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BioMed Realty Trust Inc. Reports Operating Results (10-Q)

July 29, 2010 | About:
10qk

10qk

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BioMed Realty Trust Inc. (BMR) filed Quarterly Report for the period ended 2010-06-30.

Biomed Realty Trust Inc. has a market cap of $2.04 billion; its shares were traded at around $17.95 with a P/E ratio of 9.7 and P/S ratio of 5.6. The dividend yield of Biomed Realty Trust Inc. stocks is 3.4%. Biomed Realty Trust Inc. had an annual average earning growth of 27.6% over the past 5 years.BMR is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Columbia Wanger of Columbia Wanger Asset Management, Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Stanley Druckenmiller of Duquesne Capital Management, LLC, Pioneer Investments, Kenneth Fisher of Fisher Asset Management, LLC.

Highlight of Business Operations:

Rental Revenues. Rental revenues increased $6.7 million to $72.4 million for the three months ended June 30, 2010 compared to $65.7 million for the three months ended June 30, 2009. The increase was primarily due to properties that were under redevelopment or development for which partial revenue recognition commenced during 2009 and 2010 (principally related to buildings placed into service at our Landmark at Eastview property) and the commencement of leases. Same property rental revenues decreased $61,000, or 0.1%, for the three months ended June 30, 2010 compared to the same period in 2009. The decrease in same property rental revenues was primarily due to lease expirations and early lease terminations occurring in the prior year for which the space vacated has not yet been fully released or for which leases to occupy the space have not yet commenced, offset by the commencement of new leases at certain properties in 2010 and 2009, and increases in lease rates related to CPI adjustments and lease extensions (increasing rental revenue recognized on a straight-line basis).

Other Income. Other income was $259,000 for the three months ended June 30, 2010 compared to $3.2 million for the three months ended June 30, 2009. Other income for the three months ended June 30, 2010 primarily comprised development fees earned from our PREI joint ventures. Other income for the three months ended June 30, 2009 primarily comprised consideration received related to early lease terminations of approximately $2.6 million and development fees earned from our PREI joint ventures. Termination payments received for terminated leases for the three months ended June 30, 2010 and 2009 aggregated $9,000 and $2.6 million, respectively.

Rental Operations Expense. Rental operations expense increased $2.4 million to $17.1 million for the three months ended June 30, 2010 compared to $14.7 million for the three months ended June 30, 2009. The increase was primarily due to properties that were under redevelopment or development for which partial revenue recognition commenced during 2009 and 2010 (principally at our Landmark at Eastview and Pacific Research Center properties) and the write-off of accounts receivable and accrued straight line rents related to early lease terminations of approximately $500,000 in 2009. Same property rental operations expense increased $949,000, or 7.9%, for the three months ended June 30, 2010 compared to 2009 primarily due to net increases in utility usage and other recoverable costs compared to the same period in the prior year due to lease commencements in 2010 and 2009.

Real Estate Tax Expense. Real estate tax expense increased $1.1 million to $8.7 million for the three months ended June 30, 2010 compared to $7.6 million for the three months ended June 30, 2009. The increase was primarily due to properties that were under redevelopment or development in the prior year for which partial revenue recognition commenced during 2009 (principally at our Pacific Research Center property) and increases in assessed property values. Same property real estate tax expense increased $642,000, or 9.1%, for the three months ended June 30, 2010 compared to 2009 primarily due to increases in both the assessed property values and in the property tax rates at a number of properties.

During the three months ended June 30, 2010, we capitalized $1.3 million of interest compared to $3.5 million for the three months ended June 30, 2009. The decrease reflects the cessation of capitalized interest at our Center for Life Science | Boston, Landmark at Eastview, and 530 Fairview Avenue development projects and our Pacific Research Center redevelopment project due to the commencement of certain leases at those properties or the cessation of development or redevelopment activities. Although capitalized interest costs on certain properties currently under development or redevelopment will decrease or cease as rentable space at these properties is readied for its intended use through 2010, this decrease will be offset by an increase in interest capitalized at our Gazelle Court development project, which began development activities in April 2010 as well as continued predevelopment activities at certain other properties. Net of capitalized interest and the accretion of debt premiums and a debt discount, interest expense increased $9.0 million to $21.9 million for the three months ended June 30, 2010 compared to $12.9 million for the three months ended June 30, 2009. We expect interest expense to continue to increase as additional properties currently under development or redevelopment are readied for their intended use and placed in service, from higher interest expense associated with fixed-rate indebtedness that replaced variable-rate borrowings and from the anticipated increases in interest costs related to our variable-rate indebtedness.

(Loss)/Gain on Extinguishment of Debt. During the three months ended June 30, 2010, we repurchased $18.0 million face value of our Notes due 2026 at 100.3% of par. The repurchase resulted in the recognition of a loss on extinguishment of debt of approximately $584,000 (representing the write-off of deferred loan fees and unamortized debt discount). In addition, we recognized a loss on extinguishment of debt related to the write-off of approximately $860,000 of deferred loan fees and legal expenses as a result of the prepayment of the remaining $150.0 million of the outstanding borrowings on our secured term loan. During the three months ended June 30, 2009, we repurchased $8.8 million face value of our Notes due 2026 for approximately $5.7 million. The repurchase resulted in the recognition of a gain on extinguishment of debt of approximately $2.6 million (net of the write-off of approximately $510,000 in deferred loan fees and unamortized debt discount), partially offset by the write-off of approximately $843,000 of deferred loan fees related to the repayment of our secured construction loan in June 2009, which is reflected in our consolidated statements of income.

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