depreciation and amortization expense increased by approximately $24.1 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Portfolio Depreciation and Amortization for the nine months ended September 30,

Depreciation and amortization expense increased by approximately $1.1 million for the three months ended March 31, 2022 compared to 2021, as detailed below.

Portfolio Depreciation and Amortization for the three months ended March 31,

2022 2021 Change

6 unchanged sentences

$ 177,624 $ 176,565 $ 1,059

_______________

(1) During the nine months ended September 30, 2021, we commenced redevelopment of View Boston Observatory at The Prudential Center, a 59,000 net rentable square foot redevelopment of the top three floors of 800 Boylston Street - The Prudential Center, located in Boston, Massachusetts.

As a result, during the nine months ended September 30, 2021, we recorded approximately $2.6 million of accelerated depreciation expense for the demolition of the space, of which approximately $0.8 million related to the step-up of real estate assets.

(2) On February 25, 2021, we commenced redevelopment of 880 Winter Street in Waltham, Massachusetts.

As a result, during the nine months ended September 30, 2021, we recorded approximately $13.7 million of accelerated depreciation expense for the demolition of a portion of the building.

Boston Properties Limited Partnership

Depreciation and amortization expense increased by approximately $22.9 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Portfolio Depreciation and Amortization for the nine months ended September 30,

Depreciation and amortization expense increased by approximately $2.4 million for the three months ended March 31, 2022 compared to 2021, as detailed below.

Portfolio Depreciation and Amortization for the three months ended March 31,

2022 2021 Change

6 unchanged sentences

$ 175,886 $ 173,500 $ 2,386

_______________

As a result, during the nine months ended September 30, 2021, we recorded approximately $1.8 million of accelerated depreciation expense for the demolition of the space.

(2) On February 25, 2021, we commenced redevelopment of 880 Winter Street in Waltham, Massachusetts.

As a result, during the nine months ended September 30, 2021, we recorded approximately $13.7 million of accelerated depreciation expense for the demolition of a portion of the building.

Direct Reimbursements of Payroll and Related Costs From Management Services Contracts and Payroll and Related Costs From Management Service Contracts

2 unchanged sentences

Other Income and Expense Items

Loss from Unconsolidated Joint Ventures

For the nine months ended September 30, 2021 compared to 2020, loss from unconsolidated joint ventures decreased by approximately $3.7 million primarily due to an approximately $10.3 million gain on sale of investment from the sale of our Annapolis Junction joint venture interest during the nine months ended September 30, 2021 (See Note 5 to the Consolidated Financial Statements).

This increase was partially offset by (1) an approximately $5.8 million gain on sale of real estate from the sale of Annapolis Junction Building Eight and two undeveloped land parcels during the nine months ended September 30, 2020 and (2) an approximately $1.1 million decrease in net income from our Metropolitan Square joint venture, primarily related to increased interest expense related to the mortgage refinancing.

Income from Unconsolidated Joint Ventures

For the three months ended March 31, 2022 compared to 2021, income from unconsolidated joint ventures decreased by approximately $3.0 million due to a $10.3 million gain on sale of investment from the sale of our Annapolis Junction joint venture during the three months ended March 31, 2021.

This decrease was partially offset by an approximately $6.9 million increase in net income from placing in-service (1) 7750 Wisconsin Avenue (Marriott International Headquarters) in Bethesda, Maryland, (2) 100 Causeway Street in Boston, Massachusetts and (3) increased leasing at the Hub50House residential property in Boston, Massachusetts.

Gains on Sales of Real Estate

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For additional information, see the Explanatory Note that follows the cover page of this Quarterly Report on Form 10-Q.

Boston Properties, Inc.

Gains on sales of real estate decreased by approximately $605.6 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Name Date Sold Property Type Square Feet Sale Price Net Cash Proceeds Gain (Loss) on Sale of Real Estate

(dollars in millions)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 8.1 (1)

N/A N/A $ 8.1

601, 611 and 651 Gateway January 28, 2020 Office 768,000 $ 350.0 $ — $ 217.7

New Dominion Technology Park February 20, 2020 Office 493,000 256.0 254.0 192.3

Capital Gallery June 25, 2020 Office 455,000 253.7 246.6 203.6

$ 859.7 $ 500.6 $ 613.6 (2)

(1) On December 13, 2018, we sold our 6595 Springfield Center Drive development project located in Springfield, Virginia.

Concurrently with the sale, we agreed to act as development manager and guaranteed the completion of the project (See Note 9 to the Consolidated Financial Statements).

The development project achieved final completion during the third quarter of 2021 and, upon completion of the project, the total cost of development was determined to be below the estimated total investment at the time of sale.

As a result, we recognized a gain of approximately $8.1 million.

(2) Excludes approximately $0.1 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.

Boston Properties Limited Partnership

Gains on sales of real estate decreased by approximately $618.6 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Name Date Sold Property Type Square Feet Sale Price Net Cash Proceeds Gain (Loss) on Sale of Real Estate

(dollars in millions)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 8.1 (1)

N/A N/A $ 8.1

601, 611 and 651 Gateway January 28, 2020 Office 768,000 $ 350.0 $ — $ 222.4

New Dominion Technology Park February 20, 2020 Office 493,000 256.0 254.0 197.1

Capital Gallery June 25, 2020 Office 455,000 253.7 246.6 207

$ 859.7 $ 500.6 $ 626.5 (2)

(1) On December 13, 2018, we sold our 6595 Springfield Center Drive development project located in Springfield, Virginia.

Concurrently with the sale, we agreed to act as development manager and guaranteed the completion of the project (See Note 9 to the Consolidated Financial Statements).

As a result, we recognized a gain of approximately $8.1 million.

(2) 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.

Gains on sales of real estate increased by approximately $22.7 million for the three months ended March 31, 2022 compared to 2021.

During the three months ended March 31, 2022, we recognized a gain of approximately $22.7 million related to the sale of 195 West Street in Waltham, Massachusetts (See Note 3 to the Consolidated Financial Statements).

Gains on sales of real estate increased by approximately $23.4 million for the three months ended March 31, 2022 compared to 2021.

During the three months ended March 31, 2022, we recognized a gain of approximately $23.4 million related to the sale of 195 West Street in Waltham, Massachusetts (See Note 3 to the Consolidated Financial Statements).

Interest and Other Income (Loss)

Interest and other income (loss) decreased by approximately $0.1 million for the nine months ended September 30, 2021 compared to 2020, due primarily to a decrease of approximately $2.9 million in interest income as a result of lower interest earned on our deposits, partially offset by an approximately $2.8 million decrease in the allowance for current expected credit losses, which results in higher income.

On January 1, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) and, as a result, we were required to record an allowance for current expected credit losses related to our outstanding (1) related party note receivable, (2) notes receivable and (3) off-balance sheet credit exposures.

Gains from Investments in Securities

Gains from investments in securities for the nine months ended September 30, 2021 and 2020 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors.

Interest and other income (loss) increased by approximately $0.1 million for the three months ended March 31, 2022 compared to 2021, due to an approximately $0.1 million decrease in the allowance for current expected credit losses, which results in higher income.

Gains (Losses) from Investments in Securities

Gains (losses) from investments in securities for the three months ended March 31, 2022 and 2021 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors.

Under the deferred compensation plans, each officer or non-employee director who is eligible to participate is permitted to defer a portion of the officer’s current income or the non-employee director’s compensation on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer or non-employee director.

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This enables us to generally match our liabilities to BXP’s officers or former non-employee directors under our deferred compensation plans with equivalent assets and thereby limit our market risk.

The performance of these investments is recorded as gains from investments in securities.

During the nine months ended September 30, 2021 and 2020, we recognized gains of approximately $3.7 million and $1.0 million, respectively, on these investments.

By comparison, our general and administrative expense increased by approximately $3.7 million and $1.0 million during the nine months ended September 30, 2021 and 2020, respectively, as a result of increases in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.

The performance of these investments is recorded as gains (losses) from investments in securities.

During the three months ended March 31, 2022 and 2021, we recognized gains (losses) of approximately $(2.3) million and $1.7 million, respectively, on these investments.

By comparison, our general and administrative expense increased (decreased) by approximately $(2.3) million and $1.7 million during the three months ended March 31, 2022 and 2021, respectively, as a result of increases (decreases) in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.

Losses From Early Extinguishment of Debt

3 unchanged sentences

We recognized a loss from early extinguishment of debt totaling approximately $0.4 million related to unamortized origination costs.

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts outstanding on its delayed draw term loan (“Delayed Draw Facility”) under our prior unsecured revolving credit agreement (the “2017 Credit Facility”).

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts outstanding on its delayed draw term loan facility (“Delayed Draw Facility”) under our prior unsecured revolving credit agreement (the “2017 Credit Facility”).

We recognized a loss from early extinguishment of debt totaling approximately $0.5 million related to unamortized financing costs.

Interest Expense

Interest expense increased by approximately $0.3 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Component Change in interest expense for the nine months ended September 30, 2021 compared to September 30, 2020

Interest expense decreased by approximately $6.7 million for the three months ended March 31, 2022 compared to 2021, as detailed below.

Component Change in interest expense for the three months ended March 31, 2022 compared to March 31, 2021

(in thousands)

Increases to interest expense due to:

Issuance of $1.25 billion in aggregate principal of 3.250% senior notes due 2031 on May 5, 2020

Issuance of $850 million in aggregate principal of 2.550% senior notes due 2032 on March 16, 2021 11,897

Decrease in capitalized interest related to development projects 3,645

Increase in interest due to finance leases for two in-service properties 1,604

Increase in interest due to finance leases that are related to development properties 1,052

Issuance of $850 million in aggregate principal of 2.450% senior notes due 2033 on September 29, 2021 $ 5,212

Total increases to interest expense 32,469

Decreases to interest expense due to:

Redemption of $850 million in aggregate principal of 4.125% senior notes due 2021 on February 14, 2021 (22,550)

Decrease in interest rates for the 2017 and 2021 Credit Facilities and the repayment of the unsecured term loan on March 16, 2021 (1) (5,196)

Increase in capitalized interest related to development projects that had finance leases (3,645)

Other interest expense (excluding senior notes) (658)

Decrease in interest related to the repayment of the University Place mortgage loan (131)

Total decreases to interest expense (32,180)

Total change in interest expense $ 289

_______________

(1) On June 15, 2021, BPLP entered into the 2021 Credit Facility, which replaced the 2017 Credit Facility (See Note 8 to the Consolidated Financial Statements).

Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term.

As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed.

Interest capitalized for the nine months ended September 30, 2021 and 2020 was approximately $36.6 million and $41.3 million, respectively.

These costs are not included in the interest expense referenced above.

On October 15, 2021, BPLP used available cash and funds under its 2021 Credit Facility to complete the redemption of $1.0 billion in aggregate principal amount of its 3.85% senior notes due February 1, 2023.

The redemption price was approximately $1.05 billion, which was equal to par plus approximately $7.9 million of accrued and unpaid interest to, but not including, the redemption date and an early redemption premium and unamortized financing costs totaling approximately $43.9 million.

