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Previous: NUVEEN TAX FREE UNIT TRUST SERIES 953, 485BPOS, 1999-10-27 |
Next: HOME SECURITY INTERNATIONAL INC, DEF 14A, 1999-10-27 |
<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 25, 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.)
800 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02199
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 236-3300
<PAGE>
ITEM 5. OTHER EVENTS
Following the issuance of a press release on October 25, 1999,
announcing the Company's results for the third quarter ended September 30, 1999,
the Company intends to provide, to certain investors and analysts at their
request, supplemental information regarding the Company's operations that is to
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
September 30, 1999.
99.2 The Boston Properties, Inc. press release dated October 25, 1999 for the quarter ended
September 30, 1999.
</TABLE>
<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, 1999 BOSTON PROPERTIES, INC.
/s/ David G. Gaw
----------------------------------
By: David G. Gaw
Chief Financial Officer
<PAGE>
EXHIBIT 99.1
BOSTON PROPERTIES, INC.
SUPPLEMENTAL OPERATING AND FINANCIAL DATA
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
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
Joint Ventures 12
Portfolio Overview 13-14
Occupancy Analysis 15
Office Properties 16
R&D Properties 17
Industrial Properties 18
Grand Total - Office, R&D and Industrial Properties 19
Hotel Performance 20
Same Property Performance 21
"In-Service" Property Performance 22
Capital Expenditures 23
Value Creation Pipeline - Acquisitions/Repositioning 24
Value Creation Pipeline - Development 25
Value Creation Pipeline - Land Parcels 26
Acquisition Property Profiles 27-28
</TABLE>
1
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
COMPANY BACKGROUND
Boston Properties is a fully integrated, self-administered and self-managed real
estate investment trust that develops, redevelops, acquires, manages, operates
and owns a diverse portfolio of office, industrial and hotel properties. The
Company is one of the largest owners and developers of office properties in the
United States, concentrated in the Northeast Corridor from Virginia to Greater
Boston and in greater San Francisco.
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. On
May 20, 1999, the Company raised an additional $141,002,500, net of issuance
costs, through the issuance of 4,000,000 shares.
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 44
properties adding approximately 15.6 million square feet to its portfolio,
representing an investment of approximately $3.8 billion. In addition, the
Company is developing ten Class A Office Buildings for a total anticipated
investment of approximately $1.1 billion. The Company owns or controls land
where it can develop an additional 10.0 million square feet.
2
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
INVESTOR INFORMATION
800 Boylston Street
Boston, MA 02199
(617) 236-3300
(617) 536-5087 (fax)
<TABLE>
<S> <C>
Mortimer B. Zuckerman Chairman of the Board
Edward H. Linde President, Chief Executive Officer and Director
Robert E. Burke Executive Vice President, Operations
Douglas T. Linde Senior Vice President, Financial and Capital Markets
David G. Gaw Senior Vice President, Chief Financial Officer
Elaine M. Quinlan Director of Investor Relations
</TABLE>
TIMING
Quarterly results for 1999 and 2000 will be announced according to the following
anticipated schedule:
<TABLE>
<S> <C>
Year End 1999 Early February
First Quarter 2000 Early May
Second Quarter 2000 Early August
Third Quarter 2000 Early November
</TABLE>
3
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
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 1999 3rd Quarter 1998
---------------- ----------------
<S> <C> <C>
High Price $ 35.6250 $ 34.6875
Low Price $ 30.3125 $ 23.8750
Closing Price $ 30.6875 $ 28.50
Dividends per share - annualized $ 1.80 $ 1.62
Closing dividend yield - annualized 5.87% 5.68%
Closing shares, common units and preferred units
(if converted) outstanding (thousands) 104,721 86,392
Closing market value of shares and units outstanding (thousands) $ 3,213,626 $ 2,524,037
</TABLE>
4
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
FINANCIAL HIGHLIGHTS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------------------
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 % CHANGE
------------------ ------------------ --------
<S> <C> <C> <C>
INCOME ITEMS:
Revenues $ 202,205 $ 140,177 44.25%
Net Income available to common shareholders $ 27,418 $ 25,341 8.20%
Funds from Operations $ 67,817 $ 55,763 21.62%
Company's share (74.03% and 73.62%) $ 50,207 $ 41,053 22.30%
Funds from Operations per share - basic $ 0.74 $ 0.65 14.31%
Funds from Operations per share - diluted $ 0.72 $ 0.64 12.95%
Dividends per share $ 0.450 $ 0.405 11.11%
Ratios:
Interest Coverage Ratio 2.50 2.71 -7.83%
Dividend Payout Ratio 62.25% 62.61% -0.57%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 DECEMBER 31, 1998 % CHANGE
------------------ ----------------- --------
<S> <C> <C> <C>
CAPITALIZATION:
Total Debt $ 3,277,763 $ 3,088,724 6.12%
Total Common Shares Outstanding @ Quarter End 67,903 63,528 6.89%
Total Preferred Shares Outstanding @ Quarter End
(if converted) 2,625 - -
Total Common Units Outstanding @ Quarter End 23,817 23,798 0.08%
Total Preferred Units Outstanding @ Quarter End
(if converted) 10,376 10,454 -0.75%
Price @ Quarter End $ 30.6875 $ 30,500 0.61%
Equity Value @ Quarter End $ 3,213,626 $ 2,982,294 7.76%
Total Market Capitalization $ 6,491,389 $ 6,071,018 6.92%
Debt/Total Market Capitalization 50.49% 50.88% -0.75%
</TABLE>
5
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
ASSETS
Real Estate and equipment $ 5,084,503 $ 4,725,757
Land and development in progress 421,122 191,436
Less accumulated depreciation (441,575) (357,384)
----------- -----------
Total real estate and equipment 5,064,050 4,559,809
Cash 50,415 12,166
Escrows 25,886 19,014
Notes receivable -- 420,143
Tenant and other receivables 21,420 40,830
Accrued rental income 78,413 64,251
Deferred charges, net 49,590 46,029
Prepaid expenses and other assets 29,194 26,058
Investment in joint ventures 35,807 46,787
----------- -----------
Total assets $ 5,354,775 $ 5,235,087
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,943,763 $ 2,653,581
Notes payable -- 420,143
Unsecured line of credit 334,000 15,000
Accounts payable and accrued expenses 49,070 42,897
Dividends payable 48,483 40,494
Accrued interest payable 9,611 7,307
Other liabilities 34,919 27,950
----------- -----------
Total liabilities 3,419,846 3,207,372
----------- -----------
Commitments and contingencies -- --
Minority interests 780,910 1,079,234
Series A Convertible Redeemable Preferred Stock, liquidation preference
$50.00 per share, 2,000,000 shares issued and outstanding 100,000 --
Stockholders' Equity:
Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.01 par value, 250,000,000 shares authorized,
67,902,967 and 63,527,819 issued and outstanding, respectively 679 635
Additional paid-in capital 1,068,050 955,711
Dividend in excess of earnings (14,710) (7,865)
----------- -----------
Total stockholders' equity 1,054,019 948,481
----------- -----------
Total liabilities and stockholders' equity $ 5,354,775 $ 5,235,087
----------- -----------
----------- -----------
</TABLE>
6
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
CONSOLIDATED INCOME STATEMENTS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------
30-SEP-99 30-SEP-98 % CHANGE
----------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Rental
Base Rent $ 166,582 $ 119,535 39.36%
Recoveries from tenants 19,212 13,665 40.59%
Parking and other 11,261 3,174 254.79%
--------- --------- ------
Total rental revenue 197,055 136,374 44.50%
Development and management services 3,706 2,734 35.55%
Interest and other 1,444 1,069 35.08%
--------- --------- ------
Total revenue 202,205 140,177 44.25%
--------- --------- ------
Expenses:
Rental expenses 66,665 43,255 54.12%
General and administrative 7,383 6,129 20.46%
Interest 51,768 33,183 56.01%
Depreciation and amortization 31,078 21,523 44.39%
--------- --------- ------
Total expenses 156,894 104,090 50.73%
--------- --------- ------
Income before minority interests and before income from unconsolidated joint venture 45,311 36,087 25.56%
Minority interest in property partnership (179) (161) 11.18%
Income from unconsolidated joint venture 206 -- --
--------- --------- ------
Income before minority interest in Operating Partnership 45,338 35,926 26.20%
Preferred distribution (6,649) (1,505) --
Minority interest in Operating Partnership (1) (9,617) (9,080) 5.91%
--------- --------- ------
Income before preferred dividend 29,072 25,341 14.72%
Preferred dividend (1,654) -- --
Net income available to common shareholders $ 27,418 $ 25,341 8.20%
--------- --------- ------
--------- --------- ------
INCOME PER SHARE OF COMMON STOCK
Net income per share - basic $ 0.40 $ 0.40 0.00%
--------- --------- ------
--------- --------- ------
Net income per share - diluted $ 0.40 $ 0.40 0.00%
--------- --------- ------
--------- --------- ------
</TABLE>
- ----------
(1) Equals minority interest percent (25.97% and 26.38%, respectively) of
income before minority interest in Operating Partnership after deduction
for preferred dividends and distributions.
7
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
FUNDS FROM OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------
30-SEP-99 30-SEP-98 % CHANGE
--------- --------- --------
<S> <C> <C> <C>
Income from operations before minority interests and before income from unconsolidated
joint venture $ 45,311 $ 36,087 25.56%
Add:
Real estate depreciation and amortization 30,882 21,359 44.59%
Income from unconsolidated joint venture 206 -
Less:
Gain on sale of land (68) -
Minority property partnership's share of funds from operations (211) (178) 18.54%
Preferred allocation (8,303) (1,505) -
--------- --------- --------
Funds from Operations $ 67,817 $ 55,763 21.62%
--------- --------- --------
--------- --------- --------
Funds from Operations available to common shareholders (1) $ 50,207 $ 41,053 22.30%
--------- --------- --------
--------- --------- --------
Funds from Operations per share - basic $ 0.74 $ 0.65 14.31%
--------- --------- --------
--------- --------- --------
Weighted average shares outstanding - basic 67,901 63,468 6.98%
--------- --------- --------
--------- --------- --------
Funds from Operations per share - diluted $ 0.72 $ 0.64 12.50%
--------- --------- --------
--------- --------- --------
Weighted average shares outstanding - diluted 81,485 63,991 27.34%
--------- --------- --------
--------- --------- --------
</TABLE>
- ----------
(1) Based on weighted average shares for the quarter. Company's share for the
quarter ended 9/30/99 was 74.03% and 73.62% for the quarter ended 9/30/98.
RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended September 30, 1999
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic Funds from Operations $ 67,817 91,718 $ 0.74
Effect of Dilutive Securities
Convertible Preferred Units 6,649 10,377 (0.01)
Convertible Preferred Stock 1,654 2,625 -
Stock Options - 583 (0.01)
--------- ------------- ----------
Dilutive Funds from Operations (1) $ 76,120 105,303 $ 0.72
--------- ----------- -------
Company's share of Diluted Funds from Operations $ 58,902 81,485 $ 0.72
--------- ----------- -------
</TABLE>
<TABLE>
<CAPTION>
For the Three Months Ended September 30, 1998
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic Funds from Operations $ 55,763 86,208 $ 0.65
Effect of Dilutive Securities
Convertible Preferred Units - - -
Convertible Preferred Stock - - -
Stock Options - 524 (0.01)
-------- ------ ------
Dilutive Funds from Operations (1) $ 55,763 86,732 $ 0.64
-------- ------ ------
Company's share of Diluted Funds from Operations $ 41,142 63,991 $ 0.64
-------- ------ ------
</TABLE>
- ----------
(1) Based on weighted average diluted shares for the quarter. Company's share
for the quarter ended 9/30/99 was 77.38% and 73.78% for the quarter ended
9/30/98.
8
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
FINANCIAL RATIOS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
RATIOS COMPUTED FOR INDUSTRY COMPARISONS:
<S> <C>
OPERATIONAL RATIOS (1,2)
Debt Service Coverage Ratio 2.21
(EBITDA + Income from Unconsolidated Joint Ventures)/(Interest+Principal)
Interest Coverage Ratio 2.50
(EBITDA + Income from Unconsolidated Joint Venture)/Interest
Return on Shareholder's Equity 15.27%
(EBITDA - Interest)/Average Equity (book value) (%)
Return on Real Estate Investments 10.42%
(EBITDA/Average Real Estate Investments (book value)) (%)
FFO Payout Ratio 62.50%
(Dividends Declared/FFO) (%)
</TABLE>
- ----------
(1) EBITDA is equal to earnings before interest, taxes, depreciation and
amortization.
(2) FFO is calculated based on the NAREIT White Paper.
9
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
CAPITAL STRUCTURE
DEBT
(IN THOUSANDS)
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
30-SEP-99
---------
<S> <C>
Mortgage Loans $ 2,943,763
Unsecured Line of Credit 334,000
-----------
Total Debt $ 3,277,763
-----------
-----------
</TABLE>
EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
SHARES & UNITS STOCK $ VALUE
OUTSTANDING EQUIVALENTS EQUIVALENT (1)
----------- ----------- --------------
<S> <C> <C> <C>
Common Stock 67,903 67,903 $ 2,083,773
Preferred Stock 2,000 2,625 80,555
Operating Partnership Units 23,817 23,817 730,884
Preferred Operating Partnership Units 8,713 10,376 318,414
------- -----------
Total Equity 104,721 $ 3,213,626
------- -----------
------- -----------
Total Market Capitalization $ 6,491,389
-----------
-----------
</TABLE>
- ----------
(1) Value based on September 30, 1999 closing price of $30.6875.
