The Arboretum, Reston, VA (left) 100 East Pratt Street, Baltimore, MD LOOKING FORWARD The impact of the current recession must not be minimized, particularly for the year ahead. Even when the recovery begins, there will be a lag between a return to positive economic activity and the growth in demand for first-class  office space. Too many tenants have space under lease in excess of their expected needs that will have to be absorbed by their own growth, or subleasing, before they seek additional space. The lease-up time on the uncommitted portion of our current development program will be extended as will the time required to re-lease space vacated in the  existing portfolio. That being said, Boston Properties’ financial condition and prospects remain very strong and we are optimistic about the opportunities available for further growth. The level of debt on our balance sheet is low and a large percentage of our Funds From Operations and cash flow is highly predictable and secure. There is still embedded upside potential in our existing portfolio, and our substantially pre-committed new developments will add to income and earnings growth as they come on stream. We have ample resources that put us in a strong position to deal with possible further erosion in the markets and to capture the opportunities for acquisitions that may emerge as others deal with weakened  market conditions. Economic recovery will allow us in the years ahead to capitalize on the many millions of square feet of potential development projects under our control. And the more than 650 men and women who work at  Boston Properties, the most important resource we have, remain committed to achieving the best results possible through every phase of the always cyclical real estate market. Their continued efforts, creativity, and dedication to the Company, which have contributed so much to our success during these past five years, will remain the keys to our accomplishments going forward.  MORTIMER B. ZUCKERMAN Chairman of the Board EDWARD H. LINDE President and Chief Executive Officer 9