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BioMed Realty Trust Reports Second Quarter 2007 Financial Results

SAN DIEGO, Calif., Aug. 6 /PRNewswire-FirstCall/ -- BioMed Realty Trust, Inc. (NYSE: BMR), a real estate investment trust focused on providing real estate to the life science industry, today announced financial results for the second quarter ended June 30, 2007.

Highlights:

  • Quarterly total revenues increased 40.2% to $68.4 million from $48.8 million in the second quarter 2006

  • Quarterly funds from operations (FFO) per diluted share increased 22.0% to $0.50 per share versus the second quarter 2006

  • Total assets increased 60.2% to $2.9 billion from June 30, 2006

  • Completed the formation of a joint venture with Prudential Real Estate Investors

    • The joint venture simultaneously acquired a portfolio of properties including approximately 600,000 square feet of life science space recently completed or under construction, and land that can support approximately 266,000 square feet of laboratory and office space, in Cambridge, Massachusetts

  • Acquired two additional properties for total consideration of $65.1 million, including three office/laboratory buildings in San Diego, California comprising 112,000 square feet and a 51,181 square foot office/laboratory building in Rockville, Maryland

  • Disposed of the Colorow Drive property in Salt Lake City, Utah for gross proceeds of $20.0 million, resulting in a gain of approximately $1.1 million

  • Entered into a new ten-year lease with The Macroflux Corporation for 55,588 square feet after terminating an existing lease at our Ardentech Court property in the Newark/Fremont submarket of San Francisco, California

"We delivered another strong financial performance in the second quarter with significant growth in revenue and FFO. Our properties continued to perform very well, the fundamentals for our business remain positive and we continue to see positive leasing momentum throughout our markets," commented Alan D. Gold, President and Chief Executive Officer of BioMed Realty Trust.

"Forming the joint venture with Prudential was an important milestone for our industry and a significant vote of confidence in our company. In addition to the joint venture formation and related acquisitions, we made two fully leased property acquisitions in the quarter, continuing to strengthen the quality of our portfolio. Importantly, we also disposed of the Salt Lake City asset we acquired in December 2005, generating a gain on the sale," added Mr. Gold. "With our highly flexible balance sheet, we are well positioned for continued growth through the acquisition, development and redevelopment of world-class life science facilities in our core markets."

Second Quarter 2007 Financial Results

Total revenues for the quarter increased to $68.4 million from $48.8 million in the second quarter of 2006, due primarily to the addition of properties through acquisitions. Second quarter 2007 revenues also included $3.3 million (or $0.05 per diluted share) of other income, which comprised lease termination and other fees. Net income available to common stockholders for the quarter was $14.2 million, or $0.22 per diluted share, compared to $7.2 million, or $0.14 per diluted share, in the second quarter of 2006. Income from continuing operations per share available to common stockholders for the quarter was $0.20 per diluted share, compared to $0.13 per diluted share in the second quarter of 2006.

FFO during the quarter increased 51.6% to $33.8 million from $22.3 million in the comparable period in 2006. FFO per diluted share increased 22.0% to $0.50 for the second quarter of 2007 versus $0.41 in the second quarter of 2006.

FFO is a supplemental non-GAAP financial measure used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO and a definition of FFO are included at the end of this release.

Financing Activity

As of June 30, 2007, the company's consolidated debt included fixed-rate mortgage indebtedness with an aggregate outstanding principal amount of $387.4 million, excluding $12.2 million of debt premium, and a weighted-average interest rate of 5.4% at quarter-end; a $250 million secured term loan, for which the company, through an interest rate swap, has fixed the interest rate at 6.4% until the loan matures in 2010; $175 million aggregate principal amount of 4.50% exchangeable senior notes due 2026; $132.2 million in outstanding borrowings under the company's $500 million unsecured revolving line of credit, with a weighted-average interest rate of 6.5% at quarter-end; and $356.1 million in outstanding borrowings under the company's $550 million acquisition and construction loan secured by the Center for Life Science | Boston property, with a weighted-average interest rate of 6.6% at quarter-end. The company's debt to total capitalization ratio was 40.2% at June 30, 2007.

Portfolio Update

During the quarter, the company acquired the following two properties:

  • 6114-6154 Nancy Ridge Drive -- three office/laboratory buildings in the Sorrento Mesa submarket of San Diego, California comprising 112,000 square feet that is fully leased to Arena Pharmaceuticals, Inc.

  • 9920 Belward Campus Drive -- a 51,181 square foot office/laboratory building in Rockville, Maryland that is fully leased to Novavax, Inc.

The company also entered into a joint venture with Prudential Real Estate Investors to acquire a portfolio of assets, including approximately 600,000 square feet of life science space recently completed or under construction at the Rogers Street project and land that can support approximately 266,000 square feet of life science laboratory and office space at Kendall Square in Cambridge, Massachusetts. In addition, the company sold its property located on Colorow Drive in Salt Lake City, Utah.

