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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended SeptemberJune 30, 20172023
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File Number: 1-13087 (Boston Properties, Inc.)
Commission File Number: 0-50209 (Boston Properties Limited Partnership)

BOSTON PROPERTIES, INC.
BOSTON PROPERTIES LIMITED PARTNERSHIP
(Exact name of Registrants as specified in its charter)
Boston Properties, Inc.Delaware04-2473675
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
Boston Properties Limited PartnershipDelaware04-3372948
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
Prudential Center, 800 Boylston Street, Suite 1900, Boston, Massachusetts 02199-8103
(Address of principal executive offices) (Zip Code)
(617) 236-3300
(Registrants’ telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
RegistrantTitle of each classTrading Symbol(s)Name of each exchange on which registered
Boston Properties, Inc.Common Stock, par value $0.01 per shareBXPNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
Boston Properties, Inc.:    Yes  x   No  ¨ ☐         Boston Properties Limited Partnership:    Yes  x    No  ¨☐

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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    
Boston Properties, Inc.:    Yes  x    No  ¨ ☐         Boston Properties Limited Partnership:    Yes  x    No  ¨


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☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Boston Properties, Inc.:    
Large accelerated filer  x         Accelerated filer  ¨☐         Non-accelerated filer  ¨
☐Smaller reporting company  ¨ ☐         Emerging growth company¨☐

Boston Properties Limited Partnership:
Large accelerated filer  ¨☐         Accelerated filer  ¨☐         Non-accelerated filer  x
Smaller reporting company  ¨☐           Emerging growth company¨

☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Boston Properties, Inc. ¨ ☐                 Boston Properties Limited Partnership ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
Boston Properties, Inc.:    Yes  ¨☐    No  x        Boston Properties Limited Partnership:    Yes  ¨☐    No  x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Boston Properties, Inc.Common Stock, par value $0.01 per share154,322,266156,864,549
(Registrant)(Class)(Outstanding on November 2, 2017)July 28, 2023)


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EXPLANATORY NOTE
This report combines the quarterly reportsQuarterly Reports on Form 10-Q for the period ended SeptemberJune 30, 20172023 of Boston Properties, Inc. and Boston Properties Limited Partnership. Unless stated otherwise or the context otherwise requires, references to “BXP” mean Boston Properties, Inc., a Delaware corporation and real estate investment trust (“REIT”), and references to “BPLP” and the “Operating Partnership” mean Boston Properties Limited Partnership, a Delaware limited partnership. Unless stated otherwise or the context requires, references to the “Company,” “we,” “us” and “our” mean collectively BXP, BPLP and those entities/subsidiaries consolidated by BXP.
BPLP is the entity through which BXP conducts substantially all of its business and owns, either directly or through subsidiaries, substantially all of its assets. BXP is the sole general partner and also a limited partner of BPLP. As the sole general partner of BPLP, BXP has exclusive control of BPLP’s day-to-day management. Therefore, unless stated otherwise or the context requires, references to the “Company,” “we,” “us” and “our” mean collectively BXP, BPLP and those entities/subsidiaries consolidated by BXP.
As of SeptemberJune 30, 2017,2023, BXP owned an approximate 89.7%89.4% ownership interest in BPLP. The remaining approximate 10.3%10.6% interest iswas owned by limited partners. The other limited partners of BPLP are (1) persons who contributed their direct or indirect interests in properties to BPLP in exchange for common units or preferred units of limited partnership interest in BPLP and/or (2) recipients of long termreceived long-term incentive plan units of BPLP pursuant to BXP’s Stock Option and Incentive Plans.Plans, or both. Under the limited partnership agreement of BPLP, unitholders may present their common units of BPLP for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time, generally one year from issuance). Upon presentation of a common unit for redemption, BPLP must redeem the unit for cash equal to the then value of a share of BXP’s common stock. In lieu of a cash redemption by BPLP, however, BXP may elect to acquire any common units so tendered by issuing shares of BXP common stock in exchange for the common units. If BXP so elects, its common stock will be exchanged for common units on a one-for-one basis. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. BXP generally expects that it will elect to issue its common stock in connection with each such presentation for redemption rather than having BPLP pay cash. With each such exchange or redemption, BXP’s percentage ownership in BPLP will increase. In addition, whenever BXP issues shares of its common stock other than to acquire common units of BPLP, BXP must contribute any net proceeds it receives to BPLP and BPLP must issue to BXP an equivalent number of common units of BPLP. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.
The Company believes that combining the quarterly reportsQuarterly Reports on Form 10-Q of BXP and BPLP into this single report provides the following benefits:report:
•enhances investors’ understanding of BXP and BPLP by enabling investorsthem 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.
The Company believes it is important to understand the few differences between BXP and BPLP in the context of how BXP and BPLP operate as a consolidated company. The financial results of BPLP are consolidated into the financial statements of BXP. BXP does not have any other significant assets, liabilities or operations, other than its investment in BPLP, nor does it have employees of its own. BPLP, not BXP, generally executes all significant business relationships other than transactions involving the securities of BXP. BPLP holds substantially all of the assets of BXP, including ownership interests in subsidiaries and joint ventures. BPLP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offeringsissuances by BXP, which are contributed to the capital of BPLP in exchange for common or preferred units of partnership in BPLP, as applicable, BPLP generates all remaining capital required by the Company’s business. These sources include working capital, net cash provided by operating activities, borrowings under its credit facilities, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties and interests in joint ventures.
Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of BXP and BPLP. The limited partners of BPLP are accounted for as partners’ capital in BPLP’s financial statements and as noncontrolling interests in BXP’s financial statements. The noncontrolling interests in BPLP’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in BXP’s financial statements include the same

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noncontrolling interests at BPLP’s levelin BPLP and limited partners of BPLP. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued atby each of BXP and BPLP levels.

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BPLP.
In addition, the consolidated financial statements of BXP and BPLP differ in total real estate assets resulting from previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor redemptions of common units of BPLP. This accounting resulted in a step-up of the real estate assets of BXP at BXP. This resultedthe time of such redemptions, resulting in a difference between the net real estate of BXP as compared to BPLP of approximately $320.8$246.4 million, or 2.0%1.3% at SeptemberJune 30, 20172023, and a corresponding difference in depreciation expense, impairment losses and gains on sales of real estate upon the sale of certainthese properties having an allocation of the real estate step-up. The acquisition accounting was nullified on a prospective basis beginning in 2009 as a result of the Company’s adoption of a new accounting standard requiring any futuresubsequent redemptions to be accounted for solely as an equity transaction.
To help investors better understand the key differences between BXP and BPLP, certainthe following items in this report present information separately for BXP and BPLP in this report has been separated, as set forth below:BPLP:
• Item 1. Financial Statements (unaudited), which includes the following specific disclosures for BXP and BPLP:
•Note 3. Real Estate;
•Note 6. Derivative Instruments and Hedging Activities;
•Note 8. Noncontrolling Interests;
•Note 9.10. Stockholders’ Equity / Partners’ Capital;
•Note 10.11. Segment Information; and
• Note 12. Earnings Per Share / Common Unit; andUnit
•Note 12: Segment Information
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Liquidity and Capital Resources, 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.
This report also includes separate Part I - Item 4. Controls and Procedures and Part II - Item 2. Unregistered Sales of Equity Securities and Use of Proceeds sections for each of BXP and BPLP, as well as separate Exhibits 12, 31 and 32 calculation of ratios of earnings to fixed charges and certifications for each of BXP and BPLP.





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BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP
FORM 10-Q
for the quarter ended SeptemberJune 30, 20172023
TABLE OF CONTENTS
Page
ITEM 1.
1
Boston Properties, Inc.
21
b) Consolidated Statements of Operations for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022
3
c) Consolidated Statements of Comprehensive Income for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022
4
d) Consolidated Statements of Stockholders’ Equity for the ninethree and six months ended SeptemberJune 30, 20172023 and 20162022
5
e) Consolidated Statements of Cash Flows for the ninesix months ended SeptemberJune 30, 20172023 and 20162022
67
Boston Properties Limited Partnership
89
b) Consolidated Statements of Operations for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022
911
c) Consolidated Statements of Comprehensive Income for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022
1012
d) Consolidated Statements of Partners’ Capital and Noncontrolling Interests for the ninethree and six months ended SeptemberJune 30, 20172023 and 20162022
1113
e) Consolidated Statements of Cash Flows for the ninesix months ended SeptemberJune 30, 20172023 and 20162022
1215
Boston Properties, Inc. and Boston Properties Limited Partnership
1417


ITEM 2.
4144
ITEM 3.
8797
ITEM 4.
8798
ITEM 1.
8999
ITEM 1A.
8999
ITEM 2.
8999
ITEM 3.
89100
ITEM 4.
89100
ITEM 5.
89100
ITEM 6.
90101
91102



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PART I. FINANCIAL INFORMATION
ITEM 1—Financial Statements.






BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except for share and par value amounts)
June 30, 2023December 31, 2022
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,870,107 and $6,789,029 at June 30, 2023 and December 31, 2022, respectively)$25,762,722 $25,389,663 
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at June 30, 2023 and December 31, 2022, respectively)237,526 237,510 
Right of use assets - operating leases166,421 167,351 
Less: accumulated depreciation (amounts related to VIEs of $(1,434,592) and $(1,381,401) at June 30, 2023 and December 31, 2022, respectively)(6,568,568)(6,298,082)
Total real estate19,598,101 19,496,442 
Cash and cash equivalents (amounts related to VIEs of $256,201 and $259,658 at June 30, 2023 and December 31, 2022, respectively)1,581,575 690,333 
Cash held in escrows46,915 46,479 
Investments in securities33,481 32,277 
Tenant and other receivables, net (amounts related to VIEs of $13,921 and $16,521 at June 30, 2023 and December 31, 2022, respectively)91,968 81,389 
Related party note receivable, net88,834 78,576 
Sales-type lease receivable, net13,250 12,811 
Accrued rental income, net (amounts related to VIEs of $382,622 and $367,138 at June 30, 2023 and December 31, 2022, respectively)1,318,320 1,276,580 
Deferred charges, net (amounts related to VIEs of $172,655 and $176,597 at June 30, 2023 and December 31, 2022, respectively)710,820 733,282 
Prepaid expenses and other assets (amounts related to VIEs of $13,534 and $11,647 at June 30, 2023 and December 31, 2022, respectively)77,457 43,589 
Investments in unconsolidated joint ventures1,780,959 1,715,911 
Total assets$25,341,680 $24,207,669 
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,274,764 and $3,272,368 at June 30, 2023 and December 31, 2022, respectively)$3,274,764 $3,272,368 
Unsecured senior notes, net10,985,395 10,237,968 
Unsecured line of credit— — 
Unsecured term loan, net1,196,046 730,000 
Lease liabilities - finance leases (amounts related to VIEs of $20,675 and $20,604 at June 30, 2023 and December 31, 2022, respectively)251,874 249,335 
Lease liabilities - operating leases204,826 204,686 
Accounts payable and accrued expenses (amounts related to VIEs of $57,852 and $29,466 at June 30, 2023 and December 31, 2022, respectively)434,574 417,545 
Dividends and distributions payable171,465 170,643 
Accrued interest payable111,088 103,774 
Other liabilities (amounts related to VIEs of $101,301 and $114,232 at June 30, 2023 and December 31, 2022, respectively)418,813 450,918 
Total liabilities17,048,845 15,837,237 
Commitments and contingencies (See Note 8)
Redeemable deferred stock units— 108,642 and 97,853 units outstanding at redemption value at June 30, 2023 and December 31, 2022, respectively6,292 6,613 
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BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except for share and par value amounts)
June 30, 2023December 31, 2022
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, none issued or outstanding— — 
Common stock, $0.01 par value, 250,000,000 shares authorized, 156,932,300 and 156,836,767 issued and 156,853,400 and 156,757,867 outstanding at June 30, 2023 and December 31, 2022, respectively1,569 1,568 
Additional paid-in capital6,561,161 6,539,147 
Dividends in excess of earnings(516,550)(391,356)
Treasury common stock at cost, 78,900 shares at June 30, 2023 and December 31, 2022(2,722)(2,722)
Accumulated other comprehensive loss(3,406)(13,718)
Total stockholders’ equity attributable to Boston Properties, Inc.6,040,052 6,132,919 
Noncontrolling interests:
Common units of Boston Properties Limited Partnership689,123 683,583 
Property partnerships1,557,368 1,547,317 
Total equity8,286,543 8,363,819 
Total liabilities and equity$25,341,680 $24,207,669 
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 September 30, 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 $7,084,588 and $6,760,078 at September 30, 2017 and December 31, 2016, respectively)$20,859,245
 $20,147,263
Less: accumulated depreciation (amounts related to VIEs of $(825,390) and $(758,640) at September 30, 2017 and December 31, 2016, respectively)(4,484,798) (4,222,235)
Total real estate16,374,447
 15,925,028
Cash and cash equivalents (amounts related to VIEs of $285,089 and $253,999 at September 30, 2017 and December 31, 2016, respectively)493,055
 356,914
Cash held in escrows (amounts related to VIEs of $6,179 and $4,955 at September 30, 2017 and December 31, 2016, respectively)83,779
 63,174
Investments in securities27,981
 23,814
Tenant and other receivables (amounts related to VIEs of $19,891 and $23,525 at September 30, 2017 and December 31, 2016, respectively)79,750
 92,548
Accrued rental income (amounts related to VIEs of $232,336 and $224,185 at September 30, 2017 and December 31, 2016, respectively)835,415
 799,138
Deferred charges, net (amounts related to VIEs of $268,727 and $290,436 at September 30, 2017 and December 31, 2016, respectively)657,474
 686,163
Prepaid expenses and other assets (amounts related to VIEs of $68,330 and $42,718 at September 30, 2017 and December 31, 2016, respectively)144,817
 129,666
Investments in unconsolidated joint ventures611,800
 775,198
Total assets$19,308,518
 $18,851,643
LIABILITIES AND EQUITY   
Liabilities:   
Mortgage notes payable, net (amounts related to VIEs of $2,941,550 and $2,018,483 at September 30, 2017 and December 31, 2016, respectively)$2,982,067
 $2,063,087
Unsecured senior notes, net7,252,567
 7,245,953
Unsecured line of credit—
 —
Unsecured term loan—
 —
Mezzanine notes payable (amounts related to VIEs of $0 and $307,093 at September 30, 2017 and December 31, 2016, respectively)—
 307,093
Outside members’ notes payable (amounts related to VIEs of $0 and $180,000 at September 30, 2017 and December 31, 2016, respectively)—
 180,000
Accounts payable and accrued expenses (amounts related to VIEs of $106,772 and $110,457 at September 30, 2017 and December 31, 2016, respectively)325,440
 298,524
Dividends and distributions payable130,434
 130,308
Accrued interest payable (amounts related to VIEs of $6,800 and $162,226 at September 30, 2017 and December 31, 2016, respectively)99,100
 243,933
Other liabilities (amounts related to VIEs of $146,517 and $175,146 at September 30, 2017 and December 31, 2016, respectively)419,215
 450,821
Total liabilities11,208,823
 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 September 30, 2017 and December 31, 2016200,000
 200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 154,401,166 and 153,869,075 issued and 154,322,266 and 153,790,175 outstanding at September 30, 2017 and December 31, 2016, respectively1,543
 1,538
Additional paid-in capital6,370,932
 6,333,424
Dividends in excess of earnings(692,739) (693,694)
Treasury common stock at cost, 78,900 shares at September 30, 2017 and December 31, 2016(2,722) (2,722)
Accumulated other comprehensive loss(51,796) (52,251)
Total stockholders’ equity attributable to Boston Properties, Inc.5,825,218
 5,786,295
Noncontrolling interests:   
Common units of Boston Properties Limited Partnership605,802
 614,982
Property partnerships1,668,675
 1,530,647
Total equity8,099,695
 7,931,924
Total liabilities and equity$19,308,518
 $18,851,643

















The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(unaudited and in thousands, except for per share amounts)
Three months ended June 30,Six months ended June 30,
 2023202220232022
Revenue
Lease$761,733 $721,899 $1,518,608 $1,440,019 
Parking and other26,984 30,346 50,993 52,080 
Hotel13,969 12,089 22,070 16,646 
Development and management services9,858 6,354 18,838 12,185 
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Total revenue817,153 773,927 1,620,353 1,528,234 
Expenses
Operating
Rental291,036 273,848 582,344 544,103 
Hotel8,161 6,444 14,832 11,284 
General and administrative44,175 34,665 99,977 77,859 
Payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Transaction costs308 496 1,219 496 
Depreciation and amortization202,577 183,146 411,311 360,770 
Total expenses550,866 501,838 1,119,527 1,001,816 
Other income (expense)
Income (loss) from unconsolidated joint ventures(6,668)(54)(14,237)2,135 
Gains on sales of real estate— 96,247 — 118,948 
Interest and other income (loss)17,343 1,195 28,284 2,423 
Other income - assignment fee— 6,624 — 6,624 
Gains (losses) from investments in securities1,571 (4,716)3,236 (6,978)
Unrealized gain on non-real estate investment124 — 383 — 
Interest expense(142,473)(104,142)(276,680)(205,370)
Net income136,184 267,243 241,812 444,200 
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships(19,768)(18,546)(38,428)(36,095)
Noncontrolling interest—common units of the Operating Partnership(12,117)(25,708)(21,169)(42,061)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 $182,215 $366,044 
Basic earnings per common share attributable to Boston Properties, Inc.
Net income$0.67 $1.42 $1.16 $2.33 
Weighted average number of common shares outstanding156,826 156,720 156,815 156,685 
Diluted earnings per common share attributable to Boston Properties, Inc.
Net income$0.66 $1.42 $1.16 $2.33 
Weighted average number of common and common equivalent shares outstanding157,218 157,192 157,131 157,098 
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
 (in thousands, except for per share amounts)
Revenue       
Rental       
Base rent$513,269
 $489,312
 $1,537,373
 $1,518,826
Recoveries from tenants94,476
 92,560
 272,803
 267,852
Parking and other26,092
 24,638
 78,164
 75,576
Total rental revenue633,837
 606,510
 1,888,340
 1,862,254
Hotel revenue13,064
 12,354
 33,859
 33,919
Development and management services10,811
 6,364
 24,648
 18,586
Total revenue657,712
 625,228
 1,946,847
 1,914,759
Expenses       
Operating       
Rental237,341
 228,560
 696,082
 665,670
Hotel8,447
 8,118
 23,942
 23,730
General and administrative25,792
 25,165
 84,319
 79,936
Transaction costs239
 249
 572
 1,187
Impairment loss—
 1,783
 —
 1,783
Depreciation and amortization152,164
 203,748
 463,288
 516,371
Total expenses423,983
 467,623
 1,268,203
 1,288,677
Operating income233,729
 157,605
 678,644
 626,082
Other income (expense)       
Income from unconsolidated joint ventures843
 1,464
 7,035
 5,489
Interest and other income1,329
 3,628
 3,447
 6,657
Gains from investments in securities944
 976
 2,716
 1,713
Gains (losses) from early extinguishments of debt—
 (371) 14,354
 (371)
Losses from interest rate contracts—
 (140) —
 (140)
Interest expense(92,032) (104,641) (282,709) (314,953)
Income before gains on sales of real estate144,813
 58,521
 423,487
 324,477
Gains on sales of real estate2,891
 12,983
 6,791
 80,606
Net income147,704
 71,504
 430,278
 405,083
Net income attributable to noncontrolling interests       
Noncontrolling interests in property partnerships(14,340) 17,225
 (33,967) (53)
Noncontrolling interest—common units of Boston Properties Limited Partnership(13,402) (9,387) (40,350) (42,120)
Net income attributable to Boston Properties, Inc.119,962
 79,342
 355,961
 362,910
Preferred dividends(2,625) (2,589) (7,875) (7,796)
Net income attributable to Boston Properties, Inc. common shareholders$117,337
 $76,753
 $348,086
 $355,114
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:       
Net income$0.76
 $0.50
 $2.26
 $2.31
Weighted average number of common shares outstanding154,355
 153,754
 154,132
 153,681
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:       
Net income$0.76
 $0.50
 $2.26
 $2.31
Weighted average number of common and common equivalent shares outstanding154,483
 154,136
 154,344
 153,971
        
Dividends per common share$0.75
 $0.65
 $2.25
 $1.95




The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)(unaudited and in thousands)
 
Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016Three months ended June 30,Six months ended June 30,
(in thousands) 2023202220232022
Net income$147,704
 $71,504
 $430,278
 $405,083
Net income$136,184 $267,243 $241,812 $444,200 
Other comprehensive income (loss):       
Other comprehensive income:Other comprehensive income:
Effective portion of interest rate contracts—
 5,712
 (6,133) (85,285)Effective portion of interest rate contracts14,965 35 8,427 7,600 
Amortization of interest rate contracts (1)1,665
 1,190
 4,368
 2,445
Amortization of interest rate contracts (1)1,674 1,677 3,349 3,353 
Other comprehensive income (loss)1,665
 6,902
 (1,765) (82,840)
Other comprehensive incomeOther comprehensive income16,639 1,712 11,776 10,953 
Comprehensive income149,369
 78,406
 428,513
 322,243
Comprehensive income152,823 268,955 253,588 455,153 
Net income attributable to noncontrolling interests(27,742) 7,838
 (74,317) (42,173)Net income attributable to noncontrolling interests(31,885)(44,254)(59,597)(78,156)
Other comprehensive income (loss) attributable to noncontrolling interests(300) (1,097) 2,220
 23,011
Other comprehensive income attributable to noncontrolling interestsOther comprehensive income attributable to noncontrolling interests(1,831)(304)(1,463)(1,368)
Comprehensive income attributable to Boston Properties, Inc.$121,327
 $85,147
 $356,416
 $303,081
Comprehensive income attributable to Boston Properties, Inc.$119,107 $224,397 $192,528 $375,629 
_______________
(1)Amounts reclassified from comprehensive income primarily to interest expense within the Boston Properties, Inc.’s Consolidated Statements of Operations.





























































The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF EQUITY
 (unaudited and in thousands)
 Common StockAdditional Paid-in CapitalDividends in Excess of EarningsTreasury Stock,
at cost		Accumulated Other Comprehensive LossNoncontrolling Interests - Common UnitsNoncontrolling Interests - Property PartnershipsTotal
 SharesAmount
Equity, March 31, 2023156,830 $1,568 $6,549,314 $(467,159)$(2,722)$(18,214)$691,627 $1,552,070 $8,306,484 
Redemption of operating partnership units to common stock16 1 598 — — — (599)— — 
Allocated net income for the period— — — 104,325 — — 12,091 19,768 136,184 
Dividends/distributions declared— — — (153,716)— — (18,376)— (172,092)
Net activity from stock option and incentive plan8 — (110)— — — 14,052 — 13,942 
Distributions to noncontrolling interests in property partnerships— — — — — — — (14,614)(14,614)
Effective portion of interest rate contracts— — — — — 13,435 1,530 — 14,965 
Amortization of interest rate contracts— — — — — 1,373 157 144 1,674 
Reallocation of noncontrolling interest— — 11,359 — — — (11,359)— — 
Equity, June 30, 2023156,854 $1,569 $6,561,161 $(516,550)$(2,722)$(3,406)$689,123 $1,557,368 $8,286,543 
Equity, March 31, 2022156,712 $1,567 $6,509,663 $(636,421)$(2,722)$(28,485)$649,602 $1,548,455 $8,041,659 
Redemption of operating partnership units to common stock11 — 401 — — — (401)— — 
Allocated net income for the period— — — 222,997 — — 25,700 18,546 267,243 
Dividends/distributions declared— — — (153,592)— — (17,939)— (171,531)
Net activity from stock option and incentive plan3 — 4,420 — — — 13,605 — 18,025 
Distributions to noncontrolling interests in property partnerships— — — — — — — (14,439)(14,439)
Effective portion of interest rate contracts— — — — — 31 4 — 35 
Amortization of interest rate contracts— — — — — 1,377 156 144 1,677 
Reallocation of noncontrolling interest— — 10,513 — — — (10,513)— — 
Equity, June 30, 2022156,726 $1,567 $6,524,997 $(567,016)$(2,722)$(27,077)$660,214 $1,552,706 $8,142,669 
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited and in thousands)


5
 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, 2016153,790
 $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 stock492
 5
 —
 16,807
 —
 —
 —
 (16,812) —
Allocated net income for the year—
 —
 —
 —
 355,961
 —
 —
 74,317
 430,278
Dividends/distributions declared—
 —
 —
 —
 (354,734) —
 —
 (40,292) (395,026)
Shares issued pursuant to stock purchase plan6
 —
 —
 795
 —
 —
 —
 —
 795
Net activity from stock option and incentive plan34
 —
 —
 2,920
 —
 —
 —
 26,271
 29,191
Cumulative effect of a change in accounting principle—
 —
 —
 —
 (272) —
 —
 (1,763) (2,035)
Contributions from noncontrolling interests in property partnerships—
 —
 —
 —
 —
 —
 —
 147,772
 147,772
Distributions to noncontrolling interests in property partnerships—
 —
 —
 —
 —
 —
 —
 (41,439) (41,439)
Effective portion of interest rate contracts—
 —
 —
 —
 —
 —
 (3,304) (2,829) (6,133)
Amortization of interest rate contracts—
 —
 —
 —
 —
 —
 3,759
 609
 4,368
Reallocation of noncontrolling interest—
 —
 —
 16,986
 —
 —
 —
 (16,986) —
Equity, September 30, 2017154,322
 $1,543
 $200,000
 $6,370,932
 $(692,739) $(2,722) $(51,796) $2,274,477
 $8,099,695
                  
Equity, December 31, 2015153,580
 $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 stock173
 2
 —
 5,879
 —
 —
 —
 (5,881) —
Allocated net income for the year—
 —
 —
 —
 362,910
 —
 —
 42,173
 405,083
Dividends/distributions declared—
 —
 —
 —
 (307,480) —
 —
 (35,500) (342,980)
Shares issued pursuant to stock purchase plan6
 —
 —
 730
 —
 —
 —
 —
 730
Net activity from stock option and incentive plan14
 —
 —
 2,870
 —
 —
 —
 21,420
 24,290
Sale of interests in property partnerships—
 —
 —
 1,320
 —
 —
 —
 (1,320) —
Contributions from noncontrolling interests in property partnerships—
 —
 —
 —
 —
 —
 —
 6,737
 6,737
Distributions to noncontrolling interests in property partnerships—
 —
 —
 —
 —
 —
 —
 (38,694) (38,694)
Effective portion of interest rate contracts—
 —
 —
 —
 —
 —
 (62,022) (23,263) (85,285)
Amortization of interest rate contracts—
 —
 —
 —
 —
 —
 2,193
 252
 2,445
Reallocation of noncontrolling interest—
 —
 —
 10,094
 —
 —
 —
 (10,094) —
Equity, September 30, 2016153,773
 $1,538
 $200,000
 $6,326,580
 $(725,522) $(2,722) $(73,943) $2,133,322
 $7,859,253
Table of Contents

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF EQUITY
 (unaudited and in thousands)
Common StockAdditional Paid-in CapitalDividends in Excess of EarningsTreasury Stock,
at cost		Accumulated Other Comprehensive LossNoncontrolling Interests - Common UnitsNoncontrolling Interests - Property PartnershipsTotal
SharesAmount
Equity, December 31, 2022156,758 $1,568 $6,539,147 $(391,356)$(2,722)$(13,718)$683,583 $1,547,317 $8,363,819 
Redemption of operating partnership units to common stock21 1 793 — — — (794)— — 
Allocated net income for the period— — — 182,215 — — 21,169 38,428 241,812 
Dividends/distributions declared— — — (307,409)— — (36,737)— (344,146)
Shares issued pursuant to stock purchase plan9 — 586 — — — — — 586 
Net activity from stock option and incentive plan66 — 3,338 — — — 38,023 — 41,361 
Contributions from noncontrolling interests in property partnerships— — — — — — — 7,555 7,555 
Distributions to noncontrolling interests in property partnerships— — — — — — — (36,220)(36,220)
Effective portion of interest rate contracts— — — — — 7,565 862 — 8,427 
Amortization of interest rate contracts— — — — — 2,747 314 288 3,349 
Reallocation of noncontrolling interest— — 17,297 — — — (17,297)— — 
Equity, June 30, 2023156,854 $1,569 $6,561,161 $(516,550)$(2,722)$(3,406)$689,123 $1,557,368 $8,286,543 
Equity, December 31, 2021156,545 $1,565 $6,497,730 $(625,891)$(2,722)$(36,662)$642,655 $1,556,553 $8,033,228 
Redemption of operating partnership units to common stock152 2 5,427 — — — (5,429)— — 
Allocated net income for the period— — — 366,044 — — 42,061 36,095 444,200 
Dividends/distributions declared— — — (307,169)— — (35,859)— (343,028)
Shares issued pursuant to stock purchase plan5 — 600 — — — — — 600 
Net activity from stock option and incentive plan24 — 4,287 — — — 32,659 — 36,946 
Contributions from noncontrolling interests in property partnerships— — — — — — — 849 849 
Distributions to noncontrolling interests in property partnerships— — — — — — — (41,079)(41,079)
Effective portion of interest rate contracts— — — — — 6,831 769 — 7,600 
Amortization of interest rate contracts— — — — — 2,754 311 288 3,353 
Reallocation of noncontrolling interest— — 16,953 — — — (16,953)— — 
Equity, June 30, 2022156,726 $1,567 $6,524,997 $(567,016)$(2,722)$(27,077)$660,214 $1,552,706 $8,142,669 






The accompanying notes are an integral part of these consolidated financial statements.

6
5

Table of Contents

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 Six months ended June 30,
 20232022
Cash flows from operating activities:
Net income$241,812 $444,200 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization411,311 360,770 
Amortization of right of use assets - operating leases929 1,407 
Non-cash compensation expense41,524 36,195 
Loss (income) from unconsolidated joint ventures14,237 (2,135)
Distributions of net cash flow from operations of unconsolidated joint ventures11,437 10,097 
Losses (gains) from investments in securities(3,236)6,978 
Allowance for current expected credit losses264 (458)
Non-cash portion of interest expense14,940 12,528 
Other income - assignment fee— (6,624)
Gains on sales of real estate— (118,948)
Unrealized gain on non-real estate investment(383)— 
Change in assets and liabilities:
Tenant and other receivables, net3,721 10,167 
Notes receivable, net— (152)
Accrued rental income, net(42,965)(48,901)
Prepaid expenses and other assets(24,758)6,326 
Lease liabilities - operating leases140 82 
Accounts payable and accrued expenses6,320 (18,636)
Accrued interest payable7,314 2,036 
Other liabilities(21,773)(37,732)
Tenant leasing costs(47,651)(40,561)
Total adjustments371,371 172,439 
Net cash provided by operating activities613,183 616,639 
Cash flows from investing activities:
Acquisitions of real estate— (727,835)
Construction in progress(235,331)(237,182)
Building and other capital improvements(78,344)(63,278)
Tenant improvements(135,743)(97,844)
Proceeds from sales of real estate— 157,345 
Proceeds from assignment fee— 6,624 
Capital contributions to unconsolidated joint ventures(103,595)(69,819)
Capital distributions from unconsolidated joint ventures7,350 36,622 
Investment in non-real estate investments(733)— 
Issuance of related party note receivable(10,500)— 
Proceeds from notes receivable— 10,000 
Investments in securities, net2,032 5,197 
Net cash used in investing activities(554,864)(980,170)
7
 For the nine months ended September 30,
 2017 2016
 (in thousands)
Cash flows from operating activities:   
Net income$430,278
 $405,083
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization463,288
 516,371
Impairment loss—
 1,783
Non-cash compensation expense27,260
 25,290
Income from unconsolidated joint ventures(7,035) (5,489)
Distributions of net cash flow from operations of unconsolidated joint ventures8,563
 11,645
Gains from investments in securities(2,716) (1,713)
(Gains) losses from early extinguishments of debt(14,444) 371
Non-cash portion of interest expense(6,667) (27,386)
Gains on sales of real estate(6,791) (80,606)
Change in assets and liabilities:   
Cash held in escrows7,795
 1,675
Tenant and other receivables, net12,528
 22,135
Accrued rental income, net(36,012) (14,618)
Prepaid expenses and other assets(13,633) 4,883
Accounts payable and accrued expenses7,861
 16,852
Accrued interest payable(144,833) 44,242
Other liabilities(65,031) (114,321)
Tenant leasing costs(67,699) (62,412)
Total adjustments162,434
 338,702
Net cash provided by operating activities592,712
 743,785
Cash flows from investing activities:   
Acquisitions of real estate(15,953) (78,000)
Construction in progress(452,283) (359,716)
Building and other capital improvements(162,395) (81,842)
Tenant improvements(152,749) (167,762)
Proceeds from sales of real estate29,810
 122,750
Proceeds from sales of real estate placed in escrow(29,810) (122,647)
Proceeds from sales of real estate released from escrow16,640
 122,647
Cash released from escrow for investing activities9,638
 6,694
Cash released from escrow for land sale contracts—
 1,403
Cash placed in escrow for investment in unconsolidated joint venture(25,000) —
Capital contributions to unconsolidated joint ventures(89,874) (546,982)
Capital distributions from unconsolidated joint ventures251,000
 —
Investments in securities, net(1,451) (929)
Net cash used in investing activities(622,427) (1,104,384)
    
    
    

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Table of Contents

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 Six months ended June 30,
 20232022
Cash flows from financing activities:
Proceeds from unsecured senior notes747,727 — 
Borrowings on unsecured line of credit— 340,000 
Repayments of unsecured line of credit— (320,000)
Borrowings on unsecured term loan1,200,000 730,000 
Repayment of unsecured term loan(730,000)— 
Deferred financing costs(12,339)(2,230)
Net activity from equity transactions(39)(366)
Dividends and distributions(343,325)(341,951)
Contributions from noncontrolling interests in property partnerships7,555 849 
Distributions to noncontrolling interests in property partnerships(36,220)(41,079)
Net cash provided by financing activities833,359 365,223 
Net increase in cash and cash equivalents and cash held in escrows891,678 1,692 
Cash and cash equivalents and cash held in escrows, beginning of period736,812 501,158 
Cash and cash equivalents and cash held in escrows, end of period$1,628,490 $502,850 
Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period$690,333 $452,692 
Cash held in escrows, beginning of period46,479 48,466 
Cash and cash equivalents and cash held in escrows, beginning of period$736,812 $501,158 
Cash and cash equivalents, end of period$1,581,575 $456,491 
Cash held in escrows, end of period46,915 46,359 
Cash and cash equivalents and cash held in escrows, end of period$1,628,490 $502,850 
Supplemental disclosures:
Cash paid for interest$273,214 $216,409 
Interest capitalized$21,153 $27,819 
Non-cash investing and financing activities:
Write-off of fully depreciated real estate$(85,878)$(65,435)
Change in real estate included in accounts payable and accrued expenses$25,562 $40,655 
Construction in progress, net deconsolidated$— $(11,316)
Investment in unconsolidated joint ventures recorded upon deconsolidation$— $11,316 
Dividends and distributions declared but not paid$171,465 $170,937 
Conversions of noncontrolling interests to stockholders’ equity$794 $5,429 
Issuance of restricted securities to employees and non-employee directors$47,885 $47,198 

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the nine months ended September 30,
 2017 2016
 (in thousands)
Cash flows from financing activities:   
Proceeds from mortgage notes payable2,300,000
 —
Repayments of mortgage notes payable(1,313,890) (1,323,284)
Proceeds from unsecured senior notes—
 1,989,790
Borrowings on unsecured line of credit470,000
 —
Repayments of unsecured line of credit(470,000) —
Repayments of mezzanine notes payable(306,000) —
Repayments of outside members’ notes payable(70,424) —
Payments on capital lease obligations(373) —
Payments on real estate financing transactions(1,306) (4,712)
Deposit on mortgage note payable interest rate lock(23,200) —
Return of deposit on mortgage note payable interest rate lock23,200
 —
Deferred financing costs(44,083) (16,101)
Net proceeds from equity transactions241
 (270)
Dividends and distributions(394,900) (557,262)
Contributions from noncontrolling interests in property partnerships38,196
 6,737
Distributions to noncontrolling interests in property partnerships(41,605) (38,694)
Net cash provided by financing activities165,856
 56,204
Net increase (decrease) in cash and cash equivalents136,141
 (304,395)
Cash and cash equivalents, beginning of period356,914
 723,718
Cash and cash equivalents, end of period$493,055
 $419,323
Supplemental disclosures:   
Cash paid for interest$477,189
 $327,053
Interest capitalized$43,286
 $28,956
Non-cash investing and financing activities:   
Write-off of fully depreciated real estate$(103,972) $(168,861)
Additions to real estate included in accounts payable and accrued expenses$36,609
 $11,864
Real estate acquired through capital lease$28,962
 $—
Outside members’ notes payable contributed to noncontrolling interests in property partnerships$109,576
 $—
Dividends and distributions declared but not paid$130,434
 $113,038
Conversions of noncontrolling interests to stockholders’ equity$16,812
 $5,881
Issuance of restricted securities to employees$35,711
 $33,711







The accompanying notes are an integral part of these consolidated financial statements.

8
7

Table of Contents



BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except for unit amounts)
June 30, 2023December 31, 2022
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,870,107 and $6,789,029 at June 30, 2023 and December 31, 2022, respectively)$25,396,457 $25,022,149 
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at June 30, 2023 and December 31, 2022, respectively)237,526 237,510 
Right of use assets - operating leases166,421 167,351 
Less: accumulated depreciation (amounts related to VIEs of $(1,434,592) and $(1,381,401) at June 30, 2023 and December 31, 2022, respectively)(6,448,665)(6,180,474)
Total real estate19,351,739 19,246,536 
Cash and cash equivalents (amounts related to VIEs of $256,201 and $259,658 at June 30, 2023 and December 31, 2022, respectively)1,581,575 690,333 
Cash held in escrows46,915 46,479 
Investments in securities33,481 32,277 
Tenant and other receivables, net (amounts related to VIEs of $13,921 and $16,521 at June 30, 2023 and December 31, 2022, respectively)91,968 81,389 
Related party note receivable, net88,834 78,576 
Sales-type lease receivable, net13,250 12,811 
Accrued rental income, net (amounts related to VIEs of $382,622 and $367,138 at June 30, 2023 and December 31, 2022, respectively)1,318,320 1,276,580 
Deferred charges, net (amounts related to VIEs of $172,655 and $176,597 at June 30, 2023 and December 31, 2022, respectively)710,820 733,282 
Prepaid expenses and other assets (amounts related to VIEs of $13,534 and $11,647 at June 30, 2023 and December 31, 2022, respectively)77,457 43,589 
Investments in unconsolidated joint ventures1,780,959 1,715,911 
Total assets$25,095,318 $23,957,763 
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,274,764 and $3,272,368 at June 30, 2023 and December 31, 2022, respectively)$3,274,764 $3,272,368 
Unsecured senior notes, net10,985,395 10,237,968 
Unsecured line of credit— — 
Unsecured term loan, net1,196,046 730,000 
Lease liabilities - finance leases (amounts related to VIEs of $20,675 and $20,604 at June 30, 2023 and December 31, 2022, respectively)251,874 249,335 
Lease liabilities - operating leases204,826 204,686 
Accounts payable and accrued expenses (amounts related to VIEs of $57,852 and $29,466 at June 30, 2023 and December 31, 2022, respectively)434,574 417,545 
Dividends and distributions payable171,465 170,643 
Accrued interest payable111,088 103,774 
Other liabilities (amounts related to VIEs of $101,301 and $114,232 at June 30, 2023 and December 31, 2022, respectively)418,813 450,918 
Total liabilities17,048,845 15,837,237 
Commitments and contingencies (See Note 8)
Redeemable deferred stock units— 108,642 and 97,853 units outstanding at redemption value at June 30, 2023 and December 31, 2022, respectively6,292 6,613 
9
Table of Contents
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 September 30, 2017 December 31, 2016
 (in thousands, except for unit amounts)
ASSETS   
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $7,084,588 and $6,760,078 at September 30, 2017 and December 31, 2016, respectively)$20,447,767
 $19,733,872
Less: accumulated depreciation (amounts related to VIEs of $(825,390) and $(758,640) at September 30, 2017 and December 31, 2016, respectively)(4,394,077) (4,136,364)
Total real estate16,053,690
 15,597,508
Cash and cash equivalents (amounts related to VIEs of $285,089 and $253,999 at September 30, 2017 and December 31, 2016, respectively)493,055
 356,914
Cash held in escrows (amounts related to VIEs of $6,179 and $4,955 at September 30, 2017 and December 31, 2016, respectively)83,779
 63,174
Investments in securities27,981
 23,814
Tenant and other receivables (amounts related to VIEs of $19,891 and $23,525 at September 30, 2017 and December 31, 2016, respectively)79,750
 92,548
Accrued rental income (amounts related to VIEs of $232,336 and $224,185 at September 30, 2017 and December 31, 2016, respectively)835,415
 799,138
Deferred charges, net (amounts related to VIEs of $268,727 and $290,436 at September 30, 2017 and December 31, 2016, respectively)657,474
 686,163
Prepaid expenses and other assets (amounts related to VIEs of $68,330 and $42,718 at September 30, 2017 and December 31, 2016, respectively)144,817
 129,666
Investments in unconsolidated joint ventures611,800
 775,198
Total assets$18,987,761
 $18,524,123
LIABILITIES AND CAPITAL   
Liabilities:   
Mortgage notes payable, net (amounts related to VIEs of $2,941,550 and $2,018,483 at September 30, 2017 and December 31, 2016, respectively)$2,982,067
 $2,063,087
Unsecured senior notes, net7,252,567
 7,245,953
Unsecured line of credit—
 —
Unsecured term loan—
 —
Mezzanine notes payable (amounts related to VIEs of $0 and $307,093 at September 30, 2017 and December 31, 2016, respectively)—
 307,093
Outside members’ notes payable (amounts related to VIEs of $0 and $180,000 at September 30, 2017 and December 31, 2016, respectively)—
 180,000
Accounts payable and accrued expenses (amounts related to VIEs of $106,772 and $110,457 at September 30, 2017 and December 31, 2016, respectively)325,440
 298,524
Distributions payable130,434
 130,308
Accrued interest payable (amounts related to VIEs of $6,800 and $162,226 at September 30, 2017 and December 31, 2016, respectively)99,100
 243,933
Other liabilities (amounts related to VIEs of $146,517 and $175,146 at September 30, 2017 and December 31, 2016, respectively)419,215
 450,821
Total liabilities11,208,823
 10,919,719
Commitments and contingencies—
 —
Noncontrolling interests:   
Redeemable partnership units—16,812,329 and 17,079,511 common units and 816,982 and 904,588 long term incentive units outstanding at redemption value at September 30, 2017 and December 31, 2016, respectively2,166,290
 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 September 30, 2017 and December 31, 2016193,623
 193,623
Boston Properties Limited Partnership partners’ capital—1,719,516 and 1,717,743 general partner units and 152,602,750 and 152,072,432 limited partner units outstanding at September 30, 2017 and December 31, 2016, respectively3,750,350
 3,618,094
Noncontrolling interests in property partnerships1,668,675
 1,530,647
Total capital5,612,648
 5,342,364
Total liabilities and capital$18,987,761
 $18,524,123
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except for unit amounts)
June 30, 2023December 31, 2022
Noncontrolling interests:
Redeemable partnership units— 16,522,540 and 16,531,172 common units and 2,135,852 and 1,679,175 long term incentive units outstanding at redemption value at June 30, 2023 and December 31, 2022, respectively1,135,053 1,280,886 
Capital:
Boston Properties Limited Partnership partners’ capital— 1,755,118 and 1,749,682 general partner units and 155,098,282 and 155,008,185 limited partner units outstanding at June 30, 2023 and December 31, 2022, respectively5,351,166 5,299,428 
Accumulated other comprehensive loss(3,406)(13,718)
Total partners’ capital5,347,760 5,285,710 
Noncontrolling interests in property partnerships1,557,368 1,547,317 
Total capital6,905,128 6,833,027 
Total liabilities and capital$25,095,318 $23,957,763 





























The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(unaudited and in thousands, except for per unit amounts)
 Three months ended June 30,Six months ended June 30,
 2023202220232022
Revenue
Lease$761,733 $721,899 $1,518,608 $1,440,019 
Parking and other26,984 30,346 50,993 52,080 
Hotel13,969 12,089 22,070 16,646 
Development and management services9,858 6,354 18,838 12,185 
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Total revenue817,153 773,927 1,620,353 1,528,234 
Expenses
Operating
Rental291,036 273,848 582,344 544,103 
Hotel8,161 6,444 14,832 11,284 
General and administrative44,175 34,665 99,977 77,859 
Payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Transaction costs308 496 1,219 496 
Depreciation and amortization200,895 181,416 407,767 357,302 
Total expenses549,184 500,108 1,115,983 998,348 
Other income (expense)
Income (loss) from unconsolidated joint ventures(6,668)(54)(14,237)2,135 
Gains on sales of real estate— 99,608 — 122,992 
Interest and other income (loss)17,343 1,195 28,284 2,423 
Other income - assignment fee— 6,624 — 6,624 
Gains (losses) from investments in securities1,571 (4,716)3,236 (6,978)
Unrealized gain on non-real estate investment124 — 383 — 
Interest expense(142,473)(104,142)(276,680)(205,370)
Net income137,866 272,334 245,356 451,712 
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships(19,768)(18,546)(38,428)(36,095)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 $206,928 $415,617 
Basic earnings per common unit attributable to Boston Properties Limited Partnership
Net income$0.68 $1.45 $1.18 $2.38 
Weighted average number of common units outstanding174,748 174,392 174,693 174,323 
Diluted earnings per common unit attributable to Boston Properties Limited Partnership
Net income$0.67 $1.45 $1.18 $2.38 
Weighted average number of common and common equivalent units outstanding175,140 174,864 175,009 174,736 
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
 (in thousands, except for per unit amounts)
Revenue       
Rental       
Base rent$513,269
 $489,312
 $1,537,373
 $1,518,826
Recoveries from tenants94,476
 92,560
 272,803
 267,852
Parking and other26,092
 24,638
 78,164
 75,576
Total rental revenue633,837
 606,510
 1,888,340
 1,862,254
Hotel revenue13,064
 12,354
 33,859
 33,919
Development and management services10,811
 6,364
 24,648
 18,586
Total revenue657,712
 625,228
 1,946,847
 1,914,759
Expenses       
Operating       
Rental237,341
 228,560
 696,082
 665,670
Hotel8,447
 8,118
 23,942
 23,730
General and administrative25,792
 25,165
 84,319
 79,936
Transaction costs239
 249
 572
 1,187
Impairment loss—
 1,783
 —
 1,783
Depreciation and amortization150,210
 198,582
 457,102
 507,234
Total expenses422,029
 462,457
 1,262,017
 1,279,540
Operating income235,683
 162,771
 684,830
 635,219
Other income (expense)       
Income from unconsolidated joint ventures843
 1,464
 7,035
 5,489
Interest and other income1,329
 3,628
 3,447
 6,657
Gains from investments in securities944
 976
 2,716
 1,713
Gains (losses) from early extinguishments of debt—
 (371) 14,354
 (371)
Losses from interest rate contracts—
 (140) —
 (140)
Interest expense(92,032) (104,641) (282,709) (314,953)
Income before gains on sales of real estate146,767
 63,687
 429,673
 333,614
Gains on sales of real estate2,891
 12,983
 7,368
 82,775
Net income149,658
 76,670
 437,041
 416,389
Net income attributable to noncontrolling interests       
Noncontrolling interests in property partnerships(14,340) 17,225
 (33,967) (53)
Net income attributable to Boston Properties Limited Partnership135,318
 93,895
 403,074
 416,336
Preferred distributions(2,625) (2,589) (7,875) (7,796)
Net income attributable to Boston Properties Limited Partnership common unitholders$132,693
 $91,306
 $395,199
 $408,540
Basic earnings per common unit attributable to Boston Properties Limited Partnership common unitholders:       
Net income$0.77
 $0.53
 $2.30
 $2.38
Weighted average number of common units outstanding171,691
 171,379
 171,649
 171,353
Diluted earnings per common unit attributable to Boston Properties Limited Partnership common unitholders:       
Net income$0.77
 $0.53
 $2.30
 $2.38
Weighted average number of common and common equivalent units outstanding171,819
 171,761
 171,861
 171,643
        
Distributions per common unit$0.75
 $0.65
 $2.25
 $1.95




The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)(unaudited and in thousands)
 
Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016 Three months ended June 30,Six months ended June 30,
(in thousands) 2023202220232022
Net income$149,658
 $76,670
 $437,041
 $416,389
Net income$137,866 $272,334 $245,356 $451,712 
Other comprehensive income (loss):       
Other comprehensive income:Other comprehensive income:
Effective portion of interest rate contracts—
 5,712
 (6,133) (85,285)Effective portion of interest rate contracts14,965 35 8,427 7,600 
Amortization of interest rate contracts (1)1,665
 1,190
 4,368
 2,445
Amortization of interest rate contracts (1)1,674 1,677 3,349 3,353 
Other comprehensive income (loss)1,665
 6,902
 (1,765) (82,840)
Other comprehensive incomeOther comprehensive income16,639 1,712 11,776 10,953 
Comprehensive income151,323
 83,572
 435,276
 333,549
Comprehensive income154,505 274,046 257,132 462,665 
Comprehensive income attributable to noncontrolling interests(14,484) 16,812
 (31,695) 16,081
Comprehensive income attributable to noncontrolling interests(19,912)(18,690)(38,716)(36,383)
Comprehensive income attributable to Boston Properties Limited Partnership$136,839
 $100,384
 $403,581
 $349,630
Comprehensive income attributable to Boston Properties Limited Partnership$134,593 $255,356 $218,416 $426,282 
_______________
(1)Amounts reclassified from comprehensive income primarily to interest expense within the Boston Properties Limited Partnership'sPartnership’s Consolidated Statements of Operations.


































































The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS
(unaudited and in thousands)
UnitsCapital
 General PartnerLimited PartnerPartners’ Capital (General and Limited Partners)Accumulated
Other
Comprehensive Loss		Noncontrolling
Interests - Property Partnerships		Total CapitalNoncontrolling Interests - Redeemable Partnership Units
Equity, March 31, 20231,755 155,075 $5,449,936 $(18,214)$1,552,070 $6,983,792 $1,074,648 
Net activity from contributions and unearned compensation— 7 (110)— — (110)14,052 
Allocated net income for the period— — 106,007 — 19,768 125,775 12,091 
Distributions— — (153,716)— — (153,716)(18,376)
Conversion of redeemable partnership units— 16 599 — — 599 (599)
Adjustment to reflect redeemable partnership units at redemption value— — (51,550)— — (51,550)51,550 
Effective portion of interest rate contracts— — — 13,435 — 13,435 1,530 
Amortization of interest rate contracts— — — 1,373 144 1,517 157 
Distributions to noncontrolling interests in property partnerships— — — — (14,614)(14,614)— 
Equity, June 30, 20231,755 155,098 $5,351,166 $(3,406)$1,557,368 $6,905,128 $1,135,053 
Equity, March 31, 20221,749 154,962 $3,914,832 $(28,485)$1,548,455 $5,434,802 $2,347,834 
Net activity from contributions and unearned compensation1 4 4,418 — — 4,418 13,607 
Allocated net income for the period— — 228,088 — 18,546 246,634 25,700 
Distributions— — (153,592)— — (153,592)(17,939)
Conversion of redeemable partnership units— 11 401 — — 401 (401)
Adjustment to reflect redeemable partnership units at redemption value— — 722,283 — — 722,283 (722,283)
Effective portion of interest rate contracts— — — 31 — 31 4 
Amortization of interest rate contracts— — — 1,377 144 1,521 156 
Distributions to noncontrolling interests in property partnerships— — — — (14,439)(14,439)— 
Equity, June 30, 20221,750 154,977 $4,716,430 $(27,077)$1,552,706 $6,242,059 $1,646,678 
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
(Unaudited and in thousands)

13
 Total Partners’ Capital
Balance at December 31, 2016$3,811,717
Contributions4,937
Net income allocable to general and limited partner units362,724
Distributions(354,734)
Accumulated other comprehensive income455
Cumulative effect of a change in accounting principle(272)
Unearned compensation(1,222)
Conversion of redeemable partnership units16,812
Adjustment to reflect redeemable partnership units at redemption value103,556
Balance at September 30, 2017$3,943,973
  
Balance at December 31, 2015$3,684,522
Contributions3,269
Net income allocable to general and limited partner units374,216
Distributions(307,480)
Accumulated other comprehensive loss(59,829)
Unearned compensation1,651
Conversion of redeemable partnership units5,881
Adjustment to reflect redeemable partnership units at redemption value(151,545)
Balance at September 30, 2016$3,550,685
Table of Contents

BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS
(unaudited and in thousands)
UnitsCapital
 General PartnerLimited PartnerPartners’ Capital (General and Limited Partners)Accumulated
Other
Comprehensive Loss		Noncontrolling
Interests - Property Partnerships		Total CapitalNoncontrolling Interests - Redeemable Partnership Units
Equity, December 31, 20221,750 155,008 $5,299,428 $(13,718)$1,547,317 $6,833,027 $1,280,886 
Net activity from contributions and unearned compensation5 69 3,922 — — 3,922 38,025 
Allocated net income for the period— — 185,759 — 38,428 224,187 21,169 
Distributions— — (307,409)— — (307,409)(36,737)
Conversion of redeemable partnership units— 21 794 — — 794 (794)
Adjustment to reflect redeemable partnership units at redemption value— — 168,672 — — 168,672 (168,672)
Effective portion of interest rate contracts— — — 7,565 — 7,565 862 
Amortization of interest rate contracts— — — 2,747 288 3,035 314 
Contributions from noncontrolling interests in property partnerships— — — — 7,555 7,555 — 
Distributions to noncontrolling interests in property partnerships— — — — (36,220)(36,220)— 
Equity, June 30, 20231,755 155,098 $5,351,166 $(3,406)$1,557,368 $6,905,128 $1,135,053 
Equity, December 31, 20211,746 154,799 $4,173,290 $(36,662)$1,556,553 $5,693,181 $2,078,603 
Net activity from contributions and unearned compensation1 29 4,885 — — 4,885 32,661 
Allocated net income for the period— — 373,556 — 36,095 409,651 42,061 
Distributions— — (307,169)— — (307,169)(35,859)
Conversion of redeemable partnership units3 149 5,429 — — 5,429 (5,429)
Adjustment to reflect redeemable partnership units at redemption value— — 466,439 — — 466,439 (466,439)
Effective portion of interest rate contracts— — — 6,831 — 6,831 769 
Amortization of interest rate contracts— — — 2,754 288 3,042 311 
Contributions from noncontrolling interests in property partnerships— — — — 849 849 — 
Distributions to noncontrolling interests in property partnerships— — — — (41,079)(41,079)— 
Equity, June 30, 20221,750 154,977 $4,716,430 $(27,077)$1,552,706 $6,242,059 $1,646,678 
























The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 Six months ended June 30,
 20232022
Cash flows from operating activities:
Net income$245,356 $451,712 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization407,767 357,302 
Amortization of right of use assets - operating leases929 1,407 
Non-cash compensation expense41,524 36,195 
Loss (income) from unconsolidated joint ventures14,237 (2,135)
Distributions of net cash flow from operations of unconsolidated joint ventures11,437 10,097 
Losses (gains) from investments in securities(3,236)6,978 
Allowance for current expected credit losses264 (458)
Non-cash portion of interest expense14,940 12,528 
Other income - assignment fee— (6,624)
Gains on sales of real estate— (122,992)
Unrealized gain on non-real estate investment(383)— 
Change in assets and liabilities:
Tenant and other receivables, net3,721 10,167 
Note receivable, net— (152)
Accrued rental income, net(42,965)(48,901)
Prepaid expenses and other assets(24,758)6,326 
Lease liabilities - operating leases140 82 
Accounts payable and accrued expenses6,320 (18,636)
Accrued interest payable7,314 2,036 
Other liabilities(21,773)(37,732)
Tenant leasing costs(47,651)(40,561)
Total adjustments367,827 164,927 
Net cash provided by operating activities613,183 616,639 
Cash flows from investing activities:
Acquisitions of real estate— (727,835)
Construction in progress(235,331)(237,182)
Building and other capital improvements(78,344)(63,278)
Tenant improvements(135,743)(97,844)
Proceeds from sales of real estate— 157,345 
Proceeds from assignment fee— 6,624 
Capital contributions to unconsolidated joint ventures(103,595)(69,819)
Capital distributions from unconsolidated joint ventures7,350 36,622 
Investment in non-real estate investments(733)— 
Issuance of related party note receivable(10,500)— 
Proceeds from notes receivable— 10,000 
Investments in securities, net2,032 5,197 
Net cash used in investing activities(554,864)(980,170)
15
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 
 For the nine months ended September 30,
 2017 2016
 (in thousands)
Cash flows from operating activities:   
Net income$437,041
 $416,389
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization457,102
 507,234
Impairment loss—
 1,783
Non-cash compensation expense27,260
 25,290
Income from unconsolidated joint ventures(7,035) (5,489)
Distributions of net cash flow from operations of unconsolidated joint ventures8,563
 11,645
Gains from investments in securities(2,716) (1,713)
(Gains) losses from early extinguishments of debt(14,444) 371
Non-cash portion of interest expense(6,667) (27,386)
Gains on sales of real estate(7,368) (82,775)
Change in assets and liabilities:   
Cash held in escrows7,795
 1,675
Tenant and other receivables, net12,528
 22,135
Accrued rental income, net(36,012) (14,618)
Prepaid expenses and other assets(13,633) 4,883
Accounts payable and accrued expenses7,861
 16,852
Accrued interest payable(144,833) 44,242
Other liabilities(65,031) (114,321)
Tenant leasing costs(67,699) (62,412)
Total adjustments155,671
 327,396
Net cash provided by operating activities592,712
 743,785
Cash flows from investing activities:   
Acquisitions of real estate(15,953) (78,000)
Construction in progress(452,283) (359,716)
Building and other capital improvements(162,395) (81,842)
Tenant improvements(152,749) (167,762)
Proceeds from sales of real estate29,810
 122,750
Proceeds from sales of real estate placed in escrow(29,810) (122,647)
Proceeds from sales of real estate released from escrow16,640
 122,647
Cash released from escrow for investing activities9,638
 6,694
Cash released from escrow for land sale contracts—
 1,403
Cash placed in escrow for investment in unconsolidated joint venture(25,000) —
Capital contributions to unconsolidated joint ventures(89,874) (546,982)
Capital distributions from unconsolidated joint ventures251,000
 —
Investments in securities, net(1,451) (929)
Net cash used in investing activities(622,427) (1,104,384)
    
    

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BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 Six months ended June 30,
 20232022
Cash flows from financing activities:
Proceeds from unsecured senior notes747,727 — 
Borrowings on unsecured line of credit— 340,000 
Repayments of unsecured line of credit— (320,000)
Borrowings on unsecured term loan1,200,000 730,000 
Repayment of unsecured term loan(730,000)— 
Deferred financing costs(12,339)(2,230)
Net activity from equity transactions(39)(366)
Distributions(343,325)(341,951)
Contributions from noncontrolling interests in property partnerships7,555 849 
Distributions to noncontrolling interests in property partnerships(36,220)(41,079)
Net cash provided by financing activities833,359 365,223 
Net increase in cash and cash equivalents and cash held in escrows891,678 1,692 
Cash and cash equivalents and cash held in escrows, beginning of period736,812 501,158 
Cash and cash equivalents and cash held in escrows, end of period$1,628,490 $502,850 
Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period$690,333 $452,692 
Cash held in escrows, beginning of period46,479 48,466 
Cash and cash equivalents and cash held in escrows, beginning of period$736,812 $501,158 
Cash and cash equivalents, end of period$1,581,575 $456,491 
Cash held in escrows, end of period46,915 46,359 
Cash and cash equivalents and cash held in escrows, end of period$1,628,490 $502,850 
Supplemental disclosures:
Cash paid for interest$273,214 $216,409 
Interest capitalized$21,153 $27,819 
Non-cash investing and financing activities:
Write-off of fully depreciated real estate$(84,629)$(65,435)
Change in real estate included in accounts payable and accrued expenses$25,562 $40,655 
Construction in progress, net deconsolidated$— $(11,316)
Investment in unconsolidated joint ventures recorded upon deconsolidation$— $11,316 
Distributions declared but not paid$171,465 $170,937 
Conversions of redeemable partnership units to partners’ capital$794 $5,429 
Issuance of restricted securities to employees and non-employee directors$47,885 $47,198 
BOSTON PROPERTIES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 
 For the nine months ended September 30,
 2017 2016
 (in thousands)
Cash flows from financing activities:   
Proceeds from mortgage notes payable2,300,000
 —
Repayments of mortgage notes payable(1,313,890) (1,323,284)
Proceeds from unsecured senior notes—
 1,989,790
Borrowings on unsecured line of credit470,000
 —
Repayments of unsecured line of credit(470,000) —
Repayments of mezzanine notes payable(306,000) —
Repayments of outside members’ notes payable(70,424) —
Payments on capital lease obligations(373) —
Payments on real estate financing transaction(1,306) (4,712)
Deposit on mortgage note payable interest rate lock(23,200) —
Return of deposit on mortgage note payable interest rate lock23,200
 —
Deferred financing costs(44,083) (16,101)
Net proceeds from equity transactions241
 (270)
Distributions(394,900) (557,262)
Contributions from noncontrolling interests in property partnerships38,196
 6,737
Distributions to noncontrolling interests in property partnerships(41,605) (38,694)
Net cash provided by financing activities165,856
 56,204
Net increase (decrease) in cash and cash equivalents136,141
 (304,395)
Cash and cash equivalents, beginning of period356,914
 723,718
Cash and cash equivalents, end of period$493,055
 $419,323
Supplemental disclosures:   
Cash paid for interest$477,189
 $327,053
Interest capitalized$43,286
 $28,956
Non-cash investing and financing activities:   
Write-off of fully depreciated real estate$(102,795) $(164,528)
Additions to real estate included in accounts payable and accrued expenses$36,609
 $11,864
Real estate acquired through capital lease$28,962
 $—
Outside members’ notes payable contributed to noncontrolling interests in property partnerships$109,576
 $—
Distributions declared but not paid$130,434
 $113,038
Conversions of redeemable partnership units to partners’ capital$16,812
 $5,881
Issuance of restricted securities to employees$35,711
 $33,711











The accompanying notes are an integral part of these consolidated financial statements.

