BOSTON PROPERTIES INC Management’s Discussion and Analysis of Financial Condition and Resultsof Operations (form 10-K)

The following discussion should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this report.

Forward-Looking Statements

This Annual Report on Form 10-K, including the documents incorporated by
reference, 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. 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 are including this statement for purposes of complying with
those safe harbor provisions, in each case, to the extent applicable. Such
statements are contained principally, but not only, under the captions
"Business-Business and Growth Strategies," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." We
caution investors that any such forward-looking statements are based on current
beliefs or expectations of future events and on assumptions made by, and
information currently available to, our management. When used, the words
"anticipate," "believe," "budget," "could", "estimate," "expect," "intend,"
"may," "might," "plan," "project," "should," "will" and similar expressions that
do not relate solely to historical matters are intended to identify
forward-looking statements. Such 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. Should one or more of these
known or unknown risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary 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 and trends at the time they are made, to
anticipate future results or trends.

The most significant factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking statements include the
ongoing impact of the global COVID-19 pandemic on the U.S. and global economies,
which has impacted, and is likely to continue to impact, us directly and
indirectly, as well as the other important factors below and the risks set forth
in this Form 10-K in Part I, Item 1A.

Some of the risks and uncertainties that may cause our actual results,
performance or achievements to differ materially from those expressed or implied
by forward-looking statements include, among others, the following:

•the risks and uncertainties related to the impact of the COVID-19 global
pandemic, including the emergence of additional variants, the effectiveness,
availability and distribution of vaccines, including their efficacy against new
variant strains and the willingness of individuals to be vaccinated, the
severity and duration of indirect economic impacts such as recession, supply
chain disruptions, labor market disruptions, inflation, dislocation and
volatility in capital markets, job losses, potential longer-term changes in
consumer and tenant behavior, as well as possible future governmental responses;

•volatile or adverse global economic and political conditions, health crises and
dislocations in the credit markets could adversely affect our access to
cost-effective capital and have a resulting material adverse effect on our
business opportunities, results of operations and financial condition;

•general risks affecting the real estate industry (including, without
limitation, the inability to enter into or renew leases, tenant space
utilization, dependence on tenants’ financial condition, and competition from
other developers, owners and operators of real estate);

•failure to manage effectively our growth and expansion into new markets and
sub-markets or to integrate acquisitions and developments successfully;

•the ability of our joint venture partners to satisfy their obligations;

•risks and uncertainties affecting property development and construction
(including, without limitation, supply chain disruptions, labor shortages,
construction delays, increased construction costs, cost overruns, inability to
obtain necessary permits, tenant accounting considerations that may result in
negotiated lease provisions that limit a tenant's liability during construction,
and public opposition to such activities);
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•risks associated with the availability and terms of financing and 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;

•risks associated with forward interest rate contracts and the effectiveness of
such arrangements;

•risks associated with downturns in the national and local economies, increases
in interest rates, and volatility in the securities markets;

•risks associated with actual or threatened terrorist attacks;

•costs of compliance with the Americans with Disabilities Act and other similar
laws;

•potential liability for uninsured losses and environmental contamination;

•risks associated with the physical effects of climate change;

•risks associated with security breaches through cyber attacks, cyber intrusions
or otherwise, as well as other significant disruptions of our information
technology (IT) networks and related systems, which support our operations and
our buildings;

•risks associated with BXP’s potential failure to qualify as a REIT under the
Internal Revenue Code of 1986, as amended;

•possible adverse changes in tax and environmental laws;

•the impact of newly adopted accounting principles on our accounting policies
and on period-to-period comparisons of financial results;

•risks associated with possible state and local tax audits; and

•risks associated with our dependence on key personnel whose continued service
is not guaranteed.

The risks set forth above are not exhaustive. Other sections of this report,
including "Part I, Item 1A-Risk Factors," include additional factors that could
adversely affect our business and financial performance. Moreover, we operate in
a very competitive and rapidly changing environment, particularly in light of
the circumstances relating to COVID-19. New risk factors emerge from time to
time and it is not possible for management to predict all risk factors, nor can
we assess the impact of all risk factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. Given these
risks and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. Investors should
also refer to our 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 December 31, 2021) in the
United States that develops, owns and manages primarily Class A office
properties. Our properties are concentrated in six markets in the United States
- Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC.
BPLP is the entity through which BXP conducts substantially all of its business
and owns (either directly or through subsidiaries) substantially all of its
assets. We generate revenue and cash primarily by leasing Class A office space
to our tenants. When making leasing decisions, we consider, among other things,
the creditworthiness of the tenant 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 costs of tenant improvements, free rent periods
and other landlord concessions, anticipated operating expenses and real estate
taxes, current and anticipated vacancy in our properties and the market overall
(including sublease space), current and expected future demand for the space,
the impact of other tenants' expansion rights and general economic factors.

Our core strategy has always been to develop, acquire and manage high-quality
properties in supply-constrained markets with high barriers-to-entry and
attractive demand drivers, and to focus on executing long-term leases with
financially strong tenants. Historically, these factors have minimized our
exposure in weaker economic cycles and enhanced revenues as market conditions
improve. Our tenant base is diverse across market sectors
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and the weighted-average lease term for our in-place leases, excluding
residential units, was approximately 7.9 years, as of December 31, 2021,
including leases signed by our unconsolidated joint ventures. The
weighted-average lease term for our 20 largest office tenants was approximately
11.4 years as of December 31, 2021.

To be successful in any leasing environment, we believe we must consider all
aspects of the tenant-landlord relationship. In this regard, we believe that our
competitive leasing advantage is based on the following attributes:

•our understanding of tenants’ short- and long-term space utilization and
amenity needs in the local markets;

•our track record of developing and operating Class A office properties in a
sustainable and responsible manner;

•our reputation as a premier developer, owner and manager of primarily Class A
office properties;

•our financial strength and our ability to maintain high building standards; and

•our relationships with local brokers.

Outlook

The United States economy continues to recover from the COVID-19 pandemic as
quarter-over-quarter GDP growth increased to an annual rate of 6.9% in the
fourth quarter of 2021 compared to 2.3% in the third quarter of 2021. GDP growth
was 3.1% above pre-pandemic level, including the impacts of an uptick of
COVID-19 infections. However, the momentum slowed by December as the Omicron
variant contributed to decreased spending as well as disruptions to factories
and services businesses. Despite this, we have not experienced any delays in
negotiating leases nor did these tenants change their space needs. We believe
there are signs that infections have peaked within the markets we operate in,
which could lead to increased demand for services. We believe these trends,
combined with relatively low unemployment rates and consistent job growth, bode
well for continuing economic growth in our markets.

The overall economic recovery is having a positive impact on our leasing
activity. Although additional COVID variants and supply-chain issues may
continue to emerge, we believe as employees return to their offices in greater
numbers, our strategically located, high-quality office properties will remain a
vital component of the strategies of today's forward-thinking organizations that
prioritize fostering collaboration, innovation, productivity and culture, and we
expect tenants will take advantage of the availability of Class A space and
upgrade.

BXP Priorities

Despite the concerns surrounding COVID-19 and the lingering impact on economic
conditions in our markets, we remain optimistic for our industry generally and
our company in particular, given the demand for workers across sectors, the high
quality of our properties, and the success of our development efforts.

We remain focused on the following priorities, which we believe are key to
increasing future revenue and asset values over the long-term:

•ensuring tenant health, safety and satisfaction;

•leasing available space in our in-service and development properties, as well
as proactively focusing on future lease expirations;

•completing the construction and leasing of our development properties;

•continuing and completing the redevelopment, repositioning, and repurposing for
growing life sciences use of several key properties;

•identifying new investment opportunities that meet our criteria while
maintaining discipline in our underwriting;

•managing our near-term debt maturities and maintaining our conservative balance
sheet; and

•actively managing our operations in a sustainable and responsible manner.

The following is an overview of leasing and investment activity in the fourth
quarter of 2021.

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Leasing Activity and Occupancy

In the fourth quarter of 2021, we signed approximately 1.8 million square feet
of new leases and renewals with a weighted-average lease term of approximately
8.6 years, indicating that many new and existing tenants continue to commit to
the long-term use of space and view our properties as their preferred choice for
a premium Class A office environment. More than 25% of the square footage signed
in the fourth quarter was leased to life sciences tenants, demonstrating the
strong demand from this sector and the opportunities we have to grow our life
sciences portfolio. Leasing activity steadily increased throughout 2021, with
the fourth quarter achieving the largest square footage leased since the third
quarter of 2019, a 55% increase from the fourth quarter of 2020, and
approximately 97% of our 10-year fourth quarter leasing average.

The overall occupancy of our in-service office and retail properties was 88.8%
at December 31, 2021, an increase of 0.4% from September 30, 2021. Given current
vacancy and near-term rollover, the amount of leases signed, but for which
occupancy has not commenced, leases in negotiation on space in the in-service
portfolio, and the expected delivery of our development properties, we are
confident that our occupancy will increase.

Our parking and other revenue was approximately $23 million in the fourth
quarter of 2021, an increase of approximately $1.7 million, or 8% from the third
quarter of 2021, and an increase of approximately $7 million, or 41% from the
depth of the pandemic in the second quarter of 2020. As infections from the
Omicron variant rose, transient parking revenue declined modestly in January
2022 as compared to our forecast, but we believe this decrease is only temporary
and that we will begin to see an increase in the remainder of the first quarter
of 2022 as infection rates decline and workers increasingly return to work in
their offices.

Our hotel property, the Boston Marriott Cambridge, operated at approximately 50%
occupancy during the fourth quarter of 2021. For the full-year 2021, it operated
at a small profit contributing approximately $0.6 million to our net income. In
2019, prior to the commencement of the pandemic, the hotel contributed
approximately $15 million to our net income. Given the hotel's location in the
heart of Cambridge, Massachusetts and adjacent to MIT, we expect hotel occupancy
and REVPAR to improve to pre-pandemic levels over time as business and leisure
travel return to historical levels.

Investment Activity

We remain committed to developing and acquiring assets to enhance our long-term
growth and to meet tenant demand for high-quality office, residential, and lab
space. We continually evaluate current and prospective markets for possible
acquisitions of "value-add" assets that require lease-up or repositioning, and
acquisitions that are otherwise consistent with our long-term strategy of
owning, managing, developing and improving, premier Class A properties in each
of our chosen markets.

During the fourth quarter of 2021, we continued to execute on our strategy and
completed the acquisition of 360 Park Avenue South. 360 Park Avenue South is an
approximately 450,000 square foot, 20-story office property located in the
Midtown South submarket of Manhattan, New York. Utilizing our Strategic Capital
Program ("SCP"), we contributed the asset and related loan to a joint venture
with two institutional partners for our aggregate (direct and indirect) 42.21%
ownership interest in the joint venture. Midtown South has been an attractive
market to growing technology companies. We are repositioning the asset, both in
terms of building system and the common areas and tenant spaces, to attract the
type of tenancy that prefers the Midtown South location.

We believe this investment aligns with several elements of our growth strategy,
including entering new markets or submarkets that exhibit strong demand and
limitations on supply, uncovering opportunities that utilize our leasing and
redevelopment skills to increase value, broadening our portfolio to meet the
current and anticipated future demand of tenants in the technology sector and
using private equity to increase our returns and enhance our investment capacity
(Refer to the heading "Liquidity and Capital Resources" within "Item
7-Management's Discussion and Analysis of Financial Condition and Results of
Operations" for a discussion of the SCP).

In the fourth quarter of 2021, we completed and fully placed in-service two
development projects and one redevelopment project, partially placed in-service
a development project, and commenced two new development projects. For the
full-year 2021 and including January 2022, we placed in-service five development
projects and commenced the development/redevelopment of seven projects.

As of December 31, 2021, our development/redevelopment pipeline consists of nine
properties that, when completed, we expect will total approximately 3.4 million
net rentable square feet. Our share of the estimated total cost for these
projects is approximately $2.5 billion, of which approximately $1.1 billion
remained to be invested. The total development pipeline, inclusive of both
office and lab/life sciences developments, but excluding the View
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Boston Observatory at The Prudential Center, is 59% pre-leased as of
February 14, 2022. The office development projects, which total approximately
2.4 million square feet, are approximately 65% pre-leased, as of February 14,
2022, to predominately credit-strong tenants with long-lease terms.

Four of the new development and redevelopment projects added to our development
pipeline in 2021 focus on the specific needs of tenants in the life sciences
sector. As of January 2022, our lab/life sciences developments in our pipeline
total approximately 1.2 million square feet and include properties in Waltham,
Massachusetts and South San Francisco, California. Although the approximately
435,000 square foot Shady Grove Innovation District, which we acquired in 2021,
is not currently included in our development pipeline, we anticipate
redeveloping these office buildings to lab/life sciences space. We commenced the
development of 103 CityPoint in Waltham, Massachusetts in the fourth quarter of
2021, and in January 2022, we commenced the redevelopment of 651 Gateway, which
we own a 50% interest, in South San Francisco, California. Our lab/life sciences
developments are located in some of the largest life sciences clusters in the
United States, with strong demand from tenants because of the close proximity to
universities, research institutions and related businesses and concentrations of
labor with specialized skills and knowledge.

Supply-chain concerns and inflation pressures continue to impact our business
both in time to completion and increased costs. Our construction schedule is one
of the criteria we use when we evaluate bids for development projects and
capital improvements. We have been successful in awarding bids and maintaining
schedules through the pandemic. However, there are fewer choices for materials,
and we are working closely with our consultants and contractors to ensure there
are not items used in the development or redevelopment process that could,
directly or indirectly, cause delays. We are intentionally minimizing the amount
of materials we acquire from foreign suppliers, releasing material packages as
early as possible and making advance purchases of materials and storing them
off-site. We currently expect to deliver all active developments and
redevelopments on time and budget. However, we may experience greater costs
and/or necessary materials may not be available, which could delay the
completion of our development projects. A failure to deliver a project on time
could expose us to additional costs, in time or penalties, for signed leases
with such penalties.

As we continue to focus on new investments to drive future growth, we
continually review our portfolio to identify properties as potential sales
candidates that either no longer fit within our portfolio strategy or could
attract premium pricing in the current market. On October 25, 2021, we completed
the sale of 181,191 and 201 Spring Street, a three-building complex aggregating
approximately 333,000 net rentable square feet in Lexington, Massachusetts, for
an aggregate gross sales price of $191.5 million. The three buildings were 100%
leased at the time of the sale. We will continue to evaluate the sale of similar
properties.

A brief overview of each of our markets follows.

Boston

The Boston region is home to the largest cluster of life sciences companies in
the world with growth and increasing demand driving and growing rents. During
the fourth quarter of 2021, we signed approximately 415,000 square feet of
leases and approximately 274,000 square feet of leases commenced. Approximately
167,000 square feet of the leases that commenced had been vacant for less than
one year and represent an increase in net rental obligations of approximately
34% over the prior leases.

Our Boston central business district ("CBD") in-service portfolio was
approximately 94% leased as of December 31, 2021. During the fourth quarter of
2021, we completed and fully placed in-service 100 Causeway Street, an
approximately 634,000 net rentable square feet Class A office building in which
we have a 50% ownership interest. Including leases that have not yet commenced,
this project is 95% leased.

Our approximately 2.0 million square foot in-service office portfolio in
Cambridge was approximately 99% leased as of December 31, 2021. During the
fourth quarter of 2021, we continued our development of 325 Main Street at
Kendall Center in Cambridge, Massachusetts, which is 90% pre-leased to an office
tenant for a term of 15 years. We expect to place the building in-service in
2022. In early 2021, we received approximately one million square feet of new
entitlements at Kendall Center for potential future development of office or
lab/life sciences spaces.

Waltham and the area surrounding the Route 128-Mass Turnpike interchange
continue to comprise a popular submarket of Boston for leading and emerging
companies in the life sciences, biotechnology and technology sectors. During the
fourth quarter of 2021, we signed leases for approximately 165,000 square feet
at 880 Winter Street, an approximately 224,000 square foot office property in
Waltham, Massachusetts under conversion to lab
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space. This project is 74% pre-leased as of February 14, 2022, with delivery
expected in late 2022. In addition, we completed and fully placed in-service the
redeveloped portion of 200 West Street in Waltham, Massachusetts, an
approximately 138,000 square foot redevelopment to convert a portion of the
building to lab space. Including leases that have not yet commenced, this
project is 100% leased. In addition, we commenced the development of 103
CityPoint in Waltham, Massachusetts. When completed, the project will consist of
approximately 113,000 square feet of life sciences space.

Los Angeles

Our Los Angeles ("LA") in-service portfolio of approximately 2.3 million square
feet is currently focused in West LA and includes Colorado Center, a 1.1 million
square foot property of which we own 50%, and Santa Monica Business Park, a
21-building, approximately 1.2 million square foot property of which we own 55%.
As of December 31, 2021, our LA in-service properties were approximately 89%
leased.

Leasing activity in the greater Los Angeles market continued to recover in the
fourth quarter of 2021, especially in West LA where our properties are located.
Technology and media tenants accounted for almost half of all transactions in
the fourth quarter in the greater Los Angeles market. These transactions suggest
a steady preference by many creative tenants for modern low-rise product with
collaborative space similar to our two office parks in Santa Monica.

