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BioMed Realty Trust Reports First Quarter 2009 Operating and Financial Results
Date:4/29/2009

Generates Record $94 Million in Total Revenues for the Quarter

SAN DIEGO, April 29 /PRNewswire-FirstCall/ -- BioMed Realty Trust, Inc. (NYSE: BMR), a real estate investment trust focused on Providing Real Estate to the Life Science Industry(R), today announced operating and financial results for the first quarter ended March 31, 2009.

Highlights:

  • Record total revenues for the first quarter were $94.0 million, up 39.5% from $67.4 million for the same period in 2008, driven primarily by sustained leasing success and deliveries from the company's development pipeline.
  • Executed 13 leasing transactions during the quarter representing approximately 420,000 square feet:
    • Nine new leases totaling approximately 121,000 square feet, including approximately 24,400 square feet for the previously announced addition of Kowa Company, Ltd. to the premier tenant roster at the Center for Life Science | Boston, which increased the leased percentage to 91% at this world-class research facility. Also during the quarter, the company leased approximately 75,600 additional square feet to Arena Pharmaceuticals, Inc. at 6114-6154 Nancy Ridge Drive in San Diego.
    • Four leases amended to extend their terms totaling approximately 299,000 square feet, consisting primarily of the previously announced extensions through 2015 of two leases totaling approximately 292,800 square feet in Cambridge, Massachusetts with Vertex Pharmaceuticals Inc., including its corporate headquarters.
  • Completed construction and development of the Center for Life Science | Boston and achieved Gold LEED(R) certification. At 91% leased, the property was moved from the company's development portfolio into its stabilized operating portfolio.
  • Closed on a $203 million secured loan facility for the company's joint venture with a fund managed by Prudential Real Estate Investors (PREI(R)), in which BioMed has a 20% interest, the net proceeds of which were used to repay a portion of the outstanding balance of the existing facility.
  • Further de-leveraged through the repurchase of exchangeable senior notes with a face value of $12.0 million for approximately 58% of par, resulting in a gain on debt extinguishment of approximately $4.4 million.
  • Increased same-property cash-basis net operating income 6.0% over the prior year period, primarily resulting from continued leasing successes and scheduled rent escalations.
  • Generated net income attributable to common stockholders of $19.0 million for the quarter, up 54.3% from the same period in 2008. On a per share basis, net income attributable to common stockholders was $0.23 per diluted share, compared to $0.19 per diluted share for the same period in 2008.
  • Funds from operations (FFO) for the quarter were $0.56 per diluted share, or $47.7 million, compared to $0.45 per diluted share, or $31.1 million, for the same period in 2008. Excluding the gain on debt extinguishment of approximately $4.4 million, or $0.05 per diluted share, FFO would have been approximately $0.51 per diluted share.

Alan D. Gold, Chairman and Chief Executive Officer of BioMed, remarked, "Once again, BioMed delivered strong financial results in the face of a challenging economic environment and uncertain credit markets. The sustained strong operating and financial success of the first quarter, on the heels of an excellent 2008, is a direct result of our team's ability to focus and execute on our proven business plan, while maintaining a conservative capital structure and leveraging the expertise and experience of our real estate professionals throughout the company."

First Quarter 2009 Operating and Financial Results

Rental revenues for the quarter were $68.4 million compared to $50.3 million in the same period in 2008, an increase of 35.9%. Total revenues for the quarter were $94.0 million, compared to $67.4 million of total revenues for the same period in 2008, an increase of 39.5%.

Same property net operating income on a cash basis for the quarter was $45.1 million compared to $42.5 million for the same period in 2008, an increase of 6.0%.

During the quarter, the company terminated leases totaling approximately 138,000 square feet. The first quarter financial results included approximately $2.3 million of rental revenues, $3.8 million of other income and $3.4 million of operating expenses associated with lease terminations.

Net income attributable to common stockholders for the quarter was $19.0 million, or $0.23 per diluted share, compared to $12.3 million, or $0.19 per diluted share, for the same period in 2008.

FFO for the quarter was $0.56 per diluted share, or $47.7 million, compared to $0.45 per diluted share, or $31.1 million, for the same period in 2008. Excluding the gain on debt extinguishment of approximately $4.4 million, or $0.05 per diluted share, FFO would have been approximately $0.51 per diluted share.

