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Real Estate | 9 Months Ended
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Sep. 30, 2022
Real Estate [Abstract] |
Real Estate | 3. Real Estate BXP Real estate consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):
|  | September 30, 2022 |  | December 31, 2021
Land |  | $ | 5,208,688 |  |  | $ | 5,061,169 |
Right of use assets - finance leases |  | 237,505 |  |  | 237,507 |
Right of use assets - operating leases |  | 167,935 |  |  | 169,778 |
Land held for future development (1) |  | 601,676 |  |  | 560,355 |
Buildings and improvements |  | 15,598,033 |  |  | 14,291,214 |
Tenant improvements |  | 3,061,686 |  |  | 2,894,025 |
Furniture, fixtures and equipment |  | 52,126 |  |  | 51,695 |
Construction in progress |  | 670,167 |  |  | 894,172 |
Total |  | 25,597,816 |  |  | 24,159,915 |
Less: Accumulated depreciation |  | (6,170,472) |  |  | (5,883,961) |
|  | $ | 19,427,344 |  |  | $ | 18,275,954 |
_______________ (1)Includes pre-development costs. BPLP Real estate consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):
|  | September 30, 2022 |  | December 31, 2021
Land |  | $ | 5,113,979 |  |  | $ | 4,964,986 |
Right of use assets - finance leases |  | 237,505 |  |  | 237,507 |
Right of use assets - operating leases |  | 167,935 |  |  | 169,778 |
Land held for future development (1) |  | 601,676 |  |  | 560,355 |
Buildings and improvements |  | 15,325,228 |  |  | 14,014,010 |
Tenant improvements |  | 3,061,686 |  |  | 2,894,025 |
Furniture, fixtures and equipment |  | 52,126 |  |  | 51,695 |
Construction in progress |  | 670,167 |  |  | 894,172 |
Total |  | 25,230,302 |  |  | 23,786,528 |
Less: Accumulated depreciation |  | (6,055,172) |  |  | (5,772,018) |
|  | $ | 19,175,130 |  |  | $ | 18,014,510 |
_______________ (1)Includes pre-development costs. Acquisitions On May 17, 2022, the Company completed the acquisition of Madison Centre in Seattle, Washington for a net purchase price, including transaction costs, of approximately $724.3 million. The acquisition was completed using the proceeds from BPLP’s $730.0 million unsecured term loan (See Note 6). Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace. The following table summarizes the allocation of the purchase price, including transaction costs, of Madison Centre at the date of acquisition (in thousands):
Land |  | $ | 104,641 |
Building and improvements |  | 505,766 |
Tenant improvements |  | 58,570 |
In-place lease intangibles |  | 74,598 |
Above-market lease intangibles |  | 3,794 |
Below-market lease intangibles |  | (23,114) |
Net assets acquired |  | $ | 724,255 |
The following table summarizes the estimated annual amortization of the acquired in-place lease intangibles and the acquired above- and below-market lease intangibles for Madison Centre from May 17, 2022 through the remainder of 2022 and each of the five succeeding fiscal years (in thousands):
|  | Acquired In-Place Lease Intangibles |  | Acquired Above-Market Lease Intangibles |  | Acquired Below-Market Lease Intangibles
Period from May 17, 2022 through December 31, 2022 |  | $ | 7,266 |  |  | $ | 640 |  |  | $ | 2,011 |
2023 |  | 12,200 |  |  | 1,098 |  |  | 3,442 |
2024 |  | 10,842 |  |  | 254 |  |  | 3,411 |
2025 |  | 10,770 |  |  | 254 |  |  | 3,398 |
2026 |  | 10,306 |  |  | 254 |  |  | 3,210 |
2027 |  | 9,161 |  |  | 254 |  |  | 2,805 |
Madison Centre contributed approximately $18.8 million of revenue and approximately $1.3 million of net income to the Company for the period from May 17, 2022 through September 30, 2022. On September 16, 2022, the Company acquired 125 Broadway in Cambridge, Massachusetts for a net purchase price, including transaction costs, of approximately $592.4 million. The acquisition was completed with available cash and borrowings under BPLP’s unsecured credit facility. 125 Broadway is a 271,000 net rentable square foot, six-story, laboratory/life sciences property. The following table summarizes the allocation of the purchase price, including transaction costs, of 125 Broadway at the date of acquisition (in thousands):
Land |  | $ | 126,364 |
Building and improvements |  | 403,588 |
Tenant improvements |  | 30,074 |
In-place lease intangibles |  | 49,137 |
Below-market lease intangibles |  | (16,725) |
Net assets acquired |  | $ | 592,438 |
The following table summarizes the estimated annual amortization of the acquired in-place lease intangibles and the acquired below-market lease intangible for 125 Broadway from September 16, 2022 through the remainder of 2022 and each of the five succeeding fiscal years (in thousands):
|  | Acquired In-Place Lease Intangibles |  | Acquired Below-Market Lease Intangible
Period from September 16, 2022 through December 31, 2022 |  | $ | 2,185 |  |  | $ | 744 |
2023 |  | 8,740 |  |  | 2,975 |
2024 |  | 8,740 |  |  | 2,975 |
2025 |  | 8,740 |  |  | 2,975 |
2026 |  | 8,740 |  |  | 2,975 |
2027 |  | 8,740 |  |  | 2,975 |
