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Item 2. Management’s Discussion and Analysis

2022-08-05 compared with 2022-05-02 · 764 added, 340 removed, 675 unchanged (62% of the section changed)

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We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions, in each case, to the extent applicable.

Such statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution investors that any such forward-looking statements are based on current beliefs or expectations of future events and on assumptions made by, and information currently available to, our management.

The forward-looking statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution investors that forward-looking statements are based on current beliefs, expectations of future events and assumptions made by, and information currently available to, our management.

When used, the words “anticipate,” “believe,” “budget,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “will” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements.

Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control.

These statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control.

Should one or more of these known or unknown risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied by the forward-looking statements.

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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.

economic conditions due to the ongoing COVID-19 pandemic, the ongoing war in Ukraine, continuing inflation, increasing interest rates, and 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 Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 including those described under the caption “Risk Factors,” (iii) our subsequent filings under the Exchange Act and (iv) 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;

• 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 client 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);

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

• failure to manage effectively our growth and expansion into new markets and sub-markets or to integrate acquisitions and developments successfully;

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

• 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 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, client accounting considerations that may result in negotiated lease provisions that limit a client ’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;

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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 March 31, 2022) 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 June 30, 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.

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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.

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 clients.

Our core strategy has always been to develop, acquire and manage the highest 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 clients.

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

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.

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 June 30, 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 June 30, 2022.

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

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

• our reputation as a premier developer, owner and manager of primarily Class A office properties;

• our reputation as a premier developer, owner and manager of the highest quality Class A office properties in our markets;

• our financial strength and our ability to maintain high building standards;

• our relationships with local brokers.

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:

Over the last quarter, the economic conditions in the U.S.

and globally have deteriorated, primarily due to rising inflation.

As inflation continued to reach new highs, it set off a chain reaction of events, beginning with the Federal Reserve taking and signaling severe tightening measures, interest rates rising across the yield curve, volatility and losses in the public equity and debt markets, and now increasing concerns that the U.S.

economy may experience a recession.

This evolving operating environment impacts BXP’s operating activities as:

• business leaders may generally become more reticent to make large capital allocation decisions, such as entry into a new lease, given the uncertain economic environment;

• our capital costs have increased due to higher interest rates and credit spreads, and private market debt financing, both for construction and existing assets, is significantly more challenging to arrange;

• construction costs have increased for new development and, although the costs for our active development pipeline are, at this stage, relatively fixed, the cost of potential future developments continues to increase.

Despite the challenging economic environment, we have continued to sign new leases above our historical volumes and our occupancy has increased by 90 basis points since June 30, 2021.

Additionally, there is increasing evidence that many businesses have or will tighten up in-person work policies as economic conditions worsen.

Many of these companies increased their workforce during the pandemic without increasing their available space.

We expect these factors to help offset, at least partially, the recessionary headwinds to space demand.

In light of the foregoing, we are positioning BXP for relative success, regardless of the economic trajectory, by managing our leverage while continuing to selectively invest (including both acquisitions and developments) in premium Class A office and lab opportunities.

We remain focused on the following priorities:

• ensuring client health, safety and satisfaction;

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

• managing our near-term debt maturities and maintaining our conservative balance sheet;

• managing our near-term debt maturities and overall leverage;

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

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

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

Leasing Activity and Occupancy

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.

In the second quarter of 2022, we signed approximately 1.9 million square feet of new leases and renewals, our strongest leasing quarter since the third quarter of 2019 and approximately 140% of our historical 10-year average for the second quarter.

These leases have a weighted-average lease term of approximately 10.9 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 89.5% at June 30, 2022, an increase of 40 basis points from March 31, 2022 and our third consecutive quarter of occupancy growth.

We expect a slight decline in occupancy over the next few quarters as we wait for recently signed leases covering approximately 975,000 square feet of currently vacant space to commence.

Only 4.7% of the square footage in our in-service portfolio expires in 2023 and, based on our current leasing activity, we expect occupancy to increase slightly in 2023 from this quarter’s level.

Our parking and other revenue continue to grow as activity levels increase at our properties and in the cities where they are located.

Our parking revenue in the second quarter of 2022 exceeded 90% of its pre-pandemic run rate.

Similarly, our hotel property, the Boston Marriott Cambridge, experienced a better-than-projected increase in revenue and revenue returned back to the pre-pandemic level we saw in the second quarter of 2019.

Investment Activity

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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.

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.

Consistent with this strategy, on May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington, for a gross purchase price of $730.0 million.

Madison Centre is an approximately 755,000 square foot, 37-story, LEED-Platinum certified, Class A office property.

Madison Centre was constructed in 2017, is approximately 93% leased as of June 30, 2022, and is considered one of the highest quality buildings in Seattle.

The acquisition was completed with a $730.0 million unsecured term loan that matures on May 16, 2023.

As of June 30, 2022, the term loan bears interest at a variable rate equal to term SOFR plus 0.95% per annum.

In June 2022, we completed and fully placed in-service 325 Main Street, a Class A office building with approximately 414,000 square feet of office and retail space located in Cambridge, Massachusetts.

The office component, comprising approximately 380,000 square feet, is 100% leased.

As of June 30, 2022, our development/redevelopment pipeline consists of 12 properties that, when completed, we expect will total approximately 4.2 million net rentable square feet.

Our share of the estimated total cost for these projects is approximately $2.6 billion, of which approximately $1.1 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 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.

The total development pipeline, inclusive of both office and lab/life sciences developments, but excluding the View Boston Observatory at the Prudential Center and Reston Next Residential, is 49% pre-leased as of August 2, 2022.

The office development projects, which total approximately 2.5 million square feet, are approximately 49% pre-leased, as of August 2, 2022, to predominately credit-strong clients with long-lease terms.

We have approximately $1.4 billion (our share) of developments delivering through the second quarter of 2023 that are approximately 81% pre-leased, excluding the View Boston Observatory at the Prudential Center and as of August 2, 2022, and are expected to contribute to our revenue growth in 2023.

As we continue to focus on new investments to drive future growth, we regularly 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.

In June 2022, we completed the sale of Virginia 95 Office Park, a portfolio of 11 suburban office properties aggregating approximately 733,000 net rentable square feet, located in Springfield, Virginia, for an aggregate gross sale price of $127.5 million.

Net cash proceeds totaled approximately $121.9 million and BXP recognized a gain on sale of real estate totaling approximately $96.2 million.

Total dispositions for 2022 could exceed $850 million, allowing BXP to both raise incremental liquidity and reallocate capital on a tax efficient basis from the Washington, DC market to the Seattle market.

There is no assurance that we will be able to dispose of these assets on the terms or timeline currently contemplated or at all.

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 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.

During the second quarter of 2022, we signed approximately 1.3 million square feet of leases and approximately 1.6 million square feet of leases commenced.

Approximately 1.1 million 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 24% over the prior leases.

Our Boston CBD in-service portfolio was approximately 94% leased as of June 30, 2022.

Our approximately 2.4 million square foot in-service office portfolio in Cambridge, including our newly placed in-service 325 Main Street property, was approximately 98% leased as of June 30, 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.

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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 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.

Our Route 128-Mass Turnpike portfolio is comprised of approximately 4.8 million square feet and was approximately 84% leased as of June 30, 2022.

We currently have three life sciences developments and redevelopments under way in Waltham that average 51% pre-leased as of August 2, 2022, and that are expected to stabilize by the end of 2024.

Among these projects is 880 Winter Street, which is 97% pre-leased as of August 2, 2022, and we expect to deliver this project in the fourth quarter of 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, an approximately 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 June 30, 2022, our LA in-service properties were approximately 93% leased.

During the second quarter of 2022, we executed approximately 294,000 square feet of leases in the New York region and approximately 166,000 square feet of leases commenced.

Approximately 130,000 square feet of the leases that commenced in the second quarter had been vacant for less than one year and they represent a decrease in net rental obligations of approximately 17% over the prior leases.

The most significant transaction completed in the second quarter of 2022 was an approximately 125,000 square foot lease at 767 Fifth Avenue (The General Motors Building) in New York City, New York.

As of June 30, 2022, our New York CBD in-service portfolio was approximately 90% leased.

San Francisco

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.

During the second quarter of 2022, we executed approximately 175,000 square feet of leases and approximately 136,000 square feet of leases commenced in the San Francisco region.

Approximately 119,000 square feet of leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 21% over the prior leases.

Our San Francisco CBD in-service properties were approximately 90% leased as of June 30, 2022.

Our Seattle in-service portfolio includes Safeco Plaza, an approximately 780,000 square foot property of which we own 33.67%, and the newly acquired Madison Centre, an approximately 755,000 square foot property.

