##### 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 September 30, 2007.
 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.)17140 Bernardo Center Drive, Suite 222San Diego, California
    
    92128(Address of Principal Executive Offices)
    
    (Zip Code)
 (858) 485-9840
 (Registrants telephone number, including area code)
 þ o
  þ o o
 o þ




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##### 



BIOMED REALTY TRUST, INC.
 FORM 10-Q  QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1 Consolidated Financial Statements
    
    
    3Consolidated Balance Sheets as of September 30, 2007 (Unaudited) and December 31, 2006
    
    
    3Consolidated Statements of Income for the three and nine months ended September 30,
2007 and 2006 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows for the nine months ended September 30, 2007
and 2006 (Unaudited)
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    22Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4 Controls and Procedures
    
    
    34PART 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
    
    
    35Item 5 Other Information
    
    
    35Item 6 Exhibits
    
    
    35SIGNATURES
    
    
    36EXHIBIT 10.3EXHIBIT 10.4EXHIBIT 10.5EXHIBIT 10.6EXHIBIT 10.7EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
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##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 September 30, 2007
    
    
    December 31, 2006(Unaudited)ASSETSInvestments in real estate, net
    
    $
    2,742,603
    
    
    $
    2,457,538Investment in unconsolidated partnerships
    
    
    21,741
    
    
    
    2,436Cash and cash equivalents
    
    
    18,424
    
    
    
    25,664Restricted cash
    
    
    10,003
    
    
    
    6,426Accounts receivable, net of allowance for doubtful
accounts of $1,602 and $1,240 as of September 30, 2007
and December 31, 2006, respectively
    
    
    3,722
    
    
    
    5,985Accrued straight-line rents, net
    
    
    32,012
    
    
    
    20,446Acquired above-market leases, net
    
    
    6,339
    
    
    
    7,551Deferred leasing costs, net
    
    
    119,699
    
    
    
    129,322Deferred loan costs, net
    
    
    17,052
    
    
    
    17,608Prepaid expenses
    
    
    4,608
    
    
    
    3,627Other assets
    
    
    31,959
    
    
    
    16,039Total assets
    
    $
    3,008,162
    
    
    $
    2,692,642LIABILITIES AND STOCKHOLDERS EQUITYMortgage notes payable, net
    
    $
    397,341
    
    
    $
    403,836Secured construction loan
    
    
    389,904
    
    
    
    286,355Secured term loan
    
    
    250,000
    
    
    
    250,000Exchangeable senior notes
    
    
    175,000
    
    
    
    175,000Unsecured line of credit
    
    
    216,847
    
    
    
    228,165Security deposits
    
    
    7,513
    
    
    
    7,704Dividends and distributions payable
    
    
    25,557
    
    
    
    19,847Accounts payable, accrued expenses, and other liabilities
    
    
    81,195
    
    
    
    62,602Acquired below-market leases, net
    
    
    25,220
    
    
    
    25,101Total liabilities
    
    
    1,568,577
    
    
    
    1,458,610Minority interests
    
    
    19,269
    
    
    
    19,319Stockholders 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 September 30, 2007
    
    
    222,413
    
    
    
    Common stock, $.01 par value, 100,000,000 shares
authorized, 65,465,839 and 65,425,598 shares issued and
outstanding at September 30, 2007 and December 31, 2006,
respectively
    
    
    655
    
    
    
    654Additional paid-in capital
    
    
    1,275,347
    
    
    
    1,272,243Accumulated other comprehensive income
    
    
    6,945
    
    
    
    8,417Dividends in excess of earnings
    
    
    (85,044
    )
    
    
    (66,601
    )Total stockholders equity
    
    
    1,420,316
    
    
    
    1,214,713Total liabilities and stockholders equity
    
    $
    3,008,162
    
    
    $
    2,692,642
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##### Table of Contents



BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)Revenues:Rental
    
    $
    49,382
    
    
    $
    49,197
    
    
    $
    146,351
    
    
    $
    115,808Tenant recoveries
    
    
    15,084
    
    
    
    14,632
    
    
    
    47,264
    
    
    
    39,870Other income
    
    
    366
    
    
    
    9
    
    
    
    8,445
    
    
    
    79Total revenues
    
    
    64,832
    
    
    
    63,838
    
    
    
    202,060
    
    
    
    155,757Expenses:Rental operations
    
    
    12,789
    
    
    
    11,030
    
    
    
    38,784
    
    
    
    30,030Real estate taxes
    
    
    5,079
    
    
    
    5,682
    
    
    
    16,538
    
    
    
    14,409Depreciation and amortization
    
    
    17,665
    
    
    
    18,481
    
    
    
    54,556
    
    
    
    46,283General and administrative
    
    
    5,283
    
    
    
    4,609
    
    
    
    15,990
    
    
    
    13,162Total expenses
    
    
    40,816
    
    
    
    39,802
    
    
    
    125,868
    
    
    
    103,884Income from operations
    
    
    24,016
    
    
    
    24,036
    
    
    
    76,192
    
    
    
    51,873Equity in net (loss)/income of
unconsolidated partnerships
    
    
    (261
    )
    
    
    20
    
    
    
    (694
    )
    
    
    62Interest income
    
    
    239
    
    
    
    218
    
    
    
    809
    
    
    
    813Interest expense
    
    
    (7,043
    )
    
    
    (13,346
    )
    
    
    (21,013
    )
    
    
    (30,383
    )Income from continuing
operations before minority
interests
    
    
    16,951
    
    
    
    10,928
    
    
    
    55,294
    
    
    
    22,365Minority interests in continuing operations
of consolidated partnerships
    
    
    51
    
    
    
    15
    
    
    
    (61
    )
    
    
    115Minority interests in continuing operations
of operating partnership
    
    
    (545
    )
    
    
    (497
    )
    
    
    (1,821
    )
    
    
    (1,131
    )Income from continuing operations
    
    
    16,457
    
    
    
    10,446
    
    
    
    53,412
    
    
    
    21,349Income from discontinued operations before
(loss)/gain on sale of assets and minority
interests
    
    
    
    
    
    
    383
    
    
    
