<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
OCTOBER 26, 1998
BOSTON PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-13087 04-2473675
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 859-2600
<PAGE>
ITEM 5. OTHER EVENTS.
Following the issuance of a press release on October 26, 1998, announcing
the Company's results for the third quarter ended September 30, 1998, the
Company intends to provide, to certain investors and analysts at their request,
supplemental information regarding the Company's operations that is too
voluminous for a press release. The Company is attaching this supplementary
operating and financial data as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS:
Exhibit No.
- -----------
99.1 The Boston Properties, Inc. Supplemental Operating and Financial Data
for the Quarter Ended September 30, 1998, and press release dated
October 26, 1998.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 26, 1998 BOSTON PROPERTIES, INC.
/s/David G. Gaw
---------------------------------------
By: David G. Gaw
Chief Financial Officer
3
<PAGE>
================================================================================
EXHIBIT 99.1
BOSTON PROPERTIES, INC.
Supplemental Operating and Financial Data for
the Quarter Ended September 30, 1998
================================================================================
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
<TABLE>
<CAPTION>
===============================================================================================================
INDEX
Page Page
---- ----
<S> <C> <C> <C>
Company Background 2 Occupancy Analysis-same property 14
Investor Information 3-4 Office Properties 15
Financial Highlights 5 R&D Properties 16
Consolidated Balance Sheets 6 Industrial Properties 17
Consolidated Income Statements 7 Grand Total Office, R&D and Industrial Properties 18
Funds From Operations 8 Same Property Performance 19-21
Financial Ratios 9 Capital Expenditures 22
Capital Structure 10 Value Creation Pipeline Acquisitions/Repositioning 23
Debt Analysis 11 Value Creation Pipeline Development 24
Portfolio Overview 12-13 Value Creation Pipeline Land Parcels 25
Acquisition Property Profiles 26-29
===============================================================================================================
</TABLE>
1
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
COMPANY BACKGROUND
Boston Properties Inc., is a self-administered and self-managed real estate
investment trust that develops, acquires, owns, and manages a diverse portfolio
of office, industrial, and hotel properties predominantly located in greater
Boston, greater Washington, DC, midtown Manhattan, Baltimore, Maryland,
Richmond, Virginia and the Princeton/East Brunswick, New Jersey markets. The
Company is one of the largest owners and developers of office properties in the
United States.
On June 23, 1997, Boston Properties successfully completed its initial public
offering. The offering and the underwriters' overallotment option closed on the
same date resulting in 36,110,000 shares being sold at $25.00 per share for a
total offering of $902,750,000. On January 30,1998, the Company closed a
follow on offering of 23,000,000 shares (including the underwriters'
overallotment) at $35.125 per share for a total offering of $807,875,000.
Through its predecessor company founded by Mortimer B. Zuckerman and Edward H.
Linde in 1970, the Company grew through the seventies, eighties, and nineties by
developing and redeveloping Class A office properties, R&D and industrial
properties, and hotels in its primary markets of greater Boston, greater
Washington, DC, and midtown Manhattan.
Since the Company's Initial Offering in June 1997, the Company has acquired 31
properties adding approximately 10.0 million square feet to its portfolio,
representing an investment of approximately $2.3 billion. In addition, the
Company is developing eight Class A Office Buildings and one 221 room hotel for
a total anticipated investment of approximately $224.8 million. The Company owns
or controls land where it can develop an additional 8.8 million square feet.
Boston Properties is a full-service real estate company with substantial
in-house expertise and resources in acquisitions, development, financing,
construction management, property management, marketing, leasing, accounting,
and legal services.
This report contains forward-looking statements within the meaning of the
Federal securities laws. Forward-looking statements are inherently subject to
risks and uncertainties, many of which cannot be predicted with accuracy. The
risks and uncertainties associated with the forward-looking information include
the strength of the commercial office and industrial real estate markets in
which the Company operates, competitive market conditions, general economic
growth, interest rates, capital market conditions and risks associated with
development. The Company discusses such risks in detail in its prospectus dated
January 26, 1998 as filed with the Securities and Exchange Commission.
Acquisitions that are pursued by Boston Properties may not be consummated for a
variety of reasons, including a failure to reach agreement with the selling
party regarding the acquisition price or other terms of a contribution or
acquisition agreement. Agreements that the Company enters into may be terminated
or abandoned for a variety of reasons, including a failure by the Company or the
other party to fulfill all conditions required for consummation of the
agreements.
2
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
INVESTOR INFORMATION
--------------------
8 Arlington Street
Boston, MA 02116
(617) 8592600
(617) 5365087 (fax)
Mortimer B. Zuckerman Chairman of the Board
Edward H. Linde President, Chief Executive
Officer and Director
Robert E. Burke Executive Vice President,
Operations
David G. Gaw Senior Vice President,
Chief Financial Officer
TIMING
------
Quarterly results are anticipated to be announced according to the
following schedule:
First Quarter Early May
Second Quarter Early August
Third Quarter Early November
Year End Early February
3
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
COMMON STOCK DATA (NYSE:BXP)
----------------------------
Boston Properties' common stock is traded primarily on the New York Stock
Exchange under the symbol: BXP. BXP's common stock has had the following
characteristics:
<TABLE>
<CAPTION>
========================================================================================================
3rd Quarter 1998 3rd Quarter 1997
---------------- ----------------
<S> <C> <C>
High Price $ 34.6875 $ 33.250
Low Price $ 23.8750 $ 26.63
Closing Price $ 28.50 $ 32.8125
Dividends per share-annualized $ 1.62 $ 1.62
Closing Dividend yield-annualized 5.68% 4.94%
Closing shares and units outstanding (thousands) 86,392 54,760
Closing market value of shares and units outstanding (thousands) $ 2,524,037 $ 1,796,813
========================================================================================================
</TABLE>
4
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
FINANCIAL HIGHLIGHTS
(unaudited and in thousands)
<TABLE>
<CAPTION>
=========================================================================================================================
THREE MONTHS ENDED
-----------------------------------------------------
ACTUAL ACTUAL
30-SEP-98 30-SEP-97 % CHANGE
--------- --------- --------
INCOME ITEMS:
-------------
<S> <C> <C> <C>
Revenues $ 140,177 $ 62,989 122.54%
Net Income (1) $ 25,341 $ 13,780 83.90%
Funds from Operations $ 55,763 $ 28,588 95.06%
Company's share (73.62% and 70.66%) $ 41,053 $ 20,200 103.23%
Funds from Operations per share - basic $ 0.65 $ 0.52 23.90%
Funds from Operations per share - diluted $ 0.64 $ 0.52 23.85%
Dividends per share $ 0.405 $ 0.405 n/a
RATIOS:
-------
Interest Coverage Ratio (2) 2.71 3.00 -9.54%
Dividend Payout Ratio 62.61% 77.89% -19.62%
=========================================================================================================================
</TABLE>
(1) Net income is before net extraordinary items
(2) FFO plus interest (excluding amortization of principal)/interest (excluding
amortization of principal)
<TABLE>
<CAPTION>
=========================================================================================================================
SEPTEMBER 30, 1998 DECEMBER 31, 1997 % CHANGE
------------------ ----------------- --------
CAPITALIZATION:
---------------
<S> <C> <C> <C>
Total Debt $ 1,947,430 $ 1,332,253 46.18%
Total Shares Outstanding @ Quarter End 63,527 38,694 64.18%
Total Units Outstanding @ Quarter End 22,865 16,957 34.84%
Total Preferred Units Outstanding @ Quarter End (3) 2,171 n/a n/a
Price @ Quarter End $ 28.50 $ 33.0625 -13.80%
Equity Value @ Quarter End $ 2,524,037 $ 1,839,961 37.18%
Total Market Capitalization $ 4,471,467 $ 3,172,214 40.96%
Debt/Total Market Capitalization 43.55% 42.00% 3.70%
=========================================================================================================================
</TABLE>
(3) Preferred units are reflected on an as converted basis. The actual number of
Preferred units outstanding is 2,442,222.