10
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
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 $ 7,751 642,230 150,011 407,913 212,874 1,856,984 $ 3,277,763
</TABLE>
UNSECURED LINE OF CREDIT - DUE JUNE 23, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
OUTSTANDING LETTERS OF REMAINING
FACILITY @ 9/30/1999 CREDIT CAPACITY
- -------- ----------- ------ --------
<S> <C> <C> <C>
$ 500,000 334,000 25,297 $ 140,703
</TABLE>
UNSECURED AND SECURED DEBT ANALYSIS
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED AVERAGE
% OF DEBT AVERAGE RATE MATURITY
--------- ------------ --------
<S> <C> <C> <C>
Unsecured Debt 10.19% 6.63% 0.7 years
Secured Debt 89.81% 7.06% 6.4 years
------ ---- ---
Total Debt 100.00% 7.01% 5.8 years
------ ---- ---
------ ---- ---
</TABLE>
FLOATING AND FIXED RATE DEBT ANALYSIS
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED AVERAGE
% OF DEBT AVERAGE RATE MATURITY
--------- ------------ ----------------
<S> <C> <C> <C>
Floating Rate Debt 13.67% 6.75% 1.0 years
Fixed Rate Debt 86.33% 7.06% 6.5 years
------ ---- ---
Total Debt 100.00% 7.01% 5.8 years
------ ---- ---
------ ---- ---
</TABLE>
11
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
JOINT VENTURE ANALYSIS
as of September 30, 1999
<TABLE>
<CAPTION>
ONE ONE AND TWO MARKET
FREEDOM RESTON SQUARE
SQUARE OVERLOOK NORTH COMBINED
------- ------------ ------- --------
<S> <C> <C> <C> <C>
Total Equity (1) $ 5,340 $ 45 $30,422 $35,807
------- ------- ------- -------
------- ------- ------- -------
Mortgage/Construction loans payable (1) $10,781 $17,237 $20,903 $48,921
------- ------- ------- -------
------- ------- ------- -------
BXP's ownership percentage 25.00% 25.00% 50.00%
----- ----- -----
----- ----- -----
</TABLE>
(1) Represents the Company's share.
RESULTS OF OPERATIONS FOR THE IN-SERVICE JOINT VENTURES
for the quarter ended September 30, 1999
<TABLE>
<CAPTION>
ONE AND TWO MARKET
RESTON SQUARE
OVERLOOK NORTH (1) COMBINED
----------- --------- --------
REVENUE
<S> <C> <C> <C>
Total rental revenue $2,976 $ 521 $3,497
Interest and other 9 59 68
------ ------ ------
Total revenue 2,985 580 3,565
------ ------ ------
EXPENSES
Operating 414 360 774
Interest 626 211 837
Depreciation and amortization 621 259 880
------ ------ ------
Total expenses 1,661 830 2,491
------ ------ ------
Net income $1,324 $ (250) $1,074
------ ------ ------
------ ------ ------
</TABLE>
(1) Represents the residential portion of the joint venture only.
12
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
PORTFOLIO OVERVIEW
RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY
<TABLE>
<CAPTION>
Geographic Area Office (1) R&D Industrial Total % of Total
--------------- ---------- --- ---------- ----- ----------
<S> <C> <C> <C> <C> <C>
Greater Boston 5,402,035 545,206 247,318 6,194,559 25.11%
Greater Washington, D.C. 5,068,094 (2) 1,381,010 237,195 6,686,299 27.11%
Greater San Francisco 4,496,989 143,930 280,213 4,921,132 19.95%
Midtown Manhattan 2,874,854 - - 2,874,854 11.65%
Princeton/East Brunswick, NJ 1,763,740 - - 1,763,740 7.15%
Baltimore, MD 1,166,797 - - 1,166,797 4.73%
Richmond, VA 899,717 - - 899,717 3.65%
Bucks County, PA - - 161,000 161,000 0.65%
---------- --------- ------- ---------- ------
21,672,226 2,070,146 925,726 24,668,098 100.00%
---------- --------- ------- ---------- ------
---------- --------- ------- ---------- ------
% of Total 87.86% 8.39% 3.75% 100.00%
</TABLE>
(1) Includes retail square footage of approximately 1,000,000.
(2) Includes 444,286 square feet at One and Two Reston Overlook which are
25% owned by Boston Properties.
HOTEL PROPERTIES
<TABLE>
<CAPTION>
NUMBER OF SQUARE
HOTEL PROPERTIES ROOMS FEET
- ---------------- ----- ----
<S> <C> <C>
Long Wharf Marriott, Boston, MA 402 420,000
Cambridge Center Marriott, Cambridge, MA 431 330,400
Residence Inn by Marriott, Cambridge, MA 221 187,474
----- -------
Total Hotel Properties 1,054 937,874
----- -------
----- -------
</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 16,726 5,851,221
------ ---------
Total Garage Property and Structured Parking 17,896 6,183,663
------ ---------
------ ---------
</TABLE>
13
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
PORTFOLIO OVERVIEW
PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS* FOR IN-SERVICE PROPERTIES BY
LOCATION AND TYPE OF PROPERTY FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
GEOGRAPHIC AREA OFFICE (1) R&D INDUSTRIAL HOTEL GARAGE TOTAL
--------------- ------ --- --- ---------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Greater Boston 19.1% 0.8% 0.2% 6.9% 0.4% 27.4%
Greater Washington, D.C. 20.6% 3.0% 0.2% n/a n/a 23.8%
Greater San Francisco 18.9% 0.3% 0.2% n/a n/a 19.4%
Midtown Manhattan 16.8% n/a n/a n/a n/a 16.8%
Baltimore, MD 3.8% n/a n/a n/a n/a 3.8%
Richmond, VA 3.0% n/a n/a n/a n/a 3.0%
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 87.9% 4.1% 0.7% 6.9% 0.4% 100.0%
---- --- --- --- --- -----
---- --- --- --- --- -----
</TABLE>
(1) Includes Retail Center FFO (Prudential Center Boston and Embarcadero
Center).
* 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.
