BXP Inc
For the period ended Mar 31, 2025. Filed May 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
BXP$65.01-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001656423-24-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001656423-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 465 previous paragraphs and 352 current paragraphs.
173 unchanged; 121 reworded; 52 added; 137 removed; 34 previous and 6 current paragraphs rearranged.
Tables are not compared: 38 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (52)
Current report
The market is experiencing increased volatility in the capital markets, heightened concerns over the potential for inflation and increased interest rates and a reduction in consumer confidence. These factors led many to forecast a potential recession or decline in U.S. Gross Domestic Product (“GDP”) growth in 2025, and the recent report that first quarter GDP declined by 0.3% did not contradict those forecasts.
Current report
For BXP, the primary drivers of leasing activity continue to be corporate confidence and in-person workplace behavior. Despite our initial concerns that clients might delay or cancel space requirements in response to a more uncertain operating environment, we have not observed this trend to date. Of the approximately one million square feet currently under negotiation, only one prospective user—accounting for approximately 8,000 square feet—has elected not to move forward, citing current market conditions. Our overall leasing pipeline remains active and robust.
Current report
In the life sciences sector, proposed federal funding cuts to the National Institutes of Health and other research organizations, as well as uncertainties regarding U.S. Food and Drug Administration approvals, are creating additional headwinds. These challenges are leading some investors and operators within the life sciences community to reconsider new financial commitments, which may impact leasing velocity in this sector.
Current report
Should the U.S. economy enter a recession, we would expect overall leasing demand to soften; however, we also believe a recession could result in lower interest rates and a potential decline in remote work due to a weaker labor market. With respect to construction costs, while tariffs are expected to increase the prices of certain materials, we anticipate modest impact on our overall construction budgets, due to the limited proportion of non-U.S. sourced materials used in our projects and strong competition among contractors.
Current report
Based on the first quarter leasing results, our current pipeline of transactions under negotiation and possible additional activity, we have seen limited impact on our 2025 leasing plan of four million square feet, inclusive of approximately three million square feet of leasing on vacant space and known 2025 expirations.
Current report
In the first quarter of 2025, we executed 91 leases totaling more than 1.1 million square feet with a weighted-average lease term of approximately 10.9 years. This result represents a 25% increase in the number of square feet leased over the first quarter of 2024. Notable leases for the quarter included an approximately 244,000 square foot lease at 200 Fifth Avenue in New York, New York and an approximately 162,000 square foot lease in Waltham, Massachusetts, both of which were on vacant space.
Current report
Including vacant space for which we have signed leases that have not yet commenced revenue recognition in accordance with GAAP, our in-service office and retail properties were approximately 89.4% leased at March 31, 2025. The percentage leased remained stable quarter-over-quarter demonstrating the continued strength of BXP’s leasing activity and pipeline, as illustrated by the lease executed at 200 Fifth Avenue in the first quarter.
Current report
We continually evaluate current and prospective markets for possible acquisitions of “value-add” assets that require lease-up or repositioning, and acquisitions that are otherwise consistent with our long-term strategy of owning, managing, developing, and improving premier workplaces in each of our chosen markets. Additional new acquisition opportunities will likely increase in this environment, and we remain committed to developing and acquiring assets to enhance our long-term growth and to meet client demand by focusing on premier workplaces.
Current report
Consistent with this strategy, on March 5, 2025, we completed the formation of a joint venture with CrossHarbor Capital and Albanese Organization to develop 290 Coles Street, a fully entitled, 670-unit market-rate residential project offering panoramic views of the Hudson River and Manhattan skyline in Jersey City, New Jersey. The estimated total investment (inclusive of interest carry on the equity investments) is approximately $455.8 million. BXP owns 19.46% of the common equity interests in the venture and will also provide up to $65.0 million of the required capital as preferred equity. In addition, the joint venture entered into a $225.0 million construction loan that bears interest at a rate of Term SOFR plus 2.50% per annum, and matures on March 5, 2029 with an additional one-year extension option, subject to certain conditions.
Current report
As of March 31, 2025, our New York CBD in-service portfolio was approximately 88.1% occupied and approximately 92.3% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current report
(1)Total square feet from properties taken out of service during the three months ended March 31, 2025 consists of 201,634 square feet at Reservoir Place and 261,046 square feet at Reston Corporate Center.
Current report
•On March 31, 2025, we commenced the redevelopment of 1050 Winter Street in Waltham, Massachusetts. 1050 Winter Street is a redevelopment of an approximately 162,000 net rentable square foot office property. On April 5, 2025, this property was partially placed in-service. The project is fully pre-leased.
Current report
Unconsolidated joint venture activities
Current report
•On February 27, 2025, a joint venture in which we have a 50% ownership interest, entered into a $252.0 million mortgage loan secured by 7750 Wisconsin Avenue in Bethesda, Maryland. The loan is scheduled to mature on March 1, 2035, bears interest at a fixed rate of 5.49% per annum, and requires monthly principal and interest payments. The proceeds from the loan were used to repay the existing $252.0 million construction loan collateralized by the property. The repayment resulted in the joint venture recognizing a loss from early extinguishment of debt of approximately $0.1 million related to unamortized finance costs during the three months ended March 31, 2025. 7750 Wisconsin Avenue is an office property with approximately 736,000 net rentable square feet.
Current report
•On March 5, 2025, we acquired a 19.46% interest in a joint venture that is developing 290 Coles Street located in Jersey City, New Jersey for a gross purchase price of approximately $20.0 million. Additionally, we agreed to fund up to $65.0 million of the required capital through a preferred equity investment. Our preferred equity investment is expected to earn a 13.0% internal rate of return (“IRR”) and is to be redeemed, in full, upon the earlier of two years after stabilization of the property or March 5, 2030. On March 5, 2025, the joint venture entered into a $225.0 million construction loan, which will fund construction costs after the funding of all common and preferred equity investments required by the construction loan agreement. The loan bears interest at a variable rate equal to Term SOFR plus 2.50% per annum and is scheduled to mature on March 5, 2029 with an additional one-year extension option, subject to certain conditions. When completed, 290 Coles Street is expected to be a 670-unit residential property with retail space aggregating approximately 560,000 net rentable square feet.
Current report
•On March 28, 2025, BPLP amended and restated its revolving credit agreement (as amended and restated, the “2025 Credit Facility”). The 2025 Credit Facility provides for aggregate borrowings of up to $2.950 billion through an unsecured revolving credit facility and an unsecured term loan facility, subject to customary conditions. Among other things, the amendment and restatement (1) increased the total commitment of the revolving line of credit (the “Revolving Facility”) from $2.0 billion to $2.250 billion, (2) extended the maturity date of the Revolving Facility from June 15, 2026 to March 29, 2030, and (3) added a $700.0 million unsecured term loan facility (the “Term Loan Facility”) with an initial maturity date of March 30, 2029, with two, six-month extension options, each subject to customary conditions. In connection with the amendment and restatement, we recognized a loss from early extinguishment of debt of approximately $0.3 million related to unamortized origination costs during thethree months ended March 31, 2025.
