Item 1. Financial Statements.

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Item 1. Financial Statements.


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for share and par value amounts)
	September 30, 2021		December 31, 2020
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,688,647 and $6,592,019 at September 30, 2021 and December 31, 2020, respectively)	$	23,711,400	$	22,969,110
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at September 30, 2021 and December 31, 2020, respectively)	237,845		237,393
Right of use assets - operating leases	170,085		146,406
Less: accumulated depreciation (amounts related to VIEs of $(1,266,516) and $(1,158,548) at September 30, 2021 and December 31, 2020, respectively)	(5,850,397)		(5,534,102)
Total real estate	18,268,933		17,818,807
Cash and cash equivalents (amounts related to VIEs of $288,186 and $340,642 at September 30, 2021 and December 31, 2020, respectively)	1,002,728		1,668,742
Cash held in escrows	79,193		50,587
Investments in securities	41,517		39,457
Tenant and other receivables, net (amounts related to VIEs of $8,598 and $10,911 at September 30, 2021 and December 31, 2020, respectively)	61,269		77,411
Related party note receivable, net	78,144		77,552
Notes receivable, net	19,297		18,729
Accrued rental income, net (amounts related to VIEs of $352,291 and $336,594 at September 30, 2021 and December 31, 2020, respectively)	1,203,840		1,122,502
Deferred charges, net (amounts related to VIEs of $174,172 and $183,306 at September 30, 2021 and December 31, 2020, respectively)	622,807		640,085
Prepaid expenses and other assets (amounts related to VIEs of $42,051 and $13,137 at September 30, 2021 and December 31, 2020, respectively)	97,560		33,840
Investments in unconsolidated joint ventures	1,373,522		1,310,478
Total assets	$	22,848,810	$	22,858,190
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $2,898,699 and $2,907,590 at September 30, 2021 and December 31, 2020, respectively)	$	2,898,699	$	2,909,081
Unsecured senior notes, net	10,479,651		9,639,287
Unsecured line of credit	—		—
Unsecured term loan, net	—		499,390
Lease liabilities - finance leases (amounts related to VIEs of $20,420 and $20,306 at September 30, 2021 and December 31, 2020, respectively)	243,562		236,492
Lease liabilities - operating leases	204,137		201,713
Accounts payable and accrued expenses (amounts related to VIEs of $36,967 and $23,128 at September 30, 2021 and December 31, 2020, respectively)	331,687		336,264
Dividends and distributions payable	169,739		171,082
Accrued interest payable	87,408		106,288

Other liabilities (amounts related to VIEs of $124,615 and $158,805 at September 30, 2021 and December 31, 2020, respectively)	370,403		412,084
Total liabilities	14,785,286		14,511,681
Commitments and contingencies (See Note 9)
Redeemable deferred stock units— 80,989 and 72,966 units outstanding at redemption value at September 30, 2021 and December 31, 2020, respectively	8,775		6,897


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for share and par value amounts)
	September 30, 2021		December 31, 2020
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 December 31, 2020	—		200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 156,285,391 and 155,797,725 issued and 156,206,491 and 155,718,825 outstanding at September 30, 2021 and December 31, 2020, respectively	1,562		1,557
Additional paid-in capital	6,415,802		6,356,791
Dividends in excess of earnings	(657,021)		(509,653)
Treasury common stock at cost, 78,900 shares at September 30, 2021 and December 31, 2020	(2,722)		(2,722)
Accumulated other comprehensive loss	(40,803)		(49,890)
Total stockholders’ equity attributable to Boston Properties, Inc.	5,716,818		5,996,083
Noncontrolling interests:
Common units of Boston Properties Limited Partnership	609,830		616,596
Property partnerships	1,728,101		1,726,933
Total equity	8,054,749		8,339,612
Total liabilities and equity	$	22,848,810	$	22,858,190

The accompanying notes are an integral part of these consolidated financial statements.

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Revenue
Lease	$	692,260	$	666,674	$	2,062,102	$	2,006,904
Parking and other	23,507		16,327		58,727		54,777
Hotel	5,189		90		7,382		7,014
Development and management services	6,094		7,281		20,181		23,285
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Total revenue	730,056		693,268		2,157,558		2,100,597
Expenses
Operating
Rental	258,281		258,261		764,373		761,014
Hotel	3,946		3,164		7,993		11,958
General and administrative	34,560		27,862		117,924		102,059
Payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Transaction costs	1,888		307		2,970		1,254
Depreciation and amortization	179,412		166,456		539,815		515,738
Total expenses	481,093		458,946		1,442,241		1,400,640
Other income (expense)
Loss from unconsolidated joint ventures	(5,597)		(6,873)		(1,745)		(5,410)
Gains (losses) on sales of real estate	348		(209)		8,104		613,723
Interest and other income (loss)	1,520		(45)		4,140		4,277
Gains (losses) from investments in securities	(190)		1,858		3,744		965
Losses from early extinguishment of debt	—		—		(898)		—
Interest expense	(105,794)		(110,993)		(320,015)		(319,726)
Net income	139,250		118,060		408,647		993,786
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,971)		(15,561)		(52,602)		(34,280)
Noncontrolling interest—common units of the Operating Partnership	(11,982)		(10,020)		(35,393)		(97,090)
Net income attributable to Boston Properties, Inc.	108,297		92,479		320,652		862,416
Preferred dividends	—		(2,625)		(2,560)		(7,875)
Preferred stock redemption charge	—		—		(6,412)		—
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	$	89,854	$	311,680	$	854,541
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.69	$	0.58	$	2.00	$	5.49
Weighted average number of common shares outstanding	156,183		155,645		156,062		155,349
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.69	$	0.58	$	1.99	$	5.49
Weighted average number of common and common equivalent shares outstanding	156,598		155,670		156,394		155,447

The accompanying notes are an integral part of these consolidated financial statements.

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Net income	$	139,250	$	118,060	$	408,647	$	993,786
Other comprehensive income (loss):
Effective portion of interest rate contracts	1,088		1,027		5,482		(9,352)
Amortization of interest rate contracts (1)	1,676		1,677		5,028		5,020
Other comprehensive income (loss)	2,764		2,704		10,510		(4,332)
Comprehensive income	142,014		120,764		419,157		989,454
Net income attributable to noncontrolling interests	(30,953)		(25,581)		(87,995)		(131,370)
Other comprehensive (income) loss attributable to noncontrolling interests	(401)		(405)		(1,423)		45
Comprehensive income attributable to Boston Properties, Inc.	$	110,660	$	94,778	$	329,739	$	858,129

(1)Amounts reclassified from comprehensive income primarily to interest expense within Boston Properties, Inc.’s Consolidated Statements of Operations.

The accompanying notes are an integral part of these consolidated financial statements.


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited and in thousands)
	Common Stock			Preferred Stock		Additional Paid-in Capital		Dividends in Excess of Earnings		Treasury Stock, at cost		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Common Units		Noncontrolling Interests - Property Partnerships		Total
	Shares	Amount
Equity, June 30, 2021	156,136	$	1,561	$	—	$	6,405,916	$	(612,247)	$	(2,722)	$	(43,166)	$	615,308	$	1,725,343	$	8,089,993
Redemption of operating partnership units to common stock	50	1		—		1,747		—		—		—		(1,748)		—		—
Allocated net income for the period	—	—		—		—		108,308		—		—		11,971		18,971		139,250
Dividends/distributions declared	—	—		—		—		(153,082)		—		—		(17,203)		—		(170,285)
Shares issued pursuant to stock purchase plan	4	—		—		520		—		—		—		—		—		520
Net activity from stock option and incentive plan	16	—		—		1,185		—		—		—		7,679		—		8,864
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		11,318		11,318
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(27,675)		(27,675)
Effective portion of interest rate contracts	—	—		—		—		—		—		981		107		—		1,088
Amortization of interest rate contracts	—	—		—		—		—		—		1,382		150		144		1,676
Reallocation of noncontrolling interest	—	—		—		6,434		—		—		—		(6,434)		—		—
Equity, September 30, 2021	156,206	$	1,562	$	—	$	6,415,802	$	(657,021)	$	(2,722)	$	(40,803)	$	609,830	$	1,728,101	$	8,054,749

Equity, June 30, 2020	155,622	$	1,556	$	200,000	$	6,340,665	$	(302,511)	$	(2,722)	$	(54,921)	$	640,491	$	1,724,588	8,547,146
Redemption of operating partnership units to common stock	9	—		—		338		—		—		—		(338)		—		—
Allocated net income for the period	—	—		—		—		92,934		—		—		9,565		15,561		118,060
Dividends/distributions declared	—	—		—		—		(155,143)		—		—		(17,183)		—		(172,326)
Shares issued pursuant to stock purchase plan	5	—		—		434		—		—		—		—		—		434
Net activity from stock option and incentive plan	—	—		—		1,390		—		—		—		7,249		—		8,639
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		1,407		1,407
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(11,026)		(11,026)
Effective portion of interest rate contracts	—	—		—		—		—		—		917		110		—		1,027
Amortization of interest rate contracts	—	—		—		—		—		—		1,382		151		144		1,677
Reallocation of noncontrolling interest	—	—		—		5,249		—		—		—		(5,249)		—		—
Equity, September 30, 2020	155,636	$	1,556	$	200,000	$	6,348,076	$	(364,720)	$	(2,722)	$	(52,622)	$	634,796	$	1,730,674	$	8,495,038



BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited and in thousands)
	Common Stock			Preferred Stock		Additional Paid-in Capital		Dividends in Excess of Earnings		Treasury Stock, at cost		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Common Units		Noncontrolling Interests - Property Partnerships		Total
	Shares	Amount












Equity, December 31, 2020	155,719	$	1,557	$	200,000	$	6,356,791	$	(509,653)	$	(2,722)	$	(49,890)	$	616,596	$	1,726,933	$	8,339,612
Redemption of operating partnership units to common stock	227	2		—		8,031		—		—		—		(8,033)		—		—
Allocated net income for the period	—	—		—		—		320,652		—		—		35,393		52,602		408,647
Dividends/distributions declared	—	—		—		—		(461,608)		—		—		(51,743)		—		(513,351)
Shares issued pursuant to stock purchase plan	9	—		—		1,004		—		—		—		—		—		1,004
Net activity from stock option and incentive plan	251	3		—		20,893		—		—		—		39,332		—		60,228
Preferred stock redemption	—	—		(200,000)		6,377		—		—		—		—		—		(193,623)
Preferred stock redemption charge	—	—		—		—		(6,412)		—		—		—		—		(6,412)
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		13,738		13,738
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(65,604)		(65,604)
Effective portion of interest rate contracts	—	—		—		—		—		—		4,943		539		—		5,482
Amortization of interest rate contracts	—	—		—		—		—		—		4,144		452		432		5,028
Reallocation of noncontrolling interest	—	—		—		22,706		—		—		—		(22,706)		—		—
Equity, September 30, 2021	156,206	$	1,562	$	—	$	6,415,802	$	(657,021)	$	(2,722)	$	(40,803)	$	609,830	$	1,728,101	$	8,054,749

Equity, December 31, 2019	154,790	$	1,548	$	200,000	$	6,294,719	$	(760,523)	$	(2,722)	$	(48,335)	$	600,860	$	1,728,689	$	8,014,236
Cumulative effect of a change in accounting principle	—	—		—		—		(1,505)		—		—		(174)		—		(1,679)
Redemption of operating partnership units to common stock	774	8		—		26,674		—		—		—		(26,682)		—		—
Allocated net income for the period	—	—		—		—		862,416		—		—		97,090		34,280		993,786
Dividends/distributions declared	—	—		—		—		(465,108)		—		—		(51,821)		—		(516,929)
Shares issued pursuant to stock purchase plan	7	—		—		759		—		—		—		—		—		759
Net activity from stock option and incentive plan	65	—		—		9,646		—		—		—		32,278		—		41,924
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		7,364		7,364
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(40,091)		(40,091)
Effective portion of interest rate contracts	—	—		—		—		—		—		(8,416)		(936)		—		(9,352)
Amortization of interest rate contracts	—	—		—		—		—		—		4,129		459		432		5,020
Reallocation of noncontrolling interest	—	—		—		16,278		—		—		—		(16,278)		—		—
Equity, September 30, 2020	155,636	$	1,556	$	200,000	$	6,348,076	$	(364,720)	$	(2,722)	$	(52,622)	$	634,796	$	1,730,674	$	8,495,038

The accompanying notes are an integral part of these consolidated financial statements.


