ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Boston Properties, Inc. | Delaware | 04-2473675 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
Boston Properties Limited Partnership | Delaware | 04-3372948 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Boston Properties, Inc. | Common Stock, par value $0.01 per share | 153,857,334 |
(Registrant) | (Class) | (Outstanding on May 3, 2017) |
• | enhances investors’ understanding of BXP and BPLP by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminates duplicative disclosure and provides a more concise and readable presentation because a substantial portion of the disclosure applies to both BXP and BPLP; and |
• | creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | Item 1. Financial Statements (unaudited), which includes the following specific disclosures for BXP and BPLP: |
• | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable; and |
• | Item 2. Liquidity and Capital Resources includes separate reconciliations of amounts to each entity’s financial statements, where applicable. |
Page | ||
ITEM 1. | ||
Boston Properties, Inc. | ||
Boston Properties Limited Partnership | ||
Boston Properties, Inc. and Boston Properties Limited Partnership | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
(in thousands, except for share and par value amounts) | |||||||
ASSETS | |||||||
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,908,551 and $6,760,078 at March 31, 2017 and December 31, 2016, respectively) | $ | 20,392,260 | $ | 20,147,263 | |||
Less: accumulated depreciation (amounts related to VIEs of $(774,077) and $(758,640) at March 31, 2017 and December 31, 2016, respectively) | (4,302,283 | ) | (4,222,235 | ) | |||
Total real estate | 16,089,977 | 15,925,028 | |||||
Cash and cash equivalents (amounts related to VIEs of $271,494 and $253,999 at March 31, 2017 and December 31, 2016, respectively) | 302,939 | 356,914 | |||||
Cash held in escrows (amounts related to VIEs of $4,901 and $4,955 at March 31, 2017 and December 31, 2016, respectively) | 51,244 | 63,174 | |||||
Investments in securities | 25,817 | 23,814 | |||||
Tenant and other receivables (amounts related to VIEs of $16,652 and $23,525 at March 31, 2017 and December 31, 2016, respectively) | 73,012 | 92,548 | |||||
Accrued rental income (amounts related to VIEs of $227,638 and $224,185 at March 31, 2017 and December 31, 2016, respectively) | 812,124 | 799,138 | |||||
Deferred charges, net (amounts related to VIEs of $277,519 and $290,436 at March 31, 2017 and December 31, 2016, respectively) | 666,677 | 686,163 | |||||
Prepaid expenses and other assets (amounts related to VIEs of $68,910 and $42,718 at March 31, 2017 and December 31, 2016, respectively) | 150,905 | 129,666 | |||||
Investments in unconsolidated joint ventures | 793,932 | 775,198 | |||||
Total assets | $ | 18,966,627 | $ | 18,851,643 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Mortgage notes payable, net (amounts related to VIEs of $2,004,163 and $2,018,483 at March 31, 2017 and December 31, 2016, respectively) | $ | 2,046,959 | $ | 2,063,087 | |||
Unsecured senior notes, net | 7,248,152 | 7,245,953 | |||||
Unsecured line of credit | 105,000 | — | |||||
Mezzanine notes payable (amounts related to VIEs of $306,734 and $307,093 at March 31, 2017 and December 31, 2016, respectively) | 306,734 | 307,093 | |||||
Outside members’ notes payable (amounts related to VIEs of $180,000 at March 31, 2017 and December 31, 2016) | 180,000 | 180,000 | |||||
Accounts payable and accrued expenses (amounts related to VIEs of $133,749 and $110,457 at March 31, 2017 and December 31, 2016, respectively) | 313,723 | 298,524 | |||||
Dividends and distributions payable | 130,418 | 130,308 | |||||
Accrued interest payable (amounts related to VIEs of $171,395 and $162,226 at March 31, 2017 and December 31, 2016, respectively) | 266,714 | 243,933 | |||||
Other liabilities (amounts related to VIEs of $181,535 and $175,146 at March 31, 2017 and December 31, 2016, respectively) | 446,489 | 450,821 | |||||
Total liabilities | 11,044,189 | 10,919,719 | |||||
Commitments and contingencies | — | — | |||||
Equity: | |||||||
Stockholders’ equity attributable to Boston Properties, Inc.: | |||||||
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding | — | — | |||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; | |||||||
5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 200,000 | 200,000 | |||||
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,928,131 and 153,869,075 issued and 153,849,231 and 153,790,175 outstanding at March 31, 2017 and December 31, 2016, respectively | 1,538 | 1,538 | |||||
Additional paid-in capital | 6,339,970 | 6,333,424 | |||||
Dividends in excess of earnings | (712,270 | ) | (693,694 | ) | |||
Treasury common stock at cost, 78,900 shares at March 31, 2017 and December 31, 2016 | (2,722 | ) | (2,722 | ) | |||
Accumulated other comprehensive loss | (50,983 | ) | (52,251 | ) | |||
Total stockholders’ equity attributable to Boston Properties, Inc. | 5,775,533 | 5,786,295 | |||||
Noncontrolling interests: | |||||||
Common units of Boston Properties Limited Partnership | 617,252 | 614,982 | |||||
Property partnerships | 1,529,653 | 1,530,647 | |||||
Total equity | 7,922,438 | 7,931,924 | |||||
Total liabilities and equity | $ | 18,966,627 | $ | 18,851,643 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands, except for per share amounts) | |||||||
Revenue | |||||||
Rental | |||||||
Base rent | $ | 503,562 | $ | 536,128 | |||
Recoveries from tenants | 89,164 | 89,586 | |||||
Parking and other | 25,610 | 24,825 | |||||
Total rental revenue | 618,336 | 650,539 | |||||
Hotel revenue | 7,420 | 8,757 | |||||
Development and management services | 6,472 | 6,689 | |||||
Total revenue | 632,228 | 665,985 | |||||
Expenses | |||||||
Operating | |||||||
Rental | 228,287 | 219,172 | |||||
Hotel | 7,091 | 7,634 | |||||
General and administrative | 31,386 | 29,353 | |||||
Transaction costs | 34 | 25 | |||||
Depreciation and amortization | 159,205 | 159,448 | |||||
Total expenses | 426,003 | 415,632 | |||||
Operating income | 206,225 | 250,353 | |||||
Other income (expense) | |||||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | |||||
Interest and other income | 614 | 1,505 | |||||
Gains from investments in securities | 1,042 | 259 | |||||
Interest expense | (95,534 | ) | (105,309 | ) | |||
Income before gains on sales of real estate | 115,431 | 148,599 | |||||
Gains on sales of real estate | 133 | 67,623 | |||||
Net income | 115,564 | 216,222 | |||||
Net income attributable to noncontrolling interests | |||||||
Noncontrolling interests in property partnerships | (4,424 | ) | (10,464 | ) | |||
Noncontrolling interest—common units of Boston Properties Limited Partnership | (11,432 | ) | (21,393 | ) | |||
Net income attributable to Boston Properties, Inc. | 99,708 | 184,365 | |||||
Preferred dividends | (2,625 | ) | (2,618 | ) | |||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 97,083 | $ | 181,747 | |||
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders: | |||||||
Net income | $ | 0.63 | $ | 1.18 | |||
Weighted average number of common shares outstanding | 153,860 | 153,626 | |||||
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders: | |||||||
Net income | $ | 0.63 | $ | 1.18 | |||
Weighted average number of common and common equivalent shares outstanding | 154,214 | 153,917 | |||||
Dividends per common share | $ | 0.75 | $ | 0.65 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income | $ | 115,564 | $ | 216,222 | |||
Other comprehensive income (loss): | |||||||
Effective portion of interest rate contracts | 180 | (58,646 | ) | ||||
Amortization of interest rate contracts (1) | 1,306 | 627 | |||||
Other comprehensive income (loss) | 1,486 | (58,019 | ) | ||||
Comprehensive income | 117,050 | 158,203 | |||||
Net income attributable to noncontrolling interests | (15,856 | ) | (31,857 | ) | |||
Other comprehensive income (loss) attributable to noncontrolling interests | (218 | ) | 15,427 | ||||
Comprehensive income attributable to Boston Properties, Inc. | $ | 100,976 | $ | 141,773 |
Common Stock | Preferred Stock | Additional Paid-in Capital | Dividends in Excess of Earnings | Treasury Stock, at cost | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||
Equity, December 31, 2016 | 153,790 | $ | 1,538 | $ | 200,000 | $ | 6,333,424 | $ | (693,694 | ) | $ | (2,722 | ) | $ | (52,251 | ) | $ | 2,145,629 | $ | 7,931,924 | ||||||||||||||
Redemption of operating partnership units to common stock | 23 | — | — | 793 | — | — | — | (793 | ) | — | ||||||||||||||||||||||||
Allocated net income for the year | — | — | — | — | 99,708 | — | — | 15,856 | 115,564 | |||||||||||||||||||||||||
Dividends/distributions declared | — | — | — | — | (118,012 | ) | — | — | (13,653 | ) | (131,665 | ) | ||||||||||||||||||||||
Shares issued pursuant to stock purchase plan | 3 | — | — | 373 | — | — | — | — | 373 | |||||||||||||||||||||||||
Net activity from stock option and incentive plan | 33 | — | — | 996 | — | — | — | 11,285 | 12,281 | |||||||||||||||||||||||||
Cumulative effect of a change in accounting principle | — | — | — | — | (272 | ) | — | — | (1,763 | ) | (2,035 | ) | ||||||||||||||||||||||
Contributions from noncontrolling interests in property partnerships | — | — | — | — | — | — | — | 8,145 | 8,145 | |||||||||||||||||||||||||
Distributions to noncontrolling interests in property partnerships | — | — | — | — | — | — | — | (13,635 | ) | (13,635 | ) | |||||||||||||||||||||||
Effective portion of interest rate contracts | — | — | — | — | — | — | 97 | 83 | 180 | |||||||||||||||||||||||||
Amortization of interest rate contracts | — | — | — | — | — | — | 1,171 | 135 | 1,306 | |||||||||||||||||||||||||
Reallocation of noncontrolling interest | — | — | — | 4,384 | — | — | — | (4,384 | ) | — | ||||||||||||||||||||||||
Equity, March 31, 2017 | 153,849 | $ | 1,538 | $ | 200,000 | $ | 6,339,970 | $ | (712,270 | ) | $ | (2,722 | ) | $ | (50,983 | ) | $ | 2,146,905 | $ | 7,922,438 | ||||||||||||||
Equity, December 31, 2015 | 153,580 | $ | 1,536 | $ | 200,000 | $ | 6,305,687 | $ | (780,952 | ) | $ | (2,722 | ) | $ | (14,114 | ) | $ | 2,177,492 | $ | 7,886,927 | ||||||||||||||
Redemption of operating partnership units to common stock | 13 | — | — | 446 | — | — | — | (446 | ) | — | ||||||||||||||||||||||||
Allocated net income for the year | — | — | — | — | 184,365 | — | — | 31,857 | 216,222 | |||||||||||||||||||||||||
Dividends/distributions declared | — | — | — | — | (102,461 | ) | — | — | (11,865 | ) | (114,326 | ) | ||||||||||||||||||||||
Shares issued pursuant to stock purchase plan | 3 | — | — | 332 | — | — | — | — | 332 | |||||||||||||||||||||||||
Net activity from stock option and incentive plan | 9 | — | — | 696 | — | — | — | 8,384 | 9,080 | |||||||||||||||||||||||||
Contributions from noncontrolling interests in property partnerships | — | — | — | — | — | — | — | 2,489 | 2,489 | |||||||||||||||||||||||||
Distributions to noncontrolling interests in property partnerships | — | — | — | — | — | — | — | (12,915 | ) | (12,915 | ) | |||||||||||||||||||||||
Effective portion of interest rate contracts | — | — | — | — | — | — | (43,154 | ) | (15,492 | ) | (58,646 | ) | ||||||||||||||||||||||
Amortization of interest rate contracts | — | — | — | — | — | — | 562 | 65 | 627 | |||||||||||||||||||||||||
Reallocation of noncontrolling interest | — | — | — | (438 | ) | — | — | — | 438 | — | ||||||||||||||||||||||||
Equity, March 31, 2016 | 153,605 | $ | 1,536 | $ | 200,000 | $ | 6,306,723 | $ | (699,048 | ) | $ | (2,722 | ) | $ | (56,706 | ) | $ | 2,180,007 | $ | 7,929,790 |
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 115,564 | $ | 216,222 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 159,205 | 159,448 | |||||
Non-cash compensation expense | 10,802 | 10,069 | |||||
Income from unconsolidated joint ventures | (3,084 | ) | (1,791 | ) | |||
Distributions of net cash flow from operations of unconsolidated joint ventures | 1,861 | 10,718 | |||||
Gains from investments in securities | (1,042 | ) | (259 | ) | |||
Non-cash portion of interest expense | (7,729 | ) | (10,138 | ) | |||
Gains on sales of real estate | (133 | ) | (67,623 | ) | |||
Change in assets and liabilities: | |||||||
Cash held in escrows | 6,664 | 1,940 | |||||
Tenant and other receivables, net | 19,023 | 25,018 | |||||
Accrued rental income, net | (9,158 | ) | (12,981 | ) | |||
Prepaid expenses and other assets | (21,197 | ) | 45,560 | ||||
Accounts payable and accrued expenses | (16,306 | ) | (5,209 | ) | |||
Accrued interest payable | 22,781 | 31,192 | |||||
Other liabilities | (7,090 | ) | (33,319 | ) | |||
Tenant leasing costs | (23,631 | ) | (19,867 | ) | |||
Total adjustments | 130,966 | 132,758 | |||||
Net cash provided by operating activities | 246,530 | 348,980 | |||||
Cash flows from investing activities: | |||||||
Construction in progress | (154,518 | ) | (122,940 | ) | |||
Building and other capital improvements | (43,687 | ) | (25,329 | ) | |||
Tenant improvements | (50,810 | ) | (55,739 | ) | |||
Proceeds from sales of real estate | 133 | 104,816 | |||||
Proceeds from sales of real estate placed in escrow | — | (104,696 | ) | ||||
Proceeds from sales of real estate released from escrow | — | 104,696 | |||||
Cash released from escrow for investing activities | 5,230 | — | |||||
Cash released from escrow for land sale contracts | — | 488 | |||||
Capital contributions to unconsolidated joint ventures | (17,980 | ) | (10,215 | ) | |||
Investments in securities, net | (961 | ) | (438 | ) | |||
Net cash used in investing activities | (262,593 | ) | (109,357 | ) | |||
BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Cash flows from financing activities: | |||||||
Repayments of mortgage notes payable | (5,038 | ) | (6,265 | ) | |||
Proceeds from unsecured senior notes | — | 997,080 | |||||
Borrowings on unsecured line of credit | 175,000 | — | |||||
Repayments of unsecured line of credit | (70,000 | ) | — | ||||
Payments on real estate financing transactions | (480 | ) | (781 | ) | |||
Deferred financing costs | — | (8,047 | ) | ||||
Net proceeds from equity transactions | (183 | ) | (657 | ) | |||
Dividends and distributions | (131,555 | ) | (328,567 | ) | |||
Contributions from noncontrolling interests in property partnerships | 8,145 | 2,489 | |||||
Distributions to noncontrolling interests in property partnerships | (13,801 | ) | (12,915 | ) | |||
Net cash provided by (used in) financing activities | (37,912 | ) | 642,337 | ||||
Net increase (decrease) in cash and cash equivalents | (53,975 | ) | 881,960 | ||||
Cash and cash equivalents, beginning of period | 356,914 | 723,718 | |||||
Cash and cash equivalents, end of period | $ | 302,939 | $ | 1,605,678 | |||
Supplemental disclosures: | |||||||
Cash paid for interest | $ | 92,774 | $ | 93,524 | |||
Interest capitalized | $ | 12,345 | $ | 9,269 | |||
Non-cash investing and financing activities: | |||||||
Write-off of fully depreciated real estate | $ | (49,292 | ) | $ | (17,518 | ) | |
Additions to real estate included in accounts payable and accrued expenses | $ | 44,708 | $ | (24,857 | ) | ||
Dividends and distributions declared but not paid | $ | 130,418 | $ | 113,079 | |||
Conversions of noncontrolling interests to stockholders’ equity | $ | 793 | $ | 446 | |||
Issuance of restricted securities to employees | $ | 34,592 | $ | 32,630 |
BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
(in thousands, except for unit amounts) | |||||||
ASSETS | |||||||
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,908,551 and $6,760,078 at March 31, 2017 and December 31, 2016, respectively) | $ | 19,978,869 | $ | 19,733,872 | |||
Less: accumulated depreciation (amounts related to VIEs of $(774,077) and $(758,640) at March 31, 2017 and December 31, 2016, respectively) | (4,214,265 | ) | (4,136,364 | ) | |||
Total real estate | 15,764,604 | 15,597,508 | |||||
Cash and cash equivalents (amounts related to VIEs of $271,494 and $253,999 at March 31, 2017 and December 31, 2016, respectively) | 302,939 | 356,914 | |||||
Cash held in escrows (amounts related to VIEs of $4,901 and $4,955 at March 31, 2017 and December 31, 2016, respectively) | 51,244 | 63,174 | |||||
Investments in securities | 25,817 | 23,814 | |||||
Tenant and other receivables (amounts related to VIEs of $16,652 and $23,525 at March 31, 2017 and December 31, 2016, respectively) | 73,012 | 92,548 | |||||
Accrued rental income (amounts related to VIEs of $227,638 and $224,185 at March 31, 2017 and December 31, 2016, respectively) | 812,124 | 799,138 | |||||
Deferred charges, net (amounts related to VIEs of $277,519 and $290,436 at March 31, 2017 and December 31, 2016, respectively) | 666,677 | 686,163 | |||||
Prepaid expenses and other assets (amounts related to VIEs of $68,910 and $42,718 at March 31, 2017 and December 31, 2016, respectively) | 150,905 | 129,666 | |||||
Investments in unconsolidated joint ventures | 793,932 | 775,198 | |||||
Total assets | $ | 18,641,254 | $ | 18,524,123 | |||
LIABILITIES AND CAPITAL | |||||||
Liabilities: | |||||||
Mortgage notes payable, net (amounts related to VIEs of $2,004,163 and $2,018,483 at March 31, 2017 and December 31, 2016, respectively) | $ | 2,046,959 | $ | 2,063,087 | |||
Unsecured senior notes, net | 7,248,152 | 7,245,953 | |||||
Unsecured line of credit | 105,000 | — | |||||
Mezzanine notes payable (amounts related to VIEs of $306,734 and $307,093 at March 31, 2017 and December 31, 2016, respectively) | 306,734 | 307,093 | |||||
Outside members’ notes payable (amounts related to VIEs of $180,000 at March 31, 2017 and December 31, 2016) | 180,000 | 180,000 | |||||
Accounts payable and accrued expenses (amounts related to VIEs of $133,749 and $110,457 at March 31, 2017 and December 31, 2016, respectively) | 313,723 | 298,524 | |||||
Distributions payable | 130,418 | 130,308 | |||||
Accrued interest payable (amounts related to VIEs of $171,395 and $162,226 at March 31, 2017 and December 31, 2016, respectively) | 266,714 | 243,933 | |||||
Other liabilities (amounts related to VIEs of $181,535 and $175,146 at March 31, 2017 and December 31, 2016, respectively) | 446,489 | 450,821 | |||||
Total liabilities | 11,044,189 | 10,919,719 | |||||
Commitments and contingencies | — | — | |||||
Noncontrolling interests: | |||||||
Redeemable partnership units—17,277,109 and 17,079,511 common units and 811,476 and 904,588 long term incentive units outstanding at redemption value at March 31, 2017 and December 31, 2016, respectively | 2,395,110 | 2,262,040 | |||||
Capital: | |||||||
5.25% Series B cumulative redeemable preferred units, liquidation preference $2,500 per unit, 80,000 units issued and outstanding at March 31, 2017 and December 31, 2016 | 193,623 | 193,623 | |||||
Boston Properties Limited Partnership partners’ capital—1,719,378 and 1,717,743 general partner units and 152,129,853 and 152,072,432 limited partner units outstanding at March 31, 2017 and December 31, 2016, respectively | 3,478,679 | 3,618,094 | |||||
Noncontrolling interests in property partnerships | 1,529,653 | 1,530,647 | |||||
Total capital | 5,201,955 | 5,342,364 | |||||
Total liabilities and capital | $ | 18,641,254 | $ | 18,524,123 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands, except for per unit amounts) | |||||||
Revenue | |||||||
Rental | |||||||
Base rent | $ | 503,562 | $ | 536,128 | |||
Recoveries from tenants | 89,164 | 89,586 | |||||
Parking and other | 25,610 | 24,825 | |||||
Total rental revenue | 618,336 | 650,539 | |||||
Hotel revenue | 7,420 | 8,757 | |||||
Development and management services | 6,472 | 6,689 | |||||
Total revenue | 632,228 | 665,985 | |||||
Expenses | |||||||
Operating | |||||||
Rental | 228,287 | 219,172 | |||||
Hotel | 7,091 | 7,634 | |||||
General and administrative | 31,386 | 29,353 | |||||
Transaction costs | 34 | 25 | |||||
Depreciation and amortization | 157,058 | 157,461 | |||||
Total expenses | 423,856 | 413,645 | |||||
Operating income | 208,372 | 252,340 | |||||
Other income (expense) | |||||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | |||||
Interest and other income | 614 | 1,505 | |||||
Gains from investments in securities | 1,042 | 259 | |||||
Interest expense | (95,534 | ) | (105,309 | ) | |||
Income before gains on sales of real estate | 117,578 | 150,586 | |||||
Gains on sales of real estate | 133 | 69,792 | |||||
Net income | 117,711 | 220,378 | |||||
Net income attributable to noncontrolling interests | |||||||
Noncontrolling interests in property partnerships | (4,424 | ) | (10,464 | ) | |||
Net income attributable to Boston Properties Limited Partnership | 113,287 | 209,914 | |||||
Preferred distributions | (2,625 | ) | (2,618 | ) | |||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 110,662 | $ | 207,296 | |||
Basic earnings per common unit attributable to Boston Properties Limited Partnership common unitholders: | |||||||
Net income | $ | 0.64 | $ | 1.21 | |||
Weighted average number of common units outstanding | 171,581 | 171,309 | |||||
Diluted earnings per common unit attributable to Boston Properties Limited Partnership common unitholders: | |||||||
Net income | $ | 0.64 | $ | 1.21 | |||
Weighted average number of common and common equivalent units outstanding | 171,935 | 171,600 | |||||
Distributions per common unit | $ | 0.75 | $ | 0.65 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income | $ | 117,711 | $ | 220,378 | |||
Other comprehensive income (loss): | |||||||
Effective portion of interest rate contracts | 180 | (58,646 | ) | ||||
Amortization of interest rate contracts (1) | 1,306 | 627 | |||||
Other comprehensive income (loss) | 1,486 | (58,019 | ) | ||||
Comprehensive income | 119,197 | 162,359 | |||||
Comprehensive income attributable to noncontrolling interests | (4,496 | ) | 62 | ||||
Comprehensive income attributable to Boston Properties Limited Partnership | $ | 114,701 | $ | 162,421 |
Total Partners’ Capital | |||
Balance at December 31, 2016 | $ | 3,811,717 | |
Contributions | 4,491 | ||
Net income allocable to general and limited partner units | 101,855 | ||
Distributions | (118,012 | ) | |
Accumulated other comprehensive income | 1,268 | ||
Cumulative effect of a change in accounting principle | (272 | ) | |
Unearned compensation | (3,122 | ) | |
Conversion of redeemable partnership units | 793 | ||
Adjustment to reflect redeemable partnership units at redemption value | (126,416 | ) | |
Balance at March 31, 2017 | $ | 3,672,302 | |
Balance at December 31, 2015 | $ | 3,684,522 | |
Contributions | 1,165 | ||
Net income allocable to general and limited partner units | 188,521 | ||
Distributions | (102,461 | ) | |
Accumulated other comprehensive loss | (42,592 | ) | |
Unearned compensation | (137 | ) | |
Conversion of redeemable partnership units | 446 | ||
Adjustment to reflect redeemable partnership units at redemption value | (8,218 | ) | |
Balance at March 31, 2016 | $ | 3,721,246 |
BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 117,711 | $ | 220,378 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 157,058 | 157,461 | |||||
Non-cash compensation expense | 10,802 | 10,069 | |||||
Income from unconsolidated joint ventures | (3,084 | ) | (1,791 | ) | |||
Distributions of net cash flow from operations of unconsolidated joint ventures | 1,861 | 10,718 | |||||
Gains from investments in securities | (1,042 | ) | (259 | ) | |||
Non-cash portion of interest expense | (7,729 | ) | (10,138 | ) | |||
Gains on sales of real estate | (133 | ) | (69,792 | ) | |||
Change in assets and liabilities: | |||||||
Cash held in escrows | 6,664 | 1,940 | |||||
Tenant and other receivables, net | 19,023 | 25,018 | |||||
Accrued rental income, net | (9,158 | ) | (12,981 | ) | |||
Prepaid expenses and other assets | (21,197 | ) | 45,560 | ||||
Accounts payable and accrued expenses | (16,306 | ) | (5,209 | ) | |||
Accrued interest payable | 22,781 | 31,192 | |||||
Other liabilities | (7,090 | ) | (33,319 | ) | |||
Tenant leasing costs | (23,631 | ) | (19,867 | ) | |||
Total adjustments | 128,819 | 128,602 | |||||
Net cash provided by operating activities | 246,530 | 348,980 | |||||
Cash flows from investing activities: | |||||||
Construction in progress | (154,518 | ) | (122,940 | ) | |||
Building and other capital improvements | (43,687 | ) | (25,329 | ) | |||
Tenant improvements | (50,810 | ) | (55,739 | ) | |||
Proceeds from sales of real estate | 133 | 104,816 | |||||
Proceeds from sales of real estate placed in escrow | — | (104,696 | ) | ||||
Proceeds from sales of real estate released from escrow | — | 104,696 | |||||
Cash released from escrow for investing activities | 5,230 | — | |||||
Cash released from escrow for land sale contracts | — | 488 | |||||
Capital contributions to unconsolidated joint ventures | (17,980 | ) | (10,215 | ) | |||
Investments in securities, net | (961 | ) | (438 | ) | |||
Net cash used in investing activities | (262,593 | ) | (109,357 | ) | |||
BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Cash flows from financing activities: | |||||||
Repayments of mortgage notes payable | (5,038 | ) | (6,265 | ) | |||
Proceeds from unsecured senior notes | — | 997,080 | |||||
Borrowings on unsecured line of credit | 175,000 | — | |||||
Repayments of unsecured line of credit | (70,000 | ) | — | ||||
Payments on real estate financing transaction | (480 | ) | (781 | ) | |||
Deferred financing costs | — | (8,047 | ) | ||||
Net proceeds from equity transactions | (183 | ) | (657 | ) | |||
Distributions | (131,555 | ) | (328,567 | ) | |||
Contributions from noncontrolling interests in property partnerships | 8,145 | 2,489 | |||||
Distributions to noncontrolling interests in property partnerships | (13,801 | ) | (12,915 | ) | |||
Net cash provided by (used in) financing activities | (37,912 | ) | 642,337 | ||||
Net increase (decrease) in cash and cash equivalents | (53,975 | ) | 881,960 | ||||
Cash and cash equivalents, beginning of period | 356,914 | 723,718 | |||||
Cash and cash equivalents, end of period | $ | 302,939 | $ | 1,605,678 | |||
Supplemental disclosures: | |||||||
Cash paid for interest | $ | 92,774 | $ | 93,524 | |||
Interest capitalized | $ | 12,345 | $ | 9,269 | |||
Non-cash investing and financing activities: | |||||||
Write-off of fully depreciated real estate | $ | (49,292 | ) | $ | (17,518 | ) | |
Additions to real estate included in accounts payable and accrued expenses | $ | 44,708 | $ | (24,857 | ) | ||
Distributions declared but not paid | $ | 130,418 | $ | 113,079 | |||
Conversions of redeemable partnership units to partners’ capital | $ | 793 | $ | 446 | |||
