BXP Inc.
11/07/2025 | Press release | Distributed by Public on 11/07/2025 13:52
Quarterly Report for Quarter Ending 9/30/2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.
This Quarterly Report on Form 10-Q, including the documents incorporated by reference herein, contain 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 (the "Exchange Act"). 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, 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 forward-looking statements are based on current beliefs, expectations of future events and 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 that do not relate solely to historical matters are intended to identify forward-looking statements. These 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. If one or more of these known or unknown risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may differ materially from those expressed or implied 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, trends and assumptions 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 following risks and uncertainties, among others:
•volatile or adverse economic, capital markets and political conditions, including continued inflation, elevated interest rates, supply chain disruptions, policy changes related to tariffs and prolonged government shutdowns or disruptions, which may directly or indirectly impact us, our current clients and our prospective clients, including their demand for office space, and the costs and availability of construction materials and the economic returns on our construction and development activities;
•volatile or adverse geopolitical conflicts and dislocations in the credit markets 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;
•risks associated with the availability and terms of financing, the use of debt to fund acquisitions and developments or refinance existing indebtedness, including the impact of higher interest rates on the cost and/or availability of financing and the use of forward interest rate contracts and derivatives and the effectiveness of such arrangements;
•general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on attractive terms, sustained changes in client preferences and space utilization, dependence on clients' financial condition, and competition from other developers, owners and operators of real estate);
•failure to integrate acquisitions and developments successfully;
•risks and uncertainties affecting property development and construction;
•the ability of our joint venture partners to satisfy their obligations;
•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;
•risks associated with cyber security breaches, incidents, and compromises, 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 legal proceedings and other claims that could result in substantial monetary damages and other costs;
•risks associated with BXP's potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code");
•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.
Investors are also urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results, including the risks and uncertainties described in (i) our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 including those described under the caption "Risk Factors," (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Form 10-Q in Part II, Item 1A, if any.
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 unduly rely on forward-looking statements as a prediction of actual results. Investors should also refer to our most recent Annual Report on Form 10-K and 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 Current 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 one of the largest publicly traded office real estate investment trusts (REITs) (based on total market capitalization as of September 30, 2025) in the United States 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.
We generate revenue and cash primarily by leasing premier workplaces to our clients. We consider premier workplaces to be well-located buildings that are modern structures or have been modernized to compete with newer buildings, are professionally managed and maintained, and offer a number and type of amenities that are in high demand by clients that are focused on the importance of the physical work environment in recruiting and retaining the best and brightest employees. As such, these properties attract creditworthy clients and command upper-tier rental rates in their markets. We do not consider the expression "premier workplaces" a classification of our properties in accordance with any standard listing criteria in the real estate industry. We therefore caution investors that our use and definition of "premier workplaces" may be different than the use and definition of similar expressions and traditional classifications that may be used by other companies.
When making leasing decisions, we consider, among other things, the creditworthiness of the 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 improvement allowances, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, the date by which we expect to begin revenue recognition for the lease under generally accepted accounting principles ("GAAP"), current and anticipated vacancy in our properties and the market overall (including
sublease space), current and expected future demand for the space, the impact of other clients' expansion rights and general economic factors.
We believe our key competitive advantages are our commitments to the office asset class and to our clients as many competitors have divested from the sector, a strong balance sheet with access to capital in the secured and unsecured debt markets and the private and public equity markets, and one of the highest quality portfolios of premier workplaces in the U.S. assembled over several decades of intentional development, acquisitions and dispositions. Clients and their advisors are increasingly focused on building owners with these attributes, a factor that distinguishes BXP among its competitors.
Our core strategy has always been to develop, acquire and manage premier workplaces in gateway markets with high barriers-to-entry and attractive demand drivers and to focus on executing long-term leases with financially strong clients that are diverse across market sectors. We believe this strategy provides a competitive advantage as our clients are interested in leasing space in vibrant, amenitized and accessible premier workplaces. This interest has accelerated the flight to quality in the office market. Over the past several years, BXP's experience and performance has diverged from the larger market and media sentiment, as premier workplaces have outperformed the broader office market consistently and substantially in both rental rates achieved and occupancy. We believe this divergence validates our strategy and differentiates BXP from other office companies.
Premier workplaces in our five traditional central business district ("CBD") markets (Boston, New York, San Francisco, Seattle and Washington, DC) have consistently outperformed the broader office market in those CBDs on several key metrics, including occupancy, net absorption levels, rental rates and landlord concessions. This outperformance is evident in BXP's portfolio where we derive approximately 89% of our share of annualized rental obligations from predominantly premier workplaces located in CBDs. We define annualized rental obligations as the monthly contractual base rent (excluding percentage rent and rent abatements) and budgeted reimbursements from clients under existing leases as of September 30, 2025, multiplied by twelve. Our share of annualized rental obligations is calculated as the consolidated amount, plus our share of the amount from our unconsolidated joint ventures (calculated based on our economic percentage ownership interest), less our partners' share of the amount from our consolidated joint ventures (calculated based on the partners' economic percentage ownership interest). As of September 30, 2025, our CBD assets are 89.3% occupied and 92.0% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).
As of September 30, 2025, the weighted-average remaining lease term for (1) our in-place leases, based on square feet, including those signed by our unconsolidated joint ventures but excluding residential units, was approximately 7.8 years, and (2) our 20 largest clients, based on square feet, was approximately 10.0 years. Through year-end 2027, we have historically low exposure to contractual lease expirations with approximately 8.7% of our share of the square footage of our in-service portfolio expiring (at our share).
During the third quarter of 2025, BXP continued to execute on the multi-year action plan introduced at our recent Investor Day held on September 8, 2025. The action plan focuses on growing Funds From Operations ("FFO") per share, funding development activity, and reducing our leverage. Our progress reflects steady advancement across each of these key priorities.
Growth in FFO per share depends in large part on the success of our leasing activity. Leasing momentum remained strong during the third quarter of 2025, as we signed leases for more than 1.5 million square feet during the quarter - or 39% greater than the third quarter of 2024 - driven by healthy corporate fundamentals and continued improvement in office utilization, particularly in our East Coast markets.
We are also making significant progress in raising capital to fund our development activity while reducing our leverage. Our plan contemplates generating approximately $1.9 billion of estimated net proceeds from the sales of 27 land, residential assets and non-strategic office assets by the end of 2027. There can be no assurance that we will complete any of these transactions on the terms and schedules currently contemplated or at all.
Consistent with our strategy to concentrate the portfolio in premier workplace assets in the CBDs of our gateway markets, we launched new developments at 343 Madison Avenue in New York City and 725 12th Street in Washington, D.C., while monetizing primarily suburban assets. Our development pipeline remains a key contributor to long-term growth, with eight active projects totaling approximately 3.5 million square feet and approximately $3.9 billion of BXP investment (at our share). Collectively, these initiatives underscore our disciplined approach to enhancing portfolio quality, strengthening the balance sheet, and positioning BXP for sustainable FFO growth over the next several years.
Outlook
BXP's leasing activity remains healthy and active across many of our core submarkets, supported by improving corporate sentiment and a continued rebound in office utilization. While conditions vary by region, we are encouraged by the breadth and depth of client demand in our premier assets, particularly in our East Coast markets.
Additionally, new construction of office space has slowed significantly, contributing to occupancy and rent growth in many submarkets in which we operate. Debt and equity investors are becoming constructive on the office sector resulting in more availability of capital at better pricing.
We remain focused on leveraging these positive trends by actively engaging with clients, deploying capital prudently, and positioning our portfolio to meet evolving demand for best-in-class, highly amenitized, and sustainable office environments.
Leasing Activity and Occupancy
Although all the markets in which we operate still need consistent incremental absorption to constitute a macro recovery, we continue to see pockets of strength where low availability is driving constructive client behavior. As clients choose premier workplaces in sound financial condition with building owners that are committed for the long term to their properties operated by the best property management teams, we expect to continue to be successful in gaining market share.
In the third quarter of 2025, we executed 79 leases totaling more than 1.5 million square feet and having a weighted-average lease term of approximately 7.9 years. This leasing volume represents our strongest third quarter since 2019, and a 39% increase from the third quarter of 2024.
At September 30, 2025, our total portfolio occupancy for the third quarter was 86.0%, a decrease of 40 basis points from the second quarter of 2025. As previously communicated, the addition of the 360 Park Avenue South, 1050 Winter Street and Reston Next Office Phase II developments to the in-service portfolio decreased the third quarter occupancy rate because each property has leases for which revenue recognition has not commenced in accordance with GAAP. Excluding the impact of placing these three properties in-service, total portfolio occupancy increased 20 basis points from the second quarter of 2025 to 86.6%.
Our portfolio percentage leased for the third quarter was 88.8% (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP). Excluding the impact of placing the three development properties in-service, the leased percentage increased by 10 basis points from the second quarter of 2025 to 89.2%.
An overview of the leasing activity in each of our regions for the three months ended September 30, 2025 is set forth in the table below. Amounts shown are in square feet, except for percentages, and include 100% of the unconsolidated joint venture properties.
|
Leases commenced (1)
|
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| Region |
Leases executed (2)
|
Total | Second generation space vacant < 1 Year |
Change in second generation cash rents, net (3)
|
Occupancy |
Leased (4)
|
||||||||||||||||||||||||||||||||
| Boston | 397,854 | 482,632 | 146,875 | 3.19 | % | 89.7 | % | 91.6 | % | |||||||||||||||||||||||||||||
| Los Angeles | 4,705 | 10,709 | 1,285 | (41.02) | % | 86.7 | % | 87.1 | % | |||||||||||||||||||||||||||||
| New York | 794,741 | 238,839 | 135,547 | 8.11 | % | 82.8 | % | 88.3 | % | |||||||||||||||||||||||||||||
| San Francisco | 133,551 | 176,055 | 113,890 | (24.57) | % | 77.8 | % | 79.7 | % | |||||||||||||||||||||||||||||
| Seattle | 54,100 | 36,329 | - | - | % | 82.6 | % | 85.1 | % | |||||||||||||||||||||||||||||
| Washington, DC | 139,247 | 212,091 | 130,737 | (11.78) | % | 91.3 | % | 93.4 | % | |||||||||||||||||||||||||||||
| Total / Weighted Average | 1,524,198 | 1,156,655 | 528,334 | (7.13) | % | 86.0 | % | 88.8 | % | |||||||||||||||||||||||||||||
__________________
(1)Represents space with signed leases for which lease revenue recognition has commenced in accordance with GAAP during the three months ended September 30, 2025.
(2)Represents leases executed during the three months ended September 30, 2025 for which we either (1) commenced lease revenue recognition in such quarter or (2) will commence lease revenue recognition in
subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed during the three months ended September 30, 2025 for which we recognized lease revenue in the three months ended September 30, 2025 is 332,570.
(3)Represents the increase (decrease) in net rent (gross rent less operating expenses) on the new versus expired leases on the 528,334 square feet of second generation leases that had been occupied within the prior 12 months for the three months ended September 30, 2025.
(4)Represents signed leases for which lease revenue recognition has commenced in accordance with GAAP and signed leases for vacant space with future commencement dates.
The table below details the vacancy and leasing activity in our portfolio, including 100% of the unconsolidated joint ventures, that commenced revenue recognition during the three and nine months ended September 30, 2025:
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | |||||||||||||
| (Square Feet) | ||||||||||||||
| Vacant space available at the beginning of the period | 6,559,755 | 6,122,074 | ||||||||||||
| Vacant space from property dispositions/properties taken out of service (1) | (23,633) | (486,313) | ||||||||||||
| Vacant space from properties placed (and partially placed) in-service (2) | 535,011 | 590,615 | ||||||||||||
| Leases expiring or terminated during the period | 977,209 | 3,680,532 | ||||||||||||
| Total space available for lease | 8,048,342 | 9,906,908 | ||||||||||||
|
1stgeneration leases
|
198,797 | 289,050 | ||||||||||||
|
2ndgeneration leases with new clients
|
688,867 | 1,725,910 | ||||||||||||
|
2ndgeneration lease renewals
|
268,991 | 1,000,261 | ||||||||||||
| Total space leased (3) | 1,156,655 | 3,015,221 | ||||||||||||
| Vacant space available for lease at the end of the period | 6,891,687 | 6,891,687 | ||||||||||||
|
Second generation leasing information: (4)
|
||||||||||||||
| Leases commencing during the period, in square feet | 957,858 | 2,726,171 | ||||||||||||
| Weighted Average Lease Term | 96 Months | 80 Months | ||||||||||||
| Weighted Average Free Rent Period | 215 Days | 174 Days | ||||||||||||
| Total Transaction Costs Per Square Foot (5) | $77.47 | $78.92 | ||||||||||||
| Increase (Decrease) in Gross Rents (6) | (4.48) | % | (3.38) | % | ||||||||||
| Increase (Decrease) in Net Rents (7) | (7.13) | % | (5.38) | % | ||||||||||
__________________
(1)Total square feet from properties taken out of service during the three months ended September 30, 2025 consists of 23,633 square feet at 200 Clarendon Street. Total square feet from properties taken out of service during the nine months ended September 30, 2025 consists of 201,634 square feet at Reservoir Place, 261,046 square feet at Reston Corporate Center and 23,633 square feet at 200 Clarendon Street.
(2)Total square feet from properties placed (and partially placed) in-service during the three months ended September 30, 2025 consists of 345,570 square feet at 360 Park Avenue South, 106,670 square feet at 1050 Winter Street and 82,771 square feet at Reston Next Office Phase II. Total square feet from properties placed (and partially placed) in-service during the nine months ended September 30, 2025 consists of 345,570 square feet at 360 Park Avenue South, 162,274 square feet at 1050 Winter Street and 82,771 square feet at Reston Next Office Phase II.
(3)Represents leases for which lease revenue recognition has commenced in accordance with GAAP during the three and nine months ended September 30, 2025.
(4)Second generation leases are defined as leases for space that we have previously leased. Of the 957,858 and 2,726,171 square feet of second generation leases that commenced revenue recognition during the three and nine months ended September 30, 2025, respectively, leases for 625,288 and 2,122,899 square feet, respectively, were signed in prior periods.
(5)Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.
(6)Represents the increase (decrease) in gross rent (base rent plus expense reimbursements) on the new versus expired leases on the 528,334 and 1,554,454 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2025, respectively; excludes
leases that management considers temporary because the client is not expected to occupy the space on a long-term basis.
(7)Represents the increase (decrease) in net rent (gross rent less operating expenses) on the new versus expired leases on the 528,334 and 1,554,454 square feet of second generation leases that had been occupied within the prior 12 months for the three and nine months ended September 30, 2025, respectively.
Investment Activity
In the third quarter of 2025, we completed and fully placed in-service three development projects:
•1050 Winter Street, an approximately 162,000 net rentable square foot office building located in Waltham, Massachusetts. The project is 100% leased.
•Reston Next Office Phase II, an approximately 87,000 net rentable square foot boutique premier workplace located in Reston, Virginia. The project is 92% leased.
•360 Park Avenue South, an approximately 450,000 net rentable square foot premier workplace located in New York City, New York. The project is 38% leased.
In addition, we commenced full vertical construction of 343 Madison Avenue in New York City, New York. 343 Madison Avenue will be a highly amenitized, sustainably designed, 46-story, 930,000 square foot premier workplace located on one of the best office development sites in Manhattan with direct access to Grand Central Station. We signed a letter of intent with a prospective client to lease approximately 274,000 square feet, or 30% of the building's square footage. We are in active discussions with other prospective clients, underscoring the continued strong demand for the future premier workplace. We believe 343 Madison represents a strong and significant value creation opportunity for shareholders.
