Boston Properties Announces Exchangeable Senior Notes Offering

    BOSTON, Aug. 13 /EMWNews/ -- Boston Properties, Inc.

(NYSE: BXP), a real estate investment trust (the "Company"), announced

today that Boston Properties Limited Partnership, a Delaware limited

partnership and the Company's subsidiary ("BPLP"), has commenced an

offering of $500 million aggregate principal amount of exchangeable senior

notes due 2014. An additional $75 million aggregate principal amount of

notes may be issued, at the option of the initial purchasers to cover

over-allotments, within thirty (30) days of the initial issuance of the

notes.



    The notes will be senior unsecured obligations of BPLP. Boston

Properties expects to use the net proceeds from the notes offering, after

deducting the initial purchasers' discounts and estimated expenses related

to the offering, including the cost of the capped call transaction

described below, for the repayment of debt, real estate development

opportunities, real estate asset acquisitions and other real estate

investment opportunities.



    The notes will be sold to qualified institutional buyers in accordance

with Rule 144A under the Securities Act of 1933. The notes and the

Company's common stock issuable upon exchange of the notes have not been

registered under the Securities Act of 1933, or any state securities laws,

and unless so registered, may not be offered or sold in the United States

except pursuant to an exemption from the registration requirements of the

Securities Act of 1933 and applicable state laws. This release shall not

constitute an offer to sell or the solicitation of an offer to buy any of

these securities, nor shall it constitute an offer, solicitation or sale in

any jurisdiction in which such offer, solicitation or sale is unlawful.



    In connection with this offering and contemporaneously with the pricing

of the notes, BPLP expects to enter into a capped call transaction with

affiliates of the initial purchasers of the notes (the "option

counterparties"). The capped call transaction is expected to reduce the

potential dilution upon exchange of the notes in the event that the market

value per share of the Company's common stock, as measured under the terms

of the capped call transaction, at the time of settlement is greater than

the strike price of the capped call transaction, which will correspond to

the initial exchange price of the notes. If, however, the market value per

share of the Company's common stock exceeds the cap price of the capped

call transaction, as measured under the terms of the capped call

transaction, the dilution mitigation under the capped call transaction will

be limited, which means that there would be dilution to the extent that the

then market value per share of the Company's common stock exceeds the cap

price of the capped call transaction.



    If the initial purchasers of the notes exercise their option to

purchase additional notes, BPLP expects to use a portion of the proceeds

from the sale of such notes to increase the notional size of the capped

call transaction. Various terms related to the capped call transaction will

be determined contemporaneously with the pricing of the notes.



    In connection with hedging the capped call transaction, the option

counterparties or their affiliates expect to enter into various derivative

transactions with respect to the Company's common stock concurrently with

or shortly after the pricing of the notes. These activities could have the

effect of increasing or preventing a decline in the price of the Company's

common stock concurrently with or shortly after the pricing of the notes.

In addition, the option counterparties or their affiliates may from time to

time following the pricing of the notes enter into or unwind various

derivatives and/or purchase or sell the Company's common stock in secondary

market transactions. These activities could have the effect of decreasing

the price of the Company's common stock and adversely affecting the price

of the notes during any observation period related to an exchange of notes.



    Boston Properties is a fully integrated, self-administered and

self-managed real estate investment trust that develops, redevelops,

acquires, manages, operates and owns a diverse portfolio consisting

primarily of Class A office properties and one hotel. The Company is one of

the largest owners and developers of Class A office properties in the

United States, concentrated in five select markets -- Boston, Midtown

Manhattan, Washington, D.C., San Francisco, and Princeton, N.J.



    This press release contains forward-looking statements within the

meaning of the Federal securities laws. You can identify these statements

by our use of the words "expects," "plans," "estimates," "projects,"

"intends," "believes" and similar expressions that do not relate to

historical matters. You should exercise caution in interpreting and relying

on forward-looking statements because they involve known and unknown risks,

uncertainties and other factors which are, in some cases, beyond Boston

Properties' control and could materially affect actual results, performance

or achievements. These factors include, without limitation, the ability of

our joint venture partners to satisfy their obligations, the ability to

enter into new leases or renew leases on favorable terms, dependence on

tenants' financial condition, the uncertainties of real estate development

and acquisition activity, the ability to effectively integrate

acquisitions, the costs and availability of financing, the effects of local

economic and market conditions, the impact of newly adopted accounting

principles on the Company's accounting policies and on period-to-period

comparisons of financial results, regulatory changes and other risks and

uncertainties detailed from time to time in the Company's filings with the

Securities and Exchange Commission. Boston Properties does not undertake a

duty to update or revise any forward-looking statement whether as a result

of new information, future events or otherwise.