Boston Properties : 2020 Annual Report to Stockholders (PDF)

2020

ANNUAL REP ORT

Salesforce Tower, San Francisco, CA

About Boston Properties

Boston Properties, Inc. (NYSE: BXP) is the largest publicly-traded developer, owner and manager of Class A office properties in the United States, concentrated in five regions-Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a REIT, that develops, manages and operates a diverse portfolio of primarily Class A office space. The Company's portfolio totals 51.2 million square feet and 196 properties, including six properties under construction/redevelopment.

Boston Properties is well known for its development expertise, in-house building management and responsiveness to tenants' needs. The Company holds a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes and build-to-suit projects for a diverse array of creditworthy tenants.

Boston Properties actively works to promote its growth and operations in a sustainable and responsible manner. The Company has earned nine consecutive Global Real Estate Sustainability Benchmark (GRESB) Green Stars and the highest GRESB 5-star Rating.

The Company was founded in 1970 and became a public company in 1997.

This Annual Report contains "forward-looking statements" within the meaning of the federal securities laws. See the discussion under "Forward-Looking Statements" in the Form 10-K for matters to be considered in this regard. This Annual Report also contains certain non-GAAP financial measures within the meaning of Regulation G. The calculations of these non-GAAP financial measures may differ from those used by other REITs. The reasons for their use and reconciliations to the most directly comparable GAAP measures are included in the Form 10-K and on the pages immediately following the Form 10-K titled "Disclosures Relating to Non-GAAP Financial Measures." All data as of 12/31/20 unless noted.

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To our shareholders

In 2020, we demonstrated the resilience and stability of our business during an unexpectedly challenging year due to the COVID-19 pandemic, while at the same time we reinforced our unwavering commitment to serving our clients.

In March 2020, many cities throughout the United States initiated a full lockdown to mitigate the spread of the virus, resulting in a precipitous drop in economic activity. In addition to tragic human loss, the pandemic signifi cantly impacted the built environment, causing a halt in construction and development, a pause in leasing activity, and, most devastating, a sudden loss of employment for millions of Americans. In the face of the shutdowns, BXP and many of our clients were required to move to a remote work structure seemingly overnight.

BXP remained resilient through the crisis. We continued our strong rent collection throughout the year, collecting over 99% of office rents billed. We experienced limited rollover of our office clients, demonstrating the attrac tiveness of our portfolio. Although many of our retail clients experienced hardship due to the shutdowns, we worked with them to provide financial relief, investing in their future recovery and ultimate success.

One of the most significant achievements for BXP was our ability to lead the industry in health security. Leveraging our property management expertise and consistent with our "tenant first" priorities, we quickly imple mented additional processes and protocols to ensure the safety and health security of our clients and employees and prepared our buildings for the new normal. We immediately formed an internal, cross-regional Health Security Task Force comprised of internal and external health security experts and developed a comprehensive Health Security Plan. This was effectively implemented across our portfolio thanks to the hard work and dedication of our property management team. We are proud that, through out the pandemic, our buildings remained open to our clients.

In addition to our pandemic-focused activities, BXP also accomplished significant business objectives in 2020, including:

• Completed 184 leases comprising 3.7 million square feet with a weighted- average lease term of 8.3 years1, 2
• Delivered 1.8 million square feet of new developments representing $909 million of investment3
• Continued the construction of properties in our active development pipeline, which consists of six properties, totaling 3.7 million square feet2 These projects are 87% pre-leased1,4 and are projected to deliver incremental FFO growth in 2021 and beyond,

The BXP Strategy

Develop Premier Properties in Robust Markets with Sustained Growth

SELECT	PREMIER
MARKETS	PROPERTIES
EXPERIENCE	ROBUST
OPERATING &
& INTEGRITY	DEVELOPMENT
	PLATFORM
CAPITAL	FINANCIAL
ALLOCATION	STRENGTH

SELECT MARKETS

Focus on supply-constrained

markets with the strongest economic growth and investment

characteristics over time

PREMIER PROPERTIES

Maintain high occupancy and

achieve premium rental rates through economic cycles by focusing on delivering our clients exceptional space and place

ROBUST OPERATING &

DEVELOPMENT PLATFORM

Provide an integrated leasing, development, construction and property management

platform to ensure superior customer service and to create value for

shareholders

FINANCIAL STRENGTH

Maintain a strong balance sheet and access to capital to minimize debt costs and max-

imize our ability to make opportunistic investments

CAPITAL ALLOCATION

Remain astute in market timing for investment decisions to ensure

continuous portfolio refreshment and value creation

EXPERIENCE & INTEGRITY Preserve our reputation of integrity and fair dealing and be the counterparty of choice for real estate industry participants

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Douglas T. Linde, President

Owen D. Thomas, Chief Executive Officer

COLLABORATION

• INNOVATION

"We take great pride in the quality of our work, the customers we serve, the communities we support, the assets we nurture and the trust we develop with investors and industry professionals."

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