New York

As of December 31, 2021, our New York CBD in-service portfolio was approximately
90% leased. During the fourth quarter of 2021, we executed approximately 594,000
square feet of leases and commenced approximately 222,000 square feet of leases.
Approximately 93,000 square feet of the leases that commenced had been vacant
for less than one year and represent a decrease in net rental obligations of
approximately 18% over the prior leases. One lease where we terminated a tenant,
received a fee, and subsequently took over a below-market sublease accounted for
the decrease. Excluding this lease, we experienced an increase in net rental
obligations of approximately 7%.

In the fourth quarter of 2021, we acquired and commenced the redevelopment of
360 Park Avenue South, in which we have an aggregate (direct and indirect)
42.21% interest. The redevelopment will include modernizing building systems and
creating amenities, collaborative spaces, and client spaces to reimagine the
property to meet the needs of today's tech and creative firms and position it as
the premier workspace for growing companies in the Midtown South submarket.

San Francisco

The recovery in San Francisco continues to lag our East Coast markets as fewer
businesses have commenced their return to work, street-level retail remains
closed or slow, and the streets are quiet. As restrictions are lifted, we
believe the pace of new leasing activity will begin to increase.

Our San Francisco CBD in-service properties were approximately 92% leased as of
December 31, 2021. In the fourth quarter of 2021 in the CBD portfolio, we
commenced approximately 76,000 square feet of leases with an increase in net
rental obligations of approximately 13%.

In South San Francisco, life sciences activity at our Gateway Commons joint
venture continues to be productive. We executed a 229,000 square foot lease with
a leading biotech company at 751 Gateway. The lease comprises the entire
building, which is currently under construction with initial occupancy expected
in 2024. 751 Gateway is the first phase of a multi-phase life sciences campus
development project at Gateway Commons. When completed, we will have a 49%
ownership interest in 751 Gateway. Also at Gateway Commons, in January 2022, we
commenced the redevelopment 651 Gateway. 651 Gateway is an approximately 300,000
net rentable square feet office building that will be converted to life sciences
space. This property is owned by a joint venture in which we have a 50%
interest.

Throughout 2021, the Class A office Silicon Valley leasing markets grew stronger
with healthy net absorption. We are experiencing improving tour activity and the
market is seeing large technology tenant requirements for existing and new
products. Due to the limited supply of new, high-quality office space in this
submarket, in February 2022, we announced the restart of the first phase of our
Platform 16 development project. Platform 16, in which we own a 55% interest, is
an approximately 1.1 million aggregate square foot development located in San
Jose, California and proximate to San Jose Diridon Station. The first phase of
the development project will include the
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construction of an approximately 390,000 square foot Class A creative office
building and a below-grade parking garage, which are expected to be completed in
early 2025.

Inclusive of the CBD and suburban portfolio, we executed approximately 405,000
square feet of leases, and commenced approximately 191,000 square feet of leases
in the San Francisco region during the fourth quarter of 2021. Of the leases
that commenced, approximately 159,000 square feet had been vacant for less than
one year and represent a modest increase in net rental obligations of
approximately 1% over the prior leases.

Seattle

We entered the Seattle market on September 1, 2021 with the acquisition of
Safeco Plaza, a 50-story, 765,000 net rentable square feet, LEED Platinum
certified, Class A office property in Seattle, Washington. The property was
acquired under a joint venture in which we have a 33.67% ownership interest.
Safeco Plaza was approximately 90% leased at December 31, 2021.

Seattle is one of the most dynamic office markets in the U.S. for companies in
the technology, life sciences, financial services, and manufacturing sectors.
Much like San Francisco, the recovery from the pandemic is lagging behind our
East Coast markets as workers are slow to return to the office, office worker
supported retail remains closed or slow and the streets remain quiet. However,
in the Seattle market, there are signs of recovery as leasing activity and
tenant demand increased throughout 2021. The technology industry remains a key
market driver and, in the fourth quarter of 2021, accounted for more than 51% of
the total leasing volume.

We continue to explore opportunities to increase our presence in the Seattle
market including seeking investments where our financial, operational,
redevelopment and development expertise provide the opportunity to achieve
accretive returns.

Washington, DC

During the fourth quarter of 2021, we executed approximately 379,000 square feet
of leases and we commenced approximately 1.4 million square feet of leases in
the Washington, DC region. Of these leases, approximately 240,000 square feet
had been vacant for less than one year and represent a decrease in net rental
obligations of approximately 18% over the prior leases.

Our Washington, DC CBD in-service properties were approximately 85% leased as of
December 31, 2021. In December 2021, we delivered 2100 Pennsylvania Avenue to
our anchor tenant, who leases approximately 56% of the building, to perform
their tenant improvements and we are working on leasing the remainder of the
building. 2100 Pennsylvania Avenue is a Class A office project with
approximately 480,000 net rentable square feet located in Washington, DC and is
58% pre-leased as of February 14, 2022.

Our Washington, DC suburban properties include our significant presence in
Reston, Virginia, where demand from technology and cybersecurity tenants remains
strong. Our Washington, DC suburban properties were approximately 89% leased as
of December 31, 2021. During the fourth quarter of 2021, we completed more than
200,000 square feet of leasing in Reston, including an approximately 89,000
square foot lease with a technology company at South of Market in Reston,
Virginia.

During the fourth quarter of 2021, we partially placed in-service Reston Next, a
Class A office project with approximately 1.1 million square feet located in
Reston, Virginia. This project is 86% pre-leased as of February 14, 2022. In
addition, a joint venture in which we own a 50% interest fully placed in-service
7750 Wisconsin Avenue, a Class A office project with approximately 733,000 net
rentable square feet located in Bethesda, Maryland. This project is 100% leased.




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Leasing Statistics

The table below details the leasing activity, including 100% of the
unconsolidated joint ventures, that commenced during the year ended December 31,
2021:

                                                                                             Year ended December 31,
                                                                                                      2021
                                                                                                  (Square Feet)
Vacant space available at the beginning of the period                                                     4,517,385
Property dispositions/properties taken out of service (1)                                                  (104,613)
Vacant space in properties acquired (2)                                                                     143,848
Properties placed (and partially placed) in-service (3)                                                   2,035,237
Leases expiring or terminated during the period                                                           5,236,075
Total space available for lease                                                                          11,827,932
1st generation leases                                                                                     1,896,596
2nd generation leases with new tenants                                                                    2,592,605
2nd generation lease renewals                                                                             1,998,702
Total space leased (4)                                                                                    6,487,903
Vacant space available for lease at the end of the period                                                 5,340,029

Leases executed during the period, in square feet (5)                                                     5,056,310

Second generation leasing information: (6)
Leases commencing during the period, in square feet                                                       4,591,307
Weighted Average Lease Term                                                                                  83 Months
Weighted Average Free Rent Period                                                                             170 Days
Total Transaction Costs Per Square Foot (7)                                                                  $71.71
Increase (Decrease) in Gross Rents (8)                                                                        (0.16) %
Increase (Decrease) in Net Rents (9)                                                                          (0.31) %


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(1)Total square feet of property dispositions during the year ended December 31,
2021 consists of 29,595 square feet due to the sale of Annapolis Junction
Building Six. Total square feet of properties taken out of service during the
year ended December 31, 2021 consists of 34,290 square feet at 880 Winter Street
and 40,728 square feet at 800 Boylston Street - The Prudential Center, both due
to redevelopment.
(2)Total square feet of vacant space in properties acquired during the year
ended December 31, 2021 consists of 69,581 square feet at Safeco Plaza and
74,267 square feet at Shady Grove Innovation District.
(3)Total square feet of properties placed (and partially placed) in-service
during the year ended December 31, 2021 consists of 195,326 square feet of
office and 31,950 square feet of retail at One Five Nine East 53rd Street, 6,709
square feet at 685 Gateway, 633,819 square feet at 100 Causeway Street, 733,483
square feet at 7750 Wisconsin Avenue, 295,506 square feet at Reston Next and
138,444 square feet at 200 West Street.
(4)Represents leases for which lease revenue recognition has commenced in
accordance with GAAP during the year ended December 31, 2021.
(5)Represents leases executed during the year ended December 31, 2021 for which
we either (1) commenced lease revenue recognition in such period or (2) will
commence lease revenue recognition in subsequent periods, in accordance with
GAAP, and includes leases at properties currently under development. The total
square feet of leases executed and recognized during the year ended December 31,
2021 is 1,156,558.
(6)Second generation leases are defined as leases for space that had previously
been leased by us. Of the 4,591,307 square feet of second generation leases that
commenced during the year ended December 31, 2021, leases for 2,856,968 square
feet were signed in prior periods.
(7)Total transaction costs include tenant improvements and leasing commissions
but exclude free rent concessions and other inducements in accordance with GAAP.
(8)Represents the decrease in gross rent (base rent plus expense reimbursements)
on the new versus expired leases on the 3,285,722 square feet of second
generation leases that had been occupied within the prior 12 months for the year
ended December 31, 2021; excludes leases that management considers temporary
because the tenant is not expected to occupy the space on a long-term basis.
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(9)Represents the decrease in net rent (gross rent less operating expenses) on
the new versus expired leases on the 3,285,722 square feet of second generation
leases that had been occupied within the prior 12 months for the year ended
December 31, 2021.

For descriptions of significant transactions that we completed during 2021, see
“Item 1. Business-Transactions During 2021.”

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America, or GAAP, requires management
to use judgment in the application of accounting policies, including making
estimates and assumptions. We base our estimates on historical experience and on
various other assumptions believed to be reasonable under the circumstances.
These judgments affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. If our judgment or interpretation of the facts and circumstances
relating to various transactions had been different, it is possible that
different accounting policies would have been applied resulting in a different
presentation of our financial statements. From time to time, we evaluate our
estimates and assumptions. In the event estimates or assumptions prove to be
different from actual results, adjustments are made in subsequent periods to
reflect more current information. Our significant accounting policies, which
utilize these critical accounting estimates, are described in Note 2 to our
Consolidated Financial Statements.

We consider our critical accounting estimates to be those used in the
determination of the reported amounts and disclosure related to the following:

•Purchase price allocations; and

•Impairment.

Each of the above critical accounting estimates is described in more detail
below.

Real Estate

Purchase Price Allocations

We assess the fair value of acquired tangible and intangible assets (including
land, buildings, tenant improvements, "above-" and "below-market" leases,
leasing and assumed financing origination costs, acquired in-place leases, other
identified intangible assets and assumed liabilities) and allocate the purchase
price to the acquired assets and assumed liabilities, including land and
buildings as if vacant. We assess fair value based on estimated cash flow
projections that utilize discount and/or capitalization rates that we deem
appropriate, as well as available market information. Estimates of future cash
flows are based on a number of factors including the historical operating
results, known and anticipated trends, and market and economic conditions.

The fair value of the tangible assets of an acquired property considers the
value of the property as if it were vacant. We also consider an allocation of
purchase price of other acquired intangibles, including acquired in-place leases
that may have a customer relationship intangible value, including (but not
limited to) the nature and extent of the existing relationship with the tenants,
the tenants' credit quality and expectations of lease renewals. Based on our
acquisitions to date, our allocation to customer relationship intangible assets
has been immaterial.

We record acquired "above-" and "below-market" leases at their fair values
(using a discount rate which reflects the risks associated with the leases
acquired) equal to the difference between (1) the contractual amounts to be paid
pursuant to each in-place lease and (2) management's estimate of fair market
lease rates for each corresponding in-place lease, measured over a period equal
to the remaining term of the lease for above-market leases and the initial term
plus the term of any below-market fixed rate renewal options for below-market
leases. Acquired "above-" and "below-market" lease values have been reflected
within Prepaid Expenses and Other Assets and Other Liabilities, respectively, in
our Consolidated Balance Sheets. Other intangible assets acquired include
amounts for in-place lease values that are based on our evaluation of the
specific characteristics of each tenant's lease. Factors to be considered
include estimates of carrying costs during hypothetical expected lease-up
periods considering current market conditions, and costs to execute similar
leases. In estimating carrying costs, we include real estate taxes, insurance
and other operating expenses and estimates of lost rentals at market rates
during the expected lease-up periods, depending on local market conditions. In
estimating costs to execute similar leases, we consider leasing commissions,
legal and other related expenses.
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Impairment

Management reviews its long-lived assets for indicators of impairment following
the end of each quarter and when events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. This evaluation of
long-lived assets is dependent on a number of factors, including when there is
an event or adverse change in the operating performance of the long-lived asset
or a current expectation that, more likely than not, a long-lived asset will be
sold or otherwise disposed of significantly before the end of its previously
estimated useful life or hold period. An impairment loss is recognized if the
carrying amount of an asset is not recoverable and exceeds its fair value. The
evaluation of anticipated cash flows is subjective and is based in part on
assumptions regarding anticipated hold periods, future occupancy, future rental
rates, future capital requirements, discount rates and capitalization rates that
could differ materially from actual results in future periods. Because cash
flows on properties considered to be "long-lived assets to be held and used" are
considered on an undiscounted basis to determine whether an asset may be
impaired, our established strategy of holding properties over the long term
directly decreases the likelihood of recording an impairment loss. If our hold
strategy changes or market conditions otherwise dictate an earlier sale date, an
impairment loss may be recognized and such loss could be material. If we
determine that an impairment has occurred, the affected assets must be reduced
to their fair value.

Income Taxes

Our accounting policies related to income tax are described in Note 2 to our
Consolidated Financial Statements.

Boston Properties Inc.

The net difference between the tax basis and the reported amounts of BXP's
assets and liabilities was approximately $1.8 billion and $2.0 billion as of
December 31, 2021 and 2020, respectively, which was primarily related to the
difference in basis of contributed property and accrued rental income.

Certain entities included in BXP's Consolidated Financial Statements are subject
to certain state and local taxes. These taxes are recorded as operating expenses
in the accompanying Consolidated Financial Statements.

The following table reconciles GAAP net income attributable to Boston
Properties, Inc.
to taxable income:

For the year ended December 31,

                                                                          2021                  2020               2019
                                                                                        (in thousands)
Net income attributable to Boston Properties, Inc.                 $    505,195             $ 872,727          $ 521,534

Straight-line rent and net “above-” and “below-market” rent
adjustments

                                                            (107,942)              (90,144)           (65,111)
Book/Tax differences from depreciation and amortization                 146,028               106,203            125,281

Book/Tax differences on gains/(losses) from capital
transactions

                                                            (25,756)             (345,854)            51,555
Book/Tax differences from stock-based compensation                       61,387                42,576             49,123
Tangible Property Regulations                                           (77,489)             (144,981)          (148,157)
Other book/tax differences, net                                          71,464               117,166            (15,221)
Taxable income                                                     $    572,887             $ 557,693          $ 519,004

Boston Properties Limited Partnership

The net difference between the tax basis and the reported amounts of BPLP's
assets and liabilities was approximately $2.9 billion as of December 31, 2021
and 2020, which was primarily related to the difference in basis of contributed
property and accrued rental income.

Certain entities included in BPLP’s Consolidated Financial Statements are
subject to certain state and local taxes. These taxes are recorded as operating
expenses in the accompanying Consolidated Financial Statements.

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The following table reconciles GAAP net income attributable to Boston Properties
Limited Partnership
to taxable income:

For the year ended December 31,

                                                                         2021                  2020               2019
                                                                                       (in thousands)

Net income attributable to Boston Properties Limited
Partnership

                                                       $    570,965             $ 990,479          $ 590,602

Straight-line rent and net “above-” and “below-market” rent
adjustments

                                                           (120,074)             (100,375)           (72,687)
Book/Tax differences from depreciation and amortization                144,794               101,470            124,108

Book/Tax differences on gains/(losses) from capital
transactions

                                                           (24,109)             (359,497)            56,955
Book/Tax differences from stock-based compensation                      68,287                47,408             54,838
Tangible Property Regulations                                          (86,199)             (161,435)          (165,395)
Other book/tax differences, net                                         81,693               121,397            (20,177)
Taxable income                                                    $    635,357             $ 639,447          $ 568,244

Results of Operations for the Year Ended December 31, 2021 and 2020

This section of this Form 10-K generally discusses 2021 and 2020 items and
year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and
year-to-year comparisons between 2020 and 2019 that are not included in this
Form 10-K can be found in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Part II, Item 7 of our Annual Report on
Form 10-K for the year ended December 31, 2020, which was filed with the SEC on
February 26, 2021.

Net income attributable to Boston Properties, Inc. common shareholders and net
income attributable to Boston Properties Limited Partnership common unitholders
decreased approximately $366.0 million and $418.0 million for the year ended
December 31, 2021 compared to 2020, respectively, as set forth in the following
tables and for the reasons discussed below under the heading "Comparison of the
year ended December 31, 2021 to the year ended December 31, 2020" within "Item
7-Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The following are reconciliations of Net Income Attributable to Boston
Properties, Inc.
Common Shareholders to Net Operating Income and Net Income
Attributable to Boston Properties Limited Partnership Common Unitholders to Net
Operating Income for the year ended December 31, 2021 and 2020 (in thousands):

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Boston Properties, Inc.