Issuance of restricted securities to employees | $ | 34,592 | $ | 32,630 |
• | common units of partnership interest (also referred to as “OP Units”), |
• | long term incentive units of partnership interest (also referred to as “LTIP Units”), and |
• | preferred units of partnership interest (also referred to as “Preferred Units”). |
• | 164 Office properties (including six properties under construction/redevelopment); |
• | one hotel; |
• | five retail properties; and |
• | four residential properties (including two properties under construction). |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||
Mortgage notes payable, net | $ | 2,046,959 | $ | 2,074,954 | $ | 2,063,087 | $ | 2,092,237 | |||||||||||
Mezzanine notes payable | 306,734 | 307,600 | 307,093 | 308,344 | |||||||||||||||
Unsecured line of credit | 105,000 | 105,099 | — | — | |||||||||||||||
Unsecured senior notes, net | 7,248,152 | 7,460,437 | 7,245,953 | 7,428,077 | |||||||||||||||
Total | $ | 9,706,845 | $ | 9,948,090 | $ | 9,616,133 | $ | 9,828,658 |
March 31, 2017 | December 31, 2016 | ||||||
Land | $ | 4,879,015 | $ | 4,879,020 | |||
Land held for future development (1) | 249,800 | 246,656 | |||||
Buildings and improvements | 11,904,196 | 11,890,626 | |||||
Tenant improvements | 2,111,336 | 2,060,315 | |||||
Furniture, fixtures and equipment | 36,589 | 32,687 | |||||
Construction in progress | 1,211,324 | 1,037,959 | |||||
Total | 20,392,260 | 20,147,263 | |||||
Less: Accumulated depreciation | (4,302,283 | ) | (4,222,235 | ) | |||
$ | 16,089,977 | $ | 15,925,028 |
(1) | Includes pre-development costs. |
March 31, 2017 | December 31, 2016 | ||||||
Land | $ | 4,774,455 | $ | 4,774,460 | |||
Land held for future development (1) | 249,800 | 246,656 | |||||
Buildings and improvements | 11,595,365 | 11,581,795 | |||||
Tenant improvements | 2,111,336 | 2,060,315 | |||||
Furniture, fixtures and equipment | 36,589 | 32,687 | |||||
Construction in progress | 1,211,324 | 1,037,959 | |||||
Total | 19,978,869 | 19,733,872 | |||||
Less: Accumulated depreciation | (4,214,265 | ) | (4,136,364 | ) | |||
$ | 15,764,604 | $ | 15,597,508 |
(1) | Includes pre-development costs. |
Nominal % Ownership | Carrying Value of Investment (1) | ||||||||||||
Entity | Properties | March 31, 2017 | December 31, 2016 | ||||||||||
(in thousands) | |||||||||||||
Square 407 Limited Partnership | Market Square North | 50.0 | % | $ | (7,837 | ) | $ | (8,134 | ) | ||||
The Metropolitan Square Associates LLC | Metropolitan Square | 20.0 | % | 2,007 | 2,004 | ||||||||
BP/CRF 901 New York Avenue LLC | 901 New York Avenue | 25.0 | % | (2) | (10,167 | ) | (10,564 | ) | |||||
WP Project Developer LLC | Wisconsin Place Land and Infrastructure | 33.3 | % | (3) | 41,151 | 41,605 | |||||||
Annapolis Junction NFM, LLC | Annapolis Junction | 50.0 | % | (4) | 19,920 | 20,539 | |||||||
540 Madison Venture LLC | 540 Madison Avenue | 60.0 | % | 67,653 | 67,816 | ||||||||
500 North Capitol Venture LLC | 500 North Capitol Street, NW | 30.0 | % | (3,606 | ) | (3,389 | ) | ||||||
501 K Street LLC | 1001 6th Street | 50.0 | % | (5) | 42,474 | 42,528 | |||||||
Podium Developer LLC | The Hub on Causeway | 50.0 | % | 36,888 | 29,869 | ||||||||
Residential Tower Developer LLC | The Hub on Causeway - Residential | 50.0 | % | 21,666 | 20,803 | ||||||||
Hotel Tower Developer LLC | The Hub on Causeway - Hotel | 50.0 | % | 1,167 | 933 | ||||||||
1265 Main Office JV LLC | 1265 Main Street | 50.0 | % | 4,866 | 4,779 | ||||||||
BNY Tower Holdings LLC | Dock 72 at the Brooklyn Navy Yard | 50.0 | % | (6) | 43,497 | 33,699 | |||||||
CA-Colorado Center Limited Partnership | Colorado Center | 49.8 | % | 512,643 | 510,623 | ||||||||
$ | 772,322 | $ | 753,111 |
(1) | Investments with deficit balances aggregating approximately $21.6 million and $22.1 million at March 31, 2017 and December 31, 2016, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets. |
(2) | The Company’s economic ownership has increased based on the achievement of certain return thresholds. |
(3) | The Company’s wholly-owned entity that owns the office component of the project also owns a 33.3% interest in the entity owning the land, parking garage and infrastructure of the project. |
(4) | The joint venture owns four in-service buildings and two undeveloped land parcels. |
(5) | Under the joint venture agreement for this land parcel, the partner will be entitled to up to two additional payments from the venture based on increases in total entitled square footage of the project above 520,000 square feet and achieving certain project returns at stabilization. |
(6) | The entity is a VIE (See Note 2). |
March 31, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Real estate and development in process, net | $ | 1,553,799 | $ | 1,519,217 | |||
Other assets | 297,969 | 297,263 | |||||
Total assets | $ | 1,851,768 | $ | 1,816,480 | |||
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY | |||||||
Mortgage and notes payable, net | $ | 864,344 | $ | 865,665 | |||
Other liabilities | 68,695 | 67,167 | |||||
Members’/Partners’ equity | 918,729 | 883,648 | |||||
Total liabilities and members’/partners’ equity | $ | 1,851,768 | $ | 1,816,480 | |||
Company’s share of equity | $ | 471,112 | $ | 450,662 | |||
Basis differentials (1) | 301,210 | 302,449 | |||||
Carrying value of the Company’s investments in unconsolidated joint ventures (2) | $ | 772,322 | $ | 753,111 |
(1) | This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials result from impairments of investments, acquisitions through joint ventures with no change in control and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level. At March 31, 2017 and December 31, 2016, there was an aggregate basis differential of approximately $327.4 million and $328.8 million, respectively, between the carrying value of the Company’s investment in the joint venture that owns Colorado Center and the joint venture’s basis in the assets and liabilities, which differential (excluding land) shall be amortized over the remaining lives of the related assets and liabilities. |
(2) | Investments with deficit balances aggregating approximately $21.6 million and $22.1 million at March 31, 2017 and December 31, 2016, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets. |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Total revenue (1) | $ | 54,761 | $ | 37,669 | |||
Expenses | |||||||
Operating | 22,079 | 16,667 | |||||
Depreciation and amortization | 14,309 | 9,064 | |||||
Total expenses | 36,388 | 25,731 | |||||
Operating income | 18,373 | 11,938 | |||||
Other expense | |||||||
Interest expense | 9,300 | 8,389 | |||||
Net income | $ | 9,073 | $ | 3,549 | |||
Company’s share of net income | $ | 4,323 | $ | 1,599 | |||
Basis differential (2) | (1,239 | ) | 192 | ||||
Income from unconsolidated joint ventures | $ | 3,084 | $ | 1,791 |
(1) | Includes straight-line rent adjustments of approximately $7.0 million and $2.2 million for the three months ended March 31, 2017 and 2016, respectively. |
(2) | Includes a straight-line rent adjustment of approximately $0.7 million and a net above-/below-market rent adjustment of approximately $0.4 million for the three months ended March 31, 2017. |
Derivative Instrument | Aggregate Notional Amount | Effective Date | Maturity Date | Strike Rate Range | Balance Sheet Location | Fair Value | ||||||||||||||
Low | High | |||||||||||||||||||
Interest Rate Swaps | $ | 325,000 | June 7, 2017 | June 7, 2027 | 2.423 | % | - | 2.950 | % | Other Liabilities | $ | (8,635 | ) | |||||||
Interest Rate Swaps | 125,000 | June 7, 2017 | June 7, 2027 | 2.336 | % | - | 2.418 | % | Prepaid Expenses and Other Assets | 551 | ||||||||||
$ | 450,000 | $ | (8,084 | ) |
Derivative Instrument | Aggregate Notional Amount | Effective Date | Maturity Date | Strike Rate Range | Balance Sheet Location | Fair Value | ||||||||||||||
Low | High | |||||||||||||||||||
Interest Rate Swaps | $ | 350,000 | June 7, 2017 | June 7, 2027 | 2.418 | % | - | 2.950 | % | Other Liabilities | $ | (8,773 | ) | |||||||
Interest Rate Swaps | 100,000 | June 7, 2017 | June 7, 2027 | 2.336 | % | - | 2.388 | % | Prepaid Expenses and Other Assets | 509 | ||||||||||
$ | 450,000 | $ | (8,264 | ) |
Three months ended March 31, | ||||||||
2017 | 2016 | |||||||
(in thousands) | ||||||||
Amount of gain (loss) related to the effective portion recognized in other comprehensive loss | $ | 180 | $ | (58,646 | ) | |||
Amount of loss related to the effective portion subsequently reclassified to earnings | $ | (1,306 | ) | $ | (627 | ) | ||
Amount of (gain) loss related to the ineffective portion and amount excluded from effectiveness testing | $ | — | $ | — |
Balance at December 31, 2016 | $ | (52,251 | ) | |
Effective portion of interest rate contracts | 180 | |||
Amortization of interest rate contracts | 1,306 | |||
Other comprehensive loss attributable to noncontrolling interests | (218 | ) | ||
Balance at March 31, 2017 | $ | (50,983 | ) | |
Balance at December 31, 2015 | $ | (14,114 | ) | |
Effective portion of interest rate contracts | (58,646 | ) | ||
Amortization of interest rate contracts | 627 | |||
Other comprehensive income attributable to noncontrolling interests | 15,427 | |||
Balance at March 31, 2016 | $ | (56,706 | ) |
Balance at December 31, 2016 | $ | (60,853 | ) | |
Effective portion of interest rate contracts | 180 | |||
Amortization of interest rate contracts | 1,306 | |||
Other comprehensive loss attributable to noncontrolling interests | (72 | ) | ||
Balance at March 31, 2017 | $ | (59,439 | ) | |
Balance at December 31, 2015 | $ | (18,337 | ) | |
Effective portion of interest rate contracts | (58,646 | ) | ||
Amortization of interest rate contracts | 627 | |||
Other comprehensive income attributable to noncontrolling interests | 10,526 | |||
Balance at March 31, 2016 | $ | (65,830 | ) |
Record Date | Payment Date | Distributions per OP Unit and LTIP Unit | Distributions per MYLTIP Unit | |||||||
March 31, 2017 | April 28, 2017 | $0.75 | $0.075 | |||||||
December 31, 2016 | January 30, 2017 | $0.75 | $0.075 |
Balance at December 31, 2016 | $ | 2,262,040 | |
Contributions | 29,918 | ||
Net income | 11,432 | ||
Distributions | (13,653 | ) | |
Conversion of redeemable partnership units | (793 | ) | |
Unearned compensation | (18,633 | ) | |
Cumulative effect of a change in accounting principle | (1,763 | ) | |
Accumulated other comprehensive income | 146 | ||
Adjustment to reflect redeemable partnership units at redemption value | 126,416 | ||
Balance at March 31, 2017 | $ | 2,395,110 | |
Balance at December 31, 2015 | $ | 2,286,689 | |
Contributions | 30,808 | ||
Net income | 21,393 | ||
Distributions | (11,865 | ) | |
Conversion of redeemable partnership units | (446 | ) | |
Unearned compensation | (22,424 | ) | |
Accumulated other comprehensive loss | (4,901 | ) | |
Adjustment to reflect redeemable partnership units at redemption value | 8,218 | ||
Balance at March 31, 2016 | $ | 2,307,472 |
Balance at December 31, 2016 | $ | 1,530,647 | |
Capital contributions | 8,145 | ||
Net income | 4,424 | ||
Accumulated other comprehensive income | 72 | ||
Distributions | (13,635 | ) | |
Balance at March 31, 2017 | $ | 1,529,653 | |
Balance at December 31, 2015 | $ | 1,574,400 | |
Capital contributions | 2,489 | ||
Net income | 10,464 | ||
Accumulated other comprehensive loss | (10,526 | ) | |
Distributions | (12,915 | ) | |
Balance at March 31, 2016 | $ | 1,563,912 |
Record Date | Payment Date | Dividend (Per Share) | Distribution (Per Unit) | |||||||
March 31, 2017 | April 28, 2017 | $0.75 | $0.75 | |||||||
December 31, 2016 | January 30, 2017 | $0.75 | $0.75 |
Record Date | Payment Date | Dividend (Per Share) | ||||
May 5, 2017 | May 15, 2017 | $32.8125 | ||||
February 3, 2017 | February 15, 2017 | $32.8125 |
Three Months Ended March 31, 2017 | ||||||||||
Income (Numerator) | Shares (Denominator) | Per Share Amount | ||||||||
(in thousands, except for per share amounts) | ||||||||||
Basic Earnings: | ||||||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 97,083 | 153,860 | $ | 0.63 | |||||
Effect of Dilutive Securities: | ||||||||||
Stock Based Compensation | — | 354 | — | |||||||
Diluted Earnings: | ||||||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 97,083 | 154,214 | $ | 0.63 | |||||
Three Months Ended March 31, 2016 | ||||||||||
Income (Numerator) | Shares (Denominator) | Per Share Amount | ||||||||
(in thousands, except for per share amounts) | ||||||||||
Basic Earnings: | ||||||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 181,747 | 153,626 | $ | 1.18 | |||||
Allocation of undistributed earnings to participating securities | (247 | ) | — | — | ||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 181,500 | 153,626 | $ | 1.18 | |||||
Effect of Dilutive Securities: | ||||||||||
Stock Based Compensation | — | 291 | — | |||||||
Diluted Earnings: | ||||||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 181,500 | 153,917 | $ | 1.18 |
Three Months Ended March 31, 2017 | ||||||||||
Income (Numerator) | Units (Denominator) | Per Unit Amount | ||||||||
(in thousands, except for per unit amounts) | ||||||||||
Basic Earnings: | ||||||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 110,662 | 171,581 | $ | 0.64 | |||||
Effect of Dilutive Securities: | ||||||||||
Stock Based Compensation | — | 354 | — | |||||||
Diluted Earnings: | ||||||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 110,662 | 171,935 | $ | 0.64 |
Three Months Ended March 31, 2016 | ||||||||||
Income (Numerator) | Units (Denominator) | Per Unit Amount | ||||||||
(in thousands, except for per unit amounts) | ||||||||||
Basic Earnings: | ||||||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 207,296 | 171,309 | $ | 1.21 | |||||
Allocation of undistributed earnings to participating securities | (275 | ) | — | — | ||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 207,021 | 171,309 | $ | 1.21 | |||||
Effect of Dilutive Securities: | ||||||||||
Stock Based Compensation | — | 291 | — | |||||||
Diluted Earnings: | ||||||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 207,021 | 171,600 | $ | 1.21 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 97,083 | $ | 181,747 | |||
Add: | |||||||
Preferred dividends | 2,625 | 2,618 | |||||
Noncontrolling interest—common units of Boston Properties Limited Partnership | 11,432 | 21,393 | |||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Interest expense | 95,534 | 105,309 | |||||
Depreciation and amortization expense | 159,205 | 159,448 | |||||
Transaction costs | 34 | 25 | |||||
General and administrative expense | 31,386 | 29,353 | |||||
Less: | |||||||
Gains on sales of real estate | 133 | 67,623 | |||||
Gains from investments in securities | 1,042 | 259 | |||||
Interest and other income | 614 | 1,505 | |||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | |||||
Development and management services revenue | 6,472 | 6,689 | |||||
Net Operating Income | $ | 390,378 | $ | 432,490 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | 110,662 | 207,296 | |||||
Add: | |||||||
Preferred distributions | 2,625 | 2,618 | |||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Interest expense | 95,534 | 105,309 | |||||
Depreciation and amortization expense | 157,058 | 157,461 | |||||
Transaction costs | 34 | 25 | |||||
General and administrative expense | 31,386 | 29,353 | |||||
Less: | |||||||
Gains on sales of real estate | 133 | 69,792 | |||||
Gains from investments in securities | 1,042 | 259 | |||||
Interest and other income | 614 | 1,505 | |||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | |||||
Development and management services revenue | 6,472 | 6,689 | |||||
Net Operating Income | $ | 390,378 | $ | 432,490 |
Boston | New York | San Francisco | Washington, DC | Total | |||||||||||||||
Rental Revenue: | |||||||||||||||||||
Office | $ | 185,436 | $ | 241,570 | $ | 84,641 | $ | 102,733 | $ | 614,380 | |||||||||
Residential | 1,139 | — | — | 2,817 | 3,956 | ||||||||||||||
Hotel | 7,420 | — | — | — | 7,420 | ||||||||||||||
Total | 193,995 | 241,570 | 84,641 | 105,550 | 625,756 | ||||||||||||||
% of Grand Totals | 31.00 | % | 38.60 | % | 13.53 | % | 16.87 | % | 100.00 | % | |||||||||
Rental Expenses: | |||||||||||||||||||
Office | 75,256 | 91,684 | 24,474 | 35,322 | 226,736 | ||||||||||||||
Residential | 495 | — | — | 1,056 | 1,551 | ||||||||||||||
Hotel | 7,091 | — | — | — | 7,091 | ||||||||||||||
Total | 82,842 | 91,684 | 24,474 | 36,378 | 235,378 | ||||||||||||||
% of Grand Totals | 35.19 | % | 38.95 | % | 10.40 | % | 15.46 | % | 100.00 | % | |||||||||
Net operating income | $ | 111,153 | $ | 149,886 | $ | 60,167 | $ | 69,172 | $ | 390,378 | |||||||||
% of Grand Totals | 28.47 | % | 38.40 | % | 15.41 | % | 17.72 | % | 100.00 | % |
Boston | New York | San Francisco | Washington, DC | Total | |||||||||||||||
Rental Revenue: | |||||||||||||||||||
Office | $ | 177,827 | $ | 291,858 | $ | 76,317 | $ | 100,488 | $ | 646,490 | |||||||||
Residential | 1,171 | — | — | 2,878 | 4,049 | ||||||||||||||
Hotel | 8,757 | — | — | — | 8,757 | ||||||||||||||
Total | 187,755 | 291,858 | 76,317 | 103,366 | 659,296 | ||||||||||||||
% of Grand Totals | 28.48 | % | 44.27 | % | 11.57 | % | 15.68 | % | 100.00 | % | |||||||||
Rental Expenses: | |||||||||||||||||||
Office | 70,687 | 88,798 | 23,905 | 34,182 | 217,572 | ||||||||||||||
Residential | 520 | — | — | 1,080 | 1,600 | ||||||||||||||
Hotel | 7,634 | — | — | — | 7,634 | ||||||||||||||
Total | 78,841 | 88,798 | 23,905 | 35,262 | 226,806 | ||||||||||||||
% of Grand Totals | 34.76 | % | 39.15 | % | 10.54 | % | 15.55 | % | 100.00 | % | |||||||||
Net operating income | $ | 108,914 | $ | 203,060 | $ | 52,412 | $ | 68,104 | $ | 432,490 | |||||||||
% of Grand Totals | 25.18 | % | 46.95 | % | 12.12 | % | 15.75 | % | 100.00 | % |
• | if there is a negative change in the economy, including, without limitation, a reversal of current job growth trends and an increase in unemployment, it could have a negative effect on the following, among other things: |
• | the fundamentals of our business, including overall market occupancy, tenant space utilization and rental rates; |
• | the financial condition of our tenants, many of which are financial, legal, media/telecommunication, technology and other professional firms, our lenders, counterparties to our derivative financial instruments and institutions that hold our cash balances and short-term investments, which may expose us to increased risks of default by these parties; and |
• | the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis; |
• | volatile or adverse global economic and political conditions, and dislocations in the credit markets, could adversely affect our business opportunities, results of operations and financial condition; |
• | general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, tenant space utilization, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); |
• | failure to manage effectively our growth and expansion into new markets and sub-markets or to integrate acquisitions and developments successfully; |
• | the ability of our joint venture partners to satisfy their obligations; |
• | risks and uncertainties affecting property development and construction (including, without limitation, construction delays, increased construction costs, cost overruns, inability to obtain necessary permits, tenant accounting considerations that may result in negotiated lease provisions that limit a tenant’s liability during construction, and public opposition to such activities); |
• | risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments and/or refinance existing indebtedness, including the impact of higher interest rates on the cost and/or availability of financing; |
• | risks associated with forward interest rate contracts and the effectiveness of such arrangements; |
• | risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets; |
• | risks associated with actual or threatened terrorist attacks; |
• | costs of compliance with the Americans with Disabilities Act and other similar laws; |
• | potential liability for uninsured losses and environmental contamination; |
• | risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems, which support our operations and our buildings; |
• | risks associated with BXP’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended; |
• | possible adverse changes in tax and environmental laws; |
• | the impact of newly adopted accounting principles on our accounting policies and on period-to-period comparisons of financial results; |
• | risks associated with possible state and local tax audits; |
• | risks associated with our dependence on key personnel whose continued service is not guaranteed; and |
• | the other risk factors identified in our most recently filed Annual Reports on Form 10-K, including those described under the caption “Risk Factors.” |
Three months ended March 31, 2017 | ||||
(Square Feet) | ||||
Vacant space available at the beginning of the period | 4,196,275 | |||
Properties placed in-service | 9,480 | |||
Leases expiring or terminated during the period | 843,647 | |||
Total space available for lease | 5,049,402 | |||
1st generation leases | 23,865 | |||
2nd generation leases with new tenants | 624,425 | |||
2nd generation lease renewals | 290,455 | |||
Total space leased (1) | 938,745 | |||
Vacant space available for lease at the end of the period | 4,110,657 | |||
Leases executed during the period, in square feet (2) | 565,188 | |||
Second generation leasing information: (3) | ||||
Leases commencing during the period, in square feet | 914,880 | |||
Weighted Average Lease Term | 85 Months | |||
Weighted Average Free Rent Period | 82 Days | |||
Total Transaction Costs Per Square Foot (4) | $55.92 | |||
Increase in Gross Rents (5) | 13.12 | % | ||
Increase in Net Rents (6) | 19.54 | % |
(1) | Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the three months ended March 31, 2017. |
(2) | Represents leases executed during the three months ended March 31, 2017 for which we either (1) commenced rental revenue recognition in such period or (2) will commence rental revenue recognition in subsequent periods, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed and recognized in the three months ended March 31, 2017 is 139,735. |
(3) | Second generation leases are defined as leases for space that had previously been leased by us. Of the 914,880 square feet of second generation leases that commenced during the three months ended March 31, 2017, leases for 775,145 square feet were signed in prior periods. |
(4) | Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions and other inducements in accordance with GAAP. |
(5) | Represents the increase in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 609,624 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2017; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis. |
(6) | Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the 609,624 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended March 31, 2017; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis. |
• | On April 19, 2017, we completed the sale of a parcel of land at 30 Shattuck Road located in Andover, Massachusetts for a gross sale price of approximately $5.0 million. |
• | On April 21, 2017, we exercised our option to ground lease, with the future right to purchase, real property adjacent to the MacArthur BART station located in Oakland, California, that could support the development of a 402-unit residential building and supporting retail space. |
• | On April 24, 2017, BPLP executed the Eighth Amended and Restated Credit Agreement (as amended and restated, the “2017 Credit Facility”). Among other things, the amendment and restatement (1) increased the total commitment of the Revolving Facility from $1.0 billion to $1.5 billion, (2) extended the maturity date from July 26, 2018 to April 24, 2022, (3) reduced the per annum variable interest rates, and (4) added a $500.0 million delayed draw term loan facility (the “Delayed Draw Facility”) that permits BPLP to borrow until the first anniversary of the closing date. The Delayed Draw Facility was undrawn at closing. Based on BPLP’s current credit rating, (1) the applicable Eurocurrency margins for the Revolving Facility and Delayed Draw Facility are 87.5 basis points and 95 basis points, respectively, and (2) the facility fee on the Revolving Facility commitment is 0.15%. The Delayed Draw Facility has a fee on unused commitments equal to 0.15% per annum. |
• | On April 24, 2017, our consolidated entity in which we have a 60% interest and that owns 767 Fifth Avenue (the General Motors Building) located in New York City entered into an interest rate lock and commitment agreement with a group of lenders on a ten-year financing totaling $2.3 billion at a fixed interest rate of 3.43% per annum. We expect to close on the financing by the end of June 2017, although there can be no assurance that the financing will be consummated on the terms currently contemplated or at all. In conjunction with the interest rate lock and commitment agreement, the consolidated entity terminated its forward-starting interest rate swap contracts with notional amounts aggregating $450.0 million and paid approximately $14.4 million, which amount will increase our interest expense over the ten-year term of the financing, resulting in an estimated effective interest rate of approximately 3.65% per annum, inclusive of other estimated amortization of financing costs and additional mortgage recording taxes (See Note 5 to the Consolidated Financial Statements.) |
• | On May 1, 2017, we entered into an agreement to acquire 103 Carnegie Center located in Princeton, New Jersey within our Carnegie Center office complex for a purchase price of approximately $15.8 million. 103 Carnegie Center is an approximately 96,000 net rentable square foot Class A office property. We expect that the acquisition will close during the second quarter of 2017. However, the acquisition is subject to the satisfaction of customary closing conditions and there can be no assurance that the acquisition will be consummated on the terms currently contemplated or at all. |
Total Property Portfolio | |||||||||||||||
2017 | 2016 | Increase/ (Decrease) | % Change | ||||||||||||
(in thousands) | |||||||||||||||
Net Income Attributable to Boston Properties, Inc. Common Shareholders | $ | 97,083 | $ | 181,747 | $ | (84,664 | ) | (46.58 | )% | ||||||
Preferred dividends | 2,625 | 2,618 | 7 | 0.27 | % | ||||||||||
