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<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):
JANUARY 26, 1999
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 January 26, 1999,
announcing the Company's results for the fourth quarter ended December 31, 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 and the press release as Exhibit
99.2 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C>
99.1 The Boston Properties, Inc. Supplemental Operating and Financial Data
for the quarter ended December 31, 1998.
99.2 The Boston Properties, Inc. press release dated January 26, 1999 for
the quarter and year ended December 31, 1998.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 27, 1999
BOSTON PROPERTIES, INC.
By: /s/ DAVID G. GAW
------------------------
David G. Gaw
Chief Financial Officer
<PAGE>
Exhibit 99.1
BOSTON PROPERTIES, INC.
Supplemental Operating and Financial Data for
the Quarter Ended December 31, 1998
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
COMPANY BACKGROUND 2
INVESTOR INFORMATION 3-4
FINANCIAL HIGHLIGHTS 5
CONSOLIDATED BALANCE SHEETS 6
CONSOLIDATED INCOME STATEMENTS 7
FUNDS FROM OPERATIONS 8
FINANCIAL RATIOS 9
CAPITAL STRUCTURE 10
DEBT ANALYSIS 11
PORTFOLIO OVERVIEW 12-13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OCCUPANCY ANALYSIS - SAME PROPERTY 14
OFFICE PROPERTIES 15
R&D PROPERTIES 16
INDUSTRIAL PROPERTIES 17
GRAND TOTAL - OFFICE, R&D AND INDUSTRIAL PROPERTIES 18
SAME PROPERTY PERFORMANCE 19-21
CAPITAL EXPENDITURES 22
VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING 23
VALUE CREATION PIPELINE - DEVELOPMENT 24
VALUE CREATION PIPELINE - LAND PARCELS 25
ACQUISITION PROPERTY PROFILES 26-27
</TABLE>
1
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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, greater San Francisco, Baltimore, Maryland,
Richmond, Virginia, and Princeton/East Brunswick, New Jersey. 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 over-allotment
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' over-allotment) 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 39 properties adding approximately 14.1 million square feet
to its portfolio, representing an investment of approximately $3.6
billion. In addition, the Company is developing eight Class A Office
Buildings and one 221 room hotel for a total anticipated investment of
approximately $222.3 million. The Company owns or controls land where
it can develop an additional 9.1 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.
2
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
INVESTOR INFORMATION
--------------------
8 Arlington Street
Boston, MA 02116
(617) 859-2600
(617) 536-5087 (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 WILL BE ANNOUNCED ACCORDING TO THE FOLLOWING
ANTICIPATED SCHEDULE:
FIRST QUARTER EARLY MAY
SECOND QUARTER EARLY AUGUST
THIRD QUARTER EARLY NOVEMBER
YEAR END LATE JANUARY
3
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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>
4TH QUARTER 1998 4TH QUARTER 1997
---------------- ----------------
<S> <C> <C>
HIGH PRICE $ 32.5000 $ 34.3750
LOW PRICE $ 26.6250 $ 30.0000
CLOSING PRICE $ 30.5000 $ 33.0625
DIVIDENDS PER SHARE - ANNUALIZED $ 1.70 $ 1.62
CLOSING DIVIDEND YIELD - ANNUALIZED 5.57% 4.90%
CLOSING SHARES, COMMON UNITS AND PREFERRED UNITS (IF CONVERTED) OUTSTANDING (THOUSANDS) 97,780 55,651
CLOSING MARKET VALUE OF SHARES AND UNITS OUTSTANDING (THOUSANDS) $ 2,982,290 $ 1,893,989
</TABLE>
4
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
FINANCIAL HIGHLIGHTS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------
ACTUAL ACTUAL
31-DEC-98 31-DEC-97 % CHANGE
INCOME ITEMS:
------------- ----------- ----------- ---------
<S> <C> <C> <C>
Revenues $ 170,026 $ 77,288 119.99%
Net Income (1) $ 27,271 $ 12,372 120.43%
Funds from Operations $ 59,711 $ 29,017 105.78%
Company's share (76.79% and 70.66%) $ 43,607 $ 20,355 114.23%
Funds from Operations per share - basic $ 0.69 $ 0.53 30.48%
Funds from Operations per share - diluted $ 0.68 $ 0.52 30.76%
Dividends per share $ 0.425 $ 0.405 4.94%
RATIOS:
-------
Interest Coverage Ratio (2) 2.41 2.37 1.78%
Dividend Payout Ratio 62.51% 77.88% -19.74%
</TABLE>
(1) Net income is before net extraordinary items
(2) FFO plus interest (excluding amortization)/interest (excluding amortization)
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997 % CHANGE
----------------- ----------------- --------
CAPITALIZATION:
---------------
<S> <C> <C> <C>
Total Debt $ 3,088,724 $ 1,332,253 131.84%
Total Shares Outstanding @ Quarter End 63,528 38,694 64.18%
Total Units Outstanding @ Quarter End 23,798 16,957 40.34%
Total Preferred Units Outstanding @ Quarter End
(if converted) 10,454 - -
Price @ Quarter End $ 30.50 $ 33.0625 -7.75%
Equity Value @ Quarter End $ 2,982,294 $ 1,839,961 62.08%
Total Market Capitalization $ 6,071,018 $ 3,172,214 91.38%
Debt/Total Market Capitalization 50.88% 42.00% 21.14%
</TABLE>
5
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
ASSETS
------
<S> <C> <C>
Real Estate and equipment $ 4,755,436 $ 1,778,973
Land and development in progress 191,436 17,527
Less accumulated depreciation (357,384) (294,218)
------------------- -------------------
Total real estate and equipment 4,559,809 1,502,282
Cash 12,166 17,560
Escrows 19,014 14,178
Notes receivable 420,143 -
Tenant and other receivables 40,830 24,458
Accrued rental income 64,251 55,190
Deferred charges, net 46,029 35,485
Prepaid expenses and other assets 26,058 20,225
Investment in joint ventures 46,787 3,143
------------------- -------------------
TOTAL ASSETS $ 5,235,087 $ 1,672,521