Critical Accounting Estimates
Management's Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with 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. Actual results may differ from those estimates and assumptions.
Our Annual Report on Form 10-K for the year ended December 31, 2024 contains a discussion of our critical accounting estimates. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2024.
Results of Operations
At September 30, 2025 and 2024, we owned or had joint venture interests in a portfolio of 187 and 184 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 provides a complete understanding of our operating results. Therefore, the comparison of operating results for the three and nine months ended September 30, 2025 and 2024 shows 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, In or Held for Development or Redevelopment or Sold Portfolios.
In our analysis of operating results, particularly to make comparisons of Net Operating Income ("NOI") 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 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.
NOI is a non-GAAP financial measure equal to net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net (income) loss attributable to noncontrolling interests, interest expense, loss from early extinguishment of debt, impairment losses, loss on sales-type lease, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain (loss) on non-real estate investments, gains from investments in securities, 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. 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 (loss) attributable to BXP, Inc. and net income (loss) 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.
We believe that in order to understand our operating results, NOI should be examined in conjunction with net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. NOI should not be considered as a substitute for net income (loss) attributable to BXP, Inc. or net income (loss) 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.
Gains on sales of real estate, impairments 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 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 depreciation expense, impairment losses and gains on sales of real estate upon the sale of these properties. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.
Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Net incomeattributable to BXP, Inc.and net income attributable to Boston Properties Limited Partnership decreased by approximately $214.7 million and $236.2 million, respectively, for the nine months ended September 30, 2025 compared to 2024, as set forth in the following tables and for the reasons discussed below under the heading "Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024"within "Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations."
Thefollowing are reconciliations of (1) Net Income Attributable to BXP, Inc. to NOI and (2) Net Income Attributable to Boston Properties Limited Partnership to NOI for the nine months ended September 30, 2025 and 2024. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 55.
BXP
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
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| (in thousands) | ||||||||||||||||||||||||||
| Net Income Attributable to BXP, Inc. | $ | 28,450 | $ | 243,126 | $ | (214,676) | (88.30) | % | ||||||||||||||||||
| Net Income Attributable to Noncontrolling Interests: | ||||||||||||||||||||||||||
|
Noncontrolling interest-common units of the Operating Partnership
|
4,054 | 28,596 | (24,542) | (85.82) | % | |||||||||||||||||||||
|
Noncontrolling interests in property partnerships
|
56,702 | 50,283 | 6,419 | 12.77 | % | |||||||||||||||||||||
| Net Income | 89,206 | 322,005 | (232,799) | (72.30) | % | |||||||||||||||||||||
|
Other Expenses:
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Add:
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||||||||||||||||||||||||||
|
Interest expense
|
490,526 | 474,727 | 15,799 | 3.33 | % | |||||||||||||||||||||
| Loss from early extinguishment of debt | 338 | - | 338 | 100.00 | % | |||||||||||||||||||||
| Impairment losses | 68,901 | 13,615 | 55,286 | 406.07 | % | |||||||||||||||||||||
| Loss on sales-type lease | 2,490 | - | 2,490 | 100.00 | % | |||||||||||||||||||||
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Other Income:
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| Less: | ||||||||||||||||||||||||||
| Unrealized gain (loss) on non-real estate investments | (344) | 548 | (892) | (162.77) | % | |||||||||||||||||||||
| Gains from investments in securities | 4,635 | 4,785 | (150) | (3.13) | % | |||||||||||||||||||||
| Interest and other income (loss) | 23,433 | 39,747 | (16,314) | (41.04) | % | |||||||||||||||||||||
| Gains on sales of real estate | 20,322 | 517 | 19,805 | 3,830.75 | % | |||||||||||||||||||||
| Income (loss) from unconsolidated joint ventures | (153,792) | 6,376 | (160,168) | (2,512.05) | % | |||||||||||||||||||||
| Other Expenses: | ||||||||||||||||||||||||||
|
Add:
|
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| Depreciation and amortization expense | 680,073 | 661,148 | 18,925 | 2.86 | % | |||||||||||||||||||||
|
Transaction costs
|
2,556 | 890 | 1,666 | 187.19 | % | |||||||||||||||||||||
|
Payroll and related costs from management services contracts
|
12,424 | 12,090 | 334 | 2.76 | % | |||||||||||||||||||||
|
General and administrative expense
|
130,988 | 127,479 | 3,509 | 2.75 | % | |||||||||||||||||||||
| Other Revenue: | ||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
|
Direct reimbursements of payroll and related costs from management services contracts
|
12,424 | 12,090 | 334 | 2.76 | % | |||||||||||||||||||||
|
Development and management services revenue
|
27,938 | 19,276 | 8,662 | 44.94 | % | |||||||||||||||||||||
| Net Operating Income ("NOI") | $ | 1,542,886 | $ | 1,528,615 | $ | 14,271 | 0.93 | % | ||||||||||||||||||
BPLP
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
|||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net Income Attributable to Boston Properties Limited Partnership | $ | 40,625 | $ | 276,826 | $ | (236,201) | (85.32) | % | ||||||||||||||||||
| Net Income Attributable to Noncontrolling Interests: | ||||||||||||||||||||||||||
|
Noncontrolling interests in property partnerships
|
56,702 | 50,283 | 6,419 | 12.77 | % | |||||||||||||||||||||
| Net Income | 97,327 | 327,109 | (229,782) | (70.25) | % | |||||||||||||||||||||
|
Other Expenses:
|
||||||||||||||||||||||||||
|
Add:
|
||||||||||||||||||||||||||
|
Interest expense
|
490,526 | 474,727 | 15,799 | 3.33 | % | |||||||||||||||||||||
| Loss from early extinguishment of debt | 338 | - | 338 | 100.00 | % | |||||||||||||||||||||
| Impairment losses | 65,988 | 13,615 | 52,373 | 384.67 | % | |||||||||||||||||||||
| Loss on sales-type lease | 2,490 | - | 2,490 | 100.00 | % | |||||||||||||||||||||
|
Other Income:
|
||||||||||||||||||||||||||
|
Less:
|
||||||||||||||||||||||||||
| Unrealized gain (loss) on non-real estate investments | (344) | 548 | (892) | (162.77) | % | |||||||||||||||||||||
| Gains from investments in securities | 4,635 | 4,785 | (150) | (3.13) | % | |||||||||||||||||||||
| Interest and other income (loss) | 23,433 | 39,747 | (16,314) | (41.04) | % | |||||||||||||||||||||
| Gains on sales of real estate | 20,421 | 517 | 19,904 | 3,849.90 | % | |||||||||||||||||||||
| Income (loss) from unconsolidated joint ventures | (153,792) | 6,376 | (160,168) | (2,512.05) | % | |||||||||||||||||||||
| Other Expenses: | ||||||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Depreciation and amortization expense | 674,964 | 656,044 | 18,920 | 2.88 | % | |||||||||||||||||||||
|
Transaction costs
|
2,556 | 890 | 1,666 | 187.19 | % | |||||||||||||||||||||
|
Payroll and related costs from management services contracts
|
12,424 | 12,090 | 334 | 2.76 | % | |||||||||||||||||||||
|
General and administrative expense
|
130,988 | 127,479 | 3,509 | 2.75 | % | |||||||||||||||||||||
| Other Revenue: | ||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
|
Direct reimbursements of payroll and related costs from management services contracts
|
12,424 | 12,090 | 334 | 2.76 | % | |||||||||||||||||||||
|
Development and management services revenue
|
27,938 | 19,276 | 8,662 | 44.94 | % | |||||||||||||||||||||
| Net Operating Income ("NOI") | $ | 1,542,886 | $ | 1,528,615 | $ | 14,271 | 0.93 | % | ||||||||||||||||||
Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024
The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 148 properties totaling approximately 41.4 million net rentable square feet, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or placed in-service on or prior to January 1, 2024 and owned and in service through September 30, 2025. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in or held for development or redevelopment after January 1, 2024 or disposed of on or prior to September 30, 2025. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the nine months ended September 30, 2025 and 2024 with respect to the properties that were acquired, placed in-service, in or held for development or redevelopment, or sold.
| Same Property Portfolio | Properties Acquired Portfolio |
Properties Placed In-Service Portfolio |
Properties in or Held for Development or Redevelopment Portfolio | Properties Sold Portfolio | Total Property Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
Increase/ (Decrease) |
% Change |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental Revenue: (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Lease Revenue (Excluding Termination Income)
|
$ | 2,302,693 | $ | 2,268,039 | $ | 34,654 | 1.53 | % | $ | 23,792 | $ | 23,651 | $ | 55,046 | $ | 15,189 | $ | 6,412 | $ | 20,536 | $ | (4) | $ | 604 | $ | 2,387,939 | $ | 2,328,019 | $ | 59,920 | 2.57 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Termination Income
|
2,396 | 7,874 | (5,478) | (69.57) | % | - | - | - | - | - | 7,085 | - | - | 2,396 | 14,959 | (12,563) | (83.98) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Lease Revenue
|
2,305,089 | 2,275,913 | 29,176 | 1.28 | % | 23,792 | 23,651 | 55,046 | 15,189 | 6,412 | 27,621 | (4) | 604 | 2,390,335 | 2,342,978 | 47,357 | 2.02 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Parking and Other
|
98,126 | 97,512 | 614 | 0.63 | % | 1,163 | 937 | 12 | 101 | (73) | 1,147 | - | - | 99,228 | 99,697 | (469) | (0.47) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Rental Revenue (1) | 2,403,215 | 2,373,425 | 29,790 | 1.26 | % | 24,955 | 24,588 | 55,058 | 15,290 | 6,339 | 28,768 | (4) | 604 | 2,489,563 | 2,442,675 | 46,888 | 1.92 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Operating Expenses | 942,687 | 917,020 | 25,667 | 2.80 | % | 9,763 | 9,157 | 13,551 | 6,543 | 10,590 | 13,024 | 215 | 323 | 976,806 | 946,067 | 30,739 | 3.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss), Excluding Residential and Hotel | 1,460,528 | 1,456,405 | 4,123 | 0.28 | % | 15,192 | 15,431 | 41,507 | 8,747 | (4,251) | 15,744 | (219) | 281 | 1,512,757 | 1,496,608 | 16,149 | 1.08 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Net Operating Income (2) | 19,155 | 19,614 | (459) | (2.34) | % | - | - | - | - | - | - | - | - | 19,155 | 19,614 | (459) | (2.34) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hotel Net Operating Income (2) | 10,974 | 12,393 | (1,419) | (11.45) | % | - | - | - | - | - | - | - | - | 10,974 | 12,393 | (1,419) | (11.45) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss) | $ | 1,490,657 | $ | 1,488,412 | $ | 2,245 | 0.15 | % | $ | 15,192 | $ | 15,431 | $ | 41,507 | $ | 8,747 | $ | (4,251) | $ | 15,744 | $ | (219) | $ | 281 | $ | 1,542,886 | $ | 1,528,615 | $ | 14,271 | 0.93 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________
(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 provide investors with information regarding our performance that is not immediately apparent from the most directly comparable 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 55. Residential Net Operating Income for the nine months ended September 30, 2025 and 2024 is comprised of Residential Revenue of $37,725 and $37,027 less Residential Expenses of $18,570 and $17,413, respectively. Hotel Net Operating Income for the nine months ended September 30, 2025 and 2024 is comprised of Hotel Revenue of $37,532 and $38,080 less Hotel Expenses of $26,558 and $25,687, respectively, per the Consolidated Statements of Operations.
Same Property Portfolio
Lease Revenue (Excluding Termination Income)
Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $34.7 million for the nine months ended September 30, 2025 compared to 2024. The increase was a result of our average revenue per square foot increasing by approximately $2.08, contributing approximately $53.3 million, partially offset by approximately $18.6 million due to our average occupancy decreasing from 89.0% to 88.3%.
Termination Income
Termination income decreased by approximately $5.5 million for the nine months ended September 30, 2025 compared to 2024.
Termination income for the nine months ended September 30, 2025 related to six clients across the Same Property Portfolio and totaled approximately $2.4 million.
Termination income for the nine months ended September 30, 2024 related to 23 clients across the Same Property Portfolio and totaled approximately $7.9 million.
Parking and Other Revenue
Parking and other revenue increased by approximately $0.6 million for the nine months ended September 30, 2025 compared to 2024. Parking revenue increased by approximately $1.7 million, partially offset by a decrease in other revenue of approximately $1.1 million. The increase in parking revenue was primarily due to an increase in monthly parking. The decrease in other revenue was primarily associated with a decrease in insurance proceeds.
Real Estate Operating Expenses
Real estate operating expenses from the Same Property Portfolio increased by approximately $25.7 million, or 2.8%, for the nine months ended September 30, 2025 compared to 2024, due primarily to increases in (1) repairs and maintenance of approximately $18.3 million, or 11.8% and (2) utilities of approximately $13.6 million, or 13.8%, partially offset by a decrease in other real estate operating expenses of approximately $6.2 million, or 0.9%. The increase in repairs and maintenance was primarily in the New York region. The increase in utilities was primarily in the Boston region.
