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Noncontrolling Interests | 9 Months Ended
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Sep. 30, 2018
Noncontrolling Interest [Abstract] |
Noncontrolling Interests | 7. Noncontrolling Interests Noncontrolling interests relate to the interests in Boston Properties Limited Partnership not owned by Boston Properties, Inc. and interests in consolidated property partnerships not wholly-owned by the Company. As of September 30, 2018, the noncontrolling interests in Boston Properties Limited Partnership consisted of 16,804,929 OP Units, 992,321 LTIP Units (including 118,067 2012 OPP Units, 68,889 2013 MYLTIP Units, 23,187 2014 MYLTIP Units and 28,724 2015 MYLTIP Units), 471,579 2016 MYLTIP Units, 398,871 2017 MYLTIP Units and 341,366 2018 MYLTIP Units held by parties other than Boston Properties, Inc. Noncontrolling Interest—Common Units During the nine months ended September 30, 2018, 61,021 OP Units were presented by the holders for redemption (including 47,985 OP Units issued upon conversion of LTIP Units, 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units) and were redeemed by Boston Properties, Inc. in exchange for an equal number of shares of Common Stock. At September 30, 2018, Boston Properties Limited Partnership had outstanding 471,579 2016 MYLTIP Units, 398,871 2017 MYLTIP Units and 341,366 2018 MYLTIP Units. Prior to the applicable measurement date (February 9, 2019 for 2016 MYLTIP Units, February 6, 2020 for 2017 MYLTIP Units and February 5, 2021 for the 2018 MYLTIP Units), holders of MYLTIP Units will be entitled to receive per unit distributions equal to one-tenth (10%) of the regular quarterly distributions payable on an OP Unit, but will not be entitled to receive any special distributions. After the measurement date, the number of MYLTIP Units, both vested and unvested, that MYLTIP award recipients have earned, if any, based on the establishment of a performance pool, will be entitled to receive distributions in an amount per unit equal to distributions, both regular and special, payable on an OP Unit. On February 4, 2018, the measurement period for the Company’s 2015 MYLTIP awards ended and, based on Boston Properties, Inc.’s relative TSR performance, the final awards were determined to be 22.0% of target or an aggregate of approximately $3.6 million (after giving effect to voluntary employee separations). As a result, an aggregate of 337,847 2015 MYLTIP Units that had been previously granted were automatically forfeited. The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 MYLTIP Units and 2014 MYLTIP Units and, after the February 4, 2018 measurement date, the 2015 MYLTIP Units) and its distributions on the 2015 MYLTIP Units (prior to the February 4, 2018 measurement date), 2016 MYLTIP Units, 2017 MYLTIP Units and 2018 MYLTIP Units (after the February 6, 2018 issuance date) paid in 2018:
Record Date |  | Payment Date |  | Distributions per OP Unit and LTIP Unit |  | Distributions per MYLTIP Unit
September 28, 2018 |  | October 31, 2018 |  |  | $0.95 |  |  |  | $0.095 |
June 29, 2018 |  | July 31, 2018 |  |  | $0.80 |  |  |  | $0.080 |
March 29, 2018 |  | April 30, 2018 |  |  | $0.80 |  |  |  | $0.080 |
December 29, 2017 |  | January 30, 2018 |  |  | $0.80 |  |  |  | $0.080 |
A holder of an OP Unit may present the OP Unit to Boston Properties Limited Partnership for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, Boston Properties Limited Partnership must redeem the OP Unit for cash equal to the then value of a share of common stock of Boston Properties, Inc. Boston Properties, Inc. may, in its sole discretion, elect to assume and satisfy the redemption obligation by paying either cash or issuing one share of Common Stock. The value of the OP Units not owned by Boston Properties, Inc. and LTIP Units (including the 2012 OPP Units, 2013 MYLTIP Units, 2014 MYLTIP Units and 2015 MYLTIP Units), assuming that all conditions had been met for the conversion thereof, had all of such units been redeemed at September 30, 2018 was approximately $2.2 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $123.09 per share on September 28, 2018. Boston Properties Limited Partnership The following table reflects the activity of noncontrolling interests—redeemable partnership units of Boston Properties Limited Partnership for the nine months ended September 30, 2018 and 2017 (in thousands):
Balance at December 31, 2017 | $ | 2,292,263 |
Contributions | 34,970 |
