BXP, Inc. · 10-Q · Item 2 MD&A

Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

This Quarterly Report on Form 10-Q, including the documents incorporated by reference herein, 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 (the “Exchange Act”). 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 we are including this statement for purposes of complying with those safe harbor provisions, in each case, to the extent applicable. The forward-looking statements are contained principally, but not only, under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We caution investors that forward-looking statements are based on current beliefs, expectations of future events and 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. These 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. If one or more of these known or unknown risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may differ 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, trends and assumptions at the time they are made, to anticipate future results or trends.

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

•volatile or adverse economic, capital markets and political conditions, including continued inflation, elevated interest rates, supply chain disruptions, policy changes related to tariffs and prolonged government shutdowns or disruptions, which may directly or indirectly impact us, our current clients and our prospective clients, including their demand for office space, and the costs and availability of construction materials and the economic returns on our construction and development activities;

•volatile or adverse geopolitical conflicts and dislocations in the credit markets could adversely affect economic conditions and/or restrict our access to cost-effective capital, which could have a material adverse effect on our business opportunities, results of operations and financial condition;

•risks associated with the availability and terms of financing, 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 and the use of forward interest rate contracts and derivatives and the effectiveness of such arrangements;

•general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases on attractive terms, sustained changes in client preferences and space utilization, dependence on clients’ financial condition, and competition from other developers, owners and operators of real estate);

•failure to integrate acquisitions and developments successfully;

•risks and uncertainties affecting property development and construction;

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

•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 climate change and severe weather events, as well as the regulatory efforts intended to reduce the effects of climate change;

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•risks associated with our use of AI and cyber security breaches, incidents and compromises, 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 legal proceedings and other claims that could result in substantial monetary damages and other costs;

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

•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.

Investors are also urged to carefully review the disclosures we make concerning these risks and other factors

that may affect our business and operating results, including the risks and uncertainties described in (i) our Annual

Report on Form 10-K for the fiscal year ended December 31, 2025 including those described under the caption

“Risk Factors,” (ii) our subsequent filings under the Exchange Act and (iii) the risk factors set forth in this Quarterly Report on Form 10-Q in Part II, Item 1A, if any.

Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. 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 unduly rely on forward-looking statements as a prediction of actual results. Investors should also refer to our most recent Annual Report on Form 10-K and 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 our 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 REITs (based on total market capitalization as of June 30, 2026) in the United States that develops, owns, and manages primarily premier workplaces. Our properties are concentrated in six gateway markets in the U.S. - Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC.

We generate revenue and cash primarily by leasing premier workplaces to our clients. We consider premier workplaces to be well-located buildings that are modern structures or have been modernized to compete with newer buildings, are professionally managed and maintained, and offer a number and type of amenities that are in high demand by clients that are focused on the importance of the physical work environment in recruiting and retaining the top-performing employees. As such, these properties attract creditworthy clients and command upper-tier rental rates in their markets. We do not consider the expression “premier workplaces” a classification of our properties in accordance with any standard listing criteria in the real estate industry.

We therefore caution investors that our use and definition of “premier workplaces” may be different than the use and definition of similar expressions and traditional classifications that may be used by other companies.

When making leasing decisions, we consider, among other things, the creditworthiness of the client 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 amount of any security deposit or letter of credit posted by the client, the costs of tenant improvement allowances, free rent periods and other landlord concessions, anticipated operating expenses and real estate taxes, the date by which we expect to begin revenue recognition for the lease under GAAP, 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 clients’ expansion rights and general economic factors.

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We believe our key competitive advantages are our commitments to the office asset class and to our clients as many competitors have divested from the sector, a strong balance sheet with access to capital in the secured and unsecured debt markets and the private and public equity markets, and the high quality of our portfolio of premier workplaces. Our core strategy has always been to develop, acquire and manage premier workplaces in gateway markets with high barriers-to-entry and attractive demand drivers and to focus on executing long-term leases with financially strong clients that are diverse across market sectors. We believe this strategy provides a competitive advantage as our clients are interested in leasing space in vibrant, amenitized and accessible premier workplaces.

T1This interest has accelerated the flight to quality in the office market. Over the past several years, BXP’s experience and performance has diverged from the larger market sentiment, as premier workplaces have outperformed the broader office market consistently and substantially in both rental rates achieved and occupancy. T2We believe this divergence validates our strategy and differentiates BXP from other office companies.

Premier workplaces in our five traditional central business district (“CBD”) markets (Boston, New York, San Francisco, Seattle and Washington, DC) have consistently outperformed the broader office market in those CBDs on several key metrics, including occupancy, net absorption levels, rental rates and landlord concessions. This outperformance is evident in BXP’s portfolio where we derive approximately 91% of our share of annualized rental obligations from predominantly premier workplaces located in CBDs. We define annualized rental obligations as the monthly contractual base rent (excluding percentage rent and rent abatements) and budgeted reimbursements from clients under existing leases as of June 30, 2026, multiplied by twelve. Our share of annualized rental obligations is calculated as the consolidated amount, plus our share of the amount from our unconsolidated joint ventures (calculated based on our economic percentage ownership interest), less our partners’ share of the amount from our consolidated joint ventures (calculated based on the partners’ economic percentage ownership interest). As of June 30, 2026, our CBD assets were 90.7% occupied and 93.6% leased (including vacant space for which we have signed leases that have not yet commenced in accordance with GAAP).