Properties Acquired Portfolio
The table below lists the properties acquired between January 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses increased by approximately $0.4 million and $0.6 million, respectively, for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Square Feet | Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Date acquired | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 901 New York Avenue | January 8, 2024 | 508,130 | $ | 24,955 | $ | 24,588 | $ | 367 | $ | 9,763 | $ | 9,157 | $ | 606 | ||||||||||||||||||||||||||||||||||||
Properties Placed In-Service Portfolio
The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $39.8 million and $7.0 million, respectively, for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Quarter Initially Placed In-Service | Quarter Fully Placed In-Service | Rental Revenue | Real Estate Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 180 CityPoint | Third Quarter, 2023 | Third Quarter, 2024 | 329,195 | $ | 11,593 | $ | 10,475 | 1,118 | $ | 5,061 | $ | 4,313 | $ | 748 | ||||||||||||||||||||||||||||||||||||||||||
| 103 CityPoint | Fourth Quarter, 2023 | Fourth Quarter, 2024 | 112,841 | 2 | 2 | - | 1,128 | 531 | 597 | |||||||||||||||||||||||||||||||||||||||||||||||
| 760 Boylston Street | Second Quarter, 2024 | Second Quarter, 2024 | 118,000 | 7,214 | 4,613 | 2,601 | 874 | 528 | 346 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reston Next Office Phase II | Third Quarter, 2024 | Third Quarter, 2025 | 86,629 | 179 | - | 179 | 335 | 11 | 324 | |||||||||||||||||||||||||||||||||||||||||||||||
| 300 Binney Street | Fourth Quarter, 2024 | Fourth Quarter, 2024 | 239,908 | 34,690 | - | 34,690 | 4,997 | - | 4,997 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reston Next Retail | First Quarter, 2025 | N/A | 30,000 | - | - | - | 42 | - | 42 | |||||||||||||||||||||||||||||||||||||||||||||||
| 1050 Winter Street | Second Quarter, 2025 | Third Quarter, 2025 | 162,274 | 1,380 | 200 | 1,180 | 1,114 | 1,160 | (46) | |||||||||||||||||||||||||||||||||||||||||||||||
| 1,078,847 | $ | 55,058 | $ | 15,290 | $ | 39,768 | $ | 13,551 | $ | 6,543 | $ | 7,008 | ||||||||||||||||||||||||||||||||||||||||||||
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 January 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses from our Properties in or Held for Development or Redevelopment Portfolio decreased by approximately $22.4 million and $2.4 million, respectively, for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Date Commenced Held for Development / Redevelopment | Rental Revenue | Real Estate Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Held for Development or Redevelopment (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lexington Office Park | March 31, 2023 | 167,000 | $ | 690 | $ | 757 | $ | (67) | $ | 1,366 | $ | 1,224 | $ | 142 | |||||||||||||||||||||||||||||||||||||||
| Shady Grove Innovation District (2) | March 31, 2024 | 129,000 | 2 | 82 | (80) | 382 | 587 | (205) | |||||||||||||||||||||||||||||||||||||||||||||
| 1100 Winter Street (3) | September 30, 2024 | 293,000 | 2,495 | 9,348 | (6,853) | 2,576 | 3,109 | (533) | |||||||||||||||||||||||||||||||||||||||||||||
| Kingstowne One | September 30, 2024 | 154,000 | 721 | 1,594 | (873) | 1,044 | 1,000 | 44 | |||||||||||||||||||||||||||||||||||||||||||||
| Reston Corporate Center | January 1, 2025 | 261,000 | 13 | 9,553 | (9,540) | 1,610 | 2,908 | (1,298) | |||||||||||||||||||||||||||||||||||||||||||||
| Reservoir Place (4) | March 31, 2025 | 361,000 | 2,418 | 7,434 | (5,016) | 3,351 | 4,022 | (671) | |||||||||||||||||||||||||||||||||||||||||||||
| 1,365,000 | 6,339 | 28,768 | (22,429) | 10,329 | 12,850 | (2,521) | |||||||||||||||||||||||||||||||||||||||||||||||
| Redevelopment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 171 Dartmouth Street | March 28, 2024 | N/A | - | - | - | 261 | 174 | 87 | |||||||||||||||||||||||||||||||||||||||||||||
| - | - | - | - | 261 | 174 | 87 | |||||||||||||||||||||||||||||||||||||||||||||||
| 1,365,000 | $ | 6,339 | $ | 28,768 | $ | (22,429) | $ | 10,590 | $ | 13,024 | $ | (2,434) | |||||||||||||||||||||||||||||||||||||||||
_____________
(1)These properties are no longer considered "in-service" because each property's occupied percentage is less than 50% and we anticipate a future development/redevelopment of the property. A property will be considered held for development or redevelopment until the last client has vacated the property and the property is no longer revenue producing.
(2)This portion of Shady Grove Innovation District is comprised of two buildings, 2098 Gaither Road and 15825 Shady Grove Road.
(3)Rental revenue for the nine months ended September 30, 2024 includes approximately $6.4 million of termination income.
(4)Reservoir Place is an approximately 526,000 square foot office building, of which approximately 165,000 square feet remains in-service. Rental revenue for the nine months ended September 30, 2024 includes approximately $0.7 million of termination income.
Properties Sold Portfolio
The table below lists the properties we sold between January 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses from our Properties Sold Portfolio decreased by approximately $0.6 million and $0.1 million, respectively, for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Rental Revenue | Real Estate Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Date Sold | Property Type | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue (1) | June 27, 2025 | Office | 30,000 | $ | (4) | $ | 604 | $ | (608) | $ | 215 | $ | 323 | $ | (108) | |||||||||||||||||||||||||||||||||||||||||
______________
(1)During the nine months ended September 30, 2024, this property was removed from our "in-service" properties listing and classified as held for redevelopment (See Notes 3 and 5 to the Consolidated Financial Statements).
Residential Net Operating Income
Net operating income for our residential same properties decreased by approximately $0.5 million for the nine months ended September 30, 2025 compared to 2024.
The following reflects our occupancy and rate information, by region, for our residential same properties for the nine months ended September 30, 2025 and 2024.
| Average Monthly Rental Rate (1) | Average Rental Rate Per Occupied Square Foot | Average Physical Occupancy (2) | Average Economic Occupancy (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Region | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | ||||||||||||||||||||||||||||||||||||||
| Boston | $ | 3,601 | $ | 3,473 | 3.7 | % | $ | 5.72 | $ | 5.53 | 3.4 | % | 95.8 | % | 95.1 | % | 0.7 | % | 95.7 | % | 94.8 | % | 0.9 | % | ||||||||||||||||||||||||||
| San Francisco | $ | 3,038 | $ | 3,065 | (0.9) | % | $ | 3.83 | $ | 3.87 | (1.0) | % | 90.4 | % | 88.3 | % | 2.4 | % | 88.7 | % | 86.5 | % | 2.5 | % | ||||||||||||||||||||||||||
| Washington, DC | $ | 3,056 | $ | 2,822 | 8.3 | % | $ | 3.16 | $ | 2.90 | 9.0 | % | 95.1 | % | 95.8 | % | (0.7) | % | 94.9 | % | 95.8 | % | (0.9) | % | ||||||||||||||||||||||||||
_____________
(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.
Hotel Net Operating Income
The Boston Marriott Cambridge hotel had net operating income of approximately $11.0 million for the nine months ended September 30, 2025, representing a decrease of approximately $1.4 million compared to the nine months ended September 30, 2024.
The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the nine months ended September 30, 2025 and 2024.
| 2025 | 2024 |
Change (%) |
||||||||||||||||||
| Occupancy | 80.2 | % | 78.1 | % | 2.7 | % | ||||||||||||||
| Average daily rate | $ | 322.31 | $ | 331.19 | (2.7) | % | ||||||||||||||
| REVPAR | $ | 258.37 | $ | 258.75 | (0.1) | % | ||||||||||||||
Other Operating Revenue and Expense Items
Development and Management Services Revenue
Development and management services revenue increased by approximately $8.7 million for the nine months ended September 30, 2025 compared to 2024. Development services revenue and management services revenue increased by approximately $4.0 million and $4.7 million, respectively. The increase in development services revenue was primarily related to an increase in fees associated with a tenant improvement project in the Boston region. The increase in management services revenue was primarily related to leasing commissions earned from an unconsolidated joint venture and a third-party managed building in the New York region.
General and Administrative Expense
General and administrative expense increased by approximately $3.5 million for the nine months ended September 30, 2025 compared to 2024 primarily due to increases in compensation expense and other general and administrative expenses of approximately $2.5 million and $1.0 million, respectively.
Wages directly related to the development of rental properties are capitalized and included in real estate assets on our Consolidated Balance Sheets and amortized over the useful lives of the applicable asset or lease term. Capitalized wages for each of the nine months ended September 30, 2025 and 2024 were approximately $12.8 million and $13.2 million, respectively. These costs are not included in the general and administrative expenses discussed above.
Transaction Costs
Transaction costs increased by approximately $1.7 million for the nine months ended September 30, 2025 compared to 2024. 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
BXP
Depreciation and amortization expense increased by approximately $18.9 million for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Portfolio |
Depreciation and Amortization for the nine months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Same Property Portfolio | $ | 647,040 | $ | 637,576 | $ | 9,464 | ||||||||||||||
| Properties Acquired Portfolio | 10,405 | 10,763 | (358) | |||||||||||||||||
| Properties Placed In-Service Portfolio | 16,305 | 5,885 | 10,420 | |||||||||||||||||
| Properties in or Held for Development or Redevelopment Portfolio | 6,285 | 6,852 | (567) | |||||||||||||||||
| Properties Sold Portfolio | 38 | 72 | (34) | |||||||||||||||||
| $ | 680,073 | $ | 661,148 | $ | 18,925 | |||||||||||||||
BPLP
Depreciation and amortization expense increased by approximately $18.9 million for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Portfolio |
Depreciation and Amortization for the nine months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Same Property Portfolio | $ | 641,931 | $ | 632,472 | $ | 9,459 | ||||||||||||||
| Properties Acquired Portfolio | 10,405 | 10,763 | (358) | |||||||||||||||||
| Properties Placed In-Service Portfolio | 16,305 | 5,885 | 10,420 | |||||||||||||||||
| Properties in or Held for Development or Redevelopment Portfolio | 6,285 | 6,852 | (567) | |||||||||||||||||
| Properties Sold Portfolio | 38 | 72 | (34) | |||||||||||||||||
| $ | 674,964 | $ | 656,044 | $ | 18,920 | |||||||||||||||
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
Income (Loss) from Unconsolidated Joint Ventures
For the nine months ended September 30, 2025 compared to 2024, income (loss) from unconsolidated joint ventures decreased by approximately $160.2 million primarily due to the recognition of a non-cash impairment loss of approximately $145.1 million, partially offset by an approximately $2.2 million gain on the sale of Beach Cities Media Campus during the nine months ended September 30, 2025 (See Note 5 to the Consolidated Financial Statements). The decrease is also due to an approximately $21.8 million gain recognized from acquiring our joint venture partner's economic ownership interest in 901 New York Avenue during the nine months ended September 30, 2024, which did not recur during the nine months ended September 30, 2025.
Gains on Sales of Real Estate
BXP
Gains on sales of real estate increased by approximately $19.8 million for the nine months ended September 30, 2025 compared to 2024, as detailed below. The $0.5 million gains on sales of real estate for the nine months ended September 30, 2024 was related to the sale of real estate occurring in prior periods.
| Name | Date Sold | Property Type | Square Feet | Gross Sale Price | Net Cash Proceeds | Gain on Sale of Real Estate (1) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue (2) | June 27, 2025 | Office | 30,000 | $ | 21,840 | $ | 21,840 | $ | 18,390 | |||||||||||||||||||||||||||||
(1)Excludes approximately $1.9 million of gains on sales of real estate recognized during the nine months ended September 30, 2025 related the sale of real estate occurring in prior periods.
(2)See Notes 3 and 5 to the Consolidated Financial Statements.
BPLP
Gains on sales of real estate increased by approximately $19.9 million for the nine months ended September 30, 2025 compared to 2024, as detailed below. The $0.5 million gains on sale of real estate for the nine months ended September 30, 2024 was related to the sale of real estate occurring in prior periods.
| Name | Date Sold | Property Type | Square Feet | Gross Sale Price | Net Cash Proceeds | Gain on Sale of Real Estate (1) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue (2) | June 27, 2025 | Office | 30,000 | $ | 21,840 | $ | 21,840 | $ | 18,489 | |||||||||||||||||||||||||||||
______________
(1)Excludes approximately $1.9 million of gains on sales of real estate recognized during the nine months ended September 20, 2025 related to the sale of real estate occurring in prior periods.
(2)See Notes 3 and 5 to the Consolidated Financial Statements.
Interest and Other Income (Loss)
Interest and other income (loss) decreased by approximately $16.3 million for the nine months ended September 30, 2025 compared to 2024, due primarily to a decrease in our outstanding cash balances and corresponding lower interest income and an approximately $5.6 million reserve related to the unpaid default interest on one of our Related Party Notes Receivable (See Note 14 to the Consolidated Financial Statements).
Gains from Investments in Securities
Gains from investments in securities for the nine months ended September 30, 2025 and 2024 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 their respective deferred compensation plans, eligible officers and non-employee directors are permitted to defer a portion of their current compensation on a pre-tax basis and receive a tax-deferred return on the amounts deferred based on the performance of specific investments selected by participating officers and non-employee directors. 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 participants under our deferred compensation plans 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, 2025 and 2024, we recognized gains of approximately $4.6 million and $4.8 million, respectively, on these investments. By comparison, our general and administrative expense decreased by approximately $4.6 million and $4.8 million during the nine months ended September 30, 2025 and 2024, respectively, as a result of decreases in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by participating officers and former non-employee directors of BXP.
Unrealized Gain (Loss) on Non-Real Estate Investments
We invest in non-real estate investments, which primarily consist of environmentally-focused investment funds. During the nine months ended September 30, 2025 and 2024, we recognized an unrealized gain (loss) of approximately $(0.3) million and $0.5 million, respectively, due to the observable changes in the fair value of the investments.
Loss on Sales-Type Lease
During the nine months ended September 30, 2025, we recognized approximately $2.5 million in additional costs, which had previously been contingent, related to a ground lease for land at our Reston Next property located in Reston, Virginia. We entered into the ground lease in 2020 with a third-party hotel developer and amended it in 2022. The amendment resulted in the derecognition of the assets related to the ground lease and the classification of the ground lease as a sales-type lease resulting in the recognition of a gain on sales-type lease of approximately $10.1 million.
Impairment Losses
During the three months ended September 30, 2025, inconjunction with our strategy to sell non-core assets, we evaluated our properties that were under negotiation for sale with third-parties (See Note 2 to the Consolidated Financial Statements).
BXP
Impairment losses for the nine months ended September 30, 2025 and 2024, related to the following:
| Name | Location | Property Type | Impairment Loss | |||||||||||||||||
| in thousands) | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
|
Plaza at Almaden (1)
|
San Jose, CA | Land | $ | 25,515 | ||||||||||||||||
| 1330 Connecticut Avenue | Washington, DC | Office | 20,358 | |||||||||||||||||
| Shady Grove - Parcel 3 | Rockville, MD | Land | 13,913 | |||||||||||||||||
| North First Business Park | San Jose, CA | Office | 9,115 | |||||||||||||||||
| $ | 68,901 | |||||||||||||||||||
| 2024 | ||||||||||||||||||||
| 2 Choke Cherry Road, 2094 Gaither Road and a land parcel | Rockville, MD | Office and land | $ | 13,615 | ||||||||||||||||
(1)See Note 14 to the Consolidated Financial Statements.
BPLP
Impairment losses for the nine months ended September 30, 2025 and 2024, related to the following:
______________
| Name | Location | Property Type | Impairment Loss | |||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
|
Plaza at Almaden (1)
|
San Jose, CA | Land | $ | 25,515 | ||||||||||||||||
| 1330 Connecticut Avenue | Washington, DC | Office | 17,460 | |||||||||||||||||
| Shady Grove - Parcel 3 | Rockville, MD | Land | 13,913 | |||||||||||||||||
| North First Business Park | San Jose, CA | Office | 9,100 | |||||||||||||||||
| $ | 65,988 | |||||||||||||||||||
| 2024 | ||||||||||||||||||||
| 2 Choke Cherry Road, 2094 Gaither Road and a land parcel | Rockville, MD | Office and land | $ | 13,615 | ||||||||||||||||
(1)See Note 14 to the Consolidated Financial Statements.
Loss From Early Extinguishment of Debt
On March 28, 2025, BPLP amended and restated its revolving credit agreement (See Note 6to the Consolidated Financial Statements). In connection with the amendment and restatement, we recognized a loss from early extinguishment of debt of approximately $0.3 million related to unamortized origination costs during the nine monthsended September 30, 2025.