    639
    
    
    
    1,156(Loss)/gain on sale of real estate assets
    
    
    (1
    )
    
    
    
    
    
    
    1,087
    
    
    
    Minority interests attributable to
discontinued operations
    
    
    
    
    
    
    (17
    )
    
    
    (74
    )
    
    
    (61
    )(Loss)/income from discontinued
operations
    
    
    (1
    )
    
    
    366
    
    
    
    1,652
    
    
    
    1,095Net income
    
    
    16,456
    
    
    
    10,812
    
    
    
    55,064
    
    
    
    22,444Preferred stock dividends
    
    
    (4,241
    )
    
    
    
    
    
    
    (12,628
    )
    
    
    Net income available to common
stockholders
    
    $
    12,215
    
    
    $
    10,812
    
    
    $
    42,436
    
    
    $
    22,444Income from continuing operations per share
available to common stockholders:Basic and diluted earnings per share
    
    $
    0.19
    
    
    $
    0.17
    
    
    $
    0.62
    
    
    $
    0.40Net income per share available to common
stockholders:Basic and diluted earnings per share
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.65
    
    
    $
    0.42Weighted-average common shares outstanding:Basic
    
    
    65,308,702
    
    
    
    60,477,672
    
    
    
    65,300,802
    
    
    
    52,822,498Diluted
    
    
    68,274,908
    
    
    
    63,646,647
    
    
    
    68,262,086
    
    
    
    55,926,343
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BIOMED REALTY TRUST, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Nine Months EndedSeptember 30,2007
    
    
    2006(Unaudited)Operating activities:Net income
    
    $
    55,064
    
    
    $
    22,444Adjustments to reconcile net income to net cash provided by operating activities:Gain on sale of real estate assets
    
    
    (1,087
    )
    
    
    Depreciation and amortization, including amounts for discontinued operations
    
    
    54,784
    
    
    
    46,694Minority interests in consolidated partnerships
    
    
    61
    
    
    
    (115
    )Minority interests in operating partnership and discontinued operations
    
    
    1,895
    
    
    
    1,192Allowance for doubtful accounts
    
    
    281
    
    
    
    118Revenue reduction attributable to acquired above-market leases
    
    
    1,857
    
    
    
    1,840Revenue recognized related to acquired below-market leases
    
    
    (4,347
    )
    
    
    (3,588
    )Compensation expense related to restricted common stock and LTIP units
    
    
    4,064
    
    
    
    2,887Amortization of deferred loan costs
    
    
    2,278
    
    
    
    1,322Amortization of debt premium on mortgage notes payable
    
    
    (596
    )
    
    
    (1,837
    )Loss/(income) from unconsolidated partnerships
    
    
    694
    
    
    
    (62
    )Distributions received from unconsolidated partnerships
    
    
    328
    
    
    
    100Distributions to minority interest in consolidated partnerships
    
    
    (108
    )
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    (3,577
    )
    
    
    (613
    )Accounts receivable
    
    
    1,982
    
    
    
    5,139Accrued straight-line rents
    
    
    (11,566
    )
    
    
    (7,845
    )Deferred leasing costs
    
    
    (7,267
    )
    
    
    (1,507
    )Prepaid expenses
    
    
    (981
    )
    
    
    (3,817
    )Other assets
    
    
    (3,081
    )
    
    
    (531
    )Security deposits
    
    
    (164
    )
    
    
    (668
    )Accounts payable, accrued expenses and other liabilities
    
    
    (7,450
    )
    
    
    10,553Net cash provided by operating activities
    
    
    83,064
    
    
    
    71,706Investing activities:Purchases of interests in and additions to investments in real estate and
related intangible assets
    
    
    (313,081
    )
    
    
    (799,291
    )Purchases of interests in unconsolidated partnerships
    
    
    (20,327
    )
    
    
    Proceeds from sale of real estate assets, net of selling costs
    
    
    19,389
    
    
    
    Minority interest investment in consolidated partnerships
    
    
    205
    
    
    
    337Receipts of master lease payments
    
    
    696
    
    
    
    454Security deposits received from prior owners of rental property
    
    
    
    
    
    
    319Additions to non-real estate assets
    
    
    (307
    )
    
    
    (1,094
    )Funds held in escrow for acquisitions
    
    
    (12,399
    )
    
    
    (2,100
    )Net cash used in investing activities
    
    
    (325,824
    )
    
    
    (801,375
    )Financing activities:Proceeds from common stock offering
    
    
    
    
    
    
    528,784Proceeds from exercise of common stock warrant
    
    
    
    
    
    
    4,050Proceeds from preferred stock offering
    
    
    230,000
    
    
    
    Payment of common stock offering costs
    
    
    
    
    
    
    (21,866
    )Payment of preferred stock offering costs
    
    
    (7,587
    )
    
    
    Payment of deferred loan costs
    
    
    (3,809
    )
    
    
    (8,138
    )Unsecured line of credit proceeds
    
    
    232,137
    
    
    
    392,311Unsecured line of credit repayments
    
    
    (243,455
    )
    
    
    (409,311
    )Secured bridge loan proceeds
    
    
    
    
    
    
    150,000Secured bridge loan payments
    
    
    
    
    
    
    (150,000
    )Exchangeable notes proceeds
    
    
    
    
    
    
    175,000Mortgage notes proceeds
    
    
    
    
    
    
    147,000Principal payments on mortgage notes payable
    
    
    (4,547
    )
    
    
    (3,990
    )Secured construction loan proceeds
    
    
    103,549
    
    
    
    Tenant improvement loan
    
    
    
    
    
    
    (2,000
    )Tenant improvement loan repayments
    
    
    91
    
    
    
    24Distributions to operating partnership unit and LTIP unit holders
    
    
    (2,914
    )
    
    
    (2,434
    )Dividends paid to common stockholders
    
    
    (59,558
    )
    
    
    (42,755
    )Dividends paid to preferred stockholders
    
    
    (8,387
    )
    
    
    Net cash provided by financing activities
    
    
    235,520
    
    
    
    756,675Net (decrease)/increase in cash and cash equivalents
    
    
    (7,240
    )
    