14
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
OCCUPANCY ANALYSIS
SAME PROPERTY OCCUPANCY - BY LOCATION
<TABLE>
<CAPTION>
LOCATION 30-SEP-99 30-SEP-98
- -------- --------- ---------
<S> <C> <C>
Greater Boston, MA 97.7% 98.7%
Greater Washington, D.C. 97.2% 98.3%
Midtown Manhattan, NY 99.9% 99.6%
Baltimore, MD 100.0% 99.7%
Princeton/East Brunswick, NJ 98.9% 100.0%
Richmond, VA 97.1% 98.8%
Greater San Francisco, CA 94.6% 99.7%
Bucks County, PA 100.0% 100.0%
----- -----
Total Portfolio 98.1% 99.0%
----- -----
----- -----
</TABLE>
SAME PROPERTY - BY TYPE OF PROPERTY
<TABLE>
<CAPTION>
30-SEP-99 30-SEP-98
--------- ---------
<S> <C> <C>
Total Office Portfolio 99.1% 99.5%
Total R&D Portfolio 95.9% 97.6%
Total Industrial Portfolio 90.4% 95.0%
---- ----
Total Portfolio 98.1% 99.0%
---- ----
---- ----
</TABLE>
15
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
IN-SERVICE OFFICE PROPERTIES
LEASE EXPIRATIONS
<TABLE>
<CAPTION>
ANNUALIZED
RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER
YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL
EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING
- ---------- --------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1999* 417,690 $ 16,436,536 $ 16,508,686 2.02%
2000 1,359,222 37,585,403 37,911,254 6.59%
2001 2,084,867 63,176,117 63,347,347 10.11%
2002 2,066,887 78,663,677 79,295,964 10.02%
2003 1,786,015 54,427,426 55,494,982 8.66%
2004 2,245,954 73,545,051 77,536,567 10.89%
2005 1,445,473 40,148,218 43,724,371 7.01%
2006 2,500,532 80,317,308 87,693,730 12.12%
2007 1,958,780 70,960,736 71,330,774 9.49%
2008 853,117 28,925,547 27,204,415 4.14%
Thereafter 3,911,298 120,616,356 142,344,159 18.96%
</TABLE>
- ----------
* October 1, 1999 through December 31, 1999
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
30-SEP-99 30-SEP-98
--------- ---------
<S> <C> <C>
Greater Boston, MA 97.6% 99.2%
Greater Washington, D.C. 98.0% 99.7%
Midtown Manhattan, NY 99.9% 99.7%
Baltimore, MD 100.0% 99.2%
Richmond, VA 97.1% 98.8%
Princeton/East Brunswick, NJ 99.1% 100.0%
Greater San Francisco, CA 97.9% n/a
Bucks County, PA n/a n/a
----- -----
Total Office Portfolio 98.3% 98.9%
----- -----
----- -----
</TABLE>
16
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
IN-SERVICE R&D PROPERTIES
LEASE EXPIRATIONS
<TABLE>
<CAPTION>
ANNUALIZED
RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER
YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL
EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING
---------- --------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1999* 108,137 $ 1,209,394 $ 1,209,394 5.36%
2000 465,041 4,809,147 4,817,831 23.06%
2001 199,344 2,274,651 2,348,896 9.89%
2002 349,746 4,722,873 4,874,672 17.35%
2003 70,152 836,942 855,259 3.48%
2004 72,593 983,302 1,093,791 3.60%
2005 148,330 1,999,167 2,152,281 7.36%
2006 150,000 1,708,004 1,820,504 7.44%
2007 107,895 2,239,757 2,291,792 5.35%
2008 - - - 0.01%
Thereafter 345,209 5,481,741 6,694,020 17.12%
</TABLE>
- ----------
* October 1, 1999 through December 31, 1999
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
30-SEP-99 30-SEP-98
--------- ---------
<S> <C> <C>
Greater Boston, MA 100.0% 100.0%
Greater Washington, D.C. 94.0% 96.4%
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 97.9% 99.0%
Bucks County, PA n/a n/a
----- -----
Total R&D Portfolio 95.9% 98.2%
----- -----
----- -----
</TABLE>
17
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
IN-SERVICE INDUSTRIAL PROPERTIES
LEASE EXPIRATIONS
<TABLE>
<CAPTION>
ANNUALIZED
RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER
YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL
EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING
- ---------- --------------- ----------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1999* 70,029 $ 539,570 $ 539,570 8.37%
2000 249,280 1,380,551 1,380,551 29.80%
2001 70,829 361,882 361,882 8.47%
2002 - - - 0.00%
2003 147,305 972,805 1,036,857 17.61%
2004 195,076 946,510 974,928 23.32%
2005 20,500 125,065 140,199 2.45%
2006 - - - 0.00%
2007 - - - 0.00%
2008 83,608 728,226 728,226 9.98%
Thereafter - - - 0.00%
</TABLE>
- ----------
* October 1, 1999 through December 31, 1999
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
30-SEP-99 30-SEP-98
--------- ---------
<S> <C> <C>
Greater Boston, MA 93.0% 93.0%
Greater Washington, D.C. 78.2% 87.8%
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 92.9% 100.0%
Bucks County, PA 100.0% 100.0%
----- -----
Total Industrial Portfolio 90.4% 95.0%
----- -----
----- -----
</TABLE>
18
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
GRAND TOTAL OF ALL
IN-SERVICE PROPERTIES
LEASE EXPIRATION
<TABLE>
<CAPTION>
ANNUALIZED
RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER
YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL
EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING
---------- --------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1999* 595,856 $ 18,185,500 $ 18,257,650 2.54%
2000 2,073,543 43,775,101 44,109,636 8.83%
2001 2,355,040 65,812,650 66,058,125 10.03%
2002 2,416,633 83,386,550 84,170,636 10.29%