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	408,647	$	993,786
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	539,815		515,738
Amortization of right of use assets - operating leases	3,208		1,667
Non-cash compensation expense	43,098		36,152
Loss from unconsolidated joint ventures	1,745		5,410
Distributions of net cash flow from operations of unconsolidated joint ventures	18,462		22,285
Gains from investments in securities	(3,744)		(965)
Allowance for current expected credit losses	(758)		1,997
Non-cash portion of interest expense	17,584		17,397
Settlement of accreted debt discount on redemption of unsecured senior notes	(6,290)		—
Losses from early extinguishments of debt	898		—
Gains on sales of real estate	(8,104)		(613,723)
Change in assets and liabilities:
Tenant and other receivables, net	13,738		18,543
Notes receivable, net	(419)		(395)
Accrued rental income, net	(74,283)		(85,843)
Prepaid expenses and other assets	(61,019)		(60,365)
Lease liabilities - operating leases	(24,023)		1,157
Accounts payable and accrued expenses	26,097		8,273
Accrued interest payable	(18,237)		(1,202)
Other liabilities	(51,938)		(24,868)
Tenant leasing costs	(37,618)		(52,621)
Total adjustments	378,212		(211,363)
Net cash provided by operating activities	786,859		782,423
Cash flows from investing activities:
Acquisitions of real estate	(218,679)		(135,698)
Construction in progress	(381,104)		(358,824)
Building and other capital improvements	(103,840)		(116,894)
Tenant improvements	(218,878)		(172,401)
Proceeds from sales of real estate	—		505,679
Capital contributions to unconsolidated joint ventures	(95,462)		(158,374)
Capital distributions from unconsolidated joint ventures	122		55,123
Issuance of notes receivable, net	—		(9,800)
Proceeds from sale of investment in unconsolidated joint venture	17,789		—
Investments in securities, net	1,684		2,778
Net cash used in investing activities	(998,368)		(388,411)
Cash flows from financing activities:
Repayments of mortgage notes payable	(13,261)		(12,795)
Proceeds from unsecured senior notes	1,695,996		1,248,125
Redemption of unsecured senior notes	(843,710)		—
Borrowings on unsecured line of credit	300,000		265,000
Repayments of unsecured line of credit	(300,000)		(265,000)


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2021		2020
Repayment of unsecured term loan	(500,000)		—
Redemption of preferred stock	(200,000)		—
Payments on finance lease obligations	1,250		—
Deferred financing costs	(20,770)		(10,416)
Debt prepayment and extinguishment costs	(185)		—
Net proceeds from equity transactions	20,028		3,276
Dividends and distributions	(513,381)		(516,572)
Contributions from noncontrolling interests in property partnerships	13,738		7,364
Distributions to noncontrolling interests in property partnerships	(65,604)		(40,091)
Net cash provided by (used in) financing activities	(425,899)		678,891
Net increase (decrease) in cash and cash equivalents and cash held in escrows	(637,408)		1,072,903
Cash and cash equivalents and cash held in escrows, beginning of period	1,719,329		691,886
Cash and cash equivalents and cash held in escrows, end of period	$	1,081,921	$	1,764,789

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	1,668,742	$	644,950
Cash held in escrows, beginning of period	50,587		46,936
Cash and cash equivalents and cash held in escrows, beginning of period	$	1,719,329	$	691,886

Cash and cash equivalents, end of period	$	1,002,728	$	1,714,783
Cash held in escrows, end of period	79,193		50,006
Cash and cash equivalents and cash held in escrows, end of period	$	1,081,921	$	1,764,789

Supplemental disclosures:
Cash paid for interest	$	358,015	$	335,591
Interest capitalized	$	36,632	$	41,329

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(159,108)	$	(73,584)
Change in real estate included in accounts payable and accrued expenses	$	(22,104)	$	(30,924)
Right-of-use assets obtained in exchange for lease liabilities	$	26,887	$	—
Accrued rental income, net deconsolidated	$	—	$	(4,558)
Tenant leasing costs, net deconsolidated	$	—	$	(3,462)
Building and other capital improvements, net deconsolidated	$	—	$	(111,889)
Tenant improvements, net deconsolidated	$	—	$	(12,331)
Investment in unconsolidated joint venture recorded upon deconsolidation	$	—	$	347,898
Dividends and distributions declared but not paid	$	169,739	$	171,070
Conversions of noncontrolling interests to stockholders’ equity	$	8,033	$	26,682
Issuance of restricted securities to employees and non-employee directors	$	44,257	$	43,244

The accompanying notes are an integral part of these consolidated financial statements.


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	September 30, 2021		December 31, 2020
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,688,647 and $6,592,019 at September 30, 2021 and December 31, 2020, respectively)	$	23,335,905	$	22,592,301
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at September 30, 2021 and December 31, 2020, respectively)	237,845		237,393
Right of use assets - operating leases	170,085		146,406
Less: accumulated depreciation (amounts related to VIEs of $(1,266,516) and $(1,158,548) at September 30, 2021 and December 31, 2020, respectively)	(5,739,625)		(5,428,576)
Total real estate	18,004,210		17,547,524
Cash and cash equivalents (amounts related to VIEs of $288,186 and $340,642 at September 30, 2021 and December 31, 2020, respectively)	1,002,728		1,668,742
Cash held in escrows	79,193		50,587
Investments in securities	41,517		39,457
Tenant and other receivables, net (amounts related to VIEs of $8,598 and $10,911 at September 30, 2021 and December 31, 2020, respectively)	61,269		77,411
Related party note receivable, net	78,144		77,552
Notes receivable, net	19,297		18,729
Accrued rental income, net (amounts related to VIEs of $352,291 and $336,594 at September 30, 2021 and December 31, 2020, respectively)	1,203,840		1,122,502
Deferred charges, net (amounts related to VIEs of $174,172 and $183,306 at September 30, 2021 and December 31, 2020, respectively)	622,807		640,085
Prepaid expenses and other assets (amounts related to VIEs of $42,051 and $13,137 at September 30, 2021 and December 31, 2020, respectively)	97,560		33,840
Investments in unconsolidated joint ventures	1,373,522		1,310,478
Total assets	$	22,584,087	$	22,586,907
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $2,898,699 and $2,907,590 at September 30, 2021 and December 31, 2020, respectively)	$	2,898,699	$	2,909,081
Unsecured senior notes, net	10,479,651		9,639,287
Unsecured line of credit	—		—
Unsecured term loan, net	—		499,390
Lease liabilities - finance leases (amounts related to VIEs of $20,420 and $20,306 at September 30, 2021 and December 31, 2020, respectively)	243,562		236,492
Lease liabilities - operating leases	204,137		201,713
Accounts payable and accrued expenses (amounts related to VIEs of $36,967 and $23,128 at September 30, 2021 and December 31, 2020, respectively)	331,687		336,264
Dividends and distributions payable	169,739		171,082
Accrued interest payable	87,408		106,288

Other liabilities (amounts related to VIEs of $124,615 and $158,805 at September 30, 2021 and December 31, 2020, respectively)	370,403		412,084
Total liabilities	14,785,286		14,511,681
Commitments and contingencies (See Note 9)
Redeemable deferred stock units— 80,989 and 72,966 units outstanding at redemption value at September 30, 2021 and December 31, 2020, respectively	8,775		6,897


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	September 30, 2021		December 31, 2020
Noncontrolling interests:
Redeemable partnership units— 15,989,304 and 16,037,121 common units and 1,487,492 and 1,336,115 long term incentive units outstanding at redemption value at September 30, 2021 and December 31, 2020, respectively	1,893,611		1,643,024
Capital:
5.25% Series B cumulative redeemable preferred units, liquidation preference $2,500 per unit, 80,000 units issued and outstanding at December 31, 2020	—		193,623
Boston Properties Limited Partnership partners’ capital— 1,736,833 and 1,730,921 general partner units and 154,469,658 and 153,987,904 limited partner units outstanding at September 30, 2021 and December 31, 2020, respectively	4,209,117		4,554,639
Accumulated other comprehensive loss	(40,803)		(49,890)
Total partners’ capital	4,168,314		4,698,372
Noncontrolling interests in property partnerships	1,728,101		1,726,933
Total capital	5,896,415		6,425,305
Total liabilities and capital	$	22,584,087	$	22,586,907

The accompanying notes are an integral part of these consolidated financial statements.

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Revenue
Lease	$	692,260	$	666,674	$	2,062,102	$	2,006,904
Parking and other	23,507		16,327		58,727		54,777
Hotel	5,189		90		7,382		7,014
Development and management services	6,094		7,281		20,181		23,285
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Total revenue	730,056		693,268		2,157,558		2,100,597
Expenses
Operating
Rental	258,281		258,261		764,373		761,014
Hotel	3,946		3,164		7,993		11,958
General and administrative	34,560		27,862		117,924		102,059
Payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Transaction costs	1,888		307		2,970		1,254
Depreciation and amortization	177,677		164,706		533,255		510,400
Total expenses	479,358		457,196		1,435,681		1,395,302
Other income (expense)
Loss from unconsolidated joint ventures	(5,597)		(6,873)		(1,745)		(5,410)
Gains (losses) on sales of real estate	348		(209)		8,104		626,686
Interest and other income (loss)	1,520		(45)		4,140		4,277
Gains (losses) from investments in securities	(190)		1,858		3,744		965
Losses from early extinguishment of debt	—		—		(898)		—
Interest expense	(105,794)		(110,993)		(320,015)		(319,726)
Net income	140,985		119,810		415,207		1,012,087
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,971)		(15,561)		(52,602)		(34,280)
Net income attributable to Boston Properties Limited Partnership	122,014		104,249		362,605		977,807
Preferred distributions	—		(2,625)		(2,560)		(7,875)
Preferred unit redemption charge	—		—		(6,412)		—
Net income attributable to Boston Properties Limited Partnership common unitholders	$	122,014	$	101,624	$	353,633	$	969,932
Basic earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	0.70	$	0.59	$	2.04	$	5.61
Weighted average number of common units outstanding	173,194		172,677		173,078		172,628
Diluted earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	0.70	$	0.59	$	2.04	$	5.61
Weighted average number of common and common equivalent units outstanding	173,609		172,702		173,410		172,726

The accompanying notes are an integral part of these consolidated financial statements.

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Net income	$	140,985	$	119,810	$	415,207	$	1,012,087
Other comprehensive income (loss):
Effective portion of interest rate contracts	1,088		1,027		5,482		(9,352)
Amortization of interest rate contracts (1)	1,676		1,677		5,028		5,020
Other comprehensive income (loss)	2,764		2,704		10,510		(4,332)
Comprehensive income	143,749		122,514		425,717		1,007,755
Comprehensive income attributable to noncontrolling interests	(19,115)		(15,705)		(53,034)		(34,712)
Comprehensive income attributable to Boston Properties Limited Partnership	$	124,634	$	106,809	$	372,683	$	973,043

(1)Amounts reclassified from comprehensive income primarily to interest expense within Boston Properties Limited Partnership’s Consolidated Statements of Operations.

The accompanying notes are an integral part of these consolidated financial statements.


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (unaudited and in thousands)
	Units		Capital
	General Partner	Limited Partner	Partners’ Capital (General and Limited Partners)		Preferred Units		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Property Partnerships		Total Capital		Noncontrolling Interests - Redeemable Partnership Units

Equity, June 30, 2021	1,737	154,399	$	4,132,880	$	—	$	(43,166)	$	1,725,343	$	5,815,057	$	2,008,478
Net activity from contributions and unearned compensation	—	21	1,705		—		—		—		1,705		7,679
Allocated net income for the period	—	—	110,043		—		—		18,971		129,014		11,971
Distributions	—	—	(153,082)		—		—		—		(153,082)		(17,203)
Conversion of redeemable partnership units	—	50	1,748		—		—		—		1,748		(1,748)
Adjustment to reflect redeemable partnership units at redemption value	—	—	115,823		—		—		—		115,823		(115,823)
Effective portion of interest rate contracts	—	—	—		—		981		—		981		107
Amortization of interest rate contracts	—	—	—		—		1,382		144		1,526		150
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		11,318		11,318		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(27,675)		(27,675)		—
Equity, September 30, 2021	1,737	154,470	$	4,209,117	$	—	$	(40,803)	$	1,728,101	$	5,896,415	$	1,893,611

Equity, June 30, 2020	1,731	153,891	$	4,828,066	$	193,623	$	(54,921)	$	1,724,588	$	6,691,356	$	1,581,010
Net activity from contributions and unearned compensation	—	5	1,824		—		—		—		1,824		7,249
Allocated net income (loss) for the period	—	—	92,059		2,625		—		15,561		110,245		9,565
Distributions	—	—	(152,518)		(2,625)		—		—		(155,143)		(17,183)
Conversion of redeemable partnership units	—	9	338		—		—		—		338		(338)
Adjustment to reflect redeemable partnership units at redemption value	—	—	174,080		—		—		—		174,080		(174,080)
Effective portion of interest rate contracts	—	—	—		—		917		—		917		110
Amortization of interest rate contracts	—	—	—		—		1,382		144		1,526		151
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		1,407		1,407		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(11,026)		(11,026)		—
Equity, September 30, 2020	1,731	153,905	$	4,943,849	$	193,623	$	(52,622)	$	1,730,674	$	6,815,524	$	1,406,484


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (unaudited and in thousands)
	Units		Capital
	General Partner	Limited Partner	Partners’ Capital (General and Limited Partners)		Preferred Units		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Property Partnerships		Total Capital		Noncontrolling Interests - Redeemable Partnership Units













Equity, December 31, 2020	1,731	153,988	$	4,554,639	$	193,623	$	(49,890)	$	1,726,933	$	6,425,305	$	1,643,024
Net activity from contributions and unearned compensation	4	255	21,900		—		—		—		21,900		39,332
Allocated net income for the period	—	—	324,652		2,560		—		52,602		379,814		35,393
Distributions	—	—	(459,048)		(2,560)		—		—		(461,608)		(51,743)
Preferred unit redemption	—	—	—		(193,623)		—		—		(193,623)		—
Preferred unit redemption charge	—	—	(6,412)		—		—		—		(6,412)		—
Conversion of redeemable partnership units	2	227	8,033		—		—		—		8,033		(8,033)
Adjustment to reflect redeemable partnership units at redemption value	—	—	(234,647)		—		—		—		(234,647)		234,647
Effective portion of interest rate contracts	—	—	—		—		4,943		—		4,943		539
Amortization of interest rate contracts	—	—	—		—		4,144		432		4,576		452
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		13,738		13,738		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(65,604)		(65,604)		—
Equity, September 30, 2021	1,737	154,470	$	4,209,117	$	—	$	(40,803)	$	1,728,101	$	5,896,415	$	1,893,611

Equity, December 31, 2019	1,727	153,063	$	3,380,175	$	193,623	$	(48,335)	$	1,728,689	$	5,254,152	$	2,468,753
Cumulative effect of a change in accounting principle	—	—	(1,505)		—		—		—		(1,505)		(174)
Net activity from contributions and unearned compensation	1	73	10,405		—		—		—		10,405		32,278
Allocated net income for the period	—	—	872,842		7,875		—		34,280		914,997		97,090
Distributions	—	—	(457,233)		(7,875)		—		—		(465,108)		(51,821)
Conversion of redeemable partnership units	3	769	26,682		—		—		—		26,682		(26,682)
Adjustment to reflect redeemable partnership units at redemption value	—	—	1,112,483		—		—		—		1,112,483		(1,112,483)
Effective portion of interest rate contracts	—	—	—		—		(8,416)		—		(8,416)		(936)
Amortization of interest rate contracts	—	—	—		—		4,129		432		4,561		459
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		7,364		7,364		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(40,091)		(40,091)		—
Equity, September 30, 2020	1,731	153,905	$	4,943,849	$	193,623	$	(52,622)	$	1,730,674	$	6,815,524	$	1,406,484

The accompanying notes are an integral part of these consolidated financial statements.


