##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008.
 Commission File Number: 1-32261
 
 BIOMED REALTY TRUST, INC.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    20-1142292(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 17190 Bernardo Center DriveSan Diego, California
    
    92128(Address of Principal Executive Offices)
    
    (Zip Code)
 (858) 485-9840
 (Registrants telephone number, including area code)
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



BIOMED REALTY TRUST, INC.
 FORM 10-Q  QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1 Consolidated Financial Statements
    
    
    3Consolidated Balance Sheets as of June 30, 2008 (Unaudited) and December 31, 2007
    
    
    3Consolidated Statements of Income for the three and six months ended June 30, 2008 and
2007 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007
(Unaudited)
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4 Controls and Procedures
    
    
    33PART II  OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    34Item 1A Risk Factors
    
    
    34Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3 Defaults Upon Senior Securities
    
    
    34Item 4 Submission of Matters to a Vote of Security Holders
    
    
    34Item 5 Other Information
    
    
    34Item 6 Exhibits
    
    
    34SIGNATURES
    
    
    35EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 June 30, 2008
    
    
    December 31, 2007(Unaudited)ASSETSInvestments in real estate, net
    
    $
    2,885,704
    
    
    $
    2,805,983Investments in unconsolidated partnerships
    
    
    21,158
    
    
    
    22,588Cash and cash equivalents
    
    
    21,357
    
    
    
    13,479Restricted cash
    
    
    7,991
    
    
    
    8,867Accounts receivable, net
    
    
    3,377
    
    
    
    4,457Accrued straight-line rents, net
    
    
    46,997
    
    
    
    36,415Acquired above-market leases, net
    
    
    5,017
    
    
    
    5,745Deferred leasing costs, net
    
    
    109,380
    
    
    
    116,491Deferred loan costs, net
    
    
    13,230
    
    
    
    15,567Other assets
    
    
    68,323
    
    
    
    27,676Total assets
    
    $
    3,182,534
    
    
    $
    3,057,268LIABILITIES AND STOCKHOLDERS EQUITYMortgage notes payable, net
    
    $
    373,571
    
    
    $
    379,680Secured construction loan
    
    
    483,997
    
    
    
    425,160Secured term loan
    
    
    250,000
    
    
    
    250,000Exchangeable senior notes
    
    
    175,000
    
    
    
    175,000Unsecured line of credit
    
    
    213,210
    
    
    
    270,947Security deposits
    
    
    7,611
    
    
    
    7,090Dividends and distributions payable
    
    
    29,441
    
    
    
    25,596Accounts payable, accrued expenses, and other liabilities
    
    
    96,626
    
    
    
    95,871Acquired below-market leases, net
    
    
    20,702
    
    
    
    23,708Total liabilities
    
    
    1,650,158
    
    
    
    1,653,052Minority interests, redemption value of partnership
units of $87.9 million and $79.3 million at June 30,
2008 and December 31, 2007, respectively (Note 3)
    
    
    15,572
    
    
    
    17,280Stockholders 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 June 30, 2008 and December 31, 2007
    
    
    222,413
    
    
    
    222,413Common stock, $.01 par value, 100,000,000 shares
authorized, 71,719,958 and 65,571,304 shares issued
and outstanding at June 30, 2008 and December 31,
2007, respectively
    
    
    717
    
    
    
    656Additional paid-in capital
    
    
    1,430,942
    
    
    
    1,277,770Accumulated other comprehensive loss
    
    
    (25,778
    )
    
    
    (21,762
    )Dividends in excess of earnings
    
    
    (111,490
    )
    
    
    (92,141
    )Total stockholders equity
    
    
    1,516,804
    
    
    
    1,386,936Total liabilities and stockholders equity
    
    $
    3,182,534
    
    
    $
    3,057,268
  3




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BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except share data)
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)Revenues:Rental
    
    $
    54,223
    
    
    $
    49,460
    
    
    $
    104,565
    
    
    $
    96,969Tenant recoveries
    
    
    15,804
    
    
    
    15,670
    
    
    
    32,386
    
    
    
    32,180Other income
    
    
    744
    
    
    
    3,299
    
    
    
    1,178
    
    
    
    8,078Total revenues
    
    
    70,771
    
    
    
    68,429
    
    
    
    138,129
    
    
    
    137,227Expenses:Rental operations
    
    
    13,454
    
    
    
    12,880
    
    
    
    27,318
    
    
    
    25,995Real estate taxes
    
    
    4,915
    
    
    
    5,543
    
    
    
    10,185
    
    
    
    11,459Depreciation and amortization
    
    
    19,331
    
    
    
    19,637
    
    
    
    37,018
    
    
    
    36,891General and administrative
    
    
    5,645
    
    
    
    5,364
    
    
    
    11,839
    
    
    
    10,707Total expenses
    
    
    43,345
    
    
    
    43,424
    
    
    
    86,360
    
    
    
    85,052Income from operations
    
    
    27,426
    
    
    
    25,005
    
    
    
    51,769
    
    
    
    52,175Equity in net income/(loss) of unconsolidated
partnerships
    
    
    43
    
    
    
    (454
    )
    
    
    (130
    )
    
    
    (432
    )Interest income
    
    
    106
    
    
    
    339
    
    
    
    261
    
    
    
    570Interest expense
    
    
    (8,629
    )
    
    
    (7,117
    )
    
    
    (15,566
    )
    
    
    (13,969
    )Income from continuing operations before
minority interests
    
    
    18,946
    
    
    
    17,773
    
    
    
    36,334
    
    
    
    38,344Minority interests in continuing operations of
consolidated partnerships
    
    
    (1
    )
    
    
    (113
    )
    
    
    7
    
    
    
    (113
    )Minority interests in continuing operations of
operating partnership
    
    
    (619
    )
    
    
    (577
    )
    
    
    (1,209
    )
    
    
    (1,276
    )Income from continuing operations
    
    
    18,326
    
    
    
    17,083
    
    
    
    35,132
    
    
    
    36,955Income from discontinued operations before gain
on sale of assets and minority interests
    
    
    
    
    
    
    252
    
    
    
    
    
    
    
    639Gain on sale of real estate assets
    
    
    
    
    
    
    1,088
    
    
    
    
    
    
    
    1,088Minority interests attributable to discontinued
operations
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    (74
    )Income from discontinued operations
    
    
    
    
    
    
    1,283
    
    
    
    
    
    
    
    1,653Net income
    
    
    18,326
    
    
    
    18,366
    
    
    
    35,132
    
    
    
    38,608Preferred stock dividends
    
    
    (4,241
    )
    
    
    (4,194
    )
    
    
    (8,481
    )
    