2003 2,003,472 56,237,173 57,387,098 8.53%
2004 2,513,623 75,474,863 79,605,286 10.70%
2005 1,614,303 42,272,450 46,016,851 6.87%
2006 2,650,532 82,025,312 89,514,234 11.29%
2007 2,066,675 73,200,493 73,622,566 8.80%
2008 936,725 29,653,773 27,932,641 3.99%
Thereafter 4,256,507 126,098,097 149,038,179 18.13%
</TABLE>
* October 1, 1999 through December 31, 1999
OCCUPANCY BY LOCATION
<TABLE>
<CAPTION>
30-SEP-99 30-SEP-98
--------- ---------
<S> <C> <C>
Greater Boston, MA 97.6% 99.0%
Greater Washington, D.C. 96.5% 98.5%
Midtown Manhattan, NY 99.9% 99.6%
Baltimore, MD 100.0% 99.2%
Richmond, VA 97.1% 98.8%
Princeton/East Brunswick, NJ 99.1% 100.0%
Greater San Francisco, CA 97.6% 99.7%
Bucks County, PA 100.0% 100.0%
----- -----
Total Portfolio 97.8% 98.5%
----- -----
----- -----
</TABLE>
19
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
HOTEL PERFORMANCE
SAME PROPERTY HOTELS
Long Wharf Marriott - Boston
<TABLE>
<CAPTION>
THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT
1999 1998 CHANGE 1999 1998 CHANGE
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 92.90% 90.90% 2.20% 89.30% 89.00% 0.3%
Average Daily Rate $ 267.80 $ 254.47 5.24% $ 238.67 $ 228.57 4.4%
REVPAR $ 248.79 $ 231.31 7.56% $ 213.13 $ 203.43 4.8%
</TABLE>
CAMBRIDGE CENTER MARRIOTT
<TABLE>
<CAPTION>
THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT
1999 1998 CHANGE 1999 1998 CHANGE
---- ---- ------ ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 88.50% 90.40% -2.10% 85.90% 86.10% -0.2%
Average Daily Rate $ 200.33 $ 192.13 4.27% $ 187.70 $ 183.07 2.5%
REVPAR $ 177.29 $ 173.69 2.07% $ 161.23 $ 157.62 2.3%
</TABLE>
TOTAL SAME PROPERTY HOTEL PERFORMANCE
<TABLE>
<CAPTION>
THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT
1999 1998 CHANGE 1999 1998 CHANGE
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 90.60% 90.60% 0.00% 87.50% 87.50% 0.0%
Average Daily Rate $ 232.89 $ 222.21 4.81% $ 212.30 $ 205.03 3.5%
REVPAR $ 211.79 $ 201.50 5.11% $ 186.28 $ 179.73 3.6%
</TABLE>
NEWLY PLACED-IN-SERVICE HOTEL
Residence Inn by Marriott
<TABLE>
<CAPTION>
THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT
1999 1998 CHANGE 1999 1998 CHANGE
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Occupancy 91.40% N/A N/A 83.90% N/A N/A
Average Daily Rate $ 164.61 N/A N/A $ 155.59 N/A N/A
REVPAR $ 150.45 N/A N/A $ 130.54 N/A N/A
</TABLE>
20
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
SAME PROPERTY PERFORMANCE
OFFICE, R&D, INDUSTRIAL AND HOTEL PROPERTIES
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL HOTEL GARAGE TOTAL
------ --- ---------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Number of Properties 55 32 9 2 1 99
Square feet 11,640,240 2,070,146 925,726 750,400 332,442 15,718,954
Percent of in-service properties 53.7% 100.0% 100.0% 80.0% 100% 55.8%
Occupancy @ 9/30/98 99.5% 97.6% 95.0% - - 99.0%
Occupancy @ 9/30/99 99.1% 95.9% 90.4% - - 98.1%
Percent change from 3rd quarter 1999
over 3rd quarter 1998:
Revenue 4.9% 7.5% -8.7% 11.2% 62.6% 5.5%
Expense 4.5% -10.0% -31.5% 28.6% 60.1% 4.2%
Net Operating Income 5.0% 13.6% 0.9% 9.1% 63.4% 6.1%
</TABLE>
SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL TOTAL
------ --- ---------- -----
<S> <C> <C> <C> <C>
Vacant space available @ 7/1/99 (sf) 133,997 74,896 89,099 297,992
Square footage of leases expiring or
terminated 7/1/99-9/30/99 192,047 93,200 6,125 291,372
Total space for lease (sf) 326,044 168,096 95,224 589,364
New tenants (sf) 115,690 21,238 6,125 143,053
Renewals (sf) 98,909 60,881 - 159,790
Total space leased (sf) 214,599 82,119 6,125 302,843
Space available @ 9/30/99 (sf) 111,445 85,977 89,099 286,521
Net increase (decrease) in leased space (sf) 22,552 (11,081) - 11,471
Average lease term (months) 62 22 12 51
2nd generation TI/Comm PSF $ 8.01 $ 1.48 $ - $ 6.08
Increase in 2nd generation net rents (2) 37.7% 6.2% 0.0% 31.6%
</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.)
21
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
ALL "IN-SERVICE" PROPERTIES - QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
OFFICE R&D INDUSTRIAL TOTAL
------ --- ---------- -----
<S> <C> <C> <C> <C>
Vacant space available @ 7/1/99 (sf) 382,881 74,896 89,099 546,876
Square footage of leases expiring or
terminated 7/1/99-9/30/99 347,318 93,200 6,125 446,643
------------ ------------ ------------ ------------
Total space for lease (sf) 730,199 168,096 95,224 993,519
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
New tenants (sf) 298,905 21,238 6,125 326,268
Renewals (sf) 107,576 60,881 - 168,457
------------ ------------ ------------ ------------
Total space leased (sf) 406,481 82,119 6,125 494,725
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Space available @ 9/30/99 (sf) 323,718 85,977 89,099 498,794
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net increase/(decrease) in leased space (sf) 59,163 (11,081) - 48,082
Average lease term (months) 62 22 12 55
2nd generation TI/Comm PSF $ 13.35 $ 1.48 $ - $ 11.22
Increase in 2nd generation net rents (1) 43.37% 5.68% 0.00% 38.32%
</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).