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 attributable to common stockholders to FFO and a definition of FFO are included at the end of this release.

Financial information for the current and, where applicable, prior periods has been presented to reflect the application of the following new accounting guidance adopted by the company effective January 1, 2009: FASB Staff Position APB 14-1 "Accounting for Convertible Debt That May be Settled Upon Conversion (Including Partial Cash Settlement)"; Statement of Financial Accounting Standard No. 160 "Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51"; and FASB Staff Position EITF 03-6-1 "Determining Whether Instruments Granted in Share Based Payment Transactions are Participating Securities."

Financing Activity

During the first quarter, the company completed the refinancing of the secured acquisition and interim loan facility held by the company's joint venture with a fund managed by PREI(R). The original secured acquisition and interim loan facility was used by the joint venture to acquire, among other properties, approximately 600,000 square feet of life science space in Cambridge, Massachusetts. Proceeds from the refinancing were approximately $203 million, and were used to repay a portion of the outstanding indebtedness under the existing secured acquisition and interim loan facility. BioMed's share of the financed amount is approximately $40.7 million, based on its 20% interest in the joint venture. BioMed repaid its remaining portion of the outstanding balance on the existing secured acquisition and interim loan facility by drawing on the company's $600 million unsecured line of credit.

Also during the first quarter, the company further de-leveraged through the repurchase of exchangeable senior notes with a face value of $12.0 million for approximately 58% of par, resulting in a gain on debt extinguishment of approximately $4.4 million.

At March 31, 2009, the company's debt to total assets ratio was 43.0%.

Commenting on the company's financial performance in the first quarter, Kent Griffin, President and Chief Financial Officer of BioMed, said, "We continue to view prudent stewardship of capital as a core component of our business strategy and our ability to navigate through economic uncertainty. Our balance sheet and liquidity positions remain very strong, thanks to our ongoing efforts to proactively manage our capital structure. The refinancing of our joint venture's secured acquisition and interim loan is especially noteworthy as it extended the maturity by two years, with an option for an additional year, and demonstrated the support and commitment of our lending partners in an otherwise highly restrictive credit market. And, we are making solid progress on refinancing our upcoming loan maturities, including securing permanent financing for our Center for Life Science | Boston asset."

Portfolio Update

During the quarter ended March 31, 2009, the company executed 13 leasing transactions representing approximately 420,000 square feet, including nine new leases totaling approximately 121,000 square feet and four leases amended to extend their terms totaling approximately 299,000 square feet.

As of March 31, 2009, BioMed owned or had interests in 69 properties with 112 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 included the following as of March 31, 2009:

                                                      Rentable
                                                     Square Feet
                                                     -----------
    Operating portfolio                               8,233,988
    Repositioning and redevelopment properties        1,543,858
    Construction in progress                            736,708
                                                     ----------
      Total portfolio                                10,514,554
                                                     ----------

    Land parcels                                      1,352,000
                                                      ---------
      Total proforma portfolio                       11,866,554
                                                     ==========



As of March 31, 2009, the company's operating portfolio was 85.9% leased to 121 tenants.

Quarterly Distributions

BioMed announced today that its board of directors intends to modify the company's dividend distributions, starting with the dividend expected to be declared in the second quarter of 2009. The company expects to re-set its annualized dividend rate at approximately $0.44 per share of common stock. The company anticipates that the revised dividend level will result in approximately $76 million of retained cash flow annually, which may be utilized to pay down BioMed's outstanding debt and further enhance the company's strong liquidity position.

"The decision to re-set the dividend level was made in the best long-term interests of BioMed and its stockholders in order to further enhance our capital position in light of the ongoing uncertainty in the credit markets," said Chairman and Chief Executive Officer Alan Gold. "This new dividend level will protect and reward our stockholders by allowing us to further strengthen our liquidity position, thereby enhancing our ability to execute on our core business plan and take advantage of compelling opportunities in the future."

Earnings Guidance

The company is raising its 2009 guidance for net income per diluted share and FFO per diluted share, largely reflecting the higher than anticipated first quarter FFO of $0.56, and narrowing its 2009 guidance for net income per diluted share and FFO per diluted share due to the company's continued expectation of refinancing the construction loan for the Center for Life Science | Boston around mid-year 2009. The company's revised 2009 guidance for net income per diluted share and FFO per diluted share is set forth and reconciled below.