Net Income Attributable to Boston Properties, Inc. | 99,708 | 184,365 | (84,657 | ) | (45.92 | )% | |||||||||
Net Income Attributable to Noncontrolling Interests: | |||||||||||||||
Noncontrolling interest—common units of Boston Properties Limited Partnership | 11,432 | 21,393 | (9,961 | ) | (46.56 | )% | |||||||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | (6,040 | ) | (57.72 | )% | |||||||||
Net Income | 115,564 | 216,222 | (100,658 | ) | (46.55 | )% | |||||||||
Gains on sales of real estate | 133 | 67,623 | (67,490 | ) | (99.80 | )% | |||||||||
Income Before Gains on Sales of Real Estate | 115,431 | 148,599 | (33,168 | ) | (22.32 | )% | |||||||||
Other Expenses: | |||||||||||||||
Add: | |||||||||||||||
Interest expense | 95,534 | 105,309 | (9,775 | ) | (9.28 | )% | |||||||||
Other Income: | |||||||||||||||
Less: | |||||||||||||||
Gains from investments in securities | 1,042 | 259 | 783 | 302.32 | % | ||||||||||
Interest and other income | 614 | 1,505 | (891 | ) | (59.20 | )% | |||||||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | 1,293 | 72.19 | % | ||||||||||
Operating Income | 206,225 | 250,353 | (44,128 | ) | (17.63 | )% | |||||||||
Other Expenses: | |||||||||||||||
Add: | |||||||||||||||
Depreciation and amortization expense | 159,205 | 159,448 | (243 | ) | (0.15 | )% | |||||||||
Transaction costs | 34 | 25 | 9 | 36.00 | % | ||||||||||
General and administrative expense | 31,386 | 29,353 | 2,033 | 6.93 | % | ||||||||||
Other Revenue: | |||||||||||||||
Less: | |||||||||||||||
Development and management services revenue | 6,472 | 6,689 | (217 | ) | (3.24 | )% | |||||||||
Net Operating Income | $ | 390,378 | $ | 432,490 | $ | (42,112 | ) | (9.74 | )% |
Total Property Portfolio | |||||||||||||||
2017 | 2016 | Increase/ (Decrease) | % Change | ||||||||||||
(in thousands) | |||||||||||||||
Net Income Attributable to Boston Properties Limited Partnership Common Unitholders | $ | 110,662 | $ | 207,296 | $ | (96,634 | ) | (46.62 | )% | ||||||
Preferred distributions | 2,625 | 2,618 | 7 | 0.27 | % | ||||||||||
Net Income Attributable to Boston Properties Limited Partnership | 113,287 | 209,914 | (96,627 | ) | (46.03 | )% | |||||||||
Net Income Attributable to Noncontrolling Interests: | |||||||||||||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | (6,040 | ) | (57.72 | )% | |||||||||
Net Income | 117,711 | 220,378 | (102,667 | ) | (46.59 | )% | |||||||||
Gains on sales of real estate | 133 | 69,792 | (69,659 | ) | (99.81 | )% | |||||||||
Income Before Gains on Sales of Real Estate | 117,578 | 150,586 | (33,008 | ) | (21.92 | )% | |||||||||
Other Expenses: | |||||||||||||||
Add: | |||||||||||||||
Interest expense | 95,534 | 105,309 | (9,775 | ) | (9.28 | )% | |||||||||
Other Income: | |||||||||||||||
Less: | |||||||||||||||
Gains from investments in securities | 1,042 | 259 | 783 | 302.32 | % | ||||||||||
Interest and other income | 614 | 1,505 | (891 | ) | (59.20 | )% | |||||||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | 1,293 | 72.19 | % | ||||||||||
Operating Income | 208,372 | 252,340 | (43,968 | ) | (17.42 | )% | |||||||||
Other Expenses: | |||||||||||||||
Add: | |||||||||||||||
Depreciation and amortization expense | 157,058 | 157,461 | (403 | ) | (0.26 | )% | |||||||||
Transaction costs | 34 | 25 | 9 | 36.00 | % | ||||||||||
General and administrative expense | 31,386 | 29,353 | 2,033 | 6.93 | % | ||||||||||
Other Revenue: | |||||||||||||||
Less: | |||||||||||||||
Development and management services revenue | 6,472 | 6,689 | (217 | ) | (3.24 | )% | |||||||||
Net Operating Income | $ | 390,378 | $ | 432,490 | $ | (42,112 | ) | (9.74 | )% |
Same Property Portfolio | Properties Placed In-Service Portfolio | Properties Acquired Portfolio | Properties in Development or Redevelopment Portfolio | Properties Sold Portfolio | Total Property Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2017 | 2016 | Increase/ (Decrease) | % Change | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | Increase/ (Decrease) | % Change | |||||||||||||||||||||||||||||||||||||||||||||
Rental Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental Revenue | $ | 591,967 | $ | 578,852 | $ | 13,115 | 2.27 | % | $ | 15,972 | $ | 8,051 | $ | 1,485 | $ | — | $ | 1,039 | $ | 6,606 | $ | — | $ | 1,675 | $ | 610,463 | $ | 595,184 | $ | 15,279 | 2.57 | % | |||||||||||||||||||||||||||||
Termination Income | 5,389 | 51,306 | (45,917 | ) | (89.50 | )% | — | — | — | — | (1,472 | ) | — | — | — | 3,917 | 51,306 | (47,389 | ) | (92.37 | )% | ||||||||||||||||||||||||||||||||||||||||
Total Rental Revenue | 597,356 | 630,158 | (32,802 | ) | (5.21 | )% | 15,972 | 8,051 | 1,485 | — | (433 | ) | 6,606 | — | 1,675 | 614,380 | 646,490 | (32,110 | ) | (4.97 | )% | ||||||||||||||||||||||||||||||||||||||||
Real Estate Operating Expenses | 218,992 | 212,923 | 6,069 | 2.85 | % | 4,576 | 1,784 | 270 | — | 2,898 | 2,433 | — | 432 | 226,736 | 217,572 | 9,164 | 4.21 | % | |||||||||||||||||||||||||||||||||||||||||||
Net Operating Income (Loss), excluding residential and hotel | 378,364 | 417,235 | (38,871 | ) | (9.32 | )% | 11,396 | 6,267 | 1,215 | — | (3,331 | ) | 4,173 | — | 1,243 | 387,644 | 428,918 | (41,274 | ) | (9.62 | )% | ||||||||||||||||||||||||||||||||||||||||
Residential Net Operating Income (1) | 2,405 | 2,449 | (44 | ) | (1.80 | )% | — | — | — | — | — | — | — | — | 2,405 | 2,449 | (44 | ) | (1.80 | )% | |||||||||||||||||||||||||||||||||||||||||
Hotel Net Operating Income (1) | 329 | 1,123 | (794 | ) | (70.70 | )% | — | — | — | — | — | — | — | — | 329 | 1,123 | (794 | ) | (70.70 | )% | |||||||||||||||||||||||||||||||||||||||||
Net Operating Income (Loss) (1) | $ | 381,098 | $ | 420,807 | $ | (39,709 | ) | (9.44 | )% | $ | 11,396 | $ | 6,267 | $ | 1,215 | $ | — | $ | (3,331 | ) | $ | 4,173 | $ | — | $ | 1,243 | $ | 390,378 | $ | 432,490 | $ | (42,112 | ) | (9.74 | )% |
(1) | For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 43. Residential Net Operating Income for the three months ended March 31, 2017 and 2016 are comprised of Residential Revenue of $3,956 and $4,049 less Residential Expenses of $1,551 and $1,600, respectively. Hotel Net Operating Income for the three months ended March 31, 2017 and 2016 are comprised of Hotel Revenue of $7,420 and $8,757 less Hotel Expenses of $7,091 and $7,634, respectively, per the Consolidated Statements of Operations. |
Quarter Initially Placed In-Service | Quarter Fully Placed In-Service | Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||
Name | Square Feet | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
601 Massachusetts Avenue | Third Quarter, 2015 | Second Quarter, 2016 | 478,883 | $ | 9,073 | $ | 8,051 | $ | 1,022 | $ | 2,276 | $ | 1,784 | $ | 492 | ||||||||||||||||
804 Carnegie Center | Second Quarter, 2016 | Second Quarter, 2016 | 130,000 | 1,398 | — | 1,398 | 380 | — | 380 | ||||||||||||||||||||||
10 CityPoint | Second Quarter, 2016 | Second Quarter, 2016 | 241,460 | 2,666 | — | 2,666 | 818 | — | 818 | ||||||||||||||||||||||
Reservoir Place North | Second Quarter, 2016 | N/A | 73,000 | — | — | — | 69 | — | 69 | ||||||||||||||||||||||
888 Boylston Street | Third Quarter, 2016 | N/A | 425,000 | 2,835 | — | 2,835 | 1,033 | — | 1,033 | ||||||||||||||||||||||
1,348,343 | $ | 15,972 | $ | 8,051 | $ | 7,921 | $ | 4,576 | $ | 1,784 | $ | 2,792 |
Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||
Name | Date acquired | Square Feet | 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
3625-3635 Peterson Way | April 22, 2016 | 218,336 | $ | 1,485 | $ | — | $ | 1,485 | $ | 270 | $ | — | $ | 270 | |||||||||||||||
218,336 | $ | 1,485 | $ | — | $ | 1,485 | $ | 270 | $ | — | $ | 270 |
Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||
Name | Date commenced development / redevelopment | Square Feet | 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
One Five Nine East 53rd Street (1) | August 19, 2016 | 220,000 | $ | (433 | ) | $ | 5,416 | $ | (5,849 | ) | $ | 1,523 | $ | 1,935 | $ | (412 | ) | ||||||||||||
191 Spring Street (2) | December 29, 2016 | 160,000 | — | 1,190 | (1,190 | ) | 1,375 | 498 | 877 | ||||||||||||||||||||
380,000 | $ | (433 | ) | $ | 6,606 | $ | (7,039 | ) | $ | 2,898 | $ | 2,433 | $ | 465 |
(1) | This is the low-rise portion of 601 Lexington Avenue in New York City. Rental revenue includes approximately $(1.5) million of termination income for the three months ended March 31, 2017. In addition, real estate operating expenses for the three months ended March 31, 2017 includes approximately $1.1 million of demolition costs. |
(2) | Real estate operating expenses for the three months ended March 31, 2017 were entirely related to demolition costs. |
Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||||
Name | Date Sold | Property Type | Square Feet | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Office | |||||||||||||||||||||||||||||||
415 Main Street | February 1, 2016 | Office | 231,000 | $ | — | $ | 1,675 | $ | (1,675 | ) | $ | — | $ | 432 | $ | (432 | ) | ||||||||||||||
231,000 | $ | — | $ | 1,675 | $ | (1,675 | ) | $ | — | $ | 432 | $ | (432 | ) |
The Lofts at Atlantic Wharf | The Avant at Reston Town Center | |||||||||||||||||||||
2017 | 2016 | Percentage Change | 2017 | 2016 | Percentage Change | |||||||||||||||||
Average Monthly Rental Rate (1) | $ | 4,167 | $ | 4,153 | 0.3 | % | $ | 2,370 | $ | 2,327 | 1.8 | % | ||||||||||
Average Rental Rate Per Occupied Square Foot | $ | 4.67 | $ | 4.57 | 2.2 | % | $ | 2.58 | $ | 2.55 | 1.2 | % | ||||||||||
Average Physical Occupancy (2) | 93.8 | % | 96.1 | % | (2.4 | )% | 89.8 | % | 92.9 | % | (3.3 | )% | ||||||||||
Average Economic Occupancy (3) | 96.6 | % | 97.6 | % | (1.0 | )% | 89.9 | % | 92.8 | % | (3.1 | )% |
(1) | Average Monthly Rental Rates are calculated by us as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units. |
(2) | Average Physical Occupancy is defined as the average number of occupied units divided by the total number of units, expressed as a percentage. |
(3) | Average Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property's total possible gross revenue. Market Rents used by us in calculating Economic Occupancy are based on the current market rates set by the managers of our residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions. |
2017 | 2016 | Percentage Change | |||||||||
Occupancy | 66.5 | % | 75.2 | % | (11.6 | )% | |||||
Average daily rate | $ | 219.87 | $ | 223.48 | (1.6 | )% | |||||
Revenue per available room, REVPAR | $ | 146.12 | $ | 168.08 | (13.1 | )% |
Portfolio | Depreciation and Amortization Expense for the three months ended March 31, | |||||||||||
2017 | 2016 | Change | ||||||||||
(in thousands) | ||||||||||||
Same Property Portfolio | $ | 154,738 | $ | 157,134 | $ | (2,396 | ) | |||||
Properties Placed in-Service Portfolio | 3,494 | 1,303 | 2,191 | |||||||||
Properties Acquired Portfolio | 973 | — | 973 | |||||||||
Properties in Development or Redevelopment Portfolio | — | 903 | (903 | ) | ||||||||
Properties Sold Portfolio | — | 108 | (108 | ) | ||||||||
$ | 159,205 | $ | 159,448 | $ | (243 | ) |
Portfolio | Depreciation and Amortization Expense for the three months ended March 31, | |||||||||||
2017 | 2016 | Change | ||||||||||
(in thousands) | ||||||||||||
Same Property Portfolio | $ | 152,591 | $ | 155,147 | $ | (2,556 | ) | |||||
Properties Placed in-Service Portfolio | 3,494 | 1,303 | 2,191 | |||||||||
Properties Acquired Portfolio | 973 | — | 973 | |||||||||
Properties in Development or Redevelopment Portfolio | — | 903 | (903 | ) | ||||||||
Properties Sold Portfolio | — | 108 | (108 | ) | ||||||||
$ | 157,058 | $ | 157,461 | $ | (403 | ) |
Component | Change in interest expense for the three months ended March 31, 2017 compared to March 31, 2016 | |||
(in thousands) | ||||
Increases to interest expense due to: | ||||
Issuance of $1.0 billion in aggregate principal of 2.750% senior notes due 2026 on August 17, 2016 | $ | 8,264 | ||
Issuance of $1.0 billion in aggregate principal of 3.650% senior notes due 2026 on January 20, 2016 | 1,947 | |||
Increase in interest expense for the Outside Members’ Notes Payable for 767 Fifth Avenue (the General Motors Building) (1) | 944 | |||
Total increases to interest expense | 11,155 | |||
Decreases to interest expense due to: | ||||
Repayment of mortgage financings (2) | (17,763 | ) | ||
Increase in capitalized interest (3) | (3,076 | ) | ||
Other interest expense (excluding senior notes) | (91 | ) | ||
Total decreases to interest expense | (20,930 | ) | ||
Total change in interest expense | $ | (9,775 | ) |
(1) | The related interest expense from the Outside Members’ Notes Payable totaled approximately $9.2 million and $8.2 million for the three months ended March 31, 2017 and 2016, respectively. These amounts are allocated to the outside joint venture partners as an adjustment to Noncontrolling Interests in Property Partnerships in our Consolidated Statements of Operations. |
(2) | Includes the repayment of the mortgage loans collateralized by Fountain Square, Embarcadero Center Four and 599 Lexington Avenue. |
(3) | The increase was primarily due to the commencement and continuation of several development projects. For a list of development projects refer to “Liquidity and Capital Resources” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Name | Date sold | Property Type | Square Feet | Sale Price | Cash Proceeds | Gain on Sale of Real Estate | |||||||||||||
2016 | |||||||||||||||||||
415 Main Street | February 1, 2016 | Office | 231,000 | $ | 105.4 | $ | 104.9 | $ | 60.8 |
Name | Date sold | Property Type | Square Feet | Sale Price | Cash Proceeds | Gain on Sale of Real Estate | |||||||||||||
2016 | |||||||||||||||||||
415 Main Street | February 1, 2016 | Office | 231,000 | $ | 105.4 | $ | 104.9 | $ | 63.0 |
Property | Noncontrolling Interests in Property Partnerships for the three months ended March 31, | |||||||||||
2017 | 2016 | Change | ||||||||||
(in thousands) | ||||||||||||
Salesforce Tower | $ | (65 | ) | $ | — | $ | (65 | ) | ||||
767 Fifth Avenue (the General Motors Building) (1) | (6,164 | ) | (4,694 | ) | (1,470 | ) | ||||||
Times Square Tower | 6,654 | 6,836 | (182 | ) | ||||||||
601 Lexington Avenue (2) | 1,490 | 5,224 | (3,734 | ) | ||||||||
100 Federal Street | 160 | 782 | (622 | ) | ||||||||
Atlantic Wharf Office | 2,349 | 2,316 | 33 | |||||||||
$ | 4,424 | $ | 10,464 | $ | (6,040 | ) |
(1) | The net loss allocation is primarily due to the partners’ share of the interest expense for the outside members’ notes payable, which was $9.2 million and $8.2 million for the three months ended March 31, 2017 and 2016, respectively. |
(2) | On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns this property commenced the redevelopment of the six-story low-rise office and retail building component of the complex. The redeveloped portion of the low-rise building will contain approximately 195,000 net rentable square feet of Class A office space and approximately 25,000 net rentable square feet of retail space. |
• | fund normal recurring expenses; |
• | meet debt service and principal repayment obligations, including balloon payments on maturing debt; |
• | fund capital expenditures, including major renovations, tenant improvements and leasing costs; |
• | fund development costs; |
• | fund dividend requirements on BXP’s Series B Preferred Stock; |
• | fund possible property acquisitions; and |
• | make the minimum distribution required to enable BXP to maintain its REIT qualification under the Internal Revenue Code of 1986, as amended. |
• | cash flow from operations; |
• | distribution of cash flows from joint ventures; |
• | cash and cash equivalent balances; |
• | issuances of BXP equity securities and/or additional preferred or common units of partnership interest in BPLP; |
• | BPLP’s 2017 Credit Facility and other short-term bridge facilities; |
• | construction loans; |
• | long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness); and |
• | sales of real estate. |
Construction Properties | Estimated Stabilization Date | Location | # of Buildings | Estimated Square Feet | Investment to Date (1) | Estimated Total Investment (1) | Estimated Future Equity Requirement (1) | Percentage Leased (2) | ||||||||||||||||||
Office and Retail | ||||||||||||||||||||||||||
888 Boylston Street | Fourth Quarter, 2017 | Boston, MA | 1 | 425,000 | $ | 237,731 | $ | 271,500 | $ | 33,769 | 84 | % | (3) | |||||||||||||
Salesforce Tower (95% ownership) | First Quarter, 2019 | San Francisco, CA | 1 | 1,400,000 | 837,245 | 1,073,500 | 249,866 | 69 | % | (4) | ||||||||||||||||
The Hub on Causeway (50% ownership) | Fourth Quarter, 2019 | Boston, MA | 1 | 385,000 | 31,806 | 141,870 | 110,064 | 42 | % | |||||||||||||||||
Dock 72 (50% ownership) | First Quarter, 2020 | Brooklyn, NY | 1 | 670,000 | 50,111 | 204,900 | 29,789 | 33 | % | (5) | ||||||||||||||||
Total Office and Retail Properties under Construction | 4 | 2,880,000 | 1,156,893 | 1,691,770 | 423,488 | 59 | % | |||||||||||||||||||
Residential | ||||||||||||||||||||||||||
Proto at Cambridge (274 units) | First Quarter, 2019 | Cambridge, MA | 1 | 164,000 | 33,628 | 140,170 | 106,542 | N/A | ||||||||||||||||||
Signature at Reston (508 units) | Second Quarter, 2020 | Reston, VA | 1 | 490,000 | 113,529 | 234,854 | 121,325 | N/A | ||||||||||||||||||
Signature at Reston - Retail | — | 24,600 | — | — | — | 81 | % | |||||||||||||||||||
Total Residential Properties under Construction | 2 | 678,600 | 147,157 | 375,024 | 227,867 | 59 | % | (6) | ||||||||||||||||||
Redevelopment Properties | ||||||||||||||||||||||||||
Reservoir Place North | First Quarter 2018 | Waltham, MA | 1 | 73,000 | 15,721 | 24,510 | 8,789 | — | % | (7) | ||||||||||||||||
191 Spring Street | Third Quarter, 2018 | Lexington, MA | 1 | 160,000 | 4,796 | 53,920 | 49,124 | 49 | % | |||||||||||||||||
One Five Nine East 53rd Street (55% ownership) | Fourth Quarter, 2019 | New York, NY | — | 220,000 | 25,433 | 106,000 | 80,567 | — | % | (8) | ||||||||||||||||
Total Redevelopment Properties under Construction | 2 | 453,000 | 45,950 | 184,430 | 138,480 | 17 | % | |||||||||||||||||||
Total Properties under Construction and Redevelopment | 8 | 4,011,600 | $ | 1,350,000 | $ | 2,251,224 | $ | 789,835 | 54 | % | (6) |
(1) | Represents our share. Includes net revenue during lease up period, acquisition expenses and approximately $63.3 million of construction cost and leasing commission accruals. |
(2) | Represents percentage leased as of May 3, 2017, including leases with future commencement dates and excluding residential units. |
(3) | As of March 31, 2017, this property was 28% placed in-service. |
(4) | Under the joint venture agreement, if the project is funded with 100% equity, we have agreed to fund 50% of our partner’s equity requirement, structured as preferred equity. We will fund approximately $25.4 million at a rate of LIBOR plus 3.0% per annum and receive priority distributions from all distributions to our partner until the principal and interest are repaid. As of March 31, 2017, we have funded approximately $11.8 million. |
(5) | This development has a $125 million construction facility. As of March 31, 2017, no amounts have been drawn under this facility. |
(6) | Percentage leased includes only the retail space and includes approximately 9,000 square feet of retail space from the Proto at Cambridge residential development, which is 0% leased. |
(7) | As of March 31, 2017, this property was 4% placed in-service. |
(8) | Formerly the low-rise portion of 601 Lexington Avenue. |
Three months ended March 31, | |||||||||||
2017 | 2016 | Increase (Decrease) | |||||||||
(in thousands) | |||||||||||
Net cash provided by operating activities | $ | 246,530 | $ | 348,980 | $ | (102,450 | ) | ||||
Net cash used in investing activities | (262,593 | ) | (109,357 | ) | (153,236 | ) | |||||
Net cash provided by (used in) financing activities | (37,912 | ) | 642,337 | (680,249 | ) |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Construction in progress (1) | $ | (154,518 | ) | $ | (122,940 | ) | |
Building and other capital improvements | (43,687 | ) | (25,329 | ) | |||
Tenant improvements | (50,810 | ) | (55,739 | ) | |||
Proceeds from sales of real estate (2) | 133 | 104,816 | |||||
Proceeds from sales of real estate placed in escrow (2) | — | (104,696 | ) | ||||
Proceeds from sales of real estate released from escrow (2) | — | 104,696 | |||||
Cash released from escrow for investing activities | 5,230 | — | |||||
Cash released from escrow for land sale contracts | — | 488 | |||||
Capital contributions to unconsolidated joint ventures (3) | (17,980 | ) | (10,215 | ) | |||
Investments in securities, net | (961 | ) | (438 | ) | |||
Net cash used in investing activities | $ | (262,593 | ) | $ | (109,357 | ) |
(1) | Construction in progress for the three months ended March 31, 2017 includes ongoing expenditures associated with Reservoir Place North, 888 Boylston Street and the Prudential Center retail expansion, which were partially or fully placed in-service during the three months ended March 31, 2017. In addition, we incurred costs associated with our continued development/redevelopment of Salesforce Tower, One Five Nine East 53rd Street (the low-rise portion of 601 Lexington Avenue), 191 Spring Street and Proto at Cambridge and Signature at Reston residential projects. |
(2) | On February 1, 2016, we completed the sale of our 415 Main Street property located in Cambridge, Massachusetts to the tenant for a gross sale price of approximately $105.4 million. Net cash proceeds totaled approximately $104.9 million. |
(3) | Capital contributions to unconsolidated joint ventures for the three months ended March 31, 2017 were primarily due to cash contributions of approximately $8.1 million and $9.8 million to our Hub on Causeway and Dock 72 joint ventures, respectively. |
March 31, 2017 | |||||||||||
Shares / Units Outstanding | Common Stock Equivalent | Equivalent Value (1) | |||||||||
Common Stock | 153,849,231 | 153,849,231 | $ | 20,371,177 | |||||||
Common Operating Partnership Units | 18,088,585 | 18,088,585 | 2,395,110 | (2) | |||||||
5.25% Series B Cumulative Redeemable Preferred Stock (non-callable until March 27, 2018) | 80,000 | — | 200,000 | ||||||||
Total Equity | 171,937,816 | $ | 22,966,287 | ||||||||
Consolidated Debt | $ | 9,886,845 | |||||||||
Add: | |||||||||||
BXP’s share of unconsolidated joint venture debt (3) | 317,719 | ||||||||||
Subtract: | |||||||||||
Partners’ share of Consolidated Debt (4) | (1,138,446 | ) | |||||||||
BXP’s Share of Debt | $ | 9,066,118 | |||||||||
Consolidated Market Capitalization | $ | 32,853,132 | |||||||||
BXP’s Share of Market Capitalization | $ | 32,032,405 | |||||||||
Consolidated Debt/Consolidated Market Capitalization | 30.09 | % | |||||||||
BXP’s Share of Debt/BXP’s Share of Market Capitalization | 28.30 | % |
(1) | Values based on the closing price per share of BXP’s Common Stock on March 31, 2017 of $132.41, except for the Series B Cumulative Redeemable Preferred Stock which has been valued at the liquidation preference of $2,500.00 per share. |
(2) | Includes 811,476 long-term incentive plan units (including 118,067 2012 OPP Units, 85,491 2013 MYLTIP Units and 25,124 2014 MYLTIP Units), but excludes an aggregate of 1,240,578 MYLTIP Units granted between 2015 and 2017. |
(3) | See page 62 for additional information. |
(4) | See page 58 for additional information. |
(i) | the number of outstanding shares of common stock of BXP, |
(ii) | the number of outstanding OP Units in BPLP (excluding OP Units held by BXP), |
(iii) | the number of OP Units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units and |
(iv) | the number of OP Units issuable upon conversion of 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units that were issued in the form of LTIP Units; plus |
March 31, | |||||||
2017 | 2016 | ||||||
(dollars in thousands) | |||||||
Debt Summary: | |||||||
Balance | |||||||
Fixed rate mortgage notes payable, net | $ | 2,046,959 | $ | 3,416,622 | |||
Unsecured senior notes, net | 7,248,152 | 6,255,602 | |||||
Unsecured line of credit | 105,000 | — | |||||
Mezzanine notes payable | 306,734 | 308,142 | |||||
Outside members’ notes payable | 180,000 | 180,000 | |||||
Consolidated Debt | 9,886,845 | 10,160,366 | |||||
Add: | |||||||
BXP’s share of unconsolidated joint venture debt (1) | 317,719 | 351,394 | |||||
Subtract: | |||||||
Partners’ share of consolidated mortgage notes payable, net (2) | (835,752 | ) | (859,035 | ) | |||
Partners’ share of consolidated mezzanine notes payable (2) | (122,694 | ) | (123,257 | ) | |||
Outside members’ notes payable | (180,000 | ) | (180,000 | ) | |||
BXP’s Share of Debt | $ | 9,066,118 | $ | 9,349,468 | |||
March 31, | |||||||
2017 | 2016 | ||||||
Consolidated Debt Financing Statistics: | |||||||
Percent of total debt: | |||||||
Fixed rate | 98.92 | % | 100.00 | % | |||
Variable rate | 1.08 | % | — | % | |||
Total | 100.00 | % | 100.00 | % | |||
GAAP Weighted-average interest rate at end of period: | |||||||
Fixed rate | 4.06 | % | 4.29 | % | |||
Variable rate | 2.45 | % | — | % | |||
Total | 4.04 | % | 4.29 | % | |||
Coupon/Stated Weighted-average interest rate at end of period: | |||||||
Fixed rate | 4.50 | % | 4.79 | % | |||
Variable rate | 1.93 | % | — | % | |||
Total | 4.47 | % | 4.79 | % | |||
Weighted-average maturity at end of period (in years): | |||||||
Fixed rate | 4.7 | 4.6 | |||||
Variable rate | 1.3 | — | |||||
Total | 4.7 | 4.6 |
(1) | See page 62 for additional information. |
(2) | See page 61 for additional information. |
• | a leverage ratio not to exceed 60%, however the leverage ratio may increase to no greater than 65% provided that it is reduced back to 60% within one year; |
• | an unsecured leverage ratio not to exceed 60%, however the leverage ratio may increase to no greater than 65% provided that it is reduced back to 60% within one year; |
Coupon/ Stated Rate | Effective Rate(1) | Principal Amount | Maturity Date(2) | ||||||||
10 Year Unsecured Senior Notes | 5.875 | % | 5.967 | % | $ | 700,000 | October 15, 2019 | ||||
10 Year Unsecured Senior Notes | 5.625 | % | 5.708 | % | 700,000 | November 15, 2020 | |||||
10 Year Unsecured Senior Notes | 4.125 | % | 4.289 | % | 850,000 | May 15, 2021 | |||||
7 Year Unsecured Senior Notes | 3.700 | % | 3.853 | % | 850,000 | November 15, 2018 | |||||
11 Year Unsecured Senior Notes | 3.850 | % | 3.954 | % | 1,000,000 | February 1, 2023 | |||||
10.5 Year Unsecured Senior Notes | 3.125 | % | 3.279 | % | 500,000 | September 1, 2023 | |||||
10.5 Year Unsecured Senior Notes | 3.800 | % | 3.916 | % | 700,000 | February 1, 2024 | |||||