22
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
HISTORICALLY GENERATED CAPITAL EXPENDITURES,
TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
HISTORICAL CAPITAL EXPENDITURES
<TABLE>
<CAPTION>
1993 1994 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Recurring capital expenditures $1,547 $1,812 $1,618 $1,083
------ ------ ------ ------
------ ------ ------ ------
Hotel improvements, equipment upgrades
and replacements $ 836 $1,917 $4,420 $3,041
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
1/1-9/30
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Recurring capital expenditures $1,125 $3,543 $6,838
------ ------ ------
------ ------ ------
Hotel improvements, equipment upgrades
and replacements $2,625 $3,872 $1,702
------ ------ ------
------ ------ ------
</TABLE>
2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS
<TABLE>
<CAPTION>
1993 1994 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Office
Square feet 451,295 690,459 768,459 970,072
----------- ----------- ----------- -----------
Tenant improvement and lease commissions p.s.f $ 8.45 $ 9.45 $ 10.66 $ 11.40
----------- ----------- ----------- -----------
R&D
Square feet 166,957 276,332 177,073 337,676
----------- ----------- ----------- -----------
Tenant improvement and lease commissions p.s.f $ 5.53 $ 0.68 $ 6.99 $ 10.45
----------- ----------- ----------- -----------
Industrial
Square feet 241,500 132,521 308,388 128,148
----------- ----------- ----------- -----------
Tenant improvement and lease commissions p.s.f $ 0.28 $ 3.32 $ 1.00 $ 1.71
----------- ----------- ----------- -----------
Average tenant improvement and lease commission p.s.f $ 5.59 $ 6.51 $ 7.77 $ 10.31
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
1/1-9/30
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Office
Square feet 1,016,427 648,291 1,461,987
---------- -------- ----------
Tenant improvement and lease commissions p.s.f. $ 10.83 $ 9.82 $ 10.79
---------- -------- ----------
R&D
Square feet 169,878 113,428 109,120
---------- -------- ----------
Tenant improvement and lease commissions p.s.f. $ 2.22 $ 3.32 $ 1.52
---------- -------- ----------
Industrial
Square feet 258,795 320,608 100,058
---------- -------- ----------
Tenant improvement and lease commissions p.s.f. $ 0.99 $ 1.13 $ 0.49
---------- -------- ----------
Average tenant improvement and lease commission p.s.f. $ 8.06 $ 6.57 $ 9.57
---------- -------- ----------
---------- -------- ----------
</TABLE>
23
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING
AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
ANTICIPATED
INITIAL FUTURE
PROPERTY DATE ACQUIRED SQUARE FEET INVESTMENT INVESTMENT
-------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
ACQUISITIONS
CLASS A OFFICE BUILDINGS
Embarcadero Center Nov-98/Feb-99 4,009,536 $ 1,216,000,000 $ 37,710,000
Sumner Square Mar-99 205,391 32,600,000 3,500,000
510 Carnegie Center Apr-99 234,160 48,000,000 -
206 Carnegie Center Jul-99 161,763 27,000,000 -
The Gateway Aug-99 487,453 117,600,000 2,500,000
---------- ---------------- -------------
TOTAL VALUE CREATION PIPELINE - 5,098,303 $ 1,441,200,000 $ 43,710,000
---------- ---------------- -------------
---------- ---------------- -------------
ACQUISITIONS
</TABLE>
<TABLE>
<CAPTION>
TOTAL CURRENT
PROPERTY INVESTMENT OCCUPANCY
-------- ---------- ---------
<S> <C> <C>
ACQUISITIONS
CLASS A OFFICE BUILDINGS
Embarcadero Center $1,253,710,000 98%
Sumner Square 36,100,000 67%
510 Carnegie Center 48,000,000 100%
206 Carnegie Center 27,000,000 100%
The Gateway 120,100,000 96%
-------------- ---
TOTAL VALUE CREATION PIPELINE -
ACQUISITIONS $1,484,910,000 97%
-------------- ---
-------------- ---
</TABLE>
REPOSITIONS PLACED IN SERVICE DURING 1999
<TABLE>
<CAPTION>
ANTICIPATED
DATE PLACED INITIAL ADDITIONAL TOTAL PERCENT
IN SERVICE SQUARE FEET INVESTMENT COSTS TO DATE INVESTMENT LEASED
---------- ----------- ---------- ------------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
CLASS A OFFICE BUILDING
1301 New York Avenue Feb-99 177,249 $ 28,000,000 $ 14,313,912 $ 47,800,000 100%
</TABLE>
24
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS
AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
ESTIMATED
PLACED ANTICIPATED CURRENT
IN SERVICE # OF SQUARE INVESTMENT TOTAL PERCENTAGE
DEVELOPMENT PROPERTIES DATE LOCATION BUILDINGS FEET TO DATE INVESTMENT LEASED (3)
- ---------------------- ---------- -------- --------- ------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A OFFICE BUILDINGS
181 Spring Street Q41999 Lexington, MA 1 53,306 $ 10,505,487 $ 12,000,000 41%
One Freedom Square
(25% ownership) Q4 1999 Reston, VA 1 406,980 16,079,000 20,750,000(1) 90%
502 Carnegie Center Q4 1999 Princeton, NJ 1 114,910 14,345,690 19,300,000 95%
Orbital Sciences Phase I -
Building 1 & 2 Q2 2000 Loudon, VA 2 185,028 11,671,902 33,100,000 100%
Market Square North
(50% ownership) Q4 2000 Washington, DC 1 409,843 52,128,874 70,829,000(2) 25%
New Dominion Tech Park -
Building 1 Q4 2000 Herndon, VA 1 235,201 8,688,952 48,800,000 100%
302 Carnegie Center Q4 2000 Princeton, NJ 1 64,565 1,720,685 12,900,000 0%
111 Huntington Avenue -
Prudential Center Q3 2001 Boston, MA 1 890,000 60,340,600 290,000,000 28%(4)
5 Times Square Q4 2001 New York, NY 1 1,099,154 174,612,011 545,000,000 100%
-- --------- -------------- -------------- ---
TOTAL DEVELOPMENT PROPERTIES 10 3,458,987 $ 350,093,201 $1,052,679,000 68%
-- --------- -------------- -------------- ---
-- --------- -------------- -------------- ---
</TABLE>
DEVELOPMENTS PLACED-IN-SERVICE DURING 1999
<TABLE>
<CAPTION>
PLACED # OF INVESTMENT TOTAL PERCENTAGE
IN SERVICE DATE LOCATION BUILDINGS SQUARE FEET TO DATE INVESTMENT LEASED (3)
--------------- -------- --------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A OFFICE BUILDINGS
One and Two Reston Overlook
(25% ownership) Q1-Q2 1999 Reston, VA 2 444,286 $ 15,781,510 $ 15,812,500 (1) 100%
200 West Street Q2 1999 Waltham, MA 1 248,341 40,611,184 47,000,000 95%
Eight Cambridge Center Q2 1999 Cambridge, MA 1 177,226 26,067,695 26,400,000 100%
The Arboretum Q2 1999 Reston, VA 1 95,584 14,761,225 15,200,000 100%
HOTELS
Residence Inn by Marriott Q1 1999 Cambridge, MA 1 187,474 27,238,376 32,000,000 n/a
-- --------- ------------ ------------ ---
TOTAL 6 1,152,911 $124,459,990 $136,412,500 99%
-- --------- ------------ ------------ ---
-- --------- ------------ ------------ ---
</TABLE>
(1) Represents 25% of the total anticipated project-level investment.
(2) Represents 50% of the total anticipated project-level investment including
residential.
(3) As of October 18, 1999.
(4) 29% of available office space.
25
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
VALUE CREATION PIPELINE - OWNED LAND PARCELS
AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
NO. OF DEVELOPABLE
LOCATION PARCELS ACREAGE SQUARE FEET
- -------- ------- ------- -----------
<S> <C> <C> <C>
S. San Francisco, CA 2 3.6 275,000
Andover, MA 2 19.9 230,000
Boston, MA 4 2.5 839,000
Waltham, MA 2 32.0 418,000
Rockville, MD 7 128.3 2,331,000
Dulles, VA 6 91.1 1,400,000
Herndon, VA 1 17.0 238,558
Reston, VA 2 8.8 775,000
Springfield, VA 3 9.4 130,000
-- ----- ---------
29 312.6 6,636,558
-- ----- ---------
-- ----- ---------
</TABLE>
VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS
AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
NO. OF DEVELOPABLE
LOCATION PARCELS ACREAGE SQUARE FEET
- -------- ------- ------- -----------
<S> <C> <C> <C>
Princeton, NJ 14 149.9 1,921,335
Cambridge, MA 1 2.6 209,000
New York, NY 1 0.5 1,194,918
--- ----- ---------
16 153.0 3,325,253
--- ----- ---------
--- ----- ---------
</TABLE>
26
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
ACQUISITION PROPERTY PROFILE
PROPERTY NAME: The Gateway
PRODUCT TYPE: Class A Office & Development Sites
LOCATION: South San Francisco, CA
DESCRIPTION: Two class A office buildings -
Building 601 - 12 stories 207,234 square feet
Building 681 - 16 stories 280,219 square feet
Entitlements to build additional 275,000 square feet of
buildings
SIZE: 487,453 net rentable square feet
YEAR CONSTRUCTED: 1984/1986
PURCHASE PRICE: $117.6 million
CLOSING DATE: August 31, 1999
FUTURE INVESTMENT: $2.5 million
OCCUPANCY LEVEL: 96%
NUMBER OF TENANTS: 43
FUNDING SOURCE: Line of Credit and Note Payable
LARGEST TENANT:
COMPANY: Cellular One SIZE: 185,451 s.f.