125 Broadway contributed approximately $1.6 million of revenue and approximately $0.4 million of net income to the Company for the period from September 16, 2022 through September 30, 2022. Dispositions On March 31, 2022, the Company completed the sale of 195 West Street located in Waltham, Massachusetts for a gross sale price of $37.7 million. Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP. 195 West Street is an approximately 63,500 net rentable square foot office property. 195 West Street contributed approximately $0.4 million of net income to the Company from January 1, 2022 through March 30, 2022 and contributed approximately $0.4 million and $0.2 million of net income to the Company for the three and nine months ended September 30, 2021, respectively. On April 19, 2021, the Company entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, the Company executed an agreement to assign its right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million and is reflected as Other income - assignment fee in the Company's Consolidated Statements of Operations. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres. The property was 100% leased. On June 15, 2022, the Company completed the sale of its suburban Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million. Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP. Virginia 95 Office Park consists of eleven office/flex properties aggregating approximately 733,000 net rentable square feet. Virginia 95 Office Park contributed approximately $2.3 million of net income to the Company from January 1, 2022 through June 14, 2022 and contributed approximately $1.8 million and $5.9 million of net income to the Company for the three and nine months ended September 30, 2021, respectively. On August 30, 2022, the Company completed the sale of 601 Massachusetts Avenue located in Washington, DC for a gross sale price of $531.0 million. Net cash proceeds totaled approximately $512.3 million, resulting in a gain on sale of real estate of approximately $237.4 million for BXP and approximately $237.5 million for BPLP. 601 Massachusetts Avenue is an approximately 479,000 net rentable square foot premier workplace. 601 Massachusetts Avenue contributed approximately $3.6 million and $14.9 million of net income to the Company for the period from July 1, 2022 through August 29, 2022 and the period from January 1, 2022 through August 29, 2022, respectively, and contributed approximately $5.6 million and $16.7 million of net income to the Company for the three and nine months ended September 30, 2021, respectively. On September 15, 2022, the Company completed the sale of two parcels of land located in Loudoun County, Virginia for an aggregate gross sale price of $27.0 million. Net cash proceeds totaled approximately $25.6 million, resulting in a gain on sale of real estate totaling approximately $24.4 million for BXP and BPLP. Developments On April 27, 2022, the Company entered into a 15-year lease agreement with AstraZeneca for approximately 570,000 net rentable square feet at the Company’s 290 Binney Street future development project. 290 Binney Street is part of the initial phase of a future life sciences development project located in the heart of Kendall Square in Cambridge, Massachusetts. The full project will consist of two buildings aggregating approximately 1.1 million rentable square feet of life sciences space and an approximately 400,000 square foot residential building. The lease and commencement of construction are subject to various conditions, some of which are not within the Company’s control. There can be no assurance that the conditions will be satisfied or that the Company will commence the development on the terms and schedule currently contemplated or at all. On April 29, 2022, the Company partially placed in-service 2100 Pennsylvania Avenue, a premier workplace project with approximately 480,000 net rentable square feet located in Washington, DC. On May 13, 2022, the Company commenced the development of Reston Next Office Phase II, a premier workplace project located in Reston, Virginia. When completed, the building will consist of approximately 90,000 net rentable square feet. On June 29, 2022, the Company completed and fully placed in-service 325 Main Street, a premier workplace project with approximately 414,000 net rentable square feet located in Cambridge, Massachusetts. On July 1, 2022, the Company commenced the redevelopment of 140 Kendrick Street, a premier workplace that consists of three buildings aggregating approximately 388,000 net rentable square feet located in Needham, Massachusetts. The redevelopment is a repositioning of one building consisting of approximately 90,000 net rentable square feet into a net zero, carbon neutral premier workplace building, as defined by the LEED Zero Carbon Certification. When completed, the building will consist of approximately 104,000 net rentable square feet. On July 15, 2022, the Company partially placed in-service 880 Winter Street, an approximately 244,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts. On September 8, 2022, the Company terminated its existing lease agreement with its client at 300 Binney Street to facilitate the conversion and expansion of the property. 300 Binney Street is a premier workplace with approximately 195,000 net rentable square feet at Kendall Center in Cambridge, Massachusetts that will be redeveloped into approximately 240,000 net rentable square feet of laboratory/life sciences space. The commencement of construction is subject to various conditions. There can be no assurance that the Company will commence the redevelopment on the terms and schedule currently contemplated or at all. On September 12, 2022, the Company commenced the redevelopment of 760 Boylston Street, a retail project at the Prudential Center located in Boston, Massachusetts. The redevelopment is a modernization of the space consisting of approximately 118,000 net rentable square feet.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI https://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI https://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI https://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI https://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI https://asc.fasb.org/topic&trid=2134617 + Details
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