10 Year Unsecured Senior Notes | 3.650 | % | 3.766 | % | 1,000,000 | February 1, 2026 | |||||
10 Year Unsecured Senior Notes | 2.750 | % | 3.495 | % | 1,000,000 | October 1, 2026 | |||||
Total principal | 7,300,000 | ||||||||||
Net unamortized discount | (18,132 | ) | |||||||||
Deferred financing costs, net | (33,716 | ) | |||||||||
Total | $ | 7,248,152 |
(1) | Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs. |
(2) | No principal amounts are due prior to maturity. |
Properties | Stated Interest Rate | GAAP Interest Rate(1) | Stated Principal Amount | Historical Fair Value Adjustment | Deferred Financing Costs, Net | Carrying Amount | Carrying Amount (partners’ share) | Maturity Date | ||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||
Wholly-owned | ||||||||||||||||||||||||||||||
New Dominion Tech Park, Bldg. One | 7.69 | % | 7.84 | % | $ | 34,409 | $ | — | $ | (316 | ) | $ | 34,093 | N/A | January 15, 2021 | |||||||||||||||
University Place | 6.94 | % | 6.99 | % | 8,758 | — | (55 | ) | 8,703 | N/A | August 1, 2021 | |||||||||||||||||||
43,167 | — | (371 | ) | 42,796 | N/A | |||||||||||||||||||||||||
Consolidated Joint Ventures | ||||||||||||||||||||||||||||||
767 Fifth Avenue (the General Motors Building) | 5.95 | % | 2.44 | % | 1,300,000 | 22,622 | (195 | ) | 1,322,427 | 528,971 | (2)(3)(4) | October 7, 2017 | ||||||||||||||||||
601 Lexington Avenue | 4.75 | % | 4.79 | % | 683,411 | — | (1,675 | ) | 681,736 | 306,781 | (5) | April 10, 2022 | ||||||||||||||||||
1,983,411 | 22,622 | (1,870 | ) | 2,004,163 | 835,752 | |||||||||||||||||||||||||
Total | $ | 2,026,578 | $ | 22,622 | $ | (2,241 | ) | $ | 2,046,959 | $ | 835,752 |
(1) | GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, effects of hedging transactions and adjustments required to reflect loans at their fair values upon acquisition or consolidation. All adjustments to reflect loans at their fair value upon acquisition or consolidation are noted above. |
(2) | The mortgage loan requires interest only payments with a balloon payment due at maturity (See Note 12 to the Consolidated Financial Statements). |
(3) | This property is owned by a consolidated entity in which we have a 60% interest. |
(4) | In connection with the assumption of the loan, we guaranteed the joint venture’s obligation to fund various escrows, including tenant improvements, taxes and insurance in lieu of cash deposits. As of March 31, 2017, the maximum funding obligation under the guarantee was approximately $25.0 million. We earn a fee from the joint venture for providing the guarantee and have an agreement with our partners to reimburse the joint venture for their share of any payments made under the guarantee. |
(5) | This property is owned by a consolidated entity in which we have a 55% interest. |
Debt is Associated With | Stated Interest Rate | GAAP Interest Rate(1) | Stated Principal Amount | Historical Fair Value Adjustment | Carrying Amount | Carrying Amount (partners’ share) | Maturity Date | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
767 Fifth Avenue (the General Motors Building) | 6.02 | % | 5.53 | % | $ | 306,000 | $ | 734 | $ | 306,734 | $ | 122,694 | (2)(3) | October 7, 2017 |
(1) | GAAP interest rate differs from the stated interest rate due to adjustments required to reflect loans at their fair values upon acquisition or consolidation. The adjustment to reflect the loan at its fair value upon consolidation is noted above. |
(2) | This property is owned by a consolidated joint venture in which we have a 60% interest. |
(3) | The mezzanine note requires interest only payments with a balloon payment due at maturity (See Note 12 to the Consolidated Financial Statements). |
Properties | Venture Ownership % | Stated Interest Rate | GAAP Interest Rate (1) | Stated Principal Amount | Deferred Financing Costs, Net | Carrying Amount | Carrying Amount (Our Share) | Maturity Date | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
540 Madison Avenue | 60 | % | 2.28 | % | 2.45 | % | $ | 120,000 | $ | (238 | ) | $ | 119,762 | $ | 71,857 | (2)(3) | June 5, 2018 | ||||||||||||
Market Square North | 50 | % | 4.85 | % | 4.91 | % | 122,856 | (294 | ) | 122,562 | 61,281 | October 1, 2020 | |||||||||||||||||
Annapolis Junction Building One | 50 | % | 6.53 | % | 6.71 | % | 39,549 | (83 | ) | 39,466 | 19,731 | (4) | March 31, 2018 | ||||||||||||||||
Annapolis Junction Building Six | 50 | % | 3.10 | % | 3.27 | % | 12,863 | (56 | ) | 12,807 | 6,404 | (5) | November 17, 2018 | ||||||||||||||||
Annapolis Junction Building Seven and Eight | 50 | % | 3.13 | % | 3.37 | % | 36,586 | (274 | ) | 36,312 | 18,156 | (6) | December 7, 2019 | ||||||||||||||||
1265 Main Street | 50 | % | 3.77 | % | 3.83 | % | 40,278 | (410 | ) | 39,868 | 19,934 | January 1, 2032 | |||||||||||||||||
Dock 72 | 50 | % | N/A | N/A | — | — | — | — | (2)(7) | December 18, 2020 | |||||||||||||||||||
500 North Capitol Street | 30 | % | 4.15 | % | 4.19 | % | 105,000 | (365 | ) | 104,635 | 31,391 | (2) | June 6, 2023 | ||||||||||||||||
901 New York Avenue | 25 | % | 3.61 | % | 3.68 | % | 225,000 | (1,385 | ) | 223,615 | 55,904 | January 5, 2025 | |||||||||||||||||
Metropolitan Square | 20 | % | 5.75 | % | 5.81 | % | 165,622 | (305 | ) | 165,317 | 33,061 | May 5, 2020 | |||||||||||||||||
Total | $ | 867,754 | $ | (3,410 | ) | $ | 864,344 | $ | 317,719 |
(1) | GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges. |
(2) | The loan requires interest only payments with a balloon payment due at maturity. |
(3) | Mortgage loan bears interest at a variable rate equal to LIBOR plus 1.50% per annum. |
(4) | On April 11, 2016, a notice of event of default was received from the lender because the loan to value ratio is not in compliance with the applicable covenant in the loan agreement. On October 17, 2016, the lender notified the joint venture that it has elected to charge the default rate on the loan. The default rate is defined as LIBOR plus 5.75% per annum. Subsequently, the cash flows generated from the property have become insufficient to fund debt service payments and capital improvements necessary to lease and operate the property and the joint venture is not prepared to fund additional cash shortfalls at this time. Consequently, the joint venture is not current on making debt service payments and |
(5) | The loan bears interest at a variable rate equal to LIBOR plus 2.25% per annum. |
(6) | The loan bears interest at a variable rate equal to LIBOR plus 2.35% per annum and matures on December 7, 2019, with three, one-year extension options, subject to certain conditions. |
(7) | No amounts have been drawn under the $250.0 million construction facility. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on December 18, 2020 with two, one-year extension option, subject to certain conditions. |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income attributable to Boston Properties, Inc. common shareholders | $ | 97,083 | $ | 181,747 | |||
Add: | |||||||
Preferred dividends | 2,625 | 2,618 | |||||
Noncontrolling interest—common units of Boston Properties Limited Partnership | 11,432 | 21,393 | |||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Less: | |||||||
Gains on sales of real estate | 133 | 67,623 | |||||
Income before gains on sales of real estate | 115,431 | 148,599 | |||||
Add: | |||||||
Depreciation and amortization | 159,205 | 159,448 | |||||
Noncontrolling interests in property partnerships’ share of depreciation and amortization | (21,415 | ) | (19,555 | ) | |||
BXP’s share of depreciation and amortization from unconsolidated joint ventures | 9,041 | 4,496 | |||||
Corporate-related depreciation and amortization | (525 | ) | (364 | ) | |||
Less: | |||||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Preferred dividends | 2,625 | 2,618 | |||||
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”) | 254,688 | 279,542 | |||||
Less: | |||||||
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of funds from operations | 26,305 | 28,854 | |||||
FFO attributable to Boston Properties, Inc. common shareholders | $ | 228,383 | $ | 250,688 | |||
Boston Properties, Inc.’s percentage share of Funds from Operations—basic | 89.67 | % | 89.68 | % | |||
Weighted-average shares outstanding—basic | 153,860 | 153,626 |
Three Months Ended March 31, 2017 | Three Months Ended March 31, 2016 | ||||||||||||
Income (Numerator) | Shares (Denominator) | Income (Numerator) | Shares (Denominator) | ||||||||||
(in thousands) | |||||||||||||
Basic FFO | $ | 254,688 | 171,581 | $ | 279,542 | 171,309 | |||||||
Effect of Dilutive Securities | |||||||||||||
Stock Based Compensation | — | 354 | — | 291 | |||||||||
Diluted FFO | 254,688 | 171,935 | 279,542 | 171,600 | |||||||||
Less: | |||||||||||||
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of diluted FFO | 26,251 | 17,721 | 28,805 | 17,683 | |||||||||
Boston Properties, Inc.’s share of Diluted FFO (1) | $ | 228,437 | 154,214 | $ | 250,737 | 153,917 |
(1) | BXP’s share of diluted FFO was 89.69% and 89.70% for the three months ended March 31, 2017 and 2016, respectively. |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 110,662 | $ | 207,296 | |||
Add: | |||||||
Preferred distributions | 2,625 | 2,618 | |||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Less: | |||||||
Gains on sales of real estate | 133 | 69,792 | |||||
Income before gains on sales of real estate | 117,578 | 150,586 | |||||
Add: | |||||||
Depreciation and amortization | 157,058 | 157,461 | |||||
Noncontrolling interests in property partnerships’ share of depreciation and amortization | (21,415 | ) | (19,555 | ) | |||
BPLP’s share of depreciation and amortization from unconsolidated joint ventures | 9,041 | 4,496 | |||||
Corporate-related depreciation and amortization | (525 | ) | (364 | ) | |||
Less: | |||||||
Noncontrolling interests in property partnerships | 4,424 | 10,464 | |||||
Preferred distributions | 2,625 | 2,618 | |||||
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders (“Basic FFO”) (1) | $ | 254,688 | $ | 279,542 | |||
Weighted-average units outstanding—basic | 171,581 | 171,309 |
(1) | Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units, vested 2013 MYLTIP Units and vested 2014 MYLTIP Units). |
Three Months Ended March 31, 2017 | Three Months Ended March 31, 2016 | ||||||||||||
Income (Numerator) | Units (Denominator) | Income (Numerator) | Units (Denominator) | ||||||||||
(in thousands) | |||||||||||||
Basic FFO | $ | 254,688 | 171,581 | $ | 279,542 | 171,309 | |||||||
Effect of Dilutive Securities | |||||||||||||
Stock Based Compensation | — | 354 | — | 291 | |||||||||
Diluted FFO | $ | 254,688 | 171,935 | $ | 279,542 | 171,600 |
2017 | 2018 | 2019 | 2020 | 2021 | 2022+ | Total | Estimated Fair Value | ||||||||||||||||||||||||
(dollars in thousands) Mortgage debt, net | |||||||||||||||||||||||||||||||
Fixed Rate | $ | 1,334,719 | $ | 18,202 | $ | 19,239 | $ | 20,335 | $ | 39,840 | $ | 614,624 | $ | 2,046,959 | $ | 2,074,954 | |||||||||||||||
Average Interest Rate | 2.46 | % | 5.52 | % | 5.53 | % | 5.55 | % | 6.62 | % | 4.79 | % | 3.33 | % | |||||||||||||||||
Variable Rate | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Mezzanine debt | |||||||||||||||||||||||||||||||
Fixed Rate | $ | 306,734 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 306,734 | $ | 307,600 | |||||||||||||||
Average Interest Rate | 5.53 | % | — | — | — | — | — | 5.53 | % | ||||||||||||||||||||||
Variable Rate | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Unsecured debt, net | |||||||||||||||||||||||||||||||
Fixed Rate | $ | (6,631 | ) | $ | 841,285 | $ | 692,461 | $ | 692,962 | $ | 844,289 | $ | 4,183,786 | $ | 7,248,152 | $ | 7,460,437 | ||||||||||||||
Average Interest Rate | — | 3.85 | % | 5.97 | % | 5.71 | % | 4.29 | % | 3.71 | % | 4.21 | % | ||||||||||||||||||
Variable Rate | — | 105,000 | — | — | — | — | 105,000 | 105,099 | |||||||||||||||||||||||
$ | 1,634,822 | $ | 964,487 | $ | 711,700 | $ | 713,297 | $ | 884,129 | $ | 4,798,410 | $ | 9,706,845 | $ | 9,948,090 |
(a) | During the three months ended March 31, 2017, Boston Properties, Inc. issued an aggregate of 23,182 shares of common stock in exchange for 23,182 common units of limited partnership held by certain limited partners of Boston Properties Limited Partnership. Of these shares, 1,000 shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. We relied on the exemption under Section 4(a)(2) based upon factual representations received from the limited partner who received the common shares. |
(b) | Not applicable. |
(c) | Issuer Purchases of Equity Securities. |
Period | (a) Total Number of Shares of Common Stock Purchased | (b) Average Price Paid per Common Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased | |||
January 1, 2017 - January 31, 2017 | 9,019 | (1) | $128.50 | N/A | N/A | ||
February 1, 2017 - February 28, 2017 | 570 | (1) | $130.72 | N/A | N/A | ||
March 1, 2017 - March 31, 2017 | — | — | N/A | N/A | |||
Total | 9,589 | $128.63 | N/A | N/A |
(1) | Represents shares of Common Stock surrendered by employees to the Company to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted Common Stock. |
(a) | Each time Boston Properties, Inc. issues shares of stock (other than in exchange for common units when such common units are presented for redemption), it contributes the proceeds of such issuance to Boston Properties Limited Partnership in return for an equivalent number of partnership units with rights and preferences analogous to the shares issued. During the three months ended March 31, 2017, in connection with issuances of common stock by Boston Properties, Inc. pursuant to issuances to employees of restricted common stock and an exercise of non-qualified stock options under the Boston Properties, Inc. 2012 Stock Option and Incentive Plan and pursuant to issuances under the Boston Properties, Inc. 1999 Non-Qualified Employee Stock Purchase Plan, we issued an aggregate of approximately 45,463 common units to Boston Properties, Inc. in exchange for approximately $974,710, the aggregate proceeds of such common stock issuances to Boston Properties, Inc. Such units were |
(b) | Not Applicable. |
(c) | Issuer Purchases of Equity Securities. |
Period | (a) Total Number of Units Purchased | (b) Average Price Paid per Unit | (c) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Units that May Yet be Purchased | ||||
January 1, 2017 - January 31, 2017 | 9,019 | (1) | $ | 128.50 | N/A | N/A | ||
February 1, 2017 - February 28, 2017 | 447,956 | (2) | $ | 0.42 | N/A | N/A | ||
March 1, 2017 - March 31, 2017 | — | — | N/A | N/A | ||||
Total | 456,975 | $ | 2.94 | N/A | N/A |
(1) | Represents common units previously held by Boston Properties, Inc. that were redeemed in connection with the January 15, 2017 surrender of shares of restricted common stock of Boston Properties, Inc. by employees to Boston Properties, Inc. to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common stock. |
(2) | Includes 447,386 2014 MYLTIP units. The measurement period for such 2014 MYLTIP units ended on February 3, 2017 and Boston Properties, Inc.’s total return to stockholders was sufficient for employees to earn and therefore become eligible to vest in a portion of the 2014 MYLTIP units. Under the terms of the applicable 2014 MYLTIP award agreements, the 447,386 unearned 2014 MYLTIP units were repurchased at a price of $0.25 per 2014 MYLTIP unit, which was the amount originally paid by each employee for the units. Also includes 570 common units previously held by Boston Properties, Inc. that were redeemed in connection with the surrender of shares of restricted common stock of Boston Properties, Inc. by employees to Boston Properties, Inc. to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common stock. |
(a) | None. |
(b) | None. |
(a) | Exhibits |
10.1 | — | ||
12.1 | — | ||
12.2 | — | ||
31.1 | — | ||
31.2 | — | ||
31.3 | — | ||
31.4 | — | ||
32.1 | — | ||
32.2 | — | ||
32.3 | — | ||
32.4 | — | ||
101 | — | The following materials from Boston Properties, Inc.’s and Boston Properties Limited Partnership’s Quarterly Reports on Form 10-Q for the quarter ended March 31, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Partners’ Capital (vi) the Consolidated Statements of Cash Flows, and (vii) related notes to these financial statements. |
BOSTON PROPERTIES, INC. | ||
May 8, 2017 | /s/ MICHAEL R. WALSH | |
Michael R. Walsh | ||
Chief Accounting Officer (duly authorized officer and principal accounting officer) |
BOSTON PROPERTIES LIMITED PARTNERSHIP | ||
By: Boston Properties, Inc., its General Partner | ||
May 8, 2017 | /s/ MICHAEL R. WALSH | |
Michael R. Walsh | ||
Chief Accounting Officer (duly authorized officer and principal accounting officer) |
Three Months Ended March 31, 2017 | Year Ended December 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||
Income from continuing operations before income from unconsolidated joint ventures, gains on consolidation of joint ventures and gain on sale of investment in unconsolidated joint venture | $ | 112,347 | $ | 421,927 | $ | 401,253 | $ | 345,249 | $ | 242,583 | $ | 236,378 | ||||||||||||
Gains on sales of real estate | 133 | 80,606 | 375,895 | 168,039 | — | — | ||||||||||||||||||
Amortization of interest capitalized | 2,702 | 10,685 | 10,203 | 8,211 | 5,522 | 5,278 | ||||||||||||||||||
Distributions from unconsolidated joint ventures | 1,861 | 24,955 | 8,469 | 7,372 | 17,600 | 20,565 | ||||||||||||||||||
Fixed charges (see below) | 109,032 | 456,710 | 471,441 | 515,891 | 528,116 | 469,083 | ||||||||||||||||||
Subtract: | ||||||||||||||||||||||||
Interest capitalized | (12,345 | ) | (39,237 | ) | (34,213 | ) | (52,476 | ) | (68,152 | ) | (44,278 | ) | ||||||||||||
Preferred distributions of consolidated subsidiaries | — | — | (6 | ) | (1,023 | ) | (6,046 | ) | (3,497 | ) | ||||||||||||||
Noncontrolling interests in income of subsidiaries that have not incurred fixed charges | (9,098 | ) | (37,171 | ) | (40,248 | ) | (28,958 | ) | (5,818 | ) | — | |||||||||||||
Total earnings | $ | 204,632 | $ | 918,475 | $ | 1,192,794 | $ | 962,305 | $ | 713,805 | $ | 683,529 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expensed | $ | 95,534 | $ | 412,849 | $ | 432,196 | $ | 455,743 | $ | 447,240 | $ | 413,564 | ||||||||||||
Interest capitalized | 12,345 | 39,237 | 34,213 | 52,476 | 68,152 | 44,278 | ||||||||||||||||||
Portion of rental expense representative of the interest factor (one-third of rental expense) | 1,153 | 4,624 | 5,026 | 6,649 | 6,678 | 7,744 | ||||||||||||||||||
Preferred distributions of consolidated subsidiaries | — | — | 6 | 1,023 | 6,046 | 3,497 | ||||||||||||||||||
Total fixed charges | $ | 109,032 | $ | 456,710 | $ | 471,441 | $ | 515,891 | $ | 528,116 | $ | 469,083 | ||||||||||||
Preferred dividends | 2,625 | 10,500 | 10,500 | 10,500 | 8,057 | — | ||||||||||||||||||
Total combined fixed charges and preferred dividends | $ | 111,657 | $ | 467,210 | $ | 481,941 | $ | 526,391 | $ | 536,173 | $ | 469,083 | ||||||||||||
Ratio of earnings to fixed charges | 1.88 | 2.01 | 2.53 | 1.87 | 1.35 | 1.46 | ||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred dividends | 1.83 | 1.97 | 2.47 | 1.83 | 1.33 | 1.46 |
Three Months Ended March 31, 2017 | Year Ended December 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||
Income from continuing operations before income from unconsolidated joint ventures, gains on consolidation of joint ventures and gain on sale of investment in unconsolidated joint venture | $ | 114,494 | $ | 433,554 | $ | 409,246 | $ | 353,758 | $ | 254,536 | $ | 244,561 | ||||||||||||
Gains on sales of real estate | 133 | 82,775 | 377,093 | 174,686 | — | — | ||||||||||||||||||
Amortization of interest capitalized | 2,702 | 10,685 | 10,203 | 8,211 | 5,522 | 5,278 | ||||||||||||||||||
Distributions from unconsolidated joint ventures | 1,861 | 24,955 | 8,469 | 7,372 | 17,600 | 20,565 | ||||||||||||||||||
Fixed charges (see below) | 109,032 | 456,710 | 471,435 | 514,868 | 522,070 | 465,586 | ||||||||||||||||||
Subtract: | ||||||||||||||||||||||||
Interest capitalized | (12,345 | ) | (39,237 | ) | (34,213 | ) | (52,476 | ) | (68,152 | ) | (44,278 | ) | ||||||||||||
Noncontrolling interests in income of subsidiaries that have not incurred fixed charges | (9,098 | ) | (37,171 | ) | (40,248 | ) | (28,958 | ) | (5,818 | ) | — | |||||||||||||
Total earnings | $ | 206,779 | $ | 932,271 | $ | 1,201,985 | $ | 977,461 | $ | 725,758 | $ | 691,712 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expensed | $ | 95,534 | $ | 412,849 | $ | 432,196 | $ | 455,743 | $ | 447,240 | $ | 413,564 | ||||||||||||
Interest capitalized | 12,345 | 39,237 | 34,213 | 52,476 | 68,152 | 44,278 | ||||||||||||||||||
Portion of rental expense representative of the interest factor (one-third of rental expense) | 1,153 | 4,624 | 5,026 | 6,649 | 6,678 | 7,744 | ||||||||||||||||||
Total fixed charges | $ | 109,032 | $ | 456,710 | $ | 471,435 | $ | 514,868 | $ | 522,070 | $ | 465,586 | ||||||||||||
Preferred distributions | 2,625 | 10,500 | 10,506 | 11,523 | 14,103 | 3,497 | ||||||||||||||||||
Total combined fixed charges and preferred distributions | $ | 111,657 | $ | 467,210 | $ | 481,941 | $ | 526,391 | $ | 536,173 | $ | 469,083 | ||||||||||||
Ratio of earnings to fixed charges | 1.90 | 2.04 | 2.55 | 1.90 | 1.39 | 1.49 | ||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred distributions | 1.85 | 2.00 | 2.49 | 1.86 | 1.35 | 1.47 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Boston Properties, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ OWEN D. THOMAS | |
Owen D. Thomas | |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Boston Properties, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ MICHAEL E. LABELLE | |
Michael E. LaBelle | |
Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Boston Properties Limited Partnership; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ OWEN D. THOMAS |
Owen D. Thomas Chief Executive Officer of Boston Properties, Inc. General Partner of Boston Properties Limited Partnership |
1. | I have reviewed this Quarterly Report on Form 10-Q of Boston Properties Limited Partnership; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ MICHAEL E. LABELLE |
Michael E. LaBelle Chief Financial Officer of Boston Properties, Inc. General Partner of Boston Properties Limited Partnership |
/s/ OWEN D. THOMAS | |
Owen D. Thomas | |
Chief Executive Officer |
/s/ MICHAEL E. LABELLE | |
Michael E. LaBelle | |
Chief Financial Officer |
/s/ OWEN D. THOMAS |
Owen D. Thomas Chief Executive Officer of Boston Properties, Inc. General Partner of Boston Properties Limited Partnership |
/s/ MICHAEL E. LABELLE |
Michael E. LaBelle Chief Financial Officer of Boston Properties, Inc. General Partner of Boston Properties Limited Partnership |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 03, 2017 |
|
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | BOSTON PROPERTIES INC | |
Amendment Flag | false | |
Entity Central Index Key | 0001037540 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 153,857,334 | |
Boston Properties Limited Partnership | ||
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | BOSTON PROPERTIES LTD PARTNERSHIP | |
Amendment Flag | false | |
Entity Central Index Key | 0001043121 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||
Net income | $ 115,564 | $ 216,222 | |||||
Other comprehensive income (loss): | |||||||
Effective portion of interest rate contracts | 180 | (58,646) | |||||
Amortization of interest rate contracts | [1] | 1,306 | 627 | ||||
Other comprehensive income (loss) | 1,486 | (58,019) | |||||
Comprehensive income | 117,050 | 158,203 | |||||
Comprehensive income attributable to noncontrolling interests | (15,856) | (31,857) | |||||
Other comprehensive income (loss) attributable to noncontrolling interests | (218) | 15,427 | |||||
Comprehensive income attributable to the Company | 100,976 | 141,773 | |||||
Boston Properties Limited Partnership | |||||||
Net income | 117,711 | 220,378 | |||||
Other comprehensive income (loss): | |||||||
Effective portion of interest rate contracts | 180 | (58,646) | |||||
Amortization of interest rate contracts | [2] | 1,306 | 627 | ||||
Other comprehensive income (loss) | 1,486 | (58,019) | |||||
Comprehensive income | 119,197 | 162,359 | |||||
Comprehensive income attributable to noncontrolling interests | (4,496) | 62 | |||||
Comprehensive income attributable to the Company | $ 114,701 | $ 162,421 | |||||
|
Consolidated Statement of Partners' Capital Statement - USD ($) $ in Thousands |
Total |
Boston Properties Limited Partnership |
---|---|---|
Beginning Balance at Dec. 31, 2015 | $ 3,684,522 | |
Contributions | 1,165 | |
Net income allocable to general and limited partner units | 188,521 | |
Distributions | (102,461) | |
Accumulated other comprehensive loss | (42,592) | |
Unearned compensation | (137) | |
Conversion of redeemable partnership units | 446 | |
Adjustment to reflect redeemable partnership units at redemption value | (8,218) | |
Ending Balance at Mar. 31, 2016 | 3,721,246 | |
Beginning Balance at Dec. 31, 2016 | 3,811,717 | |
Contributions | 4,491 | |
Net income allocable to general and limited partner units | 101,855 | |
Distributions | (118,012) | |
Accumulated other comprehensive loss | 1,268 | |
Cumulative effect of a change in accounting principle | $ (2,035) | (272) |
Unearned compensation | (3,122) | |
Conversion of redeemable partnership units | 793 | |
Adjustment to reflect redeemable partnership units at redemption value | (126,416) | |
Ending Balance at Mar. 31, 2017 | $ 3,672,302 |
Organization |
3 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||
Organization | 1. Organization Boston Properties, Inc., a Delaware corporation, is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). Boston Properties, Inc. is the sole general partner of Boston Properties Limited Partnership, its operating partnership, and at March 31, 2017 owned an approximate 89.5% (89.5% at December 31, 2016) general and limited partnership interest in Boston Properties Limited Partnership. Unless stated otherwise or the context requires, the “Company” refers to Boston Properties, Inc. and its subsidiaries, including Boston Properties Limited Partnership, and its consolidated subsidiaries. Partnership interests in Boston Properties Limited Partnership include:
