Form 8-K BOSTON PROPERTIES INC For: Oct 25

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October 26, 2016 6:04 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 25, 2016

BOSTON PROPERTIES, INC.

BOSTON PROPERTIES LIMITED PARTNERSHIP

(Exact Name of Registrants As Specified in its Charter)


Boston Properties, Inc.	Delaware	1-13087	04-2473675
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Boston Properties Limited Partnership	Delaware	0-50209	04-3372948
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

800 Boylston Street, Suite 1900, Boston, Massachusetts 02199

(Address of Principal Executive Offices) (Zip Code)

(617) 236-3300

(Registrants’ telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The information in this Item 2.02 - “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On October 25, 2016, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the third quarter of 2016. That press release referred to certain supplemental information that is available on the Company’s website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d)	Exhibits.


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended September 30, 2016.

*99.2		Press release dated October 25, 2016.

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


BOSTON PROPERTIES, INC.

By:		/s/ Michael E. LaBelle

		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc., its General Partner

By:		/s/ Michael E. LaBelle

		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

Date: October 25, 2016

EXHIBIT INDEX


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended September 30, 2016.

*99.2		Press release dated October 25, 2016.

*	Filed herewith.

Exhibit 99.1

LOGO

Supplemental Operating and Financial Data

for the Quarter Ended September 30, 2016

LOGO

THIRD QUARTER 2016

Table of Contents


	Page
Company Profile		3
Investor Information		4
Research Coverage		5
Guidance and Assumptions		6
Financial Highlights		7-8
Consolidated Balance Sheets		9
Consolidated Income Statements		10
Funds From Operations		11
Funds Available for Distribution		12
Interest Coverage Ratios		13
Capital Structure		14
Debt Analysis		15-16
Unconsolidated Joint Ventures		17-18
Consolidated Joint Ventures		19-20
Reconciliation to Same Property Performance and Net Income		21-23
Residential and Hotel Performance		24
Capital Expenditures, Tenant Improvements and Leasing Commissions		25
Portfolio Overview		26
In-Service Property Listing		27-29
Occupancy by Location		30
Top 20 Tenants and Tenant Diversification		31
Aggregate Lease Expiration Roll Out		32
Boston Lease Expiration Roll Out		33-34
New York Lease Expiration Roll Out		35-36
San Francisco and Los Angeles Lease Expiration Roll Out		37-38
Washington, DC Lease Expiration Roll Out		39-40
CBD/Suburban Lease Expiration Roll Out		41-42
Leasing Activity		43
Acquisitions/Dispositions		44
Value Creation Pipeline - Construction in Progress		45
Value Creation Pipeline - Land Parcels and Purchase Options		46
Definitions		47-48

This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Boston Properties’ control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effectiveness of our interest rate hedging programs, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof and are not guarantees of future results, performance or achievements. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

(Cover photo: Renderings of Dock72, Brooklyn, NY)

LOGO

THIRD QUARTER 2016

COMPANY PROFILE

The Company

Boston Properties, Inc. (“Boston Properties,” “BXP” or the “Company”), a self-administered and self-managed real estate investment trust (REIT), is one of the largest owners, managers, and developers of first-class office properties in the United States, with a significant presence in five markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC. The Company was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston, where it maintains its headquarters. Boston Properties became a public company in June 1997. The Company acquires, develops and manages its properties through full-service regional offices. Its property portfolio is comprised primarily of Class A office properties, five retail properties, four residential properties (including two properties under construction) and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record in developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for the U.S. government and a diverse array of creditworthy tenants.

Management

Boston Properties’ senior management team is among the most respected and accomplished in the REIT industry. Our deep and talented team of 35 individuals averages 30 years of real estate experience and 19 years with Boston Properties. We believe that our size, management depth, financial strength, reputation, and relationships of key personnel provide a competitive advantage to realize growth through property development and acquisitions. Boston Properties benefits from the reputation and relationships of key personnel, including Owen D. Thomas, Chief Executive Officer; Douglas T. Linde, President; Raymond A. Ritchey, Senior Executive Vice President; and Michael E. LaBelle, Executive Vice President, Chief Financial Officer and Treasurer. Our senior management team’s national reputation helps us attract business and investment opportunities. In addition, our other executive officers that serve as Regional Managers have strong reputations that assist in identifying and closing on new opportunities, having opportunities brought to us, and in negotiating with tenants and build-to-suit prospects. Additionally, Boston Properties’ Board of Directors consists of 11 distinguished members, the majority of whom are Independent Directors.

Strategy

Boston Properties’ primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the Company maintains consistent strategies that include the following:

•

concentrating on carefully targeted markets characterized by high barriers to the creation of new supply and strong real estate fundamentals where tenants have demonstrated a preference for high-quality office buildings and other facilities—currently Boston, Los Angeles, New York, San Francisco and Washington, DC;

•

investing in the highest quality buildings (primarily office) that are able to maintain high occupancy and achieve premium rental rates through economic cycles;

•

in our core markets, maintaining scale and a full service real estate capability (leasing, development, construction and property management) to ensure we (1) see all relevant investment deal flow and (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle;

•

be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing into economic growth and selectively selling assets to either take advantage of the demand for our premier properties or pare from the portfolio properties that we believe have slower future growth potential, resulting in continuous portfolio refreshment;

•

taking on complex, technically-challenging development projects that leverage the skills of our management team to successfully develop, acquire, and reposition properties;

•

exploring joint-venture opportunities with partners who seek to benefit from our depth of development and management expertise;

•

ensuring a strong balance sheet to maintain consistent access to capital and the resultant ability to make opportunistic investments; and

•

fostering a culture and reputation of integrity and fair dealing, making us the counterparty of choice for tenants and real estate industry participants.


Snapshot (as of September 30, 2016)
Corporate Headquarters		Boston, Massachusetts
Markets		Boston, Los Angeles, New York, San Francisco and Washington, DC
Fiscal Year-End		December 31
Total Properties (includes unconsolidated joint ventures)		174
Total Square Feet (includes unconsolidated joint ventures)		47.7 million
Common shares outstanding, plus common units and LTIP units (including Outperformance Plan Units and 2013 Multi-Year Long-Term Incentive Program (“MYLTIP”) Units when earned) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned) (1)		171.8 million
Dividend - Quarter/Annualized		$0.65/$2.60
Dividend Yield		1.91%
Consolidated Market Capitalization		$33.4 billion
BXP’s Share of Combined Market Capitalization (2)		$32.6 billion
Senior Debt Ratings		A- (S&P); BBB+ (Fitch); Baa2 (Moody’s)

(1)	For additional detail, see page 14.

(2)	For the Company’s definition of BXP’s Share of Combined Market Capitalization and related disclosures, see page 47. For a quantitative reconciliation of Consolidated Market Capitalization to BXP’s Share of Combined Market Capitalization, see page 14.

LOGO

THIRD QUARTER 2016

INVESTOR INFORMATION


Board of Directors		Management
Joel I. Klein	Dr. Jacob A. Frenkel	Raymond A. Ritchey	John F. Powers
Lead Independent Director	Director, Chair of Nominating & Corporate Governance Committee	Senior Executive Vice President	Executive Vice President,
			New York Region
Owen D. Thomas		Michael E. LaBelle
Chief Executive Officer and Director	Matthew J. Lustig	Executive Vice President, Chief Financial Officer and Treasurer	Frank D. Burt
	Director		Senior Vice President, General Counsel
Douglas T. Linde
President and Director	Alan J. Patricof	Peter D. Johnston	Michael R. Walsh
	Director	Executive Vice President,	Senior Vice President, Chief Accounting Officer
Bruce W. Duncan		Washington, DC Region
Director	Martin Turchin
	Director	Bryan J. Koop
Karen E. Dykstra		Executive Vice President,
Director	David A. Twardock	Boston Region
	Director, Chair of Audit Committee
Carol B. Einiger	Director, Chair of Audit Committee	Robert E. Pester
Director, Chair of Compensation Committee		Executive Vice President,
Director, Chair of Compensation Committee		San Francisco Region

Chairman Emeritus
Mortimer B. Zuckerman

Company Information
Corporate Headquarters	Trading Symbol	Investor Relations	Inquires
800 Boylston Street	BXP	Boston Properties, Inc.	Inquiries should be directed to
Suite 1900		800 Boylston Street, Suite 1900	Michael E. LaBelle
Boston, MA 02199	Stock Exchange Listing	Boston, MA 02199	Executive Vice President, Chief Financial Officer
(t) 617.236.3300	New York Stock Exchange	(t) 617.236.3322	and Treasurer
(f) 617.236.3311		(f) 617.236.3311	at 617.236.3352 or
		www.bostonproperties.com	[email protected]

			Arista Joyner, Investor Relations Manager
			at 617.236.3343 or
			[email protected]

Common Stock Data (NYSE: BXP)

Boston Properties’ common stock has the following characteristics (based on information reported by the New York Stock Exchange):


	Q3 2016			Q2 2016			Q1 2016			Q4 2015			Q3 2015
High Closing Price	$	143.61		$	133.13		$	127.26		$	130.15		$	126.32
Low Closing Price	$	130.03		$	123.71		$	108.18		$	118.62		$	108.65
Average Closing Price	$	138.78		$	128.38		$	118.69		$	124.47		$	119.54
Closing Price, at the end of the quarter	$	136.29		$	131.90		$	127.08		$	127.54		$	118.40
Dividends per share	$	0.65		$	0.65		$	0.65		$	0.65		$	0.65
Special dividends per share	$	—		$	—		$	—		$	1.25		$	—

Total dividends	$	0.65		$	0.65		$	0.65		$	1.90		$	0.65

Closing dividend yield - annualized		1.91	%		1.97	%		2.05	%		3.02	%(1)		2.20	%
Closing common shares outstanding, plus common units and LTIP units (including Outperformance Plan Units and 2013 MYLTIP Units when earned) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned) (thousands) (2)		171,775			171,772			171,763			171,509			171,509
Closing market value of outstanding shares and units (thousands)	$	23,611,215		$	22,856,727		$	22,027,642		$	22,074,258		$	20,506,666

(1)

Includes the special dividend of $1.25 per share paid on January 28, 2016 to shareholders of record as of the close of business on December 31, 2015.

(2)

For additional detail, see page 14.


Timing
Quarterly results for the next four quarters will be announced according to the following schedule:

Fourth Quarter, 2016		Tentatively January 31, 2017
First Quarter, 2017		Tentatively April 25, 2017
Second Quarter, 2017		Tentatively August 1, 2017
Third Quarter, 2017		Tentatively November 1, 2017

LOGO

THIRD QUARTER 2016

RESEARCH COVERAGE


Equity Research Coverage		Debt Research Coverage	Rating Agencies
Jacob Kilstein	Anthony Paolone	Andrew Mollay	Stephen Boyd
Argus Research Company	J.P. Morgan Securities	Bank of America Merrill Lynch	Fitch Ratings
646.747.5447	212.622.6682	646.855.6435	212.908.9153

Jeffrey Spector / Jamie Feldman	Craig Mailman / Jordan Sadler	Peter Troisi	Ranjini Venkatesan
Bank of America Merrill Lynch	KeyBanc Capital Markets	Barclays	Moody’s Investors Service
646.855.1363 / 646.855.5808	917.368.2316 / 917.368.2280	212.412.3695	212.553.3828

Ross Smotrich / Peter Siciliano	Richard Anderson	Thomas Cook	Anita Ogbara
Barclays Capital	Mizuho Securities	Citi Investment Research	Standard & Poor’s
212.526.2306 / 212.526.3098	212.205.8445	212.723.1112	212.438.5077

John Kim	Sumit Sharma / Vikram Malhotra	John Giordano
BMO Capital	Morgan Stanley	Credit Suisse Securities
212.885.4115	212.761.7567 / 212.761.7064	212.538.4935

Thomas Lesnick / Tom Catherwood	Mike Carroll	Ron Perrotta
Capital One Securities	RBC Capital Markets	Goldman Sachs
571.633.8191	440.715.2649	212.702.7885

Michael Bilerman / Emmanuel Korchman	David Rodgers / Richard Schiller	Mark Streeter
Citigroup Global Markets	RW Baird	J.P. Morgan Securities
212.816.1383 / 212.816.1382	216.737.7341 / 312.609.5485	212.834.5086

Barry Oxford	Alexander Goldfarb / Daniel Santos	Thierry Perrein / Jason Jones
D.A. Davidson & Co.	Sandler O’Neill & Partners	Wells Fargo
212.240.9871	212.466.7937 / 212.466.7927	704.715.8455 / 704.715.7932

Vincent Chao / Mike Husseini	John Guinee / Erin Aslakson
Deutsche Bank Securities	Stifel, Nicolaus & Company
212.250.6799 / 212.250.7703	443.224.1307 / 443.224.1350

Steve Sakwa / Robert Simone	Michael Lewis
Evercore ISI	SunTrust Robinson Humphrey
212.446.9462 / 212.446.9459	212.319.5659

Brad Burke	Nick Yulico
Goldman Sachs	UBS Securities
917.343.2082	212.713.3402

Jed Reagan / Tyler Grant	Blaine Heck
Green Street Advisors	Wells Fargo Securities
949.640.8780	443.263.6529

Jonathan Petersen / Omotayo Okusanya
Jefferies & Co.
212.284.1705 / 212.336.7076

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

LOGO

THIRD QUARTER 2016

GUIDANCE

The Company’s guidance for the full year 2016 and 2017 for diluted earnings per common share attributable to Boston Properties, Inc. common shareholders (“EPS”) and diluted funds from operations (“FFO”) per common share attributable to Boston Properties, Inc. common shareholders is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in the earnings release issued on October 25, 2016 and otherwise referenced during the Company’s conference call scheduled for October 26, 2016. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.


	Full Year 2016					Full Year 2017
	Low			High		Low			High
Projected EPS (diluted)	$	2.98	-	$	3.00	$	2.58	-	$	2.76
Add:
Projected Company share of real estate depreciation and amortization		3.46	-		3.46		3.47	-		3.47
Less:
Projected Company share of gains on sales of real estate		0.47	-		0.47		—	-		—

Projected FFO per share (diluted)	$	5.97	-	$	5.99	$	6.05	-	$	6.23

ASSUMPTIONS

(dollars in thousands)


	Full Year 2016							Full Year 2017
	Low				High			Low				High
Operating property activity:
Average In-service portfolio occupancy		89.0	%	-		90.0	%		90.0	%	-		91.0	%
Increase (decrease) in BXP’s Share of Combined Same Property net operating income (1)		1.25	%	-		1.75	%		2.00	%	-		3.50	%
Increase (decrease) in BXP’s Share of Combined Same Property net operating income — cash basis (1)		3.50	%	-		4.00	%		2.00	%	-		4.00	%
BXP’s Share of Combined Non Same Properties’ incremental contribution over prior year	$	40,000		-	$	43,000		$	18,000		-	$	30,000
BXP’s Share of Combined Straight-line rent and fair value lease revenue (non-cash revenue)	$	60,000		-	$	64,000		$	50,000		-	$	70,000
Hotel net operating income	$	13,000		-	$	14,000		$	13,000		-	$	15,000
Lease termination fees	$	58,000		-	$	59,000		$	4,000		-	$	5,000
Other income (expense):
Development and management services income	$	24,000		-	$	25,000		$	24,000		-	$	28,000
General and administrative expense	$	(107,000	)	-	$	(104,000	)	$	(114,000	)	-	$	(108,000	)
Net interest expense	$	(407,000	)	-	$	(403,000	)	$	(391,000	)	-	$	(378,000	)
Noncontrolling interest:
Noncontrolling interest in property partnerships’ share of FFO	$	(102,000	)	-	$	(104,000	)	$	(105,000	)	-	$	(90,000	)

(1)	Increase (decrease) in Combined Same Property Net Operating Income and Combined Same Property Net Operating Income – cash basis is assumed to be 0.25%-0.75% and 2.50%-3.00%, respectively. Full year 2016 and 2017 percentages are assumed changes from 2015 and 2016, respectively.

LOGO

THIRD QUARTER 2016

FINANCIAL HIGHLIGHTS

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

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are shown on pages 11-13. Definitions of the non-GAAP financial measures the Company presents and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations can be found on pages 47-48.


	Three Months Ended
	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	96,597		$	181,747		$	137,851		$	184,082
Net income attributable to Boston Properties, Inc. per share - basic	$	0.50		$	0.63		$	1.18		$	0.90		$	1.20
Net income attributable to Boston Properties, Inc. per share - diluted	$	0.50		$	0.63		$	1.18		$	0.90		$	1.20
FFO attributable to Boston Properties, Inc. (1)	$	219,564		$	220,595		$	250,688		$	197,339		$	217,261
FFO per share - diluted (1)	$	1.42		$	1.43		$	1.63		$	1.28		$	1.41
Dividends per common share	$	0.65		$	0.65		$	0.65		$	1.90	(2)	$	0.65
Funds available for distribution to common shareholders and common unitholders (FAD) (1) (3)	$	149,725		$	160,948		$	188,204		$	138,872		$	142,301
Ratios:
Interest Coverage Ratio (excluding capitalized interest) (4)		3.49			3.63			3.79			3.20			3.28
Interest Coverage Ratio (including capitalized interest) (4)		3.17			3.28			3.45			2.95			3.00
FFO Payout Ratio (3)		45.77	%		45.45	%		39.88	%		50.78	%		46.10	%
FAD Payout Ratio (3)		74.63	%		69.42	%		59.35	%		80.33	%		78.39	%
Selected Items (5):
Revenue	$	625,228		$	623,546		$	665,985		$	624,240		$	629,884
Partners’ share of revenue from consolidated joint ventures		(69,391	)		(69,609	)		(73,667	)		(73,697	)		(83,117	)
BXP’s share of revenue from unconsolidated joint ventures		25,271			18,825			18,447			18,672			18,745

BXP’s Share of Combined revenue	$	581,108		$	572,762		$	610,765		$	569,215		$	565,512
Straight-line rent	$	11,107		$	(6,503	)(6)	$	14,424		$	19,623		$	15,992
Partners’ share of straight-line rent from consolidated joint ventures		(707	)		(718	)(6)		(1,696	)		(2,605	)		(3,204	)
BXP’s share of straight-line rent from unconsolidated joint ventures		3,285			1,787			1,064			1,131			(158	)

BXP’s Share of Combined straight-line rent	$	13,685		$	(5,434	)	$	13,792		$	18,149		$	12,630
Fair value lease revenue (7)	$	6,547		$	8,808		$	8,186		$	7,450		$	8,838
Partners’ share of fair value lease revenue from consolidated joint ventures (7)		(2,084	)		(3,031	)		(2,810	)		(2,483	)		(2,889	)
BXP’s share of fair value lease revenue from unconsolidated joint ventures (7)		511			(1	)		(1	)		(1	)		(12	)

BXP’s Share of Combined fair value lease revenue	$	4,974		$	5,776		$	5,375		$	4,966		$	5,937
Lease termination fees (8)	$	(170	)	$	7,654		$	51,306		$	7,701		$	9,589
Partners’ share of lease termination fees from consolidated joint ventures		421			(44	)		(1,852	)		(2,113	)		(1,829	)
BXP’s share of lease termination fees from unconsolidated joint ventures		8			4			(9	)		17			—

BXP’s Share of Combined lease termination fees	$	259		$	7,614		$	49,445		$	5,605		$	7,760
Fair value interest adjustment	$	10,378		$	11,272		$	12,321		$	13,076		$	13,204
Partners’ share of fair value interest adjustment from consolidated joint ventures		(4,569	)		(4,540	)		(4,511	)		(4,483	)		(5,142	)
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—

BXP’s Share of Combined fair value interest adjustment	$	5,809		$	6,732		$	7,810		$	8,593		$	8,062
Ground rent expense (9)	$	3,471		$	3,469		$	3,471		$	3,463		$	3,534
Losses from early extinguishments of debt	$	(371	)	$	—		$	—		$	(22,040	)	$	—
Capitalized interest	$	9,788		$	9,899		$	9,269		$	8,298		$	9,100
Capitalized wages	$	4,155		$	4,467		$	4,344		$	4,130		$	4,111
Operating margins [(rental revenue—rental expense)/rental revenue]		62.3	%		64.0	%		66.3	%		64.3	%		64.0	%
Income from unconsolidated joint ventures	$	1,464		$	2,234		$	1,791		$	2,211		$	2,647
BXP’s share of funds from operations (FFO) from unconsolidated joint ventures	$	10,592	(10)	$	6,852		$	6,287		$	6,205		$	6,455
Net income attributable to noncontrolling interests in property partnerships	$	(17,225	)	$	6,814		$	10,464		$	10,143		$	115,240
FFO attributable to noncontrolling interests in property partnerships	$	23,682	(11)	$	26,183		$	30,019		$	30,828		$	35,527
Income before gains on sales of real estate	$	58,521		$	117,357		$	148,599		$	85,406		$	123,792

(1)	For the Company’s definitions and related disclosures, see pages 47-48.

(2)	For the three months ended December 31, 2015, dividends per common share includes the $1.25 per common share special dividend paid on January 28, 2016 to shareholders of record as of the close of business on December 31, 2015.

(3)

FFO Payout Ratio equals dividends per common share (excluding any special dividends) divided by FFO per share-diluted. For a quantitative reconciliation of FFO, see page 11. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD. For a quantitative reconciliation of FAD, see page 12.

(4)	For a quantitative reconciliation and related disclosures, see page 13.

(5)	Partners’ share and BXP’s share of line items below are based upon percentage ownership interests in the applicable joint ventures.

(6)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(7)	Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(8)

For the three months ended March 31, 2016, includes approximately $45.0 million received from a tenant that terminated its lease for approximately 85,000 square feet at the Company’s 250 West 55th Street property located in New York City. For the three months ended June 30, 2016 and September 30, 2015, includes distributions received by the Company from its unsecured creditor claim against Lehman Brothers, Inc. of approximately $1.4 million and $3.6 million, respectively.

(9)	Includes non-cash straight-line adjustments to ground rent. See page 13 for the straight-line adjustments to the ground rent expense.

(10)	For additional detail, see page 18.

(11)	For additional detail, see page 20.