We expect to recognize a loss from early extinguishment of debt related primarily to the payment of the redemption premium in the fourth quarter.

At September 30, 2021, our variable rate debt consisted of BPLP’s $1.5 billion revolving facility (the “Revolving Facility”).

T he Revolving Facility did not have an outstanding balance as of September 30, 2021.

For a summary of our consolidated debt as of September 30, 2021 and September 30, 2020 refer to the heading “ Liquidity and Capital Resources—Capitalization—Debt Financing” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Noncontrolling Interests in Property Partnerships

Noncontrolling interests in property partnerships increased by approximately $18.3 million for the nine months ended September 30, 2021 compared to 2020, as detailed below.

Property Noncontrolling Interests in Property Partnerships for the nine months ended September 30,

2021 2020 Change

(in thousands)

767 Fifth Avenue (the General Motors Building) (1) $ 8,873 $ 4,205 $ 4,668

Times Square Tower (2) 14,915 198 14,717

601 Lexington Avenue (3) 11,245 12,317 (1,072)

100 Federal Street 10,211 10,874 (663)

Atlantic Wharf Office Building 7,358 6,686 672

$ 52,602 $ 34,280 $ 18,322

_______________

(1) The increase was primarily attributable to an increase in lease revenue from our tenants.

In addition, during the nine months ended September 30, 2020, we accelerated amortization expense related to a below-market lease that terminated early.

(2) During the nine months ended September 30, 2020, we wrote off approximately $26.8 million of accrued rent and accounts receivable balances for tenants that either terminated their leases or for which we determined their accrued rent and/or accounts receivable balances, primarily retail tenants, were no longer probable of collection.

Approximately $12.0 million represents our partners’ share of the write-offs.

(3) The decrease was primarily due to a decrease in lease revenue from our retail tenants and a tenant that terminated its space during the nine months ended September 30, 2020, partially offset by the increase in revenue related to placing in-service One Five Nine East 53rd Street.

During the nine months ended September 30, 2020, we wrote off approximately $2.9 million of accrued rent and accounts receivable balances for tenants that either terminated their leases or for which we determined their accrued rent and/or accounts receivable balances, primarily retail tenants, were no longer probable of collection.

Approximately $1.3 million represents our partners’ share of the write-offs.

Noncontrolling Interest—Common Units of the Operating Partnership

For BXP, noncontrolling interest—common units of the Operating Partnership decreased by approximately $61.7 million for the nine months ended September 30, 2021 compared to 2020 due primarily to a decrease in allocable income, which was the result of recognizing a greater gain on sales of real estate amount during 2020.

Due to our ownership structure, there is no corresponding line item on BPLP’s financial statements.

Results of Operations for the Three Months Ended September 30, 2021 and 2020

Net income attributable to Boston Properties, Inc.

common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders increased approximately $18.4 million and $20.4 million for the three months ended September 30, 2021 compared to 2020, respectively, as detailed in the following tables and for the reasons discussed below under the heading “ Comparison of the three months ended September 30, 2021 to the three months ended September 30, 2020” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Below are reconciliations of net income attributable to Boston Properties, Inc.

common shareholders to NOI and net income attributable to Boston Properties Limited Partnership common unitholders to NOI for the three months ended September 30, 2021 and 2020.

For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 59.

Boston Properties, Inc.

Three months ended September 30,

2021 2020 Increase/

(in thousands)

Net Income Attributable to Boston Properties, Inc.

Common Shareholders

$ 108,297 $ 89,854 $ 18,443 20.53 %

Preferred dividends

— 2,625 (2,625) (100.00) %

Net Income Attributable to Boston Properties, Inc.

108,297 92,479 15,818 17.10 %

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interest—common units of the Operating Partnership

11,982 10,020 1,962 19.58 %

Noncontrolling interests in property partnerships

18,971 15,561 3,410 21.91 %

Net Income 139,250 118,060 21,190 17.95 %

Other Expenses:

Interest expense 105,794 110,993 (5,199) (4.68) %

Loss from unconsolidated joint ventures 5,597 6,873 (1,276) (18.57) %

Other Income:

Gains (losses) from investments in securities (190) 1,858 (2,048) (110.23) %

Interest and other income (loss)

1,520 (45) 1,565 3,477.78 %

Gains (losses) on sales of real estate 348 (209) 557 266.51 %

Other Expenses:

Depreciation and amortization expense 179,412 166,456 12,956 7.78 %

Transaction costs

1,888 307 1,581 514.98 %

Payroll and related costs from management services contracts

3,006 2,896 110 3.80 %

General and administrative expense

34,560 27,862 6,698 24.04 %

Other Revenue:

Direct reimbursements of payroll and related costs from management services contracts

3,006 2,896 110 3.80 %

Development and management services revenue

6,094 7,281 (1,187) (16.30) %

Net Operating Income $ 458,729 $ 421,666 $ 37,063 8.79 %

Boston Properties Limited Partnership

Three months ended September 30,

2021 2020 Increase/

(in thousands)

Net Income Attributable to Boston Properties Limited Partnership Common Unitholders

$ 122,014 $ 101,624 $ 20,390 20.06 %

Preferred distributions

— 2,625 (2,625) (100.00) %

Net Income Attributable to Boston Properties Limited Partnership 122,014 104,249 17,765 17.04 %

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interests in property partnerships

18,971 15,561 3,410 21.91 %

Net Income 140,985 119,810 21,175 17.67 %

Other Expenses:

Interest expense

105,794 110,993 (5,199) (4.68) %

Loss from unconsolidated joint ventures 5,597 6,873 (1,276) (18.57) %

Other Income:

Gains (losses) from investments in securities (190) 1,858 (2,048) (110.23) %

Interest and other income (loss)

1,520 (45) 1,565 3,477.78 %

Gains (losses) on sales of real estate 348 (209) 557 266.51 %

Other Expenses:

Depreciation and amortization expense 177,677 164,706 12,971 7.88 %

Transaction costs

1,888 307 1,581 514.98 %

Payroll and related costs from management services contracts

3,006 2,896 110 3.80 %

General and administrative expense

34,560 27,862 6,698 24.04 %

Other Revenue:

Direct reimbursements of payroll and related costs from management services contracts

3,006 2,896 110 3.80 %

Development and management services revenue

6,094 7,281 (1,187) (16.30) %

Net Operating Income $ 458,729 $ 421,666 $ 37,063 8.79 %

Comparison of the three months ended September 30, 2021 to the three months ended September 30, 2020

The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio.

The Same Property Portfolio consists of 143 properties totaling approximately 39.7 million net rentable square feet, excluding unconsolidated joint ventures.

The Same Property Portfolio includes properties acquired or placed in-service on or prior to July 1, 2020 and owned and in-service through September 30, 2021.

The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in development or redevelopment after July 1, 2020 or disposed of on or prior to September 30, 2021.

This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the three months ended September 30, 2021 and 2020 with respect to the properties that were acquired, placed in-service, in development or redevelopment or sold.

We did not sell any properties during the three months ended September 30, 2021 and 2020.

Same Property Portfolio Properties

Acquired Portfolio Properties

Placed In-Service

Portfolio Properties in

Development or

Redevelopment

Portfolio Total Property Portfolio

2021 2020 Increase/

Change 2021 2020 2021 2020 2021 2020 2021 2020 Increase/

(dollars in thousands)

Rental Revenue:

Lease Revenue (Excluding Termination Income)

$ 671,248 $ 649,484 $ 21,764 3.35 % $ 2,840 $ — $ 3,904 $ 157 $ 1,752 $ 4,753 $ 679,744 $ 654,394 $ 25,350 3.87 %

Termination Income

1,874 2,715 (841) (30.98) % — — — — — — 1,874 2,715 (841) (30.98) %

Lease Revenue

673,122 652,199 20,923 3.21 % 2,840 — 3,904 157 1,752 4,753 681,618 657,109 24,509 3.73 %

Parking and Other

23,250 16,170 7,080 43.78 % — — 5 4 — — 23,255 16,174 7,081 43.78 %

Total Rental Revenue (1) 696,372 668,369 28,003 4.19 % 2,840 — 3,909 161 1,752 4,753 704,873 673,283 31,590 4.69 %

Real Estate Operating Expenses 249,844 250,951 (1,107) (0.44) % 582 — 648 307 1,162 2,048 252,236 253,306 (1,070) (0.42) %

Net Operating Income (Loss), Excluding Residential and Hotel 446,528 417,418 29,110 6.97 % 2,258 — 3,261 (146) 590 2,705 452,637 419,977 32,660 7.78 %

Residential Net Operating Income (Loss) (2) 5,731 5,480 251 4.58 % — — (882) (717) — — 4,849 4,763 86 1.81 %

Hotel Net Operating Income (Loss) (2) 1,243 (3,074) 4,317 140.44 % — — — — — — 1,243 (3,074) 4,317 140.44 %

Net Operating Income (Loss) $ 453,502 $ 419,824 $ 33,678 8.02 % $ 2,258 $ — $ 2,379 $ (863) $ 590 $ 2,705 $ 458,729 $ 421,666 $ 37,063 8.79 %

_______________

(1) Rental Revenue is equal to Revenue less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Revenue per the Consolidated Statements of Operations, excluding the residential and hotel revenue that is noted below.

We use 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.

(2) For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 59.

Residential Net Operating Income for the three months ended September 30, 2021 and 2020 is comprised of Residential Revenue of $10,894 and $9,718 less Residential Expenses of $6,045 and $4,955, respectively.

Hotel Net Operating Income (Loss) for the three months ended September 30, 2021 and 2020 is comprised of Hotel Revenue of $5,189 and $90 less Hotel Expenses of $3,946 and $3,164, respectively, per the Consolidated Statements of Operations.

Same Property Portfolio

Lease Revenue (Excluding Termination Income)

Lease revenue from the Same Property Portfolio increased by approximately $21.8 million for the three months ended September 30, 2021 compared to 2020.

Approximately $7.5 million of the increase related to write-offs of accrued rent and accounts receivable balances that occurred during the three months ended September 30, 2020 and did not recur in 2021, for primarily retail tenants that either terminated their leases or we determined that the accrued rent and/or accounts receivable balances were no longer probable of collection.

Excluding the write-offs, the Same Property Portfolio increased by approximately $14.3 million primarily due to our average revenue per square foot increasing by approximately $2.77, resulting in an increase of approximately $24.1 million, partially offset by an approximately $9.8 million decrease due to our average occupancy decreasing from 92.4% to 91.0%.

We continue to evaluate the collectability of our accrued rent and accounts receivable balances related to lease revenue.

If our estimate of collectability differs from the cash received, then the timing and amount of our reported revenue could be impacted.

Termination Income

Termination income decreased by approximately $0.8 million for the three months ended September 30, 2021 compared to 2020.

Termination income for the three months ended September 30, 2021 related to six tenants across the Same Property Portfolio and totaled approximately $1.9 million, which was primarily related to tenants that terminated leases early in New York City.

Termination income for the three months ended September 30, 2020 related to 10 tenants across the Same Property Portfolio and totaled approximately $2.7 million, which was primarily related to tenants that terminated leases early in New York City and the Washington, DC region.