                                                                                    Year ended December 31,
                                                                                                    Increase/                 %
                                                             2021                 2020             (Decrease)              Change
Net Income Attributable to Boston Properties,
Inc. Common Shareholders                                $   496,223          $   862,227          $ (366,004)                 (42.45) %
Preferred stock redemption charge                             6,412                    -               6,412                  100.00  %
Preferred dividends                                           2,560               10,500              (7,940)                 (75.62) %
Net Income Attributable to Boston Properties,
Inc.                                                        505,195              872,727            (367,532)                 (42.11) %
Net Income Attributable to Noncontrolling
Interests:
Noncontrolling interest-common units of the
Operating Partnership                                        55,931               97,704             (41,773)                 (42.75) %
Noncontrolling interests in property partnerships            70,806               48,260              22,546                   46.72  %
Net Income                                                  631,932            1,018,691            (386,759)                 (37.97) %
Other Expenses:
Add:
Interest expense                                            423,346              431,717              (8,371)                  (1.94) %
Losses from early extinguishment of debt                     45,182                    -              45,182                  100.00  %

Loss from unconsolidated joint ventures                       2,570               85,110             (82,540)                 (96.98) %
Other Income:
Less:
Gains from investments in securities                          5,626                5,261                 365                    6.94  %
Interest and other income (loss)                              5,704                5,953                (249)                  (4.18) %
Gains on sales of real estate                               123,660              618,982            (495,322)                 (80.02) %
Other Expenses:
Add:
Depreciation and amortization expense                       717,336              683,751              33,585                    4.91  %
Transaction costs                                             5,036                1,531               3,505                  228.94  %
Payroll and related costs from management
services contracts                                           12,487               11,626                 861                    7.41  %
General and administrative expense                          151,573              133,112              18,461                   13.87  %
Other Revenue:
Less:
Direct reimbursements of payroll and related
costs from management services contracts                     12,487               11,626                 861                    7.41  %
Development and management services revenue                  27,697               29,641              (1,944)                  (6.56) %
Net Operating Income                                    $ 1,814,288          $ 1,694,075          $  120,213                    7.10  %


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Boston Properties Limited Partnership

                                                                                    Year ended December 31,
                                                                                                    Increase/                 %
                                                             2021                 2020             (Decrease)              Change
Net Income Attributable to Boston Properties
Limited Partnership Common Unitholders                  $   561,993          $   979,979          $ (417,986)                 (42.65) %
Preferred unit redemption charge                              6,412                    -               6,412                  100.00  %
Preferred distributions                                       2,560               10,500              (7,940)                 (75.62) %
Net Income Attributable to Boston Properties
Limited Partnership                                         570,965              990,479            (419,514)                 (42.35) %
Net Income Attributable to Noncontrolling
Interests:
Noncontrolling interests in property partnerships            70,806               48,260              22,546                   46.72  %
Net Income                                                  641,771            1,038,739            (396,968)                 (38.22) %
Other Expenses:
Add:
Interest expense                                            423,346              431,717              (8,371)                  (1.94) %
Losses from early extinguishment of debt                     45,182                    -              45,182                  100.00  %

Loss from unconsolidated joint ventures                       2,570               85,110             (82,540)                 (96.98) %
Other Income:
Less:
Gains from investments in securities                          5,626                5,261                 365                    6.94  %
Interest and other income (loss)                              5,704                5,953                (249)                  (4.18) %
Gains on sales of real estate                               125,198              631,945            (506,747)                 (80.19) %
Other Expenses:
Add:
Depreciation and amortization expense                       709,035              676,666              32,369                    4.78  %
Transaction costs                                             5,036                1,531               3,505                  228.94  %
Payroll and related costs from management
services contracts                                           12,487               11,626                 861                    7.41  %
General and administrative expense                          151,573              133,112              18,461                   13.87  %
Other Revenue:
Less:
Direct reimbursements of payroll and related
costs from management services contracts                     12,487               11,626                 861                    7.41  %
Development and management services revenue                  27,697               29,641              (1,944)                  (6.56) %
Net Operating Income                                    $ 1,814,288          $ 1,694,075          $  120,213                    7.10  %


At December 31, 2021 and 2020, we owned or had joint venture interests in a
portfolio of 201 and 196 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 year ended December 31,
2021 and 2020 show separately the changes attributable to the properties that
were owned by us and in-service throughout each period compared (the "Same
Property Portfolio") and the changes attributable to the properties included in
the Acquired, Placed In-Service, Development or Redevelopment or Sold
Portfolios.

In our analysis of operating results, particularly to make comparisons of net
operating income 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 development or redevelopment after the beginning of the
earliest period presented or disposed of prior to the end of the latest period
presented.
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Net operating income ("NOI") is a non-GAAP financial measure equal to net income
attributable to Boston Properties, Inc. common shareholders and net income
attributable to Boston Properties Limited Partnership common unitholders, as
applicable, the most directly comparable GAAP financial measures, plus (1)
preferred stock/unit redemption charge, preferred dividends/distributions, net
income attributable to noncontrolling interests, interest expense, losses from
early extinguishment of debt, loss from unconsolidated joint ventures,
depreciation and amortization expense, transaction costs, payroll and related
costs from management services contracts and corporate general and
administrative expense less (2) gains from investments in securities, interest
and other income (loss), gains on sales of real estate, direct reimbursements of
payroll and related costs from management services contracts and development and
management services revenue. We use NOI internally as a performance measure and
believe it provides useful information to investors regarding our results of
operations and financial condition because, when compared across periods, it
reflects the impact on operations from trends in occupancy rates, rental rates,
operating costs and acquisition and development activity on an unleveraged
basis, providing perspective not immediately apparent from net income
attributable to Boston Properties, Inc. common shareholders and net income
attributable to Boston Properties Limited Partnership common unitholders. For
example, interest expense is not necessarily linked to the operating performance
of a real estate asset and is often incurred at the corporate level as opposed
to the property level. Similarly, interest expense may be incurred at the
property level even though the financing proceeds may be used at the corporate
level (e.g., 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 attributable to Boston Properties, Inc.
common shareholders and net income attributable to Boston Properties Limited
Partnership common unitholders as presented in our Consolidated Financial
Statements. NOI should not be considered as a substitute for net income
attributable to Boston Properties, Inc. common shareholders or net income
attributable to Boston Properties Limited Partnership common unitholders
(determined in accordance with GAAP) or any other GAAP financial measures and
should only be considered together with and as a supplement to our financial
information prepared in accordance with GAAP.

The gains on sales of real estate and depreciation expense may differ between
BXP and BPLP as a result of previously applied acquisition accounting by BXP for
the issuance of common stock in connection with non-sponsor OP Unit redemptions
by BPLP. This accounting resulted in a step-up of the real estate assets at BXP
that was allocated to certain properties. The difference between the real estate
assets of BXP as compared to BPLP for certain properties having an allocation of
the real estate step-up will result in a corresponding difference in gains on
sales of real estate and depreciation expense when those properties are sold.
For additional information see the Explanatory Note that follows the cover page
of this Annual Report on Form 10-K.

Comparison of the year ended December 31, 2021 to the year ended December 31,
2020

The table below shows selected operating information for the Same Property
Portfolio and the Total Property Portfolio. The Same Property Portfolio consists
of 137 properties totaling approximately 38.7 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, 2020 and
owned and in service through December 31, 2021. The Total Property Portfolio
includes the effects of the other properties either acquired, placed in-service,
in development or redevelopment after January 1, 2020 or disposed of on or prior
to December 31, 2021. This table includes a reconciliation from the Same
Property Portfolio to the Total Property Portfolio by also providing information
for the years ended December 31, 2021 and 2020 with respect to the properties
that were acquired, placed in-service, in development or redevelopment or sold.

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                                                                                                                                                                  Properties
                                                                                                                         Properties Acquired                  Placed In-Service               Properties in Development or
                                                            Same Property Portfolio                                           Portfolio                           Portfolio                      Redevelopment Portfolio               Properties Sold Portfolio                                      Total Property Portfolio
                                                                             Increase/                %                                                                                                                                                                                                                 Increase/               %
                                      2021                 2020             (Decrease)             Change                2021             2020              2021              2020               2021               2020                 2021                2020                2021                 2020             (Decrease)             Change
                                                                                                                                                                                 (dollars in thousands)
Rental Revenue: (1)
Lease Revenue (Excluding
Termination Income)              $ 2,614,630          $ 2,518,898          $   95,732                  3.80  %       $   8,145          $  435         

$ 50,717 $ 24,573 $ 4,028 $ 14,430 $ 22,247 $ 41,440 $ 2,699,767 $ 2,599,776

          $   99,991                 3.85  %
Termination Income                    11,428                8,914               2,514                 28.20  %              54               -                  -                 -                   -                 -                      -                59               11,482                8,973               2,509                27.96  %
Lease Revenue                      2,626,058            2,527,812              98,246                  3.89  %           8,199             435             50,717            24,573               4,028            14,430                 22,247            41,499            2,711,249            2,608,749             102,500                 3.93  %
Parking and Other                     78,388               68,608               9,780                 14.25  %             895              14                 15                20                 201                 -                  1,412             1,404               80,911               70,046              10,865                15.51  %
Total Rental Revenue (1)           2,704,446            2,596,420             108,026                  4.16  %           9,094             449             50,732            24,593               4,229            14,430                 23,659            42,903            2,792,160            2,678,795             113,365                 4.23  %
Real Estate Operating Expenses       967,317              966,623                 694                  0.07  %           3,643             875             15,639            11,567               2,285             4,834                  7,823            14,570              996,707              998,469              (1,762)               (0.18) %
Net Operating Income (Loss),
Excluding Residential and Hotel    1,737,129            1,629,797             107,332                  6.59  %           5,451            (426)            35,093            13,026               1,944             9,596                 15,836            28,333            1,795,453            1,680,326             115,127                 6.85  %
Residential Net Operating Income
(Loss) (2)                            21,049               21,513                (464)                (2.16) %               -               -             (2,825)           (2,106)                  -                 -                      -                 -               18,224               19,407              (1,183)               (6.10) %
Hotel Net Operating Income
(Loss) (2)                               611               (5,658)              6,269                110.80  %               -               -                  -                 -                   -                 -                      -                 -                  611               (5,658)              6,269               110.80  %
Net Operating Income (Loss)      $ 1,758,789          $ 1,645,652          $  113,137                  6.87  %       $   5,451          $ (426)         $  32,268          $ 10,920          $    1,944          $  9,596          $      15,836          $ 28,333          $ 1,814,288          $ 1,694,075          $  120,213                 7.10  %


_______________
(1)Rental Revenue is equal to Revenue less Development and Management Services
Revenue and Direct Reimbursements of Payroll and Related Costs from Management
Services Revenue per the Consolidated Statements of Operations, excluding the
residential and hotel revenue that is noted below. We use Rental Revenue
internally as a performance measure and in calculating other non-GAAP financial
measures (e.g., NOI), which provides investors with information regarding our
performance that is not immediately apparent from the comparable non-GAAP
measures and allows investors to compare operating performance between periods.
(2)For a detailed discussion of NOI, including the reasons management believes
NOI is useful to investors, see page 71. Residential Net Operating Income (Loss)
for the year ended December 31, 2021 and 2020 is comprised of Residential
Revenue of $42,668 and $38,146 less Residential Expenses of $24,444 and $18,739,
respectively. Hotel Net Operating Income (Loss) for the year ended December 31,
2021 and 2020 is comprised of Hotel Revenue of $13,609 and $7,478 less Hotel
Expenses of $12,998 and $13,136, respectively, per the Consolidated Statements
of Operations.
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Same Property Portfolio

Lease Revenue (Excluding Termination Income)

Lease revenue (excluding termination income) from the Same Property Portfolio
increased by approximately $95.7 million for the year ended December 31, 2021
compared to 2020. Approximately $86.1 million of the increase related to
write-offs of accrued rent and accounts receivable balances which occurred
during the year ended December 31, 2020 and did not recur in 2021, for primarily
retail and co-working tenants that either terminated their leases or for which
we determined that the accrued rent and/or accounts receivable balances were no
longer probable of collection. Excluding the write-offs, the Same Property
Portfolio increased by approximately $9.6 million due to an increase in average
revenue per square foot by approximately $1.54, contributing approximately $52.0
million, partially offset by average occupancy decreasing from 93.1% to 91.5%,
resulting in a decrease of approximately $42.4 million.

We continue to evaluate the collectability of our accrued rent and accounts
receivable balances related to lease revenue. Following a write-off, if (1) we
subsequently determine that it is probable we will collect substantially all the
remaining lessee's lease payments under the lease term and (2) the lease has not
been modified since the write-off, we will then reinstate the accrued rent and
accounts receivable write-offs, adjusting for the amount related to the period
when the lease payments were considered not probable of collection. If our
estimate of collectability differs from the cash received, then the timing and
amount of our reported revenue could be impacted.

The number of executed COVID-19 lease modifications has decreased each quarter
since the second quarter of 2020 and we are now executing COVID-19 modifications
on a limited basis.

Termination Income

Termination income increased by approximately $2.5 million for the year ended
December 31, 2021 compared to 2020.

Termination income for the year ended December 31, 2021 totaled approximately
$11.4 million and related to 27 tenants across the Same Property Portfolio, most
of which related to tenants that terminated leases early in New York City and
the Boston region.

Termination income for the year ended December 31, 2020 totaled approximately
$8.9 million and related to 39 tenants across the Same Property Portfolio, most
of which related to tenants that terminated leases early in New York City.

Parking and Other Revenue

Parking and other revenue increased by approximately $9.8 million for the year
ended December 31, 2021 compared to 2020. Parking revenue and other revenue
increased by approximately $7.1 million and $2.7 million, respectively. The
increase in parking revenue was primarily due to an increase in transient
parking. The increase in other revenue was primarily due to approximately $5.3
million in insurance proceeds related to damage at one of our properties in the
New York region due to a water-main break, partially offset by a decrease in
other revenue of approximately $2.6 million related to tenant restoration
obligation payments in 2020 that did not recur in 2021. Expenses of $5.3 million
related to the insurance claim are included within real estate operating
expenses.

For the year ended December 31, 2021, transient parking increased by
approximately $10.0 million, partially offset by a decrease in monthly parking
of approximately $3.3 million, compared to the year ended December 31, 2020.
Some of our monthly parking revenues are contractual agreements embedded in our
leases, and some are at will individual agreements.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio increased by
approximately $0.7 million, or 0.1%, for the year ended December 31, 2021
compared to 2020, due primarily to an increase in utility expense and expenses
related to the insurance claim mentioned above, partially offset by a decrease
in real estate taxes. The increase in utility expense was experienced across the
portfolio and was primarily driven by an increase in physical tenant occupancy,
which led to greater demand for electricity and HVAC.
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Properties Acquired Portfolio

The table below lists the properties acquired between January 1, 2020 and
December 31, 2021. Rental revenue and real estate operating expenses increased
by approximately $8.6 million and $2.8 million, respectively, for the year ended
December 31, 2021 compared to 2020, as detailed below.

                                                                                             Rental Revenue                             Real Estate Operating Expenses
          Name                    Date acquired            Square Feet            2021            2020           Change              2021               2020           Change
                                                                                                                    (dollars in thousands)
777 Harrison Street (1)        June 26, 2020                         N/A       $ 2,392          $ 449          $ 1,943          $      2,211          $ 875          $ 1,336
153 & 211 Second Avenue        June 2, 2021                136,882               5,470              -            5,470                   547              -              547
Shady Grove Innovation
District                       August 2, 2021              233,452               1,232              -            1,232                   885              -              885
                                                           370,334             $ 9,094          $ 449          $ 8,645          $      3,643          $ 875          $ 2,768


_______________

(1)Includes operating results for 759 Harrison Street, which we fully acquired
on December 16, 2020.

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially
placed in-service between January 1, 2020 and December 31, 2021. Rental revenue
and real estate operating expenses from our Properties Placed In-Service
Portfolio increased by approximately $29.9 million and $8.5 million,
respectively, for the year ended December 31, 2021 compared to 2020, as detailed
below.

                            Quarter Initially                                                                                            Rental Revenue                                  Real Estate Operating Expenses
       Name                 Placed In-Service            Quarter Fully Placed In-Service            Square Feet             2021              2020             Change               2021                2020             Change
                                                                                                                                                                  (dollars in thousands)
Office
20 CityPoint              Second Quarter, 2019         Second Quarter, 2020                          211,476             $  8,580          $  7,246          $  1,334          $      3,117          $  2,782          $   335
17Fifty Presidents
Street                    First Quarter, 2020          First Quarter, 2020                           275,809               19,868            13,339             6,529                 5,759             3,894            1,865
One Five Nine East
53rd Street (1)           First Quarter, 2021          First Quarter, 2021                           220,000               15,672            (1,041)           16,713                 3,582             1,504            2,078
200 West Street (2)       Fourth Quarter, 2020         Fourth Quarter, 2021                          273,365                6,612             5,049             1,563                 3,181             3,387             (206)
Total Office                                                                                         980,650               50,732            24,593            26,139                15,639            11,567            4,072

Residential
The Skylyne               Third Quarter, 2020          Third Quarter, 2020                           330,996                3,891               155             3,736                 6,716             2,261            4,455
Total Residential                                                                                    330,996                3,891               155             3,736                 6,716             2,261            4,455
                                                                                                   1,311,646             $ 54,623          $ 24,748          $ 29,875          $     22,355          $ 13,828          $ 8,527


_____________
(1)This is the low-rise portion of 601 Lexington Avenue, which was in
development for the year ended December 31, 2020. Rental revenue for the year
ended December 31, 2020 includes an approximately $2.9 million write-off of
accrued rent and accounts receivable balances for a terminated tenant.
(2)Includes 138,444 square feet of redevelopment that was fully placed
in-service in December 2021. This property was in development for the year ended
December 31, 2020.
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Properties in Development or Redevelopment Portfolio

The table below lists the properties that were in development or redevelopment
between January 1, 2020 and December 31, 2021. Rental revenue and real estate
operating expenses from our Properties in Development or Redevelopment Portfolio
decreased by approximately $10.2 million and $2.5 million, respectively, for the
year ended December 31, 2021 compared to 2020, as detailed below.

