What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-04 compared with 2022-08-05 · 458 added, 418 removed, 1021 unchanged (46% of the section changed)

10 unchanged sentences

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, 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.

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 June 30, 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 client 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, continued 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, client space utilization, dependence on client s’ financial condition, and competition from other developers, owners and operators of real estate);

• risks associated with downturns in the national and local economies, continued inflation, 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, client space utilization, dependence on clients’ 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, 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 and uncertainties affecting property development and construction (including, without limitation, continued 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;

17 unchanged sentences

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 June 30, 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 September 30, 2022) in the United States that develops, owns, and manages primarily premier workplaces.

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

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

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

We generate revenue and cash primarily by leasing premier workplaces to our clients.

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

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 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.

Our core strategy has always been to develop, acquire and manage highest quality premier workplaces in gateway markets with high barriers-to-entry and attractive demand drivers, and to focus on executing long-term leases with financially strong clients.

Our client base is diverse across market sectors and the weighted-average lease term for our in-place leases, excluding residential units, was approximately 7.8 years, as of September 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 11.0 years as of September 30, 2022.

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

1 unchanged sentence

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

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

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

• our track record of developing and operating premier workplaces in a sustainable and responsible manner;

• our reputation as a premier developer, owner and manager of the highest quality premier workplaces in our markets;

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

• our relationships with local brokers.

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:

Over the last quarter, inflation has remained resilient.

Although the U.S.

GDP returned to growth in the third quarter after two consecutive quarterly contractions, consumer spending still slowed as inflation shrank buying power.

The Federal Reserve remains committed to taming the fastest rising inflation in four decades by aggressively raising interest rates and are expected to continue to do so.

This evolving operating environment impacts our 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;

1 unchanged sentence

• 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.

In light of the foregoing, we believe we are positioning ourself for success, notwithstanding the uncertain trajectory of the U.S.

and global economy, by managing our leverage while continuing to selectively invest (including both acquisitions and developments) in premier workplace opportunities.

We remain focused on the following priorities:

• ensuring client health, safety and satisfaction;

• continuing to embrace our leadership position in the premier workplace industry and leveraging our strength in portfolio quality, client relationships, development skills, market penetration and sustainability to profitably build market share.

Premier workplaces, the preferred choice for our current and prospective clients, are gaining market share and demonstrating the highest occupancy, net absorption levels and rental rates in the central business district (“CBD”) markets where we operate;

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

• completing the construction and leasing of our development properties;

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

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

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

• pursuing attractive asset class adjacencies where we have a track record of success, such as life sciences and multi-family development;

• continuing to raise the bar in the quality of our portfolio and actively recycle capital by selling assets, subject to market condition;

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

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

• prioritizing risk management by actively managing liquidity, investing more extensively with joint venture partners to manage our debt levels, and being highly selective in new investment commitments.

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

Leasing Activity and Occupancy

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.

In the third quarter of 2022, we signed approximately 1.4 million square feet of new leases and renewals, our strongest third quarter leasing volume since 2019.

These leases have a weighted-average lease term of approximately 9.8 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 premier workplace environment.

The overall occupancy of our in-service office and retail properties was 88.9% at September 30, 2022, a decrease of 60 basis points from June 30, 2022.

We experienced a slight decline in occupancy as we wait for recently signed leases to commence.

We also removed three assets from our in-service portfolio:

601 Massachusetts Avenue, which was approximately 98% leased prior to its sale, 140 Kendrick Street Building A, which is now under redevelopment and 100% pre-leased, and 760 Boylston Street which is in redevelopment and 100% pre-leased.

The macroeconomic environment has resulted in softening demand in all of our markets.

While tours continue and leases under negotiation move forward, there is less urgency from clients to make new commitments.

Potential clients touring space acknowledge that economic uncertainty is impacting space decisions.

As we consider our expectations for leasing in 2023, we are factoring in the impacts of a slower economy, softer business performance, and reduced demand for space.

We expect the bulk of our leasing will continue to come from small and medium-sized professional and financial services firms.

Investment Activity

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

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

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 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.

Consistent with this strategy, in September 2022, we further expanded our life sciences portfolio in Kendall Square in Cambridge, Massachusetts by completing the acquisition of 125 Broadway for a purchase price, including transaction costs, of approximately $592.4 million.

125 Broadway is a six-story, 271,000 square foot laboratory/life sciences property adjacent to our existing 2.2 million square foot portfolio in the heart of Kendall Square.

Kendall Square is considered to be among the largest and most important cluster of life sciences companies and research space in the United States.

This property is 100% leased.

In October of 2022, we entered into an agreement to acquire an approximate 27% interest in the joint venture that owns 200 Fifth Avenue, a 14-story, approximately 870,000 square-foot, LEED Gold certified, premier workplace located in New York City that is approximately 93% leased.

The acquisition of the joint venture interest will be our second investment in the vibrant Midtown South neighborhood in the past twelve months.

We will serve as the managing member and provide customary leasing and property management services for the joint venture.

We expect to close the acquisition in the fourth quarter of 2022 for a gross purchase price of approximately $280.2 million, which includes $120.1 million of cash and our pro rata share of the outstanding loan secured by the property of $160.1 million.

The mortgage loan bears interest at 4.34% per annum and matures in November 2028.

There can be no assurance that we will complete the acquisition on the terms currently contemplated or at all.

As of September 30, 2022, our development/redevelopment pipeline consists of 14 properties that, when completed, we expect will total approximately 4.4 million square feet.

Our share of the estimated total cost for these projects is approximately $2.7 billion, of which approximately $948.2 million remained to be invested.

The total development pipeline, inclusive of both office and laboratory/life sciences developments, but excluding the View Boston Observatory at the Prudential Center and Reston Next Residential, is 52% pre-leased.

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.

In the third quarter of 2022, we completed the disposition of:

• 601 Massachusetts Avenue located in Washington, DC for a gross sale price of $531.0 million.

Net cash proceeds totaled approximately $512.3 million resulting in a gain on sale of real estate totaling approximately $237.4 million for BXP and $237.5 million for BPLP.

601 Massachusetts Avenue is an 11-

story, approximately 479,000 square foot premier workplace originally developed by us in 2013.

We will continue to provide property management services to the new owner.

• Land parcels located in Loudoun County, Virginia for a gross sale price of $27.0 million.

Net cash proceeds totaled approximately $25.6 million resulting in a gain on sale of real estate totaling approximately $24.4 million.

In October of 2022, we entered into an agreement to sell the residential component of The Avant at Reston Town Center located in Reston, Virginia.

The Avant is a 15-story, approximately 329,000 square foot, excluding retail space, 359-unit, luxury multifamily building that was 95% occupied, as of September 30, 2022.

We will retain ownership of the approximately 26,000 square foot ground-level retail space.

We expect to complete the transaction in the fourth quarter of 2022 for a gross sale price of $141 million.

There can be no assurance that we will complete the sale on the terms currently contemplated or at all.

We do not anticipate any further dispositions in 2022.

Assuming the completion of the sale of The Avant, our total dispositions in 2022 is projected to be approximately $864 million.

A brief overview of each of our markets follows.

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.

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

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

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 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.

During the third quarter of 2022, we signed approximately 800,000 square feet of leases and approximately 238,000 square feet of leases commenced in the Boston region.

Approximately 180,000 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 28% over the prior leases.

Our Boston CBD in-service portfolio was approximately 95% leased as of September 30, 2022.

Our approximately 2.7 million square foot in-service office portfolio in Cambridge was approximately 96% leased as of September 30, 2022.

We and Biogen Inc.

terminated Biogen’s lease at 300 Binney Street in Kendall Square to facilitate the conversion and expansion of the property, which is expected to begin in early 2023.

Biogen will be vacating the property in phases through early 2023.

300 Binney Street is currently an approximately 195,000 net rentable square foot property that will be redeveloped into an approximately 240,000 net rentable square foot laboratory/life sciences space for The Broad Institute who has signed a lease for 100% of the laboratory/life sciences space.

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

Our Route 128-Mass Turnpike portfolio is comprised of approximately 4.7 million square feet and was approximately 83% leased as of September 30, 2022.

We partially placed in-service 880 Winter Street, an approximately 244,000 square foot laboratory/life sciences project located in Waltham, Massachusetts.

The project is 97% pre-leased, as of November 1, 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.

As of September 30, 2022, our LA in-service properties were approximately 90% leased.

During the third quarter of 2022, we executed approximately 290,000 square feet of leases in the New York region and approximately 704,000 square feet of leases commenced.

Approximately 578,000 square feet of the leases that commenced in the third quarter had been vacant for less than one year and they represent a decrease in net rental obligations of approximately 4% over the prior leases.

As of September 30, 2022, our New York CBD in-service portfolio was approximately 89% leased.

San Francisco

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.

During the third quarter of 2022, we executed approximately 165,000 square feet of leases and approximately 271,000 square feet of leases commenced in the San Francisco region.

Approximately 169,000 square feet of leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 3% 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.

Our San Francisco CBD in-service properties were approximately 89% leased as of September 30, 2022.

Our Seattle in-service portfolio includes Safeco Plaza, an approximately 778,000 square foot property of which we own 33.67%, and Madison Centre, an approximately 755,000 square foot property.

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

Washington, DC

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.

During the third quarter of 2022, we executed approximately 163,000 square feet of leases and approximately 526,000 square feet of leases commenced in the Washington, DC region.

Approximately 455,000 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 9% 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%.

Our Washington, DC CBD in-service properties were approximately 84% leased as of September 30, 2022.

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.

Our Reston, Virginia properties were approximately 92% leased as of September 30, 2022.

Leasing Statistics

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

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

Three months ended September 30, 2022 Nine months ended September 30, 2022

(Square Feet)

22 unchanged sentences

__________________

(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.

(1) Total vacant square feet of properties taken out of service and property disposition during the three months ended September 30, 2022 consists of 117,907 square feet at 760 Boylston Street and 5,270 square feet at 601 Massachusetts Avenue.

Total vacant square feet of properties taken out of service and property dispositions during the nine months ended September 30, 2022 consists of 117,907 square feet at 760

Boylston Street, 95,180 square feet at 651 Gateway, 185,298 square feet at Virginia 95 Office Park and 5,270 square feet at 601 Massachusetts Avenue.

(2) Total vacant square feet of properties acquired during the nine months ended September 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 September 30, 2022 consists of 4,207 square feet at 2100 Pennsylvania Avenue, 7,531 square feet at Reston Next and 51,195 square feet at 880 Winter Street.

Total square feet of properties placed (and partially placed) in-service during the nine months ended September 30, 2022 consists of 51,195 square feet at 880 Winter Street, 418,221 square feet at Reston Next, 10,752 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 nine months ended September 30, 2022 .

(5) Represents leases executed during the three and nine months ended September 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 nine months ended September 30, 2022 is 193,318 and 758,239 square feet, respectively.

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

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.

Of the 1,680,341 and 4,669,664 square feet of second generation leases that commenced during the three and nine months ended September 30, 2022, respectively, leases for 1,498,628 and 3,923,030 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.

(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;

(8) Represents the increase in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 1,382,469 and 3,681,677 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 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:

(9) Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the 1,382,469 and 3,681,677 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2022, respectively.

Transactions during the three months ended September 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.

• On September 16, 2022, we acquired 125 Broadway in Cambridge, Massachusetts for a net purchase price, including transaction costs, of approximately $592.4 million.

The acquisition was completed with available cash and borrowings under BPLP’s unsecured credit facility.

125 Broadway is a 271,000 net rentable square foot, six-story, laboratory/life sciences property.

The property is 100% leased.

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.

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

• On August 30, 2022, we completed the sale of 601 Massachusetts Avenue located in Washington, DC for a gross sale price of $531.0 million.

Net cash proceeds totaled approximately $512.3 million, resulting in a gain on sale of real estate of approximately $237.4 million for BXP and approximately $237.5 million for BPLP.

601 Massachusetts Avenue is an approximately 479,000 net rentable square foot premier workplace.

• On September 15, 2022, we completed the sale of two parcels of land located in Loudoun County, Virginia for an aggregate gross sale price of $27.0 million.

Net cash proceeds totaled approximately $25.6 million, resulting in a gain on sale of real estate totaling approximately $24.4 million for BXP and BPLP.

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.

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

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

There can be no assurance that the conditions will

be satisfied or that we will commence the development on the terms and schedule currently contemplated or at all.

• 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.

• On July 1, 2022, we commenced the redevelopment of 140 Kendrick Street, a premier workplace that consists of three buildings aggregating approximately 388,000 net rentable square feet located in Needham, Massachusetts.

The redevelopment is a repositioning of one building consisting of approximately 90,000 net rentable square feet into a net zero, carbon neutral premier workplace building, as defined by the LEED Zero Carbon Certification.

When completed, the building will consist of approximately 104,000 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.

This project is 100% pre-leased.

• On July 15, 2022, we partially placed in-service 880 Winter Street, an approximately 244,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.

This project is 97% pre-leased.

• On September 8, 2022, we terminated our existing lease agreement with our client at 300 Binney Street to facilitate the conversion and expansion of the property.

300 Binney Street is a premier workplace with approximately 195,000 net rentable square feet at Kendall Center in Cambridge, Massachusetts that will be redeveloped into approximately 240,000 net rentable square feet of laboratory/life sciences space.

The commencement of construction is subject to various conditions.

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

This property is 100% pre-leased to a single client.

• On September 12, 2022, we commenced the redevelopment of 760 Boylston Street, a retail project at the Prudential Center located in Boston, Massachusetts.

The redevelopment is a modernization of the space consisting of approximately 118,000 net rentable square feet.

This project is 100% pre-leased to a single client.

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.

• On August 8, 2022, a joint venture in which we have a 50% interest modified the construction loan collateralized by its Dock 72 property located in Brooklyn, New York.

At the time of the modification, the loan had an outstanding balance totaling approximately $198.4 million, a total commitment amount of $250.0 million, bore interest at a variable rate equal to LIBOR plus 3.35% per annum, and was scheduled to mature on December 18, 2023.

The modified construction loan bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25% plus (2) 3.10% per annum, has a total commitment amount of approximately $198.4 million, and continues to mature on December 18, 2023.

Dock 72 is a premier workplace with approximately 669,000 net rentable square feet.

• On September 1, 2022, a joint venture in which we have a 20% interest entered into an interest rate cap agreement to cap the variable rate debt secured by its Metropolitan Square property located in Washington, DC.

The mortgage and mezzanine loans have an aggregate principal balance of $420.0 million and bear interest at a weighted average variable rate equal to SOFR plus 2.75% per annum.

The interest rate cap agreement capped SOFR at 4.50% per annum on a notional amount of $420.0 million through April 15, 2024.

Metropolitan Square is a premier workplace with approximately 657,000 net rentable square feet located in Washington, DC.

• On September 9, 2022, a joint venture in which we have an approximate 33.67% interest modified the mortgage loan collateralized by its Safeco Plaza property located in Seattle, Washington.

At the time of the modification, the loan’s outstanding balance totaled $250.0 million, bore interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum, and was scheduled to mature on September 1, 2026.

The modified mortgage loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum and continues to mature on September 1, 2026.

In conjunction with the loan modification, the joint venture entered into an interest rate cap agreement that capped SOFR at 2.50% per annum on a notional amount of $250.0 million through September 1, 2023.

Safeco Plaza is a premier workplace with approximately 765,000 net rentable square feet.

Transactions completed subsequent to September 30, 2022 included the following:

• On October 6, 2022, we entered into an agreement to sell the residential component of The Avant at Reston Town Center, located in Reston, Virginia, for a gross sale price of $141 million.

The Avant is a 15-story, approximately 329,000 square foot, excluding retail space, 359-unit, luxury multifamily building.

We will retain ownership of the approximately 26,000 square foot ground-level retail space.

There can be no assurance that we will complete the sale on the terms currently contemplated or at all.

• On October 25, 2022, we entered into an agreement to acquire an approximate 27% interest in the joint venture that owns 200 Fifth Avenue located in New York City, for a gross purchase price of approximately $280.2 million, which includes $120.1 million of cash and our pro rata share of the outstanding loan secured by the property of $160.1 million.

The mortgage loan bears interest at 4.34% per annum and matures in November 2028.

200 Fifth Avenue is a 14-story, approximately 870,000 square-foot, LEED Gold certified, premier workplace located in the Midtown South submarket.

There can be no assurance that we will complete the acquisition on the terms currently contemplated or at all.

Critical Accounting Estimates

4 unchanged sentences

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

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

Results of Operations for the Nine Months Ended September 30, 2022 and 2021

Net income attributable to Boston Properties, Inc.

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 .”

common shareho lders and net income attributable to Boston Properties Limited Partnership common unitholders increased by approximately $415.5 million and $465.6 million for the nine months ended September 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 nine months ended September 30, 2022 to the nine months ended September 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 six months ended June 30, 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 nine months ended September 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 56 .

Six months ended June 30,

Nine months ended September 30,

2022 2021 Increase/

18 unchanged sentences

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

Loss from unconsolidated joint ventures 1,389 1,745 (356) (20.40) %

Other Income:

4 unchanged sentences

381,293 8,104 373,189 4,605.00 %

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

Other Expenses:

12 unchanged sentences

Net Operating Income $ 1,442,266 $ 1,355,845 $ 86,421 6.37 %

Six months ended June 30,

Nine months ended September 30,

2022 2021 Increase/

14 unchanged sentences

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

Loss from unconsolidated joint ventures 1,389 1,745 (356) (20.40) %

Other Income:

4 unchanged sentences

385,349 8,104 377,245 4,655.05 %

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

Other Expenses:

12 unchanged sentences

Net Operating Income $ 1,442,266 $ 1,355,845 $ 86,421 6.37 %

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”).

At September 30, 2022 and 2021, we owned or had joint venture interests in a portfolio of 193 and 202 commercial real estate properties, respectively (in each case, the “Total Property Portfolio”).

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

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

Therefore, the comparison of operating results for the three and 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.

Therefore, the comparison of operating results for the three and nine months ended September 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.

3 unchanged sentences

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.

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

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

12 unchanged sentences

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

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

Comparison of the nine months ended September 30, 2022 to the nine months ended September 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 126 properties totaling approximately 38.2 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 June 30, 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 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.

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

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

23 unchanged sentences

(2) For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 56.

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.

Residential Net Operating Income for the nine months ended September 30, 2022 and 2021 is comprised of Residential Revenue of $44,218 and $29,832 less Residential Expenses of $23,274 and $18,100, respectively.

Hotel Net Operating Income (Loss) for the nine months ended September 30, 2022 and 2021 is comprised of Hotel Revenue of $28,395 and $7,382 less Hotel Expenses of $19,832 and $7,993, 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 $48.1 million for the six months ended June 30, 2022 compared to 2021.

Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $67.7 million for the nine months ended September 30, 2022 compared to 2021.

The increase was a result of our average revenue per square foot increasing by approximately $2.95, contributing approximately $74.6 million, partially offset by average occupancy decreasing from 91.6% to 91.2%, resulting in a decrease of approximately $6.9 million.

Termination Income

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.

Termination income decreased by approximately $5.9 million for the nine months ended September 30, 2022 compared to 2021.

Termination income for the nine months ended September 30, 2022 related to 23 clients across the Same Property Portfolio and totaled approximately $5.0 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 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.

Termination income for the nine months ended September 30, 2021 related to 23 clients across the Same Property Portfolio and totaled approximately $11.5 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 $13.1 million for the six months ended June 30, 2022 compared to 2021.

Parking and other revenue increased by approximately $16.6 million for the nine months ended September 30, 2022 compared to 2021.

Parking revenue increased by approximately $17.3 million and was partially offset by a decrease in other revenue of approximately $0.7 million.

1 unchanged sentence

Real Estate Operating Expenses

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.

Real estate operating expenses from the Same Property Portfolio increased by approximately $47.0 million, or 6.5%, for the nine months ended September 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 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.

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

Rental revenue and real estate operating expenses increased by approximately $26.7 million and $6.6 million, respectively, for the nine months ended September 30, 2022 compared to 2021, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

4 unchanged sentences

Madison Centre (1) May 17, 2022 754,988 18,765 — 18,765 4,805 — 4,805

125 Broadway September 16, 2022 271,000 1,622 — 1,622 208 — 208

1,395,148 $ 30,293 $ 3,596 $ 26,697 $ 7,214 $ 653 $ 6,561

______________

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

(1) Rental revenue for the nine months ended September 30, 2022 includes approximately $0.4 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 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.

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

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $43.1 million and $9.7 million, respectively, for the nine months ended September 30, 2022 compared to 2021, as detailed below.

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

6 unchanged sentences

2100 Pennsylvania Avenue Second Quarter, 2022 N/A 480,000 169 — 169 305 — 305

880 Winter Street (4) Third Quarter, 2022 N/A 244,000 684 2,476 (1,792) 376 1,509 (1,133)

2,693,373 $ 61,055 $ 17,976 $ 43,079 $ 15,673 $ 6,001 $ 9,672

2 unchanged sentences

(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.

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

(4) Conversion of a 224,000 square foot office property located in Waltham, Massachusetts to laboratory space.

Properties in Development or Redevelopment Portfolio

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.

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

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $2.4 million and $0.6 million, respectively, for the nine months ended September 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

1 unchanged sentence

(dollars in thousands)

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

3625-3635 Peterson Way (1) April 16, 2021 218,000 $ — $ 1,753 $ (1,753) $ — $ 459 $ (459)

140 Kendrick - Building A July 1, 2022 104,000 2,876 3,244 (368) 991 889 102

760 Boylston Street September 12, 2022 118,000 — 247 (247) 608 834 (226)

440,000 $ 2,876 $ 5,244 $ (2,368) $ 1,599 $ 2,182 $ (583)

_____________

(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.

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

1 unchanged sentence

Properties Sold Portfolio

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.

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

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $21.5 million and $6.4 million, respectively, for the nine months ended September 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

4 unchanged sentences

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 5,190 11,091 (5,901) 1,787 2,990 (1,203)

601 Massachusetts Avenue August 30, 2022 Office 478,667 28,225 32,099 (3,874) 8,499 9,877 (1,378)

1,608,588 $ 34,164 $ 55,627 $ (21,463) $ 10,528 $ 16,878 $ (6,350)

1 unchanged sentence

Residential Net Operating Income

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.

Net operating income for our residential same properties increased by approximately $9.2 million for the nine months ended September 30, 2022 compared to 2021.

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

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

15 unchanged sentences

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

(4) See Note 13 to the Consolidated Financial Statements.

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.

The Boston Marriott Cambridge hotel had net operating income of approximately $8.6 million for the nine months ended September 30, 2022, representing an increase of approximately $9.2 million compared to the nine months ended September 30, 2021.

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

Occupancy 63.4 % 27.8 % 128.1 %

3 unchanged sentences

Development and Management Services Revenue

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.

Development and management services revenue decreased by approximately $0.5 million for the nine months ended September 30, 2022 compared to 2021.

Development services revenue decreased by approximately $1.7 million and management services revenue increased by approximately $1.2 million.

The decrease in development services revenue was 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.

The increase in management services revenue was primarily related to an increase in property management fees from an unconsolidated joint venture in the Boston region and asset management fees from an unconsolidated joint venture in the Seattle region.

General and Administrative Expense

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.

General and administrative expense decreased by approximately $7.5 million for the nine months ended September 30, 2022 compared to 2021 primarily due to a decrease in compensation expense of approximately $13.2 million, partially offset by an approximately $5.7 million increase in other general and administrative expenses.

The decrease in compensation expense related to an approximately $12.2 million decrease in the value of our deferred compensation plan and an approximately $1.0 million decrease 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 six months ended June 30, 2022 and 2021 were approximately $8.1 million and $6.8 million, respectively.

Capitalized wages for the nine months ended September 30, 2022 and 2021 were approximately $12.0 million and $10.1 million, respectively.

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

Transaction Costs

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.

Transaction costs decreased by approximately $0.8 million for the nine months ended September 30, 2022 compared to 2021 due primarily to costs incurred in connection with the pursuit and formation of new joint ventures in 2021 that did not occur at the same levels in 2022.

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

4 unchanged sentences

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 $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,

Depreciation and amortization expense increased by approximately $11.6 million for the nine months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

7 unchanged sentences

_____________

(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.

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

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

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

As a result, during the 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,

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

Depreciation and amortization expense increased by approximately $13.0 million for the nine months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

7 unchanged sentences

_____________

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.

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

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

As a result, during the 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.

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

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

2 unchanged sentences

Other Income and Expense Items

Income from Unconsolidated Joint Ventures

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.

Loss from Unconsolidated Joint Ventures

For the nine months ended September 30, 2022 compared to 2021, loss from unconsolidated joint ventures decreased by approximately $0.4 million primarily due to an approximately $10.0 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.

This increase was partially offset by a $10.3 million gain on sale of investment from the sale of our Annapolis Junction joint venture interest during the nine months ended September 30, 2021.

Gains on Sales of Real Estate

3 unchanged sentences

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 $111.2 million for the six months ended June 30, 2022 compared to 2021, as detailed below.

Gains on sales of real estate increased by approximately $373.2 million for the nine months ended September 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

2 unchanged sentences

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

601 Massachusetts Avenue August 30, 2022 Office 478,667 531.0 512.3 237.4

Broadrun Land Parcel September 15, 2022 Land N/A 27.0 25.6 24.4

$ 723.2 $ 695.2 $ 380.7 (1)

1 unchanged sentence

N/A N/A $ 8.1

(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.

_____________

(1) Excludes approximately $0.6 million of gains on sales of real estate recognized during the nine months ended September 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.

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

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

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.

Gains on sales of real estate increased by approximately $377.2 million for the nine months ended September 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

2 unchanged sentences

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

601 Massachusetts Avenue August 30, 2022 Office 478,667 531.0 512.3 237.5

Broadrun Land Parcel September 15, 2022 Land N/A 27.0 25.6 24.4

$ 723.2 $ 695.2 $ 384.8 (1)

1 unchanged sentence

N/A N/A $ 8.1

(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.

_____________

(1) Excludes approximately $0.5 million of gains on sales of real estate recognized during the nine months ended September 30, 2022 related to gains on sales of real estate occurring in the prior periods.

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

Concurrently with the sale, we agreed to act as development manager and guaranteed the completion of the project.

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

Interest and Other Income (Loss)

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.

Interest and other income (loss) increased by approximately $2.0 million for the nine months ended September 30, 2022 compared to 2021, due primarily to an increase of approximately $2.0 million in interest income due to increased interest earned on our deposits.

Other Income - Assignment Fee

5 unchanged sentences

Gains (Losses) from Investments in Securities

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.

Gains (losses) from investments in securities for the nine months ended September 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.

2 unchanged sentences

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

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.

During the nine months ended September 30, 2022 and 2021, we recognized gains (losses) of approximately $(8.5) million and $3.7 million, respectively, on these investments.

By comparison, our general and administrative expense increased (decreased) by approximately $(8.5) million and $3.7 million during the nine months ended September 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

3 unchanged sentences

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.

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

Interest Expense

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

Interest expense decreased by approximately $2.8 million for the nine months ended September 30, 2022 compared to 2021, as detailed below.

Component Change in interest expense for the nine months ended September 30, 2022 compared to September 30, 2021

(in thousands)

1 unchanged sentence

Issuance of $850 million in aggregate principal of 2.450% senior notes due 2033 on September 29, 2021 $ 15,521

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 9,672

Amortization expense of financing fees related to unsecured term loan 801

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

Amortization expense of financing fees primarily related to the unsecured term loan 2,208

Total increases to interest expense 31,978

8 unchanged sentences

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

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

Interest capitalized for the nine months ended September 30, 2022 and 2021 was approximately $40.0 million and $39.3 million, respectively.

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

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.

We expect our interest expense will be materially greater in 2023 compared to 2022 due to the cessation of capitalized interest on our development deliveries, acquisitions funded by debt, higher interest rates on our floating rate debt, and the impact of refinancing our 2023 debt maturities at materially higher interest rates.

At September 30, 2022, our variable rate debt consisted of BPLP’s $1.5 billion revolving facility (the “Revolving Facility”) and BPLP’s $730.0 million unsecured credit agreement (the “ Unsecured Term Loan”.) T he Revolving Facility and Unsecured Term Loan had approximately $1.1 billion outstanding as of September 30, 2022.

For a summary of our consolidated debt as of September 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 $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,

Noncontrolling interests in property partnerships increased by approximately $2.3 million for the nine months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

7 unchanged sentences

_____________

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

(1) The decrease was primarily attributable to an increase in operating expenses.

(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 $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.

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $47.4 million for the nine months ended September 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.

5 unchanged sentences

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

Results of Operations for the Three Months Ended September 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.

and net income attributable to Boston Properties Limited Partnership increased approximately $252.7 million and $281.6 million for the three months ended September 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 September 30, 2022 to the three months ended September 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.

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

For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 68.

Three months ended June 30,

Three months ended September 30,

2022 2021 Increase/

10 unchanged sentences

Interest expense 111,846 105,794 6,052 5.72 %

Losses from investments in securities 1,571 190 1,381 726.84 %

Loss from unconsolidated joint ventures 3,524 5,597 (2,073) (37.04) %

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)

15 unchanged sentences

Net Operating Income $ 488,908 $ 458,729 $ 30,179 6.58 %

Three months ended June 30,

Three months ended September 30,

2022 2021 Increase/

8 unchanged sentences

111,846 105,794 6,052 5.72 %

Losses from investments in securities 1,571 190 1,381 726.84 %

Loss from unconsolidated joint ventures 3,524 5,597 (2,073) (37.04) %

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)

15 unchanged sentences

Net Operating Income $ 488,908 $ 458,729 $ 30,179 6.58 %

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.

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, losses from investments in securities, 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) 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.

5 unchanged sentences

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.

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

Comparison of the three months ended September 30, 2022 to the three months ended September 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 128 properties totaling approximately 38.6 million net rentable square feet, excluding unconsolidated joint ventures.

The Same Property Portfolio includes properties acquired or placed in-service on or prior to 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.

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

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

19 unchanged sentences

Real Estate Operating Expenses 262,076 244,283 17,793 7.28 % 3,894 334 5,947 1,162 501 560 2,260 5,897 274,678 252,236 22,442 8.90 %

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 %

Net Operating Income (Loss), Excluding Residential and Hotel 444,545 437,940 6,605 1.51 % 10,756 161 18,797 590 (501) 806 4,794 13,140 478,391 452,637 25,754 5.69 %

Residential Net Operating Income (2) 7,316 4,849 2,467 50.88 % — — — — — — — — 7,316 4,849 2,467 50.88 %

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 %

Hotel Net Operating Income (2) 3,201 1,243 1,958 157.52 % — — — — — — — — 3,201 1,243 1,958 157.52 %

Net Operating Income (Loss) $ 455,062 $ 444,032 $ 11,030 2.48 % $ 10,756 $ 161 $ 18,797 $ 590 $ (501) $ 806 $ 4,794 $ 13,140 $ 488,908 $ 458,729 $ 30,179 6.58 %

_______________

2 unchanged sentences

(2) For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 68.

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.

Residential Net Operating Income for the three months ended September 30, 2022 and 2021 is comprised of Residential Revenue of $14,340 and $10,894 less Residential Expenses of $7,024 and $6,045, respectively.

Hotel Net Operating Income for the three months ended September 30, 2022 and 2021 is comprised of Hotel Revenue of $11,749 and $5,189 less Hotel Expenses of $8,548 and $3,946, 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.

Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $21.0 million for the three months ended September 30, 2022 compared to 2021.

The increase was a result of our average revenue per square foot increasing by approximately $2.88, contributing approximately $25.4 million, partially offset by an approximately $4.4 million decrease due to our average occupancy decreasing from 91.4% to 90.8%.

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.

Termination income decreased by approximately $0.2 million for the three months ended September 30, 2022 compared to 2021.

Termination income for the three months ended September 30, 2022 related to eight clients across the Same Property Portfolio and totaled approximately $1.7 million, which was primarily related to clients that terminated leases early in San Francisco.

Termination income for the three months ended September 30, 2021 related to six clients across the Same Property Portfolio and totaled approximately $1.9 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.

Parking and other revenue increased by approximately $3.5 million for the three months ended September 30, 2022 compared to 2021.

Parking revenue increased by approximately $3.9 million and was partially offset by a decrease in other revenue of approximately $0.4 million.

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.

Real estate operating expenses from the Same Property Portfolio increased by approximately $17.8 million, or 7.3%, for the three months ended September 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 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.

The table below lists the properties acquired between July 1, 2021 and September 30, 2022.

Rental revenue and real estate operating expenses increased by approximately $14.2 million and $3.6 million, respectively, for the three months ended September 30, 2022 compared to 2021, as detailed below.

Square Feet Rental Revenue Real Estate Operating Expenses

1 unchanged sentence

(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 $ 735 $ 495 $ 240 $ 561 $ 334 $ 227

Madison Centre (1) May 17, 2022 754,988 12,293 — 12,293 3,125 — 3,125

125 Broadway September 16, 2022 271,000 1,622 — 1,622 208 — 208

1,258,266 $ 14,650 $ 495 $ 14,155 $ 3,894 $ 334 $ 3,560

______________

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

(1) Rental revenue for the three months ended September 30, 2022 includes approximately $0.3 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.

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

Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $23.0 million and $4.8 million, respectively, for the three months ended September 30, 2022 compared to 2021, as detailed below.

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

5 unchanged sentences

2100 Pennsylvania Avenue Second Quarter, 2022 N/A 480,000 160 — 160 288 — 288

880 Winter Street (3) Third Quarter, 2022 N/A 244,000 684 — 684 376 61 315

2,473,373 $ 24,744 $ 1,752 $ 22,992 $ 5,947 $ 1,162 $ 4,785

1 unchanged sentence

(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.

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

(3) Conversion of a 224,000 square foot office property located in Waltham, Massachusetts to laboratory space.

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.

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

Rental revenue and real estate operating expenses from our Properties in Development or Redevelopment Portfolio decreased by approximately $1.4 million and $0.1 million, respectively, for the three months ended September 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

1 unchanged sentence

(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)

140 Kendrick - Building A July 1, 2022 104,000 $ — $ 1,119 $ (1,119) $ 321 $ 310 $ 11

760 Boylston Street September 12, 2022 118,000 — 247 (247) 180 250 (70)

222,000 $ — $ 1,366 $ (1,366) $ 501 $ 560 $ (59)

(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.

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

Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $12.0 million and $3.6 million, respectively, for the three months ended September 30, 2022 compared to 2021, as detailed below.

Rental Revenue Real Estate Operating Expenses

4 unchanged sentences

Virginia 95 Office Park June 15, 2022 Office/Flex 733,421 — 3,397 (3,397) — 925 (925)

601 Massachusetts Avenue August 30, 2022 Office 478,667 7,054 10,894 (3,840) 2,260 3,415 (1,155)

1,608,588 $ 7,054 $ 19,037 $ (11,983) $ 2,260 $ 5,897 $ (3,637)

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.

Net operating income for our residential same properties increased by approximately $2.5 million for the three months ended September 30, 2022 compared to 2021.

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

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

15 unchanged sentences

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.

(4) See Note 13 to the Consolidated Financial Statements.

Hotel Net Operating Income

The Boston Marriott Cambridge hotel had net operating income of approximately $3.2 million for the three months ended September 30, 2022, representing an increase of approximately $2.0 million compared to the three months ended September 30, 2021.

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

Occupancy 75.8 % 49.4 % 53.4 %

3 unchanged sentences

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.

Development and management services revenue increased by approximately $1.4 million for the three months ended September 30, 2022 compared to 2021.

Management services revenue increased by approximately $1.4 million and was primarily related to an increase in property management fees from an unconsolidated joint venture in the Boston region and asset management fees from an unconsolidated joint venture in the Los Angeles region.

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.

General and administrative expense decreased by approximately $2.0 million for the three months ended September 30, 2022 compared to 2021 primarily due to a decrease in compensation expense of approximately $3.9 million, partially offset by an increase of approximately $1.9 million in other general and administrative expenses.

The decrease in compensation expense primarily related to an approximately $1.4 million decrease in the value of

our deferred compensation plan, and an approximately $2.5 million decrease in other compensation expenses.

The increase in other general and administrative expenses was 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.

Capitalized wages for the three months ended September 30, 2022 and 2021 were approximately $3.9 million and $3.4 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.

Transaction costs decreased by approximately $0.2 million for the three months ended September 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.

4 unchanged sentences

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,

Depreciation and amortization expense increased by approximately $11.3 million for the three months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

6 unchanged sentences

$ 190,675 $ 179,412 $ 11,263

_______________

(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,

Depreciation and amortization expense increased by approximately $11.3 million for the three months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

6 unchanged sentences

$ 188,969 $ 177,677 $ 11,292

_______________

(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

3 unchanged sentences

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.

For the three months ended September 30, 2022 compared to 2021, loss from unconsolidated joint ventures decreased by approximately $2.1 million due primarily to an approximately $2.2 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.

Gains on Sales of Real Estate

3 unchanged sentences

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.

Gains on sales of real estate increased by approximately $262.0 million for the three months ended September 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

601 Massachusetts Avenue August 30, 2022 Office 478,667 $ 531.0 $ 512.3 $ 237.4

Broadrun Land Parcel September 15, 2022 Land N/A 27.0 25.6 24.4

$ 558.0 $ 537.9 $ 261.8 (1)

1 unchanged sentence

N/A N/A $ 0.3

(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.

(1) Excludes approximately $0.5 million of gains on sales of real estate recognized during the three months ended September 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 $0.3 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.

Gains on sales of real estate increased by approximately $262.0 million for the three months ended September 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

601 Massachusetts Avenue August 30, 2022 Office 478,667 $ 531 $ 512.3 $ 237.5

Broadrun Land Parcel September 15, 2022 Land N/A 27.0 25.6 24.4

$ 558.0 $ 537.9 $ 261.9 (1)

1 unchanged sentence

N/A N/A $ 0.3

(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.

(1) Excludes approximately $0.4 million of gains on sales of real estate recognized during the three months ended September 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 $0.3 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.

Interest and other income (loss) increased by approximately $2.2 million for the three months ended September 30, 2022 compared to 2021, due primarily to an increase of approximately $2.2 million in interest income due to increased interest earned on our deposits.

Losses from Investments in Securities

Losses from investments in securities for the three months ended September 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.

1 unchanged sentence

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.

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

During the three months ended September 30, 2022 and 2021, we recognized losses of approximately $1.6 million and $0.2 million, respectively, on these investments.

By comparison, our general and administrative expense decreased by approximately $1.6 million and $0.2 million during the three months ended September 30, 2022 and 2021, respectively, as a result of 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

Interest expense increased by approximately $6.1 million for the three months ended September 30, 2022 compared to 2021, as detailed below.

Component Change in interest expense for the three months ended September 30, 2022 compared to September 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 $ 7,401

Amortization expense of financing fees related to unsecured term loan 801

Issuance of $850 million in aggregate principal of 2.450% senior notes due 2033 on September 29, 2021 5,097

Decrease in capitalized interest related to development projects 1,880

Amortization expense of financing fees primarily related to unsecured term loan 1,407

Total increases to interest expense 15,785

1 unchanged sentence

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) (49)

3 unchanged sentences

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.

Interest capitalized for the three months ended September 30, 2022 and 2021 was approximately $12.2 million and $14.2 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.

At September 30, 2022, our outstanding variable rate debt consisted of BPLP’s $1.5 billion Revolving Facility and $730.0 million Unsecured Term Loan.

T he Revolving Facility and Unsecured Term Loan had approximately $1.1 billion outstanding as of September 30, 2022.

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

Noncontrolling interests in property partnerships decreased by approximately $0.2 million for the three months ended September 30, 2022 compared to 2021, as detailed below.

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

2022 2021 Change

7 unchanged sentences

_______________

(1) The decrease was primarily attributable to an increase in operating expenses.

(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 $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.

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $28.9 million for the three months ended September 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.

14 unchanged sentences

• sales of real estate;

• private equity sources through our Strategic Capital Program (“SCP”) with large institutional investors;

• private equity sources including through our Strategic Capital Program (“SCP”) with large institutional investors;

• issuances of BXP equity securities and/or preferred or common units of partnership interests in BPLP.

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

We expect to fund our current development/redevelopment properties primarily with our available cash balances, construction loans, proceeds from asset sales and BPLP’s Revolving Facility.

We expect to fund our current development/redevelopment properties primarily with our available cash balances, construction loans, unsecured term 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.

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):

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 June 30, 2022

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, our available cash and access to cost effective capital at the given time.

The following table presents information on properties under construction and redevelopment as of September 30, 2022 (dollars in thousands):

Estimated Future Equity Requirement (1)(2)(4) Percentage Leased (5)

140 Kendrick - Building A (Redevelopment) Third Quarter, 2023 Needham, MA 1 104,000 $ 4,163 $ 26,600 $ — $ — $ 22,437 100 %

Fourth Quarter, 2023 Reston, VA 2 1,062,000 560,445 715,300 — — 154,855 87 % (6)

4 unchanged sentences

Total Office Properties under Construction 7 2,575,500 1,159,864 1,609,900 92,774 87,299 444,561 51 %

Lab/Life Sciences

Laboratory/Life Sciences

880 Winter Street (Redevelopment) First Quarter, 2023 Waltham, MA 1 244,000 100,112 108,000 — — 7,888 97 % (10)

3 unchanged sentences

651 Gateway (50% ownership) (Redevelopment) Fourth Quarter, 2025 South San Francisco, CA 1 327,000 33,738 146,500 — — 112,762 — %

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

Total Laboratory/Life Sciences Properties under Construction 5 1,244,000 367,563 771,900 — — 404,337 49 %

Reston Next Residential (508 units) (20% ownership) Second Quarter, 2026 Reston, VA 1 417,000 11,394 47,700 28,000 4,116 12,422 — %

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

Total Residential Property under Construction 1 417,000 11,394 47,700 28,000 4,116 12,422 —

760 Boylston Street (Redevelopment) Second Quarter, 2024 Boston, MA 1 118,000 2,355 43,800 — — 41,445 100 %

Total Retail Property under Construction 1 118,000 2,355 43,800 — — 41,445 100 %

View Boston Observatory at The Prudential Center (Redevelopment) N/A Boston, MA — 59,000 136,896 182,300 — — 45,404 N/A (11)

1 unchanged sentence

(1) Represents our share.

(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 $95.9 million of unpaid but accrued construction costs and leasing commissions.

(4) Excludes approximately $95.9 million of unpaid but accrued construction costs and leasing commissions.

(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.

(5) Represents percentage leased as of November 1, 2022, including leases with future commencement dates.

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

(7) The property was 6% placed in-service as of September 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.

3 unchanged sentences

In conjunction with the construction of Building A, garage and site work will be completed for Phase II, which will support approximately 700,000 square feet of development in two office buildings, budgeted to be an incremental $141 million.

(10) The property was 25% placed in-service as of September 30, 2022.

(11) We expect to place this project in-service and open to the public in the second quarter of 2023.

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

Estimated total investment excludes approximately $210 million related to the redevelopment of 300 Binney Street which is currently in-service.

We terminated our existing lease agreement with Biogen at 300 Binney Street to facilitate the redevelopment of the property, which is expected to begin in early 2023.

Biogen will be vacating the property in phases through early 2023.

The project is 100% pre-leased.

The commencement of construction is subject to various conditions.

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

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.

3 unchanged sentences

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 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.

We expect our primary uses of capital over the next twelve months will be to fund the anticipated acquisition of an approximate 27% interest in the joint venture that owns 200 Fifth Avenue in New York City, the commencement, continuation and completion of our current and committed development and redevelopment projects, repaying debt maturities (as discussed below), servicing the interest payments on our outstanding indebtedness, and satisfying our REIT distribution requirements.

As of September 30, 2022, we had 14 properties under development or redevelopment.

Our share of the remaining development and redevelopment costs of active development and redevelopment projects that we expect to fund through 2026 was approximately $948.2 million (excluding costs related to 300 Binney Street).

In the third quarter of 2022, we commenced two redevelopment projects and committed to begin a third redevelopment project in early 2023 described below:

• 140 Kendrick Street Building A in Needham, Massachusetts.

When completed, the building will consist of approximately 104,000 net rentable square feet and will be the first net zero, carbon neutral office repositioning of this scale in Massachusetts.

This project is 100% pre-leased.

• 760 Boylston Street, a retail property at the Prudential Center in Boston, Massachusetts.

The redevelopment is a modernization of the approximately 118,000 net rentable square foot space.

This project is 100% pre-leased.

• 300 Binney Street in Cambridge, Massachusetts.

The conversion of this approximately 195,000 net rentable square foot property into an approximately 240,000 net rentable square foot laboratory/life sciences property has a total budgeted cost of $210.0 million and is expected to begin in early 2023.

This project is 100% pre-leased.

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

On September 16, 2022, we acquired 125 Broadway in Cambridge, Massachusetts for a net purchase price, including transaction costs, of approximately $592.4 million.

The acquisition was completed with available cash and borrowings under BPLP’s Revolving Facility.

125 Broadway is a 271,000 square foot, six-story, laboratory/life sciences property.

The property is 100% leased.

In the third quarter of 2022, we completed the sale of 601 Massachusetts Avenue located in Washington, DC and two parcels of land located in Loudoun County, Virginia for aggregate net proceeds of $537.9 million.

On October 6, 2022, we entered into an agreement to sell the residential component of The Avant at Reston Town Center located in Reston, Virginia for a gross sale price of $141 million.

There can be no assurance that we will complete the sale on the terms currently contemplated or at all.

In July 2021, we announced the formation of the SCP with two partners each having a targeted equity commitment 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.

3 unchanged sentences

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.

As we move forward, we anticipate increasing our use of joint venture partner equity to manage our debt levels.

We have no remaining debt maturities in 2022.

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

In our unconsolidated joint venture portfolio, we have approximately $533.6 million (our share) of debt maturating in 2023.

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

As of November 1, 2022, we had available cash of approximately $268.5 million (of which approximately $100.3 million is attributable to our consolidated joint venture partners).

Our liquidity and capital resources depend on a wide range of factors and we believe that our access to capital and our strong liquidity, including the approximately $1.1 billion available under the Revolving Facility and our available cash, as of November 1, 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.

14 unchanged sentences

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 $502.9 million and $637.3 million at June 30, 2022 and 2021, respectively, representing a decrease of approximately $134.4 million.

Cash and cash equivalents and cash held in escrows aggregated approximately $448.9 million and $1.1 billion at September 30, 2022 and 2021, respectively, representing a decrease of approximately $633.0 million.

The following table sets forth changes in cash flows:

Six months ended June 30,

Nine months ended September 30,

2022 2021 Change

4 unchanged sentences

Our principal source of cash flow is related to the operation of our properties.

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%.

The weighted-average term of our in-place leases, including leases signed by our unconsolidated joint ventures, excluding residential units, was approximately 7.8 years as of September 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.

1 unchanged sentence

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

Six months ended June 30,

We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings to enhance or maintain our market position.

Cash used in investing activities for the nine months ended September 30, 2022 and September 30, 2021 is detailed below:

Nine months ended September 30,

(in thousands)

12 unchanged sentences

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

(1) On September 16, 2022, we acquired 125 Broadway in Cambridge, Massachusetts for a net purchase price, including transaction costs, of approximately $592.4 million.

The acquisition was completed with available cash and borrowings under BPLP’s Revolving Facility.

125 Broadway is a 271,000 net rentable square foot, six-story, laboratory/life sciences property.

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.

Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace.

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

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

On June 2, 2021, we acquired 153 & 211 Second Avenue located in Waltham, Massachusetts for a purchase price of approximately $100.2 million in cash.

153 & 211 Second Avenue consists of two life sciences lab buildings totaling approximately 137,000 net rentable square feet.

(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.

(2) Construction in progress for the nine months ended September 30, 2022 included ongoing expenditures associated with Reston Next, 2100 Pennsylvania Avenue and 880 Winter Street, each of which are partially placed in-service, and 325 Main Street, which was completed and fully placed in-service during the nine months ended September 30, 2022.

In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, View Boston Observatory at The Prudential Center, 103 CityPoint, Reston Next Office Phase II, 140 Kendrick Street Building A and 760 Boylston Street.

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

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 August 30, 2022, we completed the sale of 601 Massachusetts Avenue located in Washington, DC for a gross sale price of $531.0 million.

Net cash proceeds totaled approximately $512.3 million, resulting in a gain on sale of real estate totaling approximately $237.4 million for BXP and approximately $237.5 million for BPLP.