As of June 30, 2022, our Seattle in-service properties were approximately 89% leased.

The most significant leasing transaction in the second quarter of 2022 was an approximately 60,000 square foot lease for the top three vacant floors at Safeco Plaza.

When we acquired the asset in 2021, our plan included a major repositioning of the public and amenity spaces at the 4th and 3rd Avenue street planes.

We believe our repositioning plans for the building,

combined with our proven track record of creating great spaces and places, allowed us to market to, and enter into a lease with, an important West Coast client for space at Safeco Plaza.

Washington, DC

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.

During the second quarter of 2022, we executed approximately 81,000 square feet of leases and approximately 296,000 square feet of leases commenced in the Washington, DC region.

Approximately 159,000 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 16% over the prior leases.

Our Washington, DC CBD in-service properties were approximately 85% leased as of June 30, 2022.

On April 29, 2022, we partially placed in-service 2100 Pennsylvania Avenue, a Class A office project with approximately 480,000 net rentable square feet located in Washington, DC.

The project is 61% pre-leased as of August 2, 2022, and we are negotiating leases for an additional 95,000 square feet, which, if signed, will increase our percentage pre-leased to greater than 80%.

A significant component of our Washington DC regional portfolio is in Reston Town Center, an award winning mixed-use development in Northern Virginia.

Reston is a hub for technology, cloud services, cybersecurity and defense intelligence companies.

Our Reston, Virginia properties were approximately 95% leased as of June 30, 2022.

Leasing Statistics

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

The table below details the leasing activity, including 100% of the unconsolidated joint ventures, that commenced during the three and six months ended June 30, 2022:

Three months ended June 30, 2022 Six months ended June 30, 2022

(Square Feet)

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Property dispositions/properties taken out of service (1) (185,298) (280,478)

Vacant space in properties acquired (2) 77,581 77,581

Properties placed (and partially placed) in-service (3) 420,553 831,243

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1 st generation leases

2 nd generation leases with new tenants

423,150 975,880

2 nd generation leases with new clients

887,859 1,575,515

2 nd generation lease renewals

1,044,390 1,413,808

Total space leased (4) 2,355,399 3,965,203

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Leases commencing during the period, in square feet 1,932,249 2,989,323

Weighted Average Lease Term 71 Months

Weighted Average Free Rent Period 135 Days

Weighted Average Lease Term 111 Months 97 Months

Weighted Average Free Rent Period 92 Days 107 Days

Total Transaction Costs Per Square Foot (7) $71.73 $65.81

Increase (Decrease) in Gross Rents (7) (2.36) %

Increase (Decrease) in Net Rents (8) (4.34) %

Increase in Gross Rents (8) 9.62 % 5.51 %

Increase in Net Rents (9) 14.73 % 8.27 %

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(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.

(1) Total vacant square feet of properties taken out of service during the three months ended June 30, 2022 consists of 185,298 square feet at Virginia 95 Office Park.

Total vacant square feet of properties taken out of service and property dispositions during the six months ended June 30, 2022 consists of 95,180 square feet at 651 Gateway and 185,298 square feet at Virginia 95 Office Park.

(2) Total vacant square feet of properties acquired during the three and six months ended June 30, 2022 consists of 77,581 square feet at Madison Centre.

(3) Total vacant square feet of properties placed (and partially placed) in-service during the three months ended June 30, 2022 consists of 6,545 square feet at 2100 Pennsylvania Avenue and 414,008 square feet at 325 Main Street.

Total square feet of properties placed (and partially placed) in-service during the six months ended June 30, 2022 consists of 410,690 square feet at Reston Next, 6,545 square feet at 2100 Pennsylvania Avenue and 414,008 square feet at 325 Main Street.

(4) Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three and six months ended June 30, 2022 .

(5) Represents leases executed during the three and six months ended June 30, 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 and six months ended June 30, 2022 is 243,004 and 564,921, respectively.

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

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.

Of the 1,932,249 and 2,989,323 square feet of second generation leases that commenced during the three and six months ended June 30, 2022, respectively, leases for 1,689,245 and 2,424,402 square feet, respectively, were signed in prior periods.

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

(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.

(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.

(8) Represents the increase in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 1,565,183 and 2,299,208 square feet of second generation leases that had been occupied within the prior 12 months for the three and six months ended June 30, 2022, respectively;

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

(9) Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the 1,565,183 and 2,299,208 square feet of second generation leases that had been occupied within the prior 12 months for the three and six months ended June 30, 2022, respectively.

Transactions during the three months ended June 30, 2022 included the following:

Acquisition activity

• On May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington for a net purchase price, including transaction costs, of approximately $724.3 million.

The acquisition was completed using the proceeds from BPLP’s $730.0 million unsecured term loan (See Note 6 to the Consolidated Financial Statements).

Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, Class A office property.

Disposition activities

• On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million.

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

Net cash proceeds totaled approximately $6.6 million and is reflected as Other income - assignment fee in the Company's Consolidated Statements of Operations.

11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.

The property was 100% leased.

• On June 15, 2022, we completed the sale of our suburban Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million.

Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP.

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

Unconsolidated joint venture activities

• 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.

Virginia 95 Office Park consists of eleven Class A office/flex properties aggregating approximately 733,000 net rentable square feet.

Development activities

• On April 27, 2022, we entered into a 15-year lease agreement with AstraZeneca for approximately 570,000 net rentable 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.

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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.

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.

• On April 29, 2022, we partially placed in-service 2100 Pennsylvania Avenue, a Class A office project with approximately 480,000 net rentable square feet located in Washington, DC.

• On May 13, 2022, we commenced the development of Reston Next Office Phase II, a Class A office project located in Reston, Virginia.

When completed, the building will consist of approximately 90,000 net rentable square feet.

• On June 29, 2022, we completed and fully placed in-service 325 Main Street, a Class A office project with approximately 414,000 net rentable square feet located in Cambridge, Massachusetts.

Unconsolidated joint venture activities

• On April 18, 2022, a joint venture in which we have a 50% ownership interest extended the maturity date of the construction loan collateralized by its Hub50House property to June 19, 2022.

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

On June 17, 2022, the joint venture repaid the existing construction loan and obtained a new mortgage loan.

The new mortgage loan has a principal balance of $185.0 million, bears interest at a variable rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 1.35% per annum and matures on June 17, 2032.

At closing, the joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts.

In conjunction with the new mortgage loan, the joint venture paid off the existing construction loan.

At the time of the payoff of the construction loan, the outstanding balance of the loan totaled approximately $176.7 million.

The joint venture distributed excess loan proceeds from the new mortgage loan totaling approximately $6.8 million, of which our share totaled approximately $3.4 million.

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

• On May 13, 2022, we entered into a joint venture with a third party to own, operate and develop Reston Next Residential located in Reston, Virginia.

Reston Next Residential is expected to consist of 508 residential rental units upon completion.

We contributed approximately $11.3 million of improvements at closing and will contribute cash totaling approximately $3.5 million in the future for our 20% ownership interest in the joint venture.

The partner contributed approximately $0.5 million of cash at closing and will contribute cash totaling approximately $58.7 million in the future for its 80% ownership interest in the joint venture.

As a result of the partner’s deferred contribution, as of the acquisition date we owned an approximately 96% interest in the joint venture.

On May 13, 2022, the joint venture commenced development and entered into a construction loan collateralized by the property.

The construction loan has a principal amount of up to $140.0 million, bears interest at a variable rate equal to SOFR plus 2.00% per annum and matures on May 13, 2026, with two, one-year extension options, subject to certain conditions.

As of June 30, 2022, no amounts had been drawn under the loan.

• On June 16, 2022, we entered into a joint venture with a third party to own, operate and develop 751 Gateway, a laboratory building located in South San Francisco, California, that is expected to be approximately 231,000 net rentable square feet upon completion.

751 Gateway was previously part of our Gateway Commons joint venture.

We contributed assets with an agreed upon value aggregating approximately $53.9 million and cash totaling approximately $2.6 million for our 49% ownership interest in the joint venture.

The partner contributed assets with an agreed upon value aggregating approximately $53.9 million and cash totaling approximately $4.9 million for its 51% ownership interest in the joint venture.

Debt activity

• On May 17, 2022, BPLP entered into an unsecured credit agreement (the “Unsecured Term Loan”) providing for a single borrowing of up to $730.0 million.

The Unsecured Term Loan matures on May 16, 2023.

On May 17, 2022, BPLP exercised its option to draw $730.0 million under the Unsecured Term Loan (See Note 3 to the Consolidated Financial Statements).

As of June 30, 2022, the Unsecured Term Loan bears interest at a variable rate equal to term SOFR plus 0.95% per annum based on BPLP’s credit rating at June 30, 2022.