Current report
At closing on March 28, 2025, BPLP drew the full $700.0 million of the Term Loan Facility under the 2025 Credit Facility, the proceeds of which were used to fully repay the remaining $700.0 million of borrowings outstanding under it’s $1.2 billion unsecured term loan facility (the “2023 Unsecured Term Loan”). The 2023 Unsecured Term Loan was scheduled to mature on May 16, 2025. There was no prepayment penalty associated with the repayment of the 2023 Unsecured Term Loan.
Current report
On April 22, 2025, BPLP amended its 2025 Credit Facility to remove the SOFR conversion adjustment of 10 basis points previously applicable to the Term Loan Facility. Other than the foregoing, the material terms of the Tenth Amended and Restated Credit Agreement, which governs the 2025 Credit Facility, remained unchanged (See Note 6 to the Consolidated Financial Statements).
Current report
•On March 28, 2025, BPLP increased the amount by which it may issue unsecured commercial paper notes under its commercial paper program (the “Commercial Paper Program”) from $500.0 million to $750.0 million. Other than the increase in the program’s maximum capacity, all other terms of the Commercial Paper Program remained unchanged (See Note 6 to the Consolidated Financial Statements).
Current report
Derivative instrument and hedging activity
Current report
•On April 8, 2025, BPLP entered into an interest rate swap contract with a notional amount of $300.0 million to replace $300.0 million of interest rate swap contracts that expired on April 1, 2025. The interest rate swap was entered into to fix Daily Simple SOFR at a fixed interest rate of 3.6775% per annum for the period commencing on April 7, 2025 and ending on April 6, 2026.
Current report
Termination income for the three months ended March 31, 2025 related to two clients across the Same Property Portfolio and totaled approximately $0.2 million.
Current report
(3)Reservoir Place is an approximately 526,000 square foot office building, of which approximately 165,000 square feet remains in-service.
Current report
(4)1050 Winter Street was no longer considered “in-service” on March 31, 2024. 1050 Winter Street commenced redevelopment on March 31, 2025.
Current report
Net operating income for our residential same properties decreased by approximately $0.5 million for the three months ended March 31, 2025 compared to 2024.
Current report
Depreciation and amortization expense increased by approximately $1.4 million for the three months ended March 31, 2025 compared to 2024, as detailed below.
Current report
Depreciation and amortization expense increased by approximately $1.4 million for the three months ended March 31, 2025 compared to 2024, as detailed below.
Current report
Income (loss) from unconsolidated joint ventures decreased by approximately $21.3 million for the three months ended March 31, 2025 compared to 2024, due primarily to an approximately $21.8 million gain recognized upon acquiring our joint venture partner’s economic ownership interest in 901 New York Avenue during the three months ended March 31, 2024 that did not recur during the three months ended March 31, 2025.
Current report
Loss on Sales-Type Lease
Current report
During the three months ended March 31, 2025, we recognized approximately $2.5 million in additional costs, which had previously been contingent, related to a ground lease for land at our Reston Next property located in Reston, Virginia. We entered into the ground lease in 2020 with a third-party hotel developer and amended it in 2022. The amendment resulted in the derecognition of the assets related to the ground lease and the classification of the ground lease as a sales-type lease resulting in the recognition of a gain on sales-type lease of approximately $10.1 million.
Current report
Loss From Early Extinguishment of Debt
Current report
On March 28, 2025, BPLP amended and restated its revolving credit agreement(See Note 6 to the Consolidated Financial Statements). In connection with the amendment and restatement, we recognized a loss from early extinguishment of debt of approximately $0.3 million related to unamortized origination costs during thethree months ended March 31, 2025.
Current report
Interest expense increased by approximately $1.6 million for the three months ended March 31, 2025 compared to 2024, as detailed below.
Current report
At March 31, 2025, our variable rate debt consisted of (1) BPLP’s $2.25 billion Revolving Credit Facility, (2) BPLP’s $700.0 million Term Loan Facility and (3) BPLP’s $750.0 million Commercial Paper Program. As of March 31, 2025, there were $300.0 million, $700.0 million and $500.0 million outstanding under the Revolving Credit Facility, Term Loan Facility and Commercial Paper Program, respectively.
Current report
(3)Property was fully placed in service on October 31, 2024.
Current report
•$1.0 billion of 3.650% unsecured senior notes due February 1, 2026, and
Current report
(6)As of March 31, 2025, this property was 30% placed in-service.
Current report
(7)As of March 31, 2025, this property was 6% placed in-service.
Current report
(9)On January 1, 2025, in accordance with our accounting policy, we ceased interest capitalization of our equity method investment. As of March 31, 2025, the joint venture partner, which is also the managing partner, classifies the project as under construction. As such, we continue to reflect the project as under construction. As of March 31, 2025, this property was 27% placed in-service.
Current report
(10)On March 5, 2025, we acquired a 19.46% interest in 290 Coles Street. The budget represents our 19.46% ownership of the project budget and financings which includes our share of preferred equity. We contributed $20.0 million of common equity at closing. In addition, we committed to provide up to $65.0 million in preferred equity accruing at a 13.0% IRR. As of March 31, 2025, no preferred equity has been contributed.
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Removed paragraphs (137)
Previous report
We believe the most important market forces driving occupancy, rental rates and earnings for BXP are interest rates, corporate earnings growth, return-to-office behaviors, and outperformance of premier workplaces, all of which are currently trending in BXP’s favor, serving as tailwinds for BXP’s performance.
Previous report
In particular, corporate earnings growth is an important driver for BXP’s performance given its correlation to leasing activity. After remaining flat for all of 2023, S&P 500 earnings, which are viewed as a proxy for corporate health, are expected to grow 9.9% in 2024. Our experience tells us that companies with earnings growth are much more likely to invest, hire and expand their leased space, as demonstrated in BXP’s growing leasing volumes this year. We do not currently see evidence of a looming recession in the decision-making of our clients.
Previous report
Return-to-office behaviors continue to improve in the cities in which we operate. Several large companies have recently announced more stringent in-office work requirements for their employees, and 84% of the CEOs surveyed in a recent third-party study believe there will be a full return-to-office work at their companies within three years, up from 64% of those surveyed just one year ago. The reasons cited by the CEOs include concerns about diminished collaboration, innovation and productivity, inadequate supervision and training for younger employees, and the cost of maintaining vacant offices.
Previous report
The evolving operating environment impacts various aspects of our operating activities as:
Previous report
•labor market conditions shift, which has gradually increased employer demand for mandatory in-person workdays;
Previous report
•volatility in the capital markets has led companies to be more reticent in their capital outlays and slowed down decision-making, including capital required for leasing new space;
Previous report
•private market debt financing, both for construction and existing assets, is significantly more challenging to arrange; and
Previous report
•construction costs have increased and, although much of the cost for our active development pipeline is fixed, the cost of potential future construction activity continues to increase.