Unless specifically noted otherwise, all references to OP Units exclude units held by Boston Properties, Inc. A holder of an OP Unit may present such OP Unit to Boston Properties Limited Partnership for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, Boston Properties Limited Partnership is obligated to redeem such OP Unit for cash equal to the value of a share of common stock of Boston Properties, Inc. (“Common Stock”) at such time. In lieu of a cash redemption, Boston Properties, Inc. may elect to acquire such OP Unit for one share of Common Stock. Because the number of shares of Common Stock outstanding at all times equals the number of OP Units that Boston Properties, Inc. owns, one share of Common Stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of Common Stock. The Company uses LTIP Units as a form of equity-based award for annual long-term incentive equity compensation. The Company has also issued LTIP Units to employees in the form of (1) 2012 outperformance plan awards (“2012 OPP Units”) and (2) 2013, 2014, 2015, 2016 and 2017 multi-year, long-term incentive program awards (also referred to as “2013 MYLTIP Units,” “2014 MYLTIP Units,” “2015 MYLTIP Units,” “2016 MYLTIP Units” and “2017 MYLTIP Units,” respectively, and collectively as “MYLTIP Units”), each of which, upon the satisfaction of certain performance and vesting conditions, is convertible into one OP Unit. The three-year measurement periods for the 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units expired on February 6, 2015, February 4, 2016 and February 3, 2017, respectively, and Boston Properties, Inc.’s total stockholder return (“TSR”) was sufficient for employees to earn and therefore become eligible to vest in a portion of the awards. Unless and until they are earned, the rights, preferences and privileges of the 2015, 2016 and 2017 MYLTIP Units differ from other LTIP Units granted to employees (including the 2012 OPP Units, the 2013 MYLTIP Units and the 2014 MYLTIP Units, which have been earned). Therefore, unless specifically noted otherwise, all references to LTIP Units exclude the 2015, 2016 and 2017 MYLTIP Units. LTIP Units (including the 2012 OPP Units, the 2013 MYLTIP Units and the 2014 MYLTIP Units), whether vested or not, will receive the same quarterly per unit distributions as OP Units, which equal per share dividends on Common Stock (See Notes 7, 8 and 10). At March 31, 2017, there was one series of Preferred Units outstanding (i.e., Series B Preferred Units). The Series B Preferred Units were issued to Boston Properties, Inc. on March 27, 2013 in connection with the issuance of 80,000 shares (8,000,000 depositary shares each representing 1/100th of a share) of 5.25% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”). Boston Properties, Inc. contributed the net proceeds from the offering to Boston Properties Limited Partnership in exchange for 80,000 Series B Preferred Units having terms and preferences generally mirroring those of the Series B Preferred Stock (See Note 8). Properties At March 31, 2017, the Company owned or had interests in a portfolio of 174 commercial real estate properties (the “Properties”) aggregating approximately 47.7 million net rentable square feet of primarily Class A office properties, including eight properties under construction/redevelopment totaling approximately 4.0 million net rentable square feet. At March 31, 2017, the Properties consisted of:
The Company considers Class A office properties to be centrally located buildings that are professionally managed and maintained, attract high-quality tenants and command upper-tier rental rates, and that are modern structures or have been modernized to compete with newer buildings. |
Basis Of Presentation And Summary Of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Boston Properties, Inc. does not have any other significant assets, liabilities or operations, other than its investment in Boston Properties Limited Partnership, nor does it have employees of its own. Boston Properties Limited Partnership, not Boston Properties, Inc., generally executes all significant business relationships other than transactions involving securities of Boston Properties, Inc. All majority-owned subsidiaries and joint ventures over which the Company has financial and operating control and variable interest entities (“VIEs”) in which the Company has determined it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for all other unconsolidated joint ventures using the equity method of accounting. Accordingly, the Company’s share of the earnings of these joint ventures and companies is included in consolidated net income. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair statement of the financial statements for these interim periods have been included. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for other interim periods or for the full fiscal year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosure required by GAAP. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto contained in the Company’s Annual Report in the Company’s Form 10-K for its fiscal year ended December 31, 2016. Fair Value of Financial Instruments The Company determines the fair value of its unsecured senior notes using market prices. The inputs used in determining the fair value of the Company’s unsecured senior notes are categorized at a level 1 basis (as defined in the accounting standards for Fair Value Measurements and Disclosures) due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized at a level 2 basis (as defined in the accounting standards for Fair Value Measurements and Disclosures) if trading volumes are low. The Company determines the fair value of its mortgage notes payable using discounted cash flow analysis by discounting the spread between the future contractual interest payments and hypothetical future interest payments on mortgage debt based on current market rates for similar securities. In determining the current market rates, the Company adds its estimates of market spreads to the quoted yields on federal government treasury securities with similar maturity dates to its debt. The inputs used in determining the fair value of the Company’s mortgage notes payable and mezzanine notes payable are categorized at a level 3 basis (as defined in the accounting standards for Fair Value Measurements and Disclosures) due to the fact that the Company considers the rates used in the valuation techniques to be unobservable inputs. To the extent that there are outstanding borrowings under the unsecured line of credit, the Company utilizes a discounted cash flow methodology in order to estimate the fair value. To the extent that credit spreads have changed since the origination, the net present value of the difference between future contractual interest payments and future interest payments based on the Company’s estimate of a current market rate would represent the difference between the book value and the fair value. The Company’s estimate of a current market rate is based upon the rate, considering current market conditions and the Company’s specific credit profile, at which it estimates it could obtain similar borrowings. To the extent there are outstanding borrowings, this current market rate is internally estimated and therefore would be primarily based upon a level 3 input. Because the Company’s valuations of its financial instruments are based on these types of estimates, the actual fair values of its financial instruments may differ materially if the Company’s estimates do not prove to be accurate, and the Company’s estimated fair values for these instruments as of the end of the applicable reporting period are not necessarily indicative of estimated or actual fair values in future reporting periods. The following table presents the aggregate carrying value of the Company’s mortgage notes payable, net, mezzanine notes payable, unsecured line of credit and unsecured senior notes, net and the Company’s corresponding estimate of fair value as of March 31, 2017 and December 31, 2016 (in thousands):
The Company uses interest rate swap agreements to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. To comply with the provisions of Accounting Standards Codification (“ASC”) 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2017, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Variable Interest Entities (VIEs) Consolidated VIEs are those where the Company is considered to be the primary beneficiary of a VIE. The primary beneficiary is the entity that has a controlling financial interest in the VIE, which is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and (2) the obligation to absorb losses or the right to receive the returns from the VIE that could potentially be significant to the VIE. The Company has determined that it is the primary beneficiary for seven of the eight entities that are VIEs. Consolidated Variable Interest Entities As of March 31, 2017, Boston Properties, Inc. has identified seven consolidated VIEs, including Boston Properties Limited Partnership. The VIEs own (1) the following five in-service properties: 767 Fifth Avenue (the General Motors Building), Time Square Tower, 601 Lexington Avenue, Atlantic Wharf Office Building and 100 Federal Street and (2) the entity that owns Salesforce Tower, which is currently under development. The Company consolidates these VIEs because it is the primary beneficiary. The third parties’ interests in these consolidated entities, with the exception of Boston Properties Limited Partnership, are reflected as noncontrolling interest in property partnerships in the accompanying Consolidated Financial Statements (See Note 7). In addition, Boston Properties, Inc.’s significant asset is its investment in Boston Properties Limited Partnership and, consequently, substantially all of Boston Properties, Inc.’s assets and liabilities are the assets and liabilities of Boston Properties Limited Partnership. All of Boston Properties, Inc.’s debt is an obligation of Boston Properties Limited Partnership. Variable Interest Entities Not Consolidated The Company has determined that its BNY Tower Holdings LLC joint venture, which owns Dock 72 at the Brooklyn Navy Yard, is a VIE. The Company does not consolidate this entity because the Company does not have the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and, therefore, the Company is not considered to be the primary beneficiary. Recent Accounting Pronouncements In May 2014, the Financial Standards Accounting Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying ASU 2014-09, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB’s ASC. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which delayed the effective date of ASU 2014-09 by one year making it effective for the first interim period within annual reporting periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). ASU 2016-12 is intended to clarify and provide practical expedients for certain aspects of ASU 2014-09, which outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and notes that lease contracts with customers are a scope exception. The Company may elect to adopt ASU 2016-12 as of the original effective date; however, adoption is required for annual reporting periods beginning after December 15, 2017. The Company has commenced the process of adopting ASU 2014-09 for reporting periods beginning after December 15, 2017, including forming a project team and compiling an inventory of the sources of revenue the Company expects will be impacted by the adoption of ASU 2014-09. The Company expects that executory costs and certain non-lease components of revenue from leases (upon the adoption of ASU 2016-02), tenant service revenue, development and management services revenue, parking revenue and gains on sales of real estate may be impacted by the adoption of ASU 2014-09, although the Company expects that the impact will be to the pattern of revenue recognition and not the total revenue recognized over time. The Company is in the process of evaluating the significance of the impact on the changes in the recognition pattern of its revenue and is still completing its assessment of the overall impact of adopting ASU 2014-09. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes previous leasing standards. ASU 2016-02 is effective for the Company for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company has commenced the process of adopting ASU 2016-02 by forming a project team and beginning to compile an inventory of its leases that will be impacted by the adoption of ASU 2016-02. The Company is still assessing the impact of adopting ASU 2016-02. However, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of ground leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In addition, under ASU 2016-02, lessors may only capitalize incremental direct leasing costs. As a result, the Company expects that it will no longer be able to capitalize its internal leasing wages and instead will expense these costs as incurred. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 is intended to improve the accounting for share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment awards are simplified with ASU 2016-09, including income tax consequences, classification of awards as equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for the Company for reporting periods beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09 and elected to make an accounting policy change to its method of accounting for forfeitures on its awards of stock-based compensation including the issuance of shares of restricted common stock, LTIP Units and MYLTIP Units. The Company now accounts for forfeitures as they occur instead of estimating the number of forfeitures upon the issuance of such awards of stock-based compensation. The adoption resulted in the Company recognizing cumulative effect of a change in accounting principle adjustments to its consolidated balance sheets totaling approximately $0.3 million to Dividends in Excess of Earnings and Partners’ Capital for Boston Properties, Inc. and Boston Properties Limited Partnership, respectively, and approximately $1.8 million to noncontrolling interests - common units of Boston Properties Limited Partnership and noncontrolling interests - redeemable partnership units for Boston Properties, Inc. and Boston Properties Limited Partnership, respectively. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. This update is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions that have not been reported in previously issued (or available to be issued) financial statements and shall be applied on a prospective basis. The Company early adopted ASU 2017-01 during the first quarter of 2017. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. In February 2017, the FASB issued ASU No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”). ASU 2017-05 updates the definition of an “in substance nonfinancial asset” and clarifies the derecognition guidance for nonfinancial assets to conform with the new revenue recognition standard. The effective date and transition methods of ASU 2017-05 are aligned with ASU 2014-09 described above and are effective for the first interim period within annual reporting periods beginning after December 15, 2017. The Company is currently assessing the potential impact that the adoption of ASU 2017-05 will have on its consolidated financial statements. |
Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Boston Properties, Inc. Real estate consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):
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Boston Properties Limited Partnership Real estate consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):
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Investments in Unconsolidated Joint Ventures |
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Investments In Unconsolidated Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments In Unconsolidated Joint Ventures | 4. Investments in Unconsolidated Joint Ventures The investments in unconsolidated joint ventures consist of the following at March 31, 2017 and December 31, 2016:
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Certain of the Company’s unconsolidated joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. With limited exception, under these provisions, the Company is not compelled to purchase the interest of its outside joint venture partners. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners will be entitled to an additional promoted interest or payments. The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:
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The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:
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Derivative Instruments and Hedging Activities (Notes) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities [Text Block] | 5. Derivative Instruments and Hedging Activities During the year ended December 31, 2015, Boston Properties Limited Partnership commenced a planned interest rate hedging program and entered into 17 forward-starting interest rate swap contracts that fixed the 10-year swap rate at a weighted-average rate of approximately 2.423% per annum on notional amounts aggregating $550.0 million. These interest rate swap contracts were entered into in advance of a financing with a target commencement date in September 2016 and maturity in September 2026. On August 17, 2016, in conjunction with Boston Properties Limited Partnership’s offering of its 2.750% senior unsecured notes due 2026, the Company terminated the forward-starting interest rate swap contracts and cash-settled the contracts by making cash payments to the counterparties aggregating approximately $49.3 million. The Company recognized approximately $0.1 million of losses on interest rate contracts during the year ended December 31, 2016 related to the partial ineffectiveness of the interest rate contracts. The Company is reclassifying into earnings, as an increase to interest expense, approximately $49.2 million (or approximately $4.9 million per year over the 10-year term of the 2.750% senior unsecured notes due 2026) of the amounts recorded in the consolidated balance sheets within accumulated other comprehensive loss, which represents the effective portion of the applicable interest rate contracts. In addition, 767 Fifth Partners LLC, which is a subsidiary of the consolidated entity in which the Company has a 60% interest and owns 767 Fifth Avenue (the General Motors Building) in New York City, entered into 16 forward-starting interest rate swap contracts (including two contracts entered into during the three months ended March 31, 2016 with notional amounts aggregating $50.0 million) that fix the 10-year swap rate at a weighted-average rate of approximately 2.619% per annum on notional amounts aggregating $450.0 million. These interest rate swap contracts were entered into in advance of a financing with a target commencement date in June 2017 and maturity in June 2027 (See Note 12). 767 Fifth Partners LLC’s interest rate swap contracts consisted of the following at March 31, 2017 (dollars in thousands):
767 Fifth Avenue Partners LLC’s interest rate swap contracts consisted of the following at December 31, 2016 (dollars in thousands):
Boston Properties Limited Partnership entered into the interest rate swap contracts designated and qualifying as cash flow hedges to reduce its exposure to the variability in future cash flows attributable to changes in the 10-year swap rate in contemplation of obtaining 10-year fixed-rate financing in September 2016. The Company’s 767 Fifth Partners LLC consolidated entity entered into the interest rate swap contracts designated and qualifying as cash flow hedges to reduce its exposure to the variability in future cash flows attributable to changes in the 10-year swap rate in contemplation of obtaining 10-year fixed-rate financing in June 2017 (See Note 12). Boston Properties Limited Partnership has formally documented all of its relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. Boston Properties Limited Partnership also assesses and documents, both at the hedging instrument’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows associated with the hedged items. All components of the forward-starting interest rate swap contracts were included in the assessment of hedge effectiveness. 767 Fifth Partners LLC has agreements with each of its derivative counterparties that contain a provision where it could be declared in default on its derivative obligations if repayment of its indebtedness is accelerated by the lender due to its default on the indebtedness. As of March 31, 2017, the fair value of 767 Fifth Partners LLC’s derivatives is in a net liability position, excluding any adjustment for nonperformance risk and excluding accrued interest, related to these agreements of approximately $8.6 million. As of March 31, 2017, 767 Fifth Partners LLC has not posted any collateral related to these agreements. If 767 Fifth Partners LLC had breached any of these provisions at March 31, 2017, it could have been required to settle its obligations under the agreements at their termination value of approximately $8.6 million. The Company accounts for the effective portion of changes in the fair value of a derivative in accumulated other comprehensive loss and subsequently reclassifies the effective portion to earnings over the term that the hedged transaction affects earnings. The Company accounts for the ineffective portion of changes in the fair value of a derivative directly in earnings. The Company classifies cash flows related to derivative instruments within its Consolidated Statements of Cash Flows consistent with the nature of the hedged item. 767 Fifth Partners LLC has recorded the changes in fair value of the swap contracts related to the effective portion of the interest rate contracts aggregating approximately $8.6 million in Other Liabilities and approximately $0.6 million in Prepaid Expenses and Other Assets and Accumulated Other Comprehensive Loss within the Company’s Consolidated Balance Sheets. During the three months ended March 31, 2017, 767 Fifth Partners LLC did not record any hedge ineffectiveness. 767 Fifth Partners LLC expects that within the next twelve months it will reclassify into earnings as an increase to interest expense approximately $0.7 million of the amounts recorded within Accumulated Other Comprehensive Loss relating to the forward-starting interest rate swap contracts in effect and as of March 31, 2017. The following table presents the location in the financial statements of the gains (losses) recognized related to the Company’s cash flow hedges for the three months ended March 31, 2017 and 2016:
Boston Properties, Inc. The following table reflects the changes in accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 (in thousands):
Boston Properties Limited Partnership The following table reflects the changes in accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 (in thousands):