    
    27,006Cash and cash equivalents at beginning of period
    
    
    25,664
    
    
    
    20,312Cash and cash equivalents at end of period
    
    $
    18,424
    
    
    $
    47,318
 Nine Months EndedSeptember 30,2007
    
    2006(Unaudited)Supplemental disclosure of cash flow information:Cash paid during the period for interest (net of amounts capitalized of
$40,642 and $1,284, respectively)
    
    $
    21,582
    
    
    $
    29,814Supplemental disclosure of non-cash investing and financing activities:Accrual for preferred stock dividends declared
    
    $
    4,241
    
    
    $
    Accrual for common stock dividends declared
    
    
    20,294
    
    
    
    18,993Accrual for distributions declared for partnership unit and LTIP unit holders
    
    
    1,022
    
    
    
    830Mortgage loans assumed (includes premium of $236 for the nine months ended
September 30, 2006)
    
    
    
    
    
    
    2,001Accrued additions to real estate and related intangible assets
    
    
    52,174
    
    
    
    5,270Change in minority interest for vesting of LTIP units
    
    
    959
    
    
    
    
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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
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##### Table of Contents



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
   Investments in Real Estate
  September 30, 2007
    
    
    December 31, 2006Land
    
    $
    307,504
    
    
    $
    270,286Ground lease
    
    
    6,243
    
    
    
    14,210Land under development
    
    
    103,827
    
    
    
    85,362Buildings and improvements
    
    
    1,670,484
    
    
    
    1,598,384Construction in progress
    
    
    688,741
    
    
    
    497,971Tenant improvements
    
    
    59,503
    
    
    
    51,9042,836,302
    
    
    
    2,518,117Accumulated depreciation
    
    
    (93,699
    )
    
    
    (60,579
    )$
    2,742,603
    
    
    $
    2,457,538
  Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
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Deferred Leasing Costs
   Balance atSeptember 30,
    
    
    Accumulated2007
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    167,663
    
    
    $
    (65,821
    )
    
    $
    101,842Acquired management agreements
    
    
    12,921
    
    
    
    (6,109
    )
    
    
    6,812Deferred leasing and other direct costs
    
    
    12,310
    
    
    
    (1,265
    )
    
    
    11,045$
    192,894
    
    
    $
    (73,195
    )
    
    $
    119,699
  Balance atDecember 31,
    
    
    Accumulated2006
    
    
    Amortization
    
    
    NetAcquired in-place leases
    
    $
    162,935
    
    
    $
    (47,066
    )
    
    $
    115,869Acquired management agreements
    
    
    12,601
    
    
    
    (4,574
    )
    
    
    8,027Deferred leasing and other direct costs
    
    
    6,122
    
    
    
    (696
    )
    
    
    5,426$
    181,658
    
    
    $
    (52,336
    )
    
    $
    129,322
 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;
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##### Table of Contents




    
    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.
    September 30,
    
    
    December 31,2007
    
    
    2006Acquired above-market leases
    
    $
    12,729
    
    
    $
    12,084Accumulated amortization
    
    
    (6,390
    )
    
    
    (4,533
    )$
    6,339
    
    
    $
    7,551
  September 30,
    
    
    December 31,2007
    
    
    2006Acquired below-market leases
    
    $
    37,961
    
    
    $
    33,495Accumulated amortization
    
    
    (12,741
    )
    
    
    (8,394
    )$
    25,220
    
    
    $
    25,101
 Reporting Revenue Gross as a Principal versus Net as an
Agent
  9




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##### Table of Contents



Incentive Awards
 Share-Based
Payment
 Derivative Instruments
    Managements Estimates
  Reclassifications
  3. Minority Interests
  10




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September 30, 2007
    
    December 31, 2006Partnership units
    
    Percentage of
    
    Partnership units
    
    Percentage ofand LTIP units
    
    total
    
    and LTIP units
    
    totalBioMed Realty Trust
    
    
    65,308,702
    
    
    
    95.7
    %
    
    
    65,151,884
    
    
    
    95.8
    %Minority interest consisting of:Partnership and LTIP units held by
employees and related parties
    
    
    2,726,172
    
    
    
    4.0
    %
    
    
    2,673,172
    
    
    
    3.9
    %Partnership units held by third parties
    
    
    190,392
    
    
    
    0.3
    %
    
    
    190,392
    
    
    
    0.3
    %Total
    
    
    68,225,266
    
    
    
    100.0
    %
    
    
    68,015,448
    
    
    
    100.0
    %
  4. Stockholders Equity
   Common Stock, Partnership Units and LTIP Units
  11




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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 15, 2007.
    
    Common stock and 
partnership and LTIP
units
    
    $
    0.31000
    
    
    January 1, 2007 to 
March 31, 2007
    
    April 16, 2007
    
    $
    21,309March 15, 2007.
    
    Series A preferred
stock
    
    $
    0.45582
    
    
    January 18, 2007 to
April 16, 2007
    
    April 16, 2007
    
    $
    4,193June 15, 2007.
    
    Common stock and 
partnership and LTIP
units
    
    $
    0.31000
    
    
    April 1, 2007 to
June 30, 2007
    
    July 16, 2007
    
    $
    21,315June 15, 2007.
    