Previous report
In the third quarter of 2024, we executed 74 leases totaling more than 1.1 million square feet with a weighted-average lease term of approximately 7.2 years. We signed leases for a total of approximately 3.3 million square feet in the first three quarters of 2024, representing a 25% increase compared to the same period in 2023.
Previous report
BXP’s CBD portfolio was 90.1% occupied and 92.1% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP) at September 30, 2024. Approximately 90% of our share of NOI comes from assets located in our CBD portfolio, underscoring the strength of BXP’s strategy to invest in the highest quality buildings in dynamic urban gateway markets. For a detailed discussion of our share of NOI, including the reasons management believes the metric is useful to investors and a reconciliation to the most comparable GAAP measure, see page 39.
Previous report
In the third quarter of 2024, we completed and fully placed in-service 180 CityPoint, an approximately 329,000 square foot laboratory/life sciences project located in Waltham, Massachusetts. BXP also partially placed in-service Skymark, a luxury residential property in Reston, Virginia that consists of 508 residential units across a five-story low-rise building and an iconic 39-story tower, which is one of the tallest buildings in Northern Virginia. The residential property is owned by a joint venture in which BXP has a 20% ownership interest.
Previous report
(1)Total square feet of properties taken out of service during the three months ended September 30, 2024 consists of 205,355 square feet at 1100 Winter Street and 111,183 square feet at Kingstowne One. Total square feet of properties taken out of service during the nine months ended September 30, 2024 consists of 205,355 square feet at 1100 Winter Street, 162,274 square feet at 1050 Winter Street, 111,183 square feet at Kingstowne One, 71,420 square feet at 15825 Shady Grove Road and 30,000 square feet at 17 Hartwell Avenue.
Previous report
(2)Total square feet of properties placed in service during the three months ended September 30, 2024 consists of 187,048 square feet at 180 CityPoint and 22,365 square feet at 651 Gateway. Total square feet of properties placed in service during the nine months ended September 30, 2024 consists of 187,048 square feet at 180 CityPoint, 117,907 square feet at 760 Boylston Street and 67,017 square feet at 651 Gateway.
Previous report
•On September 26, 2024, we fully placed in-service 180 CityPoint, an approximately 329,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.
Previous report
Pending disposition activity
Previous report
•On July 22, 2024, we executed an amendment to an agreement with a third-party developer for the sale of a portion of our Shady Grove property for an aggregate gross sale price of approximately $24.7 million (See Note 3 to the Consolidated Financial Statements). The properties under agreement consist of 2 Choke Cherry Road, 2094 Gaither Road and a land parcel, located in Rockville, Maryland. The disposition is subject to satisfaction of certain closing conditions and there can be no assurance that this transaction will be consummated on the terms currently contemplated or at all.
Previous report
Unconsolidated joint ventures activities
Previous report
•On July 12, 2024, a joint venture in which we have a 20% ownership interest partially placed in-service Skymark, a luxury residential property located in Reston, Virginia, that consists of 508 residential units aggregating approximately 417,000 net rentable square feet across a five-story, low-rise building and an iconic 39-story tower, which is one of the tallest buildings in Northern Virginia.
Previous report
•On July 18, 2024, a joint venture in which we have a 50% ownership interest extended by one year the maturity date of its loan collateralized by 100 Causeway Street. At the time of the extension, the loan had an outstanding balance totaling approximately $333.6 million, bore interest at Term SOFR plus 1.48% per annum, and was scheduled to mature on September 5, 2024. Following the extension, the loan will continue to bear interest at Term SOFR plus 1.48% per annum, and is scheduled to mature on September 5, 2025. 100 Causeway Street is an approximately 634,000 net rentable square foot premier workplace located in Boston, Massachusetts.
Previous report
•On August 8, 2024, a joint venture in which we have a 71.11% ownership interest partially placed in-service 360 Park Avenue South, a 20-story, premier workplace building with ground floor retail located in New York City, New York, aggregating approximately 450,000 net rentable square feet.
Previous report
•On August 26, 2024, BPLP completed a public offering of $850.0 million in aggregate principal amount of its 5.750% unsecured senior notes due 2035. The notes were priced at 99.961% of the principal amount to yield an effective rate (including financing fees) of approximately 5.842% per annum to maturity. The notes will mature on January 15, 2035, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $841.9 million after deducting underwriting discounts and transaction expenses.
Previous report
•On September 27, 2024, BPLP entered into a credit agreement that provides for a $100.0 million unsecured term loan facility (the “2024 Unsecured Term Loan”) with a lender (the “Lender”) under the mortgage loan collateralized by our Santa Monica Business Park properties located in Santa Monica, California (the “SMBP Loan”). Upon entry into the credit agreement, BPLP exercised its option to draw $100.0 million under the 2024 Unsecured Term Loan. The proceeds were used to repay the portion of the SMBP Loan held by the Lender. After the repayment, the SMBP Loan had a remaining principal balance of $200.0 million. The 2024 Unsecured Term Loan bears interest at a variable rate, matures on September 26, 2025 with three, one-year extension options, subject to customary conditions (See Note 6 to the Consolidated Financial Statements). The interest rate is subject to an existing interest rate swap to fix Daily Simple SOFR at a fixed interest rate of approximately 2.688% per annum for a period that ends on April 1, 2025.
Previous report
Transactions completed subsequent to September 30, 2024 included the following:
Previous report
•On October 5, 2024, we fully placed in-service 103 CityPoint, an approximately 113,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.
Previous report
•On October 8, 2024, we modified the SMBP Loan. The SMBP Loan had an outstanding principal balance of $200.0 million, bore interest at a variable rate equal to Daily Simple SOFR + 1.38% per annum and was scheduled to mature on July 19, 2025 (See “Debt Activities” above). The modified loan is scheduled to mature on October 8, 2028 and continues to bear interest at a variable rate equal to Daily Simple SOFR + 1.38% per annum until July 19, 2025. Beginning July 19, 2025, the mortgage loan will bear interest at Daily Simple SOFR + 1.60% per annum through the maturity date. The entire principal is subject to interest rate swap contracts to fix Daily Simple SOFR at a weighted-average fixed interest rate of approximately 2.675% per annum through April 1, 2025 (See Note 7 to the Consolidated Financial Statements). The mortgage loan requires monthly interest-only payments during the term of the loan, with the entire principal due at maturity. Santa Monica Business Park is an office park consisting of 21 buildings totaling approximately 1.2 million net rentable square feet.
Previous report
•On October 31, 2024, we completed and fully placed in-service 300 Binney Street, a laboratory/life sciences redevelopment project with approximately 236,000 net rentable square feet located in Cambridge, Massachusetts. The property is fully leased to a life sciences client.