LOGO

THIRD QUARTER 2016

FINANCIAL HIGHLIGHTS (continued)

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


	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Balance Sheet Items:
Above-market rents (included within Prepaid Expenses and Other Assets)	$	40,346		$	43,780		$	47,388		$	51,397		$	55,434
Below-market rents (included within Other Liabilities)	$	142,595		$	152,576		$	160,504		$	172,670		$	184,154
Accrued ground rent expense, net (included within Prepaid Expenses and Other Assets and Other Liabilities)	$	41,718		$	40,687		$	39,752		$	38,765		$	42,962
Outside members’ notes payable (1)	$	180,000		$	180,000		$	180,000		$	180,000		$	180,000
Accrued interest payable on outside members’ notes payable (included within Accrued Interest Payable) (1)	$	144,825		$	136,131		$	127,670		$	119,436		$	111,422
Capitalization:
Common Stock Price @ Quarter End	$	136.29		$	131.90		$	127.08		$	127.54		$	118.40
Equity Value @ Quarter End	$	23,611,215		$	22,856,727		$	22,027,642		$	22,074,258		$	20,506,666
Consolidated Debt	$	9,808,922		$	9,934,084		$	10,160,366		$	9,188,543		$	9,879,187
BXP’s share of Unconsolidated Joint Venture Debt (2)		350,225			350,831			351,394			351,926			351,340

Combined Debt (3)(4)		10,159,147			10,284,915			10,511,760			9,540,469			10,230,527
Less:
Partners’ share of Consolidated Debt (5)		1,150,462			1,156,399			1,162,292			1,168,142			1,173,988

BXP’s Share of Combined Debt (3)(4)	$	9,008,685		$	9,128,516		$	9,349,468		$	8,372,327		$	9,056,539

Consolidated Market Capitalization	$	33,420,137		$	32,790,811		$	32,188,008		$	31,262,801		$	30,385,853
Consolidated Debt/Consolidated Market Capitalization (3)		29.35	%		30.30	%		31.57	%		29.39	%		32.51	%
BXP’s Share of Combined Market Capitalization (3)(4)	$	32,619,900	(6)	$	31,985,243		$	31,377,110		$	30,446,585		$	29,563,205
BXP’s Share of Combined Debt/BXP’s Share of Combined Market Capitalization (3)(4)		27.62	%(6)		28.54	%		29.80	%		27.50	%		30.63	%

(1)	Amount is allocated to the Company’s 767 Fifth Avenue (The GM Building) partners through noncontrolling interests in property partnerships.

(2)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(3)	For the Company’s definitions, see pages 47-48.

(4)

The Company notes that the ownership percentages used in calculating “Combined” amounts and “BXP’s Share” of any Combined amounts may not completely and accurately depict the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For additional detail, see page 47.

Management also uses these measures to evaluate regional decisions about resource allocations.

(5)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

(6)	For additional detail, see page 14.

LOGO

THIRD QUARTER 2016

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
ASSETS
Real estate	$	18,704,856		$	18,690,403		$	18,424,542		$	18,465,405		$	18,412,086
Construction in progress (1)		954,013			865,359			857,578			763,935			725,601
Land held for future development (2)		243,887			241,106			256,952			252,195			264,598
Less accumulated depreciation		(4,113,553	)		(4,056,716	)		(3,969,648	)		(3,925,894	)		(3,833,277	)

Total real estate		15,789,203			15,740,152			15,569,424			15,555,641			15,569,008
Cash and cash equivalents		419,323			1,180,044			1,605,678			723,718			1,387,007
Cash held in escrows		63,980			65,654			71,349			73,790			90,379
Investments in securities		23,022			21,775			21,077			20,380			19,645
Tenant and other receivables, net		76,258			84,861			73,759			97,865			66,446
Accrued rental income, net		785,569			776,816			767,864			754,883			737,145
Deferred charges, net (3)		680,192			697,823			693,976			704,867			719,019
Prepaid expenses and other assets		176,693			144,222			136,799			185,118			143,476
Investments in unconsolidated joint ventures		775,659			252,618			235,904			235,224			217,529

Total assets	$	18,789,899		$	18,963,965		$	19,175,830		$	18,351,486		$	18,949,654

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (3)	$	2,077,707		$	3,189,013		$	3,416,622		$	3,435,242		$	4,127,007
Unsecured senior notes, net (3)		7,243,767			6,257,274			6,255,602			5,264,819			5,263,363
Unsecured line of credit		—			—			—			—			—
Mezzanine notes payable		307,448			307,797			308,142			308,482			308,817
Outside members’ notes payable		180,000			180,000			180,000			180,000			180,000
Accounts payable and accrued expenses		312,979			287,464			252,727			274,709			245,200
Dividends and distributions payable		113,038			113,071			113,079			327,320			112,912
Accrued interest payable		234,628			222,175			221,578			190,386			200,916
Other liabilities		461,079			508,952			498,290			483,601			448,680

Total liabilities		10,930,646			11,065,746			11,246,040			10,464,559			10,886,895

Commitments and contingencies		—			—			—			—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—			—			—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding		200,000			200,000			200,000			200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,773,012, 153,674,930, 153,604,966, 153,579,966 and 153,574,600 outstanding, respectively		1,538			1,537			1,536			1,536			1,536
Additional paid-in capital		6,326,580			6,316,191			6,306,723			6,305,687			6,300,780
Dividends in excess of earnings		(725,522	)		(702,361	)		(699,048	)		(780,952	)		(627,054	)
Treasury common stock, at cost		(2,722	)		(2,722	)		(2,722	)		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(73,943	)		(79,748	)		(56,706	)		(14,114	)		(20,625	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,725,931			5,732,897			5,749,783			5,709,435			5,851,915
Noncontrolling interests:
Common units of the Operating Partnership		608,280			612,385			616,095			603,092			620,036
Property partnerships		1,525,042			1,552,937			1,563,912			1,574,400			1,590,808

Total equity		7,859,253			7,898,219			7,929,790			7,886,927			8,062,759

Total liabilities and equity	$	18,789,899		$	18,963,965		$	19,175,830		$	18,351,486		$	18,949,654

(1)	Represents the portion of the Company’s consolidated development projects that qualifies for interest capitalization. Such portion generally excludes intangible assets.

(2)	Includes land held for future development and pre-development costs.

(3)

On January 1, 2016, the Company adopted Accounting Standards Update 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company retrospectively adopted the guidance resulting in the presentation of deferred financing costs, net (previously included within Deferred Charges, Net) as a reduction to Mortgage Notes Payable, Net and Unsecured Senior Notes, Net for all periods presented. The recognition and measurement guidance for debt issuance costs was not affected.

LOGO

THIRD QUARTER 2016

CONSOLIDATED INCOME STATEMENTS

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


	Three Months Ended
	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Revenue
Rental
Base rent	$	489,312		$	493,386		$	536,128		$	493,141		$	494,300
Recoveries from tenants		92,560			85,706			89,586			88,576			91,544
Parking and other		24,638			26,113			24,825			25,132			25,509

Total rental revenue		606,510			605,205			650,539			606,849			611,353
Hotel revenue		12,354			12,808			8,757			10,939			12,619
Development and management services		6,364			5,533			6,689			6,452			5,912

Total revenue		625,228			623,546			665,985			624,240			629,884

Expenses
Operating		117,728			113,212			114,467			112,846			113,962
Real estate taxes		109,480			104,726			104,705			103,796			105,834
Demolition costs		1,352			—			—			—			—
Hotel operating		8,118			7,978			7,634			7,888			8,125
General and administrative (1)		25,165			25,418			29,353			24,300			20,944
Transaction costs		249			913			25			470			254
Impairment loss		1,783			—			—			—			—
Depreciation and amortization		203,748	(2)		153,175			159,448			164,460			153,015

Total expenses		467,623			405,422			415,632			413,760			402,134

Operating income		157,605			218,124			250,353			210,480			227,750
Other income (expense)
Income from unconsolidated joint ventures		1,464			2,234			1,791			2,211			2,647
Interest and other income		3,628			1,524			1,505			440			3,637
Gains (losses) from investments in securities (1)		976			478			259			493			(1,515	)
Interest expense (3)		(104,641	)		(105,003	)		(105,309	)		(106,178	)		(108,727	)
Losses from early extinguishments of debt		(371	)		—			—			(22,040	)		—
Losses from interest rate contracts		(140	)		—			—			—			—

Income before gains on sales of real estate		58,521			117,357			148,599			85,406			123,792
Gains on sales of real estate (4)		12,983			—			67,623			81,332			199,479

Net income		71,504			117,357			216,222			166,738			323,271
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships		17,225			(6,814	)		(10,464	)		(10,143	)		(115,240	)(5)
Noncontrolling interest - common units of the Operating Partnership (6)		(9,387	)		(11,357	)		(21,393	)		(16,098	)		(21,302	)

Net income attributable to Boston Properties, Inc.		79,342			99,186			184,365			140,497			186,729
Preferred dividends		(2,589	)		(2,589	)		(2,618	)		(2,646	)		(2,647	)

Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	96,597		$	181,747		$	137,851		$	184,082

INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic	$	0.50		$	0.63		$	1.18		$	0.90		$	1.20

Net income attributable to Boston Properties, Inc. per share - diluted	$	0.50		$	0.63		$	1.18		$	0.90		$	1.20

(1)

General and administrative expense includes $(976), $(478), $(259), $(493) and $1,515 and gains (losses) from investments in securities include $976, $478, $259, $493 and $(1,515) for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, related to the Company’s deferred compensation plan.

(2)

For the three months ended September 30, 2016, includes approximately $50.8 million (including approximately $3.2 million related to an allocation of corporate real estate step-up assets) of accelerated depreciation expense related to the redevelopment of the Company’s 601 Lexington Avenue property.

(3)

For the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, interest expense includes $8,694, $8,461, $8,234, $8,014 and $7,800, respectively, consisting of the interest expense on the partner loans for the 767 Fifth Avenue (The GM Building) consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships. The Company’s share of the interest expense on its loan to the joint venture eliminates in consolidation.

(4)	See page 44 for additional information.

(5)

For the three months ended September 30, 2015, noncontrolling interest in property partnerships includes approximately $101.1 million consisting of the allocation of the gain on sale of real estate to the outside partners in the consolidated entity that sold 505 9th Street, N.W. located in Washington, DC.

(6)

Equals noncontrolling interest—common units of the Operating Partnership’s share of 10.28%, 10.33%, 10.32%, 10.26% and 10.26% of income before net income attributable to noncontrolling interests in Operating Partnership after deduction for preferred distributions for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively.

LOGO

THIRD QUARTER 2016

FUNDS FROM OPERATIONS (FFO)

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


	Three Months Ended
	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	96,597		$	181,747		$	137,851		$	184,082
Add:
Preferred dividends		2,589			2,589			2,618			2,646			2,647
Noncontrolling interest - common units of the Operating Partnership		9,387			11,357			21,393			16,098			21,302
Noncontrolling interests in property partnerships		(17,225	)		6,814			10,464			10,143			115,240
Less:
Gains on sales of real estate		12,983			—			67,623			81,332			199,479

Income before gains on sales of real estate		58,521			117,357			148,599			85,406			123,792
Add:
Depreciation and amortization		203,748			153,175			159,448			164,460			153,015
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(40,907	)		(19,369	)		(19,555	)		(20,685	)		(21,405	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		9,128			4,618			4,496			3,994			3,808
Corporate-related depreciation and amortization		(393	)		(362	)		(364	)		(486	)		(334	)
Less:
Noncontrolling interests in property partnerships		(17,225	)		6,814			10,464			10,143			14,122	(1)
Preferred dividends		2,589			2,589			2,618			2,646			2,647

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”)		244,733			246,016			279,542			219,900			242,107
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO		25,169			25,421			28,854			22,561			24,846

FFO attributable to Boston Properties, Inc. common shareholders	$	219,564		$	220,595		$	250,688		$	197,339		$	217,261

Boston Properties, Inc.’s percentage share of FFO - basic		89.72	%		89.67	%		89.68	%		89.74	%		89.74	%

FFO per share - basic	$	1.43		$	1.44		$	1.63		$	1.28		$	1.41

Weighted average shares outstanding - basic		153,754			153,662			153,626			153,602			153,595

FFO per share - diluted	$	1.42		$	1.43		$	1.63		$	1.28		$	1.41

Weighted average shares outstanding - diluted		154,136			153,860			153,917			153,897			153,786

Reconciliation to Diluted FFO:
Basic FFO	$	244,733		$	246,016		$	279,542		$	219,900		$	242,107
Add:
Effect of dilutive securities - stock-based compensation		—			—			—			—			—

Diluted FFO		244,733			246,016			279,542			219,900			242,107
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO		25,113			25,391			28,805			22,522			24,818

Boston Properties, Inc.’s share of diluted FFO	$	219,620		$	220,625		$	250,737		$	197,378		$	217,289

Reconciliation of Shares/Units for Diluted FFO:
Shares/units for Basic FFO		171,379			171,370			171,309			171,162			171,160
Add:
Effect of dilutive securities - stock-based compensation (shares/units)		382			198			291			295			191

Shares/units for Diluted FFO		171,761			171,568			171,600			171,457			171,351
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO (shares/units)		17,625			17,708			17,683			17,560			17,565

Boston Properties, Inc.’s share of shares/units for diluted FFO		154,136			153,860			153,917			153,897			153,786

Boston Properties, Inc.’s percentage share of FFO - diluted		89.74	%		89.68	%		89.70	%		89.76	%		89.75	%

(1)	For the three months ended September 30, 2015, excludes the noncontrolling interests in property partnerships’ share of a gain on sale of real estate totaling approximately $101.1 million.

LOGO

THIRD QUARTER 2016

FUNDS AVAILABLE FOR DISTRIBUTION (FAD)

(in thousands, except for ratio amounts)


	Three Months Ended
	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	96,597		$	181,747		$	137,851		$	184,082
Add:
Preferred dividends		2,589			2,589			2,618			2,646			2,647
Noncontrolling interest - common units of the Operating Partnership		9,387			11,357			21,393			16,098			21,302
Noncontrolling interests in property partnerships		(17,225	)		6,814			10,464			10,143			115,240
Less:
Gains on sales of real estate		12,983			—			67,623			81,332			199,479

Income before gains on sales of real estate		58,521			117,357			148,599			85,406			123,792
Add:
Depreciation and amortization		203,748			153,175			159,448			164,460			153,015
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(40,907	)		(19,369	)		(19,555	)		(20,685	)		(21,405	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		9,128			4,618			4,496			3,994			3,808
Corporate-related depreciation and amortization		(393	)		(362	)		(364	)		(486	)		(334	)
Less:
Noncontrolling interests in property partnerships		(17,225	)		6,814			10,464			10,143			14,122	(1)
Preferred dividends		2,589			2,589			2,618			2,646			2,647

Basic FFO		244,733			246,016			279,542			219,900			242,107
Straight-line rent		(11,107	)		6,503	(2)		(14,424	)		(19,623	)		(15,992	)
Partners’ share of straight-line rent from consolidated joint ventures		707			718	(2)		1,696			2,605			3,204
BXP’s share of straight-line rent from unconsolidated joint ventures		(3,285	)		(1,787	)		(1,064	)		(1,131	)		158
Lease transaction costs that qualify as rent inducements (3)		861			2,200			5,305			1,939			1,911
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (3)		—			—			(17	)		(18	)		(412	)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (3)		15			—			—			24			147
Fair value lease revenue (4)		(6,547	)		(8,808	)		(8,186	)		(7,450	)		(8,838	)
Partners’ share of fair value lease revenue from consolidated joint ventures (4)		2,084			3,031			2,810			2,483			2,889
BXP’s share of fair value lease revenue from unconsolidated joint ventures (4)		(511	)		1			1			1			12
Non-cash losses (gains) from early extinguishments of debt		371			—			—			(3,604	)		—
Non-cash termination income adjustment (fair value lease amounts)		—			141			29			3			(1,389	)
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		—			(41	)		—			—			555
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			—			—			—
Straight-line ground rent expense adjustment (5)		1,031			935			987			(3,983	)		891
Stock-based compensation		7,643			7,578			10,069			6,358			6,345
Non-real estate depreciation		393			362			364			486			334
Impairment loss		1,783			—			—			—			—
Fair value interest adjustment		(10,378	)		(11,272	)		(12,321	)		(13,076	)		(13,204	)
Partners’ share of fair value interest adjustment from consolidated joint ventures		4,569			4,540			4,511			4,483			5,142
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—
2nd generation tenant improvements and leasing commissions		(69,742	)		(74,719	)		(58,100	)		(34,206	)		(53,268	)
Partners’ share of 2nd generation tenant improvements and leasing commissions from consolidated joint ventures		805			1,247			2,525			2,075			742
BXP’s share of 2nd generation tenant improvements and leasing commissions from unconsolidated joint ventures		(18	)		(8,616	)		(4,769	)		(207	)		(12,279	)
Unearned portion of capitalized fees		250			2,697			1,191			451			616
Maintenance capital expenditures (6)		(11,889	)		(9,654	)		(21,961	)		(18,963	)		(17,148	)
Partners’ share of maintenance capital expenditures from consolidated joint ventures (6)		377			422			573			2,134			886
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (6)		(283	)		(112	)		(197	)		(578	)		(672	)
Hotel improvements, equipment upgrades and replacements		(2,137	)		(434	)		(360	)		(1,231	)		(436	)

Funds available for distribution to common shareholders and common unitholders (FAD) (A)	$	149,725		$	160,948		$	188,204		$	138,872		$	142,301

Distributions to common shareholders and unitholders (excluding any special distributions) (B)	$	111,739		$	111,737		$	111,708		$	111,556		$	111,552
FAD Payout Ratio (B÷A)		74.63	%		69.42	%		59.35	%		80.33	%		78.39	%

(1)	For the three months ended September 30, 2015, excludes the noncontrolling interests in property partnerships’ share of a gain on sale of real estate totaling approximately $101.1 million.

(2)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the period the lease commences.

(4)	Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(5)

For the three months ended September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 200 Clarendon Street property’s adjacent 100 Clarendon Street garage and Back Bay Station concourse level. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur over the next three years with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. For additional information, see page 7.

(6)	Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures – see page 25 for additional detail.

LOGO

INTEREST COVERAGE RATIOS

(in thousands, except for ratio amounts)


	Three Months Ended
	30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	96,597		$	181,747		$	137,851		$	184,082
Add:
Preferred dividends		2,589			2,589			2,618			2,646			2,647
Noncontrolling interest - common units of the Operating Partnership		9,387			11,357			21,393			16,098			21,302
Noncontrolling interests in property partnerships		(17,225	)		6,814			10,464			10,143			115,240
Less:
Gains on sales of real estate		12,983			—			67,623			81,332			199,479

Income before gains on sales of real estate		58,521			117,357			148,599			85,406			123,792
Noncontrolling interests in property partnerships		17,225			(6,814	)		(10,464	)		(10,143	)		(14,122	)(1)
Interest expense		104,641			105,003			105,309			106,178			108,727
Partners’ share of interest expense from consolidated joint ventures		(17,460	)		(17,177	)		(16,988	)		(16,928	)		(18,339	)
BXP’s share of interest expense from unconsolidated joint ventures		4,025			4,010			4,015			3,908			3,830
Depreciation and amortization expense		203,748			153,175			159,448			164,460			153,015
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(40,907	)		(19,369	)		(19,555	)		(20,685	)		(21,405	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		9,128			4,618			4,496			3,994			3,808
Losses from early extinguishments of debt		371			—			—			22,040			—
Impairment loss		1,783			—			—			—			—
Non-cash termination income adjustment (fair value lease amounts)		—			141			29			3			(1,389	)
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		—			(41	)		—			—			555
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			—			—			—
Stock-based compensation		7,643			7,578			10,069			6,358			6,345
Straight-line ground rent expense adjustment (2)		1,031			935			987			(3,983	)		891
Straight-line rent		(11,107	)		6,503	(3)		(14,424	)		(19,623	)		(15,992	)
Partners’ share of straight-line rent from consolidated joint ventures		707			718	(3)		1,696			2,605			3,204
BXP’s share of straight-line rent from unconsolidated joint ventures		(3,285	)		(1,787	)		(1,064	)		(1,131	)		158
Lease transaction costs that qualify as rent inducements (4)		861			2,200			5,305			1,939			1,911
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (4)		—			—			(17	)		(18	)		(412	)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (4)		15			—			—			24			147
Fair value lease revenue (5)		(6,547	)		(8,808	)		(8,186	)		(7,450	)		(8,838	)
Partners’ share of fair value lease revenue from consolidated joint ventures (5)		2,084			3,031			2,810			2,483			2,889
BXP’s share of fair value lease revenue from unconsolidated joint ventures (5)		(511	)		1			1			1			12

Subtotal (A)	$	331,966		$	351,274		$	372,066		$	319,438		$	328,787

Divided by:
Interest expense	$	104,641		$	105,003		$	105,309		$	106,178		$	108,727
Partners’ share of interest expense from consolidated joint ventures		(17,460	)		(17,177	)		(16,988	)		(16,928	)		(18,339	)
BXP’s share of interest expense from unconsolidated joint ventures		4,025			4,010			4,015			3,908			3,830
Fair value interest adjustment		10,378			11,272			12,321			13,076			13,204
Partners’ share of fair value interest adjustment from consolidated joint ventures		(4,569	)		(4,540	)		(4,511	)		(4,483	)		(5,142	)
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—
Amortization of financing costs		(1,889	)		(1,704	)		(1,829	)		(1,921	)		(1,935	)
Partners’ share of amortization of financing costs from consolidated joint ventures		38			38			38			39			64
BXP’s share of amortization of financing costs from unconsolidated joint ventures		(113	)		(112	)		(120	)		(113	)		(102	)

Adjusted interest expense excluding capitalized interest (B)		95,051			96,790			98,235			99,756			100,307
Capitalized interest		9,788			10,222			9,525			8,380			9,223
Partners’ share of capitalized interest from consolidated joint ventures		(21	)		—			—			—			—
BXP’s share of capitalized interest from unconsolidated joint ventures		—			—			—			50			123

Adjusted interest expense including capitalized interest (C)	$	104,818		$	107,012		$	107,760		$	108,186		$	109,653

Interest Coverage Ratio (excluding capitalized interest) (A ÷ B) (6)		3.49			3.63			3.79			3.20			3.28

Interest Coverage Ratio (including capitalized interest) (A ÷ C) (6)		3.17			3.28			3.45			2.95			3.00

(1)	For the three months ended September 30, 2015, excludes the noncontrolling interests in property partnerships’ share of a gain on sale of real estate totaling approximately $101.1 million.

