Boston Properties, Inc., a Delaware corporation organized in 1997, individually
or together with its subsidiaries, including Boston Properties Limited Partnership,
a Delaware limited partnership, and our predecessors. We are a fully integrated
self-administered and self-managed real estate investment trust, or 'REIT,' and
one of the largest owners and developers of office properties in the United States.
Our properties are concentrated in five markets'Boston, Washington, D.C., midtown
Manhattan, San Francisco and Princeton, N.J. We conduct substantially all of our
business through our subsidiary, Boston Properties Limited Partnership. At December'
31, 2005, we owned or had interests in 121 properties, totaling approximately
42.0'million net rentable square feet and structured parking for vehicles containing
approximately 9.3'million square feet.
Our properties consisted of:
117 office properties comprised of 100 Class'A office properties (including
three properties under construction) and 17 Office/Technical properties;
two hotels; and
two retail properties.
We own or control undeveloped land totaling approximately 527.1 acres, which
will support approximately 9.2'million square feet of development. In addition,
we have a 25% interest in the Boston Properties Office Value-Added Fund, L.P.,
which we refer to as the 'Value-Added Fund,' which is a strategic partnership
with two institutional investors through which we intend to pursue the acquisition
of assets within our existing markets that have deficiencies in property characteristics
which provide an opportunity to create value through repositioning, refurbishment
or renovation. Our investments through the Value-Added Fund are not included
in our portfolio information tables or any other portfolio level statistics.
We consider Class'A office properties to be centrally-located buildings that
are professionally managed and maintained, attract high-quality tenants and
command upper-tier rental rates, and that are modern structures or have been
modernized to compete with newer buildings. The Company considers Office/Technical
properties to be properties that support office, research and development and
other technical uses. Our definitions of Class'A office and Office/Technical
properties may be different than those used by other companies.
We are a full-service real estate company, with substantial in-house expertise
and resources in acquisitions, development, financing, capital markets, construction
management, property management, marketing, leasing, accounting, tax and legal
services.
Our primary business objective is to maximize return on investment so as to
provide our investors with the greatest possible total return. Our strategy
to achieve this objective is:
to concentrate on a few carefully selected geographic markets, including Boston,
Washington D.C., midtown Manhattan, San Francisco and Princeton, N.J., and to
be one of the leading, if not the leading, owners and developers in each of
those markets. We select markets and submarkets where tenants have demonstrated
a preference for high-quality office buildings and other facilities;
to emphasize markets and submarkets within those markets where the lack of
available sites and the difficulty of receiving the necessary approvals for
development and the necessary financing constitute high barriers to the creation
of new supply, and where skill, financial strength and diligence are required
to successfully develop, finance and manage high-quality office, research and
development space as well as selected retail space;
to take on complex, technically challenging projects, leveraging the skills
of our management team to successfully develop, acquire or reposition properties
which other organizations may not have the capacity or resources to pursue;
to concentrate on high-quality real estate designed to meet the demands of
today's tenants who require sophisticated telecommunications and related infrastructure
and support services, and to manage those facilities so as to become the landlord
of choice for both existing and prospective clients;
to opportunistically acquire assets which increase our penetration in the markets
in which we have chosen to concentrate and which exhibit an opportunity to improve
or preserve returns through repositioning (through a combination of capital
improvements and shift in marketing strategy), changes in management focus and
re-leasing as existing leases terminate;
to explore joint venture opportunities primarily with existing owners of land
parcels located in desirable locations, who seek to benefit from the depth of
development and management expertise we are able to provide and our access to
capital, and/or to explore joint venture opportunities with strategic institutional
partners, leveraging our skills as owners, operators and developers of Class'
A office space;
to pursue on a selective basis the sale of properties, including core properties,
to take advantage of our value creation and the demand for our premier properties
to seek third-party development contracts, which benefits us when our internal
development is less active or when new development is less-warranted due to
market conditions, which can be a significant source of revenue and enables
us to retain and utilize our existing development and construction management
staff; and
to enhance our capital structure through our access to a variety of sources
of capital.
Competition
We compete in the leasing of office space with a considerable number of other
real estate companies, some of which may have greater marketing and financial
resources than are available to us. In addition, our hotel properties compete
for guests with other hotels, some of which may have greater marketing and financial
resources than are available to us and to the manager of our hotels, Marriott'
International, Inc.
Principal factors of competition in our primary business of owning, acquiring
and developing office properties are the quality of properties, leasing terms
(including rent and other charges and allowances for tenant improvements), attractiveness
and convenience of location, the quality and breadth of tenant services provided,
and reputation as an owner and operator of quality office properties in the
relevant market. Additionally, our ability to compete depends upon, among other
factors, trends of the national and local economies, investment alternatives,
financial condition and operating results of current and prospective tenants,
availability and cost of capital, construction and renovation costs, taxes,
utilities, governmental regulations, legislation and population trends.