                                                                                             Rental Revenue                                 Real Estate Operating Expenses
                               Date Commenced
                               Development /
        Name                   Redevelopment             Square Feet            2021             2020              Change               2021               2020            Change
                                                                                                                     (dollars in thousands)
325 Main Street (1)         May 9, 2019                  115,000             $     -          $     36          $     (36)         $       317          $   276          $     41
880 Winter Street (2)       February 25, 2021            224,000               2,476             8,253             (5,777)               1,509            3,174            (1,665)
3625-3635 Peterson
Way (3)                     April 16, 2021               218,000               1,753             6,141             (4,388)                 459            1,384              (925)
                                                         557,000             $ 4,229          $ 14,430          $ (10,201)         $     2,285          $ 4,834          $ (2,549)


_______________
(1)Real estate operating expenses for the year ended December 31, 2021 and 2020
were related to demolition costs.
(2)On February 25, 2021, we commenced the redevelopment and conversion of 880
Winter Street, a 224,000 square foot office property located in Waltham,
Massachusetts, to laboratory space.
(3)On April 16, 2021, we removed 3625-3635 Peterson Way, located in Santa Clara,
California, from our in-service portfolio. We demolished the building and expect
to redevelop the site at a future date.

Properties Sold Portfolio

The table below lists the properties we sold between January 1, 2020 and
December 31, 2021. Rental revenue and real estate operating expenses from our
Properties Sold Portfolio decreased by approximately $19.2 million and $6.7
million, respectively, for the year ended December 31, 2021 compared to 2020, as
detailed below.

                                                                                                                            Rental Revenue                                 Real Estate Operating Expenses
         Name                        Date Sold                Property Type           Square Feet             2021              2020              Change              2021               2020             Change
                                                                                                                                                    (dollars in thousands)
601, 611 and 651
Gateway                       January 28, 2020              Office                     768,000             $      -          $  1,946          $  (1,946)         $        -          $    881          $   (881)
New Dominion Technology
Park                          February 20, 2020             Office                     493,000                    -             2,551             (2,551)                  -               772              (772)
Capital Gallery (1)           June 25, 2020                 Office                     631,000               11,010            23,352            (12,342)              3,824             8,669            (4,845)
181, 191 and 201 Spring
Street                        October 25, 2021              Office                     333,000               12,649            15,054             (2,405)              3,999             4,248              (249)
                                                                                     2,225,000             $ 23,659          $ 42,903          $ 

(19,244) $ 7,823 $ 14,570 $ (6,747)

______________

(1)We completed the sale of a portion of our Capital Gallery property located in
Washington, DC. Capital Gallery is an approximately 631,000 net rentable square
foot Class A office property. The portion sold was comprised of approximately
455,000 net rentable square feet of commercial office space. We continue to own
the land, underground parking garage and remaining commercial office and retail
space. The amounts shown represent the entire property and not just the portion
sold.

For additional information on the sales of the above properties refer to
“Results of Operations-Other Income and Expense Items-Gains on Sales of Real
Estate” within “Item 7-Management’s Discussion and Analysis of Financial
Condition and Results of Operations.”

Residential Net Operating Income (Loss)

Net operating income for our residential same properties decreased by
approximately $0.5 million for the year ended December 31, 2021 compared to
2020. The decrease was primarily due to approximately $0.7 million of
termination income from a retail tenant in 2020 that did not recur in 2021.

The following reflects our occupancy and rate information for The Lofts at
Atlantic Wharf, The Avant at Reston Town Center, Signature at Reston and Proto
Kendall Square
for the years ended December 31, 2021 and 2020.

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                                      The Lofts at Atlantic Wharf                                   The Avant at Reston Town Center                                    Signature at Reston                                       

Proto Kendall Square

                              2021                2020             Change (%)                2021                 2020             Change (%)              2021              2020             Change (%)              2021               2020             Change (%)
Average Monthly
Rental Rate (1)         $      3,558           $ 4,269                  (16.7) %       $       2,277           $ 2,336                   (2.5) %       $   2,358          $ 2,329                    1.2  %       $    2,615          $ 2,810                   (6.9) %
Average Rental
Rate Per Occupied
Square Foot             $       3.99           $  4.73                  (15.6) %       $        2.49           $  2.56                   (2.7) %       $    2.44          $  2.45                   (0.4) %       $     4.80          $  5.17                   (7.2) %
Average Physical
Occupancy (2)                   94.2   %          88.4  %                 6.6  %                94.2   %          90.3  %                 4.3  %            88.6  %          81.6  %                 8.6  %             93.0  %          90.9  %                 2.3  %
Average Economic
Occupancy (3)                   92.2   %          87.9  %                 4.9  %                93.6   %          89.1  %                 5.1  %            86.0  %          77.2  %                11.4  %             92.0  %          89.4  %                 2.9  %


_______________
(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 (Loss)

The Boston Marriott Cambridge hotel had net operating income of approximately
$0.6 million for the year ended December 31, 2021, representing an increase of
approximately $6.3 million compared to the year ended December 31, 2020.

The Boston Marriott Cambridge closed in March 2020 due to COVID-19. The hotel
re-opened on October 2, 2020 and has operated at lower occupancy levels due to
the continued impact of COVID-19 on business and leisure travel. The closing of
the hotel for more than two fiscal quarters, and the decreased demand and
occupancy since its re-opening, have had, and are expected to continue to have,
a material adverse effect on the hotel's operations. We expect hotel occupancy
to remain low until the demand for business and leisure travel accelerates.

The following reflects our occupancy and rate information for the Boston
Marriott Cambridge
hotel for the years ended December 31, 2021 and 2020.

                           2021           2020         Change (%)
Occupancy                   33.5  %        16.4  %        104.3  %
Average daily rate      $ 211.59       $ 211.36             0.1  %
REVPAR                  $  70.92       $  33.52           111.6  %

Other Operating Revenue and Expense Items

Development and Management Services Revenue

Development and management services revenue decreased by approximately $1.9
million for the year ended December 31, 2021 compared to 2020. Development
services revenue decreased by approximately $3.9 million while management
services revenue increased by approximately $2.0 million. The decrease in
development services revenue was primarily related to a decrease in development
fees earned from a building owned by a third-party in the Washington, DC region
and an unconsolidated joint venture in New York City and fees associated with
tenant improvement projects earned from a third-party owned building in the
Washington, DC region. The increase in management services revenue was primarily
related to an increase in property management fees earned from a building owned
by a third-party in the Washington, DC region, the unconsolidated joint venture
that owns Safeco
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Plaza in Seattle, Washington, leasing commissions earned in the Washington, DC
region and from an unconsolidated joint venture in the Los Angeles region.

General and Administrative Expense

General and administrative expense increased by approximately $18.5 million for
the year ended December 31, 2021 compared to 2020 primarily due to an increase
in compensation and health care expenses of approximately $19.9 million,
partially offset by an approximately $1.4 million decrease in other general and
administrative expenses. The increase in compensation expense was related to (1)
an approximately $18.4 million increase in other compensation expenses,
primarily due to the reduction of bonuses paid to senior management for the year
ended December 31, 2020, which resulted from the impact of the COVID-19 pandemic
on our actual performance versus targets under BXP's 2020 annual cash incentive
plan, and accelerated age-based vesting of certain employees, (2) an
approximately $1.2 million increase in health care costs and (3) an
approximately $0.3 million increase in the value of our deferred compensation
plan. The decrease in other general and administrative expenses was primarily
related to a decrease in professional fees.

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 year ended December 31, 2021 and 2020 were
approximately $13.7 million and $12.9 million, respectively. These costs are not
included in the general and administrative expenses discussed above.

Transaction Costs

Transaction costs increased by approximately $3.5 million for the year ended
December 31, 2021 compared to 2020 due primarily to costs incurred in connection
with the pursuit and formation of new joint ventures. In general, transaction
costs relating to the formation of new and pending joint ventures and the
pursuit of other transactions are expensed as incurred.

Depreciation and Amortization Expense

Depreciation expense may differ between BXP and BPLP as a result of previously
applied acquisition accounting by BXP for the issuance of common stock in
connection with non-sponsor OP Unit redemptions by BPLP.  This accounting
resulted in a step-up of the real estate assets at BXP that was allocated to
certain properties.  The difference between the real estate assets of BXP as
compared to BPLP for certain properties having an allocation of the real estate
step-up will result in a corresponding difference in depreciation expense. For
additional information see the Explanatory Note that follows the cover page of
this Annual Report on Form 10-K.

Boston Properties, Inc.

Depreciation and amortization expense increased by approximately $33.6 million
for the year ended December 31, 2021 compared to 2020, as detailed below.

                                                              Depreciation 

and Amortization for the year ended

                                                                                December 31,
Portfolio                                                         2021                2020             Change
                                                                               (in thousands)
Same Property Portfolio (1)                                  $   661,972          $ 656,409          $  5,563
Properties Acquired Portfolio                                      8,990                  2             8,988
Properties Placed In-Service Portfolio                            22,273             10,475            11,798

Properties in Development or Redevelopment Portfolio
(2)

                                                               19,703              9,219            10,484
Properties Sold Portfolio                                          4,398              7,646            (3,248)
                                                             $   717,336          $ 683,751          $ 33,585


_______________
(1)During the year ended December 31, 2021, we commenced redevelopment of View
Boston Observatory at The Prudential Center, a 59,000 net rentable square foot
redevelopment of the top three floors of 800 Boylston Street - The Prudential
Center, located in Boston, Massachusetts. As a result, during the year ended
December 31, 2021, we recorded approximately $2.6 million of accelerated
depreciation expense for the demolition of the space, of which approximately
$0.8 million related to the step-up of real estate assets.
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(2)On February 25, 2021, we commenced redevelopment of 880 Winter Street in
Waltham, Massachusetts. As a result, during the year ended December 31, 2021, we
recorded approximately $13.7 million of accelerated depreciation expense for the
demolition of a portion of the building.

Boston Properties Limited Partnership

Depreciation and amortization expense increased by approximately $32.4 million
for the year ended December 31, 2021 compared to 2020, as detailed below.

                                                              Depreciation 

and Amortization for the year ended

                                                                                December 31,
Portfolio                                                         2021                2020             Change
                                                                               (in thousands)
Same Property Portfolio (1)                                  $   653,671          $ 649,324          $  4,347
Properties Acquired Portfolio                                      8,990                  2             8,988
Properties Placed In-Service Portfolio                            22,273             10,475            11,798

Properties in Development or Redevelopment Portfolio
(2)

                                                               19,703              9,219            10,484
Properties Sold Portfolio                                          4,398              7,646            (3,248)
                                                             $   709,035          $ 676,666          $ 32,369


_______________
(1)During the year ended December 31, 2021, we commenced redevelopment of View
Boston Observatory at The Prudential Center, a 59,000 net rentable square foot
redevelopment of the top three floors of 800 Boylston Street - The Prudential
Center, located in Boston, Massachusetts. As a result, during the year ended
December 31, 2021, we recorded approximately $1.8 million of accelerated
depreciation expense for the demolition of the space.
(2)On February 25, 2021, we commenced redevelopment of 880 Winter Street in
Waltham, Massachusetts. As a result, during the year ended December 31, 2021, we
recorded approximately $13.7 million of accelerated depreciation expense for the
demolition of a portion of the building.

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 year ended December 31, 2021 compared to 2020, loss from unconsolidated
joint ventures decreased by approximately $82.5 million primarily due to (1) a
$60.5 million non-cash impairment charge at our Dock 72 joint venture during the
year ended December 31, 2020, (2) a net decrease in loss from unconsolidated
joint ventures of approximately $4.5 million related to our exit from the
Annapolis, Maryland submarket in 2021 and 2020 (See Note 6 to the Consolidated
Financial Statements) and (3) an approximately $8.1 million increase in net
income at our Dock 72 and Metropolitan Square joint ventures primarily due to a
write-off of lease revenue during the year ended December 31, 2020. There were
no non-cash impairment charge or write-off of lease revenue during 2021.

Gains on Sales of Real Estate

Gains on sales of real estate may differ between BXP and BPLP as a result of
previously applied acquisition accounting by BXP for the issuance of common
stock in connection with non-sponsor OP Unit redemptions by BPLP. This
accounting resulted in a step-up of the real estate assets at BXP that was
allocated to certain properties. The difference between the real estate assets
of BXP as compared to BPLP for certain properties having an allocation of the
real estate step-up will result in a corresponding difference in the gains on
sales of real estate when those properties are sold. For additional information,
see the Explanatory Note that follows the cover page of this Annual Report on
Form 10-K.
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Boston Properties, Inc.

Gains on sales of real estate decreased by approximately $495.3 million for the
year ended December 31, 2021 compared to 2020, as detailed below.

                                                                                                                                                     Gain on Sale
                                                                                                                                    Net Cash            of Real
          Name                        Date Sold                Property Type            Square Feet            Sale Price           Proceeds            Estate
                                                                                                                             (dollars in millions)
2021
6595 Springfield Center
Drive                          December 13, 2018             Office                      634,000                        N/A                N/A       $      8.1    (1)
181, 191 and 201 Spring
Street                         October 25, 2021              Office                      333,000             $     191.5          $   179.9               115.6
                                                                                                             $     191.5          $   179.9          $    123.7
2020
601, 611 and 651 Gateway       January 28, 2020              Office                      768,000             $     350.0          $       -          $    217.7
New Dominion Technology
Park                           February 20, 2020             Office                      493,000                   256.0              254.0               192.3
Capital Gallery                June 25, 2020                 Office                      455,000                   253.7              246.6               203.5
Crane Meadow                   December 16, 2020             Land                                  N/A              14.3               14.2                 5.2
                                                                                                             $     874.0          $   514.8          $    618.7    (2)


___________
(1)On December 13, 2018, we sold our 6595 Springfield Center Drive development
project located in Springfield, Virginia. Concurrently with the sale, we agreed
to act as development manager and guaranteed the completion of the project (See
Note 10 to the Consolidated Financial Statements). The development project
achieved final completion during the third quarter of 2021 and, upon completion
of the project, the total cost of development was determined to be below the
estimated total investment at the time of sale. As a result, we recognized a
gain of approximately $8.1 million.
(2)Excludes approximately $0.3 million of gains on sales of real estate
recognized during the year ended December 31, 2020 related to gain amounts from
sales of real estate occurring in the prior year.

Boston Properties Limited Partnership

Gains on sales of real estate decreased by approximately $506.7 million for the
year ended December 31, 2021 compared to 2020, as detailed below.

                                                                                                                                                     Gain on Sale
                                                                                                                                    Net Cash            of Real
          Name                        Date Sold                Property Type            Square Feet            Sale Price           Proceeds            Estate
                                                                                                                             (dollars in millions)
2021
6595 Springfield Center
Drive                          December 13, 2018             Office                      634,000                        N/A                N/A       $      8.1    (1)
181, 191 and 201 Spring
Street                         October 25, 2021              Office                      333,000             $     191.5          $   179.9               117.1
                                                                                                             $     191.5          $   179.9          $    125.2
2020
601, 611 and 651 Gateway       January 28, 2020              Office                      768,000             $     350.0          $       -          $    222.4
New Dominion Technology
Park                           February 20, 2020             Office                      493,000                   256.0              254.0               197.1
Capital Gallery                June 25, 2020                 Office                      455,000                   253.7              246.6               207.0
Crane Meadow                   December 16, 2020             Land                                  N/A              14.3               14.2                 5.2
                                                                                                             $     874.0          $   514.8          $    631.7    (2)


___________
(1)On December 13, 2018, we sold our 6595 Springfield Center Drive development
project located in Springfield, Virginia. Concurrently with the sale, we agreed
to act as development manager and guaranteed the completion of the project (See
Note 10 to the Consolidated Financial Statements). The development project
achieved final completion during the third quarter of 2021 and, upon completion
of the project, the total cost of development was determined to be below the
estimated total investment at the time of sale. As a result, we recognized a
gain of approximately $8.1 million.
(2)Excludes approximately $0.2 million of gains on sales of real estate
recognized during the year ended December 31, 2020 related to gain amounts from
sales of real estate occurring in the prior year.
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Interest and Other Income (Loss)

Interest and other income (loss) decreased by approximately $0.2 million for the
year ended December 31, 2021 compared to 2020, due primarily to a decrease of
approximately $3.4 million in interest income due to lower interest earned on
our deposits, partially offset by an approximately $3.2 million decrease in the
allowance for current expected credit losses, which results in higher income.

On January 1, 2020, we adopted Accounting Standards Update ("ASU") 2016-13,
"Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments" ("ASU 2016-13") and, as a result, we were required to
record an allowance for current expected credit losses related to our
outstanding (1) related party note receivable, (2) notes receivable and (3)
off-balance sheet credit exposures.

