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Real Estate
 9 Months Ended
Sep. 30, 2024
Real Estate [Abstract]  
Real Estate
3. Real Estate
BXP
Real estate consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Land$5,318,724 $5,251,224 
Right of use assets - finance leases (1)372,896 401,680 
Right of use assets - operating leases (1)339,804 324,298 
Land held for future development (2)690,774 697,061 
Buildings and improvements16,898,821 16,607,756 
Tenant improvements3,782,391 3,592,172 
Furniture, fixtures and equipment54,992 53,716 
Construction in progress812,122 547,280 
Total28,270,524 27,475,187 
Less: Accumulated depreciation(7,369,545)(6,881,728)
$20,900,979 $20,593,459 
_______________
(1)See Note 4.
(2)Includes pre-development costs.
BPLP
Real estate consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Land$5,224,015 $5,156,515 
Right of use assets - finance leases (1)372,896 401,680 
Right of use assets - operating leases (1)339,804 324,298 
Land held for future development (2)690,774 697,061 
Buildings and improvements16,627,265 16,336,200 
Tenant improvements3,782,391 3,592,172 
Furniture, fixtures and equipment54,992 53,716 
Construction in progress812,122 547,280 
Total27,904,259 27,108,922 
Less: Accumulated depreciation(7,241,074)(6,758,361)
$20,663,185 $20,350,561 
_______________
(1)See Note 4.
(2)Includes pre-development costs.
Acquisition
On January 8, 2024, the Company completed the acquisition of its joint venture partner’s 50% economic ownership interest in the joint venture that owns 901 New York Avenue, located in Washington, DC. At acquisition, the total net equity acquired was $20.0 million, which includes $10.0 million in cash that the Company paid for the joint venture partner's 50% economic ownership interest in the joint venture. The property is subject to existing mortgage indebtedness of approximately $207.1 million (See Note 6). The acquisition resulted in the Company recording a gain upon consolidation of approximately $21.8 million, which is the difference between the fair value of the previously held equity method investment immediately prior to the consolidation of $10.0 million, less the Company’s costs basis of approximately $(11.8) million. The gain on consolidation is included within income (loss) from unconsolidated joint ventures in the Consolidated Statement of Operations.
The total net assets acquired is equal to (1) the total net equity acquired of $20.0 million, which includes $10.0 million in cash that the Company paid for the joint venture partner's 50% economic ownership interest in the joint venture plus (2) $207.1 million of debt assumed, less (3) net working capital acquired of approximately $7.1 million. The following table summarizes the allocation of the fair value of the net assets the Company received at the date of acquisition for 901 New York Avenue (in thousands):
Land and site improvements$65,808 
Building and improvements56,882 
Tenant improvements16,088 
In-place lease intangibles72,621 
Above-market lease intangibles2,757 
Below-market lease intangibles(2,515)
Mortgage note payable adjustment8,374 
Net assets acquired$220,015 
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 901 New York Avenue from January 8, 2024 through the remainder of 2024 and each of the next five succeeding fiscal years (in thousands):
Acquired In-Place Lease Intangibles Acquired Above-Market Lease Intangibles Acquired Below-Market Lease Intangibles
Period from January 8, 2024 through December 31, 2024$10,364 $607 $252 
20259,030 454 257 
20266,494 238 257 
20276,265 201 257 
20286,069 186 257 
20296,076 186 251 
The following table summarizes the weighted-average useful life of the acquired in-place lease intangibles and the acquired above- and below-market lease intangibles for 901 New York Avenue as of the acquisition date (in years):
Acquired In-Place Lease Intangibles Acquired Above-Market Lease Intangibles Acquired Below-Market Lease Intangibles
Weighted-average useful life6.74.09.8
901 New York Avenue contributed approximately $24.7 million of revenue and $6.9 million of net loss to the Company for the period from January 8, 2024 through September 30, 2024. 901 New York Avenue is an office property consisting of approximately 524,000 net rentable square feet.
Development
On February 12, 2024, the Company commenced the development of a residential project at 121 Broadway Street in Cambridge, Massachusetts that is adjacent to its development projects at 290 Binney Street and 300 Binney Street. 121 Broadway will consist of 439 residential units aggregating approximately 492,000 net rentable square feet. There can be no assurance that the Company will complete development of the project on the terms and schedule currently contemplated or at all.
On April 5, 2024, the Company completed and fully placed in-service 760 Boylston Street, an approximately 118,000 net rentable square foot retail redevelopment located in Boston, Massachusetts.
On July 17, 2024, the Company partially placed in-service Reston Next Office Phase II, an approximately 90,000 net rentable square foot development project comprised of office and retail space located in Reston, Virginia.
On September 26, 2024, the Company fully placed in-service 180 CityPoint, an approximately 329,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.
Pending Disposition and Impairment
At March 31, 2024, the Company evaluated the expected hold period for a portion of its Shady Grove property, consisting of 2 Choke Cherry Road, 2094 Gaither Road and a land parcel, located in Rockville, Maryland. Based on a shorter-than-expected hold period, the Company reduced the carrying value of a portion of the property that the Company anticipates selling to a third-party developer to its estimated fair value at March 31, 2024. As a result, each of BXP and BPLP recognized an impairment loss of approximately $13.6 million during the nine months ended September 30, 2024. The Company’s estimated fair value was based on Level 3 inputs as defined in ASC 820 and on a pending offer from a third-party.
On May 7, 2024, the Company entered into an agreement with the third-party developer for the sale of 2 Choke Cherry Road, 2094 Gaither Road and the land parcel for an aggregate gross sale price of approximately $24.8 million. On July 22, 2024, the Company executed an amendment to the agreement for an aggregate gross sale price of approximately $24.7 million. 2 Choke Cherry Road and 2094 Gaither Road are two vacant office properties aggregating approximately 143,000 net rentable square feet that were taken out of service and held for redevelopment. The disposition is subject to satisfaction of certain closing conditions and there can be no assurance that this transaction will be consummated on the terms currently contemplated or at all.