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	415,207	$	1,012,087
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	533,255		510,400
Amortization of right of use assets - operating leases	3,208		1,667
Non-cash compensation expense	43,098		36,152
Loss from unconsolidated joint ventures	1,745		5,410
Distributions of net cash flow from operations of unconsolidated joint ventures	18,462		22,285
Gains from investments in securities	(3,744)		(965)
Allowance for current expected credit losses	(758)		1,997
Non-cash portion of interest expense	17,584		17,397
Settlement of accreted debt discount on redemption of unsecured senior notes	(6,290)		—
Losses from early extinguishments of debt	898		—
Gains on sales of real estate	(8,104)		(626,686)
Change in assets and liabilities:
Tenant and other receivables, net	13,738		18,543
Notes receivable, net	(419)		(395)
Accrued rental income, net	(74,283)		(85,843)
Prepaid expenses and other assets	(61,019)		(60,365)
Lease liabilities - operating leases	(24,023)		1,157
Accounts payable and accrued expenses	26,097		8,273
Accrued interest payable	(18,237)		(1,202)
Other liabilities	(51,938)		(24,868)
Tenant leasing costs	(37,618)		(52,621)
Total adjustments	371,652		(229,664)
Net cash provided by operating activities	786,859		782,423
Cash flows from investing activities:
Acquisitions of real estate	(218,679)		(135,698)
Construction in progress	(381,104)		(358,824)
Building and other capital improvements	(103,840)		(116,894)
Tenant improvements	(218,878)		(172,401)
Proceeds from sales of real estate	—		505,679
Capital contributions to unconsolidated joint ventures	(95,462)		(158,374)
Capital distributions from unconsolidated joint ventures	122		55,123
Proceeds from sale of investment in unconsolidated joint venture	17,789		—
Issuance of notes receivable, net	—		(9,800)
Investments in securities, net	1,684		2,778
Net cash used in investing activities	(998,368)		(388,411)
Cash flows from financing activities:
Repayments of mortgage notes payable	(13,261)		(12,795)
Proceeds from unsecured senior notes	1,695,996		1,248,125
Redemption of unsecured senior notes	(843,710)		—
Borrowings on unsecured line of credit	300,000		265,000
Repayments of unsecured line of credit	(300,000)		(265,000)


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2021		2020
Repayment of unsecured term loan	(500,000)		—
Redemption of preferred units	(200,000)		—
Payments on finance lease obligations	1,250		—
Deferred financing costs	(20,770)		(10,416)
Debt prepayment and extinguishment costs	(185)		—
Net proceeds from equity transactions	20,028		3,276
Distributions	(513,381)		(516,572)
Contributions from noncontrolling interests in property partnerships	13,738		7,364
Distributions to noncontrolling interests in property partnerships	(65,604)		(40,091)
Net cash provided by (used in) financing activities	(425,899)		678,891
Net increase (decrease) in cash and cash equivalents and cash held in escrows	(637,408)		1,072,903
Cash and cash equivalents and cash held in escrows, beginning of period	1,719,329		691,886
Cash and cash equivalents and cash held in escrows, end of period	$	1,081,921	$	1,764,789

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	1,668,742	$	644,950
Cash held in escrows, beginning of period	50,587		46,936
Cash and cash equivalents and cash held in escrows, beginning of period	$	1,719,329	$	691,886

Cash and cash equivalents, end of period	$	1,002,728	$	1,714,783
Cash held in escrows, end of period	79,193		50,006
Cash and cash equivalents and cash held in escrows, end of period	$	1,081,921	$	1,764,789

Supplemental disclosures:
Cash paid for interest	$	358,015	$	335,591
Interest capitalized	$	36,632	$	41,329

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(157,794)	$	(73,584)
Change in real estate included in accounts payable and accrued expenses	$	(22,104)	$	(30,924)
Right-of-use assets obtained in exchange for lease liabilities	$	26,887	$	—
Accrued rental income, net deconsolidated	$	—	$	(4,558)
Tenant leasing costs, net deconsolidated	$	—	$	(3,462)
Building and other capital improvements, net deconsolidated	$	—	$	(111,889)
Tenant improvements, net deconsolidated	$	—	$	(12,331)
Investment in unconsolidated joint venture recorded upon deconsolidation	$	—	$	347,898
Distributions declared but not paid	$	169,739	$	171,070
Conversions of redeemable partnership units to partners’ capital	$	8,033	$	26,682
Issuance of restricted securities to employees and non-employee directors	$	44,257	$	43,244

The accompanying notes are an integral part of these consolidated financial statements.

BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

Boston Properties, Inc., a Delaware corporation, is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). Boston Properties, Inc. is the sole general partner of Boston Properties Limited Partnership, its operating partnership, and at September 30, 2021 owned an approximate 89.9% (90.0% at December 31, 2020) general and limited partnership interest in Boston Properties Limited Partnership. Unless stated otherwise or the context requires, the “Company” refers to Boston Properties, Inc. and its subsidiaries, including Boston Properties Limited Partnership and its consolidated subsidiaries. Partnership interests in Boston Properties Limited Partnership include:

common units of partnership interest (also referred to as “OP Units”),
long term incentive units of partnership interest (also referred to as “LTIP Units”), and
preferred units of partnership interest (also referred to as “Preferred Units”).

Unless specifically noted otherwise, all references to OP Units exclude units held by Boston Properties, Inc. A holder of an OP Unit may present such OP Unit to Boston Properties Limited Partnership for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, Boston Properties Limited Partnership is obligated to redeem the OP Unit for cash equal to the value of a share of common stock of Boston Properties, Inc. (“Common Stock”). In lieu of a cash redemption, Boston Properties, Inc. may elect to acquire the OP Unit for one share of Common Stock. Because the number of shares of Common Stock outstanding at all times equals the number of OP Units that Boston Properties, Inc. owns, one share of Common Stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of Common Stock.

The Company uses LTIP Units as a form of time-based, restricted equity compensation and as a form of performance-based equity compensation for employees, and has previously granted LTIP Units in the form of (1) 2012 outperformance plan awards (“2012 OPP Units”) and (2) 2013 - 2021 multi-year, long-term incentive program awards (also referred to as “MYLTIP Units”), each of which, upon the satisfaction of certain performance and vesting conditions, is convertible into one OP Unit. The three-year measurement periods for the 2012 OPP Units and the 2013 - 2018 MYLTIP Units have ended and Boston Properties, Inc.’s total stockholder return (“TSR”) was sufficient for employees to earn and therefore become eligible to vest in a portion of the awards. Unless and until they are earned, the rights, preferences and privileges of the 2019 - 2021 MYLTIP Units differ from other LTIP Units granted to employees (including the 2012 OPP Units and the 2013 - 2018 MYLTIP Units, which have been earned). Therefore, unless specifically noted otherwise, all references to LTIP Units exclude the 2019 - 2021 MYLTIP Units. LTIP Units (including the earned 2012 OPP Units and the earned 2013 - 2018 MYLTIP Units), whether vested or not, will receive the same quarterly per unit distributions as OP Units, which equal per share dividends on Common Stock (See Notes 10 and 14).

At December 31, 2020, there was one series of Preferred Units outstanding (i.e., Series B Preferred Units). The Series B Preferred Units were issued to Boston Properties, Inc. on March 27, 2013 in connection with the issuance of 80,000 shares (8,000,000 depositary shares each representing 1/100th of a share) of 5.25% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”). Boston Properties, Inc. contributed the net proceeds from the offering to Boston Properties Limited Partnership in exchange for 80,000 Series B Preferred Units having terms and preferences generally mirroring those of the Series B Preferred Stock. On March 2, 2021, Boston Properties, Inc. issued a redemption notice for 80,000 shares of Series B Preferred Stock, which constituted all of the outstanding Series B Preferred Stock, and the corresponding depositary shares, each representing 1/100th of a share of Series B Preferred Stock (the “Depositary Shares”), and recorded it as a liability. On March 31, 2021, Boston Properties, Inc. transferred the full redemption price for all outstanding shares of Series B Preferred Stock of approximately $201.3 million, including approximately $1.3 million of accrued and unpaid dividends to, but not including, the redemption date, to the redemption agent. On April 1, 2021, Boston Properties, Inc. redeemed 80,000 shares of Series B Preferred Stock (including the corresponding 8,000,000 Depositary Shares), which represented all of the outstanding shares of Series B Preferred Stock and all of the outstanding Depositary Shares. In connection with the redemption of the Series B Preferred Stock, the Series B Preferred Units were also redeemed (See Note 11).

Properties

At September 30, 2021, the Company owned or had joint venture interests in a portfolio of 202 commercial real estate properties (the “Properties”) aggregating approximately 52.5 million net rentable square feet of primarily Class A office properties, including nine properties under construction/redevelopment totaling approximately 4.3 million net rentable square feet. At September 30, 2021, the Properties consisted of:

183 office properties (including nine properties under construction/redevelopment);
12 retail properties;
six residential properties; and
one hotel.

The Company considers Class A office properties to be well-located buildings that are modern structures or have been modernized to compete with newer buildings and professionally managed and maintained. As such, these properties attract high-quality tenants and command upper-tier rental rates.

2. Basis of Presentation and Summary of Significant Accounting Policies

Boston Properties, Inc. does not have any other significant assets, liabilities or operations, other than its investment in Boston Properties Limited Partnership, nor does it have employees of its own. Boston Properties Limited Partnership, not Boston Properties, Inc., generally executes all significant business relationships other than transactions involving securities of Boston Properties, Inc. All majority-owned subsidiaries and joint ventures over which the Company has financial and operating control and variable interest entities (“VIEs”) in which the Company has determined it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for all other unconsolidated joint ventures using the equity method of accounting. Accordingly, the Company’s share of the earnings of these joint ventures and companies is included in consolidated net income.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair statement of the financial statements for these interim periods have been included. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for other interim periods or for the full fiscal year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosure required by GAAP. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto contained in the Company’s Annual Report in the Company’s Form 10-K for its fiscal year ended December 31, 2020.

The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the circumstances, including the impact of extraordinary events such as the coronavirus (“COVID-19”) pandemic, the results of which form the basis for making significant judgments about the carrying values of assets and liabilities, assessments of future collectability, and other areas of the financial statements that are impacted by the use of estimates. Actual results may differ from these estimates under different assumptions or conditions.

Variable Interest Entities (VIEs)

Consolidated VIEs are those for which the Company is considered to be the primary beneficiary of a VIE. The primary beneficiary is the entity that has a controlling financial interest in the VIE, which is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and (2) the obligation to absorb losses or the right to receive the returns from the VIE that could potentially be significant to the VIE. The Company has determined that it is the primary beneficiary for six of the seven entities that are VIEs.

Consolidated Variable Interest Entities

As of September 30, 2021, Boston Properties, Inc. has identified six consolidated VIEs, including Boston Properties Limited Partnership. Excluding Boston Properties Limited Partnership, the VIEs consisted of the following five in-service properties: 767 Fifth Avenue (the General Motors Building), Times Square Tower, 601 Lexington Avenue, Atlantic Wharf Office Building and 100 Federal Street.

The Company consolidates these VIEs because it is the primary beneficiary. The third parties’ interests in these consolidated entities (excluding Boston Properties Limited Partnership’s interest) are reflected as noncontrolling interests in property partnerships in the accompanying consolidated financial statements (See Note 10).

In addition, Boston Properties, Inc.’s only significant asset is its investment in Boston Properties Limited Partnership and, consequently, substantially all of Boston Properties, Inc.’s assets and liabilities are the assets and liabilities of Boston Properties Limited Partnership.

Variable Interest Entities Not Consolidated

The Company has determined that the Platform 16 Holdings LP joint venture is a VIE. The Company does not consolidate this entity as the Company does not have the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and, therefore, the Company is not considered to be the primary beneficiary.

Fair Value of Financial Instruments

The Company follows the authoritative guidance for fair value measurements when valuing its financial instruments for disclosure purposes. The table below presents the financial instruments that are being valued for disclosure purposes as well as the Level at which they are categorized (as defined in Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”)).


Financial Instrument			Level
Unsecured senior notes (1)			Level 1
Related party note receivable			Level 3
Notes receivable			Level 3
Mortgage notes payable			Level 3
Unsecured line of credit (2)			Level 3

(1)If trading value for the period is low, the valuation could be categorized as Level 2.

(2)As of September 30, 2021, there were no amounts outstanding under the unsecured line of credit.

Because the Company’s valuations of its financial instruments are based on the above Levels and involve the use of estimates, the actual fair values of its financial instruments may differ materially from those estimates.

The following table identifies the range and weighted average of significant unobservable inputs for the Company’s Level 3 fair value measured instruments.


Financial Instrument	Level	Range	Weighted Average
Related party note receivable	Level 3	3.58%	3.58%
Notes receivable	Level 3	3.54% - 8.00%	5.78%
Mortgage notes payable	Level 3	2.50% - 4.75%	2.96%

The Company’s estimated fair values for these instruments as of the end of the applicable reporting period are not projections of, nor necessarily indicative of, estimated or actual fair values in future reporting periods.

The following table presents the aggregate carrying value of the Company’s related party note receivable, net, notes receivable, net, mortgage notes payable, net, unsecured senior notes, net, unsecured line of credit and unsecured term loan, net and the Company’s corresponding estimate of fair value as of September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Related party note receivable, net	$	78,144	$	83,354	$	77,552	$	84,579
Notes receivable, net	19,297		19,885		18,729		19,372
Total	$	97,441	$	103,239	$	96,281	$	103,951

Mortgage notes payable, net	$	2,898,699	$	3,032,122	$	2,909,081	$	3,144,150
Unsecured senior notes, net	10,479,651		11,157,602		9,639,287		10,620,527
Unsecured line of credit	—		—		—		—
Unsecured term loan, net	—		—		499,390		500,326
Total	$	13,378,350	$	14,189,724	$	13,047,758	$	14,265,003

3. Real Estate

Boston Properties, Inc.

