3. Real Estate

Boston Properties, Inc.

Real estate consisted of the following at September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018			December 31, 2017
Land	$	5,108,491		$	5,080,679
Land held for future development (1)	205,096			204,925
Buildings and improvements	12,949,543			12,284,164
Tenant improvements	2,322,552			2,219,608
Furniture, fixtures and equipment	44,696			37,928
Construction in progress	1,057,261			1,269,338
Total	21,687,639			21,096,642
Less: Accumulated depreciation	(4,838,496		)	(4,589,634		)
	$	16,849,143		$	16,507,008

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(1)	Includes pre-development costs.

Boston Properties Limited Partnership

Real estate consisted of the following at September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018			December 31, 2017
Land	$	5,005,507		$	4,976,303
Land held for future development (1)	205,096			204,925
Buildings and improvements	12,646,614			11,977,062
Tenant improvements	2,322,552			2,219,608
Furniture, fixtures and equipment	44,696			37,928
Construction in progress	1,057,261			1,269,338
Total	21,281,726			20,685,164
Less: Accumulated depreciation	(4,741,280		)	(4,496,959		)
	$	16,540,446		$	16,188,205

_______________


(1)	Includes pre-development costs.

Development

On January 24, 2018, the Company entered into a lease agreement with an affiliate of Leidos Holdings, Inc. for a build-to-suit project with approximately 276,000 net rentable square feet of Class A office space at the Company's 17Fifty Presidents Street development project located in Reston, Virginia. Concurrently with the execution of the lease, the Company commenced development of the project and expects the building to be completed and available for occupancy during the second quarter of 2020.

On January 31, 2018, the Company partially placed in-service its Signature at Reston development project comprised of 508 apartment units and retail space aggregating approximately 518,000 square feet located in Reston, Virginia. This project was completed and fully placed in-service on June 7, 2018.

On February 23, 2018, the Company entered into a lease agreement with Fannie Mae to lease approximately 850,000 net rentable square feet of Class A office space at the Company's Reston Gateway development project located in Reston, Virginia. The initial phase of the project will consist of two Class A office buildings aggregating approximately 1.1 million net rentable square feet. On August 31, 2018, the Company commenced development of the project.

On June 20, 2018, the Company partially placed in-service its Proto Kendall Square development project comprised of 280 apartment units and retail space aggregating approximately 167,000 square feet located in Cambridge, Massachusetts. This project was completed and fully placed in-service on September 1, 2018.

On August 7, 2018, the Company entered into an agreement with a third party to (1) share certain pre-development costs during the pre-lease period and (2) to form a joint venture to thereafter own and develop a leasehold interest in 343 Madison Avenue located in New York City, which will support a Class A office tower with approximately 850,000 net rentable square feet. The Company will serve as development manager of the project and will own a 55% interest in the joint venture. In 2016, the Company was selected by the Metropolitan Transportation Authority ("MTA") as the developer of the project and will enter into a pre-lease agreement and a 99-year ground lease with the MTA for the site. There can be no assurances that the transaction will be completed on the terms currently contemplated, or at all.

The Company exercised its option to acquire land parcels at its Carnegie Center property located in Princeton, New Jersey for a purchase price of approximately $42.4 million. The seller will be entitled to receive additional payments in the future aggregating approximately $9.2 million, which are contingent on the development of each of the parcels. The land parcels will support approximately 1.7 million square feet of development. There can be no assurances that the transaction will be completed on the terms currently contemplated, or at all.

Dispositions

On January 9, 2018, the Company completed the sale of its 500 E Street, S.W. property located in Washington, DC for a net contract sale price of approximately $118.6 million. Net cash proceeds totaled approximately $116.1 million, resulting in a gain on sale of real estate totaling approximately $96.4 million for Boston Properties, Inc. and approximately $98.9 million for Boston Properties Limited Partnership. 500 E Street, S.W. is an approximately 262,000 net rentable square foot Class A office property. 500 E Street, S.W. contributed approximately $0.1 million of net income to the Company for the period from January 1, 2018 through January 8, 2018 and contributed approximately $1.7 million and $4.9 million of net income to the Company for the three and nine months ended September 30, 2017, respectively.

On May 24, 2018, the Company completed the sale of its 91 Hartwell Avenue property located in Lexington, Massachusetts for a gross sale price of approximately $22.2 million. Net cash proceeds totaled approximately $21.7 million, resulting in a gain on sale of real estate totaling approximately $15.5 million for Boston Properties, Inc. and approximately $15.9 million for Boston Properties Limited Partnership. 91 Hartwell Avenue is an approximately 119,000 net rentable square foot Class A office property. 91 Hartwell Avenue contributed approximately $0.3 million of net income to the Company for the period from January 1, 2018 through May 23, 2018 and contributed approximately $0.1 million and $0.4 million of net income to the Company for the three and nine months ended September 30, 2017, respectively.

On August 30, 2018, the Company entered into a binding agreement for the sale of its 1333 New Hampshire Avenue property located in Washington, DC for a gross sale price of approximately $136.5 million. 1333 New Hampshire Avenue is an approximately 316,000 net rentable square foot Class A office property. The sale is subject to the satisfaction of customary closing conditions and there can be no assurance that the sale will be completed on the terms currently contemplated or at all.

On September 27, 2018, the Company completed the sale of its Quorum Office Park property located in Chelmsford, Massachusetts for a gross sale price of approximately $35.3 million. Net cash proceeds totaled approximately $34.3 million, resulting in a gain on sale of real estate totaling approximately $7.9 million for Boston Properties, Inc. and approximately $9.2 million for Boston Properties Limited Partnership. Quorum Office Park is an approximately 268,000 net rentable square foot Class A office property. Quorum Office Park contributed approximately $0.2 million and $0.7 million of net income to the Company for the period from July 1, 2018 through September 26, 2018 and the period from January 1, 2018 through September 26, 2018, respectively, and contributed approximately $0.3 million and $0.7 million of net income to the Company for the three and nine months ended September 30, 2017, respectively.