Parking and Other Revenue

Parking and other revenue increased by approximately $7.1 million for the three months ended September 30, 2021 compared to 2020.

Parking revenue and other revenue increased by approximately $6.3 million and $0.8 million, respectively.

The increase in parking revenue was primarily due to an increase in transient parking.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio decreased by approximately $1.1 million, or 0.4%, for the three months ended September 30, 2021 compared to 2020, due primarily to a decrease in real estate taxes of approximately $5.9 million, or 4.4%, offset by an increase in utility and other real estate operating expenses of approximately $3.1 million, or 12.1%, and $1.7 million, or 1.9%, respectively.

The decrease in real estate taxes was primarily experienced in New York City.

The increase in utility expense was experienced across the portfolio and was primarily driven by an increase in physical tenant occupancy, which led to higher demand for electricity and HVAC.

Properties Acquired Portfolio

The table below lists the properties acquired between July 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses increased by approximately $2.8 million and $0.6 million, respectively, for the three months ended September 30, 2021 compared to 2020, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

Name Date acquired 2021 2020 Change 2021 2020 Change

(dollars in thousands)

153 & 211 Second Avenue June 2, 2021 136,882 $ 2,345 $ — $ 2,345 $ 248 $ — $ 248

Shady Grove Bio+Tech Campus August 2, 2021 233,452 495 — 495 334 — 334

370,334 $ 2,840 $ — $ 2,840 $ 582 $ — $ 582

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially placed in-service between July 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $4.5 million and $1.3 million, respectively, for the three months ended September 30, 2021 compared to 2020, as detailed below.

Quarter Initially Placed In-Service Quarter Fully Placed In-Service Rental Revenue Real Estate Operating Expenses

Name Square Feet 2021 2020 Change 2021 2020 Change

(dollars in thousands)

One Five Nine East 53rd Street (1) First Quarter, 2021 First Quarter, 2021 220,000 $ 3,909 $ 161 $ 3,748 $ 648 $ 307 $ 341

Total Office 220,000 3,909 161 3,748 648 307 341

The Skylyne Third Quarter, 2020 Third Quarter, 2020 330,996 806 23 783 1,688 740 948

Total Residential 330,996 806 23 783 1,688 740 948

550,996 $ 4,715 $ 184 $ 4,531 $ 2,336 $ 1,047 $ 1,289

_______________

(1) This is the low-rise portion of 601 Lexington Avenue, which was in development for the three months ended September 30, 2020.

Properties in Development or Redevelopment Portfolio

The table below lists the properties that were in development or redevelopment between July 1, 2020 and September 30, 2021.

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $3.0 million and $0.9 million, respectively, for the three months ended September 30, 2021 compared to 2020.

Rental Revenue Real Estate Operating Expenses

Name Date Commenced Development / Redevelopment Square Feet 2021 2020 Change 2021 2020 Change

(dollars in thousands)

325 Main Street (1) May 9, 2019 115,000 $ — $ — $ — $ 169 $ 207 $ (38)

200 West Street (2) September 30, 2019 261,000 1,752 1,233 519 932 784 148

880 Winter Street (3) February 25, 2021 224,000 — 1,977 (1,977) 61 706 (645)

3625-3635 Peterson Way (4) April 16, 2021 218,000 — 1,543 (1,543) — 351 (351)

818,000 $ 1,752 $ 4,753 $ (3,001) $ 1,162 $ 2,048 $ (886)

_______________

(1) Real estate operating expenses for the three months ended September 30, 2021 and 2020 were related to demolition costs.

(2) Conversion of a 126,000 square foot portion of the property to life sciences space from office space.

(3) On February 25, 2021, we commenced the redevelopment and conversion of 880 Winter Street, a 224,000 square foot office property located in Waltham, Massachusetts, to laboratory space.

(4) On April 16, 2021, we removed 3625-3635 Peterson Way, located in Santa Clara, California, from our in-service portfolio.

We are demolishing the building and expect to redevelop the site at a future date.

Residential Net Operating Income

Net operating income for our residential same properties increased by approximately $0.3 million for the three months ended September 30, 2021 compared to 2020.

Net operating income for the three months ended September 30, 2020 includes approximately $0.7 million of termination income from a retail tenant.

The following reflects our occupancy and rate information for The Lofts at Atlantic Wharf, The Avant at Reston Town Center, Signature at Reston and Proto Kendall Square for the three months ended September 30, 2021 and 2020.

The Lofts at Atlantic Wharf The Avant at Reston Town Center Signature at Reston Proto Kendall Square

2021 2020 Change (%) 2021 2020 Change (%) 2021 2020 Change (%) 2021 2020 Change (%)

Average Monthly Rental Rate (1)

$ 3,747 $ 4,231 (11.4) % $ 2,299 $ 2,352 (2.3) % $ 2,429 $ 2,319 4.7 % $ 2,642 $ 2,676 (1.3) %

Average Rental Rate Per Occupied Square Foot

$ 4.17 $ 4.62 (9.7) % $ 2.50 $ 2.57 (2.7) % $ 2.51 $ 2.42 3.7 % $ 4.82 $ 4.91 (1.8) %

Average Physical Occupancy (2)

96.5 % 80.2 % 20.3 % 96.3 % 89.7 % 7.4 % 93.2 % 82.2 % 13.4 % 94.5 % 85.7 % 10.3 %

Average Economic Occupancy (3)

95.4 % 80.7 % 18.2 % 96.3 % 88.9 % 8.3 % 92.0 % 78.2 % 17.6 % 93.9 % 83.1 % 13.0 %

_______________

(1) Average Monthly Rental Rate is calculated 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.

(2) 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.

(3) 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.

Market Rents used by us in calculating Economic Occupancy are based on the current market rates set by the managers of our residential properties based on their experience in renting their residential property’s units and publicly available market data.

Actual market rents and trends in such rents for a region as reported by others may vary materially from Market Rents used by us.

Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Hotel Net Operating Income (Loss)

The Boston Marriott Cambridge hotel property operated at an approximately $1.2 million profit during the three months ended September 30, 2021.

This is approximately $4.3 million greater than the three months ended September 30, 2020.

The Boston Marriott Cambridge closed in March 2020 due to COVID-19.

The hotel re-opened on October 2, 2020 and has operated at lower occupancy levels due to the continued impact of COVID-19 on business and leisure travel.

We expect hotel occupancy to remain low until the demand for business and leisure travel returns to historical levels .

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the three months ended September 30, 2021 and 2020.

Occupancy 49.4 % — % 100.0 %

Average daily rate $ 222.31 $ — 100.0 %

REVPAR $ 109.86 $ — 100.0 %

Other Operating Revenue and Expense Items

Development and Management Services Revenue

Development and management services revenue decreased by approximately $1.2 million for the three months ended September 30, 2021 compared to 2020.

Development and management services revenue decreased by approximately $1.1 million and $0.1 million, respectively.

The decrease in development services revenue was primarily related to a decrease of approximately $0.6 million in development fees earned in New York City from an unconsolidated joint venture and a decrease of approximately $0.5 million in fees associated with tenant improvement projects earned from a building owned by a third-party in the Washington, DC region.

The decrease in management services revenue was primarily related to a decrease in property management fees earned from third-party owned buildings in the Washington, DC region.

General and Administrative Expense

General and administrative expense increased by approximately $6.7 million for the three months ended September 30, 2021 compared to 2020 primarily due to an increase in compensation expense of approximately $6.4 million, and an increase of approximately $0.3 million in other general and administrative expenses.

The increase in compensation expense was partially offset by a decrease of approximately $2.1 million in the value of our deferred compensation plan.

The increase in other general and administrative expenses was primarily related to an increase in meals and travel expense.

Capitalized wages for the three months ended September 30, 2021 and 2020 were approximately $3.4 million.

These costs are not included in the general and administrative expenses discussed above.

Transaction Costs

Transaction costs increased by approximately $1.6 million for the three months ended September 30, 2021 compared to 2020 due primarily to costs incurred in connection with the pursuit and formation of new joint ventures.

In general, transaction costs relating to the formation of new and pending joint ventures and the pursuit of other transactions are expensed as incurred.

Depreciation and Amortization Expense

Depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP.

This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties.

The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in depreciation expense.

For additional information see the Explanatory Note that follows the cover page of this Quarterly Report on Form 10-Q.

Boston Properties, Inc.

Depreciation and amortization expense increased by approximately $13.0 million for the three months ended September 30, 2021 compared to 2020, as detailed below.

Portfolio Depreciation and Amortization for the three months ended September 30,

2021 2020 Change

(in thousands)

Same Property Portfolio $ 171,977 $ 163,114 $ 8,863

Properties Acquired Portfolio 3,761 — 3,761

Properties Placed In-Service Portfolio 3,295 695 2,600

Properties in Development or Redevelopment Portfolio 379 2,647 (2,268)

$ 179,412 $ 166,456 $ 12,956

Boston Properties Limited Partnership

Depreciation and amortization expense increased by approximately $13.0 million for the three months ended September 30, 2021 compared to 2020, as detailed below.

Portfolio Depreciation and Amortization for the three months ended September 30,

2021 2020 Change

(in thousands)

Same Property Portfolio $ 170,242 $ 161,364 $ 8,878

Properties Acquired Portfolio 3,761 — 3,761

Properties Placed In-Service Portfolio 3,295 695 2,600

Properties in Development or Redevelopment Portfolio 379 2,647 (2,268)

$ 177,677 $ 164,706 $ 12,971

Direct Reimbursements of Payroll and Related Costs From Management Services Contracts and Payroll and Related Costs From Management Service Contracts

We have determined that amounts reimbursed for payroll and related costs received from third parties in connection with management services contracts should be reflected on a gross basis instead of on a net basis as we have determined that we are the principal under these arrangements.

We anticipate that these two financial statement line items will generally offset each other.

Other Income and Expense Items

Loss from Unconsolidated Joint Ventures

For the three months ended September 30, 2021 compared to 2020, loss from unconsolidated joint ventures decreased by approximately $1.3 million due to a $2.2 million increase in net income at our Colorado Center joint venture, primarily due to a write-off of lease revenue during the three months ended September 30, 2020.

This increase was partially offset by an approximately $1.1 million decrease in net income from our Dock 72 joint venture, primarily related to depreciation and amortization.

Gains (Losses) on Sales of Real Estate

Gains (losses) on sales of real estate increased by approximately $0.6 million for the three months ended September 30, 2021 compared to 2020.

During the three months ended September 30, 2021, we recognized a gain of approximately $0.3 million related to the sale of 6595 Springfield Center Drive (See Note 3 to the Consolidated Financial Statements).

During the three months ended September 30, 2020, we incurred approximately $0.2 million of additional expenses related to the sale of a portion of Capital Gallery in Washington, DC, thus resulting in a loss on sale of real estate.

Interest and Other Income (Loss)

Interest and other income (loss) increased by approximately $1.6 million for the three months ended September 30, 2021 compared to 2020, due to an approximately $1.9 million decrease in the allowance for current

expected credit losses, which results in higher income, partially offset by a decrease of approximately $0.3 million in interest income as a result of lower interest earned on our deposits.