LEASE EXPIRATION: 10/2003
27
<PAGE>
BOSTON PROPERTIES, INC.
THIRD QUARTER 1999
ACQUISITION PROPERTY PROFILE
PROPERTY NAME: 206 Carnegie Center
PRODUCT TYPE: Class A Office Building
LOCATION: Carnegie Center, Princeton, NJ
DESCRIPTION: 5 Stories of Class A Office Space
SIZE: 161,763 net rentable square feet
YEAR CONSTRUCTED: 1998
PURCHASE PRICE: $27 million
CLOSING DATE: July 9, 1999
FUTURE INVESTMENT: $ --
OCCUPANCY LEVEL: 100%
NUMBER OF TENANTS: 1
FUNDING SOURCE: Cash
LARGEST TENANT: Covance, Inc.
COMPANY: Covance, Inc. SIZE: 161,763 s.f.
LEASE EXPIRATION: 01/2014
28
<PAGE>
Exhibit 99.2
BOSTON PROPERTIES, INC.
800 BOYLSTON STREET, SUITE 400
BOSTON, MA 02199
(NYSE: BXP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
- -------------- --------------------------------
Elaine Quinlan Marianne Stewart - General Info. (212) 661-8030
Investor Relations Claire Koeneman - Analyst (312) 266-7800
(617) 236-3300 Judith Sylk-Siegel - Media (212) 661-8030
IMMEDIATE RELEASE:
- ------------------
October 25, 1999
BOSTON PROPERTIES, INC. ANNOUNCES THIRD QUARTER 1999 RESULTS
------------------------------------------------------------
REPORTS FFO OF $0.72 PER SHARE
------------------------------
BOSTON, MA, OCTOBER 25, 1999 -- Boston Properties, Inc. (NYSE: BXP) today
reported results for the third quarter and nine months ended September 30, 1999.
Funds from Operations (FFO) for the quarter ended September 30, 1999 were $50.2
million, or $0.74 per share basic and $0.72 per share diluted, compared to FFO
of $41.1 million, or $0.65 per share basic and $0.64 per share diluted, for the
quarter ended September 30, 1998. This represents a 12.5% year-to-year increase
in diluted FFO per share. The weighted average number of basic and diluted
shares outstanding totaled 67,900,734 and 81,485,166, respectively, for the
quarter ended September 30, 1999 and 63,467,722 and 63,991,255, respectively,
for the same quarter last year.
FFO for the nine months ended September 30, 1999 were $144.6 million, or $2.20
per share basic and $2.15 per share diluted, compared to FFO of $109.5 million,
or $1.82 per share basic and $1.80 per share diluted, for the nine months ended
September 30, 1998. This represents a 19.4% year-to-year increase in diluted FFO
per share. The weighted average number of basic and diluted shares outstanding
totaled 65,672,095 and 76,674,436, respectively, for the nine months ended
September 30, 1999 and 60,101,500 and, 60,743,896, respectively, for the same
period last year.
Revenues were $202.2 million for the quarter and $581.5 million for the nine
months ended September 30, 1999, compared to revenues of $140.2 million and
$343.8 million for the same periods in 1998. Net income available to common
shareholders was $27.4 million for the quarter and $79.6 million for the nine
months ended September 30, 1999, compared to $25.3
- - MORE - -
<PAGE>
Boston Properties, Inc. Announces Third Quarter 1999 Results
October 25, 1999
Page 2
million and $74.9 million for the same periods in 1998. Net income per share
available to common shareholders for the quarter ended September 30, 1999 and
1998 was $0.40 per share basic and diluted. Income per share before
extraordinary gain for the nine months ended September 30, 1999 was $1.21 per
share basic and $1.20 per share diluted, compared to $1.19 per share basic and
$1.17 per share diluted for the same period last year.
The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the quarter ended September
30, 1999. In the opinion of management, all adjustments considered necessary for
a fair presentation of these reported results have been made.
As of September 30, 1999, the Company's portfolio consisted of 132 properties
comprised of more than 35.3 million square feet, including 10 properties under
development totaling 3.5 million square feet. The overall occupancy rate for the
properties in service as of September 30, 1999 was 97.8%.
Additional highlights of the third quarter include:
- - Acquisition of 206 Carnegie Center, a 161,763 net rentable square foot
Class A office building in Princeton, New Jersey for $27.0 million on July
9, 1999. The property is currently 100% leased.
- - Acquisition of the leasehold interest and ground rent credits at 5 Times
Square in New York, New York for approximately $152.5 million. The
development will consist of a 37-floor, 1.1 million square foot office
tower that has been 100% pre-leased to Ernst & Young.
- - Acquisition of The Gateway, two Class A office buildings with 487,453 net
rentable square feet and two development sites for approximately $117.6
million on August 31, 1999, in South San Francisco, California. The two
office buildings are currently 96.0% leased.
- - Closing of mortgage financing secured by Eight Cambridge Center in the
amount of $29.0 million at a rate of 7.73% and maturing in July 2010.
- - Closing of mortgage financing secured by The Gateway in the amount of $75.0
million at a rate of LIBOR + 1.60% and maturing in September 2000.
- - Closing of a construction loan secured by the 111 Huntington Avenue
development in the amount of $203.0 million at a rate of LIBOR + 2.00% and
maturing in September 2002.
- - Closing of a construction loan secured by the Orbital Sciences Phase I
development in the amount of $27.0 million at a rate of LIBOR + 1.65% and
maturing in August 2002.
- - MORE - -
<PAGE>
Boston Properties, Inc. Announces Third Quarter 1999 Results
October 25, 1999
Page 3
Boston Properties is a fully integrated, self-administered and self-managed real
estate investment trust that develops, redevelops, acquires, manages, operates
and owns a diverse portfolio of Class A office, industrial and hotel properties.