------------------- -------------------
------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Mortgage notes payable $ 2,653,581 $ 1,099,253
Notes payable 420,143 -
Unsecured line of credit 15,000 233,000
Accounts payable and accrued expenses 33,638 23,822
Dividends payable 40,494 22,539
Accrued interest payable 7,307 6,581
Other liabilities 37,209 11,642
------------------- -------------------
Total liabilities 3,207,372 1,396,837
------------------- -------------------
Commitments and contingencies - -
------------------- -------------------
Minority interests 1,105,864 100,636
------------------- -------------------
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,
63,527,552 and 38,694,041 issued and outstanding, respectively 635 387
Additional paid-in capital 929,081 172,347
Earnings in excess of dividends (7,865) 2,314
------------------- -------------------
Total stockholders' equity 921,851 175,048
------------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,235,087 $ 1,672,521
------------------- -------------------
------------------- -------------------
</TABLE>
6
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
CONSOLIDATED INCOME STATEMENTS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
ACTUAL ACTUAL
31-DEC-98 31-DEC-97 % CHANGE
--------- --------- --------
<S> <C> <C> <C>
Revenue:
Rental income $162,060 $ 75,388 114.97%
Development and management services 3,517 1,591 121.06%
Interest and other 4,449 309 1339.81%
-------- --------- --------
Total revenue 170,026 77,288 119.99%
Operating Expenses:
Rental expenses 53,303 22,201 140.09%
General and administrative 5,753 3,525 63.21%
Interest 42,934 22,214 93.27%
Depreciation and amortization 24,205 11,565 109.30%
-------- --------- --------
Total expenses 126,195 59,505 112.07%
-------- --------- --------
Income before minority interests 43,831 17,783 146.48%
Minority interest in property partnerships (2,163) (146) 1381.51%
-------- --------- --------
Income before minority interest in Operating Partnership 41,668 17,637 136.25%
Minority interest in Operating Partnership (14,397) (5,265) 173.45%
-------- --------- --------
Net income before extraordinary items 27,271 12,372 120.43%
Net extraordinay loss on early debt extinguishments, net of
minority interest (9,045) - -
-------- --------- --------
Net income $ 18,226 $ 12,372 47.32%
-------- --------- --------
-------- --------- --------
INCOME PER SHARE OF COMMON STOCK
Net income before extraordinary item $ 0.43 $ 0.32 34.26%
-------- --------- --------
-------- --------- --------
Net income $ 0.29 $ 0.32 -10.34%
-------- --------- --------
-------- --------- --------
</TABLE>
7
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
FUNDS FROM OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
ACTUAL ACTUAL
31-DEC-98 31-DEC-97 % CHANGE
--------- --------- --------
<S> <C> <C> <C>
Income from operations before minority interests $ 43,831 $ 17,783 146.48%
Add:
Real estate depreciation and amortization 23,930 11,395 110.00%
Less:
Minority property partnership's share of funds from operations (3,725) (161) 2213.66%
---------
Preferred allocation (4,325) - -
--------- -------- ---------
Funds from Operations $ 59,711 $ 29,017 105.78%
--------- -------- ---------
--------- -------- ---------
Company's share (1) $ 43,607 $ 20,355 114.23%
--------- -------- ---------
--------- -------- ---------
Funds from Operations per share - basic $ 0.69 $ 0.53 30.48%
--------- -------- ---------
--------- -------- ---------
Weighted average shares outstanding - basic 63,528 38,694 64.18%
--------- -------- ---------
--------- -------- ---------
Funds from Operations per share - diluted $ 0.68 $ 0.52 30.76%
--------- -------- ---------
--------- -------- ---------
Weighted average shares outstanding - diluted 68,432 39,108 74.98%
--------- -------- ---------
--------- -------- ---------
</TABLE>
(1) Based on weighted average shares for the quarter. Company's share for
the quarter ended 12/31/98 was 73.03% and 70.15% for the quarter ended
12/31/97.
8
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
FINANCIAL RATIOS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31, 1998
------------------
<S> <C>
RATIOS COMPUTED FOR INDUSTRY COMPARISONS: (1)
OPERATIONAL RATIOS (2)
Debt Service Coverage Ratio 2.20
(Funds from Operations ("FFO")+Interest/Interest+Principal)
Interest Coverage Ratio 2.41
(Funds from Operations+Interest/Interest)
Return on Shareholder's Equity 24.74%
(Funds from Operations/Average Equity (book value) ) (%)
Return on Real Estate Investments 10.54%
(Funds from Operations+Interest/Average Real Estate Investments (book value)) (%)
FFO Payout Ratio 62.50%
(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.
FOURTH QUARTER 1998
CAPITAL STRUCTURE
DEBT
(IN THOUSANDS)
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
DECEMBER 31, 1998
-------------------
<S> <C>
Mortgage Loans $ 2,653,581
Notes Payable 420,143
Unsecured Line of Credit 15,000
--------------------
Total Debt $ 3,088,724
--------------------
--------------------
</TABLE>
EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
SHARES & UNITS STOCK $ VALUE
OUTSTANDING EQUIVALENTS EQUIVALENT (1)
-------------- ----------- --------------
<S> <C> <C> <C>
Common Stock 63,528 63,528 $ 1,937,598
Operating Partnership Units 23,798 23,798 725,839
Preferred Operating Partnership Units 8,754 10,454 318,856
----------- -------------
Total Equity 97,780 $ 2,982,294
----------- -------------
----------- -------------
Total Market Capitalization $ 6,071,018
-------------
-------------
</TABLE>
(1) Value based on December 31, 1998 closing price of $30.50.