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Commitments And Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 6. Commitments and Contingencies General In the normal course of business, the Company guarantees its performance of services or indemnifies third parties against its negligence. In addition, in the normal course of business, the Company guarantees to certain tenants the obligations of its subsidiaries for the payment of tenant improvement allowances and brokerage commissions in connection with their leases and limited costs arising from delays in delivery of their premises. The Company has letter of credit and performance obligations related to lender and development requirements that total approximately $12.0 million. Certain of the Company’s joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. With limited exception, under these provisions, the Company is not compelled to purchase the interest of its outside joint venture partners. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners will be entitled to an additional promoted interest or payments. In connection with the assumption of 767 Fifth Avenue’s (the General Motors Building) secured loan by the Company’s consolidated joint venture entity, 767 Venture, LLC, the Company guaranteed the consolidated joint venture’s obligation to fund various escrows, including tenant improvements, taxes and insurance in lieu of cash deposits. As of March 31, 2017, the maximum funding obligation under the guarantee was approximately $25.0 million. The Company earns a fee from the joint venture for providing the guarantee and has an agreement with the outside partners to reimburse the joint venture for their share of any payments made under the guarantee. In connection with 767 Fifth Partners LLC entering into interest rate swap contracts (See Notes 5 and 12), the Company guaranteed 767 Fifth Partners LLC’s obligations under the hedging agreements in favor of each hedge counterparty. 767 Fifth Partners LLC is the entity that owns 767 Fifth Avenue (the General Motors Building). It is a subsidiary of 767 Venture, LLC, a consolidated entity in which the Company has a 60% interest. The Company earns a fee from the joint venture for providing the guarantee and has an agreement with the outside partners to reimburse the joint venture for their share of any payments made under the guarantee. From time to time, the Company (or the applicable joint venture) has also agreed to guarantee portions of the principal, interest or other amounts in connection with other unconsolidated joint venture borrowings. In addition to the financial guarantees referenced above, the Company has agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) on certain of its unconsolidated joint venture loans. In 2009, the Company filed a general unsecured creditor’s claim against Lehman Brothers, Inc. for approximately $45.3 million related to its rejection of a lease at 399 Park Avenue in New York City. On January 10, 2014, the trustee for the liquidation of the business of Lehman Brothers allowed the Company’s claim in the amount of approximately $45.2 million. During 2014 and 2015, the Company received distributions of approximately $7.7 million and $8.1 million, respectively. On July 5, 2016, the Company received a fourth interim distribution totaling approximately $1.4 million, leaving a remaining claim of approximately $28.0 million. The Company will continue to evaluate whether to attempt to sell the remaining claim or wait until the trustee distributes proceeds from the Lehman Brothers estate. Given the inherent uncertainties in bankruptcy proceedings, there can be no assurance as to the timing or amount of additional proceeds, if any, that the Company may ultimately realize on the remaining claim, whether by sale to a third party or by one or more distributions from the trustee. Accordingly, the Company has not recorded any estimated recoveries associated with this gain contingency within its Consolidated Financial Statements at March 31, 2017. Insurance The Company carries insurance coverage on its properties, including those under development, of types and in amounts and with deductibles that it believes are in line with coverage customarily obtained by owners of similar properties. Certain properties owned in joint ventures with third parties are insured by the third party partner with insurance coverage of types and in amounts and with deductibles the Company believes are in line with coverage customarily obtained by owners of similar properties. In response to the uncertainty in the insurance market following the terrorist attacks of September 11, 2001, the Federal Terrorism Risk Insurance Act (as amended, “TRIA”) was enacted in November 2002 to require regulated insurers to make available coverage for “certified” acts of terrorism (as defined by the statute). The expiration date of TRIA was extended to December 31, 2014 by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and further extended to December 31, 2020 by the Terrorism Risk Insurance Program Reauthorization Act of 2015 (“TRIPRA”), and the Company can provide no assurance that it will be extended further. Currently, the Company’s property insurance program per occurrence limits are $1.0 billion for its portfolio insurance program, including coverage for acts of terrorism other than nuclear, biological, chemical or radiological terrorism (“Terrorism Coverage”). The Company also carries $250 million of Terrorism Coverage for 601 Lexington Avenue, New York, New York (“601 Lexington Avenue”) in excess of the $1.0 billion of coverage in the Company’s property insurance program. Certain properties, including the General Motors Building located at 767 Fifth Avenue in New York, New York (“767 Fifth Avenue”), are currently insured in separate insurance programs. The property insurance program per occurrence limits for 767 Fifth Avenue are $1.625 billion, including Terrorism Coverage. The Company also currently carries nuclear, biological, chemical and radiological terrorism insurance coverage for acts of terrorism certified under TRIA (“NBCR Coverage”), which is provided by IXP as a direct insurer, for the properties in our portfolio, including 767 Fifth Avenue, but excluding certain other properties owned in joint ventures with third parties or which the Company manages. The per occurrence limit for NBCR Coverage is $1.0 billion. Under TRIA, after the payment of the required deductible and coinsurance, the NBCR Coverage provided by IXP is backstopped by the Federal Government if the aggregate industry insured losses resulting from a certified act of terrorism exceed a “program trigger.” In 2017, the program trigger is $140 million and the coinsurance is 17%, however, both will increase in subsequent years pursuant to TRIPRA. If the Federal Government pays out for a loss under TRIA, it is mandatory that the Federal Government recoup the full amount of the loss from insurers offering TRIA coverage after the payment of the loss pursuant to a formula in TRIPRA. The Company may elect to terminate the NBCR Coverage if the Federal Government seeks recoupment for losses paid under TRIA, if there is a change in its portfolio or for any other reason. The Company intends to continue to monitor the scope, nature and cost of available terrorism insurance and maintain terrorism insurance in amounts and on terms that are commercially reasonable. The Company also currently carries earthquake insurance on its properties located in areas known to be subject to earthquakes in an amount and subject to self-insurance that the Company believes is commercially reasonable. In addition, this insurance is subject to a deductible in the amount of 3% of the value of the affected property. Specifically, the Company currently carries earthquake insurance which covers its San Francisco (including Salesforce Tower) and Los Angeles regions with a $240 million (increased from $170 million on March 1, 2017) per occurrence limit, and a $240 million (increased from $170 million on March 1, 2017) annual aggregate limit, $20 million of which is provided by IXP, as a direct insurer. Prior to March 1, 2017, the builders risk policy maintained for the development of Salesforce Tower in San Francisco included a $60 million per occurrence and annual aggregate limit of earthquake coverage. The amount of the Company’s earthquake insurance coverage may not be sufficient to cover losses from earthquakes. In addition, the amount of earthquake coverage could impact the Company’s ability to finance properties subject to earthquake risk. The Company may discontinue earthquake insurance or change the structure of its earthquake insurance program on some or all of its properties in the future if the premiums exceed the Company’s estimation of the value of the coverage. IXP, a captive insurance company which is a wholly-owned subsidiary of the Company, acts as a direct insurer with respect to a portion of the Company’s earthquake insurance coverage for its Greater San Francisco and Los Angeles properties and the Company’s NBCR Coverage. Insofar as the Company owns IXP, it is responsible for its liquidity and capital resources, and the accounts of IXP are part of the Company’s consolidated financial statements. In particular, if a loss occurs which is covered by the Company’s NBCR Coverage but is less than the applicable program trigger under TRIA, IXP would be responsible for the full amount of the loss without any backstop by the Federal Government. IXP would also be responsible for any recoupment charges by the Federal Government in the event losses are paid out and its insurance policy is maintained after the payout by the Federal Government. If the Company experiences a loss and IXP is required to pay under its insurance policy, the Company would ultimately record the loss to the extent of the required payment. Therefore, insurance coverage provided by IXP should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance. In addition, Boston Properties Limited Partnership has issued a guarantee to cover liabilities of IXP in the amount of $20.0 million. The mortgages on the Company’s properties typically contain requirements concerning the financial ratings of the insurers who provide policies covering the property. The Company provides the lenders on a regular basis with the identity of the insurance companies in the Company’s insurance programs. The ratings of some of the Company’s insurers are below the rating requirements in some of the Company’s loan agreements and the lenders for these loans could attempt to claim that an event of default has occurred under the loan. The Company believes it could obtain insurance with insurers which satisfy the rating requirements. Additionally, in the future, the Company’s ability to obtain debt financing secured by individual properties, or the terms of such financing, may be adversely affected if lenders generally insist on ratings for insurers or amounts of insurance which are difficult to obtain or which result in a commercially unreasonable premium. There can be no assurance that a deficiency in the financial ratings of one or more of the Company’s insurers will not have a material adverse effect on the Company. The Company continues to monitor the state of the insurance market in general, and the scope and costs of coverage for acts of terrorism and California earthquake risk in particular, but the Company cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. There are other types of losses, such as from wars, for which the Company cannot obtain insurance at all or at a reasonable cost. With respect to such losses and losses from acts of terrorism, earthquakes or other catastrophic events, if the Company experiences a loss that is uninsured or that exceeds policy limits, the Company could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties. Depending on the specific circumstances of each affected property, it is possible that the Company could be liable for mortgage indebtedness or other obligations related to the property. Any such loss could materially and adversely affect the Company’s business and financial condition and results of operations. |
Noncontrolling Interests |
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Noncontrolling Interests | 7. Noncontrolling Interests Noncontrolling interests relate to the interests in Boston Properties Limited Partnership not owned by Boston Properties, Inc. and interests in consolidated property partnerships not wholly-owned by the Company. As of March 31, 2017, the noncontrolling interests in Boston Properties Limited Partnership consisted of 17,277,109 OP Units, 811,476 LTIP Units (including 118,067 2012 OPP Units, 85,491 2013 MYLTIP Units and 25,124 2014 MYLTIP Units), 367,218 2015 MYLTIP Units, 473,360 2016 MYLTIP Units and 400,000 2017 MYLTIP Units held by parties other than Boston Properties, Inc. Noncontrolling Interest—Common Units During the three months ended March 31, 2017, 23,182 OP Units were presented by the holders for redemption (including 20,682 OP Units issued upon conversion of LTIP Units, 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units) and were redeemed by Boston Properties, Inc. in exchange for an equal number of shares of Common Stock. At March 31, 2017, Boston Properties Limited Partnership had outstanding 367,218 2015 MYLTIP Units, 473,360 2016 MYLTIP Units and 400,000 2017 MYLTIP Units. Prior to the applicable measurement date (February 4, 2018 for 2015 MYLTIP Units, February 9, 2019 for 2016 MYLTIP Units and February 6, 2020 for 2017 MYLTIP Units), holders of MYLTIP Units will be entitled to receive per unit distributions equal to one-tenth (10%) of the regular quarterly distributions payable on an OP Unit, but will not be entitled to receive any special distributions. After the measurement date, the number of MYLTIP Units, both vested and unvested, that MYLTIP award recipients have earned, if any, based on the establishment of a performance pool, will be entitled to receive distributions in an amount per unit equal to distributions, both regular and special, payable on an OP Unit. On February 3, 2017, the measurement period for the Company’s 2014 MYLTIP awards ended and, based on Boston Properties, Inc.’s relative TSR performance, the final awards were determined to be 27.7% of target or an aggregate of approximately $3.5 million (after giving effect to voluntary employee separations and the unallocated reserve). As a result, an aggregate of 447,386 2014 MYLTIP Units that had been previously granted were automatically forfeited. The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units and 2013 MYLTIP Units and, after the February 3, 2017 measurement date, the 2014 MYLTIP Units) and its distributions on the 2014 MYLTIP Units (prior to the February 3, 2017 measurement date), 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units (after the February 7, 2017 issuance date) paid in 2017:
A holder of an OP Unit may present the OP Unit to Boston Properties Limited Partnership for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, Boston Properties Limited Partnership must redeem the OP Unit for cash equal to the then value of a share of common stock of Boston Properties, Inc. Boston Properties, Inc. may, in its sole discretion, elect to assume and satisfy the redemption obligation by paying either cash or issuing one share of Common Stock. The value of the OP Units not owned by Boston Properties, Inc. and LTIP Units (including the 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units), assuming that all conditions had been met for the conversion thereof, had all of such units been redeemed at March 31, 2017 was approximately $2.4 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $132.41 per share on March 31, 2017. Boston Properties Limited Partnership The following table reflects the activity of noncontrolling interests—redeemable partnership units of Boston Properties Limited Partnership for the three months ended March 31, 2017 and 2016 (in thousands):
Noncontrolling Interests—Property Partnerships The noncontrolling interests in property partnerships consist of the outside equity interests in ventures that are consolidated with the financial results of the Company because the Company exercises control over the entities that own the properties. The equity interests in these ventures that are not owned by the Company, totaling approximately $1.5 billion at March 31, 2017 and December 31, 2016, are included in Noncontrolling Interests—Property Partnerships in the accompanying Consolidated Balance Sheets. On May 12, 2016, the partners in the Company’s consolidated entity that owns Salesforce Tower located in San Francisco, California amended the venture agreement. Under the venture agreement, if the Company elects to fund the construction of Salesforce Tower without a construction loan (or a construction loan of less than 50% of project costs) and the venture has commenced vertical construction of the project, then the partner’s capital funding obligation shall be limited, in which event the Company shall fund up to 2.5% of the total project costs (i.e., 50% of the partner’s 5% interest in the venture) in the form of a loan to the partner. This loan would bear interest at the then prevailing market interest rates for construction loans. Under the amended agreement, the partners have agreed to structure this funding by the Company as preferred equity rather than a loan. The preferred equity contributed by the Company shall earn a preferred return equal to LIBOR plus 3.00% per annum and shall be payable to the Company out of any distributions to which the partner would otherwise be entitled until such preferred equity and preferred return have been repaid to the Company. As of March 31, 2017, approximately $11.8 million of preferred equity had been contributed by the Company to the venture. The following table reflects the activity of the noncontrolling interests in property partnerships for the three months ended March 31, 2017 and 2016 (in thousands):
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Stockholders' Equity / Partners' Capital | 8. Stockholders’ Equity / Partners’ Capital As of March 31, 2017, Boston Properties, Inc. had 153,849,231 shares of Common Stock outstanding. As of March 31, 2017, Boston Properties, Inc. owned 1,719,378 general partnership units and 152,129,853 limited partnership units of Boston Properties Limited Partnership. On June 3, 2014, Boston Properties, Inc. established an “at the market” (“ATM”) stock offering program through which it may sell from time to time up to an aggregate of $600.0 million of its common stock through sales agents over a three-year period. The Company intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. No shares of common stock have been issued under this ATM stock offering program since its inception. During the three months ended March 31, 2017, Boston Properties, Inc. issued 23,182 shares of Common Stock in connection with the redemption of an equal number of redeemable OP Units from third parties. The following table presents Boston Properties, Inc.’s dividends per share and Boston Properties Limited Partnership’s distributions per OP Unit and LTIP Unit paid in 2017:
Preferred Stock As of March 31, 2017, Boston Properties, Inc. had 80,000 shares (8,000,000 depositary shares each representing 1/100th of a share) outstanding of its 5.25% Series B Cumulative Redeemable Preferred Stock with a liquidation preference of $2,500.00 per share ($25.00 per depositary share). Boston Properties, Inc. pays cumulative cash dividends on the Series B Preferred Stock at a rate of 5.25% per annum of the $2,500.00 liquidation preference per share. Boston Properties, Inc. may not redeem the Series B Preferred Stock prior to March 27, 2018, except in certain circumstances relating to the preservation of Boston Properties, Inc.’s REIT status. On or after March 27, 2018, Boston Properties, Inc., at its option, may redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per depositary share), plus all accrued and unpaid dividends. The Series B Preferred Stock is not redeemable by the holders, has no maturity date and is not convertible into any other security of Boston Properties, Inc. or its affiliates. The following table presents Boston Properties Inc.’s dividends per share on its outstanding Series B Preferred Stock paid during 2017:
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share / Common Unit | 9. Earnings Per Share / Common Unit Boston Properties, Inc. The following table provides a reconciliation of both the net income attributable to Boston Properties, Inc. common shareholders and the number of common shares used in the computation of basic earnings per share (“EPS”), which is calculated by dividing net income attributable to Boston Properties, Inc. common shareholders by the weighted-average number of common shares outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of the Company, LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic EPS of the Company using the two-class method. Participating securities are included in the computation of diluted EPS of the Company using the if-converted method if the impact is dilutive. Because the 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units required, and the 2015-2017 MYLTIP Units require, the Company to outperform absolute and relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, the Company excludes such units from the diluted EPS calculation. Other potentially dilutive common shares, including stock options, restricted stock and other securities of Boston Properties Limited Partnership that are exchangeable for the Boston Properties, Inc.’s Common Stock, and the related impact on earnings, are considered when calculating diluted EPS.
Boston Properties Limited Partnership The following table provides a reconciliation of both the net income attributable to Boston Properties Limited Partnership common unitholders and the number of common units used in the computation of basic earnings per common unit, which is calculated by dividing net income attributable to Boston Properties Limited Partnership common unitholders by the weighted-average number of common units outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of Boston Properties, Inc. and Boston Properties Limited Partnership’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic earnings per common unit using the two-class method. Participating securities are included in the computation of diluted earnings per common unit using the if-converted method if the impact is dilutive. Because the 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units required, and the 2015-2017 MYLTIP Units require, Boston Properties, Inc. to outperform absolute and relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties Limited Partnership excludes such units from the diluted earnings per common unit calculation. Other potentially dilutive common units and the related impact on earnings are considered when calculating diluted earnings per common unit. Included in the number of units (the denominator) below are approximately 17,721,000 and 17,683,000 redeemable common units for the three months ended March 31, 2017 and 2016, respectively.
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Stock Option and Incentive Plan |
3 Months Ended |
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Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option and Incentive Plan | 10. Stock Option and Incentive Plan On January 25, 2017, Boston Properties, Inc.’s Compensation Committee approved the 2017 MYLTIP awards under Boston Properties, Inc.’s 2012 Stock Option and Incentive Plan (the “2012 Plan”) to certain officers and employees of Boston Properties, Inc. The 2017 MYLTIP awards utilize Boston Properties, Inc.’s total stockholder return (“TSR”) over a three-year measurement period, on an annualized, compounded basis, as the performance metric. Earned awards will be based on Boston Properties, Inc.’s TSR relative to (i) the Cohen & Steers Realty Majors Portfolio Index (50% weight) and (ii) the NAREIT Office Index adjusted to include Vornado Realty Trust (50% weight). Earned awards will range from zero to a maximum of approximately $42.7 million depending on Boston Properties, Inc.’s TSR relative to the two indices, with four tiers (threshold: approximately $10.7 million; target: approximately $21.3 million; high: approximately $32.0 million; exceptional: approximately $42.7 million) and linear interpolation between tiers. Earned awards measured on the basis of relative TSR performance are subject to an absolute TSR component in the form of relatively simple modifiers that (A) reduce the level of earned awards in the event Boston Properties, Inc.’s annualized TSR is less than 0% and (B) cause some awards to be earned in the event Boston Properties, Inc.’s annualized TSR is more than 12% even though on a relative basis alone Boston Properties, Inc.’s TSR would not result in any earned awards. Earned awards (if any) will vest 50% on February 6, 2020 and 50% on February 6, 2021, based on continued employment. Vesting will be accelerated in the event of a change in control, termination of employment by Boston Properties, Inc. without cause, or termination of employment by the award recipient for good reason, death, disability or retirement. If there is a change of control prior to February 6, 2020, earned awards will be calculated based on TSR performance up to the date of the change of control. The 2017 MYLTIP awards are in the form of LTIP Units issued on the grant date which (i) are subject to forfeiture to the extent awards are not earned and (ii) prior to the performance measurement date are only entitled to one-tenth (10%) of the regular quarterly distributions payable on common partnership units and no special distributions. Under ASC 718, the 2017 MYLTIP awards have an aggregate value of approximately $17.7 million, which amount will generally be amortized into earnings over the four-year plan period under the graded vesting method. On February 3, 2017, the measurement period for the Company’s 2014 MYLTIP awards ended and, based on Boston Properties, Inc.’s relative TSR performance, the final awards were determined to be 27.7% of target or an aggregate of approximately $3.5 million (after giving effect to voluntary employee separations and the unallocated reserve). As a result, an aggregate of 447,386 2014 MYLTIP Units that had been previously granted were automatically forfeited. During the three months ended March 31, 2017, Boston Properties, Inc. issued 35,839 shares of restricted common stock and Boston Properties Limited Partnership issued 100,639 LTIP Units and 400,000 2017 MYLTIP Units to employees under the 2012 Plan. Employees paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and 2017 MYLTIP Unit. When issued, LTIP Units are not economically equivalent in value to a share of Common Stock, but over time can increase in value to one-for-one parity with Common Stock if there is sufficient appreciation in the value of the Company’s assets. The aggregate value of the LTIP Units is included in noncontrolling interests in the Consolidated Balance Sheets. Grants of restricted stock and LTIP Units to employees vest in four equal annual installments. Restricted stock is measured at fair value on the date of grant based on the number of shares granted and the closing price of Boston Properties, Inc.’s Common Stock on the date of grant as quoted on the New York Stock Exchange. Such value is recognized as an expense ratably over the corresponding employee service period. The shares of restricted stock granted during the three months ended March 31, 2017 were valued at approximately $4.7 million ($130.72 per share). The LTIP Units granted were valued at approximately $12.1 million (approximately $120.66 per unit weighted-average fair value) using a Monte Carlo simulation method model. The per unit fair values of the LTIP Units granted were estimated on the dates of grant and for a substantial majority of such units were valued using the following assumptions: an expected life of 5.7 years, a risk-free interest rate of 2.14% and an expected price volatility of 28.0%. As the 2012 OPP Units, 2013 MYLTIP Units, 2014 MYLTIP Units, 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units are subject to both a service condition and a market condition, the Company recognizes the compensation expense related to the 2012 OPP Units, 2013 MYLTIP Units, 2014 MYLTIP Units, 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units under the graded vesting attribution method. Under the graded vesting attribution method, each portion of the award that vests at a different date is accounted for as a separate award and recognized over the period appropriate to that portion so that the compensation cost for each portion should be recognized in full by the time that portion vests. The Company recognizes forfeitures as they occur on its awards of stock-based compensation (See Note 2). Dividends paid on both vested and unvested shares of restricted stock are charged directly to Dividends in Excess of Earnings in Boston Properties, Inc.’s Consolidated Balance Sheets and Partners’ Capital in Boston Properties Limited Partnership’s Consolidated Balance Sheets. Aggregate stock-based compensation expense associated with restricted stock, non-qualified stock options, LTIP Units, 2012 OPP Units, 2013 MYLTIP Units, 2014 MYLTIP Units, 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units was approximately $10.3 million and $9.4 million for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017, there was $30.9 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units, 2013 MYLTIP Units and 2014 MYLTIP Units and $32.2 million of unrecognized compensation expense related to unvested 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.8 years. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 11. Segment Information The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the three months ended March 31, 2017 and 2016. Boston Properties, Inc.