5
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
<TABLE>
<CAPTION>
=======================================================================================================================
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
<S> <C> <C>
ASSETS
------
Real estate and equipment $ 3,562,645 $ 1,796,500
Less accumulated depreciation (335,821) (294,218)
----------------- -----------------
Total real estate and equipment 3,226,824 1,502,282
Cash 15,544 17,560
Escrows 19,668 14,178
Tenant and other receivables 33,160 24,458
Accrued rental income 67,692 55,190
Deferred charges, net 41,244 35,485
Prepaid expenses and other assets 23,064 20,225
Investment in joint ventures 32,136 3,143
----------------- -----------------
Total assets $ 3,459,332 $ 1,672,521
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Mortgage notes payable $ 1,752,430 $ 1,099,253
Unsecured line of credit 195,000 233,000
Accounts payable and accrued expenses 41,502 23,822
Dividends payable - 22,539
Accrued interest payable 4,784 6,581
Other liabilities 26,357 11,642
----------------- -----------------
Total liabilities 2,020,073 1,396,837
----------------- -----------------
Commitments and contingencies - -
----------------- -----------------
Minority interests 462,015 100,636
----------------- -----------------
Stockholders' Equity:
Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding - -
Preferred stock, $.01 par value, 50,000,000 shares
authorized, none issued or outstanding - -
Common stock, $.01 par value, 250,000,000 shares
authorized, 63,526,785 issued and outstanding 635 387
Additional paid-in capital 949,972 172,347
Earnings in excess of dividends 26,637 2,314
----------------- -----------------
Total stockholders' equity 977,244 175,048
----------------- -----------------
Total liabilities and stockholders' equity $ 3,459,332 $ 1,672,521
================= =================
=======================================================================================================================
</TABLE>
6
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
CONSOLIDATED INCOME STATEMENTS
(unaudited and in thousands)
<TABLE>
<CAPTION>
============================================================================================================
THREE MONTHS ENDED
---------------------------------------
ACTUAL ACTUAL
30-SEP-98 30-SEP-97 % CHANGE
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Rental income $ 136,374 $ 59,251 130.16%
Development and management services 2,734 2,105 29.88%
Interest and other 1,069 1,633 -34.54%
---------- ---------- ----------
Total revenue 140,177 62,989 122.54%
---------- ---------- ----------
Operating Expenses:
Rental expenses 43,255 16,523 161.79%
General and administrative 6,129 2,917 110.11%
Interest 33,183 14,719 125.44%
Depreciation and amortization 21,523 9,268 132.23%
---------- ---------- ----------
Total expenses 104,090 43,427 139.69%
---------- ---------- ----------
Income before minority interests and extraordinary items 36,087 19,562 84.48%
Minority interest in property partnership (161) (60) 168.33%
---------- ---------- ----------
Income before minority interest in Operating Partnership
and extraordinary items 35,926 19,502 84.22%
Minority interest in Operating Partnership (10,585) (5,722) 85.00%
---------- ---------- ----------
Net income before extraordinary items 25,341 13,780 83.89%
Net extraordinary loss on early debt extinguishment,
net of minority interest - (58) -
---------- ---------- ----------
Net income $ 25,341 $ 13,722 84.67%
========== ========== ==========
INCOME PER SHARE OF COMMON STOCK
Net income per share - basic $ 0.40 $ 0.36 9.50%
========== ========== ==========
Net income per share - diluted $ 0.40 $ 0.35 12.54%
========== ========== ==========
============================================================================================================
</TABLE>
7
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
FUNDS FROM OPERATIONS
(in thousands, except for per share amounts)
(unaudited)
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------
ACTUAL ACTUAL
30-SEP-98 30-SEP-97 % CHANGE
---------- ---------- --------
<S> <C> <C> <C>
Income from operations before minority interests $ 36,087 $ 19,562 84.48%
Add:
Real estate depreciation and amortization 21,359 9,143 133.61%
Less:
Preferred Distribution (1,505) - -
Minority property partnership's share of
Funds from Operations (178) (117) 52.14%
---------- ---------- --------
Funds from Operations $ 55,763 $ 28,588 95.06%
========== ========== ========
Company's share (1) $ 41,053 $ 20,200 103.23%
========== ========== ========
Funds from Operations per share - basic $ 0.65 $ 0.52 23.90%
========== ========== ========
Weighted average shares outstanding - basic 63,468 38,694 64.02%
========== ========== ========
Funds from Operations per share - diluted $ 0.64 $ 0.52 23.85%
========== ========== ========
Weighted average shares outstanding - diluted 63,991 38,998 64.09%
========== ========== ========
</TABLE>
(1) Based on weighted average shares for the quarter. Company's share for the
quarter ended 9/30/98 was 73.62% and 70.66% for the quarter ended 9/30/97.
================================================================================
8
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
FINANCIAL RATIOS
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, 1998
------------------
<S> <C>
RATIOS COMPUTED FOR INDUSTRY COMPARISONS: (1)
OPERATIONAL RATIOS (2)
Debt Service Coverage Ratio 2.4
(Funds from Operations ("FFO")+Interest/Interest+Principal)
Interest Coverage Ratio 2.7
(Funds from Operations+Interest/Interest)
FFO Return on Shareholder's Equity 23.1%
(Funds from Operations/Average Equity (book value)) (%)
FFO Return on Real Estate Investments 12.7%
(Funds from Operations+Interest/Average Real Estate
Investments (book value)) (%)
FFO Payout Ratio 63.0%
(Dividends Declared/Funds from Operations) (%)
</TABLE>
(1) All coverage and return ratios computed based on FFO before minority
interest in earnings of the Operating Partnership and the minority interest
share of FFO add-backs.
(2) FFO is calculated based on the NAREIT White Paper
================================================================================
9
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
CAPITAL STRUCTURE
DEBT
(IN THOUSANDS)
================================================================================
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
SEPTEMBER 30, 1998
-------------------
<S> <C>
Mortgage Loans $ 1,752,430
Unsecured Line of Credit 195,000
-------------------
Total Debt $ 1,947,430
===================
</TABLE>
================================================================================
EQUITY
(IN THOUSANDS)
================================================================================
<TABLE>
<CAPTION>
COMMON
SHARES & UNITS STOCK $ VALUE
OUTSTANDING EQUIVALENTS EQUIVALENT(1)
-------------- ----------- -------------
<S> <C> <C> <C>
Common Stock 63,527 63,527 $ 1,810,513
Operating Partnership Units 22,865 22,865 651,650
Preferred Operating Partnership
Units 2,442 2,171 61,874
----------- -------------
Total Equity 88,563 $ 2,524,037
=========== =============
Total Market Capitalization $ 4,471,467
=============
</TABLE>
================================================================================
(1) Value based on September 30, 1998 closing price of $28.50.