    
    (8,387
    )Net income available to common stockholders
    
    $
    14,085
    
    
    $
    14,172
    
    
    $
    26,651
    
    
    $
    30,221Income from continuing operations per share available
to common stockholders:Basic and diluted earnings per share
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.39
    
    
    $
    0.44Net income per share available to common stockholders:Basic and diluted earnings per share
    
    $
    0.20
    
    
    $
    0.22
    
    
    $
    0.39
    
    
    $
    0.46Weighted-average common shares outstanding:Basic
    
    
    70,094,003
    
    
    
    65,298,747
    
    
    
    67,722,258
    
    
    
    65,294,411Diluted
    
    
    73,248,311
    
    
    
    68,269,656
    
    
    
    70,827,426
    
    
    
    68,258,562
  4




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BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Six Months EndedJune 30,2008
    
    
    2007(Unaudited)Operating activities:Net income
    
    $
    35,132
    
    
    $
    38,608Adjustments to reconcile net income to net cash provided by operating activities:Gain on sale of real estate asset
    
    
    
    
    
    
    (1,088
    )Depreciation and amortization, including amounts for discontinued operations
    
    
    37,018
    
    
    
    37,118Minority interests in consolidated partnerships
    
    
    (7
    )
    
    
    113Minority interests in operating partnership and discontinued operations
    
    
    1,209
    
    
    
    1,350Allowance for doubtful accounts
    
    
    39
    
    
    
    309Revenue reduction attributable to acquired above-market leases
    
    
    728
    
    
    
    1,262Revenue recognized related to acquired below-market leases
    
    
    (3,006
    )
    
    
    (2,882
    )Compensation expense related to restricted common stock and LTIP units
    
    
    2,839
    
    
    
    2,578Amortization of deferred loan costs
    
    
    1,524
    
    
    
    1,293Amortization of debt premium on mortgage notes payable
    
    
    (397
    )
    
    
    (437
    )Loss from unconsolidated partnerships
    
    
    130
    
    
    
    432Distributions representing return on capital from unconsolidated partnerships
    
    
    306
    
    
    
    29Distributions to minority interest in consolidated partnerships
    
    
    
    
    
    
    (73
    )Changes in operating assets and liabilities:Restricted cash
    
    
    876
    
    
    
    (2,777
    )Accounts receivable
    
    
    1,041
    
    
    
    1,724Accrued straight-line rents
    
    
    (10,582
    )
    
    
    (7,396
    )Deferred leasing costs
    
    
    (4,332
    )
    
    
    (4,441
    )Other assets
    
    
    (2,982
    )
    
    
    (763
    )Security deposits
    
    
    521
    
    
    
    (821
    )Accounts payable, accrued expenses and other liabilities
    
    
    (10,299
    )
    
    
    (13,006
    )Net cash provided by operating activities
    
    
    49,758
    
    
    
    51,132Investing activities:Purchases of interests in and additions to investments in real estate and related intangible
assets
    
    
    (127,745
    )
    
    
    (192,832
    )Distributions representing return of capital from unconsolidated partnerships
    
    
    1,373
    
    
    
    Contributions to unconsolidated partnerships
    
    
    (67
    )
    
    
    (18,450
    )Proceeds from sale of real estate assets, net of selling costs
    
    
    
    
    
    
    19,690Minority interest investment in consolidated partnerships
    
    
    
    
    
    
    205Receipts of master lease payments
    
    
    103
    
    
    
    464Additions to non-real estate assets
    
    
    (5,535
    )
    
    
    (472
    )Funds held in escrow for acquisitions
    
    
    
    
    
    
    (12,249
    )Net cash used in investing activities
    
    
    (131,871
    )
    
    
    (203,644
    )Financing activities:Proceeds from preferred stock offering
    
    
    
    
    
    
    230,000Payment of preferred stock offering costs
    
    
    
    
    
    
    (7,587
    )Proceeds from common stock offering
    
    
    156,289
    
    
    
    Payment of common stock offering costs
    
    
    (6,593
    )
    
    
    Payment of deferred loan costs
    
    
    
    
    
    
    (515
    )Unsecured line of credit proceeds
    
    
    91,801
    
    
    
    147,440Unsecured line of credit repayments
    
    
    (149,538
    )
    
    
    (243,455
    )Principal payments on mortgage notes payable
    
    
    (4,992
    )
    
    
    (3,020
    )Secured construction loan proceeds
    
    
    58,837
    
    
    
    69,716Deferred settlement payments, net on interest rate swaps
    
    
    (2,832
    )
    
    
    Distributions to operating partnership unit and LTIP unit holders
    
    
    (2,200
    )
    
    
    (1,892
    )Dividends paid to common stockholders
    
    
    (42,299
    )
    
    
    (39,264
    )Dividends paid to preferred stockholders
    
    
    (8,482
    )
    
    
    (4,193
    )Net cash provided by financing activities
    
    
    89,991
    
    
    
    147,230Net increase/(decrease) in cash and cash equivalents
    
    
    7,878
    
    
    
    (5,282
    )Cash and cash equivalents at beginning of period
    
    
    13,479
    
    
    
    25,664Cash and cash equivalents at end of period
    
    $
    21,357
    
    
    $
    20,382Supplemental disclosure of cash flow information:Cash paid during the period for interest (net of amounts capitalized of $26,178 and
$25,739, respectively)
    
    $
    15,768
    
    
    $
    13,875Supplemental disclosure of non-cash investing and financing activities:Accrual for preferred stock dividends declared
    
    $
    4,241
    
    
    $
    4,194Accrual for common stock dividends declared
    
    
    24,026
    
    
    
    20,292Accrual for distributions declared for operating partnership unit and LTIP unit holders
    
    
    1,174
    
    
    
    1,023Accrued additions to real estate and related intangible assets
    
    
    44,926
    
    
    
    36,995
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BIOMED REALTY TRUST, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Organization and Description of Business
  2. Basis of Presentation and Summary of Significant Accounting Policies
  Principles of Consolidation
  Investments in Partnerships
 Consolidation of Variable Interest Entities Consolidated Financial Statements
 Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited
Partnership or Similar Entity When the Limited Partners Have Certain Rights
 6




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##### Table of Contents



Investments in Real Estate
  June 30, 2008
    
    
    December 31, 2007Land
    
    $
    334,306
    
    
    $
    313,685Land under development
    
    
    83,259
    
    
    
    103,743Buildings and improvements
    
    
    1,892,296
    
    
    
    1,675,530Construction in progress
    
    
    619,507
    
    
    
    750,460Tenant improvements
    
    
    85,557
    
    
    
    67,0093,014,925
    
    
    
    2,910,427Accumulated depreciation
    
    
    (129,221
    )
    
    
    (104,444
    )$
    2,885,704
    
    
    $
    2,805,983
  Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
  7




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Deferred Leasing Costs
   Balance atJune 30,
    