At June 30, 2022, BPLP had $730.0 million outstanding under the Unsecured Term Loan.

Critical Accounting Estimates

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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

Results of Operations for the Six Months Ended June 30, 2022 and 2021

Net income attributable to Boston Properties, Inc.

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.

common shareho lders and net income attributable to Boston Properties Limited Partnership common unitholders increased approximately $162.7 million and $184.0 million for the six months ended June 30, 2022 compared to 2021, respectively, as set forth in the following tables and for the reasons discussed below under the heading “ Comparison of the six months ended June 30, 2022 to the six months ended June 30, 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 three months ended March 31, 2022 and 2021.

Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the six months ended June 30, 2022 and 2021.

For a detailed discussion of Net Operating Income (“NOI”), including the reasons management believes NOI is useful to investors, see page 55 .

Three months ended March 31,

Six months ended June 30,

2022 2021 Increase/

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Interest expense

205,370 214,221 (8,851) (4.13) %

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

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Gains (losses) from investments in securities (6,978) 3,934 (10,912) (277.38) %

Other income - assignment fee 6,624 — 6,624 100.00 %

Interest and other income (loss) 2,423 2,620 (197) (7.52) %

1,228 1,168 60 5.14 %

Gains on sales of real estate

118,948 7,756 111,192 1,433.63 %

Income from unconsolidated joint ventures 2,135 3,852 (1,717) (44.57) %

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Net Operating Income $ 953,358 $ 897,116 $ 56,242 6.27 %

Three months ended March 31,

Six months ended June 30,

2022 2021 Increase/

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Gains (losses) from investments in securities (6,978) 3,934 (10,912) (277.38) %

Other income - assignment fee 6,624 — 6,624 100.00 %

Interest and other income (loss) 2,423 2,620 (197) (7.52) %

1,228 1,168 60 5.14 %

Gains on sales of real estate

122,992 7,756 115,236 1,485.77 %

Income from unconsolidated joint ventures 2,135 3,852 (1,717) (44.57) %

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Net Operating Income $ 953,358 $ 897,116 $ 56,242 6.27 %

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”).

At June 30, 2022 and 2021, we owned or had joint venture interests in a portfolio of 193 and 197 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 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.

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 six months ended June 30, 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 more 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.

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.

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, 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, other income - assignment fee, 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.

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NOI presented by us may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.

We believe that, in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income attributable to Boston Properties, Inc.

We believe that in order to understand our operating results, NOI should be examined in conjunction with net income attributable to Boston Properties, Inc.

common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders as presented in our Consolidated Financial Statements.

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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 gains on sales of real estate, depreciation expense and impairment losses 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.

The gains on sales of real estate and 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 gains on sales of real estate, depreciation expense and impairment losses, when those properties are sold.

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 gains on sales of real estate and depreciation expense when those properties are sold.

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

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

Comparison of the six months ended June 30, 2022 to the six months ended June 30, 2021

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

The Same Property Portfolio consists of 129 properties totaling approximately 38.9 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, 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

The Same Property Portfolio includes properties acquired or placed in-service on or prior to January 1, 2021 and owned and in service through June 30, 2022.

This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the six months ended June 30, 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/

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Residential Net Operating Income (2) 13,628 6,883 6,745 98.00 % — — — — — — — — 13,628 6,883 6,745 98.00 %

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

Hotel Net Operating Income (Loss) (2) 5,362 (1,854) 7,216 389.21 % — — — — — — — — 5,362 (1,854) 7,216 389.21 %

Net Operating Income $ 916,693 $ 876,150 $ 40,543 4.63 % $ 10,033 $ 685 $ 22,722 $ 7,096 $ — $ 2,322 $ 3,910 $ 10,863 $ 953,358 $ 897,116 $ 56,242 6.27 %

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(2) For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 55.

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.

Residential Net Operating Income for the six months ended June 30, 2022 and 2021 is comprised of Residential Revenue of $29,878 and $18,938 less Residential Expenses of $16,250 and $12,055, respectively.

Hotel Net Operating Income (Loss) for the six months ended June 30, 2022 and 2021 is comprised of Hotel Revenue of $16,646 and $2,193 less Hotel Expenses of $11,284 and $4,047, 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 $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%.

Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $48.1 million for the six months ended June 30, 2022 compared to 2021.

The increase was a result of our average revenue per square foot increasing by approximately $2.96, contributing approximately $50.6 million, partially offset by average occupancy decreasing from 91.5% to 91.4%, resulting in a decrease of approximately $2.5 million.

Termination Income

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.

Termination income decreased by approximately $5.8 million for the six months ended June 30, 2022 compared to 2021.

Termination income for the six months ended June 30, 2022 related to 15 clients across the Same Property Portfolio and totaled approximately $3.3 million, which was primarily related to clients that terminated leases early in New York City.

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.

Termination income for the six months ended June 30, 2021 related to 19 clients across the Same Property Portfolio and totaled approximately $9.6 million, which was primarily related to clients that terminated leases early in New York City and the Boston region.

Parking and Other Revenue

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

Parking and other revenue increased by approximately $13.1 million for the six months ended June 30, 2022 compared to 2021.

Parking revenue increased by approximately $13.4 million and was partially offset by a decrease in other revenue of approximately $0.3 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 $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.

Real estate operating expenses from the Same Property Portfolio increased by approximately $28.9 million, or 6.0%, for the six months ended June 30, 2022 compared to 2021, due primarily to an increase in operating expenses, including cleaning, utilities, repairs and maintenance, and roads/grounds/security.

The increase in operating expenses was driven by an increase in physical occupancy.

Properties Acquired Portfolio

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.

The table below lists the properties acquired between January 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses increased by approximately $12.3 million and $3.0 million, respectively, for the six months ended June 30, 2022 compared to 2021, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

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Shady Grove Innovation District August 2, 2021 232,278 1,502 — 1,502 800 — 800

Madison Centre (1) May 17, 2022 754,988 6,472 — 6,472 1,680 — 1,680

1,124,148 $ 13,082 $ 756 $ 12,326 $ 3,049 $ 71 $ 2,978

______________

(1) Rental revenue for the six months ended June 30, 2022 includes approximately $0.1 million of termination income.

Properties Placed In-Service Portfolio

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.

The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $21.9 million and $6.3 million, respectively, for the six months ended June 30, 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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Reston Next Fourth Quarter, 2021 N/A 1,062,000 14,978 — 14,978 5,031 — 5,031

325 Main Street (3) Second Quarter, 2022 Second Quarter, 2022 414,000 213 — 213 10 109 (99)

2100 Pennsylvania Avenue Second Quarter, 2022 N/A 480,000 9 — 9 17 — 17

2,449,365 $ 31,772 $ 9,839 $ 21,933 $ 9,050 $ 2,743 $ 6,307

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

(3) Real estate operating expenses for the six months ended June 30, 2021 were related to demolition costs.

Properties in Development or Redevelopment Portfolio

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.

The table below lists the properties that were in development or redevelopment between January 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $4.2 million and $1.9 million, respectively, for the six months ended June 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

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(dollars in thousands)

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

880 Winter Street (1) February 25, 2021 224,000 $ — $ 2,476 $ (2,476) $ — $ 1,448 $ (1,448)

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_______________

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

(1) 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.

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Properties Sold Portfolio

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.

The table below lists the properties we sold between January 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $9.4 million and $2.5 million, respectively, for the six months ended June 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

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195 West Street March 31, 2022 Office 63,500 749 124 625 242 277 (35)

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 5,190 7,689 (2,499) 1,787 2,064 (277)

1,129,921 $ 5,939 $ 15,382 $ (9,443) $ 2,029 $ 4,519 $ (2,490)

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 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.

Net operating income for our residential same properties increased by approximately $6.7 million for the six months ended June 30, 2022 compared to 2021.

The following reflects our occupancy and rate information for our residential same properties for the six months ended June 30, 2022 and 2021.

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

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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 Loss

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 three months ended March 31, 2022 and 2021.

Hotel Net Operating Income (Loss)

The Boston Marriott Cambridge hotel had net operating income of approximately $5.4 million for the six months ended June 30, 2022, representing an increase of approximately $7.2 million compared to the six months ended June 30, 2021.

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the six months ended June 30, 2022 and 2021.

Occupancy 55.1 % 16.5 % 233.9 %

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Development and Management Services Revenue

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.

Development and management services revenue decreased by approximately $1.9 million for the six months ended June 30, 2022 compared to 2021.

Development and management services revenue decreased by approximately $1.7 million and $0.2 million, respectively.

The decrease in development services revenue primarily related to a decrease in development fees earned from unconsolidated joint venture properties in the Washington, DC and Boston regions, which were placed in-service during prior periods.

General and Administrative Expense

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.