On January 1, 2020, we adopted ASU 2016-13 and, as a result, we were required to record an allowance for current expected credit losses related to our outstanding (1) related party note receivable, (2) notes receivable and (3) off-balance sheet credit exposures.

Gains (Losses) from Investments in Securities

Gains (losses) from investments in securities for the three months ended September 30, 2021 and 2020 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors.

In order to reduce our market risk relating to these plans, we typically acquire, in a separate account that is not restricted as to its use, similar or identical investments as those selected by each officer or non-employee director.

This enables us to generally match our liabilities to BXP’s officers or former non-employee directors under our deferred compensation plans with equivalent assets and thereby limit our market risk.

The performance of these investments is recorded as gains (losses) from investments in securities.

During the three months ended September 30, 2021 and 2020, we recognized gains (losses) of approximately $(0.2) million and $1.9 million, respectively, on these investments.

By comparison, our general and administrative expense increased (decreased) by approximately $(0.2) million and $1.9 million during the three months ended September 30, 2021 and 2020, respectively, as a result of increases (decreases) in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.

Interest Expense

Interest expense decreased by approximately $5.2 million for the three months ended September 30, 2021 compared to 2020, as detailed below.

Component Change in interest expense for the three months ended September 30, 2021 compared to September 30, 2020

(in thousands)

Increases to interest expense due to:

Issuance of $850 million in aggregate principal of 2.550% senior notes due 2032 on March 16, 2021 4,577

Decrease in capitalized interest related to development projects 2,876

Increase in interest due to finance leases for two in-service properties 447

Issuance of $850 million in aggregate principal of 2.450% senior notes due 2033 on September 29, 2021 116

Total increases to interest expense 9,789

Decreases to interest expense due to:

Redemption of $1.0 billion in aggregate principal of 3.85% senior notes due 2023 on October 15, 2021 (9,683)

Redemption of $850 million in aggregate principal of 4.125% senior notes due 2021 on February 14, 2021 (4,279)

Increase in capitalized interest related to development projects that had finance leases (2,876)

Decrease in interest due to finance leases that are related to development properties (999)

Decrease in interest rates for the 2017 and 2021 Credit Facilities and the repayment of the unsecured term loan on March 16, 2021 (1) (981)

Increase in capitalized interest related to development projects (1,685)

Decrease in interest rates for the unsecured credit facilities and the repayment of the unsecured term loan on March 16, 2021 (565)

Other interest expense (excluding senior notes) (251)

Decrease in interest related to the repayment of University Place mortgage loan (42)

Total decreases to interest expense (16,463)

Total change in interest expense $ (6,674)

_______________

(1) On June 15, 2021, BPLP entered into the 2021 Credit Facility, which replaced the 2017 Credit Facility (See Note 8 to the Consolidated Financial Statements).

As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed.

Interest capitalized for the three months ended September 30, 2021 and 2020 was approximately $11.6 million and $13.5 million, respectively.

Interest capitalized for the three months ended March 31, 2022 and 2021 was approximately $13.7 million and $12.0 million, respectively.

These costs are not included in the interest expense referenced above.

We expect to recognize a loss from early extinguishment of debt related primarily to the payment of the redemption premium in the fourth quarter.

At September 30, 2021, our outstanding variable rate debt consisted of BPLP’s $1.5 billion Revolving Facility.

T he Revolving Facility did not have an outstanding balance as of September 30, 2021.

At March 31, 2022, our outstanding variable rate debt consisted of BPLP’s $1.5 billion unsecured credit facility (the “Revolving Facility”).

T he Revolving Facility had $255 million outstanding as of March 31, 2022.

For a summary of our consolidated debt as of March 31, 2022 and March 31, 2021 refer to the heading “ Liquidity and Capital Resources—Debt Financing” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Noncontrolling Interests in Property Partnerships

Noncontrolling interests in property partnerships increased by approximately $3.4 million for the three months ended September 30, 2021 compared to 2020, as detailed below.

Property Noncontrolling Interests in Property Partnerships for the three months ended September 30,

Noncontrolling interests in property partnerships increased by approximately $1.1 million for the three months ended March 31, 2022 compared to 2021, as detailed below.

Property Noncontrolling Interests in Property Partnerships for the three months ended March 31,

2022 2021 Change

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(1) The decrease was primarily attributable to a decrease in lease revenue from our tenants.

(2) The increase was primarily attributable to an increase in lease revenue from our tenants.

(2) During the three months ended September 30, 2020, we wrote off approximately $0.5 million of accrued rent and accounts receivable balances for retail tenants whose balances we determined were no longer probable of collection.

Approximately $0.2 million represents our partners’ share of the write-offs.

Noncontrolling Interest—Common Units of the Operating Partnership

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $2.0 million for the three months ended September 30, 2021 compared to 2020 due primarily to an increase in allocable income.

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $5.3 million for the three months ended March 31, 2022 compared to 2021 due primarily to an increase in allocable income, which was partially the result of recognizing a greater gain on sales of real estate during 2022.

Due to our ownership structure, there is no corresponding line item on BPLP’s financial statements.

Preferred Stock/Unit Redemption Charge

On March 2, 2021, BXP issued a redemption notice for 80,000 shares of its 5.25% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), which constituted all of the outstanding Series B Preferred Stock, and the corresponding depositary shares, each representing 1/100th of a share of Series B Preferred Stock.

The redemption price per share of Series B Preferred Stock was $2,500, plus all accrued and unpaid dividends to, but not including, the redemption date, totaling $2,516.41 per share.

On March 31, 2021, we transferred the full redemption price for all outstanding shares of Series B Preferred Stock , including accrued and unpaid dividends to, but not including, the redemption date, to the redemption agent.

The excess of the redemption price over the carrying value of the Series B Preferred Stock and Series B Preferred Units of approximately $6.4 million relates to the original issuance costs and is reflected as a reduction to Net Income Attributable to Boston Properties, Inc.

common shareholders and Net Income Attributable to Boston Properties Limited Partnership common unitholders on the Consolidated Income Statement.

Liquidity and Capital Resources

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• cash and cash equivalent balances;

• borrowings under BPLP’s 2021 Credit Facility, short-term bridge facilities and construction loans;

• borrowings under BPLP’s Revolving Facility, unsecured term loans, short-term bridge facilities and construction loans;

• long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness);

• sales of real estate;

• issuances of BXP equity securities and/or preferred or common units of partnership interest in BPLP.

• private equity sources through our Strategic Capital Program (“SCP”) with large institutional investors;

• issuances of BXP equity securities and/or preferred or common units of partnership interests in BPLP.

We draw on multiple financing sources to fund our long-term capital needs.

We expect to fund our current development properties primarily with our available cash balances, construction loans and BPLP’s Revolving Facility.

We expect to fund our current development/redevelopment properties primarily with our available cash balances, construction loans and BPLP’s Revolving Facility.

We use BPLP’s Revolving Facility primarily as a bridge facility to fund acquisition opportunities, refinance outstanding indebtedness and meet short-term development and working capital needs.

Although we may seek to fund our development projects with construction loans, which may require guarantees by BPLP, the financing for each particular project ultimately depends on several factors, including, among others, the project’s size and duration, the extent of pre-leasing and our available cash and access to cost effective capital at the given time.

The following table presents information on properties under construction and redevelopment as of September 30, 2021 (dollars in thousands):

Construction Properties Estimated Stabilization Date Location # of Buildings Estimated Square Feet Investment to Date (1)(2)(3) Estimated Total Investment (1)(2) Total Available (1) Outstanding at 9/30/2021 (1)

The following table presents information on properties under construction and redevelopment as of March 31, 2022 (dollars in thousands):

Estimated Future Equity Requirement (1)(2)(4) Percentage Leased (5)

325 Main Street Third Quarter, 2022 Cambridge, MA 1 420,000 $ 328,547 $ 418,400 $ — $ — $ 89,853 90 %

100 Causeway Street (50% ownership) Third Quarter, 2022 Boston, MA 1 632,000 229,627 267,300 200,000 148,603 — 95 % (6)

7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership) First Quarter, 2022 Bethesda, MD 1 734,000 168,945 198,900 127,500 104,036 6,491 100 % (7)

Fourth Quarter, 2023 Reston, VA 2 1,062,000 538,075 715,300 — — 177,225 87 % (6)

2100 Pennsylvania Avenue Third Quarter, 2024 Washington, DC 1 480,000 252,049 356,100 — — 104,051 61 %

360 Park Avenue South (42% ownership) First Quarter, 2025 New York, NY 1 450,000 195,333 219,000 92,774 85,588 16,481 — % (7)

Platform 16 Building A (55% ownership) Fourth Quarter, 2026 San Jose, CA 1 389,500 65,199 231,900 — — 166,701 — % (8)

Total Office Properties under Construction 6 2,801,500 1,379,203 1,940,700 92,774 85,588 554,311 57 %

Lab/Life Sciences

200 West Street (Redevelopment) Fourth Quarter, 2021 Waltham, MA — 138,000 29,340 47,800 — — 18,460 100 % (9)

880 Winter Street (Redevelopment) Second Quarter, 2024 Waltham, MA 1 224,000 6,964 108,000 — — 101,036 23 %

751 Gateway (49% ownership) Third Quarter, 2024 South San Francisco, CA 1 229,000 28,723 127,600 — — 98,877 — %

880 Winter Street (Redevelopment) First Quarter, 2023 Waltham, MA 1 244,000 47,522 108,000 — — 60,478 85 %

751 Gateway (49% ownership) Second Quarter, 2024 South San Francisco, CA 1 231,000 55,892 127,600 — — 71,708 100 %

103 CityPoint Third Quarter, 2024 Waltham, MA 1 113,000 16,156 115,100 — — 98,944 — %

180 CityPoint Fourth Quarter, 2024 Waltham, MA 1 329,000 66,272 274,700 — — 208,428 43 %

651 Gateway (50% ownership) Fourth Quarter, 2025 South San Francisco, CA 1 327,000 5,227 146,500 — — 141,273 — %

Total Lab/Life Sciences Properties under Construction 5 1,244,000 191,069 771,900 — — 580,831 47 %

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(1) Represents our share.

(2) Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement all include our share of acquisition expenses, as applicable, and reflect our share of the estimated net revenue/expenses that we expect to incur prior to stabilization of the project, including any amounts actually received or paid through September 30, 2021.

(2) Each of Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement includes our share of acquisition expenses, as applicable, and reflect our share of the estimated net revenue/expenses that we expect to incur prior to stabilization of the project, including any amounts actually received or paid through March 31, 2022.

(3) Includes approximately $92.8 million of unpaid but accrued construction costs and leasing commissions.

(4) Excludes approximately $92.8 million of unpaid but accrued construction costs and leasing commissions.

(5) Represents percentage leased as of November 2, 2021, including leases with future commencement dates.

(6) This property was 79% placed in-service as of September 30, 2021.

(7) On October 29, 2021, this project was fully placed in-service (See Note 15 to the Consolidated Financial Statements).