Previous report
Net income attributable to BXP, Inc. and netincome attributable to Boston Properties Limited Partnership increased by approximately $172.8 million and $192.6 million, respectively, for the nine months ended September 30, 2024 compared to 2023, as set forth in the following tables and for the reasons discussed below under the heading “Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Previous report
Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023
Previous report
(2)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 61. Residential Net Operating Income for the nine months ended September 30, 2024 and 2023 is comprised of Residential Revenue of $37,027 and $35,768 less Residential Expenses of $17,413 and $16,984, respectively. Hotel Net Operating Income for the nine months ended September 30, 2024 and 2023 is comprised of Hotel Revenue of $38,080 and $35,554 less Hotel Expenses of $25,687 and $23,852, respectively, per the Consolidated Statements of Operations.
Previous report
Lease revenue (excluding termination income) from the Same Property Portfolio decreased by approximately $24.1 million for the nine months ended September 30, 2024 compared to 2023. The decrease was a result of our average occupancy decreasing from 90.9% to 89.0%, resulting in a decrease of approximately $45.8 million, partially offset by revenue per square foot increasing by approximately $0.82, contributing approximately $21.7 million.
Previous report
Termination income increased by approximately $5.8 million for the nine months ended September 30, 2024 compared to 2023.
Previous report
Termination income for the nine months ended September 30, 2024 related to 24 clients across the Same Property Portfolio and totaled approximately $8.4 million, which was primarily related to a retail client that terminated its lease early in Boston.
Previous report
Termination income for the nine months ended September 30, 2023 related to 22 clients across the Same Property Portfolio and totaled approximately $2.6 million, which was primarily related to clients that terminated leases early in Seattle and Washington, DC.
Previous report
Parking and other revenue increased by approximately $12.9 million for the nine months ended September 30, 2024 compared to 2023. Parking and other revenue increased by approximately $1.0 million and $11.9 million, respectively. The increase in other revenue primarily related to the View Boston observatory.
Previous report
Real estate operating expenses from the Same Property Portfolio increased by approximately $45.3 million, or 5.4%, for the nine months ended September 30, 2024 compared to 2023, due primarily to increases in (1) repairs and maintenance of approximately $15.1 million, or 11.0%, (2) utilities fluctuation of approximately $8.7 million, or 10.1%, and (3) increases in other real estate operating expenses of approximately $12.6 million, or 2.0%. The increase in repairs and maintenance related primarily to properties in our Boston region. The increase in utilities related primarily to properties in our New York City region. In addition, approximately $8.9 million of the increase related to marketing and operating expenses associated with the View Boston observatory.
Previous report
The table below lists the properties acquired between January 1, 2023 and September 30, 2024. Rental revenue and real estate operating expenses increased by approximately $82.1 million and $29.8 million, respectively, for the nine months ended September 30, 2024 compared to 2023, as detailed below.
Previous report
(1)Rental revenue for the nine months ended September 30, 2024 includes approximately $0.2 million of termination income.
Previous report
(1)On October 5, 2024, 103 CityPoint was fully placed in-service.
Previous report
The table below lists the properties that were in or held for development or redevelopment between January 1, 2023 and September 30, 2024. Rental revenue from our Properties in or Held for Development or Redevelopment Portfolio increased by approximately $4.2 million and real estate operating expenses decreased by approximately $3.2 million for the nine months ended September 30, 2024 compared to 2023, as detailed below.
Previous report
(1)On November 30, 2023, we elected to suspend redevelopment. Although no longer in redevelopment, this property is not considered “in-service” as we are not actively leasing this property in anticipation of restarting redevelopment in the future.
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Reworded paragraphs (121)
Previous wording
This Quarterly Report on Form 10-Q, including the documents incorporated by reference, contain forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with those safe harbor provisions, in each case, to the extent applicable. The forward-looking statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution investors that forward-looking statements are based on current beliefs, expectations of future events and assumptions made by, and information currently available to, our management. When used, the words “anticipate,” “believe,” “budget,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “will” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control. If one or more of these known or unknown risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied by the forward-looking statements. We caution you that, while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance or occurrences and are impacted by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.
Current wording
This Quarterly Report on Form 10-Q, including the documents incorporated by reference herein, contain forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with those safe harbor provisions, in each case, to the extent applicable. The forward-looking statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution investors that forward-looking statements are based on current beliefs, expectations of future events and assumptions made by, and information currently available to, our management. When used, the words “anticipate,” “believe,” “budget,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “will,” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control. If one or more of these known or unknown risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you that, while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance or occurrences and are impacted by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results, trends and assumptions at the time they are made, to anticipate future results or trends.
Previous wording
The most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include the risks and uncertainties related to adverse changes in general economic and capital market conditions, including inflation, increases in interest rates, supply chain disruptions, labor market disruptions, dislocation and volatility in capital markets, and potential longer-term changes in consumer and client behavior, sustained changes in client preferences and space utilization, as well as the other important factors below and the risks described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 including those described under the caption “Risk Factors,” (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Form 10-Q in Part II, Item 1A.
Current wording
The most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include the risks and uncertainties related to adverse changes in general economic and capital market conditions, including continued inflation, elevated interest rates, supply chain disruptions, dislocation and volatility in capital markets, and potential longer-term changes in consumer and client behavior, sustained changes in client preferences and space utilization, as well as the other important factors below and the risks described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 including those described under the caption “Risk Factors,” (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Form 10-Q in Part II, Item 1A, if any.
Previous wording
•volatile or adverse global economic and geopolitical conditions, health crises and dislocations in the credit markets could adversely affect economic conditions and/or restrict our access to cost-effective capital, which could have a material adverse effect on our business opportunities, results of operations and financial condition;
Current wording
•volatile or adverse global economic and political conditions, including policy changes by the presidential administration, such as the direct and indirect negative impacts that new and increased tariffs may have on (1) our current and prospective clients and their demand for office space and (2) the costs and availability of construction materials and the economic returns on our construction and development activities, the impact of geopolitical conflicts, health crises and dislocations in the credit markets could adversely affect economic conditions and/or restrict our access to cost-effective capital, which could have a material adverse effect on our business opportunities, results of operations and financial condition;
Previous wording
•general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on attractive terms, changes in client preferences and space utilization, dependence on clients’ financial condition, and competition from other developers, owners and operators of real estate);
Current wording
•general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on attractive terms, sustained changes in client preferences and space utilization, dependence on clients’ financial condition, and competition from other developers, owners and operators of real estate);
Previous wording
•risks associated with BXP’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended;
Current wording
•risks associated with BXP’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”);
Previous wording
BXP is one of the largest publicly traded office real estate investment trusts (REITs) (based on total market capitalization as of September 30, 2024) in the U.S. that develops, owns, and manages primarily premier workplaces. Our properties are concentrated in six dynamic gateway markets in the U.S. - Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. BPLP is the entity through which BXP conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. We generate revenue and cash primarily by leasing premier workplaces to our clients. When making leasing decisions, we consider, among other things, the creditworthiness of the client and the industry in which it conducts business, the length of the lease, the rental rate to be paid at inception and throughout the lease term, the amount of any security deposit or letter of credit posted by the client, the costs of tenant improvement allowances, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, current and anticipated vacancy in our properties and the market overall (including sublease space), current and expected future demand for the space, the impact of other clients’ expansion rights and general economic factors.