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BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Organization
Boston Properties, Inc., a Delaware corporation,BXP is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). Boston Properties, Inc.REIT. BXP is the sole general partner of Boston Properties Limited Partnership,BPLP, its operating partnership, and at SeptemberJune 30, 20172023 owned an approximate 89.7% (89.5%89.4% (89.6% at December 31, 2016)2022) general and limited partnership interest in Boston Properties Limited Partnership.BPLP. Unless stated otherwise or the context requires, the “Company” refers to Boston Properties, Inc.BXP and its subsidiaries, including Boston Properties Limited Partnership,BPLP and its consolidated subsidiaries. Partnership interests in Boston Properties Limited PartnershipBPLP include:
•common units of partnership interest (also referred to as “OP Units”), and
•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”).
Unless specifically noted otherwise, all references to OP Units exclude units held by Boston Properties, Inc.BXP. A holder of an OP Unit may present suchthe OP Unit to Boston Properties Limited PartnershipBPLP 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 PartnershipBPLP is obligated to redeem suchthe OP Unit for cash equal to the value of a share of common stock of Boston Properties, Inc.BXP (“Common Stock”) at such time.. In lieu of asuch cash redemption, Boston Properties, Inc.BXP may elect to acquire suchthe 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.BXP 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 awardtime-based, restricted equity compensation and as a form of performance-based equity compensation for annual long-term incentive equity compensation. The Companyemployees, and has also issuedpreviously granted LTIP Units to employees in the form of (1) 2012 outperformance plan awards (“2012 OPP Units”) and (2) 2013 2014, 2015, 2016 and 2017- 2023 multi-year, long-term incentive program awards (also referred to as “MYLTIP Units”), each of which, upon the satisfaction of certain performanceperformance-based and time-based vesting conditions, is convertible into one OP Unit. The three-yearthree-year measurement periods for the 2012 OPP Units and the 2013 - 2020 MYLTIP Units have ended and 2014 MYLTIP Units expired on February 6, 2015, February 4, 2016 and February 3, 2017, respectively, and Boston Properties, Inc.’sBXP’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 20172021 - 2023 MYLTIP Units differ from other LTIP Units granted to employees (including the 2012 OPP Units and the 2013 MYLTIP Units and the 2014- 2020 MYLTIP Units, which have been earned). Therefore, unless specifically noted otherwise, all references to LTIP Units exclude the 2015, 2016 and 20172021 - 2023 MYLTIP Units. LTIP Units (including the earned 2012 OPP Units the 2013 MYLTIP Units and the 2014earned 2013 - 2020 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 8, 9 and 11)13).
At September 30, 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 9).
Properties
At SeptemberJune 30, 2017,2023, the Company owned or had joint venture interests in a portfolio of 177191 commercial real estate properties (the “Properties”) aggregating approximately 49.854.1 million net rentable square feet of primarily Class A office properties,premier workplaces, including ten13 properties under construction/redevelopment totaling approximately 5.73.1 million net rentable square feet. At SeptemberJune 30, 2017,2023, the Properties consisted of:

166 Office•170 office and life sciences properties (including seven10 properties under construction/redevelopment);
one hotel;•14 retail properties (including two properties under construction/redevelopment);
five retail properties; and
five•six residential properties (including three propertiesone property under construction).construction); and

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•one hotel.
The Company considers Class A office propertiespremier workplaces to be well-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.buildings and professionally managed and maintained. As such, these properties attract high-quality clients and command upper-tier rental rates.
2. Basis of Presentation and Summary of Significant Accounting Policies
Boston Properties, Inc.BXP does not have any other significant assets, liabilities or operations, other than its investment in Boston Properties Limited Partnership,BPLP, nor does it have employees of its own. Boston Properties Limited Partnership,BPLP, not Boston Properties, Inc.,BXP, generally executes all significant business relationships other than transactions involving securities of Boston Properties, Inc.BXP. 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
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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.Commission (the “SEC”). 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, 2016.2022.
The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the circumstances, including the impact of extraordinary events such as the coronavirus (“COVID-19”) pandemic, the results of which form the basis for making significant judgments about the carrying values of assets and liabilities, assessments of future collectability, and other areas of the financial statements that are impacted by the use of estimates. Actual results may differ from these estimates under different assumptions or conditions.
Variable Interest Entities (VIEs)
Consolidated VIEs are those for which 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 assets of each VIE are only available to satisfy such VIE's respective liabilities. The Company has identified six entities that are VIEs as of June 30, 2023 and has determined that it is the primary beneficiary for all of these entities as of June 30, 2023.
Consolidated Variable Interest Entities
As of June 30, 2023, BXP has identified six consolidated VIEs, including BPLP. Excluding BPLP, the VIEs consisted of the following five in-service properties: 767 Fifth Avenue (the General Motors Building), Times Square Tower, 601 Lexington Avenue, Atlantic Wharf Office Building and 100 Federal Street.
The Company consolidates these VIEs because it is the primary beneficiary.  The third parties’ interests in these consolidated entities (excluding BPLP’s interest) are reflected as noncontrolling interests in property partnerships in the accompanying consolidated financial statements (See Note 9).
In addition, BXP’s only significant asset is its investment in BPLP and, consequently, substantially all of BXP’s assets and liabilities are the assets and liabilities of BPLP.
Fair Value of Financial InstrumentsMeasurements
The Company determinesfollows the authoritative guidance for fair value of its unsecured senior notes using market prices. measurements.
The inputs used in determiningtable below presents for June 30, 2023 and December 31, 2022, the fair value offinancial instruments that are being valued for disclosure purposes as well as the Company’s unsecured senior notesLevel at which they are categorized at a level 1 basis (as defined in the accounting standards for FairAccounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures) due toDisclosures”).
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Financial InstrumentLevel
Unsecured senior notes (1)Level 1
Related party note receivableLevel 3
Sales-type lease receivableLevel 3
Mortgage notes payableLevel 3
Unsecured line of creditLevel 3
Unsecured term loanLevel 3
_______________
(1)If trading volume for the fact thatperiod is low, the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair valuevaluation 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.as Level 2.
Because the Company’s valuations of its financial instruments are based on these typesthe above Levels and involve the use of estimates, the actual fair values of its financial instruments may differ materially if the Company’s estimates do not prove to be accurate, andfrom those estimates.
In addition, the Company’s estimated fair values for these instruments as of the end of the applicable reporting period are not projections of, nor necessarily indicative of, estimated or actual fair values in future reporting periods.
The following table presents the aggregate carrying value of the Company’s related party note receivable, net, sales-type lease receivable, net, mortgage notes payable, net, mezzanineunsecured senior notes, payablenet, unsecured line of credit and unsecured senior notes,term loan, net and the Company’s corresponding estimate of fair value as of SeptemberJune 30, 20172023 and December 31, 20162022 (in thousands):

 June 30, 2023December 31, 2022
 Carrying
Amount		Estimated
Fair Value		Carrying
Amount		Estimated
Fair Value
Related party note receivable, net$88,834 $90,500 $78,576 $79,220 
Sales-type lease receivable, net13,250 13,173 12,811 13,045 
Total$102,084 $103,673 $91,387 $92,265 
Mortgage notes payable, net$3,274,764 $2,765,657 $3,272,368 $2,744,479 
Unsecured senior notes, net10,985,395 9,751,688 10,237,968 9,135,512 
Unsecured line of credit— — — — 
Unsecured term loan, net1,196,046 1,194,895 730,000 730,000 
Total$15,456,205 $13,712,240 $14,240,336 $12,609,991 
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 September 30, 2017 December 31, 2016
 
Carrying
Amount
   
Estimated
Fair Value
 
Carrying
Amount
   
Estimated
Fair Value
Mortgage notes payable, net$2,982,067
    $3,049,617
 $2,063,087
    $2,092,237
Mezzanine notes payable—
   —
 307,093
   308,344
Unsecured senior notes, net7,252,567
    7,533,164
 7,245,953
    7,428,077
Total$10,234,634
    $10,582,781
 $9,616,133
    $9,828,658
TheIn addition to the financial instruments noted above, the Company uses interest rate swap agreements to manage its interest rate risk.risk (See Note 7). 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”)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. TheHowever, as of June 30, 2023, 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 whereThe following table presents 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 bothaggregate fair value of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performanceCompany’s interest rate swaps as of June 30, 2023 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 nine entities that are VIEs.
Consolidated Variable Interest Entities
As of September 30, 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), Times Square Tower, 601 Lexington Avenue, Atlantic Wharf Office Building and 100 Federal Street and (2) 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 8). 
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, and its 7750 Wisconsin Avenue LLC joint venture, which owns 7750 Wisconsin Avenue, are VIEs.  The Company does not consolidate these entities because the Company does not have the power to direct the activities that, when taken together, most significantly impact each 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

December 31, 2022 (in thousands):
Fair valueJune 30, 2023December 31, 2022
Interest rate swaps$6,445 $— 
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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 FASBissued 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. ASU 2014-09 is effective for the Company for reporting periods beginning after December 15, 2017. The Company will adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective approach. The Company’s project team has completed the compilation of the inventory of the sources of revenue that 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), certain of its development and management services revenue and gains on sales of real estate may be impacted by the adoption of ASU 2014-09, although the Company anticipates that the impact will be to the pattern of revenue recognition and not the total revenue recognized over time. The Company is progressing with its analysis and evaluation of the impact that the adoption of ASU 2014-09 will have on the recognition pattern of each of its sources of revenue and is nearing completion of its assessment of the overall impact of adopting ASU 2014-09. The Company does not expect that the adoption of ASU 2014-09 will have a material impact on its consolidated financial statements.
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 will adopt ASU 2016-02 effective January 1, 2019 using the modified retrospective approach. The Company is in the process of evaluating whether it will elect to apply the practical expedients. The Company is in the process of adopting ASU 2016-02, with its project team compiling an inventory of its leases that will be impacted by the adoption of ASU 2016-02. The Company continues to assess the impact of adopting ASU 2016-02. However, the Company will account for operating leases under which it is the lessor on its balance sheet in a manner 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 will 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 over the term of the lease. In addition, under ASU 2016-02, lessors will only capitalize incremental direct leasing costs. As a result, the Company will no longer be able to capitalize legal costs and internal leasing wages and instead will be required to expense these and other non-incremental 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,

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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.
In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 is intended to provide clarity and reduce (1) diversity in practice, (2) cost and (3) complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for public entities for fiscal years and interim periods beginning after December 15, 2017. The Company is currently assessing the potential impact that the adoption of ASU 2017-09 will have on its consolidated financial statements.
In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). ASU 2017-12 was issued with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. ASU 2017-12 also makes certain targeted improvements to simplify the application of the hedge accounting guidance. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that the adoption of ASU 2017-12 will have on its consolidated financial statements.
3. Real Estate
Boston Properties, Inc.BXP
Real estate consisted of the following at SeptemberJune 30, 20172023 and December 31, 20162022 (in thousands):
September 30, 2017 December 31, 2016June 30, 2023December 31, 2022
Land$4,880,331
 $4,879,020
Land$5,189,287 $5,189,811 
Right of use assets - finance leasesRight of use assets - finance leases237,526 237,510 
Right of use assets - operating leasesRight of use assets - operating leases166,421 167,351 
Land held for future development (1)212,585
 246,656
Land held for future development (1)637,191 721,501 
Buildings and improvements12,155,126
 11,890,626
Buildings and improvements16,054,447 15,820,724 
Tenant improvements2,186,953
 2,060,315
Tenant improvements3,345,766 3,200,743 
Furniture, fixtures and equipment37,612
 32,687
Furniture, fixtures and equipment53,181 50,310 
Construction in progress1,386,638
 1,037,959
Construction in progress482,850 406,574 
Total20,859,245
 20,147,263
Total26,166,669 25,794,524 
Less: Accumulated depreciation(4,484,798) (4,222,235)Less: Accumulated depreciation(6,568,568)(6,298,082)
$16,374,447
 $15,925,028
$19,598,101 $19,496,442 
_______________
(1)Includes pre-development costs.

(1)Includes pre-development costs.
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Boston Properties Limited Partnership
Real estate consisted of the following at SeptemberJune 30, 20172023 and December 31, 20162022 (in thousands):
 September 30, 2017 December 31, 2016
Land$4,775,955
 $4,774,460
Land held for future development (1)212,585
 246,656
Buildings and improvements11,848,024
 11,581,795
Tenant improvements2,186,953
 2,060,315
Furniture, fixtures and equipment37,612
 32,687
Construction in progress1,386,638
 1,037,959
Total20,447,767
 19,733,872
Less: Accumulated depreciation(4,394,077) (4,136,364)
 $16,053,690
 $15,597,508
_______________
(1)Includes pre-development costs.
Development
June 30, 2023December 31, 2022
Land$5,094,578 $5,095,102 
Right of use assets - finance leases237,526 237,510 
Right of use assets - operating leases166,421 167,351 
Land held for future development (1)637,191 721,501 
Buildings and improvements15,782,891 15,547,919 
Tenant improvements3,345,766 3,200,743 
Furniture, fixtures and equipment53,181 50,310 
Construction in progress482,850 406,574 
Total25,800,404 25,427,010 
Less: Accumulated depreciation(6,448,665)(6,180,474)
$19,351,739 $19,246,536 
_______________
(1)Includes pre-development costs.
Developments/Redevelopments
On April 6, 2017,January 5, 2023, the Company commenced the development of 145 Broadway, a build-to-suit Class A office290 Binney Street, an approximately 566,000 net rentable square foot laboratory/life sciences project in Cambridge, Massachusetts. Concurrent with the commencement of this project, the Kendall Center Blue Parking Garage was taken out of service and demolished to support the development of this project. 290 Binney Street is 100% pre-leased to AstraZeneca.
On January 30, 2023, the Company commenced the redevelopment of 300 Binney Street at Kendall Center in Cambridge, Massachusetts. 300 Binney Street consisted of an approximately 485,000195,000 net rentable square foot premier workplace that is being redeveloped into approximately 236,000 net rentable square feet located in Cambridge, Massachusetts.of laboratory/life sciences space. BXP and BPLP recognized approximately $11.0 million of depreciation expense during the six months ended June 30, 2023 associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. The project is 100% pre-leased to the Broad Institute.
On May 27, 2017,April 29, 2023, the Company completed and fully placed in-service Reservoir Place North,2100 Pennsylvania Avenue, a Class A office redevelopmentpremier workplace project with approximately 73,000476,000 net rentable square feet located in Waltham, Massachusetts.Washington, DC.
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On August 24, 2017, the Company entered into a 15-year lease with the General Services Administration under which the Company will develop the new headquarters for the Transportation Security Administration (TSA). The TSA will occupy 100% of the approximately 623,000 net rentable square feet of Class A office space and a parking garage at 6595 Springfield Center Drive located in Springfield, Virginia. Concurrently with the execution of the lease, the Company commenced development of the project and expects the building to be available for occupancy by the fourth quarter of 2020.
On September 16, 2017,June 1, 2023, the Company completed and fully placed in-service 888its View Boston Observatory at The Prudential Center, a redevelopment of the top three floors of 800 Boylston Street a Class A office and retail project with- The Prudential Center, located in Boston, Massachusetts. View Boston Observatory at The Prudential Center consists of approximately 417,00063,000 net rentable square feet locatedof retail, including food and beverage, and observation space.
4. Leases
The Company estimates the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of these accrued rent and accounts receivable balances, management considers tenant creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on tenants’ businesses, and changes in Boston, Massachusetts.
Ground Lease
On June 29, 2017,tenants’ payment patterns, on a lease-by-lease basis. If the Company executed a 99-year ground lease (including extension options), withdetermines that the right to purchase prior to 10 years after stabilizationaccrued rent and/or accounts receivable balances are no longer probable of collection then the development project as defined inbalances are written-off and the lease land adjacentis recognized on a cash basis.
If applicable, information related to the MacArthur BART station located in Oakland, California. The Company has commenced developmentwrite-offs of a 402-unit residential buildingaccrued rent, net balances and supporting retail space on the site. The Company’s option to purchase the land, is considered a bargain purchase optionaccounts receivable, net balances and as a result, the Company has concluded that the lease should be accountedreinstatements of accrued rent balances for as a capital lease. At the inception of the ground lease, the Company recorded an approximately $29.0 million capital lease asset and liability, which is reflected within Construction in Progress and Other Liabilities on the Company’s Consolidated Balance Sheets. Capital lease assets and liabilities are accounted for at the lower of fair market value or the present value of future minimum lease payments. This capital lease is for land only, therefore, the Company will notunconsolidated joint ventures can be depreciating the capital lease asset, because land is assumed to have an indefinite life.found in Note 5.

Lessor
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As of June 29, 2017, future minimum lease payments related to this capital lease are as follows (in thousands):
Period from June 29, 2017 through December 31, 2017$5
201810
201910
202010
202113
Thereafter38,778
Total expected minimum obligations38,826
Interest portion(9,864)
Present value of net expected minimum payments$28,962
Acquisitions
On May 15, 2017, the Company acquired 103 Carnegie Center located in Princeton, New Jersey for a purchase price of approximately $15.8 million in cash. 103 Carnegie Center is an approximately 96,000 net rentable square foot Class A office property. The following table summarizes the allocationcomponents of lease revenue recognized under the aggregate purchase price, including transaction costs, of 103 Carnegie Center at the date of acquisition (in thousands). 
Land$2,890
Building and improvements11,229
Tenant improvements871
In-place lease intangibles2,389
Below-market lease intangible(1,426)
Net assets acquired$15,953
The following table summarizes the estimated annual amortization of the acquired below-market lease intangiblesCompany’s operating and the acquired in-place lease intangibles for 103 Carnegie Center for the remainder of 2017 and each of the next four succeeding fiscal years (in thousands).
 
Acquired In-Place
Lease Intangibles  
 
Acquired Below-
Market Lease Intangibles  
Period from May 15, 2017 through December 31, 2017$660
 $(248)
2018590
 (363)
2019367
 (337)
2020243
 (308)
202196
 (105)

103 Carnegie Center contributed approximately $1.1 million of revenue and approximately ($0.1 million) of earnings to the Company for the period from May 15, 2017 through September 30, 2017.
Dispositions
On April 19, 2017, the Company completed the sale of an approximately 9.5-acre parcel of land at 30 Shattuck Road located in Andover, Massachusetts for a gross sale price of $5.0 million. Net cash proceeds totaled approximately $5.0 million, resulting in a gain on sale of real estate totaling approximately $3.7 million.
On June 13, 2017, the Company completed the sale of 40 Shattuck Road located in Andover, Massachusetts for a gross sale price of $12.0 million. Net cash proceeds totaled approximately $11.9 million, resulting in a gain on sale of real estate totaling approximately $28,000 for Boston Properties, Inc. and approximately $0.6 million for Boston Properties Limited Partnership. 40 Shattuck Road is an approximately 122,000 net rentable square foot Class A office property. 40 Shattuck Road contributed approximately $(28,000) of net loss to the Company for the period from January 1, 2017 through June 13, 2017 and contributed approximately $(33,000) and $(18,000) of net loss to the Companysales-type leases for the three and ninesix months ended SeptemberJune 30, 2016, respectively.2023 and 2022 and included within the Company's Consolidated Statements of Operations (in thousands):

Three months ended June 30,Six months ended June 30,
Lease Revenue2023202220232022
Fixed contractual payments$629,189 $601,351 $1,250,835 $1,200,958 
Variable lease payments132,315 120,548 267,318 239,061 
Sales-type lease income229 — 455 — 
$761,733 $721,899 $1,518,608 $1,440,019 
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On August 30, 2017, the Company completed the sale of its Reston Eastgate property located in Reston, Virginia for a gross sale price of $14.0 million.  Net cash proceeds totaled approximately $13.2 million, resulting in a gain on sale of real estate totaling approximately $2.8 million. Reston Eastgate is a parcel of land containing approximately 21.7 acres located at 11011 Sunset Hills Road.
4.5. Investments in Unconsolidated Joint Ventures
The investments in unconsolidated joint ventures consist of the following at SeptemberJune 30, 20172023 and December 31, 2016:2022:
 
Nominal %
Ownership
 Carrying Value of Investment (1) Carrying Value of Investment (1)
Entity Properties  September 30, 2017 December 31, 2016EntityPropertiesNominal % OwnershipJune 30, 2023December 31, 2022
   (in thousands)(in thousands)
Square 407 Limited Partnership Market Square North 50.0% $(8,474) $(8,134)Square 407 Limited PartnershipMarket Square North50.00 %$(6,053)$(6,198)
The Metropolitan Square Associates LLC Metropolitan Square 20.0% 2,537
 2,004
BP/CRF 901 New York Avenue LLC 901 New York Avenue 25.0%(2) (10,747) (10,564)
BP/CRF Metropolitan Square LLCBP/CRF Metropolitan Square LLCMetropolitan Square20.00 %(37,654)(37,629)
901 New York, LLC901 New York, LLC901 New York Avenue25.00 %(2) (12,150)(12,493)
WP Project Developer LLC Wisconsin Place Land and Infrastructure 33.3%(3) 40,158
 41,605
WP Project Developer LLCWisconsin Place Land and Infrastructure33.33 %(3) 31,398 31,971 
Annapolis Junction NFM, LLC Annapolis Junction 50.0%(4) 18,771
 20,539
540 Madison Venture LLC 540 Madison Avenue 60.0% 67,046
 67,816
500 North Capitol Venture LLC 500 North Capitol Street, NW 30.0% (3,642) (3,389)500 North Capitol Venture LLC500 North Capitol Street, NW30.00 %(8,559)(9,185)
501 K Street LLC 1001 6th Street 50.0%(5) 42,442
 42,528
501 K Street LLC1001 6th Street50.00 %43,443 42,922 
Podium Developer LLC The Hub on Causeway 50.0% 55,917
 29,869
Podium Developer LLCThe Hub on Causeway - Podium50.00 %44,542 46,839 
Residential Tower Developer LLC The Hub on Causeway - Residential 50.0% 25,811
 20,803
Residential Tower Developer LLCHub50House50.00 %44,214 45,414 
Hotel Tower Developer LLC The Hub on Causeway - Hotel 50.0% 1,596
 933
Hotel Tower Developer LLCThe Hub on Causeway - Hotel Air Rights50.00 %12,750 12,366 
Office Tower Developer LLCOffice Tower Developer LLC100 Causeway Street50.00 %59,550 59,716 
1265 Main Office JV LLC 1265 Main Street 50.0% 4,686
 4,779
1265 Main Office JV LLC1265 Main Street50.00 %3,583 3,465 
BNY Tower Holdings LLC Dock 72 at the Brooklyn Navy Yard 50.0%(6)67,901
 33,699
BNY Tower Holdings LLCDock 7250.00 %(4)(13,511)(19,921)
CA-Colorado Center Limited Partnership Colorado Center 50.0% 263,834
 510,623
CA-Colorado Center, LLCCA-Colorado Center, LLCColorado Center50.00 %235,846 233,862 
7750 Wisconsin Avenue LLC 7750 Wisconsin Avenue 50.0%(6)21,101
 N/A
7750 Wisconsin Avenue LLC7750 Wisconsin Avenue50.00 %50,789 52,152 
BP-M 3HB Venture LLCBP-M 3HB Venture LLC3 Hudson Boulevard25.00 %115,878 116,397 
SMBP Venture LPSMBP Venture LPSanta Monica Business Park55.00 %161,368 164,735 
Platform 16 Holdings LPPlatform 16 Holdings LPPlatform 1655.00 %(5)184,642 158,109 
Gateway Portfolio Holdings LLCGateway Portfolio Holdings LLCGateway Commons50.00 %349,055 324,038 
Rosecrans-Sepulveda Partners 4, LLCRosecrans-Sepulveda Partners 4, LLCBeach Cities Media Campus50.00 %27,013 27,000 
Safeco Plaza REIT LLCSafeco Plaza REIT LLCSafeco Plaza33.67 %(6)70,331 69,785 
360 PAS Holdco LLC360 PAS Holdco LLC360 Park Avenue South42.21 %(7)112,219 114,992 
PR II/BXP Reston Gateway LLCPR II/BXP Reston Gateway LLCReston Next Residential20.00 %11,796 11,351 
751 Gateway Holdings LLC751 Gateway Holdings LLC751 Gateway49.00 %89,025 80,714 
200 Fifth Avenue JV LLC200 Fifth Avenue JV LLC200 Fifth Avenue26.69 %116,335 120,083 
ABXP Worldgate Investments LLCABXP Worldgate Investments LLC13100 and 13150 Worldgate Drive50.00 %17,182 N/A
   $588,937
 $753,111
$1,703,032 $1,630,485 
 _______________
(1)Investments with deficit balances aggregating approximately $22.9 million and $22.1 million at September 30, 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.
(1)Investments with deficit balances aggregating approximately $77.9 million and $85.4 million at June 30, 2023 and December 31, 2022, respectively, are included 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. At June 30, 2023 and December 31, 2022, the Company’s economic ownership was approximately 50%.
(3)The Company’s wholly-owned subsidiary that owns Wisconsin Place Office also owns a 33.33% interest in the joint venture entity that owns the land, parking garage and infrastructure of the project.
(4)This property includes net equity balances from the amenity joint venture.
(5)At December 31, 2022, this entity was a VIE.
(6)The Company’s ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two entities through which each partner owns its interest in the joint venture.
(7)The Company’s ownership includes (1) a 35.79% direct interest in the joint venture, (2) an additional 5.837% indirect ownership in the joint venture, and (3) an additional 1% interest in each of the two entities through which each partner owns its interest in the joint venture. The Company’s partners will fund required capital until their aggregate investment is approximately 58% of all capital contributions; thereafter, the partners will fund required capital according to their percentage interests.
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(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).
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 or the Company will be entitled to an additional promoted interest or payments.

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The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:
June 30, 2023December 31, 2022
 (in thousands)
ASSETS
Real estate and development in process, net (1)$6,748,400 $6,537,554 
Other assets779,220 756,786 
Total assets$7,527,620 $7,294,340 
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net$4,056,181 $4,022,746 
Other liabilities (2)724,078 716,271 
Members’/Partners’ equity2,747,361 2,555,323 
Total liabilities and members’/partners’ equity$7,527,620 $7,294,340 
Company’s share of equity$1,301,827 $1,238,929 
Basis differentials (3)401,205 391,556 
Carrying value of the Company’s investments in unconsolidated joint ventures (4)$1,703,032 $1,630,485 
_______________
(1)At June 30, 2023 and December 31, 2022, this amount included right of use assets - finance leases totaling approximately $248.9 million. At June 30, 2023 and December 31, 2022, this amount included right of use assets - operating leases totaling approximately $20.6 million and $21.2 million, respectively.
(2)At June 30, 2023 and December 31, 2022, this amount included lease liabilities - finance leases totaling approximately $379.7 million and $382.2 million, respectively. At June 30, 2023 and December 31, 2022, this amount included lease liabilities - operating leases totaling approximately $30.5 million.
(3)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. The majority of the Company’s basis differences are as follows:
June 30, 2023December 31, 2022
Property(in thousands)
Colorado Center$300,370 $301,820 
200 Fifth Avenue96,837 94,497 
Gateway Commons48,078 47,808 
Dock 72(97,232)(98,980)
These basis differentials (excluding land) will be amortized over the remaining lives of the related assets and liabilities.
(4)Investments with deficit balances aggregating approximately $77.9 million and $85.4 million at June 30, 2023 and December 31, 2022, respectively, are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
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 September 30, 2017 December 31, 2016
 (in thousands)
ASSETS   
Real estate and development in process, net$1,716,447
 $1,519,217
Other assets374,484
 297,263
Total assets$2,090,931
 $1,816,480
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY   
Mortgage and notes payable, net$1,411,401
 $865,665
Other liabilities86,971
 67,167
Members’/Partners’ equity592,559
 883,648
Total liabilities and members’/partners’ equity$2,090,931
 $1,816,480
Company’s share of equity$291,029
 $450,662
Basis differentials (1)297,908
 302,449
Carrying value of the Company’s investments in unconsolidated joint ventures (2)$588,937
 $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 September 30, 2017 and December 31, 2016, there was an aggregate basis differential of approximately $324.4 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 $22.9 million and $22.1 million at September 30, 2017 and December 31, 2016, respectively, have been reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.
The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:
 Three months ended June 30,Six months ended June 30,
 2023202220232022
 (in thousands)
Total revenue (1)$164,771 $120,871 $316,194 $245,362 
Expenses
Operating61,023 45,353 118,229 90,994 
Transaction costs27 811 101 811 
Depreciation and amortization51,233 43,293 101,211 87,957 
Total expenses112,283 89,457 219,541 179,762 
Other income (expense)
Loss from early extinguishment of debt(3)— (3)(1,327)
Interest expense(58,799)(32,219)(116,049)(62,592)
Unrealized gain on derivative instruments14,457 — 3,847 — 
Net income (loss)$8,143 $(805)$(15,552)$1,681 
Company’s share of net income (loss)$639 $1,082 $(6,263)$4,476 
Basis differential (2)(7,307)(1,136)(7,974)(2,341)
Income (loss) from unconsolidated joint ventures$(6,668)$(54)$(14,237)$2,135 
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
 (in thousands)
Total revenue (1)$55,516
 $49,002
 $166,139
 $125,039
Expenses       
Operating23,128
 21,753
 67,310
 54,779
Depreciation and amortization16,440
 12,038
 44,973
 30,306
Total expenses39,568
 33,791
 112,283
 85,085
Operating income15,948
 15,211
 53,856
 39,954
Other expense       
Interest expense13,088
 8,400
 31,815
 25,172
Net income$2,860
 $6,811
 $22,041
 $14,782
        
Company’s share of net income$2,909
 $3,179
 $11,576
 $6,830
Basis differential (2)(2,066) (1,715) (4,541) (1,341)
Income from unconsolidated joint ventures$843
 $1,464
 $7,035
 $5,489
_______________ 
(1)Includes straight-line rent adjustments of approximately $5.1 million and $5.2 million for the three months ended September 30, 2017 and 2016, respectively, and $16.4 million and $11.0 million for the nine months ended September 30, 2017 and 2016, respectively.

(1)Includes straight-line rent adjustments of approximately $6.9 million and $17.8 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $13.2 million and $45.3 million for the six months ended June 30, 2023 and 2022, respectively.
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Table(2)Includes straight-line rent adjustments of Contentsapproximately $0.4 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $0.7 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively. Also includes net above-/below-market rent adjustments of approximately $0.2 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $0.4 million and $0.2 million for the six months ended June 30, 2023 and 2022.

(2)Includes straight-line rent adjustments of approximately $0.7 million and $0.7 million for the three months ended September 30, 2017 and 2016, respectively, and $2.2 million and $0.7 million for the nine months ended September 30, 2017 and 2016, respectively. Also includes net above-/below-market rent adjustments of approximately $0.4 million and $0.5 million for the three months ended September 30, 2017 and 2016, respectively, and $1.3 million and $0.5 million for the nine months ended September 30, 2017 and 2016, respectively.
On July 10, 2017,January 31, 2023, the Company acquired an additional 0.2%a 50% interest in the unconsolidateda joint venture that owns Colorado Center13100 and 13150 Worldgate Drive located in Santa Monica, CaliforniaHerndon, Virginia for a gross purchase price of approximately $2.1 million$17.0 million. The acquisition was completed with available cash. 13100 and 13150 Worldgate Drive consists of two vacant office buildings aggregating approximately 350,000 rentable square feet and a 1,200-space structured parking deck situated on a 10-acre site. The joint venture intends to redevelop the property for residential use. There can be no assurance that the joint venture will commence the development as currently contemplated or at all.
On April 21, 2023, a joint venture in cash. Following the acquisition,which the Company owns a 50% interest inexercised an option to extend the joint venture. The Company continues to account formaturity date of the joint venture under the equity method of accounting as there were no changesconstruction loan collateralized by its 7750 Wisconsin Avenue property. Prior to the rightsextension, the loan had a total commitment amount of the members as a result of the acquisition. On July 28, 2017, the unconsolidated joint venture obtained mortgage financing collateralized by the property totaling $550.0 million. The mortgage financing bearsapproximately $252.6 million, bore interest at a fixedvariable rate of 3.56%equal to London interbank offered rate (“LIBOR”) plus 1.25% per annum and was scheduled to mature on April 26, 2023, with two, one-year extension options, subject to certain conditions. The extended loan continued to bear interest at LIBOR plus 1.25% per annum through June 1, 2023 after which, the interest rate was converted to a variable rate equal to Term Secured Overnight Finance Rate (“SOFR”) plus 1.35% per annum. The extended loan now matures on August 9, 2027. The loan requires interest-only payments during the 10-year term of the loan,April 26, 2024, with the entire principal amount due at maturity. The joint venture distributeda one-year extension option, subject to the partners the net proceeds from the financing totaling $502.0 million, of which the Company’s share was $251.0 million. Colorado Centercertain conditions. 7750 Wisconsin Avenue is a six-building office complex that sits on a 15-acre site and contains an aggregate ofpremier workplace with approximately 1,118,000734,000 net rentable square feet with an underground parking garage for 3,100 vehicles.located in Bethesda, Maryland.
On August 7, 2017, the Company entered intoJune 5, 2023, a joint venture in which the Company owns a 30% interest repaid the existing construction loan collateralized by its 500 North Capitol Street, NW property and obtained new mortgage loans with related parties. At the time of the pay off, the outstanding balance of the loan totaled approximately $105.0 million and the loan was scheduled to mature on June 6, 2023. The Bernstein Companies to developnew mortgage loans have an aggregate principal balance of $105.0 million, bear interest at a weighted average fixed rate of 6.83% per annum and mature on June 5, 2026. The Company’s portion of the mortgage loans, $10.5 million, has been reflected as a Related Party Note
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Receivable on the Company’s Consolidated Balance Sheets. 500 North Capitol Street, NW is an approximately 722,000231,000 net rentable square foot (subject to adjustment based on finalized building design) build-to-suit Class A office building and below-grade parking garage at 7750 Wisconsin Avenuepremier workplace in Bethesda, Maryland. TheWashington, DC.
On June 28, 2023, a joint venture entered intoin which the Company owns a lease agreement with25% interest exercised an affiliate of Marriott International, Inc. under which Marriott will lease 100%option to extend by 30 days the maturity date of the office building and garage for a term of 20 years, andloan collateralized by its 3 Hudson Boulevard property. At the building will serve as Marriott’s new worldwide headquarters. Marriott has agreed to fund 100%time of the related tenant improvement costsmodification, the outstanding balance of the loan totaled $80.0 million, bore interest at a variable rate equal to LIBOR plus 3.50% per annum and leasing commissionswas scheduled to mature on July 13, 2023, with two extension options (30 days and 180 days, respectively), subject to certain conditions. The modified loan continued to bear interest at a variable rate equal to LIBOR plus 3.50% per annum for the office building.period from June 28, 2023 through July 6, 2023. As of June 30, 2023, the loan had approximately $23.2 million of accrued interest due at the maturity date, August 13, 2023. For the period commencing on July 7, 2023 through the maturity date, the modified loan will bear interest at a variable rate equal to Term SOFR plus approximately 3.61% per annum. The Company will serve as co-development manager for the venture and expectsmodified loan now matures on August 13, 2023, with one 180 days extension option, subject to commence construction in 2018. The Company and The Bernstein Companies each own a 50% interest in the joint venture. For its initial contribution, The Bernstein Companies contributedcertain conditions. 3 Hudson Boulevard consists of land with an initial fair value of $72.0 million and cash and improvements aggregating approximately $4.9 million. The Company contributed cash and improvements aggregating approximately $20.8 millionheld for its initial contribution, of which $11.0 million was distributed to The Bernstein Companies. In addition, the Company was required to fund $25.0 million into an escrow account to be used by the joint venture to fund future development costs. See also Note 7.located in New York, New York.
On September 6, 2017,During the three months ended June 30, 2023, a joint venture in which the Company has a 50%55% interest obtainedelected to pause vertical construction financing with a total commitmenton Platform 16 in San Jose, California. Platform 16 was planned to be constructed in phases to best accommodate market demand. The first phase of $204.6 million collateralized by its Hub on Causewaythe development project.  Theproject included the construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2021, with two, one-year extension options, subject to certain conditions.  As of September 30, 2017, the venture had not drawn any funds under the loan. The Hub on Causeway is an approximately 385,000390,000 net rentable square foot project containing retailpremier workplace building and office space located in Boston, Massachusetts. In connection with the construction financing, the Company obtained the rightbelow-grade parking garage. The joint venture intends to complete the construction of the below-grade parking garage underneathand building foundation elements over the project being developed by an affiliatenext several months to facilitate a restart of its joint venture partnerconstruction in the future as demand improves.
6. Debt
Unsecured Senior Notes
The following summarizes the unsecured senior notes outstanding as of June 30, 2023 (dollars in thousands):
Coupon/Stated RateEffective Rate(1)Principal AmountMaturity Date(2)
10.5 Year Unsecured Senior Notes3.125 %3.279 %$500,000 September 1, 2023
10.5 Year Unsecured Senior Notes3.800 %3.916 %700,000 February 1, 2024
7 Year Unsecured Senior Notes3.200 %3.350 %850,000 January 15, 2025
10 Year Unsecured Senior Notes3.650 %3.766 %1,000,000 February 1, 2026
10 Year Unsecured Senior Notes2.750 %3.495 %1,000,000 October 1, 2026
5 Year Unsecured Senior Notes6.750 %6.924 %750,000 December 1, 2027
10 Year Unsecured Senior Notes4.500 %4.628 %1,000,000 December 1, 2028
10 Year Unsecured Senior Notes3.400 %3.505 %850,000 June 21, 2029
10.5 Year Unsecured Senior Notes2.900 %2.984 %700,000 March 15, 2030
10.75 Year Unsecured Senior Notes3.250 %3.343 %1,250,000 January 30, 2031
11 Year Unsecured Senior Notes2.550 %2.671 %850,000 April 1, 2032
12 Year Unsecured Senior Notes2.450 %2.524 %850,000 October 1, 2033
10.7 Year Unsecured Senior Notes6.500 %6.619 %750,000 January 15, 2034
Total principal11,050,000 
Less:
Net unamortized discount14,831 
Deferred financing costs, net49,774 
Total$10,985,395 
_______________
(1)Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and obtain funding from the garage construction lender.  The Company agreedamortization of financing costs.
(2)No principal amounts are due prior to guaranty completionmaturity.
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Table of the garage to the construction lender and an affiliate of its partner agreed to reimburse the Company for the partner’s share of any payments made under the guaranty.Contents
5. Debt
Mortgage Notes Payable, Net, Mezzanine Notes Payable and Outside Members’ Notes Payable
On June 7, 2017, the Company’s consolidated entityMay 15, 2023, BPLP completed a public offering of $750.0 million in which it has a 60% ownership interest and that owns 767 Fifth Avenue (the General Motors Building) located in New York City completed the refinancing of the indebtedness that had been secured by direct and indirect interests in the property. The new mortgage financing has a principal amount of $2.3 billion, bears interest at a fixed interest rate of 3.43% per annum and matures on June 9, 2027. The loan requires monthly interest-only payments during the 10-year term of the loan, with the entire principal amount being due at maturity.
The refinanced indebtedness consisted of (1) mortgage loans payable collateralized by the property aggregating $1.3 billion, (2) mezzanine loans payable aggregating $306.0 million, (3) additional mezzanine loans payable aggregating $294.0 million and (4) member loans aggregating $450.0 million with outstanding accrued interest payable totaling approximately $425.0 million. The mortgage loans required monthly interest-only payments at a weighted-average fixed interest rate of 5.95% per annum and were scheduled to mature on October 7, 2017. The mezzanine loans required interest-only payments at a weighted-average fixed interest rate of 6.02% per annum and were scheduled to mature on October 7, 2017. In addition, a subsidiary of the consolidated entity had acquired a lender’s interest in certain other mezzanine loans assumed during the acquisition of the property having an aggregate principal amount of $294.0 million and a stated interestits 6.500% unsecured senior notes due 2034. The notes were priced at 99.697% of the principal amount to yield an effective rate (including financing fees) of 6.02%approximately 6.619% per annum for a purchase price of approximately $263.1 million in cash. These mezzanine loans payable had been eliminated in

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consolidation and were canceled upon the refinancing of the indebtedness.to maturity. The member loans bore interest at a fixed rate of 11.0% per annum and were scheduled tonotes will mature on June 9, 2017. A portion of the original purchase price of the property was financed with loans from the members on a pro rata basis equal to their percentage interest in the consolidated entity.January 15, 2034, unless earlier redeemed. The Company had eliminated in consolidation its member loan totaling $270.0 million and its share of the related accrued interest payable of approximately $255.0 million at the date of the refinancing. The remaining outside members’ notes payable and related accrued interest payable totaling $180.0 million and approximately $170.0 million, respectively, at the date of the refinancing had been reflected as Outside Members’ Notes Payable and within Accrued Interest Payable, respectively, on the Company’s Consolidated Balance Sheets. Theaggregate net proceeds from the new financingoffering were usedapproximately $741.3 million after deducting underwriting discounts and transaction expenses.
The indenture relating to repay allthe unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of the outstanding accrued interest payable on the member loansgreater than 1.50, and a portion(4) an unencumbered asset value of the outstanding principal balancenot less than 150% of the member loans totaling approximately $176.1 million. In connectionunsecured debt. At June 30, 2023, BPLP was in compliance with the refinancing, the memberseach of the Company’s consolidated entity contributed the remaining balance of the member notes payable totaling approximately $273.9 million (of which the Company’s share of approximately $164.4 million had been eliminated in consolidation) to equity in the consolidated entity (See Note 8). There was no prepayment penalty associated with the repayments. The Company recognized a gain from early extinguishment of debt totaling approximately $14.6 million primarily consisting of the acceleration of the remaining balance related to historical fair value debt adjustments.these financial restrictions and requirements.
Unsecured Credit Facility
On April 24, 2017, Boston Properties Limited PartnershipJune 1, 2023, BPLP amended and restated its revolvingunsecured credit agreementfacility (as amended, and restated, the “2017“2021 Credit Facility”) to replace the LIBOR-based daily floating rate option with a SOFR-based daily floating rate option and to add options for SOFR-based term floating rates and rates for alternative currency loans. In addition, the amendment added a SOFR credit spread adjustment of 0.10%. Among other things,Other than the 2017foregoing, the material terms of the 2021 Credit Facility (1) increased the total commitmentremain unchanged.
The 2021 Credit Facility provides for borrowings of theup to $1.5 billion through BPLP’s revolving line of creditfacility (the “Revolving Facility”) from $1.0 billion, subject to $1.5 billion, (2) extendedcustomary conditions. The 2021 Credit Facility matures on June 15, 2026 and includes a sustainability-linked pricing component. Under 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, until the first anniversary of the closing date, to draw upon up to four times a minimum of $50.0 million (or, if less, the unused delayed draw term commitments), provided that amounts drawn under the Delayed Draw2021 Credit Facility, and subsequently repaid may not be borrowed again. In addition, Boston Properties Limited PartnershipBPLP may increase the total commitment under the 2017 Credit Facility by up to $500.0 million through increases inby increasing the amount of the Revolving Facility and/or the Delayed Draw Facility,by incurring one or both,more term loans, in each case, subject to syndication of the increase and other conditions.
At Boston Properties Limited Partnership’sBPLP’s option, loans under the Revolving Facility and Delayed Draw2021 Credit Facility will bear interest at a rate per annum equal to (1) (a) in the case of loans denominated in Dollars, Term SOFR and SOFR, (b) in the case of loans denominated in Euro, or Sterling, LIBOR, and (b)EURIBOR, (c) in the case of loans denominated in Canadian Dollars, CDOR, and (d) in the case of loans denominated in Sterling, SONIA, in each case, plus a margin ranging from 77.570.0 to 155140.0 basis points for the Revolving Commitment and 85 to 175 basis points for the Delayed Draw Facility, based on Boston Properties Limited Partnership’sBPLP’s credit rating or (2) an alternate base rate equal to the greatest of (x) the Administrative Agent’s prime rate, (y)(a) the Federal Funds rate plus 0.50% or (z) LIBOR for a one-month period0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 5540 basis points for the Revolving Facility and 0 to 75 basis points for the Delayed Draw Facility, based on Boston Properties Limited Partnership’sBPLP’s credit rating.
The 20172021 Credit Facility also features a sustainability-linked pricing component such that if BPLP meets certain sustainability performance targets, the applicable per annum interest rate will be reduced by one basis point. In addition, the 2021 Credit Facility contains a competitive bid option for up to 65% of the Revolving Facility that allows banks that are part of the lender consortium to bid to make loan advances to Boston Properties Limited Partnership BPLPat a reduced interest rate.
In addition, Boston Properties Limited PartnershipPursuant to the 2021 Credit Facility, BPLP is obligated to pay (1) in quarterly installments a facility fee on the total commitment under the Revolving Facility at a rate per annum ranging from 0.10% to 0.30% based on Boston Properties Limited Partnership’sBPLP’s credit rating and (2) an annual fee on the undrawn amount of each letter of credit equalranging from 0.70% to the LIBOR margin1.40% based on the Revolving Facility and (3) a fee on the unused commitments under the Delayed Draw Facility equal to 0.15% per annum.BPLP’s credit rating.
Based on Boston Properties Limited Partnership’s currentBPLP’s June 30, 2023 credit rating, (1) the applicable EurocurrencyDaily SOFR, Term SOFR, alternative currency daily rate, and alternative currency term rate margins for the Revolving Facility and Delayed Draw Facility are 87.5 basis points and 95 basis points, respectively,0.775%, (2) the alternate base rate margin is zero basis points for each of the Revolving Facility and Delayed Draw Facility and (3) the facility fee on the Revolving Facility commitment is 0.15% per annum.
At June 30, 2023, BPLP had no amount outstanding under the Revolving Facility.
Unsecured Term Loan
On January 4, 2023, BPLP entered into a credit agreement that provided for a $1.2 billion unsecured term loan facility (the “2023 Unsecured Term Loan”). Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 20172023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions. Upon entry into the credit agreement, BPLP exercised its option to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the $730.0 million outstanding under its prior unsecured credit agreement (the “2022 Unsecured Term Loan”), which was scheduled to mature on May 16, 2023. There was no prepayment penalty associated with the
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repayment of the 2022 Unsecured Term Loan.
At BPLP’s option, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating. Based on BPLP’s credit rating upon entry into the credit agreement, the base rate margin is 0 basis points and the Term SOFR margin is 0.85%. As of June 30, 2023, the 2023 Unsecured Term Loan bears interest at a rate equal to adjusted Term SOFR plus 0.85% (see Note 7). At June 30, 2023, BPLP had $1.2 billion outstanding under the 2023 Unsecured Term Loan.
2021 Credit Facility containsand 2023 Unsecured Term Loan Compliance
The agreements governing the 2021 Credit Facility and 2023 Unsecured Term Loan contain customary representations and warranties, affirmative and negative covenants and events of default provisions, including the failure to pay indebtedness, breaches of covenants and bankruptcy and other insolvency events, which could result in the acceleration of the obligation to repay, in the case of the 2021 Credit Facility, all outstanding amounts and the cancellation of all commitments outstanding under the 2021 Credit Agreement.Facility and, in the case of the 2023 Unsecured Term Loan, any outstanding amount under the 2023 Unsecured Term Loan. Among other covenants, the 20172021 Credit Facility requiresand the 2023 Unsecured Term Loan require that Boston Properties Limited PartnershipBPLP maintain on an ongoing basis: (1) 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, (2) a secured debt leverage ratio not to exceed 55%, (3) a fixed charge coverage ratio of at least 1.40, (4) an unsecured debt leverage ratio not to exceed 60%, however, the unsecured debt leverage ratio may increase to no greater than 65% provided that it is reduced to 60% within one year, (5) an unsecured debt interest coverage ratio of at least 1.75 and (6) limitations on permitted investments. At June 30, 2023, BPLP was in compliance with each of these financial and other covenant requirements.

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6.7. Derivative Instruments and Hedging Activities
During the year ended December 31, 2015, Boston Properties Limited Partnership commenced a planned interest rate hedging program andOn May 2, 2023, BPLP entered into 17 forward-startingfour 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 nine months ended September 30, 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$1.2 billion. BPLP entered into 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. On April 24, 2017, the consolidated entity 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 (See Note 5). In conjunction with the interest rate lock and commitment agreement, 767 Fifth Partners LLC terminated the forward-starting interest rate swap contracts and cash-settled the contracts by making cash payments to the counterparties aggregating approximately $14.4 million. 767 Fifth Partners LLC did not record any hedge ineffectiveness. The Company is reclassifying into earnings, as an increase to interest expense, approximately $14.4 million (or approximately $1.4 million per year over the 10-year term of the financing) 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.
At September 30, 2017, there were no outstanding interest rate swap contracts. 767 Fifth Partners LLC’s interest rate swap contracts consisted of the following at December 31, 2016 (dollars in thousands):
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)
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 swap2023 Unsecured Term Loan interest rate. These interest rate in contemplation of obtaining 10-year fixed-rate financing in September 2016. The Company’s 767 Fifth Partners LLC consolidated entityswaps were entered into to fix Term SOFR, the reference rate for BPLP’s 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024 (see Note 6). For the period from May 4, 2023 through June 30, 2023, the Company recognized approximately $(0.9) million of interest expense related to its interest rate swap contracts designated and qualifying as cash flow hedges to reduce its exposure tocontracts.
BPLP assesses 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. Boston Properties Limited Partnership has formally documented alleffectiveness 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,hedges both at the hedging instrument’s inception and on an ongoing basis, whetherbasis. If the derivativeshedges are deemed to be effective, the fair value is recorded in “Accumulated other comprehensive loss” in the Company’s Consolidated Balance Sheets and is subsequently reclassified into “Interest expense” in the Company’s Consolidated Statements of Operations in the period that the hedged forecasted transactions affect earnings. BPLP’s derivative financial instruments are cash flow hedges that are used in hedging transactionsdesignated as effective hedges, and are highly effective in offsetting changes in cash flows associated withcarried at their estimated fair value on a recurring basis (See Note 2). The Company did not incur any ineffectiveness during the hedged items. All components of the forward-startingthree months ended June 30, 2023.
BPLP’s interest rate swap contracts were included in the assessment of hedge effectiveness. 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 natureconsisted of the hedged item.following at June 30, 2023 (dollars in thousands):

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Derivative InstrumentAggregate Notional AmountStrike Rate RangeBalance Sheet Location
Effective DateMaturity DateLowHighFair Value
Interest Rate Swaps$1,200,000 May 4, 2023May 16, 20244.638 %—4.646 %Prepaid expenses and other assets$6,445 
The following table presents the location in the financial statements of the gains (losses)or losses recognized related to the Company’s cash flow hedges for the three and ninesix months ended SeptemberJune 30, 20172023 and 2016:
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
  (in thousands)
Amount of gain (loss) related to the effective portion recognized in other comprehensive loss $—
 $5,712
 $(6,133) $(85,285)
Amount of loss related to the effective portion subsequently reclassified to earnings $(1,665) $(1,190) $(4,368) $(2,445)
Amount of loss related to the ineffective portion and amount excluded from effectiveness testing $—
 $(140) $—
 $(140)
Boston Properties, Inc.
The following table reflects the changes2022 (dollars in accumulated other comprehensive loss for the nine months ended September 30, 2017 and 2016 (in thousands):
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Balance at December 31, 2016 $(52,251)
Effective portion of interest rate contracts (6,133)
Amortization of interest rate contracts 4,368
Other comprehensive loss attributable to noncontrolling interests 2,220
Balance at September 30, 2017 $(51,796)
   
Balance at December 31, 2015 $(14,114)
Effective portion of interest rate contracts (85,285)
Amortization of interest rate contracts 2,445
Other comprehensive loss attributable to noncontrolling interests 23,011
Balance at September 30, 2016 $(73,943)
Boston Properties Limited Partnership
The following table reflects the changes in accumulated other comprehensive loss for the nine months ended September 30, 2017 and 2016 (in thousands):
Balance at December 31, 2016 $(60,853)
Effective portion of interest rate contracts (6,133)
Amortization of interest rate contracts 4,368
Other comprehensive loss attributable to noncontrolling interests 2,272
Balance at September 30, 2017 $(60,346)
   
Balance at December 31, 2015 $(18,337)
Effective portion of interest rate contracts (85,285)
Amortization of interest rate contracts 2,445
Other comprehensive loss attributable to noncontrolling interests 16,134
Balance at September 30, 2016 $(85,043)


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Three months ended June 30,Six months ended June 30,
2023202220232022
Amount of gain (loss) related to the effective portion recognized in other comprehensive income (1)$14,965 $35 $8,427 $7,600 
Amount of gain (loss) related to the effective portion subsequently reclassified to earnings (2)$1,674 $1,677 $3,349 $3,353 
Amount of gain (loss) relate do the ineffective portion and amount excluded from effectiveness testing$— $— $— $— 
7._______________
(1)Includes the Company’s share of gain (loss) related to the effective portion of derivatives outstanding at its unconsolidated joint venture properties.
(2)Consists of amounts from previous interest rate programs.
BPLP has formally documented all of its relationships between hedge instruments and hedging items, as well as its risk-management objectives and strategy for undertaking various hedge transactions. While management believes its judgments are reasonable, a change in a derivative's effectiveness as a hedge could materially affect expenses, net income (loss) and equity.
BPLP’s agreements with the swap derivative counterparties contain provisions whereby if BPLP defaults on the underlying indebtedness, including defaults where repayment of the indebtedness has not been accelerated by the lender, then BPLP could also be declared in default of the swap derivative obligation. As of June 30, 2023, the Company had not posted any collateral related to the agreements.
8. 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 hashad letter of credit and performance obligations related to lender and development requirements that total approximately $9.1 million.$21.6 million at June 30, 2023.
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. From time to time, under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, either the Company or its partners willmay be entitled to an additional promoted interest or payments. See also Note 8.
From time to time, the Company (or ventures in which the Company has an ownership interest) has agreed, and may in the future agree, to (1) guarantee portions of the principal, interest and other amounts in connection with their borrowings, (2) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with their borrowings and (3) provide guarantees to lenders, tenants and other third parties for the completion of development projects. The Company has agreements with its outside or joint venture partners whereby the partners agree to reimburse the joint venture for their share of any payments made under the guarantee. In some cases, the Company earns a fee from the applicable joint venture for providing the guarantee.
In connection with the refinancing 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 entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of SeptemberJune 30, 2017,2023, the maximum funding obligation under the guarantee was approximately $222.7$11.2 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. As of SeptemberJune 30, 2017,2023, no amounts related to the guarantee arewere recorded as liabilities in the Company’s consolidated financial statements.
Pursuant toIn connection with the lease agreement with Marriott, the Company has guaranteed the completiondevelopment of the officeCompany’s 290 Binney Street project located in Cambridge, Massachusetts, which commenced on January 5, 2023 (see Note 3), the Cambridge Zoning Ordinance requires that
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a building and parking garage on behalf of its 7750 Wisconsin Avenue joint venture and has also agreed to provide any financing guaranty that may be required with respect to third-party construction financing.  The Company earns a fee from the joint venturepermit for providing the guarantees and any amounts the Company pays under the guarantee(s) will be deemed to be capital contributions by the Company to the joint venture.  The Company has also agreed to fund construction costs through capital contributions to the joint venture in the event of unavailability or insufficiency of third-party construction financing.  In addition, the Company has guaranteed to Marriott, as hotel manager, the completion of a hotel being developed by an affiliate of The Bernstein Companies adjacent to the office property, for which the Company earns a fee from the affiliate of The Bernstein Companies.  In addition, the Company entered into agreements with affiliates of The Bernstein Companies whereby the Company could be required to act as a mezzanine and/or mortgage lender and finance the construction of a residential project of at least 400,000 square feet be issued prior to or concurrently with the hotel property.  To secure such financing arrangements, affiliatesissuance of The Bernstein Companiesa building permit for the commercial building. 290 Binney Street and the residential project are required to provide certain security, which varies depending oncomponents of the specific loan, by pledges of their equity interestCompany’s future life sciences development project located in the office property, a fee mortgage onheart of Kendall Square in Cambridge, Massachusetts. When completed the hotel property, or both. AsCompany expects the project will consist of September 30, 2017, no amounts related totwo premier workplace properties aggregating approximately 1.1 million rentable square feet of life sciences space and the contingent aspectapproximately 400,000 square foot residential building. The commencement of anyconstruction of each phase of the guaranteesoverall project is subject to various conditions, some of which are recorded as liabilities innot within the Company’s consolidated financial statements. See also Note 4.
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. On May 19, 2017, the Company received a fifth interim distribution totaling approximately $0.4 million, leaving a remaining claim of approximately $27.6 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, therecontrol. There can be no assurance as tothat the timingconditions will be satisfied or amount of additional proceeds, if any, that the Company may ultimately realizewill commence the development of the remaining phases on the remaining claim, whether by sale to a third partyterms and schedule currently contemplated 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 September 30, 2017.