General and administrative expense decreased by approximately $5.5 million for the six months ended June 30, 2022 compared to 2021 primarily due to a decrease in compensation expense of approximately $9.3 million, partially offset by an approximately $3.8 million increase in other general and administrative expenses.

The decrease in compensation expense related to an approximately $10.9 million decrease in the value of our deferred compensation plan, partially offset by an approximately $1.6 million increase in other compensation expenses.

The increase in other general and administrative expenses was 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 three months ended March 31, 2022 and 2021 were approximately $4.0 million and $3.3 million, respectively.

Capitalized wages for the six months ended June 30, 2022 and 2021 were approximately $8.1 million and $6.8 million, respectively.

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

Transaction Costs

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.

Transaction costs decreased by approximately $0.6 million for the six months ended June 30, 2022 compared to 2021 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 joint ventures and the pursuit of other transactions are expensed as incurred.

Depreciation and Amortization Expense

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

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,

Depreciation and amortization expense increased by approximately $0.4 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

Portfolio Depreciation and Amortization for the six months ended June 30,

2022 2021 Change

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$ 360,770 $ 360,403 $ 367

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,

_______________

(1) During the six months ended June 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 six months ended June 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 six months ended June 30, 2021, we recorded approximately $13.7 million of accelerated depreciation expense for the demolition of a portion of the building.

Depreciation and amortization expense increased by approximately $1.7 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

Portfolio Depreciation and Amortization for the six months ended June 30,

2022 2021 Change

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$ 357,302 $ 355,578 $ 1,724

_______________

As a result, during the six months ended June 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 six months ended June 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

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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.

For the six months ended June 30, 2022 compared to 2021, income from unconsolidated joint ventures decreased by approximately $1.7 million primarily due to a $10.3 million gain on sale of investment from the sale of our Annapolis Junction joint venture interest during the six months ended June 30, 2021.

This decrease was partially offset by an approximately $10.1 million increase in net income from placing in-service (1) 7750 Wisconsin Avenue (Marriott International Headquarters) in Bethesda, Maryland, and (2) 100 Causeway Street in Boston, Massachusetts, as well as 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.

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).

Gains on sales of real estate increased by approximately $111.2 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

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

(dollars in millions)

195 West Street March 31, 2022 Office 63,500 $ 37.7 $ 35.4 $ 22.7

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 127.5 121.9 96.2

$ 165.2 $ 157.3 $ 118.9 (1)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 7.8 (2)

N/A N/A $ 7.8

(1) Excludes approximately $0.1 million of gains on sales of real estate recognized during the six months ended June 30, 2022 related to gains on sales of real estate occurring in the prior periods.

(2) 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.

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 $7.8 million.

Gains on sales of real estate increased by approximately $115.2 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

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

(dollars in millions)

195 West Street March 31, 2022 Office 63,500 $ 37.7 $ 35.4 $ 23.4

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 127.5 121.9 99.5

$ 165.2 $ 157.3 $ 122.9 (1)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 7.8 (2)

N/A N/A $ 7.8

(1) Excludes approximately $0.1 million of gains on sales of real estate recognized during the six months ended June 30, 2022 related to gains on sales of real estate occurring in the prior periods.

(2) 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.

As a result, we recognized a gain of approximately $7.8 million.

Interest and Other Income (Loss)

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.

Interest and other income (loss) decreased by approximately $0.2 million for the six months ended June 30, 2022 compared to 2021, due primarily to a decrease of approximately $0.3 million in interest income due to lower interest earned on our deposits.

Other Income - Assignment Fee

On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million.

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

Net cash proceeds totaled approximately $6.6 million and is reflected as Other income - assignment fee.

11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.

The property was 100% leased.

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.

Gains (losses) from investments in securities for the six months ended June 30, 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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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.

During the six months ended June 30, 2022 and 2021, we recognized gains (losses) of approximately $(7.0) million and $3.9 million, respectively, on these investments.

By comparison, our general and administrative expense increased (decreased) by approximately $(7.0) million and $3.9 million during the six months ended June 30, 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

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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 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”).

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts outstanding on its delayed draw term loan facility (“Delayed Draw Facility”) under its 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 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

Interest expense decreased by approximately $8.9 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

Component Change in interest expense for the six months ended June 30, 2022 compared to June 30, 2021

(in thousands)

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Issuance of $850 million in aggregate principal of 2.550% senior notes due 2032 on March 16, 2021 4,577

Increase in interest associated with unsecured credit facilities and term loans 2,271

Amortization expense of financing fees related to unsecured term loan 801

Total increases to interest expense 18,073

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Increase in capitalized interest related to development projects (2,735)

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) (543)

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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 March 31, 2022 and 2021 was approximately $13.7 million and $12.0 million, respectively.

Interest capitalized for the six months ended June 30, 2022 and 2021 was approximately $27.8 million and $25.0 million, respectively.

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

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.

At June 30, 2022, our variable rate debt consisted of BPLP’s $1.5 billion revolving facility (the “Revolving Facility”) and BPLP’s Unsecured Term Loan.

T he Revolving Facility and Unsecured Term Loan had $895 million outstanding as of June 30, 2022.

For a summary of our consolidated debt as of June 30, 2022 and 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 $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,

Noncontrolling interests in property partnerships increased by approximately $2.5 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

Property Noncontrolling Interests in Property Partnerships for the six months ended June 30,

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.

(1) The decrease was primarily attributable to a decrease in lease revenue from our clients.

(2) The increase was primarily attributable to an increase in lease revenue from our clients.

Noncontrolling Interest—Common Units of the Operating Partnership

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.

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $18.6 million for the six months ended June 30, 2022 compared to 2021 due primarily to an increase in allocable income, which was the result of recognizing a greater gain on sales of real estate amount 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.

On March 2, 2021, BXP issued a redemption notice for 80,000 shares of its 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 dividend 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 of approximately $201.3 million, including approximately $1.3 million of 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.

Results of Operations for the Three Months Ended June 30, 2022 and 2021

Net income attributable to Boston Properties, Inc.

and net income attributable to Boston Properties Limited Partnership increased approximately $111.3 million and $127.9 million for the three months ended June 30, 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 June 30, 2022 to the three months ended June 30, 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.

to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership to Net Operating Income for the three months ended June 30, 2022 and 2021.

For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 67.

Three months ended June 30,

2022 2021 Increase/

(in thousands)

Net Income Attributable to Boston Properties, Inc.

$ 222,989 $ 111,703 $ 111,286 99.63 %

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interest—common units of the Operating Partnership

25,708 12,383 13,325 107.61 %

Noncontrolling interests in property partnerships

18,546 17,164 1,382 8.05 %

Net Income 267,243 141,250 125,993 89.20 %

Other Expenses:

Interest expense 104,142 106,319 (2,177) (2.05) %

Loss from unconsolidated joint ventures 54 1,373 (1,319) (96.07) %

Other Income:

Gains (losses) from investments in securities (4,716) 2,275 (6,991) (307.30) %

Other income - assignment fee 6,624 — 6,624 100.00 %

Interest and other income (loss)

1,195 1,452 (257) (17.70) %

Gains on sales of real estate 96,247 7,756 88,491 1,140.94 %

Other Expenses:

Depreciation and amortization expense 183,146 183,838 (692) (0.38) %

Transaction costs

496 751 (255) (33.95) %

Payroll and related costs from management services contracts

3,239 2,655 584 22.00 %

General and administrative expense

34,665 38,405 (3,740) (9.74) %

Other Revenue:

Direct reimbursements of payroll and related costs from management services contracts

3,239 2,655 584 22.00 %

Development and management services revenue

6,354 7,284 (930) (12.77) %

Net Operating Income $ 484,042 $ 453,169 $ 30,873 6.81 %

Three months ended June 30,

2022 2021 Increase/

(in thousands)

Net Income Attributable to Boston Properties Limited Partnership $ 253,788 $ 125,846 $ 127,942 101.67 %

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interests in property partnerships

18,546 17,164 1,382 8.05 %

Net Income 272,334 143,010 129,324 90.43 %

Other Expenses:

Interest expense

104,142 106,319 (2,177) (2.05) %

Loss from unconsolidated joint ventures 54 1,373 (1,319) (96.07) %

Other Income:

Gains (losses) from investments in securities (4,716) 2,275 (6,991) (307.30) %

Other income - assignment fee 6,624 — 6,624 100.00 %

Interest and other income (loss)

1,195 1,452 (257) (17.70) %

Gains on sales of real estate 99,608 7,756 91,852 1,184.27 %

Other Expenses:

Depreciation and amortization expense 181,416 182,078 (662) (0.36) %

Transaction costs

496 751 (255) (33.95) %

Payroll and related costs from management services contracts

3,239 2,655 584 22.00 %

General and administrative expense

34,665 38,405 (3,740) (9.74) %

Other Revenue:

Direct reimbursements of payroll and related costs from management services contracts

3,239 2,655 584 22.00 %

Development and management services revenue

6,354 7,284 (930) (12.77) %

Net Operating Income $ 484,042 $ 453,169 $ 30,873 6.81 %

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

and net income attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income attributable to noncontrolling interests, interest expense, 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, other income - assignment fee, interest and other income (loss), gains on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue.

and net income attributable to Boston Properties Limited Partnership.