The Company is one of the largest owners and developers of Class A office
properties in the United States, concentrated in the Northeast Corridor from
Virginia to Greater Boston and in Greater San Francisco.
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 visit 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.
Financial tables follow.
###
<PAGE>
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
(unaudited and in thousands)
<S> <C> <C> <C> <C>
Income before minority interests $ 45,311 $ 36,087 $ 136,058 $ 96,744
Add:
Real estate depreciation and amortization 30,882 21,359 87,669 50,718
Income from unconsolidated joint venture 206 -- 648 --
Less:
Gain on sale of land (68) -- (68) --
Minority property partnership's share
of Funds from Operations (211) (178) (3,502) (460)
Preferred allocation (8,303) (1,505) (23,808) (1,505)
--------- --------- --------- ---------
Funds from operations $ 67,817 $ 55,763 $ 196,997 $ 145,497
--------- --------- --------- ---------
--------- --------- --------- ---------
Funds from operations available to common shareholders $ 50,207 $ 41,053 $ 144,569 $ 109,472
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average shares outstanding - basic 67,901 63,468 65,672 60,102
--------- --------- --------- ---------
--------- --------- --------- ---------
Per share - basic $ 0.74 $ 0.65 $ 2.20 $ 1.82
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average shares outstanding - diluted 81,485 63,991 76,674 60,744
--------- --------- --------- ---------
--------- --------- --------- ---------
Per share - diluted $ 0.72 $ 0.64 $ 2.15 $ 1.80
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenue
Rental:
Base rent $ 166,582 $ 119,535 $ 476,261 $ 286,610
Recoveries from tenants 19,212 13,665 53,878 33,027
Parking and other 11,261 3,174 34,272 5,880
--------- --------- --------- ---------
Total rental revenue 197,055 136,374 564,411 325,517
Development and management services 3,706 2,734 11,364 8,893
Interest and other 1,444 1,069 5,710 9,410
--------- --------- --------- ---------
Total revenue 202,205 140,177 581,485 343,820
--------- --------- --------- ---------
Expenses
Operating 66,665 43,255 184,321 97,188
General and administrative 7,383 6,129 21,345 16,750
Interest 51,768 33,183 151,446 81,926
Depreciation and amortization 31,078 21,523 88,315 51,212
--------- --------- --------- ---------
Total expenses 156,894 104,090 445,427 247,076
--------- --------- --------- ---------
Income before minority interests and joint venture income 45,311 36,087 136,058 96,744
Minority interests in property partnerships (179) (161) (4,473) (390)
Income from unconsolidated joint venture 206 -- 648 --
--------- --------- --------- ---------
Income before minority interest in Operating Partnership 45,338 35,926 132,233 96,354
Minority interest in Operating Partnership (16,266) (10,585) (48,483) (25,025)
--------- --------- --------- ---------
Income before extraordinary item 29,072 25,341 83,750 71,329
Extraordinary gain, net -- -- -- 3,564
--------- --------- --------- ---------
Income before preferred dividend 29,072 25,341 83,750 74,893
Preferred dividend (1,654) -- (4,175) --
--------- --------- --------- ---------
Net income available to common shareholders $ 27,418 $ 25,341 $ 79,575 $ 74,893
--------- --------- --------- ---------
--------- --------- --------- ---------
Basic earnings per share:
Income before extraordinary gain $ 0.40 $ 0.40 $ 1.21 $ 1.19
Extraordinary gain, net -- -- -- 0.06
--------- --------- --------- ---------
Net income available to common shareholders $ 0.40 $ 0.40 $ 1.21 $ 1.25
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average number of common shares outstanding 67,901 63,468 65,672 60,101
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted earnings per share:
Income before extraordinary gain $ 0.40 $ 0.40 $ 1.20 $ 1.17
Extraordinary gain, net -- -- -- 0.06
--------- --------- --------- ---------
Net income available to common shareholders $ 0.40 $ 0.40 $ 1.20 $ 1.23
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average number of common and common
equivalent shares outstanding 68,484 63,991 66,280 60,744
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C>
ASSETS
Real estate: $ 5,505,625 $ 4,917,193
Less: accumulated depreciation (441,575) (357,384)
----------- -----------
Total real estate 5,064,050 4,559,809
Cash and cash equivalents 50,415 12,166
Notes receivable -- 420,143
Escrows 25,886 19,014
Tenant and other receivables, net 21,420 40,830
Accrued rental income, net 78,413 64,251
Deferred charges, net 49,590 46,029
Prepaid expenses and other assets 29,194 26,058
Investments in joint ventures 35,807 46,787
----------- -----------
Total assets $ 5,354,775 $ 5,235,087
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,943,763 $ 2,653,581
Notes payable -- 420,143
Unsecured line of credit 334,000 15,000
Accounts payable and accrued expenses 49,070 42,897
Dividends payable 48,483 40,494
Accrued interest payable 9,611 7,307
Other liabilities 34,919 27,950
----------- -----------
Total liabilities 3,419,846 3,207,372
----------- -----------
Commitments and contingencies -- --
Minority interests 780,910 1,079,234
Series A Convertible Redeemable Preferred Stock, liquidation
preference $50.00 per share, 2,000,000 shares issued
and outstanding 100,000 --
Stockholders' equity:
Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.01 par value, 250,000,000 shares
authorized, 67,902,967 and 63,527,819 issued and
outstanding in 1999 and 1998, respectively 679 635
Additional paid-in capital 1,068,050 955,711
Dividends in excess of earnings (14,710) (7,865)
----------- -----------
Total stockholders' equity 1,054,019 948,481
----------- -----------
Total liabilities and stockholders' equity $ 5,354,775 $ 5,235,087
----------- -----------
----------- -----------
</TABLE>
<PAGE>
BOSTON PROPERTIES, INC
PORTFOLIO OCCUPANCY
<TABLE>
<CAPTION>
Occupancy by Location
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
Greater Boston 97.6% 97.0%
Greater Washington, DC 96.5% 98.5%
Midtown Manhattan 99.9% 99.9%
Baltimore, MD 100.0% 99.8%
Richmond, VA 97.1% 98.8%
Princeton/East Brunswick, NJ 99.1% 98.7%
Greater San Francisco 97.6% 98.5%
Bucks County, PA 100.0% 100.0%
------------------ -----------------
Total Portfolio 97.8% 98.4%
------------------ -----------------
------------------ -----------------
<CAPTION>
Occupancy by Type
September 30, 1999 December 31, 1998
------------------ -----------------
Class A Office Portfolio 98.3% 98.8%
R&D Portfolio 95.9% 99.2%
Industrial Portfolio 90.4% 89.3%
------------------ -----------------
Total Portfolio 97.8% 98.4%
------------------ -----------------
------------------ -----------------
</TABLE>
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