Net income | 49,128 |
Distributions | (45,730 | )
Conversion of redeemable partnership units | (2,112 | )
Unearned compensation | (5,754 | )
Cumulative effect of a change in accounting principle | 563 |
Other comprehensive income | 599 |
Adjustment to reflect redeemable partnership units at redemption value | (133,263 | )
Balance at September 30, 2018 | $ | 2,190,664 |
Balance at December 31, 2016 | $ | 2,262,040 |
Contributions | 31,465 |
Net income | 40,350 |
Distributions | (40,292 | )
Conversion of redeemable partnership units | (16,812 | )
Unearned compensation | (5,194 | )
Cumulative effect of a change in accounting principle | (1,763 | )
Other comprehensive income | 52 |
Adjustment to reflect redeemable partnership units at redemption value | (103,556 | )
Balance at September 30, 2017 | $ | 2,166,290 |
Noncontrolling Interests—Property Partnerships The noncontrolling interests in property partnerships consist of the outside equity interests in ventures that are consolidated with the financial results of the Company because the Company exercises control over the entities that own the properties. The equity interests in these ventures that are not owned by the Company, totaling approximately $1.7 billion at September 30, 2018 and December 31, 2017, are included in Noncontrolling Interests—Property Partnerships in the accompanying Consolidated Balance Sheets. On May 12, 2016, the partners in the Company’s consolidated entity that owns Salesforce Tower located in San Francisco, California amended the venture agreement. Under the original venture agreement, if the Company elects to fund the construction of Salesforce Tower without a construction loan (or a construction loan of less than 50% of project costs) and the venture has commenced vertical construction of the project, then the partner’s capital funding obligation shall be limited, in which event the Company shall fund up to 2.5% of the total project costs (i.e., 50% of the partner’s 5% interest in the venture) in the form of a loan to the partner. This loan would bear interest at the then prevailing market interest rates for construction loans. Under the amended agreement, the partners have agreed to structure this funding by the Company as preferred equity rather than a loan. The preferred equity contributed by the Company earns a preferred return equal to LIBOR plus 3.00% per annum and is payable to the Company out of any distributions to which the partner would otherwise be entitled until such preferred equity and preferred return have been repaid to the Company. As of September 30, 2018, the Company had contributed an aggregate of approximately $22.6 million of preferred equity to the venture. Also, under the joint venture agreement, (a) from and after the stabilization date, the partner has the right to cause the Company to purchase all (but not less than all) of the partner’s interest and (b) from and after the third anniversary of the stabilization date, the Company has the right to acquire all (but not less than all) of the partner’s interest, in each case at an agreed upon purchase price or appraised value. In addition, if certain threshold returns are achieved the partner will be entitled to receive an additional promoted interest with respect to cash flow distributions. The term stabilization date is defined in the agreement to generally mean the first date after completion upon which Salesforce Tower is (1) at least 90% leased and (2) 50% occupied by tenants that are paying rent. The stabilization date is expected to occur in the fourth quarter of 2018. The Company expects the partner to exercise its right and to close on the purchase of the partner's interest by the end of the first half of 2019. The following table reflects the activity of the noncontrolling interests—property partnerships for the nine months ended September 30, 2018 and 2017 (in thousands):
Balance at December 31, 2017 | $ | 1,683,760 |
Capital contributions | 37,148 |
Net income | 46,484 |
Accumulated other comprehensive income | 432 |
Distributions | (56,796 | )
Balance at September 30, 2018 | $ | 1,711,028 |
Balance at December 31, 2016 | $ | 1,530,647 |
Capital contributions | 147,772 |
Net income | 33,967 |
Accumulated other comprehensive loss | (2,272 | )
Distributions | (41,439 | )
Balance at September 30, 2017 | $ | 1,668,675 |

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- Definition The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
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