(2)

For the three months ended September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the 100 Clarendon Street garage and Back Bay Station concourse level, which are adjacent to the the Company’s 200 Clarendon Street property. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur over the next three years with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. For additional information, see page 7.

(3)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant's lease term. These amounts are in addition to the tenants’ monthly rental payments.

(4)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions.

(5)	Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(6)

The Company believes that the presentation of its Interest Coverage Ratio provides investors with useful information about the Company’s financial condition because it measures the margin it has for paying interest expense as of a certain date. In addition, by analyzing interest coverage ratios over a period of time, trends may emerge that provide investors a better sense of whether a company’s financial condition is improving or worsening. The ratios may also be used to compare the ability of different companies to meet their interest expense obligations, which can help when making an investment decision. The Company presents its Interest Coverage Ratio in two ways - including capitalized interest and excluding capitalized interest. GAAP requires the capitalization of interest expense during development. Therefore, for a company like Boston Properties, Inc. that is an active developer of real estate, presenting the Interest Coverage Ratio (excluding capitalized interest) provides an alternative measure of financial condition that may be more indicative of the Company’s ability to meet its interest expense obligations.

LOGO

THIRD QUARTER 2016

CAPITAL STRUCTURE

(in thousands, except percentages)

Consolidated Debt


	Aggregate Principal
	September 30, 2016
Mortgage Notes Payable	$	2,035,195
Mezzanine Notes Payable		306,000
Unsecured Line of Credit		—
Unsecured Senior Notes, at face value		7,300,000
Outside Members’ Notes Payable		180,000

Subtotal		9,821,195
Fair Value Interest Adjustment on Mortgage Notes Payable		44,970
Fair Value Interest Adjustment on Mezzanine Notes Payable		1,448
Discount on Unsecured Senior Notes		(19,429	)
Deferred Financing Costs, Net		(39,262	)

Consolidated Debt	$	9,808,922

Boston Properties Limited Partnership Unsecured Senior Notes (1)


Settlement Date	Maturity Date		Principal		Yield (on issue date)			Coupon			Public Offering Price			Discount		Deferred Financing Costs, Net		Unsecured Senior Notes, net
8/17/2016		10/1/2026	$	1,000,000		3.495	%(2)		2.750	%		99.271	%	$	7,242	$	8,093	$	984,665
1/20/2016		2/1/2026		1,000,000		3.766	%		3.650	%		99.708	%		2,756		7,598		989,646
6/27/2013		2/1/2024		700,000		3.916	%		3.800	%		99.694	%		1,553		4,124		694,323
4/11/2013		9/1/2023		500,000		3.279	%		3.125	%		99.379	%		2,184		2,781		495,035
6/11/2012		2/1/2023		1,000,000		3.954	%		3.850	%		99.779	%		1,410		4,951		993,639
11/10/2011		11/15/2018		850,000		3.853	%		3.700	%		99.767	%		652		2,100		847,248
11/18/2010		5/15/2021		850,000		4.289	%		4.125	%		99.260	%		3,104		3,116		843,780
4/19/2010		11/15/2020		700,000		5.708	%		5.625	%		99.891	%		348		2,316		697,336
10/9/2009		10/15/2019		700,000		5.967	%		5.875	%		99.931	%		180		1,725		698,095

			$	7,300,000										$	19,429	$	36,804	$	7,243,767

Equity


	Shares/Units
	Outstanding		Common Stock			Equivalent
	as of 9/30/2016		Equivalents			Value (3)
Common Stock		153,773		153,773	(4)	$	20,957,722
Common Operating Partnership Units		18,002		18,002	(5)		2,453,493
5.25% Series B Cumulative Redeemable Preferred Stock		80		—			200,000	(6)

Total Equity				171,775		$	23,611,215

Consolidated Debt						$	9,808,922
Add:
BXP’s share of unconsolidated joint venture debt (7)							350,225

Combined Debt (8)							10,159,147
Less:
Partners’ share of consolidated debt (9)							1,150,462

BXP’s Share of Combined Debt (8)						$	9,008,685

Consolidated Market Capitalization						$	33,420,137

BXP’s Share of Combined Market Capitalization (8)						$	32,619,900

(1)	All unsecured senior notes are rated A- (stable), BBB+ (stable) and Baa2 (positive) by S&P, Fitch and Moody’s, respectively.

(2)	Includes the impact of the cash settlement of certain forward-starting interest rate swap contracts that fixed the 10-year swap rate at a weighted-average rate of approximately 2.423% per annum on notional amounts aggregating $550.0 million.

(3)	Values based on September 30, 2016 closing price of $136.29 per share of common stock, except the shares of Series B Cumulative Redeemable Preferred Stock have been valued at the liquidation preference of $2,500.00 per share (see Note 6 below).

(4)	Includes 59,777 shares of restricted stock.

(5)

Includes 905,494 long-term incentive plan units (including 166,629 Outperformance Plan Units and 93,928 2013 MYLTIP Units), but excludes an aggregate of 1,314,993 2014, 2015 and 2016 MYLTIP Units because the performance periods for these MYLTIP Units have not ended and therefore none of such units have been earned.

(6)

On or after March 27, 2018, the Company, at its option, may redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per depositary share), plus all accrued and unpaid dividends. The Series B Preferred Stock is not redeemable by the holders, has no maturity date and is not convertible into or exchangeable for any other security of the Company or any of its affiliates.

(7)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(8)	For the Company’s definitions, see pages 47-48.

(9)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

LOGO

THIRD QUARTER 2016

DEBT ANALYSIS (1)

as of September 30, 2016

(dollars in thousands)

Debt Maturities and Principal Payments


	2016			2017			2018			2019			2020			Thereafter			Total
Floating Rate Debt:
Mortgage Notes Payable	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Unsecured Line of Credit		—			—			—			—			—			—			—

Total Floating Rate Debt	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Fixed Rate Debt:
767 Fifth Avenue (The GM Building) (60% ownership)	$	—		$	1,300,000		$	—		$	—		$	—		$	—		$	1,300,000	(2)
601 Lexington Avenue (55% ownership)		3,167			13,051			13,684			14,349			15,045			630,486			689,782
New Dominion Technology Park, Building One		—			2,878			3,100			3,340			3,598			22,906			35,822
University Place		413			1,725			1,849			1,981			2,123			1,500			9,591

Mortgage Notes Payable		3,580			1,317,654			18,633			19,670			20,766			654,892			2,035,195
Fair Value Interest Adjustment		11,140			33,830			—			—			—			—			44,970
Deferred Financing Costs, Net		(109	)		(629	)		(431	)		(431	)		(431	)		(427	)		(2,458	)

Mortgage Notes Payable, Net	$	14,611		$	1,350,855		$	18,202		$	19,239		$	20,335		$	654,465		$	2,077,707

Mezzanine Notes Payable	$	—		$	306,000		$	—		$	—		$	—		$	—		$	306,000
Fair Value Interest Adjustment		355			1,093			—			—			—			—			1,448

Mezzanine Notes Payable	$	355		$	307,093		$	—		$	—		$	—		$	—		$	307,448

Unsecured Senior Notes, Face Amount	$	—		$	—		$	850,000		$	700,000		$	700,000		$	5,050,000		$	7,300,000
Discount Amortization		(645	)		(2,643	)		(2,696	)		(2,503	)		(2,528	)		(8,414	)		(19,429	)
Deferred Financing Costs, Net		(1,547	)		(6,187	)		(6,019	)		(5,036	)		(4,510	)		(13,505	)		(36,804	)

Unsecured Senior Notes, Net	$	(2,192	)	$	(8,830	)	$	841,285		$	692,461		$	692,962		$	5,028,081		$	7,243,767

Outside Members’ Notes Payable	$	—		$	180,000		$	—		$	—		$	—		$	—		$	180,000

Total Fixed Rate Debt	$	12,774		$	1,829,118		$	859,487		$	711,700		$	713,297		$	5,682,546		$	9,808,922

Consolidated Debt	$	12,774		$	1,829,118		$	859,487		$	711,700		$	713,297		$	5,682,546		$	9,808,922

% of Consolidated Debt		0.13	%		18.65	%		8.76	%		7.26	%		7.27	%		57.93	%		100.00	%

Balloon Payments	$	—		$	1,786,000		$	850,000		$	700,000		$	700,000		$	5,683,554		$	9,719,554
Scheduled Principal Amortization	$	3,580		$	17,654		$	18,633		$	19,670		$	20,766		$	21,338		$	101,641
GAAP Weighted Average Floating Rate Debt (3) (4)		—			—			—			—			—			—			—

GAAP Weighted Average Fixed Rate Debt (3) (4)		5.03	%		3.04	%		3.89	%		5.96	%		5.70	%		3.94	%		4.06	%

Total GAAP Weighted Average Rate (3) (4)		5.03	%		3.04	%		3.89	%		5.96	%		5.70	%		3.94	%		4.06	%

Total Stated Weighted Average Rate (4)		4.99	%		5.96	%		3.77	%		5.87	%		5.63	%		3.86	%		4.50	%

Unsecured Line of Credit - Matures July 26, 2018


	Outstanding		Letters of		Remaining Capacity
Facility	at 9/30/2016		Credit		at 9/30/2016
$ 1,000,000	$	—	$	6,716	$	993,284

Unsecured and Secured Debt Analysis (4)


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Unsecured Debt		75.23	%		4.12	%		4.21	%		6.2
Secured Debt		24.77	%		5.64	%		3.61	%		2.4

Consolidated Debt		100.00	%		4.50	%		4.06	%		5.2

Floating and Fixed Rate Debt Analysis (4)


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Floating Rate Debt		—			—			—			—
Fixed Rate Debt		100.00	%		4.50	%		4.06	%		5.2

Consolidated Debt		100.00	%		4.50	%		4.06	%		5.2

Interest Rate Hedging Instruments

Weighted-Average

Notional Amount

10-Year Swap Rate

Effective Date

Termination Date

Forward-starting interest rate swaps (5)

450,000

2.619

June 1, 2017

June 1, 2027

(1)	Excludes unconsolidated joint ventures. For information on BXP’s unconsolidated joint venture debt, see page 17.

(2)	This property has a fair value interest adjustment that is shown on the Fair Value Interest Adjustment line.

(3)	The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, effects of hedging transactions and adjustments required to reflect loans at their fair values upon acquisition or consolidation.

(4)	Percentage of total debt, weighted average rates and weighted average maturities exclude the Outside Members’ Notes Payable because they are allocated to the Company’s partners through noncontrolling interests in property partnerships.

(5)	Represents forward interest rate swap contracts entered into by the Company’s 767 Fifth Partners LLC consolidated entity (the entity in which the Company has a 60% interest and that owns 767 Fifth Avenue (the GM Building) in New York City).

LOGO

THIRD QUARTER 2016

SENIOR UNSECURED DEBT COVENANT COMPLIANCE RATIOS

(dollars in thousands)

In the fourth quarter of 2002, the Company’s Operating Partnership (Boston Properties Limited Partnership) received investment grade ratings on its senior unsecured debt securities and thereafter issued unsecured notes. The notes were issued under an indenture, dated as of December 13, 2002, by and between Boston Properties Limited Partnership and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented from time to time (the “Indenture”), which, among other things, requires us to comply with the following limitations on incurrence of debt: Limitation on Outstanding Debt; Limitation on Secured Debt; Ratio of Annualized Consolidated EBITDA to Annualized Interest Expense; and Maintenance of Unencumbered Assets. Compliance with these restrictive covenants requires us to apply specialized terms the meanings of which are described in detail in our filings with the SEC, and to calculate ratios in the manner prescribed by the Indenture.

This section presents such ratios as of September 30, 2016 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the Indenture. This section also presents certain other indenture-related data that we believe assists investors in evaluating the Company’s unsecured debt securities.


			Senior Notes			Senior Notes
			Issued Prior to			Issued On or After
			October 9, 2009			October 9, 2009
			September 30, 2016
Total Assets:
Capitalized Property Value (1)			$	22,985,995		$	23,424,925
Cash and Cash Equivalents				419,323			419,323
Investments in Securities				23,022			23,022
Undeveloped Land, at Cost (including Joint Venture %)				290,594			290,594
Development in Process, at Cost (including Joint Venture %)				1,080,398			1,080,398

Total Assets			$	24,799,332		$	25,238,262

Unencumbered Assets			$	19,440,151		$	19,860,307

Consolidated Secured Debt (Fixed and Variable) (2)			$	2,035,195		$	2,035,195
Mezzanine Notes Payable (3)				306,000			306,000
Unconsolidated Joint Venture Debt (4)				351,397			351,397
Outside Members’ Notes Payable				180,000			180,000
Contingent Liabilities & Letters of Credit				14,032			14,032
Unsecured Debt (5)				7,300,000			7,300,000

Total Outstanding Debt			$	10,186,624		$	10,186,624

Consolidated EBITDA:
Income before Gains on Sales of Real Estate (per Consolidated Income Statement)			$	58,521		$	58,521
Subtract: Income from Unconsolidated Joint Ventures (per Consolidated Income Statement)				(1,464	)		(1,464	)
Subtract: Gains from Investments in Securities (per Consolidated Income Statement)				(976	)		(976	)
Add: Losses from Interest Rate Contracts (per Consolidated Income Statement)				140			140
Add: Losses from Early Extinguishments of Debt (per Consolidated Income Statement)				371			371
Add: Interest Expense (per Consolidated Income Statement)				104,641			104,641
Add: Depreciation and Amortization (per Consolidated Income Statement)				203,748			203,748
Add: Impairment Loss (per Consolidated Income Statement)				1,783			1,783

EBITDA				366,764			366,764
Add: BXP’s share of unconsolidated joint venture EBITDA				14,436			14,436

Consolidated EBITDA			$	381,200		$	381,200

Adjusted Interest Expense:
Interest Expense (per Consolidated Income Statement)			$	104,641		$	104,641
Add: BXP’s share of unconsolidated joint venture interest expense				4,025			4,025
Less: Amortization of financing costs (including BXP’s share of unconsolidated joint ventures)				(2,002	)		(2,002	)
Less: Interest expense funded by construction loan draws				(75	)		(75	)

Adjusted Interest Expense			$	106,589		$	106,589


	Test		Actual			Actual
Covenant Ratios and Related Data
Total Outstanding Debt/Total Assets		Less than 60%		41.1	%		40.4	%
Secured Debt/Total Assets		Less than 50%		10.9	%		10.7	%
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense)		Greater than 1.50x		3.58			3.58
Unencumbered Assets/ Unsecured Debt		Greater than 150%		266.3	%		272.1	%

Unencumbered Consolidated Property EBITDA (6)			$	323,398		$	323,398

Unencumbered Interest Coverage (Unencumbered Consolidated Property EBITDA to Unsecured Interest Expense)				4.59			4.59

% of Unencumbered Consolidated Property EBITDA to Consolidated EBITDA				84.8	%		84.8	%

# of in-service unencumbered properties				153			153

(1)

For senior notes issued prior to October 9, 2009, Capitalized Property Value is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.5% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. Capitalized Property Value for senior notes issued on or after October 9, 2009 is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.0% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP.

(2)	Excludes aggregate fair value interest adjustment of $44,970 and deferred financing costs, net of $2,458.

(3)	Excludes aggregate fair value interest adjustment of $1,448.

(4)	Excludes aggregate deferred financing costs, net of $1,172.

(5)	Excludes aggregate debt discount of $19,429 and deferred financing costs, net of $36,804.

(6)

Unencumbered Consolidated Property EBITDA is a non-GAAP financial measure equal to Consolidated EBITDA excluding corporate revenue and expenses, encumbered consolidated Property EBITDA, EBITDA from land and properties that have either been disposed of or not fully placed in-service and items that, in the Company’s view, are not representative of a property’s standard ongoing performance, such as termination income and other similar items. For the three months ended September 30, 2016, these excluded amounts were approximately $(17,072), $74,375, $(1,637) and $2,136, respectively.

LOGO

THIRD QUARTER 2016

UNCONSOLIDATED JOINT VENTURES (1)

as of September 30, 2016

(dollars in thousands)

Balance Sheet Information


							Mortgage/
							Construction
	BXP’s Nominal						Loans
Property	Ownership			Net Equity (2)			Payable, Net
540 Madison Avenue		60.00	%	$	69,602		$	71,796
Market Square North		50.00	%		(8,483	)		61,820
Metropolitan Square		51.00	%		9,552			84,965
901 New York Avenue		25.00	%		(10,898	)		55,882
Wisconsin Place (3)		33.33	%		42,073			—
Annapolis Junction (4)		50.00	%		21,075			44,380
500 North Capitol Street, N.W.		30.00	%		(3,395	)		31,382
Colorado Center		49.80	%		507,259			—
The Hub on Causeway (Phase 1)		50.00	%		33,820			—
1001 6th Street		50.00	%		42,541			—
Dock72		50.00	%		25,980			—
1265 Main Street		50.00	%		23,757			—

				$	752,883		$	350,225

Debt Maturities and Principal Payments by Property


Property	2016			2017			2018			2019			2020			Thereafter			Total
Metropolitan Square (51%)	$	340		$	1,410		$	1,493		$	1,582		$	80,327		$	—		$	85,152
540 Madison Avenue (60%)		—			—			72,000			—			—			—			72,000
Market Square North (50%)		279			1,148			1,205			1,265			58,091			—			61,988
901 New York Avenue (25%)		—			—			—			—			955			55,295			56,250
500 North Capitol Street, N.W. (30%)		—			—			—			—			—			31,500			31,500
Annapolis Junction Building One (50%)		70			279			19,519			—			—			—			19,868	(5)
Annapolis Junction Building Six (50%)		6,477			—			—			—			—			—			6,477
Annapolis Junction Building Seven (50%)		—			10,797			—			—			—			—			10,797	(6)
Annapolis Junction Building Eight (50%)		—			7,365			—			—			—			—			7,365	(7)

		7,166			20,999			94,217			2,847			139,373			86,795			351,397
Deferred Financing Costs, Net		(106	)		(359	)		(219	)		(156	)		(111	)		(221	)		(1,172	)

Mortgage/Construction Loans Payable, Net	$	7,060		$	20,640		$	93,998		$	2,691		$	139,262		$	86,574		$	350,225

GAAP Weighted Average Rate		3.07	%		2.84	%		2.30	%		5.15	%		5.42	%		3.87	%		4.00	%
% of Total Debt		2.02	%		5.89	%		26.84	%		0.77	%		39.76	%		24.72	%		100.00	%
Balloon Payments	$	6,477		$	18,162		$	91,472		$	—		$	136,880		$	81,932		$	334,923
Scheduled Amortization	$	689		$	2,837		$	2,745		$	2,847		$	2,493		$	4,863		$	16,474

Floating and Fixed Rate Debt Analysis


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Floating Rate Debt		33.17	%		2.09	%		2.28	%		1.4
Fixed Rate Debt		66.83	%		4.79	%		4.85	%		5.2

Total Debt		100.00	%		3.89	%		4.00	%		4.0

(1)	Amounts represent the Company’s share based on its ownership percentage.

(2)	As of September 30, 2016, certain investments with deficit balances aggregating ($22,776) have been reflected within Other Liabilities on the Company’s Consolidated Balance Sheet.

(3)	Represents the Company’s interest in the joint venture entity that owns the land, parking garage and infrastructure. The Company’s entity that owns 100% of the office component of the project is consolidated within the accounts of the Company.

(4)	Annapolis Junction includes four in-service properties and two undeveloped land parcels.

(5)

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. The loan has one, three-year extension option, subject to certain conditions including that no event of default exists or is ongoing.

(6)	Loan has one, one-year extension option, subject to certain conditions.

(7)	Loan has two, one-year extension options, subject to certain conditions.