10
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
DEBT ANALYSIS
Long-Term Debt Maturities and Principal Payments
(in thousands)
<TABLE>
<CAPTION>
YEAR 1999 2000 2001 2002 2003 THEREAFTER TOTAL
---- ---- ---- ---- ---- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Amount $ 26,940 233,075 146,059 385,394 206,853 2,090,403 $ 3,088,724
</TABLE>
UNSECURED LINE OF CREDIT - DUE JUNE 23, 2000
(in thousands)
<TABLE>
<CAPTION>
FACILITY OUTSTANDING @ 12/31/98 REMAINING CAPACITY
-------- ---------------------- ------------------
<S> <C> <C>
$ 500,000 15,000 $ 485,000
</TABLE>
UNSECURED AND SECURED DEBT ANALYSIS
<TABLE>
<CAPTION>
WEIGHTED AVERAGE WEIGHTED AVERAGE
% OF DEBT RATE MATURITY
--------- ---------------- ----------------
<S> <C> <C> <C>
Unsecured Debt 14.09% 5.79% 1.7 years
Secured Debt 85.91% 7.04% 6.5 years
------ ---- ---------
Total Debt 100.00% 6.87% 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 14.46% 5.81% 0.2 years
Fixed Rate Debt 85.54% 7.05% 6.6 years
------ ----- ---------
Total Debt 100.00% 6.87% 5.6 years
------ ----- ---------
------ ----- ---------
</TABLE>
11
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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 5,008,699 545,206 247,318 5,801,223 26.17%
Greater Washington, D.C. 4,161,795 1,383,442 236,743 5,781,980 26.08%
Greater San Francisco 3,701,118 144,479 281,000 4,126,597 18.61%
Midtown Manhattan 2,880,508 - - 2,880,508 12.99%
Princeton/East Brunswick, NJ 1,366,360 - - 1,366,360 6.16%
Baltimore, MD 1,152,436 - - 1,152,436 5.19%
Richmond, VA 899,720 - - 899,720 4.06%
Bucks County, PA - - 161,000 161,000 0.73%
---------- --------- --------- ---------- --------
Total 19,170,636 2,073,127 926,061 22,169,824 100.00%
---------- --------- --------- ---------- --------
---------- --------- --------- ---------- --------
% of Total 86.48% 9.35% 4.18% 100.00%
* Includes retail square footage.
</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
GARAGE PROPERTIES --------- ------
-----------------
<S> <C> <C>
Cambridge Center North Garage 1,170 332,442
STRUCTURED PARKING 15,997 5,802,711
------- ---------
TOTAL GARAGE PROPERTY AND STRUCTURED PARKING 17,167 6,135,153
------- ---------
------- ---------
</TABLE>
12
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
PORTFOLIO OVERVIEW
PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS* FOR IN-SERVICE PROPERTIES BY
LOCATION
and Type of Property for Quarter Ended December 31, 1998
<TABLE>
<CAPTION>
GEOGRAPHIC AREA OFFICE (1) R&D INDUSTRIAL HOTEL GARAGE TOTAL
--------------- ------- --- ---------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Greater Boston 21.5% (2) 1.0% 0.3% 5.3% 0.3% 28.4%
Greater Washington, D.C. 24.7% 3.6% 0.2% n/a n/a 28.5%
Greater San Francisco 6.8% (3) 0.3% 0.2% n/a n/a 7.3%
Midtown Manhattan 21.2% n/a n/a n/a n/a 21.2%
Baltimore 5.0% n/a n/a n/a n/a 5.0%
Richmond 3.8% n/a n/a n/a n/a 3.8%
Princeton/East Brunswick, NJ 5.7% n/a n/a n/a n/a 5.7%
Bucks County, PA n/a n/a 0.1% n/a n/a 0.1%
------- ------ ----- ------ ---- ------
Total 88.7% 4.9% 0.8% 5.3% 0.3% 100.0%
------- ------ ----- ------ ---- ------
------- ------ ----- ------ ---- ------
</TABLE>
(1) Includes Retail Center FFO (Prudential Center Boston and Embarcadero
Center).
(2) Includes Reservoir Place since its acquisition on November 3, 1998.
(3) Includes Embarcadero Center since phase 1 of the acquisition on
November 12, 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.