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

(9) Represents a portion of the property under redevelopment for conversion to laboratory space.

(5) Represents percentage leased as of April 29, 2022, including leases with future commencement dates.

(6) The property was 67% placed in-service as of March 31, 2022.

(7) Investment to Date includes all related costs incurred prior to the contribution of the property by us to the joint venture on December 15, 2021 totaling approximately $107 million and our proportionate share of the loan.

Our joint venture partners will fund required capital until their aggregate investment is approximately 58% of all capital contributions;

thereafter, the joint venture partners will fund required capital according to their percentage interests.

(8) Estimated total investment represents the costs to complete Building A, a 389,500 square foot building, and Building A’s proportionate share of land and garage costs.

In conjunction with the construction of Building A, garage and site work will be completed for Phase II, which will support approximately 700,000 square feet of development in two office buildings, budgeted to be an incremental $141 million.

(9) We expect to place this project in-service and open to the public in the second quarter of 2023.

(10) Percentage leased excludes View Boston Observatory at The Prudential Center (redevelopment) at 800 Boylston Street - The Prudential Center.

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We seek to maximize income from our existing properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing tenant turnover and controlling operating expenses.

Our sources of revenue also include third-party fees generated by our property management, leasing and development and construction businesses, as well as the sale of assets from time to time.

Our sources of revenue also include third-party fees generated by our property management, leasing, development and construction businesses, as well as the sale of assets from time to time.

We believe these sources of capital will continue to provide the funds necessary for our short-term liquidity needs, including our properties under development and redevelopment.

Material adverse changes in one or more sources of capital, whether due to the impacts of the COVID-19 pandemic or otherwise, may adversely affect our net cash flows.

Leasing activity and revenue from transient parking and our hotel improved during the third quarter of 2021.

We signed approximately 1.4 million square feet of leases in the quarter, which represents more than double the leasing volume in the first quarter of 2021 and is approximately 90% of our pre-pandemic average for the third quarter.

Our parking and hotel revenue also increased approximately 36% compared to the second quarter of 2021.

We expect parking revenue to continue to improve gradually as the return to in-person work accelerates and hotel occupancy to remain low until the demand for business and leisure travel returns to historical levels .

Our primary uses of capital over the next twelve months will be the completion of our current and committed development and redevelopment projects, servicing the principal and interest payments on our outstanding indebtedness and satisfying our REIT distribution requirements.

As of September 30, 2021, we had nine properties under development or redevelopment.

We expect our primary uses of capital over the next twelve months will be the commencement, continuation and completion of our current and committed development and redevelopment projects, the acquisition of Madison Centre, servicing the interest payments on our outstanding indebtedness and satisfying our REIT distribution requirements.

As of March 31, 2022, we had 11 properties under development or redevelopment.

Our share of the remaining development and redevelopment costs that we expect to fund through 2026 was approximately $1.2 billion.

During the third quarter of 2021, BPLP completed a public “green bond” offering of $850.0 million of 2.450% unsecured senior notes due October 2033.

The offering marked BPLP’s fourth green bond offering and represented the lowest coupon ever issued by BPLP.

The net proceeds from the offering along with available cash and borrowings under BPLP’s Revolving Facility were used to fully redeem the $1.0 billion aggregate principal amount of 3.85% unsecured senior notes that were scheduled to mature in February 2023.

The early repayment will result in a loss from early extinguishment of debt of approximately $43.9 million in the fourth quarter of 2021.

This amount includes approximately $1.0 million of unamortized financing and other costs.

We have a SCP that provides us the opportunity to partner with large institutional investors and capitalize our investment opportunities partially through private equity.

The SCP enhances our access to capital and investment capacity and further enhances our returns through fees paid to us, and in certain partnerships, a greater share of income upon achieving certain success criteria.

In January 2022, we commenced the redevelopment of 651 Gateway in South San Francisco, California, a project in which we own a 50% interest, and in February 2022, we restarted the first phase of our Platform 16 development project in San Jose, California, a project in which we own a 55% interest (see Note 5 to the Consolidated Financial Statements).

In July 2021, we announced the formation of an investment program with two partners committing a targeted equity investment of $1.0 billion, including $250 million from us.

Under this agreement, we will provide these partners, for up to two years, exclusive first offers to form joint ventures with us to invest in assets that meet target criteria.

All investments are discretionary to each partner.

The SCP provides us the opportunity to partner with large institutional investors and capitalize our investment opportunities partially through private equity.

The SCP enhances our access to capital and investment capacity and further enhances our returns through fee income, and in certain partnerships, a greater share of income upon achieving certain success criteria.

These large financial partners include some of the world’s largest sovereign wealth funds and pension plans.

Our use of the SCP is consistent with our ongoing strategy to create value through opportunistic investments in high-quality office properties in markets with the strongest economic growth over time while maintaining a strong balance sheet and modest leverage.

As part of the broader SCP, we announced in July 2021 the formation of an investment program with two large partners committing a targeted equity investment of $1.0 billion, including $250 million from us.

Under this agreement, we will provide these partners, for up to two years, exclusive first offers to form joint ventures with us to invest in assets that meet the SCP’s target criteria.

All investments are discretionary to each partner.

For example, during the third quarter of 2021, we partnered with two SCP partners to acquire Safeco Plaza, a 50-story, approximately 765,000 net rentable square foot, LEED-Platinum certified, Class A office property located in Seattle, Washington.

After mortgage financing, the partners contributed approximately $215 million to fund the acquisition.

Each partner owns approximately a one-third ownership interest in the property (See Note 5 to the Consolidated Financial Statements).

In addition, we expect to acquire 360 Park Avenue South, located in New York, New York, for a purchase price of approximately $300 million in the fourth quarter of 2021.

At closing, we will assume approximately $202 million of mortgage debt and issue approximately $98 million of OP Units, with a floor price of $111 per OP Unit.

Other than customary closing costs, no cash is required to close the transaction.

We expect to fund future investment in this asset through a joint venture with one or more financial partners from the SC Program.

There can be no assurance that this acquisition will be consummated on the terms currently contemplated or at all.

On October 25, 2021, we completed the sale of our 181, 191 and 201 Spring Street properties, located in Lexington, Massachusetts, for a gross sales price of $191.5 million.

We have no debt maturities during the remainder of 2021.

We have one loan maturing in 2022 that has an outstanding principal balance of approximately $618.7 million (of which our share is approximately $340.3 million).

The loan is secured by our 601 Lexington Avenue property in New York.

Our unconsolidated joint ventures have two loans maturing in 2022, of which our share of outstanding principal is approximately $147.0 million.

We are currently in the market to refinance the 601 Lexington Avenue mortgage.

Due to the increase in cash flow from this asset, due in part to the redevelopment completed earlier in 2021, we anticipate increasing the principal amount of the mortgage and reducing the interest rate as part of the refinancing.

There can be no assurance that this refinancing will be consummated on the terms currently contemplated or at all.

Although the current and future impact of COVID-19 on our liquidity and capital resources will depend on a wide range of factors, we believe that our access to capital and our strong liquidity, including the approximately $1.2 billion available under the 2021 Credit Facility and available cash of approximately $362.7 million (of which approximately $122.2 million is attributable to our consolidated joint venture partners), as of November 2, 2021, is sufficient to fund our remaining capital requirements on existing development and redevelopment projects, repay our maturing indebtedness when due, satisfy our REIT distribution requirements and still allow us to act opportunistically on attractive investment opportunities.

On April 14, 2022, we entered into an agreement to purchase Madison Centre, an approximately 760,000 square foot, 37-story Class A office building in Seattle, Washington for a gross purchase price of $730.0 million.

The acquisition is expected to close in the second quarter of this year and will be initially funded with a one-year, $730.0 million unsecured term loan.

We anticipate ultimately funding the acquisition through incremental asset sales, which we anticipate would be structured as like-kind exchanges, or joint venture equity.

We have no debt maturities until September 2023.

Our unconsolidated joint ventures have one loan maturing in 2022, of which our share of the aggregate outstanding principal is approximately $88.2 million.

We are currently in the market to refinance this maturity with a mortgage debt in an amount equal to or greater than the current balance.

There can be no assurance that we will complete this refinancing on the terms currently contemplated or at all.

As of April 25, 2022, we had available cash of approximately $313.8 million (of which approximately $103.8 million is attributable to our consolidated joint venture partners).

Although the future impact of COVID-19 on our liquidity and capital resources will depend on a wide range of factors, we believe that our access to capital and our strong liquidity, including the approximately $1.3 billion available under the Revolving Facility and our available cash, as of April 25, 2022, are sufficient to fund our remaining capital requirements on existing development and redevelopment projects, fund acquisitions, repay our maturing indebtedness when due, satisfy our REIT distribution requirements and still allow us to act opportunistically on attractive investment opportunities.

We may seek to enhance our liquidity to fund our current and future development activity, pursue additional attractive investment opportunities and refinance or repay indebtedness.

Depending on interest rates, the overall conditions in the debt and public and private equity markets, and our leverage at the time, we may decide to access one or more of these capital sources (including utilization of BXP’s $600.0 million “at the market” equity offering program).

Doing so may result in us carrying additional cash and cash equivalents pending our use of the proceeds, which could increase our net interest expense or be dilutive to our earnings, or both.

We have not sold any shares under BXP’s $600.0 million “at the market” equity offering program.

We may seek to enhance our liquidity to fund our foreseeable potential development activity, pursue additional attractive investment opportunities and refinance or repay indebtedness.

Depending on interest rates and overall conditions in the debt and equity markets, we may decide to access either or both of these markets in advance of the need for the funds.

Doing so may result in us carrying additional cash and cash equivalents pending our use of the proceeds, which would increase our net interest expense and be dilutive to our earnings.

REIT Tax Distribution Considerations

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Our policy is for BXP to distribute at least 100% of its taxable income, including capital gains, to avoid paying federal tax.

BXP’s Board of Directors will continue to evaluate BXP’s dividend rate in light of our actual and projected taxable income (including gains on sales), liquidity requirements and other circumstances, including the impact of COVID-19, and there can be no assurance that the future dividends declared by BXP’s Board of Directors will not differ materially from the current quarterly dividend amount.

Common and LTIP unitholders of limited partnership interest in BPLP receive the same total distribution per unit.

BXP’s Board of Directors will continue to evaluate BXP’s dividend rate in light of our actual and projected taxable income (including gains on sales), liquidity requirements and other circumstances and there can be no assurance that the future dividends declared by BXP’s Board of Directors will not differ materially from the current quarterly dividend amount.

To the extent that we sell assets at a gain and cannot efficiently use the proceeds in a tax deferred manner for either our development activities or attractive acquisitions, BXP would, at the appropriate time, decide whether it is better to declare a special dividend, adopt a stock repurchase program, reduce indebtedness or retain the cash for future investment opportunities.

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The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

Cash and cash equivalents and cash held in escrows aggregated approximately $1.1 billion and $1.8 billion at September 30, 2021 and 2020, respectively, representing a decrease of approximately $0.7 billion.