LOGO

THIRD QUARTER 2016

UNCONSOLIDATED JOINT VENTURES (continued)

(unaudited and dollars in thousands)

Results of Operations

for the three months ended September 30, 2016


																			500 North																		Total
	540 Madison			Market Square			Metropolitan			901 New York			Wisconsin			Annapolis			Capitol			Colorado			The Hub on Causeway			1001						1265 Main			Unconsolidated
	Avenue			North			Square			Avenue			Place (1)			Junction (2)			Street, N.W.			Center			(Phase 1)			6th Street			Dock72			Street			Joint Ventures
REVENUE
Rental (3)	$	6,531		$	3,798		$	4,499		$	6,356		$	982		$	2,023		$	2,738		$	9,736		$	—		$	241		$	—		$	—		$	36,904
Operating recoveries		965			842			1,357			1,173			352			513			1,142			418			—			—			—			—			6,762
Straight-line rent		(56	)		1,085			1,986			509			—			41			311			1,354			—			—			—			—			5,230
Fair value lease revenue		(2	)		—			—			—			—			—			—			96			—			—			—			—			94
Lease termination fees		22			—			(10	)		—			—			—			—			—			—			—			—			—			12

Total revenue		7,460			5,725			7,832			8,038			1,334			2,577			4,191			11,604			—			241			—			—			49,002

EXPENSES
Operating		3,680			2,298			3,639			3,304			575			1,658			1,365			4,907			—			327			—			—			21,753

NET OPERATING INCOME/(LOSS)		3,780			3,427			4,193			4,734			759			919			2,826			6,697			—			(86	)		—			—			27,249
Interest		676			1,526			2,428			2,075			—			577			1,118			—			—			—			—			—			8,400
Depreciation and amortization		1,891			975			1,707			1,386			1,383			1,044			911			2,741			—			—			—			—			12,038

SUBTOTAL		2,567			2,501			4,135			3,461			1,383			1,621			2,029			2,741			—			—			—			—			20,438

NET INCOME/(LOSS)	$	1,213		$	926		$	58		$	1,273		$	(624	)	$	(702	)	$	797		$	3,956		$	—		$	(86	)	$	—		$	—		$	6,811

BXP’s nominal ownership percentage		60.00	%		50.00	%		51.00	%		25.00	%		33.33	%		50.00	%		30.00	%		49.80	%		50.00	%		50.00	%		50.00	%		50.00	%

BXP’s share of net income/(loss)	$	728		$	463		$	30		$	350	(4)	$	(207	)	$	(351	)	$	239		$	1,970		$	—		$	(43	)	$	—		$	—		$	3,179
Basis differential
Straight-line rent		—			—			—			—			—			—			—			732	(5)		—			—			—			—			732
Fair value lease revenue		1			—			—			—			—			—			—			462	(5)		—			—			—			—			463
Depreciation and amortization		171			(7	)		17			(5	)		(7	)		(7	)		(25	)		(3,047	)(5)		—			—			—			—			(2,910	)

Total basis differential (6)		172			(7	)		17			(5	)		(7	)		(7	)		(25	)		(1,853	)(5)		—			—			—			—			(1,715	)

Income/(loss) from unconsolidated joint ventures	$	900		$	456		$	47		$	345	(4)	$	(214	)	$	(358	)	$	214		$	117		$	—		$	(43	)	$	—		$	—		$	1,464
BXP’s share of depreciation & amortization		1,024			499			882			1,003	(4)		466			533			308			4,413			—			—			—			—			9,128

BXP’s share of Funds from Operations (FFO)	$	1,924		$	955		$	929		$	1,348		$	252		$	175		$	522		$	4,530		$	—		$	(43	)	$	—		$	—		$	10,592

BXP’s share of interest expense	$	406		$	763		$	1,238		$	994	(4)	$	—		$	289		$	335		$	—		$	—		$	—		$	—		$	—		$	4,025

BXP’s share of fair value interest adjustment	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

BXP’s share of amortization of financing costs	$	31		$	11		$	13		$	21		$	—		$	33		$	4		$	—		$	—		$	—		$	—		$	—		$	113

BXP’s share of capitalized interest	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	172		$	—		$	119		$	125		$	416

BXP’s share of non-cash termination income adjustment (fair value lease amounts)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

BXP’s share of revenue (7) (8)	$	4,476		$	2,863		$	3,994		$	3,852	(4)	$	445		$	1,289		$	1,257		$	6,974		$	—		$	121		$	—		$	—		$	25,271
BXP’s share of operating expenses		2,208			1,149			1,856			1,583	(4)		192			829			410			2,444						164									10,835

BXP’s share of net operating income/(loss) (7) (8)		2,268			1,714			2,138			2,269	(4)		253			460			847			4,530			—			(43	)		—			—			14,436
Less:
BXP’s share of lease termination fees		13			—			(5	)		—	(4)		—			—			—			—			—			—			—			—			8
BXP’s share of straight-line rent		(34	)		543			1,013			244	(4)		—			21			93			1,405			—			—			—			—			3,285
BXP’s share of fair value lease revenue		(1	)		—			—			—	(4)		—			—			—			512			—			—			—			—			511
Add:
BXP’s share of lease transaction costs that qualify as rent inducements		—			—			15			—	(4)		—			—			—			—			—			—			—			—			15

BXP’s share of net operating income/(loss) (excluding lease termination fees) - cash basis (7) (8)	$	2,290		$	1,171		$	1,145		$	2,025	(4)	$	253		$	439		$	754		$	2,613		$	—		$	(43	)	$	—		$	—		$	10,647

(1)	Represents the Company’s interest in the joint venture entity that owns the land, parking garage and infrastructure. The Company’s entity that owns 100% of the office component of the project is consolidated within the accounts of the Company.

(2)	Annapolis Junction includes four properties in service and two undeveloped land parcels.

(3)	Includes approximately $61 of management services income and approximately $34 of interest and other income.

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

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

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

(7)	Includes the Company’s share of approximately $3,179 of operating recoveries.

(8)	Includes the Company’s share of approximately $36 of management services income and approximately $16 of interest and other income.

LOGO

THIRD QUARTER 2016

CONSOLIDATED JOINT VENTURES

(unaudited and in thousands)

Balance Sheets

as of September 30, 2016


BXP’s ownership percentage		60.00	%		55.00	%		95.00	%


				Norges Joint Ventures
	767 Fifth Avenue (The GM Building)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office			Salesforce Tower			Total Consolidated Joint Ventures
ASSETS
Real estate, net	$	3,436,843		$	2,154,339	(1)	$	668,376		$	6,259,558
Cash and cash held in escrows		82,671			138,898			27,446			249,015
Other assets		123,083			191,954			344			315,381

Total assets	$	3,642,597		$	2,485,191		$	696,166		$	6,823,954

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	1,344,772		$	687,942		$	—		$	2,032,714
Mezzanine notes payable		307,448			—			—			307,448
Outside members’ notes payable		180,000			—			—			180,000
Accrued interest on related party notes		144,825			—			—			144,825
Other liabilities		183,641			60,628			90,328			334,597

Total liabilities		2,160,686			748,570			90,328			2,999,584

Equity:
Boston Properties, Inc.		1,084,393	(2)		634,079			582,146			2,300,618
Noncontrolling interests		397,518			1,102,542			23,692			1,523,752	(3)

Total equity		1,481,911			1,736,621			605,838			3,824,370

Total liabilities and equity	$	3,642,597		$	2,485,191		$	696,166		$	6,823,954

Partners’ share of mortgage notes payable, net	$	537,909		$	309,574		$	—		$	847,483
Partners’ share of mezzanine notes payable		122,979			—			—			122,979
Outside members’ notes payable		180,000			—			—			180,000

Partners’ share of consolidated debt	$	840,888		$	309,574		$	—		$	1,150,462

(1)

During the three months ended September 30, 2016, the consolidated entity recognized approximately $47.6 million of depreciation expense associated with the acceleration of depreciation on the assets being removed from service as part of the redevelopment of the low-rise portion of 601 Lexington Avenue.

(2)	Amount is adjusted for related party notes and accrued interest that are allocated to BXP’s partners through noncontrolling interests in property partnerships.

(3)	Amount excludes preferred shareholders’ capital of approximately $0.1 million.

LOGO

THIRD QUARTER 2016

CONSOLIDATED JOINT VENTURES (continued)

(unaudited and in thousands)

Income Statements

for the three months ended September 30, 2016


				Norges Joint Ventures
	767 Fifth Avenue (The GM Building)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office			Salesforce Tower			Total Consolidated Joint Ventures
REVENUE
Rental	$	68,619		$	85,969		$	—		$	154,588
Straight-line rent		1,717			44			—			1,761
Fair value lease revenue		3,466			1,552			—			5,018
Termination income		—			(935	)		—			(935	)
Parking and other		624			1,417			—			2,041

Total revenue		74,426			88,047			—			162,473

EXPENSES
Operating		29,212			34,302	(1)		—			63,514

NET OPERATING INCOME		45,214			53,745			—			98,959
Management services income		(375	)		(651	)		—			(1,026	)
Interest and other income		(90	)		(168	)		—			(258	)
Interest expense		24,156			8,243			—			32,399
Interest expense - outside members’ notes		8,694			—			—			8,694
Fair value interest adjustment		(11,422	)		—			—			(11,422	)
Depreciation and amortization		24,571			69,173	(1)		—			93,744
Other		—			—			—			—

SUBTOTAL		45,534			76,597			—			122,131

NET INCOME/(LOSS)	$	(320	)	$	(22,852	)	$	—		$	(23,172	)

BXP’s ownership percentage		60.00	%		55.00	%		95.00	%

Partners’ share of NOI (2)	$	18,086		$	24,185		$	—		$	42,271

BXP’s share of NOI	$	27,128		$	29,560		$	—		$	56,688

Unearned portion of capitalized fees (3)	$	189		$	61		$	—		$	250

Reconciliation of partners’ noncontrolling interest (NCI):
Net income/(loss)	$	(320	)	$	(22,852	)	$	—		$	(23,172	)
Add depreciation & amortization - BXP’s basis difference		83			35			—			118
Special allocation - BXP’s basis		—			(482	)		—			(482	)
Add partners’ share of outside members’ loan interest		8,694			—			—			8,694

Net income/(loss) before interest allocation	$	8,457		$	(23,299	)	$	—		$	(14,842	)

Partners’ share of net income before interest allocation (2)	$	3,383		$	(10,485	)	$	—		$	(7,102	)
Partners’ share of outside members’ loan interest (2)		(8,694	)		—			—			(8,694	)
Allocation of management and other fees to non-controlling partners (2)		(625	)		(801	)		—			(1,426	)
Accretion and adjustments (2)		—			—			(3	)		(3	)

Partners’ NCI (2)	$	(5,936	)	$	(11,286	)	$	(3	)	$	(17,225	)

Reconciliation of partners’ share of FFO:
Net income/(loss)	$	(320	)	$	(22,852	)	$	—		$	(23,172	)
Add depreciation & amortization		24,571			69,173			—			93,744

Entity FFO	$	24,251		$	46,321		$	—		$	70,572

Partners’ NCI (2)	$	(5,936	)	$	(11,286	)	$	(3	)	$	(17,225	)
Partners’ share of depreciation and amortization after BXP’s basis differential (2)		9,795			31,112			—			40,907

Partners’ share FFO (2)	$	3,859		$	19,826		$	(3	)	$	23,682

Reconciliation of BXP’s share of FFO:
BXP’s share of net income/(loss) adjusted for partners’ NCI	$	5,616		$	(11,566	)	$	3		$	(5,947	)
Depreciation & amortization - BXP’s basis difference		83			35			—			118
BXP’s share of depreciation & amortization		14,693			38,026			—			52,719

BXP’s share of FFO	$	20,392		$	26,495		$	3		$	46,890

Partners’ share of select items:
Partners’ share of revenue (2)	$	29,770		$	39,621		$	—		$	69,391

Partners’ share of interest expense (2)	$	18,356		$	3,673		$	—		$	22,029

Partners’ share of fair value interest adjustment (2)	$	(4,569	)	$	—		$	—		$	(4,569	)

Partners’ share of amortization of financing costs (2)	$	2		$	36		$	—		$	38

Partners’ share of capitalized interest (2)	$	—		$	21		$	—		$	21

Partners’ share of non-cash termination income adjustment (fair value lease amounts) (2)	$	—		$	—		$	—		$	—

Reconciliation of Partners’ share of NOI (2):
Rental revenue	$	29,770		$	39,621		$	—		$	69,391
Less: Lease termination fees		—			(421	)		—			(421	)

Rental revenue (excluding lease termination fees)		29,770			40,042			—			69,812
Operating expenses		11,684			15,436			—			27,120

NOI (excluding lease termination fees)	$	18,086		$	24,606		$	—		$	42,692

Rental revenue (excluding lease termination fees)	$	29,770		$	40,042			—		$	69,812
Less: Straight-line rent		687			20			—			707
Fair value lease revenue		1,386			698			—			2,084
Add: Lease transaction costs that qualify as rent inducements (4)		—			—			—			—

Subtotal		27,697			39,324			—			67,021
Less: Operating expenses		11,684			15,436			—			27,120
Straight-line ground rent expense		—			—			—			—

NOI (excluding lease termination fees) - cash basis	$	16,013		$	23,888		$	—		$	39,901

(1)

During the three months ended September 30, 2016, the consolidated entity recognized approximately $0.8 million of demolition costs and approximately $47.6 million of depreciation expense associated with the acceleration of depreciation on the assets being removed from service as part of the redevelopment of the low-rise portion of 601 Lexington Avenue.

(2)	Amounts represent the partners’ share based on their respective ownership percentage.

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

(4)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Leasing transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12.

LOGO

THIRD QUARTER 2016

RECONCILIATION OF NET INCOME TO NET OPERATING INCOME (NOI)

(in thousands)


	For the three months ended
	September 30, 2016			September 30, 2015
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	184,082
Preferred dividends		2,589			2,647

Net income attributable to Boston Properties, Inc.		79,342			186,729
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		9,387			21,302
Noncontrolling interest in property partnerships (1)		(17,225	)		115,240

Net income		71,504			323,271
Gains on sales of real estate		(12,983	)		(199,479	)

Income before gains on sales of real estate		58,521			123,792
Add:
Losses from interest rate contracts		140			—
Losses from early extinguishments of debt		371			—
Interest expense		104,641			108,727
Depreciation and amortization		203,748			153,015
Impairment loss		1,783			—
Transaction costs		249			254
General and administrative expense		25,165			20,944
Subtract:
Gains (losses) from investments in securities		(976	)		1,515
Interest and other income		(3,628	)		(3,637	)
Income from unconsolidated joint ventures		(1,464	)		(2,647	)
Development and management services income		(6,364	)		(5,912	)

Net Operating Income (NOI)		382,186			396,051
Add:
BXP’s share of NOI from unconsolidated joint ventures		14,436	(2)		10,827

Combined NOI		396,622			406,878
Subtract:
Partners’ share of NOI from consolidated joint ventures		(42,271	)(3)		(55,450	)

BXP’s Share of Combined NOI		354,351			351,428
Subtract:
Lease termination fees		170			(9,589	)
BXP’s share of lease termination fees from unconsolidated joint ventures		(8	)(2)		—
Add:
Partners’ share of lease termination fees from consolidated joint ventures		(421	)(3)		1,829

BXP’s Share of Combined NOI (excluding lease termination fees)	$	354,092		$	343,668

Net Operating Income (NOI)	$	382,186		$	396,051
Subtract:
NOI from non Same Properties (excluding lease termination fees) (4)(5)		(14,312	)		(15,562	)
Lease termination fees		170			(9,589	)

Same Property NOI (excluding lease termination fees)		368,044			370,900
Add:
BXP’s share of NOI from unconsolidated joint ventures		14,436	(2)		10,827
Subtract:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (4)		(4,862	)		(95	)
BXP’s share of lease termination fees from unconsolidated joint ventures		(8	)(2)		—

Combined Same Property NOI (excluding lease termination fees)		377,610			381,632
Subtract:
Partners’ share of NOI from consolidated joint ventures		(42,271	)(3)		(55,450	)
Add:
Partners’ share of lease termination fees from consolidated joint ventures		(421	)(3)		1,829
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding lease termination fees) (4)(5)		(460	)(3)		5,323

BXP’s Share of Combined Same Property NOI (excluding lease termination fees)	$	334,458		$	333,334

(1)

These partnerships include 505 9th Street, N.W. in Washington, DC, which was sold on September 18, 2015, Fountain Square in Reston, VA, of which the Company acquired the remaining 50% interest on September 15, 2015, 767 Fifth Avenue (The GM Building), 601 Lexington Avenue and Times Square Tower in New York City, Salesforce Tower in San Francisco, CA and 100 Federal Street and Atlantic Wharf Office Building in Boston, MA. For additional information, refer to page 10.

(2)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

(3)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(4)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. Non Same Properties include properties that were sold prior to September 30, 2016 and therefore are no longer a part of the Company’s property portfolio.

(5)

During the three months ended September 30, 2016, approximately 13% of 601 Lexington Avenue complex was removed from the in-service portfolio as part of a planned redevelopment. As a result, the partners’ share of NOI for the three months ended September 30, 2015, related to the planned redevelopment at 601 Lexington Avenue, is included in Partners’ share of NOI from non Same Properties from consolidated joint ventures.

LOGO

THIRD QUARTER 2016

RECONCILIATION OF NET INCOME TO NET OPERATING INCOME (NOI) - CASH BASIS

(in thousands)


	For the three months ended
	September 30, 2016			September 30, 2015
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	184,082
Preferred dividends		2,589			2,647

Net income attributable to Boston Properties, Inc.		79,342			186,729
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		9,387			21,302
Noncontrolling interest in property partnerships (1)		(17,225	)		115,240

Net income		71,504			323,271
Gains on sales of real estate		(12,983	)		(199,479	)

Income before gains on sales of real estate		58,521			123,792
Add:
Losses from interest rate contracts		140			—
Losses from early extinguishments of debt		371			—
Interest expense		104,641			108,727
Depreciation and amortization		203,748			153,015
Impairment loss		1,783			—
Transaction costs		249			254
General and administrative expense		25,165			20,944
Subtract:
Gains (losses) from investments in securities		(976	)		1,515
Interest and other income		(3,628	)		(3,637	)
Income from unconsolidated joint ventures		(1,464	)		(2,647	)
Development and management services income		(6,364	)		(5,912	)

Net Operating Income (NOI)		382,186			396,051
Subtract:
Straight-line rent		(11,107	)		(15,992	)
Fair value lease revenue		(6,547	)		(8,838	)
Add:
Straight-line ground rent expense adjustment (2)		1,031			891
Lease transaction costs that qualify as rent inducements (3)		861			1,911

NOI - cash basis		366,424		$	374,023
Subtract:
NOI (excluding lease termination fees) - cash basis from non Same Properties (4)(7)		(12,000	)		(13,240	)
Lease termination fees		170			(9,589	)

Same Property NOI (excluding lease termination fees) - cash basis		354,594			351,194
Add:
BXP’s share of NOI - cash basis from unconsolidated joint ventures		10,655	(5)		11,145
Subtract:
BXP’s share of NOI (excluding lease termination fees) - cash basis from non Same Properties from unconsolidated joint ventures (4)		(2,924	)		(899	)
BXP’s share of lease termination fees from unconsolidated joint ventures		(8	)(5)		—

Combined Same Property NOI (excluding lease termination fees) - cash basis		362,317			361,440
Subtract:
Partners’ share of NOI - cash basis from consolidated joint ventures		(39,480	)(6)		(49,726	)
Add:
Partners’ share of lease termination fees from consolidated joint ventures		(421	)(6)		1,829
Partners’ share of NOI (excluding lease termination fees) - cash basis from non Same Properties from consolidated joint ventures (4)(7)		(231	)(6)		5,290

BXP’s Share of Combined Same Property NOI (excluding lease termination fees) - cash basis	$	322,185		$	318,833

(1)

(2)	For additional information, refer to page 13.

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 13.

(4)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. Non Same Properties include dispositions that occurred prior to September 30, 2016 and therefore are no longer a part of the Company’s property portfolio.

(5)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

(6)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(7)

During the three months ended September 30, 2016, approximately 13% of 601 Lexington Avenue complex was removed from the in-service portfolio as part of a planned redevelopment. As a result, the partners’s share of NOI—cash basis for the three months ended September 30, 2015, related to the planned redevelopment at 601 Lexington Avenue, is included in NOI—cash basis from non Same Properties from Partners’ share of consolidated joint ventures.

LOGO

THIRD QUARTER 2016

SAME PROPERTY NET OPERATING INCOME (NOI) BY REPORTABLE SEGMENT

(dollars in thousands)


	Office (1)												Hotel & Residential
	For the three months ended												For the three months ended
	30-Sep-16			30-Sep-15			$ Change			% Change			30-Sep-16		30-Sep-15		$ Change			% Change
Rental Revenue	$	580,778		$	585,352								$	16,726	$	16,730
Less: Lease termination fees		836			10,133									—		—

Rental revenue (excluding lease termination fees) (2)		579,942			575,219		$	4,723			0.8	%		16,726		16,730	$	(4	)		(0.0	)%
Less: Operating expenses and real estate taxes		218,906			211,390			7,516			3.6	%		9,718		9,659		59			0.6	%

NOI (excluding lease termination fees) (3)	$	361,036		$	363,829		$	(2,793	)		(0.8	)%	$	7,008	$	7,071	$	(63	)		(0.9	)%

Rental revenue (excluding lease termination fees)	$	579,942		$	575,219								$	16,726	$	16,730
Less: Straight-line rent and fair value lease revenue		15,160			21,946			(6,786	)		(30.9	)%		15		20		(5	)		(25.0	)%
Add: Lease transaction costs that qualify as rent inducements (4)		694			1,369			(675	)		(49.3	)%		—		—		—			—

Subtotal		565,476			554,642			10,834			2.0	%		16,711		16,710		1			0.0	%
Less: Operating expenses and real estate taxes		218,906			211,390			7,516			3.6	%		9,718		9,659		59			0.6	%
Add: Straight-line ground rent expense (5)		1,031			891			140			15.7	%		—		—		—			—

NOI (excluding lease termination fees) - cash basis	$	347,601		$	344,143		$	3,458			1.0	%	$	6,993	$	7,051	$	(58	)		(0.8	)%


	Consolidated Total (1)												Unconsolidated Joint Ventures (BXP’s Share)
	For the three months ended												For the three months ended
	30-Sep-16			30-Sep-15			$ Change			% Change			30-Sep-16		30-Sep-15		$ Change			% Change
Rental Revenue	$	597,504		$	602,082								$	17,720	$	18,563
Less: Lease termination fees		836			10,133									8		—

Rental revenue (excluding lease termination fees) (2)		596,668			591,949		$	4,719			0.8	%		17,712		18,563	$	(851	)		(4.6	)%
Less: Operating expenses and real estate taxes		228,624			221,049			7,575			3.4	%		8,146		7,831		315			4.0	%

NOI (excluding lease termination fees) (3)	$	368,044		$	370,900		$	(2,856	)		(0.8	)%	$	9,566	$	10,732	$	(1,166	)		(10.9	)%

Rental revenue (excluding lease termination fees)	$	596,668		$	591,949								$	17,712	$	18,563
Less: Straight-line rent and fair value lease revenue		15,175			21,966			(6,791	)		(30.9	)%		1,858		633		1,225			193.5	%
Add: Lease transaction costs that qualify as rent inducements (4)		694			1,369			(675	)		(49.3	)%		15		147		(132	)		(89.8	)%

Subtotal		582,187			571,352			10,835			1.9	%		15,869		18,077		(2,208	)		(12.2	)%
Less: Operating expenses and real estate taxes		228,624			221,049			7,575			3.4	%		8,146		7,831		315			4.0	%
Add: Straight-line ground rent expense (5)		1,031			891			140			15.7	%		—		—		—			—

NOI (excluding lease termination fees) - cash basis	$	354,594	(6)	$	351,194	(6)	$	3,400			1.0	%	$	7,723	$	10,246	$	(2,523	)		(24.6	)%


	Combined												BXP’s Share of Combined (7)
	For the three months ended												For the three months ended
	30-Sep-16			30-Sep-15			$ Change			% Change			30-Sep-16		30-Sep-15		$ Change			% Change
Rental Revenue	$	615,224		$	620,645								$	545,881	$	544,508
Less: Lease termination fees		844			10,133									812		8,549

Rental revenue (excluding lease termination fees) (2)		614,380			610,512		$	3,868			0.6	%		545,069		535,959	$	9,110			1.7	%
Less: Operating expenses and real estate taxes		236,770			228,880			7,890			3.4	%		210,611		202,625		7,986			3.9	%

NOI (excluding lease termination fees) (3)	$	377,610		$	381,632		$	(4,022	)		(1.1	)%	$	334,458	$	333,334	$	1,124			0.3	%

Rental revenue (excluding lease termination fees)	$	614,380		$	610,512								$	545,069	$	535,959
Less: Straight-line rent and fair value lease revenue		17,033		$	22,599			(5,566	)		(24.6	)%		14,013		16,494		(2,481	)		(15.0	)%
Add: Lease transaction costs that qualify as rent inducements (4)		709		$	1,516			(807	)		(53.2	)%		709		1,103		(394	)		(35.7	)%

Subtotal		598,056		$	589,429			8,627			1.5	%		531,765		520,568		11,197			2.2	%
Less: Operating expenses and real estate taxes		236,770		$	228,880			7,890			3.4	%		210,611		202,625		7,986			3.9	%
Add: Straight-line ground rent expense (5)		1,031		$	891			140			15.7	%		1,031		890		141			15.8	%

NOI (excluding lease termination fees) - cash basis (6)	$	362,317		$	361,440		$	877			0.2	%	$	322,185	$	318,833	$	3,352			1.1	%

(1)

Includes 100% share of consolidated joint ventures. Same Property consolidated joint venture properties includes Fountain Square in Reston, VA, of which the Company acquired the remaining 50% interest on September 15, 2015, 767 Fifth Avenue (The GM Building), 601 Lexington Avenue (excluding the low-rise portion that is under redevelopment) and Times Square Tower in New York City and 100 Federal Street and Atlantic Wharf Office Building in Boston, MA.