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all.
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$1.35 billion of Terrorism Coverage for 601 Lexington Avenue, New York, New York (“601 Lexington Avenue”)property insurance in excess of the $1.0 billion of coverage in the Company’s property insurance program.program for 601 Lexington Avenue, New York, New York, consisting of $750 million of property and Terrorism Coverage in excess of the Company’s property insurance program and $600 million of Terrorism Coverage only in excess of the $1.75 billion of coverage. 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 TRIAthe Federal Terrorism Risk Insurance Act (as amended, “TRIA”) (“NBCR Coverage”), which is provided by IXP as a direct insurer, for the properties in ourthe Company’s 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, theThe program trigger is $140$200 million, and the coinsurance is 17%, however, both will increase in subsequent years pursuant20% and the deductible is 20% of the premiums earned by the insurer for the year prior to TRIPRA.a claim. 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.TRIA. The Company may elect to terminate the NBCR Coverage if the Federal Government seeks recoupment for losses paid under TRIA, if TRIA is not extended after its expiration on December 31, 2027, 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.insurance.
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.earthquakes. Specifically, the Company currently carries earthquake insurance which covers its San Francisco (including Salesforce Tower) and Los Angeles regions with a $240$330 million (increased from $170 million on March 1, 2017) per occurrence limit, and a $240$330 million (increased from $170 million on March 1, 2017) annual aggregate limit, $20$30 million of which is provided by IXP, as a direct insurer. PriorThis insurance is subject to March 1, 2017,a deductible in the builders risk policy maintained foramount of 5% of the developmentvalue of Salesforce Tower in San Francisco includedthe affected property. In addition, the Company currently carries earthquake insurance which covers its Seattle region with a $60$110 million per occurrence limit, and a $110 million annual aggregate limitlimit. This insurance is subject to a deductible in the amount of earthquake coverage.2% of the value of the affected property. 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
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considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance. In addition, Boston Properties Limited PartnershipBPLP 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

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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, earthquakes and California earthquake riskpandemics, 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, pandemics 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.
8.9. Noncontrolling Interests
Noncontrolling interests relate to the interests in Boston Properties Limited PartnershipBPLP not owned by Boston Properties, Inc.BXP and interests in consolidated property partnerships not wholly-owned by the Company. As of SeptemberJune 30, 2017,2023, the noncontrolling interests in Boston Properties Limited PartnershipBPLP consisted of 16,812,32916,522,540 OP Units, 816,9822,135,852 LTIP Units (including 118,067514,715 LTIP Units earned by employees under the Company’s multi-year long-term incentive awards granted between 2012 and 2020 (i.e., 2012 OPP and 2013 - 2020 MYLTIP awards)), 349,267 2021 MYLTIP Units, 85,405 2013252,151 2022 MYLTIP Units and 25,107 2014 MYLTIP Units), 366,618 2015 MYLTIP Units, 473,360 2016 MYLTIP Units and 400,000 2017322,053 2023 MYLTIP Units held by parties other than Boston Properties, Inc.BXP.
Noncontrolling Interest—Common Units
During the ninesix months ended SeptemberJune 30, 2017, 492,6172023, 21,346 OP Units were presented by the holders for redemption (including 33,466an aggregate of 21,346 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.BXP in exchange for an equal number of shares of Common Stock.
At SeptemberJune 30, 2017, Boston Properties Limited Partnership2023, BPLP had outstanding 366,618 2015349,267 2021 MYLTIP Units, 473,360 2016252,151 2022 MYLTIP Units and 400,000 2017322,053 2023 MYLTIP Units. Prior to the applicable measurement date (February 4, 2018end of the respective three-year performance period for 2015 MYLTIP Units, February 9, 2019 for 2016 MYLTIP Units and February 6, 2020 for 2017 MYLTIP Units),each plan, holders of MYLTIP Units will beare 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,three-year performance period for each plan has ended, (1) 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.Unit and (2) with respect to the 2021 - 2023 MYLTIP, the Company will make a “catch-up” cash payment on the MYLTIP Units that are ultimately earned in an amount equal to the regular and special dividends, if any, declared during the performance period on Common Stock, less the distributions actually paid during the performance period on all of the awarded 2021 - 2023 MYLTIP Units.
On February 3, 2017,2023, the measurement period for the Company’s 20142020 MYLTIP awards ended and, based on Boston Properties, Inc.’sBXP’s relative TSR performance, the final awards werepayout was determined to be 27.7%50% of target, or an aggregate of approximately $3.5$3.8 million(after (after giving effect to voluntary employee separations and the unallocated reserve)separations). As a result, an aggregate of 447,386 2014152,460 2020 MYLTIP Units that had been previously granted were automatically forfeited.
The following table presents Boston Properties Limited Partnership’sBPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, and 2013 - 2019 MYLTIP Units and, after the February 3, 20172023 measurement date, the 20142020 MYLTIP Units) and its distributions on the 20142020 MYLTIP Units (prior to the February 3, 20172023 measurement date), 2015 MYLTIP Units, 2016 MYLTIP Units and 20172021 - 2023 MYLTIP Units (after the February 7, 20172023 issuance date) paid in 2017:date of the 2023 MYLTIP Units) that occurred during the six months ended June 30, 2023:
Record DatePayment DateDistributions per OP Unit and LTIP UnitDistributions per MYLTIP Unit
June 30, 2023July 31, 2023$0.98 $0.098 
March 31, 2023April 28, 2023$0.98 $0.098 
December 30, 2022January 30, 2023$0.98 $0.098 
30
Record Date Payment Date Distributions per OP Unit and LTIP Unit Distributions per MYLTIP Unit
September 29, 2017 October 31, 2017 
$0.75
 
$0.075
June 30, 2017 July 31, 2017 
$0.75
 
$0.075
March 31, 2017 April 28, 2017 
$0.75
 
$0.075
December 31, 2016 January 30, 2017 
$0.75
 
$0.075

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The following table presents BPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2018 MYLTIP Units and, after the February 4, 2022 measurement date, the 2019 MYLTIP Units) and its distributions on the 2019 MYLTIP Units (prior to the February 4, 2022 measurement date) and 2020 - 2022 MYLTIP Units (after the February 1, 2022 issuance date of the 2022 MYLTIP Units) that occurred during the six months ended June 30, 2022:
Record DatePayment DateDistributions per OP Unit and LTIP UnitDistributions per MYLTIP Unit
June 30, 2022July 29, 2022$0.98 $0.098 
March 31, 2022April 29, 2022$0.98 $0.098 
December 31, 2021January 28, 2022$0.98 $0.098 
A holder of an OP Unit may present the OP Unit to Boston Properties Limited PartnershipBPLP 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 PartnershipBPLP must redeem the OP Unit for cash equal to the then value of a share of common stockCommon Stock of Boston Properties, Inc. Boston Properties, Inc.BXP. BXP 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(other than OP Units owned by Boston Properties, Inc.BXP), and LTIP Units (including the 2012 OPP Units and 2013 MYLTIP Units and 2014- 2020 MYLTIP Units), assuming in each case that all conditions had been met for the conversion thereof, had all of such units been redeemed at SeptemberJune 30, 20172023 was approximately $2.2$1.1 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $122.88$57.59 per share on SeptemberJune 30, 2017.
Boston Properties Limited Partnership
The following table reflects the activity of noncontrolling interests—redeemable partnership units of Boston Properties Limited Partnership for the nine months ended September 30, 2017 and 2016 (in thousands):
Balance at December 31, 2016$2,262,040
Contributions31,465
Net income40,350
Distributions(40,292)
Conversion of redeemable partnership units(16,812)
Unearned compensation(5,194)
Cumulative effect of a change in accounting principle(1,763)
Accumulated other comprehensive income52
Adjustment to reflect redeemable partnership units at redemption value(103,556)
Balance at September 30, 2017$2,166,290
  
Balance at December 31, 2015$2,286,689
Contributions31,492
Net income42,120
Distributions(35,500)
Conversion of redeemable partnership units(5,881)
Unearned compensation(10,072)
Accumulated other comprehensive loss(6,877)
Adjustment to reflect redeemable partnership units at redemption value151,545
Balance at September 30, 2016$2,453,516
2023.
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 $1.7$1.6 billion at September 30, 2017 and $1.5 billion atat June 30, 2023 and December 31, 2016,2022, respectively, are included in Noncontrolling Interests—Property Partnerships inon 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 September 30, 2017, the Company had contributed an aggregate of approximately $15.2 million of preferred equity to the venture. Also, under the agreement, (1) the

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partner has the right to cause the Company to purchase the partner’s interest after the defined stabilization date and (2) the Company has the right to acquire the partner’s interest on the third anniversary of the stabilization date, in each case at an agreed upon purchase price or appraised value; provided, however, if certain return thresholds are achieved the partner will be entitled to an additional promoted interest.
On June 6, 2017, in conjunction with the refinancing of the indebtedness of 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, the members of the consolidated entity amended the limited liability company agreement to provide for the contribution of the remaining unpaid principal balance of the members’ notes payable totaling approximately $273.9 million (of which the Company’s share of approximately $164.4 million is eliminated in consolidation) to equity in the consolidated entity, resulting in an increase of approximately $109.6 million to Noncontrolling Interests in Property Partnerships on the Company’s Consolidated Balance Sheets (See Note 5). There were no changes to the ownership interests or rights of the members as a result of the amendment.
The following table reflects the activity of the noncontrolling interests in property partnerships for the nine months ended September 30, 2017 and 2016 (in thousands):
Balance at December 31, 2016$1,530,647
Capital contributions (1)147,772
Net income33,967
Accumulated other comprehensive loss(2,272)
Distributions(41,439)
Balance at September 30, 2017$1,668,675
  
Balance at December 31, 2015$1,574,400
Capital contributions5,417
Net income53
Accumulated other comprehensive loss(16,134)
Distributions(38,694)
Balance at September 30, 2016$1,525,042
 _______________
(1)Includes the contribution of the remaining unpaid principal balance of the members’ notes payable totaling $109,576 to equity in the consolidated entity that owns 767 Fifth Avenue (the General Motors Building).

9.10. Stockholders’ Equity / Partners’ Capital
As of SeptemberJune 30, 2017, Boston Properties, Inc.2023, BXP had 154,322,266156,853,400 shares of Common Stock outstanding.
As of SeptemberJune 30, 2017, Boston Properties, Inc.2023, BXP owned 1,719,5161,755,118 general partnership units and 152,602,750155,098,282 limited partnership units of Boston Properties Limited Partnership.in BPLP.
On June 2, 2017, Boston Properties, Inc.May 17, 2023, BXP renewed its “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 stockCommon Stock through sales agents over a three-year period. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaces the Company’sreplaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on June 3, 2017. The CompanyMay 22, 2023. BXP 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 stockCommon Stock have been issued under this ATM stock offering program.
During the ninesix months ended SeptemberJune 30, 2017, Boston Properties, Inc.2023, BXP did not issue any shares of Common Stock upon the exercise of options to purchase Common Stock. As a result of the applicable exercise period ending, 103,641 options were forfeited during the six months ended June 30, 2023. As of June 30, 2023, BXP no longer has any outstanding options.
During the six months ended June 30, 2023, BXP issued 492,61721,346 shares of Common Stock in connection with the redemption of an equal number of redeemable OP Units from limited partners.

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The following table presents Boston Properties, Inc.’sBXP’s dividends per share and Boston Properties Limited Partnership’sBPLP’s distributions per OP Unit and LTIP Unit paid or declared in 2017:2023 and during the six months ended June 30, 2022:
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Record Date Payment Date Dividend (Per Share)
 Distribution (Per Unit)
September 29, 2017 October 31, 2017 
$0.75
 
$0.75
June 30, 2017 July 31, 2017 
$0.75
 
$0.75
March 31, 2017 April 28, 2017 
$0.75
 
$0.75
December 31, 2016 January 30, 2017 
$0.75
 
$0.75
Record DatePayment DateDividend (Per Share)Distribution (Per Unit)
June 30, 2023July 31, 2023$0.98 $0.98 
March 31, 2023April 28, 2023$0.98 $0.98 
December 30, 2022January 30, 2023$0.98 $0.98 
June 30, 2022July 29, 2022$0.98 $0.98 
March 31, 2022April 29, 2022$0.98 $0.98 
December 31, 2021January 28, 2022$0.98 $0.98 
Preferred Stock
As11. Segment Information
The following tables present reconciliations of September 30, 2017,Net Income Attributable to Boston Properties, Inc. had 80,000 shares (8,000,000 depositary shares each representing 1/100thto the Company’s share of Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership to the Company’s share of Net Operating Income for the three and six monthsended June 30, 2023 and 2022.
BXP
 Three months ended June 30,Six months ended June 30,
2023202220232022
(in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 $182,215 $366,044 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 21,169 42,061 
Noncontrolling interests in property partnerships19,768 18,546 38,428 36,095 
Interest expense142,473 104,142 276,680 205,370 
Net operating income from unconsolidated joint ventures42,254 35,710 83,010 73,031 
Depreciation and amortization expense202,577 183,146 411,311 360,770 
Transaction costs308 496 1,219 496 
Payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
General and administrative expense44,175 34,665 99,977 77,859 
Less:
Net operating income attributable to noncontrolling interests in property partnerships47,958 47,862 95,055 94,917 
Unrealized gain on non-real estate investment124 — 383 — 
Gains (losses) from investments in securities1,571 (4,716)3,236 (6,978)
Other income - assignment fee— 6,624 — 6,624 
Interest and other income (loss)17,343 1,195 28,284 2,423 
Gains on sales of real estate— 96,247 — 118,948 
Income (loss) from unconsolidated joint ventures(6,668)(54)(14,237)2,135 
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Development and management services revenue9,858 6,354 18,838 12,185 
Company’s share of Net Operating Income$497,785 $471,890 $982,450 $931,472 
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BPLP
 Three months ended June 30,Six months ended June 30,
 2023202220232022
(in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 $206,928 $415,617 
Add:
Noncontrolling interests in property partnerships19,768 18,546 38,428 36,095 
Interest expense142,473 104,142 276,680 205,370 
Net operating income from unconsolidated joint ventures42,254 35,710 83,010 73,031 
Depreciation and amortization expense200,895 181,416 407,767 357,302 
Transaction costs308 496 1,219 496 
Payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
General and administrative expense44,175 34,665 99,977 77,859 
Less:
Net operating income attributable to noncontrolling interests in property partnerships47,958 47,862 95,055 94,917 
Unrealized gain on non-real estate investment124 — 383 — 
Gains (losses) from investments in securities1,571 (4,716)3,236 (6,978)
Other income - assignment fee— 6,624 — 6,624 
Interest and other income (loss)17,343 1,195 28,284 2,423 
Gains on sales of real estate— 99,608 — 122,992 
Income (loss) from unconsolidated joint ventures(6,668)(54)(14,237)2,135 
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 9,844 7,304 
Development and management services revenue9,858 6,354 18,838 12,185 
Company’s share of Net Operating Income$497,785 $471,890 $982,450 $931,472 
Net operating income (“NOI”) is 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).non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. pays cumulative cash dividendsand net income attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income attributable to noncontrolling interests, interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain on non-real estate investment, gains (losses) from investments in securities, other income - assignment fee, interest and other income (loss), gains on sales of real estate, income (loss) from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts 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 results of operations and financial condition because, when compared across periods, it reflects the Series B Preferred Stock at a rate of 5.25% per annum of the $2,500.00 liquidation preference per share.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. and net income attributable to Boston Properties Limited Partnership. 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., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by the Company may not redeembe comparable to NOI reported by other REITs or real estate companies that define NOI differently.
The Company’s internal reporting utilizes its share of NOI, which includes its share of NOI from consolidated and unconsolidated joint ventures, which is a non-GAAP financial measure that is calculated as the Series B Preferred Stock priorconsolidated
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amount, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s economic percentage ownership interest and, in some cases, after priority allocations), less the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ economic percentage ownership interests and, in some cases, after priority allocations, income allocation to March 27, 2018, except in certain circumstances relatingprivate REIT shareholders and their share of fees due to the preservationCompany). The Company’s share of Boston Properties, Inc.’s REIT status. On or after March 27, 2018, Boston Properties, Inc., atNOI from unconsolidated joint ventures, as defined above, also does not include its option, may redeemshare of losses from early extinguishment of debt from unconsolidated joint ventures and unrealized gain on derivative instruments, both of which are included within Income (Loss) From Unconsolidated Joint Ventures in the Series B Preferred StockCompany’s Consolidated Statements of Operations.  Management utilizes its share of NOI in assessing its performance as the Company has several significant joint ventures and, in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a cash redemption pricesignificant percentage interest. As a result, the presentations of $2,500.00 perthe Company’s share ($25.00 per depositary share), plus all accruedof NOI should not be considered a substitute for, and unpaid dividends. The Series B Preferred Stockshould only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP.
Asset information by segment is not redeemable byreported because the holders, has no maturity dateCompany does not use this measure to assess performance. Therefore, depreciation and amortization expense is not convertible into anyallocated among segments. Interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, unrealized gain on non-real estate investment, gains (losses) from investments in securities, other securityincome - assignment fee, interest and other income (loss), gains on sales of Boston Properties, Inc. orreal estate, income (loss) from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue are not included in NOI and are provided as reconciling items to the Company’s reconciliations of its affiliates.share of NOI to net income.
The following tableCompany’s segments are based on the Company’s method of internal reporting which classifies its operations by geographic area. The Company’s segments by geographic area are Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. The Company also presents Boston Properties Inc.’s dividendsinformation for each segment by property type, including Premier Workplace (which includes office, life sciences and retail), Residential and Hotel.

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Information by geographic area and property type (dollars in thousands):
For the three months ended June 30, 2023:
BostonLos AngelesNew YorkSan FranciscoSeattleWashington, DCTotal
Rental Revenue: (1)
Premier Workplace$269,464 $— $262,979 $136,241 $17,060 $90,720 $776,464 
Residential4,124 — — 3,864 — 4,265 12,253 
Hotel13,969 — — — — — 13,969 
Total287,557 — 262,979 140,105 17,060 94,985 802,686 
% of Grand Totals35.83 %— %32.76 %17.45 %2.13 %11.83 %100.00 %
Rental Expenses:
Premier Workplace95,597 — 102,948 48,197 3,082 35,429 285,253 
Residential1,601 — — 2,215 — 1,967 5,783 
Hotel8,161 — — — — — 8,161 
Total105,359 — 102,948 50,412 3,082 37,396 299,197 
% of Grand Totals35.21 %— %34.41 %16.85 %1.03 %12.50 %100.00 %
Net operating income$182,198 $— $160,031 $89,693 $13,978 $57,589 $503,489 
% of Grand Totals36.19 %— %31.78 %17.81 %2.78 %11.44 %100.00 %
Less: Net operating income attributable to noncontrolling interests in property partnerships(11,343)— (36,615)— — — (47,958)
Add: Company’s share of net operating income from unconsolidated joint ventures8,771 12,768 3,363 3,332 1,878 12,142 42,254 
Company’s share of net operating income$179,626 $12,768 $126,779 $93,025 $15,856 $69,731 $497,785 
% of Grand Totals36.08 %2.56 %25.47 %18.69 %3.19 %14.01 %100.00 %
  _______________
(1)Rental Revenue is equal to Total Revenue per share on its outstanding Series B Preferred Stock paid during 2017:the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.
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Record DatePayment DateDividend (Per Share)
November 3, 2017November 15, 2017
$32.8125
August 4, 2017August 15, 2017
$32.8125
May 5, 2017May 15, 2017
$32.8125
February 3, 2017February 15, 2017
$32.8125
For the three months ended June 30, 2022:

BostonLos AngelesNew YorkSan FranciscoSeattleWashington, DCTotal
Rental Revenue: (1)
Premier Workplace$244,936 $— $254,264 $133,707 $6,472 $95,954 $735,333 
Residential3,748 — — 5,850 — 7,314 16,912 
Hotel12,089 — — — — — 12,089 
Total260,773 — 254,264 139,557 6,472 103,268 764,334 
% of Grand Totals34.11 %— %33.27 %18.26 %0.85 %13.51 %100.00 %
Rental Expenses:
Premier Workplace87,027 — 95,363 45,201 1,680 34,759 264,030 
Residential1,492 — — 5,145 — 3,181 9,818 
Hotel6,444 — — — — — 6,444 
Total94,963 — 95,363 50,346 1,680 37,940 280,292 
% of Grand Totals33.88 %— %34.02 %17.96 %0.60 %13.54 %100.00 %
Net operating income$165,810 $— $158,901 $89,211 $4,792 $65,328 $484,042 
% of Grand Totals34.25 %— %32.83 %18.43 %0.99 %13.50 %100.00 %
Less: Net operating income attributable to noncontrolling interests in property partnerships(11,377)— (36,485)— — — (47,862)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures8,134 13,247 18 3,183 1,944 9,184 35,710 
Company’s share of net operating income$162,567 $13,247 $122,434 $92,394 $6,736 $74,512 $471,890 
% of Grand Totals34.44 %2.81 %25.95 %19.58 %1.43 %15.79 %100.00 %
  _______________
10.(1)Rental Revenue is equal to Total Revenue per the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.
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Information by geographic area and property type (dollars in thousands):
For the six months ended June 30, 2023:
BostonLos AngelesNew YorkSan FranciscoSeattleWashington, DCTotal
Rental Revenue: (1)
Premier Workplace$539,415 $— $521,171 $272,334 $31,318 $181,384 $1,545,622 
Residential8,173 — — 7,506 — 8,300 23,979 
Hotel22,070 — — — — — 22,070 
Total569,658 — 521,171 279,840 31,318 189,684 1,591,671 
% of Grand Totals35.79 %— %32.74 %17.58 %1.97 %11.92 %100.00 %
Rental Expenses:
Premier Workplace195,646 — 205,433 94,282 6,042 69,695 571,098 
Residential3,153 — — 4,388 — 3,705 11,246 
Hotel14,832 — — — — — 14,832 
Total213,631 — 205,433 98,670 6,042 73,400 597,176 
% of Grand Totals35.78 %— %34.40 %16.52 %1.01 %12.29 %100.00 %
Net operating income$356,027 $— $315,738 $181,170 $25,276 $116,284 $994,495 
% of Grand Totals35.80 %— %31.75 %18.22 %2.54 %11.69 %100.00 %
Less: Net operating income attributable to noncontrolling interests in property partnerships(22,160)— (72,895)— — — (95,055)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures17,348 25,993 7,013 6,796 3,724 22,136 83,010 
Company’s share of net operating income$351,215 $25,993 $249,856 $187,966 $29,000 $138,420 $982,450 
% of Grand Totals35.75 %2.65 %25.43 %19.13 %2.95 %14.09 %100.00 %
  _______________
(1)Rental Revenue is equal to Total Revenue per the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.

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For the six months ended June 30, 2022:
BostonLos AngelesNew YorkSan FranciscoSeattleWashington, DCTotal
Rental Revenue: (1)
Premier Workplace$487,014 $— $511,134 $266,082 $6,472 $191,519 $1,462,221 
Residential7,344 — — 8,241 — 14,293 29,878 
Hotel16,646 — — — — — 16,646 
Total511,004 — 511,134 274,323 6,472 205,812 1,508,745 
% of Grand Totals33.87 %— %33.88 %18.18 %0.43 %13.64 %100.00 %
Rental Expenses:
Premier Workplace177,555 — 191,703 88,609 1,680 68,306 527,853 
Residential2,929 — — 7,013 — 6,308 16,250 
Hotel11,284 — — — — — 11,284 
Total191,768 — 191,703 95,622 1,680 — 74,614 555,387 
% of Grand Totals34.53 %— %34.52 %17.22 %0.30 %13.43 %100.00 %
Net operating income$319,236 $— $319,431 $178,701 $4,792 $131,198 $953,358 
% of Grand Totals33.49 %— %33.51 %18.74 %0.50 %13.76 %100.00 %
Less: Net operating income attributable to noncontrolling interests in property partnerships(23,112)— (71,805)— — — (94,917)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures17,827 27,004 (138)6,364 3,899 18,075 73,031 
Company’s share of net operating income$313,951 $27,004 $247,488 $185,065 $8,691 $149,273 $931,472 
% of Grand Totals33.70 %2.90 %26.57 %19.87 %0.93 %16.03 %100.00 %
  _______________
(1)Rental Revenue is equal to Total Revenue per the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.
12. Earnings Per Share / Common Unit
Boston Properties, Inc.BXP
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,BXP and BPLP’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic EPS of the CompanyBXP using the two-class method. Participating securities are included in the computation of diluted EPS of the CompanyBXP using the if-converted method if the impact is dilutive. Because the 2012 OPP Units and 2013 MYLTIP Units and 2014- 2020 MYLTIP Units required, and the 2015-20172021 - 2023 MYLTIP Units require, the CompanyBXP to outperform absolute andand/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, the CompanyBXP 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 PartnershipBPLP that are exchangeable for the Boston Properties, Inc.’sBXP’s Common Stock, and the related impact on earnings, are considered when calculating diluted EPS.




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Three months ended June 30, 2023
Income
(Numerator)		Shares
(Denominator)		Per Share
Amount
(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc.$104,299 156,826 $0.67 
Effect of Dilutive Securities:
Stock Based Compensation— 392 (0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc.$104,299 157,218 $0.66 
Three months ended June 30, 2022
Income
(Numerator)		Shares
(Denominator)		Per Share
Amount
(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc.$222,989 156,720 $1.42 
Allocation of undistributed earnings to participating securities(267)— — 
Net income attributable to Boston Properties, Inc.222,722 156,720 1.42 
Effect of Dilutive Securities:
Stock Based Compensation— 472 — 
Diluted Earnings:
Net income attributable to Boston Properties, Inc.$222,722 157,192 $1.42 
 Six months ended June 30, 2023
 Income
(Numerator)		Shares
(Denominator)		Per Share
Amount
 (in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc.$182,215 156,815 $1.16 
Effect of Dilutive Securities:
Stock Based Compensation— 316 — 
Diluted Earnings:
Net income attributable to Boston Properties, Inc.$182,215 157,131 $1.16 
39
 Three months ended September 30, 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$117,337
 154,355
 $0.76
Allocation of undistributed earnings to participating securities(7) —
 —
Net income attributable to Boston Properties, Inc. common shareholders$117,330
 154,355
 $0.76
Effect of Dilutive Securities:     
Stock Based Compensation—
 128
 —
Diluted Earnings:     
Net income attributable to Boston Properties, Inc. common shareholders$117,330
 154,483
 $0.76
      
 Three months ended September 30, 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$76,753
 153,754
 $0.50
Effect of Dilutive Securities:     
Stock Based Compensation—
 382
 —
Diluted Earnings:     
Net income attributable to Boston Properties, Inc. common shareholders$76,753
 154,136
 $0.50
      
 Nine months ended September 30, 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$348,086
 154,132
 $2.26
Allocation of undistributed earnings to participating securities(15) —
 —
Net income attributable to Boston Properties, Inc. common shareholders$348,071
 154,132
 $2.26
Effect of Dilutive Securities:     
Stock Based Compensation—
 212
 —
Diluted Earnings:     
Net income attributable to Boston Properties, Inc. common shareholders$348,071
 154,344
 $2.26
      

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 Six months ended June 30, 2022
 Income
(Numerator)		Shares
(Denominator)		Per Share
Amount
 (in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc.$366,044 156,685 $2.33 
Allocation of undistributed earnings to participating securities(236)— — 
Net income attributable to Boston Properties, Inc.365,808 156,685 2.33 
Effect of Dilutive Securities:
Stock Based Compensation— 413 — 
Diluted Earnings:
Net income attributable to Boston Properties, Inc.$365,808 157,098 $2.33 
 Nine months ended September 30, 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$355,114
 153,681
 $2.31
Allocation of undistributed earnings to participating securities(189) —
 —
Net income attributable to Boston Properties, Inc. common shareholders$354,925
 153,681
 $2.31
Effect of Dilutive Securities:     
Stock Based Compensation—
 290
 —
Diluted Earnings:     
Net income attributable to Boston Properties, Inc. common shareholders$354,925
 153,971
 $2.31
Boston Properties Limited PartnershipBPLP
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.BXP and Boston Properties Limited Partnership’sBPLP’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 and 2013 MYLTIP Units and 2014- 2020 MYLTIP Units required, and the 2015-20172021 - 2023 MYLTIP Units require, Boston Properties, Inc.BXP to outperform absolute andand/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties Limited PartnershipBPLP 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 17,336,00017,922,000 and 17,625,00017,672,000 redeemable common units for the three months ended SeptemberJune 30, 20172023 and 2016,2022, respectively, and 17,517,00017,878,000 and 17,672,00017,638,000 redeemable common units for the ninesix months ended SeptemberJune 30, 20172023 and 2016,2022, respectively.

Three months ended September 30, 2017 Three months ended June 30, 2023
Income
(Numerator)
 
Units
(Denominator)
 
Per Unit
Amount
 Income
(Numerator)		Units
(Denominator)		Per Unit
Amount
(in thousands, except for per unit amounts) (in thousands, except for per unit amounts)
Basic Earnings:     Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders$132,693
 171,691
 $0.77
Allocation of undistributed earnings to participating securities(8) —
 —
Net income attributable to Boston Properties Limited Partnership common unitholders$132,685
 171,691
 $0.77
Net income attributable to Boston Properties Limited PartnershipNet income attributable to Boston Properties Limited Partnership$118,098 174,748 $0.68 
Effect of Dilutive Securities:     Effect of Dilutive Securities:
Stock Based Compensation—
 128
 —
Stock Based Compensation— 392 (0.01)
Diluted Earnings:     Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders$132,685
 171,819
 $0.77
Net income attributable to Boston Properties Limited PartnershipNet income attributable to Boston Properties Limited Partnership$118,098 175,140 $0.67 
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Three months ended June 30, 2022
Income
(Numerator)		Units
(Denominator)		Per Unit
Amount
(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership$253,788 174,392 $1.45 
Allocation of undistributed earnings to participating securities(297)— — 
Net income attributable to Boston Properties Limited Partnership253,491 174,392 1.45 
Effect of Dilutive Securities:
Stock Based Compensation— 472 — 
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership$253,491 174,864 $1.45 
Six months ended June 30, 2023
Income
(Numerator)		Units
(Denominator)		Per Unit
Amount
(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership$206,928 174,693 $1.18 
Effect of Dilutive Securities:
Stock Based Compensation— 316 — 
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership$206,928 175,009 $1.18 
 Six months ended June 30, 2022
 Income
(Numerator)		Units
(Denominator)		Per Unit
Amount
 (in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership$415,617 174,323 $2.38 
Allocation of undistributed earnings to participating securities(263)— — 
Net income attributable to Boston Properties Limited Partnership415,354 174,323 2.38 
Effect of Dilutive Securities:
Stock Based Compensation— 413 — 
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership$415,354 174,736 $2.38 
 Three months ended September 30, 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$91,306
 171,379
 $0.53
Effect of Dilutive Securities:     
Stock Based Compensation—
 382
 —
Diluted Earnings:     
Net income attributable to Boston Properties Limited Partnership common unitholders$91,306
 171,761
 $0.53
      
 Nine months ended September 30, 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$395,199
 171,649
 $2.30
Allocation of undistributed earnings to participating securities(17) —
 —
Net income attributable to Boston Properties Limited Partnership common unitholders$395,182
 171,649
 $2.30
Effect of Dilutive Securities:     
Stock Based Compensation—
 212
 —
Diluted Earnings:     
Net income attributable to Boston Properties Limited Partnership common unitholders$395,182
 171,861
 $2.30
      
 Nine months ended September 30, 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$408,540
 171,353
 $2.38
Allocation of undistributed earnings to participating securities(210) —
 —
Net income attributable to Boston Properties Limited Partnership common unitholders$408,330
 171,353
 $2.38
Effect of Dilutive Securities:     
Stock Based Compensation—
 290
 —
Diluted Earnings:     
Net income attributable to Boston Properties Limited Partnership common unitholders$408,330
 171,643
 $2.38
      
11.13. Stock Option and Incentive Plan
On January 25, 2017, Boston Properties, Inc.’s2023, BXP’s Compensation Committee approved the 2017grant of 2023 MYLTIP awards under the Boston Properties, Inc.’s 2012 2021 Stock Option and Incentive Plan (the “2012“2021 Plan”) to certain executive officers and employees of Boston Properties, Inc.BXP, effective February 7, 2023. The 20172023 MYLTIP awards consist of two, equally weighted (50% each) components that utilize Boston Properties, Inc.’s total stockholder return (“TSR”)BXP’s TSR over a three-year measurement period on an annualized, compounded basis, as the performance metric. Earned awards will be based on Boston

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Properties, Inc.’s TSR relative to (i)Total earned awards under the Cohen & Steers Realty Majors Portfolio Index (50% weight)2023 MYLTIP, if any, will equal the sum of the number of LTIP Units earned under the first and (ii) the NAREIT Office Index adjusted to include Vornado Realty Trust (50% weight). Earned awardssecond components and will range from zero to a maximum of 322,053 LTIP Units with a target 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)161,026 LTIP Units 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%zero 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.
maximum. Earned awards (if any) will vest 50%100% on February 6, 2020 and 50% on February 6, 2021, based on continued employment. Vesting will2026, but, in general, may not be accelerated in the event of a change in control, termination of employment by Boston Properties, Inc. without cause,converted, redeemed, sold or termination of employment by the award recipientotherwise transferred 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.one additional year thereafter. The 20172023 MYLTIP awards are in the form of LTIP Units issued on the grant date, which (i)and they are subject to forfeiture to the extent awards are not earned and (ii) priorearned. Prior to the performance measurement date holders of the 2023 MYLTIP Units are only entitled to one-tenth (10%) of the regular quarterly distributions payable on common partnership unitsunits. Following the completion of the three-year performance period, the Company will also make a “catch-up” cash payment on the 2023 MYLTIP Units that are ultimately earned in an amount equal to the regular and no special distributions.
distributions, if any, declared during the performance period on BXP’s Common Stock, less the distributions actually paid to holders of 2023 MYLTIP Units during the performance period on all of the awarded 2023 MYLTIP Units. Under ASC 718 “Compensation - Stock Compensation,” the 20172023 MYLTIP awards have an aggregate value of approximately $17.7$13.1 million, which amount will generally be amortized into earnings over the four-year plan period under the graded vesting method.
On February 3, 2017,2023, the measurement period for the Company’s 20142020 MYLTIP awards ended and, based on Boston Properties, Inc.’sBXP’s relative TSR performance, the final awards werepayout was determined to be 27.7%50% of target, or an aggregate of approximately $3.5$3.8 million(after (after giving effect to voluntary employee separations and the unallocated reserve)separations). As a result, an aggregate of 447,386 2014152,460 2020 MYLTIP Units that had been previously granted were automatically forfeited.
During the ninesix months ended SeptemberJune 30, 2017, Boston Properties, Inc.2023, BXP issued 37,41473,414 shares of restricted common stock and Boston Properties Limited PartnershipBPLP issued 111,488427,176 LTIP Units and 400,000 2017322,053 2023 MYLTIP Units to employees and non-employee directors under the 20122021 Plan. Employees and non-employee directors paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and 20172023 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. GrantsSheets of BXP and BPLP. A substantial majority of the grants of restricted common stock and LTIP Units to employees vest in four equal annual installments. Restricted common 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.’sBXP’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 common stock granted during the ninesix months ended SeptemberJune 30, 20172023 were valued at approximately $4.9 million ($130.32 per share weighted-average).$5.4 million. The LTIP Units granted were valued at approximately $13.3$29.2 million (approximately $119.52 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%. AsBecause the 2012 OPP Units and 2013 MYLTIP Units, 2014 MYLTIP Units, 2015 MYLTIP Units, 2016 MYLTIP Units and 2017- 2023 MYLTIP Units are subject to both a service condition and a market condition, the Company recognizes the related 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).compensation. 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 $7.5$14.9 million and $7.1$14.6 million for the three months ended SeptemberJune 30, 20172023 and 2016,2022, respectively, and $25.6$40.9 million and $23.6$35.5 million for the ninesix months ended SeptemberJune 30, 20172023 and 2016,2022, respectively. At SeptemberJune 30, 2017,2023, there was (1) an aggregate of approximately $22.8$29.2 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units 2013 MYLTIP Units and 20142020 MYLTIP Units and (2) an aggregate of approximately $24.7$0.8 million of unrecognized compensation expense related to unvested 2015 MYLTIP Units, 2016 MYLTIP Units and 20172021 - 2023 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.52.7 years.
12. Segment Information14. Subsequent Events
The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to Net Operating IncomeOn July 20, 2023, the Company completed and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Incomefully placed in-service 140 Kendrick Street - Building A, a premier workplace redevelopment project with approximately 104,000 net rentable square feet located in Needham, Massachusetts.
On July 28, 2023, the Company entered into a joint venture agreement with an institutional investor for the threefuture development of 343 Madison Avenue located on Madison Avenue between 44th and nine months ended September 30, 201745th Streets in New York City, New York adjacent to Grand Central Station. The Company owns a 55% interest in the venture and 2016.

its partner owns a 45% interest, and the Company will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island
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Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture executed a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the direct access to Grand Central Madison as Phase 1 of the development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the cost of the construction of access to Grand Central Station. There can be no assurance that Phase 1 will be completed on the terms currently contemplated or that Phase 2 of the development project will commence on the terms currently contemplated or at all.
On July 28, 2023, a joint venture in which the Company has a 50% interest modified and exercised an option to extend by one year the maturity date of its loan collateralized by 100 Causeway Street. At the time of the modification and extension, the loan had an outstanding balance totaling approximately $340.6 million, bore interest at Term SOFR plus 1.60% per annum, and was scheduled to mature on September 5, 2023. The modified and extended loan has an outstanding balance of $336.6 million, which included an approximately $4.0 million principal repayment, bears interest at Term SOFR plus 1.48% per annum, and matures on September 5, 2024, with an additional one-year extension option, subject to certain conditions. 100 Causeway Street is an approximately 634,000 square foot premier workplace located in Boston, Properties, Inc.Massachusetts and is approximately 95% leased.
Effective July 28, 2023, BXP’s independent directors appointed Joel I. Klein to serve as the lead independent director, replacing Kelly A. Ayotte. Ms. Ayotte stepped down as the lead independent director due to the additional time commitment and responsibilities of that role, and the independent directors determined that it is in the best interests of BXP and its stockholders that Mr. Klein once again assume that role. Ms. Ayotte served as BXP’s lead independent director since May 2022 and will remain on BXP’s Board of Directors. Mr. Klein previously served as BXP’s lead independent director from May 2016 to May 2019 and as its independent Chairman from May 2019 to May 2022.
43
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
 (in thousands)
Net income attributable to Boston Properties, Inc. common shareholders$117,337
 $76,753
 $348,086
 $355,114
Add:       
Preferred dividends2,625
 2,589
 7,875
 7,796
Noncontrolling interest—common units of Boston Properties Limited Partnership13,402
 9,387
 40,350
 42,120
Noncontrolling interests in property partnerships14,340
 (17,225) 33,967
 53
Interest expense92,032
 104,641
 282,709
 314,953
Losses from interest rate contracts—
 140
 —
 140
Depreciation and amortization expense152,164
 203,748
 463,288
 516,371
Impairment loss—
 1,783
 —
 1,783
Transaction costs239
 249
 572
 1,187
General and administrative expense25,792
 25,165
 84,319
 79,936
Less:       
Gains on sales of real estate2,891
 12,983
 6,791
 80,606
Gains (losses) from early extinguishments of debt—
 (371) 14,354
 (371)
Gains from investments in securities944
 976
 2,716
 1,713
Interest and other income1,329
 3,628
 3,447
 6,657
Income from unconsolidated joint ventures843
 1,464
 7,035
 5,489
Development and management services revenue10,811
 6,364
 24,648
 18,586
Net Operating Income$401,113
 $382,186
 $1,202,175
 $1,206,773

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Boston Properties Limited Partnership
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
 (in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders$132,693
 $91,306
 $395,199
 $408,540
Add:       
Preferred distributions2,625
 2,589
 7,875
 7,796
Noncontrolling interests in property partnerships14,340
 (17,225) 33,967
 53
Interest expense92,032
 104,641
 282,709
 314,953
Losses from interest rate contracts—
 140
 —
 140
Depreciation and amortization expense150,210
 198,582
 457,102
 507,234
Impairment loss—
 1,783
 —
 1,783
Transaction costs239
 249
 572
 1,187
General and administrative expense25,792
 25,165
 84,319
 79,936
Less:       
Gains on sales of real estate2,891
 12,983
 7,368
 82,775
Gains (losses) from early extinguishments of debt—
 (371) 14,354
 (371)
Gains from investments in securities944
 976
 2,716
 1,713
Interest and other income1,329
 3,628
 3,447
 6,657
Income from unconsolidated joint ventures843
 1,464
 7,035
 5,489
Development and management services revenue10,811
 6,364
 24,648
 18,586
Net Operating Income$401,113
 $382,186
 $1,202,175
 $1,206,773
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, losses from interest rate contracts, depreciation and amortization expense, impairment loss, transaction costs and general and administrative expense less (2) gains on sales of real estate, gains (losses) from early extinguishments of debt, 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 or 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, losses from interest rate contracts, gains (losses) from early extinguishments of debt, gains from investments in securities, interest and other income, income from unconsolidated joint ventures, depreciation and amortization expense, impairment loss, 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.

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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 September 30, 2017:
 Boston New York San Francisco Washington, DC Total
Rental Revenue:         
Office$196,687
 $242,071
 $87,162
 $103,622
 $629,542
Residential1,228
 —
 —
 3,067
 4,295
Hotel13,064
 —
 —
 —
 13,064
Total210,979
 242,071
 87,162
 106,689
 646,901
% of Grand Totals32.61% 37.43% 13.47% 16.49% 100.00%
Rental Expenses:         
Office76,086
 95,775
 26,792
 37,111
 235,764
Residential512
 —
 —
 1,065
 1,577
Hotel8,447
 —
 —
 —
 8,447
Total85,045
 95,775
 26,792
 38,176
 245,788
% of Grand Totals34.60% 38.97% 10.90% 15.53% 100.00%
Net operating income$125,934
 $146,296
 $60,370
 $68,513
 $401,113
% of Grand Totals31.40% 36.47% 15.05% 17.08% 100.00%
For the three months ended September 30, 2016:
 Boston New York San Francisco Washington, DC Total
Rental Revenue:         
Office$183,975
 $237,262
 $80,235
 $100,666
 $602,138
Residential1,227
 —
 —
 3,145
 4,372
Hotel12,354
 —
 —
 —
 12,354
Total197,556
 237,262
 80,235
 103,811
 618,864
% of Grand Totals31.92% 38.34% 12.96% 16.78% 100.00%
Rental Expenses:         
Office71,254
 95,073
 26,037
 33,973
 226,337
Residential1,141
 —
 —
 1,082
 2,223
Hotel8,118
 —
 —
 —
 8,118
Total80,513
 95,073
 26,037
 35,055
 236,678
% of Grand Totals34.02% 40.17% 11.00% 14.81% 100.00%
Net operating income$117,043
 $142,189
 $54,198
 $68,756
 $382,186
% of Grand Totals30.62% 37.21% 14.18% 17.99% 100.00%


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For the nine months ended September 30, 2017:
 Boston New York San Francisco Washington, DC Total
Rental Revenue:         
Office$573,883
 $735,485
 $257,286
 $309,225
 $1,875,879
Residential3,520
 —
 —
 8,941
 12,461
Hotel33,859
 —
 —
 —
 33,859
Total611,262
 735,485
 257,286
 318,166
 1,922,199
% of Grand Totals31.80% 38.27% 13.38% 16.55% 100.00%
Rental Expenses:         
Office225,502
 280,569
 77,204
 108,044
 691,319
Residential1,552
 —
 —
 3,211
 4,763
Hotel23,942
 —
 —
 —
 23,942
Total250,996
 280,569
 77,204
 111,255
 720,024
% of Grand Totals34.86% 38.97% 10.72% 15.45% 100.00%
Net operating income$360,266
 $454,916
 $180,082
 $206,911
 $1,202,175
% of Grand Totals29.97% 37.84% 14.98% 17.21% 100.00%
For the nine months ended September 30, 2016:
 Boston New York San Francisco Washington, DC Total
Rental Revenue:         
Office$540,850
 $773,077
 $235,076
 $300,742
 $1,849,745
Residential3,578
 —
 —
 8,931
 12,509
Hotel33,919
 —
 —
 —
 33,919
Total578,347
 773,077
 235,076
 309,673
 1,896,173
% of Grand Totals30.50% 40.77% 12.40% 16.33% 100.00%
Rental Expenses:         
Office210,695
 272,620
 75,412
 101,514
 660,241
Residential2,174
 —
 —
 3,255
 5,429
Hotel23,730
 —
 —
 —
 23,730
Total236,599
 272,620
 75,412
 104,769
 689,400
% of Grand Totals34.32% 39.54% 10.94% 15.20% 100.00%
Net operating income$341,748
 $500,457
 $159,664
 $204,904
 $1,206,773
% of Grand Totals28.32% 41.47% 13.23% 16.98% 100.00%


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ITEM 2—Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations.
The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.
TheseThis Quarterly ReportsReport on Form 10-Q, including the documents incorporated by reference, containscontain forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with those safe harbor provisions. Suchprovisions, in each case, to the extent applicable. The forward-looking statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution investors that any such forward-looking statements are based on current beliefs, expectations of future events and on assumptions made by, and information currently available to, our management. When used, the words “anticipate,” “believe,” “budget,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “should,” “will” and similar expressions whichthat do not relate solely to historical matters are intended to identify forward-looking statements. SuchThese statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control. ShouldIf one or more of these known or unknown risks or uncertainties materialize, or shouldif underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimatedexpressed or projectedimplied by the forward-looking statements. We caution you that, while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance or occurrences and are impacted by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.
The most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include the risks and uncertainties related to the impact of changes in general economic and capital market conditions, including continued inflation, increasing interest rates, supply chain disruptions, labor market disruptions, dislocation and volatility in capital markets, and potential longer-term changes in consumer and client behavior resulting from the severity and duration of any downturn in the U.S. or global economy, sustained changes in client preferences and space utilization, as well as the other important factors below and the risks described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 including those described under the caption “Risk Factors,” (ii) our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, (iii) our subsequent filings under the Exchange Act and (iv) the risk factors set forth in this Form 10-Q in Part II, Item 1A, if any.
Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:
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 politicalgeopolitical conditions, andhealth crises, dislocations in the credit markets and potential financial contagion from recent or future failures of banking institutions could adversely affect economic conditions and/or restrict our access to cost-effective capital, which could have a material adverse effect on 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, tenantchanges in client preferences and space utilization, dependence on tenants’clients’ financial condition, and competition from other developers, owners and operators of real estate);
•the impact of geopolitical conflicts, including the ongoing war in Ukraine;
•the immediate and long-term impact of the outbreak of a highly infectious or contagious disease, such as COVID-19, on our and our clients’ financial condition, results of operations and cash flows (including the impact of actions taken to contain the outbreak or mitigate its impact, the direct and indirect economic effects of the outbreak and containment measures on our clients, and the ability of our clients to successfully operate their businesses);
•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;
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•risks and uncertainties affecting property development and construction (including, without limitation, continued inflation, supply chain disruptions, labor shortages, construction delays, increased construction costs, cost overruns, inability to obtain necessary permits, tenantclient accounting considerations that may result in negotiated lease provisions that limit a tenant’sclient’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 derivatives 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 climate change and severe weather events, as well as the regulatory efforts intended to reduce the effects of climate change;
41


•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; and
•risks associated with our dependence on key personnel whose continued service is not guaranteed; andguaranteed.
the other risk factors identified in our most recently filed Annual Reports on Form 10-K, including those described under the caption “Risk Factors.”
The risks set forth above are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Investors should also refer to our most recent Annual ReportsReport on Form 10-K and our Quarterly Reports on Form 10-Q for future periods and Current Reports on Form 8-K as we file them with the SEC, and to other materials we may furnish to the public from time to time through FormsCurrent Reports on Form 8-K or otherwise, for a discussion of risks and uncertainties that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. We expressly disclaim any responsibility to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or otherwise, and you should not rely upon these forward-looking statements after the date of this report.
Overview
BXP is a fully integrated, self-administered and self-managed REIT and one of the largest owners, managers and developerspublicly traded office real estate investment trusts (REITs) (based on total market capitalization as of primarily Class A office propertiesJune 30, 2023) in the United States.U.S. that develops, owns, and manages primarily premier workplaces. Our properties are concentrated in six dynamic gateway markets in the U.S. - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BPLP is the entity through which BXP conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. Our properties are concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC. We generate revenue and cash primarily by leasing Class A office spacepremier workplaces to our tenants.clients. When making leasing decisions, we consider, among other things, the creditworthiness of the tenant,client and the industry in which it conducts business, the length of the lease, the rental rate to be paid at inception and throughout the lease term, the amount of any security deposit or letter of credit posted by the client, the costs of tenant improvements, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, current and anticipated vacancy in our properties and the
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market overall (including sublease space), current and expected future demand for the space, the impact of anyother clients’ expansion rights and general economic factors.
Our core strategy has always been to develop, acquire and operate propertiesmanage premier workplaces in supply-constrainedgateway markets with high barriers-to-entry and attractive demand drivers, and to focus on executing long-term leases with financially strong tenants. Historically, this combination has tended to reduceclients. Our client base is diverse across market sectors. As of June 30, 2023, the weighted-average remaining lease term for our exposure in down cycles and enhance revenuesin-place leases based on square feet, including those signed by our unconsolidated joint ventures but excluding residential units, was approximately 7.6 years. The weighted-average remaining lease term for our 20 largest clients, based on leased square footage, was approximately 10.4 years as market conditions improve. of June 30, 2023.
To be successful in any leasing environment, we believe we must consider all aspects of the tenant-landlordclient-landlord relationship.In this regard, we believe that our competitive leasing advantage is based on the following attributes:
•our understanding of tenants’our client’s short- and long-term space utilization and amenity needs in the local markets, markets;
•our relationships with local brokers, track record of developing and operating premier workplaces in a sustainable and responsible manner;
•our reputation as a premierhigh-quality developer, owner and operatormanager of Class A office properties, premier workplaces in our markets;
•our financial strength and our ability to maintain high building standards provide usstandards; and
•our relationships with local brokers.
Outlook
The U.S.’s economic growth is challenging to forecast as there are currently two competing and viable theories predicting very different trajectories. The first theory is that inflation is increasingly under control due to pandemic economic anomalies wearing off and the Federal Reserve’s aggressive interest rate hikes. Notwithstanding tighter fiscal and monetary conditions, the economy has remained healthy with a competitive advantage.
Outlook
Economicstrong labor market and continued GDP growth driven by consumption. The GDP, adjusted for inflation, rose 2.4% in the United States continues to be tepid yet consistent resulting insecond quarter of 2023. Consumer spending fueled the solid quarter, accounting for 68% of all economic activity during the quarter. This first theory envisions a slight decrease in‘soft landing’ for inflation with no recession.
The second theory is that inflation is already well under control and the unemployment rate in October 2017 to 4.1%. The Federal Reserve has increasedbeen overly aggressive in the magnitude and timing of its interest rates three times since December 2016rate increases, which will create dislocation in sectors of the economy, as has already started to occur with indicationsregional banks and commercial real estate. This scenario forecasts an upcoming recession, possibly as soon as later this year. While we would prefer the outcome of the first theory, BXP is prepared for the second theory by increasing liquidity, pursuing additional capital raising opportunities, and being measured in discretionary capital expenditures and new investment activity.
Whether or not the U.S. is in an economic recession, companies are experiencing a recession in earnings with S&P 500 companies reporting a 7.3% year-over-year drop in earnings per share in the second quarter of 2023. With lower earnings, companies are still focused on cost reductions, including expenditures on space. Some companies are taking more increasestime to make leasing decisions, leasing less space, offering space they have for sublease or taking a combination of one or more of the foregoing actions. This has contributed to our slower leasing volume in the first half of 2023 compared to last year.
The return-to-office trend continues to improve in the markets in which we operate. Companies in a variety of industries, including major technology companies, are increasing the days that workers on hybrid schedules are required to come yet interest rates remain relatively lowinto the office and reinforcing the importance of in-person interactions as a key contributor to overall success. Companies are emboldened by historical standards. Given the pace of GDP growth, low inflationweaker economy to enforce firmer in-person work policies. Several large companies have notified their employees that their attendance in office will be included in performance reviews and that employees who already have received approval for remote work may now have that status reevaluated. We believe the sentiment surrounding return-to-office and the uncertainty associated with Federal Reserve fiscal policy and tax reform, we do not expecteffects on office buildings is worse than the reality of what BXP is experiencing. Throughout our portfolio, there has been a sharpslow but steady increase in long-termthe number of unique occupants that are in our offices each month.
A primary tool used by companies to increase attendance is to provide modern workspaces with amenities in an easily commutable location, the definition of a premier workplace. As a result, the premier workplace segment, which we operate in, continues to outperform the broader office market, in both vacancy and net absorption, as
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companies see an opportunity to upgrade their workplaces as a method of attracting their workforces back to the office and recruiting new employees.
The evolving operating environment impacts various aspects of our operating activities as:
•labor market conditions shift, resulting in increasing employer demands for mandatory in-person workdays;
•volatility in the capital markets, on the heels of recent bank failures, have driven companies to be more reticent in capital outlays, including capital required for leasing new space;
•our capital costs have increased due to higher interest rates and expect reasonably healthy operatingcredit spreads, and financialprivate market conditionsdebt financing, both for construction and existing assets, is significantly more challenging to continue.arrange; and

•construction costs have increased and, although most of the cost for our active development pipeline is fixed, the cost of potential future construction activity continues to increase.
42In light of the foregoing, we believe we are positioning BXP for success, notwithstanding the uncertain trajectory of the U.S. and global economies, by managing our leverage while continuing to selectively invest (including through both acquisitions and developments) in premier workplace opportunities.We remain focused on the following strategies:

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•continuing to embrace our leadership position in the premier workplace segment and leveraging our strength in portfolio quality, client relationships, development skills, market penetration and sustainability to profitably build market share. Premier workplaces, the preferred choice for our current and prospective clients, are gaining market share compared to general office space and demonstrating the highest occupancy, net absorption levels and rental rates in the central business districts (“CBDs”) in markets where we operate;

In this economic climate, we continue to focus on:
ensuring tenant satisfaction;
•leasing available space in our in-service and development properties, as well as proactively focusing on sizable future lease expirations well in advance;expirations;
•completing the construction and leasing of our development properties;
•pursuing attractive asset class adjacencies where we have a track record of success, such as life sciences and redevelopment properties;residential development;
•continuing to raise the bar in the quality of our portfolio and completingactively recycling capital by selling assets, subject to market conditions, which have been, and may continue to be, negatively impacted by a slowdown in the redevelopmentcapital markets and repositioningthe limited availability of several key propertiesprivate market debt financing;
•actively managing our operations in a sustainable and responsible manner; and
•prioritizing risk management by actively managing liquidity, investing more extensively with joint venture partners to increase future revenuesmanage our debt levels, and asset values over the long-term, despite the adverse impact on near-term revenuebeing highly selective in new investment commitments.
The following is an overview of leasing and earnings;
maintaining discipline in our underwriting of investment opportunities by (1) seeking significant pre-leasing commitments before beginning new construction, and (2) targeting acquisition activity in non-stabilized assets near innovation centers where we see the best prospects for overall growth and our operational expertise can create value; and
managing our near-term debt maturities and maintaining our conservative balance sheet.
During the thirdsecond quarter of 2017,2023 and recent business highlights.
Leasing Activity and Occupancy
In the second quarter of 2023, we signed leases across our portfolio totalinga total of approximately 2.6 million square feet, which is higher than our trailing 10-year historical quarterly average of 1.4 million, and commenced revenue recognition on approximately 1.3 million938,000 square feet of leases in second-generation space. Of these second-generation leases,with a weighted-average lease term of approximately 1.0 million8.0 years. The leasing volume increased from approximately 660,000 square feet had been vacant for less than one year and,of leases signed in the aggregate, they had a slight increase in net rental obligationsfirst quarter of approximately 2%. The muted increase in net rents was primarily due to two lease renewals in our New York region and one lease renewal in our Washington, DC region. Across our portfolio we continue to experience increases in construction costs, which generally result in increased tenant allowances and costs to build out tenant spaces. However, this quarter’s statistics include several larger renewals with lower tenant allowance costs resulting in total transaction costs per square foot that do not reflect this trend. 2023.
The overall occupancy of our in-service premier workplace and retail properties decreased to 90.2% at September 30, 2017 from 90.8%was 88.3% at June 30, 2017 due mainly2023. We define occupancy as space with signed leases for which revenue recognition has commenced in accordance with GAAP. Including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP, our in-service premier workplace and retail properties were approximately 90.4% leased at June 30, 2023.
The macroeconomic environment has resulted in softening demand in all of our markets. While property tours continue and leases under negotiation move forward, there is less urgency from clients to expected lease expirations atmake new commitments. Potential clients touring space acknowledge that economic uncertainty is impacting space decisions. We have factored in the impacts of a slower economy, softer business performance, and reduced demand for space into our 399 Park Avenue property.leasing expectations for the remainder of 2023. We expect the bulk of our leasing in 2023 will continue to come from small- and medium-sized professional and financial services firms.
Our investment strategy remains mostly unchanged. Other than
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Investment Activity
We continually evaluate current and prospective markets for possible acquisitions of value-add“value-add” assets such as those requiringthat require lease-up or repositioning, like Colorado Centerand acquisitions that are otherwise consistent with our long-term strategy of owning, managing, developing, and improving premier workplaces in Santa Monica, California, we intend to continue to invest primarilyeach of our chosen markets. Additional new acquisition opportunities will likely increase in higher yielding new developments with significant pre-leasing commitments and redevelopment opportunities rather than lower yielding acquisitions of stabilized assets for which demand and pricing remain strong.
Our development activity remains vibrant. During the third quarter, we commenced development on two new build-to-suit office headquarters projects for Marriott International, Inc. and the Transportation Security Administration (TSA). We expect these office buildings to consist of an aggregate of approximately 1.4 million square feetthis environment, and we expectremain committed to developing and acquiring assets to enhance our share of the estimated development costslong-term growth and to total approximately $525 million. In addition, during the third quarter we completedmeet client demand solely focused on premier workplaces, life sciences, and fully placed in-service 888 Boylston Street, a Class A office and retail project with approximately 417,000 square feet located within our Prudential Center complex in Boston, Massachusetts. Including leases with future commencement dates, the project is 93% leased.residential development.
As of SeptemberJune 30, 2017,2023, our developmentdevelopment/redevelopment pipeline consistsconsisted of eleven development/redevelopment projects representing13 properties that, when completed, we expect will total approximately 5.73.1 million net rentable square feet. Our share of the estimated total budgeted cost for these projects is approximately $3.1$2.6 billion, of which approximately $1.4$1.6 billion remainedremains to be invested as of September 30, 2017. As of November 2, 2017, approximately 75% of theinvested. The commercial space in these development projectsthe pipeline, which excludes Reston Next Residential, is 54% pre-leased.
DuringIn June 2023, View Boston Observatory, the third quarter, we further enhanced our liquidity through two secured debt financings aggregating $754.6 million in gross commitments withhighly anticipated experiential observation deck encompassing the $550 million mortgage financing placed on Coloradotop three floors of 800 Boylston Street - The Prudential Center located in Santa Monica, California and a $204.6 million construction commitment collateralized by our Hub on Causeway development project located in Boston, Massachusetts. AsMassachusetts, opened. The approximately 63,000 square-foot experience provides a resultunique opportunity to enjoy 360-degree panoramic views of the Colorado Center financingcity, food and beverage at the Stratus cocktail bar and The Beacon bistro, and interactive state-of-the-art immersive exhibits that showcase Boston's many neighborhoods and cultural landmarks.
In the second quarter of 2023, we completed and fully placed in-service 2100 Pennsylvania Avenue in Washington, D.C. 2100 Pennsylvania Avenue is an approximately 476,000 square foot premier workplace and was approximately 61.8% occupied and approximately 90.5% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP) as of June 30, 2023.
On July 28, 2023, we entered into a joint venture agreement with an institutional investor for the future development of 343 Madison Avenue located on Madison Avenue between 44th and 45th Streets in New York City, New York adjacent to Grand Central Station. We own a 55% interest in the venture and our partner owns a 45% interest, and we will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture distributed $502.0 millionexecuted a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the partners,direct access to Grand Central Madison as Phase 1 of which our share was $251.0 million. We own a 50% interest in Colorado Centerthe development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the Hub on Causeway joint ventures.
Givencost of the relatively low interest rates currently availableconstruction of access to us in the debt markets, we may elect to supplement our liquidity position to provide additional capacity to fund our remaining capital requirements for existing development and redevelopment projects, refinance debt before maturity and pursue other attractive investment opportunities. DependingGrand Central Station. There can be no assurance that Phase 1 will be completed on the type and timing of financing, raising capital may result in us carrying additional cash and cash equivalents pending our useterms currently contemplated or that Phase 2 of the proceeds.development project will commence on the terms currently contemplated or at all.
The same factors that create challenges to acquiring assets present opportunities for us toAs we continue to focus on new investments to drive future growth, we regularly review our portfolio to identify properties as potential sales candidates because they maythat either no longer fit within our portfolio strategy or they could attract premium pricing in the current market. However, the asset sale market environment. We expectfor all real estate asset classes has slowed dramatically with the increase in interest rates and transaction volume for office assets continues to sell a modest number of non-core assetsbe minimal in 2017, subject to market conditions.