FOURTH QUARTER 1998
OCCUPANCY ANALYSIS
SAME PROPERTY OCCUPANCY - BY LOCATION
<TABLE>
<CAPTION>
LOCATION 31-DEC-98 31-DEC-97
-------- --------- ---------
<S> <C> <C>
Greater Boston, MA 95.1% 98.3%
Greater Washington, D.C. 98.0% 97.2%
Midtown Manhattan, NY 99.9% 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 95.0% 98.4%
Bucks County, PA 100.0% 100.0%
------- -----
Total Portfolio 97.5% 98.0%
------- -----
------- -----
</TABLE>
SAME PROPERTY - BY TYPE OF PROPERTY
<TABLE>
<CAPTION>
31-DEC-98 31-DEC-97
--------- ---------
<S> <C> <C>
Total Office Portfolio 98.1% 99.0%
Total R&D Portfolio 99.8% 96.9%
Total Industrial Portfolio 89.3% 93.4%
------- -----
Total Portfolio 97.5% 98.0%
------- -----
------- -----
</TABLE>
14
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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>
1999 1,372,073 37,469,294 6.15%
2000 1,406,569 39,803,309 6.54%
2001 2,264,138 64,950,377 10.67%
2002 2,247,533 101,767,905 16.71%
2003 1,739,987 52,615,550 8.64%
2004 1,900,942 50,633,360 8.32%
2005 1,316,652 33,646,533 5.53%
2006 2,303,485 77,823,860 12.78%
2007 1,684,849 53,126,078 8.73%
Thereafter 2,707,074 97,054,930 15.94%
</TABLE>
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
31-DEC-98 31-DEC-97
--------- ---------
<S> <C> <C>
Greater Boston, MA 96.9% 98.5%
Greater Washington, D.C. 99.8% 99.2%
Midtown Manhattan, NY 99.9% 95.2%
Baltimore, MD 99.8% 98.0%
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 98.7% n/a
Greater San Francisco, CA 98.9% n/a
Bucks County, PA n/a n/a
-------- ------
Total Office Portfolio 98.8% 97.6%
-------- ------
-------- ------
</TABLE>
15
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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>
1999 220,556 2,444,286 8.89%
2000 403,559 3,631,373 13.20%
2001 264,891 2,081,579 7.57%
2002 266,460 4,620,591 16.80%
2003 94,495 1,180,220 4.29%
2004 47,641 704,767 2.56%
2005 148,330 1,847,469 6.72%
2006 150,000 1,622,501 5.90%
2007 107,895 2,294,165 8.34%
Thereafter 345,209 7,080,818 25.74%
</TABLE>
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
31-DEC-98 31-DEC-97
--------- ---------
<S> <C> <C>
Greater Boston, MA 100.0% 100.0%
Greater Washington, D.C. 99.0% 95.8%
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% 95.2%
Bucks County, PA n/a n/a
------ -------
Total R&D Portfolio 99.2% 97.3%
------ -------
------ -------
</TABLE>
16
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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>
1999 147,512 1,473,292 27.69%
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>
31-DEC-98 31-DEC-97
---------- ---------
<S> <C> <C>
Greater Boston, MA 93.0% 93.0%
Greater Washington, D.C. 73.9% 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 92.9% 100.0%
Bucks County, PA 100.0% 100.0%
---------- ---------
Total Industrial Portfolio 89.3% 93.4%
---------- ---------
---------- ---------
</TABLE>
17
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH 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>
1999 1,740,141 41,386,872 6.45%
2000 2,059,408 44,903,811 7.00%
2001 2,599,858 67,389,049 10.50%
2002 2,513,993 106,388,496 16.58%
2003 1,977,587 54,771,215 8.54%
2004 2,143,659 52,273,612 8.15%
2005 1,485,482 35,604,153 5.55%
2006 2,453,485 79,446,361 12.38%
2007 1,792,744 55,420,243 8.64%
Thereafter 3,052,283 104,135,748 16.23%
</TABLE>
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
31-DEC-98 31-DEC-97
--------- ---------
<S> <C> <C>
Greater Boston, MA 97.0% 98.3%
Greater Washington, D.C. 98.5% 97.3%
Midtown Manhattan, NY 99.9% 95.2%
Baltimore, MD 99.8% 98.0%
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 98.7% n/a
Greater San Francisco, CA 98.5% 98.4%
Bucks County, PA 100.0% 100.0%
--------- ---------
Total Portfolio 98.4% 97.2%
--------- ---------
--------- ---------
</TABLE>
18
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
SAME PROPERTY PERFORMANCE
Hotel Properties
LONG WHARF MARRIOTT - BOSTON
<TABLE>
<CAPTION>
1/1/98- 1/1/97- PERCENT 10/1/98 10/1/97 PERCENT
12/31/98 12/31/97 CHANGE 12/31/98 12/31/97 CHANGE
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 87.5% 87.1% 0.46% 82.6% 84.3% -2.02%
Average Daily Rate $ 226.46 $ 218.23 3.77% $ 218.90 $ 230.09 -4.86%
REVPAR $ 198.15 $ 190.08 4.25% $ 180.81 $ 193.97 -6.78%
</TABLE>
CAMBRIDGE CENTER MARRIOTT
<TABLE>
<CAPTION>
1/1/98- 1/1/97- PERCENT 10/1/98 10/1/97 PERCENT
12/31/98 12/31/97 CHANGE 12/31/98 12/31/97 CHANGE
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 83.6% 85.3% -1.99% 76.0% 74.8% 1.60%
Average Daily Rate $ 181.15 $ 163.77 10.61% $ 179.32 $ 170.32 5.28%
REVPAR $ 151.44 $ 139.70 8.40% $ 136.28 $ 127.34 7.02%
</TABLE>
TOTAL HOTEL PERFORMANCE
<TABLE>
<CAPTION>
1/1/98- 1/1/97- PERCENT 10/1/98 10/1/97 PERCENT
12/31/98 12/31/97 CHANGE 12/31/98 12/31/97 CHANGE
-------- -------- ------- -------- -------- -------
Occupancy 85.5% 86.2% -0.81% 79.2% 79.4% -0.25%
<S> <C> <C> <C> <C> <C> <C>
Average Daily Rate $ 203.02 $ 190.05 6.82% $ 198.42 $ 199.16 -0.37%
REVPAR $ 173.98 $ 164.01 6.08% $ 157.77 $ 159.50 -1.08%
</TABLE>
19
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
SAME PROPERTY PERFORMANCE
OFFICE, R&D, INDUSTRIAL AND HOTEL PROPERTIES
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL HOTEL TOTAL
-------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Number of Properties 33 23 9 2 67
Square feet 5,641,474 1,323,693 926,061 750,400 8,641,628
Percent of in-service properties 29.4% 63.9% 100.0% 100.0%
Occupancy @ 12/31/97 99.0% 96.9% 93.4% 98.0%
Occupancy @ 12/31/98 98.1% 99.8% 89.3% 97.1%
Percent change from 4th quarter 1998 over 4th quarter 1997:
Revenue 7.3% 6.1% 4.6% 10.8% 7.3%
Expense 7.8% 21.1% 27.3% 35.8% 10.0%
Net Operating Income 7.0% 1.9% -4.9% 6.5% 6.2%
</TABLE>
SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL TOTAL
-------- ------- ------------ --------
<S> <C> <C> <C> <C>
Vacant space available @ 10/1/98 (sf) 43,584 35,867 46,222 125,673
Square footage of leases expiring or
terminated 10/1/98 - 12/31/98 149,992 11,271 136,358 297,621
-------- ------- -------- -------
Total space for lease (sf) 193,576 47,138 182,580 423,294
-------- ------- -------- -------
-------- ------- -------- -------
New tenants (sf) 32,685 36,040 - 68,725
Renewals (sf) 31,367 8,000 83,608 122,975
-------- ------- -------- -------
Total space leased (sf) 64,052 44,040 83,608 191,700
-------- ------- -------- -------
-------- ------- -------- -------
Space available @ 12/31/98 (sf) 129,524 3,098 98,972 231,594
-------- ------- -------- -------
-------- ------- -------- -------
Net increase (decrease) in leased space (sf) (85,940) 32,769 (52,750) (105,921)
Average lease term (months) 39 66 12 33
2nd generation TI/Comm PSF $ 13.54 $ 3.34 $ 0.72 $ 5.61
Increase in 2nd generation net rents (2) 10.4% 10.3% 0.0% 6.7%
</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.