For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level.

Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity).

In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level.

NOI presented by us may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.

We believe that in order to understand our operating results, NOI should be examined in conjunction with net income attributable to Boston Properties, Inc.

and net income attributable to Boston Properties Limited Partnership

as presented in our Consolidated Financial Statements.

NOI should not be considered as a substitute for net income attributable to Boston Properties, Inc.

or net income attributable to Boston Properties Limited Partnership (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.

Comparison of the three months ended June 30, 2022 to the three months ended June 30, 2021

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

The Same Property Portfolio consists of 129 properties totaling approximately 39.1 million net rentable square feet, excluding unconsolidated joint ventures.

The Same Property Portfolio includes properties acquired or placed in-service on or prior to April 1, 2021 and owned and in-service through June 30, 2022.

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

2022 2021 Increase/

Change 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Increase/

(dollars in thousands)

Rental Revenue:

Lease Revenue (Excluding Termination Income)

$ 682,184 $ 657,753 $ 24,431 3.71 % $ 9,134 $ 756 $ 12,853 $ 1,647 $ — $ 1,257 $ 2,354 $ 7,693 $ 706,525 $ 669,106 $ 37,419 5.59 %

Termination Income

1,789 5,355 (3,566) (66.59) % 133 — — — — — — — 1,922 5,355 (3,433) (64.11) %

Lease Revenue

683,973 663,108 20,865 3.15 % 9,267 756 12,853 1,647 — 1,257 2,354 7,693 708,447 674,461 33,986 5.04 %

Parking and Other

26,333 17,882 8,451 47.26 % 524 — 29 — — 201 — — 26,886 18,083 8,803 48.68 %

Total Rental Revenue (1) 710,306 680,990 29,316 4.30 % 9,791 756 12,882 1,647 — 1,458 2,354 7,693 735,333 692,544 42,789 6.18 %

Real Estate Operating Expenses 256,526 238,760 17,766 7.44 % 2,332 71 4,348 958 — 797 824 2,189 264,030 242,775 21,255 8.76 %

Net Operating Income, Excluding Residential and Hotel 453,780 442,230 11,550 2.61 % 7,459 685 8,534 689 — 661 1,530 5,504 471,303 449,769 21,534 4.79 %

Residential Net Operating Income (2) 7,094 3,835 3,259 84.98 % — — — — — — — — 7,094 3,835 3,259 84.98 %

Hotel Net Operating Income (Loss) (2) 5,645 (435) 6,080 1,397.70 % — — — — — — — — 5,645 (435) 6,080 1,397.70 %

Net Operating Income $ 466,519 $ 445,630 $ 20,889 4.69 % $ 7,459 $ 685 $ 8,534 $ 689 $ — $ 661 $ 1,530 $ 5,504 $ 484,042 $ 453,169 $ 30,873 6.81 %

_______________

(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 67.

Residential Net Operating Income for the three months ended June 30, 2022 and 2021 is comprised of Residential Revenue of $16,912 and $9,763 less Residential Expenses of $9,818 and $5,928, respectively.

Hotel Net Operating Income (Loss) for the three months ended June 30, 2022 and 2021 is comprised of Hotel Revenue of $12,089 and $1,561 less Hotel Expenses of $6,444 and $1,996, 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 $24.4 million for the three months ended June 30, 2022 compared to 2021.

The increase was a result of our average revenue per square foot increasing by approximately $3.02, contributing approximately $25.5 million, partially offset by an approximately $1.1 million decrease due to our average occupancy decreasing from 91.5% to 91.4%.

Termination Income

Termination income decreased by approximately $3.6 million for the three months ended June 30, 2022 compared to 2021.

Termination income for the three months ended June 30, 2022 related to six clients across the Same Property Portfolio and totaled approximately $1.8 million, which was primarily related to clients that terminated leases early in New York City.

Termination income for the three months ended June 30, 2021 related to 13 clients across the Same Property Portfolio and totaled approximately $5.4 million, which was primarily related to clients that terminated leases early in New York City.

Parking and Other Revenue

Parking and other revenue increased by approximately $8.5 million for the three months ended June 30, 2022 compared to 2021.

Parking and other revenue increased by approximately $7.4 million and $1.1 million, respectively.

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

The increase in other revenue was due to an increase in insurance proceeds received during the three months ended June 30, 2022 compared to 2021.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio increased by approximately $17.8 million, or 7.4%, for the three months ended June 30, 2022 compared to 2021, due primarily to an increase in operating expenses, including cleaning, utilities, repairs and maintenance, and roads/grounds/security.

The increase in operating expenses was driven by an increase in physical client occupancy.

Properties Acquired Portfolio

The table below lists the properties acquired between April 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses increased by approximately $9.0 million and $2.3 million, respectively, for the three months ended June 30, 2022 compared to 2021, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

Name Date acquired 2022 2021 Change 2022 2021 Change

(dollars in thousands)

153 & 211 Second Avenue June 2, 2021 136,882 $ 2,553 $ 756 $ 1,797 $ 272 $ 71 $ 201

Shady Grove Innovation District August 2, 2021 232,278 766 — 766 380 — 380

Madison Centre (1) May 17, 2022 754,988 6,472 — 6,472 1,680 — 1,680

1,124,148 $ 9,791 $ 756 $ 9,035 $ 2,332 $ 71 $ 2,261

______________

(1) Rental revenue for the three months ended June 30, 2022 includes approximately $0.1 million of termination income.

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially placed in-service between April 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $11.2 million and $3.4 million, respectively, for the three months ended June 30, 2022 compared to 2021, as detailed below.

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

Name Square Feet 2022 2021 Change 2022 2021 Change

(dollars in thousands)

200 West Street (1) Fourth Quarter, 2020 Fourth Quarter, 2021 273,365 $ 4,572 $ 1,647 $ 2,925 $ 1,404 $ 866 $ 538

Reston Next Fourth Quarter, 2021 N/A 1,062,000 8,088 — 8,088 2,917 — 2,917

325 Main Street (2) Second Quarter, 2022 Second Quarter, 2022 414,000 213 — 213 10 92 (82)

2100 Pennsylvania Avenue Second Quarter, 2022 N/A 480,000 9 — 9 17 — 17

2,229,365 $ 12,882 $ 1,647 $ 11,235 $ 4,348 $ 958 $ 3,390

_______________

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

(2) Real estate operating expenses for the three months ended June 30, 2021 were related to demolition costs.

Properties in Development or Redevelopment Portfolio

The table below lists the properties that were in development or redevelopment between April 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $1.5 million and $0.8 million, respectively, for the three months ended June 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

Name Date Commenced Development / Redevelopment Square Feet 2022 2021 Change 2022 2021 Change

(dollars in thousands)

880 Winter Street (1) February 25, 2021 224,000 $ — $ 1,141 $ (1,141) $ — $ 690 $ (690)

3625-3635 Peterson Way (2) April 16, 2021 218,000 — 317 (317) — 107 (107)

442,000 $ — $ 1,458 $ (1,458) $ — $ 797 $ (797)

_______________

(1) 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.

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

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 April 1, 2021 and June 30, 2022.

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $5.3 million and $1.4 million, respectively, for the three months ended June 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

Name Date Sold Property Type Square Feet 2022 2021 Change 2022 2021 Change

(dollars in thousands)

181, 191 and 201 Spring Street October 25, 2021 Office 333,000 $ — $ 3,826 $ (3,826) $ — $ 1,103 $ (1,103)

195 West Street March 31, 2022 Office 63,500 — 122 (122) — 148 (148)

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 2,354 3,745 (1,391) 824 938 (114)

1,129,921 $ 2,354 $ 7,693 $ (5,339) $ 824 $ 2,189 $ (1,365)

Residential Net Operating Income

Net operating income for our residential same properties increased by approximately $3.3 million for the three months ended June 30, 2022 compared to 2021.