    
    Accumulated2008
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    168,391
    
    
    $
    (81,784
    )
    
    $
    86,607Acquired management agreements
    
    
    12,921
    
    
    
    (7,548
    )
    
    
    5,373Deferred leasing and other direct costs
    
    
    19,953
    
    
    
    (2,553
    )
    
    
    17,400$
    201,265
    
    
    $
    (91,885
    )
    
    $
    109,380
  Balance atDecember 31,
    
    
    Accumulated2007
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    167,664
    
    
    $
    (71,412
    )
    
    $
    96,252Acquired management agreements
    
    
    12,921
    
    
    
    (6,603
    )
    
    
    6,318Deferred leasing and other direct costs
    
    
    15,541
    
    
    
    (1,620
    )
    
    
    13,921$
    196,126
    
    
    $
    (79,635
    )
    
    $
    116,491
 Revenue Recognition
  
    
    whether the lease stipulates how and on what a tenant improvement allowance may be spent;
    
    whether the tenant or landlord retain legal title to the improvements;
    
    the uniqueness of the improvements;
    
    the expected economic life of the tenant improvements relative to the length of the
lease;
    
    the responsible party for construction cost overruns; and
    
    who constructs or directs the construction of the improvements.
   8




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June 30,
    
    
    December 31,2008
    
    
    2007Acquired above-market leases
    
    $
    12,729
    
    
    $
    12,729Accumulated amortization
    
    
    (7,712
    )
    
    
    (6,984
    )$
    5,017
    
    
    $
    5,745
  June 30,
    
    
    December 31,2008
    
    
    2007Acquired below-market leases
    
    $
    37,961
    
    
    $
    37,961Accumulated amortization
    
    
    (17,259
    )
    
    
    (14,253
    )$
    20,702
    
    
    $
    23,708
 Reporting Revenue Gross as a Principal
versus Net as an Agent
  Share-Based Payments
 Share-Based
Payment
 Assets and Liabilities Measured at Fair-Value
 Fair Value Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities
 9




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Derivative Instruments
   10




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Managements Estimates
  Segment Information
 Disclosures about Segments of an Enterprise and Related Information
 Reclassifications
  3. Minority Interests
  11




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June 30, 2008
    
    December 31, 2007Partnership Units
    
    Percentage of
    
    Partnership Units
    
    Percentage ofand LTIP Units
    
    Total
    
    and LTIP Units
    
    TotalBioMed Realty Trust
    
    
    71,513,333
    
    
    
    95.9
    %
    
    
    65,308,702
    
    
    
    95.7
    %Minority interest
consisting of:Partnership and
LTIP units held
by employees and
related parties
    
    
    2,887,644
    
    
    
    3.9
    %
    
    
    2,726,172
    
    
    
    4.0
    %Partnership
units held by
third parties
    
    
    190,392
    
    
    
    0.2
    %
    
    
    190,392
    
    
    
    0.3
    %Total
    
    
    74,591,369
    
    
    
    100.0
    %
    
    
    68,225,266
    
    
    
    100.0
    %
  4. Stockholders Equity
 
   Common Stock, Partnership Units and LTIP Units
  12




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7.375% Series A Cumulative Redeemable Preferred Stock
  Dividends and Distributions
  Dividend and
    
    
    Dividend andAmount Per
    
    
    
    
    
    
    Distribution
    
    
    Distribution AmountDeclaration Date
    
    Securities Class
    
    
    Share/Unit
    
    
    Period Covered
    
    
    Payable Date
    
    
    (in thousands)March 14, 2008
    
    Common stock and partnership and LTIP units
    
    $
    0.33500
    
    
    January 1, 2008 to March 31, 2008
    
    April 15, 2008
    
    $
    23,145March 14, 2008
    
    Series A preferred stock
    
    $
    0.46094
    
    
    January 16, 2008 to April 15, 2008
    
    April 15, 2008
    
    $
    4,240June 16, 2008
    
    Common stock and partnership and LTIP units
    
    $
    0.33500
    
    
    April 1, 2008 to June 30, 2008
    
    July 15, 2008
    
    $
    25,200June 16, 2008
    
    Series A preferred stock
    
    $
    0.46094
    
    
    April 16, 2008 to July 15, 2008
    
    July 15, 2008
    
    $
    4,241
  Common stock, partnership units, and LTIP units
    
    $
    48,345Series A preferred stock
    
    
    8,481$
    56,826
 Accumulated Other Comprehensive Income
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    18,326
    
    
    $
    18,366
    
    
    $
    35,132
    
    
    $
    38,608Preferred stock dividends
    
    
    (4,241
    )
    
    
    (4,194
    )
    
    
    (8,481
    )
    
    
    (8,387
    )Net income available to common stockholders
    
    
    14,085
    
    
    
    14,172
    
    
    
    26,651
    
    
    
    30,221Other comprehensive income:Unrealized gain/(loss) on interest rate swap agreements
    
    
    30,565
    
    
    
    18,265
    
    
    
    (1,502
    )
    
    
    18,134Equity in other comprehensive income of unconsolidated
partnerships
    
    
    312
    
    
    
    
    
    
    
    312
    
    
    
    Deferred settlement payments, net on interest rate
swaps (see Note 2)
    
    
    (1,831
    )
    
    
    
    
    
    
    (2,832
    )
    
    
    Comprehensive income
    
    $
    43,131
    
    
    $
    32,437
    
    
    $
    22,629
    
    
    $
    48,355
 13




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5. Mortgage Notes Payable
  Stated Fixed
    
    
    Effective
    
    
    Principal BalanceInterest
    
    
    Interest
    
    
    June 30,
    
    
    December 31,Rate
    
    
    Rate
    
    
    2008
    
    
    2007
    
    
    Maturity DateArdentech Court
    
    
    7.25
    %
    
    
    5.06
    %
    
    $
    4,515
    
    
    $
    4,564
    
    
    July 1, 2012Bayshore Boulevard
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    15,131
    
    
    
    15,335
    
    
    January 1, 2010Bridgeview Technology Park I
    
    
    8.07
    %
    
    
    5.04
    %
    
    
    11,447
    
    
    
    11,508
    
    
    January 1, 2011Eisenhower Road
    
    
    5.80
    %
    
    
    4.63
    %
    
    
    
    
    
    
    2,113
    
    
    May 5, 200840 Erie Street
    
    
    7.34
    %
    
    
    4.90
    %
    
    
    17,070
    
    
    
    17,625
    
    
    August 1, 2008500 Kendall Street (Kendall D)
    
    
    6.38
    %
    
    
    5.45
    %
    
    
    68,636
    
    
    