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the U.S.
A brief overview of each of our markets follows.
Boston
The greater Boston region continues to attract life science and established technology companies, as well as start-up technology and maker organizations. The Boston Central Business District (“CBD”) submarket continues to be driven by lease expirations from traditional financial and professional services tenants and a steady flowDuring the second quarter of new technology companies moving into the CBD. We made significant progress leasing the vacant space at our 200 Clarendon Street property by signing2023, we executed approximately 167,000320,000 square feet of leases duringand approximately 291,000 square feet of leases commenced in the third quarter,Boston region. Approximately 221,000 square feet of the leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 20% over the prior leases.
As of June 30, 2023, our Boston CBD in-service portfolio was approximately 95.1% occupied and approximately 96.9% leased (including vacant space for which we have signed a lease for an additional approximately 60,000 square feet during October 2017. Our most active leasing opportunity is at the first phase of our Hub on Causeway development project with negotiations ongoing for approximately 140,000 of the 175,000 square feet of office spaceleases that ishave not yet leased. We expect to complete the development of this phase of the projectcommenced in 2019.accordance with GAAP).
The Cambridge office market continues to generate strong rental rates. Our approximately 1.62.5 million square foot in-service officepremier workplace portfolio in Cambridge was approximately 97.2% occupied and leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP) as of June 30, 2023.
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As of June 30, 2023, our Route 128-Mass Turnpike portfolio is dominated by large userscomprised of approximately 4.8 million square feet and is 100% occupied. Our suburban Waltham/Lexington submarket continues to strengthen due to the organic growth of our existing tenant basewas approximately 79.6% occupied and other tenantsapproximately 80.9% leased (including vacant space for which we have signed leases that have not yet commenced in the market looking for space to accommodate their expanding workforces. One example of this is a build-to-suit proposal for 50-60% of our 200,000 square foot CityPoint project. If completed, we would commence construction in early 2018 for delivery in late 2019.accordance with GAAP).
Los Angeles
Our Los Angeles (“LA”) in-service portfolio of approximately 2.3 million square feet is currently focused in West LA and includes Colorado Center, joint venture asset inan approximately 1.1 million square foot property of which we own 50%, and Santa Monica California isBusiness Park, a 21-building, approximately 93.7%1.2 million square foot property of which we own 55%. As of June 30, 2023, our LA in-service properties were approximately 86.0% occupied and 86.2% leased including leases with future commencement dates, as of September 30, 2017. In our first year of ownership, our approach to property management, leasing and commitment to invest capital has transformed this once under-leased asset into a top-tier property in the marketplace. As a result, on July 28, 2017, the joint venture, in(including vacant space for which we have a 50% interest, placed a $550.0 million, 10-year mortgage on this previously unencumbered asset. We continue to execute on our repositioning plans and are currently workingsigned leases that have not yet commenced in accordance with local permitting authorities to commence construction on an amenities enhancement project in late 2017.
We are committed to growing our presence and portfolio in the Los Angeles market and expect to continue to underwrite investment opportunities in this market while maintaining our disciplined investment approach.GAAP).
New York
Our overall expectationsDuring the second quarter of 2023, we executed approximately 280,000 square feet of leases in the New York region and approximately 323,000 square feet of leases commenced. Approximately 63,000 square feet of the leases that commenced had been vacant for less than one year and they represent an increase in net rental obligations of approximately 64% over the midtown Manhattanprior leases. As of June 30, 2023, our New York CBD in-service portfolio was approximately 90.3% occupied and approximately 92.7% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
San Francisco
During the second quarter of 2023, we executed approximately 101,000 square feet of leases and approximately 76,000 square feet of leases commenced in the San Francisco region. Approximately 50,000 square feet of leases that commenced had been vacant for less than one year and represent an increase in net rental obligations of approximately 13% over the prior leases.
As of June 30, 2023, our San Francisco CBD in-service properties were approximately 89.1% occupied and approximately 90.3% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
Client demand in the San Francisco CBD had increased more than 50% since the fourth quarter of 2022 with new technology demand responsible for much of the increase. There are a significant number of artificial intelligence (“AI”) companies actively considering space and the requirements will create net absorption. Given the potential growth of these organizations, we would expect this demand to center on the well-built technology sublet space that is readily available in the San Francisco market. Global investment in the AI industry is rapidly increasing and is likely to result in job growth. San Francisco is the leading labor market for AI jobs followed by New York and Seattle. New venture capital investment in AI is concentrated in San Francisco, New York and Boston with CBRE Insights Research reporting that San Francisco will be receiving more than 50% of the total invested during the third quarter. These are encouraging facts that could be constructive to the recovery of the San Francisco office market, if they come to fruition.
Seattle
Our Seattle in-service portfolio includes Safeco Plaza, an approximately 779,000 square foot property of which we own 33.67%, and Madison Centre, an approximately 755,000 square foot property. As of June 30, 2023, our Seattle in-service properties were approximately 87.9% occupied and approximately 90.5% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
Washington, DC
During the second quarter of 2023, we executed approximately 236,000 square feet of leases and approximately 351,000 square feet of leases commenced in the Washington, DC region. Approximately 220,000 square feet of the leases that commenced had been vacant for less than one year and represent a decrease in net rental obligations of approximately 8% over the prior leases. As of June 30, 2023, our Washington, DC CBD in-service properties were approximately 78.5% occupied and approximately 83.0% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
A significant component of our Washington, DC regional portfolio is in Reston Town Center, an award-winning mixed-use development in Northern Virginia. Reston is a hub for technology, cloud services, cybersecurity and defense intelligence companies. As of June 30, 2023, our Reston, Virginia properties were approximately 88.2%
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occupied and approximately 93.4% leased (inclusive of vacant space with signed leases that have not yet commenced in accordance with GAAP).
Leasing Statistics
The table below details the leasing activity, in our portfolio are generally consistent with recent quarters. New supply continues to come intoincluding 100% of the market inunconsolidated joint ventures, that commenced during the form of new deliveriesthree and large lease expirations. As a result, tenants have increasing options, and therefore we do not expect significant growth in office rents in the near-term, and we are experiencing higher tenant concessions. However, we are encouraged, in the third quarter, by continued leasing by tenants of high-end space at rental rates in excess of $100 per square foot. As expected, our New York City portfolio occupancy decreased to 90.0% as of September 30, 2017 from 92.9% as ofsix months ended June 30, 2017 due mainly to lease expirations at 399 Park Avenue. We signed a full-floor lease and have good activity on the remaining space with tours and proposals. We do not expect revenue from replacement tenants to begin prior to 2019.2023:
During the third quarter, we completed a lease renewal with Aramis (Estee Lauder) at 767 Fifth Avenue (the General Motors Building). They are currently an approximately 295,000 square foot tenant and have committed to a minimum of 220,000
Three months ended June 30, 2023Six months ended June 30, 2023
(Square Feet)
Vacant space available at the beginning of the period5,569,935 5,610,777 
Property dispositions/properties taken out of service (1)— (333,277)
Properties placed (and partially placed) in-service (2)181,597 181,597 
Leases expiring or terminated during the period1,093,663 2,161,543 
Total space available for lease6,845,195 7,620,640 
1st generation leases
151,087 151,087 
2nd generation leases with new clients
556,310 988,313 
2nd generation lease renewals
335,037 678,479 
Total space leased (3)1,042,434 1,817,879 
Vacant space available for lease at the end of the period5,802,761 5,802,761 
Leases executed during the period, in square feet (4)937,536 1,598,016 
Second generation leasing information: (5)
Leases commencing during the period, in square feet891,347 1,666,792 
Weighted Average Lease Term88 Months89 Months
Weighted Average Free Rent Period186 Days181 Days
Total Transaction Costs Per Square Foot (6)$60.70 $66.33 
Increase in Gross Rents (7)6.31 %3.30 %
Increase in Net Rents (8)10.02 %5.28 %
__________________
(1)Total vacant square feet of properties taken out of service during the six months ended June 30, 2023 consists of 195,191 square feet at 300 Binney Street, 55,852 square feet at 420 Bedford Street, 57,045 square feet at 430 Bedford Street and 25,189 square feet at 2098 Gaither Road.
(2)Total vacant square feet of properties placed in service during the three and six months ended June 30, 2023 consists of 181,597 square feet at 2100 Pennsylvania Avenue.
(3)Represents leases for which lease revenue recognition has commenced in accordance with a right to expand. This transaction limitsGAAP during the availablethree and six months ended June 30, 2023.
(4)Represents leases executed during the three and six months ended June 30, 2023 for which we either (1) commenced lease revenue recognition in such period or (2) will commence lease 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 during the three and six months ended June 30, 2023 are 116,230 and 303,128 square feet, respectively.
(5)Second generation leases are defined as leases for space inthat has previously been leased by us. Of the building for the next several years. In addition, on November 1, 2017, we completed a long-term lease renewal with Ann Taylor at Times Square Tower for their 2020 lease expiration.
San Francisco
The San Francisco CBD leasing market remains healthy891,347 and among the strongest markets in the United States. We continue to benefit from this strength as evidenced by the approximately 170,0001,666,792 square feet of second generation leases that commenced during the third quarter of 2017, which have been vacantthree and six monthsended June 30, 2023, respectively, leases for less than one year776,928 and provide an average1,365,475 square feet, respectively, were signed in prior periods.
(6)Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.
(7)Represents the increase in net rental obligations of approximately 24.3%.
Our near-term leasing focus remainsgross rent (base rent plus expense reimbursements) on the lease up of Salesforce Tower, for which we signednew versus expired leases totaling approximately 350,000 square feet in 2017. As of November 2, 2017, Salesforce Tower is 87% leased. We are in lease negotiations for another five floors totaling approximately 152,000 square feet which, if signed, would bringon the project to approximately 98% leased554,458 and tour activity remains active. We received our temporary certificate of occupancy during the third quarter 2017 and expect the first tenant to occupy this building in January 2018.

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Washington, DC
Overall market conditions in the Washington CBD have not changed in any meaningful way over the past few quarters. Leasing activity remains very competitive primarily because there has been no significant increase in demand, yet supply has increased. Outside of the district, our Reston Town Center properties are approximately 97.3% leased, and leasing activity is healthy for our available and near-term expiring space.
Our development activities are active as we secured two significant commitments during the third quarter of 2017 aggregating approximately 1.4 million1,059,940 square feet of new build-to-suit projects - Marriott’s worldwide headquarters in Bethesda, Maryland, andsecond generation leases that had been occupied within the new headquarters for the Transportation Security Administration (TSA) in Springfield, Virginia. In addition, we are working to secure anchor tenancies for four tenant requirements totaling approximately 2.1 million square feet, which would support the construction of four additional projects - two in Washington, DC and two in Reston, Virginia.
The table below details the leasing activity during the three and nineprior 12 months ended September 30, 2017:
  Three months ended September 30, 2017 Nine months ended September 30, 2017
  (Square Feet)
Vacant space available at the beginning of the period 3,952,331
 4,196,275
Property dispositions/properties taken out of service —
 (115,289)
Properties acquired vacant space —
 15,944
Properties placed in-service 303,861
 386,599
Leases expiring or terminated during the period 1,523,017
 3,628,613
Total space available for lease 5,779,209
 8,112,142
1st generation leases
 225,125
 302,578
2nd generation leases with new tenants
 624,427
 2,064,896
2nd generation lease renewals
 671,715
 1,486,726
Total space leased (1) 1,521,267
 3,854,200
Vacant space available for lease at the end of the period 4,257,942
 4,257,942
     
Leases executed during the period, in square feet (2) 2,565,971
 4,058,416
     
Second generation leasing information: (3)
    
Leases commencing during the period, in square feet 1,296,142
 3,551,622
Weighted Average Lease Term 93 Months
 95 Months
Weighted Average Free Rent Period 102 Days
 111 Days
Total Transaction Costs Per Square Foot (4) 
$43.66
 
$54.48
Increase in Gross Rents (5) 1.34% 10.44%
Increase in Net Rents (6) 1.54% 15.97%
___________________________
(1)Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the three and nine months ended September 30, 2017.
(2)Represents leases executed during the three and nine months ended September 30, 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 and nine months ended September 30, 2017 is 263,439 and 673,055, respectively.
(3)Second generation leases are defined as leases for space that had previously been leased by us. Of the 1,296,142 and 3,551,622 square feet of second generation leases that commenced during the three and nine months ended September 30, 2017, respectively, leases for 1,032,703 and 2,878,567 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 1,005,495 and 2,641,599 square feet of second generation leases that had been occupied within the prior 12 months

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for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively; excludes leases that
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management considers temporary because the tenantclient 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 1,005,495 and 2,641,599 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2017, respectively; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis.
(8)Represents the increase in net rent (gross rent less operating expenses) on the new versus expired leases on the 554,458 and 1,059,940 square feet of second generation leases that had been occupied within the prior 12 months for the three and six months ended June 30, 2023, respectively.
Transactions during the three months ended SeptemberJune 30, 20172023 included the following:
DevelopmentDevelopment/Redevelopment activities
•On August 7, 2017, we entered into a joint venture with The Bernstein Companies to develop an approximately 722,000 net rentable square foot (subject to adjustment based on finalized building design) build-to-suit Class A office building and below-grade parking garage at 7750 Wisconsin Avenue in Bethesda, Maryland. The joint venture entered into a lease agreement with an affiliate of Marriott International, Inc., under which Marriott will lease 100% of the office building and garage for a term of 20 years, and the building will serve as Marriott’s new worldwide headquarters. Marriott has agreed to fund 100% of the related tenant improvement costs and leasing commissions for the office building. We will serve as co-development manager for the venture and expect to commence construction in 2018. We and The Bernstein Companies each own a 50% interest in the joint venture. (See Notes 4 and 7 to the Consolidated Financial Statements).
On August 24, 2017, we entered into a 15-year lease with the General Services Administration under which we will develop the new headquarters for the TSA. The TSA will occupy 100% of the approximately 623,000 net rentable square feet of Class A office space and a parking garage at 6595 Springfield Center Drive located in Springfield, Virginia. Concurrently with the execution of the lease, we commenced development of the project and expect the building to be available for occupancy by the fourth quarter of 2020.
On September 16, 2017,April 29, 2023, we completed and fully placed in-service 888 Boylston Street,2100 Pennsylvania Avenue, a Class A office and retailpremier workplace project with approximately 417,000476,000 net rentable square feet located in Washington, DC. Including leases with future commencement dates, the property is 91% leased as of July 28, 2023.
•On June 1, 2023, we completed and fully placed in-service our View Boston Observatory at The Prudential Center, a redevelopment of the top three floors of 800 Boylston Street - The Prudential Center, located in Boston, Massachusetts. View Boston Observatory at The property is 93% leased.Prudential Center consists of approximately 63,000 net rentable square feet of retail, including food and beverage, and observation space.
Acquisition and disposition activities
On August 30, 2017, we completed the sale of our Reston Eastgate property located in Reston, Virginia for a gross sale price of $14.0 million.  Net cash proceeds totaled approximately $13.2 million, resulting in a gain on sale of real estate totaling approximately $2.8 million. Reston Eastgate is a parcel of land containing approximately 21.7 acres located at 11011 Sunset Hills Road.
JointUnconsolidated joint venture activities
•On July 10, 2017, we acquired an additional 0.2% interest in the unconsolidated joint venture that owns Colorado Center located in Santa Monica, California for approximately $2.1 million in cash. Following the acquisition, we own a 50% interest in the joint venture.
Capital markets activities
On July 28, 2017,April 21, 2023, a joint venture in which we own a 50% interest obtained mortgage financingexercised an option to extend the maturity date of the construction loan collateralized by its Colorado Center property located in Santa Monica, California totaling $550.0 million. The mortgage financing bears7750 Wisconsin Avenue property. Prior to the extension, the loan had a total commitment amount of approximately $252.6 million, bore interest at a fixedvariable rate of 3.56%equal to London interbank offered rate (“LIBOR”) plus 1.25% per annum and was scheduled to mature on April 26, 2023, with two, one-year extension options, subject to certain conditions. The extended loan continued to bear interest at LIBOR plus 1.25% per annum through June 1, 2023 after which, the interest rate was converted to a variable rate equal to Term Secured Overnight Finance Rate (“SOFR”) plus 1.35% per annum. The extended loan now matures on August 9, 2027. The loan requires interest-only payments during the 10-year term of the loan,April 26, 2024, with the entire principal amount due at maturity. The joint venture distributed $502.0 milliona one-year extension option, subject to the partners, of which our share was $251.0 million. Colorado Centercertain conditions. 7750 Wisconsin Avenue is a six-building office complex that sits on a 15-acre site and contains an aggregate ofpremier workplace with approximately 1,118,000734,000 net rentable square feet located in Bethesda, Maryland.
•On June 5, 2023, a joint venture in which we own a 30% interest repaid the existing construction loan collateralized by its 500 North Capitol Street, NW property and obtained new mortgage loans with related parties. At the time of the pay off, the outstanding balance of the loan totaled approximately $105.0 million and the loan was scheduled to mature on June 6, 2023. The new mortgage loans have an aggregate principal balance of $105.0 million, bear interest at a weighted average fixed rate of 6.83% per annum and mature on June 5, 2026. Our portion of the mortgage loans, $10.5 million, has been reflected as a Related Party Note Receivable on our Consolidated Balance Sheets. 500 North Capitol Street, NW is an approximately 231,000 net rentable square foot premier workplace in Washington, DC.
•On June 28, 2023, a joint venture in which we own a 25% interest exercised an option to extend by 30 days the maturity date of the loan collateralized by its 3 Hudson Boulevard property. At the time of the modification, the outstanding balance of the loan totaled $80.0 million, bore interest at a variable rate equal to LIBOR plus 3.50% per annum and was scheduled to mature on July 13, 2023, with two extension options (30 days and 180 days, respectively), subject to certain conditions. The modified loan continued to bear interest at a variable rate equal to LIBOR plus 3.50% per annum for the period from June 28, 2023 through July 6, 2023. As of June 30, 2023, the loan had approximately $23.2 million of accrued interest due at the maturity date, August 13, 2023. For the period commencing on July 7, 2023 through the maturity date, the modified loan will bear interest at a variable rate equal to Term SOFR plus approximately 3.61% per annum. The modified loan now matures on August 13, 2023, with one 180 days extension option, subject to certain conditions. 3 Hudson Boulevard consists of land and improvements held for future development located in New York, New York.
•During the three months ended June 30, 2023, a joint venture in which we have a 55% interest elected to pause vertical construction on Platform 16 in San Jose, California. Platform 16 was planned to be constructed in phases to best accommodate market demand. The first phase of the development project included the construction of an approximately 390,000 net rentable square foot premier
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workplace building and below-grade parking garage. The joint venture intends to complete the construction of the below-grade parking garage and building foundation elements over the next several months to facilitate a restart of construction in the future as demand improves.
Debt activities
•On May 15, 2023, BPLP completed a public offering of $750.0 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034. The notes were priced at 99.697% of the principal amount to yield an effective rate (including financing fees) of approximately 6.619% per annum to maturity. The notes will mature on January 15, 2034, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $741.3 million after deducting underwriting discounts and transaction expenses.
•On June 1, 2023, BPLP amended its unsecured credit facility (as amended, the “2021 Credit Facility”) to replace the LIBOR-based daily floating rate option with a SOFR-based daily floating rate option and to add options for SOFR-based term floating rates and rates for alternative currency loans. In addition, the amendment added a SOFR credit spread adjustment of 0.10%. Other than the foregoing, the material terms of the 2021 Credit Facility remain unchanged (See Note 6 to the Consolidated Financial Statements).
Derivative instrument and hedging activity
•On May 2, 2023, BPLP entered into four interest rate swap contracts with notional amounts aggregating $1.2 billion. BPLP entered into these interest rate swap contracts to reduce its exposure to the variability in future cash flows attributable to changes in the interest rate of BPLP’s $1.2 billion unsecured term loan facility (the “2023 Unsecured Term Loan”). These interest rate swaps were entered into to fix Term SOFR, the reference rate for BPLP’s 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024 (see Notes 6 and 7 to the Consolidated Financial Statements).
Equity activity
•On May 17, 2023, BXP renewed its “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. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its common stock on a forward basis. This program replaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on May 22, 2023. BXP 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.
Transactions completed subsequent to June 30, 2023 included the following:
•On July 20, 2023, we completed and fully placed in-service 140 Kendrick Street - Building A, a premier workplace redevelopment project with approximately 104,000 net rentable square feet located in Needham, Massachusetts. The property is 100% leased and is the first Net Zero, Carbon Neutral office repositioning of this scale in Massachusetts.
•On July 28, 2023, we entered into a joint venture agreement with an underground parking garageinstitutional investor for 3,100 vehicles.the future development of 343 Madison Avenue located on Madison Avenue between 44th and 45th Streets in New York City, New York adjacent to Grand Central Station. We own a 55% interest in the venture and our partner owns a 45% interest, and we will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture executed a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the direct access to Grand Central Madison as Phase 1 of the development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the cost of the construction of access to Grand Central Station. There can be no assurance that Phase 1 will be
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completed on the terms currently contemplated or that Phase 2 of the development project will commence on the terms currently contemplated or at all.
•On September 6, 2017,July 28, 2023, a joint venture in which we have a 50% interest obtained construction financing with a total commitmentmodified and exercised an option to extend by one year the maturity date of $204.6 millionits loan collateralized by its Hub100 Causeway Street. At the time of the modification and extension, the loan had an outstanding balance totaling approximately $340.6 million, bore interest at Term SOFR plus 1.60% per annum, and was scheduled to mature on Causeway development project.September 5, 2023. The construction financingmodified and extended loan has an outstanding balance of $336.6 million, which included an approximately $4.0 million principal repayment, bears interest at a variable rate equal to LIBORTerm SOFR plus 2.25%1.48% per annum, and matures on September 6, 2021,5, 2024, with two,an additional one-year extension options,option, subject to certain conditions. As of September 30, 2017, the venture had not drawn any funds under the loan. The Hub on100 Causeway Street is an approximately 385,000 net rentable634,000 square foot project containing retail and office spacepremier workplace located in Boston, Massachusetts.Massachusetts and is approximately 95% leased.

•Effective July 28, 2023, BXP’s independent directors appointed Joel I. Klein to serve as the lead independent director, replacing Kelly A. Ayotte. Ms. Ayotte stepped down as the lead independent director due to the additional time commitment and responsibilities of that role, and the independent directors determined that it is in the best interests of BXP and its stockholders that Mr. Klein once again assume that role. Ms. Ayotte served as BXP’s lead independent director since May 2022 and will remain on BXP’s Board of Directors. Mr. Klein previously served as BXP’s lead independent director from May 2016 to May 2019 and as its independent Chairman from May 2019 to May 2022.
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There were no transactions completed subsequent to September 30, 2017.
Critical Accounting PoliciesEstimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Certain accounting policies are considered to be critical accounting policies, as they require management to make assumptions about matters that are highly uncertain at the time the estimate is made and changes in accounting estimate are reasonably likely to occur from period to period. Management bases its estimates and assumptions on historical experience and current economic conditions. On an on-going basis, management evaluates its estimates and assumptions including those related to revenue, impairment of long-lived assets and the allowance for doubtful accounts. Actual results may differ from those estimates and assumptions.
Our Annual Report on Form 10-K for the year ended December 31, 20162022 contains a discussion of our critical accounting policies, except for our policies established following the adoption of each of ASU 2016-09 and ASU 2017-01. The adoption of each of ASU 2016-09 and ASU 2017-01 is discussedestimates. There have been no significant changes in Note 2 to our Consolidated Financial Statements. Management discusses and reviews our critical accounting policies and management’s judgments and estimates with BXP’s Audit Committee.since the year ended December 31, 2022.
Results of Operations for the Nine the Six Months EndedSeptember June 30, 20172023 and2016 2022
Net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders decreased by approximately $7.0$183.8 million and $13.3$208.7 million, respectively, for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016, respectively,2022, as detailedset forth in the following tables and for the reasons discussed below under the heading “Comparison of the ninesix months ended SeptemberJune 30, 20172023 to the ninesix months ended SeptemberJune 30, 2016” 2022”within “Item “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations.”
Thefollowing are reconciliations of net income attributableNet Income Attributable to Boston Properties, Inc. common shareholders to net operating incomeNet Operating Income and net income attributableNet Income Attributable to Boston Properties Limited Partnership common unitholders to net operating incomeNet Operating Income for the nine six months ended SeptemberJune 30, 20172023 and 2016 (in thousands):

2022. For a detailed discussion of Net Operating Income (“NOI”), including the reasons management believes NOI is useful to investors, see page 56.
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Table of Contents

BXP
Boston Properties, Inc.
Six months ended June 30,
20232022Increase/
(Decrease)		%
Change
(in thousands)
Net Income Attributable to Boston Properties, Inc.$182,215 $366,044 $(183,829)(50.22)%
Net Income Attributable to Noncontrolling Interests:
Noncontrolling interest—common units of the Operating Partnership21,169 42,061 (20,892)(49.67)%
Noncontrolling interests in property partnerships38,428 36,095 2,333 6.46 %
Net Income241,812 444,200 (202,388)(45.56)%
Other Expenses:
Add:
Interest expense276,680 205,370 71,310 34.72 %
Other Income:
Less:
Unrealized gain on non-real estate investment383 — 383 100.00 %
Gains (losses) from investments in securities3,236 (6,978)10,214 146.37 %
Other income - assignment fee— 6,624 (6,624)(100.00)%
Interest and other income (loss)28,284 2,423 25,861 1,067.31 %
Gains on sales of real estate— 118,948 (118,948)(100.00)%
Income (loss) from unconsolidated joint ventures(14,237)2,135 (16,372)(766.84)%
Other Expenses:
Add:
Depreciation and amortization expense411,311 360,770 50,541 14.01 %
Transaction costs1,219 496 723 145.77 %
Payroll and related costs from management services contracts9,844 7,304 2,540 34.78 %
General and administrative expense99,977 77,859 22,118 28.41 %
Other Revenue:
Less:
Direct reimbursements of payroll and related costs from management services contracts9,844 7,304 2,540 34.78 %
Development and management services revenue18,838 12,185 6,653 54.60 %
Net Operating Income$994,495 $953,358 $41,137 4.31 %
54
  Total Property Portfolio
  2017 2016 Increase/
(Decrease)		 %
Change
Net Income Attributable to Boston Properties, Inc. Common Shareholders $348,086
 $355,114
 $(7,028) (1.98)%
Preferred dividends 7,875
 7,796
 79
 1.01 %
Net Income Attributable to Boston Properties, Inc. 355,961
 362,910
 (6,949) (1.91)%
Net Income Attributable to Noncontrolling Interests:        
Noncontrolling interest—common units of the Operating Partnership 40,350
 42,120
 (1,770) (4.20)%
Noncontrolling interests in property partnerships 33,967
 53
 33,914
 63,988.68 %
Net Income 430,278
 405,083
 25,195
 6.22 %
Gains on sales of real estate 6,791
 80,606
 (73,815) (91.58)%
Income Before Gains on Sales of Real Estate 423,487
 324,477
 99,010
 30.51 %
Other Expenses:        
Add:        
Losses from interest rate contracts
—
 140
 (140) (100.00)%
Interest expense 282,709
 314,953
 (32,244) (10.24)%
Other Income:     

 
Less:        
Gains (losses) from early extinguishments of debt 14,354
 (371) 14,725
 3,969.00 %
Gains from investments in securities 2,716
 1,713
 1,003
 58.55 %
Interest and other income 3,447
 6,657
 (3,210) (48.22)%
Income from unconsolidated joint ventures 7,035
 5,489
 1,546
 28.17 %
Operating Income 678,644
 626,082
 52,562
 8.40 %
Other Expenses:        
Add:        
Depreciation and amortization expense 463,288
 516,371
 (53,083) (10.28)%
Impairment loss —
 1,783
 (1,783) (100.00)%
Transaction costs 572
 1,187
 (615) (51.81)%
General and administrative expense 84,319
 79,936
 4,383
 5.48 %
Other Revenue:     

 

Less:        
Development and management services revenue 24,648
 18,586
 6,062
 32.62 %
Net Operating Income $1,202,175
 $1,206,773
 $(4,598) (0.38)%


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BPLP
Boston Properties Limited Partnership
  Total Property Portfolio
  2017 2016 Increase/
(Decrease)		 %
Change
Net Income Attributable to Boston Properties Limited Partnership Common Unitholders $395,199
 $408,540
 $(13,341) (3.27)%
Preferred distributions 7,875
 7,796
 79
 1.01 %
Net Income Attributable to Boston Properties Limited Partnership 403,074
 416,336
 (13,262) (3.19)%
Net Income Attributable to Noncontrolling Interests:        
Noncontrolling interests in property partnerships 33,967
 53
 33,914
 63,988.68 %
Net Income 437,041
 416,389
 20,652
 4.96 %
Gains on sales of real estate 7,368
 82,775
 (75,407) (91.10)%
Income Before Gains on Sales of Real Estate 429,673
 333,614
 96,059
 28.79 %
Other Expenses:        
Add:        
Losses from interest rate contracts —
 140
 (140) (100.00)%
Interest expense 282,709
 314,953
 (32,244) (10.24)%
Other Income:        
Less:        
Gains (losses) from early extinguishments of debt 14,354
 (371) 14,725
 3,969.00 %
Gains from investments in securities 2,716
 1,713
 1,003
 58.55 %
Interest and other income 3,447
 6,657
 (3,210) (48.22)%
Income from unconsolidated joint ventures 7,035
 5,489
 1,546
 28.17 %
Operating Income 684,830
 635,219

49,611
 7.81 %
Other Expenses:        
Add:        
Depreciation and amortization expense 457,102
 507,234
 (50,132) (9.88)%
Impairment loss —
 1,783
 (1,783) (100.00)%
Transaction costs 572
 1,187
 (615) (51.81)%
General and administrative expense 84,319
 79,936
 4,383
 5.48 %
Other Revenue:        
Less:        
Development and management services revenue 24,648
 18,586
 6,062
 32.62 %
Net Operating Income $1,202,175
 $1,206,773
 $(4,598) (0.38)%

Six months ended June 30,
20232022Increase/
(Decrease)		%
Change
(in thousands)
Net Income Attributable to Boston Properties Limited Partnership$206,928 $415,617 $(208,689)(50.21)%
Net Income Attributable to Noncontrolling Interests:
Noncontrolling interests in property partnerships38,428 36,095 2,333 6.46 %
Net Income245,356 451,712 (206,356)(45.68)%
Other Expenses:
Add:
Interest expense276,680 205,370 71,310 34.72 %
Other Income:
Less:
Unrealized gain on non-real estate investment383 — 383 100.00 %
Gains (losses) from investments in securities3,236 (6,978)10,214 146.37 %
Other income - assignment fee— 6,624 (6,624)(100.00)%
Interest and other income (loss)28,284 2,423 25,861 1,067.31 %
Gains on sales of real estate— 122,992 (122,992)(100.00)%
Income (loss) from unconsolidated joint ventures(14,237)2,135 (16,372)(766.84)%
Other Expenses:
Add:
Depreciation and amortization expense407,767 357,302 50,465 14.12 %
Transaction costs1,219 496 723 145.77 %
Payroll and related costs from management services contracts9,844 7,304 2,540 34.78 %
General and administrative expense99,977 77,859 22,118 28.41 %
Other Revenue:
Less:
Direct reimbursements of payroll and related costs from management services contracts9,844 7,304 2,540 34.78 %
Development and management services revenue18,838 12,185 6,653 54.60 %
Net Operating Income$994,495 $953,358 $41,137 4.31 %
At SeptemberJune 30, 20172023 and September 30, 2016,2022, we owned or had joint venture interests in a portfolio of 177191 and 174193 commercial real estate properties, respectively (in each case, the “Total Property Portfolio”). As a result of changes within our Total Property Portfolio, the financial data presented below shows significant changes in revenue and expenses from period-to-period. Accordingly, we do not believe that our period-to-period financial data with respect to the Total Property Portfolio is necessarily meaningful.provides a complete understanding of our operating results. Therefore, the comparison of operating results for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 show separately the changes attributable to the properties that were owned by us and in-service throughout each period compared (the “Same Property Portfolio”) and the changes attributable to the properties included in the Acquired, Placed In-Service, Acquired,In or Held for Development or Redevelopment andor Sold Portfolios.
In our analysis of operating results, particularly to make comparisons of net operating incomeNOI between periods more meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us and in-service through the end of the latest period presented as our Same Property Portfolio. The Same Property Portfolio therefore excludes properties acquired, placed in-service acquired or in or held for development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented.

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Net operating income (“NOI”)NOI is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders orand net income attributable to Boston Properties Limited Partnership, common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred dividends/distributions,net income attributable to noncontrolling interests, losses from interest rate contracts, interest expense, depreciation and amortization expense, impairment losses, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain on non-real estate investment, gains (losses) from investments in securities, other income - assignment fee, interest and other income (loss), gains on sales of real estate, gains (losses) from early extinguishments of debt, gains from investments in securities, interest and other income income(loss) from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. We use NOI internally as a performance measure and believe it provides useful information to investors regarding our financial condition and results of operations and financial condition 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.Partnership. 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., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, depreciation and amortization expense may distort operating performance measures at the property level. NOI presented by us may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.
We believe that in order to facilitate a clear understanding ofunderstand our operating results, NOI should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders as presented in our Consolidated Financial Statements. NOI should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders or net income attributable to Boston Properties Limited Partnership common unitholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.
The gains on sales of real estate and depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor redemptions of common units of limited partnership interest of BPLP (“OP Unit redemptions by BPLP.Units”). This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in the gains on sales of real estate and depreciation expense when those properties are sold. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
Comparison of the ninesix months ended SeptemberJune 30, 20172023 to the ninesix months ended SeptemberJune 30, 2016.2022
The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 144126 properties totaling approximately 38.638.3 million net rentable square feet, of space, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or fully placed in-service on or prior to January 1, 20162022 and owned and in-servicein service through SeptemberJune 30, 2017.2023. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, acquiredin or inheld for development or redevelopment after January 1, 20162022 or disposed of on or prior to SeptemberJune 30, 2017.2023. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the ninesix months ended SeptemberJune 30, 20172023 and 20162022 with respect to the properties that were acquired, placed in-service, acquired, in or held for development or redevelopment or sold.



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 Same Property PortfolioProperties Acquired PortfolioProperties
Placed In-Service
Portfolio		Properties in or Held for Development or Redevelopment PortfolioProperties Sold PortfolioTotal Property Portfolio
20232022Increase/
(Decrease)		%
Change		2023202220232022202320222023202220232022Increase/
(Decrease)		%
Change
(dollars in thousands)
Rental Revenue: (1)
Lease Revenue (Excluding Termination Income)$1,377,163 $1,351,293 $25,870 1.91 %$49,859 $5,815 $67,334 $15,200 $874 $11,088 $697 $26,503 $1,495,927 $1,409,899 $86,028 6.10 %
Termination Income32 3,867 (3,835)(99.17)%— 133 — — — — — — 32 4,000 (3,968)(99.20)%
Lease Revenue1,377,195 1,355,160 22,035 1.63 %49,859 5,948 67,334 15,200 874 11,088 697 26,503 1,495,959 1,413,899 82,060 5.80 %
Parking and Other46,948 42,263 4,685 11.09 %2,114 524 603 — (3)4,928 1 607 49,663 48,322 1,341 2.78 %
Total Rental Revenue (1)1,424,143 1,397,423 26,720 1.91 %51,973 6,472 67,937 15,200 871 16,016 698 27,110 1,545,622 1,462,221 83,401 5.70 %
Real Estate Operating Expenses540,020 508,208 31,812 6.26 %8,053 1,680 18,379 5,058 4,478 4,639 168 8,268 571,098 527,853 43,245 8.19 %
Net Operating Income (Loss), Excluding Residential and Hotel884,123 889,215 (5,092)(0.57)%43,920 4,792 49,558 10,142 (3,607)11,377 530 18,842 974,524 934,368 40,156 4.30 %
Residential Net Operating Income (2)12,733 10,057 2,676 26.61 %— — — — — — — 3,571 12,733 13,628 (895)(6.57)%
Hotel Net Operating Income (2)7,238 5,362 1,876 34.99 %— — — — — — — — 7,238 5,362 1,876 34.99 %
Net Operating Income (Loss)$904,094 $904,634 $(540)(0.06)%$43,920 $4,792 $49,558 $10,142 $(3,607)$11,377 $530 $22,413 $994,495 $953,358 $41,137 4.31 %
_______________
(1)Rental Revenue is equal to Revenue less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Revenue per the Consolidated Statements of Operations, excluding the residential and hotel revenue that is noted below. We use Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods.
(2)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 56. Residential Net Operating Income for the six months ended June 30, 2023 and 2022 is comprised of Residential Revenue of $23,979 and $29,878 less Residential Expenses of $11,246 and $16,250, respectively. Hotel Net Operating Income for the six months ended June 30, 2023 and 2022 is comprised of Hotel Revenue of $22,070 and $16,646 less Hotel Expenses of $14,832 and $11,284, respectively, per the Consolidated Statements of Operations.
57
 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$1,793,037
 $1,737,375
 $55,662
 3.20 % $50,727
 $30,682
 $5,447
 $2,447
 $3,520
 $17,220
 $846
 $3,231
 $1,853,577
 $1,790,955
 $62,622
 3.50 %
Termination Income23,730
 59,681
 (35,951) (60.24)% —
 —
 —
 —
 (1,428) (892) —
 —
 22,302
 58,789
 (36,487) (62.06)%
Total Rental Revenue1,816,767
 1,797,056
 19,711
 1.10 % 50,727
 30,682
 5,447
 2,447
 2,092
 16,328
 846
 3,231
 1,875,879
 1,849,744
 26,135
 1.41 %
Real Estate Operating Expenses664,110
 641,839
 22,271
 3.47 % 14,640
 7,476
 1,320
 565
 10,560
 8,834
 689
 1,526
 691,319
 660,240
 31,079
 4.71 %
Net Operating Income (Loss), excluding residential and hotel1,152,657
 1,155,217
 (2,560) (0.22)% 36,087
 23,206
 4,127
 1,882
 (8,468)—
7,494
 157
 1,705
 1,184,560
 1,189,504
 (4,944) (0.42)%
Residential Net Operating Income (1)7,691
 7,703
 (12) (0.16)% —
 —
 —
 —
 7
 (623) —
 —
 7,698
 7,080
 618
 8.73 %
Hotel Net Operating Income (1)9,917
 10,189
 (272) (2.67)% —
 —
 —
 —
 —
 —
 —
 —
 9,917
 10,189
 (272) (2.67)%
Net Operating Income (Loss) (1)$1,170,265
 $1,173,109
 $(2,844) (0.24)% $36,087
 $23,206
 $4,127
 $1,882
 $(8,461) $6,871
 $157
 $1,705
 $1,202,175
 $1,206,773
 $(4,598) (0.38)%
_______________  
(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 50. Residential Net Operating Income for the nine months ended September 30, 2017 and 2016 is comprised of Residential Revenue of $12,461 and $12,509, less Residential Expenses of $4,763 and $5,429, respectively. Hotel Net Operating Income for the nine months ended September 30, 2017 and 2016 is comprised of Hotel Revenue of $33,859 and $33,919 less Hotel Expenses of $23,942 and $23,730, respectively, per the Consolidated Statements of Operations.

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Same Property Portfolio
RentalLease Revenue (Excluding Termination Income)
RentalLease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $55.7$25.9 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016.2022. The increase was primarily the result of an increase in revenue from our leases and parking and other income of approximately $54.0 million and $3.2 million, respectively, partially offset by a decrease in other tenant recoveries of approximately $1.5 million. Rental revenue from our leases increased approximately $54.0 million as a result of our average revenue per square foot increasing by approximately $2.02, which contributed$2.42, contributing approximately $54.8$44.0 million, partially offset by average occupancy decreasing from 91.6% to 90.4%, resulting in a decrease of approximately $0.8 million due to a decrease in average occupancy from 91.58% to 91.53%.$18.1 million.
Termination Income
Termination income decreased by approximately $36.0$3.8 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016.2022.
Termination income for the ninesix months ended SeptemberJune 30, 20172023 related to twenty-nine tenantsapproximately 15 clients across the Same Property Portfolio and totaled approximately $23.7 million, of which approximately $14.2 million and $5.1 million$32,000.
Termination income for the six months ended June 30, 2022 related to tenants15 clients across the Same Property Portfolio and totaled approximately $3.3 million, which was primarily related to clients that terminated leases early at 767 Fifth Avenue (the General Motors Building) and 399 Park Avenue, respectively. Both of these buildings are located in New York City. In addition, we received the fifth interima distribution from our unsecured creditor'scredit claim against Lehman Brothers, Inc. of approximately $0.4$0.6 million.
Parking and Other Revenue
Parking and other revenue increased by approximately $4.7 million (See Note 7for the six months ended June 30, 2023 compared to the Consolidated Financial Statements). Recently, claims of similar priority to that of our remaining claim were quoted privately reflecting2022. Parking revenue increased by approximately $5.0 million and was partially offset by a value for our remaining claimdecrease in other revenue of approximately $1.0 million; however, there can be no assurance as to the timing or amount of additional proceeds, if any, that we may receive.
Termination income for the nine months ended September 30, 2016 related to thirty tenants across the Same Property Portfolio and totaled approximately $59.7 million, of which approximately $58.8 million was from our New York region. On February 3, 2016, we entered into a lease termination agreement with a tenant for an approximately 85,000 square foot lease at our 250 West 55th Street property located in New York City.  The lease was scheduled to expire on February 28, 2035.  In consideration for the termination of the lease, the tenant paid us approximately $45.0$0.3 million. The remaining approximately $12.4 million of termination income from the New York regionincrease in parking revenue was primarily relateddue to negotiated early releases with three other tenants. In addition, during the nine months ended September 30, 2016, we received the fourth interim distribution from our unsecured creditor’s claim against Lehman Brothers, Inc. of approximately $1.4 million (See Note 7 to the Consolidated Financial Statements).an increase in transient and monthly parking.
Real Estate Operating Expenses
Real estate operating expenses from the Same Property Portfolio increased by approximately $22.3$31.8 million, or 6.3%, for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022, due primarily to increases in real estate taxes of approximately $12.1 million, or 4.9%, and other real estate operating expenses of approximately $15.8$17.4 million, or 5.1%, and $6.5 million, or 1.9%, respectively.6.7%. The increase in real estate taxes was primarily experienced in the New York CBD properties.City. In addition, there was approximately $2.3 million related to the marketing and initial opening expenses associated with the View Boston Observatory which was completed and placed in-service on June 1, 2023.
Properties Acquired Portfolio
The table below lists the properties acquired between January 1, 2022 and June 30, 2023. Rental revenue and real estate operating expenses increased by approximately $45.5 million and $6.4 million, respectively, for the six months ended June 30, 2023 compared to 2022, as detailed below.
Square FeetRental RevenueReal Estate Operating Expenses
NameDate acquired20232022Change20232022Change
(dollars in thousands)
Madison Centre (1)May 17, 2022754,988 $31,314 $6,472 $24,842 $6,043 $1,680 $4,363 
125 BroadwaySeptember 16, 2022271,000 20,659 — 20,659 2,010 — 2,010 
1,025,988 $51,973 $6,472 $45,501 $8,053 $1,680 $6,373 
______________
(1)Rental revenue for the six months ended June 30, 2022 includes approximately $0.1 million of termination income.
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Table of Contents
Properties Placed In-Service Portfolio
The table below lists the properties that were placed in-service or partially placed in-service frombetween January 1, 2016 through September2022 and June 30, 2017.2023. Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $20.0$52.7 million and $7.2$13.3 million, respectively, for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022, as detailed below.

Quarter Initially Placed In-ServiceQuarter Fully Placed In-ServiceRental RevenueReal Estate Operating Expenses
NameSquare Feet20232022Change20232022Change
(dollars in thousands)
Reston NextFourth Quarter, 2021Fourth Quarter, 20221,063,236 $22,747 $14,978 $7,769 $7,756 $5,031 $2,725 
325 Main StreetSecond Quarter, 2022Second Quarter, 2022414,565 22,879 213 22,666 3,795 10 3,785 
2100 Pennsylvania AvenueSecond Quarter, 2022Second Quarter, 2023475,849 10,581 9 10,572 4,160 17 4,143 
880 Winter Street (1)Third Quarter, 2022Fourth Quarter, 2022243,618 11,730 — 11,730 2,668 — 2,668 
2,197,268 $67,937 $15,200 $52,737 $18,379 $5,058 $13,321 

_____________
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  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 478,818
 $27,716
 $24,938
 $2,778
 $6,871
 $5,568
 $1,303
804 Carnegie Center Second Quarter, 2016 Second Quarter, 2016 130,000
 4,195
 2,576
 1,619
 1,024
 1,066
 (42)
10 CityPoint Second Quarter, 2016 Second Quarter, 2016 241,460
 8,661
 3,002
 5,659
 2,563
 789
 1,774
Reservoir Place North Second Quarter, 2016 Second Quarter, 2017 73,258
 —
 (8) 8
 225
 34
 191
888 Boylston Street Third Quarter, 2016 Third Quarter, 2017 417,000
 10,155
 174
 9,981
 3,957
 19
 3,938
      1,340,536
 $50,727
 $30,682
 $20,045
 $14,640
 $7,476
 $7,164
a 224,000 square foot office property located in Waltham, Massachusetts to laboratory space.
Properties Acquiredin or Held for Development or Redevelopment Portfolio
The table below lists the properties acquiredthat were in or held for development or redevelopment between January 1, 20162022 and SeptemberJune 30, 2017.2023. Rental revenue and real estate operating expenses increasedfrom our Properties in or Held for Development or Redevelopment Portfolio decreased by approximately $3.0$15.1 million and $0.8$0.2 million, respectively, for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016,2022, as detailed below.
Rental RevenueReal Estate Operating Expenses
NameDate Commenced or Held for Development / RedevelopmentSquare Feet20232022Change20232022Change
(dollars in thousands)
140 Kendrick Street - Building A (1)July 1, 2022104,000 $— $2,865 $(2,865)$— $683 $(683)
760 Boylston StreetSeptember 12, 2022118,000 — — — — 428 (428)
105 Carnegie CenterNovember 30, 202273,000 — 633 (633)— 462 (462)
2096 Gaither RoadDecember 1, 202250,000 — 111 (111)58 168 (110)
RTC Next-Hotel (2)December 19, 2022N/A455 — 455 2 — 2 
Kendall Center Blue Parking Garage (3)January 4, 2023N/A25 4,925 (4,900)3,015 656 2,359 
300 Binney StreetJanuary 30, 2023236,000 (900)5,865 (6,765)117 934 (817)
Lexington Office Park (4)March 31, 2023166,779 975 1,310 (335)1,108 1,157 (49)
2098 Gaither Road (4)March 31, 202350,000 316 307 9 178 151 27 
797,779 $871 $16,016 $(15,145)$4,478 $4,639 $(161)
      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 218,366
 $4,395
 $2,447
 $1,948
 $876
 $565
 $311
103 Carnegie Center May 15, 2017 96,332
 1,052
 —
 1,052
 444
 —
 444
    314,698
 $5,447
 $2,447
 $3,000
 $1,320
 $565
 $755
_____________
Properties(1)On July 20, 2023, we completed and fully placed this property in-service.
(2)On December 19, 2022, in Development or Redevelopment Portfolioaccordance with GAAP, the ground lease that encumbers this property was reclassified as a sales-type lease and the associated assets were derecognized.
(3)The table below listsKendall Center Blue Parking Garage was taken out of service on January 4, 2023 to support the properties we placed in development or redevelopment between January 1, 2016 and September 30, 2017. Rental revenue decreased by approximately $14.2 million and realof 290 Binney Street. Real estate operating expenses increased by approximately $1.7 million, from our Properties in Development or Redevelopment Portfolio for the ninesix months ended SeptemberJune 30, 2017 compared to 2016,2023 included approximately $3.0 million of demolition costs.
(4)Lexington Office Park and 2098 Gaither Road are no longer considered “in-service” as detailed below.each property’s occupied percentage is below 50% and we are no longer actively leasing the properties in anticipation of a future development/redevelopment.
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      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
 $1,350
 $10,707
 $(9,357) $6,562
 $6,100
 $462
191 Spring Street (2) December 29, 2016 160,000
 —
 2,652
 (2,652) 2,821
 1,511
 1,310
145 Broadway (3) April 6, 2017 79,616
 742 2,969
 (2,227) 1,177
 1,223
 (46)
    459,616
 $2,092
 $16,328
 $(14,236) $10,560
 $8,834
 $1,726
___________
(1)
This is the low-rise portion of 601 Lexington Avenue in New York City. Rental revenue includes termination income of approximately $(1.4) million and $(0.9) million for the nine months ended September 30, 2017 and 2016, respectively. In addition, real estate operating expense includes demolition costs of approximately $5.4 million and $0.7 million for the nine months ended September 30, 2017 and 2016, respectively.
(2)Real estate operating expenses for the nine months ended September 30, 2017 includes approximately $2.8 million of demolition costs.
(3)On April 6, 2017, we commenced the development of 145 Broadway, a build-to-suit Class A office project with approximately 485,000 net rentable square feet located in Cambridge, Massachusetts. Real estate operating expenses for the nine months ended September 30, 2017 includes approximately $0.8 million of demolition costs.


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In addition, during the nine months ended September 30, 2017 and 2016, we had approximately $(7,000) and $0.6 million, respectively, of demolition costs related to our Proto Kendall Square residential development project.
Properties Sold Portfolio
The table below lists the properties we sold between January 1, 20162022 and SeptemberJune 30, 2017.2023. Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $2.4$32.4 million and $0.8$10.6 million, respectively, for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022, as detailed below.
Rental RevenueReal Estate Operating Expenses
NameDate SoldProperty TypeSquare Feet20232022Change20232022Change
(dollars in thousands)
Office
195 West StreetMarch 31, 2022Office63,500 $— $749 $(749)$— $242 $(242)
Virginia 95 Office ParkJune 15, 2022Office/Flex733,421 — 5,190 (5,190)— 1,787 (1,787)
601 Massachusetts AvenueAugust 30, 2022Office478,667 — 21,171 (21,171)— 6,239 (6,239)
Total Office1,275,588 — 27,110 (27,110)— 8,268 (8,268)
Residential
The Avant at Reston Town Center (1)November 8, 2022Residential329,195 698 6,027 (5,329)168 2,456 (2,288)
Total Residential329,195 698 6,027 (5,329)168 2,456 (2,288)
1,604,783 $698 $33,137 $(32,439)$168 $10,724 $(10,556)
        Rental Revenue Real Estate Operating Expenses
Name Date Sold Property Type Square Feet 2017 2016 Change 2017 2016 Change
        (dollars in thousands)
415 Main Street February 1, 2016 Office 231,000
 $—
 $1,675
 $(1,675) $—
 $412
 $(412)
30 Shattuck Road April 19, 2017 Land N/A
 —
 —
 —
 14
 35
 (21)
40 Shattuck Road June 13, 2017 Office 122,000
 846 1,556
 (710) 599
 981
 (382)
Reston Eastgate August 30, 2017 Land N/A
 —
 —
 —
 76
 98
 (22)
      353,000
 $846
—
$3,231
—
$(2,385) $689
 $1,526
 $(837)
_____________
(1)We retained and continue to own approximately 26,000 square feet of ground-level retail space. Rental Revenue and Real Estate Operating Expenses for the six months ended June 30, 2023 represent the ground-level retail space. Rental Revenue and Real Estate Operating Expenses for the six months ended June 30, 2022 represent the entire property and not just the portion sold.
For additional information on the sales of the above properties refer to “Results of Operations—Other Income and Expense Items—Gains on Sales of Real Estate” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Residential Net Operating Income
Net operating income for our residential same properties decreasedincreased by approximately $12,000$2.7 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016.2022.
The following reflects our occupancy and rate information for The Lofts at Atlantic Wharf and The Avant at Reston Town Centerour residential same properties for the ninesix months ended SeptemberJune 30, 20172023 and 2016.2022.

Average Monthly Rental Rate (1)Average Rental Rate Per Occupied Square FootAverage Physical Occupancy (2)Average Economic Occupancy (3)
Name20232022Change (%)20232022Change (%)20232022Change (%)20232022Change (%)
Proto Kendall Square$3,034 $2,759 10.0 %$5.57 $5.07 9.9 %95.6 %94.4 %1.3 %95.3 %93.7 %1.7 %
The Lofts at Atlantic Wharf$4,434 $4,015 10.4 %$4.91 $4.47 9.8 %95.9 %96.9 %(1.0)%96.4 %96.4 %— %
Signature at Reston$2,670 $2,631 1.5 %$2.77 $2.71 2.2 %94.2 %94.7 %(0.5)%93.4 %94.1 %(0.7)%
The Skylyne$3,446 $3,366 2.4 %$4.39 $4.09 7.3 %91.9 %77.7 %18.3 %89.6 %75.2 %19.1 %
_____________  
(1)Average Monthly Rental Rate is calculated as the average of the quotients obtained by dividing (A) rental revenue as determined in accordance with GAAP, by (B) the number of occupied units for each month within the applicable fiscal period.
(2)Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
(3)Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. 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
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  The Lofts at Atlantic Wharf The Avant at Reston Town Center
  2017 2016 Percentage
Change		 2017 2016 Percentage
Change
Average Monthly Rental Rate (1) $4,248
 $4,150
 2.4 % $2,391
 $2,375
 0.7 %
Average Rental Rate Per Occupied Square Foot $4.71
 $4.59
 2.6 % $2.63
 $2.61
 0.8 %
Average Physical Occupancy (2) 94.4% 96.3% (2.0)% 93.8% 94.2% (0.4)%
Average Economic Occupancy (3) 95.3% 97.3% (2.1)% 92.9% 94.1% (1.3)%
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. Actual market rents and trends in such rents for a region as reported by others may vary materially from Market Rents used by us. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
___________  
(1)Average Monthly Rental Rate is defined as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units. 
(2)Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
(3)Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. 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.
Hotel Net Operating Income
NetThe Boston Marriott Cambridge hotel had net operating income of approximately $7.2 million for the six months ended June 30, 2023, representing an increase of approximately $1.9 million compared to the six months ended June 30, 2022. As demand for travel has returned, the Boston Marriott Cambridge hotel property decreased by approximately $0.3 million for the nine months ended September 30, 2017 comparedhas seen an increase in occupancy and room rates, which has led to 2016, which was partially due to the hotel undergoing a rooms renovation project on all of its 437 rooms that was completed during the nine months ended September 30, 2017. We expect our hotel to contribute between $13 million and $15 million toincreased net operating income for 2017 and 2018.