Cash and cash equivalents and cash held in escrows aggregated approximately $482.3 million and $949.2 million at March 31, 2022 and 2021, respectively, representing a decrease of approximately $466.8 million.

The following table sets forth changes in cash flows:

Nine months ended September 30,

2021 2020 Increase (Decrease)

Three months ended March 31,

2022 2021 Change

(in thousands)

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Net cash used in investing activities (151,335) (242,273) 90,938

Net cash provided by (used in) financing activities (425,899) 678,891 (1,104,790)

Net cash used in financing activities (86,970) (679,936) 592,966

Our principal source of cash flow is related to the operation of our properties.

The weighted-average term of our in-place leases, excluding residential units, was approximately 7.5 years as of September 30, 2021, including leases signed by our unconsolidated joint ventures, with occupancy rates historically in the range of 88% to 94%.

The weighted-average term of our in-place leases, excluding residential units, was approximately 7.9 years as of March 31, 2022, including leases signed by our unconsolidated joint ventures, with occupancy rates historically in the range of 88% to 94%.

Generally, our properties generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund regular quarterly dividend and distribution payment requirements.

In addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings.

The full extent of the impact of COVID-19 on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict.

In addition, we cannot predict the impact that COVID-19 will have on our tenants, employees, contractors, lenders, suppliers, vendors and joint venture partners;

any material adverse effect on these parties could also have a material adverse effect on us.

addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings.

Cash is used in investing activities to fund acquisitions, development, net investments in unconsolidated joint ventures and maintenance and repositioning capital expenditures.

We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings to enhance or maintain our market position.

Cash used in investing activities for the nine months ended September 30, 2021 consisted primarily of acquisitions of real estate, development projects, building and tenant improvements and capital contributions to unconsolidated joint ventures, partially offset by proceeds from sale of investment in unconsolidated joint ventures.

Cash used in investing activities for the nine months ended September 30, 2020 consisted primarily of acquisitions of real estate, development projects, building and tenant improvements and capital contributions to unconsolidated joint ventures, partially offset by the proceeds from the sale of real estate and capital distribution from unconsolidated joint ventures, as detailed below:

Nine months ended September 30,

Cash used in investing activities for the three months ended March 31, 2022 consisted primarily of development projects, building and tenant improvements and capital contributions to unconsolidated joint ventures, partially offset by proceeds from the sales of real estate and distributions from unconsolidated joint ventures.

Cash used in investing activities for the three months ended March 31, 2021 consisted primarily of development projects, building and tenant improvements and capital contributions to unconsolidated joint ventures, partially offset by the proceeds from the sale of investment in unconsolidated joint ventures, as detailed below:

Three months ended March 31,

(in thousands)

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Tenant improvements (55,168) (93,201)

Proceeds from sales of real estate (3) — 505,679

Proceeds from the sales of real estate (2) 35,397 —

Capital contributions to unconsolidated joint ventures (3) (26,293) (16,684)

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Proceeds from sale of investment in unconsolidated joint venture (5) — 17,589

Issuance of note receivable, net (7) — (9,800)

Investments in securities, net 5,338 2,114

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Cash used in investing activities changed primarily due to the following:

(1) On August 2, 2021, we acquired Shady Grove Bio+Tech Campus in Rockville, Maryland, for a purchase price, including transaction costs, of approximately $118.5 million in cash.

Shady Grove Bio+Tech Campus is an approximately 435,000 net rentable square foot, seven-building office park situated on an approximately 31-acre site.

On June 2, 2021, we acquired 153 & 211 Second Avenue located in Waltham, Massachusetts for a purchase price of approximately $100.2 million in cash.

153 & 211 Second Avenue consists of two life sciences lab buildings totaling approximately 137,000 net rentable square feet.

On July 31, 2020, we acquired an undivided ownership interest in real property at 759 Harrison Street located in San Francisco, California for a purchase price totaling approximately $2.3 million.

On June 26, 2020, we completed the acquisition of real property at 777 Harrison Street (known as Fourth + Harrison and formerly known as 425 Fourth Street) located in San Francisco, California for a gross purchase price, including entitlements, totaling approximately $140.1 million.

Fourth + Harrison is expected to support the development of approximately 804,000 square feet of primarily commercial office space.

(2) Construction in progress for the nine months ended September 30, 2021 includes ongoing expenditures associated with One Five Nine East 53rd Street , which was completed and fully placed in-service during the nine months ended September 30, 2021.

(1) Construction in progress for the three months ended March 31, 2022 included ongoing expenditures associated with Reston Next , which is partially placed in-service.

In addition, we incurred costs associated with our continued development/redevelopment of 325 Main Street, 2100 Pennsylvania Avenue, 180 CityPoint, View Boston Observatory at The Prudential Center, 880 Winter Street and 103 CityPoint.

Construction in progress for the three months ended March 31, 2021 included ongoing expenditures associated with One Five Nine East 53rd Street , which was completed and fully placed in-service during the three months ended March 31, 2021.

In addition, we incurred costs associated with our continued development/redevelopment of 200 West Street, 325 Main Street, 2100 Pennsylvania Avenue, Reston Next, 180 CityPoint, View Boston Observatory at The Prudential Center and 880 Winter Street.

Construction in progress for the nine months ended September 30, 2020 includes ongoing expenditures associated with 17Fifty Presidents Street, 20 CityPoint and The Skylyne, which were partially or fully placed in-service during the nine months ended September 30, 2020.

In addition, we incurred costs associated with our continued development/redevelopment o f One Five Nine East 53rd Street, Reston Next , 2100 Pennsylvania Avenue, 200 West Street and 325 Main Street.

(3) On June 25, 2020, we completed the sale of a portion of our Capital Gallery property located in Washington, DC for a gross sales price of approximately $253.7 million.

Net cash proceeds totaled approximately $246.6 million, resulting in a gain on sale of real estate totaling approximately $203.6 million for BXP and approximately $207.0 million for BPLP.

Capital Gallery is an approximately 631,000 net rentable square foot Class A office property.

The portion sold is comprised of approximately 455,000 net rentable square feet of commercial office space.

We continue 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.

On February 20, 2020, we completed the sale of New Dominion Technology Park located in Herndon, Virginia for a gross sales price of $256.0 million.

(2) On March 31, 2022, we completed the sale of 195 West Street located in Waltham, Massachusetts for a gross sale price of $37.7 million.

Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP.

New Dominion Technology Park is comprised of two Class A office properties aggregating approximately 493,000 net rentable square feet.

(4) Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2021 consisted primarily of cash contributions of approximately $72.6 million and $11.4 million to our Safeco Plaza and Santa Monica Business Park joint ventures, respectively.

On September 1, 2021, we entered into a new joint venture for Safeco Plaza located in Seattle, Washington (See Note 5 to the Consolidated Financial Statements).

Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2020 consisted primarily of cash contributions of approximately $75.0 million, $39.0 million, $27.2 million and $7.5 million to our Platform 16, 3 Hudson Boulevard, Beach Cities Media Center and Metropolitan Square joint ventures, respectively.

(5) Capital distributions from unconsolidated joint ventures for the nine months ended September 30, 2020 consisted of cash distributions totaling (1) approximately $22.5 million from our Metropolitan Square joint venture resulting from the excess proceeds from the refinancing of the mortgage loan on the property, (2) approximately $17.9 million from our Annapolis Junction joint venture resulting from available cash and the

net proceeds from the sale of Annapolis Junction Building Eight and two land parcels after the pay down of the mortgage loan and (3) approximately $14.0 million from our Colorado Center joint venture resulting from the excess proceeds from the mortgage financing on the property that occurred during 2017, which proceeds were released from lender reserves.

(6) On March 30, 2021, we completed the sale of our 50% ownership interest in Annapolis Junction NFM LLC (the “Annapolis Junction Joint Venture”) to the joint venture partner for a gross sales price of $65.9 million.

195 West Street is an approximately 63,500 net rentable square foot Class A office property.

(3) Capital contributions to unconsolidated joint ventures for the three months ended March 31, 2022 consisted primarily of cash contributions of approximately $14.1 million and $7.9 million to our Gateway Commons and Platform 16 joint ventures, respectively.

Capital contributions to unconsolidated joint ventures for the three months ended March 31, 2021 consisted primarily of cash contributions of approximately $11.4 million to our Santa Monica Business Park joint venture.

(4) Capital distributions from unconsolidated joint ventures for the three months ended March 31, 2022 consisted primarily of a cash distribution totaling approximately $20.1 million from our Metropolitan Square joint venture resulting from the excess proceeds from the refinancing of the mortgage and mezzanine loans on the property.

(5) On March 30, 2021, we completed the sale of our 50% ownership interest in Annapolis Junction NFM LLC to the joint venture partner for a gross sale price of $65.9 million.

Net cash proceeds to us totaled approximately $17.8 million after repayment of our share of debt totaling approximately $15.1 million.

(7) Issuance of notes receivable, net consisted of the $10.0 million of financing provided to an affiliate of our partner in the joint venture that owns and is developing 7750 Wisconsin Avenue located in Bethesda, Maryland.

The financing bears interest at a fixed rate of 8.00% per annum, compounded monthly, and matures on the fifth anniversary of the date on which the base building of the affiliate of our partner’s hotel property is substantially completed .

The loan is collateralized by a pledge of the partner’s equity interest in our joint venture that owns and is developing 7750 Wisconsin Avenue .

Cash used in financing activities for the nine months ended September 30, 2021 totaled approximately $425.9 million.

This amount consisted primarily of (1) the redemption of BPLP’s $850.0 million in aggregate principal amount of its 4.125% senior notes due 2021, (2) the repayment of the Delayed Draw Facility under the 2017 Credit Facility, (3) redemption of the Series B Preferred Stock, (4) payment of our regular dividends and distributions to our shareholders and unitholders and (5) distributions to noncontrolling interest holders in property partnership.

These decreases were partially offset by the proceeds from the issuance by BPLP of (1) $850.0 million in aggregate principal amount of its 2.550% senior unsecured notes due 2032 and (2) $850.0 million in aggregate principal amount of its 2.450% senior unsecured notes due 2033.

Future debt payments are discussed below under the heading “Capitalization—Debt Financing .”

Cash used in financing activities for the three months ended March 31, 2022 totaled approximately $87.0 million.

This amount consisted primarily of the payment of our regular dividends and distributions to our shareholders and unitholders and borrowing under BPLP’s Revolving Facility.

Future debt payments are discussed below under the heading “Debt Financing .”

Capitalization

The following table presents Consolidated Market Capitalization and BXP’s Share of Market Capitalization, as well as the corresponding ratios of Consolidated Debt to Consolidated Market Capitalization and BXP’s Share of Debt to BXP’s Share of Market Capitalization (in thousands except for percentages):

September 30, 2021

March 31, 2022

Shares / Units Outstanding Common Stock Equivalent Equivalent Value (1)

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_______________

(1) Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on September 30, 2021 of $108.35.

(2) Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2018 MYLTIP Units) but excludes MYLTIP Units granted between 2019 and 2021 because the three-year performance period has not ended.

(1) Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on March 31, 2022 of $128.80.