    69,437
    
    
    December 1, 2018Lucent Drive
    
    
    5.50
    %
    
    
    5.50
    %
    
    
    5,443
    
    
    
    5,543
    
    
    January 21, 2015Monte Villa Parkway
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    9,211
    
    
    
    9,336
    
    
    January 1, 20106828 Nancy Ridge Drive
    
    
    7.15
    %
    
    
    5.38
    %
    
    
    6,741
    
    
    
    6,785
    
    
    September 1, 2012Road to the Cure
    
    
    6.70
    %
    
    
    5.78
    %
    
    
    15,315
    
    
    
    15,427
    
    
    January 31, 2014Science Center Drive
    
    
    7.65
    %
    
    
    5.04
    %
    
    
    11,226
    
    
    
    11,301
    
    
    July 1, 2011Shady Grove Road
    
    
    5.97
    %
    
    
    5.97
    %
    
    
    147,000
    
    
    
    147,000
    
    
    September 1, 2016Sidney Street
    
    
    7.23
    %
    
    
    5.11
    %
    
    
    29,592
    
    
    
    29,986
    
    
    June 1, 20129885 Towne Centre Drive
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    21,039
    
    
    
    21,323
    
    
    January 1, 2010900 Uniqema Boulevard
    
    
    8.61
    %
    
    
    5.61
    %
    
    
    1,434
    
    
    
    1,509
    
    
    May 1, 2015363,800
    
    
    
    368,792Unamortized premiums
    
    
    
    
    
    
    
    
    
    
    9,771
    
    
    
    10,888$
    373,571
    
    
    $
    379,680
   6. Credit Facilities, Exchangeable Senior Notes, and Other Debt Instruments
 Unsecured Line of Credit
  Secured Term Loan
  14




---



##### Table of Contents



Exchangeable Senior Notes
  Secured Construction Loan
   2008
    
    $
    19,4622009
    
    
    489,0232010
    
    
    47,4462011
    
    
    239,4302012
    
    
    291,421Thereafter
    
    
    399,225$
    1,486,007
 15




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##### Table of Contents



7. Earnings Per Share
  Earnings
per Share
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Income from continuing operations and net
income available for common stockholders
(basic earnings per share):Income from continuing operations
    
    $
    18,326
    
    
    $
    17,083
    
    
    $
    35,132
    
    
    $
    36,955Preferred stock dividends
    
    
    (4,241
    )
    
    
    (4,194
    )
    
    
    (8,481
    )
    
    
    (8,387
    )Income from continuing operations available
to common stockholders
    
    
    14,085
    
    
    
    12,889
    
    
    
    26,651
    
    
    
    28,568Income from discontinued operations
    
    
    
    
    
    
    1,283
    
    
    
    
    
    
    
    1,653Net income available to common stockholders
    
    $
    14,085
    
    
    $
    14,172
    
    
    $
    26,651
    
    
    $
    30,221Income from continuing operations and net
income available for common stockholders
(diluted earnings per share):Income from continuing operations available
to common stockholders
    
    $
    14,085
    
    
    $
    12,889
    
    
    $
    26,651
    
    
    $
    28,568Minority interests in continuing
operations of operating partnership
    
    
    619
    
    
    
    577
    
    
    
    1,209
    
    
    
    1,276Income from continuing operations available
to common stockholders before minority
interests in continuing operations
    
    
    14,704
    
    
    
    13,466
    
    
    
    27,860
    
    
    
    29,844Income from discontinued operations
    
    
    
    
    
    
    1,283
    
    
    
    
    
    
    
    1,653Minority interest in discontinued
operations of operating partnership
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    74Net income available to common stockholders
before minority interests
    
    $
    14,704
    
    
    $
    14,806
    
    
    $
    27,860
    
    
    $
    31,571Weighted-average common shares outstanding:Basic
    
    
    70,094,003
    
    
    
    65,298,747
    
    
    
    67,722,258
    
    
    
    65,294,411Incremental shares from assumed
conversion/vesting:Unvested restricted stock and LTIP
units using the treasury method
    
    
    33,109
    
    
    
    54,345
    
    
    
    26,784
    
    
    
    48,076Operating partnership and LTIP units
    
    
    3,121,199
    
    
    
    2,916,564
    
    
    
    3,078,384
    
    
    
    2,916,075Diluted
    
    
    73,248,311
    
    
    
    68,269,656
    
    
    
    70,827,426
    
    
    
    68,258,562Basic and diluted earnings per share:Income per share  basic:Income per share from continuing
operations available to common
stockholders
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.39
    
    
    $
    0.44Income per share from discontinued
operations
    
    
    
    
    
    
    0.02
    
    
    
    
    
    
    
    0.02Net income per share available to
common stockholders
    
    $
    0.20
    
    
    $
    0.22
    
    
    $
    0.39
    
    
    $
    0.46Income per share  diluted:Income per share from continuing
operations available to common
stockholders
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.39
    
    
    $
    0.44Income per share from discontinued
operations
    
    
    
    
    
    
    0.02
    
    
    
    
    
    
    
    0.02Net income per share available to
common stockholders
    
    $
    0.20
    
    
    $
    0.22
    
    
    $
    0.39
    
    
    $
    0.46
 16




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##### Table of Contents



8. Incentive Award Plan
    17




---



##### Table of Contents



Weighted-Restricted Shares and
    
    
    Average Grant-LTIP Units
    
    
    Date Fair-ValueBalance at January 1, 2008
    
    
    664,318
    
    
    $
    27.81Granted
    
    
    199,115
    
    
    
    22.29Vested
    
    
    (227,103
    )
    
    
    23.93Balance at March 31, 2008
    
    
    636,330
    
    
    
    26.37Granted
    
    
    18,300
    
    
    
    25.75Forfeited
    
    
    (12,327
    )
    
    
    25.93Vested
    
    
    (10,000
    )
    
    
    28.50Balance at June 30, 2008
    
    
    632,303
    
    
    
    26.33
 Weighted-Restricted Shares and
    
    
    Average Grant-LTIP Units
    
    
    Date Fair-ValueBalance at January 1, 2007
    
    
    424,380
    
    
    $
    23.79Granted
    
    
    302,500
    
    
    
    29.83Forfeited
    
    
    (3,809
    )
    
    
    28.16Vested
    
    
    (199,818
    )
    
    
    19.96Balance at March 31, 2007
    
    
    523,253
    
    
    
    28.71Granted
    
    
    25,000
    
    
    
    27.49Forfeited
    
    
    (4,450
    )
    
    
    28.18Vested
    
    
    (10,000
    )
    
    
    28.59Balance at June 30, 2007
    
    
    533,803
    
    
    