    Series A preferred stock
    
    $
    0.45582
    
    
    April 17, 2007 to
July 15, 2007
    
    July 16, 2007
    
    $
    4,194September 14, 2007
    
    Common stock and
partnership and LTIP
units
    
    $
    0.31000
    
    
    July 1, 2007 to 
September 30, 2007
    
    October 15, 2007
    
    $
    21,316September 14, 2007
    
    Series A preferred stock
    
    $
    0.46094
    
    
    July 16, 2007 to
October 15, 2007
    
    October 15, 2007
    
    $
    4,241
 Total 2007 dividends and distributions declared through September 30, 2007:Common stock, partnership units, and LTIP units
    
    $
    63,940Series A preferred stock
    
    
    12,628$
    76,568
 Accumulated Other Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income available to common stockholders
    
    $
    12,215
    
    
    $
    10,812
    
    
    $
    42,436
    
    
    $
    22,444Unrealized (loss)/gain on interest rate swap agreements
    
    
    (19,606
    )
    
    
    (5,211
    )
    
    
    (1,472
    )
    
    
    513Comprehensive (loss)/income
    
    $
    (7,391
    )
    
    $
    5,601
    
    
    $
    40,964
    
    
    $
    22,957
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##### Table of Contents



5. Mortgage Notes Payable
  Stated Fixed
    
    
    Effective
    
    
    Principal BalanceInterest
    
    
    Interest
    
    
    September 30,
    
    
    December 31,Rate
    
    
    Rate
    
    
    2007
    
    
    2006
    
    
    Maturity DateArdentech Court
    
    
    7.25
    %
    
    
    5.06
    %
    
    $
    4,589
    
    
    $
    4,658
    
    
    July 1, 2012Bayshore Boulevard
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    15,435
    
    
    
    15,730
    
    
    January 1, 2010Bridgeview Technology Park I
    
    
    8.07
    %
    
    
    5.04
    %
    
    
    11,538
    
    
    
    11,625
    
    
    January 1, 2011Eisenhower Road
    
    
    5.80
    %
    
    
    4.63
    %
    
    
    2,122
    
    
    
    2,164
    
    
    May 5, 2008Elliott Avenue
    
    
    7.38
    %
    
    
    4.63
    %
    
    
    15,615
    
    
    
    16,020
    
    
    November 24, 200740 Erie Street
    
    
    7.34
    %
    
    
    4.90
    %
    
    
    17,895
    
    
    
    18,676
    
    
    August 1, 2008500 Kendall Street (Kendall D)
    
    
    6.38
    %
    
    
    5.45
    %
    
    
    69,827
    
    
    
    70,963
    
    
    December 1, 2018Lucent Drive
    
    
    5.50
    %
    
    
    5.50
    %
    
    
    5,591
    
    
    
    5,733
    
    
    January 21, 2015Monte Villa Parkway
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    9,397
    
    
    
    9,576
    
    
    January 1, 20106828 Nancy Ridge Drive
    
    
    7.15
    %
    
    
    5.38
    %
    
    
    6,808
    
    
    
    6,872
    
    
    September 1, 2012Road to the Cure
    
    
    6.70
    %
    
    
    5.78
    %
    
    
    15,482
    
    
    
    15,657
    
    
    January 31, 2014Science Center Drive
    
    
    7.65
    %
    
    
    5.04
    %
    
    
    11,338
    
    
    
    11,444
    
    
    July 1, 2011Shady Grove Road
    
    
    5.97
    %
    
    
    5.97
    %
    
    
    147,000
    
    
    
    147,000
    
    
    September 1, 2016Sidney Street
    
    
    7.23
    %
    
    
    5.11
    %
    
    
    30,178
    
    
    
    30,732
    
    
    June 1, 20129885 Towne Centre Drive
    
    
    4.55
    %
    
    
    4.55
    %
    
    
    21,463
    
    
    
    21,872
    
    
    January 1, 2010900 Uniqema Boulevard
    
    
    8.61
    %
    
    
    5.61
    %
    
    
    1,545
    
    
    
    1,648
    
    
    May 1, 2015385,823
    
    
    
    390,370Unamortized premiums
    
    
    
    
    
    
    
    
    
    
    11,518
    
    
    
    13,466$
    397,341
    
    
    $
    403,836
  6. Credit Facilities, Exchangeable Notes, and Other Debt Instruments
 Unsecured Line of Credit
  13




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##### Table of Contents



Secured Term Loan
   Exchangeable Senior Notes
  14




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##### Table of Contents



Secured Construction Loan
   2007
    
    $
    17,0292008
    
    
    24,4552009
    
    
    394,9302010
    
    
    47,4452011
    
    
    243,067Thereafter
    
    
    690,648$
    1,417,574
 7. Earnings Per Share
  15




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##### Table of Contents



Earnings per Share
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Income from continuing operations and net
income available for common stockholders
(basic EPS):Income from continuing operations
    
    $
    16,457
    
    
    $
    10,446
    
    
    $
    53,412
    
    
    $
    21,349Preferred stock dividends
    
    
    (4,241
    )
    
    
    
    
    
    
    (12,628
    )
    
    
    Income from continuing operations available
for common stockholders
    
    
    12,216
    
    
    
    10,446
    
    
    
    40,784
    
    
    
    21,349(Loss)/income from discontinued operations.
    
    
    (1
    )
    
    
    366
    
    
    
    1,652
    
    
    
    1,095Net income available to common stockholders
    
    $
    12,215
    
    
    $
    10,812
    
    
    $
    42,436
    
    
    $
    22,444Income from continuing operations and net
income available for common stockholders
(diluted EPS):Income from continuing operations available
for common stockholders
    
    
    12,216
    
    
    
    10,446
    
    
    
    40,784
    
    
    
    21,349Minority interests in continuing
operations of operating partnership
    
    
    545
    
    
    
    497
    
    
    
    1,821
    
    
    
    1,131Income from continuing operations available
to common stockholders before minority
interests in continuing operations
    
    
    12,761
    
    
    
    10,943
    
    
    
    42,605
    
    
    
    22,480(Loss)/income from discontinued operations.
    