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income.
The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the ninesix months ended SeptemberJune 30, 20172023 and 2016.2022.
 2017 2016 
Percentage
Change
20232022
Change (%)
Occupancy 81.0% 82.2% (1.5)%Occupancy69.3 %57.1 %21.4 %
Average daily rate $273.96
 $269.10
 1.8 %Average daily rate$323.14 $306.36 5.5 %
Revenue per available room, REVPAR $221.98
 $221.28
 0.3 %
REVPARREVPAR$223.95 $208.11 7.6 %
Other Operating IncomeRevenue and Expense Items
Development and Management Services Revenue
Development and management services revenue increased by an aggregate of approximately $6.1$6.7 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016.2022. Development services revenue and management services revenue increased by approximately $3.6$2.2 million and $2.5$4.5 million, respectively. The increase in development services revenue iswas primarily related to an approximately $2.5 million development fee we received as a result of a third-party terminating their development agreement with us. The remaining increase in the development fees earned was from a third-party development agreement in the Boston region and from our New York unconsolidated joint venture that is developing Dock 72properties in Brooklyn, New York. Managementthe San Francisco and Washington, DC regions. The increase in management services revenue increasedwas primarily duerelated to an increase in property management fees we earned from ouran unconsolidated joint venture that acquired Colorado Center in Santa Monica, California on July 1, 2016, as well as an increase in service income that wethe New York region and asset management fees earned from our tenantsan unconsolidated joint venture in our New Yorkthe Los Angeles region. We expect our development and management services revenue to contribute between $32 million and $34 million for 2017 and between $29 million and $34 million for 2018.
General and Administrative Expense
General and administrative expense increased by approximately $4.4$22.1 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022 primarily due to increases in compensation expense and other general and administrative expenses increasing byof approximately $3.5$20.3 million and $0.9$1.8 million, respectively. The increase in compensation expense was primarily related to (1) an approximately $1.0$10.2 million increase in the value of our deferred compensation plan and (2) an approximately $2.2$10.1 million difference between the unrecognized expense remaining from the 2014 MYLTIP Units compared to the expense that was recognized during the nine months ended September 30, 2017 for the newly issued 2017 MYLTIP Units (See Notes 8 and 11 to the Consolidated Financial Statements) and (3) an increase in other compensation related expenses, of approximately $0.9 million. Theseprimarily due to age-based vesting and annual increases were partially offset by an increase in capitalized wages of approximately $0.6 million. The increase in capitalized wages is shown as a decrease in general and administrative expense as these costs are capitalized and included in real estate assets or deferred charges on our Consolidated Balance Sheets (see below).employee compensation. The increase in other general and administrative expenses was primarily related to the write-off of the remaining fees associated with BXP’s ATM stock offering program that expired on June 3, 2017 and an increase in other professional fees. We expect our general and administrative expenses to be between $110 million and $115 million for 2017 and between $115 million and $120 million for 2018.
Wages directly related to the development and leasing of rental properties are capitalized and included in real estate assets or deferred charges on our Consolidated Balance Sheets and amortized over the useful lives of the applicable asset or lease term. Capitalized wages for the ninesix months ended SeptemberJune 30, 20172023 and 20162022 were approximately $13.6$9.1 million and $13.0$8.1 million, respectively. These costs are not included in the general and administrative expenses discussed above.
Transaction Costs
Transaction costs decreasedincreased by approximately $0.6$0.7 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016. This decrease was2022 due primarily related to costs incurred in connection with the acquisitionpursuit and formation of 3625-3635 Peterson Waynew joint ventures in Santa Clara, California, which was completed on April 22, 2016, and2023 that did not occur at the acquisition of a 49.8% interestsame levels in an existing joint venture that owns and operates Colorado Center in Santa Monica, California on July 1, 2016.2022. In general, transaction costs relaterelating to the formation of new and pending joint ventures pending and completed asset sales and the pursuit of other transactions including acquisitions. However, in January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”) and we chose to early adopt it during the first quarter of 2017. We expect that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business andare expensed as such we expect we will no longer be required to expense transaction costs for acquisitions or costs related to the successful acquisition of a property (See Note 2 to the Consolidated Financial Statements).

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Impairment Loss
On September 27, 2016, we executed a letter of intent for the sale of the remaining parcel of land at our Washingtonian North property located in Gaithersburg, Maryland. The letter of intent caused us to reevaluate our strategy for the land and based on a shorter than expected hold period, we reduced the carrying value of the land to the estimated net sales price and recognized an impairment loss of approximately $1.8 million during the nine months ended September 30, 2016.incurred.
Depreciation and Amortization Expense
Depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by
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BPLP.  This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties.  The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in depreciation expense. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
Boston Properties, Inc.BXP
Depreciation and amortization expense decreasedincreased by approximately $53.1$50.5 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016,2022, as detailed below.
PortfolioDepreciation and Amortization for the six months ended June 30,
20232022Change
(in thousands)
Same Property Portfolio$339,732 $339,692 $40 
Properties Acquired Portfolio35,080 4,174 30,906 
Properties Placed In-Service Portfolio23,188 6,709 16,479 
Properties in or Held for Development or Redevelopment Portfolio (1)13,088 4,005 9,083 
Properties Sold Portfolio223 6,190 (5,967)
$411,311 $360,770 $50,541 
  Depreciation and Amortization Expense for the nine months ended September 30,
2017 2016 Change
  (in thousands)
Same Property Portfolio $445,553
 $454,110
 $(8,557)
Properties Placed in-Service Portfolio 10,881
 5,741
 5,140
Properties Acquired Portfolio 3,658
 1,719
 1,939
Properties in Development or Redevelopment Portfolio (1) 2,924
 54,093
 (51,169)
Properties Sold Portfolio 272
 708
 (436)
  $463,288
 $516,371
 $(53,083)
_____________
___________
(1)
On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City 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. We recorded approximately $50.8 million, including $3.2 million related to the step-up of real estate assets, of accelerated depreciation expense for the portion of the complex demolished.
Boston Properties Limited Partnership
Depreciation and amortization expense decreased by approximately $50.1 million for(1)During the ninesix months ended SeptemberJune 30, 2017 compared2023, the Kendall Center Blue Parking Garage was taken out of service and demolished to 2016, as detailed below.
  Depreciation and Amortization Expense for the nine months ended September 30,
2017 2016 Change
  (in thousands)
Same Property Portfolio $439,367
 $448,155
 $(8,788)
Properties Placed in-Service Portfolio 10,881
 5,741
 5,140
Properties Acquired Portfolio 3,658
 1,719
 1,939
Properties in Development or Redevelopment Portfolio (1) 2,924
 50,911
 (47,987)
Properties Sold Portfolio 272
 708
 (436)
  $457,102
 $507,234
 $(50,132)
___________
(1)On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City 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

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290 Binney Street, an approximately 25,000566,000 net rentable square feet of retail space. Wefoot laboratory/life sciences project in Cambridge, Massachusetts. As a result, during the six months ended June 30, 2023, we recorded approximately $47.6$0.8 million of accelerated depreciation expense for the portiondemolition of the complex demolished.garage, of which approximately $0.2 million related to the step-up of real estate assets.
BPLP
Depreciation and amortization expense increased by approximately $50.5 million for the six months ended June 30, 2023 compared to 2022, as detailed below.
PortfolioDepreciation and Amortization for the six months ended June 30,
20232022Change
(in thousands)
Same Property Portfolio$336,368 $336,224 $144 
Properties Acquired Portfolio35,080 4,174 30,906 
Properties Placed In-Service Portfolio23,188 6,709 16,479 
Properties in or Held for Development or Redevelopment Portfolio (1)12,908 4,005 8,903 
Properties Sold Portfolio223 6,190 (5,967)
$407,767 $357,302 $50,465 
_____________
(1)During the six months ended June 30, 2023, the Kendall Center Blue Parking Garage was taken out of service and demolished to support the development of 290 Binney Street, an approximately 566,000 net rentable square foot laboratory/life sciences project in Cambridge, Massachusetts. As a result, during the six months ended June 30, 2023, we recorded approximately $0.6 million of accelerated depreciation expense for the demolition of the garage.
Direct Reimbursements of Payroll and Related Costs From Management Services Contracts and Payroll and Related Costs From Management Service Contracts
We have determined that amounts reimbursed for payroll and related costs received from third parties in connection with management services contracts should be reflected on a gross basis instead of on a net basis as we have determined that we are the principal under these arrangements. We anticipate that these two financial statement line items will generally offset each other.
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Other Income and Expense Items
Income (loss) from Unconsolidated Joint Ventures
IncomeFor the six months ended June 30, 2023 compared to 2022, income (loss) from unconsolidated joint ventures increaseddecreased by approximately $1.5$16.4 million for the nine months ended September 30, 2017 compared to 2016 due primarily to an increase in our share of net income from Colorado Center in Santa Monica, California, which we acquired on July 1, 2016, partially offset by a decrease in our share of net income from our Annapolis Junction and 540 Madison Avenue joint ventures. The decrease in our share of net income from our Annapolis Junction joint venture is primarily due to a(1) an approximately $5.3 million decrease in occupancynet income due to the acquisition of our 200 Fifth Avenue joint venture, primarily related to depreciation and amortization and (2) an increase in interest expense related to Annapolis Junction Building One’s mortgage loan having an event of default and, commencing October 17, 2016, being charged interest at the default interest rate. The decrease in net income from our 540 Madison Avenue joint venture was primarily related to an increase in interest expense as the mortgage loan that encumbers the property bears interest at a variable rate. On July 28, 2017, the joint venture that owns Colorado Center obtained mortgage loan financing, the result of which increased interest expense, which reduced the net income for the joint venture. For additional information pertaining to the Annapolis Junction Building One mortgage loan refer to “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capitalization—Off-Balance Sheet Arrangements—Joint Venture Indebtedness.”
Interest and Other Income
Interest and other income decreased by approximately $3.2 million for the nine months ended September 30, 2017 compared to 2016 due primarily to decreases in other income and interest income of approximately $3.0 million and $0.2 million, respectively. During the nine months ended September 30, 2017, the decrease in other income was primarily due to an approximately $1.3 million tax credit that we received from our Washington, DC region and approximately $1.7 million related to the sale of historic tax credits at The Lofts at Atlantic Wharf in Boston, Massachusetts. Both of these items did not recur during 2017.
On October 20, 2010, we closed a transaction with a financial institution (the “HTC Investor”) related to the historic rehabilitation of The Lofts at Atlantic Wharf in Boston, Massachusetts. The HTC Investor has contributed an aggregate of approximately $15 million to the project. As part of its contribution, the HTC Investor received substantially all of the benefits derived from the tax credits. Beginning in July 2012 through July 2016, we recognized the cash received as revenue over the five-year tax credit recapture period as defined in the Internal Revenue Code.
Gains (Losses) from Early Extinguishments of Debt
On June 7, 2017, our consolidated entity in which we have a 60% ownershipincreasing interest and that owns 767 Fifth Avenue (the General Motors Building) located in New York City completed the refinancing of approximately $1.6 billion of indebtedness that had been secured by direct and indirect interests in 767 Fifth Avenue. The new mortgage financing has a principal amount of $2.3 billion, bears interest at a fixed interest rate of 3.43% per annum and maturesrates on June 9, 2027. The loan requires interest-only payments during the 10-year term of the loan, with the entire principal amount due at maturity. The extinguished debt bore interest at a weighted-average rate of approximately 5.96% per annum, an effective GAAP interest rate of approximately 3.03% per annum and was scheduled to mature on October 7, 2017. There was no prepayment penalty associated with the repayment of the prior indebtedness. We recognized a net gain from early extinguishment of debt totaling approximately $14.6 million primarily consisting of the acceleration of the remaining balance related to the historical fair value debt adjustment.
On April 24, 2017, BPLP entered into the 2017 Credit Facility (See Note 5 to the Consolidated Financial Statements). Certain lenders, under the prior credit facility, chose to not participate in the 2017 Credit Facility and as such we recognized a loss on early extinguishment of debt of approximately $0.3 million related to the acceleration of finance fees associated with the prior credit agreement.
On September 1, 2016, we used a portion of the net proceeds from BPLP’s offering of senior unsecured notes and available cash to repay the mortgage loan collateralized by our 599 Lexington Avenue property located in New York City totaling $750.0 million. The mortgage loan bore interest at a fixed rate of 5.57% per annum (5.41% per annum GAAP interest rate) and was scheduled to mature on March 1, 2017. There was no prepayment penalty. We recognized a gain from early extinguishment of debt totaling approximately $0.4 million consisting of the acceleration of the remaining balance related to the effective portion of a previous interest rate hedging program included within accumulated other comprehensive loss, offset by the write-off of unamortized deferred financing costs.

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On September 1, 2016, we used a portion of the net proceeds from BPLP’s offering of senior unsecured notes and available cash to repay the mortgage loan collateralized by our Embarcadero Center Four property located in San Francisco, California totaling approximately $344.8 million. The mortgage loan bore interest at a fixed rate of 6.10% per annum (7.02% per annum GAAP interest rate) and was scheduled to mature on December 1, 2016. There was no prepayment penalty. We recognized a loss from early extinguishment of debt totaling approximately $0.7 million consisting of the write-off of unamortized deferred financing costs and the acceleration of the remaining balance related to the effective portion of a previous interest rate hedging program included within accumulated other comprehensive loss.
Gains from Investments in Securities
Gains from investments in securities for the nine months ended September 30, 2017 and 2016 related to investments that we have made to reduce our market risk relating to a deferred compensation plan that we maintain for BXP’s officers. Under this deferred compensation plan, each officer who is eligible to participate is permitted to defer a portion of the officer’s current income on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer. In order to reduce our market risk relating to this plan, we typically acquire, in a separate account that is not restricted as to its use, similar or identical investments as those selected by each officer. This enables us to generally match our liabilities to BXP’s officers under the deferred compensation plan with equivalent assets and thereby limit our market risk. The performance of these investments is recorded as gains from investments in securities. During the nine months ended September 30, 2017 and 2016, we recognized gains of approximately $2.7 million and $1.7 million, respectively, on these investments. By comparison, our general and administrative expense increased by approximately $2.7 million and $1.7 million during the nine months ended September 30, 2017 and 2016, respectively, as a result of an increase in our liability under our deferred compensation plan that were associated with the performance of the specific investments selected by our officers participating in the plan.
Interest Expense
Interest expense decreased by approximately $32.2 million for the nine months ended September 30, 2017 compared to 2016 as detailed below.
Component Change in interest
expense for the nine months ended
September 30, 2017 compared to September 30, 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 $20,797
Refinancing of the debt collateralized by 767 Fifth Avenue (the General Motors Building) (1) 10,251
Issuance of $1.0 billion in aggregate principal of 3.650% senior notes due 2026 on January 20, 2016 1,953
Utilization of the Unsecured Line of Credit as well as an increase in capacity due to the execution of the 2017 Credit Facility (1) 1,879
Amortization of deferred financing fees for BPLP’s unsecured debt and credit facility 1,036
Other interest expense (excluding senior notes) 203
Total increases to interest expense 36,119
Decreases to interest expense due to:  
Repayment of mortgage financings (2) (44,900)
Increase in capitalized interest (3) (14,330)
Decrease in the interest for the Outside Members’ Notes Payable for the 767 Fifth Avenue (the General Motors Building) (4) (9,133)
Total decreases to interest expense (68,363)
Total change in interest expense $(32,244)
___________  
(1)See Note 5 to the Consolidated Financial Statements.
(2)Includes the repayment of the mortgage loans collateralized Fountain Square, Embarcadero Center Four and 599 Lexington Avenue.

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(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.”
(4)
The related interest expense from the Outside Members’ Notes Payable totaled approximately $16.3 million and $25.4 million for the nine months ended September 30, 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. On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).

Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term. As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed. Interest capitalized for the nine months ended September 30, 2017 and 2016 was approximately $43.3 million and $29.0 million, respectively. These costs are not included in the interest expense referenced above.
We estimate net interest expense, which includes debt extinguishment costs, will be between $355 million to $360 million for 2017 and between $375 million to $390 million for 2018. For both years, these amounts are net of approximately $50 million to $60 million of estimated capitalized interest. In addition, if we refinance, prepay or repurchase existing indebtedness prior to its maturity, we may incur prepayment penalties, realize the acceleration of amortized costs, and our actual interest expense may differ materially from the estimates above.
At September 30, 2017, our variable rate debt consisted of BPLP’s $2.0 billion 2017 Credit Facility, of which no amount was outstanding at September 30, 2017. For a summary of our consolidated debt as of September 30, 2017 and September 30, 2016 refer to the heading “Liquidity and Capital Resources—Capitalization—Debt Financing” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Losses from Interest Rate Contracts
On August 17, 2016, in conjunction with BPLP’s offering of senior unsecured notes, we terminated 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. We cash-settled the contracts and made cash payments to the counterparties aggregating approximately $49.3 million. We recognized approximately $0.1 million of losses on interest rate contracts during the nine months ended September 30, 2016 related to the partial ineffectiveness of the interest rate contracts. We will reclassify into earnings over the 10-year term of the 2.750% senior unsecured notes due 2026 as an increase to interest expense approximately $49.2 million (or approximately $4.9 million per year) of the amounts recorded on our consolidated balance sheets within accumulated other comprehensive loss, which represents the effective portion of the applicable interest rate contracts.debt.
Gains on Sales of Real Estate
The gainsGains on sales of real estate may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP. This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in the gains on sales of real estate when those properties are sold. For additional information, see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.

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Boston Properties, Inc.
Gains on sales of real estate decreased by approximately $73.8 million for the nine months ended September 30, 2017 compared to 2016, respectively, as detailed below.
Name Date Sold Property Type Square Feet Sale Price Cash Proceeds Gain on Sale of Real Estate 
        (dollars in millions) 
2017             
30 Shattuck Road April 19, 2017 Land N/A $5.0
 $5.0
 $3.7
 
40 Shattuck Road June 13, 2017 Office 122,000 12.0
 11.9
 —
(1)
Reston Eastgate August 30, 2017 Land N/A 14.0
 13.2
 2.8
 
        $31.0
 $30.1
 $6.5
(2)
2016             
415 Main Street February 1, 2016 Office 231,000 $105.4
 $104.9
 $60.8
 
Broad Run Business Park August 16, 2016 Land N/A 18.0
 17.9
 13.0
 
        $123.4
 $122.8
 $73.8
(3)
___________  
(1)The gain on sale of real estate for this property was $28,000.
(2)Excludes approximately $58,000 and $0.1 million of gains on sale of real estate recognized during the nine months ended September 30, 2017 related to a previously deferred gain amount from 2016 and 2015 sales, respectively.
(3)Excludes approximately $6.8 million of a gain on sale of real estate recognized during the nine months ended September 30, 2016 related to a previously deferred gain amount from the 2014 sale of Patriots Park located in Reston, Virginia.

Boston Properties Limited PartnershipBXP
Gains on sales of real estate decreased by approximately $75.4$118.9 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 2016,2022. During the six months ended June 30, 2022, we recognized gains of approximately $22.7 million and $96.2 million related to the sales of 195 West Street in Waltham, Massachusetts and Virginia 95 Office Park in Springfield, Virginia, respectively.
BPLP
Gains on sales of real estate decreased by approximately $123.0 million for the six months ended June 30, 2023 compared to 2022. During the six months ended June 30, 2022, we recognized gains of approximately $23.4 million and $99.5 million related to the sales of 195 West Street in Waltham, Massachusetts and Virginia 95 Office Park in Springfield, Virginia, respectively.
Interest and Other Income (Loss)
Interest and other income (loss) increased by approximately $25.9 million for the six months ended June 30, 2023 compared to 2022, due primarily to an increase of approximately $26.8 million in interest income due to increased interest earned on our deposits partially offset by an increase in our allowance for current expected credit losses of approximately $0.8 million.
Other Income - Assignment Fee
On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, we executed an agreement to assign the right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.
Gains (Losses) from Investments in Securities
Gains (losses) from investments in securities for the six months ended June 30, 2023 and 2022 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors. Under the deferred compensation plans, each officer or non-employee director who is eligible to participate is permitted to defer a portion of the officer’s current income or the non-employee director’s compensation on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer or non-employee director. In order to reduce our market risk relating to these plans, we typically acquire, in a separate account that is not restricted as to its use, similar or identical investments as those selected by each officer or non-employee director. This enables us to generally match our liabilities to BXP’s officers or former non-employee directors under our deferred compensation plans with equivalent assets and thereby limit our market risk. The performance of these investments is recorded as gains (losses) from investments in securities. During the six months ended June 30, 2023 and 2022, we recognized gains (losses) of approximately $3.2 million and $(7.0) million, respectively, on these
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investments. By comparison, our general and administrative expense increased (decreased) by approximately $3.2 million and $(7.0) million during the six months ended June 30, 2023 and 2022, respectively, as a result of increases (decreases) in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.
Unrealized Gain on Non-Real Estate Investment
During the year ended December 31, 2022, we began investing in non-real estate investments, which are primarily environmentally focused investment funds. As a result, for the six months ended June 30, 2023, we recognized an unrealized gain of approximately $0.4 million due to the observable changes in the fair value of the investments.
Interest Expense
Interest expense increased by approximately $71.3 million for the six months ended June 30, 2023 compared to 2022, as detailed below.
Name Date Sold Property Type Square Feet Sale Price Cash Proceeds Gain on Sale of Real Estate 
        (dollars in millions) 
2017             
30 Shattuck Road April 19, 2017 Land N/A $5.0
 $5.0
 $3.7
 
40 Shattuck Road June 13, 2017 Office 122,000 12.0
 11.9
 0.6
 
Reston Eastgate August 30, 2017 Land N/A 14.0
 13.2
 2.8
 
        $31.0
 $30.1
 $7.1
(1)
2016             
415 Main Street February 1, 2016 Office 231,000 $105.4
 $104.9
 $63.0
 
Broad Run Business Park August 16, 2016 Land N/A 18.0
 17.9
 13.0
 
        $123.4
 $122.8
 $76.0
(2)
___________  
(1)ComponentExcludes approximately $58,000 and $0.1 million of gains on sale of real estate recognized duringChange in interest expense for the ninesix months ended SeptemberJune 30, 2017 related2023 compared to a previously deferred gain amount from 2016 and 2015 sales, respectively.June 30, 2022
(in thousands)
Increases to interest expense due to:
(2)Increase in interest associated with unsecured term loans and the unsecured credit facility, netExcludes approximately $6.8$29,889 
Issuance of $750 million in aggregate principal of a gain6.750% senior notes due 2027 on saleNovember 17, 202225,350 
Issuance of real estate recognized during the nine months ended September 30, 2016$750 million in aggregate principal of 6.500% senior notes due 2034 on May 15, 20236,113 
Increase in interest due to finance lease for one in-service property4,498 
Amortization expense of financing fees primarily related to a previously deferred gain amount from the 2014 sale of Patriots Park locatedunsecured term loan2,313 
Decrease in Reston, Virginia.capitalized interest related to development projects2,271 
Other interest expense (excluding senior notes)876 
Total increases to interest expense$71,310 


Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term. As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed. Interest capitalized for the six months ended June 30, 2023 and 2022 was approximately $21.2 million and $27.8 million, respectively. These costs are not included in the interest expense referenced above.
At June 30, 2023, our variable rate debt consisted of BPLP’s $1.5 billion unsecured credit facility (the “Revolving Facility”) and $1.2 billion 2023 Unsecured Term Loan. As of June 30, 2023, the Revolving Facility did not have a balance outstanding and the 2023 Unsecured Term Loan had $1.2 billion outstanding. On May 2, 2023, BPLP entered into four interest rate swap contracts with notional amounts aggregating $1.2 billion to effectively fix Term SOFR, the reference rate for the 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. For a summary of our consolidated debt as of June 30, 2023 refer to the heading “Liquidity and Capital Resources—Debt Financing” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Noncontrolling interestsInterests in property partnershipsProperty Partnerships
Noncontrolling interests in property partnerships increased by approximately $33.9$2.3 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022, as detailed below.
Property Noncontrolling Interests in Property Partnerships for the nine months ended September 30,
2017 2016 Change
  (in thousands)
Salesforce Tower $(355) $(3) $(352)
767 Fifth Avenue (the General Motors Building) (1) (1,779) (15,477) 13,698
Times Square Tower 20,002
 20,110
 (108)
601 Lexington Avenue (2) 6,597
 (14,221) 20,818
100 Federal Street 2,483
 2,683
 (200)
Atlantic Wharf Office 7,019
 6,961
 58
  $33,967
 $53
 $33,914
PropertyNoncontrolling Interests in Property Partnerships for the six months ended June 30,
20232022Change
(in thousands)
767 Fifth Avenue (the General Motors Building)$6,181 $6,049 $132 
Times Square Tower11,098 10,483 615 
601 Lexington Avenue (1)7,253 5,651 1,602 
100 Federal Street6,057 6,421 (364)
Atlantic Wharf Office Building7,839 7,491 348 
$38,428 $36,095 $2,333 
_________________________
(1)
On June 7, 2017, our consolidated entity in which we have a 60% interest completed the refinancing of indebtedness that had been secured by direct and indirect interests in 767 Fifth Avenue. Prior to this quarter, the net loss allocation was primarily due to the partners’ share of the interest expense for the outside members’ notes payable which was $16.3 million and $25.4 million for the nine months ended September 30, 2017 and 2016, respectively. On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
(1)The increase was primarily attributable to an increase in lease revenue from our clients.
(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. We will capitalize incremental costs during the redevelopment. BXP and BPLP recognized approximately $50.8 million and $47.6 million, respectively, of depreciation expense associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. Approximately $21.4 million of those amounts was allocated to the outside partners.
Noncontrolling interest - Interest—Common Units of the Operating Partnership
For BXP, noncontrolling interest–interest—common units of the Operating Partnership decreased by approximately $1.8$20.9 million for the ninesix months ended SeptemberJune 30, 20172023 compared to 20162022 due primarily to decreasesa decrease in allocable income, and inwhich was the noncontrolling interest’s ownership percentage.result of recognizing a greater gain on sales of real estate amount during 2022. Due to our UPREIT ownership structure, there is no corresponding line item on BPLP’s financial statements.
Results of Operations for the Three Months Ended SeptemberJune 30, 20172023 and 20162022
Net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders increaseddecreased approximately $40.6$118.7 million and $41.4$135.7 million, respectively, for the three months ended SeptemberJune 30, 20172023 compared to 2016, respectively,2022, as detailed in the following tables and for the reasons discussed below under the heading “Comparison of the three months ended SeptemberJune 30, 20172023 to the three months ended SeptemberJune 30, 2016”2022” within “Item“Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations.”
BelowThe following are reconciliations of net income attributableNet Income Attributable to Boston Properties, Inc. common shareholders to NOINet Operating Income and net income attributableNet Income Attributable to Boston Properties Limited Partnership common unitholders to NOINet Operating Income for the three months ended SeptemberJune 30, 20172023 and 2016.2022. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 50.



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BXP
Boston Properties, Inc.
Three months ended June 30,
20232022Increase/
(Decrease)		%
Change
(in thousands)
Net Income Attributable to Boston Properties, Inc.$104,299 $222,989 $(118,690)(53.23)%
Net Income Attributable to Noncontrolling Interests:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 (13,591)(52.87)%
Noncontrolling interests in property partnerships19,768 18,546 1,222 6.59 %
Net Income136,184 267,243 (131,059)(49.04)%
Other Expenses:
Add:
Interest expense142,473 104,142 38,331 36.81 %
Loss from unconsolidated joint ventures6,668 54 6,614 12,248.15 %
Other Income:
Less:
Unrealized gain on non-real estate investment124 — 124 100.00 %
Gains (losses) from investments in securities1,571 (4,716)6,287 133.31 %
Other income - assignment fee— 6,624 (6,624)(100.00)%
Interest and other income (loss)17,343 1,195 16,148 1,351.30 %
Gains on sales of real estate— 96,247 (96,247)(100.00)%
Other Expenses:
Add:
Depreciation and amortization expense202,577 183,146 19,431 10.61 %
Transaction costs308 496 (188)(37.90)%
Payroll and related costs from management services contracts4,609 3,239 1,370 42.30 %
General and administrative expense44,175 34,665 9,510 27.43 %
Other Revenue:
Less:
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 1,370 42.30 %
Development and management services revenue9,858 6,354 3,504 55.15 %
Net Operating Income$503,489 $484,042 $19,447 4.02 %
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  Total Property Portfolio
  2017 2016 Increase/
(Decrease)		 %
Change
  (in thousands)
Net Income Attributable to Boston Properties, Inc. Common Shareholders $117,337
 $76,753
 $40,584
 52.88 %
Preferred dividends 2,625
 2,589
 36
 1.39 %
Net Income Attributable to Boston Properties, Inc. 119,962
 79,342
 40,620
 51.20 %
Net Income Attributable to Noncontrolling Interests:        
Noncontrolling interest—common units of Boston Properties Limited Partnership 13,402
 9,387
 4,015
 42.77 %
Noncontrolling interests in property partnerships 14,340
 (17,225) 31,565
 183.25 %
Net Income 147,704
 71,504
 76,200
 106.57 %
Gains on sales of real estate 2,891
 12,983
 (10,092) (77.73)%
Income Before Gains on Sales of Real Estate 144,813
 58,521
 86,292
 147.45 %
Other Expenses:        
Add:        
Losses from interest rate contracts —
 140
 (140) (100.00)%
Losses from early extinguishments of debt —
 371
 (371) (100.00)%
Interest expense 92,032
 104,641
 (12,609) (12.05)%
Other Income:        
Less:        
Gains from investments in securities 944
 976
 (32) (3.28)%
Interest and other income 1,329
 3,628
 (2,299) (63.37)%
Income from unconsolidated joint ventures 843
 1,464
 (621) (42.42)%
Operating Income 233,729
 157,605
 76,124
 48.30 %
Other Expenses:        
Add:        
Depreciation and amortization expense 152,164
 203,748
 (51,584) (25.32)%
Impairment loss —
 1,783
 (1,783) (100.00)%
Transaction costs 239
 249
 (10) (4.02)%
General and administrative expense 25,792
 25,165
 627
 2.49 %
Other Revenue:        
Less:        
Development and management services revenue 10,811
 6,364
 4,447
 69.88 %
Net Operating Income $401,113
 $382,186
 $18,927
 4.95 %




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BPLP
Three months ended June 30,
20232022Increase/
(Decrease)		%
Change
(in thousands)
Net Income Attributable to Boston Properties Limited Partnership$118,098 $253,788 $(135,690)(53.47)%
Net Income Attributable to Noncontrolling Interests:
Noncontrolling interests in property partnerships19,768 18,546 1,222 6.59 %
Net Income137,866 272,334 (134,468)(49.38)%
Other Expenses:
Add:
Interest expense142,473 104,142 38,331 36.81 %
Loss from unconsolidated joint ventures6,668 54 6,614 12,248.15 %
Other Income:
Less:
Unrealized gain on non-real estate investment124 — 124 100.00 %
Gains (losses) from investments in securities1,571 (4,716)6,287 133.31 %
Other income - assignment fee— 6,624 (6,624)(100.00)%
Interest and other income (loss)17,343 1,195 16,148 1,351.30 %
Gains on sales of real estate— 99,608 (99,608)(100.00)%
Other Expenses:
Add:
Depreciation and amortization expense200,895 181,416 19,479 10.74 %
Transaction costs308 496 (188)(37.90)%
Payroll and related costs from management services contracts4,609 3,239 1,370 42.30 %
General and administrative expense44,175 34,665 9,510 27.43 %
Other Revenue:
Less:
Direct reimbursements of payroll and related costs from management services contracts4,609 3,239 1,370 42.30 %
Development and management services revenue9,858 6,354 3,504 55.15 %
Net Operating Income$503,489 $484,042 $19,447 4.02 %
NOI is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. and net income attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income attributable to noncontrolling interests, interest expense, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain on non-real estate investment, gains (losses) from investments in securities, other income - assignment fee, interest and other income (loss), gains on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. We use NOI internally as a performance measure and believe it provides useful information to investors regarding our results of operations and financial condition 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. and net income attributable to Boston Properties Limited Partnership. 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., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by us may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.
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  Total Property Portfolio
  2017 2016 Increase/
(Decrease)		 %
Change
  (in thousands)
Net Income Attributable to Boston Properties Limited Partnership Common Unitholders $132,693
 $91,306
 $41,387
 45.33 %
Preferred distributions 2,625
 2,589
 36
 1.39 %
Net Income Attributable to Boston Properties Limited Partnership 135,318
 93,895
 41,423
 44.12 %
Net Income Attributable to Noncontrolling Interests:        
Noncontrolling interests in property partnerships 14,340
 (17,225) 31,565
 183.25 %
Net Income 149,658
 76,670
 72,988
 95.20 %
Gains on sales of real estate 2,891
 12,983
 (10,092) (77.73)%
Income Before Gains on Sales of Real Estate 146,767
 63,687
 83,080
 130.45 %
Other Expenses:        
Add:        
Losses from interest rate contracts —
 140
 (140) (100.00)%
Losses from early extinguishments of debt —
 371
 (371) (100.00)%
Interest expense 92,032
 104,641
 (12,609) (12.05)%
Other Income:        
Less:        
Gains from investments in securities 944
 976
 (32) (3.28)%
Interest and other income 1,329
 3,628
 (2,299) (63.37)%
Income from unconsolidated joint ventures 843
 1,464
 (621) (42.42)%
Operating Income 235,683
 162,771
 72,912
 44.79 %
Other Expenses:        
Add:        
Depreciation and amortization expense 150,210
 198,582
 (48,372) (24.36)%
Impairment loss —
 1,783
 (1,783) (100.00)%
Transaction costs 239
 249
 (10) (4.02)%
General and administrative expense 25,792
 25,165
 627
 2.49 %
Other Revenue:        
Less:        
Development and management services revenue 10,811
 6,364
 4,447
 69.88 %
Net Operating Income $401,113
 $382,186
 $18,927
 4.95 %

We believe that in order to understand our operating results, NOI should be examined in conjunction with net income attributable to Boston Properties, Inc. and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. NOI should not be considered as a substitute for net income attributable to Boston Properties, Inc. or net income attributable to Boston Properties Limited Partnership (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.
Comparison of the three months ended SeptemberJune 30, 20172023 to the three months ended SeptemberJune 30, 2016.2022
The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 148126 properties totaling approximately 39.738.3 million net rentable square feet, of space, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or fully placed in-service on or prior to JulyApril 1, 20162022 and owned and in-service through SeptemberJune 30, 2017.2023. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, acquiredin or inheld for development or redevelopment after JulyApril 1, 20162022 or disposed of on or prior to SeptemberJune 30, 2017.2023. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the three months ended SeptemberJune 30, 20172023 and 20162022 with respect to the properties that were acquired, placed in-service, acquired, in or held for development or redevelopment or sold.



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 Same Property PortfolioProperties
Acquired Portfolio		Properties
Placed In-Service
Portfolio		Properties in or Held for
Development or
Redevelopment
Portfolio		Properties Sold PortfolioTotal Property Portfolio
20232022Increase/
(Decrease)		%
Change		2023202220232022202320222023202220232022Increase/
(Decrease)		%
Change
(dollars in thousands)
Rental Revenue: (1)
Lease Revenue (Excluding Termination Income)$689,485 $673,769 $15,716 2.33 %$26,433 $5,815 $33,404 $8,310 $751 $5,870 $355 $12,761 $750,428 $706,525 $43,903 6.21 %
Termination Income(164)1,789 (1,953)(109.17)%— 133 — — — — — — (164)1,922 (2,086)(108.53)%
Lease Revenue689,321 675,558 13,763 2.04 %26,433 5,948 33,404 8,310 751 5,870 355 12,761 750,264 708,447 41,817 5.90 %
Parking and Other Revenue24,559 23,543 1,016 4.32 %1,164 524 476 — — 2,491 1 328 26,200 26,886 (686)(2.55)%
Total Rental Revenue (1)713,880 699,101 14,779 2.11 %27,597 6,472 33,880 8,310 751 8,361 356 13,089 776,464 735,333 41,131 5.59 %
Real Estate Operating Expenses270,149 253,044 17,105 6.76 %4,103 1,680 9,579 2,944 1,336 2,310 86 4,052 285,253 264,030 21,223 8.04 %
Net Operating Income (Loss), Excluding Residential and Hotel443,731 446,057 (2,326)(0.52)%23,494 4,792 24,301 5,366 (585)6,051 270 9,037 491,211 471,303 19,908 4.22 %
Residential Net Operating Income (2)6,470 5,214 1,256 24.09 %— — — — — — — 1,880 6,470 7,094 (624)(8.80)%
Hotel Net Operating Income (2)5,808 5,645 163 2.89 %— — — — — — — — 5,808 5,645 163 2.89 %
Net Operating Income (Loss)$456,009 $456,916 $(907)(0.20)%$23,494 $4,792 $24,301 $5,366 $(585)$6,051 $270 $10,917 $503,489 $484,042 $19,447 4.02 %
_______________
(1)Rental Revenue is equal to Revenue less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Revenue per the Consolidated Statements of Operations, excluding the residential and hotel revenue that is noted below. We use Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods.
(2)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 67. Residential Net Operating Income for the three months ended June 30, 2023 and 2022 is comprised of Residential Revenue of $12,253 and $16,912 less Residential Expenses of $5,783 and $9,818, respectively. Hotel Net Operating Income for the three months ended June 30, 2023 and 2022 is comprised of Hotel Revenue of $13,969 and $12,089 less Hotel Expenses of $8,161 and $6,444, respectively, per the Consolidated Statements of Operations.
69
 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$618,930
 $599,451
 $19,479
 3.25 % $4,267
 $174
 $689
 $—
 $873
 $2,233
 $—
 $450
 $624,759
 $602,308
 $22,451
 3.73%
Termination Income4,740
 836
 3,904
 466.99 % —
 —
 —
 —
 43
 (1,006) —
 —
 4,783
 (170) 4,953
 2,913.53%
Total Rental Revenue623,670
 600,287
 23,383
 3.90 % 4,267
 174
 689
 —
 916
 1,227
 —
 450
 629,542
 602,138
 27,404
 4.55%
Real Estate Operating Expenses231,351
 223,024
 8,327
 3.73 % 1,674
 53
 269
 —
 2,452
 2,920
 18
 340
 235,764
 226,337
 9,427
 4.17%
Net Operating Income (Loss), excluding residential and hotel392,319
 377,263
 15,056
 3.99 % 2,593
 121
 420
 —
 (1,536) (1,693) (18) 110
 393,778
 375,801
 17,977
 4.78%
Residential Net Operating Income (1)2,711
 2,772
 (61) (2.20)% —
 —
 —
 —
 7
 (623) —
 —
 2,718
 2,149
 569
 26.48%
Hotel Net Operating Income (1)4,617
 4,236
 381
 8.99 % —
 —
 —
 —
 —
 —
 —
 —
 4,617
 4,236
 381
 8.99%
Net Operating Income (Loss) (1)$399,647
 $384,271
 $15,376
 4.00 % $2,593
 $121
 $420
 $—
 $(1,529) $(2,316) $(18) $110
 $401,113
 $382,186
 $18,927
 4.95%
_______________  
(1)
For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 50. Residential Net Operating Income for the three months ended September 30, 2017 and 2016 is comprised of Residential Revenue of $4,295 and $4,372, less Residential Expenses of $1,577 and $2,223, respectively. Hotel Net Operating Income for the three months ended September 30, 2017 and 2016 is comprised of Hotel Revenue of $13,064 and $12,354 less Hotel Expenses of $8,447 and $8,118, respectively, per the Consolidated Statements of Operations.


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Same Property Portfolio
RentalLease Revenue (Excluding Termination Income)
RentalLease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $19.5$15.7 million for the three months ended SeptemberJune 30, 20172023 compared to 2016.2022. The increase was primarily the result of increases in revenue from our leases and parking and other income of approximately $18.9 million and $1.5 million partially offset by a decrease in other tenant recoveries of approximately $0.9 million. Rental revenue from our leases increased approximately $18.9 million as a result of our average revenue per square foot increasing by approximately $1.96, which contributed$2.75, contributing approximately $17.5$25.1 million, andpartially offset by an approximately $1.4$9.4 million increasedecrease due to our average occupancy increasingdecreasing from 91.58%91.6% to 91.78%90.3%.
Termination Income
Termination income increaseddecreased by approximately $3.9$2.0 million for the three months ended SeptemberJune 30, 20172023 compared to 2016.2022.
Termination income for the three months ended SeptemberJune 30, 20172023 related to seventeen tenants10 clients across the Same Property Portfolio and totaled approximately $4.7 million, of which approximately $3.0 million is from tenants that terminated leases early at 767 Fifth Avenue (the General Motors Building)$(164,000). This building is located in New York City.
Termination income for the three months ended SeptemberJune 30, 20162022 related to nine tenantssix clients across the Same Property Portfolio and totaled approximately $0.8$1.8 million, which was primarily related to clients that terminated leases early in New York City.
Parking and Other Revenue
Parking and other revenue increased by approximately $1.0 million for the three months ended June 30, 2023 compared to 2022. Parking revenue increased by approximately $1.2 million and was partially offset by a decrease in other revenue of approximately $0.2 million. The increase in parking revenue was primarily due to an increase in transient and monthly parking.
Real Estate Operating Expenses
Real estate operating expenses from the Same Property Portfolio increased by approximately $8.3$17.1 million, or 3.7%6.8%, for the three months ended SeptemberJune 30, 20172023 compared to 20162022, due primarily to increases in real estate taxes of approximately $5.0 million, or 4.0%, and other real estate operating expenses of approximately $5.9$9.8 million, or 5.5%, and $2.4 million, or 2.1%, respectively.7.7%. The increase in real estate taxes was primarily experienced in the New York CBD properties.
Properties Placed In-Service Portfolio
The table below listsCity. In addition, there was approximately $2.3 million related to the propertiesmarketing and initial opening expenses associated with the View Boston Observatory which was completed and placed in-service or partially placed in-service from Julyon June 1, 2016 through September 30, 2017. Rental revenue and real estate operating expenses increased by approximately $4.1 million and $1.6 million, respectively, for the three months ended September 30, 2017 compared to 2016 as detailed below.


  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)
Reservoir Place North Second Quarter, 2016 Second Quarter, 2017 73,258
 $—
 $—
 $—
 $103
 $34
 $69
888 Boylston Street Third Quarter, 2016 Third Quarter, 2017 417,000
 4,267
 174
 4,093
 1,571
 19
 1,552
      490,258
 $4,267
 $174
 $4,093
 $1,674
 $53
 $1,621
2023.
Properties Acquired Portfolio
The table below lists the properties acquired between JulyApril 1, 20162022 and SeptemberJune 30, 2017.2023. Rental revenue and real estate operating expenses increased by approximately $0.7$21.1 million and $0.3$2.4 million, respectively, for the three months ended SeptemberJune 30, 20172023 compared to 2016,2022, as detailed below.
Square FeetRental RevenueReal Estate Operating Expenses
NameDate acquired20232022Change20232022Change
(dollars in thousands)
Madison Centre (1)May 17, 2022754,988 $17,056 $6,472 $10,584 $3,083 $1,680 $1,403 
125 BroadwaySeptember 16, 2022271,000 10,541 — 10,541 1,020 — 1,020 
1,025,988 $27,597 $6,472 $21,125 $4,103 $1,680 $2,423 
______________
      Rental Revenue Real Estate Operating Expenses
Name Date acquired Square Feet 2017 2016 Change 2017 2016 Change
      (dollars in thousands)
103 Carnegie Center May 25, 2017 96,332
 $689
 $—
 $689
 $269
 $—
 $269
(1)Rental revenue for the three months ended June 30, 2022 includes approximately $0.1 million of termination income.

65


Properties in Development or RedevelopmentPlaced In-Service Portfolio
The table below lists the properties wethat were placed in developmentin-service or redevelopmentpartially placed in-service between JulyApril 1, 20162022 and SeptemberJune 30, 2017.2023. Rental revenue and real estate operating expenses decreasedfrom our Properties Placed In-Service Portfolio increased by approximately $0.3$25.6 million and $0.5$6.6 million, respectively, for the three months ended SeptemberJune 30, 20172023 compared to 2016,2022, as detailed below.
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Table of Contents
      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
 $916
 $106
 $810
 $2,204
 $2,133
 $71
191 Spring Street (2) December 29, 2016 160,000
 —
 197
 (197) 233
 482
 (249)
145 Broadway (3) April 6, 2017 79,616
 —
 924
 (924) 15 305
 (290)
    459,616
 $916
 $1,227
 $(311) $2,452
 $2,920
 $(468)
Quarter Initially Placed In-ServiceQuarter Fully Placed In-ServiceRental RevenueReal Estate Operating Expenses
NameSquare Feet20232022Change20232022Change
(dollars in thousands)
Reston NextFourth Quarter, 2021Fourth Quarter, 20221,063,236 $11,412 $8,088 $3,324 $3,876 $2,917 $959 
325 Main StreetSecond Quarter, 2022Second Quarter, 2022414,565 11,353 213 11,140 1,937 10 1,927 
2100 Pennsylvania AvenueSecond Quarter, 2022Second Quarter, 2023475,849 5,440 9 5,431 2,433 17 2,416 
880 Winter Street (1)Third Quarter, 2022Fourth Quarter, 2022243,618 5,675 — 5,675 1,333 — 1,333 
2,197,268 $33,880 $8,310 $25,570 $9,579 $2,944 $6,635 
______________
___________(1)Conversion of a 224,000 square foot office property located in Waltham, Massachusetts to laboratory space.
(1)This is the low-rise portion of 601 Lexington Avenue in New York City. Rental revenue includes approximately $43,000 and $(1.0) million of termination income

Properties in or Held for Development or Redevelopment Portfolio
The table below lists the properties that were in or held for development or redevelopment between April 1, 2022 and June 30, 2023. Rental revenue and real estate operating expenses from our Properties in or Held for Development or Redevelopment Portfolio decreased by approximately $7.6 million and $1.0 million, respectively, for the three months ended September 30, 2017 and September 30, 2016, respectively. In addition, real estate operating expenses includes approximately $1.8 million and $0.7 million of demolition costs for the three months ended September 30, 2017 and September 30, 2016, respectively.
(2)Real estate operating expenses for the three months ended September 30, 2017 includes approximately $0.2 million of demolition costs.
(3)On April 6, 2017, we commenced the development of 145 Broadway, a build-to-suit Class A office project with approximately 485,000 net rentable square feet located in Cambridge, Massachusetts.
In addition, during the three months ended SeptemberJune 30, 20172023 compared to 2022, as detailed below.
Rental RevenueReal Estate Operating Expenses
NameDate Commenced or Held for Development / RedevelopmentSquare Feet20232022Change20232022Change
(dollars in thousands)
140 Kendrick Street - Building A (1)July 1, 2022104,000 $— $1,762 $(1,762)$— $346 $(346)
760 Boylston StreetSeptember 12, 2022118,000 — — — — 207 (207)
105 Carnegie CenterNovember 30, 202273,000 — 329 (329)— 228 (228)
2096 Gaither RoadDecember 1, 202250,000 — 58 (58)24 75 (51)
RTC Next-Hotel (2)December 19, 2022N/A254 — 254 — — — 
Kendall Center Blue Parking Garage (3)January 4, 2023N/A— 2,486 (2,486)— 332 (332)
300 Binney StreetJanuary 30, 2023236,000 — 2,938 (2,938)738 472 266 
Lexington Office Park (4)March 31, 2023166,779 346 626 (280)497 565 (68)
2098 Gaither Road (4)March 31, 202350,000 151 162 (11)77 85 (8)
797,779 $751 $8,361 $(7,610)$1,336 $2,310 $(974)
______________
(1)On July 20, 2023, we completed and Septemberfully placed this property in-service.
(2)On December 19, 2022, in accordance with GAAP, the ground lease that encumbers this property was reclassified as a sales-type lease and the associated assets were derecognized.
(3)The Kendall Center Blue Parking Garage was taken out of service on January 4, 2023 to support the development of 290 Binney Street. Real estate operating expenses for the three months ended June 30, 2016, we had2023 included approximately $(7,000) and $0.6$0.7 million of demolition costs related to our Proto Kendall Square residential development project.
(4)Lexington Office Park and 2098 Gaither Road are no longer considered “in-service” as each property’s occupied percentage is below 50% and we are no longer actively leasing the properties in anticipation of a future development/redevelopment.

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Properties Sold Portfolio
The table below lists the properties we sold between JulyApril 1, 20162022 and SeptemberJune 30, 2017.2023. Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $0.5$15.8 million and $0.3$5.2 million, respectively, for the three months ended SeptemberJune 30, 20172023 compared to 20162022, as detailed below.
Rental RevenueReal Estate Operating Expenses
NameDate SoldProperty TypeSquare Feet20232022Change20232022Change
(dollars in thousands)
Office
Virginia 95 Office ParkJune 15, 2022Office/Flex733,421 $— $2,354 $(2,354)$— $825 $(825)
601 Massachusetts AvenueAugust 30, 2022Office478,667 — 10,735 (10,735)— 3,227 (3,227)
1,212,088 — 13,089 (13,089)— 4,052 (4,052)
Residential
The Avant at Reston Town Center (1)November 8, 2022Residential329,195 356 3,089 (2,733)86 1,209 (1,123)
Total Residential329,195 356 3,089 (2,733)86 1,209 (1,123)
1,541,283 $356 $16,178 $(15,822)$86 $5,261 $(5,175)
______________
        Rental Revenue Real Estate Operating Expenses
Name Date Sold Property Type Square Feet 2017 2016 Change 2017 2016 Change
        (dollars in thousands)
30 Shattuck Road April 19, 2017 Land N/A
 $—
 $—
 $—
 $—
 $11
 $(11)
40 Shattuck Road June 13, 2017 Office 122,000
 —
 450
 (450) —
 297
 (297)
Reston Eastgate August 30, 2017 Land N/A
 —
 —
 —
 18
 32
 (14)
      122,000
 $—
 $450
 $(450) $18
 $340
 $(322)

(1)We retained and continue to own approximately 26,000 square feet of ground-level retail space. Rental Revenue and Real Estate Operating Expenses for the three months ended June 30, 2023 represent the ground-level retail space. Rental Revenue and Real Estate Operating Expenses for the three months ended June 30, 2022 represent the entire property and not just the portion sold.
Residential Net Operating Income
Net operating income for our residential same properties decreasedincreased by approximately $61,000$1.3 million for the three months ended SeptemberJune 30, 20172023 compared to 2016.2022.
The following reflects our occupancy and rate information for The Lofts at Atlantic Wharf and The Avant at Reston Town Centerour residential same properties for the three months ended SeptemberJune 30, 20172023 and 2016.2022.

Average Monthly Rental Rate (1)Average Rental Rate Per Occupied Square FootAverage Physical Occupancy (2)Average Economic Occupancy (3)
Name20232022Change (%)20232022Change (%)20232022Change (%)20232022Change (%)
Proto Kendall Square$3,065 $2,774 10.5 %$5.62 $5.11 10.0 %95.8 %95.2 %0.6 %95.8 %94.3 %1.6 %
The Lofts at Atlantic Wharf$4,440 $4,097 8.4 %$4.91 $4.57 7.4 %96.5 %97.7 %(1.2)%97.5 %97.1 %0.4 %
Signature at Reston$2,663 $2,683 (0.7)%$2.77 $2.77 — %94.6 %95.1 %(0.5)%93.6 %94.8 %(1.3)%
The Skylyne$3,447 $3,391 1.7 %$4.39 $4.15 5.8 %92.4 %83.8 %10.3 %89.9 %81.7 %10.0 %
_______________  
(1)Average Monthly Rental Rate is calculated as the average of the quotients obtained by dividing (A) rental revenue as determined in accordance with GAAP, by (B) the number of occupied units for each month within the applicable fiscal period.
(2)Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
(3)Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. 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. Actual market rents and trends in such rents for a region as reported by others may vary materially from Market Rents used by us. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
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  The Lofts at Atlantic Wharf The Avant at Reston Town Center
  2017 2016 Percentage
Change		 2017 2016 Percentage
Change
Average Monthly Rental Rate (1) $4,295
 $4,146
 3.6 % $2,418
 $2,429
 (0.5)%
Average Rental Rate Per Occupied Square Foot $4.74
 $4.63
 2.4 % $2.68
 $2.68
 — %
Average Physical Occupancy (2) 94.2% 97.3% (3.2)% 95.7% 95.6% 0.1 %
Average Economic Occupancy (3) 95.5% 97.7% (2.3)% 94.4% 95.6% (1.3)%
___________  
(1)Average Monthly Rental Rate is defined as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units. 
(2)Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.
(3)Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. 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.