Interest Expense
Interest expense increased by approximately $15.8 million for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Component |
Change in interest expense for the nine months ended September 30, 2025 compared to September 30, 2024
|
|||||||
| (in thousands) | ||||||||
| Increases to interest expense due to: | ||||||||
| Issuance of $850 million in aggregate principal of 5.750% senior notes due 2035 on August 26, 2024 | $ | 31,921 | ||||||
| Unsecured commercial paper | 11,933 | |||||||
| Increase in interest due to finance leases | 8,433 | |||||||
| Increase in interest associated with unsecured term loans and the unsecured credit facility, net (1) | 1,057 | |||||||
| Issuance of $1.0 billion in aggregate principal of 2.000% exchangeable senior notes due 2030 on September 29, 2025 (2) | 111 | |||||||
| Total increases to interest expense | 53,455 | |||||||
| Decreases to interest expense due to: | ||||||||
| Repayment of $850 million in aggregate principal of the 3.200% senior notes due 2025 on January 15, 2025 | (19,580) | |||||||
| Mortgage loan financings (1) | (10,136) | |||||||
| Increase in capitalized interest related to development projects | (4,615) | |||||||
| Redemption of $700 million in aggregate principal of 3.800% senior notes due 2024 on February 1, 2024 | (2,237) | |||||||
| Amortization expense of financing fees | (1,004) | |||||||
| Other interest expense (excluding senior notes) | (84) | |||||||
| Total decreases to interest expense | (37,656) | |||||||
| Total change in interest expense | $ | 15,799 | ||||||
______________
(1)Includes, if applicable, fair value and swap adjustments (See Note 7to the Consolidated Financial Statements).
(2)See Note 6 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, 2025 and 2024 was approximately $36.0 million and $31.3 million, respectively. These costs are not included in the interest expense referenced above.
At September 30, 2025, our variable rate debt consisted of (1) BPLP's $2.95 billion unsecured credit facility ("2025 Credit Facility") and (2) BPLP's $750.0 million unsecured commercial paper program ("Commercial Paper Program"). The 2025 Credit Facility consists of (1) a revolving line of credit (the "Revolving Facility") of $2.25 billion and (2) an unsecured term loan facility (the "Term Loan Facility") of $700.0 million. As of September 30, 2025, there were $700.0 million and $750.0 million outstanding under the 2025 Credit Facility and Commercial Paper Program, respectively.
In addition, we have a $100.0 million unsecured term loan facility ("2024 Unsecured Term Loan") and $800.0 million of mortgage notes collateralized by Santa Monica Business Park and 325 Main Street, 355 Main Street, 90 Broadway and Cambridge East Garage (also known as Kendall Center Green Garage) properties that bear interest at variable rates, which have all been hedged with interest rates swaps to fix SOFR for all or a portion of the applicable debt term.
For a summary of our consolidated debt as of September 30, 2025 refer to the heading "Liquidity and Capital Resources-Debt"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 $6.4 million for the nine months ended September 30, 2025 compared to 2024, as detailed below.
| Property |
Noncontrolling Interests in Property Partnerships for the nine months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| 767 Fifth Avenue (the General Motors Building) (1) | $ | 7,808 | $ | 9,242 | $ | (1,434) | ||||||||||||||
| 7 Times Square (formerly Times Square Tower) (2) | 9,318 | 12,651 | (3,333) | |||||||||||||||||
| 601 Lexington Avenue | 6,852 | 6,951 | (99) | |||||||||||||||||
| 100 Federal Street | 8,816 | 8,713 | 103 | |||||||||||||||||
| Atlantic Wharf Office Building | 12,279 | 11,750 | 529 | |||||||||||||||||
| 343 Madison Avenue (3) | (1) | (27) | 26 | |||||||||||||||||
| 300 Binney Street (4) | 10,764 | 412 | 10,352 | |||||||||||||||||
| 290 Binney Street (5) | 866 | 591 | 275 | |||||||||||||||||
| $ | 56,702 | $ | 50,283 | $ | 6,419 | |||||||||||||||
______________
(1)The decrease was primarily attributable to an increase in repairs and maintenance expense.
(2)The decrease was primarily attributable to a decrease in lease revenue from our clients.
(3)On August 27, 2025, we acquired our partner's 45% ownership interest (See Note 9 to the Consolidated Financial Statements).
(4)Property was fully placed in service on October 31, 2024.
(5)Property is currently in development.
Noncontrolling Interest-Common Units of the Operating Partnership
For BXP, noncontrolling interest-common units of the Operating Partnership decreased by approximately $24.5 million for the nine monthsended September 30, 2025 compared to 2024 due to a decrease in allocable income, which was the result of recognizing greater non-cash impairment losses during 2025, as well as a decrease in the noncontrolling interest's ownership percentage. Due to our ownership structure, there is no corresponding line item on BPLP's financial statements.
Results of Operations for the Three Months Ended September 30, 2025 and 2024
Net income (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership decreased approximately $205.3 million and $225.0 million, respectively, for the three months ended September 30, 2025 compared to 2024, as detailed in the following tables and for the reasons discussed below under the heading "Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024" within "Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations."
Thefollowing are reconciliations of (1) Net Income (Loss) Attributable to BXP, Inc. to NOI and (2) Net Income (Loss) Attributable to Boston Properties Limited Partnershipto NOI for the three months ended September 30, 2025 and 2024. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 55.
BXP
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
|||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net Income (Loss) Attributable to BXP, Inc. | $ | (121,712) | $ | 83,628 | $ | (205,340) | (245.54) | % | ||||||||||||||||||
| Net (Income) Loss Attributable to Noncontrolling Interests: | ||||||||||||||||||||||||||
|
Noncontrolling interest-common units of the Operating Partnership
|
(12,981) | 9,587 | (22,568) | (235.40) | % | |||||||||||||||||||||
|
Noncontrolling interests in property partnerships
|
17,853 | 15,237 | 2,616 | 17.17 | % | |||||||||||||||||||||
| Net Income (Loss) | (116,840) | 108,452 | (225,292) | (207.73) | % | |||||||||||||||||||||
|
Other Expenses:
|
||||||||||||||||||||||||||
|
Add:
|
||||||||||||||||||||||||||
| Interest expense | 164,299 | 163,194 | 1,105 | 0.68 | % | |||||||||||||||||||||
| Impairment losses | 68,901 | - | 68,901 | 100.00 | % | |||||||||||||||||||||
| Loss from unconsolidated joint ventures | 148,329 | 7,011 | 141,318 | 2,015.66 | % | |||||||||||||||||||||
|
Other Income:
|
||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | 84 | 89.36 | % | |||||||||||||||||||||
| Gains from investments in securities | 2,400 | 2,198 | 202 | 9.19 | % | |||||||||||||||||||||
|
Interest and other income (loss)
|
7,620 | 14,430 | (6,810) | (47.19) | % | |||||||||||||||||||||
| Gains on sales of real estate | 1,932 | 517 | 1,415 | 273.69 | % | |||||||||||||||||||||
| Other Expenses: | ||||||||||||||||||||||||||
|
Add:
|
||||||||||||||||||||||||||
| Depreciation and amortization expense | 236,147 | 222,890 | 13,257 | 5.95 | % | |||||||||||||||||||||
|
Transaction costs
|
1,431 | 188 | 1,243 | 661.17 | % | |||||||||||||||||||||
|
Payroll and related costs from management services contracts
|
3,821 | 3,649 | 172 | 4.71 | % | |||||||||||||||||||||
|
General and administrative expense
|
36,188 | 33,352 | 2,836 | 8.50 | % | |||||||||||||||||||||
| Other Revenue: | ||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
|
Direct reimbursements of payroll and related costs from management services contracts
|
3,821 | 3,649 | 172 | 4.71 | % | |||||||||||||||||||||
|
Development and management services revenue
|
9,317 | 6,770 | 2,547 | 37.62 | % | |||||||||||||||||||||
| Net Operating Income ("NOI") | $ | 517,008 | $ | 511,078 | $ | 5,930 | 1.16 | % | ||||||||||||||||||
BPLP
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
|||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net Income (Loss) Attributable to Boston Properties Limited Partnership | $ | (130,077) | $ | 94,919 | $ | (224,996) | (237.04) | % | ||||||||||||||||||
| Net Income Attributable to Noncontrolling Interests: | ||||||||||||||||||||||||||
|
Noncontrolling interests in property partnerships
|
17,853 | 15,237 | 2,616 | 17.17 | % | |||||||||||||||||||||
| Net Income (Loss) | (112,224) | 110,156 | (222,380) | (201.88) | % | |||||||||||||||||||||
|
Other Expenses:
|
||||||||||||||||||||||||||
|
Add:
|
||||||||||||||||||||||||||
|
Interest expense
|
164,299 | 163,194 | 1,105 | 0.68 | % | |||||||||||||||||||||
| Impairment losses | 65,988 | - | 65,988 | 100.00 | % | |||||||||||||||||||||
| Loss from unconsolidated joint ventures | 148,329 | 7,011 | 141,318 | 2,015.66 | % | |||||||||||||||||||||
|
Other Income:
|
||||||||||||||||||||||||||
|
Less:
|
||||||||||||||||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | 84 | 89.36 | % | |||||||||||||||||||||
| Gains from investments in securities | 2,400 | 2,198 | 202 | 9.19 | % | |||||||||||||||||||||
|
Interest and other income (loss)
|
7,620 | 14,430 | (6,810) | (47.19) | % | |||||||||||||||||||||
| Gains on sales of real estate | 1,932 | 517 | 1,415 | 273.69 | % | |||||||||||||||||||||
| Other Expenses: | ||||||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Depreciation and amortization expense | 234,444 | 221,186 | 13,258 | 5.99 | % | |||||||||||||||||||||
|
Transaction costs
|
1,431 | 188 | 1,243 | 661.17 | % | |||||||||||||||||||||
|
Payroll and related costs from management services contracts
|
3,821 | 3,649 | 172 | 4.71 | % | |||||||||||||||||||||
|
General and administrative expense
|
36,188 | 33,352 | 2,836 | 8.50 | % | |||||||||||||||||||||
| Other Revenue: | ||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
|
Direct reimbursements of payroll and related costs from management services contracts
|
3,821 | 3,649 | 172 | 4.71 | % | |||||||||||||||||||||
|
Development and management services revenue
|
9,317 | 6,770 | 2,547 | 37.62 | % | |||||||||||||||||||||
| Net Operating Income ("NOI") | $ | 517,008 | $ | 511,078 | $ | 5,930 | 1.16 | % | ||||||||||||||||||
Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024
The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 150 properties totaling approximately 42.0 million net rentable square feet, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or placed in-service on or prior to July 1, 2024 and owned and in-service through September 30, 2025. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in or held for development or redevelopment after July 1, 2024 or disposed of on or prior to September 30, 2025. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the three months ended September 30, 2025 and 2024 with respect to the properties that were acquired, placed in-service, in or held for development or redevelopment, or sold. We did not acquire any properties during the three months ended September 30, 2025 and 2024.
| Same Property Portfolio |
Properties Placed In-Service Portfolio |
Properties in or Held for Development or Redevelopment Portfolio |
Properties Sold Portfolio | Total Property Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 |
Increase/ (Decrease) |
% Change |
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
Increase/ (Decrease) |
% Change |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental Revenue: (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Lease Revenue (Excluding Termination Income)
|
$ | 778,973 | $ | 765,674 | $ | 13,299 | 1.74 | % | $ | 16,784 | $ | 3,577 | $ | 546 | $ | 6,308 | $ | - | $ | (10) | $ | 796,303 | $ | 775,549 | $ | 20,754 | 2.68 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Termination Income
|
1,241 | 5,140 | (3,899) | (75.86) | % | - | - | - | 6,980 | - | - | 1,241 | 12,120 | (10,879) | (89.76) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Lease Revenue
|
780,214 | 770,814 | 9,400 | 1.22 | % | 16,784 | 3,577 | 546 | 13,288 | - | (10) | 797,544 | 787,669 | 9,875 | 1.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parking and Other Revenue | 34,818 | 32,779 | 2,039 | 6.22 | % | 11 | 81 | (8) | 1,080 | - | - | 34,821 | 33,940 | 881 | 2.60 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Rental Revenue (1) | 815,032 | 803,593 | 11,439 | 1.42 | % | 16,795 | 3,658 | 538 | 14,368 | - | (10) | 832,365 | 821,609 | 10,756 | 1.31 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Operating Expenses | 317,950 | 315,681 | 2,269 | 0.72 | % | 4,543 | 2,065 | 3,148 | 4,060 | - | 103 | 325,641 | 321,909 | 3,732 | 1.16 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss), Excluding Residential and Hotel | 497,082 | 487,912 | 9,170 | 1.88 | % | 12,252 | 1,593 | (2,610) | 10,308 | - | (113) | 506,724 | 499,700 | 7,024 | 1.41 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Net Operating Income (2) | 6,750 | 6,129 | 621 | 10.13 | % | - | - | - | - | - | - | 6,750 | 6,129 | 621 | 10.13 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hotel Net Operating Income (2) | 3,534 | 5,249 | (1,715) | (32.67) | % | - | - | - | - | - | - | 3,534 | 5,249 | (1,715) | (32.67) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss) | $ | 507,366 | $ | 499,290 | $ | 8,076 | 1.62 | % | $ | 12,252 | $ | 1,593 | $ | (2,610) | $ | 10,308 | $ | - | $ | (113) | $ | 517,008 | $ | 511,078 | $ | 5,930 | 1.16 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________
(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 provide investors with information regarding our performance that is not immediately apparent from the most directly comparable 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 55. Residential Net Operating Income for the three months ended September 30, 2025 and 2024 is comprised of Residential Revenue of $12,845 and $12,117 less Residential Expenses of $6,095 and $5,988, respectively. Hotel Net Operating Income for the three months ended September 30, 2025 and 2024 is comprised of Hotel Revenue of $13,162 and $15,082 less Hotel Expenses of $9,628 and $9,833, respectively, per the Consolidated Statements of Operations.
Same Property Portfolio
Lease Revenue (Excluding Termination Income)
Lease revenue (excluding termination income) from the Same Property Portfolio increased by approximately $13.3 million for the three months ended September 30, 2025 compared to 2024. The increase was a result of our average revenue per square foot increasing by approximately $1.80, contributing approximately $15.4 million, partially offset by approximately $2.1 million due to our average occupancy decreasing from 88.2% to 87.9%.
Termination Income
Termination income decreased by approximately $3.9 million for the three months ended September 30, 2025 compared to 2024.
Termination income for the three months ended September 30, 2025 related to three clients across the Same Property Portfolio and totaled approximately $1.2 million.
Termination income for the three months ended September 30, 2024 related to seven clients across the Same Property Portfolio and totaled approximately $5.1 million.
Parking and Other Revenue
Parking and other revenue increased by approximately $2.0 million for the three months ended September 30, 2025 compared to 2024. Parking and other revenue increased by approximately $0.6 million and $1.4 million, respectively. The increase in parking revenue was primarily due to an increase in monthly parking. The increase in other revenue is primarily associated with an increase in insurance proceeds.
Real Estate Operating Expenses
Real estate operating expenses from the Same Property Portfolio increased by approximately $2.3 million, or 0.7%, for the three months ended September 30, 2025 compared to 2024, due primarily to an increase in real estate operating expenses of approximately $9.0 million, or 5.3%, partially offset by a decrease in real estate taxes of approximately $6.7 million, or 4.6%. The decrease in real estate taxes was primarily due to tax abatements realized in the Los Angeles region.