(2) Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2019 MYLTIP Units) but excludes the 2020 - 2022 MYLTIP Units because the three-year performance periods have not ended.

(3) See page 63 for additional information.

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(1) our consolidated debt;

(2) the product of (x) the closing price per share of BXP common stock on September 30, 2021, as reported by the New York Stock Exchange, multiplied by (y) the sum of:

(2) the product of (x) the closing price per share of BXP Common Stock on March 31, 2022, as reported by the New York Stock Exchange, multiplied by (y) the sum of:

(i) the number of outstanding shares of Common Stock of BXP,

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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, 2019 - 2021 MYLTIP Units are not included in this calculation as of September 30, 2021.

Because their three-year performance periods have not yet ended, 2020 - 2022 MYLTIP Units are not included in this calculation as of March 31, 2022.

We also present BXP’s Share of Market Capitalization and BXP’s Share of Debt/BXP’s Share of Market Capitalization, which are calculated in the same manner, except that BXP’s Share of Debt is utilized instead of our consolidated debt in both the numerator and the denominator.

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Investors should understand that these ratios are, in part, a function of the market price of the common stock of BXP and as such will fluctuate with changes in such price, and they do not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations.

value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.

For a discussion of our unconsolidated joint venture indebtedness, see “ Liquidity and Capital Resources—Capitalization—Off-Balance Sheet Arrangements—Joint Venture Indebtedness ” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and for a discussion of our consolidated joint venture indebtedness see “Liquidity and Capital Resources—Capitalization—Mortgage Notes Payable ” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

However, for a company like BXP, 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 our outstanding indebtedness.

For a discussion of our unconsolidated joint venture indebtedness, see “ Liquidity and Capital Resources—Investment in Unconsolidated Joint Ventures - Secured Debt w ithin “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and for a discussion of our consolidated joint venture indebtedness see “Liquidity and Capital Resources—Mortgage Notes Payable ” within “ Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

Debt Financing

As of September 30, 2021, we had approximately $13.4 billion of outstanding consolidated indebtedness, representing approximately 41.55% of our Consolidated Market Capitalization as calculated above consisting of approximately (1) $10.5 billion (net of discount and deferred financing fees) in publicly traded unsecured senior notes having a GAAP weighted-average interest rate of 3.48% per annum and maturities in 2023 through 2033 and (2) $2.9 billion (net of deferred financing fees) of property-specific mortgage debt having a GAAP weighted-average interest rate of 3.89% per annum and a weighted-average term of 4.6 years.

The table below summarizes the aggregate carrying value of our mortgage notes payable and BPLP’s unsecured senior notes, line of credit and term loan, as well as Consolidated Debt Financing Statistics at September 30, 2021 and September 30, 2020.

September 30,

As of March 31, 2022, we had approximately $13.0 billion of outstanding consolidated indebtedness, representing approximately 36.60% of our Consolidated Market Capitalization as calculated above consisting of approximately (1) $9.5 billion (net of discount and deferred financing fees) in publicly traded unsecured senior notes having a GAAP weighted-average interest rate of 3.43% per annum and maturities in 2023 through 2033, (2) $3.3 billion (net of deferred financing fees) of property-specific mortgage debt having a GAAP weighted-average interest rate of 3.42% per annum and a weighted-average term of 6.6 years and (3) $255.0 million outstanding under BPLP’s Revolving Facility that matures on June 15, 2026.

The table below summarizes the aggregate carrying value of our mortgage notes payable and BPLP’s unsecured senior notes and line of credit, as well as Consolidated Debt Financing Statistics at March 31, 2022 and March 31, 2021.

(dollars in thousands)

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Unsecured line of credit 255,000 —

Unsecured term loan, net — 499,270

Consolidated Debt 13,010,124 12,536,264

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BXP’s Share of Debt $ 13,078,509 $ 12,508,876

September 30,

Consolidated Debt Financing Statistics:

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Unsecured Credit Facility

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts outstanding, on the Delayed Draw Facility under the 2017 Credit Facility.

We recognized a loss from early extinguishment of debt totaling approximately $0.5 million, related to unamortized financing costs.

On June 15, 2021, BPLP amended and restated the 2017 Credit Facility and entered into the 2021 Credit Facility.

On June 15, 2021, BPLP amended and restated its prior credit facility (as amended and restated, the “2021 Credit Facility”).

The 2021 Credit Facility provides for borrowings of up to $1.5 billion through the Revolving Facility, subject to customary conditions.

Among other things, the amendment and restatement (1) extended the maturity date to June 15, 2026, (2) eliminated the $500.0 million Delayed Draw Facility provided under the 2017 Credit Facility, (3) reduced the per annum variable interest rates on borrowings and (4) added a sustainability-linked pricing component.

Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by

increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in each case, subject to syndication of the increase and other conditions (See Note 8 to the Consolidated Financial Statements).

The 2021 Credit Facility replaces the 2017 Credit Facility, which consisted of a $1.5 billion unsecured revolving line of credit and a $500.0 million Delayed Draw Facility, and was scheduled to expire on April 24, 2022.

As of September 30, 2021, BPLP had no borrowings under its 2021 Credit Facility and outstanding letters of credit totaling approximately $6.3 million, with the ability to borrow approximately $1.5 billion.

As of November 2, 2021, BPLP had $310.0 million of borrowings under its 2021 Credit Facility and outstanding letters of credit totaling approximately $6.3 million, with the ability to borrow approximately $1.2 billion.

Among other things, the 2021 Credit Facility (1) extended the maturity date from April 24, 2022 to June 15, 2026, (2) eliminated the $500.0 million delayed draw facility (3) reduced the per annum variable interest rates on borrowings and (4) added a sustainability-linked pricing component.

Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in each case, subject to syndication of the increase and other conditions.

Based on BPLP’s March 31, 2022 credit rating, (1) the applicable Eurocurrency and LIBOR

Daily Floating Rate margins are 0.775%, (2) the alternate base rate margin is 0 basis points and (3) the facility fee is 0.15% per annum.

At March 31, 2022, BPLP had $255.0 million of borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.3 million, with the ability to borrow approximately $1.2 billion.

At April 25, 2022, BPLP had $215.0 million of borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.3 million, with the ability to borrow approximately $1.3 billion.

Unsecured Senior Notes

For a description of BPLP’s outstanding unsecured senior notes as of September 30, 2021, see Note 7 to the Consolidated Financial Statements.

On February 14, 2021, BPLP completed the redemption of $850.0 million in aggregate principal amount of its 4.125% senior notes due May 15, 2021.

The redemption price was approximately $858.7 million, which was equal to the stated principal plus approximately $8.7 million of accrued and unpaid interest to, but not including, the redemption date.

Excluding the accrued and unpaid interest, the redemption price was equal to the principal amount being redeemed.

We recognized a loss from early extinguishment of debt totaling approximately $0.4 million, related to unamortized origination costs.

On March 16, 2021, BPLP completed a public offering of $850.0 million in aggregate principal amount of its 2.550% unsecured senior notes due 2032.

The notes were priced at 99.570% of the principal amount to yield an effective rate (including financing fees) of approximately 2.671% per annum to maturity.

The notes will mature on April 1, 2032, unless earlier redeemed.

The aggregate net proceeds from the offering were approximately $839.2 million after deducting underwriting discounts and transaction expenses.

On September 29, 2021, BPLP completed a public offering of $850.0 million in aggregate principal amount of its 2.450% unsecured senior notes due 2033.

The notes were priced at 99.959% of the principal amount to yield an effective rate (including financing fees) of approximately 2.524% per annum to maturity.

The notes will mature on October 1, 2033, unless earlier redeemed.

The aggregate net proceeds from the offering were approximately $842.5 million after deducting underwriting discounts and transaction expenses.

The following summarizes the unsecured senior notes outstanding as of March 31, 2022 (dollars in thousands):

Coupon/Stated Rate Effective Rate(1) Principal Amount Maturity Date(2)

10.5 Year Unsecured Senior Notes 3.125 % 3.279 % $ 500,000 September 1, 2023

10.5 Year Unsecured Senior Notes 3.800 % 3.916 % 700,000 February 1, 2024

7 Year Unsecured Senior Notes 3.200 % 3.350 % 850,000 January 15, 2025

10 Year Unsecured Senior Notes 3.650 % 3.766 % 1,000,000 February 1, 2026

10 Year Unsecured Senior Notes 2.750 % 3.495 % 1,000,000 October 1, 2026

10 Year Unsecured Senior Notes 4.500 % 4.628 % 1,000,000 December 1, 2028

10 Year Unsecured Senior Notes 3.400 % 3.505 % 850,000 June 21, 2029

10.5 Year Unsecured Senior Notes 2.900 % 2.984 % 700,000 March 15, 2030

10.75 Year Unsecured Senior Notes 3.250 % 3.343 % 1,250,000 January 30, 2031

11 Year Unsecured Senior Notes 2.550 % 2.671 % 850,000 April 1, 2032

12 Year Unsecured Senior Notes 2.450 % 2.524 % 850,000 October 1, 2033

Total principal 9,550,000

Net unamortized discount 15,835

Deferred financing costs, net 47,786

Total $ 9,486,379

_______________

(1) Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs.

(2) No principal amounts are due prior to maturity.

The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt.

At September 30, 2021, BPLP was in compliance with each of these financial restrictions and requirements.

At March 31, 2022, BPLP was in compliance with each of these financial restrictions and requirements.

Mortgage Notes Payable

The following represents the outstanding principal balances due under the mortgage notes payable at September 30, 2021:

The following represents the outstanding principal balances due under the mortgage notes payable at March 31, 2022:

Properties Stated Interest Rate GAAP Interest Rate (1) Stated Principal Amount Deferred Financing Costs, Net Carrying Amount Carrying Amount (Partners ’ Share)

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3.43 % 3.64 % $ 2,300,000 $ (18,110) $ 2,281,890 $ 912,820 (2)(3)(4) June 9, 2027

601 Lexington Avenue 4.75 % 4.79 % 618,725 (169) 618,556 278,351 (5) April 10, 2022

601 Lexington Avenue 2.79 % 2.93 % 1,000,000 (13,145) 986,855 444,085 (2)(5) January 9, 2032

Total $ 3,300,000 $ (31,255) $ 3,268,745 $ 1,356,905

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(4) In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits.

As of September 30, 2021, the maximum funding obligation under the guarantee was approximately $20.3 million.

As of March 31, 2022, the maximum funding obligation under the guarantee was approximately $17.7 million.

We earn a fee from the joint venture for providing the guarantee and have an agreement with our partners to reimburse the joint venture for their share of any payments made under the guarantee (See Note 6 to the Consolidated Financial Statements).

(5) This property is owned by a consolidated entity in which we have a 55% interest.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

Investment in Unconsolidated Joint Ventures - Secured Debt

We have investments in unconsolidated joint ventures with our effective ownership interests ranging from 20% to 55%.

Fourteen of these ventures have mortgage indebtedness.

Fifteen of these ventures have mortgage indebtedness.

We exercise significant influence over, but do not control, these entities.

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See also Note 5 to the Consolidated Financial Statements.