    28.66
 9. Property Acquisitions
  Acquisition
    
    Investments
    
    
    In-Place
    
    
    Total CashProperty
    
    Date
    
    in Real Estate
    
    
    Lease
    
    
    Consideration500 Fairview Avenue
    
    January 28, 2008
    
    $
    3,286
    
    
    $
    727
    
    
    $
    4,013Intangible amortization life (in months)
    
    
    
    
    
    
    
    
    57
 10. Investment in Unconsolidated Partnerships
  18




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##### Table of Contents



Companys
    
    CompanysOwnership
    
    EconomicName
    
    Partner
    
    Interest
    
    Interest
    
    Date AcquiredPREI I LLC(1)
    
    PREI
    
    
    20
    %
    
    
    20
    %
    
    April 4, 2007PREI II LLC(2)
    
    PREI
    
    
    20
    %
    
    
    20
    %
    
    April 4, 2007McKellar Court(3)
    
    Quidel Corporation
    
    
    21
    %
    
    
    21
    %(4)
    
    September 30, 2004
 
 (1)
    
    PREI I LLC acquired a portfolio of properties in Cambridge, Massachusetts comprised of a
stabilized laboratory/office building totaling 184,445 square feet located at 320 Bent Street,
a 37-unit apartment building, an operating garage facility on Rogers Street with 503 spaces,
an operating below grade garage facility at Kendall Square with approximately 1,400 spaces,
and two buildings currently under construction at 301 Binney Street and 650 East Kendall
Street that the Company believes can support up to 700,000 rentable square feet of laboratory
and office space. The 650 East Kendall Street site will also include a below grade parking
facility that the Company estimates can support up to 560 spaces upon completion.Each of the PREI operating agreements includes a put/call option whereby either member can cause
the limited liability company to sell certain properties in which it holds leasehold interests to
the Company at any time after the fifth anniversary and before the seventh anniversary of the
acquisition date. However, the put/call option may be terminated prior to exercise under certain
circumstances. The put/call option purchase price is based on a predetermined return on capital
invested by PREI. If the put/call option is exercised, the Company believes that it would have
adequate resources to fund the purchase price.The PREI limited liability companies jointly entered into a secured acquisition and interim loan
facility with KeyBank and utilized approximately $427.0 million of that facility to fund a
portion of the purchase price for the properties acquired in April 2007. The remaining funds
available will be utilized to fund future construction costs at certain properties currently
under development. Pursuant to the loan facility, the Company executed guaranty agreements in
which it guaranteed the full completion of the construction at the 301 Binney Street property if
PREI I LLC is unable or unwilling to complete the project. On February 19, 2008, the PREI limited
liability companies extended the term of the secured acquisition and interim loan facility by one
year to April 3, 2009, with no additional changes to the pricing or terms of the facility.(2)
    
    PREI II LLC acquired a portfolio of properties comprised of a development parcel in Houston,
Texas; a laboratory/office building totaling 259,706 rentable square feet and fee simple and
leasehold interests in surrounding land parcels located at the Science Park at Yale in New
Haven, Connecticut; and 25,000 rentable square feet of retail space and additional pad sites
for future development in Cambridge, Massachusetts. On August 2, 2007, PREI II LLC completed
the disposition of the 25,000 square feet of retail and additional pad sites in Cambridge,
Massachusetts. The total sale price included approximately $4.0 million contingently payable
in June 2012 pursuant to a put/call option, exercisable on the earlier of the extinguishment
or expiration of development restrictions placed on a portion of the development rights
included in the disposition. On September 28, 2007, PREI II LLC completed the disposition of
the laboratory/office building and the fee simple and leasehold interests in surrounding land
parcels in New Haven, Connecticut. On December 28, 2007, PREI II LLC completed the disposition
of the development parcel in Houston, Texas. None of the sales resulted in the recognition of
a material gain or loss. The Companys remaining investment in PREI II LLC (maximum exposure
to losses) was approximately $823,000 at June 30, 2008.(3)
    
    The McKellar Court partnership holds a property comprised of a two-story laboratory/office
building totaling 72,863 rentable square feet located in San Diego, California. The Companys
investment in the McKellar Court partnership (maximum exposure to losses) was approximately
$2.4 million at June 30, 2008.(4)
    
    The Companys economic interest in the McKellar partnership entitles it to 75% of the gains
upon a sale of the property and 21% of the operating cash flows.  19




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##### Table of Contents



June 30,
    
    
    December 31,2008
    
    
    2007Assets:Investments in real estate, net
    
    $
    558,486
    
    
    $
    522,277Cash and cash equivalents (including restricted cash)
    
    
    6,719
    
    
    
    8,430Intangible assets, net
    
    
    16,375
    
    
    
    17,552Other assets
    
    
    20,295
    
    
    
    8,488Total assets
    
    $
    601,875
    
    
    $
    556,747Liabilities and equity:Mortgage notes payable
    
    $
    475,733
    
    
    $
    426,914Other liabilities
    
    
    25,399
    
    
    
    23,215Members equity
    
    
    100,743
    
    
    
    106,618Total liabilities and equity
    
    $
    601,875
    
    
    $
    556,747Companys net investment in unconsolidated partnerships
    
    $
    21,158
    
    
    $
    22,588
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Total revenues
    
    $
    7,440
    
    
    $
    5,423
    
    
    $
    14,876
    
    
    $
    5,902Rental operations expense
    
    
    1,500
    
    
    
    2,165
    
    
    
    3,129
    
    
    
    2,175Real estate taxes
    
    
    1,828
    
    
    
    567
    
    
    
    3,553
    
    
    
    607Depreciation and amortization
    
    
    2,247
    
    
    
    1,786
    
    
    
    4,495
    
    
    
    1,882Interest expense, net of interest income
    
    
    2,090
    
    
    
    3,179
    
    
    
    4,695
    
    
    
    3,406Total expenses
    
    
    7,665
    
    
    
    7,697
    
    
    
    15,872
    
    
    
    8,070Net loss
    
    $
    (225
    )
    
    $
    (2,274
    )
    
    $
    (996
    )
    
    $
    (2,168
    )Companys equity in net income/(loss)
of unconsolidated partnerships
    
    $
    43
    
    
    $
    (454
    )
    
    $
    (130
    )
    
    $
    (432
    )
 11. Discontinued Operations
  OriginalProperty
    
    Date of Sale
    
    Acquisition Date
    
    Sales Price
    
    Gain on SaleColorow Drive
    
    May 30, 2007
    
    December 22, 2005
    
    $
    20,000
    
    
    $
    1,087
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Total revenues
    
    $
    
    
    
    $
    441
    
    
    $
    
    
    
    $
    1,111Total expenses
    
    
    
    
    
    
    189
    
    
    
    
    
    
    
    472Income before minority interests and gain on sale
    
    
    
    
    
    
    252
    
    
    
    
    