Properties Placed In-Service Portfolio
The table below lists the properties that were placed in-service or partially placed in-service between July 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses from our Properties Placed In-Service Portfolio increased by approximately $13.1 million and $2.5 million, respectively, for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Quarter Initially Placed In-Service | Quarter Fully Placed In-Service | Rental Revenue | Real Estate Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 180 CityPoint | Third Quarter, 2023 | Third Quarter, 2024 | 329,195 | $ | 3,799 | $ | 3,627 | $ | 172 | $ | 1,694 | $ | 1,525 | $ | 169 | |||||||||||||||||||||||||||||||||||||||||
| 103 CityPoint | Fourth Quarter, 2023 | Fourth Quarter, 2024 | 112,841 | 1 | 1 | - | 355 | 155 | 200 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reston Next Office Phase II | Third Quarter, 2024 | Third Quarter, 2025 | 86,629 | 61 | - | 61 | 227 | 11 | 216 | |||||||||||||||||||||||||||||||||||||||||||||||
| 300 Binney Street | Fourth Quarter, 2024 | Fourth Quarter, 2024 | 239,908 | 11,952 | - | 11,952 | 1,855 | - | 1,855 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reston Next Retail | First Quarter, 2025 | N/A | 30,000 | - | - | - | 13 | - | 13 | |||||||||||||||||||||||||||||||||||||||||||||||
| 1050 Winter Street | Second Quarter, 2025 | Third Quarter, 2025 | 162,274 | 982 | 30 | 952 | 399 | 374 | 25 | |||||||||||||||||||||||||||||||||||||||||||||||
| 960,847 | $ | 16,795 | $ | 3,658 | $ | 13,137 | $ | 4,543 | $ | 2,065 | $ | 2,478 | ||||||||||||||||||||||||||||||||||||||||||||
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 July 1, 2024 and September 30, 2025. Rental revenue and real estate operating expenses from our Properties in or Held for Development or Redevelopment Portfolio decreased by approximately $13.8 million and $0.9 million, respectively, for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Date Commenced Held for Development / Redevelopment | Rental Revenue | Real Estate Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Held for Development or Redevelopment (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Lexington Office Park | March 31, 2023 | 167,000 | $ | 252 | $ | 248 | $ | 4 | $ | 419 | $ | 446 | $ | (27) | ||||||||||||||||||||||||||||||||||||
| 15825 Shady Grove Road | March 31, 2024 | 79,000 | - | 57 | (57) | 93 | 130 | (37) | ||||||||||||||||||||||||||||||||||||||||||
| 1100 Winter Street (2) | September 30, 2024 | 293,000 | 822 | 7,230 | (6,408) | 860 | 907 | (47) | ||||||||||||||||||||||||||||||||||||||||||
| Kingstowne One | September 30, 2024 | 154,000 | 398 | 419 | (21) | 348 | 324 | 24 | ||||||||||||||||||||||||||||||||||||||||||
| Reston Corporate Center | January 1, 2025 | 261,000 | - | 3,095 | (3,095) | 433 | 888 | (455) | ||||||||||||||||||||||||||||||||||||||||||
| Reservoir Place (3) | March 31, 2025 | 361,000 | (934) | 3,319 | (4,253) | 995 | 1,365 | (370) | ||||||||||||||||||||||||||||||||||||||||||
| 1,315,000 | $ | 538 | $ | 14,368 | $ | (13,830) | $ | 3,148 | $ | 4,060 | $ | (912) | ||||||||||||||||||||||||||||||||||||||
(1)These properties are no longer considered "in-service" because each property's occupied percentage is less than 50% and we anticipate a future development/redevelopment of the property. A property will be considered held for development or redevelopment until the last client has vacated the property and the property is no longer revenue producing.
(2)Rental revenue for the three months ended September 30, 2024 includes approximately $6.4 million of termination income.
(3)Reservoir Place is an approximately 526,000 square foot office building, of which approximately 165,000 square feet remains in-service. Rental revenue for the three months ended September 30, 2024 includes approximately $0.6 million of termination income.
Properties Sold Portfolio
The table below lists the properties we sold between July 1, 2024 and September 30, 2025. Rental revenue from our Properties Sold Portfolio increased by approximately $10,000 and real estate operating expenses decreased by approximately $0.1 million for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Rental Revenue | Real Estate Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Date Sold | Property Type | Square Feet | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue | June 27, 2025 | Office | 30,000 | $ | - | $ | (10) | $ | 10 | $ | - | $ | 103 | $ | (103) | |||||||||||||||||||||||||||||||||||||||||
Residential Net Operating Income
Net operating income for our residential same properties increased by approximately $0.6 million for the three months ended September 30, 2025 compared to 2024.
The following reflects our occupancy and rate information, by region, for our residential same properties for the three months ended September 30, 2025 and 2024.
| Average Monthly Rental Rate (1) | Average Rental Rate Per Occupied Square Foot | Average Physical Occupancy (2) | Average Economic Occupancy (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Region | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | ||||||||||||||||||||||||||||||||||||||
| Boston | $ | 3,634 | $ | 3,513 | 3.4 | % | $ | 5.77 | $ | 5.61 | 2.9 | % | 95.7 | % | 94.6 | % | 1.2 | % | 95.8 | % | 94.3 | % | 1.6 | % | ||||||||||||||||||||||||||
| San Francisco | $ | 3,004 | $ | 2,968 | 1.2 | % | $ | 3.80 | $ | 3.76 | 1.1 | % | 90.9 | % | 89.9 | % | 1.1 | % | 89.0 | % | 87.5 | % | 1.7 | % | ||||||||||||||||||||||||||
| Washington, DC | $ | 3,081 | $ | 2,869 | 7.4 | % | $ | 3.19 | $ | 2.95 | 8.1 | % | 95.3 | % | 96.0 | % | (0.7) | % | 95.2 | % | 95.9 | % | (0.7) | % | ||||||||||||||||||||||||||
(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 Average 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.
Hotel Net Operating Income
The Boston Marriott Cambridge hotel had net operating income of approximately $3.5 million for the three months ended September 30, 2025, representing a decrease of approximately $1.7 million compared to the three months ended September 30, 2024.
The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the three months ended September 30, 2025 and 2024.
| 2025 | 2024 |
Change (%) |
||||||||||||||||||
| Occupancy | 82.8 | % | 82.7 | % | 0.1 | % | ||||||||||||||
| Average daily rate | $ | 328.68 | $ | 356.44 | (7.8) | % | ||||||||||||||
| REVPAR | $ | 272.00 | $ | 294.86 | (7.8) | % | ||||||||||||||
Other Operating Revenue and Expense Items
Development and Management Services Revenue
Development and management services revenue increased by approximately $2.5 million for the three months ended September 30, 2025 compared to 2024. Development services revenue and management services revenue increased by approximately $1.2 million and $1.3 million, respectively. The increase in development services revenue was primarily related to an increase in fees associated with tenant improvement projects in the Boston and New York regions. The increase in management services revenue was primarily related to leasing commission fees earned from a third-party owned building in New York City.
General and Administrative Expense
General and administrative expense increased by approximately $2.8 million for the three months ended September 30, 2025 compared to 2024 primarily due to increases in compensation expense of approximately $2.5 million and approximately $0.3 million increase in other general and administrative expenses. The increase in compensation expense primarily related to an approximately $1.2 million increase in health insurance costs and an approximately $0.2 million increase in the value of our deferred compensation plan.
Wages directly related to the development of rental properties are capitalized and included in real estate assets 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 September 30, 2025 and 2024 were approximately $3.7 million and $4.2 million, respectively. These costs are not included in the general and administrative expenses discussed above.
Transaction Costs
Transaction costs increased by approximately $1.2 million for the three months ended September 30, 2025 compared to 2024. 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
BXP
Depreciation and amortization expense increased by approximately $13.3 million for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Portfolio |
Depreciation and Amortization for the three months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Same Property Portfolio | $ | 228,757 | $ | 218,679 | 10,078 | |||||||||||||||
| Properties Placed In-Service Portfolio | 5,289 | 1,703 | 3,586 | |||||||||||||||||
| Properties in or Held for Development or Redevelopment Portfolio | 2,101 | 2,489 | (388) | |||||||||||||||||
| Properties Sold Portfolio | - | 19 | (19) | |||||||||||||||||
| $ | 236,147 | $ | 222,890 | $ | 13,257 | |||||||||||||||
BPLP
Depreciation and amortization expense increased by approximately $13.3 million for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Portfolio |
Depreciation and Amortization for the three months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Same Property Portfolio | $ | 227,054 | $ | 216,975 | $ | 10,079 | ||||||||||||||
| Properties Placed In-Service Portfolio | 5,289 | 1,703 | 3,586 | |||||||||||||||||
| Properties in or Held for Development or Redevelopment Portfolio | 2,101 | 2,489 | (388) | |||||||||||||||||
| Properties Sold Portfolio | - | 19 | (19) | |||||||||||||||||
| $ | 234,444 | $ | 221,186 | $ | 13,258 | |||||||||||||||
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 September 30, 2025 compared to 2024, loss from unconsolidated joint ventures increased by approximately $141.3 million primarily due to the recognition of a non-cash impairment loss of approximately $145.1 million, partially offset by an approximately $2.2 million gain on the sale of Beach Cities Media Campus during the three months ended September 30, 2025 (See Note 5 to the Consolidated Financial Statements). These items did not occur during the three months ended September 30, 2024.
Gains on Sales of Real Estate
Gains on sales of real estate increased by approximately $1.4 million for the three months ended September 30, 2025 compared to 2024. For both periods the gains on sales related to the sale of real estate that occurred in prior periods.
Interest and Other Income (Loss)
Interest and other income (loss) decreased by approximately $6.8 million for the three months ended September 30, 2025 compared to 2024, due primarily to a decrease in our outstanding cash balances and corresponding lower interest income and an approximately $1.3 million reserve related to the unpaid default interest on one of our Related Party Notes Receivable (See Note 14 to the Consolidated Financial Statements).
Gains from Investments in Securities
Gains from investments in securities for the three months ended September 30, 2025 and 2024 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 their respective deferred compensation plans, eligible officers and non-employee directors are permitted to defer a portion of their current compensation on a pre-tax basis and receive a tax-deferred return on the amounts deferred based on the performance of specific investments selected by participating officers and non-employee directors. 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 participants under our deferred compensation plans with equivalent assets and thereby limit our market risk. The performance of these investments is recorded as gains from investments in securities. During the three months ended September 30, 2025 and 2024, we recognized gains of approximately $2.4 million and $2.2 million, respectively, on these investments. By comparison, our general and administrative expense increased by approximately $2.4 million and $2.2 million during the three months ended September 30, 2025 and 2024, respectively, as a result of increases in our liability under our deferred compensation plans that was associated with the performance of the specific investments selected by participating officers and former non-employee directors of BXP.
Unrealized Gain on Non-Real Estate Investments
We invest in non-real estate investments, which primarily consist of environmentally-focused investment funds. During the three months ended September 30, 2025 and 2024, we recognized an unrealized gain of approximately $178,000 and $94,000, respectively, due to the observable changes in the fair value of the investments.
Impairment Losses
During the three months ended September 30, 2025, inconjunction with our strategy to sell non-core assets, we evaluated our properties that were under negotiation for sale with third-parties (See Note 2 to the Consolidated Financial Statements). There were no impairment losses during the three months ended September 30, 2024.
BXP
Impairment losses for the three months ended September 30, 2025, related to the following:
| Name | Location | Property Type | Impairment Loss | |||||||||||||||||
| (in thousands) | ||||||||||||||||||||
|
Plaza at Almaden (1)
|
San Jose, CA | Land | $ | 25,515 | ||||||||||||||||
| 1330 Connecticut Avenue | Washington, DC | Office | 20,358 | |||||||||||||||||
| Shady Grove - Parcel 3 | Rockville, MD | Land | 13,913 | |||||||||||||||||
| North First Business Park | San Jose, CA | Office | 9,115 | |||||||||||||||||
| $ | 68,901 | |||||||||||||||||||
(1)See Note 14 to the Consolidated Financial Statements.
BPLP
Impairment losses for the three months ended September 30, 2025, related to the following:
| Name | Location | Property Type | Impairment Loss | |||||||||||||||||
| (in thousands) | ||||||||||||||||||||
|
Plaza at Almaden (1)
|
San Jose, CA | Land | $ | 25,515 | ||||||||||||||||
| 1330 Connecticut Avenue | Washington, DC | Office | 17,460 | |||||||||||||||||
| Shady Grove - Parcel 3 | Rockville, MD | Land | 13,913 | |||||||||||||||||
| North First Business Park | San Jose, CA | Office | 9,100 | |||||||||||||||||
| $ | 65,988 | |||||||||||||||||||
(1)See Note 14 to the Consolidated Financial Statements.
Interest Expense
Interest expense increased by approximately $1.1 million for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Component |
Change in interest expense for the three months ended September 30, 2025 compared to September 30, 2024
|
|||||||
| (in thousands) | ||||||||
| Increases to interest expense due to: | ||||||||
| Issuance of $850 million in aggregate principal of 5.750% senior notes due 2035 on August 26, 2024 | $ | 7,471 | ||||||
| Increase in interest associated with unsecured term loans and the unsecured credit facility, net (1) | 4,544 | |||||||
| Unsecured commercial paper | 2,049 | |||||||
| Issuance of $1.0 billion in aggregate principal of 2.000% exchangeable senior notes due 2030 on September 29, 2025 (2) | 111 | |||||||
| Other interest expense (excluding senior notes) | 66 | |||||||
| Total increases to interest expense | 14,241 | |||||||
| Decreases to interest expense due to: | ||||||||
| Repayment of $850 million in aggregate principal of 3.200% senior notes due 2025 on January 15, 2025 | (6,880) | |||||||
| Mortgage loan financings (1) | (4,145) | |||||||
| Increase in capitalized interest related to development projects | (1,867) | |||||||
| Decrease in interest due to finance leases | (188) | |||||||
| Amortization expense of financing fees | (56) | |||||||
| Total decreases to interest expense | (13,136) | |||||||
| Total change in interest expense | $ | 1,105 | ||||||
(1)Includes, if applicable, fair value and swap adjustments (See Note 7to the Consolidated Financial Statements).
(2)See Note 6 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 three months ended September 30, 2025 and 2024 was approximately $13.5 million and $11.6 million, respectively. These costs are not included in the interest expense referenced above.
At September 30, 2025, our variable rate debt consisted of (1) BPLP's $2.95 billion 2025 Credit Facility and (2) BPLP's $750.0 million Commercial Paper Program. The 2025 Credit Facility consists of (1) the $2.25 billion Revolving Facility and (2) the $700.0 million Term Loan Facility. As of September 30, 2025, there were $700.0 million and $750.0 million outstanding under the 2025 Credit Facility and Commercial Paper Program, respectively.
In addition, we have the $100.0 million 2024 Unsecured Term Loan and $800.0 million of mortgage notes collateralized by Santa Monica Business Park and 325 Main Street, 355 Main Street, 90 Broadway and Cambridge East Garage (also known as Kendall Center Green Garage) properties that bear interest at variable rates, which have all been hedged with interest rates swaps to fix SOFR for all or a portion of the applicable debt term.
For a summary of our consolidated debt as of September 30, 2025 refer to the heading "Liquidity and Capital Resources-Debt"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 $2.6 million for the three months ended September 30, 2025 compared to 2024, as detailed below.
| Property |
Noncontrolling Interests in Property Partnerships for the three months ended September 30,
|
|||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| 767 Fifth Avenue (the General Motors Building) | $ | 3,008 | $ | 2,954 | $ | 54 | ||||||||||||||
| 7 Times Square (formerly Times Square Tower) | 2,198 | 2,326 | (128) | |||||||||||||||||
| 601 Lexington Avenue (1) | 1,186 | 2,509 | (1,323) | |||||||||||||||||
| 100 Federal Street | 3,091 | 3,038 | 53 | |||||||||||||||||
| Atlantic Wharf Office Building (2) | 4,529 | 3,706 | 823 | |||||||||||||||||
| 343 Madison Avenue (3) | - | (33) | 33 | |||||||||||||||||
| 300 Binney Street (4) | 3,632 | 277 | 3,355 | |||||||||||||||||
| 290 Binney Street (5) | 209 | 460 | (251) | |||||||||||||||||
| $ | 17,853 | $ | 15,237 | $ | 2,616 | |||||||||||||||
_______________
(1)The decrease was primarily attributable to an increase in depreciation expense.