As of June 30, 2007, BioMed Realty Trust owned or had interests in 102 buildings, located predominantly in the major U.S. life science markets of Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey. The company's portfolio was comprised of the following, with its operating portfolio 88.2% leased to 114 tenants, as of June 30, 2007:



                                                       Rentable
                                                      Square Feet

    Operating portfolio                                6,722,869
    Repositioning and redevelopment properties         1,751,527
      Total current portfolio                          8,474,396

    Construction in progress                           1,661,000
    Land parcels                                       1,468,000
      Total proforma portfolio                        11,603,396


    Quarterly Distributions

BioMed Realty Trust's board of directors previously declared a second quarter 2007 dividend of $0.31 per share of common stock, and a dividend of $0.45582 per share of the company's 7.375% Series A Cumulative Redeemable Preferred Stock for the period from April 17, 2007 through July 15, 2007.

Earnings Guidance

The company has revised earnings guidance for the year ending December 31, 2007 for earnings per diluted share and FFO per diluted share, which is set forth and reconciled below.

                                                            2007
                                                        (Low - High)
    Projected net income per diluted share             $0.64 - 0.70
       Add:
     Minority interest                                     $0.04
     Real estate depreciation and amortization             $1.13
     Projected FFO per diluted share                   $1.81 - 1.87

The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to rental rates, occupancy levels, interest rates and the amount and timing of acquisitions. The company's actual results may differ materially from these estimates.

Supplemental Information

Supplemental operating and financial data are available in the Investor Relations section of the company's web site at http://www.biomedrealty.com.

Teleconference and Web Cast

BioMed Realty Trust will conduct a conference call and audio web cast at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) Tuesday, August 7, 2007 to discuss the company's financial results and operations for the quarter. The call will be open to all interested investors either through a live audio web cast at the Investor Relations section of the company's web site at http://www.biomedrealty.com and http://www.earnings.com, or live by calling (800) 798-2801 (domestic) or (617) 614-6205 (international) with call ID number 80037439. The call will be archived for 30 days on both web sites. A telephone playback of the conference call will also be available from 1:00 p.m. Pacific Time on Tuesday, August 7, 2007 through midnight Pacific Time on Sunday, August 12, 2007 by calling (888) 286-8010 (domestic) or (617) 801-6888 (international) and using access code 93977524.

About BioMed Realty Trust

BioMed Realty Trust, Inc. is a real estate investment trust (REIT) focused on Providing Real Estate to the Life Science Industry(TM). The company's tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. BioMed Realty Trust owns or has interests in 67 properties, representing 101 buildings with approximately 8.4 million rentable square feet, as well as approximately 1.7 million square feet of development in progress. These properties are located predominantly in the major U.S. life science markets of Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey, which have well-established reputations as centers for scientific research. Additional information is available at http://www.biomedrealty.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants' financial condition, and competition from other developers, owners and operators of real estate); adverse economic or real estate developments in the life science industry or the company's target markets; risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments; failure to manage effectively the company's growth and expansion into new markets, or to complete or integrate acquisitions and developments successfully; risks and uncertainties affecting property development and construction; risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets; potential liability for uninsured losses and environmental contamination; risks associated with the company's potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and possible adverse changes in tax and environmental laws; and risks associated with the company's dependence on key personnel whose continued service is not guaranteed. For a further list and description of such risks and uncertainties, see the reports filed by the company with the Securities and Exchange Commission, including the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                          (Financial Tables Follow)



                          BIOMED REALTY TRUST, INC.
                         CONSOLIDATED BALANCE SHEETS
                                (In thousands)


                                                    June 30,      December 31,
                                                      2007            2006
                                                  (Unaudited)
                 ASSETS
    Investments in real estate, net               $2,618,590     $2,457,538
    Investment in unconsolidated partnerships         20,425          2,436
    Cash and cash equivalents                         20,382         25,664
    Restricted cash                                    9,203          6,426
    Accounts receivable, net                           3,952          5,985
    Accrued straight-line rents, net                  27,842         20,446
    Acquired above market leases, net                  6,933          7,551
    Deferred leasing costs, net                      121,308        129,322
    Deferred loan costs, net                          15,132         17,608
    Prepaid expenses                                   1,633          3,627
    Other assets                                      49,581         16,039
        Total assets                              $2,894,981     $2,692,642