FOURTH QUARTER 1998
SAME PROPERTY LEASE ANALYSIS - YEAR TO DATE 1/1/98 - 12/31/98
<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- 12/31/98 418,421 73,783 358,358 850,562
-------- -------- -------- ---------
Total space for lease (sf) 472,744 115,437 419,580 1,007,761
-------- -------- -------- ---------
-------- -------- -------- ---------
New tenants (sf) 183,200 72,494 56,000 311,694
Renewals (sf) 162,745 39,354 264,608 466,707
-------- -------- -------- ---------
Total space leased (sf) 345,945 111,848 320,608 778,401
-------- -------- -------- ---------
-------- -------- -------- ---------
Space available @ 12/31/98 (sf) 126,799 3,098 98,972 228,869
-------- -------- -------- ---------
-------- -------- -------- ---------
Net increase/(decrease) in leased space (sf) (72,476) 38,556 (37,750) (71,670)
Average lease term (months) 64 67 29 50
2nd generation TI/Comm PSF $ 13.66 $ 3.32 $ 1.13 $ 7.01
Increase in 2nd generation net rents (1) 17.0% 12.6% -9.2% 9.9%
</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).
21
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
HISTORICALLY GENERATED CAPITAL EXPENDITURES,
TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
HISTORICAL CAPITAL EXPENDITURES
<TABLE>
<CAPTION>
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 $ 3,543
-------- -------- ------- -------- --------- -------- --------
-------- -------- ------- -------- --------- -------- --------
Hotel improvements, equipment upgrades $ 3,182 $ 836 $1,917 $ 4,420 $ 3,041 $ 2,625 $ 3,872
and replacements
-------- -------- ------- -------- --------- -------- --------
-------- -------- ------- -------- --------- -------- --------
</TABLE>
2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS
<TABLE>
<CAPTION>
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 1,016,427 648,291
------- ------- ------- ------- ------- --------- --------
Tenant improvement and lease commissions p.s.f. $ 7.85 $ 8.45 $ 9.45 $ 10.66 $ 11.40 $ 10.83 $ 9.82
------- ------- ------- ------- ------- --------- --------
R&D
Square feet 185,070 166,957 276,332 177,073 337,676 169,878 113,428
------- ------- ------- ------- ------- --------- --------
Tenant improvement and lease commissions p.s.f. $ 3.82 $ 5.53 $ 0.68 $ 6.99 $ 10.45 $ 2.22 $ 3.32
------- ------- ------- ------- ------- --------- --------
Industrial
Square feet 44,473 241,500 132,521 308,388 128,148 258,795 320,608
------- ------- ------- ------- ------- --------- --------
Tenant improvement and lease commissions p.s.f. $ 2.31 $ 0.28 $ 3.32 $ 1.00 $ 1.71 $ 0.99 $ 1.13
------- ------- ------- ------- ------- --------- --------
Average tenant improvement and
lease commission p.s.f. $ 6.75 $ 5.59 $ 6.51 $ 7.77 $ 10.31 $ 8.06 $ 6.57
------- ------- ------- ------- ------- --------- --------
------- ------- ------- ------- ------- --------- --------
</TABLE>
22
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING
AS OF DECEMBER 31,1998
(IN THOUSANDS)
<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
Reservoir Place Nov-98 529,992 $ 96,000 $ 1,676 $ 97,676 99%
Embarcadero Center Nov-98 3,701,118 1,216,000 37,710 1,253,710 98%
--------- ----------- --------- ----------- ------
Subtotal 4,231,110 1,312,000 39,386 1,351,386 99%
REPOSITIONING
1301 New York Avenue Mar-99 185,000 28,000 18,200 46,200 100% (1)
--------- ----------- --------- ----------- ------
TOTAL VALUE CREATION PIPELINE -
ACQUISITIONS/REPOSITIONING 4,416,110 $ 1,340,000 $ 57,586 $ 1,397,586 99%
--------- ----------- --------- ----------- ------
--------- ----------- --------- ----------- ------
(1) As of March 1, 1999
</TABLE>
23
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
ESTIMATED PLACED # OF INVESTMENT
DEVELOPMENT PROPERTIES IN SERVICE DATE LOCATION BUILDINGS SQUARE FEET TO DATE
- ---------------------- --------------- -------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
CLASS A OFFICE BUILDINGS
200 West Street Q2 1999 Waltham, MA 1 250,000 $ 25,604,410
Eight Cambridge Center Q2 1999 Cambridge, MA 1 175,000 15,704,068
One Freedom Square (25% ownership) Q4 1999 Reston, VA 1 406,980 3,711,969
One and Two Reston Overlook (25% ownership) Q1-Q2 1999 Reston, VA 2 444,000 4,626,104
The Arboretum Q3 1999 Reston, VA 1 96,000 10,208,022
181 Spring Street Q2 1999 Lexington, MA 1 52,000 8,854,583
Market Square North Q4 2000 Washington, DC 1 409,843 37,361,361
------ ---------- -------------
TOTAL CLASS A OFFICE BUILDINGS 8 1,833,823 106,070,517