(2)The increase was primarily attributable to an increase in lease revenue from our clients.
(3)On August 27, 2025, we acquired our partner's 45% ownership interest (See Note 9to the Consolidated Financial Statements).
(4)Property was fully placed in service on October 31, 2024.
(5)Property is currently in development.
Noncontrolling Interest-Common Units of the Operating Partnership
For BXP, noncontrolling interest-common units of the Operating Partnership decreased by approximately $22.6 million for the three months ended September 30, 2025 compared to 2024 due primarily to a decrease in allocable income, which was the result of recognizing greater non-cash impairment losses during 2025, as well as a decrease in the noncontrolling interest's ownership. 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 on maturing debt, including:
•$100.0 million of principal outstanding on the 2024 Unsecured Term Loan due September 26, 2026, for which we have two, one-year extension options, subject to customary conditions,
•$1.0 billion of 3.650% unsecured senior notes due February 1, 2026,
•$1.0 billion of 2.750% unsecured senior notes due October 1, 2026 and
•amounts that become due under the Commercial Paper Program;
•fund capital calls from our unconsolidated joint venture investments to fund development costs, capital improvements, leasing costs and debt principal repayment;
•fund mezzanine debt obligations;
•fund development and redevelopment costs;
•fund capital expenditures, including major renovations, tenant improvements and leasing costs;
•fund possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests; and
•make the minimum distribution required to enable BXP to maintain its REIT qualification under the Code.
We expect to satisfy these needs using one or more of the following:
•cash flow from operations;
•distributions 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 (which may require guarantees by BPLP);
•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 institutional investors;
•third-party fees generated by our property management, leasing, development and construction businesses; 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 use BPLP's 2025 Credit Facility primarily as a bridge facility to fund acquisition opportunities, refinance outstanding indebtedness, fund short-term development costs and for working capital. We also use BPLP's 2025 Credit Facility to backstop the Commercial Paper Program. Although we may seek to fund our development projects with construction loans, which may require guarantees by BPLP, the source of financing for each particular project ultimately depends on several factors, including, among others, the project's size and duration, whether the project is funded and owned by a joint venture, the extent of pre-leasing, our available cash and access to cost effective capital at the given time.
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, interest earned on cash deposits and, from time to time, the sale of assets. We believe these capital sources will continue to meet our short-term liquidity needs. A material adverse change in one or more sources of capital may adversely affect our net cash flows and our ability to repay or refinance existing indebtedness as it matures.
Balance Sheet & Financing Activity
On September 8, 2025, our Board of Directors declared a quarterly cash dividend of $0.70 per share of BXP common stock for the period of July 1, 2025 to September 30, 2025. This declaration reset the recurring quarterly dividend to $0.70 per share from $0.98 per share to, among other things, more closely align our annual dividend payout to our taxable income, allow us to retain incremental cash per quarter, and support longer-term growth.
On September 29, 2025, we completed the issuance of $1.0 billion aggregate principal amount of 2.00% exchangeable senior notes due October 1, 2030, generating approximately $940.1 million of net proceeds after deducting transaction costs, including costs related to entering into certain capped call agreements (See Note 6 to the Consolidated Financial Statements).
As of September 30, 2025, our share of unconsolidated joint venture debt maturing through November 2026 was approximately $325.4 million. This debt matures at different times through November 2026, and we expect to fund the repayment of this debt through a combination of refinancings, available cash balances, proceeds from asset sales, draws on BPLP's Revolving Facility, and/or proceeds from other secured or unsecured debt transactions.
As of October 31, 2025, we had available cash including proceeds from the $1.0 billion issuance of unsecured exchangeable senior notes completed on September 29, 2025 and interest earned on cash deposits of approximately $683.8 million (of which approximately $102.2 million was 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 (after deducting the $750.0 million being used as a backstop for the Commercial Paper Program) as of October 31, 2025, and our available cash are sufficient to fund our near term capital needs on existing development and redevelopment projects, repay our maturing indebtedness when due (if not refinanced or extended), satisfy our REIT distribution requirements (see "REIT Tax Distribution Considerations" below) and still allow us to act opportunistically on attractive investment opportunities.
From January 1, 2025 through October 31, 2025, we sold four properties for a gross sales price of approximately $63.6 million. Our share of the net proceeds from these sales was approximately $57.0 million in 2025.
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 then-current interest rates, the overall conditions in the public and private debt and equity markets, and our existing and expected leverage at the time, we may decide to access one or more of these capital sources. Doing so may result in greater cash and cash equivalents pending our use of the proceeds.
We have not sold any shares under BXP's $600.0 million "at the market" equity offering program.
Construction & Redevelopment Activities
As of September 30, 2025, we have eight properties under development or redevelopment. Our share of the estimated total investment for these projects is approximately $3.9 billion, of which approximately $2.7 billion remains to be funded through 2031 (see table below for properties under construction/redevelopment). The commercial space in the pipeline, which excludes residential units, was approximately 43% pre-leased as of October 31, 2025.
The following table presents information on properties under construction/redevelopment as of September 30, 2025 (dollars in thousands):
| Financings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction/Redevelopment Properties | Estimated Stabilization Date | Location | # of Buildings | Estimated Square Feet | Investment to Date (1)(2)(3) | Estimated Total Investment (1)(2) | Total Available (1) |
Outstanding at September 30, 2025
(1)
|
Estimated Future Equity Requirement (1)(2)(4) | Percentage Leased (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Office | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 725 12th Street (Redevelopment) | Q4 2030 | Washington, DC | 1 | 320,000 | $ | 76,838 | $ | 349,600 | $ | - | $ | - | $ | 272,762 | 87 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 343 Madison Avenue | Q2 2031 | New York, NY | 1 | 930,000 | 183,665 | 1,971,000 | - | - | 1,787,335 | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Office Properties under Construction/Redevelopment | 2 | 1,250,000 | 260,503 | 2,320,600 | - | - | 2,060,097 | 22 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laboratory/Life Sciences | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 290 Binney Street (55% ownership) | Q2 2026 | Cambridge, MA | 1 | 573,000 | 335,288 | 508,000 | - | - | 172,712 | 100 | % | (6) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 651 Gateway (50% ownership) (Redevelopment) | Q3 2027 | South San Francisco, CA | 1 | 327,000 | 134,783 | 167,100 | - | - | 32,317 | 21 | % | (7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Laboratory/Life Sciences Properties under Construction/Redevelopment | 2 | 900,000 | 470,071 | 675,100 | - | - | 205,029 | 71 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue (312 units) (20% ownership) | Q2 2028 | Lexington, MA | 1 | 288,000 | 8,460 | 35,900 | 19,747 | - | 7,693 | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue - Retail | - | 2,100 | - | - | - | - | - | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 121 Broadway Street (439 units) | Q2 2029 | Cambridge, MA | 1 | 492,000 | 221,830 | 597,800 | - | - | 375,970 | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 290 Coles Street (670 Units) (19.46% ownership) | Q3 2029 | Jersey City, NJ | 1 | 547,000 | 20,503 | 88,700 | 56,400 | - | 11,797 | - | % | (8) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 290 Coles Street - Retail | - | 13,000 | - | - | - | - | - | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Residential Properties under Construction | 3 | 1,342,100 | 250,793 | 722,400 | 76,147 | - | 395,460 | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reston Next Retail | Q4 2026 | Reston, VA | 1 | 30,000 | 26,823 | 31,600 | - | - | 4,777 | 70 | % | (9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Retail Properties under Construction | 1 | 30,000 | 26,823 | 31,600 | - | - | 4,777 | 70 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Properties under Construction/Redevelopment | 8 | 3,522,100 | $ | 1,008,190 | $ | 3,749,700 | $ | 76,147 | $ | - | $ | 2,665,363 | 43 | % | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
___________
(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 September 30, 2025.
(3)Includes approximately $79.6 million of unpaid but accrued construction costs and leasing commissions.
(4)Excludes approximately $79.6 million of unpaid but accrued construction costs and leasing commissions.
(5)Represents percentage leased as of October 31, 2025, including leases with future commencement dates.
(6)The project budget reflects our 55% share of joint venture costs related to 290 Binney Street. We have the sole obligation to construct an underground electrical vault for an estimated gross cost of $183.9 million. We have entered into a contract to sell the electrical vault to a third-party for a fixed price of $84.1 million upon completion. The net investment of $99.8 million will be included in our outside basis in 290 Binney Street. We have invested $116.0 million for the vault as of September 30, 2025.
(7)On January 1, 2025, in accordance with our accounting policy, we ceased interest capitalization of our equity method investment. As of September 30, 2025, the joint venture partner, which is also the managing partner, classifies the project as under construction. As such, we continue to reflect the project as under construction. As of September 30, 2025, this property was 27% placed in-service.
(8)On March 5, 2025, we acquired a 19.46% interest in 290 Coles Street. The budget represents our 19.46% ownership of the project budget and financings which includes our share of preferred equity. We contributed $20.0 million of common equity at closing. In addition, we committed to provide up to $65.0 million in preferred equity accruing at a 13.0% IRR. As of September 30, 2025, approximately $11.9 million of preferred equity has been contributed.
(9)On January 16, 2025, this project was partially placed in-service.
(10)Percentage leased excludes the residential units.
REIT Tax Distribution Considerations
Dividend
As a REIT, BXP 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. 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.
Holders of common and LTIP units (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.
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 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 $938.7 million and $1.5 billion at September 30, 2025 and 2024, respectively, representing a decrease of approximately $532.8 million. The following table sets forth changes in cash flows:
| Nine months ended September 30, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net cash provided by operating activities | $ | 837,405 | $ | 850,755 | $ | (13,350) | |||||||||||
| Net cash used in investing activities | (988,228) | (850,787) | (137,441) | ||||||||||||||
| Net cash used in financing activities | (245,644) | (141,051) | (104,593) | ||||||||||||||
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 7.8 years as of September 30, 2025, with occupancy rates historically in the range of approximately 86% to 92%. Generally, our properties generate a relatively consistent stream of cash flows 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. Cash used in investing activities for the nine monthsended September 30, 2025 and September 30, 2024 is detailed below:
| Nine months ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Construction in progress (1) | $ | (500,537) | $ | (469,948) | |||||||
| Building, pre-development and other capital improvements (2) | (171,660) | (118,411) | |||||||||
| Tenant improvements | (243,194) | (178,835) | |||||||||
| Proceeds from sale of real estate (3) | 21,840 | 517 | |||||||||
| Acquisition of real estate upon consolidation of unconsolidated joint ventures (net of cash) (4) | - | 6,086 | |||||||||
| Capital contributions to unconsolidated joint ventures (5) | (118,524) | (87,498) | |||||||||
| Capital distributions from unconsolidated joint ventures (6) | 29,211 | - | |||||||||
| Investment in non-real estate investments | (2,060) | (1,500) | |||||||||
| Issuance of note receivables (including related party) | (4,026) | (2,223) | |||||||||
| Investments in securities, net | 722 | 1,025 | |||||||||
| Net cash used in investing activities | $ | (988,228) | $ | (850,787) | |||||||
Cash used in investing activities changed primarily due to the following:
(1)Construction in progress for the nine months ended September 30, 2025 included ongoing expenditures associated with Reston Next Office Phase II, Reston Next Retail and 1050 Winter Street, which were partially or fully placed in-service during the nine months ended September 30, 2025. In addition, we incurred costs associated with our continued development/redevelopment of 290 Binney Street, 121 Broadway, 725 12th Street and 343 Madison Avenue.
Construction in progress for the nine months ended September 30, 2024 included ongoing expenditures associated with 760 Boylston Street and 180 CityPoint, which were fully placed in-service during the nine months ended September 30, 2024, and 103 CityPoint that was partially placed in-service during 2023. In addition, we incurred costs associated with our continued development/redevelopment of Reston Next Office Phase II that was partially placed in-service, and 290 Binney Street, 300 Binney Street and 121 Broadway.
(2)Building, pre-development and other capital improvements for the nine months ended September 30, 2025 and September 30, 2024 included approximately $39.4 million and $34.5 million, respectively, of pre-development expenditures associated with the 343 Madison Avenue project. Beginning July 31, 2025, costs associated with the continued development of 343 Madison Avenue are included within construction in progress.
(3)Proceeds from sale of real estate for the nine months ended September 30, 2025 consisted of approximately $21.8 million of proceeds from the sale of the land at 17 Hartwell Avenue. On June 27, 2025, we entered into a new joint venture for the redevelopment of 17 Hartwell Avenue (See Notes 3 and 5 to the Consolidated Financial Statements).
(4)On January 8, 2024, we completed the acquisition of our joint venture partner's 50% economic ownership interest in the joint venture that owns 901 New York Avenue, located in Washington, DC, for a gross purchase price of $10.0 million and we acquired net working capital, including cash and cash equivalents of approximately $16.1 million.
(5)Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2025 consisted primarily of cash contributions of approximately $31.9 million, $24.3 million, $21.2 million and $14.1 million to our 290 Coles Street, 360 Park Avenue South, 751 Gateway, and 200 Fifth Avenue joint ventures, respectively. On March 5, 2025, we entered into a new joint venture for the development of 290 Coles Street (See Note 5 to the Consolidated Financial Statements).
Capital contributions to unconsolidated joint ventures for the nine months ended September 30, 2024 consisted primarily of cash contributions of approximately $27.5 million, $25.2 million, $11.8 million and $11.5 million to our 360 Park Avenue South, Gateway Commons, Platform 16 and Dock 72 joint ventures, respectively.
(6)Capital distributions from unconsolidated joint ventures for the nine months ended September 30, 2025 consisted of cash distributions totaling approximately $29.2 million from our Beach Cities Media Campus joint venture resulting from excess proceeds from the sale of the property.
Cash used in financing activities for the nine months ended September 30, 2025 totaled approximately $245.6 million. This amount consisted primarily of the repayment of BPLP's $850.0 million in aggregate principal amount of its 3.200% unsecured senior notes due January 15, 2025 and the payment of our regular dividends and distributions to our shareholders and unitholders, partially offset by the net proceeds from the issuance of BPLP's $1.0 billion in aggregate principal amount of its 2.00% unsecured exchangeable senior notes. The unsecured exchangeable senior notes are due October 2030 and net proceeds, including the purchase of the Capped Call Transactions, totaled approximately $940.1 million. Future debt payments are discussed below under the heading "Debt."