As of June 30, 2026, the weighted-average remaining lease term for (1) our in-place leases, based on square feet, including those signed by our unconsolidated joint ventures but excluding residential units, was approximately 7.7 years, and (2) our 20 largest clients, based on square feet, was approximately 9.4 years. Through year-end 2027, we have relatively low exposure to contractual lease expirations with approximately 4.6% of our share of the square footage of our in-service portfolio expiring.

During the second quarter of 2026, BXP continued to successfully execute on the multi-year strategic action plan introduced at our September 2025 Investor Day. The action plan focuses on earnings growth, which we expect will be achieved through a combination of increased occupancy and development deliveries, and reducing leverage through asset sales and retention of cash flow. Our progress reflects steady advancement across these key priorities.

Growth in Funds from Operations (“FFO”) per share depends in large part on the success of our leasing activity and improved occupancy. T3Leasing momentum remained strong during the second quarter of 2026, as we signed leases for approximately 1.8 million square feet.

During the second quarter of 2026, we continued to advance our strategic asset sales plan and remain ahead of our original disposition objectives. T4Since January 1, 2026, we have generated approximately $432 million of net sale proceeds and approximately $1.3 billion since our Investor Conference. In addition, five assets are currently under contract for sale, representing approximately $180 million of expected net proceeds, including approximately $120 million anticipated to close during 2026. We also continue to actively market several additional assets. Based on assets currently under contract and those being marketed, we estimate that net disposition proceeds in 2026 could aggregate up to an additional $440 million by year end. We also continue to evaluate additional capital raising opportunities to further enhance liquidity and funding flexibility.

Outlook

Leasing conditions across BXP's portfolio remain constructive, supported by continued demand for premier office assets and improving leasing execution. Activity is increasingly concentrated in BXP’s premier office locations, including Midtown Manhattan, Boston's Back Bay, Reston Town Center, and select San Francisco submarkets, where tightening availability and improving demand are contributing to leasing momentum. At the same time, discussion surrounding the impact of artificial intelligence on office-using employment has become more balanced and constructive, contributing to a more favorable demand backdrop. Collectively, these trends support BXP's view that premier workplaces in gateway markets remain well-positioned to capture evolving tenant demand.

While overall leasing conditions remain favorable, recovery trends continue to differ across markets and property types. T5Life science leasing demand remains below historical levels, particularly among earlier-stage

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companies, and certain markets continue to experience a more measured pace of leasing activity. Additionally, T6elevated financing costs and broader economic uncertainty continue to influence real estate investment and occupier decision-making.

Looking ahead, leasing for vacant space in our in-service buildings and coverage of near‑term lease expirations are expected to be the primary drivers of occupancy and revenue growth in our same property portfolio. We have a modest 300,000 square feet of leases expiring prior to December 31, 2026, a strong pipeline of active negotiations, and a meaningful volume totaling 1.1 million square feet of executed leases scheduled to commence this year.

Together, these factors provide increased visibility into continued occupancy improvement and position us ahead of the occupancy trajectory for 2026 outlined at our September 2025 Investor Day, reinforcing our confidence in achieving our stated goals.

On the supply side, new office construction has effectively slowed to a halt across most of our markets, which we expect will improve long‑term supply‑demand fundamentals and reinforce the relative competitiveness of institutional, well‑amenitized assets. T7Capital markets sentiment toward the office sector has continued to improve, as reflected in increasing private market transaction activity and greater availability of both debt and equity capital at more attractive pricing. This backdrop is expected to support our leasing momentum, facilitate orderly execution of strategic asset sales, and enable continued capital recycling initiatives throughout 2026.

Leasing Activity and Occupancy

Although all of the markets in which we operate still need consistent incremental absorption to constitute a macro recovery, we continue to see pockets of strength where low availability is driving constructive client behavior. As clients choose financially sound premier workplaces with building owners that are committed to their properties for the long term and are operated by the best property management teams, we expect to continue to be successful in gaining market share.

In the second quarter of 2026, we executed 106 leases totaling approximately 1.8 million square feet with a weighted-average lease term of approximately 9.9 years. The amount leased is approximately 129% of our historical 10-year average for the second quarter. Notable signed leases for projects under development include:

•an approximately 148,000 square foot lease with McDermott Will & Schulte at 343 Madison Avenue in New York City, New York, bringing the pre-leased percentage of the project to 50%, and

•an approximately 322,000 square foot lease with Boston Dynamics at Reservoir Place in Waltham, Massachusetts.

At June 30, 2026, BXP’s total in-service portfolio occupancy was 88.4%, an increase of 100 basis points from the first quarter of 2026. Total portfolio leased percentage was 91.3% (including vacant space for which we have signed leases that have not yet commenced revenue recognition in accordance with GAAP), an increase of 40 basis points from the first quarter of 2026. The spread between leased and occupied square footage was 290 basis points, representing approximately 1.3 million square feet of leases yet to commence, of which approximately 85% is expected to commence before year-end 2026.