Real estate consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021		December 31, 2020
Land	$	5,065,704	$	5,069,206
Right of use assets - finance leases	237,845		237,393
Right of use assets - operating leases (1)	170,085		146,406
Land held for future development (2)	568,034		450,954
Buildings and improvements	14,118,587		13,777,691
Tenant improvements	2,853,531		2,752,880
Furniture, fixtures and equipment	51,013		49,606
Construction in progress	1,054,531		868,773
Total	24,119,330		23,352,909
Less: Accumulated depreciation	(5,850,397)		(5,534,102)
	$	18,268,933	$	17,818,807

(1)See Note 4.

(2)Includes pre-development costs.

Boston Properties Limited Partnership

Real estate consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021		December 31, 2020
Land	$	4,968,851	$	4,971,990
Right of use assets - finance leases	237,845		237,393
Right of use assets - operating leases (1)	170,085		146,406
Land held for future development (2)	568,034		450,954
Buildings and improvements	13,839,945		13,498,098
Tenant improvements	2,853,531		2,752,880
Furniture, fixtures and equipment	51,013		49,606
Construction in progress	1,054,531		868,773
Total	23,743,835		22,976,100
Less: Accumulated depreciation	(5,739,625)		(5,428,576)
	$	18,004,210	$	17,547,524

(1)See Note 4.

(2)Includes pre-development costs.

Acquisitions

On June 2, 2021, the Company acquired 153 & 211 Second Avenue located in Waltham, Massachusetts for an aggregate purchase price of approximately $100.2 million in cash. 153 & 211 Second Avenue consists of two life sciences lab buildings totaling approximately 137,000 net rentable square feet. The properties are 100% leased. The following table summarizes the allocation of the purchase price, including transaction costs, of 153 & 211 Second Avenue at the date of acquisition (in thousands):


Land	$	33,233
Building and improvements	53,309
Tenant improvements	2,631
In-place lease intangibles	13,415
Below-market lease intangibles	(2,412)
Net assets acquired	$	100,176

The following table summarizes the estimated annual amortization of the acquired in-place lease intangibles

and the acquired below-market lease intangibles for 153 & 211 Second Avenue for the remainder of 2021 through the last lease expiration (in thousands):


	Acquired In-Place Lease Intangibles		Acquired Below-Market Lease Intangibles
Period from June 2, 2021 through December 31, 2021	$	5,202	$	935
2022	8,213		1,477

153 & 211 Second Avenue contributed approximately $3.1 million of revenue and approximately ($1.2) million of earnings to the Company for the period from June 2, 2021 through September 30, 2021.

On August 2, 2021, the Company acquired Shady Grove Bio+Tech Campus in Rockville, Maryland, for a purchase price, including transaction costs, of approximately $118.5 million in cash. Shady Grove Bio+Tech Campus is an approximately 435,000 net rentable square foot, seven-building office park situated on an approximately 31-acre site. The Company intends to reposition three of the buildings, which are currently vacant, to support lab or life sciences uses. As a result, the three vacant buildings are not part of the Company’s in-service portfolio. The Company anticipates that it will redevelop or convert the remaining four buildings to lab or life sciences-related uses as each becomes vacant. The following table summarizes the allocation of the purchase price, including transaction costs, of Shady Grove Bio+Tech Campus at the date of acquisition (in thousands):


Land	$	52,030
Building and improvements	63,060
Tenant improvements	1,152
In-place lease intangibles	2,523
Above-market lease intangibles	142
Below-market lease intangibles	(403)
Net assets acquired	$	118,504

The following table summarizes the estimated annual amortization of the acquired in-place lease intangibles

and the acquired above/below-market lease intangibles for Shady Grove Bio+Tech Campus from August 2, 2021 through the last lease expiration (in thousands):


	Acquired In-Place Lease Intangibles		Acquired Above-Market Lease Intangibles		Acquired Below-Market Lease Intangibles
Period from August 2, 2021 through December 31, 2021	$	838	$	31	$	102
2022	1,478		74		236
2023	151		25		39
2024	56		12		26

Shady Grove Bio+Tech Campus contributed approximately $0.5 million of revenue and approximately $(0.6) million of earnings to the Company for the period from August 2, 2021 through September 30, 2021.

Pending Acquisitions

On April 19, 2021, the Company entered into an agreement to acquire 11251 Roger Bacon Drive, in Reston, Virginia, for an aggregate purchase price of approximately $5.6 million. The closing is scheduled to occur in the first quarter of 2022. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres. The property is 100% leased to a single tenant with a lease that expires concurrently with the planned closing. There can be no assurance that this transaction will be consummated on the terms currently contemplated or at all.

On June 25, 2021, the Company entered into an agreement to acquire 360 Park Avenue South in New York City, New York for an aggregate purchase price of approximately $300.0 million, including (1) the assumption of the mortgage loan collateralized by the property totaling approximately $202.0 million and (2) the issuance of approximately $98.0 million of OP Units, with a floor price of $111.00 per OP Unit. The closing is scheduled to occur in the fourth quarter of 2021. The Company’s deposit of $30.0 million is reflected as Cash Held in Escrows in the Company’s Consolidated Balance Sheets. 360 Park Avenue South is an approximately 450,000 square foot Class A office building. Upon acquisition, the building will be vacant and the Company intends to redevelop or reposition the building. There can be no assurance that the acquisition will be consummated on the terms currently contemplated or at all.

Developments

On February 1, 2021, the consolidated entity in which the Company has a 55% interest completed and fully placed in-service One Five Nine East 53rd Street, a Class A office and retail redevelopment of the low-rise portion of its 601 Lexington Avenue property with approximately 220,000 net rentable square feet located in New York City.

On February 25, 2021, the Company commenced the development of 180 CityPoint, located in Waltham, Massachusetts. When completed, the building will consist of approximately 329,000 net rentable square feet of laboratory space.

On February 25, 2021, the Company commenced the redevelopment of 880 Winter Street, located in Waltham, Massachusetts. When completed, the building will consist of approximately 224,000 net rentable square feet of laboratory space.

On February 25, 2021, the Company commenced the redevelopment of View Boston Observatory at The Prudential Center, a 59,000 net rentable square foot redevelopment of the top three floors of 800 Boylston Street - The Prudential Center, located in Boston, Massachusetts.

On April 16, 2021, the Company removed 3625-3635 Peterson Way from its in-service portfolio following the lease expiration of the last tenant on April 15, 2021. The Company is demolishing the building and may redevelop the site at a future date. 3625-3635 Peterson Way is an approximately 218,000 net rentable square foot Class A office building located in Santa Clara, California.

Dispositions

On December 13, 2018, the Company sold its 6595 Springfield Center Drive development project located in Springfield, Virginia. Concurrently with the sale, the Company agreed to act as development manager and guaranteed the completion of the project (See Note 9). The development project achieved final completion during the third quarter of 2021 and, upon completion of the project, the total cost of development was determined to be

below the estimated total investment at the time of sale. As a result, the Company recognized a gain on sale of real estate of approximately $8.1 million during the nine months ended September 30, 2021.

On July 13, 2021, the Company entered into an agreement to sell its 181,191 and 201 Spring Street properties located in Lexington, Massachusetts for an aggregate gross sales price of $191.5 million. 181,191 and 201 Spring Street are three Class A office properties aggregating approximately 333,000 net rentable square feet and are 100% leased (See Note 15).

4. Leases

The Company must make estimates as to the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of tenants’ accrued rent and accounts receivable balances, management considers tenant creditworthiness, current economic trends, including the impact of COVID-19 on tenants’ businesses, and changes in tenants’ payment patterns, on a lease-by-lease basis. As a result, during the nine months ended September 30, 2021, the Company wrote off approximately $1.3 million related to accrued rent, net balances and accounts receivable, net balances. There were no write-offs related to accrued rent, net balances and accounts receivable, net balances for the three months ended September 30, 2021. During the three and nine months ended September 30, 2020, the Company wrote off approximately $7.5 million and $63.8 million, respectively, related to accrued rent, net balances and accounts receivable, net balances. The write-offs were for tenants, primarily in the retail sector, that either terminated their leases or for which the Company determined their accrued rent and/or accounts receivable balances were no longer probable of collection.

Lessee

On May 19, 2021, the Company amended its ground lease at Sumner Square in Washington, DC. The amendment extends the ground lease for an additional 15 years. Prior to the amendment, the ground lease was scheduled to expire on August 10, 2066. The ground lease will now expire on August 9, 2081. The lease requires the Company to pay $23.0 million in 2021 and requires the Company’s remaining obligation of approximately $4.0 million be used to fund certain operation and maintenance costs incurred by the government with respect to the Sumner School for the next five years, with no payments thereafter. The Company’s incremental borrowing rate is 3.95% per annum. The net present value of the total ground lease payments is approximately $26.7 million. The Company continues to classify this ground lease as an operating lease. As a result, the Company recorded a Right-of-Use Assets - Operating Leases and Lease Liabilities - Operating Leases of approximately $27.1 million and $26.7 million, respectively, on its Consolidated Balance Sheet. On July 1, 2021, the Company made the $23.0 million payment. The Sumner Square ground lease had operating lease costs of approximately $0.1 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $0.6 million and $1.0 million for the nine months ended September 30, 2021 and 2020, respectively. Sumner Square is an approximately 210,000 net rentable square foot Class A office building.

The following table provides a maturity analysis for the Company’s lease liabilities related to its Sumner Square operating lease as of May 19, 2021 (in thousands):


	Operating
Period from May 19, 2021 through December 31, 2021	$	23,599
2022	761
2023	784
2024	808
2025	832
2026	422
Thereafter	—
Total lease payments	27,206
Less: Interest portion	(536)
Present value of lease payments	$	26,670

Lessor

The following table summarizes the components of lease revenue recognized during the three and nine months ended September 30, 2021 and 2020 included within the Company's Consolidated Statements of Operations (in thousands):


	Three months ended September 30,				Nine months ended September 30,
Lease Revenue	2021		2020		2021		2020
Fixed contractual payments	$	581,393	$	557,384	$	1,732,930	$	1,673,855
Variable lease payments	110,867		109,290		329,172		333,049
	$	692,260	$	666,674	$	2,062,102	$	2,006,904

5. Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at September 30, 2021 and December 31, 2020:


					Carrying Value of Investment (1)
Entity	Properties	Nominal % Ownership			September 30, 2021		December 31, 2020
					(in thousands)
Square 407 Limited Partnership	Market Square North	50.00	%		$	(1,917)	$	(3,766)
BP/CRF Metropolitan Square LLC	Metropolitan Square	20.00	%		(14,568)		(13,584)
901 New York, LLC	901 New York Avenue	25.00	%	(2)	(12,390)		(12,264)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.33	%	(3)	34,104		35,297
Annapolis Junction NFM LLC	Annapolis Junction	50.00	%	(4)	N/A		13,463
540 Madison Venture LLC	540 Madison Avenue	60.00	%	(5)	—		122
500 North Capitol Venture LLC	500 North Capitol Street, NW	30.00	%		(7,700)		(6,945)
501 K Street LLC	1001 6th Street	50.00	%	(6)	42,669		42,499
Podium Developer LLC	The Hub on Causeway - Podium	50.00	%		48,970		48,818
Residential Tower Developer LLC	Hub50House	50.00	%		47,934		50,943
Hotel Tower Developer LLC	The Hub on Causeway - Hotel Air Rights	50.00	%		11,402		10,754
Office Tower Developer LLC	100 Causeway Street	50.00	%		56,714		56,312
1265 Main Office JV LLC	1265 Main Street	50.00	%		3,855		3,787
BNY Tower Holdings LLC	Dock 72	50.00	%		28,079		29,536
BNYTA Amenity Operator LLC	Dock 72	50.00	%		1,151		1,846
CA-Colorado Center Limited Partnership	Colorado Center	50.00	%		230,535		227,671
7750 Wisconsin Avenue LLC	7750 Wisconsin Avenue	50.00	%		59,734		58,112
BP-M 3HB Venture LLC	3 Hudson Boulevard	25.00	%		116,537		113,774
SMBP Venture LP	Santa Monica Business Park	55.00	%		155,679		145,761
Platform 16 Holdings LP	Platform 16	55.00	%	(7)	108,098		108,393
Gateway Portfolio Holdings LLC	Gateway Commons	50.00	%	(8)	328,367		336,206
Rosecrans-Sepulveda Partners 4, LLC	Beach Cities Media Campus	50.00	%		27,124		27,184
Safeco Plaza REIT LLC	Safeco Plaza	33.67	%	(9)	72,570		N/A
					$	1,336,947	$	1,273,919

(1)Investments with deficit balances aggregating approximately $36.6 million at September 30, 2021 and December 31, 2020 are included within Other Liabilities in the Company’s Consolidated Balance Sheets.

(2)The Company’s economic ownership has increased based on the achievement of certain return thresholds. At September 30, 2021 and December 31, 2020, the Company’s economic ownership was approximately 50%.

(3)The Company’s wholly-owned subsidiary that owns Wisconsin Place Office also owns a 33.33% interest in the joint venture entity that owns the land, parking garage and infrastructure of the project.

(4)On March 30, 2021, the Company sold its interest in the joint venture to the partner. See below for additional details.

(5)The property was sold on June 27, 2019. As of December 31, 2020, the investment consisted of undistributed cash. All remaining cash has been distributed as of September 30, 2021.

(6)Under the joint venture agreement for this land parcel, the partner will be entitled to up to two additional payments from the venture based on increases in total entitled square footage of the project above 520,000 square feet and achieving certain project returns at stabilization.

(7)This entity is a VIE (See Note 2).

(8)As a result of the partner’s deferred contribution, the Company owned an approximately 52% and 55% interest in the joint venture at September 30, 2021 and December 31, 2020, respectively.

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

Certain of the Company’s unconsolidated joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners or the Company will be entitled to an additional promoted interest or payments.