The following reflects our occupancy and rate information for our residential same properties for the three months ended June 30, 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 $ 2,774 $ 2,504 10.8 % $ 5.11 $ 4.60 11.1 % 95.2 % 91.7 % 3.8 % 94.3 % 90.2 % 4.5 %

The Lofts at Atlantic Wharf $ 4,097 $ 3,156 29.8 % $ 4.57 $ 3.51 30.2 % 97.7 % 96.1 % 1.7 % 97.1 % 93.7 % 3.6 %

The Avant at Reston Town Center $ 2,411 $ 2,180 10.6 % $ 2.61 $ 2.38 9.7 % 96.0 % 95.0 % 1.1 % 96.4 % 94.3 % 2.2 %

Signature at Reston $ 2,683 $ 2,143 25.2 % $ 2.77 $ 2.22 24.8 % 95.1 % 87.2 % 9.1 % 94.8 % 83.1 % 14.1 %

The Skylyne $ 3,391 $ 3,183 6.5 % $ 4.15 $ 3.79 9.5 % 83.8 % 26.5 % 216.2 % 81.7 % 18.7 % 336.9 %

_______________

(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 had net operating income of approximately $5.6 million for the three months ended June 30, 2022, representing an increase of approximately $6.1 million compared to the three months ended June 30, 2021.

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the three months ended June 30, 2022 and 2021.

Occupancy 69.6 % 21.7 % 220.7 %

Average daily rate $ 368.52 $ 160.96 129.0 %

REVPAR $ 256.47 $ 34.86 635.7 %

Other Operating Revenue and Expense Items

Development and Management Services Revenue

Development and management services revenue decreased by approximately $0.9 million for the three months ended June 30, 2022 compared to 2021.

Development and management services revenue decreased by approximately $0.8 million and $0.1 million, respectively.

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

General and Administrative Expense

General and administrative expense decreased by approximately $3.7 million for the three months ended June 30, 2022 compared to 2021 primarily due to a decrease in compensation expense of approximately $5.7 million, partially offset by an increase of approximately $2.0 million in other general and administrative expenses.

The decrease in compensation expense primarily related to an approximately $7.0 million decrease in the value of our deferred compensation plan, partially offset by an approximately $1.3 million increase in other compensation

expenses, primarily due to age-based vesting.

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

Capitalized wages for the three months ended June 30, 2022 and 2021 were approximately $4.1 million and $3.5 million, respectively.

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

Transaction Costs

Transaction costs decreased by approximately $0.3 million for the three months ended June 30, 2022 compared to 2021 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 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.

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

Depreciation and amortization expense decreased by approximately $0.7 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

(in thousands)

Same Property Portfolio $ 169,612 $ 166,746 $ 2,866

Properties Acquired Portfolio 8,233 974 7,259

Properties Placed In-Service Portfolio 4,816 379 4,437

Properties in Development or Redevelopment Portfolio (1) — 14,011 (14,011)

Properties Sold Portfolio 485 1,728 (1,243)

$ 183,146 $ 183,838 $ (692)

_______________

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

As a result, during the three months ended June 30, 2021, we recorded approximately $10.5 million of accelerated depreciation expense for the demolition of a portion of the building.

Depreciation and amortization expense decreased by approximately $0.7 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

(in thousands)

Same Property Portfolio $ 167,882 $ 164,986 $ 2,896

Properties Acquired Portfolio 8,233 974 7,259

Properties Placed In-Service Portfolio 4,816 379 4,437

Properties in Development or Redevelopment Portfolio (1) — 14,011 (14,011)

Properties Sold Portfolio 485 1,728 (1,243)

$ 181,416 $ 182,078 $ (662)

_______________

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

As a result, during the three months ended June 30, 2021, we recorded approximately $10.5 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

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 June 30, 2022 compared to 2021, loss from unconsolidated joint ventures decreased by approximately $1.3 million due to an approximately $2.1 million increase in net income from placing in-service 7750 Wisconsin Avenue in Bethesda, Maryland during the first quarter of 2022.

This decrease was partially offset by an approximately $0.8 million decrease in net income from our Hub on Causeway - Podium joint venture, primarily related to termination income recognized during the three months ended June 30, 2021.

Gains on Sales of Real Estate

Gains on sales of real estate 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 the gains on sales of real estate when those properties are sold.

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

Gains on sales of real estate increased by approximately $88.5 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

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

(dollars in millions)

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 $ 127.5 $ 121.9 $ 96.2

$ 127.5 $ 121.9 $ 96.2 (1)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 7.8 (2)

N/A N/A $ 7.8

(1) Excludes approximately $0.1 million of gains on sales of real estate recognized during the three months ended June 30, 2022 related to gains on sales of real estate occurring in the prior periods.

(2) 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.

As a result, we recognized a gain of approximately $7.8 million.

Gains on sales of real estate increased by approximately $91.9 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

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

(dollars in millions)

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 $ 127.5 $ 121.9 $ 99.5

$ 127.5 $ 121.9 $ 99.5 (1)

6595 Springfield Center Drive December 13, 2018 Office 634,000 N/A N/A $ 7.8 (2)

N/A N/A $ 7.8

(1) Excludes approximately $0.1 million of gains on sales of real estate recognized during the three months ended June 30, 2022 related to the sale of real estate occurring in the prior periods.

(2) 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.

As a result, we recognized a gain of approximately $7.8 million.

Interest and Other Income (Loss)

Interest and other income (loss) decreased by approximately $0.3 million for the three months ended June 30, 2022 compared to 2021, due primarily to a decrease of approximately $0.2 million in interest income due to lower interest earned on our deposits.

Other Income - Assignment Fee

On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million.

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

Net cash proceeds totaled approximately $6.6 million and is reflected as Other income - assignment fee.

11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.

The property was 100% leased.

Gains (Losses) from Investments in Securities

Gains (losses) from investments in securities for the three months ended June 30, 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.

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 June 30,

2022 and 2021, we recognized gains (losses) of approximately $(4.7) million and $2.3 million, respectively, on these investments.

By comparison, our general and administrative expense increased (decreased) by approximately $(4.7) million and $2.3 million during the three months ended June 30, 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.

Interest Expense

Interest expense decreased by approximately $2.2 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

Component Change in interest expense for the three months ended June 30, 2022 compared to June 30, 2021

(in thousands)

Increases to interest expense due to:

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

Increase in interest associated with unsecured credit facilities and term loans 2,836

Amortization expense of financing fees related to unsecured term loan 801

Total increases to interest expense 8,849

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 (9,684)

Increase in capitalized interest related to development projects (1,050)

Other interest expense (excluding senior notes) (292)

Total decreases to interest expense (11,026)

Total change in interest expense $ (2,177)

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 three months ended June 30, 2022 and 2021 was approximately $14.1 million and $13.0 million, respectively.

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

At June 30, 2022, our outstanding variable rate debt consisted of BPLP’s $1.5 billion Revolving Facility and Unsecured Term Loan.

T he Revolving Facility and Unsecured Term Loan had $895 million outstanding as of June 30, 2022.

For a summary of our consolidated debt as of June 30, 2022 and June 30, 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 $1.4 million for the three months ended June 30, 2022 compared to 2021, as detailed below.

Property Noncontrolling Interests in Property Partnerships for the three months ended June 30,

2022 2021 Change

(in thousands)

767 Fifth Avenue (the General Motors Building) $ 3,012 $ 3,171 $ (159)

Times Square Tower 5,183 5,020 163

601 Lexington Avenue 3,372 3,057 315

100 Federal Street 3,258 3,441 (183)

Atlantic Wharf Office Building (1) 3,721 2,475 1,246

$ 18,546 $ 17,164 $ 1,382

_______________

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

Noncontrolling Interest—Common Units of the Operating Partnership

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $13.3 million for the three months ended June 30, 2022 compared to 2021 due primarily to an increase in allocable income, which was 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.

Liquidity and Capital Resources

1 unchanged sentence

• fund normal recurring expenses;

• meet debt service and principal repayment obligations, including balloon payments on maturing debt;

• meet debt service and principal repayment obligations, including the Unsecured Term Loan and balloon payments on maturing debt;

• fund development and redevelopment costs;

12 unchanged sentences

We draw on multiple financing sources to fund our long-term capital needs.