HOTELS
Residence Inn by Marriott Q1 1999 Cambridge, MA 1 187,474 21,887,954
------ ---------- -------------
TOTAL DEVELOPMENT PROPERTIES 9 2,021,297 $ 127,958,471
------ ---------- -------------
------ ---------- -------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL PERCENTAGE
DEVELOPMENT PROPERTIES INVESTMENT LEASED
- ---------------------- ---------- ------
<S> <C> <C>
CLASS A OFFICE BUILDINGS
200 West Street $ 43,423,000 79%
Eight Cambridge Center 26,000,000 100%
One Freedom Square (25% ownership) 19,150,000 (1) 73%
One and Two Reston Overlook (25% ownership) 18,100,000 (1) 100%
The Arboretum 15,265,000 100%
181 Spring Street 10,871,085 0%
Market Square North 57,500,000 (2) 0%
------------ -------
TOTAL CLASS A OFFICE BUILDINGS 190,309,085 66%
HOTELS
Residence Inn by Marriott 32,000,000 n/a
------------ -------
TOTAL DEVELOPMENT PROPERTIES $ 222,309,085 66%
------------ -------
------------ -------
</TABLE>
(1) Represents 25% of the total anticipated project-level investment.
(2) Represents 50% of the total anticipated project-level investment.
24
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
VALUE CREATION PIPELINE - OWNED LAND PARCELS
as of December 31, 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 7 128.3 2,331,000
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)
-------- ------- -----------
21 300.1 6,776,000
-------- ------- -----------
-------- ------- -----------
</TABLE>
(1) Parcels and acreage have not yet been determined at this time.
(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>
Princeton, NJ 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.
FOURTH QUARTER 1998
ACQUISITION PROPERTY PROFILE
<TABLE>
<CAPTION>
<S> <C>
PROPERTY NAME: Reservoir Place
PRODUCT TYPE: Class A Office Building
LOCATION: Waltham, MA
DESCRIPTION: Class A office complex, located directly off Route 128, consists
of two connected buildings and a two-level underground parking
garage.
SIZE: Approximately 530,000 net rentable square feet
YEAR CONSTRUCTED: 1955/1987
PURCHASE PRICE: $96 Million
CLOSING DATE: November 3, 1998
FUTURE INVESTMENT: $1.7 million
OCCUPANCY LEVEL: 99%
NUMBER OF TENANTS: 71
FUNDING SOURCE: Common Operating Partnership Units, Assumption of Debt and Cash.
LARGEST TENANTS:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMPANY: EDS Personal Communications SIZE: 77,341 LEASE EXPIRATION: 12/31/99
COMPANY: Information Resources, Inc. SIZE: 71,954 LEASE EXPIRATION: 6/30/04
COMPANY: Parexel Int'l Corp. SIZE: 71,691 LEASE EXPIRATION: 8/31/01
</TABLE>
26
<PAGE>
BOSTON PROPERTIES, INC.
FOURTH QUARTER 1998
ACQUISITION PROPERTY PROFILE
<TABLE>
<CAPTION>
<S> <C>
PROPERTY NAME: Embarcadero Center
PRODUCT TYPE: Multi-use
LOCATION: San Francisco, California
DESCRIPTION: The largest mixed-use business complex in the western United States,
comprised of 6 multi-tenant Class-A office towers as well
as retail shops, restaurants, entertainment facilities and parking.
YEAR CONSTRUCTED: Embarcadero Centers 1-4 and West Tower - 1971-1989
The Old Federal Reserve Building - 1924/1988
PURCHASE PRICE: $1.2 Billion
CLOSING DATE: November 12, 1998 (Phase One)
February 10, 1999 (Phase Two)
FUTURE INVESTMENT: $32.7 million
OCCUPANCY LEVEL: 98.9%
NUMBER OF TENANTS: 320
FUNDING SOURCE: Cash, Preferred Operating Partnership Units, Debt Financing
LARGEST TENANTS:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Company: Orrick, Herrington & Sutcliffe Size: 146,013 Lease Expiration: 7/31/04
Company: Industrial Indemnity Company Size: 103,567 Lease Expiration: 5/31/04
Company: Peat Marwick, KPMG Size: 98,598 Lease Expiration: 12/31/09
Company: Dresdner RCM Global Investors Size: 91,040 Lease Expiration: 10/31/01
</TABLE>
27
<PAGE>
Exhibit 99.2
BOSTON PROPERTIES, INC.
8 ARLINGTON STREET
BOSTON, MA 02116
(NYSE: BXP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
- -------------- --------------------------------
Edward H. Linde Marianne Stewart - General Info. (212) 661-8030
President, CEO & Director Claire Koeneman - Analyst (312) 266-7800
David G. Gaw Judith Sylk-Siegel - Media (212) 661-8030
SVP & CFO
(617) 859-2600
FOR IMMEDIATE RELEASE:
- ----------------------
January 26, 1999 --
BOSTON PROPERTIES, INC. ANNOUNCES
FOURTH QUARTER AND YEAR END 1998 RESULTS
BOSTON, MA, JANUARY 26, 1999 - Boston Properties, Inc. (NYSE: BXP) today
reported results for the fourth quarter and the year ended December 31, 1998.