The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:


	September 30, 2021		December 31, 2020
	(in thousands)
ASSETS
Real estate and development in process, net (1)	$	5,244,585	$	4,708,571
Other assets	561,722		531,071
Total assets	$	5,806,307	$	5,239,642
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net	$	2,995,161	$	2,637,911
Other liabilities (2)	639,980		650,433
Members’/Partners’ equity	2,171,166		1,951,298
Total liabilities and members’/partners’ equity	$	5,806,307	$	5,239,642
Company’s share of equity	$	995,995	$	936,087
Basis differentials (3)	340,952		337,832
Carrying value of the Company’s investments in unconsolidated joint ventures (4)	$	1,336,947	$	1,273,919

(1)At September 30, 2021 and December 31, 2020, this amount included right of use assets - finance leases totaling approximately $248.9 million, and right of use assets - operating leases totaling approximately $22.6 million and $22.5 million, respectively.

(2)At September 30, 2021 and December 31, 2020, this amount included lease liabilities - finance leases totaling approximately $386.3 million and $388.7 million, respectively, and lease liabilities - operating leases totaling approximately $30.4 million and $29.0 million, respectively.

(3)This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials result from impairments of investments, acquisitions through joint ventures with no change in control and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level. The majority of the Company’s basis differences are as follows:


	September 30, 2021		December 31, 2020
Property	(in thousands)
Colorado Center	$	305,236	$	307,328
Gateway Commons	51,566		51,875
Dock 72	(50,599)		(52,243)

These basis differentials (excluding land) will be amortized over the remaining lives of the related assets and liabilities.

(4)Investments with deficit balances aggregating approximately $36.6 million at September 30, 2021 and December 31, 2020 are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	(in thousands)
Total revenue (1)	$	90,009	$	87,724	$	268,501	$	270,490
Expenses
Operating	40,378		37,572		114,299		106,677
Transaction costs	—		—		7		—
Depreciation and amortization	36,036		35,810		103,766		105,235
Total expenses	76,414		73,382		218,072		211,912
Other income (expense)
Interest expense	(27,519)		(25,481)		(78,711)		(71,370)
Gains on sales of real estate	—		—		—		11,720
Net loss	$	(13,924)	$	(11,139)	$	(28,282)	$	(1,072)

Company’s share of net income (loss)	$	(4,491)	$	(4,421)	$	(10,268)	$	855
Gain on sale of investment (2)	—		—		10,257		—
Basis differential (3)	(1,106)		(2,452)		(1,734)		(6,265)
Loss from unconsolidated joint ventures	$	(5,597)	$	(6,873)	$	(1,745)	$	(5,410)

(1)Includes straight-line rent adjustments of approximately $5.5 million and $3.8 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $11.6 million and $22.0 million for the nine months ended September 30, 2021 and 2020, respectively.

(2)During the nine months ended September 30, 2021, the Company completed the sale of its 50% ownership interest in Annapolis Junction NFM LLC. The Company recognized a gain on sale of investment of approximately $10.3 million.

(3)Includes straight-line rent adjustments of approximately $0.1 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $0.7 million and $1.3 million for the nine months ended September 30, 2021 and 2020, respectively. Also includes net above-/below-market rent adjustments of approximately $0.1 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and approximately $0.2 million and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively.

On February 25, 2021, a joint venture in which the Company had a 54% interest, commenced the development of 751 Gateway, a speculative laboratory building located in South San Francisco, California, that is expected to be approximately 229,000 net rentable square feet upon completion. 751 Gateway is the first phase of a multi-phase development plan at Gateway Commons. Upon the formation of the joint venture in 2020, the Company had an approximately 55% ownership interest in the joint venture as a result of the partner’s deferred contribution and the partner is obligated to fund all required capital until such time as the Company owns a 50% interest. On September 30, 2021, the Company had a 52% interest in the joint venture. The Company expects the 751 Gateway development project to be transferred to a separate joint venture with the same partner. The Company expects it will own a 49% interest in this new joint venture.

On March 30, 2021, the Company completed the sale of its 50% ownership interest in Annapolis Junction NFM LLC (the “Annapolis Junction Joint Venture”) to the joint venture partner for a gross sales price of $65.9 million. Net cash proceeds to the Company totaled approximately $17.8 million after repayment of the Company's share of debt totaling approximately $15.1 million. The Company recognized a gain on sale of investment totaling approximately $10.3 million, which is included in Loss from Unconsolidated Joint Ventures in the accompanying Consolidated Statements of Operations. In addition to net cash proceeds from the sale, the Company received a distribution of approximately $5.8 million of available cash. Annapolis Junction Buildings Six and Seven are Class A office properties totaling approximately 247,000 net rentable square feet. With the sale of the Company’s ownership interest in the Annapolis Junction Joint Venture, the Company no longer has any assets in Annapolis, Maryland.

On June 11, 2021, a joint venture in which the Company has a 50% interest partially placed in-service 100 Causeway Street, a Class A office project with approximately 632,000 net rentable square feet located in Boston, Massachusetts.

On August 31, 2021, a joint venture in which the Company has a 50% interest extended the construction loan collateralized by its The Hub on Causeway – Podium property. At the time of the extension, the outstanding balance of the loan totaled approximately $174.3 million, bore interest at a variable rate equal to LIBOR plus 2.25% per annum and was scheduled to mature on September 6, 2021, with two, one-year extension options, subject to certain conditions. The extended loan continues to bear interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2023. The Hub on Causeway - Podium is a retail and office property with approximately 382,000 net rentable square feet located in Boston, Massachusetts.

On September 1, 2021, the Company entered into a joint venture to acquire Safeco Plaza, a Class A office property located in Seattle, Washington, for a gross purchase price of approximately $465.0 million. Safeco Plaza is a 50-story, approximately 765,000 net rentable square-foot, Class A office property. The acquisition was completed through a newly formed joint venture with two institutional partners. Each of the institutional partners invested approximately $71.9 million of cash for its 33.165% ownership interest in the joint venture. The Company invested approximately $72.6 million for its 33.67% interest in the joint venture and is providing customary operating, property management and leasing services to the joint venture. The Company’s ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two Safeco Partner Entities through which each partner owns its interest in the joint venture. Subject to the occurrence of certain events and the joint venture achieving certain return thresholds, the Company is entitled to earn promote distributions. Some of the promote distributions may be payable in cash or, at the Company’s election, equity interest(s) in the Safeco Partner Entity(ies). The purchase price was funded with cash and proceeds from a new mortgage loan secured by the property. The mortgage loan has a principal amount of $250.0 million, bears interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum and matures on September 1, 2026.

6. Mortgage Notes Payable

On March 26, 2021, the Company used available cash to repay the mortgage loan collateralized by its University Place property located in Cambridge, Massachusetts totaling approximately $0.9 million. The mortgage loan bore interest at a fixed rate of 6.94% per annum and was scheduled to mature on August 1, 2021. There was no prepayment penalty.

7. Unsecured Senior Notes

The following summarizes the unsecured senior notes outstanding as of September 30, 2021 (dollars in thousands):


	Coupon/Stated Rate		Effective Rate(1)		Principal Amount		Maturity Date(2)
11 Year Unsecured Senior Notes	3.850	%	3.954	%	$	1,000,000	February 1, 2023	(3)
10.5 Year Unsecured Senior Notes	3.125	%	3.279	%	500,000		September 1, 2023
10.5 Year Unsecured Senior Notes	3.800	%	3.916	%	700,000		February 1, 2024
7 Year Unsecured Senior Notes	3.200	%	3.350	%	850,000		January 15, 2025
10 Year Unsecured Senior Notes	3.650	%	3.766	%	1,000,000		February 1, 2026
10 Year Unsecured Senior Notes	2.750	%	3.495	%	1,000,000		October 1, 2026
10 Year Unsecured Senior Notes	4.500	%	4.628	%	1,000,000		December 1, 2028
10 Year Unsecured Senior Notes	3.400	%	3.505	%	850,000		June 21, 2029
10.5 Year Unsecured Senior Notes	2.900	%	2.984	%	700,000		March 15, 2030
10.75 Year Unsecured Senior Notes	3.250	%	3.343	%	1,250,000		January 30, 2031
11 Year Unsecured Senior Notes	2.550	%	2.671	%	850,000		April 1, 2032
12 Year Unsecured Senior Notes	2.450	%	2.524	%	850,000		October 1, 2033
Total principal					10,550,000
Less:
Net unamortized discount					17,581
Deferred financing costs, net					52,768
Total					$	10,479,651

(1)Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs.

(2)No principal amounts are due prior to maturity.

(3)See Note 15.

On February 14, 2021, Boston Properties Limited Partnership completed the redemption of $850.0 million in aggregate principal amount of its 4.125% senior notes due May 15, 2021. The redemption price was approximately $858.7 million, which was equal to the stated principal plus approximately $8.7 million of accrued and unpaid interest to, but not including, the redemption date. Excluding the accrued and unpaid interest, the redemption price was equal to the principal amount being redeemed. The Company recognized a loss from early extinguishment of debt totaling approximately $0.4 million related to unamortized origination costs.

On March 16, 2021, Boston Properties Limited Partnership completed a public offering of $850.0 million in aggregate principal amount of its 2.550% unsecured senior notes due 2032. The notes were priced at 99.570% of the principal amount to yield an effective rate (including financing fees) of approximately 2.671% per annum to maturity. The notes will mature on April 1, 2032, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $839.2 million after deducting underwriting discounts and transaction expenses.

On September 29, 2021, Boston Properties Limited Partnership completed a public offering of $850.0 million in aggregate principal amount of its 2.450% unsecured senior notes due 2033. The notes were priced at 99.959% of the principal amount to yield an effective rate (including financing fees) of approximately 2.524% per annum to maturity. The notes will mature on October 1, 2033, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $842.5 million after deducting underwriting discounts and transaction expenses.

The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt. At September 30, 2021, Boston Properties Limited Partnership was in compliance with each of these financial restrictions and requirements.

8. Unsecured Credit Facility

On March 16, 2021, Boston Properties Limited Partnership repaid $500.0 million, representing all amounts outstanding on its delayed draw term loan facility under its unsecured revolving credit agreement (the “2017 Credit Facility”). The Company recognized a loss from early extinguishment of debt totaling approximately $0.5 million related to unamortized financing costs.

On June 15, 2021, Boston Properties Limited Partnership amended and restated the 2017 Credit Facility (as amended and restated, the “2021 Credit Facility”). The 2021 Credit Facility provides for borrowings of up to $1.5 billion (the “Revolving Facility”), subject to customary conditions. Among other things, the amendment and restatement (1) extended the maturity date to June 15, 2026, (2) eliminated the $500.0 million delayed draw term loan facility provided under the 2017 Credit Facility, (3) reduced the per annum variable interest rates on borrowings and (4) added a sustainability-linked pricing component. Under the 2021 Credit Facility, Boston Properties Limited Partnership may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in each case, subject to syndication of the increase and other conditions.

The 2021 Credit Facility replaces the 2017 Credit Facility, which was scheduled to expire on April 24, 2022.

At Boston Properties Limited Partnership’s option, loans under the 2021 Credit Facility will bear interest at a rate per annum equal to (1) (a) in the case of loans denominated in Dollars, LIBOR, (b) in the case of loans denominated in Euro, EURIBOR, (c) in the case of loans denominated in Canadian Dollars, CDOR, and (d) in the case of loans denominated in Sterling, SONIA, in each case, plus a margin ranging from 70.0 to 140.0 basis points based on Boston Properties Limited Partnership’s credit rating or (2) an alternate base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the Administrative Agent’s prime rate, (c) LIBOR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 40 basis points based on Boston Properties Limited Partnership’s credit rating.

The 2021 Credit Facility also features a sustainability-linked pricing component such that if Boston Properties Limited Partnership meets certain sustainability performance targets, the applicable per annum interest rate will be reduced by one basis point. The LIBOR replacement provisions in the 2021 Credit Facility permit the use of rates based on the secured overnight financing rate administered by the Federal Reserve Bank of New York plus an applicable spread adjustment. In addition, the 2021 Credit Facility contains a competitive bid option for up to 65% of the Revolving Facility that allows banks that are part of the lender consortium to bid to make loan advances to Boston Properties Limited Partnership at a reduced interest rate.

Pursuant to the 2021 Credit Facility, Boston Properties Limited Partnership is obligated to pay (1) in quarterly installments a facility fee on the total commitment under the Revolving Facility at a rate per annum ranging from 0.10% to 0.30% based on Boston Properties Limited Partnership’s credit rating and (2) an annual fee on the undrawn amount of each letter of credit ranging from 0.70% to 1.40% based on Boston Properties Limited Partnership’s credit rating.

Based on Boston Properties Limited Partnership’s current credit rating, (1) the applicable Eurocurrency and LIBOR Daily Floating Rate margins are 0.775%, (2) the alternate base rate margin is 0 basis points and (3) the facility fee is 0.15% per annum.

The 2021 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default provisions, including the failure to pay indebtedness, breaches of covenants and bankruptcy and other insolvency events, which could result in the acceleration of the obligation to repay all outstanding amounts and the cancellation of all commitments outstanding under the 2021 Credit Facility. Among other covenants, the 2021 Credit Facility requires that Boston Properties Limited Partnership maintain on an ongoing basis: (1) a leverage ratio not to exceed 60%, however, the leverage ratio may increase to no greater than 65% provided that it is reduced back to 60% within one year, (2) a secured debt leverage ratio not to exceed 55%, (3) a fixed charge coverage ratio of at least 1.40, (4) an unsecured debt leverage ratio not to exceed 60%, however, the unsecured debt leverage ratio may increase to no greater than 65% provided that it is reduced to 60% within one year, (5) an unsecured debt interest coverage ratio of at least 1.75 and (6) limitations on permitted investments. At September 30, 2021, Boston Properties Limited Partnership was in compliance with each of these financial and other covenant requirements.

At September 30, 2021, Boston Properties Limited Partnership had no amounts outstanding under the 2021 Credit Facility.

9. Commitments and Contingencies

General

In the normal course of business, the Company guarantees its performance of services or indemnifies third parties against its negligence. In addition, in the normal course of business, the Company guarantees to certain tenants the obligations of its subsidiaries for the payment of tenant improvement allowances and brokerage commissions in connection with their leases and limited costs arising from delays in delivery of their premises.