Hotel Net Operating Income
Net operating income for theThe Boston Marriott Cambridge hotel property increased byhad net operating income of approximately $0.4$5.8 million for the three months ended SeptemberJune 30, 20172023, representing an increase of approximately $0.2 million compared to 2016.the three months ended June 30, 2022.
The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the three months ended SeptemberJune 30, 20172023 and 2016.2022.
20232022
Change (%)
Occupancy77.2 %73.5 %5.0 %
Average daily rate$371.58 $349.99 6.2 %
REVPAR$286.79 $257.32 11.5 %
  2017 2016 
Percentage
Change
Occupancy 90.3% 87.2% 3.6%
Average daily rate $283.76
 $279.03
 1.7%
Revenue per available room, REVPAR $256.32
 $243.19
 5.4%
Other Operating Revenue and Expense Items
Development and Management Services Revenue
Development and management services revenue increased by an aggregate of approximately $4.4$3.5 million for the three months ended SeptemberJune 30, 20172023 compared to 2016.2022. Development services revenue and management services revenue increased by approximately $3.5$1.3 million and $0.9$2.2 million, respectively. The increase in development management services revenue iswas primarily related to an approximately $2.5 million development fee we received as a result of a third-party terminating their development agreement with us. The remaining increase in the development fees earned was from a third-party development agreementunconsolidated joint ventures in the Boston region and from our New York unconsolidated joint venture that is developing Dock 72Washington, DC region. The increase in Brooklyn, New York. Managementmanagement services revenue increasedwas primarily duerelated to an increase in service income that weproperty management fees earned from our tenantsan unconsolidated joint venture in New York City and a third-party owned building in the New YorkWashington, DC region and asset management fees earned from an unconsolidated joint venture in the Los Angeles region.
Operating Income and Expense Items
General and Administrative Expense
General and administrative expense increased by approximately $0.6$9.5 million for the three months ended SeptemberJune 30, 20172023 compared to 20162022 primarily due to increases in compensation expense and other general and administrative expenses increasing byof approximately $0.4$8.8 million and $0.2$0.7 million, respectively. The increase in compensation expense was primarily related to (1) an approximately $0.7$6.3 million difference betweenincrease in the unrecognized expense remaining from the 2014 MYLTIP Units compared to the expense that was recognized during the three months ended September 30, 2017 for the newly issued 2017 MYLTIP Units (See Notes 8 and 11 to the Consolidated Financial Statements)value of our deferred compensation plan and (2) an approximately $2.5 million increase in other compensation related expenses, of approximately $0.2 million. Theseprimarily due to age-based vesting and annual increases were partially offset by an increase in capitalized wages of approximately $0.5 million. The increase in capitalized wages is shown as a decrease in general and administrative expense as these costs are

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capitalized and included in real estate assets or deferred charges on our Consolidated Balance Sheets (see below).employee compensation. The increase in other general and administrative expenses was primarily related to an increase in professional fees.
Wages directly related to the development and leasing of rental properties are capitalized and included in real estate assets or deferred charges on our Consolidated Balance Sheets and amortized over the useful lives of the applicable asset or lease term. Capitalized wages for the three months ended SeptemberJune 30, 20172023 and 20162022 were approximately $4.7$4.6 million and $4.2$4.1 million, respectively. These costs are not included in the general and administrative expenses discussed above.
Impairment LossTransaction Costs
On September 27, 2016, we executed a letter of intentTransaction costs decreased by approximately $0.2 million for the sale of the remaining parcel of land at our Washingtonian North property located in Gaithersburg, Maryland. The letter of intent caused us to reevaluate our strategy for the land and based on a shorter than expected hold period, we reduced the carrying value of the land to the estimated net sales price and recognized an impairment loss of approximately $1.8 million during the three months ended SeptemberJune 30, 2016.2023 compared to 2022 due primarily to costs incurred in connection with the pursuit and formation of new joint ventures. In general, transaction costs relating to the formation of new joint ventures and the pursuit of other transactions are expensed as incurred.
Depreciation and Amortization Expense
Depreciation expense may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP.  This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties.  The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in depreciation expense. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
Boston Properties, Inc.
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BXP
Depreciation and amortization expense decreasedincreased by approximately $51.6$19.4 million for the three months ended SeptemberJune 30, 20172023 compared to 2016, respectively,2022, as detailed below.
PortfolioDepreciation and Amortization for the three months ended June 30,
20232022Change
(in thousands)
Same Property Portfolio$170,684 $170,690 $(6)
Properties Acquired Portfolio19,224 4,174 15,050 
Properties Placed In-Service Portfolio12,213 3,698 8,515 
Properties in or Held for Development or Redevelopment Portfolio344 1,631 (1,287)
Properties Sold Portfolio112 2,953 (2,841)
$202,577 $183,146 $19,431 
BPLP
Depreciation and amortization expense increased by approximately $19.5 million for the three months ended June 30, 2023 compared to 2022, as detailed below.
PortfolioDepreciation and Amortization for the three months ended June 30,
20232022Change
(in thousands)
Same Property Portfolio$169,002 $168,960 $42 
Properties Acquired Portfolio19,224 4,174 15,050 
Properties Placed In-Service Portfolio12,213 3,698 8,515 
Properties in or Held for Development or Redevelopment Portfolio344 1,631 (1,287)
Properties Sold Portfolio112 2,953 (2,841)
$200,895 $181,416 $19,479 
Direct Reimbursements of Payroll and Related Costs From Management Services Contracts and Payroll and Related Costs From Management Service Contracts
We have determined that amounts reimbursed for payroll and related costs received from third parties in connection with management services contracts should be reflected on a gross basis instead of on a net basis as we have determined that we are the principal under these arrangements. We anticipate that these two financial statement line items will generally offset each other.
Other Income and Expense Items
Loss from Unconsolidated Joint Ventures
For the three months ended June 30, 2023 compared to 2022, loss from unconsolidated joint ventures increased by approximately $6.6 million due primarily to an increase in interest expense due to increasing interest rates on variable rate debt.
Gains on Sales of Real Estate
Gains on sales of real estate may differ between BXP and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP. This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in the gains on sales of real estate when those properties are sold. For additional information, see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
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  Depreciation and Amortization Expense for the three months ended September 30,
2017 2016 Change
  (in thousands)
Same Property Portfolio $150,367
 $151,733
 $(1,366)
Properties Placed in-Service Portfolio 1,059
 8
 1,051
Properties Acquired Portfolio 738
 —
 738
Properties in Development or Redevelopment Portfolio (1) —
 51,817
 (51,817)
Properties Sold Portfolio —
 190
 (190)
  $152,164
 $203,748
 $(51,584)
BXP
___________Gains on sales of real estate decreased by approximately $96.2 million for the three months ended June 30, 2023 compared to 2022. During the three months ended June 30, 2022, we recognized a gain of approximately $96.2 million related to the sale of Virginia 95 Office Park in Springfield, Virginia.
BPLP
Gains on sales of real estate decreased by approximately $99.6 million for the three months ended June 30, 2023 compared to 2022. During the three months ended June 30, 2022, we recognized a gain of approximately $99.5 million related to the sale of Virginia 95 Office Park in Springfield, Virginia.
Interest and Other Income (Loss)
Interest and other income (loss) increased by approximately $16.1 million for the three months ended June 30, 2023 compared to 2022, due primarily to an increase of approximately $16.7 million in interest income from increased interest earned on our deposits partially offset by an increase in our allowance for current expected credit losses of approximately $0.4 million.
Other Income - Assignment Fee
On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, we executed an agreement to assign the right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.
Gains (Losses) from Investments in Securities
Gains (losses) from investments in securities for the three months ended June 30, 2023 and 2022 related to investments that we have made to reduce our market risk relating to deferred compensation plans that we maintain for BXP’s officers and former non-employee directors. Under the deferred compensation plans, each officer or non-employee director who is eligible to participate is permitted to defer a portion of the officer’s current income or the non-employee director’s compensation on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer or non-employee director. In order to reduce our market risk relating to these plans, we typically acquire, in a separate account that is not restricted as to its use, similar or identical investments as those selected by each officer or non-employee director. This enables us to generally match our liabilities to BXP’s officers or former non-employee directors under our deferred compensation plans with equivalent assets and thereby limit our market risk. The performance of these investments is recorded as gains (losses) from investments in securities. During the three months ended June 30, 2023 and 2022, we recognized gains (losses) of approximately $1.6 million and $(4.7) million, respectively, on these investments. By comparison, our general and administrative expense increased (decreased) by approximately $1.6 million and $(4.7) million during the three months ended June 30, 2023 and 2022, respectively, as a result of increases (decreases) in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by officers and former non-employee directors of BXP participating in the plans.
Unrealized Gain on Non-Real Estate Investment
During the year ended December 31, 2022, we began investing in non-real estate investments, which are primarily environmentally-focused investment funds. As a result, for the three months ended June 30, 2023, we recognized an unrealized gain of approximately $0.1 million due to the observable changes in the fair value of the investments.
Interest Expense
Interest expense increased by approximately $38.3 million for the three months ended June 30, 2023 compared to 2022, as detailed below.
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(1)Component
On August 19, 2016, the consolidated entity
Change in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City 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. We recorded approximately $50.8 million, including $3.2 million related to the step-up of real estate assets, of accelerated depreciation expense for the portionthree months ended June 30, 2023 compared to June 30, 2022
(in thousands)
Increases to interest expense due to:
Increase in interest associated with unsecured term loans and unsecured credit facility, net$14,217 
Issuance of the complex demolished.$750 million in aggregate principal of 6.750% senior notes due 2027 on November 17, 202212,675 
Issuance of $750 million in aggregate principal of 6.500% senior notes due 2034 on May 15, 20236,113 
Increase in interest due to finance lease for one in-service property2,604 
Decrease in capitalized interest related to development projects963 
Amortization expense of financing fees primarily related to unsecured term loan927 
Other interest expense (excluding senior notes)832 
Total increases to interest expense$38,331 


Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term. As portions of properties are placed in-service, we cease capitalizing interest on that portion and interest is then expensed. Interest capitalized for the three months ended June 30, 2023 and 2022 was approximately $10.6 million and $14.1 million, respectively. These costs are not included in the interest expense referenced above.
At June 30, 2023, our variable rate debt consisted of BPLP’s $1.5 billion Revolving Facility and $1.2 billion 2023 Unsecured Term Loan. As of June 30, 2023, the Revolving Facility did not have a balance outstanding and the 2023 Unsecured Term Loan had $1.2 billion outstanding. On May 2, 2023, BPLP entered into four interest rate swap contracts with notional amounts aggregating $1.2 billion to effectively fix Term SOFR, the reference rate for the 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. For a summary of our consolidated debt as of June 30, 2023 refer to the heading “Liquidity and Capital Resources—Debt Financing” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Noncontrolling Interests in Property Partnerships
Noncontrolling interests in property partnerships increased by approximately $1.2 million for the three months ended June 30, 2023 compared to 2022, as detailed below.
PropertyNoncontrolling Interests in Property Partnerships for the three months ended June 30,
20232022Change
(in thousands)
767 Fifth Avenue (the General Motors Building) (1)$3,778 $3,012 $766 
Times Square Tower5,415 5,183 232 
601 Lexington Avenue3,242 3,372 (130)
100 Federal Street3,245 3,258 (13)
Atlantic Wharf Office Building4,088 3,721 367 
$19,768 $18,546 $1,222 
_______________
(1)The increase was primarily attributable to an increase in lease revenue from our clients.
Noncontrolling Interest—Common Units of the Operating Partnership
For BXP, noncontrolling interest—common units of the Operating Partnership decreased by approximately $13.6 million for the three months ended June 30, 2023 compared to 2022 due primarily to a decrease in allocable
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income, which included recognizing a greater gain on sales of real estate during 2022. Due to our ownership structure, there is no corresponding line item on BPLP’s financial statements.
Liquidity and Capital Resources
General
Our principal liquidity needs for the next twelve months and beyond are to:
•fund normal recurring expenses;
•meet debt service and principal repayment obligations and balloon payments on maturing debt, including $500 million of 3.125% unsecured senior notes due September 1, 2023 and $700 million of 3.800% unsecured senior notes due February 1, 2024;
•fund development and redevelopment costs;
•fund capital expenditures, including major renovations, tenant improvements and leasing costs;
•fund pending and possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests therein; and
•make the minimum distribution required to enable BXP to maintain its REIT qualification under the Internal Revenue Code of 1986, as amended.
We expect to satisfy these needs using one or more of the following:
•cash flow from operations;
•distribution of cash flows from joint ventures;
•cash and cash equivalent balances;
•borrowings under BPLP’s Revolving Facility, unsecured term loans, short-term bridge facilities and construction loans;
•long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness);
•sales of real estate and interests in joint ventures owning real estate;
•private equity sources, including with large institutional investors; and
•issuances of BXP equity securities and/or preferred or common units of partnership interests in BPLP.
We draw on multiple financing sources to fund our long-term capital needs. We expect to fund our current development/redevelopment properties primarily with our available cash balances, construction loans, unsecured term loans, proceeds from asset sales and BPLP’s Revolving Facility. We use BPLP’s Revolving Facility primarily as a bridge facility to fund acquisition opportunities, refinance outstanding indebtedness and meet short-term development and working capital needs. Although we may seek to fund our development projects with construction loans, which may require guarantees by BPLP, the financing for each particular project ultimately depends on several factors, including, among others, the project’s size and duration, the extent of pre-leasing, our available cash and access to cost effective capital at the given time.
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The following table presents information on properties under construction/redevelopment as of June 30, 2023 (dollars in thousands):
Financings
Construction/Redevelopment PropertiesEstimated Stabilization DateLocation# of BuildingsEstimated Square FeetInvestment to Date (1)(2)(3)Estimated Total Investment (1)(2)Total Available (1)
Outstanding at June 30, 2023
(1)
Estimated Future Equity Requirement (1)(2)(4)Percentage Leased (5)
Office
140 Kendrick - Building A (Redevelopment)Third Quarter, 2023Needham, MA1104,000 $21,392 $26,600 $— $— $5,208 100 %(6)
360 Park Avenue South (42% ownership)Fourth Quarter, 2025New York, NY1450,000 204,056 248,000 92,774 91,371 42,541 2 %(7)
Reston Next Office Phase IISecond Quarter, 2025Reston, VA190,000 35,535 61,000 — — 25,465 — %
Total Office Properties under Construction/Redevelopment3644,000 260,983 335,600 92,774 91,371 73,214 18 %
Laboratory/Life Sciences
751 Gateway (49% ownership)Fourth Quarter, 2023South San Francisco, CA1231,000 103,738 127,600 — — 23,862 100 %
103 CityPointThird Quarter, 2024Waltham, MA1113,000 75,251 115,100 — — 39,849 — %
180 CityPointFourth Quarter, 2024Waltham, MA1329,000 191,337 274,700 — — 83,363 43 %
300 Binney Street (Redevelopment)First Quarter, 2025Cambridge, MA1236,000 22,359 210,200 — — 187,841 100 %
105 Carnegie Center (Redevelopment)Second Quarter, 2025Princeton, NJ173,000 1,868 40,600 — — 38,732 — %
651 Gateway (50% ownership) (Redevelopment)Fourth Quarter, 2025South San Francisco, CA1327,000 76,106 146,500 — — 70,394 14 %
290 Binney StreetSecond Quarter, 2026Cambridge, MA1566,000 152,817 1,185,200 — — 1,032,383 100 %
Total Laboratory/Life Sciences Properties under Construction/Redevelopment71,875,000 623,476 2,099,900— — 1,476,424 65 %
Residential
Reston Next Residential (508 units) (20% ownership)Second Quarter, 2026Reston, VA1417,000 23,324 47,700 28,000 7,913 4,289 — %
Total Residential Property under Construction1417,000 23,324 47,700 28,000 7,913 4,289 — 
Retail
760 Boylston Street (Redevelopment)Second Quarter, 2024Boston, MA1118,000 9,643 43,800 — — 34,157 100 %
Reston Next RetailFourth Quarter, 2025Reston, VA133,000 20,610 26,600 — — 5,990 — %
Total Retail Properties under Construction/Redevelopment2151,000 30,253 70,400 — — 40,147 78 %
Total Properties under Construction/Redevelopment133,087,000 $938,036 $2,553,600 $120,774 $99,284 $1,594,074 54 %(8)
___________  
(1)Represents our share.
(2)Each of Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement represent our share of acquisition expenses, as applicable, and reflect our share of the estimated net revenue/expenses that we expect to incur prior to stabilization of the project, including any amounts actually received or paid through June 30, 2023.
(3)Includes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(4)Excludes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(5)Represents percentage leased as of July 28, 2023, including leases with future commencement dates.
(6)The redevelopment project was completed and fully placed in-service on July 20, 2023.
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(7)Investment to Date includes all related costs incurred prior to the contribution of the property by us to the joint venture on December 15, 2021 totaling approximately $107 million and our proportionate share of the loan. Our joint venture partners will fund required capital until their aggregate investment is approximately 58% of all capital contributions; thereafter, the joint venture partners will fund required capital according to their percentage interests.
(8)Percentage leased excludes the residential property.
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Lease revenue (which includes reimbursement of operating expenses from clients, if any), other income from operations, available cash balances, proceeds from mortgage financings and offerings of unsecured indebtedness, draws on BPLP’s Revolving Facility, and funding from institutional private equity partners are the principal sources of capital that we use to fund operating expenses, debt service, maintenance and repositioning capital expenditures, tenant improvements and the minimum distribution required to enable BXP to maintain its REIT qualification. We seek to maximize income from our existing properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing client turnover and controlling operating expenses. Our sources of revenue also include third-party fees generated by our property management, leasing, development and construction businesses, as well as the sale of assets from time to time. We believe these sources of capital will continue to provide the funds necessary for our short-term liquidity needs. Material adverse changes in one or more sources of capital may adversely affect our net cash flows.
We expect our primary uses of capital over the next twelve months will be to fund our current and committed development and redevelopment projects, repay debt maturities (as discussed below), service the interest payments on our outstanding indebtedness, and satisfy our REIT distribution requirements.
As of June 30, 2023, we had 13 properties under development or redevelopment. Our share of the estimated total investment for these projects is approximately $2.6 billion, of which approximately $1.6 billion remains to be funded primarily with equity through 2026. In the second quarter of 2023, we completed the development/redevelopment of:
•2100 Pennsylvania Avenue, an approximately 476,000 square foot premier workplace located in Washington, DC, for an estimated total investment of $375.9 million. The property was 91% leased, including leases with future commencement dates, as of July 28, 2023.
•View Boston Observatory, an observatory encompassing the top three floors of 800 Boylston Street - The Prudential Center in Boston, Massachusetts, for an estimated total investment of $182.3 million.
On July 20, 2023, we completed the redevelopment of and fully placed in-service 140 Kendrick Street - Building A, a premier workplace redevelopment project with approximately 104,000 net rentable square feet located in Needham, Massachusetts. The property is 100% leased and is the first Net Zero, Carbon Neutral office repositioning of this scale in Massachusetts.
During the second quarter of 2023, a joint venture in which we have a 55% interest elected to pause vertical construction on Platform 16 in San Jose, California. Our share of the estimated total investment to complete Phase 1 of the project was approximately $231.9 million. As of June 30, 2023, we had invested approximately $100.5 million in this phase of the development project, and we expect to invest an estimated additional $45.8 million to complete the underground parking garage and building foundation elements to facilitate a restart of construction in the future as demand improves.
On July 28, 2023, we entered into a joint venture agreement with an institutional investor for the future development of 343 Madison Avenue located on Madison Avenue between 44th and 45th Streets in New York City, New York adjacent to Grand Central Station. We own a 55% interest in the venture and our partner owns a 45% interest, and we will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture executed a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the direct access to Grand Central Madison as Phase 1 of the development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the cost of the construction of access to Grand Central Station. There can be no assurance that Phase 1 will be completed on the terms currently contemplated or that Phase 2 of the development project will commence on the terms currently contemplated or at all.
During the second quarter of 2023, BPLP completed a public offering of $750.0 million aggregate principal amount of 6.500% unsecured senior notes due 2034. The net proceeds from the offering were approximately $741.3 million, which will be used to repay at maturity $500.0 million aggregate principal amount of BPLP’s 3.125% senior unsecured notes, which mature on September 1, 2023, and for general corporate purposes.
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On May 2, 2023, we entered into four interest rate swap contracts with notional amounts aggregating $1.2 billion. We entered into these interest rate swap contracts to reduce our exposure to the variability in future cash flows attributable to changes in the interest rates on our 2023 Unsecured Term Loan. These interest rate swaps fixed Term SOFR, the reference rate for the 2023 Unsecured Term Loan, at a weighted average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024.
On July 28, 2023, a joint venture in which we have a 50% interest modified and exercised an option to extend by one year the maturity date of its loan collateralized by 100 Causeway Street. At the time of the modification and extension, the loan had an outstanding balance totaling approximately $340.6 million, bore interest at Term SOFR plus 1.60% per annum, and was scheduled to mature on September 5, 2023. The modified and extended loan has an outstanding balance of $336.6 million, which included an approximately $4.0 million principal repayment, bears interest at Term SOFR plus 1.48% per annum, and matures on September 5, 2024, with an additional one-year extension option, subject to certain conditions. 100 Causeway Street is an approximately 634,000 square foot premier workplace located in Boston, Massachusetts and is approximately 95% leased.
Our 2024 debt maturities include $700.0 million aggregate principal amount of BPLP’s 3.800% senior unsecured notes, which mature on February 1, 2024 and the $1.2 billion 2023 Unsecured Term Loan (unless we exercise the one-year extension option within the loan agreement, subject to certain conditions). In our unconsolidated joint venture portfolio, after refinancing the mortgage debt at 500 North Capitol Street, NW, in Washington, DC, we have approximately $577.2 million (our share) of debt maturing through the end of 2024. We expect to fund the foregoing debt maturities using available cash balances, proceeds from asset sales, draws on BPLP’s Revolving Facility, and/or through refinancings using secured debt, unsecured debt or both. We expect our quarterly net interest expense will increase moderately for the remainder of 2023 and into 2024 compared to the first half of 2023 primarily due to the cessation of capitalized interest on our 2023 development deliveries, higher interest rates on maturing debt, and lower interest income as we use cash balances to repay debt and fund our development pipeline.
As of July 28, 2023, we had available cash of approximately $1.4 billion (of which approximately $81.7 million is attributable to our consolidated joint venture partners). Our liquidity and capital resources depend on a wide range of factors, and we believe that our access to capital and our strong liquidity, including the approximately $1.5 billion available under BPLP’s Revolving Facility and our available cash, as of July 28, 2023, are sufficient to fund our remaining capital requirements on existing development and redevelopment projects, fund acquisitions, repay our maturing indebtedness when due (if not refinanced), satisfy our REIT distribution requirements and still allow us to act opportunistically on attractive investment opportunities.
We may seek to enhance our liquidity to fund our current and future development activity, pursue additional attractive investment opportunities and refinance or repay indebtedness. Depending on interest rates, the overall conditions in the debt and public and private equity markets, and our leverage at the time, we may decide to access one or more of these capital sources. Doing so may result in us carrying additional cash and cash equivalents pending our use of the proceeds, which would increase our net interest expense.
On May 17, 2023, BXP renewed its 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. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on May 22, 2023. BXP intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. We have not sold any shares under this ATM stock offering program.
REIT Tax Distribution Considerations
Dividend
BXP as a REIT is subject to a number of organizational and operational requirements, including a requirement that BXP currently distribute at least 90% of its annual taxable income (excluding capital gains and with certain other adjustments). Our policy is for BXP to distribute at least 100% of its taxable income, including capital gains, to avoid paying federal tax. Common and LTIP unitholders (other than unearned MYLTIP units) of limited partnership interest in BPLP receive the same distribution per unit that is paid per share of BXP common stock.
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BXP’s Board of Directors will continue to evaluate BXP’s dividend rate in light of our actual and projected taxable income (including gains on sales), liquidity requirements and other circumstances, and there can be no assurance that the future dividends declared by BXP’s Board of Directors will not differ materially from the current quarterly dividend amount.
Sales
To the extent that we sell assets at a gain and cannot efficiently use the proceeds in a tax deferred manner for either our development activities or attractive acquisitions, BXP would, at the appropriate time, decide whether it is better to declare a special dividend, adopt a stock repurchase program, reduce indebtedness or retain the cash for future investment opportunities. Such a decision will depend on many factors including, among others, the timing, availability and terms of development and acquisition opportunities, our then-current and anticipated leverage, the cost and availability of capital from other sources, the price of BXP’s common stock and REIT distribution requirements. At a minimum, we expect that BXP would distribute at least that amount of proceeds necessary for BXP to avoid paying corporate level tax on the applicable gains realized from any asset sales.
From time to time in select cases, whether due to a change in use, structuring issues to comply with applicable REIT regulations or other reasons, we may sell an asset that is held by a taxable REIT subsidiary (“TRS”). Such a sale by a TRS would be subject to federal and local taxes.
Cash Flow Summary
The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash and cash equivalents and cash held in escrows aggregated approximately $1.6 billion and $502.9 million at June 30, 2023 and 2022, respectively, representing an increase of approximately $1.1 billion. The following table sets forth changes in cash flows:
 Six months ended June 30,
20232022Change
(in thousands)
Net cash provided by operating activities$613,183 $616,639 $(3,456)
Net cash used in investing activities(554,864)(980,170)425,306 
Net cash provided by financing activities833,359 365,223 468,136 
Our principal source of cash flow is related to the operation of our properties. The weighted-average term of our in-place leases, including leases signed by our unconsolidated joint ventures, excluding residential units, was approximately 7.6 years as of June 30, 2023, with occupancy rates historically in the range of 88% to 94%. Generally, our properties generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund regular quarterly dividend and distribution payment requirements. In addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings.
Cash is used in investing activities to fund acquisitions, development, net investments in unconsolidated joint ventures and maintenance and repositioning capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings to enhance or maintain our market position. Cash used in investing activities for the six months ended June 30, 2023 and June 30, 2022 is detailed below:
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 Six months ended June 30,
 20232022
 (in thousands)
Acquisitions of real estate (1)$— $(727,835)
Construction in progress (2)(235,331)(237,182)
Building and other capital improvements(78,344)(63,278)
Tenant improvements(135,743)(97,844)
Proceeds from sales of real estate (3)— 157,345 
Proceeds from assignment fee (4)— 6,624 
Capital contributions to unconsolidated joint ventures (5)(103,595)(69,819)
Capital distributions from unconsolidated joint ventures (6)7,350 36,622 
Investment in non-real estate investments(733)— 
Issuance of related party note receivable (7)(10,500)— 
Proceeds from note receivable (8)— 10,000 
Investments in securities, net2,032 5,197 
Net cash used in investing activities$(554,864)$(980,170)
Cash used in investing activities changed primarily due to the following:
(1)On May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington, for an aggregate purchase price, including transaction costs, of approximately $724.3 million. Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace.
(2)Construction in progress for the six months ended June 30, 2023 included ongoing expenditures associated with2100 Pennsylvania Avenue and the View Boston Observatory at The Prudential Center, which were both fully placed in-service during the six months ended June 30, 2023. In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, 103 CityPoint, Reston Next Office Phase II, 140 Kendrick Street Building A, 760 Boylston Street, 105 Carnegie Center, 290 Binney Street and 300 Binney Street.
Construction in progress for the six months ended June 30, 2022 included ongoing expenditures associated with Reston Next and 2100 Pennsylvania Avenue, which are partially placed in-service, and 325 Main Street, which was completed and fully placed in-service during the six months ended June 30, 2022. In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, View Boston Observatory at The Prudential Center, 880 Winter Street, 103 CityPoint and Reston Next Office Phase II.
(3)On June 15, 2022, we completed the sale of our Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million. Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP. Virginia 95 Office Park consists of eleven Class A office/flex properties aggregating approximately 733,000 net rentable square feet.

On March 31, 2022, we completed the sale of 195 West Street located in Waltham, Massachusetts for a     gross sale price of $37.7 million. Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP. 195 West Street is an approximately 63,500 net rentable square foot premier workplace.
(4)On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, we executed an agreement to assign the right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres. The property was 100% leased.
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(5)Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2023 consisted primarily of cash contributions of approximately $30.2 million, $26.5 million, $17.5 million, $10.9 million and $8.3 million to our Gateway Commons, Platform 16, Worldgate Drive, Dock 72 and 751 Gateway joint ventures, respectively. On January 31, 2023, we entered into a new joint venture for 13100 and 13150 Worldgate Drive located in Herndon, Virginia.
Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of cash contributions of approximately $32.6 million and $22.0 million to our Gateway Commons and Platform 16 joint ventures, respectively.
(6)Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2023 consisted primarily of a cash distribution totaling approximately $7.4 million from our 360 Park Avenue South joint venture.
Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of a cash distribution totaling approximately $21.6 million and $11.6 million from our Metropolitan Square and 7750 Wisconsin Avenue joint ventures, respectively.
(7)On June 5, 2023, a joint venture in which we own a 30% interest repaid the existing construction loan collateralized by its 500 North Capitol Street, NW property and obtained new mortgage loans with related parties. At the time of the pay off, the outstanding balance of the loan totaled approximately $105.0 million and was scheduled to mature on June 6, 2023. The new mortgage loans have an aggregate principal balance of $105.0 million, bear interest at a weighted average fixed rate of 6.83% per annum and mature on June 5, 2026. Our portion of the mortgage loans, $10.5 million, has been reflected as a Related Party Note Receivable on our Consolidated Balance Sheets. 500 North Capitol Street, NW is a 231,000 square foot premier workplace in Washington, DC.
(8)An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from us, and we provided the financing on June 1, 2020. The financing bore interest at a fixed rate of 8.00% per annum, compounded monthly, and was scheduled to mature on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property was substantially completed. On June 27, 2022, the borrower repaid the loan in full, including approximately $1.6 million of accrued interest.
Cash provided by financing activities for the six months ended June 30, 2023 totaled approximately $833.4 million. This amount consisted primarily of borrowings under the 2023 Unsecured Term Loan and the proceeds from the issuance by BPLP of $750 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034, partially offset by the repayment of BPLP’s $730 million unsecured credit agreement (the “2022 Unsecured Term Loan”) and payment of our regular dividends and distributions to our shareholders and unitholders and distributions to noncontrolling interests in property partnerships. Future debt payments are discussed below under the heading “Debt Financing.”
Capitalization
The following table presents Consolidated Market Capitalization and BXP’s Share of Market Capitalization, as well as the corresponding ratios of Consolidated Debt to Consolidated Market Capitalization and BXP’s Share of Debt to BXP’s Share of Market Capitalization (in thousands except for percentages):
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June 30, 2023
Shares / Units OutstandingCommon Stock EquivalentEquivalent Value (1)
Common Stock156,853 156,853 $9,033,164 
Common Operating Partnership Units18,658 18,658 1,074,514 (2)
Total Equity175,511 $10,107,678 
Consolidated Debt$15,456,205 
Add:
BXP’s share of unconsolidated joint venture debt (3)1,609,671 
Subtract:
Partners’ share of Consolidated Debt (4)(1,359,380)
BXP’s Share of Debt$15,706,496 
Consolidated Market Capitalization$25,563,883 
BXP’s Share of Market Capitalization$25,814,174 
Consolidated Debt/Consolidated Market Capitalization60.46 %
BXP’s Share of Debt/BXP’s Share of Market Capitalization60.84 %
_______________  
(1)Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on June 30, 2023 of $57.59.
(2)Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2020 MYLTIP Units) but excludes the 2021 - 2023 MYLTIP Units because the three-year performance periods had not ended as of June 30, 2023.
(3)See page 90 for additional information.
(4)See page 89 for additional information.

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT sector. We present this measure as a percentage and it is calculated by dividing (A) our consolidated debt by (B) our consolidated market capitalization, which is the market value of our outstanding equity securities plus our consolidated debt. Consolidated market capitalization is the sum of:
(1)     our consolidated debt; plus
(2)     the product of (x) the closing price per share of BXP Common Stock on June 30, 2023, as reported by the New York Stock Exchange, multiplied by (y) the sum of:
(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, and 2013 - 2020 MYLTIP Units that were issued in the form of LTIP Units.
The calculation of consolidated market capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2021 - 2023 MYLTIP Units are not included in this calculation as of June 30, 2023.
We also present BXP’s Share of Market Capitalization and BXP’s Share of Debt/BXP’s Share of Market Capitalization, which are calculated in the same manner, except that BXP’s Share of Debt is utilized instead of our consolidated debt in both the numerator and the denominator. BXP’s Share of Debt is defined as our consolidated debt plus our share of debt from our unconsolidated joint ventures (calculated based upon our ownership percentage), minus our partners’ share of debt from our consolidated joint ventures (calculated based upon the
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partners’ percentage ownership interests adjusted for basis differentials). Management believes that BXP’s Share of Debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and excludes our partners’ share of debt from consolidated joint ventures, in each case presented on the same basis. We have several significant joint ventures and presenting various measures of financial condition in this manner can help investors better understand our financial condition and/or results of operations after taking into account our economic interest in these joint ventures.  We caution investors that the ownership percentages used in calculating BXP’s Share of Debt may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the allocation of rights regarding decision making (both for routine and major decisions), distributions, transferability of interests, financing and guarantees, liquidations and other matters.  Moreover, in some cases we exercise significant influence over, but do not control, the joint venture in which case GAAP requires that we account for the joint venture entity using the equity method of accounting and we do not consolidate it for financial reporting purposes. In other cases, GAAP requires that we consolidate the venture even though our partner(s) own(s) a significant percentage interest.  As a result, management believes that the presentation of BXP’s Share of a financial measure should not be considered a substitute for, and should only be considered with and as a supplement to our financial information presented in accordance with GAAP.
We present these supplemental ratios because our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, in part, a function of the market price of the common stock of BXP and as such will fluctuate with changes in such price, and they do not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. However, for a company like BXP, whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long as they are evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.
For a discussion of our unconsolidated joint venture indebtedness, see “Liquidity and Capital Resources—Investment in Unconsolidated Joint Ventures - Secured Debt” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and for a discussion of our consolidated joint venture indebtedness see “Liquidity and Capital Resources—Mortgage Notes Payable” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Debt Financing
As of June 30, 2023, we had approximately $15.5 billion of outstanding consolidated indebtedness, representing approximately 60.46% of our Consolidated Market Capitalization as calculated above consisting of approximately (1) $11.0 billion (net of discount and deferred financing fees) in publicly traded unsecured senior notes having a GAAP weighted-average interest rate of 3.88% per annum and maturities in 2023 through 2034, (2) $3.3 billion (net of deferred financing fees) of property-specific mortgage debt having a GAAP weighted-average interest rate of 3.42% per annum and a weighted-average term of 5.3 years and (3) $1.2 billion outstanding under BPLP’s 2023 Unsecured Term Loan that matures on May 16, 2024.
The table below summarizes the aggregate carrying value of our mortgage notes payable and BPLP’s unsecured senior notes, unsecured line of credit, and unsecured term loan, as well as Consolidated Debt Financing Statistics at June 30, 2023 and June 30, 2022.  
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June 30,
20232022
 (dollars in thousands)
Debt Summary:
Balance
Fixed rate mortgage notes payable, net$3,274,764 $3,269,948 
Unsecured senior notes, net10,985,395 9,489,030 
Unsecured line of credit— 165,000 
Unsecured term loan, net1,196,046 728,795 
Consolidated Debt15,456,205 13,652,773 
Add:
BXP’s share of unconsolidated joint venture debt, net (1)1,609,671 1,446,617 
Subtract:
Partners’ share of consolidated mortgage notes payable, net (2)(1,359,380)(1,357,399)
BXP’s Share of Debt$15,706,496 $13,741,991 
June 30,
20232022
Consolidated Debt Financing Statistics:
Percent of total debt:
Fixed rate (3)100.00 %93.45 %
Variable rate— %6.55 %
Total100.00 %100.00 %
GAAP Weighted-average interest rate at end of period:
Fixed rate (3)3.95 %3.43 %
Variable rate— %2.53 %
Total3.95 %3.37 %
Coupon/Stated Weighted-average interest rate at end of period:
Fixed rate (3)3.82 %3.32 %
Variable rate— %1.96 %
Total3.82 %3.23 %
Weighted-average maturity at end of period (in years):
Fixed rate (3)5.0 6.1 
Variable rate— 1.4 
Total5.0 5.8 
_______________
(1)See page 90 for additional information.
(2)See page 89 for additional information.
(3)The 2023 Unsecured Term Loan bears interest at a variable rate of adjusted Term SOFR plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating. On May 2, 2023, BPLP executed interest rate swaps that effectively fixed Term SOFR for the $1.2 billion outstanding under the 2023 Unsecured Term Loan (see Notes 6 and 7 to the Consolidated Financial Statements). As such, the 2023 Unsecured Term Loan is reflected within Fixed rate statistics.
Unsecured Credit Facility
On June 1, 2023, BPLP amended its 2021 Credit Facility that replaced the LIBOR-based daily floating rate option with a SOFR-based daily floating rate option and to add options for SOFR-based term floating rates and rates for alternative currency loans. In addition, the amendment added a SOFR credit spread adjustment of 0.10%. Other than the foregoing, the material terms of the 2021 Credit Facility remain unchanged.
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The 2021 Credit Facility provides for borrowings of up to $1.5 billion through the Revolving Facility, subject to customary conditions. The 2021 Credit Facility matures on June 15, 2026 and includes a sustainability-linked pricing component. Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in each case, subject to syndication of the increase and other conditions. Based on BPLP’s June 30, 2023 credit rating, (1) the applicable Daily SOFR, Term SOFR, alternative currency daily rate, and alternative currency term rate margins are 0.775%, (2) the alternate base rate margin is zero basis points and (3) the facility fee is 0.15% per annum.
At June 30, 2023 and July 28, 2023, BPLP had no borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.7 million, with the ability to borrow approximately $1.5 billion.
Unsecured Term Loan
On January 4, 2023, BPLP entered into the 2023 Unsecured Term Loan, which provided for a single borrowing of up to $1.2 billion. Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 2023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions.
At BPLP’s option, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating.
On January 4, 2023, upon entry into the credit agreement, BPLP exercised its option to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the 2022 Unsecured Term Loan, which was scheduled to mature on May 16, 2023. There was no prepayment penalty associated with the repayment of the 2022 Unsecured Term Loan.
As of June 30, 2023, the 2023 Unsecured Term Loan bears interest at a rate equal to adjusted Term SOFR plus 0.85% per annum based on BPLP’s current credit rating at June 30, 2023 (See Note 7 to the Consolidated Financial Statements). At June 30, 2023, BPLP had $1.2 billion outstanding under the 2023 Unsecured Term Loan.
Derivative Instruments and Hedging Activities
On May 2, 2023, BPLP executed interest rate swaps in notional amounts aggregating $1.2 billion. These interest rate swaps were entered into to fix Term SOFR, the reference rate for BPLP’s 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. Based on BPLP’s credit rating as of June 30, 2023, the interest rate for the 2023 Unsecured Term Loan would be 6.09% (See Note 7 to the Consolidated Financial Statements).
Unsecured Senior Notes
For a description of BPLP’s outstanding unsecured senior notes as of June 30, 2023, see Note 6 to the Consolidated Financial Statements.
On May 15, 2023, BPLP completed a public offering of $750.0 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034. The notes were priced at 99.697% of the principal amount to yield an effective rate (including financing fees) of approximately 6.619% per annum to maturity. The notes will mature on January 15, 2034, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $741.3 million after deducting underwriting discounts and transaction expenses.
The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt. At June 30, 2023, BPLP was in compliance with each of these financial restrictions and requirements.
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Mortgage Notes Payable
The following represents the outstanding principal balances due under the mortgage notes payable at June 30, 2023:
PropertiesStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying Amount
Carrying Amount (Partners’ Share)
Maturity Date
 (dollars in thousands)
Consolidated Joint Ventures
767 Fifth Avenue (the General Motors Building)3.43 %3.64 %$2,300,000 $(13,743)$2,286,257 $914,552 (2)(3)(4)June 9, 2027
601 Lexington Avenue2.79 %2.93 %1,000,000 (11,493)988,507 444,828 (2)(5)January 9, 2032
Total$3,300,000 $(25,236)$3,274,764 $1,359,380 
_______________ 
(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions (if any).
(2)The mortgage loan requires interest only payments with a balloon payment due at maturity.
(3)This property is owned by a consolidated entity in which we have a 60% interest. The partners’ share of the carrying amount has been adjusted for basis differentials.
(4)In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of June 30, 2023, the maximum funding obligation under the guarantee was approximately $11.2 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 (See Note 8 to the Consolidated Financial Statements).
(5)This property is owned by a consolidated entity in which we have a 55% interest.
Investment in Unconsolidated Joint Ventures - Secured Debt
We have investments in unconsolidated joint ventures with our effective ownership interests ranging from 20% to 55%. Seventeen of these ventures have mortgage indebtedness. We exercise significant influence over, but do not control, these entities. As a result, we account for them using the equity method of accounting. See also Note 5 to the Consolidated Financial Statements. At June 30, 2023, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $4.1 billion (of which our proportionate share is approximately $1.6 billion). The table below summarizes the outstanding debt of these joint venture properties at June 30, 2023. In addition to other guarantees specifically noted in the table, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) as well as the completion of development projects on certain of the loans.
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PropertiesNominal % OwnershipStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying AmountCarrying Amount (Our share) Maturity Date
 (dollars in thousands)
Santa Monica Business Park55.00 %4.06 %4.23 %$300,000 $(1,090)$298,910 $164,400 (2)(4)July 19, 2025
Market Square North50.00 %7.56 %7.74 %125,000 (539)124,461 62,230 (2)(3) (5)November 10, 2025
1265 Main Street50.00 %3.77 %3.84 %35,127 (236)34,891 17,446 January 1, 2032
Colorado Center50.00 %3.56 %3.59 %550,000 (737)549,263 274,632 (2)August 9, 2027
Dock 7250.00 %7.59 %7.85 %198,383 (1,142)197,241 98,621 (2)(6)December 18, 2025
The Hub on Causeway - Podium50.00 %7.51 %7.68 %174,329 (57)174,272 87,136 (2)(7)September 6, 2023
Hub50House50.00 %4.43 %4.51 %185,000 (1,223)183,777 91,889 (2)(8)June 17, 2032
100 Causeway Street50.00 %6.76 %6.97 %337,604 (145)337,459 168,729 (2)(3) (9)September 5, 2023
7750 Wisconsin Avenue (Marriott International Headquarters)50.00 %6.51 %6.66 %251,542 (317)251,225 125,613 (2)(3) (10)April 26, 2024
360 Park Avenue South42.21 %7.65 %8.10 %216,686 (1,456)215,230 90,849 (2)(3) (11)December 14, 2024
Safeco Plaza33.67 %4.82 %4.96 %250,000 (1,077)248,923 83,812 (2)(12)September 1, 2026
500 North Capitol Street, NW30.00 %6.83 %7.16 %105,000 (825)104,175 31,069 (2)(13)June 5, 2026
200 Fifth Avenue26.69 %4.34 %5.60 %600,000 (9,000)591,000 149,694 (2)(14)November 24, 2028
901 New York Avenue25.00 %3.61 %3.69 %209,868 (268)209,600 52,400   January 5, 2025
3 Hudson Boulevard25.00 %8.68 %8.68 %80,000 — 80,000 20,000 (2)(3) (15)August 13, 2023
Metropolitan Square20.00 %7.25 %8.03 %420,000 (2,527)417,473 83,495 (2)(3) (16)April 9, 2024
Reston Next Residential20.00 %7.15 %7.47 %39,565 (1,284)38,281 7,656 (2)(3) (17)May 13, 2026
Total$4,078,104 $(21,923)$4,056,181 $1,609,671   
_______________ 
(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, which includes mortgage recording fees.
(2)The loan requires interest only payments with a balloon payment due at maturity.
(3)The loan includes certain extension options, subject to certain conditions.
(4)The loan bears interest at a variable rate equal to SOFR plus 1.38% per annum. A subsidiary of the joint venture entered into interest rate swap contracts with notional amounts aggregating $300.0 million through April 1, 2025, resulting in a fixed rate of approximately 4.059% per annum through the expiration of the interest rate swap contracts.
(5)The loan bears interest at a variable rate equal to the greater of (1) the sum of (x) SOFR and (y) 2.41% or (2) 2.80% per annum.
(6)The construction financing bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25%, plus (2) 2.50% per annum.
(7)The construction financing bears interest at a variable rate equal to SOFR plus 2.35% per annum.
(8)The loan bears interest at a variable rate equal to SOFR plus 1.35% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts.
(9)The loan bears interest at a variable rate equal to SOFR plus 1.60% per annum. On July 28, 2023 the joint venture extended the loan maturity to September 5, 2024. The loan extension required an approximately $4.0 million principal repayment and the interest rate was reduced from Term SOFR plus 1.60% to Term SOFR plus 1.48% per annum (See Note 14 to the Consolidated Financial Statements).
(10)The construction financing bears interest at a variable rate equal to SOFR plus 1.35% per annum.
(11)The loan bears interest at a variable rate equal to Adjusted Term SOFR plus 2.40% per annum. The spread on the variable rate may be reduced, subject to certain conditions.
(12)The loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to
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increases in the SOFR rate at a cap of 2.50% per annum on a notional amount of $250.0 million through September 1, 2023.
(13)The indebtedness consists of (x) a $70.0 million mortgage loan payable (Note A) which bears interest at a fixed rate of 6.23% per annum, and (y) a $35.0 million mortgage loan payable (Note B) which bears interest at a fixed rate of 8.03% per annum. We provided $10.5 million of the Note B mortgage financing to the joint venture. Our portion of the loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets.
(14)The loan bears interest at a variable rate equal to LIBOR plus 1.30% per annum through July 9, 2023. For the period commencing on July 10, 2023 the loan will bear interest at a variable rate equal to Term SOFR plus approximately 1.41% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $600.0 million through June 2028, resulting in a fixed rate of approximately 4.34% per annum through the expiration of the interest rate swap contracts. In addition to items noted in footnote one above, the GAAP interest rate includes the adjustment required to reflect the loan at fair value upon acquisition.
(15)We provided $80.0 million of mortgage financing to the joint venture. The loan bears interest at a variable rate equal to LIBOR plus 3.50% per annum through July 6, 2023. For the period commencing on July 7, 2023, the loan will bear interest at a variable rate equal to Term SOFR plus 3.61% per annum. The loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets. As of June 30, 2023, the loan has approximately $23.2 million of accrued interest due at the maturity date.
(16)The indebtedness consists of (x) a $305.0 million mortgage loan payable which bears interest at a variable rate equal to SOFR plus approximately 1.81%, and (y) a $115.0 million mezzanine note payable which bears interest at a variable rate equal to SOFR plus 5.25%. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the SOFR rate at a cap of 4.50% per annum on a notional amount of $420.0 million through April 15, 2024.
(17)The construction financing has a borrowing capacity of $140.0 million. The construction financing bears interest at a variable rate equal to SOFR plus 2.00% per annum.
State and Local Tax Matters
Because BXP is organized and qualifies as a REIT, it is generally not subject to federal income taxes, but is subject to certain state and local taxes. In the normal course of business, certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits or other inquiries. Although we believe that we have substantial arguments in favor of our position in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
Insurance
For information concerning our insurance program, see Note 8 to the Consolidated Financial Statements.
Funds from Operations
Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), we calculate Funds from Operations, or “FFO,” for each of BXP and BPLP by adjusting net income (loss) attributable to Boston Properties, Inc. and net income (loss) attributable to Boston Properties Limited Partnership (computed in accordance with GAAP), respectively, for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and our share of real estate-related depreciation and amortization. FFO is a non-GAAP financial measure. We believe the presentation of FFO, combined with the presentation of required GAAP financial measures, improves the understanding of operating results of REITs among the investing public and helps make comparisons of REIT operating results more meaningful. Management generally considers FFO to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit
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definition differently. We believe that in order to facilitate a clear understanding of our operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. or net income attributable to Boston Properties Limited Partnership (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.  
BXP
The following table presents a reconciliation of net income attributable to Boston Properties, Inc. to FFO attributable to Boston Properties, Inc. for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of funds from operations33,481 34,329 
Funds from Operations attributable to Boston Properties, Inc.$292,844 $304,560 
Our percentage share of Funds from Operations—basic89.74 %89.87 %
Weighted average shares outstanding—basic156,826 156,720 
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The following tables presents a reconciliation of net income attributable to Boston Properties, Inc. to Diluted FFO attributable to Boston Properties, Inc. for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted FFO326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted FFO33,383 34,262 
Diluted FFO attributable to Boston Properties, Inc. (1)$292,942 $304,627 
___________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted Funds from Operations17,922 17,672 
Diluted Funds from Operations attributable to Boston Properties, Inc. (1)157,218 157,192 
 _______________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.

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BPLP
The following table presents a reconciliation of net income attributable to Boston Properties Limited Partnership to FFO attributable to Boston Properties Limited Partnership for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)$326,325 $338,889 
Weighted average shares outstanding—basic174,748 174,392 
 _______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
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The following tables presents a reconciliation of net income attributable to Boston Properties Limited Partnership to Diluted FFO attributable to Boston Properties Limited Partnership for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted Funds from Operations attributable to Boston Properties Limited Partnership$326,325 $338,889 
_______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
Material Cash Commitments
We have various service contracts with vendors related to our property management. In addition, we have certain other contracts we enter into in the ordinary course of business that may extend beyond one year. These contracts include terms that provide for cancellation with insignificant or no cancellation penalties. Contract terms are generally between three and five years.
During the three months ended June 30, 2023, we paid approximately $80.3 million to fund tenant-related obligations, including tenant improvements and leasing commissions.
In addition, during the three months ended June 30, 2023, we and our unconsolidated joint venture partners incurred approximately $82.8 million of new client-related obligations associated with approximately 890,000 square feet of second generation leases, or approximately $93 per square foot. We signed approximately 47,500 square feet of first generation leases. The client-related obligations for the development properties are included within the projects’ “Estimated Total Investment” referred to in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” In aggregate during the second quarter of
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2023, we signed leases for approximately 937,500 square feet of space and incurred aggregate client-related obligations of approximately $90.2 million, or approximately $96 per square foot.

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ITEM 3—Quantitative and Qualitative Disclosures about Market Risk.
We are exposed to certain market risks, one of the most predominant of which is a change in interest rates. Increases in interest rates can result in increased interest expense under our Revolving Facility, 2023 Unsecured Term Loan and other variable rate debt to the extent we do not have interest rate swaps in place to hedge the effect of such rate increases. Increases in interest rates can also result in increased interest expense when our fixed rate debt matures and needs to be refinanced. As of June 30, 2023, approximately $14.3 billion of these borrowings bore interest at fixed rates and therefore the fair value of these instruments is affected by changes in the market interest rates. The remaining $1.2 billion of outstanding borrowings bore interest at a variable rate. However, we entered into interest rate swaps, thus fixing the variability of the interest rate (See Note 7 to the Consolidated Financial Statements for information pertaining to interest rate contracts in place as of June 30, 2023 and their respective fair values). Therefore, as of June 30, 2023, we have no outstanding variable rate debt that has not been subject to an interest rate swap.
The table below does not include our unconsolidated joint venture debt. For a discussion concerning our unconsolidated joint venture debt, including interest rate swaps, see Note 5 to the Consolidated Financial Statements and “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Investment in Unconsolidated Joint Ventures - Secured Debt.”
The following table presents our aggregate debt obligations carrying value, estimated fair value and where applicable, the corresponding weighted-average GAAP interest rates sorted by maturity date as of June 30, 2023.
202320242025202620272028+TotalEstimated Fair Value
(dollars in thousands)
Mortgage debt, net
Fixed Rate$(2,421)$(4,843)$(4,843)$(4,843)$2,297,138 $994,576 $3,274,764 $2,765,657 
GAAP Average Interest Rate— %— %— %— %3.64 %2.93 %3.42 %
Variable Rate— — — — — — — — 
 Unsecured debt, net
Fixed Rate$499,847 $699,532 $848,093 $1,991,832 $744,231 $6,201,860 $10,985,395 $9,751,688 
GAAP Average Interest Rate3.28 %3.92 %3.35 %3.63 %6.92 %3.72 %3.88 %
Variable Rate— 1,196,046 — — — — 1,196,046 1,194,895 
Total Debt$497,426 $1,890,735 $843,250 $1,986,989 $3,041,369 $7,196,436 $15,456,205 $13,712,240 
At June 30, 2023, the weighted-average coupon/stated rates on the fixed rate debt stated above was 3.67% per annum. At June 30, 2023, our outstanding variable rate debt totaled $1.2 billion and all of it was subject to interest rate swaps. At June 30, 2023, the coupon/stated rate on our variable rate debt, including the effect of the interest rate swaps, was approximately 5.592% per annum. If market interest rates on our variable rate debt had been 100 basis points greater, total interest expense would have increased approximately $3.0 million and $6.0 million for the three and six months ended June 30, 2023, respectively.
Our use of derivative instruments also involves certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. We believe that there is a low likelihood that these counterparties will fail to meet our obligations and we minimize our exposure by limiting counterparties to major banks who meet established credit and capital guidelines. There can be no assurance that we will adequately protect against the foregoing risks.
The fair value amounts were determined solely by considering the impact of hypothetical interest rates on our financial instruments. Due to the uncertainty of specific actions, we may undertake to minimize possible effects of market interest rate increases, this analysis assumes no changes in our financial structure.

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ITEM 4—Controls and Procedures.
Boston Properties, Inc.
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, our management, with the participation of Boston Properties, Inc.’s Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, Boston Properties, Inc.’s Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.
(b) Changes in Internal Control Over Financial Reporting. No change in Boston Properties, Inc.’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) occurred during the second quarter of our fiscal year ending December 31, 2023 that has materially affected, or is reasonably likely to materially affect, Boston Properties, Inc.’s internal control over financial reporting.
Liquidity and Capital Resources
General
Our principal liquidity needs for the next twelve months and beyond are to:
•fund normal recurring expenses;
•meet debt service and principal repayment obligations and balloon payments on maturing debt, including $500 million of 3.125% unsecured senior notes due September 1, 2023 and $700 million of 3.800% unsecured senior notes due February 1, 2024;
•fund development and redevelopment costs;
•fund capital expenditures, including major renovations, tenant improvements and leasing costs;
•fund pending and possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests therein; and
•make the minimum distribution required to enable BXP to maintain its REIT qualification under the Internal Revenue Code of 1986, as amended.
We expect to satisfy these needs using one or more of the following:
•cash flow from operations;
•distribution of cash flows from joint ventures;
•cash and cash equivalent balances;
•borrowings under BPLP’s Revolving Facility, unsecured term loans, short-term bridge facilities and construction loans;
•long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness);
•sales of real estate and interests in joint ventures owning real estate;
•private equity sources, including with large institutional investors; and
•issuances of BXP equity securities and/or preferred or common units of partnership interests in BPLP.
We draw on multiple financing sources to fund our long-term capital needs. We expect to fund our current development/redevelopment properties primarily with our available cash balances, construction loans, unsecured term loans, proceeds from asset sales and BPLP’s Revolving Facility. We use BPLP’s Revolving Facility primarily as a bridge facility to fund acquisition opportunities, refinance outstanding indebtedness and meet short-term development and working capital needs. Although we may seek to fund our development projects with construction loans, which may require guarantees by BPLP, the financing for each particular project ultimately depends on several factors, including, among others, the project’s size and duration, the extent of pre-leasing, our available cash and access to cost effective capital at the given time.
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The following table presents information on properties under construction/redevelopment as of June 30, 2023 (dollars in thousands):
Financings
Construction/Redevelopment PropertiesEstimated Stabilization DateLocation# of BuildingsEstimated Square FeetInvestment to Date (1)(2)(3)Estimated Total Investment (1)(2)Total Available (1)
Outstanding at June 30, 2023
(1)
Estimated Future Equity Requirement (1)(2)(4)Percentage Leased (5)
Office
140 Kendrick - Building A (Redevelopment)Third Quarter, 2023Needham, MA1104,000 $21,392 $26,600 $— $— $5,208 100 %(6)
360 Park Avenue South (42% ownership)Fourth Quarter, 2025New York, NY1450,000 204,056 248,000 92,774 91,371 42,541 2 %(7)
Reston Next Office Phase IISecond Quarter, 2025Reston, VA190,000 35,535 61,000 — — 25,465 — %
Total Office Properties under Construction/Redevelopment3644,000 260,983 335,600 92,774 91,371 73,214 18 %
Laboratory/Life Sciences
751 Gateway (49% ownership)Fourth Quarter, 2023South San Francisco, CA1231,000 103,738 127,600 — — 23,862 100 %
103 CityPointThird Quarter, 2024Waltham, MA1113,000 75,251 115,100 — — 39,849 — %
180 CityPointFourth Quarter, 2024Waltham, MA1329,000 191,337 274,700 — — 83,363 43 %
300 Binney Street (Redevelopment)First Quarter, 2025Cambridge, MA1236,000 22,359 210,200 — — 187,841 100 %
105 Carnegie Center (Redevelopment)Second Quarter, 2025Princeton, NJ173,000 1,868 40,600 — — 38,732 — %
651 Gateway (50% ownership) (Redevelopment)Fourth Quarter, 2025South San Francisco, CA1327,000 76,106 146,500 — — 70,394 14 %
290 Binney StreetSecond Quarter, 2026Cambridge, MA1566,000 152,817 1,185,200 — — 1,032,383 100 %
Total Laboratory/Life Sciences Properties under Construction/Redevelopment71,875,000 623,476 2,099,900— — 1,476,424 65 %
Residential
Reston Next Residential (508 units) (20% ownership)Second Quarter, 2026Reston, VA1417,000 23,324 47,700 28,000 7,913 4,289 — %
Total Residential Property under Construction1417,000 23,324 47,700 28,000 7,913 4,289 — 
Retail
760 Boylston Street (Redevelopment)Second Quarter, 2024Boston, MA1118,000 9,643 43,800 — — 34,157 100 %
Reston Next RetailFourth Quarter, 2025Reston, VA133,000 20,610 26,600 — — 5,990 — %
Total Retail Properties under Construction/Redevelopment2151,000 30,253 70,400 — — 40,147 78 %
Total Properties under Construction/Redevelopment133,087,000 $938,036 $2,553,600 $120,774 $99,284 $1,594,074 54 %(8)
___________  
(1)Represents our share.
(2)Each of Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement represent our share of acquisition expenses, as applicable, and reflect our share of the estimated net revenue/expenses that we expect to incur prior to stabilization of the project, including any amounts actually received or paid through June 30, 2023.
(3)Includes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(4)Excludes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(5)Represents percentage leased as of July 28, 2023, including leases with future commencement dates.
(6)The redevelopment project was completed and fully placed in-service on July 20, 2023.
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(7)Investment to Date includes all related costs incurred prior to the contribution of the property by us to the joint venture on December 15, 2021 totaling approximately $107 million and our proportionate share of the loan. Our joint venture partners will fund required capital until their aggregate investment is approximately 58% of all capital contributions; thereafter, the joint venture partners will fund required capital according to their percentage interests.
(8)Percentage leased excludes the residential property.
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Lease revenue (which includes reimbursement of operating expenses from clients, if any), other income from operations, available cash balances, proceeds from mortgage financings and offerings of unsecured indebtedness, draws on BPLP’s Revolving Facility, and funding from institutional private equity partners are the principal sources of capital that we use to fund operating expenses, debt service, maintenance and repositioning capital expenditures, tenant improvements and the minimum distribution required to enable BXP to maintain its REIT qualification. We seek to maximize income from our existing properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing client turnover and controlling operating expenses. Our sources of revenue also include third-party fees generated by our property management, leasing, development and construction businesses, as well as the sale of assets from time to time. We believe these sources of capital will continue to provide the funds necessary for our short-term liquidity needs. Material adverse changes in one or more sources of capital may adversely affect our net cash flows.
We expect our primary uses of capital over the next twelve months will be to fund our current and committed development and redevelopment projects, repay debt maturities (as discussed below), service the interest payments on our outstanding indebtedness, and satisfy our REIT distribution requirements.
As of June 30, 2023, we had 13 properties under development or redevelopment. Our share of the estimated total investment for these projects is approximately $2.6 billion, of which approximately $1.6 billion remains to be funded primarily with equity through 2026. In the second quarter of 2023, we completed the development/redevelopment of:
•2100 Pennsylvania Avenue, an approximately 476,000 square foot premier workplace located in Washington, DC, for an estimated total investment of $375.9 million. The property was 91% leased, including leases with future commencement dates, as of July 28, 2023.
•View Boston Properties Limited PartnershipObservatory, an observatory encompassing the top three floors of 800 Boylston Street - The Prudential Center in Boston, Massachusetts, for an estimated total investment of $182.3 million.
DepreciationOn July 20, 2023, we completed the redevelopment of and amortizationfully placed in-service 140 Kendrick Street - Building A, a premier workplace redevelopment project with approximately 104,000 net rentable square feet located in Needham, Massachusetts. The property is 100% leased and is the first Net Zero, Carbon Neutral office repositioning of this scale in Massachusetts.
During the second quarter of 2023, a joint venture in which we have a 55% interest elected to pause vertical construction on Platform 16 in San Jose, California. Our share of the estimated total investment to complete Phase 1 of the project was approximately $231.9 million. As of June 30, 2023, we had invested approximately $100.5 million in this phase of the development project, and we expect to invest an estimated additional $45.8 million to complete the underground parking garage and building foundation elements to facilitate a restart of construction in the future as demand improves.
On July 28, 2023, we entered into a joint venture agreement with an institutional investor for the future development of 343 Madison Avenue located on Madison Avenue between 44th and 45th Streets in New York City, New York adjacent to Grand Central Station. We own a 55% interest in the venture and our partner owns a 45% interest, and we will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture executed a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the direct access to Grand Central Madison as Phase 1 of the development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the cost of the construction of access to Grand Central Station. There can be no assurance that Phase 1 will be completed on the terms currently contemplated or that Phase 2 of the development project will commence on the terms currently contemplated or at all.
During the second quarter of 2023, BPLP completed a public offering of $750.0 million aggregate principal amount of 6.500% unsecured senior notes due 2034. The net proceeds from the offering were approximately $741.3 million, which will be used to repay at maturity $500.0 million aggregate principal amount of BPLP’s 3.125% senior unsecured notes, which mature on September 1, 2023, and for general corporate purposes.
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On May 2, 2023, we entered into four interest rate swap contracts with notional amounts aggregating $1.2 billion. We entered into these interest rate swap contracts to reduce our exposure to the variability in future cash flows attributable to changes in the interest rates on our 2023 Unsecured Term Loan. These interest rate swaps fixed Term SOFR, the reference rate for the 2023 Unsecured Term Loan, at a weighted average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024.
On July 28, 2023, a joint venture in which we have a 50% interest modified and exercised an option to extend by one year the maturity date of its loan collateralized by 100 Causeway Street. At the time of the modification and extension, the loan had an outstanding balance totaling approximately $340.6 million, bore interest at Term SOFR plus 1.60% per annum, and was scheduled to mature on September 5, 2023. The modified and extended loan has an outstanding balance of $336.6 million, which included an approximately $4.0 million principal repayment, bears interest at Term SOFR plus 1.48% per annum, and matures on September 5, 2024, with an additional one-year extension option, subject to certain conditions. 100 Causeway Street is an approximately 634,000 square foot premier workplace located in Boston, Massachusetts and is approximately 95% leased.
Our 2024 debt maturities include $700.0 million aggregate principal amount of BPLP’s 3.800% senior unsecured notes, which mature on February 1, 2024 and the $1.2 billion 2023 Unsecured Term Loan (unless we exercise the one-year extension option within the loan agreement, subject to certain conditions). In our unconsolidated joint venture portfolio, after refinancing the mortgage debt at 500 North Capitol Street, NW, in Washington, DC, we have approximately $577.2 million (our share) of debt maturing through the end of 2024. We expect to fund the foregoing debt maturities using available cash balances, proceeds from asset sales, draws on BPLP’s Revolving Facility, and/or through refinancings using secured debt, unsecured debt or both. We expect our quarterly net interest expense decreasedwill increase moderately for the remainder of 2023 and into 2024 compared to the first half of 2023 primarily due to the cessation of capitalized interest on our 2023 development deliveries, higher interest rates on maturing debt, and lower interest income as we use cash balances to repay debt and fund our development pipeline.
As of July 28, 2023, we had available cash of approximately $1.4 billion (of which approximately $81.7 million is attributable to our consolidated joint venture partners). Our liquidity and capital resources depend on a wide range of factors, and we believe that our access to capital and our strong liquidity, including the approximately $1.5 billion available under BPLP’s Revolving Facility and our available cash, as of July 28, 2023, are sufficient to fund our remaining capital requirements on existing development and redevelopment projects, fund acquisitions, repay our maturing indebtedness when due (if not refinanced), satisfy our REIT distribution requirements and still allow us to act opportunistically on attractive investment opportunities.
We may seek to enhance our liquidity to fund our current and future development activity, pursue additional attractive investment opportunities and refinance or repay indebtedness. Depending on interest rates, the overall conditions in the debt and public and private equity markets, and our leverage at the time, we may decide to access one or more of these capital sources. Doing so may result in us carrying additional cash and cash equivalents pending our use of the proceeds, which would increase our net interest expense.
On May 17, 2023, BXP renewed its 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. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on May 22, 2023. BXP intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. We have not sold any shares under this ATM stock offering program.
REIT Tax Distribution Considerations
Dividend
BXP as a REIT is subject to a number of organizational and operational requirements, including a requirement that BXP currently distribute at least 90% of its annual taxable income (excluding capital gains and with certain other adjustments). Our policy is for BXP to distribute at least 100% of its taxable income, including capital gains, to avoid paying federal tax. Common and LTIP unitholders (other than unearned MYLTIP units) of limited partnership interest in BPLP receive the same distribution per unit that is paid per share of BXP common stock.
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BXP’s Board of Directors will continue to evaluate BXP’s dividend rate in light of our actual and projected taxable income (including gains on sales), liquidity requirements and other circumstances, and there can be no assurance that the future dividends declared by BXP’s Board of Directors will not differ materially from the current quarterly dividend amount.
Sales
To the extent that we sell assets at a gain and cannot efficiently use the proceeds in a tax deferred manner for either our development activities or attractive acquisitions, BXP would, at the appropriate time, decide whether it is better to declare a special dividend, adopt a stock repurchase program, reduce indebtedness or retain the cash for future investment opportunities. Such a decision will depend on many factors including, among others, the timing, availability and terms of development and acquisition opportunities, our then-current and anticipated leverage, the cost and availability of capital from other sources, the price of BXP’s common stock and REIT distribution requirements. At a minimum, we expect that BXP would distribute at least that amount of proceeds necessary for BXP to avoid paying corporate level tax on the applicable gains realized from any asset sales.
From time to time in select cases, whether due to a change in use, structuring issues to comply with applicable REIT regulations or other reasons, we may sell an asset that is held by a taxable REIT subsidiary (“TRS”). Such a sale by a TRS would be subject to federal and local taxes.
Cash Flow Summary
The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash and cash equivalents and cash held in escrows aggregated approximately $48.4$1.6 billion and $502.9 million at June 30, 2023 and 2022, respectively, representing an increase of approximately $1.1 billion. The following table sets forth changes in cash flows:
 Six months ended June 30,
20232022Change
(in thousands)
Net cash provided by operating activities$613,183 $616,639 $(3,456)
Net cash used in investing activities(554,864)(980,170)425,306 
Net cash provided by financing activities833,359 365,223 468,136 
Our principal source of cash flow is related to the operation of our properties. The weighted-average term of our in-place leases, including leases signed by our unconsolidated joint ventures, excluding residential units, was approximately 7.6 years as of June 30, 2023, with occupancy rates historically in the range of 88% to 94%. Generally, our properties generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund regular quarterly dividend and distribution payment requirements. In addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings.
Cash is used in investing activities to fund acquisitions, development, net investments in unconsolidated joint ventures and maintenance and repositioning capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings to enhance or maintain our market position. Cash used in investing activities for the six months ended June 30, 2023 and June 30, 2022 is detailed below:
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 Six months ended June 30,
 20232022
 (in thousands)
Acquisitions of real estate (1)$— $(727,835)
Construction in progress (2)(235,331)(237,182)
Building and other capital improvements(78,344)(63,278)
Tenant improvements(135,743)(97,844)
Proceeds from sales of real estate (3)— 157,345 
Proceeds from assignment fee (4)— 6,624 
Capital contributions to unconsolidated joint ventures (5)(103,595)(69,819)
Capital distributions from unconsolidated joint ventures (6)7,350 36,622 
Investment in non-real estate investments(733)— 
Issuance of related party note receivable (7)(10,500)— 
Proceeds from note receivable (8)— 10,000 
Investments in securities, net2,032 5,197 
Net cash used in investing activities$(554,864)$(980,170)
Cash used in investing activities changed primarily due to the following:
(1)On May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington, for an aggregate purchase price, including transaction costs, of approximately $724.3 million. Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace.
(2)Construction in progress for the six months ended June 30, 2023 included ongoing expenditures associated with2100 Pennsylvania Avenue and the View Boston Observatory at The Prudential Center, which were both fully placed in-service during the six months ended June 30, 2023. In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, 103 CityPoint, Reston Next Office Phase II, 140 Kendrick Street Building A, 760 Boylston Street, 105 Carnegie Center, 290 Binney Street and 300 Binney Street.
Construction in progress for the six months ended June 30, 2022 included ongoing expenditures associated with Reston Next and 2100 Pennsylvania Avenue, which are partially placed in-service, and 325 Main Street, which was completed and fully placed in-service during the six months ended June 30, 2022. In addition, we incurred costs associated with our continued development/redevelopment of 180 CityPoint, View Boston Observatory at The Prudential Center, 880 Winter Street, 103 CityPoint and Reston Next Office Phase II.
(3)On June 15, 2022, we completed the sale of our Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million. Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP. Virginia 95 Office Park consists of eleven Class A office/flex properties aggregating approximately 733,000 net rentable square feet.