Funds from Operations (FFO) for the quarter ended December 31, 1998 were
approximately $43.6 million, or $0.69 per share basic and $0.68 per share
diluted, compared to FFO of approximately $20.4 million, or $0.53 per share
basic and $0.52 per share diluted for the quarter ended December 31, 1997. The
weighted average number of basic and diluted shares outstanding totaled
63,527,666 and 68,432,476, respectively, for the quarter ended December 31, 1998
and 38,693,930 and 39,107,768, respectively, for the same quarter last year. FFO
for the year ended December 31, 1998 were approximately $153.0 million, or $2.52
per share basic and $2.50 per share diluted, compared to FFO on a pro forma
basis of approximately $76.5 million, or $1.98 per share basic and $1.96 per
share diluted, for the year ended December 31, 1997.
Revenues were approximately $170.0 million for the quarter and $513.8 million
for the year ended December 31, 1998, compared to revenues of approximately
$77.3 million and $255.1 million (pro forma) for the same periods in 1997.
Income before extraordinary items was approximately $27.3 million for the
quarter and $98.6 million for the year ended December 31, 1998, compared to
$12.4 million and $48.9 million (pro forma), respectively, for the same periods
in 1997. Income before extraordinary items per share for the quarter was $0.43
basic and diluted, compared to $0.32 basic and diluted last year, and for the
year ended December 31, 1998 was $1.62 basic and diluted, compared to $1.26
basic and $1.25 diluted on a pro forma basis last year.
-MORE-
<PAGE>
Boston Properties, Inc.
Announces 4Q98 and Year End Results
Page 2
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 ended
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 were completed on June
23, 1997) had occurred at the beginning of the relevant period.
As of December 31, 1998, the Company's portfolio consisted of 122 properties
comprising more than 31.0 million square feet, including nine properties under
development totaling approximately 2.0 million square feet. The overall
occupancy rate for the properties in service as of December 31, 1998 was 98.4%.
Additional highlights of the fourth quarter, as previously announced, include:
- - Closing of the first phase of Embarcadero Center, an approximately 3.7
million-square-foot mixed-use urban center located in San Francisco,
California, on November 12, 1998 for approximately $1.2 billion.
- - Acquisition of Reservoir Place, a 529,992-square-foot Class A office
building in Waltham, Massachusetts, on November 3, 1998 for approximately
$96.0 million.
Transactions announced since the quarter ended December 31, 1998 include:
- - Signing of a binding agreement to acquire, between now and January 2001,
the leasehold interest in the remaining two development sites in New York
City's Times Square for a total purchase price of $312.25 million.
Prudential Insurance Company of America, the seller, will also retain the
right to become a 33.33% equity participant in the development ventures by
contributing, upon an election to participate, its proportionate share of
the total project equity.
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 located predominantly in the Greater Boston; Greater
Washington, D.C.; midtown Manhattan; Greater San Francisco; Baltimore, Maryland;
Princeton/East Brunswick, New Jersey; and Richmond, Virginia markets. The
Company is one of the largest owners and developers of office properties in the
United States.
Financial tables follow.
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. Or visit The Financial Relations
Board's web site at http://www.frbinc.com.
-MORE-
<PAGE>
Boston Properties, Inc.
Announces 4Q98 and Year End Results
Page 3
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.
Announces 4Q98 and Year End Results
Page 4
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three months ended Year ended
December 31, December 31,
------------------------------- -------------------------------
1998 1997 1998 1997
--------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
REVENUE (Pro forma)
Rental:
Base rent $ 140,109 $ 68,509 $426,874 $218,902
Recoveries from tenants 15,671 6,421 48,543 22,933
Parking and other 6,280 458 12,160 3,139
--------------- -------------- -------------- ---------------
Total rental revenue 162,060 75,388 487,577 244,974
Development and management services 3,517 1,591 12,411 7,029
Interest and other 4,449 309 13,859 3,105
--------------- -------------- -------------- ---------------
Total revenue 170,026 77,288 513,847 255,108
--------------- -------------- -------------- ---------------
EXPENSES
Rental:
Operating 30,451 10,764 80,894 33,114
Real estate taxes 22,852 11,437 69,596 35,401
General and administrative 5,753 3,525 22,504 12,233
Interest 42,934 22,214 124,860 65,011
Depreciation and amortization 24,205 11,565 75,418 39,079
--------------- -------------- -------------- ---------------
Total expenses 126,195 59,505 373,272 184,838
--------------- -------------- -------------- ---------------
Income before minority interests 43,831 17,783 140,575 70,270
Minority interest in property partnerships (2,163) (146) (2,555) (449)
--------------- -------------- -------------- ---------------
Income before minority interest in
Operating Partnership 41,668 17,637 138,020 69,821
Minority interest in Operating Partnership (14,397) (5,265) (39,427) (20,952)
--------------- -------------- -------------- ---------------
Income before extraordinary items 27,271 12,372 98,593 48,869
Extraordinary loss on early debt
extinguishments, net (9,045) - (5,481) -
--------------- -------------- -------------- ---------------
Net income $ 18,226 $ 12,372 $ 93,112 $ 48,869
--------------- -------------- -------------- ---------------
--------------- -------------- -------------- ---------------
Basic earnings per share:
Income before extraordinary items $ 0.43 $ 0.32 $ 1.62 $ 1.26
Extraordinary loss, net (0.14) - (0.09) -
--------------- -------------- -------------- ---------------
Net income $ 0.29 $ 0.32 $ 1.53 $ 1.26
--------------- -------------- -------------- ---------------
--------------- -------------- -------------- ---------------
Weighted average number of common shares
outstanding 63,528 38,694 60,776 38,694
Diluted earnings per share:
Income before extraordinary items $ 0.43 $ 0.32 $ 1.62 $ 1.25
Extraordinary loss, net (0.13) - (0.09) -
--------------- -------------- -------------- ---------------
Net income $ 0.30 $ 0.32 $ 1.53 $ 1.25
--------------- -------------- -------------- ---------------
--------------- -------------- -------------- ---------------
Weighted average number of common shares
outstanding 68,432 39,108 62,443 39,108
</TABLE>
<PAGE>
Boston Properties, Inc.