(2)

Rental Revenue (excluding lease termination fees) is used internally by the Company as a performance measure and provides investors with additional information regarding operating performance at a property level that allows them to compare operating performance between periods without taking into account lease termination fees, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s properties.

(3)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding lease termination fees), see page 21. For disclosures relating to the Company’s use of NOI, see page 48.

(4)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 13.

(5)	For additional information, see page 13.

(6)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to NOI (excluding lease termination fees)—cash basis, see page 22. For disclosures relating to the Company’s use of NOI, see page 48.

(7)	See page 20 for the partners’ share of each line item.

LOGO

THIRD QUARTER 2016

RESIDENTIAL and HOTEL PERFORMANCE

Rental Rates and Occupancy


	Third Quarter						Percent			YTD						Percent
	2016			2015			Change			2016			2015			Change
*The Avant at Reston Town Center (359 units)*
*Reston, VA*
Average Monthly Rental Rate (1)	$	2,429		$	2,264			7.3	%	$	2,375		$	2,257			5.2	%
Average Rental Rate Per Occupied Square Foot (1)	$	2.68		$	2.45			9.4	%	$	2.61		$	2.44			7.0	%
Average Physical Occupancy (1) (2)		95.6	%		94.4	%		1.3	%		94.2	%		89.5	%		5.3	%
Average Economic Occupancy (2)		95.6	%		93.9	%		1.8	%		94.1	%		87.6	%		7.4	%
*The Lofts at Atlantic Wharf (86 units)*
*Boston, MA*
Average Monthly Rental Rate (3)	$	4,146		$	4,054			2.3	%	$	4,150		$	4,027			3.1	%
Average Rental Rate Per Occupied Square Foot (3)	$	4.63		$	4.53			2.2	%	$	4.59		$	4.49			2.2	%
Average Physical Occupancy (2) (3)		97.3	%		95.4	%		2.0	%		96.3	%		96.8	%		(0.5	)%
Average Economic Occupancy (2)		97.7	%		97.1	%		0.6	%		97.3	%		97.6	%		(0.3	)%
*Boston Marriott Cambridge (433 rooms)*
*Cambridge, MA*
Average Occupancy		87.2	%		86.8	%		0.5	%		82.2	%		84.1	%		(2.3	)%
Average Daily Rate	$	279.03		$	288.43			(3.3	)%	$	269.10		$	271.88			(1.0	)%
Revenue per available room	$	243.19		$	250.41			(2.9	)%	$	221.28		$	294.63			(24.9	)%

Net Operating Income (dollars in thousands) (4)


	Residential									Hotel
	Third Quarter						Percent			Third Quarter				Percent
	2016			2015			Change			2016		2015		Change
Rental Revenue	$	4,372	(5)	$	4,111	(5)		6.3	%	$	12,354	$	12,619		(2.1	)%
Less: Operating expenses and real estate taxes		2,223	(6)		1,534			44.9	%		8,118		8,125		(0.1	)%

Net Operating Income	$	2,149	(5)	$	2,577	(5)		(16.6	)%	$	4,236	$	4,494		(5.7	)%

Rental Revenue	$	4,372	(5)	$	4,111	(5)				$	12,354	$	12,619
Less: Straight-line rent and fair value lease revenue		14			19			(26.3	)%		1		1		—

Subtotal		4,358			4,092			6.5	%		12,353		12,618		(2.1	)%
Less: Operating expenses and real estate taxes		2,223	(6)		1,534			44.9	%		8,118		8,125		(0.1	)%
Add: Straight-line ground rent expense		—			—			—			—		—		—

Net Operating Income - cash basis	$	2,135	(5)	$	2,558	(5)		(16.5	)%	$	4,235	$	4,493		(5.7	)%

(1)	Excludes 26,179 square feet of retail space which is 100% leased.

(2)	For disclosures related to the Company’s definition of Average Physical and Average Economic Occupancy, see page 47.

(3)	Excludes 9,617 square feet of retail space which is 100% leased.

(4)	For disclosures related to the Company’s definition of Net Operating Income, see page 48.

(5)	Includes 35,796 square feet of retail space, which had revenue of approximately $672 and $618 for the three months ended September 30, 2016 and September 30, 2015, respectively.

(6)	Includes approximately $623 of demolition costs related to the Cambridge Residential / 88 Ames Street development project.

LOGO

THIRD QUARTER 2016

HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS and LEASING COMMISSIONS

(dollars in thousands, except PSF amounts)

Historical Capital Expenditures


	Q3 2016			Q2 2016			Q1 2016			2015			2014			2013
Maintenance capital expenditures	$	11,889		$	9,654		$	21,961		$	56,383		$	45,618		$	48,353
Partners’ share of maintenance capital expenditures from consolidated joint ventures		(377	)		(422	)		(573	)		(5,565	)		(4,377	)		(766	)
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures		283			112			197			1,653			1,369			3,439
Hotel improvements, equipment upgrades and replacements		2,137			434			360			2,430			2,894			2,070
Planned capital expenditures associated with acquisition properties		—			—			87			6,914			14,652			21,041
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated joint ventures		—			—			—			(845	)		(1,565	)		(535	)
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated joint ventures		92			—			—			—			—			0
Repositioning capital expenditures		7,932	(1)		12,461	(1)		13,007	(1)		9,744			—			—
Partners’ share of repositioning capital expenditures from consolidated joint ventures		—			—			—			—			—			—
BXP’s share of repositioning capital expenditures from unconsolidated joint ventures		216	(2)		14	(2)		8	(2)		76			—			—

	$	22,172		$	22,253		$	35,047		$	70,790		$	58,591		$	73,602

2nd Generation Tenant Improvements and Leasing Commissions (3)


	Q3 2016		Q2 2016		Q1 2016		2015		2014		2013
Square feet		1,177,378		1,304,751		1,376,563		5,204,123		3,936,046		3,610,088

Tenant improvements and lease commissions PSF	$	59.26	$	70.13	$	48.87	$	45.40	$	29.60	$	36.99

(1)	Includes capital expenditures related to the repositioning activities designed to enhance revenue potential at 1330 Connecticut Avenue in Washington, DC, Prudential Center Retail Improvements in Boston, MA, and 399 Park Avenue in New York City.

(2)	Includes capital expenditures related to the repositioning activities designed to enhance revenue potential at Metropolitan Square in Washington, DC.

(3)	Includes 100% of unconsolidated joint ventures.

LOGO

THIRD QUARTER 2016

PORTFOLIO OVERVIEW

for the three months ended September 30, 2016

(dollars in thousands)

Rentable Square Footage of In-Service Properties by Location and Unit Type (1) (2)


Geographic Area	Office			Retail			Residential			Hotel			Total
Boston		12,789,730			869,227			77,480			330,000			14,066,437
New York		11,184,690			339,936			—			—			11,524,626
San Francisco and Los Angeles		6,847,982			348,946			—			—			7,196,928
Washington, DC		9,898,661			689,563			329,168			—			10,917,392

Total		40,721,063			2,247,672			406,648			330,000			43,705,383

% of Total		93.2	%		5.1	%		0.9	%		0.8	%		100.0	%

Rentable Square Footage and Rental Revenue of In-Service Properties by Unit Type (1)(2)(3)


						Partners’ Share			BXP’s Share of
						of Revenue from			Revenue from
			Consolidated			Consolidated			Unconsolidated
Unit Type	Square Feet		Revenue			Joint Ventures (4)			Joint Ventures (5)		Total		% of Total
Office		40,721,063	$	451,606		$	(51,036	)	$	18,862	$	419,432		85.4	%
Retail		2,247,672		34,244			(5,067	)		909		30,086		6.1	%
Residential		406,648		3,529			—			—		3,529		0.7	%
Hotel		330,000		12,262	(6)		—			—		12,262		2.5	%
Parking and other		N/A		24,638	(7)		(887	)		2,269		26,020		5.3	%

Total		43,705,383	$	526,279		$	(56,990	)	$	22,040	$	491,329		100.0	%

Rentable Square Footage of In-Service Same Properties by Unit Type (1)(2)(8)


Same Properties	Office			Retail			Residential			Hotel			Total
Square Feet		38,039,279			2,141,520			406,648			330,000			40,917,447
% of Properties In-Service		93.4	%		95.3	%		100.0	%		100.0	%		93.6	%

Percentage of BXP’s Share of Combined Net Operating Income (excluding lease termination fees) by Location and Type of Property (1) (9)


Geographic Area	Office			Residential			Hotel			Total
Boston		29.3	%		0.2	%		1.2	%		30.7	%
New York		31.2	%		—			—			31.2	%
San Francisco and Los Angeles		16.5	%		—			—			16.5	%
Washington, DC		21.0	%		0.6	%		—			21.6	%

Total		98.0	%		0.8	%		1.2	%		100.0	%


Geographic Area				CBD			Suburban			Total
Boston					24.1	%		6.6	%		30.7	%
New York					28.7	%		2.5	%		31.2	%
San Francisco and Los Angeles					13.2	%		3.3	%		16.5	%
Washington, DC					9.4	%		12.2	%		21.6	%

Total					75.4	%		24.6	%		100.0	%

(1)	For the definition of In-Service Properties and related disclosures, see page 48.

(2)	Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 27-29.

(3)	Excludes recoveries from tenants.

(4)	For additional information, see page 20.

(5)	Represents the Company’s share. For additional information, see page 18.

(6)	Excludes approximately $67 of base rent from retail tenants which is included in Retail above and approximately $25 of recoveries from tenants.

(7)	Includes approximately $1,700 of other income.

(8)	Pages 27-29 indicate by footnote the properties which are not included as part of Same Properties.

(9)

BXP’s Share of Combined Net Operating Income (NOI) (excluding lease termination fees) is a non-GAAP financial measure. For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of Combined NOI (excluding lease termination fees), see page 21. For disclosures relating to the Company’s use of BXP’s Share of Combined NOI (excluding lease termination fees), see pages 47-48.

LOGO

THIRD QUARTER 2016

IN-SERVICE PROPERTY LISTING

as of September 30, 2016


		Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)		Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
Boston
Office
	200 Clarendon Street	CBD Boston MA		1		1,746,151		80.2	%	$	63.94		N		CBD
	100 Federal Street (55% ownership)	CBD Boston MA		1		1,273,968		85.8	%		51.57		N		CBD
	800 Boylston Street - The Prudential Center	CBD Boston MA		1		1,229,384		93.1	%		59.87		N		CBD
	111 Huntington Avenue - The Prudential Center	CBD Boston MA		1		860,455		97.1	%		63.30		N		CBD
	Atlantic Wharf Office (55% ownership)	CBD Boston MA		1		793,827		100.0	%		67.94		N		CBD
	101 Huntington Avenue - The Prudential Center	CBD Boston MA		1		505,583		96.9	%		48.07		N		CBD
(3)	Prudential Center (retail shops)	CBD Boston MA		1		491,399		97.4	%		81.61		N		CBD
(3)	Star Market at the Prudential Center	CBD Boston MA		1		57,235		100.0	%		54.37		N		CBD

				8		6,958,002		90.4	%	$	61.51

	355 Main Street	East Cambridge MA		1		265,342		99.7	%	$	69.98		N		CBD
	90 Broadway	East Cambridge MA		1		223,771		100.0	%		51.40		N		CBD
	255 Main Street	East Cambridge MA		1		215,629		100.0	%		55.53		N		CBD
	300 Binney Street	East Cambridge MA		1		195,191		100.0	%		53.49		N		CBD
	150 Broadway	East Cambridge MA		1		177,226		100.0	%		47.07		N		CBD
	105 Broadway	East Cambridge MA		1		152,664		100.0	%		60.71		N		CBD
	325 Main Street	East Cambridge MA		1		115,361		100.0	%		46.89		N		CBD
	145 Broadway	East Cambridge MA		1		79,616		100.0	%		46.38		N		CBD
	250 Binney Street	East Cambridge MA		1		67,362		100.0	%		42.75		N		CBD
	University Place	Mid-Cambridge MA		1		195,282		100.0	%		47.26		Y		CBD

				10		1,687,444		99.9	%	$	54.11

	Bay Colony Corporate Center	Route 128 Mass Turnpike MA		4		1,010,113		78.4	%	$	35.61		N		S
	Reservoir Place	Route 128 Mass Turnpike MA		1		528,885		98.3	%		33.40		N		S
	140 Kendrick Street	Route 128 Mass Turnpike MA		3		380,987		84.2	%		37.22		N		S
	Weston Corporate Center	Route 128 Mass Turnpike MA		1		356,995		100.0	%		52.18		N		S
	Waltham Weston Corporate Center	Route 128 Mass Turnpike MA		1		306,687		92.4	%		34.65		N		S
	230 CityPoint	Route 128 Mass Turnpike MA		1		301,429		84.9	%		34.37		N		S
	200 West Street	Route 128 Mass Turnpike MA		1		256,245		97.8	%		36.84		N		S
(4)	10 CityPoint	Route 128 Mass Turnpike MA		1		241,460		92.7	%		51.29		N		S
	77 CityPoint	Route 128 Mass Turnpike MA		1		209,707		100.0	%		47.55		N		S
	195 West Street	Route 128 Mass Turnpike MA		1		63,500		100.0	%		40.82		N		S
	Quorum Office Park	Route 128 Northwest MA		2		267,527		90.0	%		18.92		N		S
	Lexington Office Park	Route 128 Northwest MA		2		166,858		73.8	%		26.29		N		S
	191 Spring Street	Route 128 Northwest MA		1		158,900		7.2	%		26.41		N		S
	40 Shattuck Road	Route 128 Northwest MA		1		121,542		68.7	%		23.08		N		S
	91 Hartwell Avenue	Route 128 Northwest MA		1		119,216		100.0	%		27.47		N		S
	201 Spring Street	Route 128 Northwest MA		1		106,300		100.0	%		37.82		N		S
	33 Hayden Avenue	Route 128 Northwest MA		1		80,872		100.0	%		43.89		N		S
	32 Hartwell Avenue	Route 128 Northwest MA		1		69,154		100.0	%		24.48		N		S
	164 Lexington Road	Route 128 Northwest MA		1		64,140		0.0	%		—		N		S
	100 Hayden Avenue	Route 128 Northwest MA		1		55,924		100.0	%		41.17		N		S
	181 Spring Street	Route 128 Northwest MA		1		55,793		100.0	%		31.40		N		S
	92 Hayden Avenue	Route 128 Northwest MA		1		31,100		100.0	%		41.80		N		S
	17 Hartwell Avenue	Route 128 Northwest MA		1		30,000		100.0	%		33.26		N		S
(3)(4)	The Point	Route 128 Northwest MA		1		16,300		84.7	%		52.27		N		S

				31		4,999,634		85.9	%	$	36.69

		Total Boston Office:		49		13,645,080		90.0	%	$	51.74

Residential
	The Lofts at Atlantic Wharf (86 units)	CBD Boston MA		1		87,097							N		CBD

		Total Boston Residential:		1		87,097

Hotel
	Boston Marriott Cambridge (433 rooms)	East Cambridge MA		1		334,260							N		CBD

		Total Boston Hotel:		1		334,260

		Total Boston:		51		14,066,437

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is a retail property.

(4)	Not included in Same Property analysis.

LOGO

THIRD QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of September 30, 2016


		Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)		Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
New York
Office
	767 Fifth Avenue (The GM Building) (60% ownership)	Plaza District NY		1		1,839,505		94.5	%	$	146.53		Y		CBD
	399 Park Avenue	Park Avenue NY		1		1,712,880		93.9	%		90.49		N		CBD
(3)	601 Lexington Avenue (55% ownership)	Park Avenue NY		1		1,436,241		93.8	%		95.73		Y		CBD
	599 Lexington Avenue	Park Avenue NY		1		1,058,008		96.0	%		87.46		N		CBD
	Times Square Tower (55% ownership)	Times Square NY		1		1,248,521		98.6	%		77.92		N		CBD
	250 West 55th Street	Times Square / West Side NY		1		988,326		85.2	%		86.03		N		CBD
	510 Madison Avenue	Fifth/Madison Avenue NY		1		355,598		100.0	%		120.26		N		CBD
(4)	540 Madison Avenue (60% ownership)	Fifth/Madison Avenue NY		1		283,695		92.4	%		101.50		Y		CBD

				8		8,922,774		94.2	%	$	101.89

	One Tower Center	East Brunswick NJ		1		412,797		21.2	%	$	31.57		N		S
	510 Carnegie Center	Princeton NJ		1		234,160		100.0	%		34.74		N		S
	210 Carnegie Center	Princeton NJ		1		162,372		79.3	%		33.38		N		S
	206 Carnegie Center	Princeton NJ		1		161,763		100.0	%		31.87		N		S
	212 Carnegie Center	Princeton NJ		1		151,547		86.9	%		36.27		N		S
	214 Carnegie Center	Princeton NJ		1		150,774		67.6	%		33.53		N		S
	506 Carnegie Center	Princeton NJ		1		149,312		59.0	%		34.60		N		S
	508 Carnegie Center	Princeton NJ		1		134,433		100.0	%		33.17		N		S
	202 Carnegie Center	Princeton NJ		1		134,381		86.3	%		37.80		N		S
(5)	804 Carnegie Center	Princeton NJ		1		130,000		100.0	%		36.25		N		S
	101 Carnegie Center	Princeton NJ		1		125,627		90.8	%		34.01		N		S
	504 Carnegie Center	Princeton NJ		1		121,990		100.0	%		30.83		N		S
	502 Carnegie Center	Princeton NJ		1		121,460		91.3	%		36.75		N		S
	701 Carnegie Center	Princeton NJ		1		120,000		100.0	%		39.28		N		S
	104 Carnegie Center	Princeton NJ		1		102,830		40.3	%		34.97		N		S
	105 Carnegie Center	Princeton NJ		1		69,955		56.3	%		32.53		N		S
	302 Carnegie Center	Princeton NJ		1		64,926		100.0	%		34.36		N		S
	211 Carnegie Center	Princeton NJ		1		47,025		100.0	%		33.40		N		S
	201 Carnegie Center	Princeton NJ		—		6,500		100.0	%		33.33		N		S

				18		2,601,852		76.1	%	$	34.50

		Total New York:		26		11,524,626		90.1	%	$	89.03

San Francisco and Los Angeles
Office
	Embarcadero Center Four	CBD San Francisco CA		1		937,954		86.2	%	$	64.77		N		CBD
	Embarcadero Center One	CBD San Francisco CA		1		831,078		97.6	%		56.21		N		CBD
	Embarcadero Center Two	CBD San Francisco CA		1		786,709		93.8	%		64.43		N		CBD
	Embarcadero Center Three	CBD San Francisco CA		1		779,318		83.4	%		54.99		N		CBD
	680 Folsom Street	CBD San Francisco CA		2		524,793		98.4	%		58.65		N		CBD
(5)	535 Mission Street	CBD San Francisco CA		1		307,235		100.0	%		71.94		N		CBD
(5)	690 Folsom Street	CBD San Francisco CA		1		26,080		100.0	%		69.75		N		CBD

				8		4,193,167		92.0	%	$	61.02

	601 and 651 Gateway	South San Francisco CA		2		506,279		99.6	%	$	39.33		N		S
	611 Gateway	South San Francisco CA		1		260,337		28.2	%		40.77		N		S
	Mountain View Research Park	Mountain View CA		15		540,433		100.0	%		41.15		N		S
	2440 West El Camino Real	Mountain View CA		1		141,392		100.0	%		57.46		N		S
	453 Ravendale Drive	Mountain View CA		1		29,620		85.8	%		36.68		N		S
(5)(6)	3625-3635 Peterson Way	Santa Clara CA		1		218,366		100.0	%		21.84		N		S
(6)	North First Business Park	San Jose CA		5		190,636		100.0	%		18.87		N		S

				26		1,887,063		89.8	%	$	36.89

(4)(5)(7)	Colorado Center	West Los Angeles CA		6		1,116,698		65.5	%	$	54.96		N		CBD

		Total San Francisco and
		Los Angeles:		40		7,196,928		87.3	%	$	53.81

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	Approximately 13% of this complex was removed from the in-service portfolio upon commencement of construction of the planned redevelopment that occurred this quarter. As a result the portion related to the planned redevelopment is not included in Same Property analysis.

(4)	This is an unconsolidated joint venture property.

(5)	Not included in Same Property analysis.

(6)	Property held for redevelopment.

(7)	Excludes approximately 59,000 square feet of storage space and 8,000 square feet of remeasurement upon lease expirations.