         LIABILITIES AND STOCKHOLDERS' EQUITY
    Mortgage notes payable, net                     $399,522       $403,836
    Secured construction loan                        356,071        286,355
    Secured term loan                                250,000        250,000
    Exchangeable senior notes                        175,000        175,000
    Unsecured line of credit                         132,150        228,165
    Security deposits                                  6,883          7,704
    Dividends and distributions payable               25,509         19,847
    Accounts payable, accrued expenses, and
     other liabilities                                58,588         62,602
    Acquired below market leases, net                 24,910         25,101
      Total liabilities                            1,428,633      1,458,610
    Minority interests                                18,873         19,319
    Stockholders' equity:
    Preferred stock, $.01 par value,
     15,000,000 shares authorized:
    Series A cumulative redeemable preferred
     stock, 7.375%, $230,000,000 liquidation
     preference ($25.00 per share), 9,200,000
     shares issued and outstanding at
     June 30, 2007                                   222,413              -
    Common stock, $.01 par value, 100,000,000
     shares authorized, 65,462,839 and
     65,425,598 shares issued and outstanding
     at June 30, 2007 and December 31, 2006,
     respectively                                        655            654
    Additional paid-in capital                     1,274,820      1,272,243
    Accumulated other comprehensive income            26,551          8,417
    Dividends in excess of earnings                  (76,964)       (66,601)
      Total stockholders' equity                   1,447,475      1,214,713
        Total liabilities and stockholders'
         equity                                   $2,894,981     $2,692,642



                          BIOMED REALTY TRUST, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
               (In thousands, except share and per share data)
                                 (Unaudited)


                                   For the Three Months   For the Six Months
                                       Ended June 30,        Ended June 30,
                                      2007      2006        2007       2006
    Revenues:
      Rental                        $49,460   $35,995     $96,969    $66,611
      Tenant recoveries              15,670    12,731      32,180     25,238
      Other income                    3,299        64       8,078         70
        Total revenues               68,429    48,790     137,227     91,919
    Expenses:
      Rental operations              12,880     9,547      25,995     19,000
      Real estate taxes               5,543     4,536      11,459      8,727
      Depreciation and amortization  19,637    14,577      36,891     27,802
      General and administrative      5,364     4,206      10,707      8,553
        Total expenses               43,424    32,866      85,052     64,082
        Income from operations       25,005    15,924      52,175     27,837
      Equity in net (loss)/income
       of unconsolidated partnerships  (454)       22        (432)        42
      Interest income                   339       435         570        595
      Interest expense               (7,117)   (9,253)    (13,969)   (17,037)
        Income from continuing
         operations before minority
         interests                   17,773     7,128      38,344     11,437
    Minority interests in continuing
     operations of consolidated
     partnerships                      (113)       46        (113)       100
    Minority interests in continuing
     operations of operating
     partnerships                      (577)     (381)     (1,276)      (635)
        Income from continuing
         operations                  17,083     6,793      36,955     10,902
    Income from discontinued
     operations before gain on sale
     of assets and minority
     interests                          252       386         639        773
    Gain on sale of real estate
     assets                           1,088         -       1,088          -
    Minority interests attributable
     to discontinued operations         (57)      (21)        (74)       (43)
        Income from discontinued
         operations                   1,283        365      1,653        730
          Net income                 18,366      7,158     38,608     11,632
    Preferred stock dividends        (4,194)         -     (8,387)         -
        Net income available to
         common stockholders        $14,172     $7,158    $30,221    $11,632
    Income from continuing
     operations per share available
     to common stockholders:
       Basic and diluted earnings
        per share                     $0.20      $0.13      $0.44      $0.22
    Net income per share available
     to common stockholders:
       Basic and diluted earnings
        per share                     $0.22      $0.14      $0.46      $0.24
    Weighted-average common shares
     outstanding:
       Basic                     65,298,747 51,394,117 65,294,411 48,895,318
       Diluted                   68,269,656 54,534,393 68,258,562 52,062,831



                          BIOMED REALTY TRUST, INC.
                            FUNDS FROM OPERATIONS
               (In thousands, except share and per share data)
                                 (Unaudited)

The following table provides the calculation of our FFO and a reconciliation to net income (in thousands, except per share amounts):


                                     For the Three Months   For the Six Months
                                        Ended June 30,        Ended June 30,
                                      2007        2006      2007        2006

    Net income available to common
     stockholders                   $14,172     $7,158     $30,221    $11,632
    Adjustments
      Minority interests in
       operating partnership            634        402       1,350        678
      Gain on sale of real estate
       assets                        (1,088)         -      (1,088)         -
      Depreciation and amortization
       - unconsolidated partnerships    358         20         378         40
      Depreciation and amortization
       - discontinued operations         91        137         228        274
      Depreciation and amortization
       - continuing operations       19,637     14,577      36,891     27,801
    Funds from operations           $33,804    $22,294     $67,980    $40,425
    Funds from operations per
     share - diluted                  $0.50      $0.41       $1.00      $0.78
    Weighted-average common
     shares outstanding -
     diluted                     68,269,656 54,534,393  68,258,562 52,062,831

We present funds from operations, or FFO, because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides an operating performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, in its March 1995 White Paper (as amended in November 1999 and April 2002). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Our computation may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

SOURCE BioMed Realty Trust, Inc.
08/06/2007

CONTACT: Kent Griffin, Chief Financial Officer of BioMed Realty Trust,
Inc., +1-858-485-9840
Web site: http://www.biomedrealty.com
(BMR)