Announces 4Q98 and Year End Results
Page 5
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except share and per share data)
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
-------------------------- ------------------------
<S> <C> <C>
ASSETS
Real estate: $ 4,917,193 $ 1,796,500
Less: accumulated depreciation (357,384) (294,218)
-------------------------- ------------------------
Total real estate 4,559,809 1,502,282
Cash and cash equivalents 12,166 17,560
Escrows 19,014 14,178
Notes receivable 420,143 -
Tenant and other receivables, net 40,830 24,458
Accrued rental income, net 64,251 55,190
Deferred charges, net 46,029 35,485
Prepaid expenses and other assets 26,058 20,225
Investment in joint ventures 46,787 3,143
-------------------------- ------------------------
Total assets $ 5,235,087 $ 1,672,521
-------------------------- ------------------------
-------------------------- ------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,653,581 $ 1,099,253
Notes payable 420,143 -
Unsecured line of credit 15,000 233,000
Accounts payable and accrued expenses 33,638 23,822
Dividends payable 40,494 22,539
Accrued interest payable 7,307 6,581
Other liabilities 37,209 11,642
-------------------------- ------------------------
Total liabilities 3,207,372 1,396,837
-------------------------- ------------------------
Commitments and contingencies - -
-------------------------- ------------------------
Minority interests 1,105,864 100,636
-------------------------- ------------------------
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, 63,527,552 and 38,694,041 issued
and outstanding, respectively 635 387
Additional paid-in capital 929,081 172,347
Dividends in excess of earnings (7,865) 2,314
-------------------------- ------------------------
Total stockholders' equity 921,851 175,048
-------------------------- ------------------------
-------------------------- ------------------------
Total liabilities and stockholders' equity $ 5,235,087 $ 1,672,521
-------------------------- ------------------------
-------------------------- ------------------------
</TABLE>
<PAGE>
Boston Properties, Inc.
Announces 4Q98 and Year End Results
Page 6
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(Unaudited and in thousands)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------
Actual Actual
December 31, 1998 December 31, 1997 % Change
----------------------- ----------------------- -------------
<S> <C> <C> <C>
Income from operations before minority interests $ 43,831 $ 17,783 146.48%
Add:
Real estate depreciation and amortization 23,930 11,395 110.00%
Less:
Preferred allocation (4,325) - -
Minority property partnerships' share of
Funds from Operations (3,725) (161) 2213.66%
----------------------- ----------------------- -------------
Funds from Operations $ 59,711 $ 29,017 105.78%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Company's share (1) $ 43,607 $ 20,355 114.23%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Funds from Operations per share - basic $ 0.69 $ 0.53 30.48%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Weighted average shares outstanding - basic 63,528 38,694 64.18%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Funds from Operations per share - diluted $ 0.68 $ 0.52 30.65%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Weighted average shares outstanding - diluted 68,432 39,108 74.98%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
</TABLE>
(1) Based on weighted average shares for the quarter. Company's share for
the quarter ended 12/31/98 was 73.03% and 70.15% for the quarter ended
12/31/97.
<TABLE>
<CAPTION>
Year Ended
-------------------------------------------------
Actual Pro Forma
December 31, 1998 December 31, 1997 % Change
----------------------- ----------------------- -------------
<S> <C> <C> <C>
Income from operations before minority interests $ 140,575 $ 70,270 100.05%
Add:
Real estate depreciation and amortization 74,649 38,527 93.76%
Less:
Preferred allocation (5,830) - -
Minority property partnerships' share of
Funds from Operations (4,185) (554) 655.42%
----------------------- ----------------------- -------------
Funds from Operations $ 205,209 $ 108,243 89.58%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Company's share (2) $ 153,045 $ 76,485 100.10%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Funds from Operations per share - basic $ 2.52 $ 1.98 27.40%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Weighted average shares outstanding - basic 60,776 38,694 57.07%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Funds from Operations per share - diluted $ 2.50 $ 1.96 27.83%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
Weighted average shares outstanding - diluted 62,443 39,108 59.67%
----------------------- ----------------------- -------------
----------------------- ----------------------- -------------
</TABLE>
(2) Based on weighted average shares for the year. Company's share for the
year ended 12/31/98 was 74.58% and 70.66% for the pro forma year ended
12/31/97.
<PAGE>
Boston Properties, Inc.
Announces 4Q98 and Year End Results
Page 7
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
(UNAUDITED)
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
------------------------- -------------------------
<S> <C> <C>
Greater Boston, MA 97.0% 98.3%
Greater Washington, DC 98.5% 97.3%
Midtown Manhattan, NY 99.9% 95.2%
Baltimore, MD 99.8% 98.0%
Richmond, VA 98.8% n/a
Princeton/East Brunswick, NJ 98.7% n/a
Greater San Francisco, CA 98.5% 98.4%
Bucks County, PA 100.0% 100.0%
------------------------- -------------------------
Total Portfolio 98.4% 97.2%
------------------------- -------------------------
------------------------- -------------------------
</TABLE>
OCCUPANCY BY TYPE
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Office Portfolio 98.8% 97.6%
R&D Portfolio 99.2% 97.3%
Industrial Portfolio 89.3% 93.4%
------------------------- -------------------------
Total Portfolio 98.4% 97.2%
------------------------- -------------------------
------------------------- -------------------------
</TABLE>
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