LOGO

THIRD QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of September 30, 2016


		Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)			Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
Washington, DC
Office
	Capital Gallery	Southwest Washington DC		1		631,029		98.6	%	$	59.16			N		CBD
	500 E Street, S.W.	Southwest Washington DC		1		251,994		100.0	%		49.52			N		CBD
(3)	Metropolitan Square (51% ownership)	East End Washington DC		1		607,041		74.7	%		61.10			Y		CBD
(3)	901 New York Avenue (25% ownership)	East End Washington DC		1		539,680		92.4	%		59.75			Y		CBD
(4)	601 Massachusetts Avenue	East End Washington DC		1		478,883		90.2	%		68.96			N		CBD
(3)	Market Square North (50% ownership)	East End Washington DC		1		415,246		82.6	%		62.83			Y		CBD
	2200 Pennsylvania Avenue	CBD Washington DC		1		458,831		100.0	%		87.99			N		CBD
	1333 New Hampshire Avenue	CBD Washington DC		1		315,371		100.0	%		47.27			N		CBD
	1330 Connecticut Avenue	CBD Washington DC		1		253,190		98.0	%		61.00			N		CBD
	Sumner Square	CBD Washington DC		1		208,892		100.0	%		50.54			N		CBD
(3)	500 North Capitol Street, N.W. (30% ownership)	Capitol Hill Washington DC		1		230,860		100.0	%		66.32			Y		CBD

				11		4,391,017		92.5	%	$	62.47

	South of Market	Reston VA		3		623,666		93.6	%	$	54.03			N		S
	Fountain Square	Reston VA		2		518,345		93.2	%		47.69			N		S
	One Freedom Square	Reston VA		1		432,581		93.0	%		47.64			N		S
	Two Freedom Square	Reston VA		1		421,757		98.5	%		45.34			N		S
	One and Two Discovery Square	Reston VA		2		366,990		100.0	%		44.58			N		S
	One Reston Overlook	Reston VA		1		319,519		100.0	%		38.55			N		S
	Reston Corporate Center	Reston VA		2		261,046		100.0	%		39.30			N		S
	Democracy Tower	Reston VA		1		259,441		100.0	%		59.50			N		S
(5)	Fountain Square Retail	Reston VA		1		237,209		96.5	%		52.35			N		S
	Two Reston Overlook	Reston VA		1		134,615		97.1	%		37.70			N		S

				15		3,575,169		96.5	%	$	47.48

	Wisconsin Place Office	Montgomery County MD		1		299,186		96.5	%	$	50.63			N		S
	2600 Tower Oaks Boulevard	Montgomery County MD		1		179,369		48.1	%		32.79			N		S
	New Dominion Technology Park - Building Two	Herndon VA		1		257,400		100.0	%		39.58			N		S
	New Dominion Technology Park - Building One	Herndon VA		1		235,201		100.0	%		33.60			Y		S
	Kingstowne Two	Springfield VA		1		156,251		74.1	%		40.97			N		S
	Kingstowne One	Springfield VA		1		151,483		75.6	%		40.28			N		S
	7601 Boston Boulevard	Springfield VA		1		114,028		100.0	%		18.60			N		S
	7435 Boston Boulevard	Springfield VA		1		103,557		100.0	%		19.06			N		S
	8000 Grainger Court	Springfield VA		1		88,775		37.6	%		23.64			N		S
(5)	Kingstowne Retail	Springfield VA		1		88,288		100.0	%		36.02			N		S
	7500 Boston Boulevard	Springfield VA		1		79,971		100.0	%		19.66			N		S
	7501 Boston Boulevard	Springfield VA		1		75,756		100.0	%		28.67			N		S
	7450 Boston Boulevard	Springfield VA		1		62,402		0.0	%		—			N		S
	7374 Boston Boulevard	Springfield VA		1		57,321		100.0	%		17.90			N		S
	8000 Corporate Court	Springfield VA		1		52,539		100.0	%		14.10			N		S
	7451 Boston Boulevard	Springfield VA		1		45,615		67.4	%		26.08			N		S
	7300 Boston Boulevard	Springfield VA		1		32,000		100.0	%		23.64			N		S
	7375 Boston Boulevard	Springfield VA		1		26,865		79.2	%		28.70			N		S
(3)(4)	Annapolis Junction Building Seven (50% ownership)	Anne Arundel County MD		1		127,229		100.0	%		31.79			Y		S
(3)(4)	Annapolis Junction Building Eight (50% ownership)	Anne Arundel County MD		1		125,685		0.0	%		—			Y		S
(3)	Annapolis Junction Building Six (50% ownership)	Anne Arundel County MD		1		119,339		48.9	%		30.55			Y		S
(3)	Annapolis Junction Building One (50% ownership)	Anne Arundel County MD		1		117,599		21.9	%		113.09			Y		S

				22		2,595,859		77.0	%	$	34.72

		Total Washington Office:		48		10,562,045		90.1	%	$	51.20

Residential
	The Avant at Reston Town Center (359 units)	Reston VA		1		355,347								N		S

		Total Washington Residential:		1		355,347

		Total Washington, DC:		49		10,917,392

		Total In-Service Properties:		166		43,705,383		89.6	%(6)	$	62.02	(6)

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is an unconsolidated joint venture property.

(4)	Not included in Same Property analysis.

(5)	This is a retail property.

(6)	Excludes Hotel and Residential properties. For disclosures relating to the Company’s Hotel and Residential properties, see page 24.

LOGO

THIRD QUARTER 2016

OCCUPANCY BY LOCATION

Total In-Service Properties (1)


	CBD						Suburban						Total
Location	30-Sep-16			30-Sep-15			30-Sep-16			30-Sep-15			30-Sep-16			30-Sep-15
Boston		92.3	%		91.2	%		85.9	%		90.8	%		90.0	%		91.1	%
New York		94.2	%		96.2	%		76.1	%		73.9	%		90.1	%		91.5	%
San Francisco and Los Angeles		86.4	%		94.4	%		89.8	%		78.5	%		87.3	%		88.6	%
Washington, DC		92.5	%		93.7	%		88.3	%		92.4	%		90.1	%		92.9	%

Total Portfolio		91.8	%		93.9	%		85.7	%		87.0	%		89.6	%		91.3	%

Same Property Portfolio (1) (2)


	CBD						Suburban						Total
Location	30-Sep-16			30-Sep-15			30-Sep-16			30-Sep-15			30-Sep-16			30-Sep-15
Boston		92.3	%		91.0	%		85.6	%		90.8	%		89.9	%		90.9	%
New York		94.2	%		96.2	%		74.9	%		73.9	%		90.0	%		91.3	%
San Francisco and Los Angeles		91.3	%		94.4	%		88.4	%		97.7	%		90.4	%		95.4	%
Washington, DC		92.8	%		93.7	%		89.9	%		92.3	%		91.1	%		92.8	%

Total Portfolio		92.9	%		93.8	%		85.9	%		89.3	%		90.3	%		92.1	%

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

(2)	For disclosures related to the Company’s definition of Same Properties, see page 48.

LOGO

THIRD QUARTER 2016

TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION

TOP 20 TENANTS (1)


	Tenant	% of BXP’s Share of Combined Annualized Rental Obligations
1.	US Government		2.75	%
2.	Citibank		2.51	%
3.	Arnold & Porter		2.19	%
4.	Biogen		2.01	%
5.	Shearman & Sterling		1.88	%
6.	Ropes & Gray		1.62	%
7.	Kirkland & Ellis		1.47	%
8.	O’Melveny & Myers		1.37	%
9.	Wellington Management		1.30	%
10.	Bank of America		1.27	%
11.	Google		1.08	%
12.	Weil Gotshal Manges		1.08	%
13.	Aramis (Estee Lauder)		1.03	%
14.	Kaye Scholer		0.97	%
15.	Microsoft		0.94	%
16.	Mass Financial Services		0.89	%
17.	Morgan Lewis Bockius		0.89	%
18.	Morrison Foerster		0.87	%
19.	Hunton & Williams		0.87	%
20.	Smithsonian Institution		0.81	%

	BXP’s Share of Combined Rental Obligations		27.80	%

	BXP’s Share of Combined Square Feet		22.90	%

NOTABLE SIGNED DEALS (2)


Tenant	Property	Square Feet
salesforce.com	Salesforce Tower		732,000
Putnam Investments	100 Federal Street		249,000

TENANT DIVERSIFICATION (1)

LOGO

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations and Rental Obligations, see pages 47-48.

(2)	Represents leases signed with occupancy commencing in the future.

LOGO

THIRD QUARTER 2016

LEASE EXPIRATIONS (1) (2) (3)

IN-SERVICE OFFICE PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		505,444	$	23,099,549	$	45.70	$	23,104,069	$	45.71		1.31	%(4)
2017		2,473,358		144,153,854		58.28		146,241,435		59.13		6.39	%
2018		1,577,970		92,146,939		58.40		93,839,576		59.47		4.08	%
2019		3,484,863		182,917,736		52.49		187,768,836		53.88		9.00	%
2020		4,438,254		280,881,506		63.29		292,110,236		65.82		11.47	%
2021		3,389,711		171,834,706		50.69		186,086,092		54.90		8.76	%
2022		4,013,608		226,223,512		56.36		250,943,010		62.52		10.37	%
2023		1,430,451		78,763,385		55.06		90,923,475		63.56		3.70	%
2024		2,598,539		150,354,200		57.86		166,571,649		64.10		6.71	%
2025		2,315,731		135,423,138		58.48		155,684,974		67.23		5.98	%
Thereafter		9,837,553		701,754,463		71.33		893,329,360		90.81		25.41	%

*IN-SERVICE RETAIL PROPERTIES*

Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		117,127	$	6,445,274	$	55.03	$	6,450,074	$	55.07		5.83	%(4)
2017		148,967		14,975,314		100.53		15,003,734		100.72		7.41	%
2018		234,020		21,316,981		91.09		21,949,618		93.79		11.64	%
2019		92,242		6,381,908		69.19		6,498,477		70.45		4.59	%
2020		184,493		11,574,011		62.73		12,000,588		65.05		9.18	%
2021		162,156		21,668,436		133.63		23,219,617		143.19		8.07	%
2022		200,612		17,688,028		88.17		19,372,402		96.57		9.98	%
2023		171,652		14,948,187		87.08		16,519,437		96.24		8.54	%
2024		113,910		10,252,730		90.01		12,098,072		106.21		5.67	%
2025		130,667		8,576,305		65.63		9,560,636		73.17		6.50	%
Thereafter		453,977		40,129,446		88.40		65,288,607		143.81		22.59	%

*TOTAL IN-SERVICE PROPERTIES*

Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		622,571	$	29,544,823	$	47.46	$	29,554,143	$	47.47		1.53	%(4)
2017		2,622,325		159,129,168		60.68		161,245,170		61.49		6.44	%
2018		1,811,990		113,463,920		62.62		115,789,194		63.90		4.45	%
2019		3,577,105		189,299,643		52.92		194,267,312		54.31		8.78	%
2020		4,622,747		292,455,517		63.26		304,110,823		65.79		11.35	%
2021		3,551,867		193,503,142		54.48		209,305,709		58.93		8.72	%
2022		4,214,220		243,911,540		57.88		270,315,413		64.14		10.35	%
2023		1,602,103		93,711,572		58.49		107,442,912		67.06		3.93	%
2024		2,712,449		160,606,931		59.21		178,669,721		65.87		6.66	%
2025		2,446,398		143,999,443		58.86		165,245,610		67.55		6.01	%
Thereafter		10,291,530		741,883,910		72.09		958,617,966		93.15		25.27	%

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Lease Expirations—Boston Region (1) (2) (3)

OFFICE


							Annualized
Year of	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		168,082	$	7,375,447	$	43.88	$	7,375,447	$	43.88	(4)
2017		619,293		27,868,446		45.00		27,968,875		45.16
2018		455,604		18,626,029		40.88		19,065,211		41.85
2019		1,115,519		53,771,678		48.20		54,283,161		48.66
2020		499,150		22,614,812		45.31		24,218,127		48.52
2021		1,034,642		41,114,174		39.74		42,633,321		41.21
2022		1,570,620		75,261,393		47.92		79,264,246		50.47
2023		528,479		26,992,742		51.08		30,861,300		58.40
2024		525,842		24,062,805		45.76		27,335,619		51.98
2025		1,099,603		62,060,293		56.44		70,082,107		63.73
Thereafter		3,712,044		212,492,056		57.24		243,083,010		65.48

*RETAIL*

							Annualized
Year of	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		56,362	$	3,490,514	$	61.93	$	3,495,314	$	62.02	(4)
2017		52,703		4,408,998		83.66		4,413,706		83.75
2018		140,449		6,527,048		46.47		6,552,408		46.65
2019		11,787		1,910,167		162.06		1,933,358		164.02
2020		91,659		5,746,610		62.70		5,919,399		64.58
2021		37,107		2,712,752		73.11		2,863,976		77.18
2022		80,640		4,604,889		57.10		5,055,232		62.69
2023		79,937		7,672,466		95.98		8,221,865		102.85
2024		70,570		4,183,931		59.29		4,578,284		64.88
2025		30,224		3,672,537		121.51		4,105,612		135.84
Thereafter		148,681		10,144,741		68.23		11,276,634		75.84

*TOTAL PROPERTY TYPES*

							Annualized
Year of	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		224,444	$	10,865,961	$	48.41	$	10,870,761	$	48.43	(4)
2017		671,996		32,277,445		48.03		32,382,581		48.19
2018		596,053		25,153,077		42.20		25,617,619		42.98
2019		1,127,306		55,681,846		49.39		56,216,519		49.87
2020		590,809		28,361,422		48.00		30,137,527		51.01
2021		1,071,749		43,826,927		40.89		45,497,297		42.45
2022		1,651,260		79,866,283		48.37		84,319,478		51.06
2023		608,416		34,665,208		56.98		39,083,165		64.24
2024		596,412		28,246,736		47.36		31,913,903		53.51
2025		1,129,827		65,732,830		58.18		74,187,719		65.66
Thereafter		3,860,725		222,636,797		57.67		254,359,644		65.88

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Quarterly Lease Expirations—Boston Region (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		26,907		1,254,896		46.64		1,254,896		46.64	(4)
Q4 2016		141,175		6,120,551		43.35		6,120,551		43.35

Total 2016		168,082	$	7,375,447	$	43.88	$	7,375,447	$	43.88

Q1 2017		83,540	$	3,546,914	$	42.46	$	3,546,914	$	42.46
Q2 2017		102,367		4,990,335		48.75		5,037,129		49.21
Q3 2017		67,379		3,071,672		45.59		3,087,576		45.82
Q4 2017		366,007		16,259,525		44.42		16,297,256		44.53

Total 2017		619,293	$	27,868,446	$	45.00	$	27,968,875	$	45.16


*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		32,079		96,237		3.00		96,237		3.00	(4)
Q4 2016		24,283		3,394,277		139.78		3,399,077		139.98

Total 2016		56,362	$	3,490,514	$	61.93	$	3,495,314	$	62.02

Q1 2017		10,549	$	1,274,865	$	120.85	$	1,277,301	$	121.08
Q2 2017		28,504		1,940,812		68.09		1,940,812		68.09
Q3 2017		3,388		526,440		155.38		526,440		155.38
Q4 2017		10,262		666,880		64.99		669,152		65.21

Total 2017		52,703	$	4,408,998	$	83.66	$	4,413,706	$	83.75


*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		58,986		1,351,133		22.91		1,351,133		22.91	(4)
Q4 2016		165,458		9,514,828		57.51		9,519,628		57.54

Total 2016		224,444	$	10,865,961	$	48.41	$	10,870,761	$	48.43

Q1 2017		94,089	$	4,821,780	$	51.25	$	4,824,216	$	51.27
Q2 2017		130,871		6,931,147		52.96		6,977,941		53.32
Q3 2017		70,767		3,598,113		50.84		3,614,017		51.07
Q4 2017		376,269		16,926,405		44.98		16,966,408		45.09

Total 2017		671,996	$	32,277,445	$	48.03	$	32,382,581	$	48.19

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Lease Expirations—New York Region (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		81,014	$	5,003,203	$	61.76	$	5,003,203	$	61.76	(4)
2017		781,141		65,057,518		83.29		65,057,518		83.29
2018		525,434		42,080,919		80.09		42,219,142		80.35
2019		488,304		38,756,482		79.37		38,942,619		79.75
2020		1,859,183		152,265,608		81.90		156,383,386		84.11
2021		388,115		33,826,099		87.15		35,019,730		90.23
2022		923,972		80,408,965		87.03		86,105,136		93.19
2023		94,316		8,482,716		89.94		9,382,670		99.48
2024		1,045,709		72,172,295		69.02		78,762,512		75.32
2025		442,855		36,613,682		82.68		40,077,558		90.50
Thereafter		3,348,175		306,639,583		91.58		409,721,723		122.37

*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		5,927	$	649,793	$	109.63	$	649,793	$	109.63	(4)
2017		36,901		7,015,689		190.12		7,015,689		190.12
2018		8,114		9,023,731		1,112.12		9,549,453		1,176.91
2019		—		—		—		—		—
2020		3,452		253,056		73.31		253,056		73.31
2021		26,225		12,586,842		479.96		13,635,533		519.94
2022		58,093		9,911,629		170.62		10,845,627		186.69
2023		2,850		2,844,360		998.02		3,455,985		1,212.63
2024		12,745		4,195,277		329.17		5,380,865		422.19
2025		1,872		654,764		349.77		730,700		390.33
Thereafter		144,516		22,220,454		153.76		44,794,342		309.96

*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		86,941	$	5,652,996	$	65.02	$	5,652,996	$	65.02	(4)
2017		818,042		72,073,207		88.10		72,073,207		88.10
2018		533,548		51,104,651		95.78		51,768,596		97.03
2019		488,304		38,756,482		79.37		38,942,619		79.75
2020		1,862,635		152,518,664		81.88		156,636,442		84.09
2021		414,340		46,412,941		112.02		48,655,262		117.43
2022		982,065		90,320,594		91.97		96,950,763		98.72
2023		97,166		11,327,077		116.57		12,838,655		132.13
2024		1,058,454		76,367,572		72.15		84,143,377		79.50
2025		444,727		37,268,446		83.80		40,808,257		91.76
Thereafter		3,492,691		328,860,037		94.16		454,516,064		130.13

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Quarterly Lease Expirations—New York Region (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		8,338		1,049,640		125.89		1,049,640		125.89	(4)
Q4 2016		72,676		3,953,563		54.40		3,953,563		54.40

Total 2016		81,014	$	5,003,203	$	61.76	$	5,003,203	$	61.76

Q1 2017		82,865	$	5,933,797	$	71.61	$	5,933,797	$	71.61
Q2 2017		142,222		12,227,116		85.97		12,227,116		85.97
Q3 2017		518,167		43,805,827		84.54		43,805,827		84.54
Q4 2017		37,887		3,090,778		81.58		3,090,778		81.58

Total 2017		781,141	$	65,057,518	$	83.29	$	65,057,518	$	83.29


*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		2,526		353,715		140.03		353,715		140.03	(4)
Q4 2016		3,401		296,078		87.06		296,078		87.06

Total 2016		5,927	$	649,793	$	109.63	$	649,793	$	109.63

Q1 2017		10,216	$	4,439,371	$	434.55	$	4,439,371	$	434.55
Q2 2017		626		180,160		287.79		180,160		287.79
Q3 2017		26,059		2,396,159		91.95		2,396,159		91.95
Q4 2017		—		—		—		—		—

Total 2017		36,901	$	7,015,689	$	190.12	$	7,015,689	$	190.12


*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		10,864		1,403,355		129.17		1,403,355		129.17	(4)
Q4 2016		76,077		4,249,641		55.86		4,249,641		55.86

Total 2016		86,941	$	5,652,996	$	65.02	$	5,652,996	$	65.02

Q1 2017		93,081	$	10,373,168	$	111.44	$	10,373,168	$	111.44
Q2 2017		142,848		12,407,276		86.86		12,407,276		86.86
Q3 2017		544,226		46,201,986		84.89		46,201,986		84.89
Q4 2017		37,887		3,090,778		81.58		3,090,778		81.58

Total 2017		818,042	$	72,073,207	$	88.10	$	72,073,207	$	88.10

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Lease Expirations—San Francisco and Los Angeles Regions (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		87,141	$	3,144,928	$	36.09	$	3,146,128	$	36.10	(4)
2017		508,246		23,186,645		45.62		25,046,505		49.28
2018		195,064		10,411,063		53.37		10,690,049		54.80
2019		836,131		41,254,699		49.34		43,724,811		52.29
2020		787,254		48,976,128		62.21		51,390,887		65.28
2021		761,906		33,679,606		44.20		38,631,464		50.70
2022		782,406		37,620,802		48.08		47,994,521		61.34
2023		301,611		19,529,785		64.75		22,928,272		76.02
2024		394,472		22,162,314		56.18		23,501,649		59.58
2025		313,833		17,119,817		54.55		21,828,149		69.55
Thereafter		967,911		61,950,804		64.00		82,304,682		85.03

*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		41,692	$	1,456,086	$	34.92	$	1,456,086	$	34.92
2017		15,277		1,054,806		69.05		1,058,353		69.28
2018		35,502		2,131,323		60.03		2,165,211		60.99
2019		14,168		769,355		54.30		793,047		55.97
2020		35,924		2,218,546		61.76		2,348,273		65.37
2021		22,132		1,420,869		64.20		1,505,709		68.03
2022		27,445		1,086,007		39.57		1,161,032		42.30
2023		29,753		1,661,776		55.85		1,770,434		59.50
2024		8,545		559,033		65.42		648,935		75.94
2025		21,461		1,329,773		61.96		1,527,889		71.19
Thereafter		36,174		2,467,228		68.20		3,014,625		83.34

*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		128,833	$	4,601,013	$	35.71	$	4,602,213	$	35.72	(4)
2017		523,523		24,241,450		46.30		26,104,857		49.86
2018		230,566		12,542,386		54.40		12,855,260		55.76
2019		850,299		42,024,054		49.42		44,517,858		52.36
2020		823,178		51,194,675		62.19		53,739,160		65.28
2021		784,038		35,100,475		44.77		40,137,172		51.19
2022		809,851		38,706,810		47.79		49,155,553		60.70
2023		331,364		21,191,561		63.95		24,698,706		74.54
2024		403,017		22,721,347		56.38		24,150,584		59.92
2025		335,294		18,449,590		55.03		23,356,038		69.66
Thereafter		1,004,085		64,418,032		64.16		85,319,307		84.97

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Quarterly Lease Expirations—San Francisco and Los Angeles Regions (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		6,692		344,139		51.43		344,139		51.43	(4)
Q4 2016		80,449		2,800,789		34.81		2,801,989		34.83