On March 31, 2022, we completed the threesale of 195 West Street located in Waltham, Massachusetts for a     gross sale price of $37.7 million. Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP. 195 West Street is an approximately 63,500 net rentable square foot premier workplace.
(4)On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, we executed an agreement to assign the right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres. The property was 100% leased.
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(5)Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2023 consisted primarily of cash contributions of approximately $30.2 million, $26.5 million, $17.5 million, $10.9 million and $8.3 million to our Gateway Commons, Platform 16, Worldgate Drive, Dock 72 and 751 Gateway joint ventures, respectively. On January 31, 2023, we entered into a new joint venture for 13100 and 13150 Worldgate Drive located in Herndon, Virginia.
Capital contributions to unconsolidated joint ventures for the six months ended SeptemberJune 30, 2017 compared2022 consisted primarily of cash contributions of approximately $32.6 million and $22.0 million to 2016, respectively, as detailed below.our Gateway Commons and Platform 16 joint ventures, respectively.
  Depreciation and Amortization Expense for the three months ended September 30,
2017 2016 Change
  (in thousands)
Same Property Portfolio $148,413
 $149,749
 $(1,336)
Properties Placed in-Service Portfolio 1,059
 8
 1,051
Properties Acquired Portfolio 738
 —
 738
Properties in Development or Redevelopment Portfolio (1) —
 48,635
 (48,635)
Properties Sold Portfolio —
 190
 (190)
  $150,210
 $198,582
 $(48,372)
___________
(1)On August 19, 2016, the consolidated entity in which we have a 55% interest and that owns 601 Lexington Avenue located in New York City 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. We recorded approximately $47.6 million of accelerated depreciation expense for the portion of the complex demolished.
Other Income and Expense Items
Income from Unconsolidated Joint Ventures
Income(6)Capital distributions from unconsolidated joint ventures decreased by approximately $0.6 million for the threesix months ended SeptemberJune 30, 2017 compared to 2016 due2023 consisted primarily toof a decrease in our share of net incomecash distribution totaling approximately $7.4 million from our Annapolis Junction, 540 Madison360 Park Avenue South joint venture.
Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of a cash distribution totaling approximately $21.6 million and Colorado Center joint ventures. The decrease in our share of net income$11.6 million from our Annapolis JunctionMetropolitan Square and 7750 Wisconsin Avenue joint ventures, respectively.
(7)On June 5, 2023, a joint venture is primarily duein which we own a 30% interest repaid the existing construction loan collateralized by its 500 North Capitol Street, NW property and obtained new mortgage loans with related parties. At the time of the pay off, the outstanding balance of the loan totaled approximately $105.0 million and was scheduled to a decrease in occupancy andmature on June 6, 2023. The new mortgage loans have an increase in interest expense related to Annapolis Junction Building One’s mortgage loan having an eventaggregate principal balance of default and, commencing October 17, 2016, being charged interest at the default interest rate. The decrease in net income from our 540 Madison Avenue joint venture was primarily related to an increase in interest expense as the mortgage loan that encumbers the property bears$105.0 million, bear interest at a variable rate. On July 28, 2017, the joint venture that owns Colorado Center obtained mortgage loan financing, the resultweighted average fixed rate of which increased interest expense, which reduced the net income for the joint venture. For additional information pertaining to the Annapolis Junction Building One mortgage loan refer to “Item 2—Management’s Discussion6.83% per annum and Analysis of Financial Condition and Results of Operations—Capitalization—Off-Balance Sheet Arrangements—Joint Venture Indebtedness.”
Interest and Other Income
Interest and other income decreased by approximately $2.3 million for the three months ended September 30, 2017 compared to 2016 due primarily to a decrease in other income of approximately $3.0 million partially offset by an increase in interest income of approximately $0.7 million. During the three months ended September 30, 2017, the decrease in other income was primarily due to an approximately $1.3 million tax credit that we received from our Washington, DC region and approximately $1.7 million related to the sale of historic tax credits at The Lofts at Atlantic Wharf in Boston, Massachusetts. Both of these items did not recur during 2017.
On October 20, 2010, we closed a transaction with a financial institution (the “HTC Investor”) related to the historic rehabilitation of The Lofts at Atlantic Wharf in Boston, Massachusetts. The HTC Investor has contributed an aggregate of approximately $15 million to the project. As part of its contribution, the HTC Investor received substantially all of the benefits derived from the tax credits. Beginning in July 2012 through July 2016, we recognized the cash received as revenue over the five-year tax credit recapture period as defined in the Internal Revenue Code.

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Losses from Early Extinguishments of Debt
On September 1, 2016, we used amature on June 5, 2026. Our portion of the net proceedsmortgage loans, $10.5 million, has been reflected as a Related Party Note Receivable on our Consolidated Balance Sheets. 500 North Capitol Street, NW is a 231,000 square foot premier workplace in Washington, DC.
(8)An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from BPLP’s offering of senior unsecured notesus, and available cash to repaywe provided the mortgage loan collateralized by our 599 Lexington Avenue property located in New York City totaling $750.0 million.financing on June 1, 2020. The mortgage loanfinancing bore interest at a fixed rate of 5.57%8.00% per annum, (5.41% per annum GAAP interest rate)compounded monthly, and was scheduled to mature on March 1, 2017. There was no prepayment penalty. We recognized a gain from early extinguishment of debt totaling approximately $0.4 million consistingthe fifth anniversary of the accelerationdate on which the base building of the remaining balance related toaffiliate of The Bernstein Companies’ hotel property was substantially completed. On June 27, 2022, the effective portionborrower repaid the loan in full, including approximately $1.6 million of a previous interest rate hedging program included within accumulated other comprehensive loss,accrued interest.
Cash provided by financing activities for the six months ended June 30, 2023 totaled approximately $833.4 million. This amount consisted primarily of borrowings under the 2023 Unsecured Term Loan and the proceeds from the issuance by BPLP of $750 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034, partially offset by the write-offrepayment of unamortized deferred financing costs.BPLP’s $730 million unsecured credit agreement (the “2022 Unsecured Term Loan”) and payment of our regular dividends and distributions to our shareholders and unitholders and distributions to noncontrolling interests in property partnerships. Future debt payments are discussed below under the heading “Debt Financing.”
On September 1, 2016, we used a portionCapitalization
The following table presents Consolidated Market Capitalization and BXP’s Share of Market Capitalization, as well as the net proceeds from BPLP’s offeringcorresponding ratios of senior unsecured notesConsolidated Debt to Consolidated Market Capitalization and available cashBXP’s Share of Debt to repay the mortgage loan collateralized by our Embarcadero Center Four property located in San Francisco, California totaling approximately $344.8 million. The mortgage loan bore interest at a fixed rateBXP’s Share of 6.10% per annum (7.02% per annum GAAP interest rate) and was scheduled to mature on December 1, 2016. There was no prepayment penalty. We recognized a loss from early extinguishmentMarket Capitalization (in thousands except for percentages):
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Table of debt totaling approximately $0.7 million consisting of the write-off of unamortized deferred financing costs and the acceleration of the remaining balance related to the effective portion of a previous interest rate hedging program included within accumulated other comprehensive loss.Contents
Gains from Investments in Securities
June 30, 2023
Shares / Units OutstandingCommon Stock EquivalentEquivalent Value (1)
Common Stock156,853 156,853 $9,033,164 
Common Operating Partnership Units18,658 18,658 1,074,514 (2)
Total Equity175,511 $10,107,678 
Consolidated Debt$15,456,205 
Add:
BXP’s share of unconsolidated joint venture debt (3)1,609,671 
Subtract:
Partners’ share of Consolidated Debt (4)(1,359,380)
BXP’s Share of Debt$15,706,496 
Consolidated Market Capitalization$25,563,883 
BXP’s Share of Market Capitalization$25,814,174 
Consolidated Debt/Consolidated Market Capitalization60.46 %
BXP’s Share of Debt/BXP’s Share of Market Capitalization60.84 %
Gains from investments in securities for the three months ended September 30, 2017 and 2016 related to investments that we have made to reduce our market risk relating to a deferred compensation plan that we maintain for BXP’s officers. Under this deferred compensation plan, each officer who is eligible to participate is permitted to defer a portion of the officer’s current income on a pre-tax basis and receive a tax-deferred return on these deferrals_______________  
(1)Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on June 30, 2023 of $57.59.
(2)Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2020 MYLTIP Units) but excludes the 2021 - 2023 MYLTIP Units because the three-year performance periods had not ended as of specific investments selectedJune 30, 2023.
(3)See page 90 for additional information.
(4)See page 89 for additional information.

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT sector. We present this measure as a percentage and it is calculated by dividing (A) our consolidated debt by (B) our consolidated market capitalization, which is the market value of our outstanding equity securities plus our consolidated debt. Consolidated market capitalization is the sum of:
(1)     our consolidated debt; plus
(2)     the product of (x) the closing price per share of BXP Common Stock on June 30, 2023, as reported by the officer. In order to reduce our market risk relating to this plan, we typically acquire,New York Stock Exchange, multiplied by (y) the sum of:
(i)     the number of outstanding shares of Common Stock of BXP,
(ii)     the number of outstanding OP Units in a separate account that is not restricted as to its use, similar or identical investments as those selectedBPLP (excluding OP Units held by each officer. This enables us to generally match our liabilities to BXP’s officers underBXP),
(iii)     the deferred compensation plan with equivalent assetsnumber 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 thereby limit our market risk. The performance
(iv)     the number of these investments is recorded as gains from investments in securities. During the three months ended September 30, 2017OP Units issuable upon conversion of 2012 OPP Units, and 2016, we recognized gains of approximately $0.9 million and $1.0 million, respectively, on these investments. By comparison, our general and administrative expense increased by approximately $0.9 million and $1.0 million during the three months ended September 30, 2017 and 2016, respectively, as a result of an increase in our liability under our deferred compensation plan2013 - 2020 MYLTIP Units that were associated with the performance of the specific investments selected by officers of BXP participatingissued in the plan.form of LTIP Units.

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Interest Expense
Interest expense decreased by approximately $12.6 million forconsolidated market capitalization does not include LTIP Units issued in the three monthsform of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, September 30, 2017 compared to 2016 as detailed below:
Component Change in interest
expense for the three
months ended
September 30, 2017
compared to
September 30, 2016
  (in thousands)
Increases to interest expense due to:  
Refinancing of the debt collateralized by 767 Fifth Avenue (the General Motors Building) (1) $8,657
Issuance of $1.0 billion in aggregate principal of 2.750% senior notes due 2026 on August 17, 2016 4,269
Utilization of the Unsecured Line of Credit as well as an increase in capacity due to the execution of the 2017 Credit Facility (1) 417
Amortization of deferred financing fees for BPLP’s unsecured debt and credit facility 373
Other interest expense (excluding senior notes) 271
Total increases to interest expense 13,987
Decreases to interest expense due to:  
Repayment of mortgage financings (2) (11,032)
Decrease in the interest for the Outside Members’ Notes Payable for the 767 Fifth Avenue (the General Motors Building) (3) (8,694)
Increase in capitalized interest (4) (6,870)
Total decreases to interest expense (26,596)
Total change in interest expense $(12,609)
___________ 
(1)See Note 5 to the Consolidated Financial Statements.
(2)Includes the repayment of the mortgage loans collateralized by Embarcadero Center Four and 599 Lexington Avenue.
(3)
The related interest expense from the Outside Members’ Notes Payable totaled approximately $8.7 million for the three months ended September 30, 2016. This amount was allocated to the outside joint venture partners as an adjustment to Noncontrolling Interests in Property Partnerships in our Consolidated Statements of Operations. On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
(4)
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.”
Interest expense directly related to the development of rental properties is capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the real estate or lease term. As portions of properties are placed in-service, we cease capitalizing interest on these portions and interest is then expensed. Interest capitalized for the three months ended September 30, 2017 and 2016 was approximately $16.7 million and $9.8 million, respectively. These costs2021 - 2023 MYLTIP Units are not included in this calculation as of June 30, 2023.
We also present BXP’s Share of Market Capitalization and BXP’s Share of Debt/BXP’s Share of Market Capitalization, which are calculated in the interest expense referenced above.
At September 30, 2017, our variable rate debt consistedsame manner, except that BXP’s Share of BPLP’s $2.0 billion 2017 Credit Facility of which no amount was outstanding at September 30, 2017. For a summaryDebt is utilized instead of our consolidated debt in both the numerator and the denominator. BXP’s Share of Debt is defined as our consolidated debt plus our share of September 30, 2017debt from our unconsolidated joint ventures (calculated based upon our ownership percentage), minus our partners’ share of debt from our consolidated joint ventures (calculated based upon the
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partners’ percentage ownership interests adjusted for basis differentials). Management believes that BXP’s Share of Debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and September 30, 2016 referexcludes our partners’ share of debt from consolidated joint ventures, in each case presented on the same basis. We have several significant joint ventures and presenting various measures of financial condition in this manner can help investors better understand our financial condition and/or results of operations after taking into account our economic interest in these joint ventures.  We caution investors that the ownership percentages used in calculating BXP’s Share of Debt may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the headingallocation of rights regarding decision making (both for routine and major decisions), distributions, transferability of interests, financing and guarantees, liquidations and other matters.  Moreover, in some cases we exercise significant influence over, but do not control, the joint venture in which case GAAP requires that we account for the joint venture entity using the equity method of accounting and we do not consolidate it for financial reporting purposes. In other cases, GAAP requires that we consolidate the venture even though our partner(s) own(s) a significant percentage interest.  As a result, management believes that the presentation of BXP’s Share of a financial measure should not be considered a substitute for, and should only be considered with and as a supplement to our financial information presented in accordance with GAAP.
We present these supplemental ratios because our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, in part, a function of the market price of the common stock of BXP and as such will fluctuate with changes in such price, and they do not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. However, for a company like BXP, whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long as they are evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.
For a discussion of our unconsolidated joint venture indebtedness, see “Liquidity and Capital Resources—Capitalization—Debt Financing” withinInvestment in Unconsolidated Joint Ventures - Secured Debt” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and for a discussion of our consolidated joint venture indebtedness see “Liquidity and Capital Resources—Mortgage Notes Payable” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
LossesDebt Financing
As of June 30, 2023, we had approximately $15.5 billion of outstanding consolidated indebtedness, representing approximately 60.46% of our Consolidated Market Capitalization as calculated above consisting of approximately (1) $11.0 billion (net of discount and deferred financing fees) in publicly traded unsecured senior notes having a GAAP weighted-average interest rate of 3.88% per annum and maturities in 2023 through 2034, (2) $3.3 billion (net of deferred financing fees) of property-specific mortgage debt having a GAAP weighted-average interest rate of 3.42% per annum and a weighted-average term of 5.3 years and (3) $1.2 billion outstanding under BPLP’s 2023 Unsecured Term Loan that matures on May 16, 2024.
The table below summarizes the aggregate carrying value of our mortgage notes payable and BPLP’s unsecured senior notes, unsecured line of credit, and unsecured term loan, as well as Consolidated Debt Financing Statistics at June 30, 2023 and June 30, 2022.  
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June 30,
20232022
 (dollars in thousands)
Debt Summary:
Balance
Fixed rate mortgage notes payable, net$3,274,764 $3,269,948 
Unsecured senior notes, net10,985,395 9,489,030 
Unsecured line of credit— 165,000 
Unsecured term loan, net1,196,046 728,795 
Consolidated Debt15,456,205 13,652,773 
Add:
BXP’s share of unconsolidated joint venture debt, net (1)1,609,671 1,446,617 
Subtract:
Partners’ share of consolidated mortgage notes payable, net (2)(1,359,380)(1,357,399)
BXP’s Share of Debt$15,706,496 $13,741,991 
June 30,
20232022
Consolidated Debt Financing Statistics:
Percent of total debt:
Fixed rate (3)100.00 %93.45 %
Variable rate— %6.55 %
Total100.00 %100.00 %
GAAP Weighted-average interest rate at end of period:
Fixed rate (3)3.95 %3.43 %
Variable rate— %2.53 %
Total3.95 %3.37 %
Coupon/Stated Weighted-average interest rate at end of period:
Fixed rate (3)3.82 %3.32 %
Variable rate— %1.96 %
Total3.82 %3.23 %
Weighted-average maturity at end of period (in years):
Fixed rate (3)5.0 6.1 
Variable rate— 1.4 
Total5.0 5.8 
_______________
(1)See page 90 for additional information.
(2)See page 89 for additional information.
(3)The 2023 Unsecured Term Loan bears interest at a variable rate of adjusted Term SOFR plus a margin ranging from Interest Rate Contracts75 to 160 basis points based on BPLP’s credit rating. On May 2, 2023, BPLP executed interest rate swaps that effectively fixed Term SOFR for the $1.2 billion outstanding under the 2023 Unsecured Term Loan (see Notes 6 and 7 to the Consolidated Financial Statements). As such, the 2023 Unsecured Term Loan is reflected within Fixed rate statistics.
Unsecured Credit Facility
On August 17, 2016,June 1, 2023, BPLP amended its 2021 Credit Facility that replaced the LIBOR-based daily floating rate option with a SOFR-based daily floating rate option and to add options for SOFR-based term floating rates and rates for alternative currency loans. In addition, the amendment added a SOFR credit spread adjustment of 0.10%. Other than the foregoing, the material terms of the 2021 Credit Facility remain unchanged.
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The 2021 Credit Facility provides for borrowings of up to $1.5 billion through the Revolving Facility, subject to customary conditions. The 2021 Credit Facility matures on June 15, 2026 and includes a sustainability-linked pricing component. Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in conjunctioneach case, subject to syndication of the increase and other conditions. Based on BPLP’s June 30, 2023 credit rating, (1) the applicable Daily SOFR, Term SOFR, alternative currency daily rate, and alternative currency term rate margins are 0.775%, (2) the alternate base rate margin is zero basis points and (3) the facility fee is 0.15% per annum.
At June 30, 2023 and July 28, 2023, BPLP had no borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $6.7 million, with the ability to borrow approximately $1.5 billion.
Unsecured Term Loan
On January 4, 2023, BPLP entered into the 2023 Unsecured Term Loan, which provided for a single borrowing of up to $1.2 billion. Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 2023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions.
At BPLP’s offeringoption, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating.
On January 4, 2023, upon entry into the credit agreement, BPLP exercised its 2.750% senior unsecured notes due 2026, we terminated forward-startingoption to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the 2022 Unsecured Term Loan, which was scheduled to mature on May 16, 2023. There was no prepayment penalty associated with the repayment of the 2022 Unsecured Term Loan.
As of June 30, 2023, the 2023 Unsecured Term Loan bears interest at a rate equal to adjusted Term SOFR plus 0.85% per annum based on BPLP’s current credit rating at June 30, 2023 (See Note 7 to the Consolidated Financial Statements). At June 30, 2023, BPLP had $1.2 billion outstanding under the 2023 Unsecured Term Loan.
Derivative Instruments and Hedging Activities
On May 2, 2023, BPLP executed interest rate swap contracts that fixedswaps in notional amounts aggregating $1.2 billion. These interest rate swaps were entered into to fix Term SOFR, the 10-year swapreference rate for BPLP’s 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. Based on BPLP’s credit rating as of June 30, 2023, the interest rate for the 2023 Unsecured Term Loan would be 6.09% (See Note 7 to the Consolidated Financial Statements).
Unsecured Senior Notes
For a description of BPLP’s outstanding unsecured senior notes as of June 30, 2023, see Note 6 to the Consolidated Financial Statements.
On May 15, 2023, BPLP completed a public offering of $750.0 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034. The notes were priced at 99.697% of the principal amount to yield an effective rate (including financing fees) of approximately 2.423%6.619% per annum to maturity. The notes will mature on January 15, 2034, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $741.3 million after deducting underwriting discounts and transaction expenses.
The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt. At June 30, 2023, BPLP was in compliance with each of these financial restrictions and requirements.
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Mortgage Notes Payable
The following represents the outstanding principal balances due under the mortgage notes payable at June 30, 2023:
PropertiesStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying Amount
Carrying Amount (Partners’ Share)
Maturity Date
 (dollars in thousands)
Consolidated Joint Ventures
767 Fifth Avenue (the General Motors Building)3.43 %3.64 %$2,300,000 $(13,743)$2,286,257 $914,552 (2)(3)(4)June 9, 2027
601 Lexington Avenue2.79 %2.93 %1,000,000 (11,493)988,507 444,828 (2)(5)January 9, 2032
Total$3,300,000 $(25,236)$3,274,764 $1,359,380 
_______________ 
(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions (if any).
(2)The mortgage loan requires interest only payments with a balloon payment due at maturity.
(3)This property is owned by a consolidated entity in which we have a 60% interest. The partners’ share of the carrying amount has been adjusted for basis differentials.
(4)In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of June 30, 2023, the maximum funding obligation under the guarantee was approximately $11.2 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 (See Note 8 to the Consolidated Financial Statements).
(5)This property is owned by a consolidated entity in which we have a 55% interest.
Investment in Unconsolidated Joint Ventures - Secured Debt
We have investments in unconsolidated joint ventures with our effective ownership interests ranging from 20% to 55%. Seventeen of these ventures have mortgage indebtedness. We exercise significant influence over, but do not control, these entities. As a result, we account for them using the equity method of accounting. See also Note 5 to the Consolidated Financial Statements. At June 30, 2023, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $4.1 billion (of which our proportionate share is approximately $1.6 billion). The table below summarizes the outstanding debt of these joint venture properties at June 30, 2023. In addition to other guarantees specifically noted in the table, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) as well as the completion of development projects on certain of the loans.
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PropertiesNominal % OwnershipStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying AmountCarrying Amount (Our share) Maturity Date
 (dollars in thousands)
Santa Monica Business Park55.00 %4.06 %4.23 %$300,000 $(1,090)$298,910 $164,400 (2)(4)July 19, 2025
Market Square North50.00 %7.56 %7.74 %125,000 (539)124,461 62,230 (2)(3) (5)November 10, 2025
1265 Main Street50.00 %3.77 %3.84 %35,127 (236)34,891 17,446 January 1, 2032
Colorado Center50.00 %3.56 %3.59 %550,000 (737)549,263 274,632 (2)August 9, 2027
Dock 7250.00 %7.59 %7.85 %198,383 (1,142)197,241 98,621 (2)(6)December 18, 2025
The Hub on Causeway - Podium50.00 %7.51 %7.68 %174,329 (57)174,272 87,136 (2)(7)September 6, 2023
Hub50House50.00 %4.43 %4.51 %185,000 (1,223)183,777 91,889 (2)(8)June 17, 2032
100 Causeway Street50.00 %6.76 %6.97 %337,604 (145)337,459 168,729 (2)(3) (9)September 5, 2023
7750 Wisconsin Avenue (Marriott International Headquarters)50.00 %6.51 %6.66 %251,542 (317)251,225 125,613 (2)(3) (10)April 26, 2024
360 Park Avenue South42.21 %7.65 %8.10 %216,686 (1,456)215,230 90,849 (2)(3) (11)December 14, 2024
Safeco Plaza33.67 %4.82 %4.96 %250,000 (1,077)248,923 83,812 (2)(12)September 1, 2026
500 North Capitol Street, NW30.00 %6.83 %7.16 %105,000 (825)104,175 31,069 (2)(13)June 5, 2026
200 Fifth Avenue26.69 %4.34 %5.60 %600,000 (9,000)591,000 149,694 (2)(14)November 24, 2028
901 New York Avenue25.00 %3.61 %3.69 %209,868 (268)209,600 52,400   January 5, 2025
3 Hudson Boulevard25.00 %8.68 %8.68 %80,000 — 80,000 20,000 (2)(3) (15)August 13, 2023
Metropolitan Square20.00 %7.25 %8.03 %420,000 (2,527)417,473 83,495 (2)(3) (16)April 9, 2024
Reston Next Residential20.00 %7.15 %7.47 %39,565 (1,284)38,281 7,656 (2)(3) (17)May 13, 2026
Total$4,078,104 $(21,923)$4,056,181 $1,609,671   
_______________ 
(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, which includes mortgage recording fees.
(2)The loan requires interest only payments with a balloon payment due at maturity.
(3)The loan includes certain extension options, subject to certain conditions.
(4)The loan bears interest at a variable rate equal to SOFR plus 1.38% per annum. A subsidiary of the joint venture entered into interest rate swap contracts with notional amounts aggregating $300.0 million through April 1, 2025, resulting in a fixed rate of approximately 4.059% per annum through the expiration of the interest rate swap contracts.
(5)The loan bears interest at a variable rate equal to the greater of (1) the sum of (x) SOFR and (y) 2.41% or (2) 2.80% per annum.
(6)The construction financing bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25%, plus (2) 2.50% per annum.
(7)The construction financing bears interest at a variable rate equal to SOFR plus 2.35% per annum.
(8)The loan bears interest at a variable rate equal to SOFR plus 1.35% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts.
(9)The loan bears interest at a variable rate equal to SOFR plus 1.60% per annum. On July 28, 2023 the joint venture extended the loan maturity to September 5, 2024. The loan extension required an approximately $4.0 million principal repayment and the interest rate was reduced from Term SOFR plus 1.60% to Term SOFR plus 1.48% per annum (See Note 14 to the Consolidated Financial Statements).
(10)The construction financing bears interest at a variable rate equal to SOFR plus 1.35% per annum.
(11)The loan bears interest at a variable rate equal to Adjusted Term SOFR plus 2.40% per annum. The spread on the variable rate may be reduced, subject to certain conditions.
(12)The loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to
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increases in the SOFR rate at a cap of 2.50% per annum on a notional amount of $250.0 million through September 1, 2023.
(13)The indebtedness consists of (x) a $70.0 million mortgage loan payable (Note A) which bears interest at a fixed rate of 6.23% per annum, and (y) a $35.0 million mortgage loan payable (Note B) which bears interest at a fixed rate of 8.03% per annum. We provided $10.5 million of the Note B mortgage financing to the joint venture. Our portion of the loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets.
(14)The loan bears interest at a variable rate equal to LIBOR plus 1.30% per annum through July 9, 2023. For the period commencing on July 10, 2023 the loan will bear interest at a variable rate equal to Term SOFR plus approximately 1.41% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $550.0 million. $600.0 million through June 2028, resulting in a fixed rate of approximately 4.34% per annum through the expiration of the interest rate swap contracts. In addition to items noted in footnote one above, the GAAP interest rate includes the adjustment required to reflect the loan at fair value upon acquisition.
(15)We cash-settled the contracts and made cash paymentsprovided $80.0 million of mortgage financing to the counterparties aggregatingjoint venture. The loan bears interest at a variable rate equal to LIBOR plus 3.50% per annum through July 6, 2023. For the period commencing on July 7, 2023, the loan will bear interest at a variable rate equal to Term SOFR plus 3.61% per annum. The loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets. As of June 30, 2023, the loan has approximately $49.3 million. We recognized approximately $0.1$23.2 million of accrued interest due at the maturity date.
(16)The indebtedness consists of (x) a $305.0 million mortgage loan payable which bears interest at a variable rate equal to SOFR plus approximately 1.81%, and (y) a $115.0 million mezzanine note payable which bears interest at a variable rate equal to SOFR plus 5.25%. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the SOFR rate at a cap of 4.50% per annum on a notional amount of $420.0 million through April 15, 2024.
(17)The construction financing has a borrowing capacity of $140.0 million. The construction financing bears interest at a variable rate equal to SOFR plus 2.00% per annum.
State and Local Tax Matters
Because BXP is organized and qualifies as a REIT, it is generally not subject to federal income taxes, but is subject to certain state and local taxes. In the normal course of business, certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits or other inquiries. Although we believe that we have substantial arguments in favor of our position in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
Insurance
For information concerning our insurance program, see Note 8 to the Consolidated Financial Statements.
Funds from Operations
Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), we calculate Funds from Operations, or “FFO,” for each of BXP and BPLP by adjusting net income (loss) attributable to Boston Properties, Inc. and net income (loss) attributable to Boston Properties Limited Partnership (computed in accordance with GAAP), respectively, for gains (or losses) from sales of properties, impairment losses on interest ratedepreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and our share of real estate-related depreciation and amortization. FFO is a non-GAAP financial measure. We believe the presentation of FFO, combined with the presentation of required GAAP financial measures, improves the understanding of operating results of REITs among the investing public and helps make comparisons of REIT operating results more meaningful. Management generally considers FFO to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit
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definition differently. We believe that in order to facilitate a clear understanding of our operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. or net income attributable to Boston Properties Limited Partnership (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.  
BXP
The following table presents a reconciliation of net income attributable to Boston Properties, Inc. to FFO attributable to Boston Properties, Inc. for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of funds from operations33,481 34,329 
Funds from Operations attributable to Boston Properties, Inc.$292,844 $304,560 
Our percentage share of Funds from Operations—basic89.74 %89.87 %
Weighted average shares outstanding—basic156,826 156,720 
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The following tables presents a reconciliation of net income attributable to Boston Properties, Inc. to Diluted FFO attributable to Boston Properties, Inc. for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted FFO326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted FFO33,383 34,262 
Diluted FFO attributable to Boston Properties, Inc. (1)$292,942 $304,627 
___________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted Funds from Operations17,922 17,672 
Diluted Funds from Operations attributable to Boston Properties, Inc. (1)157,218 157,192 
 _______________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.

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BPLP
The following table presents a reconciliation of net income attributable to Boston Properties Limited Partnership to FFO attributable to Boston Properties Limited Partnership for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)$326,325 $338,889 
Weighted average shares outstanding—basic174,748 174,392 
 _______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
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The following tables presents a reconciliation of net income attributable to Boston Properties Limited Partnership to Diluted FFO attributable to Boston Properties Limited Partnership for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted Funds from Operations attributable to Boston Properties Limited Partnership$326,325 $338,889 
_______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
Material Cash Commitments
We have various service contracts with vendors related to our property management. In addition, we have certain other contracts we enter into in the ordinary course of business that may extend beyond one year. These contracts include terms that provide for cancellation with insignificant or no cancellation penalties. Contract terms are generally between three and five years.
During the three months ended June 30, 2023, we paid approximately $80.3 million to fund tenant-related obligations, including tenant improvements and leasing commissions.
In addition, during the three months ended SeptemberJune 30, 2016 related2023, we and our unconsolidated joint venture partners incurred approximately $82.8 million of new client-related obligations associated with approximately 890,000 square feet of second generation leases, or approximately $93 per square foot. We signed approximately 47,500 square feet of first generation leases. The client-related obligations for the development properties are included within the projects’ “Estimated Total Investment” referred to in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” In aggregate during the second quarter of
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2023, we signed leases for approximately 937,500 square feet of space and incurred aggregate client-related obligations of approximately $90.2 million, or approximately $96 per square foot.

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ITEM 3—Quantitative and Qualitative Disclosures about Market Risk.
We are exposed to certain market risks, one of the most predominant of which is a change in interest rates. Increases in interest rates can result in increased interest expense under our Revolving Facility, 2023 Unsecured Term Loan and other variable rate debt to the partial ineffectivenessextent we do not have interest rate swaps in place to hedge the effect of such rate increases. Increases in interest rates can also result in increased interest expense when our fixed rate debt matures and needs to be refinanced. As of June 30, 2023, approximately $14.3 billion of these borrowings bore interest at fixed rates and therefore the fair value of these instruments is affected by changes in the market interest rates. The remaining $1.2 billion of outstanding borrowings bore interest at a variable rate. However, we entered into interest rate swaps, thus fixing the variability of the interest rate (See Note 7 to the Consolidated Financial Statements for information pertaining to interest rate contracts in place as of June 30, 2023 and their respective fair values). Therefore, as of June 30, 2023, we have no outstanding variable rate debt that has not been subject to an interest rate swap.

The table below does not include our unconsolidated joint venture debt. For a discussion concerning our unconsolidated joint venture debt, including interest rate swaps, see Note 5 to the Consolidated Financial Statements and “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Investment in Unconsolidated Joint Ventures - Secured Debt.”
The following table presents our aggregate debt obligations carrying value, estimated fair value and where applicable, the corresponding weighted-average GAAP interest rates sorted by maturity date as of June 30, 2023.
202320242025202620272028+TotalEstimated Fair Value
(dollars in thousands)
Mortgage debt, net
Fixed Rate$(2,421)$(4,843)$(4,843)$(4,843)$2,297,138 $994,576 $3,274,764 $2,765,657 
GAAP Average Interest Rate— %— %— %— %3.64 %2.93 %3.42 %
Variable Rate— — — — — — — — 
 Unsecured debt, net
Fixed Rate$499,847 $699,532 $848,093 $1,991,832 $744,231 $6,201,860 $10,985,395 $9,751,688 
GAAP Average Interest Rate3.28 %3.92 %3.35 %3.63 %6.92 %3.72 %3.88 %
Variable Rate— 1,196,046 — — — — 1,196,046 1,194,895 
Total Debt$497,426 $1,890,735 $843,250 $1,986,989 $3,041,369 $7,196,436 $15,456,205 $13,712,240 
At June 30, 2023, the weighted-average coupon/stated rates on the fixed rate debt stated above was 3.67% per annum. At June 30, 2023, our outstanding variable rate debt totaled $1.2 billion and all of it was subject to interest rate swaps. At June 30, 2023, the coupon/stated rate on our variable rate debt, including the effect of the interest rate swaps, was approximately 5.592% per annum. If market interest rates on our variable rate debt had been 100 basis points greater, total interest expense would have increased approximately $3.0 million and $6.0 million for the three and six months ended June 30, 2023, respectively.
Our use of derivative instruments also involves certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. We believe that there is a low likelihood that these counterparties will fail to meet our obligations and we minimize our exposure by limiting counterparties to major banks who meet established credit and capital guidelines. There can be no assurance that we will adequately protect against the foregoing risks.
The fair value amounts were determined solely by considering the impact of hypothetical interest rates on our financial instruments. Due to the uncertainty of specific actions, we may undertake to minimize possible effects of market interest rate increases, this analysis assumes no changes in our financial structure.

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contracts. We will reclassify into earnings over the 10-year term of the 2.750% senior unsecured notes due 2026 as an increase to interest expense approximately $49.2 million (or approximately $4.9 million per year) of the amounts recorded on our consolidated balance sheets within accumulated other comprehensive loss, which represents the effective portion of the applicable interest rate contracts.
Gains on Sales of Real Estate
The gains on sales of real estate may differ between BXPITEM 4—Controls and BPLP as a result of previously applied acquisition accounting by BXP for the issuance of common stock in connection with non-sponsor OP Unit redemptions by BPLP. This accounting resulted in a step-up of the real estate assets at BXP that was allocated to certain properties. The difference between the real estate assets of BXP as compared to BPLP for certain properties having an allocation of the real estate step-up will result in a corresponding difference in the gains on sales of real estate when those properties are sold. For additional information, see the Explanatory Note that follows the cover page of this Form 10-Q.Procedures.
Boston Properties, Inc.
Gains on sales(a) Evaluation of real estate decreasedDisclosure Controls and Procedures. As of the end of the period covered by approximately $10.1 million forthis report, our management, with the three months ended September 30, 2017 compared to 2016, respectively, as detailed below (dollars in millions):
Name Date Sold Property Type Square Feet Sale Price Cash Proceeds Gain on Sale of Real Estate 
2017             
Reston Eastgate August 30, 2017 Land N/A $14.0
 $13.2
 $2.8
(1)
2016             
Broad Run Business Park August 16, 2016 Land N/A $18.0
 $17.9
 $13.0
 
___________
(1)Excludes approximately $58,000 of a gain on sale of real estate recognized during the three months ended September 30, 2017 related to a previously deferred gain amount from a 2016 sale.
Boston Properties Limited Partnership
Gains on sales of real estate decreased by approximately $10.1 million for the three months ended September 30, 2017 compared to 2016, respectively, as detailed below (dollars in millions):
Name Date Sold Property Type Square Feet Sale Price Cash Proceeds Gain on Sale of Real Estate 
2017             
Reston Eastgate August 30, 2017 Land N/A $14.0
 $13.2
 $2.8
(1)
2016             
Broad Run Business Park August 16, 2016 Land N/A $18.0
 $17.9
 $13.0
 
___________
(1)Excludes approximately $58,000 of a gain on sale of real estate recognized during the three months ended September 30, 2017 related to a previously deferred gain amount from a 2016 sale.
Noncontrolling interests in property partnerships
Noncontrolling interests in property partnerships increased by approximately $31.6 million for the three months ended September 30, 2017 compared to 2016 as detailed below.

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Property Noncontrolling Interests in Property Partnerships for the three months ended September 30,
2017 2016 Change
  (in thousands)
Salesforce Tower $(160) $(3) $(157)
767 Fifth Avenue (the General Motors Building) (1) 1,179
 (5,938) 7,117
Times Square Tower 6,741
 6,636
 105
601 Lexington Avenue (2) 3,066
 (21,141) 24,207
100 Federal Street 1,174
 887
 287
Atlantic Wharf Office 2,340
 2,334
 6
  $14,340
 $(17,225) $31,565
___________
(1)
On June 7, 2017, our consolidated entity in which we have a 60% interest completed the refinancing of indebtedness that had been secured by direct and indirect interests in 767 Fifth Avenue. Prior to this quarter, the net loss allocation was primarily due to the partners’ share of the interest expense for the outside members’ notes payable, which was $8.7 million for the three months ended 2016. On June 7, 2017, a portion of the outside members’ notes payable was repaid and the remaining portion was contributed as equity in the consolidated entity (See Notes 5 and 8 to the Consolidated Financial Statements).
(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. We will capitalize incremental costs during the redevelopment. BXP and BPLP recognized approximately $50.8 million and $47.6 million, respectively, of depreciation expense associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. Approximately $21.4 million of those amounts was allocated to the outside partners.
Noncontrolling Interest—Common Unitsparticipation of Boston Properties, Limited Partnership
For BXP, noncontrolling interest–common unitsInc.’s Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, Boston Properties, Limited Partnership increasedInc.’s Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by approximately $4.0 million forthis report.
(b) Changes in Internal Control Over Financial Reporting. No change in Boston Properties, Inc.’s internal control over financial reporting (as defined in Rule 13a-15(f) under the three months ended September 30, 2017 comparedSecurities Exchange Act of 1934, as amended) occurred during the second quarter of our fiscal year ending December 31, 2023 that has materially affected, or is reasonably likely to 2016 due primarily to an increase in allocable income partially offset by a decrease in the noncontrolling interest’s ownership percentage. Due to our UPREIT ownership structure, there is no corresponding line item on BPLP’smaterially affect, Boston Properties, Inc.’s internal control over financial statements.reporting.
Liquidity and Capital Resources
General
Our principal liquidity needs for the next twelve months and beyond are to:
•fund normal recurring expenses;
•meet debt service and principal repayment obligations includingand balloon payments on maturing debt;debt, including $500 million of 3.125% unsecured senior notes due September 1, 2023 and $700 million of 3.800% unsecured senior notes due February 1, 2024;
•fund development and redevelopment costs;
•fund capital expenditures, including major renovations, tenant improvements and leasing costs;
•fund development costs;pending and possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests therein; and
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.
We expect to satisfy these needs using one or more of the following:
•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;
•borrowings under BPLP’s 2017 CreditRevolving Facility, and otherunsecured term loans, short-term bridge facilities;
facilities and construction loans;
•long-term secured and unsecured indebtedness (including unsecured exchangeable indebtedness); and
•sales of real estate.estate and interests in joint ventures owning real estate;

•private equity sources, including with large institutional investors; and
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BXP equity securities and/or preferred or common units of partnership interests in BPLP.
We draw on multiple financing sources to fund our long-term capital needs. OurWe expect to fund our current consolidated developmentdevelopment/redevelopment properties are expected to be fundedprimarily with our available cash balances, construction loans, unsecured term loans, proceeds from asset sales and BPLP’s 2017 CreditRevolving Facility. We use BPLP’s 2017 CreditRevolving Facility is utilized primarily as a bridge facility to fund acquisition opportunities, refinance outstanding indebtedness and meet short-term development and working capital needs. Although we may seek to fund our development projects with construction loans, which may require guarantees by BPLP, the financing for each particular project ultimately depends on several factors, including, among others, the project’s size and duration, the extent of pre-leasing, and our available cash and access to cost effective capital at the given time.
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The following table presents information on properties under construction and construction/redevelopment as of SeptemberJune 30, 20172023 (dollars in thousands):
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                 
Salesforce Tower (95% ownership) Third Quarter, 2019 San Francisco, CA 1
 1,400,000
 913,515
 1,073,500
 170,160
 87%(3)
The Hub on Causeway (50% ownership) Fourth Quarter, 2019 Boston, MA 1
 385,000
 46,272
 141,870
 —
 42%(4)
145 Broadway Fourth Quarter, 2019 Cambridge, MA 1
 485,000
 70,097
 375,000
 304,903
 98% 
Dock 72 (50% ownership) First Quarter, 2020 Brooklyn, NY 1
 670,000
 70,335
 204,900
 9,565
 33%(5)
6595 Springfield Center Drive (TSA Headquarters) Fourth Quarter, 2020 Springfield, VA 1
 634,000
 34,401
 313,700
 279,299
 98% 
7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership) Third Quarter, 2022 Bethesda, MD 1
 740,000
 11,206
 211,100
 199,894
 100%(6)
Total Office and Retail Properties under Construction   6
 4,314,000
 1,145,826
 2,320,070
 963,821
 80% 
Residential                 
Proto Kendall Square (280 units) Second Quarter, 2019 Cambridge, MA 1
 149,600
 59,422
 140,170
 80,748
 N/A
 
Proto Kendall Square - Retail     —
 14,400
 —
 —
 —
 15% 
Signature at Reston (508 units) Second Quarter, 2020 Reston, VA 1
 490,000
 171,649
 234,854
 63,205
 N/A
 
Signature at Reston - Retail     —
 24,600
 —
 —
 —
 81% 
MacArthur Station Residences (402 units) Fourth Quarter, 2021 Oakland, CA 1
 324,000
 3,133
 263,600
 260,467
 N/A
(7)
Total Residential Properties under Construction   3
 1,002,600
 234,204
 638,624
 404,420
 57% 
Redevelopment Properties               
191 Spring Street Fourth Quarter, 2018 Lexington, MA 1
 160,000
 30,221
 53,920
 23,699
 49% 
One Five Nine East 53rd Street (55% ownership) Fourth Quarter, 2019 New York, NY —
 220,000
 52,171
 106,000
 53,829
 —%(8)
Total Redevelopment Properties under Construction 1
 380,000
 82,392
 159,920
 77,528
 21% 
Total Properties under Construction and Redevelopment 10
 5,696,600
 $1,462,422
 $3,118,614
 $1,445,769
 75%
Financings
Construction/Redevelopment PropertiesEstimated Stabilization DateLocation# of BuildingsEstimated Square FeetInvestment to Date (1)(2)(3)Estimated Total Investment (1)(2)Total Available (1)
Outstanding at June 30, 2023
(1)
Estimated Future Equity Requirement (1)(2)(4)Percentage Leased (5)
Office
140 Kendrick - Building A (Redevelopment)Third Quarter, 2023Needham, MA1104,000 $21,392 $26,600 $— $— $5,208 100 %(6)
360 Park Avenue South (42% ownership)Fourth Quarter, 2025New York, NY1450,000 204,056 248,000 92,774 91,371 42,541 2 %(7)
Reston Next Office Phase IISecond Quarter, 2025Reston, VA190,000 35,535 61,000 — — 25,465 — %
Total Office Properties under Construction/Redevelopment3644,000 260,983 335,600 92,774 91,371 73,214 18 %
Laboratory/Life Sciences
751 Gateway (49% ownership)Fourth Quarter, 2023South San Francisco, CA1231,000 103,738 127,600 — — 23,862 100 %
103 CityPointThird Quarter, 2024Waltham, MA1113,000 75,251 115,100 — — 39,849 — %
180 CityPointFourth Quarter, 2024Waltham, MA1329,000 191,337 274,700 — — 83,363 43 %
300 Binney Street (Redevelopment)First Quarter, 2025Cambridge, MA1236,000 22,359 210,200 — — 187,841 100 %
105 Carnegie Center (Redevelopment)Second Quarter, 2025Princeton, NJ173,000 1,868 40,600 — — 38,732 — %
651 Gateway (50% ownership) (Redevelopment)Fourth Quarter, 2025South San Francisco, CA1327,000 76,106 146,500 — — 70,394 14 %
290 Binney StreetSecond Quarter, 2026Cambridge, MA1566,000 152,817 1,185,200 — — 1,032,383 100 %
Total Laboratory/Life Sciences Properties under Construction/Redevelopment71,875,000 623,476 2,099,900— — 1,476,424 65 %
Residential
Reston Next Residential (508 units) (20% ownership)Second Quarter, 2026Reston, VA1417,000 23,324 47,700 28,000 7,913 4,289 — %
Total Residential Property under Construction1417,000 23,324 47,700 28,000 7,913 4,289 — 
Retail
760 Boylston Street (Redevelopment)Second Quarter, 2024Boston, MA1118,000 9,643 43,800 — — 34,157 100 %
Reston Next RetailFourth Quarter, 2025Reston, VA133,000 20,610 26,600 — — 5,990 — %
Total Retail Properties under Construction/Redevelopment2151,000 30,253 70,400 — — 40,147 78 %
Total Properties under Construction/Redevelopment133,087,000 $938,036 $2,553,600 $120,774 $99,284 $1,594,074 54 %(8)
___________  
(1)Represents our share. Includes net revenue during lease up period, acquisition expenses and approximately $64.2 million of construction cost and leasing commission accruals.
(2)Represents percentage leased as of November 2, 2017, including leases with future commencement dates and excluding residential units.
(3)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 expect to 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 September 30, 2017, we had contributed an aggregate of approximately $15.2 million of preferred equity to the venture.

(1)Represents our share.
(2)Each of Investment to Date, Estimated Total Investment and Estimated Future Equity Requirement represent our share of acquisition expenses, as applicable, and reflect our share of the estimated net revenue/expenses that we expect to incur prior to stabilization of the project, including any amounts actually received or paid through June 30, 2023.
(3)Includes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(4)Excludes approximately $167.1 million of unpaid but accrued construction costs and leasing commissions.
(5)Represents percentage leased as of July 28, 2023, including leases with future commencement dates.
(6)The redevelopment project was completed and fully placed in-service on July 20, 2023.
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(4)This development has a $102.3 million (our share) construction facility. As of September 30, 2017, no amounts have been drawn under this facility.
(5)This development has a $125 million (our share) construction facility. As of September 30, 2017, no amounts have been drawn under this facility.
(6)Rentable square feet is an estimate based on current building design.
(7)This development is subject to a 99-year ground lease (including extension options) with an option to purchase in the future.
(8)The low-rise portion of 601 Lexington Avenue.

(7)Investment to Date includes all related costs incurred prior to the contribution of the property by us to the joint venture on December 15, 2021 totaling approximately $107 million and our proportionate share of the loan. Our joint venture partners will fund required capital until their aggregate investment is approximately 58% of all capital contributions; thereafter, the joint venture partners will fund required capital according to their percentage interests.
Contractual rental(8)Percentage leased excludes the residential property.
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Lease revenue recoveries(which includes reimbursement of operating expenses from tenants,clients, if any), other income from operations, available cash balances, proceeds from mortgage financings and offerings of unsecured indebtedness, draws on BPLP’s 2017 CreditRevolving Facility, and funding from institutional private equity partners are the principal sources of capital that we use to payfund operating expenses, debt service, maintenance and repositioning capital expenditures, tenant improvements and the minimum distribution required to enable BXP to maintain its REIT qualification. We seek to maximize income from our existing properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing tenantclient turnover and controlling operating expenses. Our sources of revenue also include third-party fees generated by our property management, leasing, and development and construction businesses, as well as the sale of assets from time to time. We believe our revenue, together with our cash balances and proceeds from financing activities,these sources of capital will continue to provide the funds necessary for our short-term liquidity needs, including our properties under development and redevelopment.
needs. Material adverse changes in one or more sources of capital may adversely affect our net cash flows. Such changes, in turn, could adversely affect
We expect our ability to fund operating expenses, dividends and distributions, debt service payments, maintenance and repositioning capital expenditures and tenant improvements. In addition, a material adverse change in the cash provided by our operations may affect our ability to comply with the financial covenants under BPLP’s 2017 Credit Facility and unsecured senior notes.
Our primary uses of capital over the next twelve months will be the completion ofto fund our current and committed development and redevelopment projects. projects, repay debt maturities (as discussed below), service the interest payments on our outstanding indebtedness, and satisfy our REIT distribution requirements.
As of SeptemberJune 30, 2017, our2023, we had 13 properties under development or redevelopment. Our share of the remainingestimated total investment for these projects is approximately $2.6 billion, of which approximately $1.6 billion remains to be funded primarily with equity through 2026. In the second quarter of 2023, we completed the development/redevelopment of:
•2100 Pennsylvania Avenue, an approximately 476,000 square foot premier workplace located in Washington, DC, for an estimated total investment of $375.9 million. The property was 91% leased, including leases with future commencement dates, as of July 28, 2023.
•View Boston Observatory, an observatory encompassing the top three floors of 800 Boylston Street - The Prudential Center in Boston, Massachusetts, for an estimated total investment of $182.3 million.
On July 20, 2023, we completed the redevelopment of and fully placed in-service 140 Kendrick Street - Building A, a premier workplace redevelopment project with approximately 104,000 net rentable square feet located in Needham, Massachusetts. The property is 100% leased and is the first Net Zero, Carbon Neutral office repositioning of this scale in Massachusetts.
During the second quarter of 2023, a joint venture in which we have a 55% interest elected to pause vertical construction on Platform 16 in San Jose, California. Our share of the estimated total investment to complete Phase 1 of the project was approximately $231.9 million. As of June 30, 2023, we had invested approximately $100.5 million in this phase of the development project, and redevelopment costs that we expect to fund through 2022 isinvest an estimated additional $45.8 million to complete the underground parking garage and building foundation elements to facilitate a restart of construction in the future as demand improves.
On July 28, 2023, we entered into a joint venture agreement with an institutional investor for the future development of 343 Madison Avenue located on Madison Avenue between 44th and 45th Streets in New York City, New York adjacent to Grand Central Station. We own a 55% interest in the venture and our partner owns a 45% interest, and we will provide customary development, property management, and leasing services. The 343 Madison Avenue project contemplates the construction of (1) a direct entrance to the Long Island Railroad’s new east side access project (Grand Central Madison) (“Phase 1”) and (2) an approximately $1.4 billion. 900,000 square foot premier workplace building with ground floor retail (“Phase 2”). Subsequently, on August 1, 2023, the joint venture executed a 99-year ground lease with the Metropolitan Transportation Authority for the approximately 25,000 square foot site. The ground lease requires the joint venture to construct the direct access to Grand Central Madison as Phase 1 of the development project. The joint venture has the option until July 31, 2025 to terminate the ground lease prior to construction of the new building and receive reimbursement for the cost of the construction of access to Grand Central Station. There can be no assurance that Phase 1 will be completed on the terms currently contemplated or that Phase 2 of the development project will commence on the terms currently contemplated or at all.
During the thirdsecond quarter of 2023, BPLP completed a public offering of $750.0 million aggregate principal amount of 6.500% unsecured senior notes due 2034. The net proceeds from the offering were approximately $741.3 million, which will be used to repay at maturity $500.0 million aggregate principal amount of BPLP’s 3.125% senior unsecured notes, which mature on September 1, 2023, and for general corporate purposes.
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On May 2, 2023, we further enhancedentered into four interest rate swap contracts with notional amounts aggregating $1.2 billion. We entered into these interest rate swap contracts to reduce our liquidity through two secured debt financings aggregating $754.6 millionexposure to the variability in gross commitments withfuture cash flows attributable to changes in the $550 million mortgage financing placedinterest rates on Colorado Center locatedour 2023 Unsecured Term Loan. These interest rate swaps fixed Term SOFR, the reference rate for the 2023 Unsecured Term Loan, at a weighted average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024.
On July 28, 2023, a joint venture in Santa Monica, Californiawhich we have a 50% interest modified and a $204.6 million construction commitmentexercised an option to extend by one year the maturity date of its loan collateralized by our Hub100 Causeway Street. At the time of the modification and extension, the loan had an outstanding balance totaling approximately $340.6 million, bore interest at Term SOFR plus 1.60% per annum, and was scheduled to mature on September 5, 2023. The modified and extended loan has an outstanding balance of $336.6 million, which included an approximately $4.0 million principal repayment, bears interest at Term SOFR plus 1.48% per annum, and matures on September 5, 2024, with an additional one-year extension option, subject to certain conditions. 100 Causeway development projectStreet is an approximately 634,000 square foot premier workplace located in Boston, Massachusetts. As a resultMassachusetts and is approximately 95% leased.
Our 2024 debt maturities include $700.0 million aggregate principal amount of BPLP’s 3.800% senior unsecured notes, which mature on February 1, 2024 and the Colorado Center financing$1.2 billion 2023 Unsecured Term Loan (unless we exercise the one-year extension option within the loan agreement, subject to certain conditions). In our unconsolidated joint venture distributed $502.0portfolio, after refinancing the mortgage debt at 500 North Capitol Street, NW, in Washington, DC, we have approximately $577.2 million (our share) of debt maturing through the end of 2024. We expect to fund the foregoing debt maturities using available cash balances, proceeds from asset sales, draws on BPLP’s Revolving Facility, and/or through refinancings using secured debt, unsecured debt or both. We expect our quarterly net interest expense will increase moderately for the remainder of 2023 and into 2024 compared to the partners,first half of 2023 primarily due to the cessation of capitalized interest on our 2023 development deliveries, higher interest rates on maturing debt, and lower interest income as we use cash balances to repay debt and fund our development pipeline.
As of July 28, 2023, we had available cash of approximately $1.4 billion (of which approximately $81.7 million is attributable to our share was $251.0 million. We ownconsolidated joint venture partners). Our liquidity and capital resources depend on a 50% interest in Colorado Centerwide range of factors, and the Hub on Causeway joint ventures.
With approximately $486 million of cash and cash equivalents and approximately $2.0 billion available under the 2017 Credit Facility, as of November 2, 2017, we have sufficient capital to complete these projects. We believe that our access to capital and our strong liquidity, including our availabilitythe approximately $1.5 billion available under BPLP’s 2017 CreditRevolving Facility and proceeds from debt financings and asset sales provideour available cash, as of July 28, 2023, are sufficient liquidity to fund our remaining capital requirements on existing development and redevelopment projects, fund acquisitions, repay our maturing indebtedness when due (if not refinanced), satisfy our REIT distribution requirements and pursue additionalstill allow us to act opportunistically on attractive investment opportunities. In addition, on June 2, 2017 we renewed BXP’s $600.0 million ATM stock offering program for a period of three years. We have not sold any shares under this ATM stock offering program.
Given the relatively low interest rates currently available to us in the debt markets, weWe may seek to enhance our liquidity to provide sufficient capacity to meet our debt obligations and to fund our remaining capital requirements on existing development projects, our foreseeable potentialcurrent and future development activity, pursue additional attractive investment opportunities and pursue attractive additional investment opportunities.refinance or repay indebtedness. Depending on interest rates, andthe overall conditions in the debt and public and private equity markets, and our leverage at the time, we may decide to access the debt markets in advanceone or more of the need for the funds.these capital sources. Doing so may result in us carrying additional cash and cash equivalents pending BPLP’sour use of the proceeds, and itwhich would be dilutive to our earnings by increasingincrease our net interest expense.
On May 17, 2023, BXP renewed its 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. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on May 22, 2023. BXP intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. We have not sold any shares under this ATM stock offering program.
REIT Tax Distribution Considerations
Dividend
BXP as a REIT is subject to a number of organizational and operational requirements, including a requirement that BXP currently distribute at least 90% of its annual taxable income (excluding capital gains and with certain other adjustments). Our policy is for BXP to distribute at least 100% of its taxable income, including capital gains, to avoid paying federal tax. On December 19, 2016, the Board of Directors of BXP increased our regular quarterly dividend to $0.75 per common share beginning with the fourth quarter of 2016. The dividend was paid on January 30, 2017 to shareholders of record as of the close of business on December 30, 2016. Common and LTIP unitholders (other than unearned MYLTIP units) of limited partnership interest in BPLP as ofreceive the close of business on December 30, 2016, received the same total distribution per unit on January 30, 2017.that is paid per share of BXP common stock.
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BXP’s Board of Directors will continue to evaluate BXP’s policy taking into considerationdividend rate in light of our actual and projected taxable income our(including gains on sales), liquidity requirements and other circumstances, that the BXP’s Board of Directors may deem relevant from time to time, and there can be no assurance that the future dividends declared by itsBXP’s Board of Directors will not differ materially.