An overview of the leasing activity in each of our regions for the three months ended June 30, 2026 is set forth in the table below. Amounts shown are in square feet, except for percentages, and include 100% of the unconsolidated joint venture properties.

Leases executed (1)

Region

Total

Second generation space vacant < 2 Years (2)

Change in second generation cash rents, net (3)

Occupancy

Leased (4)

Boston

%

%

%

Los Angeles

—

%

%

%

New York

%

%

%

San Francisco

%

%

%

Seattle

%

%

%

Washington, DC

%

%

%

Total / Weighted Average

%

%

%

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(1)Represents leases executed during the three months ended June 30, 2026 for which we either (1) commenced lease revenue recognition in such quarter or (2) will commence lease revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development/redevelopment.

(2)Second generation leases are defined as leases for in-service spaces that have previously been leased.

(3)Represents the increase (decrease) in net rent (gross rent less operating expenses) under the new leases versus expired leases on the 877,841 square feet of second generation leases that had been occupied within the 24 months preceding the execution of the new leases; excludes leases that management considers temporary because the client is not expected to occupy the space on a long-term basis. The calculation for the increase (decrease) of gross rent is based on current quarter expenses.

(4)Represents signed leases for which lease revenue recognition has commenced in accordance with GAAP and signed leases for vacant space with future commencement dates.

The table below details the leasing activity and second generation leasing information for leases executed, including 100% of the unconsolidated joint venture properties, during the three and six months ended June 30, 2026:

(Square Feet)

1st generation leases (1)

2nd generation leases with new clients (2)

2nd generation leases renewals (2)

Leases executed during the period, in square feet (3)

Second generation leasing information: (2)

Weighted Average Lease Term

Weighted Average Free Rent Period

Total Transaction Costs Per Square Foot (4)

Lease costs per year of term

__________________

(1)First generation leases are defined as leases for development and redevelopment space that have not previously been leased.

(2)Second generation leases are defined as leases for in-service spaces that have previously been leased.

(3)Represents leases executed during the three months ended June 30, 2026 for which we either (1) commenced lease revenue recognition in such quarter or (2) will commence lease revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development/redevelopment.

(4)Total transaction costs include tenant improvements and leasing commissions but exclude free rent concessions and other inducements in accordance with GAAP.

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The table below details the vacancy activity in our portfolio, including 100% of the unconsolidated joint venture properties, that commenced revenue recognition during the three and six months ended June 30, 2026:

(Square Feet)

Vacant space available at the beginning of the period

Vacant space from property dispositions/properties taken out of service (1)

—

Vacant space from properties placed (and partially placed) in-service (2)

Leases expiring or terminated during the period

Total space available for lease

1st generation leases (3)

2nd generation leases with new clients (4)

2nd generation lease renewals (4)

Total leases commenced during the period (5)

Vacant space available for lease at the end of the period

__________________

(1)Total square feet from property dispositions during the six months ended June 30, 2026 consists of 260,762 square feet at Gateway Commons and 79,382 square feet at North First Business Park. Total square feet from properties taken out of service during the six months ended June 30, 2026 consists of 49,219 square feet at Santa Monica Business Park.

(2)Total square feet from properties placed in service during the three months ended June 30, 2026 consists of 572,578 square feet at 290 Binney Street. Total square feet from properties placed in service during the six months ended June 30, 2026 consists of 572,578 square feet at 290 Binney Street and 30,284 square feet at Reston Next Retail.

(3)First generation leases are defined as leases for development and redevelopment spaces that have not previously been leased.

(4)Second generation leases are defined as leases for in-service spaces that have previously been leased.

(5)Leases for 296,406 and 598,600 square feet were signed during the three and six months ended June 30, 2026, respectively.

Investment Activity

BXP fully placed in-service 290 Binney Street in Cambridge, Massachusetts. 290 Binney Street is a 16-story, 572,578 square foot laboratory/life sciences property that is 100% leased to AstraZeneca.

BXP commenced the redevelopment of Reservoir Place, an approximately 363,000 square foot project located in Waltham, Massachusetts, that is 89% pre-leased to Boston Dynamics. Boston Dynamics plans to transform the property into a premier center for robotics and AI innovation.

As part of BXP’s strategy to use residential entitlements to maximize the value of its land holdings, BXP raised private equity from an institutional investor and formed a joint venture that commenced the development of a 4.7-acre land parcel into a 359-unit multi-family residential project in Herndon, Virginia. BXP has a 20% ownership interest in the joint venture and is serving as the development manager.

On July 28, 2026, BXP entered into a $1.2 billion construction loan for the development of 343 Madison Avenue in New York City, New York (see Note 14 to the Consolidated Financial Statements). The financing represents a significant milestone in the capitalization of the project and supports its ongoing construction. In addition, T8the loan significantly reduces BXP's remaining equity requirement to complete its development pipeline from approximately $2.1 billion to approximately $900 million.

Critical Accounting Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial

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statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions.

Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our critical accounting estimates. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2025.

Results of Operations

At June 30, 2026 and 2025, we owned or had joint venture interests in a portfolio of 164 and 186 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 three and six months ended June 30, 2026 and 2025 shows 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, In or Held for Development or Redevelopment or Sold Portfolios.

In our analysis of operating results, particularly to make comparisons of Net Operating Income (“NOI”) 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 or held for development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented.