We expect to fund our current development/redevelopment 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, proceeds from asset sales 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 March 31, 2022 (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 March 31, 2022

among others, the project’s size and duration, the extent of pre-leasing, 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 June 30, 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 %

Fourth Quarter, 2023 Reston, VA 2 1,062,000 $ 554,408 $ 715,300 $ — $ — $ 160,892 87 % (6)

1 unchanged sentence

360 Park Avenue South (42% ownership) First Quarter, 2025 New York, NY 1 450,000 197,862 219,000 92,774 86,245 14,609 — % (8)

Reston Next Office Phase II Second Quarter, 2025 Reston, VA 1 90,000 7,185 61,000 — — 53,815 — %

Platform 16 Building A (55% ownership) Fourth Quarter, 2026 San Jose, CA 1 389,500 71,672 231,900 — — 160,228 — % (9)

5 unchanged sentences

180 CityPoint Fourth Quarter, 2024 Waltham, MA 1 329,000 91,255 274,700 — — 183,445 43 %

651 Gateway (50% ownership) Fourth Quarter, 2025 South San Francisco, CA 1 327,000 5,227 146,500 — — 141,273 — %

651 Gateway (50% ownership) (Redevelopment) Fourth Quarter, 2025 South San Francisco, CA 1 327,000 12,782 146,500 — — 133,718 — %

Total Lab/Life Sciences Properties under Construction 5 1,244,000 271,353 771,900 — — 500,547 49 %

Reston Next Residential (508 units) (20% ownership) Second Quarter, 2026 Reston, VA 1 417,000 11,368 47,700 28,000 — 8,332 — %

Total Residential Properties under Construction 1 417,000 11,368 47,700 28,000 — 8,332 —

View Boston Observatory at The Prudential Center (Redevelopment) N/A Boston, MA — 59,000 109,624 182,300 — — 72,676 N/A (10)

1 unchanged sentence

(1) Represents our share.

(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.

(2) Each of Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement represent 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 June 30, 2022.

(3) Includes approximately $90.0 million of unpaid but accrued construction costs and leasing commissions.

(4) Excludes approximately $90.0 million of unpaid but accrued construction costs and leasing commissions.

(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.

(5) Represents percentage leased as of August 2, 2022, including leases with future commencement dates.

(6) The property was 69% placed in-service as of June 30, 2022.

(7) The property was 4% placed in-service as of June 30, 2022.

(8) 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.

4 unchanged sentences

(10) 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.

Lease revenue (which includes recoveries from tenants), other income from operations, available cash balances, mortgage financings, unsecured indebtedness and draws on BPLP’s Revolving Facility are the principal sources of capital that we use to fund operating expenses, debt service, maintenance and repositioning capital expenditures, tenant improvements and the minimum distribution required to enable BXP to maintain its REIT qualification.

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.

(11) Percentage leased excludes the residential property and the View Boston Observatory at The Prudential Center (redevelopment) at 800 Boylston Street - The Prudential Center.

Lease revenue (which includes recoveries from clients), other income from operations, available cash balances, mortgage financings, unsecured indebtedness and draws on BPLP’s Revolving Facility are the principal sources of capital that we use to fund operating expenses, debt service, maintenance and repositioning capital expenditures, tenant improvements and the minimum distribution required to enable BXP to maintain its REIT qualification.

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 client turnover and controlling operating expenses.

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.

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.

We believe these sources of capital will continue to provide the funds necessary for our short-term liquidity needs.

Material adverse changes in one or more sources of capital may adversely affect our net cash flows.

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, servicing the interest payments on our outstanding indebtedness, repaying debt maturities (as discussed below), and satisfying our REIT distribution requirements.

As of June 30, 2022, we had 12 properties under development or redevelopment.

Our share of the remaining development and redevelopment costs that we expect to fund through 2026 was approximately $1.1 billion.

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.

In the second quarter of 2022, we commenced development of Phase II of the Reston Next Office project, a 90,000 square foot office and retail development in Reston, Virginia, and Reston Next Residential, a 508-unit residential project that will include a five-story low-rise building and a 39-story high-rise tower in Reston, Virginia.

We will own a 20% interest in the Reston Next residential project (see Note 5 to the Consolidated Financial Statements).

In July 2021, we announced the formation of the SCP with two partners committing a targeted equity investment of $1.0 billion and a $250 million commitment from us.

Under this agreement, we agreed to 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.

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.

The SCP enhances our access to capital and investment capacity, enhances our returns through fee income, and in some investments provides us the opportunity to realize a greater share of income upon achieving certain success criteria.

These large financial partners are among the world’s largest sovereign wealth funds and pension plans.

On May 17, 2022, we acquired Madison Centre, an approximately 755,000 square foot, 37-story Class A office building in Seattle, Washington, for a gross purchase price of $730.0 million.

The acquisition was funded with proceeds from BPLP’s $730.0 million Unsecured Term Loan.

The loan bears interest at a variable rate equal to term SOFR plus 0.95% per annum as of June 30, 2022.

We have no debt maturities until 2023.

Our 2023 maturities include (1) the Unsecured Term Loan, which matures on May 16, 2023 and (2) BPLP’s 3.125% $500.0 million senior unsecured notes, which mature on September 1, 2023.

In our unconsolidated joint venture portfolio, we have no debt maturities in 2022 and approximately $532.4 million (our share) of debt maturating in 2023.

We expect to fund 2023 debt maturities using available cash balances, proceeds from asset sales and/or BPLP’s Revolving Facility, or through refinancings at existing balances or greater.

We expect our interest expense will be greater in 2023 when compared to 2022 due to projected higher interest rates on our floating rate debt and the impact of refinancing our 2023 debt maturities.

As of August 2, 2022, we had available cash of approximately $289.9 million (of which approximately $103.8 million is attributable to our consolidated joint venture partners).

Our liquidity and capital resources will depend on a wide range of factors and we believe that our access to capital and our strong liquidity, including the approximately $1.2 billion available under the Revolving Facility and our available cash, as of August 2, 2022, are sufficient to fund our remaining capital requirements on existing development and redevelopment projects, fund acquisitions, repay or refinance 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.

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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.

Common and LTIP unitholders of limited partnership interest in BPLP receive the same total distribution per unit.

Common and LTIP unitholders (other than unearned MYLTIP units) 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.

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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 $482.3 million and $949.2 million at March 31, 2022 and 2021, respectively, representing a decrease of approximately $466.8 million.

Cash and cash equivalents and cash held in escrows aggregated approximately $502.9 million and $637.3 million at June 30, 2022 and 2021, respectively, representing a decrease of approximately $134.4 million.

The following table sets forth changes in cash flows:

Three months ended March 31,

Six months ended June 30,

2022 2021 Change

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Net cash used in investing activities (980,170) (563,611) (416,559)

Net cash used in financing activities (86,970) (679,936) 592,966

Net cash provided by (used in) financing activities 365,223 (1,078,914) 1,444,137

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 7.9 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%.

The weighted-average term of our in-place leases, including leases signed by our unconsolidated joint ventures, excluding residential units, was approximately 7.9 years as of June 30, 2022, 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.

addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings.

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.

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 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,

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 six months ended June 30, 2022 and June 30, 2021 is detailed below:

Six months ended June 30,

(in thousands)

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Proceeds from the sales of real estate (3) 157,345 —

Proceeds from assignment fee (4) 6,624 —

Capital contributions to unconsolidated joint ventures (5) (69,819) (20,032)

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Proceeds from sale of investment in unconsolidated joint venture (7) — 17,789

Proceeds from note receivable (8) 10,000 —

Investments in securities, net 5,197 1,915

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Cash used in investing activities changed primarily due to the following:

(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.

(1) On May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington, for an aggregate purchase price, including transaction costs, of approximately $724.3 million.

Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, Class A office property.

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.

(2) Construction in progress for the six months ended June 30, 2022 included ongoing expenditures associated with Reston Next and 2100 Pennsylvania Avenue which are partially placed in-service and 325 Main Street, which was completed and fully placed in-service during the six months ended June 30, 2022.

In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, View Boston Observatory at The Prudential Center, 880 Winter Street, 103 CityPoint and Reston Next Office Phase II.

Construction in progress for the six months ended June 30, 2021 included ongoing expenditures associated with One Five Nine East 53rd Street , which was completed and fully placed in-service during the six months ended June 30, 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.

(3) On June 15, 2022, we completed the sale of our Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million.

Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP.

Virginia 95 Office Park consists of eleven Class A office/flex properties aggregating approximately 733,000 net rentable square feet.

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.

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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.

(4) On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million.

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

Net cash proceeds totaled approximately $6.6 million.

11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.

The property was 100% leased.

(5) Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of cash contributions of approximately $32.6 million and $22.0 million to our Gateway Commons and Platform 16 joint ventures, respectively.

Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2021 consisted primarily of cash contributions of approximately $11.4 million to our Santa Monica Business Park joint venture.

(6) Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of a cash distribution totaling approximately $21.6 million and $11.6 million from our Metropolitan Square and 7750 Wisconsin Avenue joint ventures, respectively.

(7) 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.

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.

(8) An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from us, and we provided the financing on June 1, 2020.

The financing bore interest at a fixed rate of 8.00% per annum, compounded monthly, and was scheduled to mature on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property was substantially completed.

On June 27, 2022, the borrower repaid the loan in full, including approximately $1.6 million of accrued interest.

Cash provided by financing activities for the six months ended June 30, 2022 totaled approximately $365.2 million.