Total 2016		87,141	$	3,144,928	$	36.09	$	3,146,128	$	36.10

Q1 2017		92,602	$	5,014,048	$	54.15	$	5,016,186	$	54.17
Q2 2017		176,105		6,295,225		35.75		6,514,577		36.99
Q3 2017		184,296		9,654,704		52.39		11,000,015		59.69
Q4 2017		55,243		2,222,668		40.23		2,515,727		45.54

Total 2017		508,246	$	23,186,645	$	45.62	$	25,046,505	$	49.28


*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		41,692		1,456,086		34.92		1,456,086		34.92

Total 2016		41,692	$	1,456,086	$	34.92	$	1,456,086	$	34.92

Q1 2017		30	$	14,400	$	480.00	$	14,400	$	480.00
Q2 2017		130		26,046		200.35		26,046		200.35
Q3 2017		8,793		635,152		72.23		636,741		72.41
Q4 2017		6,324		379,208		59.96		381,166		60.27

Total 2017		15,277	$	1,054,806	$	69.05	$	1,058,353	$	69.28


*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		6,692		344,139		51.43		344,139		51.43	(4)
Q4 2016		122,141		4,256,874		34.85		4,258,074		34.86

Total 2016		128,833	$	4,601,013	$	35.71	$	4,602,213	$	35.72

Q1 2017		92,632	$	5,028,448	$	54.28	$	5,030,586	$	54.31
Q2 2017		176,235		6,321,270		35.87		6,540,623		37.11
Q3 2017		193,089		10,289,857		53.29		11,636,756		60.27
Q4 2017		61,567		2,601,875		42.26		2,896,893		47.05

Total 2017		523,523	$	24,241,450	$	46.30	$	26,104,857	$	49.86

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

THIRD QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Lease Expirations—Washington, DC Region (1) (2) (3)


*OFFICE*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		169,207	$	7,575,971	$	44.77	$	7,579,291	$	44.79	(4)(5)
2017		564,678		28,041,245		49.66		28,168,537		49.88	(5)
2018		401,868		21,028,927		52.33		21,865,174		54.41
2019		1,044,909		49,134,877		47.02		50,818,245		48.63
2020		1,292,667		57,024,958		44.11		60,117,834		46.51
2021		1,205,048		63,214,826		52.46		69,801,579		57.92
2022		736,610		32,932,351		44.71		37,579,107		51.02
2023		506,045		23,758,141		46.95		27,751,232		54.84
2024		632,516		31,956,786		50.52		36,971,869		58.45
2025		459,440		19,629,346		42.72		23,697,161		51.58
Thereafter		1,809,423		120,672,020		66.69		158,219,946		87.44

*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		13,146	$	848,881	$	64.57	$	848,881	$	64.57
2017		44,086		2,495,820		56.61		2,515,987		57.07
2018		49,955		3,634,879		72.76		3,682,546		73.72
2019		66,287		3,702,386		55.85		3,772,072		56.91
2020		53,458		3,355,798		62.77		3,479,860		65.10
2021		76,692		4,947,973		64.52		5,214,399		67.99
2022		34,434		2,085,502		60.57		2,310,512		67.10
2023		59,112		2,769,585		46.85		3,071,154		51.95
2024		22,050		1,314,490		59.61		1,489,989		67.57
2025		77,110		2,919,231		37.86		3,196,435		41.45
Thereafter		124,606		5,297,023		42.51		6,203,006		49.78

*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		182,353	$	8,424,852	$	46.20	$	8,428,172	$	46.22	(4)
2017		608,764		30,537,065		50.16		30,684,524		50.40
2018		451,823		24,663,807		54.59		25,547,720		56.54
2019		1,111,196		52,837,263		47.55		54,590,317		49.13
2020		1,346,125		60,380,756		44.86		63,597,695		47.25
2021		1,281,740		68,162,799		53.18		75,015,978		58.53
2022		771,044		35,017,853		45.42		39,889,619		51.73
2023		565,157		26,527,726		46.94		30,822,386		54.54
2024		654,566		33,271,275		50.83		38,461,857		58.76
2025		536,550		22,548,577		42.03		26,893,596		50.12
Thereafter		1,934,029		125,969,043		65.13		164,422,951		85.02

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 10,922 and 14,887 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $40.84 and $40.86 and $47.72 and $47.93, respectively.

LOGO

THIRD QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Quarterly Lease Expirations—Washington, DC Region (1) (2) (3)


*OFFICE*


							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		42,422		1,036,190		24.43		1,036,190		24.43	(4)
Q4 2016		126,785		6,539,781		51.58		6,543,102		51.61	(5)

Total 2016		169,207	$	7,575,971	$	44.77	$	7,579,291	$	44.79

Q1 2017		114,048	$	5,261,529	$	46.13	$	5,263,431	$	46.15
Q2 2017		87,296		5,413,006		62.01		5,445,204		62.38	(5)
Q3 2017		232,720		11,242,054		48.31		11,265,402		48.41
Q4 2017		130,614		6,124,656		46.89		6,194,500		47.43

Total 2017		564,678	$	28,041,245	$	49.66	$	28,168,537	$	49.88


*RETAIL*


							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		13,146		848,881		64.57		848,881		64.57

Total 2016		13,146	$	848,881	$	64.57	$	848,881	$	64.57

Q1 2017		21,273	$	1,274,401	$	59.91	$	1,274,401	$	59.91
Q2 2017		5,066		140,592		27.75		140,592		27.75
Q3 2017		6,842		446,730		65.29		446,730		65.29
Q4 2017		10,905		634,097		58.15		654,263		60.00

Total 2017		44,086	$	2,495,820	$	56.61	$	2,515,987	$	57.07


*TOTAL PROPERTY TYPES*


							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		42,422		1,036,190		24.43		1,036,190		24.43	(4)
Q4 2016		139,931		7,388,662		52.80		7,391,982		52.83

Total 2016		182,353	$	8,424,852	$	46.20	$	8,428,172	$	46.22

Q1 2017		135,321	$	6,535,931	$	48.30	$	6,537,833	$	48.31
Q2 2017		92,362		5,553,598		60.13		5,585,796		60.48
Q3 2017		239,562		11,688,783		48.79		11,712,132		48.89
Q4 2017		141,519		6,758,753		47.76		6,848,763		48.39

Total 2017		608,764	$	30,537,065	$	50.16	$	30,684,524	$	50.40

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 10,922 and 14,887 square feet of Sensitive Compartmented Information Facility (SCIF) space in Q4 2016 and Q2 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $46.85 and $46.88 and $49.79 and $50.10, respectively.

LOGO

THIRD QUARTER 2016

CBD PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco and Los Angeles
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		127,483	$	7,621,847	$	59.79	$	7,626,647	$	59.82	(4)		84,256	$	3,215,217	$	38.16	$	3,216,417	$	38.17	(4)
2017		348,617		21,215,474		60.86		21,289,022		61.07			295,474		17,801,141		60.25		19,310,182		65.35
2018		320,907		15,939,908		49.67		16,204,392		50.50			171,523		10,293,190		60.01		10,525,952		61.37
2019		650,121		36,945,959		56.83		37,294,412		57.37			380,470		22,315,095		58.65		23,384,286		61.46
2020		315,699		18,840,650		59.68		19,496,726		61.76			747,531		47,763,200		63.89		50,038,818		66.94
2021		422,738		23,922,186		56.59		24,619,328		58.24			448,368		26,515,451		59.14		30,375,396		67.75
2022		955,602		54,345,121		56.87		58,504,105		61.22			405,507		21,793,379		53.74		28,222,940		69.60
2023		412,150		27,809,272		67.47		30,939,587		75.07			290,707		19,001,813		65.36		21,856,052		75.18
2024		272,428		15,614,664		57.32		17,233,344		63.26			378,505		21,765,379		57.50		22,939,592		60.61
2025		689,507		44,618,581		64.71		50,945,581		73.89			329,652		18,255,875		55.38		23,103,875		70.09
Thereafter		3,358,767		202,968,147		60.43		232,590,417		69.25			1,004,085		64,418,032		64.16		85,319,307		84.97

	New York											Washington, DC
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		54,418	$	4,387,989	$	80.63	$	4,387,989	$	80.63	(4)		55,237	$	2,695,440	$	48.80	$	2,695,440	$	48.80	(4)
2017		659,576		66,208,560		100.38		66,208,560		100.38			307,930		16,062,338		52.16		16,080,727		52.22
2018		320,479		43,877,084		136.91		44,402,806		138.55			116,353		6,864,525		59.00		7,130,559		61.28
2019		331,971		32,952,800		99.26		33,021,221		99.47			463,931		29,230,779		63.01		30,811,383		66.41
2020		1,554,040		141,870,013		91.29		145,505,560		93.63			449,101		24,928,827		55.51		26,453,343		58.90
2021		311,243		42,996,530		138.14		45,054,180		144.76			545,869		35,596,045		65.21		39,291,367		71.98
2022		915,419		88,137,018		96.28		94,553,309		103.29			100,909		5,812,055		57.60		6,433,114		63.75
2023		88,867		11,062,880		124.49		12,557,860		141.31			46,648		2,899,372		62.15		3,471,497		74.42
2024		669,101		62,857,518		93.94		69,837,758		104.38			193,400		12,614,112		65.22		14,658,060		75.79
2025		310,980		32,436,710		104.30		35,491,958		114.13			82,103		4,228,304		51.50		5,107,216		62.20
Thereafter		3,154,689		317,328,180		100.59		441,695,914		140.01			1,628,455		113,562,141		69.74		148,326,140		91.08

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

THIRD QUARTER 2016

SUBURBAN PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		96,961	$	3,244,115	$	33.46	$	3,244,115	$	33.46	(4)		44,577	$	1,385,796	$	31.09	$	1,385,796	$	31.09
2017		323,379		11,061,971		34.21		11,093,559		34.31			228,049		6,440,309		28.24		6,794,675		29.79
2018		275,146		9,213,169		33.48		9,413,226		34.21			59,043		2,249,196		38.09		2,329,308		39.45
2019		477,185		18,735,887		39.26		18,922,107		39.65			469,829		19,708,959		41.95		21,133,571		44.98
2020		275,110		9,520,772		34.61		10,640,801		38.68			75,647		3,431,475		45.36		3,700,342		48.92
2021		649,011		19,904,740		30.67		20,877,969		32.17			335,670		8,585,024		25.58		9,761,777		29.08
2022		695,658		25,521,161		36.69		25,815,374		37.11			404,344		16,913,430		41.83		20,932,613		51.77
2023		196,266		6,855,936		34.93		8,143,578		41.49			40,657		2,189,748		53.86		2,842,655		69.92
2024		323,984		12,632,071		38.99		14,680,559		45.31			24,512		955,968		39.00		1,210,992		49.40
2025		440,320		21,114,248		47.95		23,242,138		52.78			5,642		193,716		34.33		252,162		44.69
Thereafter		501,958		19,668,650		39.18		21,769,227		43.37			—		—		—		—		—

	New York											Washington, DC
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		32,523	$	1,265,008	$	38.90	$	1,265,008	$	38.90			127,116	$	5,729,412	$	45.07	$	5,732,732	$	45.10	(4)(5)
2017		158,466		5,864,647		37.01		5,864,647		37.01			300,834		14,474,728		48.12		14,603,797		48.54	(5)
2018		213,069		7,227,566		33.92		7,365,789		34.57			335,470		17,799,281		53.06		18,417,161		54.90
2019		156,333		5,803,682		37.12		5,921,398		37.88			647,265		23,606,483		36.47		23,778,934		36.74
2020		308,595		10,648,651		34.51		11,130,882		36.07			897,024		35,451,929		39.52		37,144,351		41.41
2021		103,097		3,416,411		33.14		3,601,082		34.93			735,871		32,566,754		44.26		35,724,611		48.55
2022		66,646		2,183,577		32.76		2,397,454		35.97			670,135		29,205,798		43.58		33,456,505		49.93
2023		8,299		264,197		31.83		280,795		33.83			518,509		23,628,354		45.57		27,350,889		52.75
2024		389,353		13,510,054		34.70		14,305,618		36.74			461,166		20,657,163		44.79		23,803,798		51.62
2025		133,747		4,831,735		36.13		5,316,299		39.75			454,447		18,320,273		40.31		21,786,380		47.94
Thereafter		338,002		11,531,857		34.12		12,820,150		37.93			305,574		12,406,902		40.60		16,096,811		52.68

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 10,922 and 14,887 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $39.75 and $39.77 and $44.30 and $44.72, respectively.

LOGO

THIRD QUARTER 2016

LEASING ACTIVITY

for the three months ended September 30, 2016

All In-Service Properties


	Total
Vacant space available @ 7/1/2016 (sf)		3,869,290
Property dispositions/ properties taken out of service (sf)		(211,110	)
Properties acquired vacant space (sf)		511,789
Properties placed in-service (sf) (1)		52,340
Leases expiring or terminated 7/1/2016-9/30/2016 (sf)		1,553,284

Total space available for lease (sf)		5,775,593

1st generation leases (sf)		122,885
2nd generation leases with new tenants (sf)		864,280
2nd generation lease renewals (sf)		313,098

Total space leased (sf)		1,300,263

Vacant space available for lease @ 9/30/2016 (sf)		4,475,330

Net (increase)/decrease in available space (sf)		(606,040	)
Second generation leasing information: (2)
Leases commencing during the period (sf)		1,177,378
Weighted average lease term (months)		100
Weighted average free rent period (days)		129
Total transaction costs per square foot (3)	$	59.26
Increase (decrease) in gross rents (4)		5.95	%
Increase (decrease) in net rents (5)		8.44	%


	All leases 1st Generation (sf)		All leases 2nd Generation (sf)		Incr (decr) in 2nd gen. gross cash rents (4)			Incr (decr) in 2nd gen. net cash rents (5)			Total Leased (sf) (6)		Total square feet of leases executed in the quarter (7)
Boston		52,340		339,977		5.15	%		7.90	%		392,317		240,598
New York		44,863		247,392		(11.41	%)		(16.74	%)		292,255		169,494
San Francisco and Los Angeles		—		453,771		48.72	%		77.86	%		453,771		261,320
Washington, DC		25,682		136,238		(7.23	%)		(9.52	%)		161,920		222,316

Total / Weighted Average		122,885		1,177,378		5.95	%		8.44	%		1,300,263		893,728

(1)	Total vacant square feet of properties placed in service in Q3 2016 consist of 52,340 square feet of existing vacancy at 888 Boylston Street.

(2)	Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,177,378 square feet of second generation leases that commenced in Q3 2016, leases for 906,639 square feet were signed in prior periods.

(3)	Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions.

(4)

Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 825,356 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(5)

Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 825,356 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

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

(7)

Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter and recognized in the current quarter is 287,244.

LOGO

THIRD QUARTER 2016

ACQUISITIONS/DISPOSITIONS

as of September 30, 2016

ACQUISITIONS

For the period from January 1, 2016 through September 30, 2016


								Anticipated
						Initial		Future			Total		Percentage
Property	Date Acquired		Square Feet			Investment		Investment			Investment		Leased
3625-3635 Peterson Way		April 22, 2016		218,366		$	78,000,000	$	—		$	78,000,000		100	%
Colorado Center (49.8% ownership interest)		July 1, 2016		1,116,698	(1)		502,988,000		—	(2)		502,988,000		66	%

Total Acquisitions				1,335,064		$	580,988,000	$	—		$	580,988,000		71	%

(1)	Excludes approximately 59,000 square feet of storage space and 8,000 square feet of remeasurement upon lease expirations.

(2)	The venture is reviewing plans to renovate the common areas and will provide a budget upon approval.

DISPOSITIONS

For the period from January 1, 2016 through September 30, 2016


					Gross		Net Cash
Property	Date Disposed		Square Feet		Sales Price		Proceeds		Book Gain
415 Main Street		February 1, 2016		231,028	$	105,360,000	$	104,868,000	$	60,803,000
Broad Run Business Park (land parcel)		August 16, 2016		N/A		18,019,000		17,934,000		12,983,000

Total Dispositions				231,028	$	123,379,000	$	122,802,000	$	73,786,000	(1)

(1)	Excludes approximately $6,820,000 of gain on sale of real estate recognized during the three months ended March 31, 2016 related to a previously deferred gain amount from a 2014 sale of real estate.

LOGO

THIRD QUARTER 2016

VALUE CREATION PIPELINE—CONSTRUCTION IN PROGRESS (1)

as of September 30, 2016


Construction Properties	Actual / Estimated Initial Occupancy		Actual / Estimated Stabilization Date		Location		# of Buildings		Square feet		Investment to Date (2)			Estimated Total Investment (2)			Total Financing (2)			Amount Drawn at 9/30/2016 (2)			Estimated Future Equity Requirement (2)		Percentage Leased (3)			Percentage Placed in service (4)
Office and Retail
1265 Main Street (50% ownership)		Q4 2016		Q4 2016		Waltham, MA		1		115,000	$	22,374,119		$	26,090,000		$	—		$	—		$	3,715,881		100	%		—
Prudential Center Retail Expansion		Q1 2016		Q3 2017		Boston, MA		—		15,000		9,108,230			10,760,000			—			—			1,651,770		100	%		39	%
888 Boylston Street		Q3 2016		Q4 2017		Boston, MA		1		425,000		227,871,847			271,500,000			—			—			43,628,153		71	%		14	%
Salesforce Tower (95% ownership)		Q4 2017		Q1 2019		San Francisco, CA		1		1,400,000		638,148,808			1,073,500,000			(25,389,074	)(5)		2,009,206	(5)		462,749,472		59	%		—
The Hub on Causeway (50% ownership)		Q4 2018		Q4 2019		Boston, MA		1		385,000		21,936,753			141,870,000			—			—			119,933,247		33	%		—
Dock72 (50% ownership)		Q2 2018		Q1 2020		Brooklyn, NY		1		670,000		29,723,774			204,900,000			—			—			175,176,226		33	%		—

Total Office Properties under Construction								5		3,010,000	$	949,163,531		$	1,728,620,000		$	(25,389,074	)	$	2,009,206		$	806,854,749		54	%		4	%

Residential
Cambridge Residential / 88 Ames (274 units)		Q1 2018		Q1 2019		Cambridge, MA		1		164,000	$	20,317,513		$	140,170,000		$	—		$	—		$	119,852,487		N/A			—
Reston Signature Site (508 units)		Q4 2017		Q2 2020		Reston, VA		1		490,000		62,935,559	(6)		234,854,025	(6)		—			—			171,918,466		N/A			—
Reston Signature Site - Retail								—		24,600		—			—			—			—			—		81	%		—

Total Residential Properties under Construction								2		678,600	$	83,253,072		$	375,024,025		$	—		$	—		$	291,770,953		59	%(7)		—

Redevelopment Properties
Reservoir Place North		Q3 2017		Q3 2017		Waltham, MA		1		73,000	$	14,999,489		$	24,510,000		$	—		$	—		$	9,510,511		—			4	%
159 East 53rd (55% ownership) (8)		Q2 2018		Q4 2019		New York, NY		—		220,000		8,245,649			106,000,000			—			—			97,754,351		—			—

Total Redevelopment Properties under Construction								1		293,000	$	23,245,138		$	130,510,000		$	—		$	—		$	107,264,862		—			3	%

Total Properties Under Construction and Redevelopment								8		3,981,600	$	1,055,661,741		$	2,234,154,025		$	(25,389,074	)	$	2,009,206		$	1,205,890,564		49	%(7)		3	%

PROJECTS FULLY PLACED IN-SERVICE DURING 2016


	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet		Investment to Date (2)		Estimated Total Investment (2)		Total Financing (2)		Amount Drawn at 9/30/2016 (2)		Estimated Future Equity Requirement (2)		Percentage Leased (3)
804 Carnegie Center	Q2 2016	Q2 2016	Princeton, NJ		1		130,000	$	45,906,709	$	47,000,000	$	—	$	—	$	1,093,291		100	%
601 Massachusetts Avenue	Q3 2015	Q1 2017	Washington, DC		1		478,883		299,663,325		339,760,000		—		—		40,096,675		90	%
10 CityPoint	Q2 2016	Q2 2016	Waltham, MA		1		241,460		89,681,015		100,400,000		—		—		10,718,985		97	%

Total Projects placed In-Service					3		850,343	$	435,251,049	$	487,160,000	$	—	$	—	$	51,908,951		94	%

IN-SERVICE PROPERTIES HELD FOR REDEVELOPMENT


	Sub Market		# of Buildings		Existing Square Feet		Leased %			Annualized Rental Obligations Per Leased SF (9)		Encumbered with secured debt (Y/N)	Central Business District (CBD) or Suburban (S)	Incremental Estimated Future SF (10)
North First Business Park		San Jose CA		5		190,636		100.0	%	$	18.87	N	S		1,359,364
3625-3635 Peterson Way		Santa Clara CA		1		218,366		100.0	%		21.84	N	S		413,690

Total Properties held for Redevelopment				6		409,002		100.0	%	$	20.46				1,773,054

(1)	A project is classified as Construction in Progress when construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed and capitalize interest has commenced.

(2)	Represents the Company’s share. Includes income (loss) and interest carry.

(3)	Represents percentage leased as of October 21, 2016, including leases with future commencement dates and excluding residential units.

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

(5)

Under the joint venture agreement, if the project is funded with 100% equity, the Company has agreed to fund 50% of our partner’s equity requirement, structured as preferred equity. The Company will fund approximately $25.4 million at a rate of LIBOR plus 3.0% per annum and receive priority distributions until the principal and interest are repaid. As of September 30, 2016, the Company has funded $2,009,206.

(6)	Includes approximately $17 million for overbuilding parking structure to support future development requirements and excludes $10 million of the purchase price for the site that is allocated to rights for future development in Reston Town Center.

(7)	Includes approximately 9,000 square feet of retail space from Cambridge Residential / 88 Ames residential development which is 0% leased.

(8)	Formerly the low-rise portion of 601 Lexington Avenue.

(9)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(10)	Incremental Future Square Footage is included in Approximate Developable Square Feet of Value Creation Pipeline—Owned Land Parcels on page 46.