At September 30, 2021, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $3.0 billion (of which our proportionate share is approximately $1.3 billion).

The table below summarizes the outstanding debt of these joint venture properties at September 30, 2021.

At March 31, 2022, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $3.4 billion (of which our proportionate share is approximately $1.4 billion).

The table below summarizes the outstanding debt of these joint venture properties at March 31, 2022.

In addition to other guarantees specifically noted in the table, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) as well as the completion of development projects on certain of the loans.

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(dollars in thousands)

Santa Monica Business Park

55.00 % 4.06 % 4.24 % $ 300,000 $ (2,003) $ 297,997 $ 163,899 (2)(3) July 19, 2025

Market Square North

50.00 % 2.80 % 2.96 % 125,000 (848) 124,152 62,076 (2)(4) November 10, 2025

1265 Main Street

50.00 % 3.77 % 3.84 % 36,694 (285) 36,409 18,204 January 1, 2032

Colorado Center

50.00 % 3.56 % 3.58 % 550,000 (602) 549,398 274,699 (2) August 9, 2027

50.00 % 3.10 % 3.32 % 196,412 (1,178) 195,234 97,617 (2)(5) December 18, 2023

The Hub on Causeway - Podium

50.00 % 2.34 % 2.50 % 174,329 (561) 173,768 86,884 (2)(6) September 6, 2023

50.00 % 2.08 % 2.37 % 176,468 (297) 176,171 88,085 (2)(7) April 19, 2022

100 Causeway Street

50.00 % 1.59 % 1.81 % 297,206 (1,624) 295,582 147,791 (2)(8) September 5, 2023

7750 Wisconsin Avenue (Marriott International Headquarters)

50.00 % 1.34 % 1.88 % 208,071 (2,204) 205,867 102,933 (2)(9) April 26, 2023

Santa Monica Business Park 55.00 % 4.06 % 4.24 % $ 300,000 $ (1,741) $ 298,259 $ 164,042 (2)(3) July 19, 2025

Market Square North 50.00 % 2.80 % 2.96 % 125,000 (745) 124,255 62,128 (2)(4) November 10, 2025

1265 Main Street 50.00 % 3.77 % 3.84 % 36,257 (271) 35,986 17,993 January 1, 2032

Colorado Center 50.00 % 3.56 % 3.58 % 550,000 (550) 549,450 274,725 (2) August 9, 2027

Dock 72 50.00 % 3.17 % 3.39 % 198,383 (954) 197,429 98,715 (2)(5) December 18, 2023

The Hub on Causeway - Podium 50.00 % 2.49 % 2.65 % 174,329 (415) 173,914 86,957 (2)(6) September 6, 2023

Hub50House 50.00 % 2.22 % 2.51 % 176,468 (42) 176,426 88,213 (2)(7) April 19, 2022

100 Causeway Street 50.00 % 1.65 % 1.86 % 331,937 (1,200) 330,737 165,369 (2)(8) September 5, 2023

7750 Wisconsin Avenue (Marriott International Headquarters) 50.00 % 1.38 % 1.93 % 223,574 (1,508) 222,066 111,033 (2)(9) April 26, 2023

360 Park Avenue South 42.21 % 2.64 % 3.09 % 202,960 (2,708) 200,252 84,526 (2)(10) December 14, 2024

Safeco Plaza 33.67 % 2.38 % 2.51 % 250,000 (1,502) 248,498 83,669 (2)(11) September 1, 2026

500 North Capitol Street, NW

30.00 % 4.15 % 4.20 % 105,000 (99) 104,901 31,470 (2) June 6, 2023

901 New York Avenue

25.00 % 3.61 % 3.69 % 217,851 (581) 217,270 54,318 January 5, 2025

3 Hudson Boulevard

25.00 % 3.59 % 3.67 % 80,000 (112) 79,888 19,972 (2)(11) July 13, 2023

Metropolitan Square

20.00 % 5.40 % 6.90 % 294,073 (3,751) 290,322 58,064 (2)(12) July 7, 2022

500 North Capitol Street, NW 30.00 % 4.15 % 4.20 % 105,000 (69) 104,931 31,479 (2) June 6, 2023

901 New York Avenue 25.00 % 3.61 % 3.69 % 215,621 (492) 215,129 53,782 January 5, 2025

3 Hudson Boulevard 25.00 % 3.68 % 3.76 % 80,000 (80) 79,920 19,980 (2)(12) July 13, 2023

Metropolitan Square 20.00 % 3.06 % 3.84 % 420,000 (6,603) 413,397 82,679 (2)(13) April 9, 2024

Total $ 3,389,529 $ (18,880) $ 3,370,649 $ 1,425,290

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The construction financing bears interest at a variable rate equal to LIBOR plus 2.00% per annum and matures on April 19, 2022, with two, one-year extension options, subject to certain conditions.

The maturity date for the loan has been extended to June 19, 2022 (See Note 12 to the Consolidated Financial Statements).

(8) The construction financing has a borrowing capacity of $400.0 million.

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The construction financing bears interest at a variable rate equal to LIBOR plus 1.25% per annum and matures on April 26, 2023, with two, one-year extension options, subject to certain conditions.

(10) The loan bears interest at a variable rate equal to Adjusted Term SOFR plus 2.40% per annum and matures on December 14, 2024, with two, one-year extension options, subject to certain conditions.

The spread on the variable rate may be reduced, subject to certain conditions.

(11) The loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum and matures on September 1, 2026.

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The loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets.

As of September 30, 2021, the loan has approximately $13.1 million of accrued interest due at the maturity date.

(12) The loan bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.65%, plus (2) 4.75% per annum and matures on July 7, 2022 with two, one-year extension options, subject to certain conditions.

The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the LIBOR rate at a cap of 3.00% per annum on a notional amount of $325.0 million through July 7, 2022.

As of March 31, 2022, the loan has approximately $14.8 million of accrued interest due at the maturity date.

(13) The indebtedness consists of (x) a $305.0 million mortgage loan payable which bears interest at a variable rate equal to SOFR plus approximately 1.81% and matures on April 9, 2024 with three, one-year extension options, subject to certain conditions, and (y) a $115.0 million mezzanine note payable which bears interest at a variable rate equal to SOFR plus 5.25% and matures on April 9, 2024 with three, one-year extension options, subject to certain conditions.

State and Local Tax Matters

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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,” for each of BXP and BPLP by adjusting net income (loss) attributable to Boston Properties, Inc.

common shareholders and net income (loss) attributable to Boston Properties Limited Partnership common unitholders (computed in accordance with GAAP), respectively, 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 our share of real estate-related depreciation and amortization.

driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and our share of real estate-related depreciation and amortization.

FFO is a non-GAAP financial measure.

We believe the presentation of FFO, combined with the presentation of required GAAP financial measures, improves the understanding of operating results of REITs among the investing public and helps make comparisons

of REIT operating results more meaningful.

Management generally considers FFO 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 can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

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common shareholders or net income attributable to Boston Properties Limited Partnership common unitholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.

The impact that COVID-19 has had on our business, financial position and results of operations is discussed throughout this report.

The full extent of the impact of COVID-19 on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict.

Boston Properties, Inc.

The following table presents a reconciliation of net income attributable to Boston Properties, Inc.

common shareholders to FFO attributable to Boston Properties, Inc.

common shareholders for the three months ended September 30, 2021 and 2020:

Three months ended September 30,

common shareholders for the three months ended March 31, 2022 and 2021:

Three months ended March 31,

(in thousands)

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$ 143,047 $ 91,624

Preferred stock redemption charge — 6,412

Preferred dividends — 2,560

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Corporate-related depreciation and amortization

Gains (losses) on sales of real estate 348 (209)

Gain on sale of investment included within income from unconsolidated joint ventures — 10,257

Gains on sales of real estate 22,701 —

Noncontrolling interests in property partnerships

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Preferred dividends — 2,560

Preferred stock redemption charge — 6,412

Funds from Operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)

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Reconciliation to Diluted Funds from Operations:

Three months ended September 30,

Three months ended March 31,

(Numerator) Shares/Units

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_______________

(1) BXP’s share of diluted Funds from Operations was 90.20% and 90.14% for the three months ended September 30, 2021 and 2020, respectively.

Boston Properties Limited Partnership

The following table presents a reconciliation of net income attributable to Boston Properties Limited Partnership common unitholders to FFO attributable to Boston Properties Limited Partnership common unitholders for the three months ended September 30, 2021 and 2020:

Three months ended September 30,

(1) BXP’s share of diluted Funds from Operations was 89.91% and 90.13% for the three months ended March 31, 2022 and 2021, respectively.

Three months ended March 31,

(in thousands)

Net income attributable to Boston Properties Limited Partnership common unitholders $ 161,829 $ 105,773

Preferred unit redemption charge — 6,412

Preferred distributions — 2,560

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Corporate-related depreciation and amortization (404) (440)

Gains (losses) on sales of real estate 348 (209)

Gain on sale of investment included within income from unconsolidated joint ventures — 10,257

Gains on sales of real estate 23,384 —

Noncontrolling interests in property partnerships 17,549 16,467

Preferred distributions — 2,560

Preferred unit redemption charge — 6,412

Funds from Operations attributable to Boston Properties Limited Partnership common unitholders (1) $ 318,318 $ 270,531

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Reconciliation to Diluted Funds from Operations:

Three months ended September 30,

(in thousands)

Three months ended March 31,

(Numerator) Shares/Units

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(Denominator)

(in thousands)

Basic Funds from Operations $ 318,318 174,276 $ 270,531 173,018

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Diluted Funds from Operations $ 318,318 174,630 $ 270,531 173,189

Contractual Obligations

Material Cash Commitments

The acquisition is expected to close in the second quarter of this year and will be initially funded with a one-year, $730.0 million unsecured term loan.

We anticipate ultimately funding the acquisition through incremental asset sales, which we anticipate would be structured as like-kind exchanges, or joint venture equity.

We have various service contracts with vendors related to our property management.

2 unchanged sentences

Contract terms are generally between three and five years.

During the three months ended September 30, 2021, we paid approximately $67.8 million to fund tenant-related obligations, including tenant improvements and leasing commissions.

In addition, during the three months ended September 30, 2021, we and our unconsolidated joint venture partners incurred approximately $102.9 million of new tenant-related obligations associated with approximately 1.4 million square feet of second generation leases, or approximately $73 per square foot.

We did not sign any first generation leases during the three months ended September 30, 2021.

During the three months ended March 31, 2022, we paid approximately $70.1 million to fund tenant-related obligations, including tenant improvements and leasing commissions.

In addition, during the three months ended March 31, 2022, we and our unconsolidated joint venture partners incurred approximately $90.8 million of new tenant-related obligations associated with approximately 1.2 million square feet of second generation leases, or approximately $79 per square foot.

We signed approximately 21,000 square feet of first generation leases.

The tenant-related obligations for the development properties are included within the projects’ “Estimated Total Investment” referred to in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” In aggregate during the first quarter of 2022, we signed leases for approximately 1.2 million square feet of space and incurred aggregate tenant-related obligations of approximately $94.9 million, or approximately $80 per square foot.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis