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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Boston Properties, Inc.
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Delaware
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04-2473675
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Boston Properties Limited Partnership
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Delaware
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04-3372948
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Boston Properties, Inc.
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Common Stock, par value $0.01 per share
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154,322,266
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(Registrant)
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(Class)
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(Outstanding on November 2, 2017)
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•
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enhances investors’ understanding of BXP and BPLP by enabling investors to view the business as a whole in the same manner as management views and operates the business;
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•
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eliminates duplicative disclosure and provides a more concise and readable presentation because a substantial portion of the disclosure applies to both BXP and BPLP; and
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•
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creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
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•
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Item 1. Financial Statements (unaudited), which includes the following specific disclosures for BXP and BPLP:
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•
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable; and
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•
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Item 2. Liquidity and Capital Resources includes separate reconciliations of amounts to each entity’s financial statements, where applicable.
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Page
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ITEM 1.
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Boston Properties, Inc.
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Boston Properties Limited Partnership
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Boston Properties, Inc. and Boston Properties Limited Partnership
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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BOSTON PROPERTIES, INC.
(Unaudited)
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September 30, 2017
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December 31, 2016
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(in thousands, except for share and par value amounts)
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ASSETS
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Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $7,084,588 and $6,760,078 at September 30, 2017 and December 31, 2016, respectively)
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$
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20,859,245
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$
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20,147,263
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Less: accumulated depreciation (amounts related to VIEs of $(825,390) and $(758,640) at September 30, 2017 and December 31, 2016, respectively)
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(4,484,798
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)
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(4,222,235
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)
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Total real estate
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16,374,447
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15,925,028
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Cash and cash equivalents (amounts related to VIEs of $285,089 and $253,999 at September 30, 2017 and December 31, 2016, respectively)
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493,055
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356,914
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Cash held in escrows (amounts related to VIEs of $6,179 and $4,955 at September 30, 2017 and December 31, 2016, respectively)
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83,779
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63,174
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Investments in securities
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27,981
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23,814
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Tenant and other receivables (amounts related to VIEs of $19,891 and $23,525 at September 30, 2017 and December 31, 2016, respectively)
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79,750
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92,548
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Accrued rental income (amounts related to VIEs of $232,336 and $224,185 at September 30, 2017 and December 31, 2016, respectively)
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835,415
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799,138
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Deferred charges, net (amounts related to VIEs of $268,727 and $290,436 at September 30, 2017 and December 31, 2016, respectively)
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657,474
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686,163
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Prepaid expenses and other assets (amounts related to VIEs of $68,330 and $42,718 at September 30, 2017 and December 31, 2016, respectively)
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144,817
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129,666
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Investments in unconsolidated joint ventures
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611,800
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775,198
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Total assets
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$
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19,308,518
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$
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18,851,643
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LIABILITIES AND EQUITY
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Liabilities:
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Mortgage notes payable, net (amounts related to VIEs of $2,941,550 and $2,018,483 at September 30, 2017 and December 31, 2016, respectively)
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$
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2,982,067
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$
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2,063,087
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Unsecured senior notes, net
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7,252,567
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7,245,953
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Unsecured line of credit
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—
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—
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Unsecured term loan
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—
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—
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Mezzanine notes payable (amounts related to VIEs of $0 and $307,093 at September 30, 2017 and December 31, 2016, respectively)
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—
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307,093
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Outside members’ notes payable (amounts related to VIEs of $0 and $180,000 at September 30, 2017 and December 31, 2016, respectively)
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—
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180,000
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Accounts payable and accrued expenses (amounts related to VIEs of $106,772 and $110,457 at September 30, 2017 and December 31, 2016, respectively)
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325,440
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298,524
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Dividends and distributions payable
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130,434
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130,308
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Accrued interest payable (amounts related to VIEs of $6,800 and $162,226 at September 30, 2017 and December 31, 2016, respectively)
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99,100
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243,933
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Other liabilities (amounts related to VIEs of $146,517 and $175,146 at September 30, 2017 and December 31, 2016, respectively)
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419,215
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450,821
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Total liabilities
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11,208,823
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10,919,719
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Commitments and contingencies
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—
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—
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Equity:
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Stockholders’ equity attributable to Boston Properties, Inc.:
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Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding
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—
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—
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Preferred stock, $0.01 par value, 50,000,000 shares authorized;
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5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at September 30, 2017 and December 31, 2016
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200,000
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200,000
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Common stock, $0.01 par value, 250,000,000 shares authorized, 154,401,166 and 153,869,075 issued and 154,322,266 and 153,790,175 outstanding at September 30, 2017 and December 31, 2016, respectively
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1,543
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1,538
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Additional paid-in capital
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6,370,932
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6,333,424
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Dividends in excess of earnings
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(692,739
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)
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(693,694
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)
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Treasury common stock at cost, 78,900 shares at September 30, 2017 and December 31, 2016
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(2,722
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)
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(2,722
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)
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Accumulated other comprehensive loss
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(51,796
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)
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(52,251
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)
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Total stockholders’ equity attributable to Boston Properties, Inc.
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5,825,218
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5,786,295
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Noncontrolling interests:
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Common units of Boston Properties Limited Partnership
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605,802
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614,982
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Property partnerships
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1,668,675
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1,530,647
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Total equity
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8,099,695
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7,931,924
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Total liabilities and equity
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$
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19,308,518
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$
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18,851,643
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Three months ended September 30,
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Nine months ended September 30,
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2017
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2016
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2017
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2016
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(in thousands, except for per share amounts)
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Revenue
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Rental
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Base rent
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$
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513,269
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$
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489,312
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$
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1,537,373
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$
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1,518,826
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Recoveries from tenants
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94,476
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92,560
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272,803
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267,852
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Parking and other
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26,092
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24,638
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78,164
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75,576
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Total rental revenue
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633,837
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606,510
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1,888,340
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1,862,254
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Hotel revenue
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13,064
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12,354
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33,859
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33,919
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Development and management services
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10,811
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6,364
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24,648
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18,586
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Total revenue
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657,712
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625,228
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1,946,847
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1,914,759
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Expenses
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Operating
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Rental
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237,341
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228,560
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696,082
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665,670
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Hotel
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8,447
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8,118
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23,942
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23,730
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General and administrative
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25,792
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25,165
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84,319
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79,936
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|
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Transaction costs
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239
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249
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572
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1,187
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|
||||
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Impairment loss
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—
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1,783
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—
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1,783
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|
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Depreciation and amortization
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152,164
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203,748
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463,288
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516,371
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|
||||
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Total expenses
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423,983
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467,623
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1,268,203
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1,288,677
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||||
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Operating income
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233,729
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157,605
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678,644
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626,082
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|
||||
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Other income (expense)
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||||||||
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Income from unconsolidated joint ventures
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843
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1,464
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7,035
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5,489
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|
||||
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Interest and other income
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1,329
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3,628
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3,447
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6,657
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Gains from investments in securities
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944
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|
976
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2,716
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1,713
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Gains (losses) from early extinguishments of debt
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—
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(371
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)
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14,354
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(371
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)
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Losses from interest rate contracts
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—
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(140
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)
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—
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(140
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)
|
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Interest expense
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(92,032
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)
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(104,641
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)
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(282,709
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)
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(314,953
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)
|
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Income before gains on sales of real estate
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144,813
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58,521
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423,487
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324,477
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|
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Gains on sales of real estate
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2,891
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12,983
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6,791
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80,606
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|
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Net income
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147,704
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71,504
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430,278
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405,083
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|
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Net income attributable to noncontrolling interests
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|
||||||||
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Noncontrolling interests in property partnerships
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(14,340
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)
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17,225
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(33,967
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)
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(53
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)
|
||||
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Noncontrolling interest—common units of Boston Properties Limited Partnership
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(13,402
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)
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(9,387
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)
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(40,350
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)
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(42,120
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)
|
||||
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Net income attributable to Boston Properties, Inc.
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119,962
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|
79,342
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355,961
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362,910
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|
||||
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Preferred dividends
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(2,625
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)
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(2,589
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)
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(7,875
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)
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(7,796
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)
|
||||
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Net income attributable to Boston Properties, Inc. common shareholders
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$
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117,337
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$
|
76,753
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$
|
348,086
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$
|
355,114
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|
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Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
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|
||||||||
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Net income
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$
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0.76
|
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$
|
0.50
|
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|
$
|
2.26
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|
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$
|
2.31
|
|
|
Weighted average number of common shares outstanding
|
154,355
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|
|
153,754
|
|
|
154,132
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|
|
153,681
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|
||||
|
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
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|
|
|
|
|
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|
||||||||
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Net income
|
$
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0.76
|
|
|
$
|
0.50
|
|
|
$
|
2.26
|
|
|
$
|
2.31
|
|
|
Weighted average number of common and common equivalent shares outstanding
|
154,483
|
|
|
154,136
|
|
|
154,344
|
|
|
153,971
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends per common share
|
$
|
0.75
|
|
|
$
|
0.65
|
|
|
$
|
2.25
|
|
|
$
|
1.95
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
Net income
|
$
|
147,704
|
|
|
$
|
71,504
|
|
|
$
|
430,278
|
|
|
$
|
405,083
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
|
Effective portion of interest rate contracts
|
—
|
|
|
5,712
|
|
|
(6,133
|
)
|
|
(85,285
|
)
|
||||
|
Amortization of interest rate contracts (1)
|
1,665
|
|
|
1,190
|
|
|
4,368
|
|
|
2,445
|
|
||||
|
Other comprehensive income (loss)
|
1,665
|
|
|
6,902
|
|
|
(1,765
|
)
|
|
(82,840
|
)
|
||||
|
Comprehensive income
|
149,369
|
|
|
78,406
|
|
|
428,513
|
|
|
322,243
|
|
||||
|
Net income attributable to noncontrolling interests
|
(27,742
|
)
|
|
7,838
|
|
|
(74,317
|
)
|
|
(42,173
|
)
|
||||
|
Other comprehensive income (loss) attributable to noncontrolling interests
|
(300
|
)
|
|
(1,097
|
)
|
|
2,220
|
|
|
23,011
|
|
||||
|
Comprehensive income attributable to Boston Properties, Inc.
|
$
|
121,327
|
|
|
$
|
85,147
|
|
|
$
|
356,416
|
|
|
$
|
303,081
|
|
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional
Paid-in
Capital
|
|
Dividends in
Excess of
Earnings
|
|
Treasury
Stock,
at cost
|
|
Accumulated
Other
Comprehensive Loss
|
|
Noncontrolling
Interests
|
|
Total
|
|||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||||||||||
|
Equity, December 31, 2016
|
153,790
|
|
|
$
|
1,538
|
|
|
$
|
200,000
|
|
|
$
|
6,333,424
|
|
|
$
|
(693,694
|
)
|
|
$
|
(2,722
|
)
|
|
$
|
(52,251
|
)
|
|
$
|
2,145,629
|
|
|
$
|
7,931,924
|
|
|
Redemption of operating partnership units to common stock
|
492
|
|
|
5
|
|
|
—
|
|
|
16,807
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,812
|
)
|
|
—
|
|
||||||||
|
Allocated net income for the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
355,961
|
|
|
—
|
|
|
—
|
|
|
74,317
|
|
|
430,278
|
|
||||||||
|
Dividends/distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(354,734
|
)
|
|
—
|
|
|
—
|
|
|
(40,292
|
)
|
|
(395,026
|
)
|
||||||||
|
Shares issued pursuant to stock purchase plan
|
6
|
|
|
—
|
|
|
—
|
|
|
795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
795
|
|
||||||||
|
Net activity from stock option and incentive plan
|
34
|
|
|
—
|
|
|
—
|
|
|
2,920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,271
|
|
|
29,191
|
|
||||||||
|
Cumulative effect of a change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
—
|
|
|
(1,763
|
)
|
|
(2,035
|
)
|
||||||||
|
Contributions from noncontrolling interests in property partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,772
|
|
|
147,772
|
|
||||||||
|
Distributions to noncontrolling interests in property partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,439
|
)
|
|
(41,439
|
)
|
||||||||
|
Effective portion of interest rate contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,304
|
)
|
|
(2,829
|
)
|
|
(6,133
|
)
|
||||||||
|
Amortization of interest rate contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,759
|
|
|
609
|
|
|
4,368
|
|
||||||||
|
Reallocation of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
16,986
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,986
|
)
|
|
—
|
|
||||||||
|
Equity, September 30, 2017
|
154,322
|
|
|
$
|
1,543
|
|
|
$
|
200,000
|
|
|
$
|
6,370,932
|
|
|
$
|
(692,739
|
)
|
|
$
|
(2,722
|
)
|
|
$
|
(51,796
|
)
|
|
$
|
2,274,477
|
|
|
$
|
8,099,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Equity, December 31, 2015
|
153,580
|
|
|
$
|
1,536
|
|
|
$
|
200,000
|
|
|
$
|
6,305,687
|
|
|
$
|
(780,952
|
)
|
|
$
|
(2,722
|
)
|
|
$
|
(14,114
|
)
|
|
$
|
2,177,492
|
|
|
$
|
7,886,927
|
|
|
Redemption of operating partnership units to common stock
|
173
|
|
|
2
|
|
|
—
|
|
|
5,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,881
|
)
|
|
—
|
|
||||||||
|
Allocated net income for the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362,910
|
|
|
—
|
|
|
—
|
|
|
42,173
|
|
|
405,083
|
|
||||||||
|
Dividends/distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(307,480
|
)
|
|
—
|
|
|
—
|
|
|
(35,500
|
)
|
|
(342,980
|
)
|
||||||||
|
Shares issued pursuant to stock purchase plan
|
6
|
|
|
—
|
|
|
—
|
|
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
730
|
|
||||||||
|
Net activity from stock option and incentive plan
|
14
|
|
|
—
|
|
|
—
|
|
|
2,870
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,420
|
|
|
24,290
|
|
||||||||
|
Sale of interests in property partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
1,320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,320
|
)
|
|
—
|
|
||||||||
|
Contributions from noncontrolling interests in property partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,737
|
|
|
6,737
|
|
||||||||
|
Distributions to noncontrolling interests in property partnerships
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,694
|
)
|
|
(38,694
|
)
|
||||||||
|
Effective portion of interest rate contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,022
|
)
|
|
(23,263
|
)
|
|
(85,285
|
)
|
||||||||
|
Amortization of interest rate contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,193
|
|
|
252
|
|
|
2,445
|
|
||||||||
|
Reallocation of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
10,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,094
|
)
|
|
—
|
|
||||||||
|
Equity, September 30, 2016
|
153,773
|
|
|
$
|
1,538
|
|
|
$
|
200,000
|
|
|
$
|
6,326,580
|
|
|
$
|
(725,522
|
)
|
|
$
|
(2,722
|
)
|
|
$
|
(73,943
|
)
|
|
$
|
2,133,322
|
|
|
$
|
7,859,253
|
|
|
|
For the nine months ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
430,278
|
|
|
$
|
405,083
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
463,288
|
|
|
516,371
|
|
||
|
Impairment loss
|
—
|
|
|
1,783
|
|
||
|
Non-cash compensation expense
|
27,260
|
|
|
25,290
|
|
||
|
Income from unconsolidated joint ventures
|
(7,035
|
)
|
|
(5,489
|
)
|
||
|
Distributions of net cash flow from operations of unconsolidated joint ventures
|
8,563
|
|
|
11,645
|
|
||
|
Gains from investments in securities
|
(2,716
|
)
|
|
(1,713
|
)
|
||
|
(Gains) losses from early extinguishments of debt
|
(14,444
|
)
|
|
371
|
|
||
|
Non-cash portion of interest expense
|
(6,667
|
)
|
|
(27,386
|
)
|
||
|
Gains on sales of real estate
|
(6,791
|
)
|
|
(80,606
|
)
|
||
|
Change in assets and liabilities:
|
|
|
|
||||
|
Cash held in escrows
|
7,795
|
|
|
1,675
|
|
||
|
Tenant and other receivables, net
|
12,528
|
|
|
22,135
|
|
||
|
Accrued rental income, net
|
(36,012
|
)
|
|
(14,618
|
)
|
||
|
Prepaid expenses and other assets
|
(13,633
|
)
|
|
4,883
|
|
||
|
Accounts payable and accrued expenses
|
7,861
|
|
|
16,852
|
|
||
|
Accrued interest payable
|
(144,833
|
)
|
|
44,242
|
|
||
|
Other liabilities
|
(65,031
|
)
|
|
(114,321
|
)
|
||
|
Tenant leasing costs
|
(67,699
|
)
|
|
(62,412
|
)
|
||
|
Total adjustments
|
162,434
|
|
|
338,702
|
|
||
|
Net cash provided by operating activities
|
592,712
|
|
|
743,785
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Acquisitions of real estate
|
(15,953
|
)
|
|
(78,000
|
)
|
||
|
Construction in progress
|
(452,283
|
)
|
|
(359,716
|
)
|
||
|
Building and other capital improvements
|
(162,395
|
)
|
|
(81,842
|
)
|
||
|
Tenant improvements
|
(152,749
|
)
|
|
(167,762
|
)
|
||
|
Proceeds from sales of real estate
|
29,810
|
|
|
122,750
|
|
||
|
Proceeds from sales of real estate placed in escrow
|
(29,810
|
)
|
|
(122,647
|
)
|
||
|
Proceeds from sales of real estate released from escrow
|
16,640
|
|
|
122,647
|
|
||
|
Cash released from escrow for investing activities
|
9,638
|
|
|
6,694
|
|
||
|
Cash released from escrow for land sale contracts
|
—
|
|
|
1,403
|
|
||
|
Cash placed in escrow for investment in unconsolidated joint venture
|
(25,000
|
)
|
|
—
|
|
||
|
Capital contributions to unconsolidated joint ventures
|
(89,874
|
)
|
|
(546,982
|
)
|
||
|
Capital distributions from unconsolidated joint ventures
|
251,000
|
|
|
—
|
|
||
|
Investments in securities, net
|
(1,451
|
)
|
|
(929
|
)
|
||
|
Net cash used in investing activities
|
(622,427
|
)
|
|
(1,104,384
|
)
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|||||||
|
|
For the nine months ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Proceeds from mortgage notes payable
|
2,300,000
|
|
|
—
|
|
||
|
Repayments of mortgage notes payable
|
(1,313,890
|
)
|
|
(1,323,284
|
)
|
||
|
Proceeds from unsecured senior notes
|
—
|
|
|
1,989,790
|
|
||
|
Borrowings on unsecured line of credit
|
470,000
|
|
|
—
|
|
||
|
Repayments of unsecured line of credit
|
(470,000
|
)
|
|
—
|
|
||
|
Repayments of mezzanine notes payable
|
(306,000
|
)
|
|
—
|
|
||
|
Repayments of outside members’ notes payable
|
(70,424
|
)
|
|
—
|
|
||
|
Payments on capital lease obligations
|
(373
|
)
|
|
—
|
|
||
|
Payments on real estate financing transactions
|
(1,306
|
)
|
|
(4,712
|
)
|
||
|
Deposit on mortgage note payable interest rate lock
|
(23,200
|
)
|
|
—
|
|
||
|
Return of deposit on mortgage note payable interest rate lock
|
23,200
|
|
|
—
|
|
||
|
Deferred financing costs
|
(44,083
|
)
|
|
(16,101
|
)
|
||
|
Net proceeds from equity transactions
|
241
|
|
|
(270
|
)
|
||
|
Dividends and distributions
|
(394,900
|
)
|
|
(557,262
|
)
|
||
|
Contributions from noncontrolling interests in property partnerships
|
38,196
|
|
|
6,737
|
|
||
|
Distributions to noncontrolling interests in property partnerships
|
(41,605
|
)
|
|
(38,694
|
)
|
||
|
Net cash provided by financing activities
|
165,856
|
|
|
56,204
|
|
||
|
Net increase (decrease) in cash and cash equivalents
|
136,141
|
|
|
(304,395
|
)
|
||
|
Cash and cash equivalents, beginning of period
|
356,914
|
|
|
723,718
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
493,055
|
|
|
$
|
419,323
|
|
|
Supplemental disclosures:
|
|
|
|
||||
|
Cash paid for interest
|
$
|
477,189
|
|
|
$
|
327,053
|
|
|
Interest capitalized
|
$
|
43,286
|
|
|
$
|
28,956
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
|
Write-off of fully depreciated real estate
|
$
|
(103,972
|
)
|
|
$
|
(168,861
|
)
|
|
Additions to real estate included in accounts payable and accrued expenses
|
$
|
36,609
|
|
|
$
|
11,864
|
|
|
Real estate acquired through capital lease
|
$
|
28,962
|
|
|
$
|
—
|
|
|
Outside members’ notes payable contributed to noncontrolling interests in property partnerships
|
$
|
109,576
|
|
|
$
|
—
|
|
|
Dividends and distributions declared but not paid
|
$
|
130,434
|
|
|
$
|
113,038
|
|
|
Conversions of noncontrolling interests to stockholders’ equity
|
$
|
16,812
|
|
|
$
|
5,881
|
|
|
Issuance of restricted securities to employees
|
$
|
35,711
|
|
|
$
|
33,711
|
|
|
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|||||||
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands, except for unit amounts)
|
||||||
|
ASSETS
|
|
|
|
||||
|
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $7,084,588 and $6,760,078 at September 30, 2017 and December 31, 2016, respectively)
|
$
|
20,447,767
|
|
|
$
|
19,733,872
|
|
|
Less: accumulated depreciation (amounts related to VIEs of $(825,390) and $(758,640) at September 30, 2017 and December 31, 2016, respectively)
|
(4,394,077
|
)
|
|
(4,136,364
|
)
|
||
|
Total real estate
|
16,053,690
|
|
|
15,597,508
|
|
||
|
Cash and cash equivalents (amounts related to VIEs of $285,089 and $253,999 at September 30, 2017 and December 31, 2016, respectively)
|
493,055
|
|
|
356,914
|
|
||
|
Cash held in escrows (amounts related to VIEs of $6,179 and $4,955 at September 30, 2017 and December 31, 2016, respectively)
|
83,779
|
|
|
63,174
|
|
||
|
Investments in securities
|
27,981
|
|
|
23,814
|
|
||
|
Tenant and other receivables (amounts related to VIEs of $19,891 and $23,525 at September 30, 2017 and December 31, 2016, respectively)
|
79,750
|
|
|
92,548
|
|
||
|
Accrued rental income (amounts related to VIEs of $232,336 and $224,185 at September 30, 2017 and December 31, 2016, respectively)
|
835,415
|
|
|
799,138
|
|
||
|
Deferred charges, net (amounts related to VIEs of $268,727 and $290,436 at September 30, 2017 and December 31, 2016, respectively)
|
657,474
|
|
|
686,163
|
|
||
|
Prepaid expenses and other assets (amounts related to VIEs of $68,330 and $42,718 at September 30, 2017 and December 31, 2016, respectively)
|
144,817
|
|
|
129,666
|
|
||
|
Investments in unconsolidated joint ventures
|
611,800
|
|
|
775,198
|
|
||
|
Total assets
|
$
|
18,987,761
|
|
|
$
|
18,524,123
|
|
|
LIABILITIES AND CAPITAL
|
|
|
|
||||
|
Liabilities:
|
|
|
|
||||
|
Mortgage notes payable, net (amounts related to VIEs of $2,941,550 and $2,018,483 at September 30, 2017 and December 31, 2016, respectively)
|
$
|
2,982,067
|
|
|
$
|
2,063,087
|
|
|
Unsecured senior notes, net
|
7,252,567
|
|
|
7,245,953
|
|
||
|
Unsecured line of credit
|
—
|
|
|
—
|
|
||
|
Unsecured term loan
|
—
|
|
|
—
|
|
||
|
Mezzanine notes payable (amounts related to VIEs of $0 and $307,093 at September 30, 2017 and December 31, 2016, respectively)
|
—
|
|
|
307,093
|
|
||
|
Outside members’ notes payable (amounts related to VIEs of $0 and $180,000 at September 30, 2017 and December 31, 2016, respectively)
|
—
|
|
|
180,000
|
|
||
|
Accounts payable and accrued expenses (amounts related to VIEs of $106,772 and $110,457 at September 30, 2017 and December 31, 2016, respectively)
|
325,440
|
|
|
298,524
|
|
||
|
Distributions payable
|
130,434
|
|
|
130,308
|
|
||
|
Accrued interest payable (amounts related to VIEs of $6,800 and $162,226 at September 30, 2017 and December 31, 2016, respectively)
|
99,100
|
|
|
243,933
|
|
||
|
Other liabilities (amounts related to VIEs of $146,517 and $175,146 at September 30, 2017 and December 31, 2016, respectively)
|
419,215
|
|
|
450,821
|
|
||
|
Total liabilities
|
11,208,823
|
|
|
10,919,719
|
|
||
|
Commitments and contingencies
|
—
|
|
|
—
|
|
||
|
Noncontrolling interests:
|
|
|
|
||||
|
Redeemable partnership units—16,812,329 and 17,079,511 common units and 816,982 and 904,588 long term incentive units outstanding at redemption value at September 30, 2017 and December 31, 2016, respectively
|
2,166,290
|
|
|
2,262,040
|
|
||
|
Capital:
|
|
|
|
||||
|
5.25% Series B cumulative redeemable preferred units, liquidation preference $2,500 per unit, 80,000 units issued and outstanding at September 30, 2017 and December 31, 2016
|
193,623
|
|
|
193,623
|
|
||
|
Boston Properties Limited Partnership partners’ capital—1,719,516 and 1,717,743 general partner units and 152,602,750 and 152,072,432 limited partner units outstanding at September 30, 2017 and December 31, 2016, respectively
|
3,750,350
|
|
|
3,618,094
|
|
||
|
Noncontrolling interests in property partnerships
|
1,668,675
|
|
|
1,530,647
|
|
||
|
Total capital
|
5,612,648
|
|
|
5,342,364
|
|
||
|
Total liabilities and capital
|
$
|
18,987,761
|
|
|
$
|
18,524,123
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands, except for per unit amounts)
|
||||||||||||||
|
Revenue
|
|
|
|
|
|
|
|
||||||||
|
Rental
|
|
|
|
|
|
|
|
||||||||
|
Base rent
|
$
|
513,269
|
|
|
$
|
489,312
|
|
|
$
|
1,537,373
|
|
|
$
|
1,518,826
|
|
|
Recoveries from tenants
|
94,476
|
|
|
92,560
|
|
|
272,803
|
|
|
267,852
|
|
||||
|
Parking and other
|
26,092
|
|
|
24,638
|
|
|
78,164
|
|
|
75,576
|
|
||||
|
Total rental revenue
|
633,837
|
|
|
606,510
|
|
|
1,888,340
|
|
|
1,862,254
|
|
||||
|
Hotel revenue
|
13,064
|
|
|
12,354
|
|
|
33,859
|
|
|
33,919
|
|
||||
|
Development and management services
|
10,811
|
|
|
6,364
|
|
|
24,648
|
|
|
18,586
|
|
||||
|
Total revenue
|
657,712
|
|
|
625,228
|
|
|
1,946,847
|
|
|
1,914,759
|
|
||||
|
Expenses
|
|
|
|
|
|
|
|
||||||||
|
Operating
|
|
|
|
|
|
|
|
||||||||
|
Rental
|
237,341
|
|
|
228,560
|
|
|
696,082
|
|
|
665,670
|
|
||||
|
Hotel
|
8,447
|
|
|
8,118
|
|
|
23,942
|
|
|
23,730
|
|
||||
|
General and administrative
|
25,792
|
|
|
25,165
|
|
|
84,319
|
|
|
79,936
|
|
||||
|
Transaction costs
|
239
|
|
|
249
|
|
|
572
|
|
|
1,187
|
|
||||
|
Impairment loss
|
—
|
|
|
1,783
|
|
|
—
|
|
|
1,783
|
|
||||
|
Depreciation and amortization
|
150,210
|
|
|
198,582
|
|
|
457,102
|
|
|
507,234
|
|
||||
|
Total expenses
|
422,029
|
|
|
462,457
|
|
|
1,262,017
|
|
|
1,279,540
|
|
||||
|
Operating income
|
235,683
|
|
|
162,771
|
|
|
684,830
|
|
|
635,219
|
|
||||
|
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
|
Income from unconsolidated joint ventures
|
843
|
|
|
1,464
|
|
|
7,035
|
|
|
5,489
|
|
||||
|
Interest and other income
|
1,329
|
|
|
3,628
|
|
|
3,447
|
|
|
6,657
|
|
||||
|
Gains from investments in securities
|
944
|
|
|
976
|
|
|
2,716
|
|
|
1,713
|
|
||||
|
Gains (losses) from early extinguishments of debt
|
—
|
|
|
(371
|
)
|
|
14,354
|
|
|
(371
|
)
|
||||
|
Losses from interest rate contracts
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
||||
|
Interest expense
|
(92,032
|
)
|
|
(104,641
|
)
|
|
(282,709
|
)
|
|
(314,953
|
)
|
||||
|
Income before gains on sales of real estate
|
146,767
|
|
|
63,687
|
|
|
429,673
|
|
|
333,614
|
|
||||
|
Gains on sales of real estate
|
2,891
|
|
|
12,983
|
|
|
7,368
|
|
|
82,775
|
|
||||
|
Net income
|
149,658
|
|
|
76,670
|
|
|
437,041
|
|
|
416,389
|
|
||||
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
||||||||
|
Noncontrolling interests in property partnerships
|
(14,340
|
)
|
|
17,225
|
|
|
(33,967
|
)
|
|
(53
|
)
|
||||
|
Net income attributable to Boston Properties Limited Partnership
|
135,318
|
|
|
93,895
|
|
|
403,074
|
|
|
416,336
|
|
||||
|
Preferred distributions
|
(2,625
|
)
|
|
(2,589
|
)
|
|
(7,875
|
)
|
|
(7,796
|
)
|
||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,693
|
|
|
$
|
91,306
|
|
|
$
|
395,199
|
|
|
$
|
408,540
|
|
|
Basic earnings per common unit attributable to Boston Properties Limited Partnership common unitholders:
|
|
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
0.77
|
|
|
$
|
0.53
|
|
|
$
|
2.30
|
|
|
$
|
2.38
|
|
|
Weighted average number of common units outstanding
|
171,691
|
|
|
171,379
|
|
|
171,649
|
|
|
171,353
|
|
||||
|
Diluted earnings per common unit attributable to Boston Properties Limited Partnership common unitholders:
|
|
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
0.77
|
|
|
$
|
0.53
|
|
|
$
|
2.30
|
|
|
$
|
2.38
|
|
|
Weighted average number of common and common equivalent units outstanding
|
171,819
|
|
|
171,761
|
|
|
171,861
|
|
|
171,643
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Distributions per common unit
|
$
|
0.75
|
|
|
$
|
0.65
|
|
|
$
|
2.25
|
|
|
$
|
1.95
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
Net income
|
$
|
149,658
|
|
|
$
|
76,670
|
|
|
$
|
437,041
|
|
|
$
|
416,389
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
|
Effective portion of interest rate contracts
|
—
|
|
|
5,712
|
|
|
(6,133
|
)
|
|
(85,285
|
)
|
||||
|
Amortization of interest rate contracts (1)
|
1,665
|
|
|
1,190
|
|
|
4,368
|
|
|
2,445
|
|
||||
|
Other comprehensive income (loss)
|
1,665
|
|
|
6,902
|
|
|
(1,765
|
)
|
|
(82,840
|
)
|
||||
|
Comprehensive income
|
151,323
|
|
|
83,572
|
|
|
435,276
|
|
|
333,549
|
|
||||
|
Comprehensive income attributable to noncontrolling interests
|
(14,484
|
)
|
|
16,812
|
|
|
(31,695
|
)
|
|
16,081
|
|
||||
|
Comprehensive income attributable to Boston Properties Limited Partnership
|
$
|
136,839
|
|
|
$
|
100,384
|
|
|
$
|
403,581
|
|
|
$
|
349,630
|
|
|
|
Total Partners’ Capital
|
||
|
Balance at December 31, 2016
|
$
|
3,811,717
|
|
|
Contributions
|
4,937
|
|
|
|
Net income allocable to general and limited partner units
|
362,724
|
|
|
|
Distributions
|
(354,734
|
)
|
|
|
Accumulated other comprehensive income
|
455
|
|
|
|
Cumulative effect of a change in accounting principle
|
(272
|
)
|
|
|
Unearned compensation
|
(1,222
|
)
|
|
|
Conversion of redeemable partnership units
|
16,812
|
|
|
|
Adjustment to reflect redeemable partnership units at redemption value
|
103,556
|
|
|
|
Balance at September 30, 2017
|
$
|
3,943,973
|
|
|
|
|
||
|
Balance at December 31, 2015
|
$
|
3,684,522
|
|
|
Contributions
|
3,269
|
|
|
|
Net income allocable to general and limited partner units
|
374,216
|
|
|
|
Distributions
|
(307,480
|
)
|
|
|
Accumulated other comprehensive loss
|
(59,829
|
)
|
|
|
Unearned compensation
|
1,651
|
|
|
|
Conversion of redeemable partnership units
|
5,881
|
|
|
|
Adjustment to reflect redeemable partnership units at redemption value
|
(151,545
|
)
|
|
|
Balance at September 30, 2016
|
$
|
3,550,685
|
|
|
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|||||||
|
|
For the nine months ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
437,041
|
|
|
$
|
416,389
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
457,102
|
|
|
507,234
|
|
||
|
Impairment loss
|
—
|
|
|
1,783
|
|
||
|
Non-cash compensation expense
|
27,260
|
|
|
25,290
|
|
||
|
Income from unconsolidated joint ventures
|
(7,035
|
)
|
|
(5,489
|
)
|
||
|
Distributions of net cash flow from operations of unconsolidated joint ventures
|
8,563
|
|
|
11,645
|
|
||
|
Gains from investments in securities
|
(2,716
|
)
|
|
(1,713
|
)
|
||
|
(Gains) losses from early extinguishments of debt
|
(14,444
|
)
|
|
371
|
|
||
|
Non-cash portion of interest expense
|
(6,667
|
)
|
|
(27,386
|
)
|
||
|
Gains on sales of real estate
|
(7,368
|
)
|
|
(82,775
|
)
|
||
|
Change in assets and liabilities:
|
|
|
|
||||
|
Cash held in escrows
|
7,795
|
|
|
1,675
|
|
||
|
Tenant and other receivables, net
|
12,528
|
|
|
22,135
|
|
||
|
Accrued rental income, net
|
(36,012
|
)
|
|
(14,618
|
)
|
||
|
Prepaid expenses and other assets
|
(13,633
|
)
|
|
4,883
|
|
||
|
Accounts payable and accrued expenses
|
7,861
|
|
|
16,852
|
|
||
|
Accrued interest payable
|
(144,833
|
)
|
|
44,242
|
|
||
|
Other liabilities
|
(65,031
|
)
|
|
(114,321
|
)
|
||
|
Tenant leasing costs
|
(67,699
|
)
|
|
(62,412
|
)
|
||
|
Total adjustments
|
155,671
|
|
|
327,396
|
|
||
|
Net cash provided by operating activities
|
592,712
|
|
|
743,785
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Acquisitions of real estate
|
(15,953
|
)
|
|
(78,000
|
)
|
||
|
Construction in progress
|
(452,283
|
)
|
|
(359,716
|
)
|
||
|
Building and other capital improvements
|
(162,395
|
)
|
|
(81,842
|
)
|
||
|
Tenant improvements
|
(152,749
|
)
|
|
(167,762
|
)
|
||
|
Proceeds from sales of real estate
|
29,810
|
|
|
122,750
|
|
||
|
Proceeds from sales of real estate placed in escrow
|
(29,810
|
)
|
|
(122,647
|
)
|
||
|
Proceeds from sales of real estate released from escrow
|
16,640
|
|
|
122,647
|
|
||
|
Cash released from escrow for investing activities
|
9,638
|
|
|
6,694
|
|
||
|
Cash released from escrow for land sale contracts
|
—
|
|
|
1,403
|
|
||
|
Cash placed in escrow for investment in unconsolidated joint venture
|
(25,000
|
)
|
|
—
|
|
||
|
Capital contributions to unconsolidated joint ventures
|
(89,874
|
)
|
|
(546,982
|
)
|
||
|
Capital distributions from unconsolidated joint ventures
|
251,000
|
|
|
—
|
|
||
|
Investments in securities, net
|
(1,451
|
)
|
|
(929
|
)
|
||
|
Net cash used in investing activities
|
(622,427
|
)
|
|
(1,104,384
|
)
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|||||||
|
|
For the nine months ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Proceeds from mortgage notes payable
|
2,300,000
|
|
|
—
|
|
||
|
Repayments of mortgage notes payable
|
(1,313,890
|
)
|
|
(1,323,284
|
)
|
||
|
Proceeds from unsecured senior notes
|
—
|
|
|
1,989,790
|
|
||
|
Borrowings on unsecured line of credit
|
470,000
|
|
|
—
|
|
||
|
Repayments of unsecured line of credit
|
(470,000
|
)
|
|
—
|
|
||
|
Repayments of mezzanine notes payable
|
(306,000
|
)
|
|
—
|
|
||
|
Repayments of outside members’ notes payable
|
(70,424
|
)
|
|
—
|
|
||
|
Payments on capital lease obligations
|
(373
|
)
|
|
—
|
|
||
|
Payments on real estate financing transaction
|
(1,306
|
)
|
|
(4,712
|
)
|
||
|
Deposit on mortgage note payable interest rate lock
|
(23,200
|
)
|
|
—
|
|
||
|
Return of deposit on mortgage note payable interest rate lock
|
23,200
|
|
|
—
|
|
||
|
Deferred financing costs
|
(44,083
|
)
|
|
(16,101
|
)
|
||
|
Net proceeds from equity transactions
|
241
|
|
|
(270
|
)
|
||
|
Distributions
|
(394,900
|
)
|
|
(557,262
|
)
|
||
|
Contributions from noncontrolling interests in property partnerships
|
38,196
|
|
|
6,737
|
|
||
|
Distributions to noncontrolling interests in property partnerships
|
(41,605
|
)
|
|
(38,694
|
)
|
||
|
Net cash provided by financing activities
|
165,856
|
|
|
56,204
|
|
||
|
Net increase (decrease) in cash and cash equivalents
|
136,141
|
|
|
(304,395
|
)
|
||
|
Cash and cash equivalents, beginning of period
|
356,914
|
|
|
723,718
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
493,055
|
|
|
$
|
419,323
|
|
|
Supplemental disclosures:
|
|
|
|
||||
|
Cash paid for interest
|
$
|
477,189
|
|
|
$
|
327,053
|
|
|
Interest capitalized
|
$
|
43,286
|
|
|
$
|
28,956
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
|
Write-off of fully depreciated real estate
|
$
|
(102,795
|
)
|
|
$
|
(164,528
|
)
|
|
Additions to real estate included in accounts payable and accrued expenses
|
$
|
36,609
|
|
|
$
|
11,864
|
|
|
Real estate acquired through capital lease
|
$
|
28,962
|
|
|
$
|
—
|
|
|
Outside members’ notes payable contributed to noncontrolling interests in property partnerships
|
$
|
109,576
|
|
|
$
|
—
|
|
|
Distributions declared but not paid
|
$
|
130,434
|
|
|
$
|
113,038
|
|
|
Conversions of redeemable partnership units to partners’ capital
|
$
|
16,812
|
|
|
$
|
5,881
|
|
|
Issuance of restricted securities to employees
|
$
|
35,711
|
|
|
$
|
33,711
|
|
|
•
|
common units of partnership interest (also referred to as “OP Units”),
|
|
•
|
long term incentive units of partnership interest (also referred to as “LTIP Units”), and
|
|
•
|
preferred units of partnership interest (also referred to as “Preferred Units”).
|
|
•
|
166
Office properties (including
seven
properties under construction/redevelopment);
|
|
•
|
one
hotel;
|
|
•
|
five
retail properties; and
|
|
•
|
five
residential properties (including
three
properties under construction).
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
|
|
Carrying
Amount
|
|
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
|
|
Estimated
Fair Value
|
||||||||
|
Mortgage notes payable, net
|
$
|
2,982,067
|
|
|
|
|
$
|
3,049,617
|
|
|
$
|
2,063,087
|
|
|
|
|
$
|
2,092,237
|
|
|
Mezzanine notes payable
|
—
|
|
|
|
|
—
|
|
|
307,093
|
|
|
|
|
308,344
|
|
||||
|
Unsecured senior notes, net
|
7,252,567
|
|
|
|
|
7,533,164
|
|
|
7,245,953
|
|
|
|
|
7,428,077
|
|
||||
|
Total
|
$
|
10,234,634
|
|
|
|
|
$
|
10,582,781
|
|
|
$
|
9,616,133
|
|
|
|
|
$
|
9,828,658
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
Land
|
$
|
4,880,331
|
|
|
$
|
4,879,020
|
|
|
Land held for future development (1)
|
212,585
|
|
|
246,656
|
|
||
|
Buildings and improvements
|
12,155,126
|
|
|
11,890,626
|
|
||
|
Tenant improvements
|
2,186,953
|
|
|
2,060,315
|
|
||
|
Furniture, fixtures and equipment
|
37,612
|
|
|
32,687
|
|
||
|
Construction in progress
|
1,386,638
|
|
|
1,037,959
|
|
||
|
Total
|
20,859,245
|
|
|
20,147,263
|
|
||
|
Less: Accumulated depreciation
|
(4,484,798
|
)
|
|
(4,222,235
|
)
|
||
|
|
$
|
16,374,447
|
|
|
$
|
15,925,028
|
|
|
(1)
|
Includes pre-development costs.
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
Land
|
$
|
4,775,955
|
|
|
$
|
4,774,460
|
|
|
Land held for future development (1)
|
212,585
|
|
|
246,656
|
|
||
|
Buildings and improvements
|
11,848,024
|
|
|
11,581,795
|
|
||
|
Tenant improvements
|
2,186,953
|
|
|
2,060,315
|
|
||
|
Furniture, fixtures and equipment
|
37,612
|
|
|
32,687
|
|
||
|
Construction in progress
|
1,386,638
|
|
|
1,037,959
|
|
||
|
Total
|
20,447,767
|
|
|
19,733,872
|
|
||
|
Less: Accumulated depreciation
|
(4,394,077
|
)
|
|
(4,136,364
|
)
|
||
|
|
$
|
16,053,690
|
|
|
$
|
15,597,508
|
|
|
(1)
|
Includes pre-development costs.
|
|
Period from June 29, 2017 through December 31, 2017
|
$
|
5
|
|
|
2018
|
10
|
|
|
|
2019
|
10
|
|
|
|
2020
|
10
|
|
|
|
2021
|
13
|
|
|
|
Thereafter
|
38,778
|
|
|
|
Total expected minimum obligations
|
38,826
|
|
|
|
Interest portion
|
(9,864
|
)
|
|
|
Present value of net expected minimum payments
|
$
|
28,962
|
|
|
Land
|
$
|
2,890
|
|
|
Building and improvements
|
11,229
|
|
|
|
Tenant improvements
|
871
|
|
|
|
In-place lease intangibles
|
2,389
|
|
|
|
Below-market lease intangible
|
(1,426
|
)
|
|
|
Net assets acquired
|
$
|
15,953
|
|
|
|
Acquired In-Place
Lease Intangibles
|
|
Acquired Below-
Market Lease Intangibles
|
||||
|
Period from May 15, 2017 through December 31, 2017
|
$
|
660
|
|
|
$
|
(248
|
)
|
|
2018
|
590
|
|
|
(363
|
)
|
||
|
2019
|
367
|
|
|
(337
|
)
|
||
|
2020
|
243
|
|
|
(308
|
)
|
||
|
2021
|
96
|
|
|
(105
|
)
|
||
|
|
|
|
|
Nominal %
Ownership
|
|
Carrying Value of Investment (1)
|
|||||||
|
Entity
|
|
Properties
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||
|
|
|
|
|
|
|
(in thousands)
|
|||||||
|
Square 407 Limited Partnership
|
|
Market Square North
|
|
50.0
|
%
|
|
$
|
(8,474
|
)
|
|
$
|
(8,134
|
)
|
|
The Metropolitan Square Associates LLC
|
|
Metropolitan Square
|
|
20.0
|
%
|
|
2,537
|
|
|
2,004
|
|
||
|
BP/CRF 901 New York Avenue LLC
|
|
901 New York Avenue
|
|
25.0
|
%
|
(2)
|
(10,747
|
)
|
|
(10,564
|
)
|
||
|
WP Project Developer LLC
|
|
Wisconsin Place Land and Infrastructure
|
|
33.3
|
%
|
(3)
|
40,158
|
|
|
41,605
|
|
||
|
Annapolis Junction NFM, LLC
|
|
Annapolis Junction
|
|
50.0
|
%
|
(4)
|
18,771
|
|
|
20,539
|
|
||
|
540 Madison Venture LLC
|
|
540 Madison Avenue
|
|
60.0
|
%
|
|
67,046
|
|
|
67,816
|
|
||
|
500 North Capitol Venture LLC
|
|
500 North Capitol Street, NW
|
|
30.0
|
%
|
|
(3,642
|
)
|
|
(3,389
|
)
|
||
|
501 K Street LLC
|
|
1001 6th Street
|
|
50.0
|
%
|
(5)
|
42,442
|
|
|
42,528
|
|
||
|
Podium Developer LLC
|
|
The Hub on Causeway
|
|
50.0
|
%
|
|
55,917
|
|
|
29,869
|
|
||
|
Residential Tower Developer LLC
|
|
The Hub on Causeway - Residential
|
|
50.0
|
%
|
|
25,811
|
|
|
20,803
|
|
||
|
Hotel Tower Developer LLC
|
|
The Hub on Causeway - Hotel
|
|
50.0
|
%
|
|
1,596
|
|
|
933
|
|
||
|
1265 Main Office JV LLC
|
|
1265 Main Street
|
|
50.0
|
%
|
|
4,686
|
|
|
4,779
|
|
||
|
BNY Tower Holdings LLC
|
|
Dock 72 at the Brooklyn Navy Yard
|
|
50.0
|
%
|
(6)
|
67,901
|
|
|
33,699
|
|
||
|
CA-Colorado Center Limited Partnership
|
|
Colorado Center
|
|
50.0
|
%
|
|
263,834
|
|
|
510,623
|
|
||
|
7750 Wisconsin Avenue LLC
|
|
7750 Wisconsin Avenue
|
|
50.0
|
%
|
(6)
|
21,101
|
|
|
N/A
|
|
||
|
|
|
|
|
|
|
$
|
588,937
|
|
|
$
|
753,111
|
|
|
|
(1)
|
Investments with deficit balances aggregating approximately
$22.9 million
and
$22.1 million
at
September 30, 2017
and
December 31, 2016
, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
|
|
(2)
|
The Company’s economic ownership has increased based on the achievement of certain return thresholds.
|
|
(3)
|
The Company’s wholly-owned entity that owns the office component of the project also owns a
33.3%
interest in the entity owning the land, parking garage and infrastructure of the project.
|
|
(4)
|
The joint venture owns
four
in-service buildings and
two
undeveloped land parcels.
|
|
(5)
|
Under the joint venture agreement for this land parcel, the partner will be entitled to up to
two
additional payments from the venture based on increases in total entitled square footage of the project above
520,000
square feet and achieving certain project returns at stabilization.
|
|
(6)
|
The entity is a VIE (See Note
2
).
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
|
ASSETS
|
|
|
|
||||
|
Real estate and development in process, net
|
$
|
1,716,447
|
|
|
$
|
1,519,217
|
|
|
Other assets
|
374,484
|
|
|
297,263
|
|
||
|
Total assets
|
$
|
2,090,931
|
|
|
$
|
1,816,480
|
|
|
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
|
|
|
|
||||
|
Mortgage and notes payable, net
|
$
|
1,411,401
|
|
|
$
|
865,665
|
|
|
Other liabilities
|
86,971
|
|
|
67,167
|
|
||
|
Members’/Partners’ equity
|
592,559
|
|
|
883,648
|
|
||
|
Total liabilities and members’/partners’ equity
|
$
|
2,090,931
|
|
|
$
|
1,816,480
|
|
|
Company’s share of equity
|
$
|
291,029
|
|
|
$
|
450,662
|
|
|
Basis differentials (1)
|
297,908
|
|
|
302,449
|
|
||
|
Carrying value of the Company’s investments in unconsolidated joint ventures (2)
|
$
|
588,937
|
|
|
$
|
753,111
|
|
|
(1)
|
This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials result from impairments of investments, acquisitions through joint ventures with no change in control and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level. At
September 30, 2017
and
December 31, 2016
, there was an aggregate basis differential of approximately
$324.4 million
and
$328.8 million
, respectively, between the carrying value of the Company’s investment in the joint venture that owns Colorado Center and the joint venture’s basis in the assets and liabilities, which differential (excluding land) shall be amortized over the remaining lives of the related assets and liabilities.
|
|
(2)
|
Investments with deficit balances aggregating approximately
$22.9 million
and
$22.1 million
at
September 30, 2017
and
December 31, 2016
, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
Total revenue (1)
|
$
|
55,516
|
|
|
$
|
49,002
|
|
|
$
|
166,139
|
|
|
$
|
125,039
|
|
|
Expenses
|
|
|
|
|
|
|
|
||||||||
|
Operating
|
23,128
|
|
|
21,753
|
|
|
67,310
|
|
|
54,779
|
|
||||
|
Depreciation and amortization
|
16,440
|
|
|
12,038
|
|
|
44,973
|
|
|
30,306
|
|
||||
|
Total expenses
|
39,568
|
|
|
33,791
|
|
|
112,283
|
|
|
85,085
|
|
||||
|
Operating income
|
15,948
|
|
|
15,211
|
|
|
53,856
|
|
|
39,954
|
|
||||
|
Other expense
|
|
|
|
|
|
|
|
||||||||
|
Interest expense
|
13,088
|
|
|
8,400
|
|
|
31,815
|
|
|
25,172
|
|
||||
|
Net income
|
$
|
2,860
|
|
|
$
|
6,811
|
|
|
$
|
22,041
|
|
|
$
|
14,782
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Company’s share of net income
|
$
|
2,909
|
|
|
$
|
3,179
|
|
|
$
|
11,576
|
|
|
$
|
6,830
|
|
|
Basis differential (2)
|
(2,066
|
)
|
|
(1,715
|
)
|
|
(4,541
|
)
|
|
(1,341
|
)
|
||||
|
Income from unconsolidated joint ventures
|
$
|
843
|
|
|
$
|
1,464
|
|
|
$
|
7,035
|
|
|
$
|
5,489
|
|
|
(1)
|
Includes straight-line rent adjustments of approximately
$5.1 million
and
$5.2 million
for the three months ended
September 30, 2017
and
2016
, respectively, and
$16.4 million
and
$11.0 million
for the
nine
months ended
September 30, 2017
and
2016
, respectively.
|
|
(2)
|
Includes straight-line rent adjustments of approximately
$0.7 million
and
$0.7 million
for the three months ended
September 30, 2017
and 2016, respectively, and
$2.2 million
and
$0.7 million
for the nine months ended September 30, 2017 and 2016, respectively. Also includes net above-/below-market rent adjustments of approximately
$0.4 million
and
$0.5 million
for the three months ended
September 30, 2017
and 2016, respectively, and
$1.3 million
and
$0.5 million
for the nine months ended
September 30, 2017
and 2016, respectively.
|
|
Derivative Instrument
|
|
Aggregate Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Strike Rate Range
|
|
Balance Sheet Location
|
|
Fair Value
|
||||||||
|
|
|
|
|
Low
|
|
High
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest Rate Swaps
|
|
$
|
350,000
|
|
|
June 7, 2017
|
|
June 7, 2027
|
|
2.418
|
%
|
-
|
2.950
|
%
|
|
Other Liabilities
|
|
$
|
(8,773
|
)
|
|
Interest Rate Swaps
|
|
100,000
|
|
|
June 7, 2017
|
|
June 7, 2027
|
|
2.336
|
%
|
-
|
2.388
|
%
|
|
Prepaid Expenses and Other Assets
|
|
509
|
|
||
|
|
|
$
|
450,000
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(8,264
|
)
|
||
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
(in thousands)
|
||||||||||||||
|
Amount of gain (loss) related to the effective portion recognized in other comprehensive loss
|
|
$
|
—
|
|
|
$
|
5,712
|
|
|
$
|
(6,133
|
)
|
|
$
|
(85,285
|
)
|
|
Amount of loss related to the effective portion subsequently reclassified to earnings
|
|
$
|
(1,665
|
)
|
|
$
|
(1,190
|
)
|
|
$
|
(4,368
|
)
|
|
$
|
(2,445
|
)
|
|
Amount of loss related to the ineffective portion and amount excluded from effectiveness testing
|
|
$
|
—
|
|
|
$
|
(140
|
)
|
|
$
|
—
|
|
|
$
|
(140
|
)
|
|
Balance at December 31, 2016
|
|
$
|
(52,251
|
)
|
|
Effective portion of interest rate contracts
|
|
(6,133
|
)
|
|
|
Amortization of interest rate contracts
|
|
4,368
|
|
|
|
Other comprehensive loss attributable to noncontrolling interests
|
|
2,220
|
|
|
|
Balance at September 30, 2017
|
|
$
|
(51,796
|
)
|
|
|
|
|
||
|
Balance at December 31, 2015
|
|
$
|
(14,114
|
)
|
|
Effective portion of interest rate contracts
|
|
(85,285
|
)
|
|
|
Amortization of interest rate contracts
|
|
2,445
|
|
|
|
Other comprehensive loss attributable to noncontrolling interests
|
|
23,011
|
|
|
|
Balance at September 30, 2016
|
|
$
|
(73,943
|
)
|
|
Balance at December 31, 2016
|
|
$
|
(60,853
|
)
|
|
Effective portion of interest rate contracts
|
|
(6,133
|
)
|
|
|
Amortization of interest rate contracts
|
|
4,368
|
|
|
|
Other comprehensive loss attributable to noncontrolling interests
|
|
2,272
|
|
|
|
Balance at September 30, 2017
|
|
$
|
(60,346
|
)
|
|
|
|
|
||
|
Balance at December 31, 2015
|
|
$
|
(18,337
|
)
|
|
Effective portion of interest rate contracts
|
|
(85,285
|
)
|
|
|
Amortization of interest rate contracts
|
|
2,445
|
|
|
|
Other comprehensive loss attributable to noncontrolling interests
|
|
16,134
|
|
|
|
Balance at September 30, 2016
|
|
$
|
(85,043
|
)
|
|
Record Date
|
|
Payment Date
|
|
Distributions per OP Unit and LTIP Unit
|
|
Distributions per MYLTIP Unit
|
||||
|
September 29, 2017
|
|
October 31, 2017
|
|
|
$0.75
|
|
|
|
$0.075
|
|
|
June 30, 2017
|
|
July 31, 2017
|
|
|
$0.75
|
|
|
|
$0.075
|
|
|
March 31, 2017
|
|
April 28, 2017
|
|
|
$0.75
|
|
|
|
$0.075
|
|
|
December 31, 2016
|
|
January 30, 2017
|
|
|
$0.75
|
|
|
|
$0.075
|
|
|
Balance at December 31, 2016
|
$
|
2,262,040
|
|
|
Contributions
|
31,465
|
|
|
|
Net income
|
40,350
|
|
|
|
Distributions
|
(40,292
|
)
|
|
|
Conversion of redeemable partnership units
|
(16,812
|
)
|
|
|
Unearned compensation
|
(5,194
|
)
|
|
|
Cumulative effect of a change in accounting principle
|
(1,763
|
)
|
|
|
Accumulated other comprehensive income
|
52
|
|
|
|
Adjustment to reflect redeemable partnership units at redemption value
|
(103,556
|
)
|
|
|
Balance at September 30, 2017
|
$
|
2,166,290
|
|
|
|
|
||
|
Balance at December 31, 2015
|
$
|
2,286,689
|
|
|
Contributions
|
31,492
|
|
|
|
Net income
|
42,120
|
|
|
|
Distributions
|
(35,500
|
)
|
|
|
Conversion of redeemable partnership units
|
(5,881
|
)
|
|
|
Unearned compensation
|
(10,072
|
)
|
|
|
Accumulated other comprehensive loss
|
(6,877
|
)
|
|
|
Adjustment to reflect redeemable partnership units at redemption value
|
151,545
|
|
|
|
Balance at September 30, 2016
|
$
|
2,453,516
|
|
|
Balance at December 31, 2016
|
$
|
1,530,647
|
|
|
Capital contributions (1)
|
147,772
|
|
|
|
Net income
|
33,967
|
|
|
|
Accumulated other comprehensive loss
|
(2,272
|
)
|
|
|
Distributions
|
(41,439
|
)
|
|
|
Balance at September 30, 2017
|
$
|
1,668,675
|
|
|
|
|
||
|
Balance at December 31, 2015
|
$
|
1,574,400
|
|
|
Capital contributions
|
5,417
|
|
|
|
Net income
|
53
|
|
|
|
Accumulated other comprehensive loss
|
(16,134
|
)
|
|
|
Distributions
|
(38,694
|
)
|
|
|
Balance at September 30, 2016
|
$
|
1,525,042
|
|
|
(1)
|
Includes the contribution of the remaining unpaid principal balance of the members’ notes payable totaling
$109,576
to equity in the consolidated entity that owns 767 Fifth Avenue (the General Motors Building).
|
|
Record Date
|
|
Payment Date
|
|
Dividend (Per Share)
|
|
|
Distribution (Per Unit)
|
|
||
|
September 29, 2017
|
|
October 31, 2017
|
|
|
$0.75
|
|
|
|
$0.75
|
|
|
June 30, 2017
|
|
July 31, 2017
|
|
|
$0.75
|
|
|
|
$0.75
|
|
|
March 31, 2017
|
|
April 28, 2017
|
|
|
$0.75
|
|
|
|
$0.75
|
|
|
December 31, 2016
|
|
January 30, 2017
|
|
|
$0.75
|
|
|
|
$0.75
|
|
|
Record Date
|
|
Payment Date
|
|
Dividend (Per Share)
|
|
|
|
November 3, 2017
|
|
November 15, 2017
|
|
|
$32.8125
|
|
|
August 4, 2017
|
|
August 15, 2017
|
|
|
$32.8125
|
|
|
May 5, 2017
|
|
May 15, 2017
|
|
|
$32.8125
|
|
|
February 3, 2017
|
|
February 15, 2017
|
|
|
$32.8125
|
|
|
|
Three months ended September 30, 2017
|
|||||||||
|
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
|
|
(in thousands, except for per share amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
117,337
|
|
|
154,355
|
|
|
$
|
0.76
|
|
|
Allocation of undistributed earnings to participating securities
|
(7
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
117,330
|
|
|
154,355
|
|
|
$
|
0.76
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
128
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
117,330
|
|
|
154,483
|
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|||||
|
|
Three months ended September 30, 2016
|
|||||||||
|
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
|
|
(in thousands, except for per share amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
76,753
|
|
|
153,754
|
|
|
$
|
0.50
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
382
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
76,753
|
|
|
154,136
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|||||
|
|
Nine months ended September 30, 2017
|
|||||||||
|
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
|
|
(in thousands, except for per share amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
348,086
|
|
|
154,132
|
|
|
$
|
2.26
|
|
|
Allocation of undistributed earnings to participating securities
|
(15
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
348,071
|
|
|
154,132
|
|
|
$
|
2.26
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
212
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
348,071
|
|
|
154,344
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|||||
|
|
Nine months ended September 30, 2016
|
|||||||||
|
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
|
|
(in thousands, except for per share amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
355,114
|
|
|
153,681
|
|
|
$
|
2.31
|
|
|
Allocation of undistributed earnings to participating securities
|
(189
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
354,925
|
|
|
153,681
|
|
|
$
|
2.31
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
290
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
354,925
|
|
|
153,971
|
|
|
$
|
2.31
|
|
|
|
Three months ended September 30, 2017
|
|||||||||
|
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|
Per Unit
Amount
|
|||||
|
|
(in thousands, except for per unit amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,693
|
|
|
171,691
|
|
|
$
|
0.77
|
|
|
Allocation of undistributed earnings to participating securities
|
(8
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,685
|
|
|
171,691
|
|
|
$
|
0.77
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
128
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,685
|
|
|
171,819
|
|
|
$
|
0.77
|
|
|
|
Three months ended September 30, 2016
|
|||||||||
|
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|
Per Unit
Amount
|
|||||
|
|
(in thousands, except for per unit amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
91,306
|
|
|
171,379
|
|
|
$
|
0.53
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
382
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
91,306
|
|
|
171,761
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|||||
|
|
Nine months ended September 30, 2017
|
|||||||||
|
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|
Per Unit
Amount
|
|||||
|
|
(in thousands, except for per unit amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
395,199
|
|
|
171,649
|
|
|
$
|
2.30
|
|
|
Allocation of undistributed earnings to participating securities
|
(17
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
395,182
|
|
|
171,649
|
|
|
$
|
2.30
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
212
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
395,182
|
|
|
171,861
|
|
|
$
|
2.30
|
|
|
|
|
|
|
|
|
|||||
|
|
Nine months ended September 30, 2016
|
|||||||||
|
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|
Per Unit
Amount
|
|||||
|
|
(in thousands, except for per unit amounts)
|
|||||||||
|
Basic Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
408,540
|
|
|
171,353
|
|
|
$
|
2.38
|
|
|
Allocation of undistributed earnings to participating securities
|
(210
|
)
|
|
—
|
|
|
—
|
|
||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
408,330
|
|
|
171,353
|
|
|
$
|
2.38
|
|
|
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
|
Stock Based Compensation
|
—
|
|
|
290
|
|
|
—
|
|
||
|
Diluted Earnings:
|
|
|
|
|
|
|||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
408,330
|
|
|
171,643
|
|
|
$
|
2.38
|
|
|
|
|
|
|
|
|
|||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
117,337
|
|
|
$
|
76,753
|
|
|
$
|
348,086
|
|
|
$
|
355,114
|
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
|
Preferred dividends
|
2,625
|
|
|
2,589
|
|
|
7,875
|
|
|
7,796
|
|
||||
|
Noncontrolling interest—common units of Boston Properties Limited Partnership
|
13,402
|
|
|
9,387
|
|
|
40,350
|
|
|
42,120
|
|
||||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
|
33,967
|
|
|
53
|
|
||||
|
Interest expense
|
92,032
|
|
|
104,641
|
|
|
282,709
|
|
|
314,953
|
|
||||
|
Losses from interest rate contracts
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
|
Depreciation and amortization expense
|
152,164
|
|
|
203,748
|
|
|
463,288
|
|
|
516,371
|
|
||||
|
Impairment loss
|
—
|
|
|
1,783
|
|
|
—
|
|
|
1,783
|
|
||||
|
Transaction costs
|
239
|
|
|
249
|
|
|
572
|
|
|
1,187
|
|
||||
|
General and administrative expense
|
25,792
|
|
|
25,165
|
|
|
84,319
|
|
|
79,936
|
|
||||
|
Less:
|
|
|
|
|
|
|
|
||||||||
|
Gains on sales of real estate
|
2,891
|
|
|
12,983
|
|
|
6,791
|
|
|
80,606
|
|
||||
|
Gains (losses) from early extinguishments of debt
|
—
|
|
|
(371
|
)
|
|
14,354
|
|
|
(371
|
)
|
||||
|
Gains from investments in securities
|
944
|
|
|
976
|
|
|
2,716
|
|
|
1,713
|
|
||||
|
Interest and other income
|
1,329
|
|
|
3,628
|
|
|
3,447
|
|
|
6,657
|
|
||||
|
Income from unconsolidated joint ventures
|
843
|
|
|
1,464
|
|
|
7,035
|
|
|
5,489
|
|
||||
|
Development and management services revenue
|
10,811
|
|
|
6,364
|
|
|
24,648
|
|
|
18,586
|
|
||||
|
Net Operating Income
|
$
|
401,113
|
|
|
$
|
382,186
|
|
|
$
|
1,202,175
|
|
|
$
|
1,206,773
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,693
|
|
|
$
|
91,306
|
|
|
$
|
395,199
|
|
|
$
|
408,540
|
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
|
Preferred distributions
|
2,625
|
|
|
2,589
|
|
|
7,875
|
|
|
7,796
|
|
||||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
|
33,967
|
|
|
53
|
|
||||
|
Interest expense
|
92,032
|
|
|
104,641
|
|
|
282,709
|
|
|
314,953
|
|
||||
|
Losses from interest rate contracts
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
|
Depreciation and amortization expense
|
150,210
|
|
|
198,582
|
|
|
457,102
|
|
|
507,234
|
|
||||
|
Impairment loss
|
—
|
|
|
1,783
|
|
|
—
|
|
|
1,783
|
|
||||
|
Transaction costs
|
239
|
|
|
249
|
|
|
572
|
|
|
1,187
|
|
||||
|
General and administrative expense
|
25,792
|
|
|
25,165
|
|
|
84,319
|
|
|
79,936
|
|
||||
|
Less:
|
|
|
|
|
|
|
|
||||||||
|
Gains on sales of real estate
|
2,891
|
|
|
12,983
|
|
|
7,368
|
|
|
82,775
|
|
||||
|
Gains (losses) from early extinguishments of debt
|
—
|
|
|
(371
|
)
|
|
14,354
|
|
|
(371
|
)
|
||||
|
Gains from investments in securities
|
944
|
|
|
976
|
|
|
2,716
|
|
|
1,713
|
|
||||
|
Interest and other income
|
1,329
|
|
|
3,628
|
|
|
3,447
|
|
|
6,657
|
|
||||
|
Income from unconsolidated joint ventures
|
843
|
|
|
1,464
|
|
|
7,035
|
|
|
5,489
|
|
||||
|
Development and management services revenue
|
10,811
|
|
|
6,364
|
|
|
24,648
|
|
|
18,586
|
|
||||
|
Net Operating Income
|
$
|
401,113
|
|
|
$
|
382,186
|
|
|
$
|
1,202,175
|
|
|
$
|
1,206,773
|
|
|
|
Boston
|
|
New York
|
|
San Francisco
|
|
Washington, DC
|
|
Total
|
||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
$
|
196,687
|
|
|
$
|
242,071
|
|
|
$
|
87,162
|
|
|
$
|
103,622
|
|
|
$
|
629,542
|
|
|
Residential
|
1,228
|
|
|
—
|
|
|
—
|
|
|
3,067
|
|
|
4,295
|
|
|||||
|
Hotel
|
13,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,064
|
|
|||||
|
Total
|
210,979
|
|
|
242,071
|
|
|
87,162
|
|
|
106,689
|
|
|
646,901
|
|
|||||
|
% of Grand Totals
|
32.61
|
%
|
|
37.43
|
%
|
|
13.47
|
%
|
|
16.49
|
%
|
|
100.00
|
%
|
|||||
|
Rental Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
76,086
|
|
|
95,775
|
|
|
26,792
|
|
|
37,111
|
|
|
235,764
|
|
|||||
|
Residential
|
512
|
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|
1,577
|
|
|||||
|
Hotel
|
8,447
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,447
|
|
|||||
|
Total
|
85,045
|
|
|
95,775
|
|
|
26,792
|
|
|
38,176
|
|
|
245,788
|
|
|||||
|
% of Grand Totals
|
34.60
|
%
|
|
38.97
|
%
|
|
10.90
|
%
|
|
15.53
|
%
|
|
100.00
|
%
|
|||||
|
Net operating income
|
$
|
125,934
|
|
|
$
|
146,296
|
|
|
$
|
60,370
|
|
|
$
|
68,513
|
|
|
$
|
401,113
|
|
|
% of Grand Totals
|
31.40
|
%
|
|
36.47
|
%
|
|
15.05
|
%
|
|
17.08
|
%
|
|
100.00
|
%
|
|||||
|
|
Boston
|
|
New York
|
|
San Francisco
|
|
Washington, DC
|
|
Total
|
||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
$
|
183,975
|
|
|
$
|
237,262
|
|
|
$
|
80,235
|
|
|
$
|
100,666
|
|
|
$
|
602,138
|
|
|
Residential
|
1,227
|
|
|
—
|
|
|
—
|
|
|
3,145
|
|
|
4,372
|
|
|||||
|
Hotel
|
12,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,354
|
|
|||||
|
Total
|
197,556
|
|
|
237,262
|
|
|
80,235
|
|
|
103,811
|
|
|
618,864
|
|
|||||
|
% of Grand Totals
|
31.92
|
%
|
|
38.34
|
%
|
|
12.96
|
%
|
|
16.78
|
%
|
|
100.00
|
%
|
|||||
|
Rental Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
71,254
|
|
|
95,073
|
|
|
26,037
|
|
|
33,973
|
|
|
226,337
|
|
|||||
|
Residential
|
1,141
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
|
2,223
|
|
|||||
|
Hotel
|
8,118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,118
|
|
|||||
|
Total
|
80,513
|
|
|
95,073
|
|
|
26,037
|
|
|
35,055
|
|
|
236,678
|
|
|||||
|
% of Grand Totals
|
34.02
|
%
|
|
40.17
|
%
|
|
11.00
|
%
|
|
14.81
|
%
|
|
100.00
|
%
|
|||||
|
Net operating income
|
$
|
117,043
|
|
|
$
|
142,189
|
|
|
$
|
54,198
|
|
|
$
|
68,756
|
|
|
$
|
382,186
|
|
|
% of Grand Totals
|
30.62
|
%
|
|
37.21
|
%
|
|
14.18
|
%
|
|
17.99
|
%
|
|
100.00
|
%
|
|||||
|
|
Boston
|
|
New York
|
|
San Francisco
|
|
Washington, DC
|
|
Total
|
||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
$
|
573,883
|
|
|
$
|
735,485
|
|
|
$
|
257,286
|
|
|
$
|
309,225
|
|
|
$
|
1,875,879
|
|
|
Residential
|
3,520
|
|
|
—
|
|
|
—
|
|
|
8,941
|
|
|
12,461
|
|
|||||
|
Hotel
|
33,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,859
|
|
|||||
|
Total
|
611,262
|
|
|
735,485
|
|
|
257,286
|
|
|
318,166
|
|
|
1,922,199
|
|
|||||
|
% of Grand Totals
|
31.80
|
%
|
|
38.27
|
%
|
|
13.38
|
%
|
|
16.55
|
%
|
|
100.00
|
%
|
|||||
|
Rental Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
225,502
|
|
|
280,569
|
|
|
77,204
|
|
|
108,044
|
|
|
691,319
|
|
|||||
|
Residential
|
1,552
|
|
|
—
|
|
|
—
|
|
|
3,211
|
|
|
4,763
|
|
|||||
|
Hotel
|
23,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,942
|
|
|||||
|
Total
|
250,996
|
|
|
280,569
|
|
|
77,204
|
|
|
111,255
|
|
|
720,024
|
|
|||||
|
% of Grand Totals
|
34.86
|
%
|
|
38.97
|
%
|
|
10.72
|
%
|
|
15.45
|
%
|
|
100.00
|
%
|
|||||
|
Net operating income
|
$
|
360,266
|
|
|
$
|
454,916
|
|
|
$
|
180,082
|
|
|
$
|
206,911
|
|
|
$
|
1,202,175
|
|
|
% of Grand Totals
|
29.97
|
%
|
|
37.84
|
%
|
|
14.98
|
%
|
|
17.21
|
%
|
|
100.00
|
%
|
|||||
|
|
Boston
|
|
New York
|
|
San Francisco
|
|
Washington, DC
|
|
Total
|
||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
$
|
540,850
|
|
|
$
|
773,077
|
|
|
$
|
235,076
|
|
|
$
|
300,742
|
|
|
$
|
1,849,745
|
|
|
Residential
|
3,578
|
|
|
—
|
|
|
—
|
|
|
8,931
|
|
|
12,509
|
|
|||||
|
Hotel
|
33,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,919
|
|
|||||
|
Total
|
578,347
|
|
|
773,077
|
|
|
235,076
|
|
|
309,673
|
|
|
1,896,173
|
|
|||||
|
% of Grand Totals
|
30.50
|
%
|
|
40.77
|
%
|
|
12.40
|
%
|
|
16.33
|
%
|
|
100.00
|
%
|
|||||
|
Rental Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Office
|
210,695
|
|
|
272,620
|
|
|
75,412
|
|
|
101,514
|
|
|
660,241
|
|
|||||
|
Residential
|
2,174
|
|
|
—
|
|
|
—
|
|
|
3,255
|
|
|
5,429
|
|
|||||
|
Hotel
|
23,730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,730
|
|
|||||
|
Total
|
236,599
|
|
|
272,620
|
|
|
75,412
|
|
|
104,769
|
|
|
689,400
|
|
|||||
|
% of Grand Totals
|
34.32
|
%
|
|
39.54
|
%
|
|
10.94
|
%
|
|
15.20
|
%
|
|
100.00
|
%
|
|||||
|
Net operating income
|
$
|
341,748
|
|
|
$
|
500,457
|
|
|
$
|
159,664
|
|
|
$
|
204,904
|
|
|
$
|
1,206,773
|
|
|
% of Grand Totals
|
28.32
|
%
|
|
41.47
|
%
|
|
13.23
|
%
|
|
16.98
|
%
|
|
100.00
|
%
|
|||||
|
•
|
if there is a negative change in the economy, including, without limitation, a reversal of current job growth trends and an increase in unemployment, it could have a negative effect on the following, among other things:
|
|
•
|
the fundamentals of our business, including overall market occupancy, tenant space utilization and rental rates;
|
|
•
|
the financial condition of our tenants, many of which are financial, legal, media/telecommunication, technology and other professional firms, our lenders, counterparties to our derivative financial instruments and institutions that hold our cash balances and short-term investments, which may expose us to increased risks of default by these parties; and
|
|
•
|
the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis;
|
|
•
|
volatile or adverse global economic and political conditions, and dislocations in the credit markets, could adversely affect our business opportunities, results of operations and financial condition;
|
|
•
|
general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, tenant space utilization, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate);
|
|
•
|
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, construction delays, increased construction costs, cost overruns, inability to obtain necessary permits, tenant accounting considerations that may result in negotiated lease provisions that limit a tenant’s liability during construction, and public opposition to such activities);
|
|
•
|
risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments and/or refinance existing indebtedness, including the impact of higher interest rates on the cost and/or availability of financing;
|
|
•
|
risks associated with forward interest rate contracts and the effectiveness of such arrangements;
|
|
•
|
risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets;
|
|
•
|
risks associated with actual or threatened terrorist attacks;
|
|
•
|
costs of compliance with the Americans with Disabilities Act and other similar laws;
|
|
•
|
potential liability for uninsured losses and environmental contamination;
|
|
•
|
risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems, which support our operations and our buildings;
|
|
•
|
risks associated with BXP’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended;
|
|
•
|
possible adverse changes in tax and environmental laws;
|
|
•
|
the impact of newly adopted accounting principles on our accounting policies and on period-to-period comparisons of financial results;
|
|
•
|
risks associated with possible state and local tax audits;
|
|
•
|
risks associated with our dependence on key personnel whose continued service is not guaranteed; and
|
|
•
|
the other risk factors identified in our most recently filed Annual Reports on Form 10-K, including those described under the caption “Risk Factors.”
|
|
•
|
ensuring tenant satisfaction;
|
|
•
|
leasing available space in our in-service and development properties, as well as focusing on sizable future lease expirations well in advance;
|
|
•
|
completing the construction of our development and redevelopment properties;
|
|
•
|
continuing and completing the redevelopment and repositioning of several key properties to increase future revenues and asset values over the long-term, despite the adverse impact on near-term revenue and earnings;
|
|
•
|
maintaining discipline in our underwriting of investment opportunities by (1) seeking significant pre-leasing commitments before beginning new construction, and (2) targeting acquisition activity in non-stabilized assets near innovation centers where we see the best prospects for overall growth and our operational expertise can create value; and
|
|
•
|
managing our near-term debt maturities and maintaining our conservative balance sheet.
|
|
|
|
Three months ended September 30, 2017
|
|
Nine months ended September 30, 2017
|
||||
|
|
|
(Square Feet)
|
||||||
|
Vacant space available at the beginning of the period
|
|
3,952,331
|
|
|
4,196,275
|
|
||
|
Property dispositions/properties taken out of service
|
|
—
|
|
|
(115,289
|
)
|
||
|
Properties acquired vacant space
|
|
—
|
|
|
15,944
|
|
||
|
Properties placed in-service
|
|
303,861
|
|
|
386,599
|
|
||
|
Leases expiring or terminated during the period
|
|
1,523,017
|
|
|
3,628,613
|
|
||
|
Total space available for lease
|
|
5,779,209
|
|
|
8,112,142
|
|
||
|
1
st
generation leases
|
|
225,125
|
|
|
302,578
|
|
||
|
2
nd
generation leases with new tenants
|
|
624,427
|
|
|
2,064,896
|
|
||
|
2
nd
generation lease renewals
|
|
671,715
|
|
|
1,486,726
|
|
||
|
Total space leased (1)
|
|
1,521,267
|
|
|
3,854,200
|
|
||
|
Vacant space available for lease at the end of the period
|
|
4,257,942
|
|
|
4,257,942
|
|
||
|
|
|
|
|
|
||||
|
Leases executed during the period, in square feet (2)
|
|
2,565,971
|
|
|
4,058,416
|
|
||
|
|
|
|
|
|
||||
|
Second generation leasing information
: (3)
|
|
|
|
|
||||
|
Leases commencing during the period, in square feet
|
|
1,296,142
|
|
|
3,551,622
|
|
||
|
Weighted Average Lease Term
|
|
93 Months
|
|
|
95 Months
|
|
||
|
Weighted Average Free Rent Period
|
|
102 Days
|
|
|
111 Days
|
|
||
|
Total Transaction Costs Per Square Foot (4)
|
|
|
$43.66
|
|
|
|
$54.48
|
|
|
Increase in Gross Rents (5)
|
|
1.34
|
%
|
|
10.44
|
%
|
||
|
Increase in Net Rents (6)
|
|
1.54
|
%
|
|
15.97
|
%
|
||
|
(1)
|
Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the three and
nine
months ended
September 30, 2017
.
|
|
(2)
|
Represents leases executed during the three and
nine
months ended
September 30, 2017
for which we either (1) commenced rental revenue recognition in such period or (2) will commence rental revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed and recognized in the three and
nine
months ended
September 30, 2017
is 263,439 and 673,055, respectively.
|
|
(3)
|
Second generation leases are defined as leases for space that had previously been leased by us. Of the 1,296,142 and 3,551,622 square feet of second generation leases that commenced during the three and
nine
months ended
September 30, 2017
, respectively, leases for 1,032,703 and 2,878,567 square feet were signed in prior periods.
|
|
(4)
|
Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions and other inducements in accordance with GAAP.
|
|
(5)
|
Represents the increase in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the
1,005,495
and
2,641,599
square feet of second generation leases that had been occupied within the prior 12 months
|
|
(6)
|
Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the
1,005,495
and
2,641,599
square feet of second generation leases that had been occupied within the prior 12 months for the three and
nine
months ended
September 30, 2017
, respectively; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis.
|
|
•
|
On August 7, 2017, we entered into a joint venture with The Bernstein Companies to develop an approximately 722,000 net rentable square foot
(subject to adjustment based on finalized building design)
build-to-suit Class A office building and below-grade parking garage at 7750 Wisconsin Avenue in Bethesda, Maryland. The joint venture entered into a lease agreement with an affiliate of Marriott International, Inc., under which Marriott will lease 100% of the office building and garage for a term of 20 years, and the building will serve as Marriott’s new worldwide headquarters. Marriott has agreed to fund 100% of the related tenant improvement costs and leasing commissions for the office building. We will serve as co-development manager for the venture and expect to commence construction in 2018. We and The Bernstein Companies each own a 50% interest in the joint venture. (See Notes
4
and
7
to the Consolidated Financial Statements).
|
|
•
|
On August 24, 2017, we entered into a 15-year lease with the General Services Administration under which we will develop the new headquarters for the TSA. The TSA will occupy 100% of the approximately 623,000 net rentable square feet of Class A office space and a parking garage at 6595 Springfield Center Drive located in Springfield, Virginia. Concurrently with the execution of the lease, we commenced development of the project and expect the building to be available for occupancy by the fourth quarter of 2020.
|
|
•
|
On September 16, 2017, we completed and fully placed in-service 888 Boylston Street, a Class A office and retail project with approximately 417,000 net rentable square feet located in Boston, Massachusetts. The property is 93% leased.
|
|
•
|
On
August 30, 2017
, we completed the sale of our Reston Eastgate property located in Reston, Virginia for a gross sale price of
$14.0 million
. Net cash proceeds totaled approximately
$13.2 million
, resulting in a gain on sale of real estate totaling approximately
$2.8 million
. Reston Eastgate is a parcel of land containing approximately 21.7 acres located at 11011 Sunset Hills Road.
|
|
•
|
On July 10, 2017, we acquired an additional 0.2% interest in the unconsolidated joint venture that owns Colorado Center located in Santa Monica, California for approximately $2.1 million in cash. Following the acquisition, we own a 50% interest in the joint venture.
|
|
•
|
On July 28, 2017, a joint venture in which we own a 50% interest obtained mortgage financing collateralized by its Colorado Center property located in Santa Monica, California totaling $550.0 million. The mortgage financing bears interest at a fixed rate of 3.56% per annum and matures on August 9, 2027. The loan requires interest-only payments during the 10-year term of the loan, with the entire principal amount due at maturity. The joint venture distributed $502.0 million to the partners, of which our share was $251.0 million. Colorado Center is a six-building office complex that sits on a 15-acre site and contains an aggregate of approximately 1,118,000 net rentable square feet with an underground parking garage for 3,100 vehicles.
|
|
•
|
On September 6, 2017, a joint venture in which we have a 50% interest obtained construction financing with a total commitment of $204.6 million collateralized by its Hub on Causeway development project. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2021, with two, one-year extension options, subject to certain conditions. As of September 30, 2017, the venture had not drawn any funds under the loan. The Hub on Causeway is an approximately 385,000 net rentable square foot project containing retail and office space located in Boston, Massachusetts.
|
|
|
|
Total Property Portfolio
|
|||||||||||||
|
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) |
|
%
Change |
|||||||
|
Net Income Attributable to Boston Properties, Inc. Common Shareholders
|
|
$
|
348,086
|
|
|
$
|
355,114
|
|
|
$
|
(7,028
|
)
|
|
(1.98
|
)%
|
|
Preferred dividends
|
|
7,875
|
|
|
7,796
|
|
|
79
|
|
|
1.01
|
%
|
|||
|
Net Income Attributable to Boston Properties, Inc.
|
|
355,961
|
|
|
362,910
|
|
|
(6,949
|
)
|
|
(1.91
|
)%
|
|||
|
Net Income Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
|||||||
|
Noncontrolling interest—common units of the Operating Partnership
|
|
40,350
|
|
|
42,120
|
|
|
(1,770
|
)
|
|
(4.20
|
)%
|
|||
|
Noncontrolling interests in property partnerships
|
|
33,967
|
|
|
53
|
|
|
33,914
|
|
|
63,988.68
|
%
|
|||
|
Net Income
|
|
430,278
|
|
|
405,083
|
|
|
25,195
|
|
|
6.22
|
%
|
|||
|
Gains on sales of real estate
|
|
6,791
|
|
|
80,606
|
|
|
(73,815
|
)
|
|
(91.58
|
)%
|
|||
|
Income Before Gains on Sales of Real Estate
|
|
423,487
|
|
|
324,477
|
|
|
99,010
|
|
|
30.51
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Losses from interest rate contracts
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
(100.00
|
)%
|
|||
|
Interest expense
|
|
282,709
|
|
|
314,953
|
|
|
(32,244
|
)
|
|
(10.24
|
)%
|
|||
|
Other Income:
|
|
|
|
|
|
|
|
|
|
||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Gains (losses) from early extinguishments of debt
|
|
14,354
|
|
|
(371
|
)
|
|
14,725
|
|
|
3,969.00
|
%
|
|||
|
Gains from investments in securities
|
|
2,716
|
|
|
1,713
|
|
|
1,003
|
|
|
58.55
|
%
|
|||
|
Interest and other income
|
|
3,447
|
|
|
6,657
|
|
|
(3,210
|
)
|
|
(48.22
|
)%
|
|||
|
Income from unconsolidated joint ventures
|
|
7,035
|
|
|
5,489
|
|
|
1,546
|
|
|
28.17
|
%
|
|||
|
Operating Income
|
|
678,644
|
|
|
626,082
|
|
|
52,562
|
|
|
8.40
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Depreciation and amortization expense
|
|
463,288
|
|
|
516,371
|
|
|
(53,083
|
)
|
|
(10.28
|
)%
|
|||
|
Impairment loss
|
|
—
|
|
|
1,783
|
|
|
(1,783
|
)
|
|
(100.00
|
)%
|
|||
|
Transaction costs
|
|
572
|
|
|
1,187
|
|
|
(615
|
)
|
|
(51.81
|
)%
|
|||
|
General and administrative expense
|
|
84,319
|
|
|
79,936
|
|
|
4,383
|
|
|
5.48
|
%
|
|||
|
Other Revenue:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Development and management services revenue
|
|
24,648
|
|
|
18,586
|
|
|
6,062
|
|
|
32.62
|
%
|
|||
|
Net Operating Income
|
|
$
|
1,202,175
|
|
|
$
|
1,206,773
|
|
|
$
|
(4,598
|
)
|
|
(0.38
|
)%
|
|
|
|
Total Property Portfolio
|
|||||||||||||
|
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) |
|
%
Change |
|||||||
|
Net Income Attributable to Boston Properties Limited Partnership Common Unitholders
|
|
$
|
395,199
|
|
|
$
|
408,540
|
|
|
$
|
(13,341
|
)
|
|
(3.27
|
)%
|
|
Preferred distributions
|
|
7,875
|
|
|
7,796
|
|
|
79
|
|
|
1.01
|
%
|
|||
|
Net Income Attributable to Boston Properties Limited Partnership
|
|
403,074
|
|
|
416,336
|
|
|
(13,262
|
)
|
|
(3.19
|
)%
|
|||
|
Net Income Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
|||||||
|
Noncontrolling interests in property partnerships
|
|
33,967
|
|
|
53
|
|
|
33,914
|
|
|
63,988.68
|
%
|
|||
|
Net Income
|
|
437,041
|
|
|
416,389
|
|
|
20,652
|
|
|
4.96
|
%
|
|||
|
Gains on sales of real estate
|
|
7,368
|
|
|
82,775
|
|
|
(75,407
|
)
|
|
(91.10
|
)%
|
|||
|
Income Before Gains on Sales of Real Estate
|
|
429,673
|
|
|
333,614
|
|
|
96,059
|
|
|
28.79
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Losses from interest rate contracts
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
(100.00
|
)%
|
|||
|
Interest expense
|
|
282,709
|
|
|
314,953
|
|
|
(32,244
|
)
|
|
(10.24
|
)%
|
|||
|
Other Income:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Gains (losses) from early extinguishments of debt
|
|
14,354
|
|
|
(371
|
)
|
|
14,725
|
|
|
3,969.00
|
%
|
|||
|
Gains from investments in securities
|
|
2,716
|
|
|
1,713
|
|
|
1,003
|
|
|
58.55
|
%
|
|||
|
Interest and other income
|
|
3,447
|
|
|
6,657
|
|
|
(3,210
|
)
|
|
(48.22
|
)%
|
|||
|
Income from unconsolidated joint ventures
|
|
7,035
|
|
|
5,489
|
|
|
1,546
|
|
|
28.17
|
%
|
|||
|
Operating Income
|
|
684,830
|
|
|
635,219
|
|
|
49,611
|
|
|
7.81
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Depreciation and amortization expense
|
|
457,102
|
|
|
507,234
|
|
|
(50,132
|
)
|
|
(9.88
|
)%
|
|||
|
Impairment loss
|
|
—
|
|
|
1,783
|
|
|
(1,783
|
)
|
|
(100.00
|
)%
|
|||
|
Transaction costs
|
|
572
|
|
|
1,187
|
|
|
(615
|
)
|
|
(51.81
|
)%
|
|||
|
General and administrative expense
|
|
84,319
|
|
|
79,936
|
|
|
4,383
|
|
|
5.48
|
%
|
|||
|
Other Revenue:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Development and management services revenue
|
|
24,648
|
|
|
18,586
|
|
|
6,062
|
|
|
32.62
|
%
|
|||
|
Net Operating Income
|
|
$
|
1,202,175
|
|
|
$
|
1,206,773
|
|
|
$
|
(4,598
|
)
|
|
(0.38
|
)%
|
|
|
Same Property Portfolio
|
|
Properties
Placed In-Service
Portfolio
|
|
Properties
Acquired Portfolio |
|
Properties in
Development or
Redevelopment
Portfolio
|
|
Properties Sold Portfolio
|
|
Total Property Portfolio
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2017
|
|
2016
|
|
Increase/
(Decrease)
|
|
%
Change
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Increase/
(Decrease)
|
|
%
Change
|
|||||||||||||||||||||||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Rental Revenue
|
$
|
1,793,037
|
|
|
$
|
1,737,375
|
|
|
$
|
55,662
|
|
|
3.20
|
%
|
|
$
|
50,727
|
|
|
$
|
30,682
|
|
|
$
|
5,447
|
|
|
$
|
2,447
|
|
|
$
|
3,520
|
|
|
$
|
17,220
|
|
|
$
|
846
|
|
|
$
|
3,231
|
|
|
$
|
1,853,577
|
|
|
$
|
1,790,955
|
|
|
$
|
62,622
|
|
|
3.50
|
%
|
|
|
Termination Income
|
23,730
|
|
|
59,681
|
|
|
(35,951
|
)
|
|
(60.24
|
)%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,428
|
)
|
|
(892
|
)
|
|
—
|
|
|
—
|
|
|
22,302
|
|
|
58,789
|
|
|
(36,487
|
)
|
|
(62.06
|
)%
|
|||||||||||||||
|
Total Rental Revenue
|
1,816,767
|
|
|
1,797,056
|
|
|
19,711
|
|
|
1.10
|
%
|
|
50,727
|
|
|
30,682
|
|
|
5,447
|
|
|
2,447
|
|
|
2,092
|
|
|
16,328
|
|
|
846
|
|
|
3,231
|
|
|
1,875,879
|
|
|
1,849,744
|
|
|
26,135
|
|
|
1.41
|
%
|
|||||||||||||||
|
Real Estate Operating Expenses
|
664,110
|
|
|
641,839
|
|
|
22,271
|
|
|
3.47
|
%
|
|
14,640
|
|
|
7,476
|
|
|
1,320
|
|
|
565
|
|
|
10,560
|
|
|
8,834
|
|
|
689
|
|
|
1,526
|
|
|
691,319
|
|
|
660,240
|
|
|
31,079
|
|
|
4.71
|
%
|
|||||||||||||||
|
Net Operating Income (Loss), excluding residential and hotel
|
1,152,657
|
|
|
1,155,217
|
|
|
(2,560
|
)
|
|
(0.22
|
)%
|
|
36,087
|
|
|
23,206
|
|
|
4,127
|
|
|
1,882
|
|
|
(8,468
|
)
|
—
|
|
7,494
|
|
|
157
|
|
|
1,705
|
|
|
1,184,560
|
|
|
1,189,504
|
|
|
(4,944
|
)
|
|
(0.42
|
)%
|
||||||||||||||
|
Residential Net Operating Income (1)
|
7,691
|
|
|
7,703
|
|
|
(12
|
)
|
|
(0.16
|
)%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(623
|
)
|
|
—
|
|
|
—
|
|
|
7,698
|
|
|
7,080
|
|
|
618
|
|
|
8.73
|
%
|
|||||||||||||||
|
Hotel Net Operating Income (1)
|
9,917
|
|
|
10,189
|
|
|
(272
|
)
|
|
(2.67
|
)%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,917
|
|
|
10,189
|
|
|
(272
|
)
|
|
(2.67
|
)%
|
|||||||||||||||
|
Net Operating Income (Loss) (1)
|
$
|
1,170,265
|
|
|
$
|
1,173,109
|
|
|
$
|
(2,844
|
)
|
|
(0.24
|
)%
|
|
$
|
36,087
|
|
|
$
|
23,206
|
|
|
$
|
4,127
|
|
|
$
|
1,882
|
|
|
$
|
(8,461
|
)
|
|
$
|
6,871
|
|
|
$
|
157
|
|
|
$
|
1,705
|
|
|
$
|
1,202,175
|
|
|
$
|
1,206,773
|
|
|
$
|
(4,598
|
)
|
|
(0.38
|
)%
|
|
|
(1)
|
For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page
50
. Residential Net Operating Income for the
nine
months ended
September 30, 2017
and
2016
is comprised of Residential Revenue of
$12,461
and
$12,509
, less Residential Expenses of
$4,763
and
$5,429
, respectively. Hotel Net Operating Income for the
nine
months ended
September 30, 2017
and
2016
is comprised of Hotel Revenue of
$33,859
and
$33,919
less Hotel Expenses of
$23,942
and
$23,730
, respectively, per the Consolidated Statements of Operations.
|
|
|
|
Quarter Initially Placed In-Service
|
|
Quarter Fully Placed In-Service
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
601 Massachusetts Avenue
|
|
Third Quarter, 2015
|
|
Second Quarter, 2016
|
|
478,818
|
|
|
$
|
27,716
|
|
|
$
|
24,938
|
|
|
$
|
2,778
|
|
|
$
|
6,871
|
|
|
$
|
5,568
|
|
|
$
|
1,303
|
|
|
804 Carnegie Center
|
|
Second Quarter, 2016
|
|
Second Quarter, 2016
|
|
130,000
|
|
|
4,195
|
|
|
2,576
|
|
|
1,619
|
|
|
1,024
|
|
|
1,066
|
|
|
(42
|
)
|
||||||
|
10 CityPoint
|
|
Second Quarter, 2016
|
|
Second Quarter, 2016
|
|
241,460
|
|
|
8,661
|
|
|
3,002
|
|
|
5,659
|
|
|
2,563
|
|
|
789
|
|
|
1,774
|
|
||||||
|
Reservoir Place North
|
|
Second Quarter, 2016
|
|
Second Quarter, 2017
|
|
73,258
|
|
|
—
|
|
|
(8
|
)
|
|
8
|
|
|
225
|
|
|
34
|
|
|
191
|
|
||||||
|
888 Boylston Street
|
|
Third Quarter, 2016
|
|
Third Quarter, 2017
|
|
417,000
|
|
|
10,155
|
|
|
174
|
|
|
9,981
|
|
|
3,957
|
|
|
19
|
|
|
3,938
|
|
||||||
|
|
|
|
|
|
|
1,340,536
|
|
|
$
|
50,727
|
|
|
$
|
30,682
|
|
|
$
|
20,045
|
|
|
$
|
14,640
|
|
|
$
|
7,476
|
|
|
$
|
7,164
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
Date acquired
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
3625-3635 Peterson Way
|
|
April 22, 2016
|
|
218,366
|
|
|
$
|
4,395
|
|
|
$
|
2,447
|
|
|
$
|
1,948
|
|
|
$
|
876
|
|
|
$
|
565
|
|
|
$
|
311
|
|
|
103 Carnegie Center
|
|
May 15, 2017
|
|
96,332
|
|
|
1,052
|
|
|
—
|
|
|
1,052
|
|
|
444
|
|
|
—
|
|
|
444
|
|
||||||
|
|
|
|
|
314,698
|
|
|
$
|
5,447
|
|
|
$
|
2,447
|
|
|
$
|
3,000
|
|
|
$
|
1,320
|
|
|
$
|
565
|
|
|
$
|
755
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
Date commenced development / redevelopment
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
One Five Nine East 53rd Street (1)
|
|
August 19, 2016
|
|
220,000
|
|
|
$
|
1,350
|
|
|
$
|
10,707
|
|
|
$
|
(9,357
|
)
|
|
$
|
6,562
|
|
|
$
|
6,100
|
|
|
$
|
462
|
|
|
191 Spring Street (2)
|
|
December 29, 2016
|
|
160,000
|
|
|
—
|
|
|
2,652
|
|
|
(2,652
|
)
|
|
2,821
|
|
|
1,511
|
|
|
1,310
|
|
||||||
|
145 Broadway (3)
|
|
April 6, 2017
|
|
79,616
|
|
|
742
|
|
2,969
|
|
|
(2,227
|
)
|
|
1,177
|
|
|
1,223
|
|
|
(46
|
)
|
|||||||
|
|
|
|
|
459,616
|
|
|
$
|
2,092
|
|
|
$
|
16,328
|
|
|
$
|
(14,236
|
)
|
|
$
|
10,560
|
|
|
$
|
8,834
|
|
|
$
|
1,726
|
|
|
(1)
|
This is the low-rise portion of 601 Lexington Avenue in New York City. Rental revenue includes termination income of approximately
$(1.4) million
and $(0.9) million for the
nine
months ended
September 30, 2017
and 2016, respectively.
In addition, real estate operating expense includes demolition costs of approximately $5.4 million and $0.7 million for the nine months ended September 30, 2017 and 2016, respectively.
|
|
(2)
|
Real estate operating expenses for the nine months ended September 30, 2017 includes approximately $2.8 million of demolition costs.
|
|
(3)
|
On April 6, 2017, we commenced the development of 145 Broadway, a build-to-suit Class A office project with approximately 485,000 net rentable square feet located in Cambridge, Massachusetts. Real estate operating expenses for the nine months ended
September 30, 2017
includes approximately $0.8 million of demolition costs.
|
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||||
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||||
|
415 Main Street
|
|
February 1, 2016
|
|
Office
|
|
231,000
|
|
|
$
|
—
|
|
|
$
|
1,675
|
|
|
$
|
(1,675
|
)
|
|
$
|
—
|
|
|
$
|
412
|
|
|
$
|
(412
|
)
|
||
|
30 Shattuck Road
|
|
April 19, 2017
|
|
Land
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
35
|
|
|
(21
|
)
|
||||||||
|
40 Shattuck Road
|
|
June 13, 2017
|
|
Office
|
|
122,000
|
|
|
846
|
|
1,556
|
|
|
(710
|
)
|
|
599
|
|
|
981
|
|
|
(382
|
)
|
|||||||||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
98
|
|
|
(22
|
)
|
||||||||
|
|
|
|
|
|
|
353,000
|
|
|
$
|
846
|
|
—
|
|
$
|
3,231
|
|
—
|
|
$
|
(2,385
|
)
|
|
$
|
689
|
|
|
$
|
1,526
|
|
|
$
|
(837
|
)
|
|
|
|
The Lofts at Atlantic Wharf
|
|
The Avant at Reston Town Center
|
||||||||||||||||||
|
|
|
2017
|
|
2016
|
|
Percentage
Change |
|
2017
|
|
2016
|
|
Percentage
Change |
||||||||||
|
Average Monthly Rental Rate (1)
|
|
$
|
4,248
|
|
|
$
|
4,150
|
|
|
2.4
|
%
|
|
$
|
2,391
|
|
|
$
|
2,375
|
|
|
0.7
|
%
|
|
Average Rental Rate Per Occupied Square Foot
|
|
$
|
4.71
|
|
|
$
|
4.59
|
|
|
2.6
|
%
|
|
$
|
2.63
|
|
|
$
|
2.61
|
|
|
0.8
|
%
|
|
Average Physical Occupancy (2)
|
|
94.4
|
%
|
|
96.3
|
%
|
|
(2.0
|
)%
|
|
93.8
|
%
|
|
94.2
|
%
|
|
(0.4
|
)%
|
||||
|
Average Economic Occupancy (3)
|
|
95.3
|
%
|
|
97.3
|
%
|
|
(2.1
|
)%
|
|
92.9
|
%
|
|
94.1
|
%
|
|
(1.3
|
)%
|
||||
|
(1)
|
Average Monthly Rental Rate is defined as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.
|
|
(2)
|
Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
|
|
(3)
|
Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue. Market Rents used by us in calculating Economic Occupancy are based on the current market rates set by the managers of our residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
|
|
|
|
2017
|
|
2016
|
|
Percentage
Change
|
|||||
|
Occupancy
|
|
81.0
|
%
|
|
82.2
|
%
|
|
(1.5
|
)%
|
||
|
Average daily rate
|
|
$
|
273.96
|
|
|
$
|
269.10
|
|
|
1.8
|
%
|
|
Revenue per available room, REVPAR
|
|
$
|
221.98
|
|
|
$
|
221.28
|
|
|
0.3
|
%
|
|
|
|
Depreciation and Amortization Expense for the nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Same Property Portfolio
|
|
$
|
445,553
|
|
|
$
|
454,110
|
|
|
$
|
(8,557
|
)
|
|
Properties Placed in-Service Portfolio
|
|
10,881
|
|
|
5,741
|
|
|
5,140
|
|
|||
|
Properties Acquired Portfolio
|
|
3,658
|
|
|
1,719
|
|
|
1,939
|
|
|||
|
Properties in Development or Redevelopment Portfolio (1)
|
|
2,924
|
|
|
54,093
|
|
|
(51,169
|
)
|
|||
|
Properties Sold Portfolio
|
|
272
|
|
|
708
|
|
|
(436
|
)
|
|||
|
|
|
$
|
463,288
|
|
|
$
|
516,371
|
|
|
$
|
(53,083
|
)
|
|
(1)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City commenced the redevelopment of the six-story, low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. We recorded approximately $50.8 million, including $3.2 million related to the step-up of real estate assets, of accelerated depreciation expense for the portion of the complex demolished.
|
|
|
|
Depreciation and Amortization Expense for the nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Same Property Portfolio
|
|
$
|
439,367
|
|
|
$
|
448,155
|
|
|
$
|
(8,788
|
)
|
|
Properties Placed in-Service Portfolio
|
|
10,881
|
|
|
5,741
|
|
|
5,140
|
|
|||
|
Properties Acquired Portfolio
|
|
3,658
|
|
|
1,719
|
|
|
1,939
|
|
|||
|
Properties in Development or Redevelopment Portfolio (1)
|
|
2,924
|
|
|
50,911
|
|
|
(47,987
|
)
|
|||
|
Properties Sold Portfolio
|
|
272
|
|
|
708
|
|
|
(436
|
)
|
|||
|
|
|
$
|
457,102
|
|
|
$
|
507,234
|
|
|
$
|
(50,132
|
)
|
|
(1)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City commenced the redevelopment of the six-story, low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and
|
|
Component
|
|
Change in interest
expense for the nine months ended September 30, 2017 compared to September 30, 2016 |
||
|
|
|
(in thousands)
|
||
|
Increases to interest expense due to:
|
|
|
||
|
Issuance of $1.0 billion in aggregate principal of 2.750% senior notes due 2026 on August 17, 2016
|
|
$
|
20,797
|
|
|
Refinancing of the debt collateralized by 767 Fifth Avenue (the General Motors Building) (1)
|
|
10,251
|
|
|
|
Issuance of $1.0 billion in aggregate principal of 3.650% senior notes due 2026 on January 20, 2016
|
|
1,953
|
|
|
|
Utilization of the Unsecured Line of Credit as well as an increase in capacity due to the execution of the 2017 Credit Facility (1)
|
|
1,879
|
|
|
|
Amortization of deferred financing fees for BPLP’s unsecured debt and credit facility
|
|
1,036
|
|
|
|
Other interest expense (excluding senior notes)
|
|
203
|
|
|
|
Total increases to interest expense
|
|
36,119
|
|
|
|
Decreases to interest expense due to:
|
|
|
||
|
Repayment of mortgage financings (2)
|
|
(44,900
|
)
|
|
|
Increase in capitalized interest (3)
|
|
(14,330
|
)
|
|
|
Decrease in the interest for the Outside Members’ Notes Payable for the 767 Fifth Avenue (the General Motors Building) (4)
|
|
(9,133
|
)
|
|
|
Total decreases to interest expense
|
|
(68,363
|
)
|
|
|
Total change in interest expense
|
|
$
|
(32,244
|
)
|
|
(1)
|
See Note 5 to the Consolidated Financial Statements.
|
|
(2)
|
Includes the repayment of the mortgage loans collateralized Fountain Square, Embarcadero Center Four and 599 Lexington Avenue.
|
|
(3)
|
The increase was primarily due to the commencement and continuation of several development projects. For a list of development projects refer to
“Liquidity and Capital Resources” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations
.”
|
|
(4)
|
The related interest expense from the Outside Members’ Notes Payable totaled approximately
$16.3 million
and
$25.4 million
for the
nine
months ended
September 30, 2017
and
2016
, respectively. These amounts are allocated to the outside joint venture partners as an adjustment to Noncontrolling Interests in Property Partnerships in our Consolidated Statements of Operations.
On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
|
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
Sale Price
|
|
Cash Proceeds
|
|
Gain on Sale of Real Estate
|
|
||||||
|
|
|
|
|
|
|
|
|
(dollars in millions)
|
|
||||||||||
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
30 Shattuck Road
|
|
April 19, 2017
|
|
Land
|
|
N/A
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
|
$
|
3.7
|
|
|
|
40 Shattuck Road
|
|
June 13, 2017
|
|
Office
|
|
122,000
|
|
12.0
|
|
|
11.9
|
|
|
—
|
|
(1)
|
|||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
14.0
|
|
|
13.2
|
|
|
2.8
|
|
|
|||
|
|
|
|
|
|
|
|
|
$
|
31.0
|
|
|
$
|
30.1
|
|
|
$
|
6.5
|
|
(2)
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
415 Main Street
|
|
February 1, 2016
|
|
Office
|
|
231,000
|
|
$
|
105.4
|
|
|
$
|
104.9
|
|
|
$
|
60.8
|
|
|
|
Broad Run Business Park
|
|
August 16, 2016
|
|
Land
|
|
N/A
|
|
18.0
|
|
|
17.9
|
|
|
13.0
|
|
|
|||
|
|
|
|
|
|
|
|
|
$
|
123.4
|
|
|
$
|
122.8
|
|
|
$
|
73.8
|
|
(3)
|
|
(1)
|
The gain on sale of real estate for this property was $28,000.
|
|
(2)
|
Excludes approximately $58,000 and $0.1 million of gains on sale of real estate recognized during the
nine
months ended
September 30, 2017
related to a previously deferred gain amount from 2016 and 2015 sales, respectively.
|
|
(3)
|
Excludes approximately $6.8 million of a gain on sale of real estate recognized during the
nine
months ended
September 30, 2016
related to a previously deferred gain amount from the 2014 sale of Patriots Park located in Reston, Virginia.
|
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
Sale Price
|
|
Cash Proceeds
|
|
Gain on Sale of Real Estate
|
|
||||||
|
|
|
|
|
|
|
|
|
(dollars in millions)
|
|
||||||||||
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
30 Shattuck Road
|
|
April 19, 2017
|
|
Land
|
|
N/A
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
|
$
|
3.7
|
|
|
|
40 Shattuck Road
|
|
June 13, 2017
|
|
Office
|
|
122,000
|
|
12.0
|
|
|
11.9
|
|
|
0.6
|
|
|
|||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
14.0
|
|
|
13.2
|
|
|
2.8
|
|
|
|||
|
|
|
|
|
|
|
|
|
$
|
31.0
|
|
|
$
|
30.1
|
|
|
$
|
7.1
|
|
(1)
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
415 Main Street
|
|
February 1, 2016
|
|
Office
|
|
231,000
|
|
$
|
105.4
|
|
|
$
|
104.9
|
|
|
$
|
63.0
|
|
|
|
Broad Run Business Park
|
|
August 16, 2016
|
|
Land
|
|
N/A
|
|
18.0
|
|
|
17.9
|
|
|
13.0
|
|
|
|||
|
|
|
|
|
|
|
|
|
$
|
123.4
|
|
|
$
|
122.8
|
|
|
$
|
76.0
|
|
(2)
|
|
(1)
|
Excludes approximately $58,000 and $0.1 million of gains on sale of real estate recognized during the
nine
months ended
September 30, 2017
related to a previously deferred gain amount from 2016 and 2015 sales, respectively.
|
|
(2)
|
Excludes approximately $6.8 million of a gain on sale of real estate recognized during the
nine
months ended
September 30, 2016
related to a previously deferred gain amount from the 2014 sale of Patriots Park located in Reston, Virginia.
|
|
Property
|
|
Noncontrolling Interests in Property Partnerships for the nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Salesforce Tower
|
|
$
|
(355
|
)
|
|
$
|
(3
|
)
|
|
$
|
(352
|
)
|
|
767 Fifth Avenue (the General Motors Building) (1)
|
|
(1,779
|
)
|
|
(15,477
|
)
|
|
13,698
|
|
|||
|
Times Square Tower
|
|
20,002
|
|
|
20,110
|
|
|
(108
|
)
|
|||
|
601 Lexington Avenue (2)
|
|
6,597
|
|
|
(14,221
|
)
|
|
20,818
|
|
|||
|
100 Federal Street
|
|
2,483
|
|
|
2,683
|
|
|
(200
|
)
|
|||
|
Atlantic Wharf Office
|
|
7,019
|
|
|
6,961
|
|
|
58
|
|
|||
|
|
|
$
|
33,967
|
|
|
$
|
53
|
|
|
$
|
33,914
|
|
|
(1)
|
On June 7, 2017, our consolidated entity in which we have a 60% interest completed the refinancing of indebtedness that had been secured by direct and indirect interests in 767 Fifth Avenue. Prior to this quarter, the net loss allocation was primarily due to the partners’ share of the interest expense for the outside members’ notes payable which was
$16.3 million
and
$25.4 million
for the
nine
months ended
September 30, 2017
and
2016
, respectively.
On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
|
|
(2)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns this property commenced the redevelopment of the six-story low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. We will capitalize incremental costs during the redevelopment. BXP and BPLP recognized approximately $50.8 million and $47.6 million, respectively, of depreciation expense associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. Approximately $21.4 million of those amounts was allocated to the outside partners.
|
|
|
|
Total Property Portfolio
|
|||||||||||||
|
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) |
|
%
Change |
|||||||
|
|
|
(in thousands)
|
|||||||||||||
|
Net Income Attributable to Boston Properties, Inc. Common Shareholders
|
|
$
|
117,337
|
|
|
$
|
76,753
|
|
|
$
|
40,584
|
|
|
52.88
|
%
|
|
Preferred dividends
|
|
2,625
|
|
|
2,589
|
|
|
36
|
|
|
1.39
|
%
|
|||
|
Net Income Attributable to Boston Properties, Inc.
|
|
119,962
|
|
|
79,342
|
|
|
40,620
|
|
|
51.20
|
%
|
|||
|
Net Income Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
|||||||
|
Noncontrolling interest—common units of Boston Properties Limited Partnership
|
|
13,402
|
|
|
9,387
|
|
|
4,015
|
|
|
42.77
|
%
|
|||
|
Noncontrolling interests in property partnerships
|
|
14,340
|
|
|
(17,225
|
)
|
|
31,565
|
|
|
183.25
|
%
|
|||
|
Net Income
|
|
147,704
|
|
|
71,504
|
|
|
76,200
|
|
|
106.57
|
%
|
|||
|
Gains on sales of real estate
|
|
2,891
|
|
|
12,983
|
|
|
(10,092
|
)
|
|
(77.73
|
)%
|
|||
|
Income Before Gains on Sales of Real Estate
|
|
144,813
|
|
|
58,521
|
|
|
86,292
|
|
|
147.45
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Losses from interest rate contracts
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
(100.00
|
)%
|
|||
|
Losses from early extinguishments of debt
|
|
—
|
|
|
371
|
|
|
(371
|
)
|
|
(100.00
|
)%
|
|||
|
Interest expense
|
|
92,032
|
|
|
104,641
|
|
|
(12,609
|
)
|
|
(12.05
|
)%
|
|||
|
Other Income:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Gains from investments in securities
|
|
944
|
|
|
976
|
|
|
(32
|
)
|
|
(3.28
|
)%
|
|||
|
Interest and other income
|
|
1,329
|
|
|
3,628
|
|
|
(2,299
|
)
|
|
(63.37
|
)%
|
|||
|
Income from unconsolidated joint ventures
|
|
843
|
|
|
1,464
|
|
|
(621
|
)
|
|
(42.42
|
)%
|
|||
|
Operating Income
|
|
233,729
|
|
|
157,605
|
|
|
76,124
|
|
|
48.30
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Depreciation and amortization expense
|
|
152,164
|
|
|
203,748
|
|
|
(51,584
|
)
|
|
(25.32
|
)%
|
|||
|
Impairment loss
|
|
—
|
|
|
1,783
|
|
|
(1,783
|
)
|
|
(100.00
|
)%
|
|||
|
Transaction costs
|
|
239
|
|
|
249
|
|
|
(10
|
)
|
|
(4.02
|
)%
|
|||
|
General and administrative expense
|
|
25,792
|
|
|
25,165
|
|
|
627
|
|
|
2.49
|
%
|
|||
|
Other Revenue:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Development and management services revenue
|
|
10,811
|
|
|
6,364
|
|
|
4,447
|
|
|
69.88
|
%
|
|||
|
Net Operating Income
|
|
$
|
401,113
|
|
|
$
|
382,186
|
|
|
$
|
18,927
|
|
|
4.95
|
%
|
|
|
|
Total Property Portfolio
|
|||||||||||||
|
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) |
|
%
Change |
|||||||
|
|
|
(in thousands)
|
|||||||||||||
|
Net Income Attributable to Boston Properties Limited Partnership Common Unitholders
|
|
$
|
132,693
|
|
|
$
|
91,306
|
|
|
$
|
41,387
|
|
|
45.33
|
%
|
|
Preferred distributions
|
|
2,625
|
|
|
2,589
|
|
|
36
|
|
|
1.39
|
%
|
|||
|
Net Income Attributable to Boston Properties Limited Partnership
|
|
135,318
|
|
|
93,895
|
|
|
41,423
|
|
|
44.12
|
%
|
|||
|
Net Income Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
|||||||
|
Noncontrolling interests in property partnerships
|
|
14,340
|
|
|
(17,225
|
)
|
|
31,565
|
|
|
183.25
|
%
|
|||
|
Net Income
|
|
149,658
|
|
|
76,670
|
|
|
72,988
|
|
|
95.20
|
%
|
|||
|
Gains on sales of real estate
|
|
2,891
|
|
|
12,983
|
|
|
(10,092
|
)
|
|
(77.73
|
)%
|
|||
|
Income Before Gains on Sales of Real Estate
|
|
146,767
|
|
|
63,687
|
|
|
83,080
|
|
|
130.45
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Losses from interest rate contracts
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
(100.00
|
)%
|
|||
|
Losses from early extinguishments of debt
|
|
—
|
|
|
371
|
|
|
(371
|
)
|
|
(100.00
|
)%
|
|||
|
Interest expense
|
|
92,032
|
|
|
104,641
|
|
|
(12,609
|
)
|
|
(12.05
|
)%
|
|||
|
Other Income:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Gains from investments in securities
|
|
944
|
|
|
976
|
|
|
(32
|
)
|
|
(3.28
|
)%
|
|||
|
Interest and other income
|
|
1,329
|
|
|
3,628
|
|
|
(2,299
|
)
|
|
(63.37
|
)%
|
|||
|
Income from unconsolidated joint ventures
|
|
843
|
|
|
1,464
|
|
|
(621
|
)
|
|
(42.42
|
)%
|
|||
|
Operating Income
|
|
235,683
|
|
|
162,771
|
|
|
72,912
|
|
|
44.79
|
%
|
|||
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|||||||
|
Add:
|
|
|
|
|
|
|
|
|
|||||||
|
Depreciation and amortization expense
|
|
150,210
|
|
|
198,582
|
|
|
(48,372
|
)
|
|
(24.36
|
)%
|
|||
|
Impairment loss
|
|
—
|
|
|
1,783
|
|
|
(1,783
|
)
|
|
(100.00
|
)%
|
|||
|
Transaction costs
|
|
239
|
|
|
249
|
|
|
(10
|
)
|
|
(4.02
|
)%
|
|||
|
General and administrative expense
|
|
25,792
|
|
|
25,165
|
|
|
627
|
|
|
2.49
|
%
|
|||
|
Other Revenue:
|
|
|
|
|
|
|
|
|
|||||||
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
|
Development and management services revenue
|
|
10,811
|
|
|
6,364
|
|
|
4,447
|
|
|
69.88
|
%
|
|||
|
Net Operating Income
|
|
$
|
401,113
|
|
|
$
|
382,186
|
|
|
$
|
18,927
|
|
|
4.95
|
%
|
|
|
Same Property Portfolio
|
|
Properties
Placed In-Service
Portfolio
|
|
Properties Acquired Portfolio
|
|
Properties in
Development or Redevelopment Portfolio |
|
Properties Sold Portfolio
|
|
Total Property Portfolio
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2017
|
|
2016
|
|
Increase/
(Decrease)
|
|
%
Change
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) |
|
%
Change |
||||||||||||||||||||||||||||||
|
Rental Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Rental Revenue
|
$
|
618,930
|
|
|
$
|
599,451
|
|
|
$
|
19,479
|
|
|
3.25
|
%
|
|
$
|
4,267
|
|
|
$
|
174
|
|
|
$
|
689
|
|
|
$
|
—
|
|
|
$
|
873
|
|
|
$
|
2,233
|
|
|
$
|
—
|
|
|
$
|
450
|
|
|
$
|
624,759
|
|
|
$
|
602,308
|
|
|
$
|
22,451
|
|
|
3.73
|
%
|
|
Termination Income
|
4,740
|
|
|
836
|
|
|
3,904
|
|
|
466.99
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
(1,006
|
)
|
|
—
|
|
|
—
|
|
|
4,783
|
|
|
(170
|
)
|
|
4,953
|
|
|
2,913.53
|
%
|
||||||||||||||
|
Total Rental Revenue
|
623,670
|
|
|
600,287
|
|
|
23,383
|
|
|
3.90
|
%
|
|
4,267
|
|
|
174
|
|
|
689
|
|
|
—
|
|
|
916
|
|
|
1,227
|
|
|
—
|
|
|
450
|
|
|
629,542
|
|
|
602,138
|
|
|
27,404
|
|
|
4.55
|
%
|
||||||||||||||
|
Real Estate Operating Expenses
|
231,351
|
|
|
223,024
|
|
|
8,327
|
|
|
3.73
|
%
|
|
1,674
|
|
|
53
|
|
|
269
|
|
|
—
|
|
|
2,452
|
|
|
2,920
|
|
|
18
|
|
|
340
|
|
|
235,764
|
|
|
226,337
|
|
|
9,427
|
|
|
4.17
|
%
|
||||||||||||||
|
Net Operating Income (Loss), excluding residential and hotel
|
392,319
|
|
|
377,263
|
|
|
15,056
|
|
|
3.99
|
%
|
|
2,593
|
|
|
121
|
|
|
420
|
|
|
—
|
|
|
(1,536
|
)
|
|
(1,693
|
)
|
|
(18
|
)
|
|
110
|
|
|
393,778
|
|
|
375,801
|
|
|
17,977
|
|
|
4.78
|
%
|
||||||||||||||
|
Residential Net Operating Income (1)
|
2,711
|
|
|
2,772
|
|
|
(61
|
)
|
|
(2.20
|
)%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(623
|
)
|
|
—
|
|
|
—
|
|
|
2,718
|
|
|
2,149
|
|
|
569
|
|
|
26.48
|
%
|
||||||||||||||
|
Hotel Net Operating Income (1)
|
4,617
|
|
|
4,236
|
|
|
381
|
|
|
8.99
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,617
|
|
|
4,236
|
|
|
381
|
|
|
8.99
|
%
|
||||||||||||||
|
Net Operating Income (Loss) (1)
|
$
|
399,647
|
|
|
$
|
384,271
|
|
|
$
|
15,376
|
|
|
4.00
|
%
|
|
$
|
2,593
|
|
|
$
|
121
|
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
(1,529
|
)
|
|
$
|
(2,316
|
)
|
|
$
|
(18
|
)
|
|
$
|
110
|
|
|
$
|
401,113
|
|
|
$
|
382,186
|
|
|
$
|
18,927
|
|
|
4.95
|
%
|
|
(1)
|
For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page
50
. Residential Net Operating Income for the three months ended
September 30, 2017
and
2016
is comprised of Residential Revenue of
$4,295
and
$4,372
, less Residential Expenses of
$1,577
and
$2,223
, respectively. Hotel Net Operating Income for the three months ended
September 30, 2017
and
2016
is comprised of Hotel Revenue of
$13,064
and
$12,354
less Hotel Expenses of
$8,447
and
$8,118
, respectively, per the Consolidated Statements of Operations.
|
|
|
|
Quarter Initially Placed In-Service
|
|
Quarter Fully Placed In-Service
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
Reservoir Place North
|
|
Second Quarter, 2016
|
|
Second Quarter, 2017
|
|
73,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
$
|
34
|
|
|
$
|
69
|
|
|
888 Boylston Street
|
|
Third Quarter, 2016
|
|
Third Quarter, 2017
|
|
417,000
|
|
|
4,267
|
|
|
174
|
|
|
4,093
|
|
|
1,571
|
|
|
19
|
|
|
1,552
|
|
||||||
|
|
|
|
|
|
|
490,258
|
|
|
$
|
4,267
|
|
|
$
|
174
|
|
|
$
|
4,093
|
|
|
$
|
1,674
|
|
|
$
|
53
|
|
|
$
|
1,621
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
Date acquired
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
103 Carnegie Center
|
|
May 25, 2017
|
|
96,332
|
|
|
$
|
689
|
|
|
$
|
—
|
|
|
$
|
689
|
|
|
$
|
269
|
|
|
$
|
—
|
|
|
$
|
269
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
Date commenced development / redevelopment
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
One Five Nine East 53rd Street (1)
|
|
August 19, 2016
|
|
220,000
|
|
|
$
|
916
|
|
|
$
|
106
|
|
|
$
|
810
|
|
|
$
|
2,204
|
|
|
$
|
2,133
|
|
|
$
|
71
|
|
|
191 Spring Street (2)
|
|
December 29, 2016
|
|
160,000
|
|
|
—
|
|
|
197
|
|
|
(197
|
)
|
|
233
|
|
|
482
|
|
|
(249
|
)
|
||||||
|
145 Broadway (3)
|
|
April 6, 2017
|
|
79,616
|
|
|
—
|
|
|
924
|
|
|
(924
|
)
|
|
15
|
|
305
|
|
|
(290
|
)
|
|||||||
|
|
|
|
|
459,616
|
|
|
$
|
916
|
|
|
$
|
1,227
|
|
|
$
|
(311
|
)
|
|
$
|
2,452
|
|
|
$
|
2,920
|
|
|
$
|
(468
|
)
|
|
(1)
|
This is the low-rise portion of 601 Lexington Avenue in New York City. Rental revenue includes approximately $43,000 and
$(1.0) million
of termination income for the three months ended September 30, 2017 and September 30, 2016, respectively. In addition, real estate operating expenses includes approximately $1.8 million and $0.7 million of demolition costs for the three months ended
September 30, 2017
and September 30, 2016, respectively.
|
|
(2)
|
Real estate operating expenses for the three months ended
September 30, 2017
includes approximately $0.2 million of demolition costs.
|
|
(3)
|
On April 6, 2017, we commenced the development of 145 Broadway, a build-to-suit Class A office project with approximately 485,000 net rentable square feet located in Cambridge, Massachusetts.
|
|
|
|
|
|
|
|
|
|
Rental Revenue
|
|
Real Estate Operating Expenses
|
|||||||||||||||||||||
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|||||||||||||
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
30 Shattuck Road
|
|
April 19, 2017
|
|
Land
|
|
N/A
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
(11
|
)
|
|
40 Shattuck Road
|
|
June 13, 2017
|
|
Office
|
|
122,000
|
|
|
—
|
|
|
450
|
|
|
(450
|
)
|
|
—
|
|
|
297
|
|
|
(297
|
)
|
||||||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
32
|
|
|
(14
|
)
|
||||||
|
|
|
|
|
|
|
122,000
|
|
|
$
|
—
|
|
|
$
|
450
|
|
|
$
|
(450
|
)
|
|
$
|
18
|
|
|
$
|
340
|
|
|
$
|
(322
|
)
|
|
|
|
The Lofts at Atlantic Wharf
|
|
The Avant at Reston Town Center
|
||||||||||||||||||
|
|
|
2017
|
|
2016
|
|
Percentage
Change |
|
2017
|
|
2016
|
|
Percentage
Change |
||||||||||
|
Average Monthly Rental Rate (1)
|
|
$
|
4,295
|
|
|
$
|
4,146
|
|
|
3.6
|
%
|
|
$
|
2,418
|
|
|
$
|
2,429
|
|
|
(0.5
|
)%
|
|
Average Rental Rate Per Occupied Square Foot
|
|
$
|
4.74
|
|
|
$
|
4.63
|
|
|
2.4
|
%
|
|
$
|
2.68
|
|
|
$
|
2.68
|
|
|
—
|
%
|
|
Average Physical Occupancy (2)
|
|
94.2
|
%
|
|
97.3
|
%
|
|
(3.2
|
)%
|
|
95.7
|
%
|
|
95.6
|
%
|
|
0.1
|
%
|
||||
|
Average Economic Occupancy (3)
|
|
95.5
|
%
|
|
97.7
|
%
|
|
(2.3
|
)%
|
|
94.4
|
%
|
|
95.6
|
%
|
|
(1.3
|
)%
|
||||
|
(1)
|
Average Monthly Rental Rate is defined as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.
|
|
(2)
|
Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
|
|
(3)
|
Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property's total possible gross revenue. Market Rents used by us in calculating Economic Occupancy are based on the current market rates set by the managers of our residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
|
|
|
|
2017
|
|
2016
|
|
Percentage
Change
|
|||||
|
Occupancy
|
|
90.3
|
%
|
|
87.2
|
%
|
|
3.6
|
%
|
||
|
Average daily rate
|
|
$
|
283.76
|
|
|
$
|
279.03
|
|
|
1.7
|
%
|
|
Revenue per available room, REVPAR
|
|
$
|
256.32
|
|
|
$
|
243.19
|
|
|
5.4
|
%
|
|
|
|
Depreciation and Amortization Expense for the three months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Same Property Portfolio
|
|
$
|
150,367
|
|
|
$
|
151,733
|
|
|
$
|
(1,366
|
)
|
|
Properties Placed in-Service Portfolio
|
|
1,059
|
|
|
8
|
|
|
1,051
|
|
|||
|
Properties Acquired Portfolio
|
|
738
|
|
|
—
|
|
|
738
|
|
|||
|
Properties in Development or Redevelopment Portfolio (1)
|
|
—
|
|
|
51,817
|
|
|
(51,817
|
)
|
|||
|
Properties Sold Portfolio
|
|
—
|
|
|
190
|
|
|
(190
|
)
|
|||
|
|
|
$
|
152,164
|
|
|
$
|
203,748
|
|
|
$
|
(51,584
|
)
|
|
(1)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City commenced the redevelopment of the six-story, low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. We recorded approximately $50.8 million, including $3.2 million related to the step-up of real estate assets, of accelerated depreciation expense for the portion of the complex demolished.
