Boston Properties : 2021 Annual Report (PDF)

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 six regions-Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC.

BXP 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. BXP's portfolio totals 52.8 million square feet and 201 properties, including nine properties under construction/redevelopment.

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

BXP actively works to promote its growth and operations in a sustainable and responsible manner. BXP has earned ten consecutive GRESB Green Stars and the highest GRESB 5-star Rating.

BXP 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 December 31, 2021 unless noted.

2021 Quick Facts

201

$2.8BS&P 500

Properties1

BXP's Share of Annual Revenue2

Company

52.8M

$1.6B

Top 5%

Square Feet Owned1

BXP's Share of Annual EBITDAre2

Sustainalytics Global Universe

4.6M

3.4%

7.8 Years

Square Foot Life Sciences Portfolio1,4

Dividend Yield

Weighted-average lease term3

4.1M	1208%
Square feet currently under devel-	Total Return Since 1997 IPO
opment / redevelopment1,5	1.6x S&P 500 1.3x REIT Index6
(1) Includes 100% of consolidated and unconsolidated properties.
(2) Refer to disclosures relating to non-GAAP Financial Measures on the pages immediately following the Form 10-K.

• (3) Excludes residential and hotel properties. Calculation is based on BXP's Share of Annualized Rental Obligations. Refer to disclosures relating to non-GAAP Financial Measures on the pages immediately following the Form 10-K.

• (4) Includes 3.4M SF of stabilized portfolio plus 1.2M SF of current life sciences redevelopments/lab conversions in process. Includes 100% of consolidated and unconsolidated properties. Actual square footage may differ materially depending on the outcome of the permitting and entitlement processes for each project

• (5) Data as of February 3, 2022.

• (6) FTSE Nareit All REITs Index.

2

To Our Shareholders,

In 2021, we demonstrated the resilience and stability of our business during another challenging year due to the ongoing COVID-19 pandemic, and at the same time we reinforced our unwavering commitment to serving our clients and communities.

As we began the year, uncertainty surrounding how companies were planning for the future of their office real estate footprints was top of mind. COVID-19 vaccines were made widely available, quarantines and social distancing requirements began to ease, and despite fits and starts caused by the spread of two variants throughout the country, a slow recovery commenced as companies began planning for and implementing in-person office work. Business leaders understand the importance of in-person collaboration to enhance their company's culture, creativity, retention, and overall competitiveness. However, a tight labor market with workers demanding flexibility coupled with buoyant business conditions driven by liquidity created headwinds for many employers pushing for a full return to the office. As a result, companies, including many of our clients, are mixing partial remote work policies with enhanced physical environments to strongly encourage workers back to the office. Our clients have thus focused on the combination of high-quality buildings located near public transit,

We are commited to creating great spaces and places that drive recruitment, retention, collaboration, innovation, and growth.

amenities with collaborative spaces and services aimed at reshaping the office to a destination where people come together.

The strategy that we have consistently pursued over the past 52 years has put us in a strong position to meet the demand of this new workplace. The core strategic principle for BXP is to build, acquire, own, and manage high-quality properties in vibrant and high demand commercial districts proximate to accessible transportation. Our portfolio is dominated by Class A assets, many among the leading buildings in our respective markets, such as Embarcadero Center, Salesforce Tower, 767 Fifth Avenue, Reston Town Center, Prudential Center, 200 Clarendon Street, and Kendall Center, and we have benefitted from the "flight to quality" as demonstrated by our leasing momentum throughout 2021.

By the fourth quarter of 2021, leasing activity was substantially at pre-pandemic levels for the quarter.

We are stepping into 2022 realistic and confident and expect significant growth in FFO this year of approximately 12.5%.1 This projected growth is driven by:

• • our elevating leasing momentum, which is expected to result in increased occupancy,

• • delivery of a well-leased development pipeline, which will add multi-year growth to our portfolio,

• • continued recovery of variable revenue streams,

• • a rapidly expanding life sciences portfolio in the U.S.'s most dynamic life sciences markets,

• • lower capital costs due to prescient refinancing activity in the last few years, and

• • a strong balance sheet combined with large-scale private equity partners in our Strategic Capital Program to pursue additional new investment opportunities as the pandemic recedes.

BXP will continue to operate in accordance with our earned reputation as a developer and landlord of choice for industry-leading clients in our geographic markets with scale, consistent economic growth, and barriers to new development. In 2021, we developed and delivered several extraordinary, high-quality properties, completed large levels of leasing across our regions, enhanced existing assets, entered new markets, and divested select portions of our portfolio. These achievements underscore our unwavering commitment to increasing shareholder returns and delivering durable cash flows throughout economic cycles.

BXP's Share of NOI*

Diversified Across U.S. Markets

34.2%Boston, MA

19.6%San Francisco, CA

15.1%Washington, DC

27.7%New York, NY

0.4%Seattle, WA

* Percentage of NOI which includes our share of NOI from our consolidated and unconsolidated joint ventures, excluding termination income, for the three months ended December 31, 2021. Refer to disclosures relating to non-GAAP Financial Measures on the pages immediately following the Annual Report on Form 10-K.

3.0%Los Angeles, CA

Industry Diversification**

BXP Client Base Balanced Across Sectors

21%Legal Services

20%Technology & Media

17%Financial Services,other

8%Commercial & Investment Banking

7%Real Estate & Insurance

7%Other Professional Services

6%Life Sciences

6%Retail

4%Manufacturing

2%Government/Public Administration

2%Other

**Represents industry diversification percentages based on BXP's Share of Annualized Rental Obligations. Refer to disclosures relating to non-GAAP Financial Measures on the pages immediately following the Form 10-K.