    
    
    639Gain on sale of real estate assets
    
    
    
    
    
    
    1,088
    
    
    
    
    
    
    
    1,088Minority interests attributable to discontinued operations
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    (74
    )Income from discontinued operations
    
    $
    
    
    
    $
    1,283
    
    
    $
    
    
    
    $
    1,653
 20




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##### Table of Contents



12. Derivatives and Other Financial Instruments
    Current
    
    
    
    
    
    
    
    
    
    
    Fair-Value(1)Notional Amount
    
    
    Strike Rate
    
    
    Effective Date
    
    Expiration Date
    
    June 30, 2008
    
    
    December 31, 2007$
    250,000
    
    
    
    4.157
    %
    
    June 1, 2005
    
    June 1, 2010
    
    $
    (3,941
    )
    
    $
    (2,830
    )150,000
    
    
    
    5.162
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    (4,412
    )
    
    
    (4,254
    )50,000
    
    
    
    5.167
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    (1,489
    )
    
    
    (1,437
    )100,000
    
    
    
    5.167
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    (2,985
    )
    
    
    (2,874
    )150,000
    
    
    
    5.152
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    (4,307
    )
    
    
    (4,139
    )115,000
    
    
    
    4.673
    %
    
    October 1, 2007
    
    August 1, 2011
    
    
    (3,138
    )
    
    
    (3,261
    )35,000
    
    
    
    4.700
    %
    
    October 10, 2007
    
    August 1, 2011
    
    
    (987
    )
    
    
    (1,019
    )330,000
    
    
    
    4.825
    %
    
    September 25, 2007
    
    September 25, 2008
    
    
    (1,732
    )
    
    
    (1,700
    )55,000
    
    
    
    4.760
    %
    
    September 20, 2007
    
    September 20, 2008
    
    
    (273
    )
    
    
    (254
    )$
    1,235,000
    
    
    
    
    
    
    
    
    
    
    $
    (23,264
    )
    
    $
    (21,768
    )
 
 (1)
    
    On January 1, 2008, the Company adopted SFAS 157, which requires the Company to disclose the
framework utilized for measuring the fair-value of assets and liabilities measured at
fair-value on a recurring basis (see Note 2). The Company has determined that its derivative
valuations for the six months ended June 30, 2008 in their entirety are classified in Level 2
of the fair-value hierarchy.   21




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##### Table of Contents



13. New Accounting Standards
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statements
  Disclosures about Derivative Instruments and
Hedging Activities Accounting for Derivative
Instruments and Hedging Activities
 Accounting for Convertible Debt
Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement) , Accounting for Convertible Debt and Debt Issued
with Stock Purchase Warrants
 Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities
 22




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    Overview
    23




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##### Table of Contents



Consolidated Portfolio
    
    
    Unconsolidated Partnership Portfolio
    
    
    Total PortfolioPercent of
    
    
    
    
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    
    
    
    
    Percent ofRentable
    
    
    Rentable
    
    
    
    
    
    
    Rentable
    
    
    Rentable
    
    
    
    
    
    
    Rentable
    
    
    RentableSquare
    
    
    Square
    
    
    
    
    
    
    Square
    
    
    Square
    
    
    
    
    
    
    Square
    
    
    SquareProperties
    
    
    Feet
    
    
    Feet Leased
    
    
    Properties
    
    
    Feet
    
    
    Feet Leased
    
    
    Properties
    
    
    Feet
    
    
    Feet LeasedStabilized properties
    
    
    42
    
    
    
    5,267,143
    
    
    
    99.2
    %
    
    
    4
    
    
    
    257,308
    
    
    
    100.0
    %
    
    
    46
    
    
    
    5,524,451
    
    
    
    99.2
    %Lease up properties(1)
    
    
    11
    
    
    
    1,147,635
    
    
    
    64.2
    %
    
    
    1
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    12
    
    
    
    1,147,635
    
    
    
    64.2
    %Total operating portfolio
    
    
    53
    
    
    
    6,414,778
    
    
    
    92.9
    %
    
    
    5
    
    
    
    257,308
    
    
    
    100.0
    %
    
    
    58
    
    
    
    6,672,086
    
    
    
    93.2
    %Repositioning and
redevelopment properties
    
    
    5
    
    
    
    1,816,642
    
    
    
    22.4
    %
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    5
    
    
    
    1,816,642
    
    
    
    22.4
    %Construction in progress
    
    
    4
    
    
    
    1,241,000
    
    
    
    72.0
    %
    
    
    2
    
    
    
    700,000
    
    
    
    16.1
    %
    
    
    6
    
    
    
    1,941,000
    
    
    
    51.8
    %Total portfolio
    
    
    62
    
    
    
    9,472,420
    
    
    
    76.7
    %
    
    
    7
    
    
    
    957,308
    
    
    
    38.6
    %
    
    
    69
    
    
    
    10,429,728
    
    
    
    73.2
    %Land parcels
    
    
    n/a
    
    
    
    1,367,000
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    1,367,000
    
    
    
    n/aTotal proforma
portfolio(2)
    
    
    62
    
    
    
    10,839,420
    
    
    
    n/a
    
    
    
    7
    
    
    
    957,308
    
    
    
    n/a
    
    
    
    69
    
    
    
    11,796,728
    
    
    
    n/a
 
 (1)
    
    The unconsolidated partnership portfolio property within the lease up property category is
the 301 Binney Street garage property, which is not yet fully leased pending completion of
development activities at the 301 Binney Street building.(2)
    
    Percent of rentable square feet leased excludes undeveloped land parcels. Factors Which May Influence Future Operations
    Critical Accounting Policies
  New Accounting Standards
  Results of Operations
 Comparison of the Three Months Ended June 30, 2008 to the Three Months Ended June 30, 2007
  24




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##### Table of Contents



Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Rental
    
    $
    46,326
    
    
    $
    44,841
    
    
    $
    4,908
    
    
    $
    3,454
    
    
    $
    2,989
    
    
    $
    1,165Tenant recoveries
    
    
    14,409
    
    
    
    13,413
    
    
    
    1,208
    
    
    
    2,183
    
    
    
    187
    
    
    
    74Other income
    
    
    744
    
    
    
    893
    
    
    
    
    
    
    
    2,406
    
    
    
    
    
    
    
    Total revenues
    
    $
    61,479
    
    
    $
    59,147
    
    
    $
    6,116
    
    
    $
    8,043
    
    
    $
    3,176
    
    
    $
    1,239
 Rental Revenues.
 Tenant Recoveries.
 Other Income.
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Rental operations
    
    $
    12,100
    
    
    $
    11,450
    
    
    $
    917
    
    
    $
    1,399
    
    
    $
    437
    
    
    $
    31Real estate taxes
    
    
    4,391
    
    
    
