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BioMed Realty Trust Reports First Quarter 2009 Operating and Financial Results
Generates Record
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 inSan 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.
- 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 |
- 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.
First Quarter 2009 Operating and Financial Results
Rental revenues for the quarter were
Same property net operating income on a cash basis for the quarter was
During the quarter, the company terminated leases totaling approximately 138,000 square feet. The first quarter financial results included approximately
Net income attributable to common stockholders for the quarter was
FFO for the quarter was
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
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
Also during the first quarter, the company further de-leveraged through the repurchase of exchangeable senior notes with a face value of
At
Commenting on the company's financial performance in the first quarter,
Portfolio Update
During the quarter ended
As of
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
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
"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
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
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
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
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
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
SOURCE BioMed Realty Trust, Inc.