    
    (1
    )
    
    
    366
    
    
    
    1,652
    
    
    
    1,095Minority interests in discontinued
operations of operating partnership
    
    
    
    
    
    
    17
    
    
    
    74
    
    
    
    61Net income available to common stockholders
before minority interests
    
    $
    12,760
    
    
    $
    11,326
    
    
    $
    44,331
    
    
    $
    23,636Weighted-average common shares outstanding:Basic
    
    
    65,308,702
    
    
    
    60,477,672
    
    
    
    65,300,802
    
    
    
    52,822,498Incremental shares from assumed
conversion/exercise:Stock warrant
    
    
    
    
    
    
    136,306
    
    
    
    
    
    
    
    127,926Unvested restricted stock and LTIP
units using the treasury method
    
    
    49,642
    
    
    
    169,105
    
    
    
    45,044
    
    
    
    112,355Operating partnership and LTIP units
    
    
    2,916,564
    
    
    
    2,863,564
    
    
    
    2,916,240
    
    
    
    2,863,564Diluted
    
    
    68,274,908
    
    
    
    63,646,647
    
    
    
    68,262,086
    
    
    
    55,926,343Basic and diluted earnings per share:Income from continuing operations available
for common stockholders
    
    $
    0.19
    
    
    $
    0.17
    
    
    $
    0.62
    
    
    $
    0.40Discontinued operations
    
    
    
    
    
    
    0.01
    
    
    
    0.03
    
    
    
    0.02Net income available to common stockholders
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.65
    
    
    $
    0.42
 8. Incentive Award Plan
   16




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##### Table of Contents



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
    
    
    
    28.66Granted
    
    
    3,000
    
    
    
    26.01Balance at September 30, 2007
    
    
    536,803
    
    
    $
    28.65
 Weighted-Restricted Shares and
    
    Average Grant-LTIP Units
    
    Date Fair-ValueBalance at January 1, 2006
    
    
    344,492
    
    
    $
    17.70Granted
    
    
    147,200
    
    
    
    27.11Vested
    
    
    (153,194
    )
    
    
    16.53Balance at March 31, 2006
    
    
    338,498
    
    
    
    22.32Granted
    
    
    11,000
    
    
    
    28.53Forfeited
    
    
    (150
    )
    
    
    26.70Vested
    
    
    (10,000
    )
    
    
    21.20Balance at June 30, 2006
    
    
    339,348
    
    
    
    22.55Granted
    
    
    2,000
    
    
    
    31.02Balance at September 30, 2006
    
    
    341,348
    
    
    $
    22.60
 9. Segment Information
 Disclosures about Segments of an Enterprise and Related Information
 17




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##### Table of Contents



10. Property Acquisitions
  Deferred Leasing CostsAcquisition
    
    
    Investments
    
    
    Acquired Above
    
    
    In place
    
    
    
    
    
    
    Acquired Below
    
    
    Total CashProperty
    
    Date
    
    
    in Real Estate
    
    
    Market Lease
    
    
    Lease
    
    
    Management Fee
    
    
    Market Lease
    
    
    ConsiderationTorreyana Road
    
    March 22, 2007
    
    $
    32,128
    
    
    $
    
    
    
    $
    1,937
    
    
    $
    57
    
    
    $
    (1,082
    )
    
    $
    33,0406114-6154 Nancy Ridge Drive
    
    May 2, 2007
    
    
    37,711
    
    
    
    645
    
    
    
    
    
    
    
    
    
    
    
    (126
    )
    
    
    38,2309920 Belward Campus Drive
    
    May 8, 2007
    
    
    15,137
    
    
    
    
    
    
    
    1,282
    
    
    
    145
    
    
    
    (1,483
    )
    
    
    15,081Pacific Center Boulevard
    
    August 24, 2007
    
    
    16,912
    
    
    
    
    
    
    
    623
    
    
    
    118
    
    
    
    (855
    )
    
    
    16,798Forbes Boulevard
    
    September 5, 2007
    
    
    32,584
    
    
    
    
    
    
    
    886
    
    
    
    
    
    
    
    (919
    )
    
    
    32,551Total
    
    
    
    
    
    $
    134,472
    
    
    $
    645
    
    
    $
    4,728
    
    
    $
    320
    
    
    $
    (4,465
    )
    
    $
    135,700Intangible amortization life (in months)
    
    
    
    
    
    
    
    
    
    
    241
    
    
    
    42
    
    
    
    58
    
    
    
    54
 11. Investment in Unconsolidated Partnerships
  Companys
    
    CompanysOwnership
    
    Economic
    
    
    
    
    
    AcquisitionName
    
    Partner
    
    Interest
    
    Interest
    
    Date Acquired
    
    Price (1)PREI I (2)
    
    PREI
    
    
    20
    %
    
    
    20
    %
    
    April 4, 2007
    
    $
    466,252PREI II (3)
    
    PREI
    
    
    20
    %
    
    
    20
    %
    
    April 4, 2007
    
    
    40,472McKellar Court (4)
    
    Quidel Corporation
    
    
    21
    %
    
    
    21
    %(5)
    
    September 30, 2004
    
    
    2,058
 
 (1)
    
    The acquisition price represents the total purchase price for the properties acquired by each
partnership, excluding closing costs.(2)
    
    The PREI I limited liability company (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 a building currently under construction at 301
Binney Street and a development site at 650 East Kendall Street that the Company believes can
support up to 420,000 and 280,000 rentable square feet of laboratory and office space,
respectively. The development site at 650 East Kendall Street also includes the potential to
build 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 $550.0 million secured acquisition
and interim loan facility with KeyBank in which the partnerships utilized approximately $427.0
million 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. 18




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##### Table of Contents



(3)
    
    The PREI II limited liability company (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. Neither sale resulted in the
recognition of a material gain or loss.(4)
    
    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.(5)
    
    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.   September 30,
    
    
    December 31,2007
    
    
    2006Assets:Investments in real estate, net
    
    $
    519,544
    
    
    $
    15,061Cash and cash equivalents (including restricted cash)
    
    
    7,995
    
    
    
    605Intangible assets, net
    
    
    15,375
    
    
    
    Other assets
    
    
    6,386
    
    
    
    1,078Total assets
    
    $
    549,300
    
    
    $
    16,744Liabilities and equity:Mortgage notes payable
    
    $
    425,611
    
    
    $
    10,619Other liabilities
    
    
    20,852
    
    
    
    285Members equity
    
    
    102,837
    
    
    
    5,840Total liabilities and equity
    
    $
    549,300
    
    
    $
    16,744Companys net investment in unconsolidated partnerships
    
    $
    21,741
    
    
    $
    2,436
 Accounting for
Asset Retirement Obligations
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Total revenues
    
    $
    6,800
    
    
    $
    479
    
    
    $
    12,701
    
    
    $
    1,433Rental operations expenses
    
    
    2,389
    
    
    
    10
    
    
    
    4,564
    
    
    
    31Real estate taxes
    
    
    678
    
    
    