Current wording
BXP is one of the largest publicly traded office real estate investment trusts (REITs) (based on total market capitalization as of March 31, 2025) in the United States that develops, owns, and manages primarily premier workplaces. Our properties are concentrated in six dynamic gateway markets in the U.S. - Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. BPLP is the entity through which BXP conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. We generate revenue and cash primarily by leasing premier workplaces to our clients. When making leasing decisions, we consider, among other things, the creditworthiness of the client and the industry in which it conducts business, the length of the lease, the rental rate to be paid at inception and throughout the lease term, the amount of any security deposit or letter of credit posted by the client, the costs of tenant improvement allowances, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, the date by which we expect to begin revenue recognition for the lease under generally accepted accounting principles (“GAAP”), current and anticipated vacancy in our properties and the market overall (including sublease space), current and expected future demand for the space, the impact of other clients’ expansion rights and general economic factors.
Previous wording
We believe our key competitive advantages are our commitment to the office asset class and to our clients as many competitors disinvest in the sector, a strong balance sheet with access to capital in the secured and unsecured debt and private and public equity markets, and one of the highest quality portfolios of premier workplaces in the U.S. assembled over several decades of intentional development, acquisitions and dispositions.
Current wording
We believe our key competitive advantages are our commitment to the office asset class and to our clients as many competitors have divested in the sector, a strong balance sheet with access to capital in the secured and unsecured debt markets and the private and public equity markets, and one of the highest quality portfolios of premier workplaces in the U.S. assembled over several decades of intentional development, acquisitions and dispositions. Clients and their advisors are increasingly focused on these attributes for their building owners, which distinguishes BXP among its competitors.
Previous wording
Premier workplaces in our five traditional central business district (“CBD”) markets (Boston, New York, San Francisco, Seattle and Washington, DC) have consistently outperformed the broader office market in those CBDs on several key metrics, including occupancy, net absorption levels, rental rates and landlord concessions. This outperformance is evident in BXP’s portfolio where approximately 90% of our share of net operating income (“NOI”) comes from predominantly premier workplaces located in CBDs. As of September 30, 2024, these CBD assets are 90.1% occupied and 92.1% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with generally accepted accounting principles (“GAAP”)). For a detailed discussion of our share of NOI, including the reasons management believes the metric is useful to investors and a reconciliation to the most comparable GAAP measure, see page 39.
Current wording
Premier workplaces in our five traditional central business district (“CBD”) markets (Boston, New York, San Francisco, Seattle and Washington, DC) have consistently outperformed the broader office market in those CBDs on several key metrics, including occupancy, net absorption levels, rental rates and landlord concessions. This outperformance is evident in BXP’s portfolio where we derive approximately 88% of our share of annualized rental obligations from predominantly premier workplaces located in CBDs. We define annualized rental obligations as the monthly contractual base rent (excluding percentage rent and rent abatements) and budgeted reimbursements from clients under existing leases as of March 31, 2025, multiplied by twelve. Our share of annualized rental obligations is calculated as the consolidated amount, plus our share of the amount from our unconsolidated joint ventures (calculated based on our economic percentage ownership interest), less our partners’ share of the amount from our consolidated joint ventures (calculated based on the partners’ economic percentage ownership interest). As of March 31, 2025, our CBD assets are 89.8% occupied and 92.3% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
As of September 30, 2024, the weighted-average remaining lease term (1) for our in-place leases, based on square feet, including those signed by our unconsolidated joint ventures but excluding residential units, was approximately 7.6 years, and (2) for our 20 largest clients, based on square feet, was approximately 10.0 years.
Current wording
As of March 31, 2025, the weighted-average remaining lease term for (1) our in-place leases, based on square feet, including those signed by our unconsolidated joint ventures but excluding residential units, was approximately 7.9 years, and (2) our 20 largest clients, based on square feet, was approximately 9.8 years.
Previous wording
•pursuing attractive asset class adjacencies where we have a track record of success, such as life sciences and residential development;
Current wording
•pursuing attractive asset class adjacencies where we have a track record of success, such as residential development;
Previous wording
The following is an overview of leasing and investment activity in the third quarter of 2024 and recent business highlights.
Current wording
The following is an overview of leasing and investment activity in the first quarter of 2025 and recent business highlights.
Previous wording
Overall, the environments in which we operate are improving. Although all the markets in which we operate still need consistent incremental absorption to constitute a macro recovery, we have started to see pockets of strength where low availability is driving constructive client behavior. As clients choose premier workplaces in sound financial condition, with building owners that are committed for the long term to their properties operated by the best property management teams, we expect to continue to be successful in gaining market share.
Current wording
Although all the markets in which we operate still need consistent incremental absorption to constitute a macro recovery, we continue to see pockets of strength where low availability is driving constructive client behavior. This is particularly true in New York and Boston, which accounts for 62% of our share of annualized rental obligations. As clients choose premier workplaces in sound financial condition with building owners that are committed for the long term to their properties operated by the best property management teams, we expect to continue to be successful in gaining market share.
Previous wording
The overall occupancy of our in-service office and retail properties was 87.0% at September 30, 2024, a decrease of 10 basis points from June 30, 2024. We define occupancy as space with signed leases for which revenue recognition has commenced in accordance with GAAP. Including vacant space for which we have signed leases that have not yet commenced revenue recognition in accordance with GAAP, our in-service office and retail properties were approximately 89.1% leased at September 30, 2024.
Current wording
At March 31, 2025, the overall occupancy of our in-service office and retail properties was 86.9%, a decline of 60 basis points from December 31, 2024, primarily due to the known expiration of an approximately 350,000 square foot lease at 200 Fifth Avenue in New York, New York, the majority of which space was re-leased in the first quarter. We define occupancy as space with signed leases for which revenue recognition has commenced in accordance with GAAP.
Previous wording
We remain in active pursuit of opportunities in our core markets and asset types with primarily two types of counterparties: lenders to highly leveraged assets that require recapitalization and institutional owners seeking to diversify from the office asset class. To date, there has been limited market transaction activity for higher-quality office assets, though owners are increasingly testing the market to understand pricing. With lenders, there are fewer premier workplaces that are struggling with leverage, and in the few cases involving premier workplaces, lenders are generally electing to extend loans to borrowers who agree to invest modestly in their assets. Institutional owners are less interested in selling their higher quality assets, and there remains a material bid-ask spread given that, in most cases, assets have not been marked down to market-clearing levels. Notwithstanding these current challenges, we expect that transactions and our investment activity will increase in the coming quarters given the volume of maturing financings and continued mark downs in institutional portfolios. Our pipeline of potential opportunities is growing, including property and note acquisitions, sites with near term preleasing potential and new residential developments. No agreements are imminent, but we are encouraged by the activity. We also have interest from institutional investors in co-investing with us for select opportunities.