NOI is a non-GAAP financial measure equal to net income attributable to BXP, Inc. and net income attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income attributable to noncontrolling interests, interest expense, loss from early extinguishment of debt, impairment loss, loss on sales-type lease, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain (loss) on non-real estate investments, gains from investments in securities, interest and other income (loss), gains on sales of real estate, income (loss) from unconsolidated joint ventures, 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 BXP, Inc. and net income attributable to Boston Properties Limited Partnership. 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 BXP, Inc. and net income attributable to Boston Properties Limited Partnership as presented in our Consolidated Financial Statements. NOI should not be considered as a substitute for net income attributable to BXP, Inc. or net income attributable to Boston Properties Limited Partnership (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.

Gains on sales of real estate, impairment losses 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 redemptions of common units of limited partnership interest of BPLP (“OP Units”). 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, impairment losses and

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depreciation expense upon the sale of these properties. For additional information see the Explanatory Note that immediately follows the cover page of this Quarterly Report on Form 10-Q.

Results of Operations for the Six Months Ended June 30, 2026 and 2025

Net income attributable to BXP, Inc. and net income attributable to Boston Properties Limited Partnership increased by approximately $20.0 million and $23.4 million, respectively, for the six months ended June 30, 2026 compared to 2025, as set forth in the following tables and for the reasons discussed below under the heading “Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following are reconciliations of (1) Net Income Attributable to BXP, Inc. to NOI and (2) Net Income Attributable to Boston Properties Limited Partnership to NOI for the six months ended June 30, 2026 and 2025. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 48.

BXP

Six months ended June 30,

Increase/

(Decrease)

%

Change

(in thousands)

Net Income Attributable to BXP, Inc.

$

$

$

%

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interest—common units of the Operating Partnership

%

Noncontrolling interests in property partnerships

%

Net Income

%

Other Expenses:

Add:

Interest expense

%

Loss from early extinguishment of debt

—

%

Impairment loss

—

%

Loss on sales-type lease

—

%

Other Income:

Less:

Unrealized gain (loss) on non-real estate investments

%

Gains from investments in securities

%

Interest and other income (loss)

%

Gains on sales of real estate

%

Income (loss) from unconsolidated joint ventures

%

Other Expenses:

Add:

Depreciation and amortization expense

%

Transaction costs

%

Payroll and related costs from management services contracts

%

General and administrative expense

%

Other Revenue:

Less:

Direct reimbursements of payroll and related costs from management services contracts

%

Development and management services revenue

%

Net Operating Income (“NOI”)

$

$

$

%

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BPLP

Six months ended June 30,

Increase/

(Decrease)

%

Change

(in thousands)

Net Income Attributable to Boston Properties Limited Partnership

$

$

$

%

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interests in property partnerships

%

Net Income

%

Other Expenses:

Add:

Interest expense

%

Loss from early extinguishment of debt

—

%

Impairment loss

—

%

Loss on sales-type lease

—

%

Other Income:

Less:

Unrealized gain (loss) on non-real estate investments

%

Gains from investments in securities

%

Interest and other income (loss)

%

Gains on sales of real estate

%

Income (loss) from unconsolidated joint ventures

%

Other Expenses:

Add:

Depreciation and amortization expense

%

Transaction costs

%

Payroll and related costs from management services contracts

%

General and administrative expense

%

Other Revenue:

Less:

Direct reimbursements of payroll and related costs from management services contracts

%

Development and management services revenue

%

Net Operating Income (“NOI”)

$

$

$

%

Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025

The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 138 properties totaling approximately 40.7 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, 2025 and owned and in service through June 30, 2026. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in or held for development or redevelopment after January 1, 2025 or disposed of on or prior to June 30, 2026. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the six months ended June 30, 2026 and 2025 with respect to the properties that were acquired, placed in-service, in or held for development or redevelopment, or sold. We did not acquire any properties during the six months ended June 30, 2026 and 2025.

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Same Property Portfolio

Properties

Placed In-Service

Portfolio

Properties in or Held for Development or Redevelopment Portfolio

Properties Sold Portfolio

Total Property Portfolio

Increase/

(Decrease)

%

Change

Increase/

(Decrease)

%

Change

(dollars in thousands)

Rental Revenue: (1)

Lease Revenue (Excluding Termination Income)

$

$

$

%

$

$

$

$

$

$

$

$

$

%

Termination Income

%

—

—

—

—

—

%

Lease Revenue

%

%

Parking and Other

%

—

—

%

Total Rental Revenue (1)

%

%

Real Estate Operating Expenses

%

%

Net Operating Income (Loss), Excluding Residential and Hotel

%

%

Residential Net Operating Income (2)

%

—

—

—

—

%

Hotel Net Operating Income (2)

%

—

—

—

—

—

—

%

Net Operating Income (Loss)

$

$

$

%

$

$

$

$

$

$

$

$

$

%

_______________

(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 provide investors with information regarding our performance that is not immediately apparent from the most directly comparable 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 48. Residential Net Operating Income for the six months ended June 30, 2026 and 2025 is comprised of Residential Revenue of $8,135 and $24,880 less Residential Expenses of $4,216 and $12,475, respectively. Hotel Net Operating Income for the six months ended June 30, 2026 and 2025 is comprised of Hotel Revenue of $24,002 and $24,370 less Hotel Expenses of $17,351 and $16,930, 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 $36.8 million for the six months ended June 30, 2026 compared to 2025. The increase was a result of our average revenue per square foot increasing by approximately $1.08, contributing approximately $19.5 million, and our average occupancy increasing from 88.1% to 89.1%, contributing approximately $17.3 million.