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):
| September 30, 2025 | |||||||||||||||||||||||
| Shares / Units Outstanding | Common Stock Equivalent | Equivalent Value (1) | |||||||||||||||||||||
| Common Stock | 158,400 | 158,400 | $ | 11,775,456 | |||||||||||||||||||
| Common Operating Partnership Units | 18,399 | 18,399 | 1,367,782 | (2) | |||||||||||||||||||
| Total Equity | 176,799 | $ | 13,143,238 | ||||||||||||||||||||
| Consolidated Debt | $ | 16,604,696 | |||||||||||||||||||||
| Add: | |||||||||||||||||||||||
| BXP's share of unconsolidated joint venture debt (3) | 1,372,439 | ||||||||||||||||||||||
| Subtract: | |||||||||||||||||||||||
| Partners' share of Consolidated Debt (4) | 1,363,861 | ||||||||||||||||||||||
| BXP's Share of Debt | $ | 16,613,274 | |||||||||||||||||||||
| Consolidated Market Capitalization | $ | 29,747,934 | |||||||||||||||||||||
| BXP's Share of Market Capitalization | $ | 29,756,512 | |||||||||||||||||||||
| Consolidated Debt/Consolidated Market Capitalization | 55.82 | % | |||||||||||||||||||||
| BXP's Share of Debt/BXP's Share of Market Capitalization | 55.83 | % | |||||||||||||||||||||
_______________
(1)Values are based on the closing price per share of BXP's common stock on the New York Stock Exchange on September 30, 2025 of $74.34.
(2)Includes long-term incentive plan units (including 2012 OPP Units and 2013 - 2022 MYLTIP Units but excludes the 2023 - 2025 MYLTIP Units because the three-year performance periods had not ended as of September 30, 2025).
(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 September 30, 2025, 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 - 2022 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, 2023 - 2025 MYLTIP Units are not included in this calculation as of September 30, 2025.
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 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-Debt" within "Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations."
Debt
For further discussion on the terms of our debt, including the unsecured exchangeable senior notes, 2025 Credit Facility, unsecured term loans and the Commercial Paper Program, see Note 6 to the Consolidated Financial Statements. The following table summarizes certain information with respect to our indebtedness outstanding as of September 30, 2025 and 2024 (dollars in thousands).
| Interest Rate | Amount | |||||||||||||||||||||||||||||||
| Stated | GAAP (1) | Maturity Date | 9/30/2025 | 9/30/2024 | ||||||||||||||||||||||||||||
| Unsecured Senior Notes (2) | ||||||||||||||||||||||||||||||||
| Unsecured Senior Notes (3) | 3.200 | % | 3.350 | % | January 15, 2025 | N/A | $ | 850,000 | ||||||||||||||||||||||||
| Unsecured Senior Notes | 3.650 | % | 3.766 | % | February 1, 2026 | $ | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||
| Unsecured Senior Notes | 2.750 | % | 3.495 | % | October 1, 2026 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 6.750 | % | 6.924 | % | December 1, 2027 | 750,000 | 750,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 4.500 | % | 4.628 | % | December 1, 2028 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 3.400 | % | 3.505 | % | June 21, 2029 | 850,000 | 850,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 2.900 | % | 2.984 | % | March 15, 2030 | 700,000 | 700,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 3.250 | % | 3.343 | % | January 30, 2031 | 1,250,000 | 1,250,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 2.550 | % | 2.671 | % | April 1, 2032 | 850,000 | 850,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 2.450 | % | 2.524 | % | October 1, 2033 | 850,000 | 850,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 6.500 | % | 6.619 | % | January 15, 2034 | 750,000 | 750,000 | |||||||||||||||||||||||||
| Unsecured Senior Notes | 5.750 | % | 5.842 | % | January 15, 2035 | 850,000 | 850,000 | |||||||||||||||||||||||||
| Total Principal Amount | 9,850,000 | 10,700,000 | ||||||||||||||||||||||||||||||
| Less: Unamortized discount and deferred financing costs, net | 46,664 | 57,967 | ||||||||||||||||||||||||||||||
| Carrying Amount | 9,803,336 | 10,642,033 | ||||||||||||||||||||||||||||||
| Unsecured Exchangeable Senior Notes | 2.000 | % | 2.496 | % | October 1, 2030 | 1,000,000 | N/A | |||||||||||||||||||||||||
| Less: Unamortized deferred financing costs | 24,920 | N/A | ||||||||||||||||||||||||||||||
| Carrying Amount | 975,080 | N/A | ||||||||||||||||||||||||||||||
| Unsecured Commercial Paper (4) | 4.63 | % | 4.64 | % | Various | 750,000 | 500,000 | |||||||||||||||||||||||||
| Unsecured Line of Credit (Revolving Credit Facility) (5) | - | % | - | % | March 29, 2030 | - | - | |||||||||||||||||||||||||
| Unsecured Term Loans | ||||||||||||||||||||||||||||||||
| 2023 Unsecured Term Loan | N/A | N/A | N/A | N/A | 700,000 | |||||||||||||||||||||||||||
| 2024 Unsecured Term Loan (6) | 4.73 | % | 4.88 | % | September 26, 2026 | 100,000 | 100,000 | |||||||||||||||||||||||||
| Unsecured Term Loan Facility (7) | 5.23 | % | 5.35 | % | March 30, 2029 | 700,000 | N/A | |||||||||||||||||||||||||
| Total Principal Amount | 800,000 | 800,000 | ||||||||||||||||||||||||||||||
| Less: Deferred financing costs and fair value adjustments, net | 3,202 | 1,942 | ||||||||||||||||||||||||||||||
| Carrying Amount | 796,798 | 798,058 | ||||||||||||||||||||||||||||||
| Mortgage Notes | ||||||||||||||||||||||||||||||||
| 767 Fifth Avenue (the General Motors Building) (60% ownership) (8)(9) | 3.43 | % | 3.64 | % | June 9, 2027 | 2,300,000 | 2,300,000 | |||||||||||||||||||||||||
| Santa Monica Business Park (8)(10) | 5.24 | % | 5.36 | % | October 8, 2028 | 200,000 | 200,000 | |||||||||||||||||||||||||
| 90 Broadway, 325 Main Street, 355 Main Street, and Cambridge East Garage (also known as Kendall Center Green Garage) (8)(11) | 6.04 | % | 6.27 | % | October 26, 2028 | 600,000 | 600,000 | |||||||||||||||||||||||||
| 901 New York Avenue (12) | 5.00 | % | 5.06 | % | January 5, 2029 | 199,119 | 203,632 | |||||||||||||||||||||||||
| Interest Rate | Amount | |||||||||||||||||||||||||||||||
| Stated | GAAP (1) | Maturity Date | 9/30/2025 | 9/30/2024 | ||||||||||||||||||||||||||||
| 601 Lexington Avenue (55% ownership) (8) | 2.79 | % | 2.93 | % | January 9, 2032 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||
| Total Principal Amount | 4,299,119 | 4,303,632 | ||||||||||||||||||||||||||||||
| Less: Deferred financing costs and fair value adjustments, net | 19,637 | 28,477 | ||||||||||||||||||||||||||||||
| Carrying Amount | 4,279,482 | 4,275,155 | ||||||||||||||||||||||||||||||
| Total Consolidated Debt | $ | 16,604,696 | $ | 16,215,246 | ||||||||||||||||||||||||||||
_______________
(1)For the unsecured senior notes, the GAAP rate represents the yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs. For all other debt, the GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, the effects of hedging transactions (if any and excluding capped calls classified as equity) and adjustments required under ASC 805 "Business Combinations" to reflect loans and swaps at their fair values (if any).
(2)No principal amounts are due prior to maturity.
(3)This unsecured senior note was repaid at maturity, see Note 6 to the Consolidated Financial Statements.
(4)At September 30, 2025, the weighted average interest rate of the commercial paper notes outstanding was approximately 4.51% per annum and had a weighted-average maturity of 43 days from the date of issuance. At October 31, 2025, BPLP had an aggregate of $750.0 million of commercial paper notes outstanding that bore interest at a weighted-average rate of approximately 4.29% per annum and had a weighted-average maturity of 26 days, from the date of issuance.
(5)The unsecured line of credit bears interest at a variable rate of SOFR+0.85% per annum. The 2025 Credit Facility is used as a backstop for the $750.0 million Commercial Paper Program. As such, BPLP intends to maintain, at a minimum, availability under the unsecured line of credit in an amount equal to the amount of unsecured commercial paper notes outstanding. The table below provides the principal indebtedness outstanding and remaining capacity under the unsecured line of credit at September 30, 2025 and October 31, 2025 (dollars in thousands).
| September 30, 2025 | October 31, 2025 | |||||||||||||||||||||||||||||||
| Facility | Outstanding | Remaining Capacity | Outstanding | Remaining Capacity | ||||||||||||||||||||||||||||
| Unsecured Line of Credit | $ | 2,250,000 | $ | - | $ | 2,250,000 | $ | - | $ | 2,250,000 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Unsecured Commercial Paper | 750,000 | 750,000 | ||||||||||||||||||||||||||||||
| Letters of Credit | 5,393 | 5,091 | ||||||||||||||||||||||||||||||
| Total Remaining Capacity | $ | 1,494,607 | $ | 1,494,909 | ||||||||||||||||||||||||||||
(6)The 2024 Unsecured Term Loan bears interest at a variable rate of SOFR+1.05% per annum. BPLP entered into an interest rate swap contract to fix SOFR at a weighted-average fixed interest rate of 3.6775% per annum for the period commencing on April 7, 2025 and ending on April 6, 2026. Stated interest rate reflects the weighted-average fixed interest rate based on the interest rate swap contracts plus 1.05% per annum. The 2024 Unsecured Term Loan has two one-year extension options, subject to certain conditions.
(7)The Unsecured Term Loan Facility bears interest at a variable rate of SOFR+0.95% per annum and has two six-month extension options, each subject to customary conditions.
(8)The mortgage loan requires interest only payments with a balloon payment due at maturity.
(9)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, 2025, the maximum funding obligation under the guarantee was approximately $6.4 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.
(10)The mortgage loan bears interest at a variable rate of Daily Simple SOFR+1.60% per annum. BPLP entered into an interest rate swap contract to fix Daily Simple SOFR at a weighted-average fixed interest rate of 3.6775% per annum for the period commencing on April 7, 2025 and ending on April 6, 2026. Stated interest rate reflects the weighted-average fixed interest rate based on the interest rate swap contracts plus 1.60% per annum.
(11)The mortgage loan bears interest at a variable rate of Daily Compounded SOFR+2.25% per annum. BPLP entered into three interest rate swap contracts with notional amounts aggregating $600.0 million to fix Daily Compounded SOFR at a weighted-average fixed interest rate of 3.7925% for the period commencing on December 15, 2023 and ending on October 26, 2028. The stated interest rate reflects the weighted average fixed interest rate based on the interest rate swap contracts plus 2.25% per annum.
(12)The loan has a one-year extension option remaining, subject to certain conditions.
The following table lists our mortgage notes, net outstanding and our partners' share, based on their respective ownership percentage, from our consolidated joint ventures as of September 30, 2025 (dollars in thousands).
| Carrying Amount | ||||||||||||||
| Properties | 100% |
Partners'Share
|
||||||||||||
| Wholly-owned | ||||||||||||||
| 901 New York Avenue | $ | 198,706 | N/A | |||||||||||
| Santa Monica Business Park | 199,239 | N/A | ||||||||||||
| 90 Broadway, 325 Main Street, 355 Main Street, and Cambridge East Garage (also known as Kendall Center Green Garage) | 595,877 | N/A | ||||||||||||
| Subtotal | 993,822 | N/A | ||||||||||||
| Consolidated Joint Ventures | ||||||||||||||
| 767 Fifth Avenue (the General Motors Building) (60% ownership) (1) | 2,294,119 | $ | 917,668 | |||||||||||
| 601 Lexington Avenue (55% ownership) | 991,541 | 446,193 | ||||||||||||
| Subtotal | 3,285,660 | 1,363,861 | ||||||||||||
| Total | $ | 4,279,482 | $ | 1,363,861 | ||||||||||
_______________
(1)The partners' share of the carrying amount has been adjusted for basis differentials.
The table below provides the debt statistics of our outstanding consolidated indebtedness at September 30, 2025 and September 30, 2024.
| September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Weighted Average | Weighted Average | ||||||||||||||||||||||||||||||||||||||||||||||
| % of Total Debt | Stated Rates | GAAP Rates (1) | Maturity (years) | % of Total Debt | Stated Rates | GAAP Rates (1) | Maturity (years) | ||||||||||||||||||||||||||||||||||||||||
| Floating Rate Debt (2) | 8.71 | % | 4.92 | % | 4.98 | % | 1.7 | 7.40 | % | 5.91 | % | 6.04 | % | 0.4 | |||||||||||||||||||||||||||||||||
| Fixed Rate Debt (3) | 91.29 | % | 3.85 | % | 3.99 | % | 4.2 | 92.60 | % | 3.89 | % | 4.11 | % | 4.8 | |||||||||||||||||||||||||||||||||
| Consolidated Debt | 100.00 | % | 3.94 | % | 4.07 | % | 4.0 | 100.00 | % | 4.04 | % | 4.25 | % | 4.4 | |||||||||||||||||||||||||||||||||
| Unsecured Debt | 74.23 | % | 3.99 | % | 4.11 | % | 4.3 | 73.63 | % | 4.17 | % | 4.28 | % | 4.7 | |||||||||||||||||||||||||||||||||
| Secured Debt | 25.77 | % | 3.80 | % | 3.99 | % | 3.1 | 26.37 | % | 3.68 | % | 4.16 | % | 3.7 | |||||||||||||||||||||||||||||||||
| Consolidated Debt | 100.00 | % | 3.94 | % | 4.07 | % | 4.0 | 100.00 | % | 4.04 | % | 4.25 | % | 4.4 | |||||||||||||||||||||||||||||||||
_______________
(1)The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, the effects of hedging transactions (if any and excluding capped calls classified as equity) and adjustments required under ASC 805 "Business Combinations" to reflect loans and swaps at their fair values (if any).
(2)The unsecured commercial paper notes are included in our floating rate debt statistics. At September 30, 2025, the weighted average interest rate of the unsecured commercial paper notes outstanding was approximately 4.51% per annum and had a weighted-average maturity of 43 days from the date of issuance.
(3)The Fixed Rate Debt includes the effects of hedging transactions.
Derivative Instruments and Hedging Activities
As of September 30, 2025, we had $900.0 million of interest rate swaps outstanding, where hedge accounting was elected, with a fair value of approximately $(8.5) million. On April 8, 2025, we entered into an interest rate swap contract with a notional amount of $300.0 million to replace $300.0 million of interest rate swaps that expired on April 1, 2025. For a description of these interest rate swaps, see Note 7 to the Consolidated Financial Statements.