The Company had letter of credit and performance obligations related to lender and development requirements that total approximately $25.8 million at September 30, 2021.

Certain of the Company’s joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. From time to time, under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, either the Company or its partners may be entitled to an additional promoted interest or payments.

From time to time, the Company (or ventures in which the Company has an ownership interest) has agreed, and may in the future agree, to (1) guarantee portions of the principal, interest and other amounts in connection with their borrowings, (2) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with their borrowings and (3) provide guarantees to lenders, tenants and other third parties for the completion of development projects. The Company has agreements with its outside partners whereby the partners agree to reimburse the joint venture for their share of any payments made under the guarantee. In some cases, the Company earns a fee from the applicable joint venture for providing the guarantee.

In connection with the refinancing of 767 Fifth Avenue’s (the General Motors Building) secured loan by the Company’s consolidated joint venture entity, 767 Venture, LLC, the Company guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of September 30, 2021, the maximum funding obligation under the guarantee was approximately $20.3 million. The Company earns a fee from the joint venture for providing the guarantee and has an agreement with the outside partners to reimburse the joint venture for their share of any payments made under the guarantee. As of September 30, 2021, no amounts related to the guarantee are recorded as liabilities in the Company’s consolidated financial statements.

Pursuant to the lease agreement with Marriott, the Company has guaranteed the completion of the office building and parking garage on behalf of its 7750 Wisconsin Avenue joint venture and has also provided a financing guaranty as required with respect to the third-party construction financing. The Company earns fees from the joint venture for providing the guarantees and any amounts the Company pays under the guarantee(s) will be deemed to be capital contributions by the Company to the joint venture. The Company has also agreed to fund construction costs through capital contributions to the joint venture in the event of insufficiency of third-party construction financing. In addition, the Company has guaranteed to Marriott, as hotel manager, the completion of a hotel being developed by an affiliate of The Bernstein Companies (the Company’s partner in the 7750 Wisconsin Avenue joint venture) adjacent to the office property, for which the Company earns a fee from the affiliate of The Bernstein Companies. In addition, the Company entered into agreements with affiliates of The Bernstein Companies whereby the Company could be required to act as a mezzanine and/or mortgage lender and finance the construction of the hotel property. An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from the Company under such agreements, which financing was provided by the Company on June 1, 2020. The financing bears interest at a fixed rate of 8.00% per annum, compounded monthly, and matures on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property is substantially completed. The financing is collateralized by a pledge of the partner’s equity interest in the joint venture that owns and is developing 7750 Wisconsin Avenue. To secure such financing arrangements, affiliates of The Bernstein Companies are required to provide certain security, which varies depending on the specific loan, by pledges of their equity interest in the office property, a fee mortgage on the hotel property, or both. As of September 30, 2021, no amounts related to the contingent aspect of any of the guarantees are recorded as liabilities in the Company’s consolidated financial statements.

In connection with the sale and development of the Company’s 6595 Springfield Center Drive development project, the Company has guaranteed the completion of the project and the payment of certain cost overruns in accordance with the development management agreement with the buyer. Although the project has been sold and the lease with the Federal Government tenant has been assigned to the buyer, pursuant to the terms of the Federal

Government lease, the Federal Government tenant was not obligated to release the prior owner/landlord from such landlord’s obligations under the lease until completion of the construction. As a result, the entity which previously owned the land remains liable to the Federal Government tenant for the completion of the construction obligations under the lease. The buyer is obligated to fund the balance of the costs to meet such construction obligations, subject to the Company’s obligation to fund cost overruns (if any), as noted above. An affiliate of the buyer has provided a guaranty of the obligations of the buyer to fund such construction costs and the buyer has agreed to use commercially reasonable efforts to require the construction lender to provide certain remedies to the Company in the event the buyer does not fund such construction obligations. Final completion of the project was achieved during the nine months ended September 30, 2021 and the Company has been released of its guarantee obligations (See Note 3).

In connection with the redevelopment of the Company’s 325 Main Street property located in Cambridge, Massachusetts, the Company was required, pursuant to the local zoning ordinance and urban renewal plan, to commence construction of a residential building of at least 200,000 square feet with 25% of the project designated as income-restricted (with a minimum of 20% of the square footage devoted to home ownership units) prior to the occupancy of the 325 Main Street property, which is expected to occur during the third quarter of 2022. The zoning ordinance and urban renewal plan were each amended to decouple the residential requirement from the occupancy of the 325 Main Street property. The amendment to the urban renewal plan is subject to final approvals and completion of administrative processes. 325 Main Street consisted of an approximately 115,000 net rentable square foot Class A office property that was demolished and is being developed into an approximately 420,000 net rentable square foot Class A office property, including approximately 41,000 net rentable square feet of retail space.

Insurance

The Company’s property insurance program per occurrence limits are $1.0 billion for its portfolio insurance program, including coverage for acts of terrorism other than nuclear, biological, chemical or radiological terrorism (“Terrorism Coverage”). The Company also carries $250 million of Terrorism Coverage for 601 Lexington Avenue, New York, New York (“601 Lexington Avenue”) in excess of the $1.0 billion of coverage in the Company’s property insurance program. Certain properties, including the General Motors Building located at 767 Fifth Avenue in New York, New York (“767 Fifth Avenue”), are currently insured in separate insurance programs. The property insurance program per occurrence limits for 767 Fifth Avenue are $1.625 billion, including Terrorism Coverage. The Company also currently carries nuclear, biological, chemical and radiological terrorism insurance coverage for acts of terrorism certified under the Federal Terrorism Risk Insurance Act (as amended, “TRIA”) (“NBCR Coverage”), which is provided by IXP as a direct insurer, for the properties in the Company’s portfolio, including 767 Fifth Avenue, but excluding certain other properties owned in joint ventures with third parties or which the Company manages. The per occurrence limit for NBCR Coverage is $1.0 billion. Under TRIA, after the payment of the required deductible and coinsurance, the NBCR Coverage provided by IXP is backstopped by the Federal Government if the aggregate industry insured losses resulting from a certified act of terrorism exceed a “program trigger.” The program trigger is $200 million, the coinsurance is 20% and the deductible is 20% of the premiums earned by the insurer for the year prior to a claim. If the Federal Government pays out for a loss under TRIA, it is mandatory that the Federal Government recoup the full amount of the loss from insurers offering TRIA coverage after the payment of the loss pursuant to a formula in TRIA. The Company may elect to terminate the NBCR Coverage if the Federal Government seeks recoupment for losses paid under TRIA, if TRIA is not extended after its expiration on December 31, 2027, if there is a change in its portfolio or for any other reason. The Company intends to continue to monitor the scope, nature and cost of available terrorism insurance.

The Company also currently carries earthquake insurance on its properties located in areas known to be subject to earthquakes. Specifically, the Company currently carries earthquake insurance which covers its San Francisco and Los Angeles regions with a $240 million per occurrence limit, and a $240 million annual aggregate limit, $20 million of which is provided by IXP, as a direct insurer. This insurance is subject to a deductible in the amount of 3% of the value of the affected property. In addition, the Company currently carries earthquake insurance which covers its Seattle region with a $60 million per occurrence limit, and a $60 million annual aggregate limit. This insurance is subject to a deductible in the amount of 2% of the value of the affected property. The amount of the Company’s earthquake insurance coverage may not be sufficient to cover losses from earthquakes. In addition, the amount of earthquake coverage could impact the Company’s ability to finance properties subject to earthquake risk. The Company may discontinue earthquake insurance or change the structure of its earthquake insurance program on some or all of its properties in the future if the premiums exceed the Company’s estimation of the value of the coverage.

IXP, a captive insurance company which is a wholly-owned subsidiary of the Company, acts as a direct insurer with respect to a portion of the Company’s earthquake insurance coverage for its Greater San Francisco and Los Angeles properties and the Company’s NBCR Coverage. Insofar as the Company owns IXP, it is responsible for its liquidity and capital resources, and the accounts of IXP are part of the Company’s consolidated financial statements. In particular, if a loss occurs which is covered by the Company’s NBCR Coverage but is less than the applicable program trigger under TRIA, IXP would be responsible for the full amount of the loss without any backstop by the Federal Government. IXP would also be responsible for any recoupment charges by the Federal Government in the event losses are paid out and its insurance policy is maintained after the payout by the Federal Government. If the Company experiences a loss and IXP is required to pay under its insurance policy, the Company would ultimately record the loss to the extent of the required payment. Therefore, insurance coverage provided by IXP should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance. In addition, Boston Properties Limited Partnership has issued a guarantee to cover liabilities of IXP in the amount of $20.0 million.

Due to the current COVID-19 pandemic, the Company anticipates the possibility of business interruption, loss of lease revenue and/or other associated expenses related to the Company’s operations across its portfolio. Because this is an ongoing situation it is not yet possible to quantify the Company’s losses and expenses, which continue to develop. Because of the complexity of the Company’s insurance policies and limited precedent for claims being made related to pandemics, it is not yet possible to determine if such losses and expenses will be covered by the Company’s insurance policies. Therefore, at this time, the Company has provided notice to the applicable insurers of potential for claims in order to protect the Company’s rights under its policies.

The Company continues to monitor the state of the insurance market in general, and the scope and costs of coverage for acts of terrorism, earthquakes and pandemics, in particular, but the Company cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. There are other types of losses, such as from wars, for which the Company cannot obtain insurance at all or at a reasonable cost. With respect to such losses and losses from acts of terrorism, earthquakes, pandemics or other catastrophic events, if the Company experiences a loss that is uninsured or that exceeds policy limits, the Company could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties. Depending on the specific circumstances of each affected property, it is possible that the Company could be liable for mortgage indebtedness or other obligations related to the property. Any such loss could materially and adversely affect the Company’s business and financial condition and results of operations.

10. Noncontrolling Interests

Noncontrolling interests relate to the interests in Boston Properties Limited Partnership not owned by Boston Properties, Inc. and interests in consolidated property partnerships not wholly-owned by the Company. As of September 30, 2021, the noncontrolling interests in Boston Properties Limited Partnership consisted of 15,989,304 OP Units, 1,487,492 LTIP Units (including 419,423 LTIP Units earned by employees under the Company’s multi-year long-term incentive awards granted between 2012-2018 (i.e., 2012 OPP and 2013-2018 MYLTIP awards)), 219,916 2019 MYLTIP Units, 203,278 2020 MYLTIP Units and 352,021 2021 MYLTIP Units held by parties other than Boston Properties, Inc.

Noncontrolling Interest—Common Units

During the nine months ended September 30, 2021, 227,233 OP Units were presented by the holders for redemption (including 144,399 OP Units issued upon conversion of LTIP Units, 2012 OPP Units and MYLTIP Units) and were redeemed by Boston Properties, Inc. in exchange for an equal number of shares of Common Stock.

At September 30, 2021, Boston Properties Limited Partnership had outstanding 219,916 2019 MYLTIP Units, 203,278 2020 MYLTIP Units and 352,021 2021 MYLTIP Units. Prior to the end of the respective three-year performance period for each plan, holders of MYLTIP Units are entitled to receive per unit distributions equal to one-tenth (10%) of the regular quarterly distributions payable on an OP Unit, but will not be entitled to receive any special distributions. After the measurement date, the number of MYLTIP Units, both vested and unvested, that MYLTIP award recipients have earned, if any, based on the establishment of a performance pool, will be entitled to receive distributions in an amount per unit equal to distributions, both regular and special, payable on an OP Unit.

aggregate of approximately $4.6 million (after giving effect to employee separations). As a result, an aggregate of 285,925 2018 MYLTIP Units that had been previously granted were automatically forfeited.

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2017 MYLTIP Units and, after the February 5, 2021 measurement date, the 2018 MYLTIP Units) and its distributions on the 2018 MYLTIP Units (prior to the February 5, 2021 measurement date) and 2019 - 2021 MYLTIP Units (after the February 2, 2021 issuance date of the 2021 MYLTIP Units) that occurred during the nine months ended September 30, 2021:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit

September 30, 2021	October 29, 2021	$0.98	$0.098
June 30, 2021	July 30, 2021	$0.98	$0.098
March 31, 2021	April 30, 2021	$0.98	$0.098
December 31, 2020	January 28, 2021	$0.98	$0.098

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2016 MYLTIP Units and, after the February 6, 2020 measurement date, the 2017 MYLTIP Units) and its distributions on the 2017 MYLTIP Units (prior to the February 6, 2020 measurement date) and 2018 - 2020 MYLTIP Units (after the February 4, 2020 issuance date of the 2020 MYLTIP Units) that occurred during the nine months ended September 30, 2020:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
September 30, 2020	October 30, 2020	$0.98	$0.098
June 30, 2020	July 31, 2020	$0.98	$0.098
March 31, 2020	April 30, 2020	$0.98	$0.098
December 31, 2019	January 30, 2020	$0.98	$0.098

A holder of an OP Unit may present the OP Unit to Boston Properties Limited Partnership for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, Boston Properties Limited Partnership must redeem the OP Unit for cash equal to the then value of a share of Common Stock of Boston Properties, Inc. Boston Properties, Inc. may, in its sole discretion, elect to assume and satisfy the redemption obligation by paying either cash or issuing one share of Common Stock. The value of the OP Units (not owned by Boston Properties, Inc. and LTIP Units (including the 2012 OPP Units and 2013 - 2018 MYLTIP Units) assuming that all conditions had been met for the conversion thereof) had all of such units been redeemed at September 30, 2021 was approximately $1.9 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $108.35 per share on September 30, 2021.

Noncontrolling Interests—Property Partnerships

The noncontrolling interests in property partnerships consist of the outside equity interests in ventures that are consolidated with the financial results of the Company because the Company exercises control over the entities that own the properties. The equity interests in these ventures that are not owned by the Company, totaling approximately $1.7 billion at September 30, 2021 and December 31, 2020, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

11. Stockholders’ Equity / Partners’ Capital

Boston Properties, Inc.

As of September 30, 2021, Boston Properties, Inc. had 156,206,491 shares of Common Stock outstanding.

As of September 30, 2021, Boston Properties, Inc. owned 1,736,833 general partnership units and 154,469,658 limited partnership units in Boston Properties Limited Partnership.