    40
    
    
    
    1,285
    
    
    
    116Depreciation and amortization
    
    
    1,827
    
    
    
    95
    
    
    
    3,709
    
    
    
    286Interest expense, net of interest income
    
    
    3,153
    
    
    
    234
    
    
    
    6,559
    
    
    
    696Total expenses
    
    
    8,047
    
    
    
    379
    
    
    
    16,117
    
    
    
    1,129Net (loss)/ income
    
    $
    (1,247
    )
    
    $
    100
    
    
    $
    (3,416
    )
    
    $
    304Companys equity in net (loss)/income
of unconsolidated partnerships
    
    $
    (261
    )
    
    $
    20
    
    
    $
    (694
    )
    
    $
    62
 19




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##### Table of Contents



12. Discontinued Operations
  OriginalProperty
    
    Date of Sale
    
    Acquisition Date
    
    Sales Price
    
    Gain on SaleColorow Drive
    
    May 30, 2007
    
    December 22, 2005
    
    $
    20,000

    
    
    $
    1,087
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Total revenues
    
    $
    
    
    
    $
    672
    
    
    $
    1,111
    
    
    $
    2,005Total expenses
    
    
    
    
    
    
    289
    
    
    
    472
    
    
    
    849Income before minority interests and gain on sale
    
    
    
    
    
    
    383
    
    
    
    639
    
    
    
    1,156(Loss)/gain on sale of real estate assets
    
    
    (1
    )
    
    
    
    
    
    
    1,087
    
    
    
    Minority interests attributable to discontinued operations
    
    
    
    
    
    
    (17
    )
    
    
    (74
    )
    
    
    (61
    )(Loss)/income from discontinued operations
    
    $
    (1
    )
    
    $
    366
    
    
    $
    1,652
    
    
    $
    1,095
 13. Derivatives and Other Financial Instruments
    Current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fair-ValueNotional Amount
    
    
    
    
    Strike Rate
    
    
    Effective Date
    
    
    Expiration Date
    
    
    September 30, 2007
    
    
    December 31, 2006$
    250,000
    
    
    
    
    
    4.157
    %
    
    June 1, 2005
    
    June 1, 2010
    
    $
    2,271
    
    
    $
    6,263150,000
    
    
    
    
    
    5.152
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    2,005
    
    
    
    808150,000
    
    
    
    
    
    5.162
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    1,895
    
    
    
    70450,000
    
    
    
    
    
    5.167
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    613
    
    
    
    217100,000
    
    
    
    
    
    5.167
    %
    
    December 30, 2008
    
    December 30, 2018
    
    
    1,227
    
    
    
    434115,000
    
    
    
    
    
    4.673
    %
    
    October 1, 2007
    
    August 1, 2011
    
    
    (248
    )
    
    
    35,000
    
    
    
    
    
    4.700
    %
    
    October 10, 2007
    
    August 1, 2011
    
    
    (115
    )
    
    
    330,000
    
    
    
    
    
    4.825
    %
    
    September 25, 2007
    
    September 25, 2008
    
    
    (631
    )
    
    
    55,000
    
    
    
    
    
    4.760
    %
    
    September 20, 2007
    
    September 20, 2008
    
    
    (59
    )
    
    
    $
    1,235,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,958
    
    
    $
    8,426
  20




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21




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##### Table of Contents



14. New Accounting Standards
 Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109
 Fair-Value Measurements
 The Fair-Value Option for Financial Assets and
Financial Liabilities Accounting for Derivative Instruments and Hedging Activities
 Accounting for
Convertible Debt and Debt Issued with Stock Purchase Warrants
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   22




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Overview
   RentableSquare FeetOperating portfolio
    
    
    6,626,723Repositioning and redevelopment properties
    
    
    1,871,353Construction in progress
    
    
    1,941,000Land parcels
    
    
    1,293,000Total proforma portfolio
    
    
    11,732,076
 Factors Which May Influence Future Operations
  23




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##### Table of Contents



Critical Accounting Policies
  New Accounting Standards
  Results of Operations
 Comparison of the Three Months Ended September 30, 2007 to the Three Months Ended September 30,
2006
  Same Properties
    
    
    Redevelopment Properties
    
    
    New Properties2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Rental
    
    $
    42,044
    
    
    $
    40,525
    
    
    $
    1,775
    
    
    $
    6,536
    
    
    $
    5,563
    
    
    $
    2,136Tenant recoveries
    
    
    13,474
    
    
    
    12,622
    
    
    
    630
    
    
    
    1,772
    
    
    
    980
    
    
    
    238Other income
    
    
    366
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total revenues
    
    $
    55,884
    
    
    $
    53,156
    
    
    $
    2,405
    
    
    $
    8,308
    
    
    $
    6,543
    
    
    $
    2,374
 Rental Revenues.
 Tenant Recoveries.
 Other Income.
 24




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##### Table of Contents



Same Properties
    
    
    Redevelopment Properties
    
    
    New Properties2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Rental operations
    
    $
    11,503
    
    
    $
    10,339
    
    
    $
    551
    
    
    $
    587
    
    
    $
    735
    
    
    $
    104Real estate taxes
    
    
    4,173
    
    
    
    4,309
    
    
    
    239
    
    
    
    1,223
    
    
    
    667
    
    
    
    150Depreciation and
amortization
    
    
    14,638
    
    
    
    14,553
    
    
    
    1,025
    
    
    
    3,102
    
    
    
    2,002
    
    
    
    826Total expenses
    
    $
    30,314
    
    
    $
    29,201
    
    
    $
    1,815
    
    
    $
    4,912
    
    
    $
    3,404
    
    
    $
    1,080
 Rental Operations Expense.
 Real Estate Tax Expense.
 Depreciation and Amortization Expense.
 General and Administrative Expenses.
 Equity in Net (Loss)/Income of Unconsolidated Partnerships.
 Interest Expense.
 25




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##### Table of Contents



Minority Interests.
 Discontinued Operations.
 Comparison of the Nine Months Ended September 30, 2007 to the Nine Months Ended September 30, 2006
  Same Properties
    