Gains from Investments in Securities

Gains from investments in securities for the year ended December 31, 2021 and
2020 related to investments that we have made to reduce our market risk relating
to deferred compensation plans that we maintain for BXP's officers and former
non-employee directors. Under the deferred compensation plans, each officer or
non-employee director who is eligible to participate is permitted to defer a
portion of the officer's current income or the non-employee director's
compensation on a pre-tax basis and receive a tax-deferred return on these
deferrals based on the performance of specific investments selected by the
officer or non-employee director. In order to reduce our market risk relating to
these plans, we typically acquire, in a separate account that is not restricted
as to its use, similar or identical investments as those selected by each
officer or non-employee director. This enables us to generally match our
liabilities to BXP's officers or former non-employee directors under our
deferred compensation plans with equivalent assets and thereby limit our market
risk. The performance of these investments is recorded as gains from investments
in securities. During the year ended December 31, 2021 and 2020, we recognized
gains of approximately $5.6 million and $5.3 million, respectively, on these
investments. By comparison, our general and administrative expense increased by
approximately $5.6 million and $5.3 million during the year ended December 31,
2021 and 2020, 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 officers and former non-employee directors of
BXP participating in the plans.

Losses From Early Extinguishment of Debt

On February 14, 2021, BPLP completed the redemption of $850.0 million in
aggregate principal amount of its 4.125% senior notes due May 15, 2021. The
redemption price was approximately $858.7 million, which was equal to the stated
principal plus approximately $8.7 million of accrued and unpaid interest to, but
not including, the redemption date. Excluding the accrued and unpaid interest,
the redemption price was equal to the principal amount being redeemed. We
recognized a loss from early extinguishment of debt totaling approximately
$0.4 million related to unamortized origination costs.

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts
outstanding on its delayed draw term loan facility (“Delayed Draw Facility”)
under our prior unsecured revolving credit agreement (the “2017 Credit
Facility”). We recognized a loss from early extinguishment of debt totaling
approximately $0.5 million related to unamortized financing costs.

On October 15, 2021, BPLP used proceeds from its September 2021 offering of
unsecured senior notes and borrowings under its new credit facility, which
replaced the 2017 Credit Facility (as amended and restated, the "2021 Credit
Facility") to complete the redemption of $1.0 billion in aggregate principal
amount of its 3.85% senior notes due February 1, 2023. The redemption price was
approximately $1.05 billion. The redemption price included approximately
$7.9 million of accrued and unpaid interest to, but not including, the
redemption date. Excluding the accrued and unpaid interest, the redemption price
was approximately 104.284% of the principal amount being redeemed. We recognized
a loss from early extinguishment of debt totaling approximately $44.2 million,
which amount included the payment of the redemption premium totaling
approximately $42.8 million.

On December 10, 2021, the consolidated entity in which we have a 55% interest
refinanced the mortgage loan collateralized by its 601 Lexington Avenue property
located in New York City with a new lender. The mortgage loan has a principal
amount of $1.0 billion, requires interest-only payments at a fixed interest rate
of 2.79% per annum and matures on January 9, 2032. The previous mortgage loan
had an outstanding balance of approximately $616.1 million, bore interest at a
fixed rate of 4.75% per annum and was scheduled to mature on April 10, 2022.
There was no prepayment penalty associated with the repayment of the previous
mortgage loan. We recognized a
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loss from early extinguishment of debt totaling approximately $0.1 million due
to the write-off of unamortized deferred financing costs.

Interest Expense

Interest expense decreased by approximately $8.4 million for the year ended
December 31, 2021 compared to 2020, as detailed below.

                                                                                Change in interest
                                                                               expense for the year
                                                                             ended December 31, 2021
                                                                             compared to December 31,
Component                                                                              2020
                                                                                  (in thousands)
Increases to interest expense due to:
Issuance of $850 million in aggregate principal of 2.550% senior notes
due 2032 on March 16, 2021                                                   $              17,389

Issuance of $1.25 billion in aggregate principal of 3.250% senior
notes due 2031 on May 5, 2020

                                                               14,155

Issuance of $850 million in aggregate principal of 2.450% senior notes
due 2033 on September 29, 2021

                                                               5,328

Increase in interest due to finance leases for two in-service
properties

                                                                                   1,880
Decrease in capitalized interest related to development projects                             1,139
Total increases to interest expense                                                         39,891

Decreases to interest expense due to:
Redemption of $850 million in aggregate principal of 4.125% senior
notes due 2021 on February 14, 2021

                                                        (31,497)

Redemption of $1.0 billion in aggregate principal of 3.85% senior
notes due 2023 on October 15, 2021

                                                          (8,176)

Decrease in interest rates for the 2017 and 2021 Credit Facilities and
the repayment of the unsecured term loan on March 16, 2021 (1)

                              (5,964)

Increase in capitalized interest related to development projects that
had finance leases

                                                                          (1,139)
Other interest expense (excluding senior notes)                                               (968)

Decrease in interest due to finance leases that are related to
development properties

                                                                        (355)

Decrease in interest related to the repayment of the University Place
mortgage loan

                                                                                 (163)
Total decreases to interest expense                                                        (48,262)
Total change in interest expense                                             $              (8,371)


_______________

(1)On June 15, 2021, BPLP entered into the 2021 Credit Facility, which replaced
the 2017 Credit Facility (See Note 9 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 years
ended December 31, 2021 and 2020 was approximately $53.1 million and $53.9
million, respectively. These costs are not included in the interest expense
referenced above.

At December 31, 2021, our variable rate debt consisted of BPLP's $1.5 billion
revolving facility (the "Revolving Facility"). The Revolving Facility had $145
million outstanding as of December 31, 2021. For a summary of our consolidated
debt as of December 31, 2021 and December 31, 2020 refer to the heading
"Liquidity and Capital Resources-Debt Financing" within "Item 7-Management's
Discussion and Analysis of Financial Condition and Results of Operations."
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Noncontrolling Interests in Property Partnerships

Noncontrolling interests in property partnerships increased by approximately
$22.5 million for the year ended December 31, 2021 compared to 2020, as detailed
below.
                                                       Noncontrolling 

Interests in Property Partnerships for

                                                                    the year ended December 31,
Property                                                    2021                 2020              Change
                                                                          (in thousands)
767 Fifth Avenue (the General Motors Building)
(1)                                                    $     11,594          $   4,954          $   6,640
Times Square Tower (2)                                       20,051              3,535             16,516
601 Lexington Avenue                                         14,897             16,575             (1,678)
100 Federal Street                                           12,158             14,313             (2,155)
Atlantic Wharf Office Building                               12,106              8,883              3,223
                                                       $     70,806          $  48,260          $  22,546


_______________
(1)The increase was primarily attributable to an increase in lease revenue from
our tenants. In addition, during the year ended December 31, 2020, we
accelerated amortization expense related to a below-market lease that terminated
early.
(2)During the year ended December 31, 2020, we wrote off approximately $26.8
million of accrued rent and accounts receivable balances for tenants that either
terminated their leases or for which we determined these balances were no longer
probable of collection. Approximately $12.0 million represents our partners'
share of the write-offs.

Noncontrolling Interest-Common Units of the Operating Partnership

For BXP, noncontrolling interest-common units of the Operating Partnership
decreased by approximately $41.8 million for the year ended December 31, 2021
compared to 2020 due primarily to a decrease in allocable income, which was the
result of recognizing a greater gain on sales of real estate amount during 2020.
Due to our ownership structure, there is no corresponding line item on BPLP's
financial statements.

Preferred Stock/Unit Redemption Charge

On March 2, 2021, BXP issued a redemption notice for 80,000 shares of its Series
B Preferred Stock, which constituted all of the outstanding Series B Preferred
Stock, and the corresponding Depositary Shares, each representing 1/100th of a
share of Series B Preferred Stock. The redemption price per share of Series B
Preferred Stock was $2,500, plus all accrued and unpaid dividend to, but not
including, the redemption date, totaling $2,516.41 per share. On March 31, 2021,
we transferred the full redemption price for all outstanding shares of Series B
Preferred Stock of approximately $201.3 million, including approximately
$1.3 million of accrued and unpaid dividends to, but not including, the
redemption date, to the redemption agent. The excess of the redemption price
over the carrying value of the Series B Preferred Stock and Series B Preferred
Units of approximately $6.4 million relates to the original issuance costs and
is reflected as a reduction to Net Income Attributable to Boston Properties,
Inc. common shareholders and Net Income Attributable to Boston Properties
Limited Partnership common unitholders on the Consolidated Income Statement.

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, including balloon
payments on maturing debt;

•fund development and redevelopment costs;

•fund capital expenditures, including major renovations, tenant improvements and
leasing costs;

•fund pending and possible acquisitions of properties, either directly or
indirectly through the acquisition of equity interests therein; and

•make the minimum distribution required to enable BXP to maintain its REIT
qualification under the Internal Revenue Code of 1986, as amended.

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We expect to satisfy these needs using one or more of the following:

•cash flow from operations;

•distribution of cash flows from joint ventures;

•cash and cash equivalent balances;

•borrowings under BPLP’s Revolving Facility, short-term bridge facilities and
construction loans;

•long-term secured and unsecured indebtedness (including unsecured exchangeable
indebtedness);

•sales of real estate;

•private equity sources through our Strategic Capital Program (“SCP”) with large
institutional investors, and

•issuances of BXP equity securities and/or preferred or common units of
partnership interests in BPLP.

We draw on multiple financing sources to fund our long-term capital needs. We
expect to fund our current development/redevelopment properties primarily with
our available cash balances, construction loans and BPLP's Revolving Facility.
We use BPLP's Revolving Facility primarily as a bridge facility to fund
acquisition opportunities, refinance outstanding indebtedness and meet
short-term development and working capital needs. Although we may seek to fund
our development projects with construction loans, which may require guarantees
by BPLP, the financing for each particular project ultimately depends on several
factors, including, among others, the project's size and duration, the extent of
pre-leasing and our available cash and access to cost effective capital at the
given time.
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The following table presents information on properties under construction and
redevelopment as of December 31, 2021 (dollars in thousands):

                                                                                                                                                                                                                                   Financings
                                                                                                                                                                                               Estimated Total                             Outstanding at          Estimated Future
                                                                                                                                                                         Investment to            Investment              Total           December 31, 2021       Equity Requirement       Percentage Leased
     Construction Properties               Estimated Stabilization Date                   Location                 # of Buildings          Estimated Square Feet         Date (1)(2)(3)             (1)(2)            Available (1)              (1)                  (1)(2)(4)                   (5)
Office
325 Main Street                          Third Quarter, 2022                     Cambridge, MA                             1                     420,000                $     308,403          $     418,400          $        -          $            -          $       109,997                      90  %
Reston Next                              Fourth Quarter, 2023                    Reston, VA                                2                   1,062,000                      534,847                715,300                   -                       -                  180,453                      86  % (6)
2100 Pennsylvania Avenue                 Third Quarter, 2024                     Washington, DC                            1                     480,000                      229,749                356,100                   -                       -                  126,351                      58  %
360 Park Avenue South (42%
ownership)                               First Quarter, 2025                     New York, NY                              1                     450,000                      192,058                219,000              92,774                  84,925                   19,093                       -  % (7)
Total Office Properties under Construction                                                                                 5                   2,412,000                    1,265,057              1,708,800              92,774                  84,925                  435,894                      65  %

Lab/Life Sciences
880 Winter Street (Redevelopment)        First Quarter, 2023                     Waltham, MA                               1                     224,000                       20,345                108,000                   -                       -                   87,655                      74  %
751 Gateway (49% ownership)              Second Quarter, 2024                    South San Francisco, CA                   1                     230,592                       41,337                127,600                   -                       -                   86,263                     100  %
103 CityPoint                            Third Quarter, 2024                     Waltham, MA                               1                     113,000                       14,663                115,100                   -                       -                  100,437                       -  %
180 CityPoint                            Fourth Quarter, 2024                    Waltham, MA                               1                     329,000                       50,776                274,700                   -                       -                  223,924                       -  %
Total Lab/Life Sciences Properties under Construction                                                                      4                     896,592                      127,121                625,400                   -                       -                  498,279                      44  %

Other
View Boston Observatory at The
Prudential Center (Redevelopment)        N/A                                     Boston, MA                                -                      59,000                       59,699                182,300                   -                       -                  122,601                        N/A (8)
Total Properties under Construction                                                                                        9                   3,367,592                $   1,451,877          $   2,516,500          $   92,774          $       84,925          $     1,056,774                      59  % (9)


___________
(1)Represents our share.
(2)Each of Investment to Date, Estimated Total Investment and Estimated Future
Equity Requirement includes 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 December 31, 2021.
(3)Includes approximately $51.1 million of unpaid but accrued construction costs
and leasing commissions.
(4)Excludes approximately $51.1 million of unpaid but accrued construction costs
and leasing commissions.
(5)Represents percentage leased as of February 14, 2022, including leases with
future commencement dates.
(6)The property was 28% placed in-service as of December 31, 2021.
(7)Investment to Date includes all related costs incurred prior to the
contribution of the property by us to the venture on December 15, 2021 totaling
approximately $107 million and our proportionate share of the loan. Our partners
will fund required capital until their aggregate investment is approximately 58%
of all capital contributions; thereafter, the partners will fund required
capital according to their percentage interests.
(8)We expect to place this project in-service and open to the public in the
second quarter of 2023.
(9)Percentage leased excludes View Boston Observatory at The Prudential Center
(redevelopment) at 800 Boylston Street - The Prudential Center.

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Lease revenue (which includes recoveries from tenants), other income from
operations, available cash balances, mortgage financings, unsecured indebtedness
and draws on BPLP's Revolving Facility are the principal sources of capital that
we use to fund operating expenses, debt service, maintenance and repositioning
capital expenditures, tenant improvements and the minimum distribution required
to enable BXP to maintain its REIT qualification. We seek to maximize income
from our existing properties by maintaining quality standards for our properties
that promote high occupancy rates and permit increases in rental rates while
reducing tenant turnover and controlling operating expenses. Our sources of
revenue also include third-party fees generated by our property management,
leasing and development and construction businesses, as well as the sale of
assets from time to time. We believe these sources of capital will continue to
provide the funds necessary for our short-term liquidity needs, including our
properties under development and redevelopment. Material adverse changes in one
or more sources of capital, whether due to the impacts of the COVID-19 pandemic
or otherwise, may adversely affect our net cash flows.

Leasing activity and revenue from parking and our hotel improved in the fourth
quarter of 2021. We signed approximately 1.8 million square feet of leases in
the fourth quarter of 2021, which is in-line with our 10-year fourth quarter
leasing average. Our fourth quarter parking revenue was approximately 87% of our
fourth quarter 2019 pre-pandemic parking revenue. While our hotel revenue
significantly improved in the fourth quarter of 2021 compared to the fourth
quarter of 2020, it was approximately 47% below our fourth quarter 2019 (i.e.,
pre-pandemic) hotel revenue as a result of low occupancy.

Our primary uses of capital over the next twelve months will be the
commencement, continuation and completion of our current and committed
development and redevelopment projects, servicing the interest payments on our
outstanding indebtedness and satisfying our REIT distribution requirements.

As of December 31, 2021, we had nine properties under development or
redevelopment. Our share of the remaining development and redevelopment costs
that we expect to fund through 2025 was approximately $1.1 billion. In January
2022, we commenced the redevelopment of 651 Gateway, in which we own a 50%
interest, located in South San Francisco, California and in February 2022, we
announced the restart of the first phase of our Platform 16 development project,
in which we own a 55% interest, in San Jose, California (see Note 18 to the
Consolidated Financial Statements).

During the fourth quarter of 2021, a joint venture in which we own a 55%
interest refinanced the mortgage debt collateralized by its 601 Lexington Avenue
property located in New York City with a new lender. The new mortgage loan
totals $1.0 billion, bears interest at a rate of 2.79% per annum and matures in
January 2032. The previous mortgage debt had an outstanding balance of
approximately $616.1 million, bore interest at a rate of 4.75% per annum and was
scheduled to expire in April 2022.

In July 2021, we announced the formation of an investment program with two
partners committing a targeted equity investment of $1.0 billion, including $250
million from us. Under this agreement, we will provide these partners, for up to
two years, exclusive first offers to form joint ventures with us to invest in
assets that meet pre-established target criteria. All investments are
discretionary to each partner.

The SCP provides us the opportunity to partner with large institutional
investors and capitalize our investment opportunities partially through private
equity. The SCP enhances our access to capital and investment capacity and
further enhances our returns through fees paid to us, and in certain
partnerships, a greater share of income upon achieving certain success criteria.
These large financial partners include some of the world's largest sovereign
wealth funds and pension plans. Our use of the SCP is consistent with our
ongoing strategy to create value through opportunistic investments in
high-quality office properties in markets with the strongest economic growth
over time while maintaining a strong balance sheet and modest leverage.

On December 14, 2021, we acquired 360 Park Avenue South, an approximately
450,000 square foot office building located in New York City, for an aggregate
purchase price, including transactions costs, of approximately $300.7 million.
At closing, we assumed approximately $200.3 million of mortgage debt and BPLP
issued approximately $99.7 million of its common units of limited partnership
interest in BPLP ("OP Units") at approximately $115 per OP Unit. Immediately
following the acquisition, we refinanced the assumed debt with a $220.0 million,
of which $202.0 million was advanced at closing, three-year mortgage loan with a
variable interest rate equal to the Adjusted SOFR plus 2.40% per annum. The
spread on the variable rate may be reduced subject to certain conditions. On
December 15, 2021, we contributed the property to a joint venture for our
aggregate (direct and indirect) approximately 42.21% ownership interest and the
two SCP partners own the remaining approximately 58%
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interest. The joint venture assumed the related indebtedness. The venture
immediately commenced redevelopment of the asset with an estimated initial
occupancy in late 2023.