On May 22, 2020, Boston Properties, Inc. renewed its “at the market” (“ATM”) stock offering program through which it may sell from time to time up to an aggregate of $600.0 million of its Common Stock through sales agents over a three-year period. Under the ATM stock offering program, Boston Properties, Inc. may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaced Boston Properties, Inc.’s prior $600.0 million ATM stock offering program that was scheduled to expire on June 2, 2020. Boston Properties, Inc. intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. No shares of Common Stock have been issued under this ATM stock offering program.

During the nine months ended September 30, 2021, Boston Properties, Inc. issued 206,377 shares of Common Stock upon the exercise of options to purchase Common Stock.

During the nine months ended September 30, 2021, Boston Properties, Inc. issued 227,233 shares of Common Stock in connection with the redemption of an equal number of redeemable OP Units from limited partners.

The following table presents Boston Properties, Inc.’s dividends per share and Boston Properties Limited Partnership’s distributions per OP Unit and LTIP Unit paid or declared in 2021 and during the nine months ended September 30, 2020:


Record Date	Payment Date	Dividend (Per Share)	Distribution (Per Unit)

September 30, 2021	October 29, 2021	$0.98	$0.98
June 30, 2021	July 30, 2021	$0.98	$0.98
March 31, 2021	April 30, 2021	$0.98	$0.98
December 31, 2020	January 28, 2021	$0.98	$0.98


September 30, 2020	October 30, 2020	$0.98	$0.98
June 30, 2020	July 31, 2020	$0.98	$0.98
March 31, 2020	April 30, 2020	$0.98	$0.98
December 31, 2019	January 30, 2020	$0.98	$0.98

Preferred Stock

On March 2, 2021, Boston Properties, Inc. issued a redemption notice for 80,000 shares of its Series B Preferred Stock, which constituted all of the outstanding Series B Preferred Stock, and the corresponding Depositary Shares, each representing 1/100th of a share of Series B Preferred Stock. The redemption price per share of Series B Preferred Stock was equal to $2,500 plus all accrued and unpaid dividend to, but not including, the redemption date, totaling $2,516.41 per share. On March 31, 2021, the Company transferred the full redemption price for all outstanding shares of Series B Preferred Stock of approximately $201.3 million including approximately $1.3 million of accrued and unpaid dividends to, but not including, the redemption date, to the redemption agent. The excess of the redemption price over the carrying value of the Series B Preferred Stock and Series B Preferred Units of approximately $6.4 million relates to the original issuance costs and is reflected as a reduction to Net Income Attributable to Boston Properties, Inc. common shareholders and Net Income Attributable to Boston Properties Limited Partnership common unitholders on the Consolidated Income Statement.

On April 1, 2021, Boston Properties, Inc. redeemed 80,000 shares of Series B Preferred Stock (including the corresponding 8,000,000 Depositary Shares), which represented all of the outstanding shares of Series B Preferred Stock and all of the outstanding Depositary Shares. In connection with the redemption of the Series B Preferred Stock, all of the Series B Preferred Units, which had terms and preferences generally mirroring those of the Series B Preferred Stock, were redeemed by Boston Properties Limited Partnership.

The following table presents Boston Properties, Inc.’s dividends per share on its Series B Preferred Stock paid or declared during 2021 and during the nine months ended September 30, 2020:


Record Date	Payment Date	Dividend (Per Share)
February 5, 2021	February 16, 2021	$32.8125


November 4, 2020	November 16, 2020	$32.8125
August 3, 2020	August 17, 2020	$32.8125
May 1, 2020	May 15, 2020	$32.8125
February 4, 2020	February 18, 2020	$32.8125

12. Segment Information

The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to the Company’s share of Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to the Company’s share of Net Operating Income for the three and nine months ended September 30, 2021 and 2020.

Boston Properties, Inc.


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	$	89,854	$	311,680	$	854,541
Add:
Preferred stock redemption charge	—		—		6,412		—
Preferred dividends	—		2,625		2,560		7,875
Noncontrolling interest—common units of the Operating Partnership	11,982		10,020		35,393		97,090
Noncontrolling interests in property partnerships	18,971		15,561		52,602		34,280
Interest expense	105,794		110,993		320,015		319,726
Losses from early extinguishment of debt	—		—		898		—

Loss from unconsolidated joint ventures	5,597		6,873		1,745		5,410
Net operating income from unconsolidated joint ventures	24,266		24,938		74,478		81,607
Depreciation and amortization expense	179,412		166,456		539,815		515,738
Transaction costs	1,888		307		2,970		1,254
Payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
General and administrative expense	34,560		27,862		117,924		102,059
Less:
Net operating income attributable to noncontrolling interests in property partnerships	47,800		42,160		138,463		122,248
Gains (losses) from investments in securities	(190)		1,858		3,744		965
Interest and other income (loss)	1,520		(45)		4,140		4,277
Gains (losses) on sales of real estate	348		(209)		8,104		613,723
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Development and management services revenue	6,094		7,281		20,181		23,285
Company’s share of Net Operating Income	$	435,195	$	404,444	$	1,291,860	$	1,255,082

Boston Properties Limited Partnership


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	122,014	$	101,624	$	353,633	$	969,932
Add:
Preferred unit redemption charge	—		—		6,412		—
Preferred distributions	—		2,625		2,560		7,875
Noncontrolling interests in property partnerships	18,971		15,561		52,602		34,280
Interest expense	105,794		110,993		320,015		319,726
Losses from early extinguishment of debt	—		—		898		—

Loss from unconsolidated joint ventures	5,597		6,873		1,745		5,410
Net operating income from unconsolidated joint ventures	24,266		24,938		74,478		81,607
Depreciation and amortization expense	177,677		164,706		533,255		510,400
Transaction costs	1,888		307		2,970		1,254
Payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
General and administrative expense	34,560		27,862		117,924		102,059
Less:
Net operating income attributable to noncontrolling interests in property partnerships	47,800		42,160		138,463		122,248
Gains (losses) from investments in securities	(190)		1,858		3,744		965
Interest and other income (loss)	1,520		(45)		4,140		4,277
Gains (losses) on sales of real estate	348		(209)		8,104		626,686
Direct reimbursements of payroll and related costs from management services contracts	3,006		2,896		9,166		8,617
Development and management services revenue	6,094		7,281		20,181		23,285
Company’s share of Net Operating Income	$	435,195	$	404,444	$	1,291,860	$	1,255,082

Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred stock/unit redemption charge, preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, losses from early extinguishment of debt, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains (losses) from investments in securities, interest and other income (loss), gains (losses) on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. The Company believes NOI is useful to investors as a performance measure and believes it provides useful information to investors regarding its results of operations and financial condition because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI

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

The Company’s internal reporting utilizes its share of NOI, which includes its share of NOI from consolidated and unconsolidated joint ventures, which is a non-GAAP financial measure that is calculated as the consolidated amount, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s economic percentage ownership interest and, in some cases, after priority allocations), minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ economic percentage ownership interests and, in some cases, after priority allocations, income allocation to private REIT shareholders and their share of fees due to the Company). The Company’s share of NOI from unconsolidated joint ventures does not include its share of gains on sales of real estate from unconsolidated joint ventures and gain on sale of investment from unconsolidated joint ventures, both of which are included within Loss From Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations. Management utilizes its share of NOI in assessing its performance as the Company has several significant joint ventures and, in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a significant percentage interest. As a result, the presentations of the Company’s share of NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP.

Asset information by segment is not reported because the Company does not use this measure to assess performance. Therefore, depreciation and amortization expense is not allocated among segments. Preferred stock/unit redemption charge, preferred dividends/distributions, interest expense, losses from early extinguishment of debt, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, gains (losses) from investments in securities, interest and other income (loss), gains (losses) on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue are not included in NOI and are provided as reconciling items to the Company’s reconciliations of its share of NOI to net income attributable to common shareholders/unitholders.

The Company’s segments are based on the Company’s method of internal reporting which classifies its operations by geographic area. The Company’s segments by geographic area are Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. On September 1, 2021, the Company invested into a joint venture that acquired Safeco Plaza located in Seattle, Washington (See Note 5). As such, the Seattle region was identified as a segment during the third quarter of 2021. The Company also presents information for each segment by property type, including Office, Residential and Hotel.

Included within the Office property type are commercial office and retail leases, as well as parking revenue. Any write-off for bad debt, including accrued rent, will be recorded as a reduction to lease revenue. During the nine months ended September 30, 2021, the Company wrote off approximately $1.3 million related to accrued rent, net balances and accounts receivable, net balances. There were no write-offs related to accrued rent, net balances and accounts receivable, net balances for the three months ended September 30, 2021. During the three and nine months ended September 30, 2020, the Company wrote off approximately $7.5 million and $63.8 million, respectively, related to accrued rent, net balances and accounts receivable, net balances. The write-offs were for tenants, primarily in the retail sector, that either terminated their leases or for which the Company considered their accrued rent and/or accounts receivable balances were no longer probable of collection.

In addition, parking and other revenue for the three months ended September 30, 2021 increased by approximately $7.2 million compared to the three months ended September 30, 2020. Parking and other revenue for the nine months ended September 30, 2021 increased by approximately $4.0 million compared to 2020.

The Boston Marriott Cambridge closed in March 2020 due to COVID-19. The hotel re-opened on October 2, 2020 and has operated at lower occupancy levels due to the continued impact of COVID-19 on business and leisure travel. The closing of the hotel for more than two fiscal quarters, and the lower demand and low occupancy since its re-opening, have had, and are expected to continue to have, a material adverse effect on the hotel’s operations and thus the results of the Company’s Hotel property type.

Information by geographic area and property type (dollars in thousands):

For the three months ended September 30, 2021:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Office	$	236,080		$	—		$	257,656		$	125,340		$	—		$	85,797		$	704,873
Residential	3,418			—			—			806			—			6,670			10,894
Hotel	5,189			—			—			—			—			—			5,189
Total	244,687			—			257,656			126,146			—			92,467			720,956
% of Grand Totals	33.93		%	—		%	35.74		%	17.50		%	—		%	12.83		%	100.00		%
Rental Expenses:
Office	82,697			—			94,338			43,582			—			31,619			252,236
Residential	1,396			—			—			1,688			—			2,961			6,045
Hotel	3,946			—			—			—			—			—			3,946
Total	88,039			—			94,338			45,270			—			34,580			262,227
% of Grand Totals	33.57		%	—		%	35.98		%	17.26		%	—		%	13.19		%	100.00		%
Net operating income	$	156,648		$	—		$	163,318		$	80,876		$	—		$	57,887		$	458,729
% of Grand Totals	34.15		%	—		%	35.60		%	17.63		%	—		%	12.62		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(10,841)			—			(36,959)			—			—			—			(47,800)
Add: Company’s share of net operating income from unconsolidated joint ventures	3,464			12,078			104			3,502			671			4,447			24,266
Company’s share of net operating income	$	149,271		$	12,078		$	126,463		$	84,378		$	671		$	62,334		$	435,195
% of Grand Totals	34.30		%	2.78		%	29.06		%	19.39		%	0.15		%	14.32		%	100.00		%

(1)Rental Revenue is equal to Total Revenue per the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.

For the three months ended September 30, 2020:


	Boston			Los Angeles			New York			San Francisco			Washington, DC			Total
Rental Revenue: (1)
Office	$	225,652		$	—		$	239,535		$	128,165		$	79,931		$	673,283
Residential	3,043			—			—			23			6,652			9,718
Hotel	90			—			—			—			—			90
Total	228,785			—			239,535			128,188			86,583			683,091
% of Grand Totals	33.48		%	—		%	35.07		%	18.77		%	12.68		%	100.00		%
Rental Expenses:
Office	81,890			—			97,904			41,518			31,994			253,306
Residential	1,350			—			—			740			2,865			4,955
Hotel	3,164			—			—			—			—			3,164
Total	86,404			—			97,904			42,258			34,859			261,425
% of Grand Totals	33.05		%	—		%	37.46		%	16.16		%	13.33		%	100.00		%
Net operating income	$	142,381		$	—		$	141,631		$	85,930		$	51,724		$	421,666
% of Grand Totals	33.77		%	—		%	33.58		%	20.38		%	12.27		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(10,228)			—			(31,932)			—			—			(42,160)
Add: Company’s share of net operating income from unconsolidated joint ventures	2,764			11,953			539			4,098			5,584			24,938
Company’s share of net operating income	$	134,917		$	11,953		$	110,238		$	90,028		$	57,308		$	404,444
% of Grand Totals	33.35		%	2.96		%	27.26		%	22.26		%	14.17		%	100.00		%

For the nine months ended September 30, 2021:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Office	$	696,054		$	—		$	760,002		$	382,119		$	—		$	252,822		$	2,090,997
Residential	9,594			—			—			1,817			—			18,421			29,832
Hotel	7,382			—			—			—			—			—			7,382
Total	713,030			—			760,002			383,936			—			271,243			2,128,211
% of Grand Totals	33.50		%	—		%	35.71		%	18.04		%	—		%	12.75		%	100.00		%
Rental Expenses:
Office	240,743			—			286,385			124,785			—			94,360			746,273
Residential	4,286			—			—			4,918			—			8,896			18,100
Hotel	7,993			—			—			—			—			—			7,993
Total	253,022			—			286,385			129,703			—			103,256			772,366
% of Grand Totals	32.76		%	—		%	37.08		%	16.79		%	—		%	13.37		%	100.00		%
Net operating income	$	460,008		$	—		$	473,617		$	254,233		$	—		$	167,987		$	1,355,845
% of Grand Totals	33.93		%	—		%	34.93		%	18.75		%	—		%	12.39		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(31,641)			—			(106,822)			—			—			—			(138,463)
Add: Company’s share of net operating income from unconsolidated joint ventures	9,369			38,535			(517)			10,562			671			15,858			74,478
Company’s share of net operating income	$	437,736		$	38,535		$	366,278		$	264,795		$	671		$	183,845		$	1,291,860
% of Grand Totals	33.88		%	2.98		%	28.35		%	20.50		%	0.05		%	14.24		%	100.00		%

For the nine months ended September 30, 2020:


	Boston			Los Angeles			New York			San Francisco			Washington, DC			Total
Rental Revenue: (1)
Office	$	683,501		$	—		$	699,063		$	393,137		$	256,904		$	2,032,605
Residential	10,512			—			—			23			18,541			29,076
Hotel	7,014			—			—			—			—			7,014
Total	701,027			—			699,063			393,160			275,445			2,068,695
% of Grand Totals	33.89		%	—		%	33.79		%	19.01		%	13.31		%	100.00		%
Rental Expenses:
Office	240,129			—			285,411			123,168			99,322			748,030
Residential	3,925			—			—			740			8,319			12,984
Hotel	11,958			—			—			—			—			11,958
Total	256,012			—			285,411			123,908			107,641			772,972
% of Grand Totals	33.12		%	—		%	36.92		%	16.03		%	13.93		%	100.00		%
Net operating income	$	445,015		$	—		$	413,652		$	269,252		$	167,804		$	1,295,723
% of Grand Totals	34.35		%	—		%	31.92		%	20.78		%	12.95		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(31,467)			—			(90,781)			—			—			(122,248)
Add: Company’s share of net operating income from unconsolidated joint ventures	8,490			42,909			2,110			11,384			16,714			81,607
Company’s share of net operating income	$	422,038		$	42,909		$	324,981		$	280,636		$	184,518		$	1,255,082
% of Grand Totals	33.63		%	3.42		%	25.89		%	22.36		%	14.70		%	100.00		%

13. Earnings Per Share / Common Unit

Boston Properties, Inc.