Termination Income

Termination income increased by approximately $14.9 million for the six months ended June 30, 2026 compared to 2025.

Termination income for the six months ended June 30, 2026 and 2025 related to 18 and three clients, respectively, across the Same Property Portfolio and totaled approximately $15.7 million and $0.8 million, respectively.

Parking and Other Revenue

Parking and other revenue increased by approximately $4.1 million for the six months ended June 30, 2026 compared to 2025. Parking and other revenue increased by approximately $3.4 million and $0.7 million, respectively. The increase in parking revenue was primarily due to an increase in monthly parking. The increase in other revenue was primarily associated with an increase in insurance proceeds.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio increased by approximately $28.8 million, or 4.6%, for the six months ended June 30, 2026 compared to 2025.

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially placed in-service between January 1, 2025 and June 30, 2026.

Quarter Initially Placed In-Service

Quarter Fully Placed In-Service

Rental Revenue

Real Estate Operating Expenses

Name

Square Feet

Change

Change

(dollars in thousands)

Reston Next Office Phase II

$

$

$

$

$

$

Reston Next Retail

—

—

—

—

—

$

$

$

$

$

$

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Properties in or Held for Development or Redevelopment Portfolio

The table below lists the properties that were in or held for development or redevelopment between January 1, 2025 and June 30, 2026.

Date Commenced Held for Development / Redevelopment

Rental Revenue

Real Estate Operating Expenses

Name

Square Feet

Change

Change

Held for Development or Redevelopment (1)

(dollars in thousands)

Lexington Office Park

$

$

$

$

$

$

Kingstowne One

Santa Monica Business Park (2)

Redevelopment

Reservoir Place (3)

$

$

$

$

$

$

_____________

(1)These properties are no longer considered “in-service” because each property’s occupied percentage is less than 50% and we anticipate a future development/redevelopment of the property. A property will be considered held for development or redevelopment until the last client has vacated the property and the property is no longer revenue producing.

(2)This portion of Santa Monica Business Park is comprised of two buildings, 2850 Ocean Park and 2800 28th Street.

(3)Reservoir Place is an approximately 528,000 square foot office building, of which approximately 165,000 square feet remains in-service. Reservoir Place commenced redevelopment during the six months ended June 30, 2026.

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Properties Sold Portfolio

The table below lists the properties we sold between January 1, 2025 and June 30, 2026.

Rental Revenue

Real Estate Operating Expenses

Name

Date Sold

Square Feet

Change

Change

(dollars in thousands)

Land

17 Hartwell Avenue

$

—

$

(4)

$

4

$

—

$

$

Almaden Boulevard

N/A

—

—

Land Parcels at Broad Run

N/A

—

—

—

—

N/A

—

—

North First Business Park (1)

Shady Grove Parcel 1

N/A

—

—

—

(1)

Total Land

Residential

Proto Kendall Square

—

—

Signature at Reston Town Center

—

—

The Lofts at Atlantic Wharf

Total Residential

Non-Strategic Office / Retail

—

—

Kingstowne Retail

Total Non-Strategic Office / Retail

$

$

$

$

$

$

______________

(1)Rental revenue for the six months ended June 30, 2025 includes approximately $0.4 million of termination income.

Residential Net Operating Income

Net operating income for our residential same property increased by approximately $1.7 million for the six months ended June 30, 2026 compared to 2025.

The following reflects our occupancy and rental rate information, by region, for our residential same property for the six months ended June 30, 2026 and 2025.

Average Monthly Rental Rate (1)

Average Rental Rate Per Occupied Square Foot

Average Physical Occupancy (2)

Average Economic Occupancy (3)

Region

Change (%)

Change (%)

Change (%)

Change (%)

San Francisco

$

$

%

$

$

%

%

%

%

%

%

%

_____________

(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

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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

The Boston Marriott Cambridge hotel had net operating income of approximately $6.7 million for the six months ended June 30, 2026, representing a decrease of approximately $0.8 million compared to the six months ended June 30, 2025, which was partially attributable to an increase in operating expenses.

The following reflects our occupancy and rate information for the Boston Marriott Cambridge hotel for the six months ended June 30, 2026 and 2025.

Change (%)

Occupancy

%

%

%

Average daily rate

$

$

%

REVPAR

$

$

%

Other Operating Revenue and Expense Items

Development and Management Services Revenue

Development and management services revenue decreased by approximately $1.8 million for the six months ended June 30, 2026 compared to 2025. Management services revenue and development services revenue decreased by approximately $1.6 million and $0.2 million, respectively. The decrease in management services revenue is primarily related to a leasing commission earned from an unconsolidated joint venture in the New York region in 2025 that did not recur in 2026.