10
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
DEBT ANALYSIS
LONG-TERM MORTGAGE DEBT MATURITIES AND PRINCIPAL PAYMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
==============================================================================================================================
YEAR 1998 1999 2000 2001 2002 THEREAFTER TOTAL
---- ---- ---- ---- ---- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Amount $ 8,716 16,467 221,328 133,454 371,369 1,001,096 $ 1,752,430
==============================================================================================================================
</TABLE>
UNSECURED LINE OF CREDIT - DUE JUNE 23, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
==============================================================================================================================
FACILITY OUTSTANDING @ 9/30/98 REMAINING CAPACITY
-------- --------------------- ------------------
<S> <C> <C>
$ 500,000 195,000 $ 305,000
==============================================================================================================================
</TABLE>
UNSECURED AND SECURED DEBT ANALYSIS
<TABLE>
<CAPTION>
==============================================================================================================================
WEIGHTED AVERAGE WEIGHTED AVERAGE
% OF DEBT RATE MATURITY
--------- ---------------- ----------------
<S> <C> <C> <C>
Unsecured Debt 10.01% 6.63% 1.7 years
Secured Debt 89.99% 7.24% 6.1 years
--------- --------- ---------
Total Debt 100.00% 7.18% 5.6 years
========= ========= =========
==============================================================================================================================
</TABLE>
FLOATING AND FIXED RATE DEBT ANALYSIS
<TABLE>
<CAPTION>
==============================================================================================================================
WEIGHTED AVERAGE WEIGHTED AVERAGE
% OF DEBT RATE MATURITY
--------- ---------------- ----------------
<S> <C> <C> <C>
Floating Rate Debt 10.60% 6.60% 1.8 years
Fixed Rate Debt 89.40% 7.25% 6.1 years
--------- --------- ---------
Total Debt 100.00% 7.18% 5.6 years
========= ========= =========
==============================================================================================================================
</TABLE>
11
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
PORTFOLIO OVERVIEW
RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY
================================================================================
<TABLE>
<CAPTION>
GEOGRAPHIC AREA OFFICE R&D INDUSTRIAL TOTAL % OF TOTAL
--------------- ------ --- ---------- ----- ----------
<S> <C> <C> <C> <C> <C>
Greater Boston 4,478,707 545,206 247,318 5,271,231 29.38%
Greater Washington, D.C. 4,161,795 1,383,332 236,743 5,781,870 32.23%
Midtown Manhattan 2,880,507 - - 2,880,507 16.06%
Princeton/East Brunswick, NJ 1,366,360 - - 1,366,360 7.62%
Baltimore, MD 1,153,190 - - 1,153,190 6.42%
Richmond, VA 899,720 - - 899,720 5.02%
Greater San Francisco - 144,479 281,000 425,479 2.37%
Bucks County, PA - - 161,000 161,000 0.90%
---------- --------- ------- ---------- -------
Total 14,940,279 2,073,017 926,061 17,939,357 100.00%
========== ========= ======= ========== =======
% of Total 83.29% 11.56% 5.16% 100.00%
</TABLE>
================================================================================
HOTEL PROPERTIES
================================================================================
<TABLE>
<CAPTION>
NUMBER OF SQUARE
HOTEL PROPERTIES ROOMS FEET
---------------- --------- ------
<S> <C> <C>
Long Wharf Marriott 402 420,000
Cambridge Center Marriott 431 330,400
--- -------
Total Hotel Properties 833 750,400
=== =======
</TABLE>
================================================================================
GARAGE PROPERTY AND STRUCTURED PARKING
================================================================================
<TABLE>
<CAPTION>
NUMBER OF SQUARE
SPACES FEET
--------- ------
<S> <C> <C>
GARAGE PROPERTIES
Cambridge Center North Garage 1,170 332,442
STRUCTURED PARKING 12,907 4,407,058
------ ---------
TOTAL GARAGE PROPERTY AND STRUCTURED PARKING 14,077 4,739,500
====== =========
</TABLE>
================================================================================
12
<PAGE>
BOSTON PROPERTIES, INC.
Third quarter 1998
PORTFOLIO OVERVIEW
PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS/*/ FOR IN-SERVICE PROPERTIES BY
LOCATION AND TYPE OF PROPERTY FOR QUARTER ENDED SEPTEMBER 30, 1998
================================================================================
<TABLE>
<CAPTION>
GEOGRAPHIC AREA OFFICE R&D INDUSTRIAL HOTEL GARAGE TOTAL
--------------- ------ --- ---------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Greater Boston 20.7%(1) 1.2% 0.3% 7.4% 0.3% 29.9%
Greater Washington, D.C. 27.0%(2) 3.7% 0.3% n/a n/a 31.0%
Midtown Manhattan 22.7% n/a n/a n/a n/a 22.7%
Baltimore, Maryland 5.1%(3) n/a n/a n/a n/a 5.1%
Richmond, Virginia 4.4% n/a n/a n/a n/a 4.4%
Princeton/East Brunswick, NJ 6.3% n/a n/a n/a n/a 6.3%
Greater San Francisco n/a 0.2% 0.2% n/a n/a 0.4%
Bucks County, PA n/a n/a 0.2% n/a n/a 0.2%
------- ----- ----- ----- ----- ------
Total 86.2% 5.1% 1.0% 7.4% 0.3% 100.0%
======= ===== ===== ===== ===== ======
</TABLE>
(1) Includes the Prudential Center since its acquisition on July 2, 1998.
(2) Includes Metropolitan Square since its acquisition on July 10,1998.
(3) Includes the Candler Building since its acquisition on July 21, 1998.
================================================================================
* For this table, Property Funds from Operations is equal to GAAP basis property
NOI which includes the effect of straight-line rent and excludes any deduction
for interest expense.