The following table provides a reconciliation of both the net income attributable to Boston Properties, Inc. common shareholders and the number of common shares used in the computation of basic earnings per share (“EPS”), which is calculated by dividing net income attributable to Boston Properties, Inc. common shareholders by the weighted-average number of common shares outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of Boston Properties, Inc. and Boston Properties Limited Partnership’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic EPS of Boston Properties, Inc. using the two-class method. Participating securities are included in the computation of diluted EPS of Boston Properties, Inc. using the if-converted method if the impact is dilutive. Because the 2012 OPP Units and 2013 - 2018 MYLTIP Units required, and the 2019 - 2021 MYLTIP Units require, Boston Properties, Inc. to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties, Inc. excludes such units from the diluted EPS calculation. Other potentially dilutive common shares, including stock options, restricted stock and other securities of Boston Properties Limited Partnership that are exchangeable for Boston Properties, Inc.’s Common Stock, and the related impact on earnings, are considered when calculating diluted EPS.


	Three months ended September 30, 2021
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	156,183	$	0.69
Effect of Dilutive Securities:
Stock Based Compensation	—		415	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	156,598	$	0.69

	Three months ended September 30, 2020
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:


Net income attributable to Boston Properties, Inc. common shareholders	$	89,854	155,645	$	0.58
Effect of Dilutive Securities:
Stock Based Compensation	—		25	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	89,854	155,670	$	0.58


	Nine months ended September 30, 2021
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:


Net income attributable to Boston Properties, Inc. common shareholders	$	311,680	156,062	$	2.00
Effect of Dilutive Securities:
Stock Based Compensation	—		332	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	311,680	156,394	$	1.99


	Nine months ended September 30, 2020
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	854,541	155,349	$	5.50
Allocation of undistributed earnings to participating securities	(1,150)		—	(0.01)
Net income attributable to Boston Properties, Inc. common shareholders	$	853,391	155,349	$	5.49
Effect of Dilutive Securities:
Stock Based Compensation	—		98	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	853,391	155,447	$	5.49

Boston Properties Limited Partnership

The following table provides a reconciliation of both the net income attributable to Boston Properties Limited Partnership common unitholders and the number of common units used in the computation of basic earnings per common unit, which is calculated by dividing net income attributable to Boston Properties Limited Partnership common unitholders by the weighted-average number of common units outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of Boston Properties, Inc. and Boston Properties Limited Partnership’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic earnings per common unit using the two-class method. Participating securities are included in the computation of diluted earnings per common unit using the if-converted method if the impact is dilutive. Because the 2012 OPP Units and 2013 - 2018 MYLTIP Units required, and the 2019 - 2021 MYLTIP Units require, Boston Properties, Inc. to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties Limited Partnership excludes such units from the diluted earnings per common unit calculation. Other potentially dilutive common units and the related impact on earnings are considered when calculating diluted earnings per common unit. Included in the number of units (the denominator) below are approximately 17,011,000 and 17,032,000 redeemable common units for the three months ended September 30, 2021 and 2020, respectively, and 17,016,000 and 17,279,000 redeemable common units for the nine months ended September 30, 2021, and 2020, respectively.


	Three months ended September 30, 2021
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	122,014	173,194	$	0.70
Effect of Dilutive Securities:
Stock Based Compensation	—		415	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	122,014	173,609	$	0.70


	Three months ended September 30, 2020
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:


Net income attributable to Boston Properties Limited Partnership common unitholders	$	101,624	172,677	$	0.59
Effect of Dilutive Securities:
Stock Based Compensation	—		25	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	101,624	172,702	$	0.59


	Nine months ended September 30, 2021
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:


Net income attributable to Boston Properties Limited Partnership common unitholders	$	353,633	173,078	$	2.04
Effect of Dilutive Securities:
Stock Based Compensation	—		332	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	353,633	173,410	$	2.04

	Nine months ended September 30, 2020
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	969,932	172,628	$	5.62
Allocation of undistributed earnings to participating securities	(1,278)		—	(0.01)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	968,654	172,628	$	5.61
Effect of Dilutive Securities:
Stock Based Compensation	—		98	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	968,654	172,726	$	5.61

14. Stock Option and Incentive Plan

On February 2, 2021, Boston Properties, Inc.’s Compensation Committee approved the 2021 MYLTIP awards under the Boston Properties, Inc. 2012 Stock Option and Incentive Plan (the “2012 Plan”) to certain officers and employees of Boston Properties, Inc. The 2021 MYLTIP awards consist of two, equally weighted (50% each) components that utilize Boston Properties, Inc.’s TSR over a three-year measurement period as the performance metric.

The first component of the 2021 MYLTIP, which represents one-half (50%) of the target grant-date value, retains the basic general structure of the 2020 MYLTIP awards with certain changes, including a change to the

custom peer index against which Boston Properties, Inc.’s TSR is compared. The number of LTIP Units that can be earned under this component ranges from zero to 200% of the target number of LTIP Units, based on Boston Properties, Inc.’s annualized relative TSR performance compared to a custom index. Under this component, 100% of the target number of LTIP Units will be earned if Boston Properties, Inc.’s TSR equals the custom index TSR; for relative TSR performance between -1,000 basis points and +1,000 basis points, the number of LTIP Units earned will be determined using linear interpolation.

The second component represents the remaining one-half (50%) of the target grant-date value of the 2021 MYLTIP. The number of LTIP Units that can be earned under this component ranges from zero to 200% of the target number of LTIP Units, based on Boston Properties, Inc.’s cumulative absolute TSR during the performance period. Under this component, 100% of the target number of LTIP Units will be earned if Boston Properties, Inc.’s achieves an absolute TSR equal to +1,000 basis points; if Boston Properties, Inc.’s absolute TSR is greater than -4,000 basis points but less than +6,000 basis points, then the number of LTIP Units earned will be determined using linear interpolation.

Total earned awards under the 2021 MYLTIP, if any, will equal the sum of the number of LTIP Units earned under the first and second components and will range from zero to a maximum of 352,021 LTIP Units with a target of approximately 176,009 LTIP Units and linear interpolation between zero and maximum. Earned awards (if any) will vest 100% on February 1, 2024, but may not be converted, redeemed, sold or otherwise transferred for one additional year thereafter. Vesting will be accelerated in the event of a change in control, termination of employment by Boston Properties, Inc. without cause, or termination of employment by the award recipient for good reason, death, disability or retirement. If there is a change of control prior to February 1, 2024, earned awards will be calculated based on TSR performance up to the date of the change of control. The 2021 MYLTIP awards are in the form of LTIP Units issued on the grant date, and they are subject to forfeiture to the extent awards are not earned. Prior to the performance measurement date holders of the 2021 MYLTIP Units are only entitled to one-tenth (10%) of the regular quarterly distributions payable on common partnership units. Following the completion of the three-year performance period, Boston Properties, Inc. will also make a “catch-up” cash payment on the 2021 MYLTIP Units that are ultimately earned in an amount equal to the regular and special distributions, if any, declared during the performance period on Boston Properties, Inc.’s common stock, less the distributions actually paid to holders of 2021 MYLTIP Units during the performance period on all of the awarded 2021 MYLTIP Units. Under ASC 718 “Compensation - Stock Compensation,” the 2021 MYLTIP awards have an aggregate value of approximately $15.3 million, which amount will generally be amortized into earnings under the graded vesting method.

On February 5, 2021, the measurement period for the Company’s 2018 MYLTIP awards ended and, based on Boston Properties, Inc.’s relative TSR performance, the final awards were determined to be 29.2% of target, or an aggregate of approximately $4.6 million (after giving effect to employee separations). As a result, an aggregate of 285,925 2018 MYLTIP Units that had been previously granted were automatically forfeited.

At Boston Properties, Inc.’s 2021 annual meeting of stockholders held on May 20, 2021, its stockholders approved the Boston Properties, Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan replaces the 2012 Plan and no further awards will be granted under the 2012 Plan. The material features of the 2021 Plan include, among other things: (i) the maximum number of shares of Common Stock reserved and available for issuance under the 2021 Plan is 5,400,000 shares less one share for every one share that was granted between March 4, 2021 and May 19, 2021 under the 2012 Plan, (ii) shares of Common Stock underlying awards granted under the 2021 Plan or the 2012 Plan that are forfeited, canceled or otherwise terminated (other than by exercise) will be added back to the shares of Common Stock available for issuance under the 2021 Plan and, with respect to “full-value” awards under the 2021 Plan or the 2012 Plan, shares tendered or held back for taxes and shares previously reserved for issuance pursuant to such an award to the extent that such shares are not issued and are no longer issuable pursuant to such an award (e.g., in the event that a full-value award that may be settled in cash or by issuance of shares of Common Stock is settled in cash) will be added back to the shares available for issuance under the 2021 Plan, (iii) the award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock units, restricted stock, unrestricted stock, dividend equivalent rights, cash-based awards and other equity-based awards (including LTIP Units) is permitted, (iv) stock options may not be repriced and “underwater” stock options may not be exchanged for another award or cash without stockholder approval; and (v) the term of the 2021 Plan is for ten years from the date of stockholder approval.

During the nine months ended September 30, 2021, Boston Properties, Inc. issued 56,841 shares of restricted common stock and Boston Properties Limited Partnership issued 281,640 LTIP Units and 352,021 2021 MYLTIP Units to employees and non-employee director advisors under the 2012 Plan and the 2021 Plan. Employees paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and 2021 MYLTIP Unit. When issued, LTIP

Units are not economically equivalent in value to a share of Common Stock, but over time can increase in value to one-for-one parity with Common Stock if there is sufficient appreciation in the value of the Company’s assets. The aggregate value of the LTIP Units is included in noncontrolling interests in the Consolidated Balance Sheets of Boston Properties, Inc. and Boston Properties Limited Partnership. A substantial majority of the grants of restricted common stock and LTIP Units to employees vest in four equal annual installments. Restricted common stock is measured at fair value on the date of grant based on the number of shares granted and the closing price of Boston Properties, Inc.’s Common Stock on the date of grant as quoted on the New York Stock Exchange. Such value is recognized as an expense ratably over the corresponding employee service period. The shares of restricted common stock granted during the nine months ended September 30, 2021 were valued at approximately $5.7 million ($100.46 per share weighted-average). The LTIP Units granted were valued at approximately $23.8 million (approximately $84.43 per unit weighted-average fair value) using a Monte Carlo simulation method model. The per unit fair values of the LTIP Units granted were estimated on the dates of grant and for a substantial majority of such units were valued using the following assumptions: an expected life of 5.7 years, a risk-free interest rate of 0.65% and an expected price volatility of 30.0%. Because the 2012 OPP Units and 2013 - 2021 MYLTIP Units are subject to both a service condition and a market condition, the Company recognizes the related compensation expense under the graded vesting attribution method. Under the graded vesting attribution method, each portion of the award that vests at a different date is accounted for as a separate award and recognized over the period appropriate to that portion so that the compensation cost for each portion should be recognized in full by the time that portion vests. The Company recognizes forfeitures as they occur on its awards of stock-based compensation. Dividends paid on both vested and unvested shares of restricted stock are charged directly to Dividends in Excess of Earnings in Boston Properties, Inc.’s Consolidated Balance Sheets and Partners’ Capital in Boston Properties Limited Partnership’s Consolidated Balance Sheets. Aggregate stock-based compensation expense associated with restricted stock, LTIP Units and MYLTIP Units was approximately $8.4 million and $8.0 million for the three months ended September 30, 2021 and 2020, respectively, and $42.2 million and $35.3 million for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021, there was (1) an aggregate of approximately $28.4 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units and 2018 MYLTIP Units and (2) an aggregate of approximately $9.4 million of unrecognized compensation expense related to unvested 2019 - 2021 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.1 years.

15. Subsequent Events

On October 15, 2021, Boston Properties Limited Partnership used available cash and funds under its 2021 Credit Facility to complete the redemption of $1.0 billion in aggregate principal amount of its 3.85% senior notes due February 1, 2023. The redemption price was approximately $1.05 billion, which included approximately $7.9 million of accrued and unpaid interest to, but not including, the redemption date and an early redemption premium and unamortized financing costs totaling approximately $43.9 million.

On October 19, 2021, the Company partially placed in-service Reston Next, a Class A office project with

approximately 1.1 million net rentable square feet located in Reston, Virginia.

On October 25, 2021, the Company completed the sale of its 181,191 and 201 Spring Street properties located in Lexington, Massachusetts for an aggregate gross sales price of $191.5 million. 181,191 and 201 Spring Street are three Class A office properties aggregating approximately 333,000 net rentable square feet and are 100% leased.

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

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