On October 25, 2021, we completed the sale of our 181, 191 and 201 Spring Street
properties, located in Lexington, Massachusetts, for an aggregate gross sales
price of $191.5 million. Net cash proceeds totaled approximately $179.9 million.

We have no debt maturities until September 2023. Our unconsolidated joint
ventures have two loans maturing in 2022, of which our share of the aggregate
outstanding principal is approximately $146.5 million. We are currently in the
market to refinance both maturities with mortgage debt in amounts equal to or
greater than the current balances. There can be no assurance that we will
complete these refinancings on the terms currently contemplated or at all.

Although the current and future impact of COVID-19 on our liquidity and capital
resources will depend on a wide range of factors, we believe that our access to
capital and our strong liquidity, including the approximately $1.2 billion
available under the 2021 Credit Facility and available cash of approximately
$292.2 million (of which approximately $101.0 million is attributable to our
consolidated joint venture partners), as of February 14, 2022, is sufficient to
fund our remaining capital requirements on existing development and
redevelopment projects, repay our maturing indebtedness when due, satisfy our
REIT distribution requirements and still allow us to act opportunistically on
attractive investment opportunities.

We have not sold any shares under BXP’s $600.0 million “at the market” equity
offering program.

We may seek to enhance our liquidity to fund our current and future development
activity, pursue additional attractive investment opportunities and refinance or
repay indebtedness. Depending on interest rates, the overall conditions in the
debt and equity markets, and our leverage at the time, we may decide to access
either or both of these capital sources. Doing so may result in us carrying
additional cash and cash equivalents pending our use of the proceeds, which
could increase our net interest expense or be dilutive to our earnings, or both.

Inflation

We are exposed to inflation risk, as income from long-term leases is the primary
source of our cash flows from operations. There are provisions in the majority
of our tenant leases that protect us from, and mitigate the risk of, the impact
of inflation. These provisions include rent steps and resets to market,
reimbursement billings for operating expense pass-through charges, real estate
tax and insurance reimbursements on a per-square-foot basis, or in some cases,
annual reimbursement of operating expenses above a certain per-square-foot
allowance. However, due to the long-term nature of the leases, the rent may not
increase frequently enough to fully cover inflation.

REIT Tax Distribution Considerations

Dividend

BXP as a REIT is subject to a number of organizational and operational
requirements, including a requirement that BXP currently distribute at least 90%
of its annual taxable income (excluding capital gains and with certain other
adjustments). Our policy is for BXP to distribute at least 100% of its taxable
income, including capital gains, to avoid paying federal tax. On December 17,
2019, the Board of Directors of BXP increased our regular quarterly dividend
from $0.95 per common share to $0.98 per common share, or 3%, beginning with the
fourth quarter of 2019. Common and LTIP unitholders of limited partnership
interest in BPLP, received the same total distribution per unit.

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, including the impact of COVID-19, and
there can be no assurance that the future dividends declared by BXP's Board of
Directors will not differ materially from the current quarterly dividend amount.

Sales

To the extent that we sell assets at a gain and cannot efficiently use the
proceeds in a tax deferred manner for either our development activities or
attractive acquisitions, BXP would, at the appropriate time, decide whether it
is better to declare a special dividend, adopt a stock repurchase program,
reduce indebtedness or retain the cash for future investment opportunities. Such
a decision will depend on many factors including, among others, the timing,
availability and terms of development and acquisition opportunities, our
then-current and anticipated leverage, the
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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 $0.5
billion and $1.7 billion at December 31, 2021 and 2020, respectively,
representing a decrease of approximately $1.2 billion. The following table sets
forth changes in cash flows:

                                                                       Year ended December 31,
                                                                                                   Increase
                                                           2021                 2020              (Decrease)
                                                                           (in thousands)
Net cash provided by operating activities             $ 1,133,227          $ 1,156,840          $    (23,613)
Net cash used in investing activities                  (1,039,956)            (613,719)             (426,237)

Net cash provided by (used in) financing activities (1,311,442)

    484,322            (1,795,764)


Our principal source of cash flow is related to the operation of our properties.
The weighted-average term of our in-place leases, excluding residential units,
was approximately 7.9 years as of December 31, 2021, including leases signed by
our unconsolidated joint ventures, with occupancy rates historically in the
range of 88% to 94%. Generally, our properties generate a relatively consistent
stream of cash flow that provides us with resources to pay operating expenses,
debt service and fund regular quarterly dividend and distribution payment
requirements. In addition, over the past several years, we have raised capital
through the sale of some of our properties and through secured and unsecured
borrowings.

The full extent of the impact of COVID-19 on our business, operations and
financial results will depend on numerous evolving factors that we may not be
able to accurately predict. In addition, we cannot predict the impact that
COVID-19 will have on our tenants, employees, contractors, lenders, suppliers,
vendors and joint venture partners; any material adverse effect on these parties
could also have a material adverse effect on us.

Cash is used in investing activities to fund acquisitions, development, net
investments in unconsolidated joint ventures and maintenance and repositioning
capital expenditures. We selectively invest in new projects that enable us to
take advantage of our development, leasing, financing and property management
skills and invest in existing buildings to enhance or maintain our market
position. Cash used in investing activities for the year ended December 31, 2021
consisted primarily of acquisitions of real estate, development projects,
building and tenant improvements and capital contributions to unconsolidated
joint ventures, partially offset by proceeds from the sales of real estate and
proceeds from sale of investment in unconsolidated joint ventures. Cash used in
investing activities for the year ended December 31, 2020 consisted primarily of
acquisitions of real estate, development projects, building and tenant
improvements and capital contributions to unconsolidated joint ventures,
partially offset by the proceeds from the sale of real estate and capital
distribution from unconsolidated joint ventures, as detailed below:
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                                                                             Year ended December 31,
                                                                            2021                  2020
                                                                                 (in thousands)
Acquisitions of real estate (1)                                       $    (222,260)         $  (137,976)
Construction in progress (2)                                               (513,878)            (482,507)
Building and other capital improvements                                    (150,998)            (160,126)
Tenant improvements                                                        (263,952)            (234,423)
Proceeds from sales of real estate (3)                                      179,887              519,303
Capital contributions to unconsolidated joint ventures (4)                  (98,152)            (172,436)
Capital distributions from unconsolidated joint ventures (5)                    122               55,298

Proceeds from sale of investment in unconsolidated joint venture (6)

  17,789                    -
Issuance of note receivable, net (7)                                              -               (9,800)
Proceeds from note receivable (8)                                            10,035                6,397
Investments in securities, net                                                1,451                2,551
Net cash used in investing activities                                 $  

(1,039,956) $ (613,719)

Cash used in investing activities changed primarily due to the following:

(1)On August 2, 2021, we acquired Shady Grove Innovation District in Rockville,
Maryland, for a purchase price, including transaction costs, of approximately
$118.5 million in cash. Shady Grove Innovation District is an approximately
435,000 net rentable square foot, seven-building office park situated on an
approximately 31-acre site.

On June 2, 2021, we acquired 153 & 211 Second Avenue located in Waltham,
Massachusetts
for a purchase price of approximately $100.2 million in cash. 153
& 211 Second Avenue consists of two life sciences lab buildings totaling
approximately 137,000 net rentable square feet.

On June 26, 2020, we completed the acquisition of real property at 777 Harrison
Street (known as Fourth + Harrison) located in San Francisco, California for a
gross purchase price, including entitlements, totaling approximately $140.1
million. On July 31, 2020 and December 16, 2020, we acquired real property at
759 Harrison Street located in San Francisco, California, which is expected to
be included in the Fourth + Harrison development project, for an aggregate
purchase price totaling approximately $4.5 million. 759 Harrison Street and
Fourth + Harrison are expected to support the development of approximately
850,000 square feet of primarily commercial office space.

(2)Construction in progress for the year ended December 31, 2021 includes
ongoing expenditures associated with One Five Nine East 53rd Street, which was
completed and fully placed in-service during the year ended December 31, 2021.
In addition, we incurred costs associated with our continued
development/redevelopment of 200 West Street, 325 Main Street, 2100 Pennsylvania
Avenue, Reston Next, 180 CityPoint, View Boston Observatory at The Prudential
Center and 880 Winter Street.

Construction in progress for the year ended December 31, 2020 includes ongoing
expenditures associated with 17Fifty Presidents Street, 20 CityPoint and The
Skylyne, which were completed and fully placed in-service during the year ended
December 31, 2020. In addition, we incurred costs associated with our continued
development/redevelopment of One Five Nine East 53rd Street, Reston Next, 2100
Pennsylvania Avenue, 200 West Street and 325 Main Street.

(3)On October 25, 2021, we completed the sale of our 181,191 and 201 Spring
Street properties located in Lexington, Massachusetts for an aggregate gross
sales price of $191.5 million. Net cash proceeds totaled approximately
$179.9 million, resulting in a gain on sale of real estate totaling
approximately $115.6 million for BXP and approximately $117.1 million for BPLP.
181,191 and 201 Spring Street are three Class A office properties aggregating
approximately 333,000 net rentable square feet.

On December 16, 2020, we completed the sale of a parcel of land located in
Marlborough, Massachusetts for a gross sale price of approximately $14.3
million
. Net cash proceeds totaled approximately $14.2 million, resulting in a
gain on sale of real estate totaling approximately $5.2 million.

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On June 25, 2020, we completed the sale of a portion of our Capital Gallery
property located in Washington, DC for a gross sales price of approximately
$253.7 million. Net cash proceeds totaled approximately $246.6 million,
resulting in a gain on sale of real estate totaling approximately $203.6 million
for BXP and approximately $207.0 million for BPLP. Capital Gallery is an
approximately 631,000 net rentable square foot Class A office property. The
portion sold is comprised of approximately 455,000 net rentable square feet of
commercial office space. We continue to own the land, underground parking garage
and remaining commercial office and retail space containing approximately
176,000 net rentable square feet at the property.

On February 20, 2020, we completed the sale of New Dominion Technology Park
located in Herndon, Virginia for a gross sales price of $256.0 million. Net cash
proceeds totaled approximately $254.0 million, resulting in a gain on sale of
real estate totaling approximately $192.3 million for BXP and approximately
$197.1 million for BPLP. New Dominion Technology Park is comprised of two Class
A office properties aggregating approximately 493,000 net rentable square feet.

(4)Capital contributions to unconsolidated joint ventures for the year ended
December 31, 2021 consisted primarily of cash contributions of approximately
$73.0 million and $11.4 million to our Safeco Plaza and Santa Monica Business
Park joint ventures, respectively. On September 1, 2021, we entered into a new
joint venture for Safeco Plaza located in Seattle, Washington (See Note 6 to the
Consolidated Financial Statements).

Capital contributions to unconsolidated joint ventures for the year ended
December 31, 2020 consisted primarily of cash contributions of approximately
$79.3 million, $46.3 million, $27.2 million, $7.5 million and $7.4 million to
our Platform 16, 3 Hudson Boulevard, Beach Cities Media Campus, Dock 72 and
Metropolitan Square joint ventures, respectively.

(5)Capital distributions from unconsolidated joint ventures for the year ended
December 31, 2020 consisted of cash distributions totaling (1) approximately
$22.5 million from our Metropolitan Square joint venture resulting from the
excess proceeds from the refinancing of the mortgage loan on the property, (2)
approximately $17.9 million from our Annapolis Junction joint venture resulting
from available cash and the net proceeds from the sale of Annapolis Junction
Building Eight and two land parcels after the pay down of the mortgage loan and
(3) approximately $14.0 million from our Colorado Center joint venture resulting
from the excess proceeds from the mortgage financing on the property that
occurred during 2017, which proceeds were released from lender reserves.

(6)On March 30, 2021, we completed the sale of our 50% ownership interest in
Annapolis Junction NFM LLC (the "Annapolis Junction Joint Venture") to the joint
venture partner for a gross sales price of $65.9 million. Net cash proceeds to
us totaled approximately $17.8 million after repayment of our share of debt
totaling approximately $15.1 million.

(7)Issuance of notes receivable, net consisted of the $10.0 million of financing
provided to an affiliate of our partner in the joint venture that owns and is
developing 7750 Wisconsin Avenue located in Bethesda, Maryland. The financing
bears interest at a fixed rate of 8.00% per annum, compounded monthly, and
matures on the fifth anniversary of the date on which the base building of the
affiliate of our partner's hotel property is substantially completed. The loan
is collateralized by a pledge of the partner's equity interest in our joint
venture that owns and is developing 7750 Wisconsin Avenue.

(8)Proceeds from note receivable consists of the final repayment of a note
receivable provided by us to the buyer in connection with the sale of land at
our Tower Oaks property located in Rockville, Maryland, which was collateralized
by a portion of the land parcel, bore interest at an effective rate of 1.92% per
annum and matured on December 20, 2021.

Cash used in financing activities for the year ended December 31, 2021 totaled
approximately $1.3 billion. This amount consisted primarily of (1) the
redemption of $1.0 billion in aggregate principal amount of BPLP's 3.85% senior
notes due 2023, (2) the redemption of $850.0 million in aggregate principal
amount of BPLP's 4.125% senior notes due 2021, (3) the repayment of the $500.0
million Delayed Draw Facility under the 2017 Credit Facility, (4) redemption of
the $200 million Series B Preferred Stock, (5) payment of our regular dividends
and distributions to our shareholders and unitholders and (6) distributions to
noncontrolling interest holders in property partnership. These decreases were
partially offset by the proceeds from the issuance by BPLP of (1) $850.0 million
in aggregate principal amount of its 2.550% senior unsecured notes due 2032 and
(2) $850.0 million in aggregate principal
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amount of its 2.450% senior unsecured notes due 2033. Future debt payments are
discussed below under the heading “Debt Financing.”

Capitalization

The following table presents Consolidated Market Capitalization and BXP's Share
of Market Capitalization, as well as the corresponding ratios of Consolidated
Debt to Consolidated Market Capitalization and BXP's Share of Debt to BXP's
Share of Market Capitalization (in thousands except for percentages):

                                                                                     December 31, 2021
                                                           Shares / Units                                          Equivalent Value
                                                            Outstanding            Common Stock Equivalent               (1)
Common Stock                                                  156,545                      156,545                 $  18,030,853
Common Operating Partnership Units                             18,047                       18,047                     2,078,653    (2)
Total Equity                                                                               174,592                 $  20,109,506

Consolidated Debt                                                                                                  $  12,896,609
Add:
BXP's share of unconsolidated joint venture debt
(3)                                                                                                                    1,383,887

Subtract:

Partners' share of Consolidated Debt (4)                                                                              (1,356,579)
BXP's Share of Debt                                                                                                $  12,923,917

Consolidated Market Capitalization                                                                                 $  33,006,115
BXP's Share of Market Capitalization                                                                               $  33,033,423
Consolidated Debt/Consolidated Market
Capitalization                                                                                                             39.07  %
BXP's Share of Debt/BXP's Share of Market
Capitalization                                                                                                             39.12  %


_______________
(1)Values are based on the closing price per share of BXP's Common Stock on the
New York Stock Exchange on December 31, 2021 of $115.18.
(2)Includes long-term incentive plan units (including 2012 OPP Units and 2013 -
2018 MYLTIP Units) but excludes MYLTIP Units granted between 2019 and 2021
because the three-year performance period has not ended.
(3)See page 95 for additional information.
(4)See page 94 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
December 31, 2021, 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, 2013 –
2018 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-

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year performance periods have not yet ended, 2019 - 2021 MYLTIP Units are not
included in this calculation as of December 31, 2021.

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-Investments in Unconsolidated Joint Ventures -
Secured Debt within "Item 7-Management's Discussion and Analysis of Financial
Condition and Results of Operations" and for a discussion of our consolidated
joint venture indebtedness see "Liquidity and Capital Resources-Mortgage Notes
Payable" within "Item 7-Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Debt Financing

As of December 31, 2021, we had approximately $12.9 billion of outstanding
consolidated indebtedness, representing approximately 39.07% of our Consolidated
Market Capitalization as calculated above consisting of approximately (1) $9.5
billion (net of discount and deferred financing fees) in publicly traded
unsecured senior notes having a GAAP weighted-average interest rate of 3.43% per
annum and maturities in 2023 through 2033, (2) $3.3 billion (net of deferred
financing fees) of property-specific mortgage debt having a GAAP
weighted-average interest rate of 3.42% per annum and a weighted-average term of
6.8 years and (3) $145.0 million outstanding under BPLP's 2021 Credit Facility
that matures on June 15, 2026.

The table below summarizes the aggregate carrying value of our mortgage notes
payable and BPLP's unsecured senior notes, line of credit and term loan, as well
as Consolidated Debt Financing Statistics at December 31, 2021 and December 31,
2020.
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                                                                                     December 31,
                                                                              2021                  2020
                                                                                (dollars in thousands)
Debt Summary:
Balance
Fixed rate mortgage notes payable, net                                   $  3,267,914          $  2,909,081
Unsecured senior notes, net                                                 9,483,695             9,639,287
Unsecured line of credit                                                      145,000                     -
Unsecured term loan, net                                                            -               499,390
Consolidated Debt                                                          12,896,609            13,047,758

Add:

BXP's share of unconsolidated joint venture debt, net (1)                   1,383,887             1,153,628

Subtract:

Partners' share of consolidated mortgage notes payable, net (2)            (1,356,579)           (1,194,619)
BXP's Share of Debt                                                      $ 

12,923,917 $ 13,006,767

December 31,

                                                                              2021                  2020
Consolidated Debt Financing Statistics:
Percent of total debt:
Fixed rate                                                                      98.88  %              96.17  %
Variable rate                                                                    1.12  %               3.83  %
Total                                                                          100.00  %             100.00  %
GAAP Weighted-average interest rate at end of period:
Fixed rate                                                                       3.43  %               3.75  %
Variable rate                                                                    0.98  %               1.19  %
Total                                                                            3.40  %               3.65  %
Coupon/Stated Weighted-average interest rate at end of period:
Fixed rate                                                                       3.32  %               3.65  %
Variable rate                                                                    0.87  %               1.10  %
Total                                                                            3.29  %               3.55  %
Weighted-average maturity at end of period (in years):
Fixed rate                                                                        6.6                   5.5
Variable rate                                                                     4.5                   1.3
Total                                                                             6.6                   5.4


_______________
(1)See page 95 for additional information.
(2)See page 94 for additional information.

Unsecured Credit Facility

On March 16, 2021, BPLP repaid $500.0 million, representing all amounts
outstanding, on the Delayed Draw Facility under the 2017 Credit Facility. We
recognized a loss from early extinguishment of debt totaling approximately $0.5
million, related to unamortized financing costs.