    
    Redevelopment Properties
    
    
    New Properties2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Rental
    
    $
    82,944
    
    
    $
    81,242
    
    
    $
    12,568
    
    
    $
    14,498
    
    
    $
    50,839
    
    
    $
    20,068Tenant recoveries
    
    
    36,985
    
    
    
    35,404
    
    
    
    5,701
    
    
    
    3,355
    
    
    
    4,578
    
    
    
    1,111Other income
    
    
    1,272
    
    
    
    78
    
    
    
    7,173
    
    
    
    1
    
    
    
    
    
    
    
    Total revenues
    
    $
    121,201
    
    
    $
    116,724
    
    
    $
    25,442
    
    
    $
    17,854
    
    
    $
    55,417
    
    
    $
    21,179
 Rental Revenues.
 Tenant Recoveries.
 Other Income.
  Same Properties
    
    
    Redevelopment Properties
    
    
    New Properties2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Rental operations
    
    $
    32,406
    
    
    $
    28,192
    
    
    $
    4,015
    
    
    $
    1,510
    
    
    $
    2,363
    
    
    $
    328Real estate taxes
    
    
    11,001
    
    
    
    11,415
    
    
    
    2,393
    
    
    
    2,100
    
    
    
    3,144
    
    
    
    894Depreciation and amortization
    
    
    33,270
    
    
    
    33,970
    
    
    
    8,028
    
    
    
    7,291
    
    
    
    13,258
    
    
    
    5,022Total expenses
    
    $
    76,677
    
    
    $
    73,577
    
    
    $
    14,436
    
    
    $
    10,901
    
    
    $
    18,765
    
    
    $
    6,244
 26




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##### Table of Contents



Rental Operations Expense.
 Real Estate Tax Expense.
 Depreciation and Amortization Expense.
 General and Administrative Expenses.
 Equity in Net (Loss)/Income of Unconsolidated Partnerships.
 Interest Expense.
 27




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##### Table of Contents



Minority Interests.
 Discontinued Operations.
 Cash Flows
 Comparison of Nine Months Ended September 30, 2007 to Nine Months Ended September 30, 2006
 Nine Months Ended September 30,2007
    
    2006
    
    Change(In thousands)Net cash provided by operating activities
    
    $
    83,064
    
    
    $
    71,706
    
    
    $
    11,358Net cash used in investing activities
    
    
    (325,824
    )
    
    
    (801,375
    )
    
    
    475,551Net cash provided by financing activities
    
    
    235,520
    
    
    
    756,675
    
    
    
    (521,155
    )Ending cash and cash equivalents balance
    
    
    18,424
    
    
    
    47,318
    
    
    
    (28,894
    )
     Funds from Operations
  28




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##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income available to common stockholders
    
    $
    12,215
    
    
    $
    10,812
    
    
    $
    42,436
    
    
    $
    22,444Adjustments:Minority interests in operating partnership
    
    
    545
    
    
    
    514
    
    
    
    1,895
    
    
    
    1,192Loss/(gain) on sale of real estate assets
    
    
    1
    
    
    
    
    
    
    
    (1,087
    )
    
    
    Depreciation and amortization  real
estate assets (unconsolidated
partnerships)
    
    
    366
    
    
    
    20
    
    
    
    745
    
    
    
    60Depreciation and amortization  real
estate assets (consolidated
entities-discontinued operations)
    
    
    
    
    
    
    137
    
    
    
    228
    
    
    
    411Depreciation and amortization  real
estate assets (consolidated
entities-continuing operations)
    
    
    17,665
    
    
    
    18,481
    
    
    
    54,556
    
    
    
    46,283Funds from operations
    
    $
    30,792
    
    
    $
    29,964
    
    
    $
    98,773
    
    
    $
    70,390Funds from operations per share  diluted
    
    $
    0.45
    
    
    $
    0.47
    
    
    $
    1.45
    
    
    $
    1.26Weighted-average common shares outstanding 
diluted
    
    
    68,274,908
    
    
    
    63,646,647
    
    
    
    68,262,086
    
    
    
    55,926,343
 Liquidity and Capital Resources
     29




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##### Table of Contents



Aggregate PrincipalAmount orShares/Units
    
    
    Dollar Value
    
    
    Percent of Totalat September 30, 2007
    
    
    Equivalent
    
    
    Capitalization(In thousands)Debt:Mortgage notes payable (1)
    
    
    
    
    
    $
    397,341
    
    
    
    12.0
    %Secured construction loan
    
    
    
    
    
    
    389,904
    
    
    
    11.8
    %Secured term loan
    
    
    
    
    
    
    250,000
    
    
    
    7.5
    %Exchangeable notes
    
    
    
    
    
    
    175,000
    
    
    
    5.3
    %Unsecured line of credit
    
    
    
    
    
    
    216,847
    
    
    
    6.5
    %Total debt
    
    
    
    
    
    
    1,429,092
    
    
    
    43.1
    %Equity:Common shares outstanding (2)
    
    
    65,465,839
    
    
    
    1,577,727
    
    
    
    47.6
    %7.375% Series A Preferred shares outstanding (3)
    
    
    9,200,000
    
    
    
    230,000
    
    
    
    6.9
    %Operating partnership units outstanding (4)
    
    
    2,863,564
    
    
    
    69,012
    
    
    
    2.1
    %LTIP units outstanding (4)
    
    
    432,666
    
    
    
    10,427
    
    
    
    0.3
    %Total equity
    
    
    
    
    
    
    1,887,166
    
    
    
    56.9
    %Total capitalization
    
    
    
    
    
    $
    3,316,258
    
    
    
    100.0
    %
 
 (1)
    
    Amount includes debt premiums of $11.5 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 $24.10 per share on the last trading
day of the quarter (September 28, 2007).(3)
    
    Based on the liquidation preference of $25.00 per share for our 7.375% Series A preferred
stock.(4)
    
    Common stock equivalents of our partnership and LTIP units, which are each individually
convertible into one share of common stock.    30




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##### Table of Contents



Off Balance Sheet Arrangements
     31




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##### Table of Contents



Principal Amount (1)OwnershipName
    
    Percentage
    
    
    Interest Rate (2)
    