13
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
OCCUPANCY ANALYSIS
SAME PROPERTY OCCUPANCY - BY LOCATION
================================================================================
<TABLE>
<CAPTION>
LOCATION 30-SEP-98 30-SEP-97
-------- --------- ---------
<S> <C> <C>
Greater Boston, MA 98.7% 98.4%
Greater Washington, D.C. 98.0% 98.2%
Midtown Manhattan, NY 100.0% 99.7%
Baltimore, MD n/a n/a
Princeton/East Brunswick, NJ n/a n/a
Richmond, VA n/a n/a
Greater San Francisco, CA 99.7% 96.8%
Bucks County, PA 100.0% 100.0%
--------- ---------
Total Portfolio 98.6% 98.4%
========= =========
</TABLE>
================================================================================
SAME PROPERTY - BY TYPE OF PROPERTY
================================================================================
<TABLE>
<CAPTION>
30-SEP-98 30-SEP-97
--------- ---------
<S> <C> <C>
Total Office Portfolio 99.4% 99.2%
Total R&D Portfolio 97.5% 98.6%
Total Industrial Portfolio 95.0% 93.4%
--------- ---------
Total Portfolio 98.6% 98.4%
========= =========
</TABLE>
================================================================================
14
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
IN-SERVICE OFFICE PROPERTIES
LEASE EXPIRATIONS
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED CURRENT
RENTABLE SQUARE REVENUES UNDER PERCENTAGE OF TOTAL
YEAR OF LEASE FOOTAGE SUBJECT TO EXPIRING LEASES ANNUALIZED CURRENT REVENUES
EXPIRATION EXPIRING LEASES (IN THOUSANDS) REPRESENTED BY EXPIRING LEASES
------------- ------------------ ------------------ ------------------------------
<S> <C> <C> <C>
1998 256,318 4,498,003 0.96%
1999 943,053 24,117,160 5.12%
2000 1,273,501 30,121,183 6.40%
2001 1,536,493 29,009,915 6.16%
2002 1,906,543 92,060,046 19.55%
2003 1,396,692 40,231,793 8.54%
2004 1,170,768 34,969,420 7.42%
2005 1,088,570 27,655,179 5.87%
2006 1,618,447 56,308,449 11.96%
2007 1,413,357 51,523,104 10.94%
Thereafter 2,248,556 80,496,059 17.09%
</TABLE>
================================================================================
OCCUPANCY BY LOCATION
================================================================================
<TABLE>
<CAPTION>
30-SEP-98 30-SEP-97
--------- ---------
<S> <C> <C>
Greater Boston, MA 99.2% 98.6%
Greater Washington, D.C. 99.7% 99.4%
Midtown Manhattan, NY 99.7% 91.4%
Baltimore, MD 99.2% n/a
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 100.0% n/a
Greater San Francisco, CA n/a n/a
Bucks County, PA n/a n/a
--------- ---------
Total Office Portfolio 98.9% 96.6%
========= =========
</TABLE>
================================================================================
15
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
IN-SERVICE R&D PROPERTIES
LEASE EXPIRATIONS
<TABLE>
<CAPTION>
============================================================================================================
ANNUALIZED CURRENT
RENTABLE SQUARE REVENUES UNDER PERCENTAGE OF TOTAL
YEAR OF LEASE FOOTAGE SUBJECT TO EXPIRING LEASES ANNUALIZED CURRENT REVENUES
EXPIRATION EXPIRING LEASES (IN THOUSANDS) REPRESENTED BY EXPIRING LEASES
------------- ------------------ ------------------ ------------------------------
<S> <C> <C> <C>
1998 9,267 310,583 1.13%
1999 214,783 2,290,862 8.35%
2000 400,867 4,202,352 15.33%
2001 251,541 2,004,707 7.31%
2002 267,660 3,780,049 13.79%
2003 86,497 1,146,799 4.18%
2004 47,641 704,767 2.57%
2005 146,741 1,815,845 6.62%
2006 150,000 1,622,501 5.92%
2007 107,895 2,294,165 8.37%
Thereafter 334,195 7,246,499 26.43%
============================================================================================================
</TABLE>
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
============================================================================================================
30-SEP-98 30-SEP-97
-------------- --------------
<S> <C> <C>
Greater Boston, MA 100.0% 100.0%
Greater Washington, D.C. 96.4% 93.8%
Midtown Manhattan, NY n/a n/a
Baltimore, MD n/a n/a
Richmond, VA n/a n/a
Princeton/East Brunswick, NJ n/a n/a
Greater San Francisco, CA 99.0% 90.6%
Bucks County, PA n/a n/a
-------------- --------------
Total R&D Portfolio 98.2% 95.8%
============== ==============
============================================================================================================
</TABLE>
16
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
IN-SERVICE INDUSTRIAL PROPERTIES
LEASE EXPIRATIONS
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED CURRENT
RENTABLE SQUARE REVENUES UNDER PERCENTAGE OF TOTAL
YEAR OF LEASE FOOTAGE SUBJECT TO EXPIRING LEASES ANNUALIZED CURRENT REVENUES
EXPIRATION EXPIRING LEASES (IN THOUSANDS) REPRESENTED BY EXPIRING LEASES
------------- ------------------ ------------------ ------------------------------
<S> <C> <C> <C>
1998 136,358 1,099,055 20.66%
1999 63,904 374,237 7.03%
2000 249,280 1,469,129 27.61%
2001 70,829 357,093 6.71%
2002 - - 0.00%
2003 143,105 975,445 18.33%
2004 195,076 935,485 17.58%
2005 20,500 110,151 2.07%
2006 - - 0.00%
2007 - - 0.00%
Thereafter - - 0.00%
</TABLE>
================================================================================
OCCUPANCY BY LOCATION
================================================================================
<TABLE>
<CAPTION>
30-SEP-98 30-SEP-97
--------- ---------
<S> <C> <C>
Greater Boston, MA 93.0% 93.0%
Greater Washington, D.C. 87.8% 81.4%
Midtown Manhattan, NY n/a n/a
Baltimore, MD n/a n/a
Richmond, VA n/a n/a
Princeton/East Brunswick, NJ n/a n/a
Greater San Francisco, CA 100.0% 100.0%
Bucks County, PA 100.0% 100.0%
------ ------
Total Industrial Portfolio 95.0% 93.4%
====== ======
</TABLE>
================================================================================
17
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
GRAND TOTAL OF ALL
IN-SERVICE PROPERTIES
LEASE EXPIRATION
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED CURRENT
RENTABLE SQUARE REVENUES UNDER PERCENTAGE OF TOTAL
YEAR OF LEASE FOOTAGE SUBJECT TO EXPIRING LEASES ANNUALIZED CURRENT REVENUES
EXPIRATION EXPIRING LEASES (IN THOUSANDS) REPRESENTED BY EXPIRING LEASES
- -------------- ------------------ ------------------ ------------------------------
<S> <C> <C> <C>
1998 401,943 5,907,641 1.17%
1999 1,221,740 26,782,259 5.32%
2000 1,923,648 35,792,664 7.11%
2001 1,858,863 31,371,715 6.23%
2002 2,174,203 95,840,095 19.03%
2003 1,626,294 42,354,037 8.41%
2004 1,413,485 36,609,672 7.27%
2005 1,255,811 29,581,175 5.87%
2006 1,768,447 57,930,950 11.50%
2007 1,521,252 53,817,269 10.68%
Thereafter 2,582,751 87,742,558 17.42%
</TABLE>
================================================================================
OCCUPANCY BY LOCATION
================================================================================
<TABLE>
<CAPTION>
30-SEP-98 30-SEP-97
--------- --------
<S> <C> <C>
Greater Boston, MA 99.0% 98.4%
Greater Washington, D.C. 98.5% 97.1%
Midtown Manhattan, NY 99.6% 91.4%
Baltimore, MD 99.2% n/a
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 100.0% n/a
Greater San Francisco, CA 99.7% 96.8%
Bucks County, PA 100.0% 100.0%
--------- --------
Total Portfolio 98.5% 96.2%
========= ========
</TABLE>
================================================================================
18
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
SAME PROPERTY PERFORMANCE
HOTEL PROPERTIES
Long Wharf Marriott - Boston
================================================================================
<TABLE>
<CAPTION>
1/1/98- 1/1/97 PERCENT 7/1/98 - 7/1/97 - PERCENT
9/30/98 9/30/97 CHANGE 9/30/98 9/30/97 CHANGE
------- ------- ------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 88.5% 88.3% 0.23% 89.0% 91.4% -2.63%
Average Daily Rate $ 227.54 $ 218.38 4.19% $ 249.70 $ 243.35 2.61%
REVPAR (1) $ 201.37 $ 193.48 4.08% $ 222.23 $ 222.42 -0.09%
</TABLE>
================================================================================
CAMBRIDGE CENTER MARRIOTT
================================================================================
<TABLE>
<CAPTION>
1/1/98- 1/1/97- PERCENT 7/1/98 - 7/1/97 - PERCENT
9/30/98 9/30/97 CHANGE 9/30/98 9/30/97 CHANGE
------- ------- ------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 83.4% 88.4% -5.66% 93.1% 93.6% -0.53%
Average Daily Rate $ 178.39 $ 162.11 10.04% $ 188.47 $ 171.71 9.76%
REVPAR (1) $ 148.78 $ 143.47 3.70% $ 175.47 $ 160.72 9.18%
</TABLE>
================================================================================
TOTAL HOTEL PERFORMANCE
================================================================================
<TABLE>
<CAPTION>
1/1/98- 1/1/97- PERCENT 7/1/98 - 7/1/97 - PERCENT
9/30/98 9/30/97 CHANGE 9/30/98 9/30/97 CHANGE
-------- ------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 85.9% 88.4% -2.83% 91.1% 92.5% -1.51%
Average Daily Rate $ 202.11 $ 189.27 6.78% $ 218.02 $ 206.28 5.69%
REVPAR (1) $ 174.16 $ 167.60 3.91% $ 198.04 $ 190.50 3.96%
</TABLE>
================================================================================
(1) REVPAR is defined as the revenue per available room as determined by
dividing room revenue over the applicable period by available rooms.