General and Administrative Expense

General and administrative expense increased by approximately $15.0 million for the six months ended June 30, 2026 compared to 2025 primarily due to increases in compensation expense and other general and administrative expenses of approximately $13.6 million and $1.4 million, respectively. The increase in compensation expense includes an approximately $5.8 million non-cash increase related to the December 2025 issuance of the 2025 Outperformance Plan Awards (“2025 OPP Units”) and an approximately $1.6 million increase in the value of our deferred compensation plan.

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 each of the six months ended June 30, 2026 and 2025 were approximately $8.6 million and $9.2 million, respectively. These costs are not included in the general and administrative expenses discussed above.

Transaction Costs

Transaction costs decreased by approximately $1.1 million for the six months ended June 30, 2026 compared to 2025. In general, transaction costs relating to the formation of new joint ventures and the pursuit of other transactions are expensed as incurred.

Depreciation and Amortization Expense

Depreciation and amortization expense increased by approximately $21.0 million and $21.1 million for the six months ended June 30, 2026 compared to 2025, for BXP and BPLP, respectively, as detailed below (in thousands).

Portfolio

BXP

BPLP

Change

Change

Same Property Portfolio

$

$

$

$

$

$

Properties Placed In-Service Portfolio

Properties in or Held for Development or Redevelopment Portfolio

Properties Sold Portfolio

$

$

$

$

$

$

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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

Income (Loss) from Unconsolidated Joint Ventures

For the six months ended June 30, 2026 compared to 2025, income (loss) from unconsolidated joint ventures increased by approximately $38.4 million primarily due to approximately $42.4 million from gains on sales related to three transactions during the six months ended June 30, 2026 (See Note 5 to the Consolidated Financial Statements).

Gains on Sales of Real Estate

Gains on sales of real estate increased by approximately $2.0 million and $1.9 million for the six months ended June 30, 2026 compared to 2025, for BXP and BPLP, respectively, as detailed below. For additional information on the sales that occurred during the six months ended June 30, 2026, refer to Note 3 to the Consolidated Financial Statements.

Gain (Loss) on Sale (1)

Property

Location

Date Disposed

Square Feet

BXP

BPLP

Land:

North First Business Park (2)

San Jose, CA

$

$

Shady Grove Parcel 1 (2)

Rockville, MD

N/A

Subtotal

Residential:

The Lofts at Atlantic Wharf (3)

Boston, MA

Retail:

Kingstowne Retail (3)

Alexandria, VA

Total

$

$

Land:

17 Hartwell Avenue (3)

Lexington, MA

$

$

Total

$

$

_______________

(1)For the six months ended June 30, 2026, the total excludes approximately $0.3 million of loss in connection with the sale of our entire 50% ownership interest in the joint venture entity that owned Gateway Commons as a result of our outstanding receivable balance for development and construction management fees that were forfeited (see Note 5 to the Consolidated Financial Statements), and $0.1 million of loss related to sales that occurred in prior periods.

(2)We had previously recognized an impairment loss for this property.

(3)The fair value of the real estate disposed exceeded the carrying value.

Interest and Other Income (Loss)

Interest and other income (loss) decreased by approximately $0.8 million for the six months ended June 30, 2026 compared to 2025, due primarily to lower interest income partially offset by a reserve related to the unpaid default interest on one of our related party notes receivable during the six months ended June 30, 2025 of approximately $4.3 million.

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Gains from Investments in Securities

Gains from investments in securities for the six months ended June 30, 2026 and 2025 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 their respective deferred compensation plans, eligible officers and non-employee directors are permitted to defer a portion of their current compensation on a pre-tax basis and receive a tax-deferred return on the amounts deferred based on the performance of specific investments selected by participating officers and non-employee directors. In order to reduce our market risk relating to these plans, we typically acquire, similar or identical investments as those selected by each officer or non-employee director and hold them in a separate account that is unrestricted as to its use.

This enables us to generally match our liabilities to participants 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 six months ended June 30, 2026 and 2025, we recognized gains of approximately $3.8 million and $2.2 million, respectively, on these investments. By comparison, our general and administrative expense increased by approximately $3.8 million and $2.2 million during the six months ended June 30, 2026 and 2025, respectively, as a result of increases in our liability under our deferred compensation plans that were associated with the performance of the specific investments selected by participating officers and former non-employee directors of BXP.

Unrealized Gain (Loss) on Non-Real Estate Investments

We invest in non-real estate investments, which primarily consist of environmentally-focused investment funds. During the six months ended June 30, 2026 and 2025, we recognized an unrealized gain (loss) of approximately $0.1 million and $(0.5) million, respectively, due to the observable changes in the fair value of the investments.

Loss on Sales-Type Lease

During the six months ended June 30, 2025, we recognized approximately $2.5 million in additional costs, which had previously been contingent, related to a ground lease for land at our Reston Next property located in Reston, Virginia. We entered into the ground lease in 2020 with a third-party hotel developer and amended it in 2022. The amendment resulted in the derecognition of the assets related to the ground lease and the classification of the ground lease as a sales-type lease resulting in the recognition of a gain on sales-type lease of approximately $10.1 million.