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materially from the current quarterly dividend amount.
Sales
To the extent that we sell assets at a gain and cannot efficiently use the proceeds in a tax deferred manner for either our development activities or attractive acquisitions, BXP would, at the appropriate time, decide whether it is better to declare a special dividend, adopt a stock repurchase program, reduce indebtedness or retain the cash for future investment opportunities. Such a decision will depend on many factors including, among others, the timing, availability and terms of development and acquisition opportunities, our then-current and anticipated leverage, the cost and availability of capital from other sources, the price of BXP’s common stock and REIT distribution requirements. At a minimum, we expect that BXP would distribute at least that amount of proceeds necessary for BXP to avoid paying corporate level tax on the applicable gains realized from any asset sales.
From time to time in select cases, whether due to a change in use, structuring issues to comply with applicable REIT regulations or other reasons, we may sell an asset that is held by a taxable REIT subsidiary (“TRS”). Such a sale by a TRS would be subject to federal and local taxes.
Cash Flow Summary
The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash and cash equivalents wereand cash held in escrows aggregated approximately $0.5$1.6 billion and $0.4 billion$502.9 million at SeptemberJune 30, 20172023 and 2016,2022, respectively, representing an increase of approximately $0.1$1.1 billion. The following table sets forth changes in cash flows:
Nine months ended September 30, Six months ended June 30,
2017 2016 Increase
(Decrease)		20232022Change
(in thousands)(in thousands)
Net cash provided by operating activities$592,712
 $743,785
 $(151,073)Net cash provided by operating activities$613,183 $616,639 $(3,456)
Net cash used in investing activities(622,427) (1,104,384) 481,957
Net cash used in investing activities(554,864)(980,170)425,306 
Net cash provided by financing activities165,856
 56,204
 109,652
Net cash provided by financing activities833,359 365,223 468,136 
Our principal source of cash flow is related to the operation of our properties. The averageweighted-average term of our in-place tenant leases, including leases signed by our unconsolidated joint ventures, isexcluding residential units, was approximately 7.27.6 years as of June 30, 2023, with occupancy rates historically in the range of 90%88% to 94%. OurGenerally, our properties generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund regular quarterly dividend and distribution payment requirements. In addition, over the past several years, we have raised capital through the sale of some of our properties and through secured and unsecured borrowings and equity offerings of BXP.borrowings.
Cash is used in investing activities to fund acquisitions, development, net investments in unconsolidated joint ventures and maintenance and repositioning capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings to enhance or maintain theirour market position. Cash used in investing activities for the ninesix months ended SeptemberJune 30, 2017 consisted primarily2023 and June 30, 2022 is detailed below:
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Table of development projects, building and tenant improvements and capital contributions to unconsolidated joint ventures. Contents
 Six months ended June 30,
 20232022
 (in thousands)
Acquisitions of real estate (1)$— $(727,835)
Construction in progress (2)(235,331)(237,182)
Building and other capital improvements(78,344)(63,278)
Tenant improvements(135,743)(97,844)
Proceeds from sales of real estate (3)— 157,345 
Proceeds from assignment fee (4)— 6,624 
Capital contributions to unconsolidated joint ventures (5)(103,595)(69,819)
Capital distributions from unconsolidated joint ventures (6)7,350 36,622 
Investment in non-real estate investments(733)— 
Issuance of related party note receivable (7)(10,500)— 
Proceeds from note receivable (8)— 10,000 
Investments in securities, net2,032 5,197 
Net cash used in investing activities$(554,864)$(980,170)
Cash used in investing activities changed primarily due to the following:
(1)On May 17, 2022, we completed the acquisition of Madison Centre in Seattle, Washington, for the nine months ended September 30, 2016 consisted primarily of development projects, tenant improvements and capital contributions to and distributions from unconsolidated joint ventures partially offset by the proceeds from the sale of real estate, as detailed below:

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 Nine months ended September 30,
 2017 2016
 (in thousands)
Acquisitions of real estate (1)$(15,953) $(78,000)
Construction in progress (2)(452,283) (359,716)
Building and other capital improvements(162,395) (81,842)
Tenant improvements(152,749) (167,762)
Proceeds from sales of real estate (3)29,810
 122,750
Proceeds from sales of real estate placed in escrow (3)(29,810) (122,647)
Proceeds from sales of real estate released from escrow (3)16,640
 122,647
Cash released from escrow for investing activities9,638
 6,694
Cash released from escrow for land sale contracts—
 1,403
Cash placed in escrow for investment in unconsolidated joint venture (4)(25,000) —
Capital contributions to unconsolidated joint ventures (5)(89,874) (546,982)
Capital distributions from unconsolidated joint ventures (6)251,000
 —
Investments in securities, net(1,451) (929)
Net cash used in investing activities$(622,427) $(1,104,384)
___________  
(1)On May 15, 2017, we acquired 103 Carnegie Center located in Princeton, New Jersey for a purchase price of approximately $16.0 million in cash, including transaction costs.
On April 22, 2016, we acquired 3625-3635 Peterson Way located in Santa Clara, California for aan aggregate purchase price, including transaction costs, of approximately $78.0 million in cash.$724.3 million. Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace.
(2)Construction in progress for the nine months ended September 30, 2017 includes ongoing expenditures associated with Reservoir Place North, 888 Boylston Street and the Prudential Center retail expansion, which were fully placed in-service during the nine months ended September 30, 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, 145 Broadway, 6595 Springfield Center Drive, and MacArthur Station Residences, Proto Kendall Square and Signature at Reston residential projects.
(2)Construction in progress for the ninesix months ended SeptemberJune 30, 2016 includes2023 included ongoing expenditures associated with 601 Massachusetts2100 Pennsylvania Avenue 804 Carnegie Center, 10 CityPoint, Reservoir Place North, 888 Boylston Street and the View Boston Observatory at The Prudential Center, retail expansion, which were partially orboth fully placed in-service during the ninesix months ended SeptemberJune 30, 2016.2023. In addition, we incurred costs associated with our continued development development/redevelopment of Salesforce Tower, One Five Nine East 53rd180 CityPoint, 103 CityPoint, Reston Next Office Phase II, 140 Kendrick Street (the low-rise portion Building A, 760 Boylston Street, 105 Carnegie Center, 290 Binney Street and 300 Binney Street.
Construction in progress for the six months ended June 30, 2022 included ongoing expenditures associated with Reston Next and 2100 Pennsylvania Avenue, which are partially placed in-service, and 325 Main Street, which was completed and fully placed in-service during the six months ended June 30, 2022. In addition, we incurred costs associated with our continued development/redevelopment of 601 Lexington Avenue),180 CityPoint, View Boston Observatory at The Prudential Center, 880 Winter Street, 103 CityPoint and Proto Kendall Square and Signature at Reston residential projects.Next Office Phase II.
(3)On April 19, 2017, we completed the sale of an approximately 9.5-acre parcel of land at 30 Shattuck Road located in Andover, Massachusetts for a gross sale price of $5.0 million. Net cash proceeds totaled approximately $5.0 million.
(3)On June 13, 2017,15, 2022, we completed the sale of 40 Shattuck Roadour Virginia 95 Office Park properties located in Andover,Springfield, Virginia for an aggregate gross sale price of $127.5 million. Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP. Virginia 95 Office Park consists of eleven Class A office/flex properties aggregating approximately 733,000 net rentable square feet.

On March 31, 2022, we completed the sale of 195 West Street located in Waltham, Massachusetts for a     gross sale price of $12.0$37.7 million. Net cash proceeds totaled approximately $11.9 million.
On August 30, 2017, we completed the$35.4 million, resulting in a gain on sale of our Reston Eastgate property locatedreal estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP. 195 West Street is an approximately 63,500 net rentable square foot premier workplace.
(4)On April 19, 2021, we entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for a gross salean aggregate purchase price of $14.0approximately $5.6 million. On April 7, 2022, we executed an agreement to assign the right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $13.2$6.6 million.
On February 1, 2016, we completed the sale of our 415 Main Street 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres. The 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.
On August 16, 2016, we completed the sale of a parcel of land within our Broad Run Business Park property located in Loudoun County, Virginia. Net cash proceeds totaled approximately $17.9 million. The sale of the land parcel was completed as part of a like-kind exchange under Section 1031 of the Internal Revenue Code.
(4)On August 7, 2017, we deposited $25.0 million into an escrow account to be contributed by us to the unconsolidated joint venture that is developing 7750 Wisconsin Avenue to fund future development costs.

100% leased.
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(5)Capital contributions to unconsolidated joint ventures for the six months ended June 30, 2023 consisted primarily of cash contributions of approximately $30.2 million, $26.5 million, $17.5 million, $10.9 million and $8.3 million to our Gateway Commons, Platform 16, Worldgate Drive, Dock 72 and 751 Gateway joint ventures, respectively. On January 31, 2023, we entered into a new joint venture for 13100 and 13150 Worldgate Drive located in Herndon, Virginia.
(5)Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2017 consisted primarily of cash contributions of approximately $34.2 million, $31.7 million and $21.4 million to our Dock 72, Hub on Causeway and 7750 Wisconsin Avenue joint ventures, respectively.
Capital contributions to unconsolidated joint ventures for the ninesix months ended SeptemberJune 30, 2016 were2022 consisted primarily due toof cash contributions of approximately $505.1 million, $15.3 million, $14.5$32.6 million and $11.8$22.0 million to our Colorado Center, Hub on Causeway, Dock72Gateway Commons and 1265 Main StreetPlatform 16 joint ventures, respectively.
(6)Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2023 consisted primarily of a cash distribution totaling approximately $7.4 million from our 360 Park Avenue South joint venture.
Capital distributions from unconsolidated joint ventures for the six months ended June 30, 2022 consisted primarily of a cash distribution totaling approximately $21.6 million and $11.6 million from our Metropolitan Square and 7750 Wisconsin Avenue joint ventures, respectively.
(7)On JulyJune 5, 2023, a joint venture in which we own a 30% interest repaid the existing construction loan collateralized by its 500 North Capitol Street, NW property and obtained new mortgage loans with related parties. At the time of the pay off, the outstanding balance of the loan totaled approximately $105.0 million and was scheduled to mature on June 6, 2023. The new mortgage loans have an aggregate principal balance of $105.0 million, bear interest at a weighted average fixed rate of 6.83% per annum and mature on June 5, 2026. Our portion of the mortgage loans, $10.5 million, has been reflected as a Related Party Note Receivable on our Consolidated Balance Sheets. 500 North Capitol Street, NW is a 231,000 square foot premier workplace in Washington, DC.
(8)An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from us, and we provided the financing on June 1, 2016, we acquired2020. The financing bore interest at a 49.8% interestfixed rate of 8.00% per annum, compounded monthly, and was scheduled to mature on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property was substantially completed. On June 27, 2022, the borrower repaid the loan in Colorado Center.full, including approximately $1.6 million of accrued interest.
(6)Capital distributions from unconsolidated joint ventures for the nine months ended September 30, 2017 consisted of a cash distribution of $251.0 million from our Colorado Center joint venture resulting from the proceeds of the new mortgage financing.
Cash provided by financing activities for the ninesix months ended SeptemberJune 30, 20172023 totaled approximately $165.9$833.4 million. This amount consisted primarily of borrowings under the net2023 Unsecured Term Loan and the proceeds from the refinancingissuance by BPLP of the 767 Fifth Avenue (the General Motors Building) debt$750 million in aggregate principal amount of its 6.500% unsecured senior notes due 2034, partially offset by the repayment of BPLP’s $730 million unsecured credit agreement (the “2022 Unsecured Term Loan”) and payment of our regular dividends and distributions to our shareholders and unitholders.unitholders and distributions to noncontrolling interests in property partnerships. Future debt payments are discussed below under the heading “Capitalization—Debt Financing.”
Capitalization
The following table presents Consolidated Market Capitalization and BXP’s Share of Market Capitalization, as well as the corresponding ratios of Consolidated Debt to Consolidated Market Capitalization and BXP’s Share of Debt to BXP’s Share of Market Capitalization (dollars in thousands)(in thousands except for percentages):
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 September 30, 2017 June 30, 2023
 Shares / Units Outstanding Common Stock Equivalent Equivalent Value (1) Shares / Units OutstandingCommon Stock EquivalentEquivalent Value (1)
Common Stock 154,322,266
 154,322,266
 $18,963,120
 Common Stock156,853 156,853 $9,033,164 
Common Operating Partnership Units 17,629,311
 17,629,311
 2,166,290
(2)Common Operating Partnership Units18,658 18,658 1,074,514 (2)
5.25% Series B Cumulative Redeemable Preferred Stock (non-callable until March 27, 2018) 80,000
 —
 200,000
 
Total Equity   171,951,577
 $21,329,410
 Total Equity175,511 $10,107,678 
       
Consolidated Debt   

 $10,234,634
 Consolidated Debt$15,456,205 
Add: 
     Add:
BXP’s share of unconsolidated joint venture debt (3)     591,622
 BXP’s share of unconsolidated joint venture debt (3)1,609,671 
Subtract:       Subtract:
Partners’ share of Consolidated Debt (4)     (1,210,389) Partners’ share of Consolidated Debt (4)(1,359,380)
BXP’s Share of Debt     $9,615,867
 BXP’s Share of Debt$15,706,496 
       
Consolidated Market Capitalization     $31,564,044
 Consolidated Market Capitalization$25,563,883 
BXP’s Share of Market Capitalization     $30,945,277
 BXP’s Share of Market Capitalization$25,814,174 
Consolidated Debt/Consolidated Market Capitalization     32.42% Consolidated Debt/Consolidated Market Capitalization60.46 %
BXP’s Share of Debt/BXP’s Share of Market Capitalization     31.07% BXP’s Share of Debt/BXP’s Share of Market Capitalization60.84 %
_______________  
(1)Except for the Series B Cumulative Redeemable Preferred Stock, which is valued at the liquidation preference of $2,500.00 per share, values are based on the closing price per share of BXP’s Common Stock on September 30, 2017 of $122.88.
(2)Includes 816,982 long-term incentive plan units (including 118,067 2012 OPP Units, 85,405 2013 MYLTIP Units and 25,107 2014 MYLTIP Units), but excludes an aggregate of 1,239,978 MYLTIP Units granted between 2015 and 2017.
(3)See page 83 for additional information.
(4)See page 82 for additional information.

(1)Values are based on the closing price per share of BXP’s Common Stock on the New York Stock Exchange on June 30, 2023 of $57.59.
(2)Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2020 MYLTIP Units) but excludes the 2021 - 2023 MYLTIP Units because the three-year performance periods had not ended as of June 30, 2023.
(3)See page 90 for additional information.
(4)See page 89 for additional information.

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT industry.sector. We present this measure as a percentage and it is calculated by dividing (A) our consolidated debt by (B) our consolidated market capitalization, which is the market value of our outstanding equity securities plus our consolidated debt. Consolidated market capitalization is the sum of:

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(1)     our consolidated debt; plus
(2)     the product of (x) the closing price per share of BXP common stockCommon Stock on SeptemberJune 30, 2017,2023, as reported by the New York Stock Exchange, multiplied by (y) the sum of:
(i)
(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
(3)     the aggregate liquidation preference ($2,500 per share) of the outstanding shares of BXP’s 5.25% Series B Cumulative Redeemable Preferred Stock.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, and 2013 - 2020 MYLTIP Units that were issued in the form of LTIP Units.
The calculation of consolidated market capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2015, 2016 and 20172021 - 2023 MYLTIP Units are not included in this calculation as of SeptemberJune 30, 2017.2023.
We also present BXP’s Share of Market Capitalization and BXP’s Share of Debt/BXP’s Share of Market Capitalization, which isare calculated in the same manner, except that BXP’s Share of Debt is utilized instead of our consolidated debt in both the numerator and the denominator. BXP’s Share of Debt is defined as our consolidated debt plus our share of debt from our unconsolidated joint ventures (calculated based upon our ownership percentage), minus our partners’ share of debt from our consolidated joint ventures (calculated based upon the
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partners’ percentage ownership interests)interests adjusted for basis differentials). Management believes that BXP’s Share of Debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and excludes our partners’ share of debt from consolidated joint ventures, in each case presented on the same basis. We have several significant joint ventures and presenting various measures of financial condition in this manner can help investors better understand our financial condition and/or results of operations after taking into account our economic interest in these joint ventures.  We caution investors that the ownership percentages used in calculating BXP’s Share of Debt may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the allocation of rights regarding decision making (both for routine and major decisions), distributions, transferability of interests, financing and guarantees, liquidations and other matters.  Moreover, in some cases we exercise significant influence over, but do not control, the joint venture in which case GAAP requires that we account for the joint venture entity using the equity method of accounting and we do not consolidate it for financial reporting purposes. In other cases, GAAP requires that we consolidate the venture even though our partner(s) own(s) a significant percentage interest.  As a result, presentationsmanagement believes that the presentation of BXP’s Share of a financial measure should not be considered a substitute for, and should only be considered with and as a supplement to our financial information presented in accordance with GAAP.
We present these supplemental ratios because our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, in part, a function of the market price of the common stock of BXP and as such will fluctuate with changes in such price, and they do not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. However, for a company like BXP, whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long as they are evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.
For a discussion of our unconsolidated joint venture indebtedness, see “Liquidity and Capital Resources—Capitalization—Off-Balance Sheet Arrangements—Investment in Unconsolidated Joint Venture Indebtedness” withinVentures - Secured Debt” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and for a discussion of our consolidated joint venture indebtedness see “Liquidity and Capital Resources—Capitalization—Mortgage Notes Payable Net” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Debt Financing
As of SeptemberJune 30, 2017,2023, we had approximately $10.2$15.5 billion of outstanding consolidated indebtedness, representing approximately 32.42%60.46% of our Consolidated Market Capitalization as calculated above consisting of approximately (1) $7.3$11.0 billion (net of discount and deferred financing fees) in publicly traded unsecured senior notes having a GAAP weighted-average interest rate of 4.21%3.88% per annum and

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maturities in 20182023 through 2026;2034, (2) $3.0$3.3 billion (net of deferred financing fees) of property-specific mortgage debt having a GAAP weighted-average interest rate of 3.96%3.42% per annum and a weighted-average term of 8.4 years.5.3 years and (3) $1.2 billion outstanding under BPLP’s 2023 Unsecured Term Loan that matures on May 16, 2024.
The table below summarizes the aggregate carrying value of our mortgage notes payable, mezzanine notes payable and outside members’ notes payable and BPLP’s unsecured senior notes, unsecured line of credit, and unsecured term loan, as well as Consolidated Debt Financing Statistics at SeptemberJune 30, 20172023 and SeptemberJune 30, 2016. Because the outside members’ notes payable are allocated to the partners, they are not included in the Consolidated Debt Financing Statistics.
2022.  
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 September 30,
 2017 2016
 (dollars in thousands)
Debt Summary:   
Balance   
Fixed rate mortgage notes payable, net$2,982,067
 $2,077,707
Unsecured senior notes, net7,252,567
 7,243,767
Unsecured line of credit—
 —
Unsecured term loan—
 —
Mezzanine notes payable—
 307,448
Outside members’ notes payable—
 180,000
Consolidated Debt10,234,634
 9,808,922
Add:   
BXP’s share of unconsolidated joint venture debt (1)591,622
 350,225
Subtract:   
Partners’ share of consolidated mortgage notes payable, net (2)(1,210,389) (847,483)
Partners’ share of consolidated mezzanine notes payable—
 (122,979)
Outside members’ notes payable—
 (180,000)
BXP’s Share of Debt$9,615,867
 $9,008,685
    
 September 30,
 2017 2016
Consolidated Debt Financing Statistics:   
Percent of total debt:   
Fixed rate100.00% 100.00%
Variable rate—% —%
Total100.00% 100.00%
GAAP Weighted-average interest rate at end of period:   
Fixed rate4.13% 4.06%
Variable rate—% —%
Total4.13% 4.06%
Coupon/Stated Weighted-average interest rate at end of period:   
Fixed rate4.02% 4.50%
Variable rate—% —%
Total4.02% 4.50%
Weighted-average maturity at end of period (in years):   
Fixed rate6.1
 5.2
Variable rate—
 —
Total6.1
 5.2
_______________  
(1)See page 83 for additional information.
(2)See page 82 for additional information.

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June 30,
20232022
 (dollars in thousands)
Debt Summary:
Balance
Fixed rate mortgage notes payable, net$3,274,764 $3,269,948 
Unsecured senior notes, net10,985,395 9,489,030 
Unsecured line of credit— 165,000 
Unsecured term loan, net1,196,046 728,795 
Consolidated Debt15,456,205 13,652,773 
Add:
BXP’s share of unconsolidated joint venture debt, net (1)1,609,671 1,446,617 
Subtract:
Partners’ share of consolidated mortgage notes payable, net (2)(1,359,380)(1,357,399)
BXP’s Share of Debt$15,706,496 $13,741,991 
June 30,
20232022
Consolidated Debt Financing Statistics:
Percent of total debt:
Fixed rate (3)100.00 %93.45 %
Variable rate— %6.55 %
Total100.00 %100.00 %
GAAP Weighted-average interest rate at end of period:
Fixed rate (3)3.95 %3.43 %
Variable rate— %2.53 %
Total3.95 %3.37 %
Coupon/Stated Weighted-average interest rate at end of period:
Fixed rate (3)3.82 %3.32 %
Variable rate— %1.96 %
Total3.82 %3.23 %
Weighted-average maturity at end of period (in years):
Fixed rate (3)5.0 6.1 
Variable rate— 1.4 
Total5.0 5.8 
_______________
(1)See page 90 for additional information.
(2)See page 89 for additional information.
(3)The 2023 Unsecured Term Loan bears interest at a variable rate of adjusted Term SOFR plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating. On May 2, 2023, BPLP executed interest rate swaps that effectively fixed Term SOFR for the $1.2 billion outstanding under the 2023 Unsecured Term Loan (see Notes 6 and 7 to the Consolidated Financial Statements). As such, the 2023 Unsecured Term Loan is reflected within Fixed rate statistics.
Unsecured Credit Facility
On April 24, 2017,June 1, 2023, BPLP entered into the 2017 Credit Facility. Among other things, the 2017amended its 2021 Credit Facility (1) increasedthat replaced the LIBOR-based daily floating rate option with a SOFR-based daily floating rate option and to add options for SOFR-based term floating rates and rates for alternative currency loans. In addition, the amendment added a SOFR credit spread adjustment of 0.10%. Other than the foregoing, the material terms of the 2021 Credit Facility remain unchanged.
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The 2021 Credit Facility provides for borrowings of up to $1.5 billion through the Revolving Facility, subject to customary conditions. The 2021 Credit Facility matures on June 15, 2026 and includes a sustainability-linked pricing component. Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility from $1.0 billionand/or by incurring one or more term loans, in each case, subject 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 Facility that permits BPLP to draw until the first anniversarysyndication of the closing date.increase and other conditions. Based on BPLP’s currentJune 30, 2023 credit rating, (1) the applicable EurocurrencyDaily SOFR, Term SOFR, alternative currency daily rate, and alternative currency term rate margins forare 0.775%, (2) the Revolving Facility and Delayed Draw Facility are 87.5alternate base rate margin is zero basis points and 95 basis points, respectively, and (2)(3) the facility fee on the Revolving Facility commitment is 0.15% per annum. The Delayed Draw Facility has a fee on unused commitments equal to 0.15% per annum (See Note 5 to the Consolidated Financial Statements).
As of SeptemberAt June 30, 20172023 and November 2, 2017, weJuly 28, 2023, BPLP had no borrowings under its Revolving Facility and outstanding letters of credit totaling approximately $1.6$6.7 million, outstanding under the 2017 Credit Facility, with the ability to borrow approximately $2.0$1.5 billion.
Unsecured Term Loan
On January 4, 2023, BPLP entered into the 2023 Unsecured Term Loan, which provided for a single borrowing of up to $1.2 billion. Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 2023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions.
At BPLP’s option, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating.
On January 4, 2023, upon entry into the credit agreement, BPLP exercised its option to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the 2022 Unsecured Term Loan, which was scheduled to mature on May 16, 2023. There was no prepayment penalty associated with the repayment of the 2022 Unsecured Term Loan.
As of June 30, 2023, the 2023 Unsecured Term Loan bears interest at a rate equal to adjusted Term SOFR plus 0.85% per annum based on BPLP’s current credit rating at June 30, 2023 (See Note 7 to the Consolidated Financial Statements). At June 30, 2023, BPLP had $1.2 billion outstanding under the 2023 Unsecured Term Loan.
Derivative Instruments and Hedging Activities
On May 2, 2023, BPLP executed interest rate swaps in notional amounts aggregating $1.2 billion. These interest rate swaps were entered into to fix Term SOFR, the reference rate for BPLP’s 2023 Unsecured Term Loan, at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. Based on BPLP’s credit rating as of June 30, 2023, the interest rate for the 2023 Unsecured Term Loan would be 6.09% (See Note 7 to the Consolidated Financial Statements).
Unsecured Senior Notes Net
The following summarizes theFor a description of BPLP’s outstanding unsecured senior notes outstanding as of SeptemberJune 30, 2017 (dollars2023, see Note 6 to the Consolidated Financial Statements.
On May 15, 2023, BPLP completed a public offering of $750.0 million in thousands):aggregate principal amount of its 6.500% unsecured senior notes due 2034. The notes were priced at 99.697% of the principal amount to yield an effective rate (including financing fees) of approximately 6.619% per annum to maturity. The notes will mature on January 15, 2034, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $741.3 million after deducting underwriting discounts and transaction expenses.
 
Coupon/
Stated Rate
 
Effective
Rate(1)
 
Principal
Amount
 Maturity Date(2)
7 Year Unsecured Senior Notes3.700% 3.853% $850,000
 November 15, 2018
10 Year Unsecured Senior Notes5.875% 5.967% 700,000
 October 15, 2019
10 Year Unsecured Senior Notes5.625% 5.708% 700,000
 November 15, 2020
10 Year Unsecured Senior Notes4.125% 4.289% 850,000
 May 15, 2021
11 Year Unsecured Senior Notes3.850% 3.954% 1,000,000
 February 1, 2023
10.5 Year Unsecured Senior Notes3.125% 3.279% 500,000
 September 1, 2023
10.5 Year Unsecured Senior Notes3.800% 3.916% 700,000
 February 1, 2024
10 Year Unsecured Senior Notes3.650% 3.766% 1,000,000
 February 1, 2026
10 Year Unsecured Senior Notes2.750% 3.495% 1,000,000
 October 1, 2026
Total principal    7,300,000
  
Net unamortized discount    (16,810)  
Deferred financing costs, net    (30,623)  
Total    $7,252,567
  
_______________
(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.
The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt. At SeptemberJune 30, 2017,2023, BPLP was in compliance with each of these financial restrictions and requirements.

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Mortgage Notes Payable Net
The following represents the outstanding principal balances due under the mortgage notes payable at SeptemberJune 30, 2017:2023:
Properties 
Stated
Interest Rate
 
GAAP
Interest Rate(1)
 
Stated
Principal
Amount
 Deferred Financing Costs, Net 
Carrying
Amount
 
Carrying Amount (partners’ share)
   Maturity DatePropertiesStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying Amount
Carrying Amount (Partners’ Share)
Maturity Date
 (dollars in thousands) (dollars in thousands)
Wholly-owned         
New Dominion Tech Park, Bldg. One 7.69% 7.84% $32,944
 $(274) $32,670
 N/A
    January 15, 2021
University Place 6.94% 6.99% 7,896
 (49) 7,847
 N/A
    August 1, 2021
     40,840
 (323) 40,517
 N/A
 
Consolidated Joint VenturesConsolidated Joint Ventures         Consolidated Joint Ventures
767 Fifth Avenue (the General Motors Building) 3.43% 3.64% 2,300,000
 (33,829) 2,266,171
 906,468
 (2)(3)(4) June 9, 2027767 Fifth Avenue (the General Motors Building)3.43 %3.64 %$2,300,000 $(13,743)$2,286,257 $914,552 (2)(3)(4)June 9, 2027
601 Lexington Avenue 4.75% 4.79% 676,885
 (1,506) 675,379
 303,921
 (5) April 10, 2022601 Lexington Avenue2.79 %2.93 %1,000,000 (11,493)988,507 444,828 (2)(5)January 9, 2032
     2,976,885
 (35,335) 2,941,550
 1,210,389
 
Total     $3,017,725
 $(35,658) $2,982,067
 $1,210,389
    Total$3,300,000 $(25,236)$3,274,764 $1,359,380 
_______________ 
(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions.
(2)The mortgage loan requires interest only payments with a balloon payment due at maturity.
(3)This property is owned by a consolidated entity in which we have a 60% interest.
(4)In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of September 30, 2017, the maximum funding obligation under the guarantee was approximately $222.7 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 (See Notes 5 and 7 to the Consolidated Financial Statements).
(5)This property is owned by a consolidated entity in which we have a 55% interest.
Off-Balance Sheet Arrangements—(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions (if any).
(2)The mortgage loan requires interest only payments with a balloon payment due at maturity.
(3)This property is owned by a consolidated entity in which we have a 60% interest. The partners’ share of the carrying amount has been adjusted for basis differentials.
(4)In connection with the refinancing of the loan, we guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of June 30, 2023, the maximum funding obligation under the guarantee was approximately $11.2 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 (See Note 8 to the Consolidated Financial Statements).
(5)This property is owned by a consolidated entity in which we have a 55% interest.
Investment in Unconsolidated Joint Venture IndebtednessVentures - Secured Debt
We have investments in unconsolidated joint ventures with our effective ownership interests ranging from 20% to 60%55%. TenSeventeen of these ventures have mortgage indebtedness. We exercise significant influence over, but do not control, these entities and therefore they are presently accountedentities. As a result, we account for them using the equity method of accounting. See also Note 45 to the Consolidated Financial Statements. At SeptemberJune 30, 2017,2023, the aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $1.4$4.1 billion (of which our proportionate share is approximately $591.6 million)$1.6 billion). The table below summarizes the outstanding debt of these joint venture properties at SeptemberJune 30, 2017.2023. In addition to other guarantees specifically noted in the table, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) as well as the completion of development projects on certain of the loans.

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Properties 
Venture
Ownership
%
 
Stated
Interest
Rate
 
GAAP
Interest
Rate (1)
 Stated Principal Amount Deferred Financing Costs, Net Carrying Amount Carrying Amount (Our Share)   Maturity DatePropertiesNominal % OwnershipStated Interest RateGAAP Interest Rate (1)Stated Principal AmountDeferred Financing Costs, NetCarrying AmountCarrying Amount (Our share) Maturity Date
 (dollars in thousands) (dollars in thousands)
540 Madison Avenue 60% 2.73% 2.90% $120,000
 $(187) $119,813
 $71,888
 (2)(3) June 5, 2018
Santa Monica Business ParkSanta Monica Business Park55.00 %4.06 %4.23 %$300,000 $(1,090)$298,910 $164,400 (2)(4)July 19, 2025
Market Square North 50% 5.75% 5.81% 121,707
 (252) 121,455
 60,727
    October 1, 2020Market Square North50.00 %7.56 %7.74 %125,000 (539)124,461 62,230 (2)(3) (5)November 10, 2025
Annapolis Junction Building One 50% 6.99% 7.16% 39,549
 (41) 39,508
 19,751
 (4) March 31, 2018
Annapolis Junction Building Six 50% 3.49% 3.66% 13,751
 (39) 13,712
 6,856
 (5) November 17, 2018
Annapolis Junction Building Seven and Eight 50% 3.58% 3.86% 36,260
 (223) 36,037
 18,019
 (6) December 7, 2019
1265 Main Street 50% 3.77% 3.84% 39,910
 (396) 39,514
 19,757
 January 1, 20321265 Main Street50.00 %3.77 %3.84 %35,127 (236)34,891 17,446 January 1, 2032
Colorado Center 50% 3.56% 3.58% 550,000
 (992) 549,008
 274,504
 (2) August 9, 2027Colorado Center50.00 %3.56 %3.59 %550,000 (737)549,263 274,632 (2)August 9, 2027
Dock 72 50% N/A
 N/A
 —
 —
 —
 —
 (2)(7) December 18, 2020Dock 7250.00 %7.59 %7.85 %198,383 (1,142)197,241 98,621 (2)(6)December 18, 2025
The Hub on Causeway - Podium 50% N/A
 N/A
 —
 —
 —
 —
 (2)(8) September 6, 2021The Hub on Causeway - Podium50.00 %7.51 %7.68 %174,329 (57)174,272 87,136 (2)(7)September 6, 2023
500 North Capitol Street 30% 4.15% 4.20% 105,000
 (335) 104,665
 31,399
 (2) June 6, 2023
Hub50HouseHub50House50.00 %4.43 %4.51 %185,000 (1,223)183,777 91,889 (2)(8)June 17, 2032
100 Causeway Street100 Causeway Street50.00 %6.76 %6.97 %337,604 (145)337,459 168,729 (2)(3) (9)September 5, 2023
7750 Wisconsin Avenue (Marriott International Headquarters)7750 Wisconsin Avenue (Marriott International Headquarters)50.00 %6.51 %6.66 %251,542 (317)251,225 125,613 (2)(3) (10)April 26, 2024
360 Park Avenue South360 Park Avenue South42.21 %7.65 %8.10 %216,686 (1,456)215,230 90,849 (2)(3) (11)December 14, 2024
Safeco PlazaSafeco Plaza33.67 %4.82 %4.96 %250,000 (1,077)248,923 83,812 (2)(12)September 1, 2026
500 North Capitol Street, NW500 North Capitol Street, NW30.00 %6.83 %7.16 %105,000 (825)104,175 31,069 (2)(13)June 5, 2026
200 Fifth Avenue200 Fifth Avenue26.69 %4.34 %5.60 %600,000 (9,000)591,000 149,694 (2)(14)November 24, 2028
901 New York Avenue 25% 3.61% 3.69% 225,000
 (1,295) 223,705
 55,926
    January 5, 2025901 New York Avenue25.00 %3.61 %3.69 %209,868 (268)209,600 52,400   January 5, 2025
3 Hudson Boulevard3 Hudson Boulevard25.00 %8.68 %8.68 %80,000 — 80,000 20,000 (2)(3) (15)August 13, 2023
Metropolitan Square 20% 5.75% 5.81% 164,240
 (256) 163,984
 32,795
    May 5, 2020Metropolitan Square20.00 %7.25 %8.03 %420,000 (2,527)417,473 83,495 (2)(3) (16)April 9, 2024
Reston Next ResidentialReston Next Residential20.00 %7.15 %7.47 %39,565 (1,284)38,281 7,656 (2)(3) (17)May 13, 2026
Total       $1,415,417
 $(4,016) $1,411,401
 $591,622
    Total$4,078,104 $(21,923)$4,056,181 $1,609,671   
_______________ 
(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 remains in default. The loan has one, three-year extension option, subject to certain conditions including that no event of default exists or is ongoing.
(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.
(8)No amounts have been drawn under the $204.6 million construction facility. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on September 6, 2021, with two, one-year extension options, subject to certain conditions. In connection with the construction financing, we obtained the right to complete the construction of the garage underneath the project being developed by an affiliate of our joint venture partner and obtain funding from the garage construction lender.  We agreed to guaranty completion of the garage to the construction lender and an affiliate of our partner agreed to reimburse us for our partner’s share of any payments under the guaranty.

(1)GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, which includes mortgage recording fees.
(2)The loan requires interest only payments with a balloon payment due at maturity.
(3)The loan includes certain extension options, subject to certain conditions.
(4)The loan bears interest at a variable rate equal to SOFR plus 1.38% per annum. A subsidiary of the joint venture entered into interest rate swap contracts with notional amounts aggregating $300.0 million through April 1, 2025, resulting in a fixed rate of approximately 4.059% per annum through the expiration of the interest rate swap contracts.
(5)The loan bears interest at a variable rate equal to the greater of (1) the sum of (x) SOFR and (y) 2.41% or (2) 2.80% per annum.
(6)The construction financing bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25%, plus (2) 2.50% per annum.
(7)The construction financing bears interest at a variable rate equal to SOFR plus 2.35% per annum.
(8)The loan bears interest at a variable rate equal to SOFR plus 1.35% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts.
(9)The loan bears interest at a variable rate equal to SOFR plus 1.60% per annum. On July 28, 2023 the joint venture extended the loan maturity to September 5, 2024. The loan extension required an approximately $4.0 million principal repayment and the interest rate was reduced from Term SOFR plus 1.60% to Term SOFR plus 1.48% per annum (See Note 14 to the Consolidated Financial Statements).
(10)The construction financing bears interest at a variable rate equal to SOFR plus 1.35% per annum.
(11)The loan bears interest at a variable rate equal to Adjusted Term SOFR plus 2.40% per annum. The spread on the variable rate may be reduced, subject to certain conditions.
(12)The loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to
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increases in the SOFR rate at a cap of 2.50% per annum on a notional amount of $250.0 million through September 1, 2023.
(13)The indebtedness consists of (x) a $70.0 million mortgage loan payable (Note A) which bears interest at a fixed rate of 6.23% per annum, and (y) a $35.0 million mortgage loan payable (Note B) which bears interest at a fixed rate of 8.03% per annum. We provided $10.5 million of the Note B mortgage financing to the joint venture. Our portion of the loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets.
(14)The loan bears interest at a variable rate equal to LIBOR plus 1.30% per annum through July 9, 2023. For the period commencing on July 10, 2023 the loan will bear interest at a variable rate equal to Term SOFR plus approximately 1.41% per annum. The joint venture entered into interest rate swap contracts with notional amounts aggregating $600.0 million through June 2028, resulting in a fixed rate of approximately 4.34% per annum through the expiration of the interest rate swap contracts. In addition to items noted in footnote one above, the GAAP interest rate includes the adjustment required to reflect the loan at fair value upon acquisition.
(15)We provided $80.0 million of mortgage financing to the joint venture. The loan bears interest at a variable rate equal to LIBOR plus 3.50% per annum through July 6, 2023. For the period commencing on July 7, 2023, the loan will bear interest at a variable rate equal to Term SOFR plus 3.61% per annum. The loan has been reflected as Related Party Note Receivable, Net on our Consolidated Balance Sheets. As of June 30, 2023, the loan has approximately $23.2 million of accrued interest due at the maturity date.
(16)The indebtedness consists of (x) a $305.0 million mortgage loan payable which bears interest at a variable rate equal to SOFR plus approximately 1.81%, and (y) a $115.0 million mezzanine note payable which bears interest at a variable rate equal to SOFR plus 5.25%. The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the SOFR rate at a cap of 4.50% per annum on a notional amount of $420.0 million through April 15, 2024.
(17)The construction financing has a borrowing capacity of $140.0 million. The construction financing bears interest at a variable rate equal to SOFR plus 2.00% per annum.
State and Local Tax Matters
Because BXP is organized and qualifies as a REIT, it is generally not subject to federal income taxes, but it is subject to certain state and local taxes. In the normal course of business, BXP, BPLP and certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits or other inquiries. Although we believe that we have substantial arguments in favor of our positionsposition in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
Insurance
We carry insurance coverage on our properties of types and in amounts and with deductibles that we believe are in line with coverage customarily obtained by owners of similar properties. For additional information concerning our insurance program, see Note 78 to the Consolidated Financial Statements.
Funds from Operations
Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”Nareit”), we calculate Funds from Operations, or “FFO,” for each of BXP and BPLP by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders and net income (loss) attributable to Boston Properties Limited Partnership common unitholders, respectively, (computed in accordance with GAAP), respectively, for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and our share of real estate-related depreciation and amortization. FFO is a non-GAAP financial measure, but wemeasure. We believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improvedimproves the understanding of operating results of REITs among the investing public and has helpedhelps make comparisons of REIT operating results more meaningful. Management generally considers FFO to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a company'scompany’s real estate across reporting periods and to the operating performance of other companies.
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREITNareit definition or that interpret the current NAREIT Nareit
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definition differently. We believe that in order to facilitate a clear understanding of our operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders or net income attributable to Boston Properties Limited Partnership common unitholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.

BXP

84


Boston Properties, Inc.
The following table presents a reconciliation of net income attributable to Boston Properties, Inc. common shareholders to FFO attributable to Boston Properties, Inc. common shareholders for the three months ended SeptemberJune 30, 20172023 and 2016:2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of funds from operations33,481 34,329 
Funds from Operations attributable to Boston Properties, Inc.$292,844 $304,560 
Our percentage share of Funds from Operations—basic89.74 %89.87 %
Weighted average shares outstanding—basic156,826 156,720 
92
 Three months ended September 30,
2017 2016
 (in thousands)
Net income attributable to Boston Properties, Inc. common shareholders$117,337
 $76,753
Add:   
Preferred dividends2,625
 2,589
Noncontrolling interest—common units of Boston Properties Limited Partnership13,402
 9,387
Noncontrolling interests in property partnerships14,340
 (17,225)
Less:   
Gains on sales of real estate2,891
 12,983
Income before gains on sales of real estate144,813
 58,521
Add:   
Depreciation and amortization152,164
 203,748
Noncontrolling interests in property partnerships’ share of depreciation and amortization(18,552) (40,907)
BXP’s share of depreciation and amortization from unconsolidated joint ventures9,282
 9,128
Corporate-related depreciation and amortization(434) (393)
Less:   
Noncontrolling interests in property partnerships14,340
 (17,225)
Preferred dividends2,625
 2,589
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”)
270,308
 244,733
Less:   
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of funds from operations27,293
 25,169
FFO attributable to Boston Properties, Inc. common shareholders$243,015
 $219,564
Boston Properties, Inc.’s percentage share of Funds from Operations—basic89.90% 89.72%
Weighted-average shares outstanding—basic154,355
 153,754
Reconciliation to Diluted Funds from Operations:
 Three months ended September 30, 2017 Three months ended September 30, 2016
Income
(Numerator)
 
Shares
(Denominator)
 
Income
(Numerator)
 
Shares
(Denominator)
 (in thousands)
Basic FFO$270,308
 171,691
 $244,733
 171,379
Effect of Dilutive Securities       
Stock Based Compensation—
 128
 —
 382
Diluted FFO270,308
 171,819
 244,733
 171,761
Less:       
Noncontrolling interest—common units of Boston Properties Limited Partnership’s share of diluted FFO27,272
 17,336
 25,113
 17,625
Boston Properties, Inc.’s share of Diluted FFO (1)$243,036
 154,483
 $219,620
 154,136
 _______________  
(1)BXP’s share of diluted FFO was 89.91% and 89.74% for the three months ended September 30, 2017 and 2016, respectively.

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The following tables presents a reconciliation of net income attributable to Boston Properties, Limited PartnershipInc. to Diluted FFO attributable to Boston Properties, Inc. for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties, Inc.$104,299 $222,989 
Add:
Noncontrolling interest—common units of the Operating Partnership12,117 25,708 
Noncontrolling interests in property partnerships19,768 18,546 
Net income136,184 267,243 
Add:
Depreciation and amortization202,577 183,146 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 96,247 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations (FFO) attributable to the Operating Partnership326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted FFO326,325 338,889 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted FFO33,383 34,262 
Diluted FFO attributable to Boston Properties, Inc. (1)$292,942 $304,627 
___________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted Funds from Operations17,922 17,672 
Diluted Funds from Operations attributable to Boston Properties, Inc. (1)157,218 157,192 
 _______________
(1)BXP’s share of diluted Funds from Operations was 89.77% and 89.89% for the three months ended June 30, 2023 and 2022, respectively.

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BPLP
The following table presents a reconciliation of net income attributable to Boston Properties Limited Partnership common unitholders to FFO attributable to Boston Properties Limited Partnership common unitholders for the three months ended SeptemberJune 30, 20172023 and 2016:2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)$326,325 $338,889 
Weighted average shares outstanding—basic174,748 174,392 
 _______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
94
 Three months ended September 30,
2017 2016
 (in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders$132,693
 $91,306
Add:   
Preferred distributions2,625
 2,589
Noncontrolling interests in property partnerships14,340
 (17,225)
Less:   
Gains on sales of real estate2,891
 12,983
Income before gains on sales of real estate146,767
 63,687
Add:   
Depreciation and amortization150,210
 198,582
Noncontrolling interests in property partnerships’ share of depreciation and amortization(18,552) (40,907)
BPLP’s share of depreciation and amortization from unconsolidated joint ventures
9,282
 9,128
Corporate-related depreciation and amortization(434) (393)
Less:   
Noncontrolling interests in property partnerships14,340
 (17,225)
Preferred distributions2,625
 2,589
Funds from Operations (FFO) attributable to Boston Properties Limited Partnership common unitholders (“Basic FFO”) (1)
$270,308
 $244,733
Weighted-average units outstanding—basic171,691
 171,379
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_______________ 
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units, vested 2013 MYLTIP Units and vested 2014 MYLTIP Units).
ReconciliationThe following tables presents a reconciliation of net income attributable to Boston Properties Limited Partnership to Diluted Funds from Operations:FFO attributable to Boston Properties Limited Partnership for income (numerator) and shares/units (denominator) for the three months ended June 30, 2023 and 2022:
 Three months ended June 30,
 20232022
 (in thousands)
Net income attributable to Boston Properties Limited Partnership$118,098 $253,788 
Add:
Noncontrolling interests in property partnerships19,768 18,546 
Net income137,866 272,334 
Add:
Depreciation and amortization200,895 181,416 
Noncontrolling interests in property partnerships’ share of depreciation and amortization(17,858)(17,414)
BXP’s share of depreciation and amortization from unconsolidated joint ventures25,756 21,120 
Corporate-related depreciation and amortization(442)(413)
Less:
Gains on sales of real estate— 99,608 
Unrealized gain on non-real estate investment124 — 
Noncontrolling interests in property partnerships19,768 18,546 
Funds from Operations attributable to Boston Properties Limited Partnership (1)326,325 338,889 
Effect of Dilutive Securities:
Stock based compensation— — 
Diluted Funds from Operations attributable to Boston Properties Limited Partnership$326,325 $338,889 
_______________
(1)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2020 MYLTIP Units).
 Three months ended June 30,
 20232022
shares/units (in thousands)
Basic Funds from Operations174,748 174,392 
Effect of Dilutive Securities:
Stock based compensation392 472 
Diluted Funds from Operations175,140 174,864 
 Three months ended September 30, 2017 Three months ended September 30, 2016
Income
(Numerator)
 
Units
(Denominator)
 
Income
(Numerator)
 
Units
(Denominator)
 (in thousands)
Basic FFO$270,308
 171,691
 $244,733
 171,379
Effect of Dilutive Securities       
Stock Based Compensation—
 128
 —
 382
Diluted FFO$270,308
 171,819
 $244,733
 171,761

Contractual ObligationsMaterial Cash Commitments
We have various service contracts with vendors related to our property management. In addition, we have certain other contracts we enter into in the ordinary course of business that may extend beyond one year. These contracts include terms that provide for cancellation with insignificant or no cancellation penalties. Contract terms are generally between three and five years.
During the third quarter of 2017,three months ended June 30, 2023, we paid approximately $75.7$80.3 million to fund tenant-related obligations, including tenant improvements and leasing commissions,commissions.
In addition, during the three months ended June 30, 2023, we and our unconsolidated joint venture partners incurred approximately $120$82.8 million of new tenant-relatedclient-related obligations associated with approximately 1.3 million890,000 square feet of second generation leases, or approximately $98$93 per square foot. In addition, weWe signed leases for approximately 1.3 million47,500 square feet of first generation space.leases. The tenant-relatedclient-related obligations for the

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development properties are included within the projects’ “Estimated Total Investment” referred to in “Item 2—Management’s Discussion and Analysis of Financial Condition” Condition and “Results Results of Operations—Liquidity and Capital Resources.”In the aggregate during the thirdsecond quarter of 2017,
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2023, we signed leases for approximately 2.6 million937,500 square feet of space and incurred aggregate tenant-relatedclient-related obligations of approximately $180$90.2 million, or approximately $70$96 per square foot.

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ITEM 3—Quantitative and Qualitative Disclosures about Market Risk.
The following table presentsWe are exposed to certain market risks, one of the aggregate carrying valuemost predominant of which is a change in interest rates. Increases in interest rates can result in increased interest expense under our mortgage notes payable, net, unsecured senior notes, netRevolving Facility, 2023 Unsecured Term Loan and other variable rate debt to the extent we do not have interest rate swaps in place to hedge the effect of such rate increases. Increases in interest rates can also result in increased interest expense when our corresponding estimatefixed rate debt matures and needs to be refinanced. As of fair value as of SeptemberJune 30, 2017. Approximately $10.22023, approximately $14.3 billion of these borrowings bore interest at fixed rates and therefore the fair value of these instruments is affected by changes in the market interest rates. The following table presents our aggregate fixed rate debt obligations with corresponding weighted-average interest rates sorted by maturity date. At September 30, 2017, noneremaining $1.2 billion of ouroutstanding borrowings bore interest at a variable rate. However, we entered into interest rate swaps, thus fixing the variability of the interest rate (See Note 7 to the Consolidated Financial Statements for information pertaining to interest rate contracts in place as of June 30, 2023 and their respective fair values). Therefore, as of June 30, 2023, we have no outstanding variable rate debt that has not been subject to an interest rate swap.
The table below does not include our unconsolidated joint venture debt. For a discussion concerning our unconsolidated joint venture debt, including interest rate swaps, see Note 45 to the Consolidated Financial Statements and “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capitalization—Off-Balance Sheet Arrangements—Operations—Liquidity and Capital Resources—Investment in Unconsolidated Joint Venture Indebtedness.Ventures - Secured Debt.”
The following table presents our aggregate debt obligations carrying value, estimated fair value and where applicable, the corresponding weighted-average GAAP interest rates sorted by maturity date as of June 30, 2023.
202320242025202620272028+TotalEstimated Fair Value
(dollars in thousands)
Mortgage debt, net
Fixed Rate$(2,421)$(4,843)$(4,843)$(4,843)$2,297,138 $994,576 $3,274,764 $2,765,657 
GAAP Average Interest Rate— %— %— %— %3.64 %2.93 %3.42 %
Variable Rate— — — — — — — — 
 Unsecured debt, net
Fixed Rate$499,847 $699,532 $848,093 $1,991,832 $744,231 $6,201,860 $10,985,395 $9,751,688 
GAAP Average Interest Rate3.28 %3.92 %3.35 %3.63 %6.92 %3.72 %3.88 %
Variable Rate— 1,196,046 — — — — 1,196,046 1,194,895 
Total Debt$497,426 $1,890,735 $843,250 $1,986,989 $3,041,369 $7,196,436 $15,456,205 $13,712,240 
 2017 2018 2019 2020 2021 2022+ Total 
Estimated
Fair Value
 
(dollars in thousands)
Mortgage debt, net
Fixed Rate$2,782
 $14,708
 $15,745
 $16,841
 $36,346
 $2,895,645
 $2,982,067
 $3,049,617
Average Interest Rate5.04% 5.52% 5.53% 5.55% 6.61% 3.89% 3.96%  
Variable Rate—
 —
 —
 —
 —
 —
 —
 —
 Unsecured debt, net
Fixed Rate$(2,216) $841,285
 $692,461
 $692,962
 $844,289
 $4,183,786
 $7,252,567
 $7,533,164
Average Interest Rate—
 3.85% 5.97% 5.71% 4.29% 3.71% 4.21%  
Variable Rate—
 —
 —
 —
 —
 —
 —
 —
 $566
 $855,993

$708,206

$709,803

$880,635

$7,079,431

$10,234,634
 $10,582,781

At SeptemberJune 30, 2017,2023, the weighted-average coupon/stated rates on the fixed rate debt stated above was 4.02%3.67% per annum. At June 30, 2023, our outstanding variable rate debt totaled $1.2 billion and all of it was subject to interest rate swaps. At June 30, 2023, the coupon/stated rate on our variable rate debt, including the effect of the interest rate swaps, was approximately 5.592% per annum. If market interest rates on our variable rate debt had been 100 basis points greater, total interest expense would have increased approximately $3.0 million and $6.0 million for the three and six months ended June 30, 2023, respectively.
Our use of derivative instruments also involves certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. We believe that there is a low likelihood that these counterparties will fail to meet our obligations and we minimize our exposure by limiting counterparties to major banks who meet established credit and capital guidelines. There can be no assurance that we will adequately protect against the foregoing risks.
The fair value amounts were determined solely by considering the impact of hypothetical interest rates on our financial instruments. Due to the uncertainty of specific actions, we may undertake to minimize possible effects of market interest rate increases, this analysis assumes no changes in our financial structure.

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ITEM 4—Controls and Procedures.
Boston Properties, Inc.
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, our management, with the participation of Boston Properties, Inc.’s Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934)1934, as amended). Based upon that evaluation, Boston Properties, Inc.’s Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.
(b) Changes in Internal Control Over Financial Reporting. No change in Boston Properties, Inc.’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934)1934, as amended) occurred during the thirdsecond quarter of our fiscal year ending December 31, 20172023 that has materially affected, or is reasonably likely to materially affect, Boston Properties, Inc.’s internal control over financial reporting.

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Boston Properties Limited Partnership
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, the management of Boston Properties, Inc., the sole general partner of Boston Properties Limited Partnership, with the participation of its Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934)1934, as amended). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of Boston Properties, Inc. concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.
(b) Changes in Internal Control Over Financial Reporting. No change in its internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934)1934, as amended) occurred during the thirdsecond quarter of our fiscal year ending December 31, 20172023 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.



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PART II. OTHER INFORMATION
ITEM 1—Legal Proceedings.
We are subject to legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management believes that the final outcome of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.
ITEM 1A—Risk Factors.
Except to the extent updated below or previously updated or to the extent additional factual information disclosed elsewhere in thesethis Quarterly ReportsReport on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—“Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations”Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2016.2022.
ITEM 2—Unregistered Sales of Equity Securities and Use of Proceeds
Boston Properties, Inc.

(a)None.
(a)None.
(b)Not applicable.
(c)Issuer Purchases of Equity Securities. None.

(b)Not Applicable.
(c)Issuer Purchases of Equity Securities. None.
Boston Properties Limited Partnership

(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 us in return for an equivalent number of partnership units with rights and preferences analogous to the shares issued. During the three months ended September 30, 2017, in connection with issuances of common stock by Boston Properties, Inc. pursuant to issuances to employees pursuant to the Boston Properties, Inc. 1999 Non-Qualified Employee Stock Purchase Plan, Boston Properties Limited Partnership issued an aggregate of approximately 3,381 common units to Boston Properties, Inc. in exchange for approximately $360,000, the aggregate proceeds of such common stock issuances, to Boston Properties, Inc. Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
(b)Not Applicable.
(c)Issuer Purchases of Equity Securities. None.

(a)Each time BXP issues shares of common stock (other than in exchange for common units when such common units are presented for redemption), it contributes the proceeds of such issuance to BPLP in return for an equivalent number of partnership units with rights and preferences analogous to the shares issued. During the three months ended June 30, 2023, in connection with issuances of common stock by BXP pursuant to issuances of restricted common stock to non-employee directors and the settlement of deferred stock awards under the Boston Properties, Inc. 2021 Stock Incentive Plan, BPLP issued an aggregate of 7,449 common units to BXP in exchange for approximately $67.80, the aggregate proceeds of such common stock issuances to BXP. Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
(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
April 1, 2023 – April 30, 2023— $— N/AN/A
May 1, 2023 – May 31, 2023576 (1)$0.25 N/AN/A
June 1, 2023 – June 30, 202311,051 (2)$0.25 N/AN/A
Total11,627  $0.25 N/AN/A
___________
(1)Represents LTIP units that were repurchased in connection with the termination of an employee’s employment with BXP. Under the terms of the applicable LTIP unit vesting agreement, the LTIP units were repurchased at a price of $0.25 per unit, which was the amount originally paid by such employee for such units.
(2)Represents LTIP units and 2020-2022 MYLTIP units that were repurchased in connection with the termination of an employee’s employment with BXP. Under the terms of the applicable LTIP unit vesting agreements and MYLTIP award agreements, the LTIP units and MYLTIP units were repurchased at a price of $0.25 per unit, which was the amount originally paid by such employee for such units.
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ITEM 3—Defaults Upon Senior Securities.
None.
ITEM 4—Mine Safety Disclosures.
None.
ITEM 5—Other Information.
(a)None.
(b)None.

(a)None.
(b)None.
(c)During the three months ended June 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
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ITEM 6—Exhibits.
(a)Exhibits
(a)Exhibits
4.1 
12.1
—
12.2
—
Calculation of Ratios of Earnings to Fixed Charges and Calculation of Ratios of Earnings to Combined Fixed Charges and Preferred Distributions for Boston Properties Limited Partnership. (Filed herewith.Partnership filed on May 15, 2023.)
31.110.1 
—
31.1 —
31.2
—
31.3
—
31.4
—
32.1
—
32.2
—
32.3
—
32.4
—
101101.SCH
—		—Inline XBRL Taxonomy Extension Schema Document. (Filed herewith.)
The following materials from Boston Properties, Inc.’s and Boston Properties Limited Partnership’s Quarterly Reports on Form 10-Q for the quarter ended September 30, 2017 formatted
101.CAL—Inline XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)
101.LAB—Inline XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
101.PRE—Inline XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
101.DEF—Inline XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
104 —Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained 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.Exhibits 101*.). (Filed herewith.)


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





BOSTON PROPERTIES, INC.
August 7, 2023BOSTON PROPERTIES, INC.
November 6, 2017
/s/    MICHAEL R. WALSH        
Michael R. Walsh
Chief Accounting Officer

(duly authorized officer and principal accounting officer)


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc., its General Partner
November 6, 2017August 7, 2023
/s/    MICHAEL R. WALSH        
Michael R. Walsh
Chief Accounting Officer

(duly authorized officer and principal accounting officer)


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