Current wording
We remain in active pursuit of opportunities in our core markets and asset types with primarily two types of counterparties: lenders to highly leveraged assets that require recapitalization and institutional owners seeking to divest from the office asset class. To date, there has been limited market transaction activity for higher-quality office assets, though owners are increasingly testing the market to understand pricing.
Previous wording
As of September 30, 2024, our development/redevelopment pipeline consisted of nine properties that, when completed, we expect will total approximately 2.7 million net rentable square feet. Our share of the estimated total cost for these projects is approximately $2.2 billion, of which approximately $1.1 billion remains to be invested. The commercial space in the pipeline, which excludes the residential projects, was 54% pre-leased as of October 31, 2024.
Current wording
As of March 31, 2025, our development/redevelopment pipeline consisted of nine properties that, when completed, we expect will total approximately 3.0 million net rentable square feet. Our share of the estimated total cost for these projects is approximately $2.4 billion, of which approximately $1.2 billion remains to be invested. The commercial space in the pipeline, which excludes the residential project, was 62% pre-leased as of April 28, 2025, an increase from 50% at February 21, 2025.
Previous wording
We are currently in active negotiations for the disposition of three land positions which, if successful, would generate approximately $70.0 million of proceeds in 2025. However, there can be no assurance that we will complete any of these transactions on the terms currently contemplated or at all.
Current wording
We are currently in active negotiations for the disposition of eight land sites and, if successful, these dispositions could generate approximately $250.0 million of aggregate net proceeds over the next 24 months. Several of these sales require re-entitlement, which we anticipate will result in relatively longer closing periods than typical transactions. However, there can be no assurance that we will complete any of these transactions on the terms and schedules currently contemplated or at all.
Previous wording
During the third quarter of 2024, we executed approximately 647,000 square feet of leases and approximately 421,000 square feet of leases commenced in the Boston region. Approximately 279,000 square feet of the leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 3.1% over the prior leases.
Current wording
During the first quarter of 2025, we executed approximately 304,000 square feet of leases and approximately 153,000 square feet of leases commenced in the Boston region. Approximately 98,000 square feet of the leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 15.7% over the prior leases.
Previous wording
As of September 30, 2024, our approximately 8.4 million square foot Boston CBD in-service portfolio was approximately 95.3% occupied and approximately 97.2% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current wording
As of March 31, 2025, our approximately 8.4 million square foot Boston CBD in-service portfolio was approximately 96.1% occupied and approximately 97.9% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
Our approximately 2.5 million square foot in-service CBD portfolio in Cambridge was approximately 96.7% occupied and 96.7% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP) as of September 30, 2024.
Current wording
Our approximately 2.7 million square foot in-service CBD portfolio in Cambridge was approximately 97.2% occupied and 98.1% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP) as of March 31, 2025.
Previous wording
As of September 30, 2024, our Route 128-Mass Turnpike in-service portfolio is comprised of approximately 4.7 million square feet and was approximately 77.1% occupied and approximately 79.2% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current wording
As of March 31, 2025, our approximately 4.5 million square foot Route 128-Mass Turnpike in-service portfolio was approximately 77.0% occupied and approximately 80.0% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
Our Los Angeles (“LA”) in-service portfolio of approximately 2.3 million square feet is currently focused in West LA and includes Colorado Center, an approximately 1.1 million square foot property of which we own 50%, and Santa Monica Business Park, a 21-building, approximately 1.2 million square foot property. As of September 30, 2024, our LA in-service properties were approximately 84.9% occupied and 86.3% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current wording
Our Los Angeles (“LA”) in-service portfolio of approximately 2.3 million square feet is currently focused in West LA and includes Colorado Center, an approximately 1.1 million square foot property of which we own 50%, and Santa Monica Business Park, a 21-building, approximately 1.2 million square foot property. As of March 31, 2025, our LA in-service properties were approximately 83.9% occupied and 86.6% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
During the third quarter of 2024, we executed approximately 143,000 square feet of leases in the New York region and approximately 641,000 square feet of leases commenced. Approximately 551,000 square feet of the leases that commenced had been vacant for less than one year, and they represent a decrease in net rental obligations of approximately 10.6% over the prior leases. As of September 30, 2024, our New York CBD in-service portfolio was approximately 88.9% occupied and approximately 92.6% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current wording
During the first quarter of 2025, we executed approximately 420,000 square feet of leases in the New York region and approximately 237,000 square feet of leases commenced. Approximately 91,000 square feet of the leases that commenced had been vacant for less than one year, and they represent an increase in net rental obligations of approximately 4.3% over the prior leases.
Previous wording
During the third quarter of 2024, we executed leases for approximately 109,000 square feet and approximately 90,000 square feet commenced in the San Francisco region. Approximately 25,000 square feet of leases that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 6.7% over the prior leases.
Current wording
During the first quarter of 2025, we executed leases for approximately 263,000 square feet and approximately 284,000 square feet commenced in the San Francisco region. Approximately 250,000 square feet of leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 0.1% over the prior leases.
Previous wording
As of September 30, 2024, our San Francisco CBD in-service properties were approximately 84.2% occupied and approximately 84.5% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Current wording
As of March 31, 2025, our San Francisco CBD in-service properties were approximately 81.7% occupied and approximately 83.7% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
Our Seattle in-service portfolio includes Safeco Plaza, an approximately 762,000 square foot property of which we own 33.67%, and Madison Centre, an approximately 755,000 square foot property. As of September 30, 2024, these in-service properties were approximately 80.2% occupied and approximately 83.0% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
Current wording
Our Seattle in-service portfolio includes Safeco Plaza, an approximately 763,000 square foot property of which we own 33.67%, and Madison Centre, an approximately 755,000 square foot property. As of March 31, 2025, these in-service properties were approximately 81.9% occupied and approximately 84.4% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
During the third quarter of 2024, we executed leases for approximately 155,000 square feet and leases for approximately 66,000 square feet commenced in the Washington, DC region. Leases for approximately 14,000 square feet that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 15.3% over the prior leases.
Current wording
During the first quarter of 2025, we executed leases for approximately 80,000 square feet and leases for approximately 97,000 square feet commenced in the Washington, DC region. Leases for approximately 36,000 square feet that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 14.3% over the prior leases.