                                                                    2009
                                                                 (Low - High)
    Projected net income per diluted share attributable
     to common stockholders                                     $0.58 - 0.68
        Add:
      Noncontrolling interest in operating partnership              $0.03
      Real estate depreciation and amortization                     $1.11
      Projected FFO per diluted share                           $1.72 - $1.82

The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, financing transactions, interest rates, and the amount and timing of development and redevelopment activities. 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 website at www.biomedrealty.com.

Teleconference and Webcast

BioMed Realty Trust will conduct a conference call and webcast at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) on Thursday, April 30, 2009 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 webcast at the Investor Relations section of the company's website at www.biomedrealty.com and at www.earnings.com, which will include an online slide presentation to accompany the call, or by calling 866.202.0886 (domestic) or 617.213.8841 (international) with call ID number 47668223. The complete webcast will be available on the company's website immediately after the call and will be archived for 30 days. A telephone playback of the conference call will also be available from 3:00 p.m. Pacific Time on Thursday, April 30, 2009 through midnight Pacific Time on Tuesday, May 5, 2009 by calling 888.286.8010 (domestic) or 617.801.6888 (international) and using access code 13915916.

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(R). 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 owns or has interests in 69 properties, representing 112 buildings with approximately 10.5 million rentable square feet, including approximately 735,000 square feet of development in progress. The company also owns undeveloped land parcels adjacent to existing properties that it estimates can support up to 1.4 million rentable square feet. The company's 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 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, the use of debt to fund acquisitions and developments, and the ability to refinance indebtedness as it comes due; 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)
                                 (unaudited)

                                                      March 31,  December 31,
                                                      --------  -----------
                                                         2009        2008
                                                         ----        ----
                                                                  (Revised)
                                       ASSETS
     Investments in real estate, net                  $3,001,077  $2,960,429
     Investment in unconsolidated partnerships            49,756      18,173
     Cash and cash equivalents                            32,318      21,422
     Restricted cash                                       4,951       7,877
     Accounts receivable, net                             14,749       9,417
     Accrued straight-line rents, net                     62,040      58,138
     Acquired above-market leases, net                     4,009       4,329
     Deferred leasing costs, net                          95,204     101,519
     Deferred loan costs, net                              8,451       9,754
     Other assets                                         37,607      38,256
                                                      ----------  ----------
       Total assets                                   $3,310,162  $3,229,314
                                                      ==========  ==========


                                LIABILITIES AND EQUITY

     Mortgage notes payable, net                        $351,469    $353,161
     Secured construction loan                           507,128     507,128
     Secured term loan                                   250,000     250,000
     Exchangeable senior notes, net                      111,068     122,043
     Unsecured line of credit                            204,334     108,767
     Security deposits                                     7,641       7,623
     Dividends and distributions payable                  32,563      32,445
     Accounts payable, accrued expenses and other
      liabilities                                         87,359      66,821
     Derivative instruments                              100,840     126,091
     Acquired below-market leases, net                    14,762      17,286
                                                      ----------  ----------
       Total liabilities                               1,667,164   1,591,365
     Equity:
     Stockholders' equity:
       Preferred stock, $.01 par value, 15,000,000
        shares authorized: 7.375% Series A
        cumulative redeemable preferred stock,
        $230,000,000 liquidation preference ($25.00
        per share), 9,200,000 shares issued and
        outstanding at March 31, 2009 and December
        31, 2008                                         222,413     222,413
       Common stock, $.01 par value, 100,000,000
        shares authorized, 81,181,196 and 80,757,421
        shares issued and outstanding at March 31,
        2009 and December 31, 2008, respectively             812         808
     Additional paid-in capital                        1,661,656   1,661,009
     Accumulated other comprehensive loss               (100,314)   (112,126)
     Dividends in excess of earnings                    (154,708)   (146,536)
                                                      ----------  ----------
       Total stockholders' equity                      1,629,859   1,625,568
                                                      ----------  ----------
     Noncontrolling interests                             13,139      12,381
                                                      ----------  ----------
       Total equity                                    1,642,998   1,637,949
                                                      ----------  ----------
       Total liabilities and equity                   $3,310,162  $3,229,314
                                                      ==========  ==========

    Financial information for the current and, where applicable, the prior
    period has been presented to reflect the application of the following new accounting guidance adopted by the company effective January 1, 2009:
    FASB Staff Position APB 14-1 "Accounting for Convertible Debt That May be
    Settled Upon Conversion (Including Partial Cash Settlement)"; Statement of
    Financial Accounting Standard No. 160 "Noncontrolling Interests in
    Consolidated Financial Statements - An Amendment of ARB No. 51"; and FASB
    Staff Position EITF 03-6-1 "Determining Whether Instruments Granted in
    Share Based Payment Transactions are Participating Securities."