Investment in Unconsolidated Joint Ventures - Secured Debt
We have investments in unconsolidated joint ventures with our effective ownership interests ranging from approximately 19% to approximately 71%. Sixteen 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 September 30, 2025, the aggregate carrying amount of debt, including both our and our partners' share, incurred by these ventures was approximately $3.2 billion (of which our proportionate share is approximately $1.4 billion). The table below summarizes the outstanding debt of these joint venture properties at September 30, 2025. 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.
| Properties | Nominal % Ownership | Stated Interest Rate | GAAP Interest Rate (1) | Term of Variable Rate + Spread | Stated Principal Amount | Deferred Financing Costs, Net | Carrying Amount | Carrying Amount (Our share) | Maturity Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 360 Park Avenue South | 71.11 | % | 6.65 | % | 6.96 | % | Term SOFR+2.50% | $ | 220,000 | $ | (1,354) | $ | 218,646 | $ | 155,479 | (2)(3)(4) | December 13, 2027 | |||||||||||||||||||||||||||||||||||||||||||||
| Market Square North | 50.00 | % | 6.61 | % | 6.78 | % | SOFR+2.41% | 125,000 | (25) | 124,975 | 62,487 | (2)(3)(5) | November 10, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1265 Main Street | 50.00 | % | 3.77 | % | 3.84 | % | N/A | 32,956 | (174) | 32,782 | 16,391 | January 1, 2032 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Colorado Center | 50.00 | % | 3.56 | % | 3.59 | % | N/A | 550,000 | (330) | 549,670 | 274,835 | (2) | August 9, 2027 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dock 72 | 50.00 | % | 5.91 | % | 6.19 | % | SOFR+2.50% | 198,383 | (113) | 198,270 | 99,135 | (2)(6) | December 18, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| The Hub on Causeway - Podium & 100 Causeway Street | 50.00 | % | 5.73 | % | 5.94 | % | N/A | 465,000 | (5,263) | 459,737 | 229,869 | (2) | April 9, 2031 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Hub50House | 50.00 | % | 4.43 | % | 4.51 | % | SOFR+1.35% | 185,000 | (916) | 184,084 | 92,042 | (2)(7) | June 17, 2032 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 7750 Wisconsin Avenue (Marriott International Headquarters) | 50.00 | % | 5.49 | % | 5.54 | % | N/A | 250,478 | (1,270) | 249,208 | 124,604 | February 27, 2035 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Safeco Plaza | 33.67 | % | 4.82 | % | 6.21 | % | SOFR+2.32% | 250,000 | (312) | 249,688 | 84,070 | (2)(8) | September 1, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 500 North Capitol Street, NW | 30.00 | % | 6.83 | % | 7.16 | % | N/A | 105,000 | (192) | 104,808 | 31,399 | (2)(9) | June 5, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 200 Fifth Avenue | 26.69 | % | 4.34 | % | 5.60 | % | Term SOFR+1.41% | 600,000 | (5,296) | 594,704 | 154,183 | (2)(10) | November 24, 2028 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 3 Hudson Boulevard | 25.00 | % | 11.86 | % | 11.86 | % | Term SOFR+7.61% | 80,000 | - | 80,000 | 20,000 | (2)(11) | August 7, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Skymark - Reston Next Residential | 20.00 | % | 6.28 | % | 6.60 | % | SOFR+2.00% | 140,000 | (277) | 139,723 | 27,945 | (2)(3)(12) | May 13, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 17 Hartwell Avenue | 20.00 | % | 6.75 | % | 6.87 | % | N/A | - | - | - | - | (2)(13) | July 10, 2030 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 290 Coles Street | 19.46 | % | N/A | N/A | Term SOFR+2.50% | - | - | - | - | (2)(3)(14) | March 5, 2029 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 3,201,817 | $ | (15,522) | $ | 3,186,295 | $ | 1,372,439 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________
(1)The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing costs, which includes mortgage recording fees, the effects of hedging transactions (if any) and adjustments required under ASC 805 "Business Combinations" to reflect loans at their fair values (if any).
(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 joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in Term SOFR rate to a cap of 5.00% per annum on a notional amount of $220.0 million through January 15, 2026.
(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 loan bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25%, plus (2) 2.50% per annum. On October 8, 2025, this loan was repaid.
(7)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.
(8)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 increases in the SOFR rate at a cap of 2.50% per annum on a notional amount of $250.0 million through September 1, 2026.
(9)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 is reflected as Related Party Notes Receivable, Net on our Consolidated Balance Sheets.
(10)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. The deferred financing costs, net include the adjustment required to reflect the loan and interest rate swap at fair value upon acquisition.
(11)As of September 30, 2025, the loan was in a maturity default and had an outstanding balance, including accrued and unpaid interest and default interest, of approximately $126.8 million. On October 17, 2025, the joint venture refinanced the loan including the accrued and unpaid interest. The new loan consists of a (1) senior loan provided by a third-party lender with a principal amount of $108.0 million that bears interest at a variable rate equal to Term SOFR plus 5.25% per annum and (2) mezzanine loan provided by us with a maximum commitment of $50.0 million that bears interest at a variable rate equal to Term SOFR plus 7.25% per annum. As of the closing, we have funded approximately $17.6 million of the mezzanine loan. The senior loan and mezzanine loan require interest-only payments, mature on November 9, 2027 and have a one-year extension option, subject to certain conditions.
(12)The construction financing has a borrowing capacity of $140.0 million.
(13)No amounts have been drawn under the $98.7 million construction loan.
(14)No amounts have been drawn under the $225.0 million construction loan.
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.
Funds from Operations
Pursuant to the revised definition of FFO adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("Nareit"), we calculate FFO for each of BXP and BPLP by adjusting net income (loss) attributable to BXP, 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, including a change in control, 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 a useful measure for understanding and comparing our operating results because, by excluding gains and losses related to sales or a change in control 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 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 (loss) attributable to BXP, Inc. and net income (loss) attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. FFO should not be considered as a substitute for net income (loss) attributable to BXP, Inc. or net income (loss) 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 (loss) attributable to BXP, Inc. to FFO attributable to BXP, Inc. for the three months ended September 30, 2025 and 2024:
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net income (loss) attributable to BXP, Inc. | $ | (121,712) | $ | 83,628 | ||||||||||
| Add: | ||||||||||||||
| Noncontrolling interest-common units of the Operating Partnership | (12,981) | 9,587 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Net income | (116,840) | 108,452 | ||||||||||||
| Add: | ||||||||||||||
| Depreciation and amortization | 236,147 | 222,890 | ||||||||||||
| Noncontrolling interests in property partnerships' share of depreciation and amortization | (22,615) | (18,857) | ||||||||||||
| BXP's share of depreciation and amortization from unconsolidated joint ventures | 17,272 | 20,757 | ||||||||||||
| Corporate-related depreciation and amortization | (582) | (438) | ||||||||||||
| Non-real estate depreciation and amortization | 2,130 | 2,130 | ||||||||||||
| Impairment losses (1) | 68,901 | - | ||||||||||||
| Impairment losses included within loss from unconsolidated joint ventures (2) | 145,133 | - | ||||||||||||
| Less: | ||||||||||||||
| Gain on sale / consolidation included within loss from unconsolidated joint ventures | 2,236 | - | ||||||||||||
| Gain on sale of real estate | 1,932 | 517 | ||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Funds from Operations (FFO) attributable to the Operating Partnership common unitholders (including BXP, Inc.) | 307,347 | 319,086 | ||||||||||||
| Less: | ||||||||||||||
| Noncontrolling interest-common units of the Operating Partnership's share of funds from operations | 30,673 | 32,228 | ||||||||||||
| Funds from Operations attributable to BXP, Inc. | $ | 276,674 | $ | 286,858 | ||||||||||
| Our percentage share of Funds from Operations-basic | 90.02 | % | 89.90 | % | ||||||||||
| Weighted average shares outstanding-basic | 158,345 | 157,725 | ||||||||||||
___________
(1)During the three months ended September 30, 2025, we recognized impairment losses related to four properties (See Note 3 to the Consolidated Financial Statements).
(2)During the three months ended September 30, 2025, we recognized an other-than-temporary impairment loss on our investment in Gateway Commons of approximately $145.1 million (See Note 5 to the Consolidated Financial Statements).
The following tables presents a reconciliation of net income (loss) attributable to BXP, Inc. to Diluted FFO attributable to BXP, Inc. for income (numerator) and shares/units (denominator) for the three months ended September 30, 2025 and 2024:
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net income (loss) attributable to BXP, Inc. | $ | (121,712) | $ | 83,628 | ||||||||||
| Add: | ||||||||||||||
| Noncontrolling interest-common units of the Operating Partnership | (12,981) | 9,587 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Net income | (116,840) | 108,452 | ||||||||||||
| Add: | ||||||||||||||
| Depreciation and amortization | 236,147 | 222,890 | ||||||||||||
| Noncontrolling interests in property partnerships' share of depreciation and amortization | (22,615) | (18,857) | ||||||||||||
| BXP's share of depreciation and amortization from unconsolidated joint ventures | 17,272 | 20,757 | ||||||||||||
| Corporate-related depreciation and amortization | (582) | (438) | ||||||||||||
| Non-real estate depreciation and amortization | 2,130 | 2,130 | ||||||||||||
| Impairment losses (1) | 68,901 | - | ||||||||||||
| Impairment losses included within loss from unconsolidated joint ventures (2) | 145,133 | - | ||||||||||||
| Less: | ||||||||||||||
| Gain on sale / consolidation included within loss from unconsolidated joint ventures | 2,236 | - | ||||||||||||
| Gain on sale of real estate | 1,932 | 517 | ||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Funds from Operations (FFO) attributable to the Operating Partnership common unitholders (including BXP, Inc.) | 307,347 | 319,086 | ||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||
| Stock based compensation | - | - | ||||||||||||
| Diluted FFO | 307,347 | 319,086 | ||||||||||||
| Less: | ||||||||||||||
| Noncontrolling interest-common units of the Operating Partnership's share of diluted FFO | 30,581 | 32,132 | ||||||||||||
| Diluted FFO attributable to BXP, Inc. (3) | $ | 276,766 | $ | 286,954 | ||||||||||
(1)During the three months ended September 30, 2025, we recognized impairment losses related to four properties (See Note 3 to the Consolidated Financial Statements).
(2)During the three months ended September 30, 2025, we recognized an other-than-temporary impairment loss on our investment in Gateway Commons of approximately $145.1 million (See Note 5 to the Consolidated Financial Statements).
(3)BXP's share of diluted Funds from Operations was 90.05% and 89.93% for the three months ended September 30, 2025 and 2024, respectively.
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| shares/units (in thousands) | ||||||||||||||
| Basic Funds from Operations | 175,901 | 175,446 | ||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||
| Stock based compensation | 583 | 488 | ||||||||||||
| Diluted Funds from Operations | 176,484 | 175,934 | ||||||||||||
| Less: | ||||||||||||||
| Noncontrolling interest-common units of the Operating Partnership's share of diluted Funds from Operations | 17,556 | 17,721 | ||||||||||||
| Diluted Funds from Operations attributable to BXP, Inc. (1) | 158,928 | 158,213 | ||||||||||||
_______________
(1)BXP's share of diluted Funds from Operations was 90.05% and 89.93% for the three months ended September 30, 2025 and 2024, respectively.
BPLP
The following table presents a reconciliation of net income (loss) attributable to Boston Properties Limited Partnership to FFO attributable to Boston Properties Limited Partnership for the three months ended September 30, 2025 and 2024:
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net income (loss) attributable to Boston Properties Limited Partnership | $ | (130,077) | $ | 94,919 | ||||||||||
| Add: | ||||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Net income | (112,224) | 110,156 | ||||||||||||
| Add: | ||||||||||||||
| Depreciation and amortization | 234,444 | 221,186 | ||||||||||||
| Noncontrolling interests in property partnerships' share of depreciation and amortization | (22,615) | (18,857) | ||||||||||||
| BXP's share of depreciation and amortization from unconsolidated joint ventures | 17,272 | 20,757 | ||||||||||||
| Corporate-related depreciation and amortization | (582) | (438) | ||||||||||||
| Non-real estate depreciation and amortization | 2,130 | 2,130 | ||||||||||||
| Impairment losses (1) | 65,988 | - | ||||||||||||
| Impairment losses included within loss from unconsolidated joint ventures (2) | 145,133 | - | ||||||||||||
| Less: | ||||||||||||||
| Gain on sale / consolidation included within loss from unconsolidated joint ventures | 2,236 | - | ||||||||||||
| Gain on sale of real estate | 1,932 | 517 | ||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Funds from Operations attributable to Boston Properties Limited Partnership (3) | $ | 307,347 | $ | 319,086 | ||||||||||
| Weighted average shares outstanding-basic | 175,901 | 175,446 | ||||||||||||
_______________
(1)During the three months ended September 30, 2025, we recognized impairment losses related to four properties (See Note 3 to the Consolidated Financial Statements).
(2)During the three months ended September 30, 2025, we recognized an other-than-temporary impairment loss on our investment in Gateway Commons of approximately $145.1 million (See Note 5 to the Consolidated Financial Statements).
(3)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2022 MYLTIP Units).
The following tables presents a reconciliation of net income (loss) 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 September 30, 2025 and 2024:
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net income (loss) attributable to Boston Properties Limited Partnership | $ | (130,077) | $ | 94,919 | ||||||||||
| Add: | ||||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Net income | (112,224) | 110,156 | ||||||||||||
| Add: | ||||||||||||||
| Depreciation and amortization | 234,444 | 221,186 | ||||||||||||
| Noncontrolling interests in property partnerships' share of depreciation and amortization | (22,615) | (18,857) | ||||||||||||
| BXP's share of depreciation and amortization from unconsolidated joint ventures | 17,272 | 20,757 | ||||||||||||
| Corporate-related depreciation and amortization | (582) | (438) | ||||||||||||
| Non-real estate depreciation and amortization | 2,130 | 2,130 | ||||||||||||
| Impairment losses (1) | 65,988 | - | ||||||||||||
| Impairment losses included within loss from unconsolidated joint ventures (2) | 145,133 | - | ||||||||||||
| Less: | ||||||||||||||
| Gain on sale / consolidation included within loss from unconsolidated joint ventures | 2,236 | - | ||||||||||||
| Gain on sale of real estate | 1,932 | 517 | ||||||||||||
| Unrealized gain on non-real estate investments | 178 | 94 | ||||||||||||
| Noncontrolling interests in property partnerships | 17,853 | 15,237 | ||||||||||||
| Funds from Operations attributable to Boston Properties Limited Partnership (3) | 307,347 | 319,086 | ||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||
| Stock based compensation | - | - | ||||||||||||
| Diluted Funds from Operations attributable to Boston Properties Limited Partnership | $ | 307,347 | $ | 319,086 | ||||||||||
(1)During the three months ended September 30, 2025, we recognized impairment losses related to four properties (See Note 3 to the Consolidated Financial Statements).
(2)During the three months ended September 30, 2025, we recognized an other-than-temporary impairment loss on our investment in Gateway Commons of approximately $145.1 million (See Note 5 to the Consolidated Financial Statements).
(3)Our calculation includes OP Units and vested LTIP Units (including vested 2012 OPP Units and vested 2013 - 2022 MYLTIP Units).
| Three months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| shares/units (in thousands) | ||||||||||||||
| Basic Funds from Operations | 175,901 | 175,446 | ||||||||||||
| Effect of Dilutive Securities: | ||||||||||||||
| Stock based compensation | 583 | 488 | ||||||||||||
| Diluted Funds from Operations | 176,484 | 175,934 | ||||||||||||
Material Cash Commitments
We have various service contracts with vendors related to our property management. In addition, we enter into other contracts 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 September 30, 2025, we paid approximately $133.4 million to fund tenant-related obligations, including tenant improvements and leasing commissions.
In addition, during the three months ended September 30, 2025, we and our unconsolidated joint venture partners incurred approximately $114.3 million of new tenant-related obligations associated with approximately 1.4 million square feet of second generation leases, or approximately $82 per square foot. During the three months ended September 30, 2025, we signed approximately 133,100 square feet of first generation leases. The tenant-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 three months ended September 30, 2025, we signed leases for approximately 1.5 million square feet of space and incurred aggregate tenant-related obligations of approximately $134.4 million, or approximately $88 per square foot.
BXP Inc. published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 19:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]