Previous wording
As of September 30, 2024, our Washington, DC CBD in-service properties were approximately 88.0% occupied and approximately 90.1% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
Current wording
As of March 31, 2025, our Washington, DC CBD in-service properties were approximately 89.3% occupied and approximately 90.8% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
A significant component of our Washington, DC regional portfolio is in Reston Town Center, an award-winning mixed-use development in Northern Virginia. Reston is a hub for technology, cloud services, cybersecurity and defense intelligence companies. As of September 30, 2024, our Reston CBD portfolio was approximately 94.5% occupied and approximately 96.6% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
Current wording
A significant component of our Washington, DC regional portfolio is in Reston Town Center, an award-winning mixed-use development in Northern Virginia. Reston is a hub for technology, cloud services, cybersecurity and defense intelligence companies. As of March 31, 2025, our approximately 4.6 million square foot Reston CBD portfolio was approximately 94.9% occupied and approximately 97.2% leased (including vacant space for which have signed leases that have not yet commenced in accordance with GAAP).
Previous wording
The table below details the leasing activity, including 100% of the unconsolidated joint ventures, that commenced revenue recognition during the three and nine months ended September 30, 2024:
Current wording
The table below details the vacancy and leasing activity in our portfolio, including 100% of the unconsolidated joint ventures, that commenced revenue recognition during the three months ended March 31, 2025:
Previous wording
(3)Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three and nine months ended September 30, 2024.
Current wording
(2)Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three months ended March 31, 2025.
Previous wording
(4)Represents leases executed during the three and nine months ended September 30, 2024 for which we either (1) commenced lease revenue recognition in such period or (2) will commence lease revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed and for which revenue recognition commenced during the three and nine months ended September 30, 2024 are 319,985 and 796,152 square feet, respectively.
Current wording
(3)Represents leases executed during the three months ended March 31, 2025 for which we either (1) commenced lease revenue recognition in such period or (2) will commence lease revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed for which revenue recognition commenced during the three months ended March 31, 2025 was 122,095 square feet.
Previous wording
(5)Second generation leases are defined as leases for space that we have previously leased. Of the 1,190,695 and 3,054,819 square feet of second generation leases that commenced during the three and nine months ended September 30, 2024, respectively, leases for 881,793 and 2,278,081 square feet, respectively, were signed in prior periods.
Current wording
(4)Second generation leases are defined as leases for space that we have previously leased. Of the 916,029 square feet of second generation leases that commenced revenue recognition during the three months ended March 31, 2025, leases for 793,934 square feet were signed in prior periods.
Previous wording
(6)Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.
Current wording
(5)Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.
Previous wording
(7)Represents the increase (decrease) in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 896,196 and 2,323,471 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2024, respectively; excludes leases that management considers temporary because the client is not expected to occupy the space on a long-term basis.
Current wording
(6)Represents the increase in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 620,626 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2025; excludes leases that management considers temporary because the client is not expected to occupy the space on a long-term basis.
Previous wording
(8)Represents the increase (decrease) in net rent (gross rent less operating expenses) on the new versus expired leases on the 896,196 and 2,323,471 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2024, respectively.
Current wording
(7)Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the 620,626 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2025.
Previous wording
Transactions during the three months ended September 30, 2024 included the following:
Current wording
Transactions during the three months ended March 31, 2025 and recent business highlights included the following:
Previous wording
•On July 17, 2024, we partially placed in-service Reston Next Office Phase II, an approximately 90,000 net rentable square foot development project comprised of office and retail space located in Reston, Virginia.
Current wording
•On January 16, 2025, we partially placed in-service Reston Next Retail, a retail project with approximately 33,000 net rentable square feet located in Reston, Virginia.
Previous wording
On February 1, 2024, BPLP repaid $700.0 million in aggregate principal amount of its 3.800% senior notes due February 1, 2024. The repayment was completed with available cash and the $600.0 million proceeds from the mortgage loan entered into on October 26, 2023. The repayment price was approximately $713.3 million, which was equal to the stated principal plus approximately $13.3 million of accrued and unpaid interest to, but not including, the repayment date. Excluding the accrued and unpaid interest, the repayment price was equal to the principal amount being repaid.
Current wording
•On January 15, 2025, BPLP repaid $850.0 million in aggregate principal amount of its 3.200% senior notes due January 15, 2025. The repayment was completed with available cash and the proceeds from BPLP’s August 2024 offering of 5.750% unsecured senior notes due 2035. The repayment price was approximately $863.6 million, which was equal to the stated principal plus approximately $13.6 million of accrued and unpaid interest to, but not including, the repayment date.
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions.
Previous wording
Net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership increased approximately $195.5 million and $217.6 million, respectively, for the three months ended September 30, 2024 compared to 2023, as detailed in the following tables and for the reasons discussed below under the heading “Comparison of the three months ended September 30, 2024 to the three months ended September 30, 2023” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current wording
Net income attributable to BXP, Inc. and net income attributable to Boston Properties Limited Partnership decreased approximately $18.7 million and $21.2 million, respectively, for the three months ended March 31, 2025 compared to 2024, as detailed in the following tables and for the reasons discussed below under the heading “Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Showing the first 40 of 121 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Termination income decreased by approximately $1.8 million for the three months ended March 31, 2025 compared to 2024.
Current report — wording carried from elsewhere
located in Cambridge, Massachusetts, (2) Santa Monica Business Park located in Santa Monica, Californiaand (3) 901 New York Avenue located in Washington, DC.
Current report — wording carried from elsewhere
For a summary of our consolidated debt as of March 31, 2025 refer to the heading “Liquidity and Capital Resources—Debt Financing” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current report — wording carried from elsewhere
On January 15, 2025, BPLP repaid $850.0 million in aggregate principal amount of its 3.200% senior notes due January 15, 2025. The repayment was completed with available cash and the proceeds from BPLP’s August 2024 offering of 5.750% unsecured senior notes due 2035. The repayment price was approximately $863.6 million, which was equal to the stated principal plus approximately $13.6 million of accrued and unpaid interest to, but not including, the repayment date.
Current report — wording carried from elsewhere
At March 31, 2025, BPLP had an aggregate of $500.0 million of unsecured commercial paper notes outstanding that bore interest at a weighted-average rate of approximately 4.66% per annum and had a weighted-average maturity of 48 days from the issuance date. At April 28, 2025, BPLP had an aggregate of $750.0 million of commercial paper notes outstanding that bore interest at a weighted-average rate of approximately 4.72% per annum and had a weighted-average maturity of 46 days, from the issuance date.
Current report — wording carried from elsewhere
(4)The loan bears interest at a variable rate equal to Term SOFR plus 2.50% per annum. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in Term SOFR rate to a cap of 5.00% per annum on a notional amount of $220.0 million through January 15, 2026.
Rearranged previous paragraphs (34)
Previous report — wording carried elsewhere
Today, clients and their advisors are more focused than ever on these attributes for their building owners, which distinguishes BXP among its competitors.