    
    September 30, 2007
    
    
    December 31, 2006
    
    
    Maturity DatePREI I and PREI II (3)
    
    
    20
    %
    
    
    6.49
    %
    
    $
    83,017
    
    
    $
    
    
    
    April 3, 2008McKellar Court (4)
    
    
    21
    %
    
    
    4.63
    %
    
    
    2,210
    
    
    
    2,230
    
    
    January 1, 2010Total
    
    
    
    
    
    
    
    
    
    $
    85,227
    
    
    $
    2,230
 
 (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 September
30, 2007.(3)
    
    Amount represents our proportionate share of the total draws outstanding under a $550.0
million 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 11). The remaining balance will be utilized to fund
future construction costs at certain properties currently under development.(4)
    
    Amount represents our proportionate share of the principal balance outstanding on a mortgage
note payable, which is secured by the McKellar Court property (including $206,000 of
unamortized debt premium). Accounting for Asset Retirement Obligations
 Cash Distribution Policy
 i.e.
  Dividend
    
    DividendQuarter Ended
    
    Date Declared
    
    Date Paid
    
    per Common Share
    
    per Preferred ShareMarch 31, 2005
    
    March 14, 2005
    
    April 15, 2005
    
    $
    0.2700
    
    
    $
    June 30, 2005
    
    June 3, 2005
    
    July 15, 2005
    
    
    0.2700
    
    
    
    September 30, 2005
    
    September 14, 2005
    
    October 17, 2005
    
    
    0.2700
    
    
    
    December 31, 2005
    
    December 13, 2005
    
    January 16, 2006
    
    
    0.2700
    
    
    
    March 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
    
    
    
    0.46094
 32




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##### Table of Contents



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)
    
    $
    572,341
    
    
    
    40.0
    %
    
    
    5.15
    %Variable interest rate (3)
    
    
    856,751
    
    
    
    60.0
    %
    
    
    6.04
    %Total/effective interest rate
    
    $
    1,429,092
    
    
    
    100.0
    %
    
    
    5.68
    %
 
 (1)
    
    Debt summary includes only consolidated indebtedness.(2)
    
    Includes 16 mortgage notes payable secured by certain of our properties (including $11.5
million of unamortized premium) and our exchangeable notes.(3)
    
    Includes our unsecured line of credit and our secured construction loan, both of which bear
interest based on LIBOR, plus a credit spread. Also includes our $250.0 million secured term
loan, which bears a LIBOR-indexed variable interest rate. However, we have entered into an
interest rate swap agreement that effectively fixes the interest rate on the entire $250.0
million outstanding balance at a rate of 5.8% until the interest rate swap expires in 2010. 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 5.8% and 6.1%, respectively. We have also
entered into four forward starting swap agreements, which will 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%.   33




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
    
 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
  34




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description of Exhibit10.1
    
    Second Amended and Restated Unsecured Credit Agreement, dated as of August 1, 2007, by and among
BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders
party thereto.(1)10.2
    
    First Amended and Restated Secured Term Loan Agreement, dated as of August 1, 2007, by and among
BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders
party thereto.(1)10.3
    
    Multi-Tenant Industrial Lease, dated as of April 7, 1997, by and between AEW/LBA Acquisition Co.
II, LLC and Aurora Biosciences Corporation.10.4
    
    First Amendment to Multi-Tenant Industrial Lease, dated as of September 1, 1997, by and between
AEW/LBA Acquisition Co. II, LLC and Aurora Biosciences Corporation.10.5
    
    Second Amendment to Multi-Tenant Industrial Lease, dated as of August 21, 2007, by and between
BMR-Torreyana LLC, as successor to AEW/LBA Acquisition Co. II, LLC, and Vertex Pharmaceuticals
(San Diego) LLC, as successor to Aurora Biosciences Corporation.10.6
    
    First Amendment to Lease, dated as of February 28, 2007, by and between BMR-21 Erie Street LLC and
Vertex Pharmaceuticals Incorporated.10.7
    
    Seventh Amendment to Lease, dated as of October 15, 2007, by and between BMR-40 Erie Street LLC,
as successor to Fort Washington Limited Partnership, and Vertex Pharmaceuticals Incorporated.31.1
    
    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.
 
 (1)
    
    Incorporated herein by reference to BioMed Realty Trust, Inc.s Current Report on Form 8-K,
filed with the Securities and Exchange Commission on August 7, 2007. 35




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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)
  36




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.1
    
    Second Amended and Restated Unsecured Credit Agreement, dated as of August 1, 2007, by and among
BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders
party thereto.(1)10.2
    
    First Amended and Restated Secured Term Loan Agreement, dated as of August 1, 2007, by and among
BioMed Realty, L.P., KeyBank National Association, as Administrative Agent, and certain lenders
party thereto.(1)10.3
    
    Multi-Tenant Industrial Lease, dated as of April 7, 1997, by and between AEW/LBA Acquisition Co.
II, LLC and Aurora Biosciences Corporation.10.4
    
    First Amendment to Multi-Tenant Industrial Lease, dated as of September 1, 1997, by and between
AEW/LBA Acquisition Co. II, LLC and Aurora Biosciences Corporation.10.5
    
    Second Amendment to Multi-Tenant Industrial Lease, dated as of August 21, 2007, by and between
BMR-Torreyana LLC, as successor to AEW/LBA Acquisition Co. II, LLC, and Vertex Pharmaceuticals
(San Diego) LLC, as successor to Aurora Biosciences Corporation.10.6
    
    First Amendment to Lease, dated as of February 28, 2007, by and between BMR-21 Erie Street LLC and
Vertex Pharmaceuticals Incorporated.10.7
    
    Seventh Amendment to Lease, dated as of October 15, 2007, by and between BMR-40 Erie Street LLC,
as successor to Fort Washington Limited Partnership, and Vertex Pharmaceuticals Incorporated.31.1
    
    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.
 
 (1)
    
    Incorporated herein by reference to BioMed Realty Trust, Inc.s Current Report on Form 8-K,
filed with the Securities and Exchange Commission on August 7, 2007.