This amount consisted primarily of borrowings under BPLP’s Revolving Facility and Unsecured Term Loan partially offset by the payment of our regular dividends and distributions to our shareholders and unitholders.

Future debt payments are discussed below under the heading “Debt Financing .”

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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):

March 31, 2022

June 30, 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 March 31, 2022 of $128.80.

(1) Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on June 30, 2022 of $88.98.

(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.

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(1) our consolidated debt;

(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:

(2) the product of (x) the closing price per share of BXP Common Stock on June 30, 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, 2020 - 2022 MYLTIP Units are not included in this calculation as of March 31, 2022.

Because their three-year performance periods have not yet ended, 2020 - 2022 MYLTIP Units are not included in this calculation as of June 30, 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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Debt Financing

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.

As of June 30, 2022, we had approximately $13.7 billion of outstanding consolidated indebtedness, representing approximately 46.72% 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 6.3 years, (3) $165.0 million outstanding under BPLP’s Revolving Facility that matures on June 15, 2026 and (4) $728.8 million (net of deferred financing fees) outstanding under BPLP’s Unsecured Term Loan that matures on May 16, 2023.

The table below summarizes the aggregate carrying value of our mortgage notes payable and BPLP’s unsecured senior notes, line of credit, and Unsecured Term Loan, as well as Consolidated Debt Financing Statistics at June 30, 2022 and June 30, 2021.

(dollars in thousands)

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Unsecured line of credit 165,000 —

Unsecured term loan, net 728,795 —

Consolidated Debt 13,652,773 12,536,065

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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.

Based on BPLP’s June 30, 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 June 30, 2022, BPLP had $165.0 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.

At August 2, 2022, BPLP had $320.0 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.

Unsecured Term Loan

On May 17, 2022, BPLP entered into an Unsecured Term Loan providing for a single borrowing of up to $730.0 million.

The Unsecured Term Loan matures on May 16, 2023.

At BPLP’s option, the Unsecured Term Loan will bear interest at a rate per annum equal to (A) (1) a base rate per annum equal to the greater of (a) the federal funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) term SOFR plus 1.00% and (d) 1.00%, or (2) a term SOFR rate per annum equal to the forward-looking SOFR term rate administered by CME Group Benchmark Administration (“CME”) two business days prior to the commencement of such interest period;

or if the rate is unavailable, then the forward-looking SOFR term rate administered by CME on the first business day immediately prior thereto, in each case, plus 0.10%, and (B) a margin ranging from 0 to 160 basis points based on BPLP’s credit rating.

On May 17, 2022, BPLP exercised its option to draw $730.0 million under the Unsecured Term Loan (See Notes 3 and 6 to the Consolidated Financial Statements).

As of June 30, 2022, the Unsecured Term Loan bears interest at a variable rate equal to term SOFR plus 0.95% per annum based on BPLP’s current credit rating at June 30, 2022.

At June 30, 2022, BPLP had $730.0 million outstanding under its Unsecured Term Loan.

Unsecured Senior Notes

The following summarizes the unsecured senior notes outstanding as of March 31, 2022 (dollars in thousands):

The following summarizes the unsecured senior notes outstanding as of June 30, 2022 (dollars in thousands):

Coupon/Stated Rate Effective Rate(1) Principal Amount Maturity Date(2)

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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 March 31, 2022, BPLP was in compliance with each of these financial restrictions and requirements.

At June 30, 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 March 31, 2022:

The following represents the outstanding principal balances due under the mortgage notes payable at June 30, 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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(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 March 31, 2022, the maximum funding obligation under the guarantee was approximately $17.7 million.

As of June 30, 2022, the maximum funding obligation under the guarantee was approximately $16.2 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 7 to the Consolidated Financial Statements).

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We have investments in unconsolidated joint ventures with our effective ownership interests ranging from 20% to 55%.

Fifteen of these ventures have mortgage indebtedness.

Sixteen 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 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.

At June 30, 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 June 30, 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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The Hub on Causeway - Podium 50.00 % 3.28 % 3.44 % 174,329 (347) 173,982 86,991 (2)(6) September 6, 2023

Hub50House 50.00 % 2.22 % 2.51 % 176,468 (42) 176,426 88,213 (2)(7) April 19, 2022

Hub50House 50.00 % 4.43 % 4.51 % 185,000 (1,365) 183,635 91,818 (2)(7) June 17, 2032

100 Causeway Street 50.00 % 2.27 % 2.48 % 337,604 (988) 336,616 168,308 (2)(8) September 5, 2023

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Metropolitan Square 20.00 % 3.61 % 4.38 % 420,000 (5,788) 414,212 82,842 (2)(13) April 9, 2024

Reston Next Residential 20.00 % N/A N/A — — — — (2)(14) May 13, 2026

Total $ 3,431,915 $ (18,353) $ 3,413,562 $ 1,446,617

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The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2023.

(7) The construction financing has a borrowing capacity of $180.0 million.

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).

(7) The loan bears interest at a variable rate equal to SOFR plus 1.35% per annum and matures on June 17, 2032.

The joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts.

(8) The construction financing has a borrowing capacity of $400.0 million.

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The loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets.

As of March 31, 2022, the loan has approximately $14.8 million of accrued interest due at the maturity date.

As of June 30, 2022, the loan has approximately $15.9 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.

(14) No amounts have been drawn under the $140.0 million construction facility.

The construction financing bears interest at a variable rate equal to SOFR plus 2.00% per annum and matures on May 13, 2026, with two, 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.

and net income (loss) attributable to Boston Properties Limited Partnership (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.

FFO is a non-GAAP financial measure.

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We believe that in order to facilitate a clear understanding of our operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc.

common shareholders and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements.

FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc.

and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements.

FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc or net income attributable to Boston Properties Limited Partnership (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 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 March 31, 2022 and 2021:

Three months ended March 31,

to FFO attributable to Boston Properties, Inc.

for the three months ended June 30, 2022 and 2021:

Three months ended June 30,

(in thousands)

Net income attributable to Boston Properties, Inc.

common shareholders

$ 222,989 $ 111,703

Preferred stock redemption charge — 6,412

Preferred dividends — 2,560

Noncontrolling interest—common units of the Operating Partnership

9 unchanged sentences

Corporate-related depreciation and amortization

Gain on sale of investment included within income from unconsolidated joint ventures — 10,257

Gains on sales of real estate 96,247 7,756

1 unchanged sentence

18,546 17,164

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.)

318,318 270,531

Funds from Operations (FFO) attributable to the Operating Partnership 338,889 297,961

Noncontrolling interest—common units of the Operating Partnership’s share of funds from operations

1 unchanged sentence

Funds from Operations attributable to Boston Properties, Inc.

common shareholders

$ 304,560 $ 268,642

3 unchanged sentences

Reconciliation to Diluted Funds from Operations:

Three months ended March 31,

Three months ended June 30,

(Numerator) Shares/Units

12 unchanged sentences

_______________

(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.

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 March 31, 2022 and 2021:

Three months ended March 31,

(1) BXP’s share of diluted Funds from Operations was 89.89% and 90.18% for the three months ended June 30, 2022 and 2021, respectively.

The following table presents a reconciliation of net income attributable to Boston Properties Limited Partnership to FFO attributable to Boston Properties Limited Partnership for the three months ended June 30, 2022 and 2021:

Three months ended June 30,

(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

Net income attributable to Boston Properties Limited Partnership $ 253,788 $ 125,846

Noncontrolling interests in property partnerships 18,546 17,164

4 unchanged sentences

Corporate-related depreciation and amortization (413) (444)

Gain on sale of investment included within income from unconsolidated joint ventures — 10,257

Gains on sales of real estate 99,608 7,756

Noncontrolling interests in property partnerships 18,546 17,164

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

Funds from Operations attributable to Boston Properties Limited Partnership (1) $ 338,889 $ 297,961

Weighted average shares outstanding—basic 174,392 173,150

2 unchanged sentences

Reconciliation to Diluted Funds from Operations:

Three months ended March 31,

Three months ended June 30,

(Numerator) Shares/Units

8 unchanged sentences

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 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.

During the three months ended June 30, 2022, we paid approximately $68.3 million to fund client-related obligations, including tenant improvements and leasing commissions.

In addition, during the three months ended June 30, 2022, we and our unconsolidated joint venture partners incurred approximately $163.0 million of new client-related obligations associated with approximately 1.3 million square feet of second generation leases, or approximately $122 per square foot.

We signed approximately 603,800

square feet of first generation leases.

The client-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 second quarter of 2022, we signed leases for approximately 1.9 million square feet of space and incurred aggregate client-related obligations of approximately $346.1 million, or approximately $179 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