Impairment Loss

On May 27, 2026, we entered into an agreement to sell our leasehold interest and improvements thereon commonly known as the Sumner Square to a third party and on May 29, 2026, the sale met our “held for sale” criteria. Following the classification of the assets as “held for sale,” the assets are written down to the lower of carrying value or estimated fair value, less the costs to sell. As a result, BXP and BPLP recognized a non-cash impairment loss of approximately $18.0 million and $16.8 million, respectively, during the six months ended June 30, 2026 (See Notes 2, 3 and 14 to the Consolidated Financial Statements).

Loss From Early Extinguishment of Debt

On March 28, 2025, BPLP amended and restated its revolving credit agreement. As a result of the amendment and restatement, during the six months ended June 30, 2025, we recognized a loss from early extinguishment of debt of approximately $0.3 million related to unamortized origination costs.

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Interest Expense

Interest expense decreased by approximately $20.7 million for the six months ended June 30, 2026 compared to 2025, as detailed below.

Component

Change in interest expense for the six months ended June 30, 2026 compared to June 30, 2025

(in thousands)

Increases to interest expense due to:

Issuance of $1.0 billion in aggregate principal of 2.000% exchangeable senior notes due 2030 on September 29, 2025

$

Amortization expense of financing fees

Unsecured commercial paper

Other interest expense (excluding senior notes)

Total increases to interest expense

Decreases to interest expense due to:

Repayment of $1.0 billion in aggregate principal of 3.650% senior notes due 2026 on February 2, 2026

Decrease in interest associated with unsecured term loans and the unsecured credit facility, net (1)

Increase in capitalized interest related to development projects

Mortgage loan financings (1)

Repayment of $850 million in aggregate principal of the 3.200% senior notes due 2025 on January 15, 2025

Decrease in interest due to finance leases

Total decreases to interest expense

Total change in interest expense

$

______________

(1)Includes, if applicable, fair value and swap adjustments (See Note 7 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 six months ended June 30, 2026 and 2025 was approximately $29.4 million and $22.5 million, respectively. These costs are not included in the interest expense referenced above.

At June 30, 2026, our variable rate debt consisted of (1) the $100.0 million unsecured term loan facility (“2024 Unsecured Term Loan”), (2) BPLP’s $2.95 billion unsecured credit facility (“2025 Credit Facility”) and (3) BPLP’s $750.0 million unsecured commercial paper program (“Commercial Paper Program”). The 2025 Credit Facility consists of (1) a revolving line of credit (the “Revolving Facility”) of $2.25 billion and (2) an unsecured term loan facility (the “Term Loan Facility”) of $700.0 million. As of June 30, 2026, there were $100.0 million, $700.0 million and $750.0 million outstanding under the 2024 Unsecured Term Loan, 2025 Credit Facility and Commercial Paper Program, respectively.

In addition, we have an aggregate of $800.0 million of mortgage notes collateralized by Santa Monica Business Park and 325 Main Street, 355 Main Street, 90 Broadway and Cambridge East Garage (also known as Kendall Center Green Garage) properties that bear interest at variable rates. However, $600.0 million of this debt has been hedged with interest rate swaps to fix SOFR, the base rate for the mortgage collateralized by 325 Main Street, 355 Main Street, 90 Broadway and Cambridge East Garage (also known as Kendall Center Green Garage) properties, for the applicable debt term.

For a summary of our consolidated debt as of June 30, 2026 refer to the heading “Liquidity and Capital Resources—Debt” within “Item 2—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 $7.1 million for the six months ended June 30, 2026 compared to 2025, as detailed below.

Property

Noncontrolling Interests in Property Partnerships for the six months ended June 30,

Change

(in thousands)

767 Fifth Avenue (the General Motors Building) (1)

$

$

$

7 Times Square (2)

601 Lexington Avenue

Atlantic Wharf Office Building

—

(1)

1

$

$

$

______________

(1)The increase was primarily due to a decrease in repairs and maintenance expense.

(2)The decrease was primarily due to the expiration of a tax credit.

(3)On August 27, 2025, we acquired our partner’s 45% ownership interest.

(4)Property was fully placed in-service on April 30, 2026.

Noncontrolling Interest—Common Units of the Operating Partnership

For BXP, noncontrolling interest—common units of the Operating Partnership increased by approximately $2.3 million for the six months ended June 30, 2026 compared to 2025 due to an increase in allocable income. Due to our ownership structure, there is no corresponding line item on BPLP’s financial statements.

Results of Operations for the Three Months Ended June 30, 2026 and 2025

Net income attributable to BXP, Inc. and net income attributable to Boston Properties Limited Partnership decreased approximately $20.4 million and $21.5 million, respectively, for the three months ended June 30, 2026 compared to 2025, as detailed in the following tables and for the reasons discussed below under the heading “Comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025” within “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following are reconciliations of (1) Net Income Attributable to BXP, Inc. to NOI and (2) Net Income Attributable to Boston Properties Limited Partnership to NOI for the three months ended June 30, 2026 and 2025. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see page 48.

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BXP

Three months ended June 30,

Increase/

(Decrease)

%

Change

(in thousands)

Net Income Attributable to BXP, Inc.