    4,609
    
    
    
    436
    
    
    
    887
    
    
    
    88
    
    
    
    47Depreciation and amortization
    
    
    16,004
    
    
    
    15,851
    
    
    
    2,297
    
    
    
    3,567
    
    
    
    1,030
    
    
    
    219Total expenses
    
    $
    32,495
    
    
    $
    31,910
    
    
    $
    3,650
    
    
    $
    5,853
    
    
    $
    1,555
    
    
    $
    297
 Rental Operations Expense.
 Real Estate Tax Expense.
 25




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##### Table of Contents



Depreciation and Amortization Expense.
 General and Administrative Expenses.
 Equity in Net Income/(Loss) of Unconsolidated Partnerships.
 Interest Expense.
 Minority Interests.
 Discontinued Operations.
 Comparison of the Six Months Ended June 30, 2008 to the Six Months Ended June 30, 2007
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Rental
    
    $
    89,896
    
    
    $
    88,151
    
    
    $
    6,981
    
    
    $
    6,870
    
    
    $
    7,688
    
    
    $
    1,948Tenant recoveries
    
    
    29,904
    
    
    
    27,709
    
    
    
    1,669
    
    
    
    4,309
    
    
    
    813
    
    
    
    162Other income
    
    
    1,177
    
    
    
    908
    
    
    
    1
    
    
    
    7,170
    
    
    
    
    
    
    
    Total revenues
    
    $
    120,977
    
    
    $
    116,768
    
    
    $
    8,651
    
    
    $
    18,349
    
    
    $
    8,501
    
    
    $
    2,110
 Rental Revenues.
 26




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##### Table of Contents



Tenant Recoveries.
 Other Income.
  Redevelopment/DevelopmentSame Properties
    
    
    Properties
    
    
    New Properties2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Rental operations
    
    $
    24,858
    
    
    $
    23,251
    
    
    $
    1,603
    
    
    $
    2,668
    
    
    $
    857
    
    
    $
    76Real estate taxes
    
    
    8,913
    
    
    
    9,541
    
    
    
    719
    
    
    
    1,771
    
    
    
    553
    
    
    
    147Depreciation and amortization
    
    
    31,032
    
    
    
    30,686
    
    
    
    3,193
    
    
    
    5,482
    
    
    
    2,793
    
    
    
    723Total expenses
    
    $
    64,803
    
    
    $
    63,478
    
    
    $
    5,515
    
    
    $
    9,921
    
    
    $
    4,203
    
    
    $
    946
 Rental Operations Expense.
 Real Estate Tax Expense.
 Depreciation and Amortization Expense.
 General and Administrative Expenses.
 Equity in Net (Loss)/Income of Unconsolidated Partnerships.
 27




---



##### Table of Contents



Interest Expense.
 Minority Interests.
 Discontinued Operations.
 Cash Flows
 Comparison of the Six Months Ended June 30, 2008 to the Six Months Ended June 30, 2007
 2008
    
    2007
    
    Change(In thousands)Net cash provided by operating activities
    
    $
    49,758
    
    
    $
    51,132
    
    
    $
    (1,374
    )Net cash used in investing activities
    
    
    (131,871
    )
    
    
    (203,644
    )
    
    
    71,773Net cash provided by financing activities
    
    
    89,991
    
    
    
    147,230
    
    
    
    (57,239
    )Ending cash and cash equivalents balance
    
    
    21,357
    
    
    
    20,382
    
    
    
    975
    Funds from Operations
  28




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income available to common stockholders
    
    $
    14,085
    
    
    $
    14,172
    
    
    $
    26,651
    
    
    $
    30,221Adjustments:Minority interests in operating partnership
    
    
    619
    
    
    
    634
    
    
    
    1,209
    
    
    
    1,350Gain on sale of real estate assets
    
    
    
    
    
    
    (1,088
    )
    
    
    
    
    
    
    (1,088
    )Depreciation and amortization  unconsolidated partnerships
    
    
    450
    
    
    
    358
    
    
    
    901
    
    
    
    378Depreciation and amortization  consolidated
entities-discontinued operations
    
    
    
    
    
    
    91
    
    
    
    
    
    
    
    228Depreciation and amortization  consolidated
entities-continuing operations
    
    
    19,331
    
    
    
    19,637
    
    
    
    37,018
    
    
    
    36,891Depreciation and amortization  allocable to minority
interest of consolidated joint ventures
    
    
    (8
    )
    
    
    
    
    
    
    (16
    )
    
    
    Funds from operations available to common shares and
partnership and LTIP
units
    
    $
    34,477
    
    
    $
    33,804
    
    
    $
    65,763
    
    
    $
    67,980Funds from operations per share  diluted
    
    $
    0.47
    
    
    $
    0.50
    
    
    $
    0.93
    
    
    $
    1.00Weighted-average common shares outstanding  diluted
    
    
    73,248,311
    
    
    
    68,269,656
    
    
    
    70,827,426
    
    
    
    68,258,562
 Liquidity and Capital Resources
      29




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##### Table of Contents



Aggregate PrincipalAmount orShares/Units
    
    
    Dollar Value
    
    
    Percent of Totalat June 30, 2008
    
    
    Equivalent
    
    
    Capitalization(In thousands)Debt:Mortgage notes payable (1)
    
    
    
    
    
    $
    373,571
    
    
    
    10.5
    %Secured construction loan
    
    
    
    
    
    
    483,997
    
    
    
    13.6
    %Secured term loan
    
    
    
    
    
    
    250,000
    
    
    
    7.0
    %Exchangeable senior notes
    
    
    
    
    
    
    175,000
    
    
    
    4.9
    %Unsecured line of credit
    
    
    
    
    
    
    213,210
    
    
    
    6.0
    %Total debt
    
    
    
    
    
    
    1,495,778
    
    
    
    42.0
    %Equity:Common shares outstanding (2)
    
    
    71,719,958
    
    
    
    1,759,291
    
    
    
    49.2
    %7.375% Series A Preferred shares outstanding (3)
    
    
    9,200,000
    
    
    
    230,000
    
    
    
    6.4
    %Operating partnership units outstanding (4)
    
    
    2,863,564
    
    
    
    70,243
    
    
    
    2.0
    %LTIP units outstanding (4)
    
    
    640,150
    
    
    
    15,703
    
    
    
    0.4
    %Total equity
    
    
    
    
    
    
    2,075,237
    
    
    
    58.0
    %Total capitalization
    
    
    
    
    
    $
    3,571,015
    
    
    
    100.0
    %
 
 (1)
    
    Amount includes debt premiums of $9.8 million recorded upon the assumption of the outstanding
indebtedness in connection with our purchase of the corresponding properties.(2)
    