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

                                                        Three Months Ended
                                                            March 31,
                                                        ------------------
                                                         2009      2008
                                                         ----      ----
                                                                 (Revised)
    Revenues:
       Rental                                          $68,419     $50,342
       Tenant recoveries                                21,081      16,582
       Other income                                      4,451         434
                                                    ----------  ----------
         Total revenues                                 93,951      67,358
                                                    ----------  ----------
     Expenses:
       Rental operations                                22,152      13,865
       Real estate taxes                                 7,233       5,269
       Depreciation and amortization                    27,313      17,687
       General and administrative                        5,280       6,194
                                                    ----------  ----------
         Total expenses                                 61,978      43,015
                                                    ----------  ----------
         Income from operations                         31,973      24,343
       Equity in net loss of unconsolidated
        partnerships                                      (301)       (172)
       Interest income                                      63         155
       Interest expense                                (12,080)     (7,173)
       Loss on derivative instruments                      (56)          -
       Gain on extinguishment of debt                    4,371           -
                                                    ----------  ----------
         Net income                                     23,970      17,153
       Net income attributable to noncontrolling
        interests                                         (705)       (581)
       Preferred stock dividends                        (4,241)     (4,241)
                                                    ----------  ----------
         Net income attributable to common
          stockholders                                 $19,024     $12,331
                                                    ==========  ==========

     Net income per share available to common
      stockholders:
       Basic and diluted earnings per share              $0.23       $0.19
                                                    ==========  ==========

     Weighted-average common shares outstanding:
       Basic                                        80,261,363  65,350,512
                                                    ==========  ==========
       Diluted                                      84,499,365  69,024,935
                                                    ==========  ==========

    Financial information for the current and, where applicable, the prior
    period has been presented to reflect the application of the following new accounting guidance adopted by the company effective January 1, 2009:
    FASB Staff Position APB 14-1 "Accounting for Convertible Debt That May be
    Settled Upon Conversion (Including Partial Cash Settlement)"; Statement
    of Financial Accounting Standard No. 160 "Noncontrolling Interests in
    Consolidated Financial Statements - An Amendment of ARB No. 51"; and FASB
    Staff Position EITF 03-6-1 "Determining Whether Instruments Granted in
    Share Based Payment Transactions are Participating Securities."


                          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 attributable to common stockholders (in
    thousands, except per share amounts):

                                                        Three Months Ended
                                                             March 31,
                                                        ------------------
                                                          2009        2008
                                                          ----        ----
                                                                   (Revised)
    Net income attributable to common stockholders       $19,024     $12,331
    Adjustments:
      Noncontrolling interests in operating partnership      722         589
      Depreciation and amortization - unconsolidated
       partnerships                                          662         451
      Depreciation and amortization - consolidated
       entities                                           27,313      17,687
      Depreciation and amortization - allocable to
       noncontrolling interest of consolidated
       joint ventures                                        (20)         (8)
                                                      ----------  ----------
    Funds from operations available to common
     shares and partnership and LTIP units               $47,701     $31,050
                                                      ==========  ==========
    Funds from operations per share - diluted              $0.56       $0.45
                                                      ==========  ==========
    Weighted-average common shares and partnership
     and LTIP units outstanding - diluted             84,499,365  69,024,935
                                                      ==========  ==========

Financial information for the current and, where applicable, the prior period has been presented to reflect the application of the following new accounting guidance adopted by the company effective January 1, 2009: FASB Staff Position APB 14-1 "Accounting for Convertible Debt That May be Settled Upon Conversion (Including Partial Cash Settlement)"; Statement of Financial Accounting Standard No. 160 "Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51"; and FASB Staff Position EITF 03-6-1 "Determining Whether Instruments Granted in Share Based Payment Transactions are Participating Securities."

We present funds from operations, or FFO, available to common shares and partnership and LTIP units 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 a 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.


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SOURCE BioMed Realty Trust, Inc.
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