Boston Properties Limited Partnership
Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, the most directly comparable GAAP financial measures, plus (1) preferred dividends/distributions, noncontrolling interests, interest expense, depreciation and amortization expense, transaction costs and general and administrative expense less (2) gains on sales of real estate, gains from investments in securities, interest and other income, income from unconsolidated joint ventures and development and management services revenue. The Company believes NOI is useful to investors as a performance measure and believes it provides useful information to investors regarding its financial condition and results of operations because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., for other investment activity). In addition, because of historical cost accounting and useful life estimates, depreciation and amortization may distort operating performance measures at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently. Asset information by segment is not reported because the Company does not use this measure to assess performance. Therefore, depreciation and amortization expense is not allocated among segments. Preferred dividends/distributions, noncontrolling interests, gains on sales of real estate, interest expense, gains from investments in securities, interest and other income, income from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, general and administrative expenses and development and management services revenue are not included in Net Operating Income as internal reporting addresses these items on a corporate level. The Company’s segments are based on the Company’s method of internal reporting which classifies its operations by both geographic area and property type. The Company’s segments by geographic area are Boston, New York, San Francisco and Washington, DC. Segments by property type include: Office, Residential and Hotel. Information by geographic area and property type (dollars in thousands): For the three months ended March 31, 2017:
For the three months ended March 31, 2016:
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On April 19, 2017, the Company completed the sale of a parcel of land at 30 Shattuck Road located in Andover, Massachusetts for a gross sale price of approximately $5.0 million. On April 21, 2017, the Company exercised its option to ground lease, with the future right to purchase, real property adjacent to the MacArthur BART station located in Oakland, California, that could support the development of a 402-unit residential building and supporting retail space. On April 24, 2017, Boston Properties Limited Partnership executed the Eighth Amended and Restated Credit Agreement (as amended and restated, the “2017 Credit Facility”). Among other things, the amendment and restatement (1) increased the total commitment of the revolving line of credit (the “Revolving Facility”) from $1.0 billion to $1.5 billion, (2) extended the maturity date from July 26, 2018 to April 24, 2022, (3) reduced the per annum variable interest rates, and (4) added a $500.0 million delayed draw term loan facility (the “Delayed Draw Facility”) that permits Boston Properties Limited Partnership to borrow until the first anniversary of the closing date. The Delayed Draw Facility was undrawn at closing. Based on Boston Properties Limited Partnership’s current credit rating, (1) the applicable Eurocurrency margins for the Revolving Facility and Delayed Draw Facility are 87.5 basis points and 95 basis points, respectively, and (2) the facility fee on the Revolving Facility commitment is 0.15%. The Delayed Draw Facility has a fee on unused commitments equal to 0.15% per annum. On April 24, 2017, the Company’s consolidated entity in which it has a 60% interest and that owns 767 Fifth Avenue (the General Motors Building) located in New York City entered into an interest rate lock and commitment agreement with a group of lenders on a ten-year financing totaling $2.3 billion at a fixed interest rate of 3.43% per annum. The Company expects to close on the financing by the end of June 2017, although there can be no assurance that the financing will be consummated on the terms currently contemplated or at all. In conjunction with the interest rate lock and commitment agreement, the consolidated entity terminated its forward-starting interest rate swap contracts with notional amounts aggregating $450.0 million and paid approximately $14.4 million, which amount will increase the Company’s interest expense over the ten-year term of the financing, resulting in an estimated effective interest rate of approximately 3.65% per annum, inclusive of other estimated amortization of financing costs and additional mortgage recording taxes (See Note 5). On May 1, 2017, the Company entered into an agreement to acquire 103 Carnegie Center located in Princeton, New Jersey within the Company’s Carnegie Center office complex for a purchase price of approximately $15.8 million. 103 Carnegie Center is an approximately 96,000 net rentable square foot Class A office property. The Company expects that the acquisition will close during the second quarter of 2017. However, the acquisition is subject to the satisfaction of customary closing conditions and there can be no assurance that the acquisition will be consummated on the terms currently contemplated or at all. |
Basis Of Presentation And Summary Of Significant Accounting Policies Recent Accounting Pronouncements (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncement [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the Financial Standards Accounting Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying ASU 2014-09, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB’s ASC. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”), which delayed the effective date of ASU 2014-09 by one year making it effective for the first interim period within annual reporting periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). ASU 2016-12 is intended to clarify and provide practical expedients for certain aspects of ASU 2014-09, which outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and notes that lease contracts with customers are a scope exception. The Company may elect to adopt ASU 2016-12 as of the original effective date; however, adoption is required for annual reporting periods beginning after December 15, 2017. The Company has commenced the process of adopting ASU 2014-09 for reporting periods beginning after December 15, 2017, including forming a project team and compiling an inventory of the sources of revenue the Company expects will be impacted by the adoption of ASU 2014-09. The Company expects that executory costs and certain non-lease components of revenue from leases (upon the adoption of ASU 2016-02), tenant service revenue, development and management services revenue, parking revenue and gains on sales of real estate may be impacted by the adoption of ASU 2014-09, although the Company expects that the impact will be to the pattern of revenue recognition and not the total revenue recognized over time. The Company is in the process of evaluating the significance of the impact on the changes in the recognition pattern of its revenue and is still completing its assessment of the overall impact of adopting ASU 2014-09. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes previous leasing standards. ASU 2016-02 is effective for the Company for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company has commenced the process of adopting ASU 2016-02 by forming a project team and beginning to compile an inventory of its leases that will be impacted by the adoption of ASU 2016-02. The Company is still assessing the impact of adopting ASU 2016-02. However, the Company expects that its operating leases where it is the lessor will be accounted for on its balance sheet similar to its current accounting with the underlying leased asset recognized as real estate. The Company expects that executory costs and certain other non-lease components will need to be accounted for separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014-09. For leases in which the Company is the lessee, primarily consisting of ground leases, the Company expects to recognize a right-of-use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and to interest expense and the right-of-use asset being amortized to expense on a straight-line basis over the term of the lease. In addition, under ASU 2016-02, lessors may only capitalize incremental direct leasing costs. As a result, the Company expects that it will no longer be able to capitalize its internal leasing wages and instead will expense these costs as incurred. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 is intended to improve the accounting for share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment awards are simplified with ASU 2016-09, including income tax consequences, classification of awards as equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for the Company for reporting periods beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09 and elected to make an accounting policy change to its method of accounting for forfeitures on its awards of stock-based compensation including the issuance of shares of restricted common stock, LTIP Units and MYLTIP Units. The Company now accounts for forfeitures as they occur instead of estimating the number of forfeitures upon the issuance of such awards of stock-based compensation. The adoption resulted in the Company recognizing cumulative effect of a change in accounting principle adjustments to its consolidated balance sheets totaling approximately $0.3 million to Dividends in Excess of Earnings and Partners’ Capital for Boston Properties, Inc. and Boston Properties Limited Partnership, respectively, and approximately $1.8 million to noncontrolling interests - common units of Boston Properties Limited Partnership and noncontrolling interests - redeemable partnership units for Boston Properties, Inc. and Boston Properties Limited Partnership, respectively. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. This update is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions that have not been reported in previously issued (or available to be issued) financial statements and shall be applied on a prospective basis. The Company early adopted ASU 2017-01 during the first quarter of 2017. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. In February 2017, the FASB issued ASU No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”). ASU 2017-05 updates the definition of an “in substance nonfinancial asset” and clarifies the derecognition guidance for nonfinancial assets to conform with the new revenue recognition standard. The effective date and transition methods of ASU 2017-05 are aligned with ASU 2014-09 described above and are effective for the first interim period within annual reporting periods beginning after December 15, 2017. The Company is currently assessing the potential impact that the adoption of ASU 2017-05 will have on its consolidated financial statements. |
Basis Of Presentation And Summary Of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value Of Indebtedness And Corresponding Estimate Of Fair Value | The following table presents the aggregate carrying value of the Company’s mortgage notes payable, net, mezzanine notes payable, unsecured line of credit and unsecured senior notes, net and the Company’s corresponding estimate of fair value as of March 31, 2017 and December 31, 2016 (in thousands):
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Real Estate Real Estate (Tables) |
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Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] | Boston Properties, Inc. Real estate consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):
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Boston Properties Limited Partnership | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] | Boston Properties Limited Partnership Real estate consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):
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Investments in Unconsolidated Joint Ventures (Tables) |
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Investments In Unconsolidated Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments In Unconsolidated Joint Ventures | The investments in unconsolidated joint ventures consist of the following at March 31, 2017 and December 31, 2016:
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Schedule Of Balance Sheets Of The Unconsolidated Joint Ventures [Text Block] | The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:
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Statements Of Operations Of The Joint Ventures | The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:
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Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | 767 Fifth Partners LLC’s interest rate swap contracts consisted of the following at March 31, 2017 (dollars in thousands):
767 Fifth Avenue Partners LLC’s interest rate swap contracts consisted of the following at December 31, 2016 (dollars in thousands):
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table presents the location in the financial statements of the gains (losses) recognized related to the Company’s cash flow hedges for the three months ended March 31, 2017 and 2016:
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Boston Properties, Inc. The following table reflects the changes in accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 (in thousands):
Boston Properties Limited Partnership The following table reflects the changes in accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 (in thousands):
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Noncontrolling Interests (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Distributions Declared to OP, LTIP, OPP and MYLTIP Units [Table Text Block] | The following table presents Boston Properties, Inc.’s dividends per share and Boston Properties Limited Partnership’s distributions per OP Unit and LTIP Unit paid in 2017:
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Schedule Of Noncontrolling Interest Common Units [Table Text Block] | The following table reflects the activity of noncontrolling interests—redeemable partnership units of Boston Properties Limited Partnership for the three months ended March 31, 2017 and 2016 (in thousands):
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Schedule Of Noncontrolling Interest Property Partnerships [Table Text Block] | The following table reflects the activity of the noncontrolling interests in property partnerships for the three months ended March 31, 2017 and 2016 (in thousands):
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Noncontrolling Interests [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Distributions Declared to OP, LTIP, OPP and MYLTIP Units [Table Text Block] | The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units and 2013 MYLTIP Units and, after the February 3, 2017 measurement date, the 2014 MYLTIP Units) and its distributions on the 2014 MYLTIP Units (prior to the February 3, 2017 measurement date), 2015 MYLTIP Units, 2016 MYLTIP Units and 2017 MYLTIP Units (after the February 7, 2017 issuance date) paid in 2017:
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Stockholders' Equity / Partners' Capital Tables (Tables) |
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Dividends Declared [Table Text Block] | The following table presents Boston Properties, Inc.’s dividends per share and Boston Properties Limited Partnership’s distributions per OP Unit and LTIP Unit paid in 2017:
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Dividends Declared [Table Text Block] | The following table presents Boston Properties Inc.’s dividends per share on its outstanding Series B Preferred Stock paid during 2017:
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Earnings Per Share / Common Unit (Tables) |
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Entity Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation Of Basic And Diluted Earnings Per Share |
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Boston Properties Limited Partnership | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation Of Basic And Diluted Earnings Per Share |
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reconciliation Of Net Operating Income To Net Income | The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the three months ended March 31, 2017 and 2016. Boston Properties, Inc.
Boston Properties Limited Partnership
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Segment Information By Geographic Area And Property Type | Information by geographic area and property type (dollars in thousands): For the three months ended March 31, 2017:
For the three months ended March 31, 2016:
|
Basis Of Presentation And Summary Of Significant Accounting Policies (Narrative) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Entity Information [Line Items] | |
Cumulative effect of a change in accounting principle | $ 2,035 |
Boston Properties Limited Partnership | |
Entity Information [Line Items] | |
Cumulative effect of a change in accounting principle | 272 |
Noncontrolling Interests [Member] | |
Entity Information [Line Items] | |
Cumulative effect of a change in accounting principle | 1,763 |
Noncontrolling Interests [Member] | Boston Properties Limited Partnership | |
Entity Information [Line Items] | |
Cumulative effect of a change in accounting principle | $ 1,763 |
Investments in Unconsolidated Joint Ventures (Investments in Unconsolidated Joint Ventures) (Details) $ in Thousands |
3 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017
USD ($)
ft²
Land_Parcels
Buildings
payments
|
Dec. 31, 2016
USD ($)
|
||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Carrying Value of investment | $ (446,489) | $ (450,821) | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | $ 793,932 | 775,198 | |||||||||||||||
Square 407 Limited Partnership [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Market Square North | ||||||||||||||||
Ownership Percentage | 50.00% | ||||||||||||||||
Carrying Value of investment | [1] | $ (7,837) | (8,134) | ||||||||||||||
The Metropolitan Square Associates LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Metropolitan Square | ||||||||||||||||
Ownership Percentage | 20.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 2,007 | 2,004 | ||||||||||||||
BP/CRF 901 New York Avenue LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | 901 New York Avenue | ||||||||||||||||
Ownership Percentage | [2] | 25.00% | |||||||||||||||
Carrying Value of investment | [1] | $ (10,167) | (10,564) | ||||||||||||||
WP Project Developer LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Wisconsin Place Land and Infrastructure | ||||||||||||||||
Ownership Percentage | [3] | 33.30% | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 41,151 | 41,605 | ||||||||||||||
Entity Owning Land And Infrastructure Of Project [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Ownership Percentage | 33.30% | ||||||||||||||||
Annapolis Junction NFM, LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Annapolis Junction | ||||||||||||||||
Ownership Percentage | [4] | 50.00% | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 19,920 | 20,539 | ||||||||||||||
Number of real estate properties | Buildings | 4 | ||||||||||||||||
Parcels of undeveloped land | Land_Parcels | 2 | ||||||||||||||||
540 Madison Venture LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | 540 Madison Avenue | ||||||||||||||||
Ownership Percentage | 60.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 67,653 | 67,816 | ||||||||||||||
500 North Capitol LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | 500 North Capitol Street, NW | ||||||||||||||||
Ownership Percentage | 30.00% | ||||||||||||||||
Carrying Value of investment | [1] | $ (3,606) | (3,389) | ||||||||||||||
501 K Street LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | 1001 6th Street | ||||||||||||||||
Ownership Percentage | [5] | 50.00% | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 42,474 | 42,528 | ||||||||||||||
Potential additonal payments to joint venture partner | payments | 2 | ||||||||||||||||
Minimum square footage to make a potential additional payment to joint venture partner (in sqft) | ft² | 520,000 | ||||||||||||||||
Podium Developer LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | The Hub on Causeway | ||||||||||||||||
Ownership Percentage | 50.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 36,888 | 29,869 | ||||||||||||||
Residential Tower Developer LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | The Hub on Causeway - Residential | ||||||||||||||||
Ownership Percentage | 50.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 21,666 | 20,803 | ||||||||||||||
Hotel Tower Developer LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | The Hub on Causeway - Hotel | ||||||||||||||||
Ownership Percentage | 50.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 1,167 | 933 | ||||||||||||||
1265 Main Office JV LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | 1265 Main Street | ||||||||||||||||
Ownership Percentage | 50.00% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 4,866 | 4,779 | ||||||||||||||
BNY Tower Holdings LLC [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Dock 72 at the Brooklyn Navy Yard | ||||||||||||||||
Ownership Percentage | [6] | 50.00% | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 43,497 | 33,699 | ||||||||||||||
CA-Colorado Center Limited Partnership [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Properties | Colorado Center | ||||||||||||||||
Ownership Percentage | 49.80% | ||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1] | $ 512,643 | 510,623 | ||||||||||||||
Unconsolidated Joint Ventures [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | (21,600) | (22,100) | |||||||||||||||
Unconsolidated Joint Ventures [Member] | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Carrying Value of investment | (68,695) | (67,167) | |||||||||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [1],[7] | $ 772,322 | $ 753,111 | ||||||||||||||
|
Investments in Unconsolidated Joint Ventures (Balance Sheets of the Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||||
---|---|---|---|---|---|---|---|---|---|
ASSETS | |||||||||
Real estate and development in process, net | $ 16,089,977 | $ 15,925,028 | |||||||
Liabilities and Members'/Partners' Equity [Abstract] | |||||||||
Mortgage notes payable, net | 2,046,959 | 2,063,087 | |||||||
Other Liabilities | 446,489 | 450,821 | |||||||
Total liabilities and equity / capital | 18,966,627 | 18,851,643 | |||||||
Carrying value of the Company's investments in unconsolidated joint ventures | 793,932 | 775,198 | |||||||
Unconsolidated Joint Ventures [Member] | |||||||||
ASSETS | |||||||||
Real estate and development in process, net | 1,553,799 | 1,519,217 | |||||||
Other assets | 297,969 | 297,263 | |||||||
Total assets | 1,851,768 | 1,816,480 | |||||||
Liabilities and Members'/Partners' Equity [Abstract] | |||||||||
Mortgage notes payable, net | 864,344 | 865,665 | |||||||
Other Liabilities | 68,695 | 67,167 | |||||||
Members'/Partners' equity | 918,729 | 883,648 | |||||||
Total liabilities and equity / capital | 1,851,768 | 1,816,480 | |||||||
Company's share of equity | 471,112 | 450,662 | |||||||
Basis differentials | [1] | 301,210 | 302,449 | ||||||
Carrying value of the Company's investments in unconsolidated joint ventures | [2],[3] | 772,322 | 753,111 | ||||||
Unconsolidated Joint Ventures [Member] | |||||||||
Liabilities and Members'/Partners' Equity [Abstract] | |||||||||
Carrying value of the Company's investments in unconsolidated joint ventures | (21,600) | (22,100) | |||||||
Colorado Center [Member] | |||||||||
Liabilities and Members'/Partners' Equity [Abstract] | |||||||||
Basis differentials | $ 327,400 | $ 328,800 | |||||||
|
Investments in Unconsolidated Joint Ventures (Statements of Operations of the Joint Ventures) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Total revenue | $ 632,228 | $ 665,985 | ||||||
Expenses | ||||||||
Depreciation and amortization | 159,205 | 159,448 | ||||||
Total expenses | 426,003 | 415,632 | ||||||
Operating income | 206,225 | 250,353 | ||||||
Other expense | ||||||||
Interest expense | 95,534 | 105,309 | ||||||
Net income | 115,564 | 216,222 | ||||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | ||||||
Mortgage notes payable, net | 2,046,959 | $ 2,063,087 | ||||||
Unconsolidated Joint Ventures [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Total revenue | [1] | 54,761 | 37,669 | |||||
Expenses | ||||||||
Operating | 22,079 | 16,667 | ||||||
Depreciation and amortization | 14,309 | 9,064 | ||||||
Total expenses | 36,388 | 25,731 | ||||||
Operating income | 18,373 | 11,938 | ||||||
Other expense | ||||||||
Interest expense | 9,300 | 8,389 | ||||||
Net income | 9,073 | 3,549 | ||||||
Company's share of net income | 4,323 | 1,599 | ||||||
Basis differential | [2] | (1,239) | 192 | |||||
Income from unconsolidated joint ventures | 3,084 | 1,791 | ||||||
Straight-line rent adjustments | 7,000 | $ 2,200 | ||||||
Mortgage notes payable, net | 864,344 | $ 865,665 | ||||||
Colorado Center [Member] | ||||||||
Other expense | ||||||||
Straight-line rent adjustments | 700 | |||||||
"Above" and "below" market rent adjustments, net | $ 400 | |||||||
|
Derivative Instruments and Hedging Activities (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Aug. 17, 2016
USD ($)
yr
|
Mar. 31, 2017
USD ($)
yr
swaps
|
Mar. 31, 2016
USD ($)
yr
swaps
|
Dec. 31, 2015
USD ($)
swaps
|
Dec. 31, 2016
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Cash payment to settle interest rate swap contracts | $ (7,090) | $ (33,319) | |||
Boston Properties Limited Partnership | Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of interest rate swap agreements entered into (swap contracts) | swaps | 17 | ||||
Term of anticipated mortgage loan (in years) | yr | 10 | ||||
Maximum period of hedging exposure to the variability in future cash flows for forecasted transactions (in years) | yr | 10 | ||||
Average Fixed Interest Rate | 2.423% | ||||
Notional Amount | $ 550,000 | ||||
Cash payment to settle interest rate swap contracts | $ 49,300 | ||||
Losses from interest rate contracts | 100 | ||||
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion | 49,200 | ||||
Derivative Instruments Loss Reclassified From Accumulated OCI Into Income Effective yearly amount | $ 4,900 | ||||
767 Fifth Partners LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Ownership Percentage by the Company | 60.00% | ||||
767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of interest rate swap agreements entered into (swap contracts) | swaps | 16 | 2 | |||
Term of anticipated mortgage loan (in years) | yr | 10 | ||||
Maximum period of hedging exposure to the variability in future cash flows for forecasted transactions (in years) | yr | 10 | 10 | |||
Derivative, Net Liability Position, Aggregate Fair Value | $ 8,600 | ||||
Assets Needed for Immediate Settlement, Aggregate Fair Value | 8,600 | ||||
Amount of loss related to the effective portion recognized in Other Liabilities | 8,600 | ||||
Derivative Instruments, Gain Recognized in Prepaid Expenses and Other Assets | $ 600 | ||||
Average Fixed Interest Rate | 2.619% | ||||
Notional Amount | $ 450,000 | $ 50,000 | $ 450,000 | ||
Estimated current balance held in Accumulated Other Comprehensive Loss to be reclassified into earnings within the next twelve months | (700) | ||||
Unsecured Debt [Member] | Boston Properties Limited Partnership | |||||
Debt Instrument [Line Items] | |||||
Coupon/Stated Rate | 2.75% | ||||
Boston Properties Limited Partnership | |||||
Debt Instrument [Line Items] | |||||
Cash payment to settle interest rate swap contracts | $ (7,090) | $ (33,319) |
Derivative Instruments and Hedging Activities Derivative Instrument and Hedging Activities Notional Table (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Derivative [Line Items] | ||||
Fair Value | $ 180 | $ (58,646) | ||
Boston Properties Limited Partnership | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 550,000 | |||
767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative Liability, Notional Amount | 325,000 | $ 350,000 | ||
Derivative Asset, Notional Amount | 125,000 | 100,000 | ||
Notional Amount | 450,000 | $ 50,000 | 450,000 | |
Fair Value | (8,084) | (8,264) | ||
Liability [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Fair Value | $ (8,635) | $ (8,773) | ||