601 Massachusetts Avenue is an approximately 479,000 net rentable square foot premier workplace.

On September 15, 2022, we completed the sale of two parcels of land located in Loudoun County, Virginia for a gross sale price of $27.0 million.

Net cash proceeds totaled approximately $25.6 million, resulting in a gain on sale of real estate totaling approximately $24.4 million for BXP and BPLP.

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.

Virginia 95 Office Park consists of eleven 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.

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

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

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

3 unchanged sentences

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.

(5) Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2022 consisted primarily of cash contributions of approximately $44.8 million, $31.6 million and $16.4 million to our Gateway Commons, Platform 16 and 751 Gateway joint ventures, respectively.

Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2021 consisted primarily of cash contributions of approximately $72.6 million and $11.4 million to our Safeco Plaza and Santa Monica Business Park joint ventures, respectively.

On September 1, 2021, we entered into a new joint venture for Safeco Plaza located in Seattle, Washington.

(6) Capital distributions from unconsolidated joint ventures for the nine months ended September 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.

3 unchanged sentences

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.

Cash provided by financing activities for the nine months ended September 30, 2022 totaled approximately $348.5 million.

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

1 unchanged sentence

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):

June 30, 2022

September 30, 2022

Shares / Units Outstanding Common Stock Equivalent Equivalent Value (1)

11 unchanged sentences

_______________

(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.

(1) Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on September 30, 2022 of $74.97.

(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.

5 unchanged sentences

(1) our consolidated debt;

(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:

(2) the product of (x) the closing price per share of BXP Common Stock on September 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,

1 unchanged sentence

(iii) the number of OP Units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, and

(iv) the number of OP Units issuable upon conversion of 2012 OPP Units, 2013 - 2019 MYLTIP Units that were issued in the form of LTIP Units.

(iv) the number of OP Units issuable upon conversion of 2012 OPP Units, and 2013 - 2019 MYLTIP Units that were issued in the form of LTIP Units.

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 June 30, 2022.

Because their three-year performance periods have not yet ended, 2020 - 2022 MYLTIP Units are not included in this calculation as of September 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.

12 unchanged sentences

Debt Financing

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.

As of September 30, 2022, we had approximately $13.8 billion of outstanding consolidated indebtedness, representing approximately 51.33% 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 6.1 years, (3) $340.0 million outstanding under BPLP’s Revolving Facility that matures on June 15, 2026 and (4) $730.0 million outstanding under BPLP’s Unsecured Term Loan that matures on May 16, 2023.

September 30,

(dollars in thousands)

8 unchanged sentences

BXP’s Share of Debt $ 13,925,599 $ 13,477,453

September 30,

Consolidated Debt Financing Statistics:

23 unchanged sentences

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 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.

Based on BPLP’s September 30, 2022 credit rating, (1) the applicable Eurocurrency and LIBOR Daily Floating Rate margins are 0.775%, (2) the alternate base rate margin is zero basis points and (3) the facility fee is 0.15% per annum.

At September 30, 2022, BPLP had $340.0 million of borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.4 million, with the ability to borrow approximately $1.2 billion.

At November 1, 2022, BPLP had $440.0 million of borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.4 million, with the ability to borrow approximately $1.1 billion.

Unsecured Term Loan

2 unchanged sentences

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.

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 zero 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.

As of September 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 September 30, 2022.

At September 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 June 30, 2022 (dollars in thousands):

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

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

18 unchanged sentences

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 June 30, 2022, BPLP was in compliance with each of these financial restrictions and requirements.

At September 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 June 30, 2022:

The following represents the outstanding principal balances due under the mortgage notes payable at September 30, 2022:

Properties Stated Interest Rate GAAP Interest Rate (1) Stated Principal Amount Deferred Financing Costs, Net Carrying Amount Carrying Amount (Partners ’ Share)

12 unchanged sentences

(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 June 30, 2022, the maximum funding obligation under the guarantee was approximately $16.2 million.

As of September 30, 2022, the maximum funding obligation under the guarantee was approximately $14.9

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).

6 unchanged sentences

See also Note 5 to the Consolidated Financial Statements.

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.

At September 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 $1.5 billion).

The table below summarizes the outstanding debt of these joint venture properties at September 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.

16 unchanged sentences

Metropolitan Square 20.00 % 5.12 % 5.90 % 420,000 (4,973) 415,027 83,005 (2)(13) April 9, 2024

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

Reston Next Residential 20.00 % 4.75 % 5.06 % 8,231 (1,566) 6,666 1,333 (2)(14) May 13, 2026

Total $ 3,443,626 $ (17,656) $ 3,425,972 $ 1,450,624

6 unchanged sentences

(5) The construction financing has a borrowing capacity of $198.4 million.

The construction financing bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.25%, plus (2) 2.85% per annum and matures on December 18, 2023.

The construction financing bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25%, plus (2) 3.10% per annum and matures on December 18, 2023.

(6) The construction financing had a borrowing capacity of $204.6 million.

9 unchanged sentences

The spread on the variable rate may be reduced, subject to certain conditions.

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

(11) The loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum and matures on September 1, 2026.

The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the SOFR rate at a cap of 2.50% per annum on a notional amount of $250.0 million through September 1, 2023.

(12) We provided $80.0 million of mortgage financing to the joint venture.

1 unchanged sentence

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

As of June 30, 2022, the loan has approximately $15.9 million of accrued interest due at the maturity date.

As of September 30, 2022, the loan has approximately $17.3 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 joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the SOFR rate at a cap of 4.50% per annum on a notional amount of $420.0 million through April 15, 2024.

(14) The construction financing has a borrowing capacity of $140.0 million.

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.

8 unchanged sentences

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.

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.

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.

4 unchanged sentences

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.

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

The following table presents a reconciliation of net income attributable to Boston Properties, Inc.

to FFO attributable to Boston Properties, Inc.

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

Three months ended June 30,

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

Three months ended September 30,

(in thousands)

24 unchanged sentences

Reconciliation to Diluted Funds from Operations:

Three months ended June 30,

Three months ended September 30,

(Numerator) Shares/Units

12 unchanged sentences

_______________

(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,

(1) BXP’s share of diluted Funds from Operations was 89.90% and 90.20% for the three months ended September 30, 2022 and 2021, respectively.

Three months ended September 30,

(in thousands)

13 unchanged sentences

Reconciliation to Diluted Funds from Operations:

Three months ended June 30,

Three months ended September 30,

(Numerator) Shares/Units

12 unchanged sentences

Contract terms are generally between three and five years.

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.

During the three months ended September 30, 2022, we paid approximately $60.1 million to fund client-related obligations, including tenant improvements and leasing commissions.

In addition, during the three months ended September 30, 2022, we and our unconsolidated joint venture partners incurred approximately $100.3 million of new client-related obligations associated with approximately 1.0 million square feet of second generation leases, or approximately $99 per square foot.

We signed approximately 429,900 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 third quarter of 2022, we signed leases for approximately 1.4 million square feet of space and incurred aggregate client-related obligations of approximately $198.9 million, or approximately $137 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