On June 15, 2021, BPLP amended and restated the 2017 Credit Facility and entered
into the 2021 Credit Facility. The 2021 Credit Facility provides for borrowings
of up to $1.5 billion through the Revolving Facility, subject to customary
conditions. Among other things, the amendment and restatement (1) extended the
maturity date to June 15, 2026, (2) eliminated the $500.0 million Delayed Draw
Facility provided under the 2017 Credit Facility, (3) reduced the per annum
variable interest rates on borrowings and (4) added a sustainability-linked
pricing component. Under the 2021 Credit Facility, BPLP may increase the total
commitment by up to $500.0 million by
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increasing the amount of the Revolving Facility and/or by incurring one or more
term loans, in each case, subject to syndication of the increase and other
conditions (See Note 9 to the Consolidated Financial Statements).

The 2021 Credit Facility replaces the 2017 Credit Facility, which consisted of a
$1.5 billion unsecured revolving line of credit and a $500.0 million Delayed
Draw Facility, and was scheduled to expire on April 24, 2022.

At December 31, 2021, BPLP had $145.0 million of borrowings under its 2021
Credit Facility and outstanding letters of credit totaling approximately $6.3
million, with the ability to borrow approximately $1.3 billion. At February 14,
2022, BPLP had $265.0 million of borrowings under its 2021 Credit Facility and
outstanding letters of credit totaling approximately $6.3 million, with the
ability to borrow approximately $1.2 billion.

Unsecured Senior Notes

For a description of BPLP’s outstanding unsecured senior notes as of December
31, 2021
, see Note 8 to the Consolidated Financial Statements.

On February 14, 2021, BPLP completed the redemption of $850.0 million in
aggregate principal amount of its 4.125% senior notes due May 15, 2021. The
redemption price was approximately $858.7 million, which was equal to the stated
principal plus approximately $8.7 million of accrued and unpaid interest to, but
not including, the redemption date. Excluding the accrued and unpaid interest,
the redemption price was equal to the principal amount being redeemed. We
recognized a loss from early extinguishment of debt totaling approximately
$0.4 million, related to unamortized origination costs.

On March 16, 2021, BPLP completed a public offering of $850.0 million in
aggregate principal amount of its 2.550% unsecured senior notes due 2032. The
notes were priced at 99.570% of the principal amount to yield an effective rate
(including financing fees) of approximately 2.671% per annum to maturity. The
notes will mature on April 1, 2032, unless earlier redeemed. The aggregate net
proceeds from the offering were approximately $839.2 million after deducting
underwriting discounts and transaction expenses.

On September 29, 2021, BPLP completed a public offering of $850.0 million in
aggregate principal amount of its 2.450% unsecured senior notes due 2033. The
notes were priced at 99.959% of the principal amount to yield an effective rate
(including financing fees) of approximately 2.524% per annum to maturity. The
notes will mature on October 1, 2033, unless earlier redeemed. The aggregate net
proceeds from the offering were approximately $842.5 million after deducting
underwriting discounts and transaction expenses.

On October 15, 2021, BPLP used proceeds from its September 2021 offering of
unsecured senior notes and borrowings under its 2021 Credit Facility to complete
the redemption of $1.0 billion in aggregate principal amount of its 3.85% senior
notes due February 1, 2023. The redemption price was approximately
$1.05 billion. The redemption price included approximately $7.9 million of
accrued and unpaid interest to, but not including, the redemption date.
Excluding the accrued and unpaid interest, the redemption price was
approximately 104.284% of the principal amount being redeemed. We recognized a
loss from early extinguishment of debt totaling approximately $44.2 million,
which amount included the payment of the redemption premium totaling
approximately $42.8 million.

The indenture relating to the unsecured senior notes contains certain financial
restrictions and requirements, including (1) a leverage ratio not to exceed 60%,
(2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage
ratio of greater than 1.50, and (4) an unencumbered asset value of not less than
150% of unsecured debt. At December 31, 2021, BPLP was in compliance with each
of these financial restrictions and requirements.

Mortgage Notes Payable

On March 26, 2021, we used available cash to repay the mortgage loan
collateralized by our University Place property located in Cambridge,
Massachusetts
totaling approximately $0.9 million. The mortgage loan bore
interest at a fixed rate of 6.94% per annum and was scheduled to mature on
August 1, 2021. There was no prepayment penalty.

On December 10, 2021, the consolidated entity in which we have a 55% interest
refinanced the mortgage loan collateralized by its 601 Lexington Avenue property
located in New York City with a new lender. The mortgage loan has a principal
amount of $1.0 billion, requires interest-only payments at a fixed interest rate
of 2.79% per annum and matures on January 9, 2032. The previous mortgage loan
had an outstanding balance of approximately
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$616.1 million, bore interest at a fixed rate of 4.75% per annum and was
scheduled to mature on April 10, 2022. There was no prepayment penalty
associated with the repayment of the previous mortgage loan. We recognized a
loss from early extinguishment of debt totaling approximately $0.1 million due
to the write-off of unamortized deferred financing costs.

The following represents the outstanding principal balances due under the
mortgage notes payable at December 31, 2021:

                                                                                                                   Deferred                             

Carrying Amount

                                           Stated              GAAP Interest Rate        Stated Principal          Financing                                       (Partners'
Properties                              Interest Rate                  (1)                    Amount              Costs, Net            Carrying Amount              Share)                                   Maturity Date
                                                                                                                       (dollars in thousands)

Consolidated Joint Ventures
767 Fifth Avenue (the General
Motors Building)                                 3.43  %                   3.64  %       $   2,300,000          $    (18,984)         $      2,281,016          $     912,474          (2)(3)(4)          June 9, 2027
601 Lexington Avenue                             2.79  %                   2.92  %           1,000,000               (13,102)                  986,898                444,105          (2)(5)             January 9, 2032

Total                                                                                    $   3,300,000          $    (32,086)         $      3,267,914          $   1,356,579


_______________
(1)GAAP interest rate differs from the stated interest rate due to the inclusion
of the amortization of financing charges and the effects of hedging transactions
(if any).
(2)The mortgage loan requires interest only payments with a balloon payment due
at maturity.
(3)This property is owned by a consolidated entity in which we have a 60%
interest. The partners' share of the carrying amount has been adjusted for basis
differentials.
(4)In connection with the refinancing of the loan, we guaranteed the
consolidated entity's obligation to fund various reserves for tenant improvement
costs and allowances, leasing commissions and free rent obligations in lieu of
cash deposits. As of December 31, 2021, the maximum funding obligation under the
guarantee was approximately $19.0 million. We earn a fee from the joint venture
for providing the guarantee and have an agreement with our partners to reimburse
the joint venture for their share of any payments made under the guarantee (See
Note 10 to the Consolidated Financial Statements).
(5)This property is owned by a consolidated entity in which we have a 55%
interest.

Contractual aggregate principal payments of mortgage notes payable at December
31, 2021
are as follows:

                                       Principal Payments
                          Year           (in thousands)
                         2022         $                 -
                         2023                           -
                         2024                           -
                         2025                           -
                         2026                           -
                         Thereafter             3,300,000
                                      $         3,300,000

Investments in Unconsolidated Joint Ventures – Secured Debt

We have investments in unconsolidated joint ventures with our effective
ownership interests ranging from 20% to 55%. Fifteen 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 6 to the Consolidated Financial Statements.
At December 31, 2021, 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
December 31, 2021. In addition to other guarantees that may be specifically
noted in the table, we have agreed to customary environmental indemnifications
and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation
and bankruptcy) as well as the completion of development projects on certain of
the loans.
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                                                                                                                           Deferred
                            Venture Ownership           Stated           GAAP Interest        Stated Principal             Financing                                    Carrying Amount
     Properties                     %               Interest Rate           Rate (1)               Amount                 Costs, Net            Carrying Amount           (Our share)                                   Maturity Date
                                                                                                            (dollars in thousands)
Santa Monica Business
Park                                    55  %              4.06  %              4.24  %       $     300,000             $     (1,872)         $        298,128          $     163,970          (2)(3)              July 19, 2025
Market Square North                     50  %              2.80  %              2.96  %             125,000                     (796)                  124,204                 62,102          (2)(4)              November 10, 2025
1265 Main Street                        50  %              3.77  %              3.84  %              36,476                     (278)                   36,198                 18,099                              January 1, 2032
Colorado Center                         50  %              3.56  %              3.58  %             550,000                     (576)                  549,424                274,712          (2)                 August 9, 2027
Dock 72                                 50  %              3.10  %              3.33  %             197,602                   (1,103)                  196,499                 98,249          (2)(5)              December 18, 2023
The Hub on Causeway -
Podium                                  50  %              2.34  %              2.51  %             174,329                     (487)                  173,842                 86,921          (2)(6)              September 6, 2023
Hub50House                              50  %              2.09  %              2.38  %             176,468                     (170)                  176,298                 88,149          (2)(7)              April 19, 2022
100 Causeway Street                     50  %              1.57  %              1.78  %             309,434                   (1,412)                  308,022                154,011          (2)(8)              September 5, 2023
7750 Wisconsin Avenue
(Marriott
International
Headquarters)                           50  %              1.34  %              1.88  %             214,769                   (1,856)                  212,913                106,456          (2)(9)              April 26, 2023
360 Park Avenue South                   42  %              2.55  %              2.79  %             201,388                   (2,935)                  198,453                 83,767          (2)(10)             December 14, 2024
Safeco Plaza                            34  %              2.35  %              2.49  %             250,000                   (1,587)                  248,413                 83,641          (2)(11)             September 1, 2026
500 North Capitol
Street, NW                              30  %              4.15  %              4.20  %             105,000                      (84)                  104,916                 31,475          (2)                 June 6, 2023
901 New York Avenue                     25  %              3.61  %              3.69  %             216,741                     (536)                  216,205                 54,051                              January 5, 2025
3 Hudson Boulevard                      25  %              3.59  %              3.67  %              80,000                      (96)                   79,904                 19,976          (2)(12)             July 13, 2023
Metropolitan Square                     20  %              5.40  %              6.90  %             294,073                   (2,531)                  291,542                 58,308          (2)(13)             July 7, 2022
Total                                                                                         $   3,231,280             $    (16,319)         $      3,214,961          $   1,383,887

_______________

(1)GAAP interest rate differs from the stated interest rate due to the inclusion
of the amortization of financing charges, which includes mortgage recording
fees.
(2)The loan requires interest only payments with a balloon payment due at
maturity.
(3)The loan bears interest at a variable rate equal to LIBOR plus 1.28% per
annum and matures on July 19, 2025. A subsidiary of the joint venture entered
into interest rate swap contracts with notional amounts aggregating $300.0
million through April 1, 2025, resulting in a fixed rate of approximately 4.063%
per annum through the expiration of the interest rate swap contracts.
(4)The loan bears interest at a variable rate equal to (1) the greater of (x)
LIBOR or (y) 0.50%, plus (2) 2.30% per annum and matures on November 10, 2025,
with one, one-year extension option, subject to certain conditions.
(5)The construction financing has a borrowing capacity of $250.0 million. The
construction financing bears interest at a variable rate equal to (1) the
greater of (x) LIBOR or (y) 0.25%, plus (2) 2.85% per annum and matures on
December 18, 2023.
(6)The construction financing had a borrowing capacity of $204.6 million. On
September 16, 2019, the joint venture paid down the construction loan principal
balance in the amount of approximately $28.8 million, reducing the borrowing
capacity to $175.8 million. The construction financing bears interest at a
variable rate equal to LIBOR plus 2.25% per annum and matures on September 6,
2023.
(7)The construction financing has a borrowing capacity of $180.0 million. The
construction financing bears interest at a variable rate equal to LIBOR plus
2.00% per annum and matures on April 19, 2022, with two, one-year extension
options, subject to certain conditions.
(8)The construction financing has a borrowing capacity of $400.0 million. The
construction financing bears interest at a variable rate equal to LIBOR plus
1.50% per annum (LIBOR plus 1.375% per annum upon stabilization, as defined in
the loan agreement) and matures on September 5, 2023, with two, one-year
extension options, subject to certain conditions.
(9)The construction financing has a borrowing capacity of $255.0 million. The
construction financing bears interest at a variable rate equal to LIBOR plus
1.25% per annum and matures on April 26, 2023, with two, one-year extension
options, subject to certain conditions.
(10)The loan bears interest at a variable rate equal to Adjusted Term SOFR plus
2.40% per annum and matures on December 14, 2024, with two, one-year extension
options, subject to certain conditions. The spread on the variable rate may be
reduced, subject to certain conditions.
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(11)The loan bears interest at a variable rate equal to the greater of (x) 2.35%
or (y) LIBOR plus 2.20% per annum and matures on September 1, 2026.
(12)We provided $80.0 million of mortgage financing to the joint venture. The
loan bears interest at a variable rate equal to LIBOR plus 3.50% per annum and
matures on July 13, 2023, with extension options, subject to certain conditions.
The loan has been reflected as Related Party Note Receivable, Net on our
Consolidated Balance Sheets.
(13)The loan bears interest at a variable rate equal to (1) the greater of (x)
LIBOR or (y) 0.65%, plus (2) 4.75% per annum and matures on July 7, 2022 with
two, one-year extension options, subject to certain conditions. The joint
venture entered into an interest rate cap agreement with a financial institution
to limit its exposure to increases in the LIBOR rate at a cap of 3.00% per annum
on a notional amount of $325.0 million through July 7, 2022.

Market Risk

Market risk is the risk of loss from adverse changes in market prices and
interest rates. Our future earnings, cash flows and fair values relevant to
financial instruments are dependent upon prevalent market interest rates. Our
primary market risk results from our indebtedness, which bears interest at fixed
and variable rates. The fair value of our debt obligations are affected by
changes in the market interest rates. We manage our market risk by matching
long-term leases with long-term, fixed-rate, non-recourse debt of similar
duration. We continue to follow a conservative strategy of generally pre-leasing
development projects on a long-term basis to creditworthy tenants in order to
achieve the most favorable construction and permanent financing terms.
Approximately 98.9% of our outstanding debt, excluding our unconsolidated joint
ventures, has fixed interest rates, which minimizes the interest rate risk
through the maturity of such outstanding debt. We also manage our market risk by
entering into hedging arrangements with financial institutions. Our primary
objectives when undertaking hedging transactions and derivative positions is to
reduce our floating rate exposure and to fix a portion of the interest rate for
anticipated financing and refinancing transactions. This in turn, reduces the
risks that the variability of cash flows imposes on variable rate debt. Our
strategy mitigates against future increases in our interest rates.

At December 31, 2021, our weighted-average coupon/stated rate on our fixed rate
outstanding Consolidated Debt was 3.32% per annum. At December 31, 2021, we had
$145.0 million outstanding of consolidated variable rate debt. At December 31,
2021, the GAAP interest rate on our variable rate debt was approximately 0.98%
per annum. If market interest rates on our variable rate debt had been 100 basis
points greater, total interest expense would have increased approximately $1.5
million, on an annualized basis, for the year ended December 31, 2021.

Funds from Operations

Pursuant to the revised definition of Funds from Operations adopted by the Board
of Governors of the National Association of Real Estate Investment Trusts
("Nareit"), we calculate Funds from Operations, or "FFO," for each of BXP and
BPLP by adjusting net income (loss) attributable to Boston Properties, Inc.
common shareholders and net income (loss) attributable to Boston Properties
Limited Partnership common unitholders (computed in accordance with GAAP),
respectively, for gains (or losses) from sales of properties, impairment losses
on depreciable real estate consolidated on our balance sheet, impairment losses
on our investments in unconsolidated joint ventures driven by a measurable
decrease in the fair value of depreciable real estate held by the unconsolidated
joint ventures and our share of real estate-related depreciation and
amortization. FFO is a non-GAAP financial measure. We believe the presentation
of FFO, combined with the presentation of required GAAP financial measures,
improves the understanding of operating results of REITs among the investing
public and helps make comparisons of REIT operating results more meaningful.
Management generally considers FFO to be useful measures for understanding and
comparing our operating results because, by excluding gains and losses related
to sales of previously depreciated operating real estate assets, impairment
losses and real estate asset depreciation and amortization (which can differ
across owners of similar assets in similar condition based on historical cost
accounting and useful life estimates), FFO can help investors compare the
operating performance of a company's real estate across reporting periods and to
the operating performance of other companies.