19
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
SAME PROPERTY PERFORMANCE
<TABLE>
<CAPTION>
OFFICE, R&D AND INDUSTRIAL PROPERTIES
=============================================================================================================
OFFICE R&D INDUSTRIAL
------ --- ----------
<S> <C> <C> <C>
Number of Properties 33 23 9
Square feet 5,641,474 1,323,693 926,061
Percent of in-service properties 37.8% 63.9% 100.0%
Occupancy @ 9/30/97 99.2% 98.6% 93.4%
Occupancy @ 9/30/98 99.4% 97.6% 95.0%
Percent change in FFO (1) from
3rd quarter 1998 over 3rd quarter 1997 3.5% 2.3% -1.5%
=============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED SEPTEMBER 30, 1998
=============================================================================================================
OFFICE R&D INDUSTRIAL TOTAL
------- ------ ---------- -------
<S> <C> <C> <C> <C>
Vacant space available @ 7/1/98 (sf) 42,677 22,080 46,222 110,979
Square footage of leases expiring or
terminated 7/1/98 - 9/30/98 137,630 31,347 40,500 209,477
------- ------- ------- -------
Total space for lease (sf) 180,307 53,427 86,722 320,456
======= ======= ======= =======
New tenants (sf) 51,929 9,663 20,500 82,092
Renewals (sf) 95,278 7,897 20,000 123,175
------- ------- ------- -------
Total space leased (sf) 147,207 17,560 40,500 205,267
======= ======= ======= =======
Space available @ 9/30/98 (sf) 33,100 35,867 46,222 115,189
======= ======= ======= =======
Net increase (decrease) in leased space (sf) 9,577 (13,787) - (4,210)
Average lease term (months) 90 36 44 76
2nd generation TI/Comm PSF $ 20.71 $ 3.84 $ 2.44 $ 15.69
Increase in 2nd generation net rents (2) 16.3% 12.9% 8.4% 15.5%
=============================================================================================================
</TABLE>
(1) For this table, Funds from Operations is equal to GAAP basis property NOI
which includes the effect of straight-line rent and excludes any deduction
for interest expense.
(2) Represents increase in net rents on a "cash to cash" basis. (Actual net
rent at time of expiration vs. initial net rent of new lease.)
20
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
SAME PROPERTY LEASE ANALYSIS - YEAR TO DATE 1/1/98 -9/30/98
================================================================================
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL TOTAL
------ --- ---------- -----
<S> <C> <C> <C> <C>
Vacant space available @ 1/1/98 (sf) 54,323 41,654 61,222 157,199
Square footage of leases expiring or
terminated 1/1/98- 9/30/98 268,427 62,512 222,000 552,939
------- ------- ------- -------
Total space for lease (sf) 322,750 104,166 283,222 710,138
======= ======= ======= =======
New tenants (sf) 158,272 36,454 56,000 250,726
Renewals (sf) 131,378 31,354 181,000 343,732
------- ------- ------- -------
Total space leased (sf) 289,650 67,808 237,000 594,458
======= ======= ======= =======
Space available @ 9/30/98 (sf) 33,100 36,367 46,222 115,689
======= ======= ======= =======
Net increase/(decrease) in leased space (sf) 21,223 5,287 15,000 41,510
Average lease term (months) 71 68 35 56
2nd generation TI/Comm PSF (2) $ 15.29 $ 3.30 $ 1.28 $ 8.33
Increase in 2nd generation net rents (1) 18.9% 13.7% -14.2% 11.1%
</TABLE>
================================================================================
(1) Represents increase in net rents on a "cash to cash" basis (actual net rent
at time of expiration vs. initial net rent of new lease).
(2) Represents the weighted average cost of tenant improvements and lease
commissions for all 2nd generation space leased during the quarter.