$

$

$

%

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interest—common units of the Operating Partnership

%

Noncontrolling interests in property partnerships

%

Net Income

%

Other Expenses:

Add:

Interest expense

%

Impairment loss

—

%

Unrealized loss on non-real estate investments

%

Loss from unconsolidated joint ventures

%

Other Income:

Less:

Gains from investments in securities

%

Interest and other income (loss)

%

Gain on sale of real estate

%

Other Expenses:

Add:

Depreciation and amortization expense

%

Transaction costs

%

Payroll and related costs from management services contracts

%

General and administrative expense

%

Other Revenue:

Less:

Direct reimbursements of payroll and related costs from management services contracts

%

Development and management services revenue

%

Net Operating Income (“NOI”)

$

$

$

%

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BPLP

Three months ended June 30,

Increase/

(Decrease)

%

Change

(in thousands)

Net Income Attributable to Boston Properties Limited Partnership

$

$

$

%

Net Income Attributable to Noncontrolling Interests:

Noncontrolling interests in property partnerships

%

Net Income

%

Other Expenses:

Add:

Interest expense

%

Impairment loss

—

%

Unrealized loss on non-real estate investments

%

Loss from unconsolidated joint ventures

%

Other Income:

Less:

Gains from investments in securities

%

Interest and other income (loss)

%

Gains on sales of real estate

%

Other Expenses:

Add:

Depreciation and amortization expense

%

Transaction costs

%

Payroll and related costs from management services contracts

%

General and administrative expense

%

Other Revenue:

Less:

Direct reimbursements of payroll and related costs from management services contracts

%

Development and management services revenue

%

Net Operating Income (“NOI”)

$

$

$

%

Comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025

The table below shows selected operating information for the Same Property Portfolio and the Total Property Portfolio. The Same Property Portfolio consists of 138 properties totaling approximately 40.7 million net rentable square feet, excluding unconsolidated joint ventures. The Same Property Portfolio includes properties acquired or placed in-service on or prior to April 1, 2025 and owned and in-service through June 30, 2026. The Total Property Portfolio includes the effects of the other properties either acquired, placed in-service, in or held for development or redevelopment after April 1, 2025 or disposed of on or prior to June 30, 2026. This table includes a reconciliation from the Same Property Portfolio to the Total Property Portfolio by also providing information for the three months ended June 30, 2026 and 2025 with respect to the properties that were acquired, placed in-service, in or held for development or redevelopment, or sold. We did not acquire any properties during the three months ended June 30, 2026 and 2025.

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Same Property Portfolio

Properties

Placed In-Service

Portfolio

Properties in or Held for

Development or

Redevelopment

Portfolio

Properties Sold Portfolio

Total Property Portfolio

Increase/

(Decrease)

%

Change

Increase/

(Decrease)

%

Change

(dollars in thousands)

Rental Revenue: (1)

Lease Revenue (Excluding Termination Income)

$

$

$

%

$

$

$

$

$

$

$

$

$

%

Termination Income

%

—

—

—

—

—

%

Lease Revenue

%

%

Parking and Other Revenue

%

—

—

%

Total Rental Revenue (1)

%

%

Real Estate Operating Expenses

%

%

Net Operating Income (Loss), Excluding Residential and Hotel

%

%

Residential Net Operating Income (2)

%

—

—

—

—

—

%

Hotel Net Operating Income (2)

%

—

—

—

—

—

—

%

Net Operating Income (Loss)

$

$

$

%

$

$

$

$

$

$

$

$

$

%

_______________

(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 provide investors with information regarding our performance that is not immediately apparent from the most directly comparable 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 48. Residential Net Operating Income for the three months ended June 30, 2026 and 2025 is comprised of Residential Revenue of $3,683 and $12,532 less Residential Expenses of $2,006 and $6,578, respectively. Hotel Net Operating Income for the three months ended June 30, 2026 and 2025 is comprised of Hotel Revenue of $14,901 and $14,773 less Hotel Expenses of $9,369 and $9,365, 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 $24.3 million for the three months ended June 30, 2026 compared to 2025. The increase resulted from our average revenue per square foot increasing by approximately $1.47, contributing approximately $13.2 million, and our average occupancy increasing from 88.0% to 89.2%, contributing approximately $11.1 million.

Termination Income

Termination income increased by approximately $2.3 million for the three months ended June 30, 2026 compared to 2025.

Termination income for the three months ended June 30, 2026 and 2025 related to 13 and two clients, respectively, across the Same Property Portfolio and totaled approximately $2.8 million and $0.6 million, respectively.

Parking and Other Revenue

Parking and other revenue increased by approximately $2.8 million for the three months ended June 30, 2026 compared to 2025. Parking and other revenue increased by approximately $2.0 million and $0.8 million, respectively. The increase in parking revenue was primarily due to an increase in monthly parking. The increase in other revenue was primarily associated with an increase in insurance proceeds.

Real Estate Operating Expenses

Real estate operating expenses from the Same Property Portfolio increased by approximately $9.9 million, or 3.1%, for the three months ended June 30, 2026 compared to 2025.

Properties Placed In-Service Portfolio

The table below lists the properties that were placed in-service or partially placed in-service between April 1, 2025 and June 30, 2026.

Quarter Initially Placed In-Service

Quarter Fully Placed In-Service

Rental Revenue

Real Estate Operating Expenses

Name

Square Feet

Change

Change

(dollars in thousands)

Reston Next Office Phase II

$

$

$

$

$

$

Reston Next Retail

—

—

—