|
|
|
|
Depreciation and Amortization Expense for the three months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Same Property Portfolio
|
|
$
|
148,413
|
|
|
$
|
149,749
|
|
|
$
|
(1,336
|
)
|
|
Properties Placed in-Service Portfolio
|
|
1,059
|
|
|
8
|
|
|
1,051
|
|
|||
|
Properties Acquired Portfolio
|
|
738
|
|
|
—
|
|
|
738
|
|
|||
|
Properties in Development or Redevelopment Portfolio (1)
|
|
—
|
|
|
48,635
|
|
|
(48,635
|
)
|
|||
|
Properties Sold Portfolio
|
|
—
|
|
|
190
|
|
|
(190
|
)
|
|||
|
|
|
$
|
150,210
|
|
|
$
|
198,582
|
|
|
$
|
(48,372
|
)
|
|
(1)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City commenced the redevelopment of the six-story, low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. We recorded approximately $47.6 million of accelerated depreciation expense for the portion of the complex demolished.
|
|
Component
|
|
Change in interest
expense for the three months ended September 30, 2017 compared to September 30, 2016 |
||
|
|
|
(in thousands)
|
||
|
Increases to interest expense due to:
|
|
|
||
|
Refinancing of the debt collateralized by 767 Fifth Avenue (the General Motors Building) (1)
|
|
$
|
8,657
|
|
|
Issuance of $1.0 billion in aggregate principal of 2.750% senior notes due 2026 on August 17, 2016
|
|
4,269
|
|
|
|
Utilization of the Unsecured Line of Credit as well as an increase in capacity due to the execution of the 2017 Credit Facility (1)
|
|
417
|
|
|
|
Amortization of deferred financing fees for BPLP’s unsecured debt and credit facility
|
|
373
|
|
|
|
Other interest expense (excluding senior notes)
|
|
271
|
|
|
|
Total increases to interest expense
|
|
13,987
|
|
|
|
Decreases to interest expense due to:
|
|
|
||
|
Repayment of mortgage financings (2)
|
|
(11,032
|
)
|
|
|
Decrease in the interest for the Outside Members’ Notes Payable for the 767 Fifth Avenue (the General Motors Building) (3)
|
|
(8,694
|
)
|
|
|
Increase in capitalized interest (4)
|
|
(6,870
|
)
|
|
|
Total decreases to interest expense
|
|
(26,596
|
)
|
|
|
Total change in interest expense
|
|
$
|
(12,609
|
)
|
|
(1)
|
See Note
5
to the Consolidated Financial Statements.
|
|
(2)
|
Includes the repayment of the mortgage loans collateralized by Embarcadero Center Four and 599 Lexington Avenue.
|
|
(3)
|
The related interest expense from the Outside Members’ Notes Payable totaled approximately $8.7 million for the three months ended September 30,
2016
. This amount was allocated to the outside joint venture partners as an adjustment to Noncontrolling Interests in Property Partnerships in our Consolidated Statements of Operations.
On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
|
|
(4)
|
The increase was primarily due to the commencement and continuation of several development projects. For a list of development projects refer to
“Liquidity and Capital Resources”
within
“Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations
.”
|
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
Sale Price
|
|
Cash Proceeds
|
|
Gain on Sale of Real Estate
|
|
|||||||
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
$
|
14.0
|
|
|
$
|
13.2
|
|
|
$
|
2.8
|
|
(1
|
)
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Broad Run Business Park
|
|
August 16, 2016
|
|
Land
|
|
N/A
|
|
$
|
18.0
|
|
|
$
|
17.9
|
|
|
$
|
13.0
|
|
|
|
|
(1)
|
Excludes approximately $58,000 of a gain on sale of real estate recognized during the three months ended
September 30, 2017
related to a previously deferred gain amount from a 2016 sale.
|
|
Name
|
|
Date Sold
|
|
Property Type
|
|
Square Feet
|
|
Sale Price
|
|
Cash Proceeds
|
|
Gain on Sale of Real Estate
|
|
||||||
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reston Eastgate
|
|
August 30, 2017
|
|
Land
|
|
N/A
|
|
$
|
14.0
|
|
|
$
|
13.2
|
|
|
$
|
2.8
|
|
(1)
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Broad Run Business Park
|
|
August 16, 2016
|
|
Land
|
|
N/A
|
|
$
|
18.0
|
|
|
$
|
17.9
|
|
|
$
|
13.0
|
|
|
|
(1)
|
Excludes approximately $58,000 of a gain on sale of real estate recognized during the three months ended
September 30, 2017
related to a previously deferred gain amount from a 2016 sale.
|
|
Property
|
|
Noncontrolling Interests in Property Partnerships for the three months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||||
|
|
|
(in thousands)
|
||||||||||
|
Salesforce Tower
|
|
$
|
(160
|
)
|
|
$
|
(3
|
)
|
|
$
|
(157
|
)
|
|
767 Fifth Avenue (the General Motors Building) (1)
|
|
1,179
|
|
|
(5,938
|
)
|
|
7,117
|
|
|||
|
Times Square Tower
|
|
6,741
|
|
|
6,636
|
|
|
105
|
|
|||
|
601 Lexington Avenue (2)
|
|
3,066
|
|
|
(21,141
|
)
|
|
24,207
|
|
|||
|
100 Federal Street
|
|
1,174
|
|
|
887
|
|
|
287
|
|
|||
|
Atlantic Wharf Office
|
|
2,340
|
|
|
2,334
|
|
|
6
|
|
|||
|
|
|
$
|
14,340
|
|
|
$
|
(17,225
|
)
|
|
$
|
31,565
|
|
|
(1)
|
On June 7, 2017, our consolidated entity in which we have a 60% interest completed the refinancing of indebtedness that had been secured by direct and indirect interests in 767 Fifth Avenue. Prior to this quarter, the net loss allocation was primarily due to the partners’ share of the interest expense for the outside members’ notes payable, which was $8.7 million for the three months ended
2016
.
On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
|
|
(2)
|
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns this property commenced the redevelopment of the six-story low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. We will capitalize incremental costs during the redevelopment. BXP and BPLP recognized approximately $50.8 million and $47.6 million, respectively, of depreciation expense associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. Approximately $21.4 million of those amounts was allocated to the outside partners.
|
|
•
|
fund normal recurring expenses;
|
|
•
|
meet debt service and principal repayment obligations, including balloon payments on maturing debt;
|
|
•
|
fund capital expenditures, including major renovations, tenant improvements and leasing costs;
|
|
•
|
fund development costs;
|
|
•
|
fund dividend requirements on BXP’s Series B Preferred Stock;
|
|
•
|
fund possible property acquisitions; and
|
|
•
|
make the minimum distribution required to enable BXP to maintain its REIT qualification under the Internal Revenue Code of 1986, as amended.
|
|
•
|
cash flow from operations;
|
|
•
|
distribution of cash flows from joint ventures;
|
|
•
|
cash and cash equivalent balances;
|
|
•
|
issuances of BXP equity securities and/or additional preferred or common units of partnership interest in BPLP;
|
|
•
|
BPLP’s 2017 Credit Facility and other short-term bridge facilities;
|
|
•
|
construction loans;
|
|
•
|
long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness); and
|
|
•
|
sales of real estate.
|
|
Construction
Properties
|
|
Estimated
Stabilization Date
|
|
Location
|
|
# of
Buildings
|
|
Estimated
Square
Feet
|
|
Investment
to Date (1)
|
|
Estimated
Total
Investment (1)
|
|
Estimated
Future
Equity
Requirement (1)
|
|
Percentage
Leased (2)
|
|
|||||||||
|
Office and Retail
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Salesforce Tower (95% ownership)
|
|
Third Quarter, 2019
|
|
San Francisco, CA
|
|
1
|
|
|
1,400,000
|
|
|
913,515
|
|
|
1,073,500
|
|
|
170,160
|
|
|
87
|
%
|
(3)
|
|||
|
The Hub on Causeway (50% ownership)
|
|
Fourth Quarter, 2019
|
|
Boston, MA
|
|
1
|
|
|
385,000
|
|
|
46,272
|
|
|
141,870
|
|
|
—
|
|
|
42
|
%
|
(4)
|
|||
|
145 Broadway
|
|
Fourth Quarter, 2019
|
|
Cambridge, MA
|
|
1
|
|
|
485,000
|
|
|
70,097
|
|
|
375,000
|
|
|
304,903
|
|
|
98
|
%
|
|
|||
|
Dock 72 (50% ownership)
|
|
First Quarter, 2020
|
|
Brooklyn, NY
|
|
1
|
|
|
670,000
|
|
|
70,335
|
|
|
204,900
|
|
|
9,565
|
|
|
33
|
%
|
(5)
|
|||
|
6595 Springfield Center Drive (TSA Headquarters)
|
|
Fourth Quarter, 2020
|
|
Springfield, VA
|
|
1
|
|
|
634,000
|
|
|
34,401
|
|
|
313,700
|
|
|
279,299
|
|
|
98
|
%
|
|
|||
|
7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership)
|
|
Third Quarter, 2022
|
|
Bethesda, MD
|
|
1
|
|
|
740,000
|
|
|
11,206
|
|
|
211,100
|
|
|
199,894
|
|
|
100
|
%
|
(6)
|
|||
|
Total Office and Retail Properties under Construction
|
|
|
|
6
|
|
|
4,314,000
|
|
|
1,145,826
|
|
|
2,320,070
|
|
|
963,821
|
|
|
80
|
%
|
|
|||||
|
Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Proto Kendall Square (280 units)
|
|
Second Quarter, 2019
|
|
Cambridge, MA
|
|
1
|
|
|
149,600
|
|
|
59,422
|
|
|
140,170
|
|
|
80,748
|
|
|
N/A
|
|
|
|||
|
Proto Kendall Square - Retail
|
|
|
|
|
|
—
|
|
|
14,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
%
|
|
|||
|
Signature at Reston (508 units)
|
|
Second Quarter, 2020
|
|
Reston, VA
|
|
1
|
|
|
490,000
|
|
|
171,649
|
|
|
234,854
|
|
|
63,205
|
|
|
N/A
|
|
|
|||
|
Signature at Reston - Retail
|
|
|
|
|
|
—
|
|
|
24,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
%
|
|
|||
|
MacArthur Station Residences (402 units)
|
|
Fourth Quarter, 2021
|
|
Oakland, CA
|
|
1
|
|
|
324,000
|
|
|
3,133
|
|
|
263,600
|
|
|
260,467
|
|
|
N/A
|
|
(7)
|
|||
|
Total Residential Properties under Construction
|
|
|
|
3
|
|
|
1,002,600
|
|
|
234,204
|
|
|
638,624
|
|
|
404,420
|
|
|
57
|
%
|
|
|||||
|
Redevelopment Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
191 Spring Street
|
|
Fourth Quarter, 2018
|
|
Lexington, MA
|
|
1
|
|
|
160,000
|
|
|
30,221
|
|
|
53,920
|
|
|
23,699
|
|
|
49
|
%
|
|
|||
|
One Five Nine East 53rd Street (55% ownership)
|
|
Fourth Quarter, 2019
|
|
New York, NY
|
|
—
|
|
|
220,000
|
|
|
52,171
|
|
|
106,000
|
|
|
53,829
|
|
|
—
|
%
|
(8)
|
|||
|
Total Redevelopment Properties under Construction
|
|
1
|
|
|
380,000
|
|
|
82,392
|
|
|
159,920
|
|
|
77,528
|
|
|
21
|
%
|
|
|||||||
|
Total Properties under Construction and Redevelopment
|
|
10
|
|
|
5,696,600
|
|
|
$
|
1,462,422
|
|
|
$
|
3,118,614
|
|
|
$
|
1,445,769
|
|
|
75
|
%
|
|
||||
|
(1)
|
Represents our share. Includes net revenue during lease up period, acquisition expenses and approximately $64.2 million of construction cost and leasing commission accruals.
|
|
(2)
|
Represents percentage leased as of
November 2, 2017
, including leases with future commencement dates and excluding residential units.
|
|
(3)
|
Under the joint venture agreement, if the project is funded with 100% equity, we have agreed to fund 50% of our partner’s equity requirement, structured as preferred equity. We expect to fund approximately $25.4 million at a rate of LIBOR plus 3.0% per annum and receive priority distributions from all distributions to our partner until the principal and interest are repaid. As of
September 30, 2017
, we had contributed an aggregate of approximately
$15.2 million
of preferred equity to the venture.
|
|
(4)
|
This development has a $102.3 million (our share) construction facility. As of
September 30, 2017
, no amounts have been drawn under this facility.
|
|
(5)
|
This development has a $125 million (our share) construction facility. As of
September 30, 2017
, no amounts have been drawn under this facility.
|
|
(6)
|
Rentable square feet is an estimate based on current building design.
|
|
(7)
|
This development is subject to a 99-year ground lease (including extension options) with an option to purchase in the future.
|
|
(8)
|
The low-rise portion of 601 Lexington Avenue.
|
|
|
Nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|||||||
|
(in thousands)
|
|||||||||||
|
Net cash provided by operating activities
|
$
|
592,712
|
|
|
$
|
743,785
|
|
|
$
|
(151,073
|
)
|
|
Net cash used in investing activities
|
(622,427
|
)
|
|
(1,104,384
|
)
|
|
481,957
|
|
|||
|
Net cash provided by financing activities
|
165,856
|
|
|
56,204
|
|
|
109,652
|
|
|||
|
|
Nine months ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Acquisitions of real estate (1)
|
$
|
(15,953
|
)
|
|
$
|
(78,000
|
)
|
|
Construction in progress (2)
|
(452,283
|
)
|
|
(359,716
|
)
|
||
|
Building and other capital improvements
|
(162,395
|
)
|
|
(81,842
|
)
|
||
|
Tenant improvements
|
(152,749
|
)
|
|
(167,762
|
)
|
||
|
Proceeds from sales of real estate (3)
|
29,810
|
|
|
122,750
|
|
||
|
Proceeds from sales of real estate placed in escrow (3)
|
(29,810
|
)
|
|
(122,647
|
)
|
||
|
Proceeds from sales of real estate released from escrow (3)
|
16,640
|
|
|
122,647
|
|
||
|
Cash released from escrow for investing activities
|
9,638
|
|
|
6,694
|
|
||
|
Cash released from escrow for land sale contracts
|
—
|
|
|
1,403
|
|
||
|
Cash placed in escrow for investment in unconsolidated joint venture (4)
|
(25,000
|
)
|
|
—
|
|
||
|
Capital contributions to unconsolidated joint ventures (5)
|
(89,874
|
)
|
|
(546,982
|
)
|
||
|
Capital distributions from unconsolidated joint ventures (6)
|
251,000
|
|
|
—
|
|
||
|
Investments in securities, net
|
(1,451
|
)
|
|
(929
|
)
|
||
|
Net cash used in investing activities
|
$
|
(622,427
|
)
|
|
$
|
(1,104,384
|
)
|
|
(1)
|
On May 15, 2017, we acquired 103 Carnegie Center located in Princeton, New Jersey for a purchase price of approximately $16.0 million in cash, including transaction costs.
|
|
(2)
|
Construction in progress for the
nine
months ended
September 30, 2017
includes ongoing expenditures associated with Reservoir Place North, 888 Boylston Street and the Prudential Center retail expansion, which were fully placed in-service during the
nine
months ended
September 30, 2017
. In addition, we incurred costs associated with our continued development/redevelopment of Salesforce Tower, One Five Nine East 53rd Street (the low-rise portion of 601 Lexington Avenue), 191 Spring Street, 145 Broadway, 6595 Springfield Center Drive, and MacArthur Station Residences, Proto Kendall Square and Signature at Reston residential projects.
|
|
(3)
|
On April 19, 2017, we completed the sale of an approximately 9.5-acre parcel of land at 30 Shattuck Road located in Andover, Massachusetts for a gross sale price of $5.0 million. Net cash proceeds totaled approximately $5.0 million
.
|
|
(4)
|
On August 7, 2017, we deposited $25.0 million into an escrow account to be contributed by us to the unconsolidated joint venture that is developing 7750 Wisconsin Avenue to fund future development costs.
|
|
(5)
|
Capital contributions to unconsolidated joint ventures for the
nine
months ended
September 30, 2017
consisted primarily of cash contributions of approximately $34.2 million, $31.7 million and $21.4 million to our Dock 72, Hub on Causeway and 7750 Wisconsin Avenue joint ventures, respectively.
|
|
(6)
|
Capital distributions from unconsolidated joint ventures for the
nine
months ended
September 30, 2017
consisted of a cash distribution of $251.0 million from our Colorado Center joint venture resulting from the proceeds of the new mortgage financing.
|
|
|
|
September 30, 2017
|
|
||||||||
|
|
|
Shares / Units Outstanding
|
|
Common Stock Equivalent
|
|
Equivalent Value (1)
|
|
||||
|
Common Stock
|
|
154,322,266
|
|
|
154,322,266
|
|
|
$
|
18,963,120
|
|
|
|
Common Operating Partnership Units
|
|
17,629,311
|
|
|
17,629,311
|
|
|
2,166,290
|
|
(2)
|
|
|
5.25% Series B Cumulative Redeemable Preferred Stock (non-callable until March 27, 2018)
|
|
80,000
|
|
|
—
|
|
|
200,000
|
|
|
|
|
Total Equity
|
|
|
|
171,951,577
|
|
|
$
|
21,329,410
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Consolidated Debt
|
|
|
|
|
|
|
$
|
10,234,634
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
||||
|
BXP’s share of unconsolidated joint venture debt (3)
|
|
|
|
|
|
591,622
|
|
|
|||
|
Subtract:
|
|
|
|
|
|
|
|
||||
|
Partners’ share of Consolidated Debt (4)
|
|
|
|
|
|
(1,210,389
|
)
|
|
|||
|
BXP’s Share of Debt
|
|
|
|
|
|
$
|
9,615,867
|
|
|
||
|
|
|
|
|
|
|
|
|
||||
|
Consolidated Market Capitalization
|
|
|
|
|
|
$
|
31,564,044
|
|
|
||
|
BXP’s Share of Market Capitalization
|
|
|
|
|
|
$
|
30,945,277
|
|
|
||
|
Consolidated Debt/Consolidated Market Capitalization
|
|
|
|
|
|
32.42
|
%
|
|
|||
|
BXP’s Share of Debt/BXP’s Share of Market Capitalization
|
|
|
|
|
|
31.07
|
%
|
|
|||
|
(1)
|
Except for the Series B Cumulative Redeemable Preferred Stock, which is valued at the liquidation preference of $2,500.00 per share, values are based on the closing price per share of BXP’s Common Stock on
September 30, 2017
of
$122.88
.
|
|
(2)
|
Includes
816,982
long-term incentive plan units (including
118,067
2012 OPP Units,
85,405
2013 MYLTIP Units and
25,107
2014 MYLTIP Units), but excludes an aggregate of
1,239,978
MYLTIP Units granted between 2015 and 2017.
|
|
(3)
|
See page
83
for additional information.
|
|
(4)
|
See page
82
for additional information.
|
|
(i)
|
the number of outstanding shares of common stock of BXP,
|
|
(ii)
|
the number of outstanding OP Units in BPLP (excluding OP Units held by BXP),
|
|
(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 MYLTIP Units and 2014 MYLTIP Units that were issued in the form of LTIP Units; plus
|
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(dollars in thousands)
|
||||||
|
Debt Summary:
|
|
|
|
||||
|
Balance
|
|
|
|
||||
|
Fixed rate mortgage notes payable, net
|
$
|
2,982,067
|
|
|
$
|
2,077,707
|
|
|
Unsecured senior notes, net
|
7,252,567
|
|
|
7,243,767
|
|
||
|
Unsecured line of credit
|
—
|
|
|
—
|
|
||
|
Unsecured term loan
|
—
|
|
|
—
|
|
||
|
Mezzanine notes payable
|
—
|
|
|
307,448
|
|
||
|
Outside members’ notes payable
|
—
|
|
|
180,000
|
|
||
|
Consolidated Debt
|
10,234,634
|
|
|
9,808,922
|
|
||
|
Add:
|
|
|
|
||||
|
BXP’s share of unconsolidated joint venture debt (1)
|
591,622
|
|
|
350,225
|
|
||
|
Subtract:
|
|
|
|
||||
|
Partners’ share of consolidated mortgage notes payable, net (2)
|
(1,210,389
|
)
|
|
(847,483
|
)
|
||
|
Partners’ share of consolidated mezzanine notes payable
|
—
|
|
|
(122,979
|
)
|
||
|
Outside members’ notes payable
|
—
|
|
|
(180,000
|
)
|
||
|
BXP’s Share of Debt
|
$
|
9,615,867
|
|
|
$
|
9,008,685
|
|
|
|
|
|
|
||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
Consolidated Debt Financing Statistics:
|
|
|
|
||||
|
Percent of total debt:
|
|
|
|
||||
|
Fixed rate
|
100.00
|
%
|
|
100.00
|
%
|
||
|
Variable rate
|
—
|
%
|
|
—
|
%
|
||
|
Total
|
100.00
|
%
|
|
100.00
|
%
|
||
|
GAAP Weighted-average interest rate at end of period:
|
|
|
|
||||
|
Fixed rate
|
4.13
|
%
|
|
4.06
|
%
|
||
|
Variable rate
|
—
|
%
|
|
—
|
%
|
||
|
Total
|
4.13
|
%
|
|
4.06
|
%
|
||
|
Coupon/Stated Weighted-average interest rate at end of period:
|
|
|
|
||||
|
Fixed rate
|
4.02
|
%
|
|
4.50
|
%
|
||
|
Variable rate
|
—
|
%
|
|
—
|
%
|
||
|
Total
|
4.02
|
%
|
|
4.50
|
%
|
||
|
Weighted-average maturity at end of period (in years):
|
|
|
|
||||
|
Fixed rate
|
6.1
|
|
|
5.2
|
|
||
|
Variable rate
|
—
|
|
|
—
|
|
||
|
Total
|
6.1
|
|
|
5.2
|
|
||
|
(1)
|
See page
83
for additional information.