21
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
HISTORICALLY GENERATED CAPITAL EXPENDITURES,
TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
HISTORICAL CAPITAL EXPENDITURES
<TABLE>
<CAPTION>
==========================================================================================================================
YTD
1992 1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Recurring capital expenditures $ 1,547 $ 1,425 $ 1,812 $ 1,618 $ 1,083 $ 1,125 $ 2,356
======= ======= ======= ======= ======= ======= =======
Hotel improvements, equipment upgrades
and replacements $ 3,182 $ 836 $ 1,917 $ 4,420 $ 3,041 $ 2,625 $ 3,658
======= ======= ======= ======= ======= ======= =======
==========================================================================================================================
</TABLE>
2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS
<TABLE>
<CAPTION>
==========================================================================================================================
YTD
1992 1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Office
Square feet 673,138 451,295 690,459 768,459 970,072 1,016,427 378,824
------- ------- ------- ------- ------- ------- -------
Tenant improvement and lease
commissions p.s.f. $ 7.85 $ 8.45 $ 9.45 $ 10.66 $ 11.40 $ 10.83 $ 12.15
------- ------- ------- ------- ------- ------- -------
R&D
Square feet 185,070 166,957 276,332 177,073 337,676 169,878 67,799
------- ------- ------- ------- ------- ------- -------
Tenant improvement and lease
commissions p.s.f. $ 3.82 $ 5.53 $ 0.68 $ 6.99 $ 10.45 $ 2.22 $ 3.30
------- ------- ------- ------- ------- ------- -------
Industrial
Square feet 44,473 241,500 132,521 308,388 128,148 258,795 237,000
------- ------- ------- ------- ------- ------- -------
Tenant improvement and lease
commissions p.s.f. $ 2.31 $ 0.28 $ 3.32 $ 1.00 $ 1.71 $ 0.99 $ 1.28
------- ------- ------- ------- ------- ------- -------
Average tenant improvement and
lease commission p.s.f. $ 6.75 $ 5.59 $ 6.51 $ 7.77 $ 10.31 $ 8.06 $ 7.50
======= ======= ======= ======= ======= ======= =======
==========================================================================================================================
</TABLE>
22
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING
as of September 30,1998
<TABLE>
<CAPTION>
====================================================================================================================================
ANTICIPATED
DATE PLACED INITIAL FUTURE TOTAL CURRENT
PROPERTY IN SERVICE SQUARE FEET INVESTMENT INVESTMENT INVESTMENT OCCUPANCY
-------- ----------- ----------- ----------- ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
ACQUISITIONS
------------
Class A Office Buildings
Prudential Center Jul-98 2,187,373 $ 546,000,000 (1) $18,100,000 $ 564,100,000 99%
Metropolitan Square Jul-98 583,685 175,000,000 4,300,000 179,300,000 100%
The Candler Building Jul-98 518,954 60,500,000 2,000,000 62,500,000 99%
----------- ----------- ------------- -------------- ---------
Subtotal 3,290,012 781,500,000 24,400,000 805,900,000 99%
REPOSITIONING
-------------
1301 New York Avenue Mar-99 185,000 28,000,000 18,200,000 46,200,000 100%(2)
----------- ----------- ------------- -------------- ---------
TOTAL VALUE CREATION PIPELINE -
ACQUISITIONS/REPOSITIONING 3,475,012 $ 809,500,000 $ 42,600,000 $ 852,100,000 99%
=========== ============= ============= ============== =========
(1) Includes $27.0 million paid for 50% of the development rights.
(2) As of March 1, 1999.
====================================================================================================================================
</TABLE>
23
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
VALUE CREATION PIPELINE - DEVELOPMENT
as of September 30, 1998
<TABLE>
<CAPTION>
===================================================================================================================================
ANTICIPATED
ESTIMATED PLACED # OF TOTAL PERCENTAGE
DEVELOPMENT PROPERTIES IN SERVICE DATE LOCATION BUILDINGS SQUARE FEET INVESTMENT LEASED
- ---------------------- --------------- -------- --------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Class A Office Buildings
- ------------------------
Washingtonian North Q2 2000 Rockville, MD 1 300,000 $ 60,000,000 100%
200 West Street Q2 1999 Waltham, MA 1 250,000 43,423,000 52%
Eight Cambridge Center Q2 1999 Cambridge, MA 1 175,000 26,000,000 100%
One Freedom Square
(25% ownership) Q4 1999 Reston, VA 1 406,980 19,150,000 (1) 73%
One and Two Reston Overlook
(25% ownership) Q1-Q2 1999 Reston, VA 2 444,000 18,100,000 (1) 100%
The Arboretum Q3 1999 Reston, VA 1 96,000 15,265,000 100%
181 Spring Street Q2 1999 Lexington, MA 1 52,000 10,871,085 0%
------- ---------- -------------- ------
Total Class Office Buildings 8 1,723,980 192,809,085 81%
Hotels
- ------
Residence Inn by Marriott Q1 1999 Cambridge, MA 1 187,474 32,000,000 n/a
------- ---------- ------------- ------
TOTAL DEVELOPMENT PROPERTIES 9 1,911,454 $ 224,809,085 81%
======= ========== ============= ======
===================================================================================================================================
</TABLE>
(1) Represents 25% of the total anticipated project-level investment
24
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
VALUE CREATION PIPELINE - OWNED LAND PARCELS
as of September 30, 1998
================================================================================
<TABLE>
<CAPTION>
NO. OF DEVELOPABLE
LOCATION PARCELS ACREAGE SQUARE FEET
-------- ------- ------- -----------
<S> <C> <C> <C>
Dulles, VA 6 91.1 1,200,000
Rockville, MD 6 117.1 2,031,000
Reston, VA 2 8.8 775,000
Herndon, VA 1 35.5 450,000
Andover, MA 2 27.0 290,000
Springfield, VA 3 9.4 130,000
Boston, MA -- -- (1) 1,600,000 (2)
------- ------- -----------
20 288.9 6,476,000
======= ======= ===========
</TABLE>
================================================================================
(1) Parcels and acreage have not yet been determined.
(2) Boston Properties has a 50% ownership interest
VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS
================================================================================
<TABLE>
<CAPTION>
NO. OF DEVELOPABLE
LOCATION PARCELS ACREAGE SQUARE FEET
-------- ------- ------- -----------
<S> <C> <C> <C>
Carnegie Center 16 167.1 2,100,000
Cambridge, MA 1 2.6 209,000
------- ------- -----------
17 169.7 2,309,000
======= ======= ===========
</TABLE>
================================================================================
25
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
ACQUISITION PROPERTY PROFILE
PROPERTY NAME: Prudential Center
PRODUCT TYPE: Multiuse
LOCATION: Boston, Massachusetts
DESCRIPTION: 23 acre mix-use urban center with approximately 1.7
million square feet of existing office space, 475,000
square feet of retail space and 2,550 parking spaces in
an underground garage.
In addition, the property has approvals for an
additional 1.6 million square feet of development.
YEAR CONSTRUCTED: 1965/1993
PURCHASE PRICE: $546 million, which includes $27 million for 50% of the
development rights.
CLOSING DATE: July 2, 1998
PER SQUARE FOOT: N/A
FUTURE INVESTMENT: $18.1 million
OCCUPANCY LEVEL: 99%
NUMBER OF TENANTS: 113
FUNDING SOURCE: Cash, Operating Partnership Units, Debt Financing
LARGEST TENANTS:
Company: Gillette Size: 412,970 s.f. Lease Expiration: 12/2007
Company: Boston Edison Size: 261,196 s.f. Lease Expiration: 12/2000
Company: John Hancock Size: 233,516 s.f. Lease Expiration: 12/2003
Company: Bronner Slosberg Size: 205,790 s.f. Lease Expiration: 11/2005
26
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
ACQUISITION PROPERTY PROFILE
PROPERTY NAME: Metropolitan Square
PRODUCT TYPE: Class A Office Building
LOCATION: Washington, D.C.