Liability [Member] | Minimum [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Fixed Interest Rate | 2.423% | 2.418% | ||
Liability [Member] | Maximum [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Fixed Interest Rate | 2.95% | 2.95% | ||
Assets [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Fair Value | $ 551 | $ 509 | ||
Assets [Member] | Minimum [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Fixed Interest Rate | 2.336% | 2.336% | ||
Assets [Member] | Maximum [Member] | 767 Fifth Partners LLC [Member] | Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Fixed Interest Rate | 2.418% | 2.388% |
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities Gain or Loss Recognized Related to Cash Flow hedges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative [Line Items] | ||
Amount of gain (loss) related to the effective portion recognized in other comprehensive loss | $ 180 | $ (58,646) |
Amount of loss related to the effective portion subsequently reclassified to earnings | (1,306) | (627) |
Amount of (gain) loss related to the ineffective portion and amount excluded from effectiveness testing | $ 0 | $ 0 |
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
||||||
Accumulated Other Comprehensive Income or Loss [Roll Forward] | ||||||||
Beginning Balance | $ (52,251) | $ (14,114) | $ (14,114) | |||||
Effective portion of interest rate contracts | 180 | (58,646) | ||||||
Amortization of interest rate contracts | [1] | 1,306 | 627 | |||||
Other comprehensive loss attributable to noncontrolling interests | (218) | 15,427 | ||||||
Ending Balance | (50,983) | (56,706) | (52,251) | |||||
Boston Properties Limited Partnership | ||||||||
Accumulated Other Comprehensive Income or Loss [Roll Forward] | ||||||||
Beginning Balance | (60,853) | (18,337) | (18,337) | |||||
Effective portion of interest rate contracts | 180 | (58,646) | ||||||
Amortization of interest rate contracts | [2] | 1,306 | 627 | |||||
Other comprehensive income (loss) attributable to noncontrolling interests | (72) | 10,526 | ||||||
Ending Balance | $ (59,439) | $ (65,830) | $ (60,853) | |||||
|
Commitments And Contingencies (Details) - USD ($) $ in Millions |
1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Feb. 28, 2017 |
Mar. 31, 2017 |
Dec. 31, 2009 |
Jul. 05, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Jan. 10, 2014 |
|
Commitments And Contingencies [Line Items] | ||||||||
Letter of credit and performance obligations | $ 12.0 | $ 12.0 | ||||||
Property insurance program per occurrence limits | 1,000.0 | 1,000.0 | ||||||
Per occurrence limit for NBCR Coverage | 1,000.0 | |||||||
Value of program trigger | 140.0 | $ 140.0 | ||||||
Coinsurance of program trigger | 17.00% | |||||||
Deductible in insurance as a percentage of the value of the affected property, San Francisco and Los Angeles | 3.00% | |||||||
Per occurrence limit of the earthquake insurance which covers San Francisco and Los Angeles regions | 240.0 | $ 170.0 | ||||||
Annual aggregate limit of the earthquake insurance which covers San Francisco and Los Angeles regions | 240.0 | 170.0 | ||||||
Amount of earthquake insurance provided by IXP, LLC as direct insurer San Francisco and Los Angeles | $ 20.0 | |||||||
Earthquake Coverage Included In Builders Risk Policy For Salesforce Tower | $ 60.0 | |||||||
767 Venture, LLC [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Maximum funding obligation | $ 25.0 | $ 25.0 | ||||||
Ownership Percentage by the Company | 60.00% | 60.00% | ||||||
Property insurance program per occurrence limits | $ 1,625.0 | $ 1,625.0 | ||||||
Lehman [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Bankruptcy claim, amount filed by general creditor | $ 45.3 | |||||||
Bankruptcy claim amount allowed by court to creditor | $ 45.2 | |||||||
Bankruptcy Claims, Amount of Claims Settled | $ 1.4 | $ 8.1 | $ 7.7 | |||||
Bankruptcy remaining claim amount allowed by court to creditor | 28.0 | 28.0 | ||||||
601 Lexington Avenue [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Coverage For Acts Of Terrorism Under TRIA Covered in Excess of Amount Covered by IXP | 250.0 | |||||||
Boston Properties Limited Partnership | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Operating partnership guarantee to cover liabilities of IXP | $ 20.0 | $ 20.0 |
Noncontrolling Interests (Narrative) (Details) - Boston Properties Limited Partnership |
Mar. 31, 2017
shares
|
---|---|
Noncontrolling Interests [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Operating Partnership (OP) Units (in shares) | 17,277,109 |
Long-Term Incentive Plan (LTIP) Units (in shares) | 811,476 |
OPP Units 2012 [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Outperformance awards in LTIP Units (in shares) | 118,067 |
2013 MYLTIP [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
2013 MYLTIP (in units) | 85,491 |
MYLTIP 2014 [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
2014 MYLTIP (in units) | 25,124 |
2015 MYLTIP [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
2015 MYLTIPS (in units) | 367,218 |
2016 MYLTIP [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
2016 MYLTIPs (in units) | 473,360 |
2017 MYLTIP [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
2017 MYLTIP (in units) | 400,000 |
(Common Units) (Narrative) (Details) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Feb. 03, 2017
USD ($)
shares
|
Mar. 31, 2017
USD ($)
yr
$ / shares
shares
|
|
OP Units [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
OP Units for redemption (in shares) | 23,182 | |
Redemption of OP units issued on conversion of LTIP Units (in shares) | 20,682 | |
Restriction on redemption of OP Unit to Common Stock (in years) | yr | 1 | |
Redemption of OP Unit equivalence to Common Stock (in shares) | 1 | |
Common units of operating partnership if converted value | $ | $ 2,400.0 | |
Closing price of common stock (in dollars per share) | $ / shares | $ 132.41 | |
MYLTIP 2014 [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Final awards percentage of target | 27.70% | |
Value of MYLTIP Awards | $ | $ 3.5 | |
2014 MYLTIP Units Forfeited | 447,386 | |
Boston Properties Limited Partnership | OP Units [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
MYLTIP distribution prior to measurement date | 10.00% | |
Boston Properties Limited Partnership | MYLTIP 2014 [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
2014 MYLTIP (in units) | 25,124 | |
Boston Properties Limited Partnership | 2015 MYLTIP [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
2015 MYLTIPS (in units) | 367,218 | |
Boston Properties Limited Partnership | 2016 MYLTIP [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
2016 MYLTIPs (in units) | 473,360 | |
Boston Properties Limited Partnership | 2017 MYLTIP [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
2017 MYLTIP (in units) | 400,000 |
Noncontrolling Interests Common units distributions (Details) - Boston Properties Limited Partnership - $ / shares |
Jan. 28, 2016 |
Mar. 16, 2017 |
---|---|---|
Dividends Payable [Line Items] | ||
Distributions Declared To OP And LTIP Units Per Unit | $ 0.75 | |
Distributions Declared To MYLTIP Units Per Unit (in dollars per unit) | $ 0.075 | |
Distributions made to OP and LTIP units per unit (in dollars per unit) | $ 0.75 | |
Distribution paid to MYLTIP Units (in dollars per unit) | $ 0.075 |
Noncontrolling Interests Common units for Boston Properties Limited Partnership (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Noncontrolling Interest [Line Items] | ||||
Conversion of redeemable partnership units | $ 0 | |||
Cumulative effect of a change in accounting principle | $ (2,035) | |||
Accumulated Other Comprehensive Income (Loss) | (50,983) | (56,706) | $ (52,251) | $ (14,114) |
Noncontrolling Interests [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Conversion of redeemable partnership units | 4,384 | (438) | ||
Cumulative effect of a change in accounting principle | (1,763) | |||
Boston Properties Limited Partnership | ||||
Noncontrolling Interest [Line Items] | ||||
Cumulative effect of a change in accounting principle | (272) | |||
Accumulated Other Comprehensive Income (Loss) | (59,439) | (65,830) | $ (60,853) | $ (18,337) |
Boston Properties Limited Partnership | Noncontrolling Interests [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Beginning balance | 2,262,040 | 2,286,689 | ||
Contributions | 29,918 | 30,808 | ||
Net Income | 11,432 | 21,393 | ||
Distributions | (13,653) | (11,865) | ||
Conversion of redeemable partnership units | (793) | (446) | ||
Unearned Compensation | (18,633) | (22,424) | ||
Cumulative effect of a change in accounting principle | (1,763) | |||
Accumulated Other Comprehensive Income (Loss) | 146 | (4,901) | ||
Adjustments To Reflect Redeemable Preferred Units At Redemption Value | 126,416 | 8,218 | ||
Ending balance | $ 2,395,110 | $ 2,307,472 |
Noncontrolling Interests (Property Partnerships) (Narrative) (Details) - USD ($) $ in Thousands |
May 12, 2016 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest in Limited Partnerships | $ 1,529,653 | $ 1,530,647 | |
Salesforce Tower[Member] | Consolidated Properties [Member] | |||
Noncontrolling Interest [Line Items] | |||
Portion of project costs covered by a construction loan | 50.00% | ||
Portion of costs funded (in percentage) | 50.00% | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 5.00% | ||
Debt Instrument, Basis Spread on Variable Rate | 3.00% | ||
Salesforce Tower[Member] | Parent Company [Member] | Consolidated Properties [Member] | |||
Noncontrolling Interest [Line Items] | |||
Costs funded (in percentage) | 2.50% | ||
Preferred equity funded | $ 11,800 |
Noncontrolling Interests Property Partnerships (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Activity of Noncontrolling Interests [Roll Forward] | ||
Beginning Balance | $ 1,530,647 | |
Capital contributions | (8,145) | $ (2,489) |
Net income | 4,424 | 10,464 |
Accumulated other comprehensive income (loss) | (218) | 15,427 |
Ending Balance | 1,529,653 | |
Property Partnerships Member | ||
Activity of Noncontrolling Interests [Roll Forward] | ||
Beginning Balance | 1,530,647 | 1,574,400 |
Capital contributions | 8,145 | 2,489 |
Net income | 4,424 | 10,464 |
Accumulated other comprehensive income (loss) | 72 | (10,526) |
Distributions | (13,635) | (12,915) |
Ending Balance | $ 1,529,653 | $ 1,563,912 |
Stockholders' Equity / Partners' Capital Narrative (Details) |
3 Months Ended | |||
---|---|---|---|---|
Jun. 03, 2014
USD ($)
yr
|
Mar. 31, 2017
USD ($)
$ / shares
shares
|
Mar. 27, 2018
$ / shares
|
Dec. 31, 2016
USD ($)
$ / shares
shares
|
|
Class of Stock [Line Items] | ||||
Common stock, shares outstanding | 153,849,231 | 153,790,175 | ||
General Partners' Capital Account, Units Outstanding | 1,719,378 | |||
Limited Partners' Capital Account, Units Outstanding | 152,129,853 | |||
Shares of Common Stock in connection with the redemption of an equal number of OP Units (in shares) | 23,182 | |||
Common Stock, Value, Issued | $ | $ 1,538,000 | $ 1,538,000 | ||
Atm Program [Member] | ||||
Class of Stock [Line Items] | ||||
At the market stock offering program, aggregate value of common stock | $ | $ 600,000,000 | |||
At Market Stock Offering Program Maximum Length Of Sale In Years | yr | 3 | |||
Common Stock, Value, Issued | $ | $ 0 | |||
Series B Cumulative Redeemable Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Series B, Shares Outstanding (in shares) | 80,000 | 80,000 | ||
Series B, Dividend Rate, Percentage | 5.25% | |||
Series B, Liquidation Preference Per Share (dollars per share) | $ / shares | $ 2,500.00 | $ 2,500 | ||
Ratio of depository shares to shares of Series B Preferred Stock | 0.01 | |||
Depository shares of Series B Cumulative Redeemable Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Series B, Shares Outstanding (in shares) | 8,000,000 | |||
Series B, Liquidation Preference Per Share (dollars per share) | $ / shares | $ 25.00 | |||
Subsequent Event [Member] | Series B Cumulative Redeemable Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Series B, Liquidation Preference Per Share (dollars per share) | $ / shares | $ 2,500.00 | |||
Subsequent Event [Member] | Depository shares of Series B Cumulative Redeemable Preferred [Member] | ||||
Class of Stock [Line Items] | ||||
Series B, Liquidation Preference Per Share (dollars per share) | $ / shares | $ 25.00 | |||
Boston Properties Limited Partnership | ||||
Class of Stock [Line Items] | ||||
General Partners' Capital Account, Units Outstanding | 1,719,378 | 1,717,743 | ||
Limited Partners' Capital Account, Units Outstanding | 152,129,853 | 152,072,432 | ||
Boston Properties Limited Partnership | Series B Cumulative Redeemable Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Series B, Shares Outstanding (in shares) | 80,000 | 80,000 | ||
Series B, Liquidation Preference Per Share (dollars per share) | $ / shares | $ 2,500 | $ 2,500 |
Stockholders' Equity / Partners' Capital Stockholders' Equity / Partners' Capital Dividends / Distributions (Details) - $ / shares |
Feb. 15, 2017 |
Jan. 30, 2017 |
Mar. 16, 2017 |
---|---|---|---|
Entity Information [Line Items] | |||
Dividends Payable, Amount Per Share / Unit | $ 0.75 | ||
Dividends, Per Share / Unit | $ 0.75 | ||
Boston Properties Limited Partnership | |||
Entity Information [Line Items] | |||
Dividends Payable, Amount Per Share / Unit | 0.75 | ||
Dividends, Per Share / Unit | $ 0.75 | ||
Series B Cumulative Redeemable Preferred Stock [Member] | |||
Entity Information [Line Items] | |||
Dividends Payable, Amount Per Share / Unit | $ 32.8125 | ||
Dividends, Per Share / Unit | $ 32.8125 |
Earnings Per Share / Common Unit (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Basic Earnings: | ||
Net income attributable to the Company's common shareholders / unitholders | $ 97,083 | $ 181,747 |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) | 153,860,000 | 153,626,000 |
Net income (in dollars per share / unit) | $ 0.63 | $ 1.18 |
Allocation of undistributed earnings to participating securities (numerator) | $ (247) | |
Allocation of undistributed earnings to participating securities (in shares / units) | 0 | |
Allocation of undistributed earnings to participating securities (in dollars per shares / units) | $ 0 | |
Net income attributable to the Company's common shareholders / unitholders | $ 181,500 | |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) | 153,626,000 | |
Net income attributable to the Company's common shareholders / unitholders (in dollars per share / unit) | $ 1.18 | |
Effect of Dilutive Securities: | ||
Stock Based Compensation, Income (Numerator) | $ 0 | $ 0 |
Stock Based Compensation, Shares / Units (Denominator) | 354,000 | 291,000 |
Stock Based Compensation, Per Share / Unit Amount (in dollars per share / unit) | $ 0.00 | $ 0.00 |
Diluted Earnings: | ||
Net income attributable to the Company's common shareholders / unitholders (Numerator) | $ 97,083 | $ 181,500 |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) (Denominator) | 154,214,000 | 153,917,000 |
Diluted Earnings: Net income, Per Share Amount (in dollars per share / unit) | $ 0.63 | $ 1.18 |
Boston Properties Limited Partnership | ||
Entity Information [Line Items] | ||
Redeemable Common Units | 17,721,000 | 17,683,000 |
Basic Earnings: | ||
Net income attributable to the Company's common shareholders / unitholders | $ 110,662 | $ 207,296 |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) | 171,581,000 | 171,309,000 |
Net income (in dollars per share / unit) | $ 0.64 | $ 1.21 |
Allocation of undistributed earnings to participating securities (numerator) | $ (275) | |
Allocation of undistributed earnings to participating securities (in shares / units) | 0 | |
Allocation of undistributed earnings to participating securities (in dollars per shares / units) | $ 0 | |
Net income attributable to the Company's common shareholders / unitholders | $ 207,021 | |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) | 171,309,000 | |
Net income attributable to the Company's common shareholders / unitholders (in dollars per share / unit) | $ 1.21 | |
Effect of Dilutive Securities: | ||
Stock Based Compensation, Income (Numerator) | $ 0 | $ 0 |
Stock Based Compensation, Shares / Units (Denominator) | 354,000 | 291,000 |
Stock Based Compensation, Per Share / Unit Amount (in dollars per share / unit) | $ 0.00 | $ 0.00 |
Diluted Earnings: | ||
Net income attributable to the Company's common shareholders / unitholders (Numerator) | $ 110,662 | $ 207,021 |
Net income attributable to the Company's common shareholders / unitholders (in shares / units) (Denominator) | 171,935,000 | 171,600,000 |
Diluted Earnings: Net income, Per Share Amount (in dollars per share / unit) | $ 0.64 | $ 1.21 |
Stock Option and Incentive Plan Stock Option and Incentive Plan (Narrative) (Details) |
Feb. 03, 2017
USD ($)
shares
|
Jan. 25, 2017
USD ($)
yr
indices
tiers
|
---|---|---|
2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
TSR Measurement, Years | yr | 3 | |
Indices Used to Compare TSR | indices | 2 | |
Number of Tiers | tiers | 4 | |
Threshold Tier | $ 10,700,000 | |
Target Tier | 21,300,000 | |
High Tier | 32,000,000 | |
Exceptional Tier | $ 42,700,000 | |
Percentage of annualized TSR for Reduction of Earned Awards | 0.00% | |
Percentage to Cause Some Awards to be Earned Even if on a Relative Basis it Would Not Result in any Earned Awards | 12.00% | |
Distributions Percent Before Measurement Date | 10.00% | |
Value of MYLTIP Awards | $ 17,700,000 | |
MYLTIP Value Amortized Into Earnings, Years | yr | 4 | |
MYLTIP 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Value of MYLTIP Awards | $ 3,500,000 | |
Final awards percentage of target | 27.70% | |
2014 MYLTIP Units Forfeited | shares | 447,386 | |
Cohen & Steers Realty Majors Portfolio Index [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Percentage of Index Used to Compare to TSR | 50.00% | |
NAREIT Office Index adjusted [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Percentage of Index Used to Compare to TSR | 50.00% | |
Minimum [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Awards Earned | $ 0 | |
Maximum [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Awards Earned | $ 42,700,000 | |
MYLTIP vesting 2020 [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting Percentage | 50.00% | |
MYLTIP vesting 2021 [Member] | 2017 MYLTIP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting Percentage | 50.00% |
Stock Option and Incentive Plan (Restricted Stock) (Narrative) (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017
USD ($)
VestingInstallments
$ / shares
shares
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued | shares | 153,928,131 | 153,869,075 | |
Stock based Compensation Expense | $ 10,300 | $ 9,400 | |
Common Stock, Value, Issued | $ 1,538 | $ 1,538 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued | shares | 35,839 | ||
Employee and director payment per share (in dollars per share) | $ / shares | $ 0.01 | ||
Common Stock, Value, Issued | $ 4,700 | ||
Employee's weighted average cost per share (in dollars per share) | $ / shares | $ 130.72 | ||
LTIPs (including 2012 OPP and 2013 and 2014 MYLTIPS) And Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting annual installments | VestingInstallments | 4 | ||
Unrecognized compensation expenses | $ 30,900 | ||
Unvested MYLTIP Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expenses | $ 32,200 | ||
Weighted-average period (years) | 2 years 9 months 18 days | ||
Boston Properties Limited Partnership | LTIP Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
LTIP units issued (in shares) | shares | 100,639 | ||
Value of LTIP units issued | $ 12,100 | ||
Per unit fair value weighted-average (in dollars per share) | $ / shares | $ 120.66 | ||
Expected life assumed to calculate per unit fair value per LTIP unit (years) | 5 years 8 months 12 days | ||
Risk-free rate | 2.14% | ||
Expected price volatility | 28.00% | ||
Boston Properties Limited Partnership | 2017 MYLTIP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
MYLTIP units issued (in shares) | shares | 400,000 | ||
Boston Properties Limited Partnership | LTIPs and 2017 MYLTIP Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee and director payment per share (in dollars per share) | $ / shares | $ 0.25 |
Segment Information (Schedule Of Reconciliation Of Net Operating Income To Net Income) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net income attributable to the Company's common shareholders / unitholders | $ 97,083 | $ 181,747 |
Preferred Stock Dividends / Distributions | (2,625) | (2,618) |
Noncontrolling interest-common units of the Operating Partnership | (11,432) | (21,393) |
Noncontrolling interest in property partnerships | (4,424) | (10,464) |
Interest expense | (95,534) | (105,309) |
Depreciation and amortization expense | (159,205) | (159,448) |
Transaction costs | (34) | (25) |
General and administrative expense | (31,386) | (29,353) |
Gains from investments in securities | (1,042) | (259) |
Interest and other income | (614) | (1,505) |
Income from unconsolidated joint ventures | (3,084) | (1,791) |
Development and management services income | (6,472) | (6,689) |
Business Intersegment, Eliminations [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net income attributable to the Company's common shareholders / unitholders | 97,083 | 181,747 |
Preferred Stock Dividends / Distributions | 2,625 | 2,618 |
Noncontrolling interest-common units of the Operating Partnership | 11,432 | 21,393 |
Noncontrolling interest in property partnerships | 4,424 | 10,464 |
Interest expense | 95,534 | 105,309 |
Depreciation and amortization expense | 159,205 | 159,448 |
Transaction costs | 34 | 25 |
General and administrative expense | 31,386 | 29,353 |
Gains on sales of real estate | 133 | 67,623 |
Gains from investments in securities | 1,042 | 259 |
Interest and other income | 614 | 1,505 |
Income from unconsolidated joint ventures | 3,084 | 1,791 |
Development and management services income | 6,472 | 6,689 |
Net Operating Income | 390,378 | 432,490 |
Boston Properties Limited Partnership | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net income attributable to the Company's common shareholders / unitholders | 110,662 | 207,296 |
Preferred Stock Dividends / Distributions | (2,625) | (2,618) |
Noncontrolling interest in property partnerships | (4,424) | (10,464) |
Interest expense | (95,534) | (105,309) |
Depreciation and amortization expense | (157,058) | (157,461) |
Transaction costs | (34) | (25) |
General and administrative expense | (31,386) | (29,353) |
Gains from investments in securities | (1,042) | (259) |
Interest and other income | (614) | (1,505) |
Income from unconsolidated joint ventures | (3,084) | (1,791) |
Development and management services income | (6,472) | (6,689) |
Boston Properties Limited Partnership | Business Intersegment, Eliminations [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net income attributable to the Company's common shareholders / unitholders | 110,662 | 207,296 |
Preferred Stock Dividends / Distributions | 2,625 | 2,618 |
Noncontrolling interest in property partnerships | 4,424 | 10,464 |
Interest expense | 95,534 | 105,309 |
Depreciation and amortization expense | 157,058 | 157,461 |
Transaction costs | 34 | 25 |
General and administrative expense | 31,386 | 29,353 |
Gains on sales of real estate | 133 | 69,792 |
Gains from investments in securities | 1,042 | 259 |
Interest and other income | 614 | 1,505 |
Income from unconsolidated joint ventures | 3,084 | 1,791 |
Development and management services income | 6,472 | 6,689 |
Net Operating Income | $ 390,378 | $ 432,490 |
Segment Information (Schedule Of Segment Reporting By Geographic Area And Property Type) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Segment Reporting Information [Line Items] | ||
Rental Revenue: Office | $ 614,380 | $ 646,490 |
Rental Revenue: Residential | 3,956 | 4,049 |
Rental Revenue: Hotel | 7,420 | 8,757 |
Total revenue | $ 625,756 | $ 659,296 |
Rental Revenue: % of Grand Totals | 100.00% | 100.00% |
Rental Expenses: Office | $ 226,736 | $ 217,572 |
Rental Expenses: Residential | 1,551 | 1,600 |
Rental Expenses: Hotel | 7,091 | 7,634 |
Rental Expenses: Total | $ 235,378 | $ 226,806 |
Rental Expenses: % Of Grand Totals | 100.00% | 100.00% |
Net operating Income | $ 390,378 | $ 432,490 |
Net operating Income: % of Grand Totals | 100.00% | 100.00% |
Boston [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental Revenue: Office | $ 185,436 | $ 177,827 |
Rental Revenue: Residential | 1,139 | 1,171 |
Rental Revenue: Hotel | 7,420 | 8,757 |
Total revenue | $ 193,995 | $ 187,755 |
Rental Revenue: % of Grand Totals | 31.00% | 28.48% |
Rental Expenses: Office | $ 75,256 | $ 70,687 |
Rental Expenses: Residential | 495 | 520 |
Rental Expenses: Hotel | 7,091 | 7,634 |
Rental Expenses: Total | $ 82,842 | $ 78,841 |
Rental Expenses: % Of Grand Totals | 35.19% | 34.76% |
Net operating Income | $ 111,153 | $ 108,914 |
Net operating Income: % of Grand Totals | 28.47% | 25.18% |
New York [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental Revenue: Office | $ 241,570 | $ 291,858 |
Rental Revenue: Residential | 0 | 0 |
Rental Revenue: Hotel | 0 | 0 |
Total revenue | $ 241,570 | $ 291,858 |
Rental Revenue: % of Grand Totals | 38.60% | 44.27% |
Rental Expenses: Office | $ 91,684 | $ 88,798 |
Rental Expenses: Residential | 0 | 0 |
Rental Expenses: Hotel | 0 | 0 |
Rental Expenses: Total | $ 91,684 | $ 88,798 |
Rental Expenses: % Of Grand Totals | 38.95% | 39.15% |
Net operating Income | $ 149,886 | $ 203,060 |
Net operating Income: % of Grand Totals | 38.40% | 46.95% |
San Francisco [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental Revenue: Office | $ 84,641 | $ 76,317 |
Rental Revenue: Residential | 0 | 0 |
Rental Revenue: Hotel | 0 | 0 |
Total revenue | $ 84,641 | $ 76,317 |
Rental Revenue: % of Grand Totals | 13.53% | 11.57% |
Rental Expenses: Office | $ 24,474 | $ 23,905 |
Rental Expenses: Residential | 0 | 0 |
Rental Expenses: Hotel | 0 | 0 |
Rental Expenses: Total | $ 24,474 | $ 23,905 |
Rental Expenses: % Of Grand Totals | 10.40% | 10.54% |
Net operating Income | $ 60,167 | $ 52,412 |
Net operating Income: % of Grand Totals | 15.41% | 12.12% |
Washington, DC [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental Revenue: Office | $ 102,733 | $ 100,488 |
Rental Revenue: Residential | 2,817 | 2,878 |
Rental Revenue: Hotel | 0 | 0 |
Total revenue | $ 105,550 | $ 103,366 |
Rental Revenue: % of Grand Totals | 16.87% | 15.68% |
Rental Expenses: Office | $ 35,322 | $ 34,182 |
Rental Expenses: Residential | 1,056 | 1,080 |
Rental Expenses: Hotel | 0 | 0 |
Rental Expenses: Total | $ 36,378 | $ 35,262 |
Rental Expenses: % Of Grand Totals | 15.46% | 15.55% |
Net operating Income | $ 69,172 | $ 68,104 |
Net operating Income: % of Grand Totals | 17.72% | 15.75% |
Subsequent Events subsequent Events (Details) |
Apr. 24, 2017
USD ($)
|
May 01, 2017
USD ($)
ft²
|
Apr. 23, 2017
USD ($)
|
Apr. 21, 2017
apartments
|
Apr. 19, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||
Secured Debt | $ 2,046,959,000 | $ 2,063,087,000 | |||||
MacArhur BART Station [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of apartment units that could potentially be built under an option agreement | apartments | 402 | ||||||
767 5th Avenue (The General Motors Building) [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Effective Percentage | 3.65% | ||||||
Ownership Percentage by the Company | 60.00% | ||||||
Secured Debt | $ 2,300,000,000 | ||||||
Coupon/Stated Rate | 3.43% | ||||||
30 Shattuck Road [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Contractual Sales Price | $ 5,000,000 | ||||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,500,000,000 | $ 1,000,000,000 | |||||
Line of Credit Facility, Commitment Fee Percentage | 0.15% | ||||||
Delayed Draw Facility [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of Credit Facility, Current Borrowing Capacity | $ 500,000,000 | ||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.15% | ||||||
Current credit rating [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Margin added to Calculated Interest Rate | 0.875% | ||||||
Current credit rating [Member] | Delayed Draw Facility [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of Credit Facility, Current Borrowing Capacity | $ 0 | ||||||
Margin added to Calculated Interest Rate | 0.95% | ||||||
Interest Rate Swap [Member] | 767 5th Avenue (The General Motors Building) [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Notional Amount | $ 450,000,000 | ||||||
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion | $ 14,400,000 | ||||||
103 Carnegie Center [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Purchase price | $ 15,800,000 | ||||||
Net Rentable Area (in sf) | ft² | 96,000 |
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