LOGO

THIRD QUARTER 2016

VALUE CREATION PIPELINE

as of September 30, 2016

Owned Land Parcels


	Approximate
	Developable
Location	Square Feet
San Jose, CA (1)		2,199,000
Reston, VA		1,160,000
Waltham, MA		805,000
Springfield, VA		800,000
Dulles, VA (2)		310,000
Rockville, MD		759,000
Santa Clara, CA (1)		414,000
Gaithersburg, MD (3)		240,000
Washington, DC (50% ownership)		520,000
Marlborough, MA		400,000
Annapolis, MD (50% ownership)		300,000
Andover, MA		110,000

		8,017,000

Land Purchase Options


	Approximate
	Developable
Location	Square Feet
Princeton, NJ		1,650,000
Boston, MA (50% ownership)		1,415,000
Boston, MA		1,300,000
Cambridge, MA		940,000
Brooklyn, NY (50% ownership)		600,000
San Francisco, CA		TBD

		5,905,000

(1)	Excludes the existing square footage related to in-service properties being held for future re-development included on page 45.

(2)

On August 16, 2016, the Company completed the sale of a parcel of land within its Broad Run Business Park property located in Loudoun County, Virginia for a gross sale price of approximately $18.0 million. Net cash proceeds totaled approximately $17.9 million, resulting in a gain on sale of real estate totaling approximately $13.0 million.

(3)

On September 27, 2016, the Company executed a letter of intent for the sale of the remaining parcel of land at its Washingtonian North property located in Gaithersburg, Maryland. The letter of intent caused the Company to reevaluate its strategy for the land and based on a shorter than expected hold period, the Company reduced the carrying value of the land to the estimated net sales price and recognized an impairment loss of approximately $1.8 million during the three months ended September 30, 2016.

LOGO

THIRD QUARTER 2016

DEFINITIONS

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

The Company also presents certain of these measures (1) on a “Combined” basis, which is defined as the consolidated amount, plus the Company’s share of the measure from its unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest), and (2) showing “BXP’s Share” of the Combined amount, which is defined as the Combined amount, minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ percentage ownership interests). Management believes that the “Combined” measures provide useful information to investors regarding the Company’s financial condition and/or results of operations because they include the Company’s share of the applicable amount from unconsolidated joint ventures and, for “BXP’s Share” of the Combined amount, exclude the Company’s partners’ share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and presenting various financial measures in this manner can help investors better understand the Company’s financial condition and/or results of operations after taking into account its economic interest in these joint ventures. The Company cautions investors that the ownership percentages used in calculating “Combined” amounts and “BXP’s Share” of any Combined amounts may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, partnership agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, liquidations, etc. As a result, presentations of measures on a Combined basis and showing BXP’s Share of the Combined amount should be considered with and as a supplement to the Company’s financial information presented in accordance with GAAP.

Annualized Rental Obligations

Annualized Rental Obligations is defined as rental obligations at the end of the reporting period, including contractual base rents (but excluding percentage rent) and budgeted reimbursements from tenants under existing leases, multiplied by twelve (12). These annualized amounts exclude rent abatements.

Average Economic Occupancy

Average Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue.

Average Monthly Rental Rates

Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.

Average Physical Occupancy

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

Debt to Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio is defined as consolidated debt as a percentage of the market value of the Company’s outstanding equity securities plus the Company’s consolidated debt, and it is a measure of leverage commonly used by analysts in the REIT sector. Consolidated Market Capitalization is the sum of (A) the Company’s consolidated debt plus (B) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company, as reported by the New York Stock Exchange, multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) on and after February 6, 2015, which was the end of the performance period for 2012 OPP Units and thus the date earned, common units issuable upon conversion of 2012 OPP Units that were issued in the form of LTIP Units and (5) on and after February 4, 2016, which was the end of the performance period for 2013 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2013 MYLTIP Units that were issued in the form of LTIP Units plus (C) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by their fixed liquidation preference of $2,500 per share. The calculation of Consolidated Market Capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year periods have not yet ended, 2014, 2015 and 2016 MYLTIP Units are not included. The Company also presents BXP’s Share of Combined Market Capitalization, which is calculated in a similar manner, except that BXP’s Share of Combined Debt is utilized instead of the Company’s consolidated debt in both the numerator and the denominator. The Company presents these ratios because its degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios, are in part, a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect the Company’s capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. However, for a company like Boston Properties, Inc., whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long they are evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of the Company’s outstanding indebtedness.

Funds Available for Distribution (FAD) and FAD Payout Ratio

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

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

LOGO

THIRD QUARTER 2016

DEFINITIONS (continued)

Funds from Operations (FFO)

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

FFO presented by the Company may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. The Company believes that in order to facilitate a clear understanding of its operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

In-Service Properties

The Company treats a property as being “in-service” upon the earlier of (1) lease-up and completion of tenant improvements or (2) one year after cessation of major construction activity under GAAP. The determination as to when an entire property should be treated as “in-service” involves a degree of judgment and is made by management based on the relevant facts and circumstances of the particular property. For portfolio operating and occupancy statistics, the Company specifies a single date for treating a property as “in-service,” which is generally later than the date the property is partially placed in-service under GAAP. Under GAAP, a property may be placed in-service in stages as construction is completed and the property is held available for occupancy. In accordance with GAAP, when a portion of a property has been substantially completed and either occupied or held available for occupancy, the Company ceases capitalizing costs on that portion, even though it may not treat the property as being “in-service,” and continues to capitalize only those costs associated with the portion still under construction. In-service properties include properties held by the Company’s unconsolidated joint ventures. In-service Office properties exclude hotel and residential properties.

Market Rents

Market Rents used by the Company in calculating Average Economic Occupancy are based on the current market rates set by the managers of the Company’s residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could 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.

Net Operating Income (NOI)

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

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

Rental Obligations

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

Same Properties

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Properties.” “Same Properties” therefore exclude properties placed in-service, acquired, repositioned, or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Properties.” Pages 27-29 indicate by footnote the “In-Service Properties” that are not included in “Same Properties.”

Exhibit 99.2

LOGO

800 Boylston Street

Boston, MA 02199

AT THE COMPANY

Michael LaBelle

Executive Vice President,

Chief Financial Officer and Treasurer

(617) 236-3352

Arista Joyner

Investor Relations Manager

(617) 236-3343

BOSTON PROPERTIES ANNOUNCES

THIRD QUARTER 2016 RESULTS

BOSTON, MA, October 25, 2016 - Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the third quarter ended September 30, 2016.

Net income attributable to common shareholders was $76.8 million for the quarter ended September 30, 2016, compared to $184.1 million for the quarter ended September 30, 2015. Net income attributable to common shareholders per share (EPS) for the quarter ended September 30, 2016 was $0.50 basic and $0.50 on a diluted basis. This compares to EPS for the quarter ended September 30, 2015 of $1.20 basic and $1.20 on a diluted basis. Net income attributable to common shareholders for the quarter ended September 30, 2016 includes gains on sales of real estate aggregating approximately $13.0 million, or $0.08 per share basic and $0.08 per share on a diluted basis, compared to $199.5 million, or $0.58 per share basic and $0.58 per share on a diluted basis, for the quarter ended September 30, 2015. In addition, net income attributable to common shareholders for the quarter ended September 30, 2016 includes accelerated depreciation expense of approximately $50.8 million, or $(0.17) per share basic and $(0.17) per share on a diluted basis, related to the redevelopment of the Company’s 601 Lexington Avenue property. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,754,000 and 154,136,000, respectively, for the quarter ended September 30, 2016 and 153,595,000 and 153,786,000, respectively, for the quarter ended September 30, 2015.

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Funds from Operations (FFO) for the quarter ended September 30, 2016 were $219.6 million, or $1.43 per share basic and $1.42 per share diluted. This compares to FFO for the quarter ended September 30, 2015 of $217.3 million, or $1.41 per share basic and $1.41 per share diluted.

The Company’s reported FFO of $1.42 per share diluted was greater than the mid-point of the guidance previously provided of $1.40-$1.42 per share diluted primarily due to better than expected portfolio operations of $0.02 per share, partially offset by a $(0.01) per share impairment loss related to the anticipated sale of the remaining parcel of land at the Company’s Washingtonian North property located in Gaithersburg, Maryland.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended September 30, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

As of September 30, 2016, the Company’s portfolio consisted of 174 properties aggregating approximately 47.7 million square feet, including eight properties under construction/redevelopment totaling approximately 4.0 million square feet. The overall percentage of leased space for the 163 properties in service (excluding the Company’s two residential properties and hotel) as of September 30, 2016 was 89.6%.

Significant events during the third quarter included:

•

On July 1, 2016, the Company entered the Los Angeles market through its acquisition of a 49.8% interest in an existing joint venture that owns and operates Colorado Center located in Santa Monica, California for a gross purchase price of approximately $511.1 million, or approximately $503.6 million in cash net of credits for free rent, unfunded leasing costs and other adjustments. Colorado Center is a six-building office complex that sits on a 15-acre site and contains an aggregate of approximately 1,184,000 net rentable square feet with an underground parking garage for 3,100 vehicles. The property is 66% leased.

•

On August 17, 2016, the Company’s Operating Partnership completed a public offering of $1.0 billion in aggregate principal amount of its 2.750% senior unsecured notes due 2026. The notes were priced at 99.271% of the principal amount to yield an effective rate, including financing fees and the impact of the settlement of certain forward-starting interest rate swap contracts, of approximately 3.495% to maturity. The notes will mature on October 1, 2026, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $984.7 million after deducting underwriting discounts and transaction expenses.

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•

On August 17, 2016, in conjunction with the Company’s Operating Partnership’s offering of senior unsecured notes, the Company terminated forward-starting interest rate swap contracts which fixed the ten-year swap rate at a weighted-average rate of approximately 2.423% per annum on notional amounts aggregating $550.0 million. The Company cash-settled the contracts and made cash payments to the counterparties aggregating approximately $49.3 million. The Company recognized approximately $0.1 million of losses on interest rate contracts during the three months ended September 30, 2016 related to the partial ineffectiveness of the interest rate contracts. The Company will reclassify into earnings over the ten-year term of the 2.750% senior unsecured notes due 2026 as an increase to interest expense approximately $49.2 million (or approximately $4.9 million per year) of the amounts recorded on the consolidated balance sheets within accumulated other comprehensive loss, which represents the effective portion of the applicable interest rate contracts.

•

On August 19, 2016, the consolidated entity in which the Company has 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. The Company recorded approximately $50.8 million of accelerated depreciation expense for the portion of the complex to be demolished.

•

On September 1, 2016, the Company used a portion of the net proceeds from its Operating Partnership’s offering of senior unsecured notes and available cash to repay the mortgage loan collateralized by its 599 Lexington Avenue property located in New York City totaling $750.0 million. The mortgage loan bore interest at a fixed rate of 5.57% per annum (5.41% per annum GAAP interest rate) and was scheduled to mature on March 1, 2017. There was no prepayment penalty. The Company recognized a gain from early extinguishment of debt totaling approximately $0.4 million consisting of the acceleration of the remaining balance related to the effective portion of a previous interest rate hedging program included within accumulated other comprehensive loss, offset by the write-off of unamortized deferred financing costs.

•

On September 1, 2016, the Company used a portion of the net proceeds from its Operating Partnership’s offering of senior unsecured notes and available cash to repay the mortgage loan collateralized by its Embarcadero Center Four property located in San Francisco, California totaling approximately $344.8 million. The mortgage loan bore interest at a fixed rate of 6.10% per annum (7.02% per annum GAAP interest rate) and was scheduled to mature on December 1, 2016. There was no prepayment penalty. The Company recognized a loss from early extinguishment of debt totaling approximately $0.7 million consisting of the write-off of unamortized deferred financing costs and the acceleration of the remaining balance related to the effective portion of a previous interest rate hedging program included within accumulated other comprehensive loss.

•

On September 16, 2016, the Company partially placed in-service 888 Boylston Street, a Class A office project with approximately 425,000 net rentable square feet located in Boston, Massachusetts. The property is 71% leased.

–more–

•

Transactions completed subsequent to September 30, 2016:

•

On October 1, 2016, a joint venture in which the Company has a 50% interest completed and fully placed in-service 1265 Main Street, a Class A office project with approximately 115,000 net rentable feet located in Waltham, Massachusetts. The property is 100% leased.

•

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square located in Washington, DC, completed the sale of an 80% interest in the joint venture for a gross sale price of approximately $288.1 million, including the assumption by the buyer of its pro rata share of the mortgage loan collateralized by the property totaling approximately $133.4 million and certain unfunded leasing costs totaling approximately $5.7 million. Prior to the sale, the Company owned a 51% interest and its partner owned a 49% interest in the joint venture. Following the sale, the Company continues to own a 20% interest in the joint venture with the buyer owning the remaining 80%. Metropolitan Square is an approximately 607,000 net rentable square foot Class A office property.

EPS and FFO per Share Guidance:

The Company’s guidance for the fourth quarter, full year 2016 and full year 2017 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.

As shown below, the Company has updated its projected EPS (diluted) for the full year 2016 to $2.98 - $3.00 per share from $3.04 - $3.11 per share. This is a decrease of approximately $0.09 per share at the mid-point of the Company’s guidance consisting of $0.19 per share of greater than budgeted depreciation expense primarily due to the redevelopment of the low-rise portion of 601 Lexington Avenue that commenced during the third quarter of 2016, partially offset by $0.08 per share from the gain on sale of a land parcel

–more–

during the third quarter of 2016 and $0.03 per share of reduced interest expense resulting from refinancing activity during the third quarter of 2016. In addition, the Company has updated its projected guidance for FFO per share (diluted) for the full year 2016 to $5.97 - $5.99 per share from $5.92 - $5.99 per share. This is an increase of approximately $0.03 per share at the mid-point of the Company’s guidance primarily consisting of $0.03 per share due to higher portfolio performance.


	Fourth Quarter 2016					Full Year 2016
	Low			High		Low			-High
Projected EPS (diluted)	$	0.64	-	$	0.66	$	2.98	-	$	3.00
Add:
Projected Company Share of Real Estate Depreciation and Amortization		0.85	-		0.85		3.46	-		3.46
Less:
Projected Company Share of Gains on Sales of Real Estate		—	-		—		0.47	-		0.47

Projected FFO per Share (diluted)	$	1.49	-	$	1.51	$	5.97	-	$	5.99

The Company’s guidance for the full year 2017 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. In addition, the estimates for the full year 2017 when compared to the full year 2016 include, among other assumptions, (1) an increase in the Company’s share of Combined Same Property NOI of 2.0% - 3.5% resulting in an incremental $0.23 per share at the mid-point, (2) an incremental contribution of $0.14 per share at the mid-point from the Company’s development deliveries offset by the impact of removing properties from service for redevelopment and a full-year contribution from 2016 acquisitions, (3) interest expense savings of $0.12 per share at the mid-point due to 2016 refinancing activities and (4) an increase in development and management service income of $0.01 per share. These items are offset by (1) a reduction in Gains on Sales of Real Estate of $0.47 per share with no sales assumed in 2017, (2) a decrease in lease termination fees of approximately $0.31 per share and (3) increased general and administrative expenses of $0.03 per share at the mid-point.


	Full Year 2017
	Low			High
Projected EPS (diluted)	$	2.58	-	$	2.76
Add:
Projected Company Share of Real Estate Depreciation and Amortization		3.47	-		3.47
Less:
Projected Company Share of Gains on Sales of Real Estate		—	-		—

Projected FFO per Share (diluted)	$	6.05	-	$	6.23

Boston Properties will host a conference call on Wednesday, October 26, 2016 at 10:00 AM Eastern Time, open to the general public, to discuss the third quarter 2016 results, the fourth quarter 2016, full fiscal year 2016 and full fiscal year 2017 projections and related assumptions, and other related matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731 (International) and entering the passcode 23629459. A replay of the conference call will be available through November 11, 2016, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 23629459. There will also be a live audio webcast of the call which may be accessed on the Company’s website at www.bostonproperties.com in the Investor Relations section. Shortly after the call a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

–more–

Additionally, a copy of Boston Properties’ third quarter 2016 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at www.bostonproperties.com.

Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space, five retail properties, four residential properties (including two properties under construction) and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC.

This press release contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties’ control and could materially affect actual results, performance or achievements. These factors include, without limitation, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the fourth quarter 2016, full fiscal year 2016 and full fiscal year 2017, whether as a result of new information, future events or otherwise.

Financial tables follow.

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BOSTON PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2016			December 31, 2015
	(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost	$	18,704,856		$	18,465,405
Construction in progress		954,013			763,935
Land held for future development		243,887			252,195
Less: accumulated depreciation		(4,113,553	)		(3,925,894	)

Total real estate		15,789,203			15,555,641
Cash and cash equivalents		419,323			723,718
Cash held in escrows		63,980			73,790
Investments in securities		23,022			20,380
Tenant and other receivables, net		76,258			97,865
Accrued rental income, net		785,569			754,883
Deferred charges, net		680,192			704,867
Prepaid expenses and other assets		176,693			185,118
Investments in unconsolidated joint ventures		775,659			235,224

Total assets	$	18,789,899		$	18,351,486

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,077,707		$	3,435,242
Unsecured senior notes, net		7,243,767			5,264,819
Unsecured line of credit		—			—
Mezzanine notes payable		307,448			308,482
Outside members’ notes payable		180,000			180,000
Accounts payable and accrued expenses		312,979			274,709
Dividends and distributions payable		113,038			327,320
Accrued interest payable		234,628			190,386
Other liabilities		461,079			483,601

Total liabilities		10,930,646			10,464,559


Commitments and contingencies		—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at September 30, 2016 and December 31, 2015		200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,851,912 and 153,658,866 issued and 153,773,012 and 153,579,966 outstanding at September 30, 2016 and December 31, 2015, respectively		1,538			1,536
Additional paid-in capital		6,326,580			6,305,687
Dividends in excess of earnings		(725,522	)		(780,952	)
Treasury common stock at cost, 78,900 shares at September 30, 2016 and December 31, 2015		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(73,943	)		(14,114	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,725,931			5,709,435
Noncontrolling interests:
Common units of the Operating Partnership		608,280			603,092
Property partnerships		1,525,042			1,574,400

Total equity		7,859,253			7,886,927

Total liabilities and equity	$	18,789,899		$	18,351,486

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BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Revenue
Rental
Base rent	$	489,312		$	494,300		$	1,518,826		$	1,471,591
Recoveries from tenants		92,560			91,544			267,852			266,932
Parking and other		24,638			25,509			75,576			76,849

Total rental revenue		606,510			611,353			1,862,254			1,815,372
Hotel revenue		12,354			12,619			33,919			35,107
Development and management services		6,364			5,912			18,586			16,102

Total revenue		625,228			629,884			1,914,759			1,866,581

Expenses
Operating
Rental		228,560			219,796			665,670			655,610
Hotel		8,118			8,125			23,730			24,196
General and administrative		25,165			20,944			79,936			72,019
Transaction costs		249			254			1,187			789
Impairment loss		1,783			—			1,783			—
Depreciation and amortization		203,748			153,015			516,371			475,082

Total expenses		467,623			402,134			1,288,677			1,227,696

Operating income		157,605			227,750			626,082			638,885
Other income (expense)
Income from unconsolidated joint ventures		1,464			2,647			5,489			20,559
Interest and other income		3,628			3,637			6,657			6,337
Gains (losses) from investments in securities		976			(1,515	)		1,713			(1,146	)
Interest expense		(104,641	)		(108,727	)		(314,953	)		(326,018	)
Losses from early extinguishments of debt		(371	)		—			(371	)		—
Losses from interest rate contracts		(140	)		—			(140	)		—

Income before gains on sales of real estate		58,521			123,792			324,477			338,617
Gains on sales of real estate		12,983			199,479			80,606			294,563

Net income		71,504			323,271			405,083			633,180
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		17,225			(115,240	)		(53	)		(139,712	)
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—			—			—			(6	)
Noncontrolling interest—common units of the Operating Partnership		(9,387	)		(21,302	)		(42,120	)		(50,906	)

Net income attributable to Boston Properties, Inc.		79,342			186,729			362,910			442,556
Preferred dividends		(2,589	)		(2,647	)		(7,796	)		(7,854	)

Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	184,082		$	355,114		$	434,702

Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.50		$	1.20		$	2.31		$	2.83

Weighted average number of common shares outstanding		153,754			153,595			153,681			153,426

Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.50		$	1.20		$	2.31		$	2.82

Weighted average number of common and common equivalent shares outstanding		154,136			153,786			153,971			153,825

–more–

BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders	$	76,753		$	184,082		$	355,114		$	434,702
Add:
Preferred dividends		2,589			2,647			7,796			7,854
Noncontrolling interest - common units of the Operating Partnership		9,387			21,302			42,120			50,906
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			—			—			6
Noncontrolling interests in property partnerships		(17,225	)		115,240			53			139,712
Less:
Gains on sales of real estate		12,983			199,479			80,606			294,563

Income before gains on sales of real estate		58,521			123,792			324,477			338,617
Add:
Depreciation and amortization		203,748			153,015			516,371			475,082
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(40,907	)		(21,405	)		(79,831	)		(70,147	)
Company’s share of depreciation and amortization from unconsolidated joint ventures		9,128			3,808			18,242			2,562
Corporate-related depreciation and amortization		(393	)		(334	)		(1,119	)		(1,017	)
Less:
Noncontrolling interests in property partnerships (2)		(17,225	)		14,122			53			38,594
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			—			—			6
Preferred dividends		2,589			2,647			7,796			7,854

Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)		244,733			242,107			770,291			698,643
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations		25,169			24,846			79,440			72,278

Funds from operations attributable to Boston Properties, Inc. common shareholders	$	219,564		$	217,261		$	690,851		$	626,365

Boston Properties, Inc.’s percentage share of funds from operations - basic		89.72	%		89.74	%		89.69	%		89.65	%

Weighted average shares outstanding - basic		153,754			153,595			153,681			153,426

FFO per share basic	$	1.43		$	1.41		$	4.50		$	4.08

Weighted average shares outstanding - diluted		154,136			153,786			153,971			153,825

FFO per share diluted	$	1.42		$	1.41		$	4.49		$	4.07

–more–

(1)

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

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.

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

(2)	For the three and nine months ended September 30, 2015, excludes the noncontrolling interests in property partnerships’ share of a gain on sale of real estate totaling approximately $101.1 million.

–more–

BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES


	% Leased by Location
	September 30, 2016			December 31, 2015
Boston		90.0	%		90.6	%
New York		90.1	%		91.5	%
San Francisco and Los Angeles		87.3	%		93.8	%
Washington, DC		90.1	%		91.0	%

Total Portfolio		89.6	%		91.4	%

# # #

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Form 8-K BOSTON PROPERTIES INC For: Oct 25

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