DESCRIPTION: Two 12-story structures connected by a
full-height 12-story atrium
SIZE: 583,685 net rentable square feet
YEAR CONSTRUCTED: 1982/1986
PURCHASE PRICE: $175 million
CLOSING DATE: July 10, 1998
PER SQUARE FOOT: $299
FUTURE INVESTMENT: $4.3 million
OCCUPANCY LEVEL: 100%
NUMBER OF TENANTS: Approximately 37
FUNDING SOURCE: Cash, Operating Partnership Units,
Assumption of Debt
LARGEST TENANTS:
Company: Jones, Day,
Reavis & Pogue Size: 196,874 s.f. Lease Expiration: 5/1999
Company: Miller & Chevalier Size: 115,343 s.f. Lease Expiration: 12/2005
Company: Kirkland & Ellis Size: 110,657 s.f. Lease Expiration: 3/2000
27
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
ACQUISITION PROPERTY PROFILE
PROPERTY NAME: The Candler Building
PRODUCT TYPE: Class A Office Building
LOCATION: Baltimore, Maryland
DESCRIPTION: 12-story office building encompassing
an entire city block
SIZE: 518,954 net rentable square feet
YEAR CONSTRUCTED: Constructed 1911, renovated 1990
PURCHASE PRICE: $60.5 million
CLOSING DATE: July 21, 1998
PER SQUARE FOOT: $114.5
FUTURE INVESTMENT: $2.0 million
OCCUPANCY LEVEL: 99%
NUMBER OF TENANTS: 31
FUNDING SOURCE: Cash, issuance of common shares
LARGEST TENANTS:
Company: John Hopkins University Size: 111,553 Lease Expiration: 6/2009
Company: Sierra Size: 83,151 Lease Expiration: 12/2008
Company: AON Size: 74,249 Lease Expiration: 2/2006
28
<PAGE>
BOSTON PROPERTIES, INC.
Third Quarter 1998
REPOSITIONING PROPERTY PROFILE
PROPERTY NAME: 1301 New York Avenue
PRODUCT TYPE: Class A Office Building
LOCATION: Washington, D.C.
DESCRIPTION: 12-story office building currently
being renovated
SIZE: 185,000 net rentable square feet
YEAR CONSTRUCTED: 1983
INITIAL PURCHASE PRICE: $28.0 million
CLOSING DATE: August 14, 1998
PER SQUARE FOOT: $150.00
FUTURE INVESTMENT: $18.2 million
TOTAL INVESTMENT: $46.2 million
FUTURE OCCUPANCY LEVEL: 100% on 3/99
NUMBER OF TENANTS: 1
FUNDING SOURCE: Cash, Debt Financing and Operating
Partnership Units
LARGEST TENANT:
GSA Size: 185,000 Lease Expiration: 2/2009
29
<PAGE>
Boston Properties, Inc.
8 Arlington Street
Boston, MA 02116
(NYSE: BXP)
Boston Properties, Inc. Announces Third Quarter 1998 Results
------------------------------------------------------------
BOSTON, MA Oct. 26, 1998 /PRNewswire/ -- Boston Properties, Inc. (NYSE:
BXP) today reported results for the third quarter and the nine months ended
September 30, 1998.
Funds from Operations (FFO) for the quarter ended September 30, 1998 were
approximately $41.1 million, or $0.65 per share basic and $0.64 per share
diluted, compared to FFO of approximately $20.2 million, or $0.52 per share
basic and diluted for the quarter ended September 30, 1997. The weighted average
number of basic and diluted shares outstanding totaled 63,467,722 and
63,991,255, respectively, for the quarter ended September 30, 1998 and
38,693,541 and 38,998,244, respectively, for the same quarter last year. FFO for
the nine months ended September 30, 1998 were approximately $109.5 million, or
$1.82 per share basic and $1.80 per share diluted, compared to FFO on a pro
forma basis of approximately $56.0 million, or $1.45 per share basic and $1.44
per share diluted, for the nine months ended September 30, 1997.
Revenues were approximately $140.2 million for the quarter and $343.8
million for the nine months ended September 30, 1998, compared to revenues of
$63.0 million and $177.8 million (pro forma) for the same periods in 1997. Net
income for the quarter was approximately $25.3 million and $74.9 million for the
nine months ended September 30, 1998, compared to $13.7 million and $36.5
million (pro forma), respectively, for the same periods in 1997. Net income per
share for the quarter was $0.40 per share basic and diluted, compared to $0.36
per share basic and $0.35 per share diluted last year, and was $1.25 per share
basic and $1.23 per share diluted for the nine months ended September 30, 1998,
compared to $0.94 per share basic and diluted on a pro forma basis last year.
The reported results are unaudited and there can be no assurance that the
results will not vary from the final audited information for the year ending
December 31, 1998. In the opinion of management, all adjustments considered
necessary for a fair presentation of these reported results have been made. Pro
forma results are presented as if the Company's initial public offering of
common stock and related formation transactions (which was completed on June 23,
1997) had occurred at the beginning of the relevant period.
As of September 30, 1998, the Company's portfolio consisted of 114
properties comprising more than 25.5 million square feet, including 9 properties
under development totaling approximately 1.9 million square feet. The overall
occupancy rate for the properties in service as of September 30, 1998 was 98.5%.
Additional highlights of the third quarter include:
-- Acquisition of the Prudential Center, a 2.2-million-square-foot mixed-
use urban center located in Boston, Mass., on July 2, 1998 for
approximately $519.0 million for the commercial property and $27.0
million for development rights.
-- Acquisition of Metropolitan Square, a 583,685-square-foot Class A office
complex in Washington, D.C., on July 10, 1998 for approximately $175.0
million.
-- Acquisition of the Candler Building, a 518,954-square-foot Class A
office building in Baltimore, Md., on July 21, 1998 for approximately
$61.0 million.
-- Entry into a binding agreement to acquire the portfolio known as
Embarcadero Center in San Francisco, Calif., on September 28, 1998,
consisting of approximately 3.76 million square feet in six Class A
buildings, for approximately $1.22 billion.
Also in the third quarter, on August 18, 1998, the Company acquired 1301
New York Avenue, N.W., a 12-story 185,000-square-foot Class A office building
located three blocks from the White House in Washington, D.C., for approximately
$28.0 million, in the form of Operating Partnership Units in Boston Properties
Limited Partnership and mortgage financing. The Company is in the process of
renovating this property, which will be 100% occupied by the General Services
Administration.
Since September 30, 1998 the Company has obtained mortgage financing
totaling $95.0 million secured by 100 East Pratt Street in Baltimore, Md. The
proceeds were used to pay down a portion of the Company's unsecured line of
credit.
Boston Properties, Inc. is a fully integrated, self-administered and self-
managed real estate investment trust ("REIT") that develops, redevelops,
acquires, manages, operates and owns a diverse portfolio of office, industrial
and hotel properties predominantly located in Greater Boston; Greater
Washington, D.C.; Midtown Manhattan; Baltimore, Md.; Richmond, Va. and
Princeton/East Brunswick, N.J. The Company is one of the largest owners and
developers of office properties in the United States.
To receive Boston Properties' latest news and corporate developments via
fax at no cost, please call 1-800-PRO-INFO; use company code BXP. Visit the
Company's web site at http://www.bostonproperties.com. Also see
http://www.frbinc.com.
This press release contains forward-looking statements within the meaning
of the Federal securities laws. Forward-looking statements are inherently
subject to risks and uncertainties, many of which cannot be predicted with
accuracy. Acquisitions that are pursued by Boston Properties may not be
consummated for a variety of reasons, including a failure to reach agreement
with the selling party regarding the acquisition price or other terms of a
contribution or acquisition agreement. Agreements that the Company enters into
may be terminated for a variety of reasons, including a failure by the Company
or the other party to fulfill all conditions required for consummation of the
agreements.