|
|
(2)
|
See page
82
for additional information.
|
|
|
Coupon/
Stated Rate
|
|
Effective
Rate(1)
|
|
Principal
Amount
|
|
Maturity Date(2)
|
||||
|
7 Year Unsecured Senior Notes
|
3.700
|
%
|
|
3.853
|
%
|
|
$
|
850,000
|
|
|
November 15, 2018
|
|
10 Year Unsecured Senior Notes
|
5.875
|
%
|
|
5.967
|
%
|
|
700,000
|
|
|
October 15, 2019
|
|
|
10 Year Unsecured Senior Notes
|
5.625
|
%
|
|
5.708
|
%
|
|
700,000
|
|
|
November 15, 2020
|
|
|
10 Year Unsecured Senior Notes
|
4.125
|
%
|
|
4.289
|
%
|
|
850,000
|
|
|
May 15, 2021
|
|
|
11 Year Unsecured Senior Notes
|
3.850
|
%
|
|
3.954
|
%
|
|
1,000,000
|
|
|
February 1, 2023
|
|
|
10.5 Year Unsecured Senior Notes
|
3.125
|
%
|
|
3.279
|
%
|
|
500,000
|
|
|
September 1, 2023
|
|
|
10.5 Year Unsecured Senior Notes
|
3.800
|
%
|
|
3.916
|
%
|
|
700,000
|
|
|
February 1, 2024
|
|
|
10 Year Unsecured Senior Notes
|
3.650
|
%
|
|
3.766
|
%
|
|
1,000,000
|
|
|
February 1, 2026
|
|
|
10 Year Unsecured Senior Notes
|
2.750
|
%
|
|
3.495
|
%
|
|
1,000,000
|
|
|
October 1, 2026
|
|
|
Total principal
|
|
|
|
|
7,300,000
|
|
|
|
|||
|
Net unamortized discount
|
|
|
|
|
(16,810
|
)
|
|
|
|||
|
Deferred financing costs, net
|
|
|
|
|
(30,623
|
)
|
|
|
|||
|
Total
|
|
|
|
|
$
|
7,252,567
|
|
|
|
||
|
(1)
|
Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs.
|
|
(2)
|
No principal amounts are due prior to maturity
.
|
|
Properties
|
|
Stated
Interest Rate
|
|
GAAP
Interest Rate(1)
|
|
Stated
Principal
Amount
|
|
Deferred Financing Costs, Net
|
|
Carrying
Amount
|
|
Carrying Amount (partners
’
share)
|
|
|
|
Maturity Date
|
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
Wholly-owned
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
New Dominion Tech Park, Bldg. One
|
|
7.69
|
%
|
|
7.84
|
%
|
|
$
|
32,944
|
|
|
$
|
(274
|
)
|
|
$
|
32,670
|
|
|
N/A
|
|
|
|
|
January 15, 2021
|
|
|
University Place
|
|
6.94
|
%
|
|
6.99
|
%
|
|
7,896
|
|
|
(49
|
)
|
|
7,847
|
|
|
N/A
|
|
|
|
|
August 1, 2021
|
||||
|
|
|
|
|
|
|
40,840
|
|
|
(323
|
)
|
|
40,517
|
|
|
N/A
|
|
|
|
|
|
||||||
|
Consolidated Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
767 Fifth Avenue (the General Motors Building)
|
|
3.43
|
%
|
|
3.64
|
%
|
|
2,300,000
|
|
|
(33,829
|
)
|
|
2,266,171
|
|
|
906,468
|
|
|
(2)(3)(4)
|
|
June 9, 2027
|
||||
|
601 Lexington Avenue
|
|
4.75
|
%
|
|
4.79
|
%
|
|
676,885
|
|
|
(1,506
|
)
|
|
675,379
|
|
|
303,921
|
|
|
(5)
|
|
April 10, 2022
|
||||
|
|
|
|
|
|
|
2,976,885
|
|
|
(35,335
|
)
|
|
2,941,550
|
|
|
1,210,389
|
|
|
|
|
|
||||||
|
Total
|
|
|
|
|
|
$
|
3,017,725
|
|
|
$
|
(35,658
|
)
|
|
$
|
2,982,067
|
|
|
$
|
1,210,389
|
|
|
|
|
|
||
|
(1)
|
GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions.
|
|
(2)
|
The mortgage loan requires interest only payments with a balloon payment due at maturity.
|
|
(3)
|
This property is owned by a consolidated entity in which we have a 60% interest.
|
|
(4)
|
In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of
September 30, 2017
, the maximum funding obligation under the guarantee was approximately
$222.7 million
. We earn a fee from the joint venture for providing the guarantee and have an agreement with our partners to reimburse the joint venture for their share of any payments made under the guarantee (See Notes
5
and
7
to the Consolidated Financial Statements).
|
|
(5)
|
This property is owned by a consolidated entity in which we have a 55% interest.
|
|
Properties
|
|
Venture
Ownership
%
|
|
Stated
Interest
Rate
|
|
GAAP
Interest
Rate (1)
|
|
Stated Principal Amount
|
|
Deferred Financing Costs, Net
|
|
Carrying Amount
|
|
Carrying Amount (Our Share)
|
|
|
|
Maturity Date
|
|||||||||||
|
|
|
(dollars in thousands)
|
|||||||||||||||||||||||||||
|
540 Madison Avenue
|
|
60
|
%
|
|
2.73
|
%
|
|
2.90
|
%
|
|
$
|
120,000
|
|
|
$
|
(187
|
)
|
|
$
|
119,813
|
|
|
$
|
71,888
|
|
|
(2)(3)
|
|
June 5, 2018
|
|
Market Square North
|
|
50
|
%
|
|
5.75
|
%
|
|
5.81
|
%
|
|
121,707
|
|
|
(252
|
)
|
|
121,455
|
|
|
60,727
|
|
|
|
|
October 1, 2020
|
||||
|
Annapolis Junction Building One
|
|
50
|
%
|
|
6.99
|
%
|
|
7.16
|
%
|
|
39,549
|
|
|
(41
|
)
|
|
39,508
|
|
|
19,751
|
|
|
(4)
|
|
March 31, 2018
|
||||
|
Annapolis Junction Building Six
|
|
50
|
%
|
|
3.49
|
%
|
|
3.66
|
%
|
|
13,751
|
|
|
(39
|
)
|
|
13,712
|
|
|
6,856
|
|
|
(5)
|
|
November 17, 2018
|
||||
|
Annapolis Junction Building Seven and Eight
|
|
50
|
%
|
|
3.58
|
%
|
|
3.86
|
%
|
|
36,260
|
|
|
(223
|
)
|
|
36,037
|
|
|
18,019
|
|
|
(6)
|
|
December 7, 2019
|
||||
|
1265 Main Street
|
|
50
|
%
|
|
3.77
|
%
|
|
3.84
|
%
|
|
39,910
|
|
|
(396
|
)
|
|
39,514
|
|
|
19,757
|
|
|
|
|
January 1, 2032
|
||||
|
Colorado Center
|
|
50
|
%
|
|
3.56
|
%
|
|
3.58
|
%
|
|
550,000
|
|
|
(992
|
)
|
|
549,008
|
|
|
274,504
|
|
|
(2)
|
|
August 9, 2027
|
||||
|
Dock 72
|
|
50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)(7)
|
|
December 18, 2020
|
||||
|
The Hub on Causeway - Podium
|
|
50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)(8)
|
|
September 6, 2021
|
||||
|
500 North Capitol Street
|
|
30
|
%
|
|
4.15
|
%
|
|
4.20
|
%
|
|
105,000
|
|
|
(335
|
)
|
|
104,665
|
|
|
31,399
|
|
|
(2)
|
|
June 6, 2023
|
||||
|
901 New York Avenue
|
|
25
|
%
|
|
3.61
|
%
|
|
3.69
|
%
|
|
225,000
|
|
|
(1,295
|
)
|
|
223,705
|
|
|
55,926
|
|
|
|
|
January 5, 2025
|
||||
|
Metropolitan Square
|
|
20
|
%
|
|
5.75
|
%
|
|
5.81
|
%
|
|
164,240
|
|
|
(256
|
)
|
|
163,984
|
|
|
32,795
|
|
|
|
|
May 5, 2020
|
||||
|
Total
|
|
|
|
|
|
|
|
$
|
1,415,417
|
|
|
$
|
(4,016
|
)
|
|
$
|
1,411,401
|
|
|
$
|
591,622
|
|
|
|
|
|
|||
|
(1)
|
GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges.
|
|
(2)
|
The loan requires interest only payments with a balloon payment due at maturity.
|
|
(3)
|
Mortgage loan bears interest at a variable rate equal to LIBOR plus 1.50% per annum.
|
|
(4)
|
On April 11, 2016, a notice of event of default was received from the lender because the loan to value ratio is not in compliance with the applicable covenant in the loan agreement. On October 17, 2016, the lender notified the joint venture that it has elected to charge the default rate on the loan. The default rate is defined as LIBOR plus 5.75% per annum. Subsequently, the cash flows generated from the property have become insufficient to fund debt service payments and capital improvements necessary to lease and operate the property and the joint venture is not prepared to fund additional cash shortfalls at this time. Consequently, the joint venture is not current on making debt service payments and remains in default. The loan has one, three-year extension option, subject to certain conditions including that no event of default exists or is ongoing.
|
|
(5)
|
The loan bears interest at a variable rate equal to LIBOR plus 2.25% per annum.
|
|
(6)
|
The loan bears interest at a variable rate equal to LIBOR plus 2.35% per annum and matures on December 7, 2019, with three, one-year extension options, subject to certain conditions.
|
|
(7)
|
No amounts have been drawn under the $250.0 million construction facility. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on December 18, 2020 with two, one-year extension option, subject to certain conditions.
|
|
(8)
|
No amounts have been drawn under the $204.6 million construction facility. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2021, with two, one-year extension options, subject to certain conditions. In connection with the construction financing, we obtained the right to complete the construction of the garage underneath the project being developed by an affiliate of our joint venture partner and obtain funding from the garage construction lender. We agreed to guaranty completion of the garage to the construction lender and an affiliate of our partner agreed to reimburse us for our partner’s share of any payments under the guaranty.
|
|
|
Three months ended September 30,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
(in thousands)
|
||||||
|
Net income attributable to Boston Properties, Inc. common shareholders
|
$
|
117,337
|
|
|
$
|
76,753
|
|
|
Add:
|
|
|
|
||||
|
Preferred dividends
|
2,625
|
|
|
2,589
|
|
||
|
Noncontrolling interest—common units of Boston Properties Limited Partnership
|
13,402
|
|
|
9,387
|
|
||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
||
|
Less:
|
|
|
|
||||
|
Gains on sales of real estate
|
2,891
|
|
|
12,983
|
|
||
|
Income before gains on sales of real estate
|
144,813
|
|
|
58,521
|
|
||
|
Add:
|
|
|
|
||||
|
Depreciation and amortization
|
152,164
|
|
|
203,748
|
|
||
|
Noncontrolling interests in property partnerships’ share of depreciation and amortization
|
(18,552
|
)
|
|
(40,907
|
)
|
||
|
BXP’s share of depreciation and amortization from unconsolidated joint ventures
|
9,282
|
|
|
9,128
|
|
||
|
Corporate-related depreciation and amortization
|
(434
|
)
|
|
(393
|
)
|
||
|
Less:
|
|
|
|
||||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
||
|
Preferred dividends
|
2,625
|
|
|
2,589
|
|
||
|
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders (including Boston Properties, Inc.) (
“
Basic FFO
”
)
|
270,308
|
|
|
244,733
|
|
||
|
Less:
|
|
|
|
||||
|
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of funds from operations
|
27,293
|
|
|
25,169
|
|
||
|
FFO attributable to Boston Properties, Inc. common shareholders
|
$
|
243,015
|
|
|
$
|
219,564
|
|
|
Boston Properties, Inc.’s percentage share of Funds from Operations—basic
|
89.90
|
%
|
|
89.72
|
%
|
||
|
Weighted-average shares outstanding—basic
|
154,355
|
|
|
153,754
|
|
||
|
|
Three months ended September 30, 2017
|
|
Three months ended September 30, 2016
|
||||||||||
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|
Income
(Numerator)
|
|
Shares
(Denominator)
|
|||||||
|
|
(in thousands)
|
||||||||||||
|
Basic FFO
|
$
|
270,308
|
|
|
171,691
|
|
|
$
|
244,733
|
|
|
171,379
|
|
|
Effect of Dilutive Securities
|
|
|
|
|
|
|
|
||||||
|
Stock Based Compensation
|
—
|
|
|
128
|
|
|
—
|
|
|
382
|
|
||
|
Diluted FFO
|
270,308
|
|
|
171,819
|
|
|
244,733
|
|
|
171,761
|
|
||
|
Less:
|
|
|
|
|
|
|
|
||||||
|
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of diluted FFO
|
27,272
|
|
|
17,336
|
|
|
25,113
|
|
|
17,625
|
|
||
|
Boston Properties, Inc.’s share of Diluted FFO (1)
|
$
|
243,036
|
|
|
154,483
|
|
|
$
|
219,620
|
|
|
154,136
|
|
|
(1)
|
BXP’s share of diluted FFO was 89.91% and 89.74% for the three months ended
September 30, 2017
and
2016
, respectively.
|
|
|
Three months ended September 30,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
(in thousands)
|
||||||
|
Net income attributable to Boston Properties Limited Partnership common unitholders
|
$
|
132,693
|
|
|
$
|
91,306
|
|
|
Add:
|
|
|
|
||||
|
Preferred distributions
|
2,625
|
|
|
2,589
|
|
||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
||
|
Less:
|
|
|
|
||||
|
Gains on sales of real estate
|
2,891
|
|
|
12,983
|
|
||
|
Income before gains on sales of real estate
|
146,767
|
|
|
63,687
|
|
||
|
Add:
|
|
|
|
||||
|
Depreciation and amortization
|
150,210
|
|
|
198,582
|
|
||
|
Noncontrolling interests in property partnerships’ share of depreciation and amortization
|
(18,552
|
)
|
|
(40,907
|
)
|
||
|
BPLP
’
s share of depreciation and amortization from unconsolidated joint ventures
|
9,282
|
|
|
9,128
|
|
||
|
Corporate-related depreciation and amortization
|
(434
|
)
|
|
(393
|
)
|
||
|
Less:
|
|
|
|
||||
|
Noncontrolling interests in property partnerships
|
14,340
|
|
|
(17,225
|
)
|
||
|
Preferred distributions
|
2,625
|
|
|
2,589
|
|
||
|
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders
(
“
Basic FFO
”
)
(1)
|
$
|
270,308
|
|
|
$
|
244,733
|
|
|
Weighted-average units outstanding—basic
|
171,691
|
|
|
171,379
|
|
||
|
(1)
|
Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units, vested 2013 MYLTIP Units and vested 2014 MYLTIP Units).
|
|
|
Three months ended September 30, 2017
|
|
Three months ended September 30, 2016
|
||||||||||
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|
Income
(Numerator)
|
|
Units
(Denominator)
|
|||||||
|
|
(in thousands)
|
||||||||||||
|
Basic FFO
|
$
|
270,308
|
|
|
171,691
|
|
|
$
|
244,733
|
|
|
171,379
|
|
|
Effect of Dilutive Securities
|
|
|
|
|
|
|
|
||||||
|
Stock Based Compensation
|
—
|
|
|
128
|
|
|
—
|
|
|
382
|
|
||
|
Diluted FFO
|
$
|
270,308
|
|
|
171,819
|
|
|
$
|
244,733
|
|
|
171,761
|
|
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022+
|
|
Total
|
|
Estimated
Fair Value
|
||||||||||||||||
|
|
(dollars in thousands)
Mortgage debt, net
|
||||||||||||||||||||||||||||||
|
Fixed Rate
|
$
|
2,782
|
|
|
$
|
14,708
|
|
|
$
|
15,745
|
|
|
$
|
16,841
|
|
|
$
|
36,346
|
|
|
$
|
2,895,645
|
|
|
$
|
2,982,067
|
|
|
$
|
3,049,617
|
|
|
Average Interest Rate
|
5.04
|
%
|
|
5.52
|
%
|
|
5.53
|
%
|
|
5.55
|
%
|
|
6.61
|
%
|
|
3.89
|
%
|
|
3.96
|
%
|
|
|
|||||||||
|
Variable Rate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
Unsecured debt, net
|
||||||||||||||||||||||||||||||
|
Fixed Rate
|
$
|
(2,216
|
)
|
|
$
|
841,285
|
|
|
$
|
692,461
|
|
|
$
|
692,962
|
|
|
$
|
844,289
|
|
|
$
|
4,183,786
|
|
|
$
|
7,252,567
|
|
|
$
|
7,533,164
|
|
|
Average Interest Rate
|
—
|
|
|
3.85
|
%
|
|
5.97
|
%
|
|
5.71
|
%
|
|
4.29
|
%
|
|
3.71
|
%
|
|
4.21
|
%
|
|
|
|||||||||
|
Variable Rate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
$
|
566
|
|
|
$
|
855,993
|
|
|
$
|
708,206
|
|
|
$
|
709,803
|
|
|
$
|
880,635
|
|
|
$
|
7,079,431
|
|
|
$
|
10,234,634
|
|
|
$
|
10,582,781
|
|
|
(a)
|
None.
|
|
(b)
|
Not applicable.
|
|
(c)
|
Issuer Purchases of Equity Securities. None.
|
|
(a)
|
Each time Boston Properties, Inc. issues shares of stock (other than in exchange for common units when such common units are presented for redemption), it contributes the proceeds of such issuance to us in return for an equivalent number of partnership units with rights and preferences analogous to the shares issued. During the three months ended September 30, 2017, in connection with issuances of common stock by Boston Properties, Inc. pursuant to issuances to employees pursuant to the Boston Properties, Inc. 1999 Non-Qualified Employee Stock Purchase Plan, Boston Properties Limited Partnership issued an aggregate of approximately 3,381 common units to Boston Properties, Inc. in exchange for approximately $360,000, the aggregate proceeds of such common stock issuances, to Boston Properties, Inc. Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
|
|
(b)
|
Not Applicable.
|
|
(c)
|
Issuer Purchases of Equity Securities. None.
|
|
(a)
|
None.
|
|
(b)
|
None.
|
|
(a)
|
Exhibits
|
|
|
|
|
|
|
12.1
|
|
—
|
|
|
|
|
|
|
|
12.2
|
|
—
|
|
|
|
|
|
|
|
31.1
|
|
—
|
|
|
|
|
|
|
|
31.2
|
|
—
|
|
|
|
|
|
|
|
31.3
|
|
—
|
|
|
|
|
|
|
|
31.4
|
|
—
|
|
|
|
|
|
|
|
32.1
|
|
—
|
|
|
|
|
|
|
|
32.2
|
|
—
|
|
|
|
|
|
|
|
32.3
|
|
—
|
|
|
|
|
|
|
|
32.4
|
|
—
|
|
|
|
|
|
|
|
101
|
|
—
|
The following materials from Boston Properties, Inc.’s and Boston Properties Limited Partnership’s Quarterly Reports on Form 10-Q for the quarter ended September 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Partners’ Capital (vi) the Consolidated Statements of Cash Flows, and (vii) related notes to these financial statements.
|
|
|
BOSTON PROPERTIES, INC.
|
|
|
|
|
|
|
November 6, 2017
|
|
/s/ M
ICHAEL
R. W
ALSH
|
|
|
|
Michael R. Walsh
|
|
|
|
Chief Accounting Officer
(duly authorized officer and principal accounting officer)
|
|
|
BOSTON PROPERTIES LIMITED PARTNERSHIP
|
|
|
|
By: Boston Properties, Inc., its General Partner
|
|
|
|
|
|
|
November 6, 2017
|
|
/s/ M
ICHAEL
R. W
ALSH
|
|
|
|
Michael R. Walsh
|
|
|
|
Chief Accounting Officer
(duly authorized officer and principal accounting officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|