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
At September 30, 2024 and 2023, we owned or had joint venture interests in a portfolio of 184 and 190 commercial real estate properties, respectively (in each case, the “Total Property Portfolio”). As a result of changes within our Total Property Portfolio, the financial data presented below shows significant changes in revenue and expenses from period-to-period. Accordingly, we do not believe that our period-to-period financial data with respect to the Total Property Portfolio provides a complete understanding of our operating results. Therefore, the comparison of operating results for the nine months ended September 30, 2024 and 2023 show separately the changes attributable to the properties that were owned by us and in-service throughout each period compared (the “Same Property Portfolio”) and the changes attributable to the properties included in the Acquired, Placed In-Service, In or Held for Development or Redevelopment or Sold Portfolios.
Previous report — wording carried elsewhere
In our analysis of operating results, particularly to make comparisons of NOI between periods more meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us and in-service through the end of the latest period presented as our Same Property Portfolio. The Same Property Portfolio therefore excludes properties acquired, placed in-service or in or held for development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented.
Previous report — wording carried elsewhere
Depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor redemptions of common units of limited partnership interest of BPLP (“OP Units”). This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in depreciation expense when those properties are sold. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
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The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 127 properties totaling approximately 40.3 million net rentable square feet, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or placed in-service on or prior to January 1, 2023 and owned and in service through September 30, 2024. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in or held for development or redevelopment after January 1, 2023 or disposed of on or prior to September 30, 2024. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the nine months ended September 30, 2024 and 2023 with respect to the properties that were acquired, placed in-service, in or held for development or redevelopment or sold. We did not sell any properties during the nine months ended September 30, 2024 and 2023.
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The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2023 and September 30, 2024. Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $30.4 million and $8.5 million, respectively, for the nine months ended September 30, 2024 compared to 2023, as detailed below.
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The following reflects our occupancy and rate information for our residential same properties for the nine months ended September 30, 2024 and 2023.
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(3)Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue. Market Rents used by us in calculating Economic Occupancy are based on the current market rates set by the managers of our residential properties based on their experience in renting their residential property’s units and publicly available market data. Actual market rents and trends in such rents for a region as reported by others may vary materially from Market Rents used by us. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
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The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the nine months ended September 30, 2024 and 2023.
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Wages directly related to the development of rental properties are capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the applicable asset or lease term. Capitalized wages for each of the nine months ended September 30, 2024 and 2023 were approximately $13.2 million and $13.5 million, respectively. These costs are not included in the general and administrative expenses discussed above.
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Transaction costs decreased by approximately $1.1 million for the nine months ended September 30, 2024 compared to 2023. In general, transaction costs relating to the formation of new joint ventures and the pursuit of other transactions are expensed as incurred.
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Interest and other income (loss) decreased by approximately $9.3 million for the nine months ended September 30, 2024 compared to 2023, due primarily to a decrease in our outstanding cash balances.
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Gains from investments in securities for the nine months ended September 30, 2024 and 2023 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors. Under the deferred compensation plans, each officer or non-employee director who is eligible to participate is permitted to defer a portion of the officer’s current income or the non-employee director’s compensation on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer or non-employee director. In order to reduce our market risk relating to these plans, we typically acquire, in a separate account that is not restricted as to its use, similar or identical investments as those selected by each officer or non-employee director. This enables us to generally match our liabilities to BXP’s officers or former non-employee directors under our deferred compensation plans with equivalent assets and thereby limit our market risk. The performance of these investments is recorded as gains from investments in securities. During the nine months ended September 30, 2024 and 2023, we recognized gains of approximately $4.8 million and $2.3 million, respectively, on these investments. By comparison, our general and administrative expense decreased by approximately $4.8 million and $2.3 million during the nine months ended September 30, 2024 and 2023, respectively, as a result of decreases in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.
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We invest in non-real estate investments, which are primarily environmentally-focused investment funds. As a result, during the nine months ended September 30, 2024 and 2023, we recognized an unrealized gain of approximately $0.5 million and $0.3 million, respectively, due to the observable changes in the fair value of the investments.
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Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term. As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed. Interest capitalized for the nine months ended September 30, 2024 and 2023 was approximately $31.3 million and $30.8 million, respectively. These costs are not included in the interest expense referenced above. The decrease in capitalized interest is primarily attributable to a development project that had a finance lease and is now placed in service.
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The following are reconciliations of Net Income (Loss) Attributable to BXP, Inc. to Net Operating Income and Net Income (Loss) Attributable to Boston Properties Limited Partnership to Net Operating Income for the three months ended September 30, 2024 and 2023. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 73.
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NOI is a non-GAAP financial measure equal to net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income (loss) attributable to noncontrolling interests, interest expense, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain (loss) on non-real estate investment, gains (losses) from investments in securities, interest and other income (loss), gains on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. We use NOI internally as a performance measure and believe it provides useful information to investors regarding our results of operations and financial condition because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by us may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.
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We believe that in order to understand our operating results, NOI should be examined in conjunction with net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. NOI should not be considered as a substitute for net income (loss) attributable to BXP, Inc. or net income (loss) attributable to Boston Properties Limited Partnership (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.
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(1)Rental Revenue is equal to Revenue less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Revenue per the Consolidated Statements of Operations, excluding the residential and hotel revenue that is noted below. We use Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods.
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Properties in or Held for Development or Redevelopment Portfolio
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(1)Average Monthly Rental Rate is calculated as the average of the quotients obtained by dividing (A) rental revenue as determined in accordance with GAAP, by (B) the number of occupied units for each month within the applicable fiscal period.
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(2)Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
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Other Operating Revenue and Expense Items
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Depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP. This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in depreciation expense. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
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Direct Reimbursements of Payroll and Related Costs From Management Services Contracts and Payroll and Related Costs From Management Service Contracts
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We have determined that amounts reimbursed for payroll and related costs received from third parties in connection with management services contracts should be reflected on a gross basis instead of on a net basis as we have determined that we are the principal under these arrangements. We anticipate that these two financial statement line items will generally offset each other.
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(1)Consists of the mortgage loan and, if applicable, fair value debt and swap adjustments collateralized by (1) 325 Main Street, 355 Main Street, 90 Broadway and Cambridge East Garage (also known as Kendall Center Green Garage) properties located in Cambridge, Massachusetts, (2) Santa Monica Business Park located in Santa Monica, Californiaand (3) 901 New York Avenue in Washington, DC (See Note 6 to the Consolidated Financial Statements).
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(1)The decrease was primarily attributable to a decrease in lease revenue from our clients.
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(3)Property is held for future development.
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Noncontrolling Interest—Common Units of the Operating Partnership
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◦$700.0 million of principal outstanding on the 2023 Unsecured Term Loan due May 16, 2025,
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However, there can be no assurance that we will complete any of these transactions on the terms currently contemplated or at all.
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Our principal source of cash flow is related to the operation of our properties. The weighted-average term of our in-place leases, including leases signed by our unconsolidated joint ventures, excluding residential units, was approximately 7.6 years as of September 30, 2024, with occupancy rates historically in the range of 87% to 92%.