Our computation of FFO may not be comparable to FFO reported by other REITs or
real estate companies that do not define the term in accordance with the current
Nareit definition or that interpret the current Nareit definition differently.
We believe that in order to facilitate a clear understanding of our operating
results, FFO should be examined in conjunction with net income attributable to
Boston Properties, Inc. common shareholders and net income attributable to
Boston Properties Limited Partnership as presented in our Consolidated Financial
Statements. FFO should not be considered as a substitute for net income
attributable to Boston Properties, Inc. common shareholders or net income
attributable to Boston Properties Limited Partnership common unitholders
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(determined in accordance with GAAP) or any other GAAP financial measures and
should only be considered together with and as a supplement to our financial
information prepared in accordance with GAAP.

The impact that COVID-19 has had on our business, financial position and results
of operations is discussed throughout this report. The full extent of the impact
of COVID-19 on our business, operations and financial results will depend on
numerous evolving factors that we may not be able to accurately predict.

Boston Properties, Inc.

The following table presents a reconciliation of net income attributable to
Boston Properties, Inc. common shareholders to FFO attributable to Boston
Properties, Inc.
common shareholders for the years ended December 31, 2021, 2020
and 2019:

                                                                                     Year ended December 31,
                                                                                        2021                2020                       2019
                                                                                                          (in thousands)

Net income attributable to Boston Properties, Inc. common
shareholders

                                                                       $   496,223          $  862,227                $   511,034

Add:

Preferred stock redemption charge                                                        6,412                   -                          -
Preferred dividends                                                                      2,560              10,500                     10,500

Noncontrolling interest-common units of the Operating
Partnership

                                                                             55,931              97,704                     59,345
Noncontrolling interests in property partnerships                                       70,806              48,260                     71,120
Net income                                                                             631,932           1,018,691                    651,999

Add:

Depreciation and amortization                                                          717,336             683,751                    677,764

Noncontrolling interests in property partnerships’ share of
depreciation and amortization

                                                          (67,825)            (71,850)                   (71,389)
BXP's share of depreciation and amortization from
unconsolidated joint ventures                                                           71,966              80,925                     58,451
Corporate-related depreciation and amortization                                         (1,753)             (1,840)                    (1,695)
Impairment loss on investment in unconsolidated joint venture
(1)                                                                                          -              60,524                          -
Impairment loss                                                                              -                   -                     24,038
Less:

Gain on sale of real estate included within (loss) income from
unconsolidated joint ventures (2)

                                                       10,257               5,958                     47,238
Gains on sales of real estate                                                          123,660             618,982                        709
Noncontrolling interests in property partnerships                                       70,806              48,260                     71,120
Preferred dividends                                                                      2,560              10,500                     10,500
Preferred stock redemption charge                                                        6,412                   -                          -

Funds from Operations (FFO) attributable to the Operating
Partnership
common unitholders (including Boston Properties,
Inc.
)

                                                                                1,137,961           1,086,501                  1,209,601

Less:

Noncontrolling interest-common units of the Operating
Partnership’s
share of funds from operations

                                           111,975             108,310                    123,757

Funds from Operations attributable to Boston Properties, Inc.
common shareholders

                                                                $ 1,025,986          $  978,191                $ 1,085,844
Our percentage share of Funds from Operations-basic                                      90.16  %            90.03  %                   89.77  %
Weighted average shares outstanding-basic                                              156,116             155,432                    154,582


_______________

(1)The impairment loss on investment in unconsolidated joint venture consists of
an other-than-temporary decline in the fair value below the carrying value of
our investment in the Dock 72 unconsolidated joint venture for the year ended
December 31, 2020.
(2)Consists of the portion of income from unconsolidated joint ventures related
to the gain on sale of real estate associated with the sale of our ownership
interest in the joint venture that owned Annapolis Junction Buildings Six and
Seven for the year ended December 31, 2021, Annapolis Junction Building Eight
and two land parcels for the year ended December 31, 2020 and 540 Madison Avenue
for the year ended December 31, 2019.
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Reconciliation to Diluted Funds from Operations:

                                                                                                         Year ended December 31,
                                                                  2021                                            2020                                            2019
                                                                                                             (in thousands)
                                                    Income               Shares/Units               Income               Shares/Units               Income               Shares/Units
                                                 (Numerator)            (Denominator)            (Numerator)            (Denominator)            (Numerator)            (Denominator)
Basic Funds from Operations                     $ 1,137,961                173,150              $ 1,086,501                172,643              $ 1,209,601                172,200
Effect of Dilutive Securities:
Stock based compensation                                  -                    260                        -                     85                        -                    301
Diluted Funds from Operations                   $ 1,137,961                173,410              $ 1,086,501                172,728              $ 1,209,601                172,501
Less: Noncontrolling interest-common
units of the Operating Partnership's
share of diluted Funds from Operations              111,748                 17,034                  108,256                 17,211                  123,541                 17,618
Diluted Funds from Operations
attributable to Boston Properties, Inc.
(1)                                             $ 1,026,213                156,376              $   978,245                155,517              $ 1,086,060                154,883


 _______________

(1)BXP’s share of diluted Funds from Operations was 90.18%, 90.04% and 89.79%
for the years ended December 31, 2021, 2020 and 2019, respectively.

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Boston Properties Limited Partnership

The following table presents a reconciliation of net income attributable to
Boston Properties Limited Partnership common unitholders to FFO attributable to
Boston Properties Limited Partnership common unitholders for the years ended
December 31, 2021, 2020 and 2019:

                                                                                 Year ended December 31,
                                                                           2021                  2020                             2019
                                                                           

(in thousands)
Net income attributable to Boston Properties Limited
Partnership
common unitholders

                                        $    561,993          $   979,979                      $   580,102

Add:

Preferred unit redemption charge                                             6,412                    -                                -
Preferred distributions                                                      2,560               10,500                           10,500
Noncontrolling interests in property partnerships                           70,806               48,260                           71,120
Net income                                                                 641,771            1,038,739                          661,722
Add:
Depreciation and amortization                                              709,035              676,666                          669,956

Noncontrolling interests in property partnerships’ share of
depreciation and amortization

                                              (67,825)             (71,850)                         (71,389)
BXP's share of depreciation and amortization from
unconsolidated joint ventures                                               71,966               80,925                           58,451
Corporate-related depreciation and amortization                             (1,753)              (1,840)                          (1,695)
Impairment loss on investment in unconsolidated joint venture
(1)                                                                              -               60,524                                -
Impairment loss                                                                  -                    -                           22,272
Less:

Gain on sale of investment included within (loss) income from
unconsolidated joint ventures (2)

                                           10,257                5,958                           47,238
Gains on sales of real estate                                              125,198              631,945                              858
Noncontrolling interests in property partnerships                           70,806               48,260                           71,120
Preferred distributions                                                      2,560               10,500                           10,500
Preferred unit redemption charge                                             6,412                    -                                -

Funds from Operations attributable to Boston Properties Limited
Partnership
common unitholders (3)

                                    $  1,137,961          $ 1,086,501                      $ 1,209,601
Weighted average shares outstanding-basic                                  173,150              172,643                          172,200


_______________

(1)The impairment loss on investment in unconsolidated joint venture consists of
an other-than-temporary decline in the fair value below the carrying value of
our investment in the Dock 72 unconsolidated joint venture for the year ended
December 31, 2020.
(2)Consists of the portion of income from unconsolidated joint ventures related
to the gain on sale of real estate associated with the sale of our ownership
interest in the joint venture that owned Annapolis Junction Buildings Six and
Seven for the year ended December 31, 2021, Annapolis Junction Building Eight
and two land parcels for the year ended December 31, 2020 and 540 Madison Avenue
for the year ended December 31, 2019.
(3)Our calculation includes OP Units and vested LTIP Units (including vested
2012 OPP Units and vested 2013 - 2018 MYLTIP Units).
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Reconciliation to Diluted Funds from Operations:

                                                                                                      Year ended December 31,
                                                               2021                                            2020                                            2019
                                                                                                          (in thousands)
                                                 Income               Shares/Units               Income               Shares/Units               Income               Shares/Units
                                              (Numerator)            (Denominator)            (Numerator)            (Denominator)            (Numerator)            (Denominator)
Basic Funds from Operations                  $ 1,137,961                173,150              $ 1,086,501                172,643              $ 1,209,601                172,200
Effect of Dilutive Securities:
Stock based compensation                               -                    260                        -                     85                        -                    301
Diluted Funds from Operations                $ 1,137,961                173,410              $ 1,086,501                172,728              $ 1,209,601                172,501


Material Cash Commitments

As of December 31, 2021, we were subject to contractual payment obligations,
excluding our unconsolidated joint ventures commitments. For details about our
unconsolidated joint venture contractual payment obligations see "Investments in
Unconsolidated Joint Ventures - Contractual Obligations" below. Our primary
contractual payment obligations, that are not disclosed in other sections of
this Annual Report on Form 10-K, are tenant and development related and
described in further detail below. For details about our other contractual
payment obligations related to operating and finance leases, mortgage debt,
unsecured senior notes and unsecured line of credit see Notes 4, 7, 8 and 9 to
the Consolidated Financial Statements, respectively.

                                                                                          Payments Due by Period
                                          Total                 2022                2023              2024              2025             2026            Thereafter
                                                                                              (in thousands)
Commitments:
Tenant obligations (1)                $   521,895          $   462,699          $  51,845          $  7,351          $     -          $     -          $         -
Construction contracts on
development projects                      847,162              617,684            187,322            42,156                -                -                    -
Total Commitments                     $ 1,369,057          $ 1,080,383          $ 239,167          $ 49,507          $     -          $     -          $         -


 _______________

(1)Committed tenant-related obligations (tenant improvements and lease
commissions) based on executed leases as of December 31, 2021.

Investments in Unconsolidated Joint Ventures – Contractual Obligations

As of December 31, 2021, the unconsolidated joint ventures that we have an
ownership interest in were subject to contractual payment obligations as
described in the table below.  The table represents our share of the contractual
obligations. For details about our unconsolidated joint ventures secured debt
see "Investments In Unconsolidated Joint Ventures - Secured Debt" referred to in
"Item 7-Management's Discussion and Analysis of Financial Condition and Results
of Operations-Liquidity and Capital Resources."
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                                                                                        Payments Due by Period
                                         Total               2022              2023              2024              2025              2026            Thereafter
                                                                                            (in thousands)
Contractual Obligations:
Operating leases (1)                  $  97,408          $     849          $    861          $    873          $    908          $    944          $   92,973
Finance leases (2)                      260,421              9,945            10,894            10,980            10,980            10,980             206,642
Total Contractual Obligations           357,829             10,794            11,755            11,853            11,888            11,924             

299,615

Commitments:

Tenant obligations (3)                   62,468             54,770             3,024                50                50             1,303              

3,271

Construction contracts on
development projects                    103,760             60,815            30,684            11,599               662                 -              

Total Commitments                       166,228            115,585            33,708            11,649               712             1,303               3,271
                                      $ 524,057          $ 126,379          $ 45,463          $ 23,502          $ 12,600          $ 13,227          $  302,886

_______________

(1)Operating leases include approximately $61.6 million related to renewal
options that the joint venture is reasonably certain it will exercise.
(2)Finance leases include approximately $194.7 million related to a purchase
option that the joint venture is reasonably certain it will exercise in 2028.
(3)Committed tenant-related obligations (tenant improvements and lease
commissions) based on executed leases as of December 31, 2021.

We have various service contracts with vendors related to our property
management. In addition, we have certain other contracts we enter into in the
ordinary course of business that may extend beyond one year. These contracts
include terms that provide for cancellation with insignificant or no
cancellation penalties. Contract terms are generally between three and five
years.

During the year ended December 31, 2021, we paid approximately $326.8 million to
fund tenant-related obligations, including tenant improvements and leasing
commissions.

In addition, we and our unconsolidated joint venture partners incurred
approximately $417 million of new tenant-related obligations associated with
approximately 4.7 million square feet of second generation leases, or
approximately $88 per square foot. In addition, we signed leases for
approximately 316,000 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 7-Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources." In the aggregate, during 2021, we
signed leases for approximately 5.1 million square feet of space and incurred
aggregate tenant-related obligations of approximately $483 million, or
approximately $96 per square foot.

New Accounting Pronouncements

As of December 31, 2021, there were no new accounting pronouncements.

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ITEM 7A-Quantitative and Qualitative Disclosures about Market Risk.

The following table presents the aggregate carrying value of our mortgage notes
payable, net, unsecured senior notes, net, unsecured line of credit and our
corresponding estimate of fair value as of December 31, 2021. As of December 31,
2021, approximately $12.8 billion of these borrowings bore interest at fixed
rates and therefore the fair value of these instruments is affected by changes
in the market interest rates. As of December 31, 2021, the weighted-average
interest rate on our variable rate debt was LIBOR plus 0.775% (0.87%) per annum.
The following table presents our aggregate debt obligations with corresponding
weighted-average interest rates sorted by maturity date.

The table below does not include our unconsolidated joint venture debt. For a
discussion concerning our unconsolidated joint venture debt, see Note 6 to the
Consolidated Financial Statements and "Item 7-Management's Discussion and
Analysis of Financial Condition and Results of
Operations-Capitalization-Off-Balance Sheet Arrangements-Joint Venture
Indebtedness."

                                                                                                                                                                 Estimated
                      2022               2023               2024               2025                2026                2027+                 Total               Fair Value
                                                                                     (dollars in thousands)
                                                                                       Mortgage debt, net
Fixed Rate        $  (4,801)         $  (4,801)         $  (4,801)         $  (4,801)         $    (4,801)         $ 3,291,919          $  3,267,914          $   3,395,569
GAAP Average
Interest Rate             -  %               -  %               -  %               -  %                 -  %              3.42  %               3.42  %
Variable Rate             -                  -                  -                  -                    -                    -                     -                      -
                                                                           

Unsecured debt, net
Fixed Rate $ (10,725) $ 489,404 $ 690,582 $ 841,852 $ 1,993,260 $ 5,479,322 $ 9,483,695

          $   9,966,591
GAAP Average
Interest Rate             -  %            3.28  %            3.92  %            3.35  %              3.63  %              3.33  %               3.43  %
Variable Rate             -                  -                  -                  -              145,000                    -               145,000                145,317

Total Debt $ (15,526) $ 484,603 $ 685,781 $ 837,051 $ 2,133,459 $ 8,771,241 $ 12,896,609

$ 13,507,477



At December 31, 2021, the weighted-average coupon/stated rates on the fixed rate
debt stated above was 3.32% per annum. At December 31, 2021, our outstanding
variable rate debt based on LIBOR totaled
approximately $145.0 million. At December 31, 2021, the coupon/stated rate on
our variable rate debt was
approximately 0.87% per annum. If market interest rates on our variable rate
debt had been 100 basis points greater, total interest expense would have
increased approximately $1.5 million, on an annualized basis, for the year ended
December 31, 2021.

The fair value amounts were determined solely by considering the impact of
hypothetical interest rates on our financial instruments. Due to the uncertainty
of specific actions, we may undertake to minimize possible effects of market
interest rate increases, this analysis assumes no changes in our financial
structure.

On March 5, 2021, the Financial Conduct Authority ("FCA") announced that USD
LIBOR will no longer be published after June 30, 2023. This announcement has
several implications, including setting the spread that may be used to
automatically convert contracts from LIBOR to the Secured Overnight Financing
Rate ("SOFR"). Additionally, banking regulators are encouraging banks to
discontinue new LIBOR debt issuances by December 31, 2021.

We anticipate that LIBOR will continue to be available at least until June 30,
2023. Any changes adopted by the FCA or other governing bodies in the method
used for determining LIBOR may result in a sudden or prolonged increase or
decrease in reported LIBOR. If that were to occur, our interest payments could
change. In addition, uncertainty about the extent and manner of future changes
may result in interest rates and/or payments that are higher or lower than if
LIBOR were to remain available in its current form.

We and our unconsolidated joint ventures have contracts that are indexed to
LIBOR and we are monitoring and evaluating the related risks. These risks arise
in connection with transitioning contracts to an alternative rate, including any
resulting value transfer that may occur, and are likely to vary by contract. The
value of loans, securities, or derivative instruments tied to LIBOR, as well as
interest rates on our unconsolidated joint ventures current or future
indebtedness, may also be impacted if LIBOR is limited or discontinued. For some
instruments the
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method of transitioning to an alternative reference rate may be challenging,
especially if we cannot agree with the respective counterparty about how to make
the transition.

While we expect LIBOR to be available in substantially its current form until at
least the end of June 30, 2023, it is possible that LIBOR will become
unavailable prior to that point. This could result, for example, if sufficient
banks decline to make submissions to the LIBOR administrator. In that case, the
risks associated with the transition to an alternative reference rate will be
accelerated and magnified.

Alternative rates and other market changes related to the replacement of LIBOR,
including the introduction of financial products and changes in market
practices, may lead to risk modeling and valuation challenges, such as adjusting
interest rate accrual calculations and building a term structure for an
alternative rate.

The introduction of an alternative rate also may create additional basis risk
and increased volatility as alternative rates are phased in and utilized in
parallel with LIBOR.

Adjustments to systems and mathematical models to properly process and account
for alternative rates will be required, which may strain the model risk
management and information technology functions and result in substantial
incremental costs for us.

Additional disclosure about market risk is incorporated herein by reference from
"Item 7-Management's Discussion and Analysis of Financial Condition and Results
of Operations-Liquidity and Capital Resources-Market Risk."
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