<PAGE>
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(pro forma)
<S> <C> <C> <C> <C>
Revenue
Rental:
Base rent $119,535 $53,433 $286,610 $150,393
Recoveries from tenants 13,665 5,656 33,027 16,512
Parking and other 3,174 162 5,880 2,681
-------- -------- -------- --------
Total rental revenue 136,374 59,251 325,517 169,586
Development and management
services 2,734 2,105 8,893 5,438
Interest and other 1,069 1,633 9,410 2,796
-------- -------- -------- --------
Total revenue 140,177 62,989 343,820 177,820
-------- -------- -------- --------
Expenses
Rental:
Operating 23,651 8,071 50,444 22,350
Real estate taxes 19,604 8,452 46,744 23,964
General and administrative 6,129 2,917 16,750 8,708
Interest 33,183 14,719 81,926 42,797
Depreciation and amortization 21,523 9,268 51,212 27,514
-------- -------- -------- --------
Total expenses 104,090 43,427 247,076 125,333
-------- -------- -------- --------
Income before minority interests 36,087 19,562 96,744 52,487
Minority interest in
property partnership (161) (60) (390) (303)
-------- -------- -------- --------
Income before minority
interest in Operating
Partnership 35,926 19,502 96,354 52,184
Minority interest in
Operating Partnership (10,585) (5,722) (25,025) (15,687)
-------- -------- -------- --------
Income before extraordinary items 25,341 13,780 71,329 36,497
Extraordinary gain (loss) on
early debt extinguishments, net -- (58) 3,564 --
-------- -------- -------- --------
Net income $ 25,341 $13,722 $ 74,893 $ 36,497
======== ======== ======== ========
Basic earnings per share:
Income before extraordinary items $ 0.40 $ 0.36 $ 1.19 $ 0.94
Extraordinary gain (loss), net -- -- 0.06 --
-------- -------- -------- --------
Net income $ 0.40 $ 0.36 $ 1.25 $ 0.94
======== ======== ======== ========
Weighted average number of
common shares outstanding 63,468 38,694 60,101 38,694
Diluted earnings per share:
Income before extraordinary items $ 0.40 $ 0.35 $ 1.17 $ 0.94
Extraordinary gain (loss), net -- -- 0.06 --
======== ======== ======== ========
Net income $ 0.40 $ 0.35 $ 1.23 $ 0.94
Weighted average number of
common shares outstanding 63,991 38,998 60,744 38,979
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
1998 1997 % Change
-------- -------- --------
(Actual) (Actual)
<S> <C> <C> <C>
Income from operations before
minority interests $36,087 $19,562 84.48%
Add:
Real estate depreciation and
amortization 21,359 9,143 133.61%
Less:
Preferred allocation (1,505) -- --
Minority property partnership's
share of Funds from Operations (178) (117) 52.14%
-------- -------- --------
Funds from Operations $55,763 $28,588 95.06%
======== ======== ========
Company's share (A) $41,053 $20,200 103.23%
======== ======== ========
Funds from Operations per share - basic $ 0.65 $ 0.52 23.90%
======== ======== ========
Weighted average shares outstanding
- basic 63,468 38,694 64.03%
======== ======== ========
Funds from Operations per share -
diluted $ 0.64 $ 0.52 23.85%
======== ======== ========
Weighted average shares
outstanding - diluted 63,991 38,998 64.09%
======== ======== ========
</TABLE>
(A) Based on weighted average shares for the quarter. Company's share for the
quarter ended 9/30/98 was 73.62% and 70.66% for the quarter ended 9/30/97.
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1998 1997 % Change
-------- -------- --------
(Actual) (Pro forma)
<S> <C> <C> <C>
Income from operations before
minority interests $ 96,744 $52,487 84.32%
Add:
Real estate depreciation and
amortization 50,718 27,132 86.93%
Less:
Preferred allocation (1,505) -- --
Minority property partnership's
share of Funds from Operations (460) (368) 25.00%
-------- -------- --------
Funds from Operations $145,497 $79,251 83.59%
======== ======== ========
Company's share $109,472 $55,999 95.49%
======== ======== ========
Funds from Operations per share - basic $ 1.82 $ 1.45 25.86%
======== ======== ========
Weighted average shares outstanding -
basic 60,101 38,694 55.32%
======== ======== ========
Funds from Operations per share - diluted $ 1.80 $ 1.44 25.44%
======== ======== ========
Weighted average shares
outstanding - diluted 60,744 38,979 55.84%
======== ======== ========
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Real estate: $3,562,645 $1,796,500
Less: accumulated depreciation (335,821) (294,218)
------------ ------------
Total real estate 3,226,824 1,502,282
Cash and cash equivalents 15,544 17,560
Escrows 19,668 14,178
Tenant and other receivables, net 33,160 24,458
Accrued rental income, net 67,692 55,190
Deferred charges, net 41,244 35,485
Prepaid expenses and other assets 23,064 20,225
Investment in joint ventures 32,136 3,143
------------ ------------
Total assets $3,459,332 $1,672,521
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $1,752,430 $1,099,253
Unsecured line of credit 195,000 233,000
Accounts payable and accrued expenses 41,502 23,822
Dividends payable -- 22,539
Accrued interest payable 4,784 6,581
Other liabilities 26,357 11,642
------------ ------------
Total liabilities 2,020,073 1,396,837
------------ ------------
Commitments and contingencies -- --
------------ ------------
Minority interests 462,015 100,636
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value,
50,000,000 shares authorized, none
issued or outstanding -- --
Excess stock, $.01 par value,
150,000,000 shares authorized, none
issued or outstanding -- --
Common stock, $.01 par value,
250,000,000 shares authorized,
63,526,785 issued and outstanding 635 387
Additional paid-in capital 949,972 172,347
Earnings in excess of dividends 26,357 2,314
------------ ------------
Total stockholders' equity 977,244 175,048
------------ ------------
Total liabilities and stockholders'
equity $3,459,332 $1,672,521
============ ============
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
(Unaudited)
Occupancy by Location
---------------------
September 30, 1998 December 31, 1997
------------------ -----------------
Greater Boston, MA 99.0% 98.3%
Greater Washington, DC 98.5% 97.3%
Midtown Manhattan, NY 99.6% 95.2%
Baltimore, MD 99.2% 98.0%
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 100.0% n/a
Greater San Francisco, CA 99.7% 98.4%
Bucks County, PA 100.0% 100.0%
------------------ -----------------
Total Portfolio 98.5% 97.2%
================== =================
Occupancy by Type
-----------------
Class A Office Portfolio 98.9% 97.6%
R&D Portfolio 98.2% 97.3%
Industrial Portfolio 95.0% 93.4%
------------------ -----------------
Total Portfolio 98.5% 97.2%
================== =================
SOURCE Boston Properties, Inc.
Web site: http://www.bostonproperties.com
CONTACT: Edward H. Linde, President, CEO & Director, or David G.
Gaw, SVP & CFO, both of Boston Properties, 617-859-2600; or
Marianne Stewart, General Info., 212-661-8030, Claire Koeneman,
Analysts, 312-266-7800, or Judith Sylk-Siegel, Media,
212-661-8030, all of The Financial Relations Board