    Based on the market closing price of our common stock of $24.53 per share on the last trading
day of the quarter (June 30, 2008).(3)
    
    Based on the liquidation preference of $25.00 per share for our 7.375% Series A preferred
stock.(4)
    
    Based on common stock equivalents of our partnership and LTIP units, which are each
individually convertible into one share of common stock using the market closing price of our
common stock of $24.53 per share on the last trading day of the quarter (June 30, 2008).   Off Balance Sheet Arrangements
   30




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##### Table of Contents



Principal Amount (1)OwnershipName
    
    Percentage
    
    
    Interest Rate (2)
    
    
    June 30, 2008
    
    December 31, 2007
    
    Maturity DatePREI I and PREI II(3)
    
    
    20
    %
    
    
    3.69
    %
    
    $
    71,673
    
    $
    83,285

    
    April 3, 2009PREI I(4)
    
    
    20
    %
    
    
    4.36
    %
    
    
    21,388
    
    
    
    
    August 13, 2010McKellar Court(5)
    
    
    21
    %
    
    
    4.63
    %
    
    
    2,189
    
    
    2,203
    
    January 1, 2010Total
    
    
    
    
    
    
    
    
    
    $
    95,250
    
    $
    85,488
 
 (1)
    
    Amount represents our proportionate share of the total outstanding indebtedness for each of
the unconsolidated partnerships.(2)
    
    Effective or weighted average interest rate of the outstanding indebtedness as of June 30,
2008.(3)
    
    Amount represents our proportionate share of the total draws outstanding under a secured
acquisition and interim loan facility, which bears interest at a LIBOR-indexed variable-rate.
The secured acquisition and interim loan facility was utilized by both PREI I LLC and PREI II
LLC to acquire a portfolio of properties (initial borrowings of approximately $427.0 million)
on April 4, 2007 (see Note 10 in the accompanying consolidated financial statements). The
remaining balance will be utilized to fund future construction costs at certain properties
currently under development. On February 19, 2008, the maturity date was extended to April 3,
2009.(4)
    
    Amount represents our proportionate share of a secured construction loan, which bears
interest at a LIBOR-indexed variable-rate. The secured construction loan was executed by a
wholly owned subsidiary of PREI I LLC in connection with the construction of the 650 East
Kendall Street property (initial borrowings of $84.0 million on February 12, 2008 were used in
part to repay a portion of the secured acquisition and interim loan facility). The remaining
balance will be utilized to fund future construction costs at the property.(5)
    
    Amount represents our proportionate share of the principal balance outstanding on a mortgage
note payable, which is secured by the McKellar Court property (excluding $146,000 of
unamortized debt premium). Accounting for Asset Retirement Obligations
 Cash Distribution Policy
 i.e.
 31




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##### Table of Contents



Dividend
    
    DividendQuarter Ended
    
    Date Declared
    
    Date Paid
    
    per Common Share
    
    per Preferred ShareMarch 31, 2006
    
    February 27, 2006
    
    April 17, 2006
    
    $
    0.2900
    
    
    $
    June 30, 2006
    
    May 19, 2006
    
    July 17, 2006
    
    
    0.2900
    
    
    
    September 30, 2006
    
    September 14, 2006
    
    October 16, 2006
    
    
    0.2900
    
    
    
    December 31, 2006
    
    December 13, 2006
    
    January 16, 2007
    
    
    0.2900
    
    
    
    March 31, 2007
    
    March 15, 2007
    
    April 16, 2007
    
    
    0.3100
    
    
    
    0.45582June 30, 2007
    
    June 15, 2007
    
    July 16, 2007
    
    
    0.3100
    
    
    
    0.45582September 30, 2007
    
    September 14, 2007
    
    October 15, 2007
    
    
    0.3100
    
    
    
    0.46094December 31, 2007
    
    December 12, 2007
    
    January 15, 2008
    
    
    0.3100
    
    
    
    0.46094March 31, 2008
    
    March 14, 2008
    
    April 15, 2008
    
    
    0.3350
    
    
    
    0.46094June 30, 2008
    
    June 16, 2008
    
    July 15, 2008
    
    
    0.3350
    
    
    
    0.46094
 Inflation
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   Effective InterestPercent of
    
    
    Rate atDebt Summary (1)
    
    
    Total Debt
    
    
    End of QuarterFixed interest rate (2)
    
    $
    548,571
    
    
    
    36.7
    %
    
    
    5.16
    %Variable interest rate (3)
    
    
    947,207
    
    
    
    63.3
    %
    
    
    5.56
    %Total/effective interest rate
    
    $
    1,495,778
    
    
    
    100.0
    %
    
    
    5.41
    %
 
 (1)
    
    Debt summary includes only consolidated indebtedness.(2)
    
    Includes 14 mortgage notes payable secured by certain of our properties (including $9.8
million of unamortized premium) and our exchangeable senior notes.(3)
    
    Includes our unsecured line of credit, secured term loan, and secured construction loan,
which bear interest based on a LIBOR-indexed variable interest rate, plus a credit spread.
However, we have entered into four interest rate swaps, which were intended to have the effect
of initially fixing the interest rates on $205.0 million of our unsecured line of credit and
$330.0 million of our secured construction loan at 5.9% and 6.1%, respectively. We have
entered into an interest rate swap agreement that is intended to
fix the interest rate on the entire $250.0 million outstanding balance of the secured term loan
at a rate of 5.8% until the interest rate swap expires in 2010. We have also entered into four
forward starting swap agreements, which are intended to have the effect of fixing the interest
rate on $450.0 million of forecasted debt issuance (after retirement of the secured construction
loan) at approximately 5.2%. At June 30, 2008, the total amount of unhedged variable-rate debt
was approximately $162.2 million, with an effective weighted average interest rate of 3.8%. 32




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
    33




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Votes For
    
    Votes WithheldAlan D. Gold
    
    
    58,219,375
    
    
    
    1,111,414Gary A. Kreitzer
    
    
    58,751,645
    
    
    
    579,144Barbara R. Cambon
    
    
    59,200,883
    
    
    
    129,906Edward A. Dennis, Ph.D.
    
    
    59,198,359
    
    
    
    132,430Richard I. Gilchrist
    
    
    59,195,245
    
    
    
    135,544Theodore D. Roth
    
    
    59,199,318
    
    
    
    131,471M. Faye Wilson
    
    
    59,193,755
    
    
    
    137,034
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 34




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##### Table of Contents



SIGNATURES
  BioMed Realty Trust, Inc./s/
    
    ALAN D. GOLDAlan D. Gold Chairman of the Board,President and Chief Executive Officer(Principal Executive Officer)/s/
    
    KENT GRIFFINKent GriffinChief Financial Officer(Principal Financial Officer)
  35




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.