BOSTON, Sept. 29 /PRNewswire/ -- Boston Properties, Inc. (NYSE: BXP)
announced today that it has signed a binding agreement to acquire Embarcadero
Center in San Francisco, California. The portfolio of six Class A buildings
will be acquired from Prudential Insurance Company of America ("Prudential")
and David Rockefeller and Associates ("Rockefeller") for a total purchase
price of approximately $1.216 billion.
Commenting on the acquisition, Boston Properties Chairman Mortimer B.
Zuckerman said, "We are extremely pleased to add this irreplaceable premier
office complex to our portfolio at a price significantly below replacement
cost and with substantial upside potential. Embarcadero Center will be a
flagship property for the Company, providing us with an immediately dominant
position in one of the best office markets in the country."
Mr. Rockefeller noted, "We are delighted to be able to combine this
extraordinary property, of which we are so proud, with this outstanding
portfolio assembled by Boston Properties. We are confident that the Company's
fine management will ensure the best possible future for Embarcadero Center."
David Twardock, Senior Managing Director in charge of Prudential's general
real estate investments, said, "This will be the second major stock investment
we have made in Boston Properties as part of the transformation of our real
estate investments. We are excited about the Company's management and its
long-term growth strategy." Prudential's other investment with Boston
Properties is in connection with The Prudential Center in Boston.
As consideration for its equity interest in Embarcadero Center,
Rockefeller will receive approximately $305.3 million in convertible preferred
Operating Partnership Units (OP Units) in the Company's Operating Partnership
subsidiary. At any time after the fourth anniversary of their issuance, the
preferred OP Units may be converted at the holder's option into Common OP
Units at a conversion price of $38.10. For its interest, Prudential will
receive $10.1 million in convertible preferred OP Units and approximately
$331.4 million of other consideration. In a separate transaction, Prudential
has agreed to purchase $100 million of convertible preferred stock of the
Company. The preferred stock will have a conversion price of $38.10. Boston
Properties is arranging financing for funds needed to complete the
transaction.
The convertible preferred OP Units will pay distributions of 5.0% through
March 31, 1999, increasing to 5.5% through December 31, 1999, 5.625% for the
year 2000, 6.0% for the year 2001, 6.5% for the year 2002, 7.0% for the next
6-1/2 years and 6.0% thereafter. The preferred stock will provide for
dividends which follow the same rate schedule.
The Embarcadero Center portfolio, situated on 8.4 acres of waterfront
property in the heart of San Francisco's Financial District, includes
Embarcadero Centers 1, 2, 3 and 4, Embarcadero Center West Tower and the Old
Federal Reserve Building. The property is believed to be the largest mixed-
use business complex in the western United States, consisting of an aggregate
of approximately 3.66 million square feet of net rentable office space,
354,000 square feet of retail space and 2,090 underground parking spaces.
The transaction will close in two stages. The Rockefeller interests are
expected to be acquired by the end of October and the Prudential interests are
expected to be acquired in a transaction closing in early 1999, although no
assurance can be given in this regard.
Boston Properties, Inc. is a fully integrated, self-administered and self-
managed real estate investment trust ("REIT") that develops, redevelops,
acquires, manages, operates and owns a diverse portfolio of office, industrial
and hotel properties predominantly located in Greater Boston, Greater
Washington, D.C., Midtown Manhattan, Baltimore, Maryland, Richmond, Virginia
and Princeton/East Brunswick, New Jersey. The Company is one of the largest
owners and developers of office properties in the United States.
Visit the Company's web site at http://www.bostonproperties.com. Also see
http://www.frbinc.com.
This press release contains forward-looking statements within the meaning
of the Federal securities laws. Forward-looking statements are inherently
subject to risks and uncertainties, many of which cannot be predicted with
accuracy. Agreements that the Company enters into may be terminated or
abandoned for a variety of reasons, including a failure by the Company or the
other party to fulfill all conditions required for consummation of the
agreements.
SOURCE Boston Properties, Inc.
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Related links:
http://www.bostonproperties.com
CONTACT:
Mortimer B. Zuckerman, Chairman of Boston
Properties, 212-326-4000; or General Info, Marianne Stewart, or
Media, Judith Sylk-Siegel, 212-661-8030, or Analyst, Claire
Koeneman, 312-266-7800, all of The Financial Relations Board
NOTE TO EDITORS: To receive Boston Properties' latest news and
corporate developments via fax at no cost, please call
1-800-PRO-INFO; use company code BXP
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